Mar32023

Treasury Develops Budget Portal to Enhance Transparency

Treasury Develops Budget Portal to Enhance Transparency

National Treasury Deputy Director of Budget, Isaiah Ochele (extreme Left ) Public financial Management Reforms Secretariat Programme Coordinator, Julius Mutua ( second Left) Jacob Muimi PFMRS ICT Specialist (middle) National Treasury, Director of ICT, Lynne Nyongesa, Fridah Kathure  (National Treasury Finance Officer) and National Treasury Senior Economist Alexander Riithi are taken through parts of the modules during the Online Budget Portal Workshop in Nakuru.

You will now be able to access budget documents and related information touching on all ministries, Departments and Agencies (MDAs) courtesy of the online budget portal.  The National Treasury and Economic planning has finalized the development of the first phase of the online budget portal.

Speaking during the workshop held in Nakuru, the Public Financial Management Reforms Secretariat, Programme Coordinator, Julius Mutua said the budget portal development is anchored in the PFM Reform Strategy 2018-23 Results Area 2 “Strategic and Transparent Spending on Public Investment and Service Delivery, which establishes a clear agenda for budget transparency with a direct focus on ensuring public involvement in the budget making process.

The development of the portal is a Disbursement linked Result (DLR) under the GESDeK (Governance for Enabling Service Delivery and Public Investment in Kenya) Program, jointly funded by the World Bank and the French Development Agency (AFD). Upon completion of the first phase, the Independent Verification Agent (IVA) as required under the GESDeK program, will subject the portal to an independent review to confirm its functionality.

Speaking during the same workshop, National Treasury, Director of ICT, Lynne Nyongesa, said the portal developed forms part of the digitization campaign to increase transparency, promote public participation in budget making, and improve accountability in decision-making processes related to public financial management.”

“The first phase, that has been developed, comprises the development of the portal by establishing the online interphase and data management procedures for the public to access budget data in searchable form on programs and sub programs”

“Members of the public will also be able to access information on how much public resources are being channeled to schools and hospitals” she added.

Developed internally by Inter-ministerial ICT Team, the budget portal can be accessed at: https://bajetiyetu.treasury.go.ke.

The portal is designed as a user-friendly interface where key budget indicators are presented as charts and graphs. The portal is designed to be useful for both financial experts and the public. The first phase of the portal has three main modules, the first being a document library. This is a searchable library of published documents from the national and county level. The library includes two main types of information: on published plans and budget strategies, as well as detailed budgets, annual budget laws, and quarterly/annual budget reports” she added. “

The second module is an interactive data module. This online interface will allow users to view and interact with budget data. Users are able to access a collection of searchable, downloadable data tables, including in excel format.

The third module is the service facilities data for health and education. This module enhances transparency by providing the ability to drill down data search from county to sub-county. This allows the public to see how much funding is allocated to specific facilities and hold their leaders accountable.

According to the National Treasury Deputy Director of budget, Isaiah Ochele, the development of the portal has created an avenue for civil society and general public in the budget making process and enable Kenyans to have informed discussions of different government policy areas.

“The philosophy of the portal is to empower the public to understand the budget making process, to gain a clearer understanding on the budget calendar and for them to feel appreciated and encouraged to participate in policy making from a public participation standpoint.” Added Mr. Mutua

The workshop is part of PFM (Public Financial Management) reforms activities coordinated by the Public financial management reforms secretariat.

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Jul292022

Broadening Revenue Streams On Own Source Revenue for Counties

Constitutionally, County Governments can impose property taxes, entertainment taxes and service fee and charges for the services they offer. According to the Commission of Revenue allocation report: County Own Source Revenue Report 2019, only 11 out of 47 counties can finance more than 10% of their overall budget which implies that the majority of the county governments finance close to 90% of their budgets through transfers to county governments. There is lots of potential being harnessed for increased revenue collection by the county governments. New revenue streams get added to the tax bracket and there is continuous expanding of the revenue base for streams.  The Public Finance Management Act (PFMA) under Section 161 requires that counties seek the view of the Commission on Revenue Allocation (CRA) and the National Treasury when imposing a tax or any other revenue raising measure.

The National Treasury Secretary Ukur Yatani said in the Quarterly Economic and Budgetary Review report for the first half of 2021/2022, “total transfers to County Governments for the period ending 31st December 2021 amounted to Sh144.9 billion, against a target of Sh196.1 billion.” This lack of sufficient funds to the counties means that the counties cannot spend on development projects like roads and sewerage, which ultimately creates an acute unemployment crisis for the youth.

