President William Ruto has assented to the Public Finance Management (Amendment) Bill, 2025, introducing new rules on the management, reporting and oversight of public funds at both national and county levels.

🇰🇪 Breaking It Down

Ruto signed the legislation alongside three other Bills at State House, Nairobi, on Tuesday, September 8, including the National Council for Population and Development Bill, Air Passenger Service Charge (Amendment) Bill and Trust Administration Bill.

The new PFM law provides a framework for transferring functions between the national and county governments, including the costing, resourcing, financing and accountability of transferred functions.

It also provides for the transfer of assets and liabilities linked to such functions, creating a clearer financial framework when responsibilities move between the two levels of government.

📌 What You Need to Know

Another major change is the introduction of accrual accounting across public entities, requiring government institutions to recognise financial transactions based on when they occur rather than solely when money is received or paid.

County governments will also be required to pass their Finance Bills before the beginning of a new financial year, aligning county revenue measures more closely with the national government's budget cycle.

The law further requires statutory deductions, including taxes and pension contributions, to be remitted to the institutions entitled to receive them once they are deducted from employees or other payments.

At the same time, financial reporting timelines have also been tightened, with accounting officers now required to submit financial statements to the Auditor-General within two months after the end of the financial year, down from the previous three-month period.

The legislation also gives Parliament and county assemblies 21 days to consider key budget documents, up from 14 days, before decisions are made.

The amendments further introduce consequences for public entities that fail to implement recommendations arising from reports by the Auditor-General and Controller of Budget, including findings adopted by Parliament or county assemblies.

📰 Source: Kenyans.co.ke