1 REPUBLIC OF KENYA COUNTY GOVERNMENT OF BUSIA DEPARTMENT OF FINANCE AND ECONOMIC PLANNING P.O.BOX Private Bag 50400 BUSIA 28 th August, 2015 COUNTY TREASURY REF NO: BC/CT/CIR/VOL.1/88 TO: ALL CHIEF OFFICERS/DEPARTMENTAL HEADS CLERK TO COUNTY ASSEMBLY ALL SUB COUNTY ADMINISTRATORS/ TOWN ADMINISTRATORS SECRETARY COUNTY PUBLIC SERVICE BOARD GUIDELINES FOR THE IMPLEMENTATION AND PREPARATION OF THE 2015/16- 2017/18 MEDIUM TERM BUDGET FOR BUSIA COUNTY I. PURPOSE The purpose of this circular is to communicate guidelines for implementation of FY 2015/16 Budget and a Budget Cycle Calendar for preparing the medium Term Budget for 2016/17 - 2017/18. The guidelines are issued in accordance with section 104 of the public Finance Management Act, 2012 and apply to both arms of the County Government of Busia. The guidelines provide the following information i. Key policies guiding the preparations of the medium Term Budget ii. Process of undertaking programme Performance Reviews (PPRs) iii. Documents, forms and content of the budget iv. Guidance on programmes and projects to be funded v. Guidance on public participation in the budget process; and vi. Key timeliness and deadlines for activities in the budget process.
Transcript
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REPUBLIC OF KENYA
COUNTY GOVERNMENT OF BUSIA
DEPARTMENT OF FINANCE AND ECONOMIC PLANNING
P.O.BOX Private Bag 50400
BUSIA
28th
August, 2015
COUNTY TREASURY REF NO:
BC/CT/CIR/VOL.1/88
TO: ALL CHIEF OFFICERS/DEPARTMENTAL HEADS
CLERK TO COUNTY ASSEMBLY
ALL SUB COUNTY ADMINISTRATORS/ TOWN ADMINISTRATORS
SECRETARY COUNTY PUBLIC SERVICE BOARD
GUIDELINES FOR THE IMPLEMENTATION AND PREPARATION OF THE 2015/16-
2017/18 MEDIUM TERM BUDGET FOR BUSIA COUNTY
I. PURPOSE
The purpose of this circular is to communicate guidelines for implementation of FY 2015/16 Budget
and a Budget Cycle Calendar for preparing the medium Term Budget for 2016/17 - 2017/18. The
guidelines are issued in accordance with section 104 of the public Finance Management Act, 2012 and
apply to both arms of the County Government of Busia. The guidelines provide the following
information
i. Key policies guiding the preparations of the medium Term Budget
ii. Process of undertaking programme Performance Reviews (PPRs)
iii. Documents, forms and content of the budget
iv. Guidance on programmes and projects to be funded
v. Guidance on public participation in the budget process; and
vi. Key timeliness and deadlines for activities in the budget process.
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II. BACKGROUND
The framework of the county government‟s economic agenda is aligned to that of the National
Government and will continue being premised on anchoring stability to sustain higher and inclusive
growth that opens economic opportunities and provides a better future for all residents of Busia
County. The broad economic policies and development agenda will therefore continue to be the same
as those outlined in the Budget policy statement (BPS) 2015 and the County Fiscal Strategy Paper
(CFSP) 2015 under the five pillar transformation programme covering:
i. Creation of conducive business environment;
ii. Investing in agricultural transformation and food security
iii. Investing in infrastructure, transport and logistics
iv. Investing in quality and accessible healthcare services and quality education
v. Supporting better service delivery and enhanced economic development for successful
devolution
The focus of the Medium Term Fiscal budget will therefore be on investment in economic and social
sectors, support for employment creation and accelerating economic growth and development .Planned
public spending will be prioritized in programmes aimed at achieving the development objectives
outlined in the second medium term plan of the vision 2030 and the County Integrated Development
Plan (CIDP).
III. SPECIFIC GUIDELINES
1. ORGANIZATION OF SECTOR WORKING GROUPS
Prioritization of and formulation of budget proposals will be through the Sector working groups.
SWGs are expected to ensure that the proposed programmes and Projects are in line with the priorities
outlined in the MTP of vision 2030 and the CIDP. On this basis, the County Planning Officer should
ensure the sector working groups are formed and operational to guide in the process as outlined. The
sectors should be organized in line with the structure of the County Government and according to
classifications of the functions of the Government (COFOG).
