Report Of The Dc On Finance And National Planning On Its Consideration On The Public Finance Management (amendment) Bill ( Natio

THENATIONALASSEMBLY

THIRTEENTHPARLIAMENT-FIFTHSESSION-2026

DIRECTORATEOFDEPARTMENTALCOMMITTEES

DEPARTMENTALCOMMITTEEONFINANCEANDNATIONALPLANNING

REPORT ON:

THECONSIDERATIONOFPUBLICFINANCEMANAGEMENT(AMENDMENT) BILL(NATIONALASSEMBLYBILLNO.I7OF2025)

THENATIONALASSEMBLY PAPERSLAID

Published by:

DATE:

2 8 APR 2026

DAY.

TUESOAY

TABLED

HD#KUIA

WimAI

Clerk'sChambers CLERK-AT' Parliament Buildings THE-TABLE: NAIROBI

IN2OPU

MWALE

APRIL,2026

29141

TABLEOFCONTENTS

| ANNEXURES.. | | |---------------------------------------------------------|----------------------------------------------------| | CHAIRPERSON'SFOREWORD | | | CHAPTERONE | | | IPREFACE | | | I.IESTABLISHMENTANDMANDATEOFTHECOMMITTEE | | | 1.2COMMITTEEMEMBERSHIP | | | I.3COMMITTEESECRETARIAT | | | CHAPTERTWO | | | 2.0OVERVIEWOFTHEPUBLICFINANCEMANAGEMENT(AMENDMENT) | 2.0OVERVIEWOFTHEPUBLICFINANCEMANAGEMENT(AMENDMENT) | | BILL(NATIONALASSEMBLYBILLNO.I7OF2025). | | | 2.1 Background | | | 2.2Summary of Legal Provisions | | | CHAPTERTHREE | 12 | | 3.PUBLICPARTICIPATIONANDSTAKEHOLDERENGAGEMENTONTHE BILL | .12 | | 3.ILEGALFRAMEWORKONPUBLICPARTICIPATION .12 | | | GeneralSubmissions | 12 | | 3.2.I The National Treasury... | 12 | | 3.2.2 Commission on Revenue Allocation (CRA). | .13 | | 3.2.3 Council of Governors (CoG).. | | | | .14 | | 3.2.4ClausebyClause | .15 | | CHAPTERFOUR | 21 | | CHAPTERFIVE | 22 | | 5.COMMITTEERECOMMENDATION | 22 |

LISTOFABBREVIATIONSANDACRONYMS

CPAs

County Participatory Agreements

COB

Controller of Budget

COK

Constitution of Kenya

IPAs

IntergovernmentalParticipation/PartnershipAgreements

MDAs

Ministries,Departments and Agencies

MP

MemberofParliament

OCOB

Office of the Controller ofBudget

ODM

OrangeDemocraticMovement

UDA

UnitedDemocraticAlliance

ANNEXURES

Annexure I:Adoption Schedule

Annexure2:Minutes

Annexure 3:The Public Finance Management (Amendment) Bill, 2025 (National Assembly Bills No.17of2025)

Annexure 4:Advertisement inviting the public to submit memoranda on the Bill

Annexure5:LetterfromtheClerkof theNationalAssemblyinvitingrelevantstakeholdersto attend thepublicparticipationforum

Annexure6:MemorandabyStakeholders

CHAIRPERSON'SFOREWORD

This report contains the proceedings of the Departmental Committee on Finance and National Planning on its consideration of the Public Finance Management Bill, 2025 (National Assembly Bills No. 17 of 2025). It was published in the Kenya Gazette Supplement No. 59 of 24th April, 2026 anditwasreadforafirsttimeon2ndDecember,2025.TheBillwascommittedtotheCommittee for consideration and tabling of the report to the House pursuant to Standing Order 127.

Thepurposeof theBill istoamend thePublicFinanceManagementAct,inorder toensure that agreements.ItseekstorepealsectionsI91A,191B,19IC,191D,and191EofthePublicFinance ManagementAct.

In compliance with Article I18 (1) (b) of the Constitution and Standing Order 127(3), the Clerk of theNationalAssemblyplaced anadvertisementintheprintmedia on21stFebruary,2026 inviting the public to submit memorandaby way of written statements on theBill. In addition,the ClerkoftheNationalAssemblyvideletterRef.No.NA/DDC/F&NP/2026/062dated15hApril 2026invitedkeystakeholders tosubmitviewsontheBilland attend apublicparticipationforum onThursday,23rdApril2026andFriday,24hApril2026.Thememorandaweretobereceived onorbefore28tFebruary2026at5.00pm(EastAfricanTime).

