Are county governments transparent in their budgets? A case of 10 counties in Kenya

Sub-National Budget Transparency: Case of Ten Counties in Kenya 
By John Mutua

County governments are now slightly over two years old since coming to effect in March 2013. The Constitution of Kenya 2010, that heralded onset of devolution and creation of a two-tier system of government, accords county government substantive, administrative, fiscal, and political responsibilities. As a result, this has heightened expectations that bringing the government closer to the people will address existing resource allocation and service delivery challenges. In the same breath, there are fears that devolution may actually exacerbate inequalities and corruption.
On this basis, the IEA, during June-August 2014, implemented a Sub-National Open Budget Survey (SNOBS). Since this survey allows for cross-county comparison, it serves as a useful tool to assess progress of counties in terms of budget transparency, and will in turn be useful in informing policy reform processes.
The Sub-National Open Budget Survey measures the extent to which county governments provide timely, useful and accessible budget information throughout the budget process as provided for in the law. In addition, this survey also assesses the degree of overall public engagement in budgetary processes at the sub-national level, and also whether information on public procurement and on the services offered by counties is made public.
This survey, while appreciating that county governments are still very young two years in the transition period goes not only beyond assessing whether counties meets minimum legal requirements, but also benchmarks their performance on international budgeting practices.
The SNOBS is based on 70 multiple-choice questions adopted from the International Budget Partnership (IBP). Majority of these questions are based on whether four key budget documents are produced and available to the public. These documents are: County Fiscal Strategy Paper and County Budget Estimates, produced at the formulation stage; County Appropriation Act and County Finance Act, produced at the enactment stage; and Annual Financial Statement, at the execution stage. The County Audit Report 2013/14 is not included in the survey because, legally, it is supposed to be released in early 2015, several months after the research period of June-August 2014.
  • The average score for COBI of 16.2 out of 100 implies that counties provide scant budget information to the public.
  • As shown in the map of Kenya (refer to book), Nakuru, with a score of 30.5 and far ahead of the other nine counties, provides minimal budget information. Unlike the other counties, the County Fiscal Strategy Paper (CFSP) 2014/15 and the County Budget Estimates 2014/15 for Nakuru were accessible online.
  • CFSP 2014/15 was available to the public in seven out of the ten counties with Mombasa, Garissa and Kajiado missing out and hence their low respective COBI scores. In these seven counties, CFSP 2014/15 was availed online. With the exception of Nyeri, the other counties four months prior the start of the financial year as provided for in the law released this document.
  • County Appropriation Act and County Finance Act 2013/14 (Enacted Budgets), as well as the Annual Financial Statement 2013/14 (Year End Report) were not available in any of the ten counties, although it is produced in all the counties for internal use.
  • Taita Taveta, Machakos, and Kajiado have established County Budget and Economic Forums (CBEFs) as a formalized platform for public consultations on matters of county planning and budget. However, these CBEFs are not functional and majority of civil society felt the process of constituting them was not transparent and integral.
  • Granted that capital expenditure is a driver to development, the scope of public discussion and consultation is expected to cover both recurrent and development expenditure as well as revenue side of the budget, which was not the case for majority of the counties.
  • Bungoma and Kisumu provide information on the services they offer at a single source, through service charters; but in the other counties, this information is available from each responsible department.
  • All the counties surveyed make information on the launch announcement of procurement tenders available to the public through various sources, but information on the award of public tenders and on procurement complaints decision is limited.
  • County Budget Estimates in majority of counties lack important details in terms of presentation of expenditure information by economic classification (only Nakuru, Taita Taveta and Nyeri present expenditure by economic classification), prior financial year expenditure and revenue information, and generally very non-financial information is presented.
  • County governments should publish and publicize CBEs, County Appropriation Act and County Finance Act and YERs already produced for internal use at no extra cost.
  • County governments should develop, publish and publicize Citizens Budget, non-technical and simple version of the main county budget estimates. Counties have an opportunity to partner with CSOs (for example, Nakuru) or they can take the initiative. Besides, they should consult with the public on the content.
  • Improve comprehensiveness of CBEs by focusing on providing information on revenue, expenditure and other fiscal information including disaggregated information, multi-year projections, and so on.
  • County government should adopt PBB because this budgeting approach enhances improved information on budget narrative, non-financial performance targeting, etc., to allow for effective budget analysis.
  • Budgets are poor on outputs and outcomes; need to provide link between counties’ policies, spending, and macroeconomic policy.
  • County governments should establish CBEFs in a transparent and integral manner as a way of formalizing public consultations and inclusivity.