Public Sector Financial Management cheat sheet

Introduction to public finance management in Kenya

• Public finance covers how government raises revenue, allocates and spends it, and manages debt and public assets, to deliver public services, keep the economy stable and promote equitable development.
• Article 201 of the Constitution sets the principles of public finance: openness and accountability with public participation, equitable sharing of the burden and benefits, prudent and responsible use, and clear fiscal reporting.
• The PFM Act, 2012 gives effect to Chapter Twelve for both levels of government, and its fiscal responsibility principles (fiscal discipline, prudent debt management, predictability, transparency, equitable sharing of revenue) apply across the whole of public finance management.
• The Act is also a policy tool: it is the mechanism through which priorities set in the strategic and budget processes become funded, prioritised programmes.
• Implementation is held back by limited capacity in some entities (especially smaller counties), a weak compliance culture, national-county coordination problems and resource constraints.