The 2020/2021 Annual Monitoring & Evaluation Report for the 2018-2023 PFMR Strategy cited various challenges affecting OSR in counties;

  • There is lack of clear revenue projection methods among most counties. Whereas some counties attempt to incorporate scientific methods in setting revenue targets, some use budget balancing figures as revenue targets. This lack of standard revenue projection approaches leads to unrealistic targets.
  • Lack of updated valuation rolls– property taxes have a huge potential to yield high revenues to county governments but are hindered by outdated valuation rolls and computation of rates based on unimproved site value, even for urban counties.
  • Weak revenue administration structures. This results in non-alignment of revenue streams and revenue leakages.
  • Pending bills due to inability to meet revenue targets by most counties
  • Political interference in OSR administration inhibits collection.
  • Lack of tariff and pricing policy to guide imposition of fees and/or charges by counties.
  • Inadequate resources in most counties to effectively carry out public participation on legislative processes.
  • Delays in disbursement of funds to county governments hinder timely implementation of the budget.

The National Treasury has developed a National Policy to Support Enhancement of County Governments’ Own Source Revenue aimed at assisting counties optimize OSR by broadening county governments’ revenue base while enhancing their revenue administrative capacity. The policy addresses OSR collection before and after devolution, challenges of revenue administration and management, policy interventions and governance, accountability and oversight for the policy. The policy interventions include; the proposed County Government (Revenue Raising Process) Bill, enactment of primary OSR Laws, development of Tariffs and Pricing Policy, development of a master valuation roll and development of an Integrated County Revenue Management System (ICRMS) among others.

Under Result Area 1 of the PFM Reforms Strategy; Sustainable and predictable fiscal space to deliver government programs, Reform Result 1.3 Efficient and effective revenue policy administration at county level, with high taxpayer compliance supported by updated legal framework and Reform Result 1.4 Credible fiscal framework at the national and county level include realistic revenue and expenditure projections consistent with a reduction in the national fiscal deficit over time address the challenges and policy recommendations named above.

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Publish Procurement Contracts in Public Procurement Reforms

Public Procurement roughly accounts for 25-30% of developing countries expenditures according to a World bank report on Strengthening Sustainable Public Procurement and therefore poses the highest corruption risk in developing countries. Procurements may range from frequent small and standardized Request for Quotations type, procurements of pens and computers, to large and more complex, albeit fewer in number, Request for Proposal type, procurements of roads, IT systems and Public Private Partnership arrangements.

 

On some level, The Government has gotten it right in a number of reforms in public procurement. The Promulgation of the Constitution committed the Government to the principles of Good Financial Governance which are laid down and regulated in its Twelfth Chapter.The enactment of Public Procurement and Disposal Act 2015 ushered in a new regulatory environment. Public Procurement and Regulatory Board, the Public Procurement Department, National Treasury and an Influential Independent review Board are some of the institutions that were rolled out. Among notable reform initiatives include the operalization of the Procurement Portal as well as enactment of the Public Procurement Regulations. The national procurement policy was rolled out in 2021 thus strengthening the regulatory and institutional framework.

 

There however remains a number of corruption risks across pre-tendering, tendering and post award stages. For example, the expose on Covid irregularities by the Auditor General and Parliament oversight committees at The Kenya Medical Supplies Agency makes for an uncomfortable reading. The scale and nature of the procurement irregularities point towards an indictment of corporate governance controls in Government agencies. There is also limited transparency. For example, annual procurement plans and large government contracts are rarely published.

With such a robust legislation and institutional architecture in place to regulate procurement in the country, one wonders why the same corruption related practices keep recurring? In order to answer this, one has to appreciate the context of public procurement.
Automation becomes another remedial intervention. There is, currently, no comprehensive e-procurement system in the country. Some e-procurement functionality exists within IFMIS, such as supplier and government entity registration, annual procurement planning, bid solicitation, contract and payment information. The information, however, is not publicly available. It’s however significant to note that tangible progress has been made by the Public Procurement Department over the last five years. Presently, The Public Procurement Department , is expected to design, develop and launch a new electronic Government Procurement system (E-GP). The process of tendering for the contractor to develop the software is almost complete. Piloting of the system is expected to be done by year end. The full rollout is expected in June 2023 barring no further delays.

International Experience of high middle-income countries such as Kyrgyzstan and the Philippines suggest that deployment of even a partial procurement automation solution could save at least 10% of procurement spending. These would translate into savings of approximately 200 billion shillings for the country, enough to cover the cost of construction of six projects like Thika Superhighway annually.

Yet, we do not have to wait for the e-Procurement system that may take a few more years to fully materialize. Transparency is an undervalued international practice.Large Public Procurement contracts should be made public. In practice, Government procurement is subjected to different transparency standards compared to private sector procurement. In public procurement, there should be a distinct audit trail, with all information clear and accessible. In my view, if a supplier is willing to do business and profit from public monies, they should be ready and willing to have such contracts made public for scrutiny.

