Budget Utilization Rates in the Ministry of Health

Post Date: 22 March 2018   |   Category: Budget   |   Hits: 740

Auditor General’s report 2015/16, shows that the approved budget for the Ministry of Health, at the national level, totaled to Ksh 60 billion for the financial year ending June 2016. This budget is composed of Ksh 31 billion development budget and Ksh 29 billion recurrent budget.  The proportion of the budget that is planned for development, (52%) is substantial and meets the fiscal threshold of 30%.  This week’s number seeks to find out how much of the budgeted expenditure was actually expended in 2015/16. A comparison of the absorption rates between recurrent and development is done to establish any existing differences. 

Budget performance for Ministry of Health, 2015/1

Source: Auditor general report, 2015/16

The chart above illustrates both approved budgets for recurrent and development for 2015/16 and compares these with the actual expenditure realized at the end of year.  It reveals that for both types of expenditure, recurrent and development, the actual expenditure is lower than the budget implying low utilization rates in the ministry of health for that particular year.

Number of the Week: 53%

  • Out of Ksh 29 billion that was budgeted for recurrent expenses, Ksh 25 billion was expended which works out to an absorption rate of 86%.
  • On the other hand, out of Ksh 31 billion that was budgeted for development expenditure, Ksh 17 billion was expended, implying a utilization rate of 53%
  • On average, absorption rate for the total budget is 69% which translates to approximately Ksh 7 for every Ksh 10.

In conclusion, the low absorption rates especially on development (53%) imply that even though development component of the health budget was more than the recurrent, the actual burn rate is just about half of the intended expenditure. In practical terms, could mean that some of the development projects that were planned for that financial year were not implemented.