Allocation and use of resources at the county level

ALLOCATION AND USE OF RESOURCES AT THE COUNTY LEVEL

Kenya’s devolution reform offers the opportunity for counties to plan, budget, and spend far more effectively for local services than in the past. Previously, responsibility was fragmented between deconcentrated districts, local authorities, and constituency-based funds operating parallel mechanisms of service delivery (World Bank 2012).

County governments can improve local service delivery by better coordinating planning and budgeting for service delivery. They have greater autonomy to manage their finances than in the predevolution system where both deconcentrated districts’ offices and local authorities had far more circumscribed authority over financial management than counties did.

County planning and budgeting

Under devolution, how and on what basis are counties allocating resources for service delivery? Is the process sound, and does it lead to budgets that underpin adequate access to services and good-quality services? The degree to which this has been the case is varied.

Improvements in service delivery are often not commensurate with increased resource allocations for public investment. Stakeholders lack adequate capacity and access to relevant information on budgets, service delivery, and public investments, which undermines effective decision-making and accountability for the use of those resources. The National Treasury has prepared public investment management (PIM) guidelines and manuals and initiated the development of an automated system titled Public Investment Management Information System (PIMIS). A stocktaking exercise of national government projects has commenced, and the adaptability of the PIM guidelines and manuals to various sectors is planned. The rollout of PIM to counties will be informed by this process, but timelines for this have not been provided. Support will be provided for this on a pilot basis (including capacity building to both the national agencies and counties) through the Kenya Accountable Devolution Program.

A comprehensive framework for county planning and budgeting has also been established through the County Governments Act 2012, the Public Finance Management Act 2012, and associated regulations. As outlined in box 4.3, these prescribe in detail the processes and documents for planning and budgeting— from a five-year County Integrated Development Plan, Annual Development Plans, County Fiscal Strategy Papers, and annual program-based budgets to County Budget Review and Outlook Papers (CBROPs).

Counties are also required to establish participatory planning processes. The regulatory framework also includes “fiscal responsibility” principles that guide resource allocation and spending at the county level. At a basic level, counties are planning and budgeting for a wide range of service delivery functions and thus taking on, grosso modo, their constitutionally mandated responsibilities.

Counties are fully responsible for their own budget processes and have extensive autonomy to manage their finances. Counties enjoy almost full discretion over resource allocation within the broad parameters set by the national government. Budget processes at the county level mirror the system at the national level, where there is full separation between the Executive (the governor and the county executive committee or cabinet) and legislature (the County Assembly).