The Committee is grateful to the Officesof theSpeaker and Clerk of theNational Assemblyfor thelogisticalandtechnicalsupportaccordedtoitduringitsconsiderationoftheBill.Similarly,1 wish to express my appreciation to the Honourable Members of the Committee and the CommitteeSecretariatwhomadeinvaluable contributions towardsthepreparation and productionofthisreport.

Onbehalfof theDepartmental CommitteeonFinance andNationalPlanningandpursuantto the provisionsof Standing OrderI99(6),it is mypleasuretoreport that theCommittee has considered the Public Finance Management (Amendment) Bill, 2025 (National Assembly Bills No. 17of2025) andwishtoreportto this augustHousewiththerecommendation thattheHouse approvestheBillwithoutamendments

Hon.FCPA.Kuria Kimani,CBS,M.P. Chairperson, Departmental Committee on Finance and National Planning

IPREFACE

I.IESTABLISHMENTANDMANDATEOFTHECOMMITTEE

• 1.TheDepartmentalCommittee onFinance andNationalPlanning isoneoftwenty departmentalcommitteesoftheNationalAssemblyestablishedunderStandingOrder216 whosemandatepursuanttotheStandingOrder216(5)isasfollows:
• a)Toinvestigate,inquire into,and report on all matters relating to the mandate, management,activities,administration,operations andestimates oftheassigned ministriesanddepartments;
• To study the programme and policy objectives of ministries and departments and the effectivenessoftheimplementation;
• To,on a quarterlybasis,monitor andreport on the implementation of the national budget inrespect of itsmandate;
• (P Tostudyandreview all legislationreferredtoit;
• e) Tostudy,assess and analyse the relative success of theministries and departments as measuredby theresultsobtained as comparedwith theirstatedobjectives;
• f Toinvestigateandinquireintoallmattersrelating totheassignedministries and departments as they may deem necessary, and as may be referred to them by the House;
• g) TovetandreportonallappointmentswheretheConstitutionoranylawrequiresthe National Assembly to approve, except those under Standing Order 204(Committee on Appointments);
• i Tomakereports andrecommendations to theHouse as often aspossible,including recommendationsofproposedlegislation;
• h)To examine treaties,agreementsand conventions;
• i ToconsiderreportsofCommissionsand IndependentOffices submitted to theHouse pursuanttotheprovisionsofArticle254oftheConstitution;and
• k) )ToexamineanyquestionsraisedbyMembersonamatterwithinitsmandate.
• 2.TheSecondSchedule to the National AssemblyStandingOrders assigns the Committee the mandate to consider mattersin relation to publicfinance,public audit policies,monetary policies,financial institutions,economy,investment policies,competition,banking,insurance, national statistics, population, revenue policies including taxation, national planning and development, digital finance,including digital currency.
• 3.In executing its mandate, the Committee oversees the following Ministries/Departments:
• a) TheNational Treasury.
• c) StateDepartmentforPublicInvestmentandAssetManagement.
• b) StateDepartmentforEconomicPlanning.
• d) The Commission onRevenue Allocation(CRA)
• e) Officeof theControllerofBudget

CHAPTERONE

1.2COMMITTEEMEMBERSHIP

• 1.TheDepartmental CommitteeonFinance andNationalPlanningwasconstitutedbytheHouse on27thOctober2022andcomprisesthefollowingMembers:

