COUNTY GOVENMENT OF KITUI COUNTY MINISTRY OF FINANCE AND ECONOMIC PLANNING COUNTY GOVENMENT OF KITUI COUNTY MINISTRY OF FINANCE AND ECONOMIC PLANNING County Bud get Review and Outlo ok Paper C ounty Budget Review and Outlook Paper SEPTEMB ER, 2015 SEPTEMBER, 2016 FOREWORD This County Budget Review and Outlook Paper (CBROP), prepared in accordance with Public Financial Management Act, 2012, is the third to be prepared by the Kitui County Government under the devolved governance structure. It presents the recent economic developments and actual fiscal performance of the FY 2015/2016 and makes comparisons to the budget appropriations for the same year. It provides updated MTEF financial forecasts and how these projections deviated from estimates contained in the last County Fiscal Strategy Paper (CFSP) released in February 2016, actual budget 2015/16. In this paper also, we show how the actual performance of the local and national economies in 2015/16 FY affected our compliance with the fiscal responsibility principles and financial objectives as detailed in CFSP 2016. Though the County Government is moving along with the National Government in implementing a raft of strategies and reforms geared towards accelerated economic growth, serious challenges have included inadequate human capacity to harness the full potential of some of these reforms. A case in point is the changing terrain in the budgeting process (from itemised to program based budgeting) that has roped in the use of the Integrated Financial Management Information System (IFMIS), which is presenting a new face of challenges right from planning to implementation. The need to address the local challenges such as poverty, has led the county Government to put in place policies and programs necessary to tackle the problem. However, such policies that include local contracting have also resulted in low absorption of funds as the contractors lack the financial capacity to fund the projects awarded to them. This has affected the implementation of the programs, at times affecting the absorption rate and the amount re- voted to the next financial year. This policy document also compares the performance of locally generated revenue and the receipts from the equitable share and grants from the national government between the two financial years and make appropriate recommendations. In looking at the two financial years, it is clear that there was improvement in both revenue collection and receipts from the national government went up in absolute terms. MR. SIMON N. MUNDU CECM, FINANCE AND ECONMIC PLANNING, KITUI COUNTY GOVERNMENT Kitui County Budget Review and Outlook Paper, 2016 i ACKNOWLEDGEMENT This CBROP has been prepared in conformity with the requirements laid down by section 26 of the PFM Act 2012. The document provides an overview of the performance of the previous year 2015/16 and paints an outlook of the economy’s performance in the medium term, emphasising on the performance forecast for 2016/17. It compares the actual performance of the period under review to the budget, and gives highlights of how the performance in 2015/16 affected our compliance with the fiscal responsibility principles and the financial objectives as outlined in the PFM Act 2012 and the CFSP 2016. The preparation of CBROP 2016 was collaborative, with all departments providing necessary information to explain the achieved level of performance and the safeguards they have put in place to mitigate against low absorption rates. The departments also did provide reports on individual ministry performance and the challenges they encountered while implementing the programs. All this information is consolidated in annex I that is attached to this document for further clarity. It is important at this time to particularly acknowledge the effort and the team spirit of County Treasury that made it possible to come up with a well consolidated paper. I wish to appreciate the efforts of all economists led by Fidhelis Mwaniki, the Deputy Director, Joel Muyanga, Assistant Director, Victor Mwangu, Principal Statistician, the work of revenue team led by Enoch Nguthu, Deputy Chief Finance Officer and John Makau, Assistant Director, and the support of the Finance team led by the Chief Finance Officer, in summarising financial information necessary to make the report easy to understand. The tireless effort of the recently formed multi-sectoral budget team provided invaluable contribution towards preparation of this CBROP. It may be difficult to mention all those who participated in the preparation of this document and acknowledge them particularly, but we recognise the role played by all the staff of County Treasury for making it possible to consolidate and produce this document. It’s my hope that the lessons learned in previous financial years will form the basis of our decision making in the future financial years and help us improve our services delivery. JUNE M. KAVYATI AG. CHIEF OFFICER/CHIEF FINANCE OFFICER COUNTY MINISTRY OF FINANCE AND ECONOMIC PLANNING Kitui County Budget Review and Outlook Paper, 2016 ii Table of Contents FOREWORD ............................................................................................................................................................ i ACKNOWLEDGEMENT ......................................................................................................................................... ii EXECUTIVE SUMMARY ......................................................................................................................................... i I. INTRODUCTION.................................................................................................................................................. 1 Objective of the County Budget Review and Outlook Paper (CBROP) ................................................................................ 1 II. REVIEW OF FISCAL PERFORMANCE IN FY 2015/16 ..................................................................................... 2 A. Overview ........................................................................................................................................................................... 2 B. 2015/16 Fiscal Performance ............................................................................................................................................. 2 C. Implications of 2015/16 fiscal performance on fiscal responsibility principles and financial objectives contained in the 2016 CFSP .......................................................................................................................................................................... 10 III. RECENT COUNTY ECONOMIC DEVELOPMENTS AND OUTLOOK ........................................................... 12 Recent Economic Developments ........................................................................................................................................ 12 Macroeconomic stability (Inflation, Interest rates, Exchange rates) .................................................................................... 15 Medium Term Fiscal Framework ......................................................................................................................................... 16 County Economic Outlook ................................................................................................................................................... 17 Risks to Economic Outlook ................................................................................................................................................. 18 IV. RESOURCE ALLOCATION FRAMEWORK ................................................................................................... 19 Adjustments to 2016/17 Budget .......................................................................................................................................... 19 Medium Term Expenditure Framework ............................................................................................................................... 20 Budget Framework 2016/17 ................................................................................................................................................ 22 V. CONCLUSION AND WAY FORWARD ............................................................................................................ 25 ANNEXTURES ..................................................................................................................................................... 26 I. EXPENDITURE ANALYSIS BY PROJECT/PROGRAMME ...................................................................................... 26 List of Tables Table 1: Revenue and Expenditure Summary for 2014/15 - 2015/16 FY................................................ 2 Table 2: Schedule of Disbursement of Equitable Share .......................................................................... 3 Table 3: Own Generated Revenue by Ministry for the Period ending 30th June 2016............................ 4 Table 4: Ministry/ Spending Entity Expenditure for the Period Ending 30th June 2016 (Kshs) ............ 7 Table 5: Recurrent Expenditure by County Spending Units ................................................................... 8 Table 6: Development Expenditure by County Spending Units .............................................................. 9 Table 7: Revenue projections 2016/17 – 2018/19................................................................................. 22 Table 8: MTEF Projections for 2016/17 – 2018/19.............................................................................. 23 List of Figures Figure 1: Pie Chart of Budgeted Revenue by Source .............................................................................. 5 Figure 2: Bar graph of budgeted vs Actual Revenue by Source .............................................................. 5 Kitui County Budget Review and Outlook Paper, 2016 iii ABBREVIATIONS AD Assistant Director AIA Appropriation-In-Aid AMS Agricultural Mechanization Services BPS Budget Policy Statement CAATs Computer Aided Audit Tools CECM County Executive Committee Member CFAs Community Forest Associations CFSP County Fiscal Strategy Paper CG County Government CLIPD Community Level Infrastructure Projects Development CO Chief Officer CoK 2010 Constitution of Kenya 2010 CRA Commission for Revenue Allocation CT County Treasury DD Deputy Director ECDE Early Childhood Development Education EZs Economic Zones GDP Gross Domestic Product GIS Geographical Information System IDCs Industrial Development Centres IFMIS Integrated Financial Management Information System KBRR Kenya Bank Reference Rate KES Kenya Shilling KEWI Kenya Water Institute KMTC Kenya Medical Training College KTTC Kitui Teachers Training College LAN Local Area Network LAPSSET Lamu Port South Sudan Ethiopia Transport (Corridor) MDGs Millennium Development Goals MTEF Medium Term Expenditure Framework NCD Non Communicable Diseases PPP Public Private Partnerships REA Rural Electrification Authority SEKU South Eastern Kenya University SGR Standard Gauge Railway SRC Salaries and Remuneration Commission VPN Virtual Private Network Kitui County Budget Review and Outlook Paper, 2016 iv Legal Basis for the Publication of the County Budget Review and Outlook Paper The County Budget Review and Outlook Paper is published in accordance with Section 118 of the Public Finance Management Act, 2012. The law states that: 1. A County Treasury shall – a) prepare a County Budget Review and Outlook Paper in respect of the county for each financial year; and b) submit the paper to the County Executive Committee by 30th September of that year. 2. In preparing the county Budget Review and Outlook Paper, the County Treasury shall specify – a) details of the actual fiscal performance in the previous year compared to the budget appropriation for that year; b) updated economic and financial forecasts with sufficient information to show changes from the most recent County Fiscal Strategy Paper; c) information on – i. any changes in the forecasts compared with the County Fiscal Strategy Paper; ii. how actual financial performance for the previous financial year may have affected compliance with fiscal responsibility principle, or the financial objective in the County Fiscal Strategy Paper for that year; and d) reasons for the deviations from the financial objectives in the County Fiscal Strategy Paper together with proposal to address the deviations and estimated time for doing so. 3. The County Executive Committee shall consider the County Budget Review Paper with a view to approving it, with or without amendments, within fourteen day after its submission. 4. Not later than seven days after the County Budget Review and Outlook Paper is approved by the County Executive Committee, the County Treasury shall – a) Arrange for the Paper to be laid before the County Assembly; and b) as soon as practicable after having done so, publish and publicise the Paper. Kitui County Budget Review and Outlook Paper, 2016 v Fiscal Responsibility Principles for the National and County Governments In line with the Constitution, the Public Finance Management (PFM) Act, 2012, sets out the fiscal responsibility principles to ensure prudent and transparent management of public resources. The PFM act, 2012, (Section 15) states that: 1) Over the medium term, a minimum of 30 percent of the national and county budgets shall be allocated to development expenditure 2) The national government’s expenditure on wages and benefits for public officers shall not exceed a percentage of the national government revenue as prescribed by the regulations. 3) The county government’s expenditure on wages and benefits for its public officers shall not exceed a percentage of the county government’s total revenue as prescribed by the County Executive member for finance in regulations and approved by the County Assembly. 4) Over the medium term, the national and 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 approved by Parliament for the National Government and the County Assemblies for the County Governments. 