Programme-Based Budgeting in Kenya: Past challenges and way forward for 2015/16Vivian MageroJason Lakin, Ph.D.

BackgroundNational government shifted from line-item to program-based budgeting in 2013/14 (following international best practice and PFM Act)First year was challenging.but in 2014/15, Kenya made big improvements in its PBB presentation. Still a number of challengesQuestion: have we built on successes and addressed challenges of 2014/15 in 2015/16?

What is a PBB?Budget organized around a set of programsWhat is a program? A group of government activities that help to achieve a common objectiveExample: Crime Prevention ProgramObjective of CPP: "Reduced crime and greater security of persons and propertyCPP might then include various activities related to policing, security cameras, etc. requiring both recurrent and capital, staff, etc.

A good PBBFocuses on outputs and service delivery objectives of spending, not inputs.Has substantive narrative link between inputs and outputs and explanation of changing prioritiesIs arranged around a set of programs with clear and specific objectives, not just administrative unitsIs usually broken down further into subprograms to provide clearer information about activities and objectivesProgram performance measured through clear indicators and targets with credible baselines and timelines.

Has Kenyas PBB improved budget presentation and transparency?

Kenyas 2012/13 Line item budgetFocused on inputs only, like fuel and stationeryLimited or no narrative explanation and link between inputs and outputsMinistries defined by administrative units, no programs or subprogramsNo measures of performance (indicators and targets)

Kenyas 2013/14 PBBEliminated certain information e.g. wage information, key personnel and job groupsInadequate narrative information on programs, unclear links between narrative and budget figuresLimited number of programs, no subprograms and unclear objectivesSome indicators and targets lacked actual figures, had no clear timelines or baselinesDifficult to understand how public money used to generate things we care about

Kenyas 2014/15 PBB: Major ImprovementsRevised PBB format, rectified a number of flaws.Substantive narrative information available in many areasIncreased number of programs with somewhat clearer objectivesIntroduction of subprograms, broken down further into economic classificationImproved presentation of indicators and targetsAdditional documents available to clarify PBB

Despite achievements, 2014/15 PBB lacked:Narrative clearly linking priorities and budget allocationsClear and distinct program objectives (program objectives overlap)Clear/sensible targets and baselines (e.g. % of facility based maternal deaths had a target of 100%) Clear economic classifications (e.g. use of other development for major spending)Information on key personnel and costs that was available in old formatAny information on Appropriations in Aid (eliminated completely information on external funding)

Kenyas 2015/16 PBB: OverviewOn balance: minor improvements, but lack of explanation for changes leads to confusionReorganization of programs and subprograms, leading to more logical presentation but confusion about changing allocationsReorganization of indicators and targets leading to improved focus, but also confusion as certain indicators have disappeared without explanationSo.some challenges to be able to compare with last years budget

2015/16 PBB: Overview ContinuedImprovement in comparability over time with inclusion of column for 2014/15 approved budgetNarrative is similar to 2014/15; weak connection to budget numbersProgram objectives have improved, but still challengesIndicators and targets are improved, but still lack baselines that allow us to track if money=improving servicesVague economic classifications still major share of spendingInformation on wage costs and Appropriations in Aid still missing

2014/15 vs 2015/16 PBB in Detail Narrative informationPrograms with clear objectivesIndicators/targetsSubprograms and further disaggregationInformation on key personnel and costsAppropriation in Aid (AiA)

Narrative Information

Narrative Link to Allocations? 2014/15

Narrative links to allocations 2015/16?

Narrative challenges continueThere is no real explanation of changes in emphasis at program/subprogram level from year to year (why some programs receive larger share than others?) For example, big change in health sector in 2015/16 is increase in funding for Health Policy subprogram, but not mentionedHow do proposed initiatives and allocations for the year respond to challenges mentioned each year?