Chairperson

UDA Party

Hon.FCPA Kuria Kimani,CBS,MP Molo Constituency

Vice-Chairperson

UDA Party

Hon.(Amb.) FCPA Langat Benjamin Kipkirui, CBS, MP Ainamoi Constituency

Members

Hon.PeterKaluma,CBS,MP Homa Bay Town Constituency ODM Party

Hon. Sunkuyia, R. George, MP Kajiado West Constituency UDA Party

Hon. FCPA Oyula, Joseph H. Maero, MP ButulaConstituency ODM Party

Hon.BettyN.Maina,MP

Murang'a County

UDA Party

Hon.Mboni,David Mwalika,MP

Hon.Sheikh Umul Sheikh,MP

Kitui Rural Constituency

Mandera County

WDM Party

UDM Party

Hon.Okuome Adipo Andrew,MP Karachuonyo Constituency ODM Party

Hon. (Dr.) Shadrack Mwiti, MP

South Imenti Constituency

Jubilee Party

Hon. Chiforomodo, Munga, MP Lunga Lunga Constituency UDM Party

Hon.Dr.CPA Ariko John Namoit, MP TurkanaSouthConstituency ODM Party

Hon. CPA Rutto Julius Kipletting, MP Kesses Constituency UDA Party

Hon. Machele M. Soud, MP Mvita Constituency ODM Party

Hon. Paul Biego, MP Chesumei Constituency UDA Party

ReportoftheDepartmentalCommitteeonFinanceandNationalPlanningontheConsideration ofThePublicFinanceManagement(Amendment)Bill,2025(NationalAssemblyBillsNo.17of 2025)

I.3COMMITTEESECRETARIAT

• 4.TheCommitteeisfacilitatedbythefollowingstaff:

Ms.Jennifer Ndeto DeputyDirectorLegalServices

Mr.Benson Kamande

Ms.WinfredKambua

ClerkAssistantII

ClerkAssistantIII

Mr.Salem Lorot

Mr.James Macharia

Senior Legal Counsel

MediaRelations Officer

Mr. George Ndenjeshe

Ms.Joyce Wachera

Fiscal Analyst Il

Hansard Reporter II

Ms. Nelly W. Ondieki

Mr. Eugene Luteshi

ResearchOfficerIll

AudioOfficerIII

Mr. Benson Muthuri

Mr. Allan Ngugi

AssistantSerjeant-At-Arms

AdministrativeOfficerIl

Ms. Peninnah Simiren Legal Counsel II

CHAPTERTWO

2.0 OVERVIEW OF THE PUBLIC FINANCE MANAGEMENT(AMENDMENT) BILL(NATIONALASSEMBLYBILLNO.I7OF2025)

2.1Background

• 5.ThePublicFinance Management(Amendment)Bill,2025(National Assembly Bills No.17of 2025),sponsored by theLeader of MajorityParty,waspublished on24th April,2025.It was readfortheFirstTimeon2ndDecember,2025,andwasthencommittedtotheCommittee forconsiderationandtablingofthereport.

2.2SummaryofLegalProvisions

• 6.Thepurposeof theBill isto amend thePublicFinance ManagementAct,in order to ensure that there shallbenoduplicationinmanagementof additionalallocations through intergovernmentalagreements.
• 7.The Bill contains 6 clauses.
• 8.Clause 2 provides for the repeal of section 19lA of the Public Finance Management Act (Principal Act).
• 9.Section19lA provides as follows—
• 191A.Intergovernmentalagreements
• (1)TheNational Treasuryshallenterintoanagreementwith therespectivecounty governmentpursuanttothisAct.
• (2)Anagreement undersubsection(l) shall setout anyconditions that may be attached totheconditionalallocationsmadeunderthisAct.
• (1),thecounty executive committee membershall submit the agreement to therespective County Assembly for approval.
• (4)The County Assembly shall,withinfourteen days of submission of an agreement under subsection (3),approve or reject the agreement.
• (5)WhereaCountyAssemblyfailstoconsideranagreementundersubsection(3)within fourteendays,theagreementshallbedeemed tobeapproved.
• (6)Anagreementundersubsection(l)shallsetoutallconditionsattachedtoan allocationmadeunderthisAct.
• (7)Therespective countygovernment shall forward the agreement approved under this sectiontotheControllerofBudgetwithinsevendaysofapproval.
• 10.Clause3providesfortherepealofsectionI91BoftheprincipalAct.
• Il.SectionI91Bprovides as follows—

19/B.Publicparticipation

The county executive committee member shall facilitate publicparticipation on any agreementmadepursuanttosection191A.

ReportoftheDepartmentalCommitteeonFinanceandNationalPlanningontheConsideration ofThePublicFinanceManagement(Amendment)Bill,2025(NationalAssemblyBillsNo.17of 2025)

• 12.Clause4providesfortherepealof section191Cof theprincipalAct.