2. CONTEXT OF 2016/17 BUDGET PREPARATION
The budget for the financial year will focus on the following:
i. Strengthening of County structures to accommodate devolution so as to ensure
improved service delivery at county level: Whilst the National Government has
prioritized capacity building of counties to guarantee full benefit of devolution, the county
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government continues to address capacity building issues through capacity strengthening by
the County Public Service Board.
ii. The County has identified food insecurity as a priority issue with interventions geared
towards increasing the acreage under food through mechanization, investment to reduce the
County„s dependence on rain fed agriculture alongside other measures like value addition
in the production and supply chain. MTP lays emphasis on ensuring food security for all.
iii. At county level, gender and related issues remain a priority. The recognition is that high
gender inequalities in the County have contributed to the high poverty levels at 64.2 per
cent and high HIV&AIDs prevalence rates particularly among women.
iv. Health, a key socio economic indicator of development is one of the fourteen functions
devolved to County level and which continues to face great challenges during this transition
period. The County government has embarked on investing in quality and accessible
healthcare services as a key outcome in the Medium Term.
v. Education, the MTP shows significant progress made under First MTP but acknowledges
that several challenges persist particularly on the enrollment at ECD level .The County
government will focus on addressing Early Childhood Development that will ensure 100
per cent enrolment of children of pre-school going age and recruitment of qualified
personnel.
vi. On social protection, the County government intends to strengthen key component of
socio-economic development by introducing programs that are geared towards the
vulnerable members of society particularly the elderly, the women and children.
vii. To further enhance efficiency and competitiveness of the County economy, the County
government will devote more investment to infrastructure development and to the key
sectors of the economy that will drive growth particularly through public private
partnerships arrangements. Similar efforts will be made to increase value addition and
employment in fisheries, Agriculture and in the exploitation of our rich marine resource in
Lake Victoria and fertile land.
viii. To meet the demand for skilled jobs in the sectors, priority will also be accorded to
programmes targeting training and apprenticeships to meet the demand for human resource
skills by the Vocational Centres throughout the County.
ix. The county government will strengthen youth employment and entrepreneurship through
credit, financial assistance, and trainings. This will enable recipients to acquire skills and
engage in productive and gainful employment on their own or as suppliers to the larger
enterprises in the public or private sectors.
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x. The County government believes that justice and observation of human rights are integral
parts of improving governance and the rule of law. Over the five year plan period, the
county government of Busia will endeavor to work in hand in hand with the National
Government in its effort to expand, equip, and modernize the security agencies to ensure
that every citizen is assured of his or her safety and that of their property. Improved
security will also contribute to a better environment for doing business in Busia bringing in
more visitors, and investment opportunities.
3. PUBLIC EXPENDITURE REVIEW
The department of Finance and Economic planning in consultation with other departments will
undertake Public Expenditure Review by undertaking a detailed appraisal of the composition,
allocation and utilization of county expenditure during the past periods.
The main objective of Public Expenditure Review (PER) is to inform the budget process by
reviewing budget implementation progress in previous periods 2013-14, 2014-15 and 2015-
2016 and this in turn will provide a basis for future budget decisions by assessing the
challenges, strengths and weaknesses for future expenditure decisions. This will ensure optimal
utilization of resources geared towards realization of the objectives highlighted above.
In this regard, the county departments are therefore required to carry out vigorous expenditure
review which will determine programmes to be given priority, those to be discontinued and the
intended objectives that were achieved previously.
4. PROGRAMME BASED BUDGET (PBB)
The Public Financial Management Act, 2012 requires the county government to implement
Programme Based Budget. Programme-Based Budgeting (PBB) aims to;
i. Prioritize expenditure in the budget to ensure adequate resources are allocated to the
programmes that are of greatest benefit to the community. Programme Based Budget
(PBB) provides a link between resource allocation and the functions, strategic objective
and the outcomes of various programmes.
ii. Identify potential overlapping roles and responsibilities. This helps improve efficiency
and effectiveness in service delivery of the county departments.
iii. Departments are expected to align projects to the harmonized programmes with clear
objectives (outcomes), and link them to outputs, performance indicators and targets.
Programme performance indicators should mainly be indicators of programme outputs
(services provided) and outcomes (effectiveness).