6) Fiscal risks shall be managed prudently; and 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. Kitui County Budget Review and Outlook Paper, 2016 vi EXECUTIVE SUMMARY This County Budget Review and Outlook Paper (CBROP) is the third one since the inception of devolution. It presents the fiscal outcome for FY 2015/16 and how this affects the financial objectives set out in the 2016/17 budget. The updated macroeconomic outlook therein also provides us with a basis to revise the 2016/17 in the context of the supplementary estimates as well as setting out the broad fiscal parameters for the next budget and in the medium term. This County Budget Review and Outlook Paper is organised in five parts as follows: Part One presents introductory information regarding the objective of the CBROP and an assessment of the County’s fiscal performance in FY 2015/16. Part Two analysis the fiscal performance in detail, capturing both revenue collection and expenditure as well as highlighting the implications of FY 2015/16 fiscal performance on fiscal responsibility principles and financial objectives contained in the 2016 County Fiscal Strategy Paper (CFSP). Part Three looks at the recent county economic developments and outlook both at the National and County levels. Part Four looks at the resource allocation framework. It gives a report of the budget estimates 2015/16 and adjustments of the same after the re-prioritization of County Government programmes for the financial year. Chapter Five concludes by giving recommendations on the best way forward. Kitui County Budget Review and Outlook Paper, 2016 i I. INTRODUCTION Objective of the County Budget Review and Outlook Paper (CBROP) 1. The objective of the 2016 CBROP is to provide a review of the previous fiscal performance and how this impacts the financial objectives and fiscal responsibility principles set out in the last County Fiscal Strategy Paper (CFSP) released in February 2015. This together with updated revenue and expenditure performance provides the basis for the revision of the current budget in the context of Supplementary Estimates and informs the choice of broad fiscal parameters underpinning the next budget and medium term. The details of the fiscal framework and medium term policy priorities will be clearly outlined by the next CFSP to be released later this year (under the revised guideline for 2017/18 budget cycle). 2. The CBROP, like the CFSP links policy, planning and the budgeting through reviewing the performance of the government in line with the budget and the laid down policies as tied to the broad priorities. These policies include the County Integrated Development Plan (CIDP), The Kenya Vision 2030 and its Medium Term Plans I & II (MTP I&II), and all other national and county policies relevant to planning. This CBROP is based on the current administrative structure and incorporates the priorities of the CIDP as well as other emerging challenges that transition to the devolved system entails. Its themes are framed around the county ministries that form the sectors of the county to develop projects and programs for each sector covering 2014/15 to 2016/17 Medium Term Expenditure Framework (MTEF). 3. This CBROP rolls out the implementation of the policies initiated in 2015/16 financial year, and continues to address the five thematic areas of CFSP 2015 framed around the five key pillars ensuring development enjoyed by every sector of the economy. These pillars are Pillar I: Ensuring a conducive business environment to enable the private sector conduct their business and attract investment. Pillar II: Investing in agricultural transformation and food security through irrigation and appropriate technology to expand food supply. Pillar III: Investing in infrastructural development such as roads network, energy and water supply to improve on the ease of doing business and attract private investors as well as reducing the cost of our products. Pillar IV: Investing in quality and accessible health care services and quality education as well as social safety nets to reduce the burden on the households. Pillar V: Cascading devolution to the decentralized units of governance for better service delivery and enhanced rural development. 4. The rest of the paper is organised as follows: Section II provides a review of the fiscal performance in FY 2015/16 and its implications on the financial objectives set out in the last budget submitted to the County Assembly in April 2015. This is followed by brief highlights of the recent economic developments and updated revenue and expenditure in section III. Section IV provides the resources allocation framework, while Section V concludes. Kitui County Budget Review and Outlook Paper, 2016 1 II. REVIEW OF FISCAL PERFORMANCE IN FY 2015/16 A. Overview 5. The fiscal performance in 2015/16 improved significantly both on the expenditure side, where overall absorption rose from 53 per cent to 78.45%, and revenue side where performance improved from 85.24% to 97.68%. 6. Though revenue collection realised improved performance, the county ministries handling devolved functions are still grappling with the challenge of organising themselves to collect Appropriation-in-Aid that falls within their function. This is underscored by the fact that even though there was rise in locally generated resources, key performing streams are those traditionally falling under the defunct local authorities. This is evident when major revenue streams like liquor licensing are analysed in terms of actual revenue collected vis-à- vis target. 7. Another challenge emerged with implementation of the Finance Act 2015, as a result of ban on sand and charcoal cess. Further, delay in the operationalization of liquor licence Act also led to loss of revenue in form of uncollected liquor licences fees. B. 2015/16 Fiscal Performance 8. The table below presents the fiscal performance for the FY 2014/15 and 2015/16, together with the deviations from the original budget estimates of FY 2015/16. Table 1: Revenue and Expenditure Summary for 2014/15 - 2015/16 FY 2014/15 2015/16 Deviation Actual Targets Actual Targets (%) A. TOTAL REVENUE AND GRANT 1. Revenue 7,901,673,830 9,270,003,001 9,638,817,685 9,830,828,957 (1.95) Equitable Share 5,199,208,810 6,340,498,549 7,267,273,063 7,267,273,063 - Other Revenues 2,702,465,020 2,929,504,452 2,371,544,622 2,563,555,894 (7.49) Locally Generated Revenue 434,268,205 650,000,000 416,188,728 608,200,000 (31.57) Equitable Share 2014/15 478,375,884 489,685,478 - - - Unspent Balances b/fwd. 1,789,818,974 1,789,818,974 1,955,355,894 1,955,355,894 - 2. Grants 34,610,000 299,716,518 250,700,011 283,520,411 (11.58) Kenya Municipal Program - 265,106,518 - - - Free Maternal Healthcare - 50,790,000 63,610,400 (20.15) Compensation for User Fees Forgone - 23,606,211 23,606,211 - Road Maintenance Fuel Levy - 92,318,534 92,318,534 - Grants from UNDP - - 20,000,000 (100.00) HSSF (DANIDA)/World Bank 34,610,000 34,610,000 83,985,266 83,985,266 - Total 7,936,283,830 9,569,719,519 9,889,517,696 10,114,349,368 (2.22) B . EXPENDITURE 1. Recurrent 3,946,763,200 4,480,576,740 4,122,629,421 4,691,762,193 (12.13) Salaries and Wages 2,242,053,687 2,421,290,925 2,623,132,187 2,661,006,445 (1.42) O&M/Others 1,704,709,513 2,059,285,815 1,499,497,234 2,030,755,748 (26.16) 2. Development 2,963,798,503 5,089,142,779 3,812,402,658 5,422,587,175 (29.69) Total 6,910,561,703 9,569,719,519 7,935,032,079 10,114,349,368 (21.55) C. SURPLUS/(DEFICIT) 1,025,722,127 - 1,954,485,617 - Notes Kitui County Budget Review and Outlook Paper, 2016 2 i. Equitable share: this is the amount of funds the county government expected to receive from the national government, as shared out using the Commission on Revenue Allocation formula, which was disbursed in full for the period. ii. Unspent balance carried forward to 2015/16 amounted to Kshs 1.955 billion, compared to Kshs 1.789 billion for the previous period. Revenue a. Equitable Share and Grants 9. The total disbursement to the county revenue fund account during the financial year 2015/2016 was Kshs 7,267,273,063, representing 100% of the total equitable the county expected to receive from National Treasury. This represents an improvement of 18% from previous financial year. 10. Over the same period, the county expected to receive a total of Kshs 283,520,411 from both the National Treasury and International donors (World Bank, United Nations Development Fund and DANIDA). Local grants comprised of Kshs 63m for Free Maternity, Kshs 23.6m for compensation of user fees forgone, and Kshs 92.3m for Roads Maintenance Fuel Levy (RMFL). A total of Kshs 250,700,011 was received, leaving only Kshs 12.8m for Free maternity and Kshs 20m from UNDP (a total of Kshs 32.8m), representing 11.58% of the total grants. Table 2: Schedule of Disbursement of Equitable Share Month Amount Due Date Received Amount July 581,381,845 22/9/2015 581,381,845 August 654,054,576 22/10/2015 654,054,576 September 581,381,845 11/10/2015 581,381,845 October 617,718,210 12/10/2015 617,718,210 November 654,054,576 16/02/2016 654,054,576 December 581,381,845 03/10/2016 581,381,845 January 581,381,845 04/01/2016 581,381,845 February 654,054,576 26/4/2016 654,054,576 March 581,381,845 05/04/2016 581,381,845 April 617,718,210 27/5/2016 617,718,210 May 581,381,845 08/06/2016 581,381,845 June 581,381,845 23/6/2016 581,381,845 TOTAL 7,267,273,063 7,267,273,063 Grants USER FEES -HEALTH 23,606,211 23,606,211 MATERNITY - HEALTH 63,610,400 50,790,000 FUEL LEVY -LANDS 92,318,534 92,318,534 DANIDA - HEALTH 36,990,000 36,990,000 WORLD BANK - HEALTH 46,995,266 46,995,266 UNDP 20,000,000 0 283,520,411 250,700,011 7,530,793,474 7,517,973,074 Kitui County Budget Review and Outlook Paper, 2016 3 Own Revenue Generated Month Target Amount Variance July 50,683,335 C o l l e c 3te5d,8 56,944 (14,826,389) August 50,683,334 25,767,163 (24,916,170) September 50,683,334 33,218,010 (17,465,323) October 50,683,333 23,248,960 (27,434,373) November 50,683,333 14,439,740 (36,243,593) December 50,683,333 22,496,425 (28,186,908) January 50,683,333 62,317,900 11,634,567 February 50,683,333 43,404,720 (7,278,613) March 50,683,333 50,680,117 (3,216) April 50,683,333 32,237,400 (18,445,933) May 50,683,333 41,535,779 (9,147,554) June 50,683,333 30,985,569 (19,697,764) Total 608,200,000 416,188,727 (192,011,273) Own Generated Revenue 11. The total revenue generated by the county over the period was Kshs 416,188,728, down from Kshs 434,268,205 collected in the previous year 2014/15. This amounts to 4.1% drop from the previous year or Kshs 18,079,477. In comparison to the projected revenue, the County missed its revenue target by 31.57% or Kshs 192,011,272. 12. The overall performance however records underperformance from various county ministries, which reported revenue collection below 40% of the targets. This accounts for the underperformance of the county below the revenue target by 33%. Nonetheless, the improvement in revenue side was commendable (25%), and if maintained or improved in the succeeding period may address some risks likely to undermine our economic outlook. Table 3: Own Generated Revenue by Ministry for the Period ending 30th June 2016 2014/15 2015-16 Vote/County Ministries/Entity Variance Actual Target Actual Target Office of the Governor 10,154,130 80,000,000 19,217,455 - - Ministry of Administration and 1 Coordination 379,687 100,000 - 128,666,410 Ministry of Agriculture water and (0) Irrigation 10,473,105 15,000,000 33,406,650 26,000,000 Ministry of Basic Education and - Skills Development 162,200 800,000 - - Ministry of Land Infrastructure 0.64 and Urban Development 4,001,502 55,000,000 20,620,263 57,243,581 Ministry of Health and Sanitation 113,746,911 144,000,000 109,883,587 131,000,000 0.16 (0.13) Ministry of Trade, Industry IT and Cooperative Development 178,231 2,000,000 1,130,475 1,000,000 Ministry of Culture, Youth, Sports 1.00 &Social Services 12,000 1,000,000 - 1,000,000 Ministry of Environment, Energy (0.32) and Minerals Investment Development 74,000 2,000,000 1,317,800 1,000,000 Kitui County Budget Review and Outlook Paper, 2016 4 2014/15 2015-16 Vote/County Ministries/Entity Variance Actual Target Actual Target Ministry of Tourism and Natural (4.67) Resources 140,900 100,000 1,133,475 200,000 Ministry of Finance & Economic (0.50) Planning 294,945,539 350,000,000 185,061,443 123,661,974 Kitui Town Administration 0 0 29,439,954 97,111,415 0.70 Mwingi Town Administration 0 0 14,977,626 41,316,620 0.64 Subtotal 434,268,205 650,000,000 416,188,728 608,200,000 (0.32) Figure 1: Pie Chart of Budgeted Revenue by Source Budgeted Revenue Revote, 1,955,355,891 , 19% Grants, 283,520,411 , 3% Own Generated , 608,200,000 , 6% Equitable Share, 7,267,273,063 , 72% Equitable Share Own Generated Grants Revote Figure 2: Bar graph of budgeted vs Actual Revenue by Source Budget vs Actual Revenue - Revote 1,955,355,891 1,955,355,891 32,820,400 Grants 250,700,011 283,520,411 192,011,272 Own Generated 416,188,728 608,200,000 - Equitable Share 7,267,273,063 7,267,273,063 - 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 Kitui County Budget Review and Outlook Paper, 2016 5 Expenditure 13. The approved budget for the county was Kshs 10,114,349,365, comprising 46.4% recurrent (or Kshs 4,691,762,193) and 53.6% development (or Kshs 5,422,587,174). This represents 23.6% above the PFM Act 2012 recommended ceiling for funds allocation between recurrent and development. However, this amount includes Kshs 1,955,355,893 brought forward from 2014/15 financial year, which represents 19.3% of the total budget. This therefore indicates that the current allocation to development is only 4.3% above the PFM Act ceiling and not 23.6% as implied by the budget allocations. 14. Further, analysis of recurrent expenditure shows that Personnel Emoluments (PE) and Operations and Maintenance (O&M) were allocated 26.3% and 20.1% respectively, compared 25% and 21.8% in the previous financial year. This reveals an upward trend for PE cost and decline in O&M expenses, explained by the ongoing recruitment to fill existing personnel capacity gaps within the county. It is also explained by the formational structures in the devolved structure like town administrations and ward structures. 15. Total expenditure for the year ending 30th June 2016 amounted to Kshs 7,935,032,079, representing gross absorption of 78.45%, up from 72.2% in 2014/15. Of this expenditure, recurrent expenditure was Kshs 4,122,629,421 while development expenditure amounted to Kshs 3,812,402,658. Overall, even though the approved budget estimates for the year had higher proportion for development than recurrent, actual expenditure reported higher recurrent absorption i.e. 52% against 48% for recurrent and development respectively. 