Anagreementundersection/91Ashallbe

191C.Executionofagreementforconditionalallocation

• (a) signed by an authorized person or officer;and
• (b)publishedintheKenyaGazettewithinaperiodofsevendaysoftheagreement.
• 191D.SubmissiontoSenate
• I3. Clause 5 provides for the repeal of section I91D of the principal Act.
• (1) The National Treasury shall,within seven days of entering into an agreement under section/9lA,submit totheSenate and theControllerofBudget,theagreementtogether withanyotherdocumentsrelatingtotheagreement.
• (2)The National Treasury shall publish and publicize all agreements entered into pursuanttosectionI9lA.
• I4. Clause 6 provides for the repeal of section 19lE of the principal Act.

Requisition of funds from the county revenue fund for the purposes of a conditional grant shall be supportedby the intergovernmental agreement approved under section I91A.

191E.Requisitionoffunds

AnalysisoftheBill

Constitutionalandstatutoryanchors

• 15.Thelawonadditional allocationsis anchored in threeprimarylevelsof legislation:

(i)TheConstitution ofKenya(2010)

• I6. Article 202(l) and (2) of the Constitution is the core anchor of additional allocations. Clause (1) mandates the equitable sharing of national revenue.Clause (2) explicitly states:"County governmentsmay be given additional allocations from the national government's share ofthe revenue, eitherconditionallyorunconditionally"
• 17.Article 203 of the Constitution sets out the criteria to be considered in the equitable sharing of revenue, including the need to ensure that county governments are able to perform the functionsallocatedtothem.
• 18.ArticleI90of theConstitutionprovidesfor thesupport andoversightof countygovernments by theNational Government,whichoften takes theform ofconditional financial grants.
• (i)The PublicFinance Management (PFM) Act (Cap.412A)
• 19.Section 19l of the Public Finance Management Act (PFM Act) provides for the framework for theNationalGovernmenttotransferfundstocounties.
• 20.Sections I91A - I91E (Specific to Intergovernmental Agreements): These sections (currently subject to the Bill under consideration) require the National Treasury to enter into intergovernmental agreements for these allocations, ensuring they are approved by County Assemblies and theSenate.
• (ii)TheCounty GovernmentsAdditional AllocationsAct

• 21.TheCountyGovernmentsAdditionalAllocationsActisanannual legislationprovidingfor additional allocations to the county governments.Because the amounts and sources of these ofthisActforeachfinancialyear.

22. Additional allocations refer to additional resources allocated to county governments from thenationalgovernment'srevenueorintheformofloansandgrantsfromdevelopment partners. 23. The legislation provides for both the unconditional and conditional allocations to county governments.

CHAPTERTHREE

3.PUBLICPARTICIPATIONANDSTAKEHOLDERENGAGEMENTONTHEBILL

3.ILEGALFRAMEWORKONPUBLICPARTICIPATION

• 24.Article I18 (1)(b) of the Constitution provides that:

"Parliament shall facilitate public participation and involvement in the legislative and other businessofParliamentanditsCommittees."

25. The National Assembly Standing Order 127 (3) and (3A) stipulates that: 2. "(3)The Departmental Committee to whichaBill is committed shall facilitatepublic 3. (a)invitingsubmissionofmemoranda; 4. (b)holding publichearings; 5. (c)consultingrelevant stakeholdersinasector;and 6. (d)consulting experts on technical subjects. 7. (3A)TheDepartmentalCommitteeshall takeintoaccounttheviewsandrecommendationsof the public under paragraph (3) in its report to the House."

3.2MEMORANDARECEIVEDONTHEBILL

• 26.Pursuant to the aforementioned provisions of law,the Clerk of the National Assembly placed memorandaontheBill.Further,theClerkoftheNationalAssemblyvideletterRef.No. NA/DDC/F&NP/2026/062,dated15thApril2026,invitedkeystakeholderstosubmitviews on the Bill and to attend a public participation forum on 23rd April 2026 and 24" April 2026.
• 27.The Committee received memoranda from the stakeholders as Annexed.

GeneralSubmissions

3.2.1 The National Treasury

The National Treasury appeared before the Committee and submitted as follows;

• 28.The National Treasury submitted that the existing constitutional and legal framework already providesclearaccountabilitymechanisms,sinceArticle226of theConstitutiondesignates ensuring compliance with laws governing transfers, thereby rendering additional

• 29.Further, the National Treasury noted that County Participatory Agreements (CPAs), which are executed between line Ministries,Departments and Agencies (MDAs) and county agreements,sincethey youtline eprojectfinancing arrangements,implementation responsibilities,conditionsprecedent,and allocationcriteriainaconsultativemanner.Onthis basis, the National Treasury supported the repeal of Section I9lA and its related subsections, unnecessary administrative burdens on both the National Treasury and county governments.

