The Strategy for Public Finance Management Reforms in Kenya (2013 – 2018)
Key Aspects of the Strategy
1. The new Strategy not only emphasizes consolidation of gains made under the 2006-2011 PFMR Strategy but also provides a framework for implementing reforms envisaged in the Constitution, the Public Finance Management Act 2012 and other relevant legislation. Most importantly, the Strategy addresses areas of concern highlighted by the report of the Public Expenditure Finance and Accounting Assessment (PEFA), 2012 which is posted on the Ministry of Finance website.
2. Implementation – covering a period of five years – is via seven priority themes important for realizing effective public financial management reforms. Four themes relate to the annual budget cycle (resource mobilization; resource allocation; budget execution, accounting and reporting; audit and oversight) while three themes are cross-cutting (fiscal decentralization; the PFM legal framework and automation and integration).
3. The existing Government systems will be used in implementing the programme and the PFM Reform Secretariat to be domiciled in the MoF will play a strategic coordination role and oversee the implementation of reforms. Political championship will be provided by the Steering Committee. Within each thematic area, there are champions and actors identified that will be responsible for reform implementation and will ensure that reforms are mainstreamed within the Government planning and work processes.
4. The Strategy also incorporates a protocol for engagement with Development Partners. The purpose of the protocol is;
- To ensure a commitment from relevant parties to harmonization and coordination of all initiatives andactivities in support of Public Finance work in the Republic of Kenya.
- To ensure that development partners’ contributions are coordinated and in compliance with policies of the Government of Kenya.
5. Priority areas identified for immediate implementation include: Deepening Integrated Financial Management Information System Reform; Fiscal Decentralization – put in place a framework for identification, assigning and costing of functions that are to be decentralized from national to county governments as well as to provide a framework for intergovernmental fiscal relations; Independent Oversight – fostering relationship between the Office of the Auditor General and the Money Committees in Parliament; Rollout of the national and county level Programme Based Budgeting; Enhancing comprehensiveness of the budget – accounting for unutilized funds from budget provisions to Ministries Departments and Agencies and factoring into the budget, as a form of expenditure, tax expenses incurred by the Government; Enhancing revenue collection by broadening the tax base, improving tax compliance etc.; Revision of the Procurement law.
6. A Monitoring and Evaluation Framework to track progress of implementation is a key element of the Strategy.
7. The Strategy further stipulates that funding of the reforms should follow a facilitative framework established within the Government. Resource allocation will be assigned to thematic areas and implementation tied to specific activities that contribute to agreed indicators. Government financing will be allocated through the normal budget process. The Government will enter into specific financing agreements with development partners willing to support the strategy. Flow of funds will be defined within the operational plan for the strategy.