REPUBLIC OF KENYA COUNTY GOVERNMENT OF BUSIA DEPARTMENT OF FINANCE AND ECONOMIC PLANNING

Transcription

1 REPUBLIC OF KENYA COUNTY GOVERNMENT OF BUSIA DEPARTMENT OF FINANCE AND ECONOMIC PLANNING COUNTY TREASURY REF NO: BC/CT/CIR/VOL.1/88 P.O.BOX Private Bag BUSIA 28 th August, 2015 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/ /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/ /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. 1

2 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. iii. iv. Investing in agricultural transformation and food security Investing in infrastructure, transport and logistics 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 2

3 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. 3

4 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 , and 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). 4

5 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) Accounting Officers therefore should be guided by the following criteria when prioritizing and allocating resources; 5

6 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 6

7 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, 7

8 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 8

9 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 9

10 ANNEX 1: Ceilings for MTEF period 2015/ /2018 County Assembly AGRICULTURE AND ANIMAL RESOURCES TRADE, CO- OPERATIVES, TOURISM AND INDUSTRY EDUCATION AND VOCATIONAL TRAINING FINANCE ECONOMIC PLANNING AND COMMUNITY DEVELOPMENT,G ENDER,CULTURE AND SOCIAL SERVICES MTEF Ceilings Actual Approved 2014/2015 Budget 2015/16 10 Projected 2016/ ,282, ,319, ,035,510 Projected 2017/18 611,137,286 Development 75,070, ,310, ,225, ,586, ,724, ,353, ,629, ,261, ,940, ,722, ,912, ,657,876 Development 79,316, ,896, ,691, ,025, ,966, ,038, ,808, ,349, ,690,207 33,156,082 40,969,666 43,018,149 Development 40,614,823 94,650,000 99,382, ,351, ,041,832 73,770, ,619, ,400, ,980, ,489, ,994, ,743,800 Development 118,999, ,315, ,830, ,022, ,003, ,489, ,309, ,574, ,121, ,268, ,910, ,306,438 Development 678,936, ,917, ,112, ,568,516 1,020,204,47 1,545,419,31 1,622,690,27 1,471,827, ,373,557 50,027,890 62,923,861 66,070,054 Development 36,334, ,000, ,450, ,242, ,646,057 86,362, ,923, ,520,054 PUBLIC WORKS, 77,903,626.5 TRANSPORT,AND DISASTER MANAGEMENT 59,608,666 70,660,886 74,193,930 Development 341,037, ,000, ,150, ,611, ,645, ,660, ,343,930 LABOUR, PUBLIC 393,779, ,344, ,011, ,512,319

11 SERVICE, ICT AND INTER- GOVERNMENTAL RELATIONS LANDS, HOUSING AND URBAN DEVELOPMENT WATER ENVIRONMENT AND NATARURAL RESOURCES HEALTH AND SANITATION COUNTY PUBLIC SERVICE BOARD THE GOVERNORSHIP Office Of The Governor Development 31,915,202 65,038,000 68,289,900 71, ,216, ,694, ,382, ,301,632 31,926,106 31,493,428 28,957,919 30,405,815 Development 61,670, ,900, ,795, ,134, ,068,856 93,163, ,857, ,200,815 75,741,371 70,514,705 68,699,656 72,134,639 Development 126,792, ,540, ,767, ,555, ,296, ,303, ,239, ,901,639 1,035,101,23 952,652, ,867, ,810,698 3 Development 348,577, ,728, ,015, ,566,146 1,301,230,82 1,516,826,07 1,592,673,37 1,444,596, , ,383,990 31,949,587 33,507,066 34,383,990 31,949,587 33,507,066 35,824,193 Rec. 133, ,028, ,578, ,334,001 Gross Dev. 20,000,000 32,393,165 10,000,000 15,000,000 Gross 153,700, ,421, ,578, ,334,001 Office of the Deputy Rec. 31,762,726 32,855,499 28,089,729 30,250,215 Governor Gross Dev. 5,000,000 0 Gross 31,762,726 37,855,499 28,089,729 30,250,215 Office Of The Rec. 69,043,939 12,248,072 59,778,302 65,756,132 County Secretary Gross 69,043,939 12,248,072 59,778,302 65,759,132 4,980,166,219 6,270,251,744 6,597,949,134 7,339,270,369 11