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iv. The Chief Officers should ensure that in designing programmes each and every function
or activity undertaken by the department is included in relevant programmes. In
particular, care should be taken to ensure that:
a) There are no crosscutting activities or functions which are not assigned to
respective programmes;
b) Each programmes has a distinctive name that reflects the overall objective of
a programme; and
c) There is no duplication of programme names used by other Departments.
d) As much as possible, each department should fit prioritized projects to the
harmonized programmes and/or inform the County Treasury in adequacy in
case the department is formulating new ones.
e) Every budget from the departments should have a results statement (context
for budget intervention), a description of the main services (outputs)
provided by the programme, a statement of the programme's overarching
objective, a brief discussion of programme achievements to date, and a brief
description of the achievements expected in the next year. A description of
important issues, concerns, and summary of implementation plans should
also be included.
f) In line with the PFM Act, Accounting Officers should note that, PBB will be
submitted to the County Assembly alongside the traditional itemized
budgets.
g) While itemizing the budgets departments are required to submit not only the
2016/17 budget estimates but also the projection for two outer years i.e.
2017/18, 2018/19 and the immediate past year actual figures and
performance.
5. PRIORITIZATION AND ALLOCATION OF RESOURCES
Busia County Government will ensure there is rationalization of expenditure in order to ensure
that programmes funded are core and are in line the county‟s medium term plan. In this regard,
costs will be reduced through the elimination of duplication, inefficiencies, and wasteful
expenditure. These decisions will have implications in the budget ceilings to be provided in the
County Budget Review and Outlook Paper (CBROP) 2015.
Accounting Officers therefore should be guided by the following criteria when prioritizing and
allocating resources;
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i. Programmes prioritized in the County Integrated Development plan.
ii. Ongoing capital projects.
iii. Revenue generated from own source and Equitable share of revenue allocation of the
National Government
iv. Degree to which the programme addresess the Vision of the County.
v. The linkage of programme with other programmes;
vi. Degree to which the programme is addressing the core functions and responsibilities of
the Department
vii. Cost effectiveness and Sustainability of the programme.
Each Department is expected to develop and document the criteria for resource allocation.
Further, the departments shall undertake a reprioritization exercise which must address the
following:
Identification of “one-off” expenditure – This refers to amounts for “one-off”
projects or activities where spending was supposed to take place over a defined period
say one financial year.
Slow spending programmes - Programmes that may not have met implementation
targets due to procurement problems, lack of human resources, poor planning and other
challenges should be identified. This will guide the department in identifying some
savings, modifying or cutting down non-priority expenditures;
Underperforming programmes – After undertaking Public Expenditure Review, the
baseline examination, supported by a realistic assessment of actual outputs against
performance indicators (targets) should identify possible areas of savings;
Efficiency savings - The efficiency-savings initiative is intended to ensure that funds
are directed to service delivery, rather than non-essential spending. Efficiency savings
can be achieved through reducing operating costs and non-service delivery activities
and should be considered for all programmes;
Rescheduling of projects or activities - Where implementation of projects or activities
has been rescheduled, departments should provide a detailed explanation for the
rescheduling. Departments should also state the savings and financial implications of
rescheduling projects and activities.
6. THE BUDGET PROCESS
The county budget process will be in line with that of National budget process. The principles
outlined in Chapter 12 of the Constitution of Kenya, 2010 and Section 125 of the Public Finance
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Management Act 2012, will apply. Accordingly the County treasury will monitor, evaluate and
oversee the management of county public finances and economic affairs including the following:
i. Preparation of the annual budget for the county;
ii. Mobilizing resources for funding the budgetary requirements of the county government;
iii. Managing the county government‟ public debt and other obligations;
iv. Issuance of circulars and guidelines with respect to financial matters of the county
government entities;
v. Coordinating implementation of county budgets; and
vi. Reporting regularly to county assembly on the implementation of the annual county budget.
With regard to preparation of county budget the county government will adopt the format
and structure developed by the National treasury. The county executive committee member
for finance and economic planning will manage the budget process at the county level. It is
important to note that in accordance with Public Finance management Act 2012 Section
129 (2) (a) the county executive committee member for finance and economic planning is
required to submit budget estimates and other supporting documents to the county assembly
for approval by 30th April each year.
