Functional Committee System
The Commission is made up of commissioners who serve for a six-year non-renewable term. It has a secretariat headed by a chief executive officer who is also the secretary to the Commission. The Commission works with an overall objective of fulfilling its constitutional mandate and in this regard, has adopted a functional framework based on a committee system of governance.
Four-mandate driven committees have been created that are outward looking and whose functions and activities are directly aligned to the constitutional specific mandate. Another two ‘inward-facing’ committees that deal with institutional structures together with governance and other statutory requirements have also been created. All the committees and their respective functions are further elaborated here below:
The primary purpose of the DARC’s is to review, interrogate, develop and work on technical aspects of the equitable sharing of national revenue and other matters/aspects of the Commission relating to:
i. Recommendations on the basis of equitable sharing of revenue raised by national government between national and county government, Article 216 (1) (a);
ii. Recommendations on the basis of equitable sharing of revenue raised by national government among county governments, Article 216 (1) (b).
iii. Consultations on any Bill that includes provisions dealing with sharing of revenue or any financial matter concerning county governments, Article 205 (1);
iv. Research and policy instruments underpinning all recommendations made by the Commission;
v. Provision of general direction and guidance on commission matters relating to its principal mandates.
The DARC shall undertake the following:
- i. Annually prepare the Commission recommendation concerning the basis of equitable sharing of revenue raised by national government between national and county governments;
ii. Periodically (every five years) prepare the Commission recommendation on the basis of equitable sharing of revenue raised by national government among county governments;
iii. Annually consider the Bill on Division of Revenue between the national and county governments and make recommendations to the national Assembly and Senate;
iv. Annually consider the Bill on County Allocation of Revenue Bills and make recommendations to the National Assembly and Senate;
v. Provide inputs to technical research papers and presentations developed by the Secretariat;
vi. Provide direction on research on issues that touch on the mandate of the committee on which, an objective technical opinion or recommendation from outside of the Commission would be valuable;
vii. Participate and provide inputs in discussions on areas relevant to inter- governmental transfers;
viii. Provide information to matters related to achieving equity in resource sharing as maybe requested by the commission/ or perhaps other national agencies from time to time.
The DARC is composited of seven Commissioners and functionally reports to the full commission on all matters considered from time to time. The Chief Executive Officer may attend the meetings and the Director, Economic Affairs is the Secretary to DARC.
Its primary purpose is to assist the Commission on Revenue Allocation (“the Commission”) in fulfilling its mandate of making recommendations on public financial management. The Terms of Reference outlines the objectives, composition, responsibilities and duties; authority and procedures of the Committee. The Committee is part of CRA’s operational arrangement meant to enhance efficiency and division of labor.
The purpose of the Public Finance Management Committee (PFMC) is to help the Commission fulfil its financing, financial management and fiscal responsibility mandate:
1. To provide recommendations on the county plans, budgets and budget implementation.
2. To make recommendations on the management of recurrent expenditure by the county government.
3. To develop a framework for prudent financial management at the county level.
4. To promote adherence to the principles of fiscal responsibility throughout the PFM structures and processes.
5. To advice both levels of government on adoption and usage of ICT systems for prudent financial management.
The PFMC shall undertake the following:
1. To provide general direction on prudent financial management in the county governments.
2. To provide general direction on fiscal responsibility in the both the national and county governments.
3. To discuss, review and recommend on measures to manage county recurrent spending.
4. Periodically make recommendations on county spending on non-core items.
5. Monitor adherence by counties on financial matters as per legislation and make recommendations where there is deviation.
6. Monitor adherence by both national and county governments to the principles of fiscal responsibilities as outlined in PFMA 2012 section 15 and 107.
7. Discuss, review and make recommendations on changes to legislations pertaining to financial management in counties.
8. Discuss, review and make recommendation or give general direction on the financial reports submitted to the Commission by both the national and county governments. These include planning reports like county Integrated Development Plans (CIDP), County Fiscal Strategy Paper (CFSP) and Annual Development Plans (ADP). It also includes financial reports like the budgets, quarterly and annual financial reports and debt reports.
9. Recommend to the full Commission capacity building county executives on identified areas of weakness pertaining to financial management.
10. Recommend to the full Commission to capacity build on County Assemblies on identified areas of weakness on their oversight role in financial management.
11. Monitor and make recommendations on sustainable debt levels in the counties.
12.Support and make recommendations on counties to set up structures to enhance financial management in counties. For example County Budget Economic Forums, the Audit Committees among others
The Committee will consist of at least three (3) Commissioners among whom one will be appointed Chairperson by the Commission. The following, who may assist the Committee with its discussion on any particular matter may attend the meetings of the committee:
i. The Commission Secretary/Chief Executive Officer.
ii. Directors /Head of Departments where applicable.
iii. Any other person at the discretion of the PFMC.
