Kitui County Budget Review and Outlook Paper 2014

Abstract

This County Budget Review and Outlook Paper (CBROP), prepared in accordance with Public Financial Management Act, 2012 is the first to be prepared under the devolved governance structure. It presents the recent economic developments and actual fiscal performance of the FY 2013/2014 and makes comparisons to the budget appropriations for the same year. In this paper also, we show how the actual performance of the local and national economy in 2013/14 FY affected our compliance with the fiscal responsibility principles and financial objectives. The funds absorption rates for the 2013/14 FY were 17.64% and 83.5% for development and recurrent respectively leading to an average of 50.58%. A review of the 2013/14 FY performance results in various lessons which are not limited to: a) Procurement process takes time. The preparatory work necessary to be able to advertise tenders must be started before or very early in the FY to be able to implement projects within the FY. b) The Community Level Infrastructure Development Programme project implementation process is lengthy covering over twelve steps/processes. Unless the process for this programme is started within the first quarter of the FY, projects may not be implemented within the FY. c) The IFMIS system allows full commitment of LPOs. Funds committed are not available for any other project even if that project has not started unless the LPO is cancelled and de-committed. There were challenges with connectivity leading to system downtime. d) Staff capacity is critical for the implementation of projects and to ensure quality work. e) Construction of buildings has a lengthy process before the tendering process commences including preparation of building plans, architectural drawings etc. Funds should only be allocated to these projects based on what is possible to accomplish within the FY. f) That revenue collection using manual systems is prone to many weaknesses. There are also many casual collecting revenues. The plan is to automate the process. g) Projects to be undertaken in partnership with companies will require longer periods because the boards of those companies must approve the project before starting the implementation process. Kitui County has huge investment potential which has attracted both local and international companies and individuals willing to invest in the County (with one contract for coal mining already signed), highlighting the bright prospects of the local economy. The county is also strategically located between the two major transport corridors; the Mombasa – Nairobi – Malaba and the proposed LAPSSET corridor. Its proximity to the two corridors presents a great investment opportunity as well as competitive advantages to potential investors. The development of the Kitui Vision for Socio Economic Transformation, a long-term development blueprint, with a core element of the six economic and investment zones will guide the county’s socio-economic development in the next one decade thereby creating investment opportunities in all the six zones...