PFT Revision Kit April 2026_watermark(1)
SAMPLE WORK
Complete copy of CPA Management Accounting Revision Kit (CPA Past Past Papers With Answers) is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APPS) And in Hard copy (Printed and Bound)
Phone: 0728 776 317
Email: [email protected]
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TOPIC 1
INTRODUCTION TO PUBLIC FINANCIAL MANAGEMENT
QUESTION 1
April 2026 Question One A and B
(a) Outline FOUR fiscal responsibility principles applicable in management of public finances as provided under Regulation 26 of the Public Finance Management Regulations, 2015. (4 marks)
(b) In a Public Finance Seminar, one of the facilitators noted that “there are certain types of information that must be included in the Budget Policy Statement (BPS) as per Section 25(4) of the Public Finance Management Act, 2012”.
With reference to the above statement, identify FOUR types of information that should be included in the BPS. (4 marks)
MASOMO MSINGI ANSWER
(a) Fiscal responsibility principles applicable in management of public finances as provided under Regulation 26 of the Public Finance Management Regulations, 2015.
Under Regulation 26 of the Public Finance Management (National Government) Regulations, 2015, the National Treasury is required to manage public finances in accordance with specific fiscal responsibility principles.
The following are four key principles as provided under that regulation:
- National government’s expenditure on the compensation of employees (including benefits and allowances) shall not exceed 35% of the national government’s equitable share of the revenue raised nationally plus other revenues generated by the national government pursuant to Article 209 (4) of the Constitution
- The compensation of employees (including benefits and allowances) shall not include revenues that accrue from extractive natural resources, including oil and coal
- The national public debt shall not exceed 50% of Gross Domestic Product (GDP) in net present value terms
- The annual fiscal primary balance shall be consistent with the Approved debt target for compensation of employees.
- The National Government’s expenditure on development shall be at least 30% of the total budget over the medium term. This is a mandatory floor to ensure investment in growth rather than just consumption.
- The National Government shall maintain a reasonable degree of predictability with respect to the level of tax rates and tax bases, ensuring a stable environment for economic planning.
- If the national government fails to meet any of these principles (such as the 30% development threshold or tax predictability), the Cabinet Secretary must submit a statement to Parliament This statement must explain the reasons for the deviation and must also provide a clear plan and timeline to return to compliance in subsequent years.
(b)Types of information that should be included in the Budget Policy Statement (BPS) under Section 25(4) of the Public Finance Management Act, 2012 are:
- An assessment of the current state of the economy and the financial outlook over the medium term, including macro-economic forecasts
- The financial outlook with respect to Government revenues, expenditures and borrowing for the next financial year and over the medium term
- The proposed expenditure limits for the national government, including those of Parliament and the Judiciary and indicative transfers to county governments; and
- The fiscal responsibility principles and financial objectives over the medium term including limits on total annual debt.
QUESTION 2
December 2025 Question Two A
The National Treasury is mandated with the preparation of annual budget estimates, co-ordination and preparation of the national government budget. Towards this function, the cabinet secretary issues out a treasury circular.
In relation to the above statement, summarise FOUR contents of treasury budget circular. (4 marks)
MASOMO MSINGI ANSWER
Contents of treasury budget circular
- Budget Preparation Guidelines
The circular provides detailed instructions and guidelines on how government ministries, departments, and agencies should prepare their budget proposals. This includes timelines, formats, and specific rules on how to allocate funds for various programs. - Fiscal Policy and Priorities
It outlines the government’s fiscal policy for the upcoming financial year, including revenue projections, expenditure targets, and any specific priorities such as infrastructure, health, education, or social welfare programs that the government aims to focus on. - Expenditure Control Measures
The circular highlights measures for controlling public expenditure, including limits on non-priority spending, guidelines for capital projects, and other fiscal discipline strategies to ensure the budget remains balanced and sustainable. - Revenue Projections and Targets
The circular includes detailed revenue targets and expectations, including forecasts for tax collection, grants, and other sources of revenue. It directs ministries to align their spending plans with these revenue projections to avoid budget deficits. - Guidelines on Public Participation
The circular provides instructions on how and when various government sectors should engage the public and other stakeholders. In line with the Constitution, it defines the requirements for involving citizens in the decision-making process for resource allocation. It ensures the budget process is transparent and constitutionally compliant.
QUESTION 3
August 2025 Question Two A
The county treasury is required to submit to the county assembly a statement setting out the debt management strategy of the county government on or before 28 February every year.
Required:
Highlight FOUR contents of such a statement. (4 marks)
MASOMO MSINGI ANSWER
Contents of debt management strategy
- The total stock of debt as at the date of the statement;
- The sources of loans made to the county government;
- The principal risks associated with those loans;
- The assumptions underlying the debt management strategy; and
- An analysis of the sustainability of the amount of debt, both actual and potential.
SAMPLE WORK
Complete copy of CPA Management Accounting Revision Kit (CPA Past Past Papers With Answers) is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APPS) And in Hard copy (Printed and Bound)
Phone: 0728 776 317
Email: [email protected]
Android App Link – Click to Download
PC/ IOS / Tablet / Android – Click to Access
