State, counties set to run joint projects in new law

The National Treasury has moved to amend the Public Finance Management Act to formalise collaboration between the national and county governments.

The 2023 Draft Public Finance Management (Amendment Bill) seeks to establish a new entity known as the Joint Authority, an intergovernmental organ established between the two levels of government.

“The main objective of the Joint Authority shall be to establish an intergovernmental mechanism that promotes consultation and cooperation between the National and County governments and amongst county governments for the implementation of the government policies, projects and programs,” reads part of the proposed amendments.

The new mechanism shall have specific objectives including coordinating and harmonising the development of norms, policies, laws and sector priorities.

Further, the new organ shall facilitate access to wider markets across the board, establish an enabling environment for trade and investment initiatives including joint investment initiatives and strengthen partnerships with the private sector through public-private partnership initiatives.

The national government and one or more county governments may set up a Joint Authority by entering into an intergovernmental agreement specifying the manner of cooperation. The new mechanism is set to see the two levels of government exercise a common power of function, perform a concurrent function or enable member governments to combine commercial efforts and achieve economies of scale.

The Joint Authority shall be led by a steering committee comprised of the concerned County Governors and the relevant Cabinet Secretary.

Additionally, the Authority is expected to have a finance committee comprised of the Principal Secretary responsible for finance and concerned chief officers for finance. The authority shall also have a sectorial committee and a secretariat headed by a chief executive officer who shall be competitively recruited.

Funding for the Joint Authority shall be sourced from revenue-raising measures created by the entity, revenue allocation by the national and county governments, investment income, grants and donations.

The setting of the new rules for collaboration between the two levels of government is expected to empower the operation of articles 187 and 189 of the constitution on the transfer of function and cooperation between national and county governments, respectively.

“The objective and purpose of the Public Finance Management (Amendment) Bill, 2023 is to provide for the financial management of cooperation between national and county governments including planning, budgeting, accounting & reporting and oversight,” said Treasury Cabinet Secretary Njuguna Ndung’u in a notice on the draft amendments.

The new regulations which now await the approval of Parliament have been constituted by a task force led by members from the National Treasury, the Controller of Budget, the Intergovernmental Relations Technical Committee, the Council of Governors, the Commission on Revenue Allocation and the Office of the Attorney General among others.

The exchequer has called for comments and inputs on the draft amendments until March 15.

The 2010 Constitution which introduced the devolved units provides for cooperation between the national and county governments including the creation of joint committees and joint authorities.

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