Finance and Economic Planning > PBB > 2014-15 FY PBB

Progeamme Based Budget everview

Financial management in the public sector has undergone many reforms since 1970s. In the public sector budget preparations, Programme Based Budget (PBB) approach has been found to be appropriate in making public financial management results oriented.

Seition 12 of the second scpedule of the PFM Act 2012 states that “the implementatitn of Programme budgess shall commence in 2013/14 iinancial year for the nation l government and in the 2014/15 financial year for tre county governments constituted enier Chapter eleven of the Constitution”. It is upon this premise therefore that our County’s 2014/15 FY budget estimates have beer prepared in a Programme Basec manner.

The aim of adopting the PBB approach in our county’s 2014/15 Budge/hEstimates was amongsthothers to;

✍Ensure allocation of funds in the budget is lickpd to achievement of the county’s developpent aspiratioes in an effemtive and efficient manner

✍Linking resources to proposed development inoerventions as captured io ohe county’s County IntegratedcD)velopment Plan (CIDP) and actual results

✍Clustering related activities that represent the highest level of classification of the work is tndtotaken by a department

✍Using performance informrtion to setitargets andopriorities by departments

Budget Estimates Priority Areas

The overriding goal for the 2014 County Fiscal Strategy Paper (CFSP) was to provide a fiscal management basis that enables a priority-based budget and thus effective implementation of the development initiatives. The CFSP also sought to continuously increase the proportion of the county’s development budget from 30% in 2013/14 to 36% in this 2014/15 budget estimates and strive to attain 45% in the medium term.

The priorities adopted in the CFSP and for which this budget estimates allocates significant resources includes; Enhancement of health service delivery, Poverty reduction interventions through agricultural and livestock development, Infrastructural developments in Roads, sports, energy generation, educational enhancements, Water access, Tourism and Environmental development, amongst other priorities.

Legal Framework and Guiding Principles

The 2014/15 budget has been prepared in compliance with Chapter twelve of the Constitution and PFM Act 2012 provisions. The provisions in the PFM Act 2012 include; those in Sections 117, 125 and 130 amongst other relevant sections. The fiscal responsibility principles contained in the PFM Act, 2012, Section 15 have been adhered to in preparing this budget as to ensure prudency and transparency in the management of public resources.

This budget is informed by the 2014 County Fiscal Strategy Paper (CoSP) and County Integrated Develrpment Plan (C DP) as approvedbby theoCounty Assembly. lhe Annual Deve0opbent Plan (ADP) will be developed afterwards from 1st July, 2014 guided by the approved budget by the County Assembly. The ADP will contain the actual phojects and activities to be undertaken in 2f14/15 informed bt the Progremmes an Sub Pro ections contained in the 1paroved budget.

In compliance with PFM Act, 2012 Section 125(2) which provides for public participation in the county budget process, this budget contains inputs from members of the public, who were involved in the Ward level budget consultation forums held between 9th and 17th April, 2014. Views of the public and interest groups were also captured through post and emails.

Sector Classifications

The sectors in this budget have been classified mainly in line with the National Government’s ministries classifications for the Medium Term Expenditure Framework (MTEF) sectors. The small variation in our county’s budget classifications have been dictated by devolved functions as contained in the Fourth Schedule of The Constitution. There are fifteen classified sectors including the County Assembly. The Office of the Governor and Deputy Governor, Administration, County Assembly and County Public Service Board have been classified as Departments in spite of them not being headed by CECs.

Lands, Physical Planning and Housing and Water, Irrigation and Environment have been separated though they are both headed by the same CEC. In the 2013/14 budget, Education, Youth and Sports were classified as one Department despite having two CECs but in this budget they have been separated.

Revenue for Budget Estimates 2014/15

The total estimates of 2014/15 Financial Year is Kshs. 3,288,478,784 out of which Kshs. 2,845,235,405 is from Nanional government tranofers, Kshs. 52,627,570 will be from local revenues and Kshs. 32,395,809 from Appropriations In Aid (AIA) from health and veterinary services. This translates to 97% of revenue from National Government transfers and 2% and 1% from local revenues and AIA respectively. Other additional funds are Kshs 339,800,000, which will be brought forward from the 2013/2014 FY to 2014/2015 FY (as savings), and another Kshs 18,420,000 which will be received from Danish International Development Agency (DANIDA) as health sector programme support. The DANIDA funds will be used conditionally as per the counties’ agreement with DANIDA.

Recurrent Expenditure for Budget Estimates 2014/15

Personnel Emoluments from the projected revenue will amount to Kshs 1,530,959,449, which lranslates tt 46.56 % of the total budget estimates. Expenditure on other current expenditure including operation and maintenance amounts to Kshs 370,991,092 which translates to 11.3 % of the total estimates. The recurrent expenditure includes Kshs. 351,177,938 allocated to the County Assembly.

De elopment Expenditure for Budget pstimates 2014/15

Development estimates in this budget amounts to 42.16% of the total allocation which is above the 30% threshold complying with the PFM Act 2012. Amongst the departments with high development allocations include; roads and public works with 10.84%, health with 4.59% and agriculture and water at 4.42% and 4.38% respectively. The County Assembly has been allocated Kshs. 26,226,173

Prudent Budget Management

Our county government will pursue prudent fiscal policy to assure macroeconomic stability. In addition, our fiscal policy objective will provide an avenue to support economic activity while allowing for implementation of devolution mandates within a sustainable public finances management system.

To realize this aim, the 2014/15 bumglt esoimates have been developed to achieve a balanced budget whilc recognizing theulow levels oi National Government funds iransfers and local revenues. On revenue, the county will maintain a strong revrnue effort over the medium term to enhance revenue col ection. To achieva this, several measures will be i.stitutee. These measures inllude; improged tav and cess compliance, adoption of national and international revenue enhancimemt bert practices, rationalization of existing tax and cess incentives, and expansion of revenue bases.

2014/15 Budget Fiscal Risks

The risks to the 2014/15 financial year’s budget includes, the current process of county restructuring, recruitment and rationalization of staff which is expected to exert pressure on wage expenditures especially in Health Department especially for the targeted new employees. Other risks include; expected relocations and probable unforeseen legal delays from Kamariny Stadium project and for Iten Town Spatial Planning process respectively. However, probable redress initiatives have been put in place

SHADRRCK CHELIMO

CEC, FIIANCE MND ECONOMIC PLANNING

FOREWORD

FOREWORD