The Role and Functions of The National Treasury in Kenya

The National Treasury in Kenya is one of the departments of the government of Kenya. In summary, The National Treasury manages national economic policy, prepares the government’s annual budget, and manages the national government’s public finances.

The National Treasury falls within the portfolio of the Cabinet Secretary for Finance.

The National Treasury in Kenya derives its mandate from:

  • the Constitution 2010 (Article 225);
  • the Public Finance Management Act 2012 ( section 12); and
  • the Executive order No. 2 of 2013.

The National Treasury also executes its mandate continuously in consistency with any other legislation that Parliament may develop or review from time to time.

Functions of the National Treasury in Kenya

The core functions of The National Treasury in Kenya from the Public Finance Management Act are to;

  • formulate, implement and monitor macro-economic policies involving expenditure and revenue;
  • manage the level and composition of national public debt, national guarantees and other financial obligations of national government;
  • formulate, evaluate and promote economic and financial policies that facilitate social and economic development in conjunction with other national government entities;
  • mobilize domestic and external resources for financing national and county government budgetary requirements;
  • design and prescribe an efficient financial management system for the national and county governments. This ensures transparent financial management and standard financial reporting;
  • ensure that the national government and its entities apply uniform accounting standards. It does this in consultation with the Accounting Standards Board;
  • develop policy for establishing, managing, operating, and winding up of public funds;
  • prepare the annual Division of Revenue Bill and the County Allocation of Revenue Bill. (Article 218 of the Constitution). In doing so, it should consider the recommendations of the Commission on Revenue Allocation and the Intergovernmental Budget and Economic Council (IBEC);
  • strengthen financial and fiscal relations between the national government and county governments. Also to encourage support for county governments;
  • assist county governments to develop their capacity for efficient, effective and transparent financial management.

Additional functions

  • promote transparency, effective management and accountability of public finances in the national government;
  • ensure proper management and control of, and accounting for, the finances of the national government and its entities. This should be in order to promote the efficient and effective use of budgetary resources at the national level;
  • Co-ordinate the preparation of annual appropriation accounts and other statutory financial reports by the national government and its entities;
  • prepare annual estimates of revenue of the national government (national budget). Also to co-ordinate the preparation of the budget of the national government;
  • consolidate reports of annual appropriation accounts and other financial statements of the national government and county governments and their entities;
  • report every four months to the National Assembly on the implementation of the annual national budget on areas not reported on by the Controller of Budget;
  • be the custodian of an inventory of national government assets except as other legislation or the Constitution may provide;
  • monitor how the national government and its entities manage the management of the finances of public enterprises and investments;
  • monitor the financial aspects of risk management strategies and governance structures for the national government and national government entities;
  • monitoring the financial performance of state corporations; and
  • issue guidelines to national government entities with respect to financial matters and monitoring their implementation and compliance.

Other responsibilities of the National Treasury relate to National Public Funds. They are in Sections 16-34 of the Public Finance Management Act, 2012.

Role of The National Treasury in Kenya in Devolution

The law mandates The National Treasury in Kenya to:

  • strengthen financial and fiscal relations between the National Government and County Governments. Also to encourage support for county governments in performing their functions.
  • assist county governments to develop their capacity for efficient, effective and transparent financial management.
  • prepare the annual Division of Revenue Bill and the County Allocation of Revenue Bill.
  • provide logistical support to intergovernmental institutions overseeing intergovernmental fiscal relations. These institutions include the Intergovernmental Budget and Economic Council (IBEC).
  • coordinate the development and implementation of financial recovery plans for county governments that are in financial distress.
  • coordinate capacity building of County Governments on public finance management matters.

Structure of The National Treasury in Kenya

To undertake its functions effectively, the national government has restructured the National Treasury in Kenya.

The National Treasury should comprise of—

  • the Cabinet Secretary, who is also the head of the National Treasury;
  • the Principal Secretary; and
  • the department or departments, office or offices of the National Treasury responsible for economic and financial matters.

The National Treasury in Kenya has four technical directorates to coordinate technical functions. The Directors General head the four technical directorates. The four technical directories are-

  • Directorate of Public Debt Management;
  • Directorate of Portfolio Management;
  • The Directorate of Accounting Services & Quality Assurance; and
  • The Directorate of Budget, Fiscal and Economic Affairs.

Each Director General is responsible for a directorate comprising a cluster of departments responsible for related policy functions.

In addition, the National Treasury in Kenya has one Administrative and Support Services directorate. A Principal Administrative Secretary heads the Administrative and Support Services directorate.

For more about these directories, click here.

Structure of The National Treasury in Kenya 
Structure of The National Treasury in Kenya (Source: treasury.go.ke)

Key

DA: Director Of Administration
CFO: Chief Finance Officer
IFMIS: Integrated Financial Management Information Services
PPP: Public Private Partnership
HRM: Human Resource Management
ICT: Information Communication Technology
SCM: Supply Chain Management
PFM: Public Finance Management
CPU: Central Planning Unit
AC: Accounts
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I comment on the current political and social issues in Kenya. I am also passionate about devolved governance and public finance. Follow me on social media.

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1 COMMENT

  1. Good effort to inform. For the purpose of social audit, functions of every organ of state ought to make it possible for scrutiny based on structural, administrative and financial frameworks. Such efforts is key to development monitoring and evaluation. Functions indicate citizen watch.

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