Budgeting of the Revenue Fund
Once the money comes into the County Revenue Fund, two conditions must be in place prior to its use. First, National and/or County legislation must permit a withdrawal or charge on the Fund, and secondly, authority must be obtained from the Controller of Budget. Chapter 12 - Public Finance,
207. (2) Money may be withdrawn from the Revenue Fund of a county government only— (a) as a charge against the Revenue Fund that is provided for by an Act of Parliament or by legislation of the county; or (b) as authorised by an appropriation by legislation of the county.
(3) Money shall not be withdrawn from a Revenue Fund unless the Controller of Budget has approved the withdrawal.
In other words just about every cent in the Revenue Fund will have been planned for even before it gets into the Fund! This is a good example of the various provisions in the Constitution that attempt to shift the management of public money from the centralised control of the executive to local control by elected officials and the new independent office of the Controller of Budget; and ensure that the people are not only well represented in the administration of Public Finance, but that their sovereignty is protected as well. (NB. The office of the Controller of Budget is discussed under the Independent Offices link).
Speaking of budgeting, the Constitution of Kenya 2010 has laid out a 3-step general framework in the budgeting process to be followed by all the 47 Counties. These three steps involve consultative planning with the National Government and the Controller of Budget, preparing a budget using a standardised format, and presentation of their budget proposals to their county assemblies on specific dates, as defined by legislation. Part 5 - Budgets and Spending:
220. (2) National legislation shall prescribe— (a) the structure of the development plans and budgets of counties; (b) when the plans and budgets of the counties shall be tabled in the county assemblies; and (c) the form and manner of consultation between the national government and county governments in the process of preparing plans and budgets.
The keen reader will notice that hidden within Article 220 (2) above is the need to ensure that policy, planning and budgeting meets the requirements of fair, equitable and affirmative distribution of County Finance, as echoed in Article 201 on the principals of Public Finance. The other key intention of the Constitution is to ensure openness and accountability in governance. In that regard, budgeting at the County level must observe a clear style of reporting devoid of ambiguities and vagueness. In broad terms, a County's budget must state expenditure, deficit finance, and debt:
220. (1) Budgets of the national and county governments shall contain— (a) estimates of revenue and expenditure, differentiating between recurrent and development expenditure; (b) proposals for financing any anticipated deficit for the period to which they apply; and (c) proposals regarding borrowing and other forms of public liability that will increase public debt during the following year.
In spite of the foregoing, public finance experts have frequently faulted the failure of the Constitution as well as the PFMA to provide for more meaningful formats of budget planning. "The budget is meant to be organised around programmes (sets of related activities) with clear objectives", (Larkin, J 2014). In other words, to provide sufficient detail of "....... how inputs become outputs". Larkin faults the long-used and opaque system where public budgets are simply presented as recurrent and development inputs without any mention of expected outcomes: "Traditionally, the Kenyan budget has been organised following what is called a “line item format.” This just means that the budget is full of budget lines for inputs, and not much else".......
Larkin also recommends that Counties be compelled to explain how they plan to measure their achievements every budget year. "It (budget planning) entails the creation of programmes with indicators and targets, and emphasises narrative detail rather than long lists of obscure inputs." (Larkin, J 2014).
Obviously, the intention of Article 220 is not to baby-sit County governments while they carry on with their budgeting mandates:
224. On the basis of the Division of Revenue Bill passed by Parliament under Article 218, each county government shall prepare and adopt its own annual budget and appropriation Bill in the form, and according to the procedure, prescribed in an Act of Parliament.
Rather, it is this author's view that the budgets of Counties must be easy enough to be followed even by the general public. Therefore while the respective County Assemblies are considering budget proposals from their governments, the people of the Counties and any other interested party should be able to participate in the process, and in a language they can understand.
Indeed, various non-governmental groups have taken the time to develop a simply-worded tool that the public can adopt for use to understand the contents of a public finance budget and through which they can ask their local leaders how they want their resources allocated and spent each and every time.
Because the recurrent expenditure of the Counties includes key items such as the wage bill for County public officers, they must consult and be guided by the Salaries and Remuneration Commission SRC in drawing up the pay structures and caps of their employees:
230. (4) The powers and functions of the Salaries and Remuneration Commission shall be to— (b) advise the ....... county governments on the remuneration and benefits of all other public officers.
