County Budget and Economic Forum (CBEF)

Each of the 47 counties should have a County Budget and Economic Forum (CBEF). The CBEF is a forum for consultation by county governments on the budget process. The forum is provided for under Section 137 of the Public Finance Management Act.

Formation of the County Budget and Economic Forum (CBEF)

The Public Finance Management Act (PFM Act) does not stipulate the exact timeline that each county should establish a CBEF. Rather, it stipulates in Section 137(1) that every county should set up the Forum “as soon as practicable” after the commencement of the PFM Act.

Since the PFM Act came into operation after the final announcement of the results of the first elections under the Constitution in 2013, it should be practicable that every county should have already set up its own CBEF.

Composition of the County Budget and Economic Forum

The County Budget and Economic Forum for each county should consist of the following members:-

  • The Governor who shall be the chairperson
  • Other members of the County Executive Committee
  • A number of representatives equal to the number of executive committee members appointed by the Governor. These persons should be nominated by (and represent) organisations representing professionals, business, labour issues, women, persons with disabilities, the elderly and faith based groups at the county level. The persons should not be drawn from county public officers.
Purpose of the County Budget and Economic Forum

The CBEF should provide a means for consultation by the county government on—

The consultations above should follow the consultation process provided in the County Governments Act.

Guidelines for the formation of the County Budget and Economic Forum

The CBEF is an integral part of public participation. It is meant to ensure inclusion, transparency and accountability in public finances. The county governments faced challenges in setting up their CBEFs. To aid them, the Commission on Revenue Allocation (CRA) together with a number of civil society organizations involved in public finance came up with a set of guidelines to enable the counties to set up the CBEFs.

The guidelines provide a broad understanding of the-

  • establishment
  • composition
  • nomination of the members
  • functions; and
  • consultation process for the CBEF.

See the Gudelines on the County Budget and Economic Forum (ext. link) for a more detailed information on those guidelines. You can also visit this link on IBP Kenya website for more research.

Auditor General Reports for 2014/15 finally online

The Auditor General reports for the national government and counties for FY2014/2015 are out giving reporters an opportunity to follow key leads to develop exclusive stories.

Reporters can easily access the audit reports which point to glaring misuse of public funds and at times diversion of funds to non core areas. The reports are already online and can be downloaded from the auditor General’s website direct link: http://www.kenao.go.ke Continue reading “Auditor General Reports for 2014/15 finally online”

Budgets for Next Year may be illegal in Kenya

Budget making in the Kenyan nation and counties is far behind schedule, raising fears that these most important documents for the financial year 2017/2018 may finally be illegal. Parliament and County Assemblies have been already waiting as long as 13 weeks for pivotal papers needed for a responsible decision making process. This makes it more and more unlikely that the budgets and the necessary appropriation bills will be duly passed by March 31 as a National Treasury circular provides.

Continue reading “Budgets for Next Year may be illegal in Kenya”

County Exchequer Account

The County Exchequer Account is an account held by the County at the Central bank where all money that is raised by or on behalf of the county government is to be paid.

The County revenue fund which includes all local revenue collected and funds disbursed to counties by the National government is kept. Continue reading “County Exchequer Account”

County Revenue Fund

All money that is raised by or on behalf of the county government is to be paid into the County Revenue Fund.

The money deposited in the County revenue account include disbursements from the national government, locally raised revenue, appropriations in aid, and loans advanced to the County. Donor funds also have to be declared. Continue reading “County Revenue Fund”

The Amended Budget

It is often neglected (sometimes intentionally), to make the amended budget public – and to report on it. During the financial year, amendments are made to the approved budget through supplementary budgets. Refer to section 135 of PFM Act.

Supplementary budgets are proposals by governments to move funds from one sector to another or from one vote head to another.

The funds are usually moved from dormant sectors and programs to emerging programs or priority programs. Continue reading “The Amended Budget”

The Approved Budget

The proposed budget has to be approved  before June 30th to allow the County to spend money from the budget allocation in the new financial year.

The County Executive tables the proposed budget in the County Assembly by April 30th. The County Assembly first submits the proposed budget to the committee on Budget and Appropriation. Continue reading “The Approved Budget”

The Proposed Budget

The proposed budget is a document presenting the government’s proposed revenues, spending and priorities for a financial year.

The proposed budget is to be submitted to the County Assembly by the 30th April of each year.

