Contingencies Fund

 

The Contingencies Fund is the National Fund that holds money set aside for a rainy day. It is therefore a national Revenue Fund.  

 

Constitutional Provision

 

The Contingencies Fund is a Constitutional Fund. Article 208 of Chapter 12 - Public Finance, Part 2 - Other Public Funds, excerpts:

208. (1) There is established a Contingencies Fund, ........

 

Allocation 

 

Although the authority to withdraw money from the Fund is governed by an Appropriation Bill, the Finance Secretary may give permission for a swift withdrawal from the Fund in emergency situations: 

208. (2) An Act of Parliament shall provide for advances from the Contingencies Fund if the Cabinet Secretary responsible for finance is satisfied that there is an urgent and unforeseen need for expenditure for which there is no other authority.

The last part of Clause 208. (2) above "........ for which there is no other authority.", implies that the Contingencies Fund is not only a Fund of last resort, but its administration places expediency above procedure in times of an emergency. The Finance Secretary can authorise an expenditure on money that came from the Fund under a different appropriation. Article 223 of Part 5 - Budgets and Spending. Excerpts:

223. ........ the national government may spend money that has not been appropriated if— (b) money has been withdrawn from the Contingencies Fund.

 

Administration

 

The Contingencies Fund is part of the National Revenue and is administered by the National Executive (Treasury) with Parliament's approval. Any withdrawals from the Fund must adhere to the law, even though the withdrawal is of an emergency nature:

208. (1) ........ a Contingencies Fund, the operation of which shall be in accordance with an Act of Parliament.

To give effect to Article 208. above, the 10th Parliament enacted in August 2011, the Contingencies Fund and County Emergency Funds Act, 2011. As its name implies, the Act authorises the creation of similar (contingencies) funds at the County level under the respective administration of County Governments. Hence, a County government may request the National Government for an advance from the Fund into its County Emergency Fund. A well-run County Government should also be able to set aside some revenue into its County Emergency Fund to use 'for a rainy day'.  

The nature of the Fund not withstanding, an emergency withdrawal from the Contingencies Fund must be regularised by Parliament within 2 months:

223. (2) The approval of Parliament for ........ spending ........ shall be sought within two months after the first withdrawal of the money, ........

Or if Parliament happens to be adjourned, approval must be secured within two weeks after it resumes:

(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.

Eventually, the requisite belated Appropriation Bill must be passed by Parliament to legalise the withdrawal and expenditure of that money: 

(4) When the National Assembly has approved spending ......., an appropriation Bill shall be introduced for the appropriation of the money spent.

 

 

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