16. In absolute terms, overall absorption went up from Kshs 6,910,561,703 in the financial year 2014/15 to Kshs 7,935,032,079 in the last financial year. The proportion of development expenditure to actual expenditure also went up from 42% in 2014/15 financial year to 48% in 2015/16. Recurrent expenditure however went down from 53% to 52% in 2015/16 financial year. 17. In comparing the budgeted expenditure vis-à-vis the actual expenditure, recurrent budget realised the highest level of utilisation at 87.6% down from 88.1% in the previous year. Development budget reported expenditure was 70.3% up from 58.2% in the financial year 2014/15. The higher utilisation rate in recurrent expenditures resulted to the overall absorption rate rising to 78.45%, underlining the need to disaggregate expenditure reporting into recurrent and development. 18. The table below analyses the total expenditure by county spending entities giving the overall absorption rate. Amounts in brackets indicate the deviation from the planned target expenditures. Major contributors to this adverse variation are Ministry of Health and sanitation; Ministry of Agriculture, Water and Irrigation; Office of the Governor, Kitui Town administration among others Kitui County Budget Review and Outlook Paper, 2016 6 Table 4: Ministry/ Spending Entity Expenditure for the Period Ending 30th June 2016 (Kshs) Jun-16 Jun-16 Jun-16 % of total Vote Ministry/Spending Entity Recurrent Variance % Development Variance % Total Variance exp to Actual Target Actual Target Actual Target budget 1 Office of the Governor 392,207,917 427,082,014 (34,874,097) (8) 934,138,987 1,188,653,049 (254,514,062) (21) 1,326,346,904 1,615,735,063 (289,388,159) 82.09 Ministry of Administration & 2 Coordination of Affairs 414,583,516 361,066,989 53,516,527 15 124,826,559 236,583,598 (111,757,039) (47) 539,410,075 597,650,587 (58,240,512) 90.26 Ministry of Agriculture, 3 Water & Irrigation 363,153,534 388,334,484 (25,180,950) (6) 654,937,460 858,077,244 (203,139,784) (24) 1,018,090,994 1,246,411,728 (228,320,734) 81.68 Ministry of Basic Education, Training & Skills 4 Development 349,991,301 360,754,193 (10,762,892) (3) 160,811,022 236,454,640 (75,643,618) (32) 510,802,323 597,208,833 (86,406,510) 85.53 Ministry of Lands, Infrastructure &Urban 5 Development 215,412,375 242,378,674 (26,966,299) (11) 779,985,156 735,025,051 44,960,105 6 995,397,531 977,403,725 17,993,806 101.84 Ministry of Health & 6 Sanitation 1,262,587,997 1,602,768,824 (340,180,827) (21) 287,100,947 734,754,026 (447,653,079) (61) 1,549,688,944 2,337,522,850 (787,833,906) 66.30 Ministry of Trade, Industry, 7 IT & Cooperatives 55,639,455 59,009,654 (3,370,199) (6) 189,560,525 295,225,622 (105,665,097) (36) 245,199,980 354,235,276 (109,035,296) 69.22 Ministry of Culture, Youth, 8 Sports & Social Services 50,125,453 55,444,901 (5,319,448) (10) 146,079,474 206,946,500 (60,867,026) (29) 196,204,927 262,391,401 (66,186,474) 74.78 Ministry of Environment, Energy and Mineral 9 Investment Development 27,826,614 33,148,510 (5,321,896) (16) 206,441,589 261,928,624 (55,487,035) (21) 234,268,203 295,077,134 (60,808,931) 79.39 Ministry of Tourism and 10 Natural Resources 38,673,069 42,121,614 (3,448,545) (8) 44,184,790 79,673,805 (35,489,015) (45) 82,857,859 121,795,419 (38,937,560) 68.03 Ministry of Finance & 11 Economic Planning 233,351,756 247,630,866 (14,279,110) (6) 28,053,845 64,026,394 (35,972,549) (56) 261,405,601 311,657,261 (50,251,660) 83.88 County Public Service - 12 Board 55,342,150 58,921,145 (3,578,995) (6) - - - 55,342,150 58,921,145 (3,578,995) 93.93 County Assembly Service 13 Board 604,786,084 703,088,381 (98,302,297) (14) 123,881,106 179,562,414 (55,681,308) (31) 728,667,190 882,650,795 (153,983,605) 82.55 14 Kitui Town Administration 33,169,002 70,629,691 (37,460,689) 78,507,655 221,223,136 (142,715,481) (65) 111,676,657 291,852,827 (180,176,170) 38.26 Mwingi Town 15 Administration 25,779,198 39,382,251 (13,603,053) 53,893,543 124,453,072 (70,559,529) (57) 79,672,741 163,835,323 (84,162,582) 48.63 TOTALS 4,122,629,421 4,691,762,193 (569,132,772) (12) 3,812,402,658 5,422,587,174 (1,610,184,516) (30) 7,935,032,079 10,114,349,367 (2,179,317,288) 78.45 Kitui County Budget Review and Outlook Paper, 2016 7 Notes The overall variance does not net out all the monies which were not received by the county as at 30th June 2016. This includes, Kshs 12,820,400 meant for Free Maternity grant, Kshs 192,011,272 not collected by the county government as targeted in its revenue budget and Kshs 20,000,000 expected from United Nations Development Program (UNDP) for budgetary support towards training. These funds will not be carried forward to 2016/17. 19. Recurrent expenditure for the financial year Kshs 4,122,629,421, 4.4% down the expenditure for the previous period of Kshs 4,480,576,740. This resulted from an increase in Personnel Expenses (PE) of 17% and a decrease in Operations and maintenance costs of 12%, resulting to an overall absorption of 88%. The table below shows the overall recurrent expenditure by spending entities. Table 5: Recurrent Expenditure by County Spending Units Jun-16 Vote Ministry/Spending Entity Recurrent Variance % Actual Target 1 Office of the Governor 392,207,917 427,082,014 (34,874,097) (8) 2 Ministry of Administration & Coordination of Affairs 414,583,516 361,066,989 53,516,527 15 3 Ministry of Agriculture, Water & Irrigation 363,153,534 388,334,484 (25,180,950) (6) Ministry of Basic Education, Training & Skills 4 Development 349,991,301 360,754,193 (10,762,892) (3) Ministry of Lands, Infrastructure &Urban 5 Development 215,412,375 242,378,674 (26,966,299) (11) 6 Ministry of Health & Sanitation 1,262,587,997 1,602,768,824 (340,180,827) (21) 7 Ministry of Trade, Industry, IT & Cooperatives 55,639,455 59,009,654 (3,370,199) (6) 8 Ministry of Culture, Youth, Sports & Social Services 50,125,453 55,444,901 (5,319,448) (10) Ministry of Environment, Energy and Mineral 9 Investment Development 27,826,614 33,148,510 (5,321,896) (16) 10 Ministry of Tourism and Natural Resources 38,673,069 42,121,614 (3,448,545) (8) 11 Ministry of Finance & Economic Planning 233,351,756 247,630,866 (14,279,110) (6) 12 County Public Service Board 55,342,150 58,921,145 (3,578,995) (6) 13 County Assembly Service Board 604,786,084 703,088,381 (98,302,297) (14) 14 Kitui Town Administration 33,169,002 70,629,691 (37,460,689) (53) 15 Mwingi Town Administration 25,779,198 39,382,251 (13,603,053) (35) TOTALS 4,122,629,421 4,691,762,193 (569,132,772) (12) Note: The amount indicated as unabsorbed of Kshs 569,132,772 includes funds budgeted as local revenue but never realised (Kshs 192,011,272) and an amount of Kshs 12,820,400 expected from National Treasury in form of local grants towards free maternity was not received by June 30, 2016. The amount available for revote will be net of these figures as the free maternity grant may not be disbursed. 20. The development expenditure for the period was Kshs 3,812,402,658, up from Kshs 2,963,798,503 spend in the financial year 2014/15. This represents an increase of 28.6% or Kshs 848,604,155 spend in the financial year 2015/16 above the amount absorbed on development budget in the previous year. The table below shows the expenditures by each spending entity, the variances both actual values (in brackets) and the percentages. Kitui County Budget Review and Outlook Paper, 2016 8 Table 6: Development Expenditure by County Spending Units Jun-16 Vote Ministry/Spending Entity Development Variance % Actual Target 1 Office of the Governor 934,138,987 1,188,653,049 (254,514,062) (21) 2 Ministry of Administration & Coordination of Affairs 124,826,559 236,583,598 (111,757,039) (47) 3 Ministry of Agriculture, Water & Irrigation 654,937,460 858,077,244 (203,139,784) (24) Ministry of Basic Education, Training & Skills 4 Development 160,811,022 236,454,640 (75,643,618) (32) Ministry of Lands, Infrastructure &Urban 5 Development 779,985,156 735,025,051 44,960,105 6 6 Ministry of Health & Sanitation 287,100,947 734,754,026 (447,653,079) (61) 7 Ministry of Trade, Industry, IT & Cooperatives 189,560,525 295,225,622 (105,665,097) (36) 8 Ministry of Culture, Youth, Sports & Social Services 146,079,474 206,946,500 (60,867,026) (29) Ministry of Environment, Energy and Mineral 9 Investment Development 206,441,589 261,928,624 (55,487,035) (21) 10 Ministry of Tourism and Natural Resources 44,184,790 79,673,805 (35,489,015) (45) 11 Ministry of Finance & Economic Planning 28,053,845 64,026,394 (35,972,549) (56) 12 County Public Service Board - - - - 13 County Assembly Service Board 123,881,106 179,562,414 (55,681,308) (31) 14 Kitui Town Administration 78,507,655 221,223,136 (142,715,481) (65) 15 Mwingi Town Administration 53,893,543 124,453,072 (70,559,529) (57) TOTALS 3,812,402,658 5,422,587,174 (1,610,184,516) (30) Note: i. Actual expenditure for the county went up from 58% in 2014/15 to 70.3% of the total development budget in 2015/16 FY, resulting in an improvement of 12%. ii. Although the unabsorbed balance is Kshs 1,610,184,516, the re-voted amount will exclude Kshs 20,000,000 meant for budgetary support (training and capacity building) from UNDP. Kitui County Budget Review and Outlook Paper, 2016 9 C. Implications of 2015/16 fiscal performance on fiscal responsibility principles and financial objectives contained in the 2016 CFSP 21. The performance of 2015/2016 did not affect the financial objectives set out in the 2016 CFSP and the budget for FY 2015/16 in any fundamental way. However: i. Based on the performance of revenue and expenditure projections for the last three financial years, the revenue forecasts should be adjusted to reflect actual performance in order to mitigate against budget deficit in the event of actual expenditure conforming to budget; ii. Due to underperformance in revenue and realisation that some grants expected from the National Treasury will not be received, actual re-vote will not include this amount. However, this will not affect any development project as much of the unrealised funds were meant to finance recurrent expenditures; iii. The accelerated absorption rate recorded in 2015/16 is likely to inform the reallocation of funds during supplementary to address the funds roll-over from one financial year to another. However, this will have to be done within the broader priorities set out in the CFSP 2016 and all other medium term policies; and iv. Funds not spend in the previous year whether recurrent or development are reallocated to development in 2016/17. However, the amount of re-voted over the last two financial years has been declining due to increased absorption. 22. The outcome of the national economic performance indicates our national economy is still resilient, as evidenced by the response of the performance Kenya’s first sovereign bond in the market. However, volatility in our main foreign exchange earners such as tourism and export of tea and coffee leaves some doubts on our growth forecast. Inadequate rainfall received in the second quarter of 2015 has dampened the performance of the economy. Drought is one of the main challenges that can adversely affect the performance of our local economy and there is need to devise ways of circumventing, given that farming is the main source of livelihood. Nevertheless, we remain optimistic that growth projections outlined in CFSP 2016 will be achieved albeit with challenges. 23. Our local revenue projections will remain as set out in our CFSP 2016, given that main sources of revenues will be severely affected by any foreseeable shock. Nonetheless, poor crop yields resulting from inadequate rains will definitely undermine the growth forecast in general. Revenue collection from devolved functions is still performing below forecasts, mainly due to operational and other setup challenges. There is need to review all the revenue streams for each county ministry/ entity and assess its potential to ensure realised revenue does not vary much to forecasts. 24. The contention raised over the implementation of the Finance Bill in 2015 and the ban on charcoal cess has had impact on the revenue targets set out in our 2015 CFSP, however, such incidences have been taken into account while preparing our projections. The effect on revenue underperformance in revenue collection has been to reduce our allocation for Kitui County Budget Review and Outlook Paper, 2016 10 development as such funds could not be re-voted for utilisation in the current financial year. This, in effect has resulted in downward review of our development allocation. 25. Given that agriculture is going to be the main driver of our local economy in the medium term, measures have been put in place to improve productivity particularly to address food security and support favourable growth prospects. This is signalled by the amount allocated to agriculture and production sectors to boost output in 2015/16 FY and over the medium term. Targets here include support to farmers through provision of farm inputs, provision of post-harvest advice/services and investment in non-rain fed agriculture. Other interventions include increased funding for acquisition of necessary machineries to revamp the agricultural mechanisation services. Kitui County Budget Review and Outlook Paper, 2016 11 III. RECENT COUNTY ECONOMIC DEVELOPMENTS AND OUTLOOK Recent Economic Developments a) National 26. The Kenyan economy is emerging as one of East Africa’s growth centres, experiencing solid growth founded on investment in infrastructure, buoyant manufacturing and vibrant agriculture sector. This is confirmed by rebasing of its GDP last year that placed Kenya in the ninth position in Africa. Sustained investment in mega infrastructural projects within stabilised macroeconomic environment bearing fruits for the country. However, expansionary fiscal policies underlying the physical infrastructure growth agenda may present downside risks associated with variability in some macroeconomic variables such as exchange rates, inflation and interest rates. 27. The growth prospects for the country looks favourable, with medium term growth forecast for 2015 to 2017 being 6.0, 6.6 and 7.0 per cent for 2015, 2016 and 2017 respectively up from 5.4 estimate for 2014. This is anchored on strong macroeconomic base, declining risks, infrastructural development and recovery in major economic driver sectors like agriculture and tourism, in the domestic market. Recover and stability of economies in the country’s major trading partners, coupled with declining oil prices in the international markets that is reducing inflationary pressures also prop this gloomy economic outlook. 28. Some of the significant contributors to economic prosperity of the country like tourism were largely affected by international incidents like terrorism and acts of violence. Such sectors are very volatile on those incidents likely to disrupt social order. 