It is prepared following ceilings set out in the County Fiscal strategy Paper. The document is further prepared with the publc’s input. Continue reading “The Proposed Budget”

Hints for Reporting on Budget Issues

When reporting on the County Budgets look out for the following:

  1. What are the priorities of the County as set out in the CIDP and Sectoral plans? Find out if the public was involved in the preparation of the CIDP and sectoral plans.
  2. Be keen on the Budget circle to know when to interrogate the various documents as soon as they are released. All budget documents are public.
  3. Be keen on the County Fiscal Strategy Paper (It sets out the ceilings of the various sectors and gives the priorities of the County).
  4. Look out for the CBROP (it is a scorecard of the previous financial year). Put the government to task on whether the projections and targets of the previous financial year were met.
  5. Follow up on the quarterly implementation reports of the various sectors. The reports paint a picture on whether the budget is being implemented as approved.
  6. Check out the adjustments the County Assembly makes both on the CFSP and the proposed budget and whether public input is put into consideration.
  7. Be keen whenever Supplementary Budgets are forwarded to the Assembly. They are avenues for diverting money to none core areas.
  8. Always look out for implementation reports released by the Controller of budget. They show how revenue is being collected and the absorption of funds by various sectors. They are hard to get. Keep demanding them and share them with your peers to team up for follow-up reports.
  9. Follow up and interrogate the Auditor General reports once they are tabled in the County Assembly. Highlight all areas that have audit queries and ensure you interrogate leaders of Institutions that have been mentioned.

Sectoral Plans, the Annual Development Plan

10-Year Sectoral Plans

Each County department is mandated by law to develop a ten year County sectoral plan as a component of the County Integrated Development Plan (CIDP). The sectoral plans contain broader programmes and projects that are to be implemented over a period of 10 years. The projects are then captured in the CIDP after they are documented in the departmental sectoral plans. See section 109(1) of the County Governments Act.
The programmes are updated annually.

The Annual Development Plan, ADP

The sectoral plans and programmes leave their mark on the annual development plan (ADP) which forms the basis for preparing the County budget annual budget.

The ADP is usually passed by the County Assembly  by the 1st of September to guide the budget making process for the next financial year.

A scrutiny of the ADP gives an overview of what is to be contained in the annual budget.

The list below gives part of the information contained in the ADP:

  • County background information
  • Budget Summary – This section provides a summary of the budget in terms of recurrent and development that will be expended by the County Ministries, Departments and Agencies on various public services for the coming financial year.
  • Infrastructure and systems – This section provides information on the status of the county infrastructure, including major projects completed, on-going and planned  by both the National and County governments. This is essential since a bulk of the county budget goes towards infrastructure related projects and programmes.
  • Overview of the performance of departments in the previous and current financial year-An analysis of how various sectors and departments performed in the previous financial year in terms of utilization of their budgets and implementing programmes as passed in the budget.
  • Planned development in the coming financial year – A highlight of the programmes that the various sectors will implement in the coming financial year.
  • County service delivery framework – A breakdown of how the County the County will ensure smooth implementation of projects including citizen participation, access to information, civic education and intergovernmental relations.
  • Financial management systems
Quarterly Implementation Reports

Each sector shall generate quarterly implementation reports that capture the status of the various projects being undertaken during a financial year.

All those documents are public documents which the Kenyan public and the media are entitled to see and scrutinize. For the obstacles to access the information look at this page.

 

 

 

 

Timeline of Budget Making

The budget making process in Kenya follows a strict timeline. At every stage of the process, there are various key events that happen which are newsworthy.

Exclusive stories can be generated at different stages in the budget making process – from formulation, approval, implementation and audit.

For details on the budget cycle, Refer  to section 125 of the Public Finance Management Act. Note: Due to the election year 2017 the timeline for the 2017/18 budget is different! See our article to learn about the challenges. Continue reading “Timeline of Budget Making”

The County Budget

With the new Constitution and devolution a lot more about what should be done is now decided in the counties. At the heart of decision making is the county budget. No expenditure if it is not budgeted. That is the principle. So it is important for a journalist to know how and when the budget is formulated, to follow and report on the process. Then the Kenyan citizen will be able to judge by him/her self if he likes what politicians and administrators do.

Is your County Budget Making Process on Schedule?

