Counties to channel revenues to CBK accounts in law review
Leader of Majority Aden Duale supports a Bill that seeks to stop county leaders from spending collected revenue without approval from the Controller of Budget. PHOTO | FILE
County governments will be barred from channelling revenue raised from levies and rates to banks and will instead deposit the income into a centralised account.
The Public Finance Management (PFM) Act currently allows county treasuries to establish funds outside the Central Bank Kenya, but proposed amendments will end this practice.
This is expected to stop spending of revenue like land rates, parking fees and business permits without approval from the Controller of Budget (CoB).
The amendment is meant “to facilitate the easy operationalisation of the Treasury Single Account (for both levels of government) by having all county exchequer accounts in the Central Bank of Kenya,” says a memorandum to the PFM Amendment Bill proposed by Majority Leader Aden Duale.
The amendments provide tighter control over spending of funds with counties accused of breaching the law by spending cash before depositing it into their main bank account.
The Constitution requires that all revenues generated be paid into the main account before they are released for spending.
This is meant to create accountability and ensure governments follow budgets approved by their assemblies.
The centralised CBK account will place county spending under the close watch of CoB. Nairobi has, for example, come under criticism of CoB, Agnes Odhiambo, for repeatedly spending its revenues before channeling it to the County Revenue Fund first.
Curious expenditure in the city include an unsanctioned emergency fund from which the county has been drawing monies for emergency cases.
The county public accounts committee has pointed out that there was no allocation to such a fund as it is not grounded in law.
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