Consolidated Fund & Treasury

 

The Consolidated Fund is the main Fund to which all revenue due to the National government is channeled. It is therefore a type of national Revenue Fund.

 

Constitutional Provision

 

The Consolidated Fund is a Constitutional Fund. Excerpts from Chapter 12 - Public Finance:

206. (1) There is established the Consolidated Fund .........

 

Allocation

 

Revenue due to the National Government goes into the Consolidated Fund. Article 206, excerpts:

206. (1) ........ the Consolidated Fund into which shall be paid all money raised or received by or on behalf of the national government, .......

Likewise, the Consolidated Fund is the 'principal' Fund to which the Public Debt is charged. Part 3 - Revenue Raising Powers and the Public Debt, Chapter 12, excerpts:

214. (1) The public debt is a charge on the Consolidated Fund, ........

This Fund can be thought of as the 'master' fund for it is from it that all other Funds, except the county Revenue Fund, receive their allocations. For example, the Judiciary Fund (discussed in more detail under the Judiciary link) gets its funding from the Consolidated Fund:

173. (1) There is established a fund to be known as the Judiciary Fund ........
(4) On approval of the estimates by the National Assembly, the expenditure of the Judiciary shall be a charge on the Consolidated Fund and the funds shall be paid directly into the Judicary Fund.

The Consolidated Fund is the fund from which the national government draws its recurrent and development expenditure. Indeed, if an office draws its funding from the Fund, then it is a "public office". Article 260 of Chapter 17 - General Provisions of the Constitution of Kenya 2010:

260. In this Constitution, unless the context requires otherwise—  “public office” means an office in the national government, a county government or the public service, if the remuneration and benefits of the office are payable directly from the Consolidated Fund ........

Key Constitutional Officers such as those of the President and Deputy President, Judges, Commissions and Parliament are examples of "public offices" that draw their "remunerations and benefits" from the Consolidated Fund, perhaps to ensure that they always continue to smoothly discharge their duties. Excerpts:

151. (1) The remuneration and benefits payable to the President and the Deputy President shall be a charge on the Consolidated Fund.

160. (3) The remuneration and benefits payable to or in respect of judges shall be a charge on the Consolidated Fund.

250. (7) The remuneration and benefits payable to or in respect of a commissioner or the holder of an independent office shall be a charge on the Consolidated Fund.

To be fair, not all revenue belonging to the National government passes through the Consolidated Fund. Sometimes it makes practical sense for some of it to go directly to a specialised Public Fund or to be retained by the agency that collects it to meet its operational costs. But even these special circumstances must be within existing legislation. Excerpts from Chapter 12 - Public Finance, Article 206:

206. (1) ........ the Consolidated Fund into which shall be paid all money raised or received by or on behalf of the national government, except money that— (a) is reasonably excluded from the Fund by an Act of Parliament and payable into another public fund established for a specific purpose; or (b) may, under an Act of Parliament, be retained by the State organ that received it for the purpose of defraying the expenses of the State organ.

 

Administration

 

The bureaucracy in-charge of the Consolidated Fund is known as the Treasury. Article 225 of Part 6 - Control of Public Money: 

225. (1) An Act of Parliament shall provide for the establishment, functions and responsibilities of the national Treasury.

The term 'Treasury' generally refers to the Ministry of Finance. Thus the Cabinet Secretary for Finance will be the head of the Fund to oversee its administration and report on it to the National Assembly and to the public. For example, the County Allocation of Revenue Act 2013's Section 10 requires Treasury to make quarterly reports on the disbursements to the devolved governments' County Revenue Funds:

 

10. The national treasury shall publish a quarterly report on actual transfers of allocations to the county governments.

The New Constitution has given the 'Cabinet Secretary responsible for Finance' various roles many of which involve working closely with Parliament in the preparation of money Bills and in particular, Appropriation Bills. Therefore the office of the Secretary for Finance is an important player in the allocation and administration of Public Finance. 

 

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