29. The Sixth Tokyo International Conference on African Development (TICAD VI) was held in Nairobi, Kenya, 27-28 August 2016, the very first TICAD to be held in Africa. It serves as a pioneering multilateral forum for international cooperation on African development. it is premised on Africa being a dynamic continent that now hosts most of the fastest growing economies in the world, including Kenya. The TICAD VI was an advanced of the TICAD V commitments which included; the enhanced role of the Regional Economic Communities (RECs), the New Partnership for Africa's Development Planning and Coordinating Agency (NPCA) and the African Peer Review Mechanism (APRM) in Africa's development management, the adoption of Agenda 2063, the adoption of the Common African Position on the Post-2015 Development Agenda by African Heads of State and Government, which facilitated global negotiations and culminated in the adoption of the 2030 Agenda for Sustainable Development at the United Nations. Three pillars were identified under TICAD VI; promoting structural economic transformation through economic diversification and industrialization, Promoting resilient health systems for quality of life and promoting social stability for shared prosperity. Kenya being one of the middle income Kitui County Budget Review and Outlook Paper, 2016 12 countries in Africa has positioned itself to reap immensely from such initiatives in sectors like infrastructure, power generation, trade and investment and Research and Development. b) County level 30. The county is a good-based as opposed to service- based economy. Most of the products in the county are from the agriculture sector. Therefore, it is expected that the performance of the county economy was greatly undermined by the inadequate rains received over the period. The dismal performance of the agriculture resulted into poor performance of the county economy due to the structural vulnerabilities inherent in our county. The county being agriculture based, which is particularly rain fed exhibits a high degree of exposure to the risks of weather variability. 31. The low production in the agriculture sector has continued to pile inflationary pressure from food and non-food sectors, resulting in an upward trend in the cost of living generally over the medium term, and eroding the purchasing power of the real wage. The non-food inflation stemmed from generally volatile oil prices in the international markets, which has received a mixed basket over the period, moving up and down at times. However, the general Consumer Price Index (CPI) has been trending up, confirming that benefits from reduced oil prices have not been passed on to the consumers. 32. There are several planned projects/programmes at the National or County Governments likely to have great impacts in the Kitui County economy. Some of these projects have already been initiated while others are still in the inception/planning stage. Such programmes/projects include but not limited to: 33. Masinga – Kitui Phase I - The Water and Sewer System project funded African Development Bank (AfDB).This project will expand the pipeline infrastructure that bring water to Kitui Town from Masinga Dam, and construct a sewer system for the town. It has been under implementation for over two years now and is contracted to Sino Hydro Co., Ltd. The likely impact of the project is to increase access to save water, reduce water borne diseases within the town and increase the value of real estate within Kitui town and its environment. The Phase II of the project and the sewer system have not been operationalized yet. 34. The Mui Coal Basin Projects, concessioned to Flenxi Mining Co., Ltd of China, for blocks C and D will involve mining of the coal. A coal powered plant to generate over 900MW has also been earmarked for the same region. Block A and B lie in Kitui East sub county and were concessioned to a consortium of Liketh and HCIG. Very little activities have been undertaken. The State department of Energy and Petroleum is the one in charge of the mineral exploitation. 35. The Standard Gauge Railway (SGR) is a 500 km railway line running from Mombasa to Uganda and Rwanda and it was commissioned in 2014/15 financial year. The railway will run along several counties; Mombasa - Kilifi - Kwale - Taita - Taveta - Makueni - Kajiado - Machakos and Nairobi. For Kitui county this major transport system is expected to transform Kitui County Budget Review and Outlook Paper, 2016 13 transport business has a T junction at Mtito Andei to Mui coal basin is envisaged to be laid. The intention of this T junction is to provide means for transporting coal from the mining site to the port for export as well as supplying other coal fired power generation plants. Once completed the project is scheduled to be operational during 2016/17 financial year. 36. The Lamu Port Southern Sudan Ethiopia Transport (LAPSSET) corridor was officially launched by the immediate former president, Mwai Kibaki on 2nd March 2012. It is also another mega project being implemented by the National Government that is expected to have great impact on the economic growth of Kitui County. The project is planned to have a highway, a railway and a pipeline. It will pass to the north of the Kitui County and will provide a major economic opportunity for the county such as the export of livestock to the Middle East. It is envisaged that preparatory activities were being implemented for the take- off of the project over the period under review. 37. Another major development initiative likely to have impact on the lives of the Kitui residents is the Kanyangi – Mutomo – Ikutha – Kanziko water project inaugurated in 2015. This project is co-funded by the County Government of Kitui and World Vision Kenya at a cost of KES 650m. This project will increase water coverage by 50% in the entire southern region of the county expected serve 100,000 people in Kanyangi, Mutomo/Kibwea, Ikutha, Kanziko and Athi wards as well as Mathima and Ndakani areas of Mutha Ward. It is designed to produce water at the rate of 1700 m3/day. During the period under review, 21km of pipeline have been laid and 44km of pipeline of on-going. Additionally, storage facilities of 500M3 reinforced concrete storage tank and 225M3 masonry storage tank are at 75% completion level. The acute problem of water which has characterised southern region of Kitui County will be sustainably solved. 38. Over the period under review, this emergence of institutions of higher learning in the County (Universities and middle level colleges) resulted in massive influx of people in the County especially the Towns of Kitui, Mwingi and Kwa Vonza. On the supply side, this has constrained sectors like housing, transport, agriculture, health, education among others. In effect, market prices for the housing and land has gone up. It is expected that once the SEKU campus in Mwingi is operational, the demand for more hospitality facilities will out way supply creating potential for expansion of physical facilities for Mwingi town. 39. The County Government has invested a sizeable portion of its development expenditure on rehabilitation of existing access roads and opening of new ones across the county with an aim of addressing access to markets and improving road transport network. A total of 19 No. drifts (1450 metres) and 120.5 km of road works were done in 2015/16. This has had the effect of cutting down on the time residents take to move from one trading centre to another as well as reducing the travel costs. 40. One of the various approaches to strengthening rural and urban financial base is to create conducive environment for business operations. The County Government of Kitui has implemented urban Street lighting over 2013/14, 2014/15 and 2015/16 which has brought in light to business premises area and allowed traders more time to operate their enterprises Kitui County Budget Review and Outlook Paper, 2016 14 towards the 24-hour economy initiative. Markets are now able to operate beyond dusk and traders are more confident to extend their operations to late hours of the night. All these efforts are intended to provide large return to investment by the Kitui County residents. 41. Kitui Vision for Economic and Social Transformation (KIVEST 2025), a blueprint for Kitui County for the next ten years has been finalised. KIVEST has apportioned the county into 6 Economic and Investment zones, each with its opportunities and comparative advantages. This is detailed plan showing bold steps that the county government in collaboration with other stakeholders will undertake to develop the county. A process to actualise this has been initiated through organising an investors’ conference in September 2015 to showcase the county potentials. Once approved by Kitui County Assembly the plan will be published, publicized and rolled out as outlined in the prescribed design of the plan. Macroeconomic stability (Inflation, Interest rates, Exchange rates) 42. Though the management of these variables is the sole responsibility of the National Treasury as alluded to earlier, their impact on the national economy is an aggregation of the effects to individual counties, which is of great concern to the counties as the National Treasury itself. The inflation rates outlook over the medium term is expected to be stable at around 5.6 per cent, as predicted, reflecting a significantly improvement from 7.0 per cent. This is attributable to; subdued oil prices, lower electricity tariffs due to increased reliance on drought-resistant geothermal power and low food prices due to improved rainfall. Sustaining inflation rates at this or even lower level is critical for the nation and the county to achieve their fiscal objectives, given that inflationary pressures have had adverse budgetary effects in the past. 43. It will be important to see how the National and County Government address the food inflation which is the main driver of overall inflation, which has remained relatively high. Energy and oil related inflationary pressures are easing up thanks to declining oil prices at the international markets and structural shifts in our energy generation mix. 44. The assenting to act of the Banking (amendment act) 2016 by HE the President, Uhuru Kenyatta set a stage for cushioning of the business sector. Section 33B of that Act introduced a limit to interests charged on credit facilities to 4% of the base rate set by the Central Bank of Kenya and a minimum of interests earned in deposits earning interest to 70% of the base rate set by the Central Bank of Kenya. This in effect meant that the interest rate will be capped at 14.5% a decrease from the 18% average that the banks used to charge. Lower interest rates have the effect of stimulating both public and private credit that is required to accelerate development. This will be important for the county since the main target of the county will be private investors who Kitui County Budget Review and Outlook Paper, 2016 15 may need to raise funds either from commercial banks or the stock exchange. Further, the introduction of Kenya Banks Reference Rate (KBRR) was to bring about transparency in the lending sector. The KBRR gives the basic rate of lending of banks in Kenya and is calculated from the average of the Central Bank Rate and the two-month weighted moving average of the 91-day Treasury bill rate. The last review of the KBRR was from 9.87 to 8.90 in July 25, 2016. 45. Access to credit is necessary for the acceleration of development through capital borrowing, which has been a major source of slow projects implementation. This is also understood in the premise that trade in livestock, construction of real estate and retail and wholesale in agricultural produce (cereals), need to be financed by commercial banks. Medium Term Fiscal Framework 46. Over the medium term, the county government will pursue prudent fiscal policy aimed at maintaining stability in the revenue segments while still improving the business environment. Expenditures management controls will continue to be implemented to stem unnecessary wastage to release funds for development, and where financial prudence requires austerity measures to be put in place, necessary policies will be prepared to avert any financial crisis. 47. Debt management policies under the PFM Act 2012 require that counties avoid borrowing within the first few financial years. It is therefore not in the county’s plan to finance any short fall in budget through loan, whether recurrent or development. However, where necessity dictates otherwise, all necessary precautions will be employed to avoid debt traps. Further, when necessary and applicable the County Government of Kitui shall raise revenue through donor funding by way of raising proposals. The funding shall be utilised purely for development purposes. 48. The proportion of the target own revenue to overall budget is insignificant. For the period under review it is still below 10%. This poses a major risk to the county’s operations as delay in National Treasury disbursements could paralyse county operations. The target for the annual locally collected revenue cannot cover five payroll expenses. Monthly collections from all the sources also cannot meet the monthly salary expenditure. All these call for urgent measures to improve administrative efficiency and widen the revenue base to ensure county operations are cushioned from disruptions in case of disbursement delays. 49. It is evident that revenue collection suffers as a result of delay in passing of Finance Bills. When necessary pieces of legislation in form of county bills and policies are not approved and/or passed on time there are unnecessary disruptions. It should be recommended that all laws that allow the county to collect levies should be prepared and appropriately approved on time to ensure adherence to legal provisions and maximise on the revenue collection period. Delay in passing bills into laws shortens implementation period, thus affecting resource mobilisation timeframe. Kitui County Budget Review and Outlook Paper, 2016 16 50. On the expenditure side, the county will continue to rationalise expenditures to bring efficiency and stem wastage. Accelerating implementation of expenditure management reforms as contained in the PFM Act 2012, and its regulations alongside full adoption of the Integrated Financial Management Information System (IFMIS) platform is expected to improve financial management capacities of the County Treasury. This will eventually improve fiscal responsibility. 