Local Authorities Transfer Fund Act

Cap. 272A

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Cap. 272A
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LAWS OF KENYA

LOCAL AUTHORITIES TRANSFER FUND ACT

CAP. 272A

  • Published in Kenya Gazette Vol. CI—No. 1 on 8 January 1999
  • Assented to on 31 December 1998
  • Commenced on 10 June 1999
  1. [Amended by Finance Act, 1999 (Act No. 4 of 1999) on 10 June 1999]
  2. [Amended by Finance Act, 2000 (Act No. 9 of 2000) on 15 June 2000]
  3. [Revised by 24th Annual Supplement (Legal Notice 221 of 2023) on 31 December 2022]
An Act of Parliament to provide for the establishment of a Local Authorities Transfer Fund, to provide for the sources, purposes and the administration of the Fund and for matters incidental thereto

1. Short title

This Act may be cited as the Local Authorities Transfer Fund Act.

2. Interpretation

In this Act, unless the context otherwise requires—"Advisory Committee" means the Advisory Committee appointed under section 8;"financial year" means the period of twelve months ending on the 30th June in each year;"Fund" means the Local Authorities Transfer Fund established under section 3;"local authority" has the meaning assigned to it in section 2 of the Local Government Act (Repealed);"Cabinet Secretary" means the Cabinet Secretary for the time being responsible for matters relating to Finance;"officer administering the Fund" means the accounting officer of the Ministry for the time being responsible for matters relating to local authorities or an officer deputed in writing for that purpose pursuant to the provisions of section 3.

3. Establishment of Fund

There is established a Fund to be known as the Local Authorities Transfer Fund which shall be administered by the accounting officer of the Ministry for the time being responsible for matters relating to local authorities, or an officer of the rank of Deputy Secretary or above deputed by the Permanent Secretary to the Treasury in writing.

4. Object and purpose of the Fund

The object and purpose of the Fund shall be to facilitate the disbursement of the funds specified under section 5 to local authorities to supplement the financing of the services and facilities they are required to provide under the Local Government Act (Repealed).

5. Sources of the Fund

(1)The initial capital of the Fund shall be two percent of all tax collected under the Income Tax Act (Cap. 470) during the 1999/2000 financial year.
(2)There shall be paid into the Fund in subsequent financial years, five percent of all tax collected under the Income Tax Act (Cap. 470) in the year or such other proportion of the said tax as the Cabinet Secretary may, with the approval of the National Assembly, from time to time, specify.
(3)The treasury shall open a special account for the Fund into which all Funds payable into the find pursuant to this section shall be credited.[Act No. 4 of 1999, s. 106.]

6. Payments out of the Fund

(1)There shall be paid out of the Fund to local authorities, such amounts and in such manner as the Cabinet Secretary, on the advice of the Committee, may specify.
(2)The cost of administering the Fund shall not be charged to the Fund but shall form a charge against the respective vote of the Ministry for the time being responsible for matters relating to local authorities.
(3)Notwithstanding subsection (2), one half per centum (0.5%) of the contributions received by the Fund may be used for the following operational expenditure—
(a)dissemination of relevant information to local authorities;
(b)monitoring of compliance by local authorities with Fund disbursement conditions; and
(c)reporting by the Administrator on Fund activities.
[Act No. 9 of 2000, s. 126.]

7. Surplus funds

(1)All receipts, savings and accruals of the Fund and the balance of the Fund at the close of each financial year shall not be paid into the Consolidated Fund but shall be retained for the purpose for which the Fund is established and any deficiency realised in any year shall, subject to the approval of the Treasury, be offset against the realised surplus.
(2)Any balance in the fund shall be held in Treasury securities except that portion of the balance the officer administering the funds considers necessary for meeting the disbursement requirements of the Fund, which shall be held on deposit in such banks as the Treasury shall, from time to time, approve.[Act No. 4 of 1999, s. 107.]

8. Advisory Committee

There shall be an Advisory Committee to advise the Cabinet Secretary generally on the operations of the Fund which shall consist of—
(a)a chairman, not being a public officer, appointed by the Cabinet Secretary;
(b)the officer administering the Fund;
(c)the Director of Fiscal and Monetary Affairs in the Ministry of Finance or his representative;
(d)the Director of Budgetary Supplies in the Ministry of Finance, or his representative;
(e)the Accountant-General of the Ministry of Finance or his representative;
(f)three persons appointed by the Permanent Secretary in the Ministry for the time being responsible for local authorities;
(g)three persons, not being public officers, appointed by the Cabinet Secretary, in consultation with the Cabinet Secretary for the time being responsible for local authorities, by virtue of their knowledge or experience in matters relating to the development, financial or legal affairs of local authorities.

