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The Purpose of the Consolidated Fund in Kenya

  • Author Gĩthĩnji
  • Updated on:

Article 206 of the Constitution establishes the Consolidated Fund in Kenya. This fund acts as the main bank account for the national government. The Public Finance Management (PFM) Act expounds on the Consolidated Fund.

Article 206 of the Constitution says all money raised or received by or on behalf of the national government, shall be paid to the Consolidated Fund in Kenya, except money that-

  • is reasonably excluded from the Fund by an Act of Parliament and payable into another public fund established for a specific purpose; or
  • may, under an Act of Parliament, be retained by the State organ that received it for the purpose of defraying the expenses of the State organ (for example, Appropriations in Aid).

The National Treasury in Kenya shall administer the Consolidated Fund in accordance with Article 206 of the Constitution.

The National Treasury shall maintain the Consolidated Fund in Kenya in an account to be known as the National Exchequer Account, kept at the Central Bank of Kenya. Subject to Article 206(1) of the Constitution, the National Treasury shall–

  • facilitate payment into that account all money raised or received by or on behalf of the national government; and
  • pay from that National Exchequer Account without undue delay all amounts that are payable for public services.

The National Treasury shall ensure that the National Exchequer Account is not overdrawn at any time.

Money can only be withdrawn from the Consolidated Fund-

  • in accordance with an appropriation by an Act of Parliament (Appropriation Act);
  • in accordance with Article 222 or 223 of the Constitution; or
  • as a charge against the Fund as authorised by the Constitution or an Act of Parliament.

“Appropriation” here means the authority granted by Parliament to pay money out of the Consolidated Fund or out of any other public fund. Article 222 contains provisions on expenditure before the annual budget is passed while Article 223 deals with supplementary budgets.

“Appropriation Act” means an Act of Parliament that provides for the provision of money to pay for the supply of services.

Money shall not be withdrawn from the Consolidated Fund in Kenya unless the Controller of Budget has approved the withdrawal.

Where a withdrawal from the Consolidated Fund is authorised under the Constitution or an Act of Parliament for the appropriation of money, the National Treasury shall make a requisition for the withdrawal and submit it to the Controller of Budget for approval.

The approval of withdrawal from the Consolidated Fund by the Controller of Budget, together with written instructions from the National Treasury requesting for the withdrawal shall be sufficient authority for the Central Bank of Kenya to pay amounts from the National Exchequer Account in accordance with the approval and instructions provided.

The National Treasury shall also disburse the equitable share for county governments to the County Revenue Fund from the Consolidated Fund.

Taxes collected and loans received by the national government include the money that shall be paid to the Consolidated Fund. Money that can be charged against the consolidated fund includes public debt.

For more about the Consolidated Fund, see Article 206 of the Constitution and the Public Finance Management Act.

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