51. There are claims from contractors and suppliers of services left by the former local authorities, which have not been verified for authentication. The former Transition Authority (TA) had not given counties any direction on the inherited debts before the authority was phased out. Effort toward that direction was a moratorium imposed on the counties not to pay any claim left by the former local authorities. It is a considered opinion that TA should have provided guidelines on the modalities of handling such cases to mitigate against interest payment on claims verified as genuine. After the phasing out of the TA, the Inter- Governmental Relations Technical Committee was established to perform the same functions. The 10-member committee is chaired by Karega Mutahi. 52. The National Government enacted a law to allow for Public – Private – Partnership (PPP) undertakings. However, the technicalities involved require experts with training and experience on the same to initiate and negotiate such contracts. This is a viable option that the county will explore over the medium term, in consultation with the National Treasury which hosts the national secretariat on PPP. Long term projects such as solar power generation, water supply sewer system management and other infrastructure projects are some of examples of viable projects to be initiated under PPP. 53. H.E. the President directive on procurement to all government entities necessitated public entities to embrace e-procurement. In line with this directive, the county has prepares Annual Procurement Plans to guide the procurement of the county within a particular fiscal year and in the medium term. It has also recruited more personnel in the department to reduce the workload and fast-track the process. This is expected to address low absorption rate in development expenditure. 54. In order to address the low proportion that locally generated revenue contributes to the overall budget, a Revenue Enhancement Plan has been prepared to address collection challenges experienced in the past years. This plan includes unbundling of the Finance bill 2015 to bring in more categorisation in rates and charges as well as creating zones within towns to complement the unbundling. A draft Revenue Administration bill has been prepared and submitted to cabinet for approval. All these efforts are geared towards enhancing locally generated revenues to ensure sustainability in cases of financial delays emanating from the National Government. County Economic Outlook 55. At the national level, the economy continued to show improvement from the previous years over the period under review. An improvement in the nation economy reflects overall Kitui County Budget Review and Outlook Paper, 2016 17 performance of all the counties. It is also important to note that improved economic performance at the national government signals trend wise increase in revenue collection and hence equitable share received by counties. 56. The county government is positioning itself to join the Coast-Eastern-Mount Kenya Tourism Circuit so as to reap benefits from the tourism sector. Initial works towards this which involve rehabilitation of all the tourist sites including Nzambani rock, South Kitui national park, Kora and Mwingi game reserves were initiated in 2013/14 fiscal year. They are incorporated in the County medium-to-long term plans. The County through the department responsible for Tourism and Natural Resources has partnered with Kenya Wildlife Services (KWS) to market tourism within the parks and reserves. It is anticipated that aggressive marketing and rebranding of our tourist destinations can increase the number of tourists visiting our county. 57. Kitui County leverages on its huge mineral deposits that will create job opportunities if extraction begins. The mining sector will prosper well if well anchored by the service sectors such as financial and hospitality. It is hoped that the extraction of coal in Mui, cement in Kanziko and Ngaie will attract the services of financial and hospitality business. Investor confidence and predictable political climate is pertinent in order to achieve sustainable economic development in the county. Risks to Economic Outlook 58. One of the major risks facing this outlook, just as many other counties is the weak revenue base that cannot cushion the county from cash flow delays from the National Treasury. Most of the counties experienced problem in payment of salaries for the months of July and August this year following a delay by the national treasury to release funds. This problem could have been averted if all the counties were able to collect own revenue adequate to shoulder monthly payroll burden. 59. Due to the weak revenue base of the county, delay in the release of the equitable share by the national treasury will definitely paralyse the operations and dampen the outlook. In essence, the achievement of the outlook forecasts is anchored on timely release and utilisation of the equitable share, mainly because the contribution of the local revenue is less than 8% of the annual budget. 60. Other risks to the economic outlook for 2015/2016 and the medium term include slow recovery in the advanced economies that will impact negatively on our tourism and export; the weak shilling against the dollar and other major currencies; emerging financial risks in the China economy that are likely to hit our stock markets too due to financial integration, resulting in capital flight and losses. 61. Delay in implementation of major infrastructural projects like Kibwezi-Kitui-Mwingi road tarmacking, Mui coal basin projects, exploration of cement, and other big impact projects will dampen the outlook. Kitui County Budget Review and Outlook Paper, 2016 18 62. Public expenditure pressures especially recurrent expenditures, mainly salaries and other personnel emoluments pose fiscal risks. The wage bill in particular limits the funds available to development, curtailing the ability of the county to expand its infrastructure and fulfil other developments as outlined in the budget. There is need to manage the wage bill in more sustainable way to avoid unnecessary redundancy costs. 63. The national as well as the county are dependent on the rain fed agriculture. Erratic weather pattern that is so characteristic in our county derailed the county development agenda with substantial resources channelled to emergency relief services and other associated expenditures. This unpredictable weather patterns pose real threat to our forecast given that Kitui is food deficient and hunger results in emergency reallocation of resources which are unprecedented. 64. Other risks that the economic outlook may be prone to include lack of goodwill from the political class, low staff morale that will affect revenue performance, delay in enactment of bills into laws, liquor licensing structure and resistance from the devolved functions staff to collect revenue. 65. Political interference and resistance by locals not to pay local revenue have negative impact on the revenue projections and the overall revenue performance. Some of efforts being put towards addressing the envisaged challenges include; automation of revenue collections and dissemination of civic education on revenue collection to the traders to create awareness on the benefits of revenue at county level. IV. RESOURCE ALLOCATION FRAMEWORK Adjustments to 2016/17 Budget 66. Given the performance in 2015/16 and the updated macroeconomic outlook of the national economy, the risk to the FY 2016/17 include instability in the stock markets both locally and internationally, the effects of Brexit to the export business, slow recovery of the advanced economies that absorb our exports; volatility and slow recovery in tourism sectors which in a major foreign exchange earner and geographical turbulence in the international oil market. 67. At the local level, the county reported improved rates of development funds absorption (from 58% in 2014/15 to 70.3% in 2015/16). This impressive performance should be rolled over to the next financial years to solidify the gains envisaged in program implementation. 68. The experience on the budget implementation so far suggests that departments need to rationalise their budget to and align resources availability to needs, allocating funds to quick- win-projects. In this regard, supplementary budget will have to be prepared to rationalise expenditures and where possible cut spending in non-priority areas. However in line with our development policy goals, resources allocated to development will not be re-allocated to Kitui County Budget Review and Outlook Paper, 2016 19 recurrent expenses and any movement of resources is expected flow from recurrent to development budget. 69. In order to achieve the revenue targets set out in the 2016/17 budget, the revenue department of the County Treasury will undertake resource mapping to identify untapped revenue potential and reassess revenue streams to improve revenue collection. The supervision of revenue collection is essential to seal off all possible revenue leakages and loss through non-collection. Other measures necessary to realise the budget are to speed up the preparation and approval of Revenue Administration. 70. With respect to locally generated revenues, the County Government managed to collect Kshs 416m against a projection of Kshs 608m. This represents an underperformance of 32%, up from 33% in 2014/15. However, the actual revenue collected went down by Kshs 18m or 4.1% compare to the previous period as the previous target was Kshs650m. This could be attributed to ban on charcoal, sand cess and contention of the Finance Act 2015. 71. The county government has taken the necessary steps to ensure that revenues expected from devolved functions transferred from national government are collected and remitted to the county revenue fund. One such step is preparation of the Liquor Licensing Bill, which has been passed by the County Assembly and assented to by the H.E the Governor. The e-revenue projected is also another such bold step the county has taken to improve revenue performance. The projected is expected to be executed in 2016/17 financial year. 72. On the expenditure side, the County Government continued to rationalize expenditures to improve efficiency and reduce wastage. In the medium term, expenditure management is expected to improve with the implementation of the Integrated Financial Management Information System (IFMIS) platform. Above all, the PFM Act, 2012 is expected to guide and accelerate reforms in expenditure management system necessary for the efficient utilisation of resources. Medium Term Expenditure Framework 73. Looking forward, and in view of the outlook, MTEF budgeting will involve expenditures rationalisation to move resources from non-priority sectors to accommodate priority needs within the broad sector goals. Over the medium term, the budget will draw largely from the CIDP, and all other planning documents, including national plans such as MTP I&II in order to address the development challenges of the county. 74. The county ministries are not organised around the MTEF sectors as recognised at the Classification of Functions of Governments (COFOG) and the national level. However, grouping by related sectors of the economy reveal the following allocation:- i. The Ministry of Lands, Infrastructure and Urban Development and Towns (Kitui and Mwingi), which address the infrastructural development and urban development were allocated Kshs 1,003m or 11% of the total budget. This sector is the driver of the economy and reflects Kitui County Budget Review and Outlook Paper, 2016 20 Government’s commitment in improving infrastructure such as roads and ensure sustainable development through planning of urban areas. ii. The social sectors, comprising ministries of education and health, will continue to receive considerable amount of the budget share. The allocation for this financial year is Kshs 2,803m (or 32%) up from previous year’s allocation of Kshs 1.9 billion. This is in line with the county government’s policy to address health access inequalities across the county and empower people through education. iii. Agriculture, water and Irrigation sector has received a huge allocation consistent with the county policies to improve food security and water availability in the county. Kitui is ranked as food insecure and water deficit, a picture that county government is fighting to change. The Agriculture, Rural & Urban Development sector has been allocated 984 million which is equivalent to 11% of the entire budget, a drop of 1% from the previous allocation of Kshs 998m in 2015/16. iv. Public, Administration & Internal Relations. The sector, which incorporates the office of the governor, administration and coordination of county affairs, Finance and economic planning, County assembly and County public service board, plays the crucial role of ensuring the smooth running of the County government. The sector will received a total allocation of over Kshs 3.32 billion in the FY 2016/2017 or (37%) of the total budget. This allocation is 1% higher than the previous allocation of Kshs 2.9 billion (36%) allocated in 2015/16 financial year. Even though this group of sectors do not undertake development projects, Office of the Governor houses the CLDP and Pro-poor programmes which had great impact in community development and education. v. Environment, Energy and mineral resources development, which is an important sector of the county economy given the mineral wealth potential. The ministry is also responsible for electricity distribution through Rural Electricity Authority (REA). This sectors received Kshs 238m mainly to power urban centres through connection to the national grid and the solar powered street lights. vi. Other priority sectors including youth, women and disadvantaged groups have been incorporated in various development programs, which will continue to attract funding. The County government will continue allocating adequate funding to social protection, culture and recreation sector in order to ensure the special interest groups are taken care of. In the 2016/2017 financial year, the sector has been allocated 209 million translating to 2% of the total budget. vii. Trade, Industry, IT and cooperatives as well as Tourism and natural resources are also key pillars in development of the county. Expansion of tourism access roads in south Kitui game reserve and the north Mwingi game reserve are expected to open up the game reserves for tourists’ attraction and activate the tourism circuit from south to the north of the county. IT enables services is reducing the cost of doing business. These sectors received a total of Kshs 335m to address the business environment, expand markets and improve tourism potential in the county. 