9. Powers and functions of the officer administering the Fund

The officer administering the Fund shall—
(a)supervise and control the administration of the Fund;
(b)cause to be kept all proper books of accounts and other records relating to the Fund and to the various facilities and services financed from the Fund; and
(c)prepare, sign and transmit to the Controller and Auditor-General, in respect of each financial year and within four months after the end thereof, a statement of accounts relating to the Fund specifying the income to the Fund and showing the expenditure incurred out of the Fund, in such detail and with such additional information as he may deem proper and sufficient for the purpose of examination and audit by the Controller and Auditor-General in accordance with section 18 (2) of the Exchequer and Audit Act (Cap. 412) and every statement of account shall include details of the balance between the assets and the liabilities of the Fund and reflect the true and fair financial status of the Fund as at the end of the financial year concerned.

10. Regulations

The Cabinet Secretary may, in consultation with the Cabinet Secretary for the time being responsible for matters relating to local authorities, make regulations generally for the better carrying out of the provisions of this Act and in particular but without prejudice to the generality of the foregoing, such regulations may provide for—
(a)the criteria for the disbursement of monies from the Fund to the various local authorities;
(b)the procedure for appointment of the members of the Advisory Committee to be appointed under paragraphs (f) and (g) of section 8;
(c)the meetings and procedure of the Advisory Committee.
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History of this document

31 December 2022 this version
15 June 2000
Amended by Finance Act, 2000
Read this version
10 June 1999
Amended by Finance Act, 1999
Commenced
08 January 1999
31 December 1998
Assented to

Cited documents 1

Act 1
1. Income Tax Act 736 citations

Documents citing this one 18

Gazette 10
1. Kenya Gazette Vol. CIX-No. 24
2. Kenya Gazette Vol. CX-No. 28
3. Kenya Gazette Vol. CXI-No. 30
4. Kenya Gazette Vol. CXII-No. 27
5. Kenya Gazette Vol. CXII-No. 42
6. Kenya Gazette Vol. CXIII-No. 47
7. Kenya Gazette Vol. CXIV-No. 32
8. Kenya Gazette dated 2002-04-19 No. 25
9. Kenya Gazette dated 2003-04-14 No. 43
10. Kenya Gazette dated 2004-04-23 No. 34
Judgment 4
1. Ahmed Bashir Abdi & Abdinoor Ahmed Magan v County Government of Wajir, CECM Environment, Energy & Natural Resources Wajir County & National Environment Management Authority;Abdi Ali Bashir, Hamdi Barre Abdi, Mohammed Ali Abdi & Salat Abdi Hat(Interested Parties) (Petition 4 of 2020) [2021] KEELC 1397 (KLR) (30 September 2021) (Ruling)
2. COUNTY COUNCIL OF NYERI v BOARD OF TRUSTEES NATIONAL SOCIAL SECURITY FUND (Miscellaneous Application 103 of 2010) [2011] KEHC 2574 (KLR) (8 April 2011) (Ruling)
3. County Council of Nyeri v Board of Trustees, National Social Security Fund (Civil Appeal 138 of 2011) [2014] KECA 489 (KLR) (22 January 2014) (Judgment)
4. Jimmy Odari, Beldina Otieno, Peter Mututi, Evans Owuoche, Ibrahim Abdi, Omar Kea Karisa & Jacinter Njeri v Minister for Local Government, Municipal Council of Mombasa & Local Authorities PensionTrust (Laptrust) (Petition 24 of 2012) [2017] KEHC 2587 (KLR) (30 October 2017) (Judgment)
Legal Notice 2
1. The Statutory Instruments (Exemption from Expiry) Regulations 1 citation
2. The Statutory Instruments (Exemption from Expiry) Regulations
Bill 1
1. The Kenya Roads (Amendment) Bill, 2024
Commission Report 1
1. The Final Report of the Constitution of Kenya Review Commission-2005

Subsidiary legislation

Title
Date
The Local Authority Transfer Fund Regulations Legal Notice 142 of 1999 31 December 2022