Theme One: Macro-Economic Management and Resource Mobilization
The overall objective is to strengthen macro-economic forecasting and enhance collection, accounting and timely reporting of public revenues at national and county Governments, in line with macro-economic fiscal policies.
This theme focuses on economic management with the aim of ensuring accelerated and sustained economic growth through pursuit of prudent economic, fiscal and monetary policies.
Resources, in the context of this theme, relate to revenues that the government needs to finance the national budget. Government revenues, on the other hand, encompass streams from taxes and other sources collected through the Kenya Revenue Authority (KRA), non-tax revenues (including Appropriations in Aid (A-I-A)) collected by MDAs, return on public investments, loans and grants, contributions through Public Private Partnerships (PPPs), and proceeds from privatization.
This theme is achieved by Strengthening Macro-Economic Forecasts, Enhance Tax Revenue Collection, Strengthen Mobilization, Accounting and Reporting on County OSR, Improve Recording, Accounting and Reporting of External Resources, Consolidate Efforts to Mobilise Additional Resources through PPP, Strengthen GoK’s Capacity for Debt Management and Reporting, Improve Reporting on and Accounting for Internally Generated Funds and External Appropriation in Aid (A-I-A) by MDAs.
Theme Two: Strategic Planning and Resource Allocation
The overall objective of this theme is to ensure effective and equitable allocation of public funds in line with national and county government priorities.
This theme include reforms on resource allocation and increase alignment of public resources with national priorities during budget preparation.
It is achieved through Strengthening Strategic Planning, Strengthen County Budget Formulation, Strengthen Planning and Oversight over Public Investments Projects,
Strengthen Systems for Budget Formulation.
Theme Three: Budget Execution, Accounting and Reporting and Review
The objective for this theme is to ensure efficient and effective budget utilization, accurate and timely accounting and reporting and effective control, scrutiny and review of expenditure of public resources at national and county governments
Budget execution refers to the process during which public institutions (MDAs and counties) implement their activities and programmes for which Parliament or County assemblies have made budget appropriations. It also covers activities of monitoring, budget adjustments (reallocations/ supplementary adjustments) and in-year reporting. Under this area, the earlier version of the PFMR Strategy identified priority reforms in a range of areas including operationalising the Treasury Single Account (TSA), rolling-out of IFMIS to all MDAs and counties, enhancing the integrity and sustainability of the payroll (civil service, teachers and pensions), enhancing risk assurance across PFM systems, implementing a strengthened framework for public procurement, and strengthening the effectiveness of internal controls.
On the other hand, accounting and reporting relates to maintaining records of transactions – financial and non-financial, during operations of budget implementation and reporting on them so that institutions can be accountable for the implementation of the budget. Obligations and procedures for accounting and reporting by all institutions are provided in the PFM Act 2012. Priority reforms for this section cover introduction of accounting standards in reporting across all State Organs and Public Sector Entities and implementation of modern asset management practices.
The key interventions on this theme are Strengthening Cash Planning and Cash Management, Strengthen In-Year Monitoring and Reporting, Strengthen Statutory Reporting, Improve Efficiency and Effectiveness of Internal Audit Function, Strengthen Oversight and Reporting of Fiscal Operations of SAGAs, Implement Asset and Liability Management Reforms, Implement Pension Reforms, Strengthen Payroll Management, Strengthen Systems for Teachers Payroll, Strengthen Procurement and Asset Disposal Functions in the Public Sector.
Theme Four: Independent Audit and Oversight
The overall objective for the theme is to ensure accountability and oversight of public resources and enhance efficiency, effectiveness and lawfulness in the collection and application of public funds.
The role of oversight involves the review of operations to uphold the integrity and enhance public trust in government institutions by holding them accountable for their actions and decisions in management of public resources.
The key institutions for audit and oversight – and their roles, have been prescribed in the law. The main institutions are Parliament, County Assemblies, the Office of Controller of Budget, Office of Auditor-General and Public Procurement Regulatory Authority. The oversight role of the legislative organ is supported by independent audit function under the Office of the Auditor-General (CoK- Article 229), and the budget implementation oversight function assigned to the Office of the Controller of Budget (CoK– Article 228). The key laws supporting the establishment and the mandates of these institutions– include the PFM Act (2012), the Public Audit Act (2015) and the Public Procurement and Asset Disposal Act (2015).
The key intervention for this theme are Strengthening Capacity of Office of the Auditor-General, Strengthen Capacity of Parliament and County Assemblies for Oversight,
Strengthen Audit Follow-Up, Implement Inter-Agency Mechanisms to Strengthen PFM Oversight Function
Theme Five: Fiscal Decentralization and Intergovernmental Fiscal Relations
The Overall Objective for this theme is to strengthen intergovernmental fiscal relations and improve the efficiency and effectiveness of county public financial management systems.
Theme Six: Legal and Institutional Framework
This theme aims at ensuring a consistent and harmonized PFM Legal and Institutional Framework and enhance compliance of MDAs and counties with its implementation.
Key legislations, namely the Constitution of Kenya 2010 and PFM Act 2012, were already in place at the time of drafting and adoption of the current PFM Strategy. They provide the framework for enacting subsidiary legislations many of which were identified under the Fifth Schedule of the Constitution. Relevant legislations in the schedule cover public participation, revenue funds for counties, contingencies fund, loans guarantees, financial control, accounts and audit of public entities, and procurement of goods and services. Institutional reforms in the Strategy mainly relate to restructuring the National Treasury in line with the PFM Act 2012.
The key intervention are strengthening legal framework, Strengthening Institutional Framework/Complete reorganization of the National Treasury an Clarifying the County Institutional Structures.
Theme Seven: IFMIS and other PFM Systems
The Overall Objective for this theme is to establish a secure, reliable, efficient, effective, and fully integrated public financial management system in national and county governments
The Government has been implementing PFM related systems such as IFMIS, Internet Banking System, KRA systems, Pension Management Information System (PMIS), Integrated Personnel and Payroll Data System (IPPD), Government Human Resource Integrated System (GHRIS), Electronic Project Management Information System (e-ProMIS), CS-DRMS, e-Citizen, and Revenue Collection and Management Systems for the counties.
The key interventions on this theme is to strengthen the implementation of PFM systems by MDAs and counties such as Implement Revenue Collection Systems for the County Governments, Integrate IFMIS and other PFM systems, and to ensure PFM systems are well supported.