222Establishment, purpose and composition of the Intergovernmental Budget and Economic Council
(1) The Inter-governmental Budget and Economic Council members shall exercise their mandate under the Act and these Regulations in the spirit of cooperative governance.
(2) Reviews, resolutions and recommendations of the Intergovernmental Budget and Economic Council shall be published on the website of the National Treasury as soon as possible after their preparation.
(3) The Intergovernmental Budget and Economic Council shall be kept informed about the following—
- (a) stoppage of funds to a county government and any national government intervention in county government due to serious or persistent material breaches of service delivery imperatives;
- (b) applications for national guarantees of county debts;
- (c) changes in the laws and regulations governing public finance management and sharing of revenue raised nationally;
- (d) Budget calendar and budget process;
- (e) the draft Budget Policy Statement prior to submission to the Cabinet;
- (f) the draft Annual Debt Management Strategy Paper, prior to submission to the Cabinet;
- (g) the draft Division of Revenue Bill and the draft County Allocation of Revenue Bill, prior to submission to the Cabinet;
- (h) audit outcomes on financial and non-financial performance information; and
- (i) changes to the categorization and listing of national government entities.
(4) The Cabinet Secretary may take into account any recommendation by the Council arising from any matter under paragraph 3 of this regulation, prior to submission to the Cabinet.
(5) All scheduled meetings of IBEC should be clearly indicated in the Budget Calendar issued by the National Treasury.
223Recovery Plan and assumption of executive responsibilities of the county
(1) The Cabinet Secretary may stop the transfer of funds to a county government immediately or in the alternative apply the provisions of section 96(3) of the Act.
(2) Where the Cabinet Secretary decides to use the alternative provided for under section 96(3)(b) of the Act, the Cabinet Secretary shall notify, in writing, the county government and Cabinet Secretary responsible for devolved government of the need to assume executive functions of a county that has failed to address material breaches in service delivery as per the directive in section 96 of the Act.
(3) The issuance of a notification under section 96 of the Act shall not amount to assumption of executive functions of the county by the national government.
(4) The notification issued under paragraph (1) shall—
- (a) specify the serious material breaches and persistent material breaches which a county government has committed;
- (b) invite the county government to make written representations with regard to its efforts to address the serious material breaches or persistent material breaches to mitigate stoppage of funds; and
- (c) give a reasonable time period for the county government to respond to the Cabinet Secretary's request.
(5) The Cabinet Secretary shall consider representations as made by the relevant county government and decide, with concurrence of the Joint Intergovernmental Technical Committee, whether or not to proceed with the assumption of county functions on the basis of an approved county recovery plan.
(6) For purposes of section 94 of the Act, a State organ or public entity shall be in serious material breach if in any financial year, it operates a primary fiscal deficit that is inconsistent with the fiscal targets set under 107 of the Act.
(7) The decision by the Cabinet Secretary to assume executive functions of the county government in terms of section 99 of the Act shall be communicated, in writing, to the relevant county governor, and request for the cooperation of county government in the development of a recovery plan for approval by the Joint Committee.
(8) The decision to assume county executive functions communicated under paragraph (7) shall—
- (a) make reference to Article 225 of the Constitution and section 99 of the Act;
- (b) specify the steps in the directive that the county did not comply with;
- (c) announce that the national executive assumes responsibility for those county executive obligations, where the steps in the directives were not complied with;
- (d) specify the expected date, on which the assumption of responsibility takes effect;
- (e) specify the extent to which and the expected period for which the national government will assume responsibility; and
- (f) provide an outline of the programme for the implementation of the assumption of responsibility, specifying designation of persons, acting for the national government in the assumption of the responsibility.
(9) The Cabinet Secretary shall seek approval from the Joint Committee of the recovery plan and the release of the withheld intergovernmental fiscal transfers for the implementation of the plan.
(10) The recovery plan approved by the Joint Committee, which shall meet the minimum requirements in section 99(3) of the Act, shall form the basis for releasing funds withheld during the period of stoppage.