REPUBLIC OF KENYA COUNTY GOVERNMENT OF KAKAMEGA THE COUNTY TREASURY MEDIUM TERM COUNTY FISCAL STRATEGY PAPER An Economically Vibrant County FEBRUARY 2016 FOREWORD This is the third County fiscal strategy paper (CFSP 2016) for County government of Kakamega prepared by the County Treasury. It sets out the County priority programs to be implemented in the Medium Term expenditure Framework (MTEF) in the FY 2016/2017-2018/19. It is prepared in line with requirements of PFM Act of 2012 Section 117. Kakamega County has witnessed tremendous economic development including improved infrastructure, revitalized agricultural sector, and massive investments in education and health sectors since the inception of county governments. In addition, the continued development of modern markets and mikopo mashinani trade loans are expected to boost the volume of trade which has a multiplier effect in job creation, increased incomes and opening up of opportunities for entrepreneurial growth in the County. However, there are challenges that continue to hold the County back from achieving its full potential. They include: Inadequate budgetary allocation from the National Treasury, low local revenue base, high unemployment rates, inadequate human resource capacity and political interest. Strategies to address these challenges have been highlighted in this Fiscal strategy paper. The strategy for economic success targets five core areas: Investment in health services, revitalizing the agriculture sector, improvement of the infrastructure network, improve education standards and promotion of trade and industry. This fiscal strategy paper gives parameters for the 2016/17 budget and the medium-term expenditure framework which is consistent with both County and National Government priority programs, strategies and policies. The CFSP 2016 is prepared taking into consideration equitable shareable revenue from the national government, in addition to County’s own source of revenue. 2 ACKNOWLEDGEMENT The preparation of this county fiscal strategy paper is a consultative and collaborative effort of the various county stakeholders. The strategic leadership of His Excellency the Governor, County departments through the respective County Executive Committee Members (CECs)s and Chief officers, comments from the various groups and public sector hearings in February 2016, in addition to inputs of Commission for Revenue Allocation (CRA), Controller of Budget (COB), the County Budget and Economic forum members among many other stakeholders who participated in the overall process which was guided by the National Government budget policy statement (BPS). A core team in the County Treasury and Economic Planning and Investments spent a significant amount of time preparing this paper. Key among them was the Chief officer County Treasury, Mr Kenneth Kinyua, Mr .Otieno Samson, the Head of Budget, Planning Department headed by Mr. James Nyabochoa and the Economists from the Economic Planning and Investments Department; Mr Geoffrey Nyakwara, Margaret Gongi, Kennedy Lumbe, Alex Simiyu, Jacob Mumia, Dan Borter and Ondari Cyrus immensely took time to prepare the document. I would like to take this opportunity to thank the entire staff of the County Treasury and Economic Planning for their dedication and commitment. MR. KULATI F. WANGIA Ag. COUNTY EXECUTIVE COMMITTEE MEMBER FOR THE COUNTY TREASURY 3 TABLE OF CONTENTS FOREWORD.................................................................................................................... 2 ACKNOWLEDGEMENT ................................................................................................ 3 LIST OF TABLES ............................................................................................................ 6 LIST OF FIGURES .......................................................................................................... 7 ABREVIATIONS AND ACRONYMS .............................................................................. 8 OUTLINE OF THE 2016 COUNTY FISCAL STRATEGY PAPER. ............................. 11 EXECUTIVE SUMMARY ............................................................................................. 12 1. AN ECONOMICALLY VIBRANT COUNTY ...................................................... 13 1.1 Overview ..............................................................................................................13 1.2 Building an Economically Vibrant County .......................................................13 1.3 Programs for achieving a vibrant and sustainable economy. .........................14 2. RECENT ECONOMIC DEVELOPMENT AND POLICY OUTLOOK IN 2015/16 ........................................................................................................................... 16 2.1 Review of Recent Economic Performance .............................................................17 2.1.1 Growth Update ....................................................................................................17 2.1.2 Growth of the private sector ................................................................................17 2.1.3 Inflation rate trend ...............................................................................................18 2.1.4 Interest rate trend.................................................................................................18 2.2 Update on fiscal performance and emerging challenges ......................................18 2.2.1 County Revenue ..................................................................................................18 2.2.2 Locally Collected Revenue .................................................................................18 2.2.3 Exchequer Disbursements ...................................................................................21 2.2.4 County Budget Expenditure ................................................................................21 2.2.5 Economic Classification of County Expenditure ................................................23 2.3 Update on Fiscal performance and emerging challenges .....................................24 2.3.1 Implementation of 2015/16 Budget and Emerging Fiscal Challenges ................25 2.3.2 Revised budgets...................................................................................................25 2.3.3 Risks to the outlook.............................................................................................26 3.0 FISCAL POLICY AND BUDGET FRAMEWORK .................................................. 27 3.1 Overview ...................................................................................................................27 3.1.1 Adherence to Fiscal Responsibility Principles....................................................27 3.2. Fiscal structural reforms ........................................................................................28 3.2.1 Deficit Financing Policy......................................................................................28 3.3 Revenue projections .................................................................................................28 3.3.1 Expenditure Forecasts .........................................................................................29 3.3.2 Overall deficit financing......................................................................................29 3.4 The 2016/2017 Budget framework ..........................................................................29 4.0 INTERGOVERNMENTAL FISCAL RELATIONS ................................................. 30 4 4.1 Legal Framework .....................................................................................................30 4.2 Challenges Encountered by County Governments in Public Finance Management ...................................................................................................................30 4.3 Equitable shares .......................................................................................................31 4.4 Additional resources ................................................................................................31 4.5 Fiscal Discipline ........................................................................................................31 4.6 Capacity Building of County Governments ...........................................................31 4.7 Summary ...................................................................................................................31 5.0 MEDIUM-TERM EXPENDITURE FRAMEWORK ................................................ 33 5.1 Resource Envelope ...................................................................................................33 5.2 Spending Priorities for 2016/2017-2018/19 MTEF Budget .......................................... 34 5.3 Medium Term Expenditure Estimates ...................................................................34 5.4 Baseline Ceilings .......................................................................................................36 5.5 Details of Sector/Department Priorities .................................................................37 5.5.1 Agriculture, Livestock, Fisheries and Cooperative Development ......................37 5.5.2 Transport, Infrastructure, Public Works and Energy ..........................................39 5.5.3 Trade, Tourism and Industry ...............................................................................40 5.5.4 Health Services....................................................................................................40 5.5.5 Education, Science and Technology ...................................................................41 5.5.6 Office of the Governor, Public Service and Administration ...............................42 5.5.7 The County Treasury...........................................................................................44 5.5.8 Social services, Youth and Sports .......................................................................44 5.5.9 Water, Environment & Natural Resources..........................................................45 5.5.10 Lands, Physical Planning, Housing and Urban Development ..........................46 5.5.11 The County Assembly .......................................................................................47 6.0 CONCLUSION ......................................................................................................... 48 Annex 1: Local revenue MTEF Forecast 2015/16-2018/19 .............................................. 49 Annex 2: Medium Term Expenditure Estimates ............................................................. 50 Annex 3: Ministerial Recurrent Budget Ceiling .............................................................. 52 Annex 4: Ministerial Development Budget Ceiling ......................................................... 53 Annex 5: County Programmes and Sub programmes ..................................................... 54 Annex 6: Budget Calendar.............................................................................................. 62 5 LIST OF TABLES Table 1: County Revenue Analysis by year .................................................................... 19 Table 2: Exchequer Issues to Kakamega County for FY 2015/16 ................................ 21 Table 3: Comparison of Recurrent and Development Budget Estimates and Actual Expenditure FY 2014/2015 ............................................................................................... 22 Table 4: Economic Classification of Expenditure for FY 2014/15 .................................. 23 Table 5: Revenue resource envelope................................................................................ 33 Table 6: Baseline ceilings 2016/17-2018/19 ..................................................................... 35 6 LIST OF FIGURES Figure 1: Real GDP Growth (%) ..................................................................................... 17 Figure 2: Actual County Revenue Analysis for FY 2012/13-2015/2016 ....................... 19 Figure 3: Trend of Revenue Collections .......................................................................... 20 Figure 4: Expenditure Trends.......................................................................................... 