30. The Ministry also submitted that provisions relating to public participation under Section 191B areredundant,since theConstitution,thePublicFinance ManagementAct,and the County Governments Act already require meaningful public participation during the budgeting duplicativeandresource-inefficient.

• 31.Additionally, the National Treasury explained that Sections I91C and 19ID, which provide forsubmission,publication,and executionof the agreements,would becomeredundant once Section I9lA is repealed,since they are dependent on the existence ofintergovernmental agreements under that section.Further, the National Treasury submitted that Section I91E, which relates towithdrawal of funds,is unnecessary since Article 228of the Constitution, togetherwith thePublicFinance ManagementAct and the Controller of BudgetAct,already Fund.

32. Consequently, the National Treasury supported the repeal of Sections I9lA, 191B, 191C, 191D,and 19lEin their entirety,so that the managementofconditional allocations can be finance management framework.Additionally,the Ministry indicated that the proposed amendmentswillfacilitateseamlessimplementationofconditionalallocations,sincethey coordinationmechanismsbetweenthenationalandcountygovernments.

CommitteeObservation

TheCommitteenotedtheNational Treasury'ssubmission.

3.2.2 CommissiononRevenueAllocation(CRA)

33. The Commission submitted that they are in support of the proposed amendments on the basis thatsectionsI9lA-EofthePFMActcreate duplication in-

• i. are also signed by line MDAs at the national level with the relevant county governments in the form of County Participatory Agreements (CPAs) where necessary; and
• ii. Public participation on the agreements yet the Public Finance Management Act

county governments, Part IV of the PFM Act outlines how the county budgetary process is tobeexecutedwhichprocessentails allsourcesoffundingincluding anyadditional allocations and conditional grants. Such budgetary processes entail public participation whichisagainarequirementundersectionsI9lA-E.

34. CRA stated that County Participatory Agreements (CPAs) under MDAs and the budget frameworkprovidedforinthePFMActareadequateintermsofformalizingagreements between the two levels of government and also on the aspect of stakeholder engagement on meritininstitutinganotherparallelprocessforconditionalgrantsundersectionsI9lA-Eof thePFMAct.

CommitteeObservation

The Committeenoted the submissions bythe Commissionon Revenue Allocation.

3.2.3Council ofGovernors(CoG)

• 35.The Council of Governors supported the Bill in its entirety and proposed that the Bill be passedwithoutanyamendments.

36. They noted that county governments, pursuant to Article I89 of the Constitution, have been grants advanced to them. Therefore, the requirement for the Intergovernmental Agreements forTransfer of the Conditional Agreements signedwith the National Treasury underSection 19lA (l)of thePFM Act is unnecessary and should be deleted. 37. They stated that MDAs are responsible for setting the conditions precedent and the day-today monitoring of adherence to these conditions to the allocations as opposed to the National TreasuryasSectionI9lAof thePFMActsuggests. 38. The IPAs are signed for the life of the projects or the agreed grant implementation period therefore any other Agreement would result to duplication of efforts leading to delays in project implementation. 39. The IPAs are always preceded by signing a Financing Agreement by the National Treasury for allDevelopmentPartnersupported allocations.Thisthereforeplaces theNational Treasury at agoodviewof the additional allocations going tocountiesfor consolidated reporting purposesandhonouringinternationalobligations. 40. Section191A (3)-(7) of the PFM Act provide for approval by the County Assembly. However, this is a duplication of the process since the CountyAssemblies approve alladditional Estimates.Theyproposed deletion of these sections.

ReportoftheDepartmentalCommitteeonFinanceandNationalPlanningontheConsideration ofThePublicFinanceManagement(Amendment)Bill,2025(NationalAssemblyBillsNo.17of 2025)

• 41.Further,theystatedthatthereisnoclarificationonwhathappens if theCountyAssembly of reintroduction of theintergovernmental agreement(s) and theprocedure or timelines to be adhered to.
• 42.They stated that there is a lack of a logical sequence of the activities tobe undertaken undertaken after the agreements have been approved by the County Assemblies and forwardedtotheControllerofBudgetundersectionI9lA(7).This negates theneedfor of thePFM Act.
• 43.Additionally, CoG noted that Sections 19lC and 191D on publication and publicization of the theSenate,could lead to inconsistencies.These processes further introduce unnecessarily lengthy procedures that are not aimed at improving efficiency and funds absorption. Therefore,theyproposeddeletionofSections191Cand 191D.

