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

Country Case Study: Kenya 487
The original criteria for including spending in the core poverty program
were agreed with development partners. Programs that directly created
employment; provided access to basic education; increased agricultural
productivity; ensured access to health services; reduced gender disparity;
provided decent shelter, clean water, and sanitation; and rehabilitated
criminals—as well as programs aimed at managing disasters and emergencies
and protecting the environment—qualified for inclusion in the core poverty
program. In 2003/04, these criteria were revised to take into account new
programs that were identified in the IP-ERS. Specifically, the new criteria
sought to cover pro-poor programs that would increase incomes of the poor
and improve their quality of life, security, and social equality.
Although the core poverty programs are supposed to be ring-fenced
from expenditure cuts, full disbursement rates have not been achieved. In
many cases, the amounts disbursed are not used fully, and in some cases the
disbursed moneys are used for other programs (Republic of Kenya 2004a).
Since 2004, some effort has been made to improve the reporting on core
poverty programs, including the development of a monitoring format.
They are also covered in the quarterly in-year review of spending (Republic
of Kenya 2004/05).
Most recently, the 2005 PER (Republic of Kenya 2005) recommended
that the core poverty programs take an even more central role in budgeting,
prioritizing expenditures at the ministerial level around the core poverty
programs and linking them to the core performance indicators identified in
the annual progress review of the IP-ERS (see box 14.2). The targets set for
these indicators should be implemented by specific programs, forming a set
of core priority programs. The identified core priority programs should
replace the core poverty programs, receive priority in resource allocation
and disbursement, and be monitored and evaluated regularly. At the time of
writing, these recommendations were still under discussion.
Remaining challenges in the budget preparation process
Over decades, Kenya has carried out various reforms to its allocative budget
process in an effort to focus scarce public resources on critical development
activities. Yet, despite having many of the institutions required for a sound
process—such as use of top-down ceilings, thorough review instruments,
cooperative forums, and budget transparency mechanisms—government
PERs and other analytical work have consistently found that key problems
persist, such as poor links between policy and budget allocations, low
budget credibility, pending bills, and stalled projects. A need exists to
sequence the allocative process better and reduce duplication between