12 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/ /18 (Kshs.) Programme (CP) Approved Expenditure Projected Estimates Programme 1 (State name of Programme) Sub programme 1 Sub programme 2 Expenditure for Programme 1 Programme 2 (State name of Programme) Sub programme / / / /2019 Sub programme 2 F: Summary of Expenditure by Economic Classification (Ksh.) Expenditure Category Current Expenditure Compensation to Employees Use of Goods and Approved Estimates 2015/2016 Projected 2016/2017 Projected 2017/2018 Projected 2018/19 12

13 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 Expenditure G: Details of Staff Establishment by Organization Structure (Delivery Units) Delivery Unit1 Staff Details Position Title Staff Establishment in F/Y year 2015/2016 Job Group Authorised Expenditure Estimates In Position 2015/ / / /19 (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 Programmes Key outputs Key performance Indicator Programme 1: Outcome: programme 1 programme 2 Programme 2: Outcome: programme 1 programme 2 13

14 ANNEX III. Budget Calendar for 2016/2017 Financial Year ACTIVITY RESPONSIBILITY TIMEFRAME/DEADLINE Develop and issue MTEF Guidelines County Treasury 30 th August 2015 and Budget Calendar Launch of Sector Working Groups (SWGs) County Treasury 15 th September 2015 Undertake Departmental Public All Departments 15 th September 2015 Expenditure Review Preparation of Progress report on All Departments 15 th September 2015 MTP Preparation of annual Plans All Departments 1st September 2015 Capacity building for MTEF and ProgrammeBased Budget County Treasury 31 st October 2015 Estimation of the Resource Envelope County Treasury 30 th September 2015 Determination of policy priorities County Treasury 30 th September 2015 Preliminary resource allocation to sectors County Treasury 30 th September 2015 Submission of Information necessary for the Development of County Budget Review and Outlook Paper Develop County Budget Review and Outlook Paper (CBROP) Submit County Budget Review and Outlook Paper ( CBROP) to the County Executive Committee Departments in counties to submit their inputs to Relevant Ministry Headquarters Preparation of MTEF Budget Proposals draft sector report Deliberation and Approval of the CBROP Submission of Approved CBROP to the County Assembly Convene Public Sector Hearing on MTEF budget proposals All Departments 10 th September, 2015 County Treasury 20 th September 2015 County Treasury 30 th September 2015 Departments in the Subcounties th September 2015 Sector Working Group 1 st October 2015 County Executive 14 th October, 2015 Committee County Treasury 21 st October, 2015 County Treasury 12 th November 2015 Issue Circular on Revised Budget County Treasury 15 th November, 2015 Review of the MTEF Budget County Treasury 20 th November, 2015 Proposals Submission of Sector Reports to the CountyTreasury Sector Working Group 27 th November, 2015 Submission of Supplementary All departments 15th December, 2015 Budget Proposals Review of Supplementary Budget Proposals County Treasury 15 th January,2016 Submission of Information for All Departments 30th December, 2015 Preparation of Draft County

15 Fiscal Strategy Paper (CFSP) Draft County Fiscal Strategy Paper County Treasury 15 th January, 2016 Submission of CFSP to the County Executive Committee in preparation or Public Participation Public Participation meetings of the CFSP Submission of CFSP to the County Executive Committee for approval Submission of CFSP to County Assembly for approval Submit Supplementary Budget Proposals to Assembly Develop and Issue final Guidelines on preparation of 2015/2016 Budget Estimates Preparation of itemized and Programme Based Budgets County Treasury 1 st February, 2016 County Treasury/ All 15 th February,2016 departments County Treasury 19 th February, 2016 County Treasury 25 th February, 2016 County Treasury 28th April, 2016 County Treasury 30 th January, 2016 All departments 15 th March, 2016 Submission of itemized and Programme Based Budgets to the County Treasury Review and finalize Departmental itemized and Programme Based Budgets Submission of Budget Estimates to Executive Committee for Approval Before Public Participation Public Hearing on the Budget Estimates Consolidation of Budget Estimates after Public Participation All departments 18 th March, 2016 County Treasury 15 30th March,2016 County Treasury 4th April, 2016 County Treasury 18 th April, 2016 County Treasury 20 th April, 2016 Submission of Budget Estimates to Executive Committee for Approval County Treasury 22 nd April, 2016 Submission of Budget Estimates to County Treasury 28 th April, 2016 County Assembly for approval Review of Budget Estimates by the County Assembly County Assembly 27 th May, 2016 Approval of the Budget Estimates County Assembly 15 th June, 2016 Consolidation of the Final Budget County Treasury 22 nd June, 2016 Estimates Submission of Appropriation Bill to the County Assembly County Treasury 27 th June, 2016 Consideration and Passage of County Assembly 30 th June, 2016 Appropriation Bill