The Controller of Budget released the first National Government Budget Implementation Review Report for the financial year (FY) 2017/18 early this year. It covers the period July to September 2017.
The Controller of Budget prepares the report in line with Article 228 of the Constitution of Kenya 2010 and Section 9 of the Controller of Budget Act, 2016.
Both laws require the Controller of Budget to submit to Parliament quarterly budget implementation reports for the National and County Governments every four
The report presents progress made in implementing the FY 2017/18 budget in the first quarter. It also identifies challenges that affected budget implementation in the reporting period.
The Controller of Budget analyses and compares the receipts into the Consolidated Fund (revenue performance) and expenditure performance with targets in the FY 2017/18 Budget and previous performance in a similar period of FY 2016/17.
A financial (or fiscal) year in Kenya begins on 1st July of the current year and ends on 30th June of the coming year. A fiscal year is a period the (national or county) government uses for accounting and budget purposes, and for financial reporting.
Revenue received by the national government
During the period of 1st July 2017 to 30th September 2017, receipts into the Exchequer Account amounted to KSh408.1 billion. This represents 18 per cent of the annual target (KSh2.3 trillion).
However, it is an 11.2 per cent decline (KSh51.5 billion) compared to a similar period of FY 2016/17 when receipts stood at KSh459.6 billion.
Revenue disbursed to MDAs and County Governments (exchequer issues)
The total exchequer issues to ministries, departments, and agencies (MDAs), and County Governments amounted to KSh352.4 billion. The figure represents 15.5 per cent of the annual net estimates.
However, it is a 9.7 per cent decline compared to a similar period of FY 2016/17 when exchequer issues stood at KSh390.1 billion.
Exchequer issues comprised:
- 4 billion for MDAs’ recurrent expenditure,
- 4 billion for development expenditure, and
- 6 billion towards Consolidated Fund Services (CFS).
Consolidated Fund Services (CFS) comprises:
- payment of Public Debt, Salaries and Allowances to Constitutional Office Holders,
- Pension and Gratuities, and
- Subscriptions to International Organisations.
Total national government expenditure in the 1st quarter
The total expenditure in the first quarter amounted to KSh383.5 billion, which represents 16.4 per cent of the annual gross estimates.
Analysis of this expenditure shows that:
- MDAs spent KSh212.4 billion on recurrent programmes. This represents 21.4 per cent of the gross recurrent estimates.
- KSh88.9 billion went to CFS representing 12 per cent of the annual gross estimates, and
- KSh82.2 billion went to development activities, representing an absorption rate of 12.8 per cent.
Personnel Emoluments (PE) was the highest recurrent expenditure category at KSh78.3 billion. This represents 36.9 per cent of the total recurrent expenditure by MDAs. Personal emoluments cover expenditure such as salaries, allowances, pensions, and gratuities.
The Teachers Service Commission (TSC) reported the highest expenditure on PE at KSh52.2 billion, which translated to 66.6 per cent of the total PE expenditure.
The second highest expenditure item was current transfers to Semi-Autonomous Government Agencies (SAGAs) at KSh65.8 billion or 31 per cent of the total recurrent expenditure.
Domestic Travel was the third highest expenditure category at KSh1.3 billion followed by Foreign Travel at KSh655.1 million.
Out of the development expenditure of KSh82.2 billion, Capital Transfers to SAGAs recorded the highest expenditure at KSh51.2 billion. The second highest expenditure was refurbishment of buildings/infrastructure at KSh5.2 billion. This represented 62.3 per cent and 6.4 per cent of the gross development expenditure respectively.
Budget implementation challenges
During the period under review, the Controller of Budget identified some budget implementation challenges. They included:
- the delay in the release of funds for development activities by the National Treasury which led to low levels of development expenditure,
- the delay in submission of financial reports by MDAs to the Office of the Controller of Budget (OCOB), and
- the shortfall of (revenue) receipts into the Consolidated Fund.
The Controller of budget recommends the national government to address these challenges to enhance budget execution.
To learn more about how the national government spent your money in this period, get your copy of the First Quarter National Government Budget Implementation Report FY 2017/18 (42 downloads)