Programme-Based Budgeting in

Kenya: Past challenges and way

forward for 2015/16

Vivian Magero

Jason Lakin, Ph.D.

Background

• National government shifted from line-item to

program-based budgeting in 2013/14 (following

international best practice and PFM Act)

• First year was challenging….but in 2014/15, Kenya

made big improvements in its PBB presentation.

• Still a number of challenges

Question: have we built on successes and

addressed challenges of 2014/15 in 2015/16?

What is a PBB?

• Budget organized around a set of programs

• What is a program? A group of government

activities that help to achieve a common

objective

• Example: Crime Prevention Program

• Objective of CPP: "Reduced crime and greater

security of persons and property“

• CPP might then include various activities

related to policing, security cameras, etc.

requiring both recurrent and capital, staff, etc.

A good PBB…

• Focuses on outputs and service delivery objectives of

spending, not inputs.

• Has substantive narrative link between inputs and outputs

and explanation of changing priorities

• Is arranged around a set of programs with clear and

specific objectives, not just administrative units

• Is usually broken down further into subprograms to provide

clearer information about activities and objectives

• Program performance measured through clear indicators

and targets with credible baselines and timelines.

Has Kenya’s PBB improved budget

presentation and transparency?

Kenya’s 2012/13 Line item budget

• Focused on inputs only, like fuel and stationery

• Limited or no narrative explanation and link

between inputs and outputs

• Ministries defined by administrative units, no

programs or subprograms

• No measures of performance (indicators and

targets)

Kenya’s 2013/14 PBB• Eliminated certain information e.g. wage

information, key personnel and job groups

• Inadequate narrative information on programs,

unclear links between narrative and budget figures

• Limited number of programs, no subprograms and

unclear objectives

• Some indicators and targets lacked actual figures,

had no clear timelines or baselines

• Difficult to understand how public money used to

generate things we care about

Kenya’s 2014/15 PBB: Major Improvements

• Revised PBB format, rectified a number of

flaws.

• Substantive narrative information available in

many areas

• Increased number of programs with somewhat

clearer objectives

• Introduction of subprograms, broken down

further into economic classification

• Improved presentation of indicators and targets

• Additional documents available to clarify PBB

Despite achievements, 2014/15 PBB lacked:

• Narrative clearly linking priorities and budget allocations

• Clear and distinct program objectives (program

objectives overlap)

• Clear/sensible targets and baselines (e.g. “% of facility

based maternal deaths had a target of 100%)

• Clear economic classifications (e.g. use of “other

development” for major spending)

• Information on key personnel and costs that was

available in old format

• Any information on Appropriations in Aid (eliminated

completely information on external funding)

Kenya’s 2015/16 PBB: Overview

• On balance: minor improvements, but lack of explanation

for changes leads to confusion

• Reorganization of programs and subprograms, leading to more

logical presentation but confusion about changing allocations

• Reorganization of indicators and targets leading to improved

focus, but also confusion as certain indicators have

disappeared without explanation

So….some challenges to be able to compare with last year’s

budget

2015/16 PBB: Overview Continued

• Improvement in comparability over time with inclusion of

column for 2014/15 approved budget

• Narrative is similar to 2014/15; weak connection to budget

numbers

• Program objectives have improved, but still challenges

• Indicators and targets are improved, but still lack baselines

that allow us to track if money=improving services

• Vague economic classifications still major share of spending

• Information on wage costs and Appropriations in Aid still

missing

2014/15 vs 2015/16 PBB in Detail

• Narrative information

• Programs with clear objectives

• Indicators/targets

• Subprograms and further disaggregation

• Information on key personnel and costs

• Appropriation in Aid (AiA)

Narrative Information

Narrative Link to Allocations? 2014/15

Narrative links to allocations 2015/16?

Narrative challenges continue…

• There is no real explanation of changes in emphasis at

program/subprogram level from year to year (why

some programs receive larger share than others?)

• For example, big change in health sector in 2015/16 is

increase in funding for Health Policy subprogram, but

not mentioned

• How do proposed initiatives and allocations for the year

respond to challenges mentioned each year?

