The Ministry of State for Planning, National Development and Vision 2030 has been identified as one of the best utilisers of the development budget according to the latest Budget Implementation Review Report.
The third quarter budget implementation report released by the Office of the Controller of Budget indicates that the Ministry together with the Ministries of Tourism, National Heritage and Culture, Industrialisation and the State Law Office optimally used their respective development funds.
The Ministry of State for Planning, National Development and Vision 2030 had gross estimates of Kshs 27,893.8 million, a net estimate of Kshs 24,479.2 million and an actual expenditure of Kshs 22,513.9 million representing 80.7 per cent (expenditure as a percentage of Gross Estimates) for the 2011/2012 Financial Year.
The Ministry of Tourism was the best with 92.3 per cent followed by National Heritage and Culture at 87.1 per cent, State Law Office 81.5 per cent, Ministry of Planning 80.7 per cent and the Ministry of Industrialisation 75.7 per cent.
“In the first half of the financial year, the Office of the Controller of Budget noted with concern from the analysis of the expenditure, that some of the Ministries Departments and Agencies had partially absorbed the available resources, which is still a major concern in the period under review,” reads a section of the report.
According to the released report, the absorption rate of development budget has been quite low for most Ministries, Departments and Agencies thus resulting in non provision of goods and services to the public.
“In particular, the uptake of donor funds by the MDAs has been slow and challenging due to problems with the procurement processes, governance and accountability issues, lack of adequate capacity for project management and delays in obtaining no objections to facilitate the absorption of the funds.”
However, it is noted that the implementation of the budget was partly affected by the austerity measures introduced by the Treasury to contain financing constraints due to revenue shortfall.
“The stoppage of procurement of some budgeted activities adversely affected the budget implementation of some MDAs during the third quarter,” notes the report.
In addition, the shortfall in revenue collection and delay in release of donor funds has impacted negatively on budget implementation. Donor releases have been slow and stood at Kshs. 58.6 billion against a target of Kshs. 183.1 billion for the Financial Year. As a long term measure, it is recommended that the Government comes up with appropriate mechanisms to enhance revenue collections, institutionalize fiscal discipline and address issues affecting disbursement of donor funds in order to improve budget implementation.
Besides, the Office of the Controller of Budget has urged relevant government agencies to; implement reliable, accurate and up to date financial management information systems at national and county governments, fast track legislation and enactment of the key laws to enable faster implementation of the Constitution, develop effective monitoring and evaluation frameworks to enhance project implementation and start capacity building for the county governments to prepare them to absorb allocated resources.
The Treasury on its part should put in place policies to address high inflation and interest rates to manageable levels to mitigate adverse effects on economic growth.
Nairobi – May 30, 2012