Administration and Control of Public Expenditure notes

Administration and Control of Public Expenditure

  • Meaning of administration and control
  • Control of public expenditure by parliament of kenya
  • Exchequer system of control
  • Statutory offices that supervise implementation of public funds
  • Budgeting as a tool in control of public finance


Administration and Control of Public Expenditure

Meaning of Administration and Control

Public expenditure refers to the spending of public funds by the government. Effective administration and control of public expenditure are crucial for ensuring:

  • Efficiency: Resources are used wisely to achieve intended outcomes.
  • Effectiveness: Government programs deliver on their objectives.
  • Accountability: Public funds are used for their intended purposes and citizens understand how their tax money is spent.
  • Transparency: The decision-making process for public spending is open and clear.

Control of Public Expenditure by the Parliament of Kenya

The Parliament of Kenya plays a central role in controlling public expenditure through various mechanisms:

  • Appropriation Bills: Parliament approves all government spending through Appropriation Bills, which specify the amount allocated to each ministry, department, and agency (MDA) for a specific period.
  • Scrutiny of Estimates: Parliamentary committees review the government’s budget proposals before they are approved. This involves analyzing spending plans and identifying potential areas for waste or inefficiency.
  • Oversight: Parliament has oversight functions to monitor how public funds are spent. Public Accounts Committee (PAC) plays a crucial role in investigating allegations of misuse of public funds and holding government accountable.

Exchequer System of Control

The Exchequer system is a mechanism for controlling the issuance and spending of public funds. Key elements include:

  • Consolidated Fund: All government revenue is deposited into the Consolidated Fund, a central account managed by the National Treasury.
  • Payments: Expenditures can only be made from the Consolidated Fund upon authorization by Parliament and following proper procurement procedures.
  • Office of the Controller of Budget (OCB): The OCB is an independent office that ensures all expenditures comply with the budget and relevant laws.

Statutory Offices that Supervise Implementation of Public Funds

Several statutory offices play a role in supervising the implementation of public funds:

  • Auditor General: The Auditor General audits government accounts to ensure proper use of public funds and identifies areas for improvement in financial management.
  • Ethics and Anti-Corruption Commission (EACC): The EACC investigates and prosecutes corruption and economic crimes related to public expenditure.
  • Public Procurement Oversight Authority (PPOA): The PPOA ensures fair and transparent procurement practices for government contracts.

Budgeting as a Tool in Control of Public Finance

Budgeting is a critical tool for controlling public expenditure. It involves:

  • Planning and Prioritization: The government identifies its spending priorities and allocates resources accordingly.
  • Allocation of Resources: The budget allocates funds to different MDAs based on their needs and objectives.
  • Performance Measurement: Budgeting allows for tracking how well government programs are performing against set targets.

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