by tcd team
The county exchequer process is a vital financial procedure that ensures public funds are managed transparently and used to deliver essential services to the people. In Kenya, this process is guided by the Public Finance Management (PFM) Act, 2012, and the County Government Act, 2012. It defines how money is collected, approved, and released from the County Revenue Fund (CRF) to finance county operations and development projects.
To begin with, all revenue collected within a county — including taxes, fees, and levies — is deposited into the County Revenue Fund, which is managed by the County Treasury under the leadership of the County Executive Committee Member (CECM) for Finance. This ensures that all funds are centralized and accounted for before any spending occurs. No money can be withdrawn from this account without proper authorization, reinforcing the principle of financial control and accountability.
Once the county budget is approved by the County Assembly, it serves as the legal framework for how resources are distributed across departments and projects. The County Treasury then develops a cash flow plan, detailing when funds will be needed and how much will be disbursed. This plan helps in aligning expenditure with the available revenue, avoiding financial shortfalls or delays in service delivery.
When county departments require funds for their activities, the County Treasury submits an exchequer release request to the Controller of Budget (CoB). The Controller of Budget reviews these requests to ensure they comply with the approved budget and financial regulations. Only after approval does the CoB authorize the release of funds from the County Revenue Fund to the county operational accounts.
Once released, departments can spend the money based on the approved Authority to Incur Expenditure (AIE). This stage requires strict adherence to procurement laws and budgetary guidelines to ensure that public funds are used efficiently. Regular reports are submitted to the County Treasury and the Controller of Budget to promote transparency and traceability in the use of funds.
Oversight bodies such as the County Assembly, the Controller of Budget, and the Office of the Auditor-General play a crucial role in monitoring how these funds are utilized. Their work ensures accountability and guards against misuse of public resources. A well-managed exchequer process not only builds public trust but also guarantees that every shilling serves the people and drives county development.