75. Specifically, the County government has prioritized key strategic interventions across major sectors as a way of accelerating county’s economic and social transformation so as to improve quality of services to the population. The main areas of interventions cover food security, improved access to quality health care and water, empowering youth and women as well as putting in place a Kitui County Budget Review and Outlook Paper, 2016 21 transformative education system. Resources earmarked for these interventions are ring fenced over the medium term and are carried forward (re-voted) at the end of the financial year to ensure these interventions are fully implemented. 76. To address structural reforms on County Budgeting, the following will be implemented over fiscal cycle; i. The expenditure side of the County budget, the County Government will continue with expenditure management reforms to improve efficiency and reduce wastage in line with the PFM Act, 2012. Expenditure management will be strengthened with implementation of the Integrated Financial Management Information System (IFMIS) to cover the expenditures of the 15 County spending units. Major operational reforms introduced by the IFMIS such e- procurement are expected to streamline wastage and free resources for development. ii. The County Government has over the last three financial years instituted measures to rationalise public expenditures and tame wage bill to recommended levels (below 35% of the total expenditure) and eliminate other unnecessary expenditures. This will free some resources that will be channelled to development financing. Some of the measures proposed here would include payroll cleansing, staff rationalization and streamlining expenditures to county priorities. Budget Framework 2016/17 77. The 2016/17 budget framework is built around the fiscal and medium term framework set out above. Stability in macroeconomic variable such as interest rates, inflation and unemployment in the global and the local economy is set to accelerate recovery and simulate growth at the county economy. The projected growth assumes normal weather pattern during the year. At national level, inflation is expected to remain low and stable, reflecting continued implementation of a prudent monetary policy and stable food and oil prices, as well as stable exchange rates. All these macroeconomic parameters have adverse ripple effects to the county economy. 78. Locally generated revenue is projected to grow at the rate of 5% over the medium term from Kshs 668.6m in 2016/17 to 737.1m in 2018/19. This is in line with the county plan to improve revenue collection to tame the risks associated with delay in funds disbursement, as experienced by most the county during the months July and August before funds are released from National Treasury. However, this own revenue will still not be able to cushion the county from cash flow problems associated with delay in funds release and other measures need to be identified to strengthen revenue based of the county (own revenue still too low at less than 7% of the total budget). The revenue projection for the financial years 2016/17 – 2018/19 are provided in the table 7 below. Table 7: Revenue projections 2016/17 – 2018/19 Revenue Revenue Estimates Estimates Projected Revenue (Kshs) Source 2015/16 2016/17 S/No (Kshs) (Kshs) 2017/18 2018/19 1 Equitable share 7,267,273,063 7,841,480,359 8,625,628,395 9,488,191,234 2 Grants - - - Free Maternal Healthcare 63,610,400 54,367,434 59,804,177 65,784,595 Compensation for User Fees Forgone 23,606,211 23,144,997 25,459,497 28,005,446 Road Maintenance Fuel Levy 92,318,534 120,484,293 132,532,722 145,785,995 Kitui County Budget Review and Outlook Paper, 2016 22 Revenue Revenue Estimates Estimates Projected Revenue (Kshs) Source 2015/16 2016/17 S/No (Kshs) (Kshs) 2017/18 2018/19 Grants from UNDP 20,000,000 - - - Grants from World Bank (KDSP) - 34,721,395 38,193,535 42,012,888 HSSP/HSPS - (DANIDA/IDA) 83,985,266 150,020,244 165,022,268 181,524,495 Subtotal 283,520,411 382,738,363 421,012,199 463,113,419 7,550,793,474 8,224,218,722 9,046,640,594 9,951,304,654 3 Own Revenue - - County Ministries/Entity - - Office of the Governor 135,099,731 141,854,717 148,947,453 Ministry of Administration and Coordination 128,666,410 - - - Ministry of Agriculture water and Irrigation 26,000,000 27,300,000 28,665,000 30,098,250 Ministry of Basic Education and Skills Development Ministry of Land Infrastructure and Urban Development 57,243,581 60,105,760 63,111,048 66,266,600 Ministry of Health and Sanitation 131,000,000 167,550,000 175,927,500 184,723,875 Ministry of Trade, Industry IT and Cooperative Development 1,000,000 1,050,000 1,102,500 1,157,625 Ministry of Culture, Youth, Sports &Social Services 1,000,000 1,050,000 1,102,500 1,157,625 Ministry of Environment, Energy and Minerals Investment Development 1,000,000 1,050,000 1,102,500 1,157,625 Ministry of Tourism and Natural Resources 200,000 210,000 220,500 231,525 Ministry of Finance & Economic Planning 123,661,974 129,845,073 136,337,326.34 143,154,192.65 Kitui Town Administration 97,111,415 101,966,986 107,065,335.04 112,418,601.79 Mwingi Town Administration 41,316,620 43,382,451 45,551,573.55 47,829,152.23 Subtotal 608,200,000 668,610,000 702,040,500 737,142,525 TOTAL 8,158,993,474 8,892,828,722 9,748,681,094 10,688,447,179 Table 8: MTEF Projections for 2016/17 – 2018/19 Revised 2016/17 Projections 8% No. Sector/County Ministry 2015/16 Estimates 2017/18 2018/19 SUB-TOTAL 1,615,735,063 1,195,961,884 1,300,564,551 1,414,487,120 1 Office of the Governor Rec. Gross 427,082,014 544,812,880 597,323,627 654,986,922 Dev. Gross 1,188,653,049 651,149,004 703,240,924 759,500,198 SUB-TOTAL 597,650,587 605,100,024 661,617,465 723,520,956 Ministry of Administration and 2 Rec. Gross 361,066,989 494,988,517 542,697,038 595,086,895 Coordination Affairs Dev. Gross 236,583,598 110,111,507 118,920,428 128,434,062 SUB-TOTAL 1,246,411,728 984,282,849 1,070,002,772 1,163,324,230 3 Ministry of Agriculture, Water & Irrigation Rec. Gross 388,334,484 425,884,044 466,932,062 512,007,863 Dev. Gross 858,077,244 558,398,805 603,070,709 651,316,366 SUB-TOTAL 597,208,833 685,715,542 746,807,624 813,451,850 Ministry of Basic Education, Skills & 4 Rec. Gross 360,754,193 380,565,542 417,245,624 457,524,890 Development Dev. Gross 236,454,640 305,150,000 329,562,000 355,926,960 SUB-TOTAL 977,403,725 664,948,447 722,581,794 785,298,946 Ministry of Lands, Infrastructure & Urban 5 Rec. Gross 242,378,674 270,856,858 296,962,878 325,630,517 Development Dev. Gross 735,025,051 394,091,589 425,618,916 459,668,429 SUB-TOTAL 2,337,522,850 2,118,164,478 2,315,575,678 2,531,760,748 6 Ministry of Health & Sanitation Rec. Gross 1,602,768,824 1,706,518,598 1,870,998,128 2,051,616,994 Dev. Gross 734,754,026 411,645,880 444,577,550 480,143,754 SUB-TOTAL 354,235,276 217,637,247 236,285,141 256,556,749 Ministry of Trade, Industry, IT & Co- 7 Rec. Gross 59,009,654 75,499,433 82,776,301 90,767,203 operatives Dev. Gross 295,225,622 142,137,814 153,508,839 165,789,546 SUB-TOTAL 262,391,401 209,513,294 227,359,608 246,749,339 Ministry of Culture, Youth, Sports & Social 8 Rec. Gross 55,444,901 66,242,103 72,626,721 79,637,822 Services Dev. Gross 206,946,500 143,271,191 154,732,886 167,111,517 SUB-TOTAL 295,077,134 238,661,298 258,494,338 279,992,936 Ministry of Environment, Energy & Mineral 9 Rec. Gross 33,148,510 45,176,824 49,531,106 54,312,646 Resources Dev. Gross 261,928,624 193,484,474 208,963,232 225,680,290 Kitui County Budget Review and Outlook Paper, 2016 23 Revised 2016/17 Projections 8% No. Sector/County Ministry 2015/16 Estimates 2017/18 2018/19 SUB-TOTAL 121,795,419 118,057,179 128,455,501 139,787,381 10 Ministry of Natural Resources & Tourism Rec. Gross 42,121,614 58,215,419 63,826,401 69,987,953 Dev. Gross 79,673,805 59,841,760 64,629,101 69,799,429 SUB-TOTAL 311,657,261 567,600,457 621,220,379 680,005,471 11 Ministry of Finance & Economic Planning Rec. Gross 247,630,866 501,241,637 549,552,853 602,604,543 Dev. Gross 64,026,394 66,358,820 71,667,526 77,400,928 SUB-TOTAL 58,921,145 64,707,602 70,944,320 77,793,009 12 County Public Service Board Rec. Gross 58,921,145 64,707,602 70,944,320 77,793,009 Dev. Gross - - SUB-TOTAL 882,650,793 884,130,694 966,806,561 1,057,370,154 13 County Assembly Rec. Gross 703,088,381 729,130,694 799,406,561 876,578,154 Dev. Gross 179,562,412 155,000,000 167,400,000 180,792,000 SUB-TOTAL 291,852,827 229,629,187 249,444,905 270,999,993 14 Kitui Town Administration Rec. Gross 70,629,691 88,224,145 96,727,460 106,065,152 Dev. Gross 221,223,136 141,405,042 152,717,445 164,934,841 SUB-TOTAL 163,835,323 108,718,541 118,391,467 128,942,231 15 Mwingi Town Administration Rec. Gross 39,382,251 59,539,588 65,278,197 71,579,900 Dev. Gross 124,453,072 49,178,953 53,113,269 57,362,331 TOTAL 10,114,349,365 8,892,828,722 9,694,552,103 10,570,041,113 TOTALS Rec. Gross 4,691,762,193 5,511,603,883 6,042,829,277 6,626,180,461 Dev. Gross 5,422,587,172 3,381,224,839 3,651,722,826 3,943,860,652 Kitui County Budget Review and Outlook Paper, 2016 24 V. CONCLUSION AND WAY FORWARD 79. The FY 2016/17-2018/19 MTEF presented in this CBROP is prepared taking into account the challenges facing the county and the national economy as a whole. It is therefore marked by moderate growth in revenue projections and the need to contain expenditure to maintain fiscal discipline adhered to in the last three financial years. The policies therefore are consistent with fiscal responsibilities outlined in the PFM law. 80. In relation to resource allocations, funds should be allocated to sector projects that result in “quick-wins” and widespread impacts. Such projects/program are cost effective in nature and take shorter time to implement. This does not really amount to any policy shift, but program rationalisation to ensure maximum benefit with least resource allocation. 81. Going forward, the policies outlined in this CBROP are expected to ensure continuity in resource allocation based on prioritised programs that have earmarked by the county government to accelerate growth, create employment and reduce poverty. 82. The policies will be reiterated by the next County Fiscal Strategy Paper, which will released before December this years (in line with shortened budget calendar for 2017/18). Kitui County Budget Review and Outlook Paper, 2016 25 ANNEXTURES I. EXPENDITURE ANALYSIS BY PROJECT/PROGRAMME 3711: Office of the Governor Budget (2015- Absorption Explanation for the level of Absorption Measure to Safeguard against S/No. Development Expenditure 2016) Rate such risk in the future Residential 12,000,000 11,873,802 99%  Sound controls  The County Government was Buildings advised by controller of budget 1. (including hostels)- not to continue implementing Governor's such capital intensive projects. residence Non-Residential 61,741,772 41,509,284 67%  The contractor for the County  The variation order request from Buildings (offices, Administration block was paid more than the contractor will be reviewed schools, hospitals, 90% of the contract money but works not and decision made if the award 2. etc.)-county HQ completed. A variation order was the variation in line with the law. requested due to unanticipated extra works during the construction of the project Other 813,975,625 737,996,084 91%  The tendering process was relatively  For 2016/2017 FY tendering Infrastructure and timely as compared to other financial process for CLIDP is expected to Civil Works-CLIDP years. Nonetheless, challenges on project be compelled early and LSO issued 3. implementation were observed by some by 30th November. The aim is to contractors failing to begin works early give contract at least 6 months to hence affecting absorption rate. start and complete projects so as to be paid by 30th June. Purchase of Police 2,042,000 2,042,000 100%  The absorption rate was as anticipated  For FY 2016/2017 this 4. and Security with the funds being used for the development budget line will not Equipment - CCTV intended purpose be available. Purchase of ICT 4,287,643 1,921,850 45%  Purchase of ICT equipment’s was done  Upon completion of the County networking and and slight networking in governor’s office. Administration Block, networking Communications  Much of the funds was meant to network of the building shall be done. 5. Equipment the new unfinished county administration (Establish and block hence the observed absorption rate. Equip a County Functions and Kitui County Budget Review and Outlook Paper, 2016 26 Protocol Office) Advertising, 8,500,000 6,520,623 77%  Funds meant for to advertise projects in  For FY 2016/2017 tendering Awareness and newsprint and publishing of County process for county magazine will Publicity magazine be done in time to avoid delays 6. Campaigns  Delayed tendering process for the publishing of the County magazine attributed to the observed absorption rate. Printing, 4,500,000 4,144,680 92%  Sound controls in printing communication  Enhanced image of the County 7. Advertising - Other and branding materials. (County Branding) Integrity Assurance 3,274,363 2,225,921 68%  Funds used in performance contracting  For FY 2016/2017 performance Programme but not entirely due to delayed cascading contracting will be done timely by 8. (Human Resource of performance contracting caused by late end of September 2016 Reforms) signing of performance contracts in December 2015 Pre-feasibility, 50,000,000 48,936,572 98%  Sound controls in organizing for an  Improved investments in the feasibility & Investors Conference County 9. appraisal studies (investors conference) Engineering and 20,000,000 770,220 4%  Funds meant to pay engineering designs  The funds will be revoted for Design Plans for County Headquarters since the FY2016/2017 for to pay the 10. consultant sued the County for a higher consultant once case is amount determined Research (UNDP 20,000,000 19,880,501 99%  Sound controls in capacity building  Enhanced service delivery 11. programme) county staff and preparation of policy documents. Research 25,000,000 24,932,784 100%  Sound controls  Enhanced service delivery and 12. Allowance evidence based decision making Scholarships and 163,331,646 158,101,145 97%  Improved awards to beneficiaries Sounds controls