The (now defunct) Commission for the Implementation of the Constitution (CIC) and the International Budget Partnership (IBP) made a publication entitled “50 Things Every Kenyan Needs to Know About Public Finance Under The Constitution”.
The publication responds to various issues that have been raised by the citizenry in relation to the public finance aspects of the Constitution and the Public Finance Management Act (PFM).
The PFM Act was enacted to operationalize Chapter 12 of the Constitution on Public Finance.
The publication intends to provide an understanding of the key components of the Constitution and the PFM Act to facilitate citizen participation in the public finance process, which is a national value and a requirement of the Constitution.
The publication is organized around a series of questions that an ordinary person might ask about Kenya’s budget process and other financial matters. These questions are as follows–
1. Overall role of citizens in the new budget process
- What is the PFM Act and why should I care?
- So what role does an ordinary mwananchi like me have to play in issues related to government spending?
- Okay, that sounds nice, but is there a legal basis for ordinary people to participate in the budget?
- I am just wondering: can I only participate in the budget process as an individual or can I also work with others?
- So there is a right to participate in the Constitution, but what about the PFM Act?
2. Timing of national budget process
- So when do I need to be ready to participate in formulating the budget?
- So we can check the Budget Policy Statement after it is released, but how do we influence it while it is being developed?
- When can we see the government’s detailed budget proposal (Budget Estimates) with the amounts set aside for things like education and health?
- So the Judiciary formulates its own budget and sends it to Parliament?
- Maybe I missed it, but when is the government’s budget proposal made available to the public? You said it must be sent to Parliament by April 30, but when does the public get to see it?
3. Role of National Assembly in national budget formulation
- Are there are any limits to the kinds of changes that we can request Parliament to make to the budget proposal?
- Okay, so let me see if I have understood: every year between April 30 and June 30, Parliament can make changes to the budget proposal as long as they don’t increase the deficit, and the public can participate in debate with MPs about the budget and make suggestions any time during that period? So there is plenty of time to participate, right? Two full months?
- So how does the parliamentary Budget Committee actually get views from the public?
- I know that in the past, the budget hasn’t always been approved before the new financial year starts. Does the PFM Act say anything about what happens in this case?
4. National budget policy and implementation
- Besides participating in the formulation of the budget, I have heard about Kenyans monitoring whether funds are actually spent the way they are supposed to be. Some groups have monitored Constituency Development Fund (CDF) money, for example. Do the new laws also create new opportunities to monitor the implementation of the budget?
- We have been talking about citizens monitoring the budget. Besides checking to see that government is spending what it promised, are there other rules that the government must follow in its budgeting?
- I often read in the newspaper people fighting about whether Kenya has too much debt. Does the PFM Act also say more about government debt beyond that it should be maintained at a “sustainable level”?
- I also have read in the newspapers about the government paying off the debts of state corporations. This means that the debts of state corporations may also become a responsibility of taxpayers. Does the PFM Act ensure that the public knows about the debts of state corporations?
- What about grants? Are there any limits on grants that the government may receive, such as money from development partners?
- I understand that sometimes, even if the government plans well, there may be unexpected events that may result in a need to adjust the budget. Does the PFM Act allow for this?
5. Devolution and transfer of money to counties
- I thought we were headed toward devolution, but you have only been talking about the national government. What happened to the counties?
- Who decides how much money the counties actually get?
- I thought there was also something called an Equalisation Fund that would give money to counties. How does that work?
- When will the counties get their money?
- Are there any conditions under which the national government can refuse to send money to the county governments?
- It seems like it might be necessary for the national and county governments to coordinate from time to time, since they share revenues and responsibilities. Does the PFM Act say anything about how national and county governments work together?
6. The county budget process
- Okay, that is all fine, but I want to know about the county budget process and how I participate. That is why you told us we should be interested in the PFM Act in the first place. So when and how do we get involved in the county budget?
- So I guess I should comment on the county development plan when it is published in September, but can the public also influence the plan while it is being developed?
- Okay, so we have tried to participate in the planning process, but how do we get involved in the budget and make sure our priorities are really being addressed?
- Since the County Fiscal Strategy Paper comes after the national Budget Policy Statement, does that mean the county budget proposal also comes after the national budget proposal?
- At the national level, the Budget Committee seems to be a very important entry point for the public to give input into the budget. Is there a Budget Committee in the County Assembly as well?
- Are there restrictions at county level on the kinds of changes the County Assembly can make to the budget like there are at national level?
- Are there any other restrictions on how the county government spends money like those that apply to the national level?
- At the national level, there are ways to adjust the budget after it is approved, like the supplementary budget and the Contingencies Fund. Are these also there at county level?
- At the national level, Parliament can approve spending even if the Appropriations Act has not been passed. Is this also true at the county level?
- Okay, so what about monitoring implementation of the county budget?
- We talked about new requirements for national government to explain how it is managing debt and to maintain debt at sustainable levels. What about counties?
- Can individual counties also receive grants and donations from development partners?
7. Revenues and taxes
- Up to now, we have talked about spending, and we have talked about debt, but what about taxes? Does the PFM Act have anything to say about taxes at national and county level?
- Okay, so that is for national taxes, but what about county taxes?
- We have discussed many documents. Can you just review for me all of the documents that must be made available to the public at county and national level and when?
- So all these laws are nice, but what really worries me is accountability. Kenya has had very nice laws and regulations in the past, but people still “eat” public money whenever they can. Do any of these laws create new ways to hold our officials to account?
- Okay, so what happens if the accounting officer and the Cabinet Secretary work together to misuse funds? Who can hold them accountable?
- You mention that audit reports by Kenya’s national auditor looking at the performance of government agencies are tabled in Parliament. Are these also available to the public?
- What are the sanctions for public officers or agencies who misuse funds?
9. Cities, urban areas, service delivery and further questions
- I have heard people say that cities and urban areas also have certain procedures to follow for budgeting. Is this covered in the PFM Act?
- Is there anything else we should know about the PFM Act that might affect our access to services, such as education, health or water?
- A lot of services are actually not delivered directly by government, but have to be contracted from private providers. This has been an area where there has been mismanagement in the past. Does the PFM Act say anything about procurement?
- Is that everything that is in the Act? How come it is so long and this single/faq is so short?
- Documents are helpful, but is there anyone I can speak to if I have further questions?
See the full guide on 50 Things Every Kenyan Needs to Know About Public Finance Under The Constitution (PDF).