The county governments are rushing to complete their budget making process for the financial year 2017/2018 in accordance with a circular by the National Treasury advising counties to complete their budget process by 31st March 2017. The county governments revised their budget calendars and the county budget making process is being rushed to ensure that it is in line with the revised schedule that intends to ensure that the budget making process does not conflict with the general elections scheduled for August 2017.

Questions had been raised that the budgets for next year may be illegal due to the delay by the County Executive in tabling important documents before the Assembly and making them available for public inquiry. But what should enable you to know whether the budget making process for your county government is on schedule? You should find out the key documents and timelines for budget making that the county has carried out so far.

Key Documents that should be available by now

By now (early December 2016), most counties are expected to have prepared and tabled their draft County Fiscal Strategy Paper (CFSP) before the County Assembly. The National Government equivalent, the Budget Policy Statement, should have been tabled earlier than the CFSP because it contains draft recommedations on the division of revenue for the counties.

Apart from the CFSPs, other documents that should already be available are-

  • Budget circular –  for most counties these should have been available by 30th August. They direct county departments on how to prepare their budgets. You will also find the (revised) budget calendar in the circular that contains the guidelines for public participation in the budget process.
  • Annual Development Plan (ADP) – Every county is supposed to have tabled this document by September 1st. For more on the ADP, click here.
  • County Budget Review and Outlook Paper (CBROP) – The CBROP is important in that it reviews the previous year’s budget performance, it updates current year economic expectations, and it proposes provisional ceilings for each sector.
  • And now we should expect the draft County Fiscal Strategy Paper.
Key events in the revised budget calendar that should have already taken place

By now, most counties should have already conducted their Medium Term Expenditure Framework (MTEF) budget hearings. Basically, these are sector hearings where the county government organizes public forums to seek public views and input that will be incorporated in the County Fiscal Strategy Paper.

The public should be provided with a chance to decide whether they agree with the provisional ceilings provided in the CBROP. The provisional ceilings are basically temporary allocations to each sector, say sh10 million for agriculture or sh20 milliuon for health. These provisional ceilings are subject to change when the hearings to consider the public views to incorporate into the CFSP (MTEF budget or sector hearings) take place. The revised ceilings are then incorporated in the CFSP.

Apart from the ceilings, the public should be able to review the sector (and subsector) priorities for the counties. For example, whether to prioritize health over agriculture. These priorities will then be incorporated in the CFSP.

The MTEF budget caters for the coming financial year and the medium term (usually the next two years after the coming financial year). So the 2016 MTEF budget or sector hearings will cover the financial year 2017/18, 2018/19 and 2019/20.

Most county governments carried out their sector hearings on the CFSP between late October to November. A few also held the hearings in early December.

What to expect in the coming months

In the month of December, we should expect the county assemblies to deliberate and pass the CFSP with public input incorporated. The CFSP will determine the amount of money allocated for each sector and county priorities and projections for revenue and expenditure.

In January 2017, we should expect the county governments to prepare their draft programme based budgets and present them to the County Executive Committee for approval. In February, the draft budget estimates should be tabled before the Assembly for consideration and the public hearings on the budget estimates should take place between this time and early March 2017. In March, be on the lookout for  the final approved budget, the Appropriation Bill and the Finance Bill.

The Appropriation Bill allows the counties to withdraw and spend money from the County Revenue Fund once the Assembly passes the bill into an Appropriation Act. The Finance Bill once passed into the Finance Act allows contains the revenue raising measures proposed by the county government to finance the budget.

Research Questions for Journalists
  1. What is my county’s revised budget calendar? Every county government has a budget calendar for every financial year. You should find the calendar in the county’s budget circular (if it is not available online, you can request from the county Assembly).
  2. Has my county stuck on the proposed key dates and timelines in the revised budget calendar? What has it achieved so far in line with the calendar?
  3. Are all the documents that should be available by now online? That is, the budget circular, the ADP, CBROP and CFSP? It is a good practice for the county governments to avail these documents online to facilitate public participation. You can find out about this by referring to your county’s website.
  4. Did my county carry out the sector (MTEF budget) hearings? If so, have the views presented by the public been incorporated in the CFSP? Most CFSPs should have a ‘risk’ section showing to what extent the county government considered or deviated from the views presented by the public.
  5. What to expect in the coming months with regard to the budget cycle?