to continue being other Educational in place to enhance education 13. Benefits (Pro-Poor sector in the County Programme) Total 1,025,321,403 1,060,855,466 Development 1,188,653,049 Kitui County Budget Review and Outlook Paper, 2016 27 3712: Ministry of Adiministration and Coordination of County Affairs S/No PROJECT/PROGR Budget 2014/15 EXPENDITU Absorptio Explanation for the level of absorption Measure to safeguard against such a AMME NAME FY RE (Kshs.) n (%) risk 1. Construction of Ward 129,485,585 54,699,274 42.2% Some of the Ward offices were not tendered in Acquisition of land required to be done Administrators the initial tender. It took the department before tender advert. Offices and Land sometime to do restricted tendering which is acquisition still going on. Community, local leaders and a) Some contractors defaulted politicians to be sensitized on the b) Delay in processing payments projects before the advert. of tenders on c) For the land acquisition most pieces of land acquisition is done. land had issues on transfer and title deed acquisition. Promote community participation and d) Exorbitant prices quoted for sale of land ownership of the projects before and by those interested. after initiation. e) Political interference by some politicians 2. Installation of water 70,075,439 32,154,714 45.9% Most of the ward offices are incomplete for the tanks, external toilet installation of water tanks and other facilities to and fencing of ward be done. offices 3. Emergency 12,542,024 12,492,024 99% 4. Acquisition of land 19,480,550 19,480,550 100% 5. Performance 5,000,000 4,999,997 100% Total 236,583,598 123,826,559 3713: Agriculture, Water and Irrigation 1. Department of Agriculture S/No. Project/Programme Budget 2015/16 Expenditure Absorptio Explanation for the level of absorption Measure to safeguard against such Name FY (Kshs.) (Kshs) n (%) risks in future 1. Agricultural 21,192,692 18,406,018 87 Delay in raising requisition for funding of Timely requisition for funding of extension and activities activities Training Kitui County Budget Review and Outlook Paper, 2016 28 2. Kitui Agricultural 24,673,625 16,383250 66 Delay in procurement process partly caused by Timely requisition and close monitor of Show and trade fair delayed release of funds the procurement process 3. Procurement/ 6,279,096 6,025,916 96 Timely procurement plan and follow up Acquisition of Motor Cycles 4. Establishing Fruit 96,000 82,600 86 Delay in raising requisition for funding of Timely requisition for funding of tree Nursery at ATC activities activities and close monitor of procurement process 5. Equipping new 998,735 998,735 99.9 Timely procurement plan and follow up kitchen at the ATC 6. Equipping conference 2,494,880 2,494,880 99.8 Timely procurement plan and follow up facilities at the ATC 7. Erecting perimeter 2,855,025 2,836,564 99.3 Correctness of BQ that guided on the correct Fence ATC farm estimate 8. Laying of irrigation 2,000,000 1,948,000 97.4 Correctness of BQ that guided on the correct system at the ATC estimate farm 9. Kitchen gardening for 15,698,216 15,698,216 100 Timely procurement plan and follow up malnutrition and poverty reduction 10. Sorghum production 1,045,196 1,045,196 100 Use of prequalified supplier (KALRO promotion and KATUMANI) utilization 11. Promotion of fruit 2,325,000 2,281,660 98 Timely procurement plan and follow up tree nursery establishment and management 12. On-farm ponds 6,482,844 5,391,644 83 Delay caused by Timely requisition for funding of activities and close monitor of procurement process 13. Perimeter masonry 4,500,000 4,440,660 99 Timely procurement plan and follow up wall Fencing with Gate of AMS Compound 14. Furnish the new 2,000,000 1,937,350 97 Timely procurement plan and follow up office complex at AMS Kitui County Budget Review and Outlook Paper, 2016 29 15. Purchase of 18,481,954 18,481,954 100 Timely procurement plan and follow up agricultural Machinery (wheel loader) 16. Completion of stalled 11,789,496 11,789,496 100 Timely procurement plan and follow up of office blocks 17. Irrigation 2,017,808 888,850 44 Delay in releasing of funds Timely requisition for funding of activities and close monitor of procurement process Sub total 124,930,567 111,130,989 89 2. Department of Livestock Development & Fisheries S/No Project/ Programme Budget 2015/16 Expenditure Absorptio Explanation for the level of absorption Measure to safeguard against such Name n (%) risks in future FISHERIES 1 Funds for buying 2,100,000 2,068,800 98.5 Timely procurement plan and follow up fishing gear and pond liners 2 Funds for 4,914,604 4,864,400 99 Timely procurement plan and follow up construction/rehabilit ating fish ponds 3 Funds for 7,943,460 7,770,020 97.8 Timely procurement plan and follow up procurement of fingerlings for fish ponds and dams 4 Funds for feasibility 700,000 651,568 93 Timely procurement plan and follow up study Sub Total 15,658,064 15,354,788 LIVESTOCK DEVELOPMENT 1. Local Goat Breed 3,500,000 3,300,000 94.29 Timely procurement plan and follow up Improvement 2. Local Poultry Breed 3,362,700 3,362,700 100 Timely procurement plan and follow up Improvement Kitui County Budget Review and Outlook Paper, 2016 30 3. Beekeeping and 9,782,000 3,330,100 33.74 Delay in procurement process partly caused by Release funds on time and initiate Honey Production delayed release of funds procurement early 4. Pasture production 3,209,811 1,623,000 50.56 Delay in procurement process partly caused by Release funds on time and initiate and conservation delayed release of funds procurement early 6. Dairy improvement 3,275,850 2,000,000 61.05 Delay in procurement process partly caused by Release funds on time and initiate through Artificial delayed release of funds procurement early Insemination 7 Purchase of Vaccines 2,850,000 2,400,000 84.21 Timely procurement plan and follow up 8. Rehabilitation of 12,899,882 6,900,000 53.49 Delay in procurement process partly caused by Release funds on time and initiate dips delayed release of funds procurement early 9. Purchase of assorted 14,134,100 8,600,916 60.85 Delay in procurement process partly caused by Release funds on time and initiate veterinary supplies delayed release of funds procurement early and materials 10. Funds for conducting 2,418,000 425,420 17.6 Caused by delayed release of funds Release funds on time feasibility studies Total 31,942,136 55,432,343 3. DEPARTMENT WATER S/No Project Name Budget FY Expenditure Absorption Explanation for level of absorption Measure to safeguard against such 2015/2016 (Kshs) (%) risks in future (Kshs) 1. Sub surface Sand 17,456,783.36 0.00 0 Feasibility study of 2400 SSD priority then Pre-Surveys of Several SSDs Dams (Ming’eeto) implementation deferred to 2016-17 FY 2. Drilling and 227,000,000.00 158,663780 70 Funds balance was spent on pipeline extensions Priority to equip drilled boreholes Equipping of & WSPs Boreholes 3. Construction/desilting 80,000,000 79,440,816 99 Funds balance was spent on pipeline extensions - of earth dams Kitui County Budget Review and Outlook Paper, 2016 31 4. Equipping B/holes 27,432,372.64 27,001,679 98 Funds balance was spent on pipeline extensions - (2014/2015 drilled boreholes) 5. Athi- Kanyangi- 199,000,000 191,019,714 96 The 4% balance was spent on WSP’s subsidies - Mutomo water Projects 6. Construction/Extensio 22,897,077 89,485,725 390 Extra funds obtained from other projects as Pre- surveys n of pipelines indicated above 7. Borehole & pipeline 12,000,000 12,293,765 103 repairs/rehabilitation 8. Subsidies to WSPs 72,153,612 109,166,923 151 Extra funds obtained from other projects as Monitoring on the performance of indicated above WSPs 9. Office refurbishment 1,000,000 970,000,00 97 Amount tendered as per estimated works - 10. Irrigation 25,000,000 25,000,000 100 Development Sub total 683,939,845 668,042,404 98 Total 3714: Basic Education Training and skills Development S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against (2015-2016) such risk in the future 1. ECDE classrooms 57,140,388 24,101,286.56 42.17% There was a revote  Procurement should be done early. Kitui County Budget Review and Outlook Paper, 2016 32 S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against (2015-2016) such risk in the future 2. Beds and mattresses 10,000,000 9,450,685 84.5%  Some contractors had not finished within  The contracts should be spread to the budget cycle many contractors. 3. ECDE desks 10,000,000 7,651,165 76.5%  Some contractors had not completed within  Contracts to be split to many the budget year contractors 4. Outdoor play 10,000,000 - -  The equipment was not bought that year  Equipment has been budgeted for equipment in 2016/17 5. Support for primary 77,196,565 57,310,625.10 74.23%  Some activities were not conducted  Activities that were not done in and secondary the year to be expunged from the academic subsequent years. performance ( exams, mentorship, benchmarking) 6. Workshop tools 15,272,965 8,142,924 53.3%  Some tools have not been procured  A more accurate B.O.Q to be done in the subsequent years. 7. Refurbishment of 27,877,274 13,154,199 47.18%  Some contractors did not finish within the  Strict supervision to be done, with polytechnics budget year. strict time lines. Construction of new 25,810,130 15,725,790.97 60.9%  There was variation in the bill of quantities  Accurate B.O.Q to be done in polytechnics which led to delays future Total 233,297,322 94,333,539.07   3715: MINISTRY OF LANDS, INFRASTRUCTURE & URBAN DEVELOPMENT Project/ Budget FY Absorption Explanation for the level of Measure to safeguard against No Expenditure Program Name 2015/2016 (%) absorption such risks in future Kitui County Budget Review and Outlook Paper, 2016 33 Land Policy and 120% Full utilization P2 63,415,000 76,029,446 Planning Department of a Survey and Mapping Non-Residential Buildings (offices, 7,000,000 6,951,840 schools, hospitals, etc.) Pre-feasibility, Feasibility and 6,000,000 5,988,035 Appraisal Studies Engineering and 2,600,000 2,600,000 Design Plans Department of b Land Adjudication & Settlement Non-Residential Buildings (offices, 17,805,000 17,805,000 schools, hospitals, etc..) Other Infrastructure and 2,000,000 1,999,998 Civil Works Purchase of 60,000 375,775 Computers, Printers and other Kitui County Budget Review and Outlook Paper, 2016 34 IT Equipment Purchase of Survey 5,000,000 5,000,000 Equipment Acquisition of Land 13,500,000 13,183,291 Non-Residential Buildings 1,000,000 - (Maintenance) Department of c Physical Planning Purchase of Computers, 4,100,000 11,597,270 Printers and other IT Equipment Purchase of 1,350,000 4,489,850 Software Pre-feasibility, Feasibility and 3,000,000 6,038,387 Appraisal Studies Housing 90% Project spans more than One financial year Starting the procurement process Development & and it took some time for the project to go for building works within the first P3 & Human through tendering process quarter of the financial year. 21,850,000 19,621,459 P4 Settlement and Government Buildings Kitui County Budget Review and Outlook Paper, 2016 35 Department of a Public works Non-Residential Buildings (offices, 15,000,000 12,190,360 schools, hospitals, etc.) Department of b Housing Non-Residential Buildings (offices, 4,850,000 4,817,591.00 schools, hospitals, etc.) Refurbishment of Residential 2,000,000 1,956,808.00 Buildings Other Infrastructure and - 656,700.00 Civil Works Department of 105% Additional graders were purchased within Building capacity among Roads & Allied the financial year which contributed to the contractors Infrastructure implementation of the programs as planned P5 (See attached for 649,760,051 684,954,370 and exceeded the Major, Access roads & Streetlights) Purchase of 6,000,000 11,390,827 Workshop Tools, Kitui County Budget Review and Outlook Paper, 2016 36 Spares and Small Equipment Maintenance of Roads, Ports and 3,500,000 92,173,450 Jetties Non-Residential Buildings (offices, 24,500,000 19,128,993 schools, hospitals, etc..) Major Roads 12,546,761 Access Roads 237,231,753 202,229,034 Construction of 23,500,000 24,474,542 Roads - Other Other Infrastructure and 150,500,000 129,286,526 Civil Works Other Infrastructure and 26,728,298 14,311,122 Civil Works Purchase of Motor - 1,745,858 Vehicles Purchase of Office Furniture and 7,500,000 5,948,100 Fittings Purchase of 2,500,000 2,682,180.00 Kitui County Budget Review and Outlook Paper, 2016 37 Software Purchase of 163,300,000 161,039,256.00 Graders Purchase of 4,500,000 7,997,721.00 Specialised Plant. - GRAND TOTAL 735,025,051 780,605,275 106% 3716: HEALTH AND SANITATION S/N Project/ Budget Expenditure Absorption Explanation For Level of Absorption Measure To Safeguard Against O Programme Name 2015/2016 (Kshs) (%) Such Risk In Future (Kshs) 1. Completion of OPD 30,533,745.0 0 0 -Delayed project documentation (It takes - Procurement plan Wards in Kitui 0 more than a month to come up with BoQ) Hospitals -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 2. Completion of OPD 29,416,911.0 0 0 -Delayed project documentation (It takes - Procurement plan Wards in Mwingi 0 more than a month to come up with BoQ) Hospitals -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ Kitui County Budget Review and Outlook Paper, 2016 38 -Lack of projects implementation plan M&E -Develop projects implementation plan 3. Purchase of Medical 10,000,000.0 0 0 Delay incompletion of construction of the Fast track the completion of and Dental 0 OPD to pave way forth equipping construction of the OPD Equipment(Equippi ng of OPD in Kitui Hospitals) 4. Purchase of Medical 10,000,000.0 0 0 Delay incompletion of construction of the Fast track the completion of and Dental 0 OPD to pave way forth equipping construction of the OPD Equipment (Equippi ng of OPD in Mwingi Hospitals) 5. Purchase of Medical 16,000,000.0 0 0 -Delayed project documentation (It takes - Procurement plan and Dental 0 more than a month to come up with BoQ) Equipment(Refurbis -Early project documentation hment and -Weak project supervision/ M&E -Continuous project supervision/ equipping Kitui level -Lack of projects implementation plan M&E IV amenity ward) -Develop projects implementation plan 6. Purchase of Medical 22,043,344.0 0 0 -Delayed project documentation (It takes - Procurement plan and Dental 0 more than a month to come up with BoQ) Equipment -Early project documentation (Completion and -Weak project supervision/ M&E -Continuous project supervision/ equipping of Mwingi -Lack of projects implementation plan M&E level IV hospital surgical and amenity -Develop projects implementation ward) plan Kitui County Budget Review