Incurring urgent or unforeseen expenditure pursuant to Article 223 of the Constitution will be made more stringent if a legislative proposal sponsored by Hon. John Mbadi is recommended for publication by the Departmental Committee on Finance and National Planning, published into Bill, passed by Parliament, and assented into law.
The legislative proposal is undergoing pre-publication scrutiny in the Departmental Committee on Finance and National Planning of the National Assembly.
Amendment of section 44 of the PFM Act
Clause 2 of the legislative proposal seeks to amend section 44 of the Public Finance Management Act, 2012, to provide for the procedure for incurring urgent or unforeseen expenditure pursuant to Article 223 of the Constitution.
The clause deletes section 44 of the Public Finance Management Act, 2012 and substitutes it with the following new section—
National government to submit supplementary budget to Parliament
44. (1) Subject to the provisions of Article 223 of the Constitution, where—
(a) an amount appropriated for any purpose under an Appropriation Act is insufficient; or
(b) a need has arisen for expenditure for a purpose for which no amount has been appropriated by an Appropriation Act,
the National Treasury shall, seek pre-approval to incur the expenditure from the relevant committee of the National Assembly.
(2) The relevant committee of the National Assembly shall consider the pre-approval request under subsection (1) within fourteen days and submit its recommendation to the National Treasury.
(3) Where the National Assembly approves the request under subsection (1), the National Treasury shall submit for approval within two months after the first withdrawal of the money, a supplementary budget in support of the money spent under Article 223 of the Constitution.
(4) After the National Assembly has approved spending under subsection (3), an Appropriation Bill shall be introduced for the appropriation of the money spent.
(5) The supplementary budget shall include a statement showing how the additional expenditure relates to the fiscal responsibility principles and financial objectives.
(6) For avoidance of doubt, no expenditure shall be considered as supplementary outside Article 223 of the Constitution.
(7) Despite the provision of this section, it shall be the responsibility of the relevant accounting officer to ensure the prudent utilization of resources for their respective entities.
Section 44 of the Public Finance Management Act, 2012, provides as follows—
National government to submit supplementary budget to Parliament
44. (1) The national government shall submit to Parliament for approval, a supplementary budget in support of money spent under Article 223 of the Constitution.
(2) After Parliament has approved spending under subsection (1), an Appropriation Bill shall be introduced for the appropriation of the money spent.
(3) The supplementary budget shall include a statement showing how the additional expenditure relates to the fiscal responsibility principles and financial objectives.
Article 223 of the Constitution provides for supplementary appropriation in the following terms—
Supplementary appropriation
223. (1) Subject to clauses (2) to (4), the national government may spend money that has not been appropriated if—
(a) the amount appropriated for any purpose under the Appropriation Act is insufficient or a need has arisen for expenditure for a purpose for which no amount has been appropriated by that Act; or
(b) money has been withdrawn from the Contingencies Fund.
(2) The approval of Parliament for any spending under this Article shall be sought within two months after the first withdrawal of the money, subject to clause (3).
(3) If Parliament is not sitting during the time contemplated in clause (2), or is sitting but adjourns before the approval has been sought, the approval shall be sought within two weeks after it next sits.
(4) When the National Assembly has approved spending under clause (2), an appropriation Bill shall be introduced for the appropriation of the money spent.
(5) In any particular financial year, the national government may not spend under this Article more than ten per cent of the sum appropriated by Parliament for that financial year unless, in special circumstances, Parliament has approved a higher percentage.
The concept of “pre-approval”
The legislative proposal seeks to introduce the concept of “pre-approval” to incur the expenditure under Article 223(1) of the Constitution.
Prepublication scrutiny
Standing Order 114(7) of Kenya’s National Assembly Standing Orders provides that the Departmental Committee to which a legislative proposal is referred to for prepublication scrutiny shall consider the proposal and submit a report to the Speaker within thirty (30) days recommending whether or not the proposal should be proceeded with.
Prepublication scrutiny is a winnowing process where the Committee broadly scrutinizes a legislative proposal for soundness of policy in order to determine whether it should recommend whether the legislative proposal should be published as a Bill or not.
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