The Public Finance Management (Amendment) (No. 4) Bill, 2024 (National Assembly Bills No. 45)

SPECIALISSUE

Kenya Gazette Supplement No.190(National Assembly Bills No.45)

KENYA GAZETTE SUPPLEMENT

NATIONALASSEMBLYBILLS,2024

NAIROBI,1stNovember,2024

CONTENT

| Bill for Introduction into the National Assembly-— | PAGE | |------------------------------------------------------|--------|

THEPUBLICFINANCEMANAGEMENT (AMENDMENT)(NO.4)BILL,2024

A Bill for

AN ACT of Parliament to amend the Public Finance Management Act; and for connected purposes

ENACTED by theParliament of Kenya,as follows-

1. This Act may be cited as the Public Finance Management (Amendment) (No. 4) Act, 2024. 2. 2.Section 50 of the Public Finance Management Act amended- 3. (a) bydeletingsubsection(2C)and substituting 4. therefor the following new subsection- 5. (2C) The provisions of subsection (2A) and (2B) shall come into force on the date that is five years from the date of the commencement of this 6. new subsection 7. Act. 8. (b) by inserting the following immediately after subsection(2C)- 9. (2CA) The Cabinet Secretary shall, not later than five years from the date of the coming into force of this Act, take measures to ensure that borrowing by the national government complies 10. with the threshold prescribed in subsection (2A). 3. section 194 of the principal Act is amended- 12. (a) in subsection (l), by adding the following new paragraphs immediately after paragraph (g)- 13. (h) prescribe a framework for the implementation of 14. accrual accounting by the Government; and 15. (i) prescribe a risk management framework. 16. (b)by adding the following new subsection 17. immediately after subsection(5)-

• (6) The framework for the implementation of accrual accounting contemplated under subsection (1)(h) shall provide for a transition period of three years from the date of the commencement of subsection (1)(h).

Short title.

Amendment of section50of Cap,412A.

Amendment of section194of Cap.412A.

MEMORANDUM OFOBJECTSAND REASONS

The principal object of the Public Finance Management (Amendment) Bill,2024,is to amend the Public Finance Management Act (Cap.412A).

Clause 1 of the Bill provides for the short title.

Clause 2 of the Bill provides for the amendment of section 50 of the principal Act to clarify the effective dates of the debt threshold requirement for the Cabinet Secretary National Treasury to ensure compliance.

Clause 3 of the Bill provides for the amendment of section 194 of the Act toprovidefor a frameworkfor implementation ofaccrual accounting in Government and risk management by the Public Sector Accounting Standards Board. This is meant to improve the accountings standards for better transparency and governance.

Dated the23rd October,2024

KIMANIICHUNG'WAH,

Leader of Majority.

Section50of Cap.412Awhichitisintended toamend-

50. Obligations and restrictions on national government guaranteeing

and borrowing

(2C) The Cabinet Secretary shall,not later than five yearsfrom the date of the coming into force of subsections (2A) and (2B), take measures to ensure that borrowing by the national government complies with the threshold prescribed in subsection (2A).

Section194 ofCap.412Awhichit isintended toamend-

194.Functions of the Board

• (1) The AccountingStandards Board shallprovide frameworks and set generally accepted standards for the development and management of accounting and financial systems by all State organs and public entities, and shall inparticularperform the following functions-

2. (a) set generally accepted accounting and financial standards; 3. (b) prescribe the minimum standards ofmaintenance of proper books ofaccountfor all levelsof Government; 4. C prescribe internal audit procedures which comply with this Act; 5. (d) prescribe formatsfor financial statements and reporting by all state organs and public entities; 6. (e) publish and publicise the accounting and financial standards and any directives and guidelinesprescribed by the Board; 7. in consultation with the Cabinet Secretary on the effective dates of implementation of thesestandards, Gazette thedates for application of the standards and guidelines;and 8. perform any other functions related to advancing financial and accounting systemsmanagement and reporting in thepublic sector.