70Definition of terms
For purposes of this Part—
- (a) "grant agreement" means an instrument that gives the power to an agency to furnish money, property or materials to a grantee and the grantee has freedom to pursue the grants stated purpose, but the agency does not specify the matter of performance of the work and is not substantially involved in it;
- (b) "financing agreements" are a document detailing commitments for provision of goods, services and activities to be performed by an organisation for the awarding agency and contain specific objectives, direction, specifications, costs or methods of performance; and
- (c) "donor or development partner or external financier" is used in this Part interchangeably to refer to the providers of external resources.
71Grants, donations and sponsorships
(1) Upon approval by the Cabinet Secretary, an Accounting Officer may receive any grants, donation, sponsorship made in favour of the government entity irrespective of whether such sponsorship or grants or donation is in cash or in kind provided that the Accounting Officer confirms with the relevant national government entity that donations given in kind are—
- (a) not harmful to health and the environment; and
- (b) in good and serviceable condition.
(2) All cash grants, donations or sponsorships shall be deposited in the Consolidated Fund provided that—
- (a) such grants, donation and sponsorship are from a credible source from a person in good standing with the Government of Kenya;
- (b) such grants, donation and sponsorship are intended to address government development policies.
(3) Where the purpose of the grant, donation, or sponsorship is not apparent, the Cabinet Secretary shall have the discretion to instruct the Accounting Officers on its application.
(4) A national government entity is not allowed to give another national government entity cash donations to augment the budgetary resources of designated departments.
(5) Grant, donations or sponsorships received during the year shall be disclosed in the annual and quarterly financial statements.
72Grants administration
(1) Projects implemented through grants, donations and sponsorships shall be aligned to the national development policies.
(2) In identification and designing of projects funded by development partners, the areas covered and amounts allocated shall be determined by objective criteria and as far as possible on need-based formula which may include geographical area, population and poverty index.
(3) The Accounting officer shall disclose the details under paragraph (2).
(4) All grants and donations shall be appropriated by national assembly before commencement of disbursements.
(5) Issues to do with tax exemptions, issuance of work permits, counter-part personnel, counter-part funding, office space, demand driven technical assistance, community contribution either in cash or in kind shall be clearly spelt out in the grant agreements, and the government and community contribution shall be properly assessed and quantified in all grant supported projects.
(6) National government shall ensure grants are factored in the budgets and counterpart funds appropriated accordingly.
73Disclosure of authorization and disbursement
(1) Where authorisation has been granted for the project to start, the Accounting Officer shall ensure public disclosure to the intended beneficiaries within thirty days of the allocation and disbursement of the grants.
(2) After disbursement of grants, the accounting officer shall report within fifteen days after the end of each quarter to the intended beneficiaries on the expenditures and performance achieved in relation to the grant.
(3) During the project identification and design, the intended beneficiaries shall be involved through public participatory approach for planning.
(4) The views of the indented beneficiaries shall be received during public forums provided for under paragraph (3) and their views shall be considered appropriately or during budgeting process of the next budget cycle.
(5) Where non-compliance by an accounting officer with grant conditions is established through an audit or fiduciary review process, the Cabinet Secretary may suspend the disbursements and institute measures to recover any amounts misappropriated by the public officer.
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ACCOUNTING AND REPORTING ON DONATIONS AND GRANTS
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74Monies received by way of grants and donations to be paid into a designated account
(1) All monies received by way of grants and donations shall constitute public monies and shall be paid into the Consolidated Fund.
(2) The Cabinet Secretary shall make provisions in the budget estimates for grants and donations receivable in kind such as commodity aid for purposes of raising cash locally.
(3) Where the quantum of the grant or donation referred to in paragraph (2) is not known, a provision shall be included in the estimates and when the quantum becomes known a supplementary estimate shall be raised for the amount involved.
(4) Where grants and donations are receivable in kind, the value of such donations shall be determined and included in the estimate and reflected as expenditure in the financial year.
(5) Monies received for specified projects which have been paid into the Consolidated Fund shall be released when required to the appropriate project bank account.
(6) An accounting officer of a national government entity shall—
- (a) cause to be kept and maintained proper books of accounts and records in respect of all projects and donations;
- (b) ensure that whenever projects are completed, the project assets including buildings, plant, vehicles, furniture, fittings and equipment are properly recorded and handed over to the accounting officer in accordance with the financing agreement;
- (c) where no time frame is provided for the project, ensure that the assets are handed over within three months from the date of the closure of the project; and
- (d) in the absence of any instructions to the contrary, ensure that any unexpended balance standing in the credit of the project account is paid into the Consolidated Fund.
75Project selection criteria
It shall be the responsibility of the National Treasury to ensure that—
- (a) any project approved for financing through grants and donations has been approved by the accounting officer; and
- (b) the project feasibility study report has been inspected and approved by the relevant national government entity.
76Project bank accounts
(1) For the purpose of disbursement of project funds, there shall be opened and maintained a project account for every project at Central Bank of Kenya unless it is exempted by the Cabinet Secretary, in writing, into which all funds shall be kept and such an account shall be known by the name of the project for which it is opened and each project shall maintain only one bank account.
(2) All foreign currency designated bank accounts shall be kept at the Central Bank of Kenya for national government entities unless exempted in writing by the Cabinet Secretary under paragraph (1).
(3) Every payment or instruction for payment out of the project account shall be strictly on the basis of the approved estimates of budget and financing agreement.
77Records of receipts and disbursements
The Accounting Officer of a project shall compile and maintain a record showing all receipts, disbursements and actual expenditure on a monthly basis in respect of every project and subproject and shall—
- (a) make monthly interim financial returns;
- (b) make quarterly financial management returns; and
- (c) submit a summary of the records for each quarter and year to the division responsible for external resources in the National Treasury not later than fifteen (15) days after the end of every quarter.
78Responsibilities of NGOs where the project is implemented by NGO
(1) Non Governmental Organisations (NGO’s) that implement development programs funded by public funds, including donor funding shall be accountable through regular financial reporting and submission of audited annual financial statements to the relevant accounting officer in a format prescribed by the Public Sector Accounting Standards Board.
(2) NGO's referred to under paragraph (1) shall be registered by the responsible national licensing authority and in accordance with the relevant law under which that authority is established.
79Documents to be attached by NGOs where the project is implemented by NGO
(1) Documents to be attached to the financial reports and annual audited accounts in regulation 78 shall include a certificate of registration confirming that the NGO—
- (a) is a body corporate and separate from its members, with perpetual succession;
- (b) can engage in public interest activities and public fundraising throughout Kenya; and
- (c) is eligible for such fiscal or other benefits and privileges, as may be applicable to NGOs from time to time.
(2) In addition to requirements under paragraph (1), the NGO shall also submit—
- (a) its annual performance report outlining the activities undertaken by the NGO in the year;
- (b) an annual return reflecting details of its trustees, directors, office bearers and auditors;
- (c) its sources of funding;
- (d) in the event of any amendment to its Constitution or governance instrument during the financial year, a certified copy of such amendment; and
- (e) any such other information the NGO considers necessary.