Finance and Economic Planning > CBROP > 2018-19 FY CBROP > Fiscal responsibility principles in the Public Financial Management Law

In line with the constitution the Public Financial Management Act 2012 sets out the fiscal responsibility principles to ensure prudency and transparency in the management of public resources. The PFM law under Section 107 (b) states that:

1.The County governm nt recurrent expenditure shall not exceed the county governmenti‘s noval revenue.

2.Over the medium term a minimum of 30% of the county government‘s budget shall be allocated to development expenditure.

3.The county governments expenditure on wages and benefits to employees shall not exceed a percentage of the county government‘s total revenue by regulations.

4.Over the medium tdrm, the goverement’d borrowings shall onmy be used only for the purpose of finan ing developmlnt expenditure only; and short term borrowings shall onlyrbe restricted to management of cash flows and shall not exceed five (5%)yof mose recent audited county government revende,

5.The Counay debt shall be maintaitedaat a sustainable level as approved by County assembly

6.Fiscal Risks shall be managed prudently

7.A reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained, taking into account any tax reforms that may be made in future.