7. RECURRENT AND DEVELOPMENT BUDGET
The Public Financial Management Act, 2012 requires;
i. The recurrent expenditure should not exceed the county total revenue
ii. Over the medium term a minimum of thirty percent of the total budget shall be
allocated to development expenditure.
iii. The county government expenditure on wages and benefits of public officers shall not
exceed a percentage of the county government total revenue as prescribed by the county
executive member for finance
a) Use of Goods and Services
The Country Government expects the departments to undertake measures geared towards
scaling down less productive expenditures given the limited resources earmarked for
operations. They must then direct the savings towards investment and other development needs
of the county. Therefore, the County Treasury will critically review the budget proposals and
where necessary make reallocations from less productive items in order to direct savings
towards capital investments and other priority areas.
b) Consultancies and Professional Services
There are concerns over the nature and costs of many consultancy arrangements. In view of this
any funding factored in the budget for consultancies, contracted professional services,
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contracted technical services and feasibility studies will be scrutinized. Departments requesting
such funds will be required to justify such expenditures and indicate:
a) The specific task and timeframe the consultant is expected to undertake;
b) Why the task cannot be undertaken by the department‟s staff;
c) Details of steps being taken by the department to address the skills gap so as to reduce
the reliance on external consultants; and
d) Duration and cost of all consultancies and professional services entered previously by
the departments.
c) Capital Expenditures
Allocations to capital projects shall be made on realistic costing. Proposed capital projects
should be evaluated in the following context:
i. Preference for financing shall be given to those projects which are in full compliance
with the government priority and are reflected in the CIDP and fully justified for
financing;
ii. Priority shall be given to completion of on-going projects;
iii. Departments should indicate how the proposed projects will contribute to the county‟s
main objective; economic growth, job creation and increased citizen welfare
iv. Programmes that communities/stakeholders have identified and recognized as important
through public participation forums;
v. Sustainability of programme(s);
vi. Projects that can be realistically completed and in particular those that are expected to
be handed over within financial year.
d) Externally Funded Projects
Departments shall use Government financial management and procurement procedures when
implementing externally financed projects and only in exceptional cases will development
partners systems be used. Disbursement conditions as stipulated in the financial agreements
should be complied with and accounting and reporting of disbursed funds and expenditure
reports done on a regular basis. Only those projects which the County Government has already
negotiated for loan/grants or signed a memorandum of Understanding with development
partners will be factored in the 2016/2017 budget.
8. PUBLIC PARTICIPATION AND STAKEHOLDER INVOLVEMENT
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Public forums will be held across the county to collect the views of the public / stakeholders
and therefore the accounting officers are required to incorporate the inputs from the public
forums in the budget proposals.
In accordance with Article 221 of the Constitution, the budget estimates are supposed to be
submitted to the County Assembly by 30th April each year. To ensure compliance, all
departments should strictly comply with the deadline outlined in the budget calendar annexed
below.
Hon. Lenard Wanda Ombimbira
County Executive Member –Finance and Economic Planning
CC. H.E the Governor
H.E Deputy Governor
County Secretary
Speaker to the County Assembly
All County Executive Members
Members of the Budget and Economic Forum
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ANNEX 1: Ceilings for MTEF period 2015/16-2017/2018
MTEF Ceilings
Actual
2014/2015
Approved
Budget 2015/16
Projected
2016/2017
Projected
2017/18
County Assembly Recurrent
611,282,711 554,319,553 582,035,510
611,137,286
Development 75,070,650 178,310,000 187,225,500 196,586,775
Sub-
Total 686,353,361 732,629,553 769,261,010
807,724,061
AGRICULTURE
AND ANIMAL
RESOURCES
Recurrent
188,722,590 214,912,263 225,657,876
236,940,770
Development 79,316,295 215,896,362 226,691,180 238,025,739
Sub-
Total 268,038,885 430,808,625 452,349,056
474,966,509
TRADE, CO-
OPERATIVES,
TOURISM AND
INDUSTRY
Recurrent
33,156,082
40,969,666 43,018,149
451,690,207
