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Relationship between National and County Governments on budget and economic matters

Unit: Public Finance and Taxation

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Practice CPA Public Finance and Taxation Relationship between National and County Governments on budget and economic matters questions with detailed answers and explanations.

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December 2024

 1 Questions
Question 1a
​​Explain the following terms as used in public finance management: 

(i) Equalisation fund. 

(ii) Appropriation Act.


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August 2024

 2 Questions
Question 1a
​​Explain the following terms as used in public finance management: 

(i) Consolidated Fund Services. 

(ii) Division of Revenue Bill


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Question 2a
​​Revenue raised nationally should be shared equitably among the national government and county governments. 

Summarise SIX criteria that should be taken into account in determining the equitable shares as provided under Article 203 of the Constitution.


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August 2023

 2 Questions
Question 1d
​ ​​Discuss THREE parameters used by the Commission on Revenue Allocation in sharing revenue among county governments or their equivalent in your country


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Question 1a
​​Explain the following terms as used in public finance management: 

(i) Equitable share. 

(ii) Conditional grants. 

(iii) Own source revenue.


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April 2023

 1 Questions
Question 1a
​​Explain the following terms as used in division and sharing of revenue in relation to the public finance management: 
(i) Vertical sharing. 

(ii) Horizontal sharing.


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December 2022

 1 Questions
Question 1a
​​Explain the following types of funds: 

(i) The contingency fund.

(ii) The equalisation fund.


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August 2022

 1 Questions
Question 1a
​​Summarise four functions of the Commission on Revenue Allocation (CRA)


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Pilot December 2021

 3 Questions
Question 2d
​ ​​During a devolution seminar in your country, one of the key speakers noted that country governments should be allocated national government share of revenue based on the ability of a county to enhance its revenue raising measures. 

Required: 
Identify three sources of revenue to the county governments.


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Question 2a
​​Highlight the steps followed by your county government in developing its annual budget.


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Question 1b
​​The national and county governments engage in a number of projects. For the purpose of monitoring these projects the governments have developed an electronic project monitoring information system (e-ProMIS) to capture information on projects implemented by the ministries, state corporations and counties. 

Required: 
Discuss four specific objectives that the National and County governments might realise from the e-ProMIS


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December 2021

 1 Questions
Question 1c
​​Discuss four roles played by the Council of Governors or its equivalent in county financial management.


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August 2021

 1 Questions
Question 1a
​​Public funds established by the Constitution are usually managed by the National and County governments. 

Required: 
(i) Identify three types of funds managed by the national government. 

(ii) Identify two types of funds managed by the county government.


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November 2019

 2 Questions
Question 1c
​ ​​Outline the stages to be followed in the budget process for the National Government in any financial year.


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Question 1b
​ ​​Propose five sources of revenue for county governments.


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May 2019

 3 Questions
Question 1a
​​Budgetary rules exercise effective control over government entities in public spending and accountability. 

With reference to the above statement, identify four ways used by the national government to demand budgetary accountability by the government entities.


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Question 1b
​​Outline four purposes of Public Finance Management Equalization Fund Regulations, 2015.


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Question 1c
​​Citing three reasons, justify the importance of information contained in the circulars guiding the budget processes for county governments.


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November 2018

 2 Questions
Question 2b
​​For the past few years, most of the counties revenue generation has stagnated or even declined although the economy's gross domestic product (GDP) has grown within the same period.

Propose four causes to which this underperformance in revenue collection by the counties or similar devolved units in your country could be attributed,


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Question 1a
​​The Public Finance Management Act requires that all payments from the consolidated fund should be authorised and comply with certain general rules.

With reference to the above statement, outline two ways of authorising payments out of the consolidated fund.


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May 2018

 3 Questions
Question 2b
​​Discuss three functions of the Council of Governors in county financial management.


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Question 1a
​​When the Cabinet Secretary for the National Treasury or equivalent ministry presents the Division of Revenue Bill to Parliament, it should be accompanied by a memorandum explaining various matters.

With reference to the above statement. identify such matters.


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Question 2a
​​Identify four factors that are considered by the Commission on Revenue Allocation (CRA) or equivalent body while selecting marginalised counties for purposes of allocating the equalisation funds.


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November 2017

 3 Questions
Question 2a
​​Explain four measures that the National Treasury should put in place when administering the Equalisation Fund in accordance with Article 204 of the Constitution.


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Question 1b
​​Summarise five functions of the Commission on Revenue Allocation (CRA).


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Question 1a
​​The Constitution and the Public Finance Management Act provide for establishment of public funds.

In relation to the above statement, explain the following public funds:

(i) Revenue funds for county government.

(ii) Contingencies fund.


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May 2017

 3 Questions
Question 1d
​​The Commission on Revenue Allocation (CRA) is supposed to ensure equitable sharing of national revenue

Discuss three parameters used by the Commission in sharing revenue among county governments or their equivalent in your country.


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Question 1c
​​During a recent seminar on "overview of public finance and management", a senior National Treasury official remarked that, "there has been a very low budget absorption capacity by the county governments"

In relation to the above statement:

(i) Explain the meaning of "low budget absorption capacity"

(ii) Identify three possible causes of low budget absorption capacity


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Question 1a
​​Distinguish between "division of revenue" and "allocation of revenue" as used in revenue management at national and county government levels


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November 2016

 1 Questions
Question 2a
​​The National Treasury is expected to prepare and submit financial statements each year to the Auditor General in respect of the Contingencies Fund.

With reference to the above statement, highlight four contents of the financial statements prepared for the Contingencies Fund.


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November 2015

 1 Questions
Question 2b
​​ Describe six roles of the Commission on Revenue Allocation.


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Pilot September 2015

 2 Questions
Question 1c
​​State two considerations that guide revenue sharing between the national government and county government.


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Question 1b
​​Discuss the function of the Commissio on Revenue Allocation (CRA) or its equivalent as provided in your country's Constitution.


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