24 7 ABREVIATIONS AND ACRONYMS BSP Budget Policy statement CBROP County budget review outlook paper CFSP County fiscal strategy paper CIDP County integrated development plan CSWGs County Sector Working Groups FY Financial Year IFMIS Integrated Financial Management Information System MTEF Medium Term Expenditure Framework PFM Public Financial Management PPP Public Private Partnership 8 Legal Basis for the Publication of the County Fiscal Strategy Paper The County fiscal strategy paper is prepared in accordance with Section 117 of the Public Financial Management Act, 2012. The law states that: (1) The County, Treasury shall prepare and submit to the County Executive Committee the County Fiscal Strategy Paper for approval and the County Treasury shall submit the approved Fiscal Strategy Paper to the county assembly, by the 28th February of each year. (2) The County Treasury shall align its County Fiscal Strategy Paper with the national objectives in the Budget Policy Statement. . (3) In preparing the County Fiscal Strategy Paper. The County Treasury shall specify the broad strategic priorities and policy goals that will guide the county government in preparing its budget for the coming financial year and over the medium term. (4) The County Treasury shall include in its County Fiscal Strategy Paper the financial outlook with respect to county government revenues, expenditures and borrowing for the coming financial year and over the medium term. (5) In preparing the County Fiscal Strategy Paper, the County Treasury shall seek and take into account the views of (a) The Commission on Revenue Allocation; (b) The public; (c) Any interested persons or groups; and (d) Any other forum that is established by legislation. (6) Not later than fourteen days after submitting the County Fiscal Strategy Paper to the county assembly, the county assembly shall consider and may adopt it with or without 9 10 Responsibility Principles in the Public Financial Management Law In line with the Constitution, the new Public Financial Management (PFM) Act, 2012, sets out the fiscal responsibility principles to ensure prudency and transparency in the management of public resources. The PFM law (Section 107(b)) states that: 1) The county government’s recurrent expenditure shall not exceed the county government’s total revenue. 2) Over the medium term, a minimum of 30% of the County budget shall be allocated to development expenditure. 3) The County government’s expenditure on wages and benefits for public officers shall not exceed 35 percent of the County government revenue. 4) Over the medium term, the County government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure. 5) Public debt and obligations shall be maintained at a sustainable level as prescribed by the executive and approved by the County Assembly. 6) Fiscal risks shall be managed prudently. 7) A reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained, taking into account any tax reforms that may be made in the future OUTLINE OF THE 2016 COUNTY FISCAL STRATEGY PAPER. This paper contains six sections as summarized below; 11 Section I Provides the county strategic blueprint which is to have an economically vibrant county and further explains how the county intends to transform its economy during its tenure in office. Section II Outlines the economic context in which the 2016/17 MTEF budget is prepared. It provides an overview of the recent economic developments and the macroeconomic outlook covering the national government and county level. Section III outlines the fiscal framework that is supportive of growth over the medium term, while continuing to provide adequate resources to facilitate service delivery and execute the policy priorities of the county Government. Section IV provides a framework of managing the county government’s administrative units and the budgetary allocation of the county revenue among its departments. Section V presents the resource envelope and spending priorities for the proposed 2016/17 MTEF Budget and the Medium Term. Sector achievements and priorities are also reviewed for the 2015/16 MTEF period. Section VI gives the conclusion. EXECUTIVE SUMMARY 12 1. AN ECONOMICALLY VIBRANT COUNTY 1.1 Overview This County fiscal strategy paper (CFSP) 2016 has been prepared under the Public Financial Management Act, 2012. In line with the law, the CFSP sets out County priority programs outlined in the next paragraphs to be implemented in FY 2016/17 and the Medium Term expenditure Framework (MTEF). The implementation of the county priority programs is expected to help in achieving its core mandate of service delivery to its citizens. These includes improving health services, enhancing food security, improving infrastructural network, upgrading education standards, revitalizing trade and industry development, promotion of social justice, provision of affordable housing and creation of employment. The National economic outlook updates have been incorporated in this CFSP to reflect changes in National and Global economic and financial trends. When preparing this CFSP, the national budget policy statement (BPS) was a key reference document in aligning the national economic policy principles to county principles. 1.2 Building an Economically Vibrant County The focus of the County Government is to steer the county forward through numerous strategies to improve the delivery of services through sustained fiscal policy framework. Riding on the enormous resources and potential that the county has in Agriculture, Tourism, Sports, Energy, Minerals, Forestry, and favourable weather conditions presents numerous opportunities for investors which will be a key driver of the county economy. The County Government has continued to support investments through infrastructure development as an enabler to spur growth in all sectors. The framework upon which an economically vibrant county agenda is built is on course despite some challenges. The low level of local revenue base of the FY 2015/16 and the inflation trend arising from the national government policies continue to be a source of concern for the County Government. Expenditure pressures with respect to salary demands and operational costs have impacted negatively on the county development agenda. The broad strategic priorities for 2016/17 Budget will be anchored on the achievements of the County Government by directing public spending to stimulate growth. The investments by the private sector and other development partners will compliment these efforts. Taking the County Intergraded Development Plan (CIDP) 2013-2017 as basic document, the 13 County Government is certain that the broad strategic priorities for 2016/17 will provide a framework sustainable growth and development. The County’s broad strategic priorities for attaining economic vibrancy include: a) Promotion of health care through investing in quality and accessible health services b) Promotion of value addition for agricultural produce to enhance food security. c) Development of key infrastructure to spur economic growth. d) Improvement and upgrading education standards. e) Creating an enabling environment for business and entrepreneurial development. f) Promotion of equitable economic and social development for stability g) Enhancing governance, transparency and accountability in the delivery of public goods and services. In identifying these priorities, the County Government acknowledges that there lies an enormous task ahead in their implementation which calls for concerted efforts of all stakeholders in the county. This County fiscal strategy paper therefore articulates priority economic policies and sectors expenditure programs to be implemented under the Medium Term Expenditure Framework (MTEF) for 2016/17-2018/19 in order to achieve the County’s sustainable development goals. 1.3 Programs for achieving a vibrant and sustainable economy. Strategic priority I: Promotion of health care through investing in quality and accessible health services. The county government will procure more ambulance services, provide pharmaceutical and non-pharmaceutical medicines, continue the construction, equipping, renovation and upgrading of health facilities and revamping of Level four (4) facilities county wide. Furthermore, the establishment of a new County General hospital and a Medical school at MMUST, construction of two MTCs in the northern and southern region and rehabilitation of Kakamega MTC will enhance access to quality health services and increased number of health personnel. In addition construction of Kakamega Teaching and Referral Hospital will enhance the provision of comprehensive and reduce referral cases outside the county. Oparanya Care will continue to be revamped in order to reduce maternal and child 14 mortality rates. In addition the Community Strategy will be strengthened to increase the capacity of the community to handle their own health issues. Strategic priority II: Revamping the Agriculture sector. Subsidization of farm inputs, procurement of tractors for improved mechanization will increase the acreage under crop production, introduction of the one cow initiative, Value addition in agriculture to increase farmer incomes, up-scaling artificial insemination for better breeds and revamping extension services are among the strategies which will be employed to revamp this sector. Strategic priority III: Improving transport infrastructure. In order to improve the connectivity in the county, massive construction of the earth, gravel and bitumen roads as well as bridges and river crossings will be undertaken. Purchase of key construction equipment in addition to investment in the modern road construction technology and Construction of the county mechanical workshop will improve accessibility and connectivity. These will be achieved through both public and private partnerships. Within the medium term the county intend to upgrade 200Km of roads to Bituminous standards. Strategic priority IV: Improvement of the education standards. Construction, equipping and staffing of modern county polytechnics and ECDE centers, roll out of ECDE school feeding progamme, infrastructure support to primary and secondary public schools and provision of bursaries and scholarships to the bright but needy students and provision of tuition subsidies to students in county polytechnics will go a long way in improving access to quality education and training. Strategy V: Promotion of Trade, Tourism and Industry. Construction of modern markets and stalls, provision of affordable credit to small and Medium sized businesses, erection of light masts in market centers, protection and development of tourism attraction sites, feasibility studies and provision of infrastructural support for the establishment of maize milling plant and tea processing factory among other cottage factories will create an enabling environment for business and industrial development and enhancing entrepreneurial culture.. Strategic priority VI: Promotion of culture, youth, sports and labour relations Enhancement of social services, preservation of culture, youth and women empowerment programmes, gender mainstreaming, support for people living with disabilities, establishment of rehabilitation centers, rescue centers, Library services and children support 15 centers. Support of sporting activities nurturing of talents and identification and training of labour laws are key in this sector. These programmes will enhance cohesion and social justice. Strategic priority VII: Provision and improving access of water Construction of water storage and harvesting facilities in schools, markets and health centers and hospitals will promote and improve access of water. The county will endeavor to fund projects with an aim of achieving sustainability in water provision in the county. 2. RECENT ECONOMIC DEVELOPMENT AND POLICY OUTLOOK IN 2015/16 16 2.1 Review of Recent Economic Performance According to National Government statistics, Economic growth has been on an upward trend. The Economy grew by 5.3 percent in 2014, and was projected at 5.6 percent in 2015 and 6.0 percent in 2016 with 6.5 percent in the medium term (BPS, 2016). This was attributed to improved agricultural production, improved infrastructure and low oil and energy prices in the country and county. The national inflation declined from double digit in 2011 and is still maintained below 10 percent in recent times. As at December 2015 the inflation was 8.01(KNBS). 