Legal and institutional framework for asset management and transfer during transition

LEGAL AND INSTITUTIONAL FRAMEWORK FOR ASSET MANAGEMENT AND TRANSFER DURING TRANSITION

The formation of the legal and institutional framework for Kenya’s devolution started with enactment of the new constitution in 2010, followed by numerous laws and regulations. The legal and institutional framework was by and large adopted, complete, and effective about one year before the devolution elections took place on March 27, 2013. The most important regulations include the following:

• Constitution of Kenya 2010 • County Governments Act, no. 17 of 2012 • County Public Finance Management (PFM) Act, Regulation 2015 (amended

PFM Act 2012) • Intergovernmental Relations (ITGR) Act, no. 2 of 2012 • Legal Notice no. 44: Regulation on Transition to Devolved Government (Mechanism for Closure and Transfer of Public Records and Information),

Legislative Supplement no. 23, March 11, 2016 • Ministry of Finance (MoF), Circular no. 14 of 2000, October 13 • Ministry of Local Government (MLG), Circular ref. no. MLG/1333/TY/ (52) of February 18, 2013 • Public Finance Management (PFM) Act, no. 18 of 2012 (amended in 2015 by

Legal Notice no. 34. Legislative Supplement no. 17, County PFM Act, March 20, 2015—see third bullet) • Public Finance Management (PFM) Transition Act, no. 8 of 2013 • Transition to Devolved Government (TDG) Act, no. 1 of 2012 • Urban Areas and Cities (UAC) Act, no. 13 of 2011

Legislators were aware of the importance of regulation and facilitation of the transfer of assets from the defunct local entities to the new county governments. That’s why they enacted the TDG Act 2012, which legislated establishment of the Transition Authority (TA) in March 2012, and with that action a centralized modality of transfer of assets and liabilities was stipulated and effectively established in Kenya a year before devolution. Figure 2.1 illustrates the institutional framework, characterized by clear assignments of functions and responsibilities, a strong chain of command, and clear checks and balances, with ultimate power of command by the president and the parliament. In the figure, red arrows indicate commands, and blue arrows indicate reporting duties.

The TA consisted of eight permanent secretaries from various state departments, the attorney general, and a TA secretary, an appointed person with no voting power. The TA directly reported to the Commission for the Implementation of the Constitution, the National and County Government Coordinating Summit (also known as the Summit), and the Council of Governors especially seeking guidance on the highest strategic decisions.

The TA was a powerful and knowledgeable body suitable for strong control, guidance, and high-level decision-making, but it was not equipped to perform daily operative tasks and fieldwork, which was performed by the the TA administration; the chair, who was the secretary of the TA; the staff of the TA administration; and a large fleet of consultants hired to complete field verification and validation. TA staff and hired specialists drafted work procedures, templates, rules, and regulations approved by the TA.