Programs with clear and distinct objectives

Programs and objectives, 2014/15 and 2015/16

Curative health services program 2015/16

Indicators, targets and timelines

Indicators/targets and timelinesIndicators still have no baselines Some of the indicators/targets that did not make sense dropped. E.g. % maternal facility deaths with target of 100%But some targets still at odds with other government figuresIn 2014/15 budget, % births conducted by skilled attendant target 44%, but this was below what was already achieved as per other government figures (66% in-facility births)In 2015/16, same issue with Average Length of Stay target at Kenyatta National Hospital: target for 2015/16 is 10.7 Days but sector report says have already achieved this in 2014/15

Key Performance Indicators2014/152015/16From 2014/15 (Above) to 2015/16 (Below) we have lost two indicators

Clear subprograms and further disaggregation of allocations

Do subprograms have clear objectives?SPs are meant to be further breakdown of programs, so they are meant to align with the objectives of the larger programNeither 2014/15 nor 2015/16 have clear subprogram objectivesMany subprograms are not clear, and are not clearly aligned with the program objectives

Program: General Administration, Planning & Support Services2014/15 objective: To improve service delivery and provide supportive function to government agencies under the health sector.2015/16 objective: To strengthen Leadership, Management, Planning & Financing of the health sectorIn both years, these program have a subprogram Health Policy, Planning and Financing.What does this SP do to contribute to admin and planning?

Subprogram: Health Policy, Planning and Financing

2014/152015/16

Does the economic breakdown help?

Information on personnel costsStill no information about staff, job group, wages or benefits of staff by ministry in 2014/15 or 15/16This information was present in 2012/13 line item budget as shown in the next slideNo breakdown beyond compensation to employees at program/subprogram level

2012/13 Line Item Budget

Generic economic classification

Appropriation in Aid (AiA)AiA includes donor funding and some local funds raised by ministries on their own (user fees, etc.)In 2012/13, extensive information was provided for each ministry, administrative unit on the source, type of donor etc.In 2013/14, information on AIA was provided by program with medium term projections but no breakdown by local v. external, source, or purpose2014/15 PBB eliminated this information altogetherSame in 2015/16 PBB

ARE THERE GOOD EXAMPLES FROM COUNTIES IN 2014/15?

Consider same aspects of the budget but also project breakdownNarrative qualityProgram Clarity and distinctnessIndicators and targetsSP Clarity and further disaggregationStaff informationAIAProject information to ward level

Narrative: West Pokot example

Homa Bay

Bungoma: Project breakdown

Some challenges at county level in 2014/15Many of same challenges as national level, but more severeLack of summary tables in many budgetsWeak connection between priorities in narrative and budget numbersLimited breakdown of economic classificationPrograms have unclear objectives, and lack of clear subprograms makes it difficult to understand what they do and how they do itMain staff costs are improperly classified under administrationIndicators and targets are extremely weak, incoherent or simply non-existent

2015/16 County Budgets: Improving?We have looked so far at:NyeriTaita TavetaElgeyo MarakwetLamuNairobi

There are successes and cross cutting issues in these budgets

Good practices in 2015/16 County PBBsSummary table at the program level (Lamu, Taita Taveta and Elgeyo Marakwet)Summary table at both the program and subprogram level (Elgeyo Marakwet)Most indicators and targets improved from last year, but still lack baselinesBudget broken down into items under programs; combining line item and program provides additional information that is useful (Lamu)

Cross cutting issues in 2015/16 County PBBsNarrative is not linked to program allocations or does not explain trends adequately (all counties)Subprograms lack or have no objectives (All counties)Staff put under the Administration program rather than service delivery programs (All counties)No staff breakdown apart from Nyeri countyIndicators lack baselines, while some lack targets (Taita Taveta)

RecommendationsMajor programs should be broken down into sub-programs, with sufficient detail provided to understand their distinct objectivesNarrative details should be improved, particularly to ensure clear link with allocations at program/subprogram levelAll indicators should be clearly linked to a specific program and to specific program objectives, with baselines and clear and realistic targets

RecommendationsIf there is a shift in programs or subprograms that would affect the indicators and targets over the years, explanation should be provided for the shift.Information on the breakdown of employees should be restored to the budget as per the 2012/13 budgetThe economic classification could be further broken down for all categoriesReduce the use of other recurrent and other development for major spending

Thank you

*Program should speak to ultimate outcomes (greater security) as well as some outputs (reduced crime, improved morale of the police, etc.)**Additional documents: line item, budget summary, budget highlights*Nyeri 2013/14 Public Health line item budget*For instance, the curative objective has improved and we can now separate curative and preventive because one is more focused on primary and one is more focused on specialized services**This slide introduces the narrative discussion, which has three bullets in our handout. You would want to mention these and then tell people that you are going to focus on just one example: is the narrative linked to the allocations?*In this snippet from 2014/15 you can see some items, such as maternal health care, that have a clear allocation which can then be found in the budget figures. However, other items, such as the money for equipping hospitals and for upgrading facilities in slum areas cannot be easily found. *No figures mentioned; not possible to find key focus items like HISP mentioned in the narrative. The first para also has information on challenges but difficult to relate to changes in spending.*One of the biggest challenges with the narrative is that it is not really organized around programs as defined by the ministries, but around other items that are hard to link to programs and their budget lines.