2.1.1 Growth Update The County relies on national government statistics to assess its economic growth. According to KNBS, the country’s economy grew by 5.5% in first three quarters of 2015 as compared to 5.3 % in 2014 in the same period. This is an increase of 0.2%. The county’s overall growth rate affects the country’s economic performance. Below is an extract from budget policy statement February 2016 that gives information on real GDP growth. Figure 1: Real GDP Growth (%) Amount in Million Kshs 600.00 500.00 400.00 300.00 200.00 100.00 - 2012/13 2013/14 2014/15 YEAR Source: BPS 2016. 2.1.2 Growth of the private sector The private sector has witnessed tremendous growth since the establishment of the devolved Governments. This is attributed to increased transfer of funds to the county 17 % GDP RATE governments to spend on provision of goods and services. Private sector contributes to the development of the economy of the county by partnering with the county in provision of goods and services. 2.1.3 Inflation rate trend According to the National Government statistics, the annual average inflation rate increased from 6.9 percent in December 2014 to 6.5 percent in December 2015. Inflation rate is expected to reduce to less than 8 percent level in future. This is the national government target which will be uniform across all the counties. 2.1.4 Interest rate trend The County government is affected overally by the national government interest rate performance. Nationally, Central Bank Rate was 8.5 percent in December 2014. This was reviewed upward to 9.87 percent in July 2015 by the Monetary Policy Committee (MPC) .The upward review resulted in an increase of lending rate by commercial banks (BPS 2016) 2.2 Update on fiscal performance and emerging challenges The main spending units of the County Government are the County Assembly and the Executive. The main sources of revenue during the period under review was national government allocation (CRA shareable revenue), Conditional grants for Level 5 Hospital and local sources. The approved budget for 2015/16 was Kshs. 12.329 B to cater for the spending on the above county units. 2.2.1 County Revenue The budget of 2015/16 FY was financed by an equivalent of the expenditure budget amounts resulting to a balanced county budget .The total allocation from the shareable revenue for the County for FY 2015/16 was Kshs. 8,908,229,519 and a conditional grants of Ksh.709,676,711. Own source of revenue was forecasted at one billion. 2.2.2 Locally Collected Revenue The county Treasury is responsible for local revenue collection. Collections from the various ministries and other departments are deposited in county revenue fund account at the Central Bank of Kenya. 18 Total revenue collection for the period 2013/2014and 2014/15 was Kshs.325M and 516 M respectively showing an upward trend. However, a collection of Kshs.218 M during the half year of FY 2015/16 ending December 2015 is an indicator of declining revenue generation. The county government has put in place measures to raise more revenue as compared to the previous years and will review the cause of underperformance compared to Ksh.242 M in the same period in December 2014. Table 1 and table 2 below show the expected trend. Table 1: County Revenue Analysis by year Actual County Revenue Analysis for FY 2012/13-2014/2015 Sources 2012/2013 2013/2014 2014/2015 Single Business Permits 50,176,925 39,216,196 91,237,493 Land Rates 36,681,519 37,173,324 20,894,388 Bus parks 27,874,990 48,866,080 45,123,400 Markets 29,886,895 42,905,440 39,761,963 Parking Fee 13,328,083 18,838,018 11,359,310 Cess 28,060,507 17,123,608 42,083,893 Hire Fees 3,038,765 2,271,370 2,417,490 House/Office Rent 308,500 1,856,205 6,533,125 Other Charges 114,653,635 100,517,166 Education 1,437,500 Health 15,011,397 259,480,062 ATDC 4,154,000 Liquor Fess 7,444,500 Slaughter Houses 915,314 Dividend 1,140,000 Court fines 344,086 Tender fees 4,056,542 TOTALS 304,009,819 329,272,846 532,889,024 Source: Kakamega County Treasury 2016 Figure 2: Actual County Revenue Analysis for FY 2012/13-2015/2016 19 600.00 500.00 400.00 300.00 200.00 100.00 - 2012/13 2013/14 2014/15 Source: The County Treasury February 2016 Figure 3: Trend of Revenue Collections 600.00 500.00 400.00 300.00 200.00 100.00 - 2012/13 2013/14 2014/15 Year Source: Kakamega County Treasury-Revenue Report 2015 From graph 2 above it is evident that the revenue collection trend is improving each year. The trend doubled from 2013/14 up to 2014/15. 20 Amount in Million Kshs Amount in mill ion(Kshs) 2.2.3 Exchequer Disbursements The exchequer disbursements to the County Government totaled Kshs. 6.577 B for financial year 2014/15 and Kshs. 5.885 billion for a half year of 2015/16. The sum released to the County for FY 2015/16 for the half year is shown in table 3. Table 2: Exchequer Issues to Kakamega County for FY 2015/16 Month Amount July -15 1,434,133,267 August -15 340,000,000 September -15 768,000,000 October -15 865,611,560 November -15 804,465,105 December -15 841,779,628 January 2016 831,418,005 Total 5,885,407,563 Source: County Treasury 2016 During the period under review, the actual monthly exchequer releases from July 2015 to January 2016 is shown in table 2 above. This comprises of part of balance from the FY 2014/15. This disbursements and exchequer requisitions are of up-to September 2015 according to CRA disbursement schedule. The challenges being faced during exchequer releases include late disbursement of funds by the National Treasury, poor financial reporting framework by the County spending units and poor implementation of strategies occasioned by inappropriate planning when executing the budget among others. 2.2.4 County Budget Expenditure The total budget for FY 2014/2015 for all departments was Kshs.10.579 billion. The total actual expenditure for the period under review cumulatively stood at Kshs 7.955 billion which comprises of Kshs. 4.434 billion recurrent and Kshs. 3.521 billion development expenditure as indicated in table 4. 21 Table 3: Comparison of Recurrent and Development Budget Estimates and Actual Expenditure FY 2014/2015 County Government Expenditures and tranfers % Revised Budget Actual Budget Actual absor Budget ption 2013/14 2014/15 Office of the Governor 0 0 271,125,751 239,887,784 155,995,573 65.03 Current 216,125,751 184,887,784 155,126,573 83.90 Development 55,000,000 55,000,000 869,000 1.58 Public Service and 1,893,099,564 3,524,418,247 2,101,513,781 2,557,424,560 2,205,209,788 86.23 Administration Current 1,613,099,564 2,802,807,816 1,916,513,781 2,372,424,560 2,193,898,716 92.47 Development 280,000,000 721,610,431 185,000,000 185,000,000 11,311,072 6.11 County Treasury 502,797,412 216,834,929 497,260,168 728,510,168 582,051,507 79.90 Current 452,797,412 199,884,929 180,310,168 167,560,168 97,471,517 58.17 Development 50,000,000 16,950,000 316,950,000 560,950,000 484,579,990 86.39 Water, Environment and Natural 284,463,240 36,573,646 275,468,000 246,949,947 134,089,399 54.30 Resource Current 119,463,240 15,011,525 102,268,000 73,749,947 63,601,067 86.24 Development 165,000,000 21,562,121 173,200,000 173,200,000 70,488,332 40.70 Social Services, Youth & Sports 376,757,786 67,143,661 276,029,110 285,420,637 97,194,000 34.05 Current 156,557,786 40,130,833 39,779,110 29,170,637 16,919,269 58.00 Development 220,200,000 27,012,828 236,250,000 256,250,000 80,274,731 31.33 Transport, Infrastructure & 2,416,881,694 153,277,669 1,139,690,660 1,320,690,660 958,435,015 72.57 Public Works Current 91,281,694 24,083,687 62,690,660 43,690,660 30,038,685 68.75 Development 2,325,600,000 129,193,982 1,077,000,000 1,277,000,000 928,396,330 72.70 Lands, Housing, Urban Areas 362,804,888 17,930,637 364,540,000 302,034,419 72,461,586 23.99 and Physical Planning Current 52,804,888 4,430,637 72,540,000 50,034,419 23,869,966 47.71 Development 310,000,000 13,500,000 292,000,000 252,000,000 48,591,620 19.28 Health Services 3,333,169,208 593,857,839 2,378,072,277 2,284,548,523 1,744,453,345 76.36 Current 2,059,669,208 159,092,588 1,749,072,277 1,660,212,277 1,459,834,113 87.93 Development 1,273,500,000 434,765,251 629,000,000 624,336,246 284,619,232 45.59 Agriculture, Livestock, Fisheries 715,065,446 57,147,543 1,040,200,000 807,597,100 431,610,586 53.44 and Co-operatives Current 330,065,446 26,303,410 310,200,000 57,597,100 37,983,357 65.95 Development 385,000,000 30,844,133 730,000,000 750,000,000 393,627,229 52.48 22 County Government Expenditures and tranfers % Revised Budget Actual Budget Actual absor Budget ption 2013/14 2014/15 Trade, Tourism & 1,022,457,000 43,267,757 409,950,000 386,950,000 318,669,048 82.35 Industrialization Current 32,457,000 14,486,126 69,950,000 46,950,000 26,117,105 55.63 Development 990,000,000 28,781,631 340,000,000 340,000,000 292,551,943 86.04 Education , Science & 1,233,550,000 497,823,942 816,440,000 668,440,000 562,296,531 84.12 Technology Current 433,550,000 13,127,222 316,440,000 118,440,000 88,953,592 75.10 Development 800,000,000 484,696,720 500,000,000.00 550,000,000.00 473,342,939 86.06 County Assembly 1,114,504,183 228,980,973 751,000,000 751,000,000 693,214,617 92.31 Current 745,504,183 203,895,355 651,000,000 651,000,000 648,214,617 99.57 Development 369,000,000 25,085,618 100,000,000 100,000,000 45,000,000 45.00 EXPENDITURES 13,255,550,421 5,437,256,843 10,321,289,747 10,579,453,798 7,955,680,995 75.20 Source: County Treasury - (County Budget Review Outlook Paper 2015) Table 3 and 4 compares the actual expenditure to the gross estimates for the FY 2013/14 - 2014/15 period. As indicated the County Public Service and administration had the highest absorption rate as compared to other ministries. This can be attributed to payments in form of salaries and wages which were lumped together. 2.2.5 Economic Classification of County Expenditure The table 5 gives the details of the classifications of the expenditure as per the various economic items. Table 4: Economic Classification of Expenditure for FY 2014/15 Description Total Expenditure (Kshs. 000) Total Expenditure % Personnel Emoluments 3,247,713,320 40.82 Operational & Maintenance 1,186,569,934 14.92 Development Expenditure 3,521,520,947 44.26 Total 7,955,804,201 100 Source: County Treasury 2016. The Table 4 groups the total county expenditures for the previous year into three main categories; 23 i. Compensation of Employees; includes basic salaries paid to permanent and temporary employees and personal allowances paid as part of salary among other related costs. ii. Operations/Use of goods and services; includes utilities, supply and services, domestic travel and subsistence, and other transportation costs, training expenses, hospitality supplies and services, routine Maintenance among other related costs. iii. Development expenditures - These are the funding to the various capital projects and programmes in the county departments. From Table 5, Compensation of Employees consumed 40.82 % of the total expenditure. Operations and Maintenance consumed 14.91 % while Capital Assets/ development consumed 44.26% of the total expenditure. Figure 4: Expenditure Trends 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000,000 500,000,000 0 Personnel Emoluments Operational & Maintenance Development Expenditure Expenditure category Source: County Treasury 2016 2.3 Update on Fiscal performance and emerging challenges The fiscal and economic assumption underlying the 2015/16 budget entailed improved collection of revenue from local sources and timely releases of funds by the national treasury. The updated Economic framework is promising, given that there is likelihood of improvement of local revenue collection and faster funds disbursement from the national government as compared to the FY 2014/2015. Despite this improvements the County Government will continue with its policy of expenditure rationalization with a view to 24 Total Expenditure (Kshs. 000) provide more funds to core services thus reducing costs through elimination of duplication and inefficiencies. 