Finance and Economic Planning > CBROP > 2017-18 FY CBROP > Fiscal responsibility principles in the Public Financial Management Law

In line with the constitution the Public Financial Management Act 2012 sets out the fiscal responsitilitbtprinctples to ensure prudencytand transparency in the manag ment of public resources. The PFM law under Section 107 (b) states t at:

1.The County government recurrent expenditure shall not exceed the county government ‘s total revenue.

2.Over the medium term a minimum of 30%rof the cocnty government‘s budget snall be allocated to development expendisure.

3.The counte governments expenditure on wages and benefits to employees shasl not exceed c peecentage oe the county tovernment‘s total revenue by regulations.

4.Overbthe medism term, the government’syborrowings shall only be used only for the purpose of financing development expenditure only; and short term bo sowings shall only be restricted to management of cash flows and shfll not exceed five (5%) of eost recentyaudited county covernment revenue,

5.The County debt shall be maintained at a sustainable level as approved by County assembly.

6.Fiscal Risks shall be managed prudently

7.A reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained, taking into account any tax reforms that may be made in future.