County Budget Implementation Review Report

Office of the Controller of Budget; Office of the Controller of Budget

dc.contributor.author	Office of the Controller of Budget
dc.contributor.author	Office of the Controller of Budget
dc.date.accessioned	2021-09-10T10:17:23Z
dc.date.available	2021-09-10T10:17:23Z
dc.date.issued	2013-11
dc.identifier.uri	http://192.168.150.44/handle/123456789/557
dc.description	This report gives a synopsis of the status of budget implementation and assesses the performance of the County Governments in the management of public resources for the first quarter of the financial year 2013/2014. The report is prepared pursuant to Article 228(6) of the Constitution that mandates the Controller of Budget to submit to each house of Parliament a report on the implementation of budgets of both the National and County Governments. Reporting on budget implementation creates awareness among stakeholders and enables them to identify and review existing policy. Further, this in-year reporting function is part of government's efforts to promote budget openness, transparency and credibility as key components of our public financial management reforms. The Office of the Controller of Budget (OCOB) established County offices in each of the 47 Counties in line with the principle of devolution to enable County Governments discharge their services effectively. This report is a careful analysis of budget implementation by the Counties for the period July to September 2013. In the report, we have compared the implementation of the budgets against the County Appropriation laws that are in force, highlighted the revenues and expenditures of the Counties and assessed their performance. It is expected that this report will enable the County Governments build on the milestones achieved by initiating corrective mechanisms on issues highlighted and forge ahead to realize the devolution aspirations notwithstanding the anticipated challenges and impediments. High on the agenda of the OCOB in improving budget implementation is to ensure withdrawals from public funds are done according to the Law. The rationales for budget monitoring are to strengthen oversight; to identify challenges in service delivery; and to generate information to appraise public budgetary debates. This office will work with the County Governments and other government agencies to ensure sound public financial management systems. This is an exciting but challenging time for the country as we strive to realize the benefits of a devolved system of governance. The OCOB therefore looks forward to continued collaborations with the County Governments as they move forward and urge the public to participate in the budgetary process and give feedback in order to continuously improve budget execution at the County Governments.	en_US
dc.description.abstract	The country embarked on reforming public financial management systems over the last decade by reorganizing functions and creating new agencies with mandates focusing on various aspects of public finance. It is against this backdrop that the Constitution of Kenya, 2010 established the Office of Controller of Budget to oversee the implementation of the budgets of both National and County Governments and report on budget implementation Every four months. The oversight and reporting roles are fundamental in the strategy of the Office of the Controller of Budget and forms the basis under which this report has been prepared. The report analyses the context within which County Government budgets were formulated, Approved and executed and whether they were in compliance with the principles and statutory provisions of public financial management. The report also highlights key issues and challenges and makes recommendations on improving budget implementation for the remaining period of the 2013/2014 financial year; In the period under review, County Governments submitted their budgets to the Office of the Controller of Budget in compliance with the requirements of the Public Financial Marriage Act, 2012, These budgets were reviewed in July, 2013 and it was established that while some Counties had well formulated and balanced budgets, others had deficits, unrealistic revenue estimates, or allocations to unauthorized items. In the first meeting of the Intergovernmental Budget and Economic Council (IBEC) held on 12th August, 2013 at the Kenya School of Government, it was resolved that Counties revise their budgets to ensure that the budget deficits and unauthorized items are removed. Further, at a meeting held on 11th September, 2013 at the Hilton Hotel, attended by all County Executive Members for Finance and Speakers of the County Assemblies, it was agreed that these revisions were to be done by 30th September, 2018. In the Financial Year 2013/2014, the cumulative budget estimates for the 47 County Governments amounted to Kshs. 277.4billion. This amount consists of Kshs. 67.4 billion as the projected local revenue and Kshs. 210.9 billion as national revenue grant to the Counties. The national revenue grant was broken down into sharable revenue, conditional grant to level 5 hospitals and funds for donor funded projects. The sharable revenue of Kshs. 190 billion was shared among Counties equitably according to the formula by the Commission on Revenue Allocation (CRA) while Kshs. 3.4 billion was allocated as conditional grant to the regional referral hospitals. Donor funded projects accounted for Kshs. 16.6 billion. In the first quarter of FY 2013/2014, the cumulative revenue for all County Governments was Kshs. 4o.4 billion consisting of Kshs. 32.9 billion from the national sharable revenue, Kshs. 4.4 billion as locally collected revenue and unspent balances brought forward from the previous financial year amounting to Kshs. 3.2 billion. The sharable revenue received by County Governments represents $.7 per cent of the annual total sharable revenue that the Counties expect to receive from the National Government in the current financial year. Local revenue collected during the first quarter of F Y 2013/2014 only represents 6.5 per cent of County's annual local revenue target. The Controller of Budget approved the transfer of Kshs. 18.7 billion from the County Revenue Funds to the respective County Operation Accounts to fund the County Budgets during the period under review. Total expenditure by the County Governments during the first quarter of FY 2013/2014 amounted to Kshs. 13.3 billion. A review of the expenditure shows that Kshs. 7.1 billion was spent on personnel emoluments, Kshs. 4.9 billion on operations and maintenance, Kshs. o.9 billion on development expenditure and Kshs. o.o9 billion on servicing of debts and pending bills. The analysis shows that a total of IGhs.27.1 billion of the total revenue available remained unspent in the period under review. This low uptake of funds could be attributed to the failure of most Counties to meet the conditions for the release of funds as stipulated in the Public Financial Management Act, 2012. During the period under review, the Counties experienced a number of challenges that affected budget implementation. Firstly, there was frequent adjournment of the County Assemblies due to the agitation for higher remuneration by the members of the County Assembly which affected approval of Supplementary Budgets and Finance Bills for respective Counties. Secondly, the delay in the enactment of the County Allocation of Revenue Act, 2013 affected the disbursement of the national shareable revenue to the Counties. Thirdly, the payroll data for the devolved functions was not shared by the National Treasury to the County Treasuries thereby affecting budget preparation. Lastly, weak internal control mechanisms led to Counties collecting revenues below their set targets. The Office recommends that with the assistance of the National Treasury, counties should proactively ensure full implementation of IFMIS and G-pay Systems, put in place elaborate procurement plans, and continuously build capacity on financial management for their staff. This will ensure that good financial control mechanisms are put in place and efficient service delivery to the public is achieved. Further, the County Assembly which is the legislative arm of the County Government should strive to fulfil their constitutional mandate by ensuring that all the necessary legislation are passed on time and provide oversight over the activities of the Executive.	en_US
dc.description.sponsorship	Mrs Agnes N. Odhiambo	en_US
dc.language.iso	en_US	en_US
dc.publisher	Republic of Kenya	en_US
dc.subject	County Budget	en_US
dc.subject	Budget Implementation review	en_US
dc.subject	Mrs Agnes N. Odhiambo	en_US
dc.title	County Budget Implementation Review Report	en_US
dc.title.alternative	First Quarter FY 2013/2014	en_US
dc.type	Technical Report	en_US