44. Lastly, CoG noted that Section 19lE requiring approval of the Controller of Budget is a unnecessaryintroductionthusshouldbedeleted. 45. The signing of the said Intergovernmental Agreements is not aligned with the Budget because the Agreements are to be signed after Parliament has passed the conditional allocations throughthe annual CountyGovernmentsAdditional AllocationsActs.

CommitteeObservation

TheCommitteenoted thesubmissionsbytheCouncil ofCountyGovernors.

3.2.4ClausebyClause

Clause I

OfficeoftheControllerofBudget(ocoB)

• 46.The stakeholder noted that the commencement left to the ministerial proclamation may indefinitelydelay the operationalisation of critical accountabilitysafeguards.Theyproposed fixing thecommencementdateintheActitselfrather thanleavingittoministerialdiscretion and that a Gazette notification shouldbefor information only,not as a conditionprecedent tocommencement.

CommitteeObservation

TheCommitteenotedthestakeholder'sproposalbutwasofadifferentview. ClauseIoftheBilldoesnotprovidethattheBill'scommencementdatewould beappointedvideaGazettebytheCabinetSecretary,asalludedbythe stakeholder.Instead,its commencement,pursuant to Article Il6(2) of the Constitution,would be fourteen days afterpublication in the Gazette.Thus,the stakeholder'sconcernshavealreadybeenaddressedintheBill.

Clause2

Bowmans

47. The stakeholder proposed deletion of the proposal. They observed that section 19lA is the stage,thereforeitsrepealwouldleavenoexpressrequirementforthepartiestodocument thetermsof aconditional allocationbeforedisbursement.Also,repealingofsectionI9lA withoutreplacement removes the onlystatutorybasisfor CountyAssemblyoversightof the conditions attached to allocations received by the County Government,which is inconsistent with the constitutional role of county assemblies in financial oversight.Further,the requirement toforward the approved agreementto theController ofBudget supportsthe Controller's oversight role under Article 228 of the Constitution and should be retained.

CommitteeObservation

TheCommitteenotedthestakeholder'sproposalbutwasoftheviewthatthe repeal of the provision was proper since it sought to address duplication. Ministries, Departments and Agencies (MDAs) and county governments execute County Participatory Agreements (CPAs) for each conditional allocation thus the provisionsin thePFM Actare duplicative sinceCPAs servethe purposeof intergovernmental agreements.Further, despite the repeal,the constitutional andstatutorysafeguardsandoversightmechanismshavenotbeenremoved.

OCOB

• 48.The stakeholder observed that the term"duplication"is undefined,giving the National Treasury thediscretion todeterminewhatconstitutesduplicationwithnoindependent verification mechanism.Additionally,the CoB's quarterly reports have consistently documenteddouble-countingofconditionalgrantsandequitablesharetop-upsacross multiplecountygovernments.
• 49.Theyproposedthefollowing:
• i.
• ii. RequiretheNational TreasurytoobtainaCertificateofNo-Duplicationfrom the ControllerofBudgetbeforedisbursing anyadditionalallocationunderan intergovernmentalagreement.

ReportoftheDepartmentalCommitteeonFinanceandNationalPlanningontheConsideration of ThePublicFinance Management(Amendment)Bill,2025(National AssemblyBillsNo.17of16 2025)

• ili. Empower theCoBtowithholdcertificationwhere aproposed allocationduplicates anexistingtransfer.
• iv. operationalisedwithin aperiodspecifiedbytheCoB.

CommitteeObservation

The Committee noted the stakeholder'sproposal and observed that the Bill's memorandumofobjects andreasonsoughttohaveelaboratedonthe "duplication" in the management of additional allocations through discerning the Bill's mischief.However, the Committee was persuaded that the repealoftheprovisionsrelatingtointergovernmentalagreementswasproper s s (CPAs) for eachconditional allocation thus the provisions in the PFM Actare duplicativesinceCPAsservethepurposeofintergovernmentalagreements. Therefore, the concerns addressed by the Bill are on duplication of processes and notduplication inallocationswhichisthestakeholder'sconcern.

Clause3

Bowmans

50. They proposed deletion of the proposal and that section 191B be retained. They noted that public participation is a foundational constitutional value,a principle of public finance management.