2.3.1 Implementation of 2015/16 Budget and Emerging Fiscal Challenges Challenges in the adherence to the budget plan continues to hamper smooth implementation of the FY 2015/16 budget. But with already established County organizational structures, the county is expected to improve on provision of services since there is clear responsibilities which are well defined. Another challenge is in revenue collection due to delay in the automation of revenue collections which is still under pilot phase. In addition, expenditure pressures have emerged with salary and operational demands from the health, public service and administration and education among other departments. This takes place as the departments continue to recruit additional staff without due consultation with the County Treasury and Public Service to ascertain the availability of funds to cater for additions. These poses a risk to the stability of the budget for 2015/16 in the face of under collection of local revenue as indicated in the revenue target projection. The revenue collection in FY 2014/15 was Kshs532M against a Kshs 903 Million target. In the FY 2015/2016 Kshs. 218 Million has been collected in the first half of the fiscal year against a target of 500million. This reflects a shortfall of Kshs 232 million indicating an underperformance from the set targets. This may be attributed to the delay in the operationalization of the County Revenue Agency that will have a strong control in addition to tapping of new revenue streams in the county. 2.3.2 Revised budgets During the FY 2014/2015 budget implementation, there were several challenges that came as a result of unrealistic budget. Some expenditure estimates were inadequate or were under-budgeted for, while others were over budgeted prompting a need for review. There was delay in approving the revised budget by the County Assembly and so the revised budget was not adequately implemented as required. In the course of the budget implementation during the first half of the financial year 2015/2016 several challenges have emerged. Key among them are: local revenue underperformance, delays in exchequer releases by the National Treasury and continued expenditure demands from departments. 25 In view of the financing constraints from revenue and emerging expenditure pressures, a supplementary budget for FY year 2015/16 reflecting these changes has already been submitted to the county assembly for approval. Adjustments to the 2015/16 budget will take into account actual performance of expenditure and absorption capacity for the remainder of the financial year. Due to resource constraints, the County Government will rationalize and re-prioritize development and operational expenditures in order to spend within the budget. 2.3.3 Risks to the outlook The devolved system has brought in itself several challenges to the counties. Expenditure pressures have emerged with salary and operational demands from across all county departments especially Health, education and Public Service and Administration. The high wage bill at the county poses a risk to sustainable implementation of the 2015/16 budget in the medium term by limiting funding to the capital expenditure. The County government will undertake appropriate measures to safeguard economic stability in order to neutralize its effects to fiscal outlook. 26 3.0 FISCAL POLICY AND BUDGET FRAMEWORK 3.1 Overview The 2016/17 Medium-Term Fiscal Policy aims at supporting a sustainably vibrant economic growth and ensuring that the county strives to provide high quality services to improve the livelihoods of its citizens. The county will pursue prudent fiscal policies to ensure economic stability. In addition, the county fiscal policies will provide support to economic activities while allowing for implementation of the projects and programmes sustainably. Adhering to these policies will also enhance local revenue collection. This will ensure that there are adequate resources for capital investments. In respect to local revenue generation, the county will institute corrective measures to reduce revenue leakages from local sources. Course of actions will include operationalization of the County Revenue Agency that will solely be responsible for efficient and effective revenue collections, enforcement of local revenue laws and regulations, automation of revenue collection systems and speedy implementation of collection of other revenue streams .It will also undertake sensitization and education of the public on revenue matters. The county will continue to hire and train more staff to improve their capacity geared towards promotion of efficiency, effectiveness and accountability. 3.1.1 Adherence to Fiscal Responsibility Principles These policies will aim at rationalizing allocation of more resources from recurrent to capital and development programmes so as to promote sustainable and inclusive growth. Some of the fiscal responsibility principles to be observed include:  Over the medium term, a minimum of 30% of the county budget shall be allocated to development expenditure. The County Government is committed to spend more in the development expenditure as compared to the recurrent expenditures.  The County Government’s expenditure on wages and benefits for public officers shall not exceed 35 percent of the County Government revenue as prescribed by the Public Financial Management Act (PFMA 2012). On wages and benefits, the share to County Government revenues was 34.20 percent in FY 2015/16, and is projected at 35 percent in FY 2016/17. 27 3.2. Fiscal structural reforms The County Government aims to widen the tax base in line with 2016 Finance Act that will be enacted by the County Assembly. The County Treasury plans to review other relevant revenue legislations in order to improve revenue raising measures and efficiency. In order to achieve this objective, the county government is in the final stages of operationalizing the county revenue agency which was created by an act of county assembly, Finance and Administrative Act 2014.This is expected to increase revenue collection in the medium term. Over the medium term, the county government will rationalize its expenditure with an aim to reduce wastages. This will be done by ensuring there is improved accountability and transparency among the accounting officers who are in charges of public finances. The on- going fiscal structural reforms will eliminate duplications. The adoption of IFMIS and Internet Banking in the County is strengthening expenditure management. However, more needs to be done to enhance prudent financial management. The county will strive to ensure that there is efficient and effective execution of the budget. This will be made possible through expenditure tracking and taking corrective measures on any deviations and instilling strong internal controls on expenditure. To achieve value for money there is need to strengthen audit function, through continuous review of audit risks and periodic monitoring and evaluation of projects and programmes. 3.2.1 Deficit Financing Policy The county envisages borrowing from Domestic Sources for capital investments. Borrowing will be undertaken upon careful and critical analysis of financial position and capability of the county in repaying its debts. This initiative will take place in future upon preparation of medium term debt strategy paper. 3.3 Revenue projections The 2016/17 budget targets total revenue of Ksh12.79 Billion which is both the CRA shareable revenue, conditional grants and own source of revenue. Out of this, the County expects to receive Equitable Shareable Revenue of Kshs. 9.785 Billion and conditional grants totaling to Kshs. 782 Million. Local revenue source target is Kshs.868 Million and the expected balance brought forward of Kshs. 1.32 Billion. 28 3.3.1 Expenditure Forecasts The County expects overall expenditure to increase by an average of 3.89 percent up from Kshs.12.329 billion in 2015/2016 to the estimated Ksh.12.79 billion in the FY 2016/17 budget owing to slow economic growth and other macro-economic risks such as inflation, terrorism and unpredictable weather conditions. Expenditure ceilings on goods and services for sectors/ministries and departments are based on funding allocation in the FY 2015/16 revised budget. The ceilings are adjusted based on expenditure trends and also the County change of priority programs within the spending units. Inflation which affects the expenditure trends is also put into consideration. An emergency fund of Kshs. 50 million will be set aside to cater for any emergency that might arise during the financial year 2016/2017. 3.3.2 Overall deficit financing The county government target to have a balanced budget. However, a debt strategy paper will be prepared and outline the various strategies to manage county future debts. The Fiscal policy outlined in this CFSP aims at improving revenue collection efforts as well as effectively managing total expenditures. This will be achieved through continued administrative and legislative reforms aimed at enhancing resource mobilization, improving efficiency in government spending and reducing wastages. The fiscal space created will avail resources to scale up investments in human capital including; health services, education and infrastructure while at the same time providing sufficient resources to improve service delivery in the county. 3.4 The 2016/2017 Budget framework The 2016/17 budget framework is prepared taking into consideration of macro-fiscal framework set by budget policy statement of February 2016 where real GDP is expected to grow by 5.5 percent by FY 2016/17 and the inflation rate is expected to remain low and stable below 8%. When preparing MTEF budget 2016/17-2018/2019, the County Integrated Development Plan, Annual Development Plans, Public Participation report and Budget Policy Statement have been key reference documents. 29 4.0 INTERGOVERNMENTAL FISCAL RELATIONS 4.1 Legal Framework This being the third year of devolution, a lot needs to be done by the national government to ensure that county governments succeed in provision of devolved functions. These include transfer of assets by the transitional authority, legal framework for borrowing, clear classification and transfer of county roads and other unbundled functions. Some of the key significant progress that has been done include the establishment of sound legal framework for effective and efficient operation of county government financial management. This comprises of PFM Act of 2012 which defines the powers and functions of national and county institutions in financial management and control. This law also provides for accountability mechanisms by entrenching public participation and disclosure of budgetary information as well as mechanism for enforcing compliance to this law. Other laws enacted include; County Government Act 2011, Intergovernmental Relations Act 2011, Urban areas and Cities Act 2011, the Transition to Devolved Government Act 2011, the Commission on Revenue Allocation Act 2011 and the Independent Offices Act 2011.These laws ensure harmony in the operation of the county governments and also boost the inter and intra government relations. The national government also rolled out IFMIS and internet banking platforms to all counties. In addition to this, the national government seconded staff to support county governments in service delivery during the transition period. Furthermore, the county government has also recruited more staff and still plan to do so in future. 4.2 Challenges Encountered by County Governments in Public Finance Management Some of the challenges encountered by the counties include:  Local revenue collection mechanism is not efficient. The county local revenue is low despite the high potential for increased collections. This may be due to poor revenue structures in place. The county finance bills sometime face opposition which often delays the collection of local revenue.  Capacity constraints in terms of both personnel and technical resource.  Delay in release of funds from the National Treasury which hamper the timely implementation of programmes. 