Health Policy Program is increasing from 8 to 12% of total ministry spending

Challenges are mentioned but not clear how the budget changes actually address the challenges mentioned

*Point out that one of the key elements of a good PBB is that it has programs with clear and distinct objectives that do not overlap. Ideally, they make reference to outputs and outcomes of the activities of government agencies. Refer people to the table. Here we will look at changes in two programs and whether they are improving or not.*In 2014/15, the first two programs overlapped, because preventive health also is intended to improve health status (reduce ill health), so it was not clear exactly what was included in each program. This was further compounded by the inclusion of curative health interventions, such as ARV treatment for HIV, in the preventive program.

In 2015/16, there is now a distinction between promotive/preventive services and specialized services, which helps to clarify the difference between the two programs. However, remember that programs should speak to both outputs and outcomes, and now there is no mention of the outcomes for either program. Alternative: Improve provision of specialized services to reduce morbidity/mortality from accidents, NCDs and other major causes of ill health in Kenya.*Although programmes are a bit vague, use of SPs and delivery units help to clarify. See here: In both years, delivery units help us to see that one of the key things in this program are the speciality hospitals for mental health and spinal patients.*SP breakdown provides some idea of what Is covered in Curative Health Serivces*First, note that indicators are changing from year to year, which makes it difficult to track progress. The number of indicators has fallen from 4 to 2 for the Maternity Subprogram. This is not bad, because some of the old targets were bad targets, such as 100% maternal death rate in facilities. However, lack of consistency makes it hard to track progress, and it is not clear why we have dropped the under 5 deaths as a key indicator.

Note also that the target for 2015/16 is the same as the target for 2014/15 for low birth rate. Does this mean no progress was made since last year? The lack of a rolling baseline for the figures makes it difficult to see if we have improved over time or not. But this is what is needed for oversight (and it is something that Uganda provides in their budget).

*Although no objective was provided in either year for the SP, one would assume that the focus of this SP was to help the overall ministry to set a direction. Perhaps to develop a strategic plan, monitor it, etc.

Yet what does this SP actually do? It does some of those things, but as we can see on the next slide, it also has control over.*It is clear from this that this SP has other functions which probably belong more in promotive or in curative health and are not related to the planning function, or to the cross-cutting administration program for the ministry under which they fall.they are also not consistent over time and there is no narrative explanation of them.*Every SP is broken down by economic classification as shown here. But as in 2014/15, the 2015/16 SP economic classification still has substantial amounts in other categories. Look at other development. These should be residual categories, yet for the CDC SP, there is a huge unexplained increase in this item and it is more than half of the total SP budget.*No information about type of job, job group, salary, allowances, job title etc.

*No breakdown beyond compensation to employees at program/subprogram level

In South Africa, there is less information than 2012/13, but more than Kenya: at least clusters of staff by job group and wages. *We looked at these factors. Few counties have done much on AIA, so we dont have examples of that. *Narrative explains reasons for changes in sector allocations from 2013/14 to 2014/15 and links this to the summary tables with the sector allocations.

This narrative should actually be at the program/SP level, explaining changes over time at that level, but it is a good start.

On education, the narrative explains that there is a considerable rise in the recurrent costs due to a bursary fund as well as a planned increase of ECD teachers. Also shows that Public Works, Roads and Transport sector had a significant reduction in its development allocations due to lack of absorption in the sector.

*Homa Bay has compensation broken further into basic salaries and benefits for each job group.Staff information should be directly linked to program and sub-program

*2014/15 example Detailed information about projects status, location, and description of the expected output. Example from Roads: Nandika Khaburi road is to be upgraded to gravel status. Could be improved to include information such as completion status for ongoing projections including timelines and remaining cost implications of projects.

*Information on wages: including at least overall spending on wages and allowances by job group, if not detailed individual salaries and allowances by worker, as per the 2012/13 budget

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