Form Judiciary’s independent fund – Business Daily

The Chief Justice, David Maraga, and the Governor of the Central Bank of Kenya (CBK), Patrick Njoroge, have been engaged in a heated exchange on whether the Judiciary is justified in demanding a dedicated fund account.

Dr Njoroge maintains that the Judiciary must engage the Treasury and comply with the procedures set out for all national government entities seeking to open an account with the CBK.

Mr Maraga, however, argues that the Constitution, laws and regulations governing public finance management are clear that the Judiciary is not a national government entity. And that the fund for which they are demanding an account is a creature of the Constitution.

I have chosen to comment on the subject because it comes at a time we are celebrating 10 years of the Constitution.

Under the Constitution, the Judiciary, Parliament and other independent organs are accorded fiscal autonomy.

In the old order Constitution, the Executive and Parliament controlled both the purse and the sword.

We adopted the concept of fiscal autonomy because it sits well with the principle of separation of powers.

It is indeed incredible that 10 years after we adopted the Constitution, opening a Judiciary fund account is still a debate.

Here is a bit of background.

Since we adopted a presidential system, it does not surprise that we ended up borrowing heavily from the American system of crafting the national Budget. It has a strong Congressional Budget Office and Office of Budget Management at the White House directly under the President.

In the American system, the Treasury’s role is limited to technical issues — superintending and managing collection of revenues, handling government borrowing, issuing warrants for expenditure, and framing and setting the macro-economic targets.

When you adopt such a system, you are in a regime where the national Budget has to be negotiated to determine how resources are distributed — first between the national and devolved government — and then among the national Legislature, the national Executive, and the Judiciary.

Had we followed the new Constitution to the letter, we would not be having a specific day for reading the Budget.

We are moving from a system where Parliament merely approves the Budget as framed by the Executive to a regime where Parliament makes the Budget.

Had we followed the public finance chapter well, the Judiciary, the Executive, and the Parliamentary Service Commission would only be meet at Parliament to defend their spending plans.

We did not. And this is why we ended up with a presidential system running largely on the public financial management infrastructure of a parliamentary system of government.

I don’t claim deep domain knowledge or experience in interpreting statutes. But as a journalist who reports and regularly comments on public finance matters, I interacted with some of the brains who were involved in designing and thinking behind the public finance chapter of the 2010 Constitution.

First, you have constitutional funds that are created and mentioned by name. They are the judiciary fund, equalization fund, consolidated fund, county revenue fund and contingencies fund.

Secondly, you have constitutional statutory public funds that the Constitution permits setting them up by an Act of Parliament such as the political parties fund.

It seems to me that in the interest of separation of powers, the thinking by the founding fathers was that money for the budget of the Judiciary would be deposited in a lumpsum from where it would only be released on authorisation by the Controller of Budget.

With the principle of fiscal autonomy on top of their minds, it is unlikely the founding fathers envisaged one single PFM Act administered by the Treasury and applicable to all arms of government and all public funds.