Part IX – ACCOUNTING AND REPORTING

97Accounting period

(1) The accounts of the county government entities shall record transactions which take place during a financial year running from the 1st July to the 30th June.

(2) Government accounts may be kept open for adjustments or a financial year may be kept open for a month in the following financial year for completion of the following end of year accounting processes—

• (a) in respect of the transactions up to the 30th June each year to capture expenditure for field services;
• (b) for carrying out certain inter-departmental agency adjustments; and
• (c) for closing the accounts of special funds and suspense accounts.

(3) Adjustments may also be made after the close of the year by journal entries for the correction of accounts due to miss-postings or misclassifications impacting on fair presentation of financial statements that may be noticed after the 30th June each year.

(4) An actual cash transaction taking place after the 30th June, shall not, however, be treated as pertaining to the previous financial year even though the accounts for that year may be open for the purposes referred to in paragraphs (2) and (3) of this regulation

(5) The County Treasury shall issue guidelines on the closure of the financial year not later than the 15th May each year.

98Charging of expenditure to year of accounts

(1) The date of payment of any amount shall determine the date of the recording of the transaction in the accounts.

(2) No advance payment shall be paid to suppliers of goods and services unless provided for in the contractual terms and conditions contained in a valid contract signed between the procuring entity and the supplier.

99Account codes and standard chart of accounts

(1) As a general rule, the classification of financial transactions in county government entity's accounts shall be based on the standard chart of accounts approved by the National Treasury.

(2) The approved estimates of expenditure shall form the basis of the accounts for the financial year.

(3) Every entry in the accounts shall be supported by a voucher or other approved document gazetted by the Cabinet Secretary containing the full details, clear narrations and particulars of the item or items to which it relates.

100Books of accounts to be kept by Accounting officers

Accounting Officers shall keep in all offices concerned with receiving cash or making payments a cash book showing the receipts and payments and shall maintain such other books and registers as may be necessary for the proper maintenance and production of the accounts of the Vote for which he or she is responsible.

101Recording and reporting basis

(1) The structure of the reporting formats shall be based on the requirements of the Act.

(2) The Cabinet Secretary may from time to time amend the Schedule in accordance with the prescribed standards set by the Public Sector Accounting Standards Board.

(3) The National Treasury shall issue financial instructions and guidelines on application of accounting policies, bases, standards and classification to be applied in financial reporting in line with the standards set by the Public Sector Accounting Standards Board.

(4) An Accounting Officer shall prepare the financial statements in a form that complies with the relevant accounting standards prescribed by the Public Sector Accounting Standards Board, not later than three months after the end of the financial year and submit them to the Auditor-General with a copy to the County Treasury, the Controller of Budget and the National Treasury.

102Financial records and automation of financial operations

(1) Financial records may be maintained in manual and or electronic form.

(2) An Accounting Officer shall take all reasonable precautions to guard against damage, destruction of or falsification of any financial record required to be kept by the Act or these Regulations.

(3) An Accounting Officer shall satisfy himself or herself that where an alteration of a financial record requires the authorization, approval or deletion of any transaction or data, whether electronic or manual by any means other than in writing, that there is sufficient audit trail which shall identify the person who approved the transaction.

103Accounting adjustments journal

(1) Journal entries prepared for all adjustments shall be authorized by the accounting officer or an officer designated by him or her before posting them in a financial record.

(2) In all cases journal vouchers shall be supported by sufficient explanations, authorisations and documentation to facilitate accounting adjustments to be understood.

104Vouchers

(1) All receipts and payments vouchers of public moneys shall be properly supported by pre-numbered receipt and payment vouchers and shall be supported by the appropriate authority and documentation.

(2) All receipt and payment vouchers shall be or made out in indelible ink and shall contain adequate narration of the particulars of the services, goods or works procured and being paid for.

(3) All amounts appearing in a voucher shall be written in words as well as in figures.

105Powers to delegate voucher approval

(1) An Accounting Officer or any other officer delegated in writing by him or her may authorize payment vouchers on his or her behalf for expenditure chargeable to his or her vote, provided such expenditure is in respect of and within the provision of the services in a County Treasury warrant, in accordance with the law, regulations, tariff, contract or agreement that may be applicable, and does not require special authority in terms of any law, regulation or County Treasury instruction.

(2) Accounting Officers may prescribe the financial limits and other conditions within which this authority in paragraph (1) may be exercised.

106Deposit accounts

Unless otherwise exempted by an Act of Parliament, any deposit which has remained unclaimed for 5 years may, with the approval of the County Executive Committee Member, be paid into County Revenue Fund and thereafter the County Executive Committee Member may refund the deposit to any person entitled thereto, if he or she is satisfied that the claim is authentic.

107Clearance and suspense accounts

(1) All the transactions relating to clearance and suspense accounts shall be supported by authentic and verifiable source documents, clearly indicating the approved allocation.

(2) Where it is necessary, to account for revenue and expenditure transactions in a clearing or suspense account, the Accounting Officer shall ensure that—

• (a) amounts included in clearing or suspense accounts are cleared and correctly allocated to the relevant cost centres on a monthly basis;
• (b) monthly reconciliation's are performed to confirm the balance of each account; and
• (c) reports on uncleared items are prepared on a monthly basis and submitted to the County Treasury.

(3) The National Treasury shall prescribe in the financial manual procedures to be used for management of balances in suspense or clearing accounts.

108Payments to beneficiaries residing outside Kenya

Wherever practicable all payments of public monies made to persons outside Kenya shall be made by direct payment or payment advice through the Central Bank of Kenya to such persons' banks account or use of banker's draft or through the national payment system.

109Use of electronic systems for financial operations

(1) For efficient and effective utilization of electronic systems in processing financial data, the National Treasury shall develop and regularly issue standard operating procedures and instructions on the automated integrated financial management system operations, use and maintenance.

(2) The Principal Secretary shall designate a person or persons in writing to administer the automated integrated financial management system.

(3) The system administrator shall ensure compliance of assigned responsibilities and when necessary take appropriate measures.

110Restricted access to systems

(1) The Accounting Officer for a county government entity shall institute appropriate access controls needed to minimize breaches of information confidentiality, data integrity and loss of business continuity.

(2) Access controls to be instituted shall include—

• (a) uniform application forms for registration of new users, deregistration of users and modification of user roles;
• (b) processes of safeguarding completed application forms;
• (c) segregation of duties;
• (d) use of multi-factor authentication including standardization of user primary identity linked to national identification numbers, payroll numbers and assigned responsibilities; and
• (e) utilization of appropriate password length for login.

(3) Users of the system under this regulation shall—

• (a) not use or attempt to use the automated public financial management system without authorization of the system administrator;
• (b) take all reasonable steps to maintain the integrity of passwords and other security mechanisms;
• (c) where a password becomes insecure or potentially insecure, as soon as is practicable, implement a new secure password;
• (d) not do anything that damages, restricts, jeopardizes, impairs or undermines the performance, usability, reliability, confidentiality or accessibility of any digital information system, programme, or other stored information data;
• (e) not alter, delete or in any other way interfere with, any information, data or files;
• (f) be responsible for any unlawful entry on the automated public financial management system using such persons password;
• (g) undertake any tasks assigned; and
• (h) take all measures to ensure that on the last day of each month, the financial period of the month is closed.

(4) Failure to adhere to the closing of financial periods or to adhere to operational protocols in paragraph (3) of this regulation constitutes an offence under the Act.