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Office of the Controller of Budget

2021-09-10T07:04:49Z

2021-09-10T07:04:49Z

2012-01

It gives me great pleasure to present the first 2012 Half year Budget Implementation Review Report. Budget implementation has attracted a great deal of attention in the 2012 fiscal year. This is not surprising as the Government Budget is the principal policy instrument for allocating public resources amongst competing socio-economic needs, and holding the Ministries, Departments and Agencies (MDA) of Government responsible for the expenditure and revenues over which they exercise control. The Constitution mandates this office to prepare and publish quarterly reports on the implementation of the budgets both at National and County governments. These reports are required to be submitted to the Executive, National Assembly, and County Assemblies and are to be widely disseminated to the general public and other stakeholders. The 20llll2 half year Budget Implementation Review Report will be duly published and publicized. One of the functions of the Office of the Controller of Budget (OCOB) as stipulated in the Constitution (Article 228(4)) is to oversee the implementation of the Budgets of the National and County governments. This function entails regularly undertaking monitoring and evaluation of prograrnmes and projects both at the National and County level. [n an effort to carry out this function effectively, the OCOB is developing a comprehensive monitoring and evaluation framework, which will be ready for use by May 2012. The office will therefore report on selected capital projects in the July 2012 report. Finally, as the Office of the Controller of Budget continues to be operationalized, this report will be subjected to continuous review and improvement to ensure it matches international best practice. I have no doubt the report will be useful in gauging the budget implementation of MDAs and improvement of efficiency and effectiveness in public financial management. I further urge the readers of this report to give their feedback, so that, we can all contribute towards ensuring value for money to the citizenry.

The 2011/2012 financial year Budget focuses on enhancing the efficiency of government expenditure in view of critical resource limitations and ensuring macroeconomic stability. One approach adopted in the budgeting process was the linking of key projects and programmes in the budget to the Kenya's Vision 2030 which is the country's long term development plan. In this first half year report of FY20l lll2, data from the Kenya National Bureau of Statistics (KNBS) demonstrates that economic growth was relatively low compared to the same period the previous year and the growth was driven by the agricultural, manufacturing, tourism and construction sectors. The overall inflation rose to 19.8% during the month of November 2011. The interest rates remained high with the average interbank call rate rising to l43Yo during the month of August. The Kenya shilling depreciated against major currencies hitting the low of Ksh 107 against the dollar during the month of October 2011. The total revenue target for fiscal year 20llll2 is Ksh.789.5 billion (or 24.7% of GDP) comprising of Ksh.713.6 billion of ordinary revenue and Ksh.75.9 billion of Appropriations in Aid (ALA). Revenue collected during the first half of the financial year under review stood at Ksh. 338 billion. The revenue collected over the period was below the target of Ksh. 351.8 billion expected to be collected. This development shows clearly the challenges of implementing the 201ll12 Budget in the first half of the financial year. The recurrent and development expenditures for FY 20llll2 for all the sectors were estimated at Ksh.552.9 billion and Ksh. 398.6 billion respectively. The MDAs received Ksh. 239.9 billion and Ksh. 90.0 billion for recurrent and development expenditures respectively for the period July to December20ll. For the same period the MDA’s spent Ksh. 231.9 billion for recurrent budget and Ksh. 70.2 billion for development activities. In conclusion, there has been a significant shortfall in revenue collection due to the economic growth challenges. The Ministry of Finance and the Offrce of Controller of Budget have worked in partnership with MDAs to ensure that the priority areas receive funding in time. On average the utilization of development funds by MDAs remains below expectation, a challenge that needs to be addressed. As MDAs undertake measures to accelerate the execution of their projects and programmes, the rate of development budget utilization should increase for the remaining quarters to ensure achievement of the budget.

Mrs. Agnes N. Odhiambo

https://libraryir.parliament.go.ke/handle/123456789/554

en_US

Republic of Kenya

Budget Implementation Review Report

Half Year 2011/2012

Technical Report