Programs with clear and distinct

objectives

Programs and objectives, 2014/15 and 2015/16

Curative health services program 2015/16

Indicators, targets and timelines

Indicators/targets and timelines

• Indicators still have no baselines

• Some of the indicators/targets that did not make sense

dropped. E.g. % maternal facility deaths with target of 100%

But some targets still at odds with other government figures

• In 2014/15 budget, % births conducted by skilled attendant

target 44%, but this was below what was already achieved as

per other government figures (66% in-facility births)

• In 2015/16, same issue with Average Length of Stay target at

Kenyatta National Hospital: target for 2015/16 is 10.7 Days but

sector report says have already achieved this in 2014/15

Key Performance Indicators 2014/15 2015/16

From 2014/15 (Above) to 2015/16 (Below) we have lost two indicators

Clear subprograms and further

disaggregation of allocations

Do subprograms have clear objectives?

• SPs are meant to be further breakdown of

programs, so they are meant to align with the

objectives of the larger program

• Neither 2014/15 nor 2015/16 have clear

subprogram objectives

• Many subprograms are not clear, and are not

clearly aligned with the program objectives

Program: General Administration, Planning &

Support Services

• 2014/15 objective: To improve service delivery and provide

supportive function to government agencies under the health

sector.

• 2015/16 objective: To strengthen Leadership, Management,

Planning & Financing of the health sector

• In both years, these program have a subprogram

“Health Policy, Planning and Financing”.

What does this SP do to contribute to admin and

planning?

Subprogram: Health Policy, Planning and Financing

2014/15

2015/16

Does the economic breakdown help?

Information on personnel costs

• Still no information about staff, job group, wages

or benefits of staff by ministry in 2014/15 or 15/16

• This information was present in 2012/13 line item

budget as shown in the next slide

• No breakdown beyond “compensation to

employees” at program/subprogram level

2012/13 Line Item Budget

Generic economic classification

Appropriation in Aid (AiA)

• AiA includes donor funding and some local funds raised

by ministries on their own (user fees, etc.)

• In 2012/13, extensive information was provided for each

ministry, administrative unit on the source, type of donor

etc.

• In 2013/14, information on AIA was provided by program

with medium term projections but no breakdown by local

v. external, source, or purpose

• 2014/15 PBB eliminated this information altogether

• Same in 2015/16 PBB

ARE THERE GOOD EXAMPLES

FROM COUNTIES IN 2014/15?

Consider same aspects of the budget

…but also project breakdown

• Narrative quality

• Program Clarity and distinctness

• Indicators and targets

• SP Clarity and further disaggregation

• Staff information

• AIA

• Project information to ward level

Narrative: West Pokot example

Homa Bay

Bungoma: Project breakdown

Some challenges at county level in

2014/15• Many of same challenges as national level, but more severe

• Lack of summary tables in many budgets

• Weak connection between priorities in narrative and budget numbers

• Limited breakdown of economic classification

• Programs have unclear objectives, and lack of clear subprograms

makes it difficult to understand what they do and how they do it

• Main staff costs are improperly classified under administration

• Indicators and targets are extremely weak, incoherent or simply non-

existent

2015/16 County Budgets: Improving?

We have looked so far at:

• Nyeri

• Taita Taveta

• Elgeyo Marakwet

• Lamu

• Nairobi

• There are successes and cross cutting issues in

these budgets

Good practices in 2015/16 County PBBs

• Summary table at the program level (Lamu, Taita

Taveta and Elgeyo Marakwet)

• Summary table at both the program and subprogram

level (Elgeyo Marakwet)

• Most indicators and targets improved from last year,

but still lack baselines

• Budget broken down into items under programs;

combining line item and program provides additional

information that is useful (Lamu)

Cross cutting issues in 2015/16 County

PBBs• Narrative is not linked to program allocations or does

not explain trends adequately (all counties)

• Subprograms lack or have no objectives (All

counties)

• Staff put under the Administration program rather

than service delivery programs (All counties)

• No staff breakdown apart from Nyeri county

• Indicators lack baselines, while some lack targets

(Taita Taveta)

Recommendations

• Major programs should be broken down into sub-

programs, with sufficient detail provided to

understand their distinct objectives

• Narrative details should be improved, particularly

to ensure clear link with allocations at

program/subprogram level

• All indicators should be clearly linked to a specific

program and to specific program objectives, with

baselines and clear and realistic targets

Recommendations

• If there is a shift in programs or subprograms that

would affect the indicators and targets over the years,

explanation should be provided for the shift.

• Information on the breakdown of employees should be

restored to the budget as per the 2012/13 budget

• The economic classification could be further broken

down for all categories

• Reduce the use of “other recurrent” and “other

development” for major spending

Thank you