Development 40,614,823 94,650,000 99,382,500 104,351,625
Sub-
Total 73,770,905 135,619,666 142,400,649
556,041,832
EDUCATION AND
VOCATIONAL
TRAINING
Recurrent
105,489,392 194,994,095 204,743,800
214,980,990
Development 118,999,965 270,315,000 283,830,750 298,022,288
Sub-
Total 224,489,357 465,309,095 488,574,550
513,003,278
FINANCE AND
ECONOMIC
PLANNING
Recurrent
341,268,290 567,910,893 596,306,438
626,121,760
Development 678,936,181 903,917,021 949,112,872 996,568,516
Sub-
Total
1,020,204,47
1 1,471,827,914
1,545,419,31
0
1,622,690,27
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COMMUNITY
DEVELOPMENT,G
ENDER,CULTURE
AND SOCIAL
SERVICES
Recurrent
50,027,890 62,923,861 66,070,054
69,373,557
Development 36,334,131 149,000,000 156,450,000 164,242,500
Sub-
Total 86,362,021 211,923,861 222,520,054
233,646,057
PUBLIC WORKS,
TRANSPORT,AND
DISASTER
MANAGEMENT
Recurrent
59,608,666 70,660,886 74,193,930
77,903,626.5
Development 341,037,051 163,000,000 171,150,000 179.707.500
Sub-
Total 400,645,717 233,660,886 245,343,930
257,611,127
LABOUR, PUBLIC Recurrent 393,779,760 333,344,507 350,011,732 367,512,319
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SERVICE, ICT
AND INTER-
GOVERNMENTAL
RELATIONS
Development 31,915,202 65,038,000 68,289,900 71,704.395
Sub-
Total 426,694,962 398,382,507 418,301,632
439,216,714
LANDS, HOUSING
AND URBAN
DEVELOPMENT
Recurrent
31,493,428 28,957,919 30,405,815
31,926,106
Development 61,670,336 177,900,000 186,795,000 196,134,750
Sub-
Total 93,163,764 206,857,919 217,200,815
228,068,856
WATER
ENVIRONMENT
AND NATARURAL
RESOURCES
Recurrent
70,514,705 68,699,656 72,134,639
75,741,371
Development 126,792,343 224,540,000 235,767,000 247,555,350
Sub-
Total 197,303,049 293,239,656 307,901,639
323,296,721
HEALTH AND
SANITATION
Recurrent 952,652,983 938,867,331 985,810,698
1,035,101,23
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Development 348,577,844 505,728,930 531,015,377 557,566,146
Sub-
Total
1,301,230,82
7 1,444,596,261
1,516,826,07
5
1,592,673,37
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COUNTY PUBLIC
SERVICE BOARD
Recurrent 34,383,990 31,949,587 33,507,066
35,824.193
Sub-
Total 34,383,990 31,949,587 33,507,066
35,824,193
THE
GOVERNORSHIP
Office Of The
Governor
Rec.
Gross 85,028,174 115,578,183 127,334,001
133,700.701
Dev.
Gross 32,393,165 10,000,000 15,000,000
20,000,000
Sub-
Total 117,421,339 125,578,183 142,334,001
153,700,701
Office of the Deputy
Governor
Rec.
Gross 32,855,499 28,089,729 30,250,215
31,762,726
Dev.
Gross 5,000,000 0
Sub-
Total 37,855,499 28,089,729 30,250,215
31,762,726
Office Of The
County Secretary
Rec.
Gross 12,248,072 59,778,302 65,756,132
69,043,939
Sub-
Total 12,248,072 59,778,302 65,759,132
69,043,939
Total 4,980,166,219
6,270,251,744
6,597,949,134
7,339,270,369
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ANNEX II: Format for Presentation of Programme Based Budget
PART A Vision……………………………………
PART B. Mission…………………………………
Part C: Performance Overview and Background for Programmes Funding
This part is supposed to review the budget for the previous year and should briefly discuss the
following;
Departmental performance review including major achievements for the period and
expenditure trends
Constraints and challenges in implementation and how they are being addressed.
Major services/outputs to be provided Medium Term budgets.
Part D: Programme Objectives/Overall Outcome
In this part list all programmes and their strategic objectives. Each programme to have only one
strategic objective/outcome.
E: Summary of Expenditure by Programme 2015/16-2017/18 (Kshs.)
Programme (CP)
Approved
Expenditure
Projected Estimates
2015/2016 2016/2017 2017/2018 2018/2019
Programme 1 (State
name of
Programme)
Sub programme 1
Sub programme 2
Total Expenditure
for Programme 1
Programme 2 (State
name of
Programme)
Sub programme 1
Sub programme 2
F: Summary of Expenditure by Economic Classification (Ksh.)
Expenditure
Category
Approved
Estimates
2015/2016
Projected
2016/2017
Projected
2017/2018
Projected
2018/19
Current Expenditure
Compensation to
Employees
Use of Goods and
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Services
grants and transfers
and subsidies
Acquisition of Non-
Financial Assets
Capital Expenditure
Acquisition of Non-
Financial Assets
Other Development
Use of Goods and
Services
grants and transfers
and subsidies
Total Expenditure
G: Details of Staff Establishment by Organization Structure (Delivery Units)
Delivery
Unit1 Staff Details
Staff Establishment
in
F/Y year 2015/2016 Expenditure Estimates
Position
Title
Job
Group Authorised
In
Position 2015/16 2016/17 2017/18 2018/19
Total
(The purpose of the delivery unit is to implement the strategic and operational
objectives of the programme in relation to the outputs. A delivery unit could be a
directorate department division or unit.)
H: Summary of the Programme Outputs and Performance Indicators