There is a lot that can be done now. Contrary to international good practice, the annual procurement plans for government agencies are not published in the centralized manner on the Public Procurement regulatory Authority Public Procurement Information Portal. Publication of procurement plans would help suppliers better prepare for the upcoming bids, increase competition, reduce cost and improve quality of goods and services procured.

Regardless whether contracts are published or not, the award notices on the portal must be much more informative to Include quantities of goods/services purchased so that people could see the unit price and beneficial ownership information was highlighted by IMF. Indeed, The primary, if not, the significant bottleneck in procurement reforms remains the close-knit relationship between politicians and private business. One significant takeaway from the parliamentary inquiry into the KEMSA covid scandal is the realization that most companies that won the lucrative tenders were referred or had close relationship with Politicians.

The legal counter argument of contract confidentiality lacks merit, why would a public contract, meant for public benefit, be made confidential? To what end? Good international practice suggests that the most important contract information should be captured in the e-GP system and be made publicly available. Also, it is an increasingly good practice for the full text of the contracts themselves, and especially larger Government contracts, to be publicly availableAs a country, we have to adopt international best practices and localize them. Of importance, we have no alternative but to adopt and operationalize an end-to-end e-procurement system.

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Apr272022

PFMR Strategy 2018 – 2023 – Mid Term Review

Various reforms have taken place in Kenyan Public Space with an aim of improving the overall public sector management to make sure that utilization of available resource is effective and efficient to enable achievement of economic growth and to reduce the level of poverty. Public Financial Management Reforms Secretariat has been one of the major vehicles driving the Reforms Agenda forward countrywide. The reforms are directed towards cost saving, enhancing efficiency and improving productivity to ensure people-centered public service delivery.

The Secretariat is currently coordinating the implementation of the Public Financial Management Reforms Strategy 2018-2023. The Strategy is anchored in the Medium-Term Plan 2018-2022(MTP) now in its third iteration (MTP III) which in turn is guided by vision 2030.The Strategy was developed through a consultative process which involved national and subnational levels of the government, MDAs and Development Partners. A result-based approach was adopted which is advancement from the previous strategy which was activity based.

The Current Strategy has been under implementation for the past two and half years and the Secretariat is required to carry out a Mid-term review. The review is meant to the progress of the strategy against the targets set, revisit interventions, timelines and key performance indicators for the PFMR Strategy. This is as well a good time to build consensus on future reforms, adjust current strategy 2018-2023 and inform future PFM Strategy 2023-2028.

The review is a step back to identify Strengths, weaknesses, opportunities as well as risks and develop necessary recommendation in the overall design of the strategy.The Mid-Term review began with a kick off launch with Development partners, MDAs, PFMR Secretariat Team as key stakeholders attending the event. The Principal Secretary, National Treasury Dr Julius Muia was the chief guest who Launched the exercise in Nairobi Sarova Panafric Hotel on the 18th March 2022.

The Mid-Term is being carried out at both National and County level of government. PFMR Secretariat Team is leading the exercise with support of European Union (EU) who is one of our Development Partner. The PFRM Team will do a visit to the 33 MDAs in their respective offices to engage them in depth consultative meetings and discussions to get insights and measure progress against set targets in the strategy. The EU has onboarded Consultants with vast knowledge and experience who will be working hand in hand with the PFMR Team to ensure success of the exercise.

All the 47 counties will be grouped in as per the 6 Regional Economic Blocs. There will be a pilot visit at Jumuia ya Kaunti za Pwani(JKP) including officers drawn from county treasury and fiscal analysts from County Assembly. Equitable transfer share to the counties, revenue generation and transparency and accountability in public spending are just among few issues to be tackled by PFMR Team with Mombasa region. Thereafter the other economic blocs will follow subsequently with much a better approach to engage the Targeted participants.

With quality data gathered from the meetings, PFMR Team in collaboration with experts will consolidate the information which will help prepare a draft report. Thereafter discussions and presentations will be held with MDAs and County Representatives on fact finding mission and allow them to make recommendations. There after a final report will be generated and presented to all stakeholders.

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Apr272022

Automation a Key Factor in Improving Reforms in Public Health

Automation has proved to be key in making sure service delivery within public sector is greatly enhanced. Talk about e-citizen, IFMIS and many others which have played a huge role in bringing better services to Kenyan Citizens.

Ministry of health has not been left behind in making efforts of developing a single authoritative source of health work force information that can provide an accurate account of health care personnel that have worked or are currently working at national or sub-national level including the private sector. This information will be maintained in an electronic health registry.