30 4.3 Equitable shares Pursuant to article 202 of the Constitution, the national government, through the budget policy statement allocated Kakamega county Kshs. 9,612,093,312. This equitable share allocation is expected to be planned, budgeted, spent and accounted for. 4.4 Additional resources The additional revenue to resource allocations by the CRA shareable revenue includes kshs. 873,804,000 own source of revenue and conditional grant of Kshs 810,427,395. This comprises of kshs.406,936,416 for level 5 hospital,Kshs38,617,147 for compensation for user fees foregone,Kshs.217,184,083 for free maternal health care, Kshs 11,750,000 DANIDA funds and Kshs147,689,749 road maintenance levy fund. 4.5 Fiscal Discipline The County Government must ensure that county resources are used in a prudent and responsible way as required under Article 201(d) of the Constitution. In addition, the county must comply with the fiscal responsibility principles as stipulated in the PFM Act 2012. County treasury will ensure compliance with the set fiscal targets. In this regard, the county will ensure that recurrent expenditure does not exceed annual revenue resource. Finally, the county will ensure that the development budget does not fall below 30 percent of the total budget over the medium term. 4.6 Capacity Building of County Governments The county is still experiencing challenges in the full compliance with the PFM Act 2012. The National Government rolled out trainings to build the capacity of county personnel in the following areas; IFMIS, budget preparation, accounting reporting, Monitoring and Evaluation, procurement among others. These has helped the county to improve service delivery to the public. 4.7 Summary The National Government, on the onset of the Constitution of Kenya (2010), embarked on the process of establishing the necessary legal and institutional framework for successful roll out of devolution. This is now in place including the requisite human and financial resources to facilitate operationalization of the devolved system of government. The share of National Government revenue allocated to this County has grown steadily from Kshs.6.825 billion in 2013/14 to Kshs. 7.7 billion 2014/2015 ,Kshs8.908 for 2015/2016 31 and is expected to increase further to 9.612 billion in 2016/2017. The county government is putting measures in place to enhance efficiency and effectiveness in the delivery of services. Training of staff has taken place and more are expected to be trained in the financial year 2016/2017. Through budget policy statement the National Government has given a hint on introduction of intergovernmental grants aimed at giving incentives for a desired result. 32 5.0 MEDIUM-TERM EXPENDITURE FRAMEWORK 5.1 Resource Envelope The resource envelope available for allocation among the spending entities is based on the updated medium term fiscal framework which is outlined in Section III. In view of the recent devolved functions and limited resources, MTEF budgeting will focus on adjusting non-priority expenditures to cater for the priority sectors. The County Integrated Development Plan 2013-2017 (CIDP) has guided resource allocation. The financing of county budget priorities revolve around two financing sources namely; transfers from the National Government and county local revenue. The shareable revenue transfers will account for 75.1 percent of the expenditure priorities in the budget while 18.4 percent will be financed from locally collected revenue sources. This comprises of 9.612 billion equitable shareable revenue, 810 million conditional grants and 873 million as own sources. The unspent balances from FY2015/2016 is estimated at 1.482 billion which makes up the total resource envelop estimated 12.79 billion. Table 5: Revenue resource envelope 2015/2016 2016/17 Revenue Category Approved Revised Estimates Estimates Estimates O wn sources 873,804,000 1,000,000,000 1,000,000,000 Exchequer balance brought forward from 2014/15 1,482,770,683 fiscal year 1,688,334,939 1,709,115,820 (1)Total own sources 2,356,574,683 2,688,334,939 2,709,115,820 Allocations from the National Government - Equitable share of revenue 9,612,093,312 8,908,229,519 8,908,229,519 (2) Total equitable share (CARA, 2015 First 9,612,093,312 Schedule) 8,908,229,519 8,908,229,519 Conditional Grants Level 5 Hospital 406,936,416 342,902,857 342,902,857 Free Medical Maternal Health Care 217,184,083 214,900,000 214,900,000 User Fees forgone 38,617,147 38,709,716 38,709,716 Road maintenance levy 147,689,749 113,164,138 113,164,138 (3)Total conditional allocations (CARA, 2015 810,427,395 Second Schedule) 709,676,711 709,676,711 Conditional Grants - - DANIDA Grant 11,750,000 23,500,000 23,500,000 (4)Total conditional allocations (CARA, 2015 Third Schedule) 23,500,000 23,500,000 11,750,000 Total Revenue (1+2+3+4) 12,329,741,169 12,350,522,050 12,790,845,390 33 5.2 Spending Priorities for 2016/2017-2018/19 MTEF Budget The county will focus on the following key priority areas;  Promotion of health care through investing in quality and accessible health services.  Promotion of value addition for agricultural produce to enhance food security.  Development of key transport infrastructure to spur economic growth.  Improvement and upgrading of education infrastructure and standards.  Creating an enabling environment for business and entrepreneurial growth.  Promotion of socio-economic stability through targeted transfers.  Enhancing governance, transparency and accountability in the delivery of public goods and services.  Upgrading and development of sports infrastructure and sporting activities. 5.3 Medium Term Expenditure Estimates Table 6 below gives the ministerial total ceiling. To support and to give guidance on resource allocation the county treasury in annex 3 and 4 provides provision for both recurrent and development estimates. In order to allow flexibility this paper gives a window for departments to adjust their budget within their overall total ministerial ceiling given in table 6. This means that the departments can adjust their budgets from recurrent and development estimates and vice-versa. 34 Table 6: Baseline ceilings 2016/17-2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 Revised Approved Projections Budget O ffice of the Governor 271,125,751 239,887,784 626,599,838 714,529,000 750,255,450 765,260,559 Current 216,125,751 184,887,784 318,599,838 374,529,000 393,255,450 401,120,559 Development 55,000,000 55,000,000 308,000,000 340,000,000 357,000,000 364,140,000 Public Service and 2,101,513,781 2,557,424,560 1,980,547,705 1,847,205,000 1,939,565,250 1,978,356,555 Administration Current 1,916,513,781 2,372,424,560 1,721,147,705 1,647,205,000 1,729,565,250 1,764,156,555 Development 185,000,000 185,000,000 259,400,000 200,000,000 210,000,000 214,200,000 County Treasury 497,260,168 728,510,168 390,642,806 548,174,000 575,582,700 587,094,354 Current 180,310,168 167,560,168 250,642,806 383,174,000 402,332,700 410,379,354 Development 316,950,000 560,950,000 140,000,000 165,000,000 173,250,000 176,715,000 Water, Environment 275,468,000 246,949,947 322,157,691 337,960,500 318,108,525 324,470,696 and Natural Resource Current 102,268,000 73,749,947 98,057,691 102,960,500 108,108,525 110,270,696 Development 173,200,000 173,200,000 224,100,000 235,000,000 210,000,000 214,200,000 Social Services, Youth 276,029,110 285,420,637 417,030,280 329,619,000 346,099,950 353,021,949 & Sports Current 39,779,110 29,170,637 56,780,280 59,619,000 62,599,950 63,851,949 Development 236,250,000 256,250,000 360,250,000 270,000,000 283,500,000 289,170,000 Transport, Infrastructure & 1,139,690,660 1,320,690,660 1,742,435,569 1,993,978,800 2,093,677,740 2,135,551,295 Public Works Current 62,690,660 43,690,660 63,789,401 66,978,800 70,327,740 71,734,295 Development 1,077,000,000 1,277,000,000 1,678,646,168 1,927,000,000 2,023,350,000 2,063,817,000 Lands, Housing, Urban Areas and 364,540,000 302,034,419 296,062,159 280,265,000 294,278,250 300,163,815 Physical Planning Current 72,540,000 50,034,419 84,062,159 88,265,000 92,678,250 94,531,815 Development 292,000,000 252,000,000 212,000,000 192,000,000 201,600,000 205,632,000 Health Services 2,378,072,277 2,284,548,523 3,173,551,311 3,490,814,400 3,665,355,120 3,738,662,222 Current 1,749,072,277 1,660,212,277 2,127,786,204 2,349,773,400 2,467,262,070 2,516,607,311 Development 629,000,000 624,336,246 1,045,765,107 1,141,041,000 1,198,093,050 1,222,054,911 Agriculture, Livestock, Fisheries and Co- 1,040,200,000 807,597,100 939,862,773 913,105,900 958,761,195 977,936,419 operatives Current 310,200,000 57,597,100 364,862,773 398,105,900 418,011,195 426,371,419 Development 730,000,000 750,000,000 575,000,000 515,000,000 540,750,000 551,565,000 Trade, Tourism & 409,950,000 386,950,000 451,613,185 455,040,000 477,792,000 487,347,840 Industrialization Current 69,950,000 46,950,000 47,657,156 50,040,000 52,542,000 53,592,840 Development 340,000,000 340,000,000 403,956,029 405,000,000 425,250,000 433,755,000 Education , Science & 816,440,000 668,440,000 1,016,586,176 875,065,400 918,818,670 937,195,043 Technology Current 316,440,000 118,440,000 269,586,176 283,065,400 297,218,670 303,163,043 Development 500,000,000.00 550,000,000.00 747,000,000 592,000,000 621,600,000 634,032,000 County Public Service 0 0 85,798,312 90,088,000 94,592,400 96,484,248 Board 85,798,312 90,088,000 94,592,400 96,484,248 County Assembly 751,000,000 751,000,000 886,853,365 915,000,000 997,500,000 1,017,450,000 35 2014/15 2015/16 2016/17 2017/18 2018/19 Revised Approved Projections Budget Current 651,000,000 651,000,000 786,853,365 865,000,000 892,500,000 910,350,000 Development 100,000,000 100,000,000 100,000,000 100,000,000 105,000,000 107,100,000 TO TAL 10,321,289,747 10,579,453,798 12,329,741,170 12,866,565,835 13,430,387,250 13,698,994,995 5.4 Baseline Ceilings The baseline estimates reflects the current ministerial spending levels in sector Programmes. In development Programmes, adjustment has been made to take into consideration new projects which are key to development of the county economy. The departmental ceilings in table 6 will form the indicative baseline for the FY 2016/17 budget. In the recurrent expenditure category, non –discretionary expenditures take first charge. Compensation of employees for county line departments’ account for a maximum of 35% of budget forecast. From the total expenditure estimates of Kshs. 12.79 billion, compensation to employees will account for utmost Kshs. 4.48 billion. When preparing the budget the County Treasury will adopt either lumping of the departments’ salaries in the department of Public Service and Administration or put the estimates in each individual department. In the medium term the County will apply the former since there is no structure that has been put in place for handling human resource issues in the individual departments. The result of this method is preparation and submission of Appropriation Act slightly different from the baseline estimates for the departments. The main reason for the inclusion of salaries in the departments' ceilings was to facilitate the allocation of the resource envelope. However, when the county will be preparing the Appropriation Bill 2016, the salaries will be managed under the Public Service and Administration department. The result of this will be less amounts of the ministerial ceilings than what is in this paper. Development expenditures are undertaken on the basis of County Integrated Development Plan, Annual Development Plan (2015), Public participation report of 2016 as well as departmental strategic priorities. The Proposed capital projects will have to be evaluated in the context of the following elements: (a) Projects that are in full compliance with the County Government regulations and priorities as outlined in the County integrated development plan, Annual Development Plan and which are fully justified for financing. 36 (b) Community needs identified through public participation. (c) Department/Agencies strategic needs that contribute greatly in addressing county’s socio-economic needs. Development expenditures are shared out on the basis of county priority programmes as well as aligning to the national government vision 2030 strategies to promote economic growth in the county. The following were also taken in consideration in order of priorities. • Ongoing projects- Emphasis on the completion and operationalization of the ongoing projects within the various departments. • Emerging issues which require much attention in provision of service delivery such as education support programmes. • Cross cutting issues and other special programmes of importance such as disaster management, youth development, gender, disability and HIV/AIDS. 5.5 Details of Sector/Department Priorities The MTEF for 2016/2017 -2018/2019 period will ensure that there is continuous resource allocation based on programme priorities that are aligned to CIDP 2013-2017 and annual development plan of 2016/2017. The medium term expenditure framework ensures continuity in resource allocation based on prioritized programmes aligned to the County Integrated Development Plan and Strategic Policy Initiatives of the county administration to accelerate growth, employment creation and poverty reduction. The recent achievements and key priority targets for each county sector are based on the reports from the County Departments. 