CommitteeObservation

requirement in our processes that is underpinned in our Constitution and statutes.However,theCommitteewasofadifferentviewofretainingclause3of theBillfortworeasons:

• (a)The provision isintertwined with the previous clause(2)providing for the repealofsectionI9lAof thePFMActproviding for intergovernmental agreements;thus,therepealofsection19lA hasaconsequentialeffecton clause3;
• Constitution and the PFM Act.For instance,section I25(2)of the PFM Act provides that,The CountyExecutive Committee memberforfinance shall ensure PFM Actprovides that,The CabinetSecretary shall ensure public participation

OCOB

• 51.The CoB noted that compliance with existing quarterly reporting requirements under SectionsI07and166ofthePFMActremainspersistentlylow.Theclause doesnotstrengthen enforcementfornon-compliance. Theyproposedthatnon-compliancewith intergovernmentalagreementreportingobligationsshouldexpresslyempowertheCoBto withhold authorisationof subsequent disbursementstothedefaultingcounty.Also,there is Act as a meaningful compliance incentive.

CommitteeObservation

The Committeenoted the stakeholder'sproposal butwas of the view that the constitutional andstatutory obligations.Therepeal oftheprovisions sought to streamlineparallelprocesses.Ministries,DepartmentsandAgencies(MDAs)and conditionalallocationthustheprovisionsinthePFMActareduplicativesince CPAs serve the purpose of intergovernmental agreements.Further, despite the repeal,theconstitutionalandstatutoryrolesoftheOcoBinthebudgetprocess remain intact.

Clauses4,5&6

Bowmans

• 52.They proposed amending the proposals rather than repealing. They observed that the transparencyfunction.Itensuresthatthetermsofconditionalallocationsareamatterof publicrecord.Additionally,it is consistent with the principles of openness and accountability inArticle20l(a)oftheConstitution.RepealingofsectionI9lDwouldremovetheSenate's oversightroleinrelationtoconditional allocation agreementswithoutreplacement.

CommitteeObservation

The Committeenoted thestakeholder'sproposal butwas of theviewthat the mainobjectoftheBillwastorepealtheprovisionsrelatingtointergovernmental agreements. Ministries, Departments and Agencies (MDAs) and county governments executeCounty Participatory Agreements (CPAs) for each conditionalallocationthustheprovisionsinthePFMActare duplicativesince CPAsserve thepurpose ofintergovernmental agreements.Further,despite the repeal,the constitutional and statutory safeguards,including openness and accountabilityin thebudget process,remain intact.

Clause4

OCOB

• 53.The stakeholder noted that the savings clause does not expressly preserve the CoB's existing powers under Article 228 of the Constitution and Section 68 of the PFM Act, thereby risking confirming that nothingin the amendment limits the CoB's powers toinvestigate,report on, or withhold authorisation in respect of any intergovernmental transfer.Also, they needed a confirmation that theCoB'sjurisdiction underArticle228(4) andSection68of thePFMAct is unaffected.

CommitteeObservation

TheCommitteenoted thestakeholder'sproposalbutwasoftheviewthatthe mainobjectof theBill was torepeal theprovisionsrelating tointergovernmental agreements. Ministries, Departments and Agencies (MDAs) and county governments execute County Participatory Agreements (CPAs) for each conditionalallocation thus theprovisionsinthePFMActareduplicativesince CPAs serve the purpose of intergovernmental agreements. Further, despite the repeal, the constitutional and statutory safeguards, including the role of OcOB inthebudgetprocess,remainintact.

KenyaInstitute ofSuppliesManagement

Clauses 2,3,4,5 and 6

• 54.Adoptdeletionof SectionsI91A,191B,19IC,191Dand I91E as theyremove duplicative approval processes relating to conditional and additional allocations to county governments. The existing requirement under Section I9l for an annual County Government Additional Allocations Bill already provides a structured mechanismfor approval of suchfunds.Retaining parallel approval frameworks creates inefficiency and delays in implementation. The proposal isfurthersupportedonthebasisthattheCountyGovernmentAdditionalAllocationsBillis preparedannuallyandiscapableofaccommodatingconditionalgrantsfromtheNational Government as well as donor-funded allocations. This consolidates approval processes into a singleframework andenhances administrative efficiency.
• 55.However,theBill shouldbe amendedtorefineSectionI9l,so astoexclude donations and funding from developmentpartners frombeing subjected to the County Government Additional Allocations Bill. Donor-funded projects are often time-bound and require timely absorption. Subjecting them to annual legislative processes may result in delays, thereby increasingtheriskofwithdrawalorreallocationoffundsbydevelopmentpartners. Accordingly,whilethe deletionofSectionsI9lA-191E enhancesefficiencyby eliminating duplication,an amendmenttoSectionI9lis necessaryto safeguard the timelyutilisation of donorfunds andensurethatexternalfinancingisnotconstrainedbyprocedural delays.