Many advantages are accrued by having a workforce data that is reliable across all information points. One of them is ; a country is able to plan for a better future by knowing how may health workers it has, what their qualifications are and skills are, where they are posted and how many new workers are likely to join them in the labour market. Without current information its not possible to ensure that the right provider is in the right place with the right skills. This therefore poses a great opportunity to meet the health care needs of our people on time.

Secondly it becomes easy to authenticate and validate the existence of a health worker and provide details about the person. Duplicate worker records will highly be eliminated and improve regulation of practice and track appropriate licenses of health professionals.

We can highly depend on the data for key policy decision making. For example policy on dual practice by health workers which poses an ongoing threat to the efficiency, quality control and equity of services especially in the public sector. We need to have practitioners being remunerated by the number of hours or days they have worked which should be contracted to ensure efficiency is maintained as well proper utilization of resource.

I believe universal health care depends on the necessary human resource to deliver health care services to the population of a country. Three major goals of universal health being equity access to health services, quality of health services that is good to improve the health of those receiving services and ensuring the cost of using care does not put people at risk of financial hardship. Developing an e-Registry will greatly deliver on Human Resources for Health.

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Public Financial Management Reforms Strategy(2018-2023) Mid-Term Review

Various reforms have taken place in Kenyan Public Space with an aim of improving the overall public sector management to make sure that utilization of available resource is effective and efficient to enable achievement of economic growth and to reduce the level of poverty.

Public Financial Management Reforms Secretariat has been spearheading the Reforms Agenda forward countrywide. The reforms are directed towards cost saving, enhancing efficiency and improving productivity to ensure people-centered public service delivery.

The Secretariat is currently coordinating the implementation of the Public Financial Management Reforms Strategy 2018-2023. The Strategy is anchored in the Medium-Term Plan 2018-2022(MTP) now in its third iteration (MTP III) which in turn is guided by vision 2030.

The Strategy was developed through a consultative process which involved national and sub national levels of the government, Ministries, Departments, Agencies and Development Partners. A result-based approach was adopted which is advancement from the previous strategy which was activity based.

The Current Strategy has been under implementation for the past two and half years and the Secretariat is required to carry out a Mid-term review. The review is meant to the progress of the strategy against the targets set, revisit interventions, timelines and key performance indicators for the PFMR Strategy. This is as well is a good time to build consensus on future reforms, adjust current strategy 2018-2023 and inform future reforms areas.

The Mid-Term review began with a kick off launch where the Principal Secretary, The National Treasury Dr Julius Muia the chief guest launched the exercise at Sarova Panafric Hotel on the 18th March 2022.The Principal Secretary Juilus Muia reiterated on the importance of continuing to strengthen our PFM system and align resources with development priorities that improve the economy.  Development Partners ,representatives from the ministries, agencies and departments were in attendance. Brainstorming sessions with stakeholders were held to identify key issues, with a number of members proposing suggestions on the areas to improve.Going forward the stakeholders were advised to work closely with consultants and the Public Financial Management Reform (PFMR)Secretariat team to probe further and engage in more consultative meetings and discussions to get insights and measure progress against set targets in the strategy.

The Mid-Term is being carried out at both National and County level of government. The Secretariat Team is leading the exercise with support of European Union (EU) who is one of our Development Partner.The EU has on boarded Consultants with vast knowledge and experience who will be working hand in hand with the Secretariat Team to ensure success of the exercise.

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Jan192022

Human Resource Management Masterplan Set To Revolutionize Public Service

The masterplan for human resources management in the Kenyan Public Service has been developed following extensive consultations with a variety of stakeholders at both the Public Service Commission and the Ministries, Departments and Agencies. Surveys and subsequent data analysis was employed in the process of coming up with the masterplan which has been bench marked against best practices at a global scale in the private and public sectors at both developed and developing countries.This masterplan is to serve multiple purposes. For Starters it is designed to standardize human resources management across the entire public service. Secondly, the masterplan has been created to promote the use of digital technology in the handling of human resources data with a purpose of making sure that data is always available to simplify processes and enhance decision making.

The masterplan has been designed to serve as a roadmap for a 10-year journey that will see the public service adopt revolutionary technologies and global best practices in all aspects of human resource management.In that light, this masterplan outlines strategies that are geared towards transformation of human resources planning and succession management, career management, exit management and formalize working arrangements in the public sector.

In addition to the input from stakeholders, this masterplan has taken into consideration various government strategic documents including the Kenya Vision 2030, the PSC Strategy 2019-2024 and government Big 4 Agenda. This is in full recognition of the critical nature of human resources in the execution of the public service’s mandate ensuring of the the success of the developments outlined in the Vision 2030. As such, this masterplan is aimed at reinforcing the strength of the human resources management practices already in place in the public service while addressing key challenges that impede the public service from achieving its maximum capacity and efficiency in performance.

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