Abstract:
PREFACE
The Constitution, and the Public Finance Management Act (PFMA), 2012 outline the
principles and framework for public fi nance management by all government entities. The
principles of public fi nance are outlined in Article 201 of the Constitution and include
requirements for: i) openness and accountability, including public participation in
fi nancial matters, ii) the public fi nance system shall promote an equitable society, iii) the
burden and benefi ts of the use of resources and public borrowing to be shared equitably
between present and future generations, iii) public money shall be used in a prudent and
responsible way, and iv) there shall be clarity in fi scal reporting and responsible fi nancial
management. These constitutional principles are further expounded under Section 107
of the PFMA, 2012.
In order to ensure adherence to the principles of public fi nance by public entities, the
Constitution established oversight institutions that include Parliament, the Auditor
General, the Controller of Budget, County Assemblies, among others. The oversight
role of the Controller of Budget is derived from Article 228 (4) of the Constitution which
states “the Controller of Budget shall oversee the implementation of the budgets of
the national and county governments by authorizing withdrawals from public funds
under Articles 204, 206 and 207”. Further, Article 228 (6) requires the Controller of
Budget to submit to each House of Parliament a report on the implementation of budgets
of the National and County Governments every four months.
This Budget Implementation Report (BIRR) is prepared to meet requirements of Article
228 (6) of the Constitution. The report covers the Financial Year (FY) 2013/14 and
provides status on budget implementation by County Governments during the year.
It highlights the status of budget execution by County Governments and compares
performance against budgeted revenue and expenditure for the period under review.
The report is largely based on analysis of expenditure reports by County Governments
which are corroborated by data on expenditure generated from the Integrated Financial
Management Information System (IFMIS). It is also informed by continuous monitoring
of exchequer issues and reviews by the Offi ce of the Controller of Budget (OCOB).
The report indicates that the last quarter of FY 2013/14 witnessed better performance
in budget execution by the Counties. Absorption of funds improved from Kshs.86.7
billion (32.2 per cent) during the third quarter to Kshs.169.4 billion (64.9 per cent) at
year end. Recurrent expenditure recorded the highest absorption rate at 82.7 per
cent while development expenditure stood at 36.4 per cent in FY 2013/14. The report
also presents the overall progress in budget implementation by County Governments. It
identifi es the challenges faced by County Governments in budget implementation and
also makes recommendations that will enhance budget implementation.
Information provided in this report is useful to many stakeholders including policy
makers, legislators, analysts, practitioners, and the general public. While successful
budget implementation depends on a number of factors, public participation and budget
monitoring remain crucial principles in the budget execution process. It is our hope that
this report will generate interest and participation by the public and other stakeholders
in monitoring County Government budget implementation. I urge all readers to
constructively engage County Governments in discussions and debate which will
improve budget execution, monitoring, quality assurance, and in the long run guarantee
Mrs. Agnes Odhiambo
Controller of Budget
value for public funds.