5.5.1 Agriculture, Livestock, Fisheries and Cooperative Development This sector comprises of the following departments; Crop production, Livestock Development, Veterinary Services, Cooperative Development and Marketing, Irrigation and Fisheries Development, Agriculture Training College. The sector's vision is to be an innovative, commercially-oriented and modernized agriculture sector. The mission is to improve livelihoods of Kakamega county residents through promotion of competitive agriculture, sustainable livestock and fisheries, 37 quality and affordable veterinary services and growth of viable cooperatives through quality training in effective and efficient farming methods. Agriculture accounts for over 65 percent of the total earnings in the county employing over 80% of residents. Multi-Sectoral strategies will be employed to increase the productivity and maximize earnings in this sector. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh.913, 105,900.This comprises of Ksh. 398,105,900 and Ksh.515,000,000 for Recurrent and Development respectively. Flagship Projects/Programmes Crop production a. Farm input subsidization programme b. Farm mechanization-Tractor services c. Promotion of Tissue Cultured Bananas d. Horticulture development and Value addition e. Establishment of a dairy plant, maize milling plant and Tea factory f. Sugar revitalization g. Irrigation-Rehabilitation of dams Livestock Production a. One cow per household programme b. Poultry Development c. Artificial Insemination Programme Veterinary Services a. Animal disease control-Vaccination programme, Cattle dip rehabilitation. Fisheries Development a. Rehabilitation of fish ponds, b. subsidies, c. Support to private hatcheries, d. Operationalization of Kakamega Fish Processing Factory. Cooperative Development a. Strengthening of Co-operatives. b. Agriculture training and research 38 5.5.2 Transport, Infrastructure, Public Works and Energy This sector comprises of Transport, Infrastructure, Public Works and Energy. The vision of the sector is to be a world class provider of cost-effective physical infrastructure, energy facilities and public works services. And the mission of the department is, provide efficient, affordable and reliable infrastructure and energy for sustainable economic growth and development through construction, modernization, rehabilitation and effective management of all infrastructure, provision of public works services and energy facilities. The state of the County infrastructural network is crucial for the overall development of the county. Reliable, adequate and quality infrastructure increases economic productivity, lowers production costs, improves quality of life, raises county’s regional and global competitiveness, attracts Foreign Direct Investment (FDI), Public Private Partnerships and including Public Partnerships and this has a direct impact in the modernizing the economy. The Multiplier effect created by the investment in this sector is critical to sustain all the other sectors of the county economy. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh.1,993,978,800.This comprises of Ksh.66,978,800 and Ksh.1,779,310,251 and Ksh. 147,689,749 for Recurrent, Development and Road Maintenance Levy Fund respectively. Development estimates in this sector also includes a provision for the estimates of Kshs. 840,000,000 for ward based civil works in all the 60 wards. Flagship Projects/Programmes a. Construction of 200 Km of roads to bitumen standard over the medium term b. Opening up, Construction and maintenance of 20 Kms per ward across all the 60 Wards of Kakamega county translating to 1200Kms. c. Continued construction and maintenance of roads across major linkages of the county d. Expansion of Kazi Mashinani roads programme across all the 60 wards. e. Construction and rehabilitation of bridges f. Research and Investment in modern road construction technology. g. Electrification of all major markets and public facilities. 39 h. Taping solar energy for utilization in schools, hospitals and market centres. i. Construction and equipping of central and regional mechanical and transport workshops. 5.5.3 Trade, Tourism and Industry This sector comprises of the following sub-sectors: Trade, Tourism, Industry, Weights and Measures. The vision of the sector is to be a leader in investment, trade and Tourism and industrialization for a globally competitive county economy. The mission is to facilitate orderly Growth and Development of Investment, Trade, Standardization and Tourism in Kakamega County. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh.3 billion but due to the budgetary constraints, the sector will prioritize and implement the following and work within Ksh.455,040,000 comprising of Ksh.50,040,000 and Ksh. 405,000,000 for Recurrent and Development expenditure. Flagship projects/programmes a. Construction and Renovation of modern markets and modern stalls b. Upscale of SME loans (Mikopo Mashinani) c. Construction, Operationalization of industrial Park /juakali shed. d. Protection and development of tourist attraction sites. (The crying stone). e. Construction of Snake Park through PPP. f. Eco-lodge in Kakamega forest through PPP g. Cable car and canopy walk in Kakamega forest through PPP. 5.5.4 Health Services This sector comprises the Public Health and Sanitation and Medical Services sub sectors. Its vision is to provide efficient and high quality County health care system that is accessible, equitable and affordable for every Kenyan. Its mission is to promote and participate in the provision of integrated and high quality promotive, preventive, curative and rehabilitative health care services to all Citizens. Access to affordable and quality health care by county residents will enhance their economic productivity and investment. 40 To undertake these programmes, the 2016/17 MTEF estimates for this sector are to be Ksh.3, 490,814,400 comprising of Ksh.2,349,773,000, Ksh.509,303,354 and Ksh.662,737,646 for Recurrent, Development and a conditional grant respectively. Flagship projects/programmes a) Construction of Kakamega Teaching and Referral Hospital in collaboration with development partners. b) Renovation of the County General Hospital for improved service delivery. c) Renovation and Expansion of existing health facilities by constructing more maternity wards, male, paediatric, and female wards. d) Upscale the Afya ya Mama na Mtoto programme (Oparanyacare) to all health facilities e) Construction of county hospitals in Khwisero, Mumias West and Shinyalu. f) Construct Lumakanda and equip 3 No. HDU facilities Butere, Lumakanda and Malava County Hospitals. g) Purchase of No. 6 ambulances to enhance referral facilities. h) Upscale Community Health Strategy programme to cater for: Reproductive health, Child Survival/EPI, Family planning, HIV/AIDS/TB and Malaria Control Program. i) Automation of health services. j) Purchase of 10 No. utility vehicles for Ikolomani County, Shibwe Sub County, County Health Office, Malava County, Mumias East County hospitals. k) Construct and equip theatre facilities for Iguhu County Hospital, Shibwe, Mautuma, Matungu and Matunda SCHs. Butere, Lumakanda and Malava County Hospitals Butere, and Malava County Hospitals l) Establishment of a medical school in collaboration with MMUST. 5.5.5 Education, Science and Technology This sector covers the following sub-sectors: ECDE, County Polytechnics and Education Support Programmes. The sector vision is to be globally competitive in education, training, research and innovation for sustainable development. Its mission is to provide, promote and coordinate quality education and training, integration of science and technology, and innovation for sustainable socio-economic development process. 41 To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh.875,065,400 comprising of Ksh.283,065,400 and Ksh.592,00,000 for Recurrent and Development respectively. The development estimates includes a provision for ward based education support for the 60 wards totaling to Kshs. 150,000,000 Flagship projects/programmes Early Childhood Development a) Equipping of 360 ECD centres b) Employment of 1000 ECD teachers c) Construction of two door toilets for ECD centres d) Feeding Programme in ECD e) Completion and equipping of Kakamega ECD teachers training resource Centre at Shisiru Polytechnics a) Purchase of tools 30 for polytechnics b) Construction of 12 twin workshops c) Employment of more polytechnic instructors d) Education subsidy e) Construction of ICT Centers in county polytechnics selected as centers of excellence f) Construction of three hostels g) 3 polytechnic buses Education Support a) Completion of the 24 centers of excellence b) Provision of Bursaries, HELB and Scholarships. c) Infrastructure support d) Purchase of buses for centers of excellence 5.5.6 Office of the Governor, Public Service and Administration The sector includes; Office of the Governor, County Administration, Legal Services, Communication, Liaison, Internal Audit, Economic Planning, Enforcement, County procurement, ICT, Cabinet Secretariat, Public Service and administration and Human Resource Management and Training. 42 The sector vision is to be a secure, just, cohesive, democratic, accountable and conducive county environment for a globally competitive and prosperous county. Its mission is to ensure effective and accountable leadership, promote a just, democratic environment and establish strong governance institutions to empower citizens for the achievement of socio- economic and political development. This sector will ensure effective and efficient leadership, accountability, security, administration of justice, zero-tolerance to corruption and public participation. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh.1,847,205,000 and Ksh. 714,529,000 for Public Service and Administration and Office of the Governor respectively totaling to Ksh.2,561,734,000. This comprises of Ksh. 2,021,734,000 and 540,000,000 respectively. Public service board has been allocated Ksh. 90,088,000. Flagship projects/programmes Office of the Governor a. Construction of the Governor’s residence. b. Establishment of county production studio and Radio. c. Enterprise Resource Planning (ERP) d. Investment banking e. County financial Investments. f. Review of the CIDP 2013-2017. g. Conducting Social Intelligence Reporting County wide. h. County Monitoring and Evaluation. i. Research, Baseline Surveys and population studies. Public Service and Administration a. Construction and refurbishment of ward and Sub-county headquarter blocks. b. Construction of county Headquarter administration block. c. Establishment and operationalization of County disaster Unit. d. Automation e. Construction of security personnel’s houses. f. Establishment of the county Training College. 43 5.5.7 The County Treasury. The sector comprises of the following sub-sectors: County Treasury, County Budgeting and Control and County Revenue Administration. The sector vision is to be a leading sector in public finance management in the country. The mission is to provide overall leadership and coordination on financial management through effective budget formulation, implementation, resource mobilization and reporting. To undertake these programmes, the 2016/17 MTEF estimates for this sector is Ksh.548,174,000 comprising of Ksh.383,174,000, Ksh.115,000,000 and Ksh. 50,000,000 for Recurrent ,Development and Emergency Fund respectively. Flagship projects/programmes a. Operationalization of County Revenue Agency. b. Automation of Revenue collection. c. Asset tagging 5.5.8 Social services, Youth and Sports This sector is comprises of the following subsectors: Social Services, Youth and Gender Development, Sports, Culture, Children and Labour. The sector Vision is to provide and promote a sustainable and equitable socio-cultural development, children and youth development in the county. The sector mission is to formulate, mainstream and implement responsive policies through coordinated strategies for sustained and balanced socio-cultural and economic development of the County. