CPFM Module II
Public Sector Financial Management flashcards
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Complete Flashcard Reference
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Which article of the Constitution sets the principles of public finance, and what are they?
Article 201 of the Constitution of Kenya, 2010. Openness and accountability, with public participation; equitable sharing of the burden and benefits; prudent and responsible use of public money; and clear fiscal reporting.
State the distinct role of the National Treasury, the Controller of Budget, the Auditor-General and the Commission on Revenue Allocation.
National Treasury: fiscal and financial policy and management of the PFM system. Controller of Budget: independent oversight of budget implementation, authorising withdrawals from public funds. Auditor-General: independent ex-post audit. Commission on Revenue Allocation: revenue-sharing recommendations between national and county government.
What are the stages of the public financial management cycle, in order?
Policy and planning, budgeting, execution, accounting and reporting, audit and oversight. What audit and oversight find feeds back into the next cycle's policy and planning, so the cycle is a loop, not a line.
How does the Contingency Fund differ from the Article 223 mechanism?
Contingency Fund: a standing fund government draws on directly for urgent and unforeseen expenditure, pending later regularisation. Article 223: authorises spending ahead of formal appropriation. Related purposes (unforeseen need versus timing of appropriation), distinct legal mechanisms.
Distinguish fiscal policy from monetary policy, and name who leads each in Kenya.
Fiscal policy: government's use of spending and taxation to influence the economy, set and executed through the budget. Led by the National Treasury. Monetary policy: management of money supply and interest rates to influence inflation, employment and growth. Led by the Central Bank of Kenya.
Which institution sets tax policy in Kenya, and which administers it?
The National Treasury sets tax policy, proposed through the annual Finance Bill. The Kenya Revenue Authority administers and collects taxes under that policy. A change to the rules is a Treasury matter; a taxpayer's filing or an audit is a KRA matter.
What is Kenya's public debt anchor, and what did it replace?
Fifty-five per cent of GDP in present value terms. Put in place by the Public Finance Management (Amendment) Act, 2023, replacing the earlier fixed KES 10 trillion ceiling.
What does an appraisal assess before a public investment is approved?
The investment's expected returns, its risks, and its fit with government policy priorities. It applies whether the investment creates a new state corporation, capitalises an existing one, or builds infrastructure.
Name the main public financial management reforms in Kenya.
Transition from cash to accrual-basis accounting. Adoption of programme-based budgeting. Rollout of the Integrated Financial Management Information System (IFMIS). Devolution-related reforms strengthening county PFM systems.
What is the Public Sector Accounting Standards Board's roadmap for accrual accounting?
A move from the cash-basis IPSAS to accrual IPSAS from the 2024/25 financial year. IPSAS 33 governs first-time adoption of the accrual basis.
What does public finance cover, and what is it aimed at?
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List the principles of public financial management that apply across the whole of PFM.
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Why is the PFM Act, 2012 described as a policy tool and not only a set of procedural rules?
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State four challenges affecting implementation of the PFM Act.
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What does Chapter 12 of the Constitution establish, and which statute operationalises it?
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How do the PFM Act Regulations, 2015 relate to the PFM Act?
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What are the functions of the National Treasury in public financial management?
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Under which constitutional articles are the Commission on Revenue Allocation, the Controller of Budget and the Auditor-General established?
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By what dates are the Budget Policy Statement, the budget estimates and the Budget Review and Outlook Paper due?
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What part do accountants, internal auditors, finance officers and procurement officers each play in the PFM cycle?
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Where does the public take part in the PFM cycle, and why is it not optional?
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How is a specific public fund, beyond the Consolidated Fund and the County Revenue Fund, created and financed?
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What is the purpose of the Equalisation Fund?
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When does government draw on the Contingency Fund?
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What are the steps in winding up a public fund?
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Who designates accounting officers for national government entities, and under which part of the PFM Act?
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What is the Central Bank of Kenya responsible for?
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Name two tools Kenya's monetary policy uses, and what they aim at.
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Why are fiscal and monetary policy kept in separate institutions in Kenya?
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What are the sources of public finance in Kenya?
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What roles do the Kenya National Bureau of Statistics and Parliament play in shaping policy?
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Distinguish the benefit theory of taxation from the ability-to-pay theory.
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What is the difference between a progressive and a regressive tax system?
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What is iTax, and what did it change?
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Which provision of the PFM Act ties the annual Finance Bill to the budget?
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What is public debt, and through which instruments is it raised?
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How does the risk of domestic debt differ from that of foreign debt?
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Where does the Public Debt Management Office sit, and what does it do?
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Name the key stakeholders in public debt management and their roles.
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GDP is KES 20 trillion. What present value of public debt does the debt anchor allow, and by how much does debt of KES 11.6 trillion exceed it?
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Why is county government borrowing more constrained than national borrowing?
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State the global best practices in managing public debt.
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Why must a government loan guarantee be tracked and disclosed even though government may never pay?
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How are state corporations established and dissolved?
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Which Act and which code govern state corporations in Kenya?
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How are public investments monitored, and where do the reports go?
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What does the PFM Reform secretariat do?
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Why do donor-funded programmes need careful coordination with Kenya's PFM systems?
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How to revise with these cards
- Answer out loud or on paper before you turn the card: recalling is what fixes it.
- Go through the deck in short sessions of ten to fifteen minutes, every day.
- Shuffle once you know the order, so you are not answering from memory of the sequence.
- When a card catches you out, read the chapter it links to, then try the topic in a past paper.