Public Sector Governance and Accountability Series: Budgeting and ...

Country Case Study: Kenya 475
Budget Supply Department in the Ministry of Finance, which is responsible
for compiling the annual budget estimates, the legal budget control instrument
that is submitted to the legislature for approval. At the same time,
the development budget is compiled. The annual recurrent estimates and
the development estimates are laid before the legislature in June each year,
starting the legislative budget process.
Instruments of the budget process
the ministerial public expenditure reviews.
MPERs have been a feature of the MTEF-budget process since the early years
of the MTEF. The reviews are aimed at institutionalizing a review of the
performance of existing expenditure against policy priorities within the
budget preparation process. The reviews were first introduced under a joint
Ministry of Finance and Planning. However, when the new government came
to power in 2002, two separate ministries were created. The PERs—together
with the MTEF Secretariat initially—were located in the Ministry of Planning
and National Development. This institutional separation of the MPERs
from the rest of the budget processes has underpinned ongoing overlap in
functions and a disconnect in sequencing between the MPER and other
budget process instruments, such as the SWG reports.
The MPERs involve reviewing ministerial programs and activities in
line with core functions of the ministry and identifying the bottlenecks in
expenditure management. The MPERs do not merely look backward; they
also have a forward-looking component. Ministries are required to cost their
baseline and new programs and prioritize the programs in line with their
core functions. An example of a typical MPER is provided in box 14.1.
When the 2005/06 budget was prepared, the MPERs were integrated
into the MTEF process. However, problems of coordination of timetables
between the MPER and MTEF process remained. Some SWGs (see later
discussion) reverted to asking ministries to prepare input papers for the
SWG process because the MPERs were not completed in time to be used.
Coordination between the Ministry of Finance and the Ministry of
Planning and National Development is insufficient regarding the function
of different documents. Ministries find themselves having to use scarce
capacity to prepare multiple and duplicative documents for the two ministries.
In addition to the MPER, which is in essence a review document,
ministries are required to prepare a monitoring and evaluation report on
their progress toward the Investment Programme for the Economic Recovery
Strategy for Wealth and Employment Creation (IP-ERS) targets (see box
14.2), a function that the Ministry of Planning and National Development