Its primary purpose is to assist the Commission on Revenue Allocation (“the Commission”) in fulfilling its mandate of defining and enhancing revenue sources for both the national and county governments. The Terms of Reference outlines the objectives, composition, responsibilities and duties; authority and procedures of the Committee.
The purpose of the Revenue Enhancement Committee (REC) is to help the Commission fulfill its revenue enhancement responsibilities to:
1. Work in collaboration with other national government agencies with related mandates to ensure enhancement of revenue collected nationally.
2. Support counties in the enactment of revenue legislation in line with the CoK 2010 and national legislation.
3. Advise county governments on the tax imposition and other revenue raising measures as required by the Public Finance Management Act (2012).
4. Advice on revenue generation from natural resources for both the national and the county governments.
5. Support county governments in setting up and enhancing systems of revenue projection, collection, administration and internal controls.
The REC shall undertake the following:
1. Review and make recommendations on the national government revenue sources and the exploitation.
2. Make recommendations on exploitation of natural resources and the sharing of revenue generated from the same.
3. Support the counties in determination of revenue potential from established own sources.
4. Support counties in identifying new revenue sources and exploiting them.
5. Make recommendations to counties on establishing systems of accurate revenue projection for budgeting purposes.
6. Support the counties in enacting revenue legislation.
7. Make recommendations to counties on revenue management policies and procedures to minimize revenue leakage.
8. Make recommendations and support counties on revenue automation.
9. Facilitate peer to peer learning and exchange of best revenue enhancement practices among counties.
10. Review and make recommendations on revenue performance against budget for both the national and county governments.
The Committee will consist of at least three (3) Commissioners among whom one will be appointed chairperson by the Commission. The following, who may assist the Committee with its discussion on any particular matter may attend the meetings of the committee:
i. The Commission Secretary/Chief Executive Officer.
ii. Directors/Head of Departments where applicable.
iii. Any other person at the discretion of the REC.
The purpose of the Committee is guided by the Commission understanding that the ability of both national and county governments to perform functions allocated to them by the Fourth Schedule of the Constitution depends on: effective coordination of the roles of the two levels of government based on the principles of distinction, independence, mutuality, corporation, mutual respect, complementarity and subsidiarity; Effective stakeholder participation or democratic involvement of all the relevant actors in the activities at both levels of government through mutual consultation, corporation, collaboration and dialogue; and effective promotion of equitable social development among the peoples of Kenya through deliberate efforts aimed at de-marginalization of social groups, regions and counties that have and continue to suffer different forms of exclusion.
Specifically, the Committee will consider the technical matters of the Commission relating to:
1. Determination and review of a policy in which the Commission sets out the criteria by which to identify the marginalized areas for purposes of the Equalization Fund.
2. Consultations on any Bill that appropriates money out of the Equalisation Fund.
3. Inter-governmental relations between the National and County governments as provided for in the constitution and other subsidiary laws governing the process, state and reality of devolution as a framework for equitable social development and national cohesion.
4. Strategic co-ordination of important stakeholders’ activities with National Government, Parliament, civil society, donor community as well as other non- governmental actors whose work or mandates have a significant bearing and impact on devolution.
5. Equitable sharing of transfers that are designed to re-distribute resources and to promote equalization across counties and de-marginalization of hitherto neglected sections of and social groups/regions in the Kenyan society.
6. Research and policy underpinning criteria for the sharing of revenues from the Equalisation Fund done by the Commission.
7. Provision of general direction and guidance in the operation of the Stakeholder Management & Marginalization Committee.
The SMMC shall undertake the following:
1. At regular intervals, the Committee shall determination, publish and review a policy in which the Commission sets out the criteria by which to identify the marginalized areas for purposes of the Equalization Fund.
2. Annually consider and make recommendations to parliament on the Bill appropriating money out of the Equalisation Fund.
3. Provide inputs to technical research papers and presentations developed/commissioned by the Stakeholder Management & Marginalization Committee.
4. Map out key stakeholders with a view to determining the comparative mandates and capacities in order to match them with the operational needs and institutional responsibilities of CRA as an independent constitutional commission with a mandate to promote equitable sharing of national resources;
5. Explore, establish and maintain institutional and statutory framework, practices and modalities of sound intergovernmental relations and effective stakeholder cooperation on the basis of which to coordinate a working relationship (between the stakeholders) in favour of the successful execution of CRA’s mandate;
6. Strengthen and render more effective the democratic efficiency of all the intergovernmental platforms and stakeholder participatory mechanisms;
The Stakeholder Management & Marginalization Committee is composed of six Commissioners (Appendix 1) and functionally reports to the full Commission on all matters considered from time to time. The Chief Executive Office of the Commission and the Director, Economic Affairs shall attend the Committee meetings. The Director Economic Affairs shall be the Secretary of Committee. The Committee will nonetheless, from time to time, coopt other commissioners into its membership depending on the contribution that he or she may make towards the execution of its mandate.
