Funds Established by The Constitution of Kenya

The funds established by the Constitution of Kenya are categorized into two: those managed by the
national government and those managed by the county governments.

Using these classifications, let’s discuss these key types of public funds in Kenya.

National Public Funds

The National Treasury in Kenya manages the national public funds. These funds are the Consolidated
Fund, the Equalization Fund and the Contingencies Fund.

The Consolidated Fund

Article 206 of the Constitution establishes the Consolidated Fund in Kenya. This fund acts as the
main bank account for the national government. The Public Finance Management (PFM) Act
expounds on the Consolidated Fund.

All money raised or received by or on behalf of the national government, should be paid to the
Consolidated Fund in Kenya, except money that (Article 206(1))-

 is reasonably excluded from the Fund by an Act of Parliament and payable into another public
fund established for a specific purpose; or

 may, under an Act of Parliament, be retained by the State organ that received it for the
purpose of defraying the expenses of the State organ (e.g. Appropriations in Aid).

The National Treasury in Kenya should administer the Consolidated Fund in accordance with Article
206 of the Constitution.

For more about this fund, see the article What is the Consolidated Fund in Kenya?

The Equalization Fund

Article 204 of the Kenyan Constitution establishes the Equalization Fund which is 0.5% of all the
revenue collected by the national government each year. This amount is calculated based on the most
recent (Auditor-General) audited accounts of revenue received, as approved by the National Assembly

The national government should use the Equalisation Fund only to provide basic services including
water, roads, health facilities and electricity to marginalised areas to the extent necessary to bring the
quality of those services in those areas to the level generally enjoyed by the rest of the nation, so far as
possible.

For more about the Equalisation Fund in Kenya, see the article what is the Equalisation Fund in
Kenya?

The Contingencies Fund

Article 208 of the Kenyan Constitution establishes the Contingencies Fund. This fund exists if the
Cabinet Secretary responsible for finance is satisfied that there is an urgent and unforeseen need for
expenditure for which there is no other authority.
The Contingencies Fund should consist of monies appropriated from the Consolidated Fund by
an appropriation Act in any financial year. The Cabinet Secretary for Finance should be in charge of
the Contingencies Fund.

For more about the contingencies fund, see the article what is the Contingencies Fund in Kenya?