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh. 329,619,000 comprising of Ksh.59,619,000 and Ksh.270,000,000 for Recurrent and Development respectively. Flagship projects/programmes a) Rehabilitation and expansion of Bukhungu stadium - Phase I. b) Shelter improvement for the elderly – 6 per ward in phase I c) Promoting sports and sport activities 44 d) Construction of Rehabilitation centres for drugs and alcohol addicts. e) Construction and rehabilitation of cultural centres. f) Establishment of children and women rescue centres phase II Lurambi g) Conservation and promotion of culture by holding cultural festivals and documentation of cultural heritage. h) Support for Persons Living with Disability. 5.5.9 Water, Environment & Natural Resources The sector is composed of water, environment, forestry and natural resources. The sector vision is “Sustainable access to adequate clean and safe water in a clean and secure environment”. The sector mission is “To promote, conserve and protect the environment and improve access to water for sustainable national development”. In order to promote sustainable utilization of environmental resources, the county will promote investments in clean energy such as solar, wind, biogas and hydro-power. All the urban markets and centers will be required to establish a designated dumpsites and sewerage systems to ensure effective and reliable disposal of waste. Since the county faces an acute shortage of clean and safe drinking water, the sector will advocate for the construction of water treatment plants and boost the storage and supply lines. There is need to establish joint community-school water projects for the benefit of schools and the local communities. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Kshs.337,960,500 comprising of Ksh.102,960,500 and Ksh.235,000,000 for Recurrent and Development respectively. Flagship Projects/Programmes a) Development of water infrastructure for public facilities, markets and Households. b) Completion of Ongoing sewerage works in Kakamega& Mumias towns. c) Afforestation and Re-afforestation-Planting of indigenous tree seedlings. d) Environmental protection & Conservation e) Pollution Control. f) Solid and waste management. 45 g) Rehabilitation of degraded mining sites. h) River-bank Conservation 5.5.10 Lands, Physical Planning, Housing and Urban Development The sector comprises of the following sub-sectors: Lands and Settlement, Survey, Physical Planning, Housing and Urban Development. Vision Excellence in spatial planning, Land management, urban development and provision of decent shelter for sustainable development of Kakamega County Mission To facilitate improvement of the livelihood of county residents through efficient administration, sustainable management of land resources and improvement of living conditions of the residents within the context of a well-planned urban and rural environment.” The county endeavors to fully utilize the available personnel and fill existing gaps to offer effective and efficient land administration, offer equitable access to land, implement the land policy to improve sustainability in the management of land resources. It will undertake the implementation of Housing policy, monitoring housing delivery processes and improvement of living conditions of the urban poor; low cost housing technologies, facilitate access to housing development finance; promotion of efficient and effective management of government housing and leases; and Rent restriction and dispute resolution services for low income groups, within the context of a well-planned urban and rural environments. To undertake these programmes, the 2016/17 MTEF estimates for this sector are estimated to be Ksh. 280,265,000 comprising of Ksh.88,265,000 and Ksh.192,000,000 for Recurrent and Development respectively. Urban Areas is one of the department within the ministry. For the purpose autonomy the County will prepare a separate budget estimates for town management as a separate entity. This will take place over the medium term expenditure framework. 46 Flagship projects/programmes a) Street lighting/flood light in urban centers b) Urban areas waste management. c) Bus park development and maintenance. d) Beautification of urban roads and public gardens e) Mapping and profiling of public land. f) Purchase of land for development g) Geographical Information Systems (G.I.S) Programmes. h) Infrastructure improvement in informal settlements i) Review and preparation of spatial plans j) County spatial planning 5.5.11 The County Assembly The county Assembly’s functions include oversight, Legislation and representation. The estimate for County Assembly programmes may change in the course of MTEF budgeting once the Commission of Revenue Allocation gives the ceilings for budget for FY 2016/2017. To undertake these programmes, the 2015/16 MTEF estimates for this sector are estimated to be Ksh.915, 000,000 comprising of Ksh.865,000,000 recurrent and Ksh.35,000,000 development expenditure. The estimates for County assembly will be amended once the county receives the expenditure ceilings from Commission for Revenue Allocation (CRA) as contained in their guidelines and recommendations . This may reduce or increase the county overall budget estimates. Flagship projects/programmes a. Construction of the county Assembly chambers 47 6.0 CONCLUSION The set of policies outlined in this CFSP reflect the changed circumstances and emerging issues and are broadly in line with the CIDP and the fiscal responsibility principles outlined in the PFM law. They are also consistent with the national strategic objectives which set a basis for County Government allocation of public resources. Details of the strategic objectives are contained in the first County Integrated Development Plan (2013-2017). The policies and sector ceilings annexed herewith will guide the County sector working groups and line ministries in preparation of the 2016/17 budget. Budgetary resources are usually limited, thus it is imperative that departments prioritize their programmes within the available ceilings to ensure that utilization of public funds are in line with county government priorities. There is also need to ensure that current resources are being utilized efficiently and effectively before funding is considered for programmes. Departments need to carefully consider detailed costing of projects, strategic significance, deliverables (output and outcomes), alternative interventions, administration and implementation plans in allocating resources. Proper implementation of the budget is critical towards providing services that will promote sustainable growth. Sustainability requires greater co-operation and alignment between county government, civil society, communities and development partners to get things done. This means providing for continuous consultations with each other, finding solutions and encouraging innovation to build a sustainable County. 48 Annex 1: Local revenue MTEF Forecast 2015/16-2018/19 2014/15 2015/16 2016/17 2017/18 2018/19 Approved Approved Actual estimates Estimates Forecast Single Business Permits 117,295,528 91,237,493 123,160,304 136,522,704 140,618,385 144,836,936 Land Rates 45,000,000 20,894,388 47,250,000 31,341,582 32,281,829 33,250,284 Bus parks 45,986,088 45,123,400 48,285,392 67,685,100 69,715,653 71,807,123 Markets 37,487,059 39,761,963 39,361,412 59,642,945 61,432,233 63,275,200 Parking Fee 46,350,800 11,359,310 48,668,340 17,038,965 17,550,134 18,076,638 Cess 230,000,000 42,083,893 241,500,000 120,000,000 132,000,000 145,200,000 Hire Fees 5,821,760 2,417,490 6,112,848 3,626,235 3,735,022 3,847,073 3,820,640 4,011,672 Housing/Stall - - Kiosk fees 12,329,480 6,533,125 12,945,954 9,799,688 10,093,678 10,396,488 Sale of tenders 86,935,033 8,000,000 - - - Bonding of County 33,363,312 Assets - - Contribution in lieu of rates 21,000,000 41,929,840 43,622,824 44,685,106 Other ministries fee charges 20,000,000 - - Health 262,000,000 243,480,062 275,100,000 365,220,093 376,176,696 387,461,997 Liquor Fees 29,283,876 4,154,000 0 6,231,000 6,417,930 6,610,468 ATDC 7,444,500 38,331,879 11,166,750 11,501,753 11,846,805 Slaughter Houses 6,789,080 915,314 7,128,534 1,372,971 1,414,160 1,456,585 Dividend 1,140,000 1,710,000 1,761,300 1,814,139 Court fines 344,086 208,632 516,129 531,613 547,561 TO TALS 903,527,623 516,889,024 1,000,000,000 873,804,000 908,853,210 945,112,403 49 Annex 2: Medium Term Expenditure Estimates 2014/15 2015/16 2016/17 2017/18 2018/19 Vote /Department Revised Approved Projections Budget O ffice of the 271,125,751 239,887,784 413,269,838 714,529,000 750,255,450 765,260,559 Governor Current 216,125,751 184,887,784 318,599,838 374,529,000 393,255,450 401,120,559 Development 55,000,000 55,000,000 94,670,000 340,000,000 357,000,000 364,140,000 Public Service and 2,101,513,781 2,557,424,560 1,980,547,705 1,847,205,000 1,939,565,250 1,978,356,555 Administration Current 1,916,513,781 2,372,424,560 1,721,147,705 1,647,205,000 1,729,565,250 1,764,156,555 Development 185,000,000 185,000,000 259,400,000 200,000,000 210,000,000 214,200,000 County Treasury 497,260,168 728,510,168 603,972,806 548,174,000 575,582,700 587,094,354 Current 180,310,168 167,560,168 250,642,806 383,174,000 402,332,700 410,379,354 Development 316,950,000 560,950,000 353,330,000 165,000,000 173,250,000 176,715,000 Water, Environment and 275,468,000 246,949,947 322,157,691 337,960,500 360,108,525 367,310,696 Natural Resource Current 102,268,000 73,749,947 98,057,691 102,960,500 108,108,525 110,270,696 Development 173,200,000 173,200,000 224,100,000 235,000,000 252,000,000 257,040,000 Social Services, 276,029,110 285,420,637 417,030,280 329,619,000 346,099,950 353,021,949 Youth & Sports Current 39,779,110 29,170,637 56,780,280 59,619,000 62,599,950 63,851,949 Development 236,250,000 256,250,000 360,250,000 270,000,000 283,500,000 289,170,000 Transport, Infrastructure & 1,139,690,660 1,320,690,660 1,742,435,569 1,916,978,800 2,012,827,740 2,053,084,295 Public Works Current 62,690,660 43,690,660 63,789,401 66,978,800 70,327,740 71,734,295 Development 1,077,000,000 1,277,000,000 1,678,646,168 1,850,000,000 1,942,500,000 1,981,350,000 Lands, Housing, Urban Areas and 364,540,000 302,034,419 296,062,159 328,265,000 344,678,250 351,571,815 Physical Planning Current 72,540,000 50,034,419 84,062,159 88,265,000 92,678,250 94,531,815 Development 292,000,000 252,000,000 212,000,000 240,000,000 252,000,000 257,040,000 Health Services 2,378,072,277 2,284,548,523 3,173,551,311 3,521,814,793 3,697,905,533 3,771,863,643 Current 1,749,072,277 1,660,212,277 2,127,786,204 2,349,773,400 2,467,262,070 2,516,607,311 Development 629,000,000 624,336,246 1,045,765,107 1,172,041,393 1,230,643,463 1,255,256,332 Agriculture, Livestock, 1,040,200,000 807,597,100 939,862,773 913,105,900 958,761,195 977,936,419 Fisheries and Co- operatives Current 310,200,000 57,597,100 364,862,773 398,105,900 418,011,195 426,371,419 Development 730,000,000 750,000,000 575,000,000 515,000,000 540,750,000 551,565,000 Trade, Tourism & 409,950,000 386,950,000 451,613,185 455,040,000 477,792,000 487,347,840 Industrialization Current 69,950,000 46,950,000 47,657,156 50,040,000 52,542,000 53,592,840 Development 340,000,000 340,000,000 403,956,029 405,000,000 425,250,000 433,755,000 Education , Science & 816,440,000 668,440,000 1,016,586,176 833,065,400 874,718,670 892,213,043 Technology Current 316,440,000 118,440,000 269,586,176 283,065,400 297,218,670 303,163,043 50 2014/15 2015/16 2016/17 2017/18 2018/19 Vote /Department Revised Approved Projections Budget Development 500,000,000.00 550,000,000.00 747,000,000 550,000,000 577,500,000 589,050,000 County Public 0 0 85,798,312 90,088,000 94,592,400 96,484,248 Service Board 85,798,312 90,088,000 94,592,400 96,484,248 County Assembly 751,000,000 751,000,000 886,853,365 915,000,000 997,500,000 1,017,450,000 Current 651,000,000 651,000,000 786,853,365 865,000,000 892,500,000 910,350,000 Development 100,000,000 100,000,000 100,000,000 50,000,000 105,000,000 107,100,000 TO TAL 10,321,289,747 10,579,453,798 12,329,741,170 12,790,845,393 13,430,387,663 13,698,995,416 51 Annex 3: Ministerial Recurrent Budget Ceiling 2014/15 2015/16 2016/17 2017/18 2018/19 Revised Approved Estimates Budget O ffice of the Governor 216,125,751 184,887,784 318,599,838 374,529,000 393,255,450 401,120,559 Public Service and 1,916,513,781 2,372,424,560 1,721,147,705 1,647,205,000 1,729,565,250 Administration 1,764,156,555 County Treasury 180,310,168 167,560,168 250,642,806 