The Audit, Corporate Governance and Risk Management Committee is established in line with Public Finance Management Act 2012-Section 73(5), Public Finance Management Regulations, section 174, good corporate governance principles and section 12(1) of the Commission on Revenue Allocation Act, 2011. The committee reports to the Commission.
The purpose of the audit committee is to;
1. Provide an independent expert assessment of the activities of management, the quality of the Risk Management, Financial Reporting, Financial Management and Internal Audit to the Commission;
2. Ensure that external audit recommendations are fully addressed and that the quality of internal audit is of an appropriate standard;
3. Ensure that line management has full regard to internal audit recommendations;
4. Support the commission by monitoring and reviewing the risk, control and governance processes that have been established in the entity pursuant to commission policies.
The Committee shall undertake the following:
a) Obtain assurance from management that all financial and non-financial internal control and risk management functions are operating effectively and reliably.
b) Provide an independent review of the commission’s reporting functions to ensure the integrity of financial reports.
c) Monitor the effectiveness of the commission’s performance management and performance information.
d) Provide strong and effective oversight of the commission’s internal audit function.
e) Provide effective liaison and facilitate communication between management and external audit.
f) Provide oversight of the implementation of accepted audit recommendation.
g) Ensure the commission effectively monitors compliance with legislative and regulatory requirements and promotes a culture committed to lawful and ethical behavior.
The committee shall have at least three but not more than five members. The committee shall be constituted as follows;
a) Two (2) independent members sourced competitively; from amongst whom the Commission shall appoint the Chair person.
b) One commissioner with as little as possible executive responsibility.
c) One National Treasury Representative.
d) The head of Internal Audit shall be the secretary to the committee.
The primary purpose of FAC is to provide a regular and consistent administrative support framework that will ensure that CRA becomes a highly efficient, accountable and transparent institution. FAC will endeavour to review, evaluate and make regular recommendations to the Commission to support CRA meet its constitutional mandates.
Broadly, FAC shall be responsible for CRA’s strategic plans, operational manuals, procedures and guidelines, various administrative directives and Gazette notices and all matters that may emanate from the Government that relate to the Commission’s operations and report to the Full Commission. General areas of focus shall be:
1. Finance
2. Human Resources & Administration
3. Procurement
4. Communication
5. Information and Communications Technology (ICT)
6. Any other assignment that may be directed by the Commission.
The FAC shall undertake the following:
Finance matters:
a) Establish and from time review the Finance and Planning Strategies of the Commission.
b) Establish and review overall budgeting and budgetary control policies of the Commission.
c) From time to time, develop financial policies and procedures in line with international best practices, international financial reporting standards, and in accordance with any other applicable laws of Kenya.
d) Ensure that at all times, there are adequate system of internal controls, management and financial reporting.
Human resources and Administration matters:
a) Create and establish a conducive working environment that can lead to a high performance organizational culture befitting of independent Constitutional body.
b) Establish and regularly review the Human Resources and Administration strategies and policies of the Commission.
c) Establish and review the overall remuneration and benefits policy for all employees of the Commission.
d) Review and recommend an appropriate Organisational Structure that effectively supports the Commission in fulfilling its constitutional mandate.
e) Perform or delegate, review and monitor the Sponsor function of the Commission with respect to the employee pension scheme sponsored by the Commission.
f) Ensure compliance with relevant legislation and practices governing human resources strategy.
Procurement matters:
a) Oversee compliance with the Public Procurement and Disposal Act, 2015 (“Procurement Act”) and Regulations issued thereunder.
b) Ensure that the Commission’s credibility is enhanced by promoting fair dealings with suppliers and other stakeholders.
Communication matters:
a) Ensure that there is a robust policy framework for effective internal and external communication.
b) Ensure that the communication department has the most accurate and update information of the Commissions mandate, operations and activities.
c) Ensure a positive image of the commission is maintained at all times.
ICT matters:
a) Assist the Commission in fulfilling its oversight responsibilities for the implementation of ICT infrastructure within the Commission and county government.
b) Reviewing the Commission’s ICT governance structure.
c) Reviewing the Commission’s ICT Policies and making appropriate recommendations to the Commission.
d) To create partnerships with ICT based government institutions whose mandates complements CRA Mandates.
e) To review recommendations on financing and financial management through process automation to county government.
The Committee consists of four (4) Commissioners among whom one will be selected chairperson by the Commission. The following may assist the committee with its discussion on any particular matter and shall attend the meetings of the committee:
1. The Commission Secretary/Chief Executive Officer
2. Directors/Head of Departments where applicable.
3. Any other person at the discretion of the FAC.