CommitteeObservation

The Committeenoted thestakeholder'ssubmissions.The Committee further observedthattheBillsoughttoaddresstheconcernsraisedbythestakeholder inregardtodonationsandfundingfromdevelopmentpartners.

CHAPTERFOUR

4.COMMITTEEOBSERVATIONS

• 56.TheCommitteemadethefollowingobservations:

ObjectoftheBill

• (a) The Bill seeks to repeal sections I91A,191B, 191C, 191D, 191E of the PFM Act which provide for intergovernmental agreements between the national government and county governments on conditional additional allocations.Ministries,Departments and Agencies eachconditional allocation thustheprovisionsinthePFMActareduplicativesinceCPAs

Constitutional and statutory safeguards

• Act,the constitutional and statutorysafeguards and oversightmechanismsinthebudget process remain intact.Further,the role of the Controller of Budget as provided for in the Constitutionand thePFMActinthebudgetprocesswithinwhichconditional additional allocationswillbeconsideredremainintact.

Submissions supporting theBill

• (c)The National Treasury,theCommissionon Revenue Allocationand the Council of Governors fully supported the Bill underscoring the parallel process thatsections I9lA, 191B, 19IC, 19ID, 191E of the PFM Act occasioned, thus duplicating the County Participatory Agreements (CPAs), thus creating bottlenecks and administrative challenges in themanagementofconditional additional allocations.

CHAPTERFIVE

5.COMMITTEERECOMMENDATION

57. The Committee, having considered the Public Finance Management (Amendment) (National AssemblyBillsNo.I7of2025)recommends thattheHouse approves theBillwithout amendments.

SIGNED...

.DATE.

HON.FCPAKURIA KIMANI,CBS,MP CHAIRPERSON DEPARTMENTALCOMMITTEEONFINANCEANDNATIONALPLANNING

DATE:

2 8 APR 2026

THENATIONALASSEMBLY THIRTEENTHPARLIAMENT-FIFTHSESSION-2026

DEPARTMENTALCOMMITTEEONFINANCEANDNATIONALPLANNING. ADOPTIONLIST

REPORTONTHEPUBLICFINANCEMANAGEMENT(AMENDMENT)BILL (NATIONALASSEMBLY BILLNO.17OF2025)

We, the Members of the Departmental Committee on Finance and National Planning have pursuant to Standing Order 199, adopted this Report and affix our signatures to affirm our approval and confirm its accuracy, validity and authenticity today, Tuesday,28hApril2026.

| S/NO. | N.IME | SIGNATURE | |---------|------------------------------------------------------------|-------------| | 1. | HON.FCPAKURIAKIMANI,CBS,MP- CHAIRPERSON | | | 2. | HON.FCPA (AMB).BENJAMIN KIPKIRUILANGAT, MP-VICECHAIRPERSON | | | 3. | HON.KALUMAPETEROPONDO,CBS,MP | | | 4. | HON.GEORGESUNKUYIARISA,MP | | | 5. | HON. (FCPA) JOSEPH MAERO OYULA, OGW, MP | | | 6. | HON.ANDREW ADIPO OKUOME,MP | | | 7. | HON.DAVIDMWALIKA MBONI, MP | | | 8. | HON.CHIFOROMODOMANGALEMUNGA,MP | | | 9. | HON.MAINABETTY NJERI,MP | | | 10. | HON. (CPA) JULIUS KIPLETTING RUTTO, MP | | | 11. | HON.PAUL KIBICHIY BIEGO,MP | | | 12. | HON.UMULKERSHEIKHKASSIM,MP | | | 13. | HON.DR.SHADRACKMWITIITHINJI,MP | | | 14. | HON.DR.JOHNARIKO NAMOIT, MP | | | 15. | HON.MOHAMEDSOUDMACHELE,MP | |