383,174,000 402,332,700 410,379,354 Water, Environment and 102,268,000 73,749,947 98,057,691 102,960,500 108,108,525 Natural Resource 110,270,696 Social Services, Youth & 39,779,110 29,170,637 56,780,280 59,619,000 62,599,950 Sports 63,851,949 Transport, Infrastructure & 62,690,660 43,690,660 63,789,401 66,978,800 70,327,740 Public Works 71,734,295 Lands, Housing, Urban Areas and Physical 72,540,000 50,034,419 84,062,159 88,265,000 92,678,250 Planning 94,531,815 Health Services 1,749,072,277 1,660,212,277 2,127,786,204 2,349,773,400 2,467,262,070 2,516,607,311 Agriculture, Livestock, 310,200,000 57,597,100 364,862,773 398,105,900 418,011,195 Fisheries and Co-operatives 426,371,419 Trade, Tourism & 69,950,000 46,950,000 47,657,156 50,040,000 52,542,000 Industrialization 53,592,840 Education , Science & 316,440,000 118,440,000 269,586,176 283,065,400 297,218,670 Technology 303,163,043 County Public Service 85,798,311 90,088,000 94,592,400 Board 96,484,248 County Assembly 651,000,000 651,000,000 786,853,365 865,000,000 892,500,000 910,350,000 TO TAL 5,686,889,747 5,455,717,552 6,275,623,865 6,758,804,000 7,080,994,200 7,222,614,084 52 Annex 4: Ministerial Development Budget Ceiling 2014/15 2015/16 2016/17 2017/18 2018/19 Revised Approved Estimates Projections Budget O ffice of the Governor 55,000,000 55,000,000 308,000,000 340,000,000 357,000,000 364,140,000 Public Service and 185,000,000 185,000,000 259,400,000 200,000,000 210,000,000 Administration 214,200,000 County Treasury 316,950,000 560,950,000 140,000,000 165,000,000 173,250,000 176,715,000 Water, Environment and 173,200,000 173,200,000 224,100,000 235,000,000 210,000,000 Natural Resource 214,200,000 Social Services, Youth & 236,250,000 256,250,000 360,250,000 270,000,000 283,500,000 Sports 289,170,000 Transport, Infrastructure 1,077,000,000 1,277,000,000 1,678,646,168 1,927,000,000 2,023,350,000 & Public Works 2,063,817,000 Lands, Housing, Urban Areas and Physical 292,000,000 252,000,000 212,000,000 192,000,000 201,600,000 Planning 205,632,000 Health Services 629,000,000 624,336,246 1,045,765,107 1,141,041,393 1,198,093,463 1,222,055,332 Agriculture, Livestock, Fisheries and Co- 730,000,000 750,000,000 575,000,000 515,000,000 540,750,000 operatives 551,565,000 Trade, Tourism & 340,000,000 340,000,000 403,956,029 405,000,000 425,250,000 Industrialization 433,755,000 Education , Science & 500,000,000.00 550,000,000.00 747,000,000 592,000,000 621,600,000 Technology 634,032,000 County Assembly 100,000,000 100,000,000 100,000,000 50,000,000 105,000,000 107,100,000 TO TAL 4,634,400,000 5,123,736,246 6,054,117,304 6,032,041,393 6,349,393,463 6,476,381,332 53 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) OFFICE OF THE GOVERNOR CP.1 Management and CSP.1.1County administration of County executive services Functions Governor’s Office Communications and County C.P.2 Support ,Co- CSP.2.1 Support and Radio ordination and Advisory Advisory services services CSP.2.2 County Internal Audit services PUBLIC SERVICE AND ADMINISTRATION C.P.1 County Public CSP.3.1. County Public Service service and Administrative administration Administration services CSP.3.2.Human Resource Management CSP.3.3.County special programmes COUNTY TREASURY AND ECONOMIC PLANNING Accounting Services, CP.1 Administration and CSP.1.1 Administrative Revenue Reource and Support services services budgetting Functions CP 2. Public Finance CSP.2.1 Financial Management and Accounting& Reporting Reporting CSP.2.2 Budget formulation and management CSP.2.3 Revenue resource mobilization CP.3 Debt management CSP 3.1Debt Management and Administration Economic Planning CP.2 Economic Policy CSP.2.1Fiscal Planning Formulation and Management 54 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) CSP.2.2 Monitoring & Evaluation CSP.2.3 Statistical Data management CSP.2.4 Population Policy Management and analysis ENVIRONMENT, WATER, ENERGY AND NATURAL RESOURCES Environmental Conservation CP.1 Administration CSP.1.1.Administrative planning and support services services Water and Sewerage Forestry CP.2Environmental CSP.2.1.Environmental conservation. protection CSP.2.2.Climate change management CP.3.water and sanitation CSP.3.1 Water resource services supply and management CSP.3.2.Sewerage services CP.4Rural electrification CSP.4.1 Rural and renewable energy Electrification. CSP.4.2 Renewable energy S.P.5 Natural Resource CSP 5. 1 Farm Forest Management resource management CSP 5. 1 Mineral resource management CSP. 5.2 Nature based enterprise Development LABOUR,SOCIAL SERVICES, CULTURE, YOUTH AND SPORTS 55 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) CP.1 CSP.1.1.Administrative Administration,Planning Services Culture and Support services Sports CP.2.Culture Development, CSP.2.1.Culture and Promotion Of Arts heritage conservation CSP 2.2. Promotion of arts CP.3 Management And CSP.3.1. Development of Development Of Sports sports facilities And Sports Facilities CSP 3.2. Promotion and Development of sports and talent CP. 4 Youth & Gender CSP 4.1 Youth,Disability Development And and Gender Promotion Services Empowerment and mainstreaming C.P 5 Labour Promotion CSP 5.1 Promotion of And Industrial Peace industrial peace CSP 5.2 Labour laws awareness CP.6 Social Development CSP 6.1 Social And Promotions Development and Social Protection C.P.7 Children Intervention CSP 7.1 Child protection Programme support services TRANSPORT, INFRASTRUCTURE AND PUBLICS WORKS CP.1.Administration, CSP.1 Administrative Infrastructure and Public Planning and Support services works Services. CP.2 Infrastructure CSP.2.1Infrastructure ,Transport Services & development Public works 56 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) CSP.2.2.Quality Enhancement and Assurance CSP.2.3.Transport system Management LANDS, PHYSICAL PLANNING, URBAN AREAS AND HOUSING CP.1General CSP.1.1Administartion administration and services Lands and settlement planning CP.2 Land administration CSP.1.2Land Use and planning Planning CSP.2.1Land administration and planning CP.3 Housing CSP.3.1Housing Housing and Physical Development and Development Planning Management. CSP.3.2 Slum Upgrading CP.4 Urban Development CSP.4.1Urban transport Urban Areas and Service Provision Management CSP.4.2Social Amenities and sanitary services CSP.4.3Urban areas landscape improvement HEALTH SERVICES CP.1Preventive and CSP.1.1Community Public Health promotive services health strategy CSP.1.2Diseases surveillance & Emergency response CSP.1.3Nutrition service promotion 57 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) Health services, Dispensaries CP.2 Curative Services CSP.2.1 Infant and and Health Centres maternal health carepromotion CSP.2.2 Reproductive health Services County Health Management CSP.2.3 Primary medical Team health services CP.3 Administration, CSP.3.1 Administrative Planning, Monitoring and and Human Resources Evaluation. management CSP.3.2 Financial Services AGRICULTURE,LIVESTOCK,FISHERIES AND COOPERATIVE DEVELOPMENT CP.1Livestock resource CSP.1.1Livestock Value management and Chains Development Livestock development CSP.1.2 Veterinary Services CP.2 Fisheries CSP.2.1 Promotion of Fisheries development fish farming CP.3 crop production and CSP.3.1 Horticulture management services Promotion and development Crop production CSP.3.2 Cash Crop production &development CSP.3.3 Farm input support and subsidies Administartive services CP.4Administrative, CSP.4.1Extension, planning and support Administration and service Support services 58 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) CSP.5.1Agricultural CSP.5.1Agricultural training services technologies ATC &ATDC development CSP.5.1Agricultural CSP.5.1Infrastructure training services support CP.6 Cooperatives CSP.6.1Promotion of Development cooperative movements CP.7. Irrigation and CSP 7.1.Small holder Drainage Development Irrigation and drainage TRADE,TOURISM AND INDUSTRIALIZATION CP.1 Administration, CSP.1.Administration Planning and support support services. Tourism services CSP.1.2 Quality assurance and Enhancement CP.2.Trade Development CSP.2.1.Modern Market and Investment infrastructure development Trade CSP.2.2.Trade financing and support CSP.2.3.Meat hygiene infrastructure development CP.3.Tourism CSP.3.1Tourism Development and promotion Marketing CSP.3.2 Development of Local content Niche tourism CP.4.Industrial CSP.4.1 Industrial Development and development support and Investment promotion 59 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) CSP.4.2 Investment promotion EDUCATION, SCIENCE AND TECHNOLOGY CP.1 General CSP.1.1Admnistrative Admnistration and support Services Polytechnics services CSP.1.2 Education quality enhancement and Assurance CP.2 Vocational Education CSP.2.1Polytechnic and Training development Support and development CSP.2.2 Training promotion and development CP.3.ECD Development CSP.3.1 ECD and Support Infrastructure Development Education support CSP.3.2 ECD education improvement and Support CP.4.Education Support CSP.4.1.General and infrastructure Infrastructure support development CSP.4.2.Education financial support C.P 1General Administrative and support CSP1.1 Administrative COUNTY ASSEMBLY services Services CSP1.2 Human Resource management CP.2. County Assembly CSP.2.1 Legislative Services and control services 60 Annex 5: County Programmes and Sub programmes COUNTY DEPARTMENT PROPOSED PROGRAMMES FOR FY 2015/16 & FUNCTIONS PROGRAMMES (CP) SUB-PROGRAMMES (CSP) CSP.2.2. Oversight and Control services 61 Annex 6: Budget Calendar Activity Responsibility Deadline Develop and issue MTEF guidelines Treasury 30-Aug-15 Launch Sector Working Groups Treasury 15-Sep-15 Performance Review and Strategic Planning MDAs 15-Sep-15 Review and update of strategic plans 15-Sep-15 Review of programme outputs and outcome 15-Sep-15 Expenditure review 15-Sep-15 Progress report on MTP implementation 15-Sep-15 Preparation of annual plans 15-Sep-15 Macro Working Determination of Fiscal Framework Group 30-Sep-15 Estimation of Resource Envelope 30-Sep-15 Determination of policy priorities 30-Sep-15 Preliminary resource allocation to sectors and County Assembly 30-Sep-15 Draft County Budget Review and Outlook Paper (C-BROP) 30-Sep-15 Submission and approval C-BROP by County Cabinet 15-Oct-15 Submit approved C-BROP to County Assembly 22-Oct-15 Preparation of MTEF budget proposals Line ministries 1-Oct-15 Draft Sector Report Sector Working Group 1-Oct-15 Review of the Proposal Treasury 22-Nov-15 Submission of Sector Report to Treasury Sector Working Group 30-Nov-15 Draft County Budget Policy Statement (C- Macro Working BPS) Group 1-Dec-15 62 Activity Responsibility Deadline Draft C-BPS Macro Working Group 1-Dec-15 Division of Revenue Bill (DORB) Treasury 15-Dec-15 County Allocation of Revenue Bill (CARB) Treasury 5-Jan-16 Submission of BPS, DORB and CARB National Treasury Treasury 15-Jan-16 Submission of BPS, DORB and CARB to National Parliament Treasury 15-Jan-16 The 2015/16 Supplementary Budget Treasury 10-Nov-15 Develop and issue guidelines on the 2015/16 revised budget Treasury 10-Nov-15 Submission of Supplementary Budget Proposals MDAs 20-Nov-15 Review of Supplementary Budget Proposals Treasury 3-Dec-15 Submission of Supplementary Budget Proposals to County Cabinet Treasury 5-Dec-15 Submission of Supplementary Budget Proposals to County Assembly Treasury 15-Dec-15 County Fiscal Strategy Paper Treasury 28-Feb-16 Submission & approval of the C-FSP by CEC Macro Working Group 15-Feb-16 Submit approved C-FSP to County Assembly Treasury 28-Feb-16 Passing the C-FSP by the County Assembly Assembly 14-Mar-16 Publishing and publicizing the C-FSP Treasury 21-Mar-16 Preparation and approval of Final MDAs Programme Budgets Treasury 28-Feb-16 Develop and issue final guidelines on preparation of 2015-16 MTEF Budget Treasury 28-Feb-16 Submission of Budget Proposals to Treasury Line ministries 15-Mar-16 63 Activity Responsibility Deadline Consolidation of Draft Budget Estimates Treasury 1-Apr-16 Submission of Draft Budget Estimates to the County Assembly Treasury 30-Apr-16 Review of Draft Budget Estimates by County Assembly County Assembly 15-May-16 Report on Draft Budget Estimates from County Assembly County Assembly 30-May-16 Consolidation of Final Budget Estimates and Cash flows Treasury 15-Jun-16 Submission of Appropriation Bill to County Assembly Treasury 15-Jun-16 Appropriation Bill passed County Assembly 30-Jun-16 Finance Bill passed County Assembly 30-Sep-16 64