and Outlook Paper, 2016 39 7. Purchase of Medical 25,000,000.0 0 0 -Delayed project documentation (It takes - Procurement plan and Dental 0 more than a month to come up with BoQ) Equipment -Early project documentation (Completion of -Weak project supervision/ M&E -Continuous project supervision/ roofing and -Lack of projects implementation plan M&E refurbishment of Kitui Level IV -Develop projects implementation hospitals) plan 8. Purchase of Medical 3,000,000.00 0 0 -Delayed project documentation (It takes - Procurement plan and Dental more than a month to come up with BoQ) Equipment -Early project documentation (Refurbishment and -Weak project supervision/ M&E -Continuous project supervision/ equipping of -Lack of projects implementation plan M&E Maintenance units at Kitui and Mwingi -Develop projects implementation Level IV Hospitals) plan 9. Purchase of Medical 5,000,000.00 0 0 -Delayed project documentation (It takes - Procurement plan and Dental more than a month to come up with BoQ) Equipment -Early project documentation (Refurbishment and -Weak project supervision/ M&E -Continuous project supervision/ equipping of eye -Lack of projects implementation plan M&E unit and ENT unit at Kitui and Mwingi -Develop projects implementation LIV Hospitals) plan 10. Purchase of Medical 5,000,000.00 0 0 -Delayed project documentation (It takes - Procurement plan and Dental more than a month to come up with BoQ) Equipment -Early project documentation (Refurbishment and -Weak project supervision/ M&E -Continuous project supervision/ equipping of MCH -Lack of projects implementation plan M&E and CCC at Mwingi -Develop projects implementation Kitui County Budget Review and Outlook Paper, 2016 40 Hospital) plan 11. Expansion of Kauwi 4,000,000.00 4,000,000.00 100.00 Hospital 12. Expansion of Ikanga 4,000,000.00 0 0 -Delayed project documentation (It takes - Procurement plan Hospital more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 13. Expansion of Nuu 4,000,000.00 1,083,710.00 27.09 -Delayed project documentation (It takes - Procurement plan Hospital more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 14. Expansion of 4,000,000.00 4,000,000.00 100.00 Katulani Hospitals 15. Completion & 7,036,278.00 0 0 -Delayed project documentation (It takes - Procurement plan Renovation of more than a month to come up with BoQ) Dispensaries/ -Early project documentation Health centres -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E Kitui County Budget Review and Outlook Paper, 2016 41 -Develop projects implementation plan 16. Purchase of Medical 85,932,035.0 0 0 Delay incompletion of construction of the Fast track the completion of and Dental 0 theatres and maternity wards to pave way construction of the theatres and Equipment for forth equipping maternity wards Theatres, Maternities and Wards 17. Purchase of 32,000,000.0 0 0 Delay incompletion of construction of the Fast track the completion of Laboratory 0 theatres and maternity wards to pave way construction of the theatres and Equipment for forth equipping maternity wards Theatres, Maternities and Wards 18. Construction of 2,255,643.00 2,255,643.00 100.00 CHMT car park 19. Construction of 24 9,451,151.00 9,451,151.00 100.00 body mortuary at Mutomo 20. Refurbishment of 141,668.00 141,668.00 100.00 records department building in Mwingi level 4 hospital 21. Alteration of mg6 to 502,650.00 502,650.00 100.00 office block at KMTC Mwingi 22. Construction of 20,000.00 20,000.00 100.00 walkway at KMTC Kitui County Budget Review and Outlook Paper, 2016 42 Mwingi 23. External water 58,000.00 58,000.00 100.00 reticulation at Mwingi KMTC 24. Amenity ward Kitui 16,557,942.3 1,587,832.84 9.59 -Delayed project documentation (It takes - Procurement plan district hospital 6 more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 25. Construction of 160,005.00 160,005.00 100.00 modern gate at Kitui district hospital 26. Re-roofing and 1,304,140.00 1,304,140.00 100.00 repainting of various buildings at Kitui district hospital 27. Construction of 9,006,390.00 0 0 -Delayed project documentation (It takes - Procurement plan Kanyangi maternity more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan Kitui County Budget Review and Outlook Paper, 2016 43 28. Construction of OPD 47,550,877.0 47,550,877.0 100.00 Mwingi 0 0 29. Construction of 29,555,220.0 29,555,220.0 100.00 amenity and surgical 0 0 ward at Mwingi 30. Extension of 4,175,203.00 4,175,203.00 100.00 laboratory at Mwingi district hospital 31. Mutitu hospital 6,050,790.00 6,050,790.00 100.00 renovations 32. Renovation of Lundi 8,080.10 8,080.10 100.00 dispensary 33. Renovation of 1,341,020.00 1,005,764.70 75.00 -Delayed project documentation (It takes - Procurement plan Mathyakani more than a month to come up with BoQ) dispensary -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 34. Construction of staff 847,215.00 847,215.00 100.00 house Katalwa dispensary 35. Renovation to 1,133,965.00 1,133,965.00 100.00 Thaana nzau 36. Mutomo mortuary 4,103,384.00 2,860,204.00 69.70 Delay in importation of the specialised Fast track the procurement of the Kitui County Budget Review and Outlook Paper, 2016 44 cold rooms mortuary equipment equipment so that they can be installed within the required timeframe 37. Construction of 373,310.00 373,310.00 100.00 CHMT gate 38. Refurbishment of 151,180.00 151,180.00 100.00 office toilet at CHMT 39. Construction of main 4,908,339.00 3,402,118.86 69.31 -Delayed project documentation (It takes - Procurement plan theatre Ikutha more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 40. Construction of OPD 19,293,307.0 18,204,739.5 94.36 -Delayed project documentation (It takes - Procurement plan Ikutha 0 7 more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 41. Construction of 15,042,355.0 15,042,355.0 100.00 -Delayed project documentation (It takes - Procurement plan maternity Iikutha 0 0 more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E Kitui County Budget Review and Outlook Paper, 2016 45 -Develop projects implementation plan 42. Chain link Fence at 2,783,500.00 0 0 -Delayed project documentation (It takes - Procurement plan Ikutha more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 43. Construction of 24 7,543,500.00 7,543,500.00 100.00 Body Mortuary at Mutitu 44. Renovation of Kyuso 1,289,992.00 0 0 -Delayed project documentation (It takes - Procurement plan Ward more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 45. Migwani Hospital 932,800.00 932,800.00 100.00 Renovations 46. Expansion of Kauma 35,217.60 35,217.60 100.00 Dispensary 47. Mutitu Mortuary 2,057,223.00 2,057,223.00 100.00 Cold rooms Kitui County Budget Review and Outlook Paper, 2016 46 48. Mechanical Works 521,512.00 521,512.00 100.00 At KMTC 49. Construction of 373,854.00 373,854.00 100.00 Mordern Gate at Mwingi District Hospital 50. Construction Of Two 36,800.00 36,800.00 100.00 Door Pit Latrine at KMTC Mwingi 51. Installation Of 98,460.00 98,460.00 100.00 3no.10,000 Litres Plastic Water Tanks at KMTC 52. Alteration To House 170,419.00 170,419.00 100.00 HG2 to Skills Laboratory and Library at KMTC 53. Alterations To 870,409.00 870,409.00 100.00 House Hg5 To 3no.Classrooms At KMTC 54. Curtains And 3,515,995.00 3,515,995.00 100.00 Partitions Of Amenity Ward Kitui District Hospital 55. Extra Works- Re- 4,554,080.00 0 0 -Delayed project documentation (It takes - Procurement plan Roofing And more than a month to come up with BoQ) Repainting Of -Early project documentation Kitui County Budget Review and Outlook Paper, 2016 47 Various Buildings At -Weak project supervision/ M&E -Continuous project supervision/ Kitui District M&E Hospital -Lack of projects implementation plan -Develop projects implementation plan 56. Construction of OPD 30,000,000.0 22,415,195.8 74.72 -Delayed project documentation (It takes - Procurement plan At Kitui District 0 1 more than a month to come up with BoQ) Hospital -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 57. Renovation And 6,118,936.00 0 0 -Delayed project documentation (It takes - Procurement plan Equipping Of Kitui more than a month to come up with BoQ) District Hospital -Early project documentation High Dependency -Weak project supervision/ M&E -Continuous project supervision/ Unit -Lack of projects implementation plan M&E -Develop projects implementation plan 58. Construction Of 4,360,920.00 0 0 -Delayed project documentation (It takes - Procurement plan Zombe Maternity more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 59. Earth Works At 3,208,650.00 0 0 -Delayed project documentation (It takes - Procurement plan Kitui County Budget Review and Outlook Paper, 2016 48 Zombe Maternity more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ M&E -Lack of projects implementation plan -Develop projects implementation plan 60. Construction Of 7,522,368.00 2,408,879.20 32.02 -Delayed project documentation (It takes - Procurement plan Mutomo Maternity more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 61. Renovations Of 1,374,611.00 1,374,611.00 100.00 Tseikuru Wards, Maternity and Theatre 62. Construction of 1,801,990.00 1,801,990.00 100.00 Kisasi Health Centre Maternity 63. Expansion of 271,439.80 271,439.80 100.00 Kwamutonga Dispensary 64. Expansion of Ikutha 4,000,000.00 0 0 -Delayed project documentation (It takes - Procurement plan Health Centre more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ Kitui County Budget Review and Outlook Paper, 2016 49 -Lack of projects implementation plan M&E -Develop projects implementation plan 65. Computerization 5,000,000.00 3,500,000.00 70.00 -Weak project supervision/ M&E, due to the -Continuous project supervision/ Kitui And Mwingi nature of the project which required ICT M&E Hospitals expert to do supervision 66. Renovation of 1,082,659.00 1,082,659.00 100.00 Kalisasi Dispensary 67. Renovation of 1,099,334.00 1,099,334.00 100.00 Kilawa Dispensary 68. Renovation of Nuu 1,342,456.00 1,198,456.40 89.27 -Delayed project documentation (It takes - Procurement plan Dispensary more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 69. Renovation of 1,089,685.00 0 0 -Delayed project documentation (It takes - Procurement plan Kakeani Dispensary more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan Kitui County Budget Review and Outlook Paper, 2016 50 70. Electrical 616,329.00 0 0 -Delayed project documentation (It takes - Procurement plan Installation at more than a month to come up with BoQ) Kathome Dispensary -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 71. Renovations At 3,163,993.00 3,163,993.00 100.00 Kauwi Sub District Hospital 72. Renovation Of Mui 1,000,000.00 710,500.00 71.05 -Delayed project documentation (It takes - Procurement plan Dispensary more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 73. Refurbishment of 81,200.00 81,200.00 100.00 Office Block at Health Administration 74. Refurbishment of 233,090.00 233,090.00 100.00 Office Block at CHMT 75. Renovation of CEC 549,625.00 549,625.00 100.00 Office Kitui County Budget Review and Outlook Paper, 2016 51 76. Construction of 2,559,164.00 1,542,215.00 60.26 -Delayed project documentation (It takes - Procurement plan Storage Block At more than a month to come up with BoQ) Ikutha -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 77. Construction of 10,272,760.0 5,078,060.00 49.43 -Delayed project documentation (It takes - Procurement plan Paediatric Ward 0 more than a month to come up with BoQ) Ikutha -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 78. Installation of 4no. 690,200.00 0 0 -Delayed project documentation (It takes - Procurement plan 10,000 Litres Plastic more than a month to come up with BoQ) Water Tanks Ikutha -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 79. Construction Of 8,134,950.00 0 0 -Delayed project documentation (It takes - Procurement plan Radiology Room more than a month to come up with BoQ) Ikutha -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation Kitui County Budget Review and Outlook Paper, 2016 52 plan 80. Drainage Works at 2,092,487.00 0 0 -Delayed project documentation (It takes - Procurement plan Ikutha more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 81. Construction of 367,300.00 0 0 -Delayed project documentation (It takes - Procurement plan Incinerator at Ikutha more than a month to come up with BoQ) -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ -Lack of projects implementation plan M&E -Develop projects implementation plan 82. Construction of 2,478,754.00 0 0 - the project was not initially factored in the -Early and comprehensive project Power House and initial plan of the facility, hence delay in documentation Generator At Ikutha commencement -Continuous project supervision/ M&E -Develop projects implementation plan 83. Construction of CEC 4,459,187.00 4,244,210.00 95.18 -Delayed project documentation (It takes - Procurement plan Member-Health more than a month to come up with BoQ) Office -Early project documentation -Weak project supervision/ M&E -Continuous project supervision/ Kitui County Budget Review and Outlook Paper, 2016 53 -Lack of projects implementation plan M&E -Develop projects implementation plan 84. Purchase of a 3,000,000.00 0 0 -The funds were allocated through a -Comprehensive budgeting of generator supplementary budget, which came late in projects the year 85. DANIDA Funds 36,990,000.0 52.58 -Delay in receiving the funds at the County Prompt disbursement of the funds to 0 19,447,665.0 accounts facilities once received in the county 0 treasury 86. Word Bank (HSSF) 46,995,266.0 4,518,550.00 9.61 -Delay in receiving the funds at the County Prompt disbursement of the funds to 0 accounts facilities once received in the county treasury Total 687,695,262 245,803,684 Kitui County Budget Review and Outlook Paper, 2016 54 3717: MINISTRY OF TRADE, INDUSTRY, ICT AND CO-OPERATIVES S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against (2015-2016) such risk in the future 8. Construction of 124,603,474 124,595,982 100% Some contracts were taken up late Fast-track the award of the market sheds, contracts toilets market renovations and chain link livestock yard fence 9. Construction of 10,190,029.00 3,787,452.00 37% Suitable site identification for some took Map out the earmarked locations boda-boda sheds time in advance 10. C onstruction of 6,730,725.00 1,922,464.00 29% Submission of certificates of works done Contractors to be asked to speed public toilets delayed and were coming at the end of up completion of works so that the financial year they are not caught with end of financial rush 11. D omestic loans to 16,000,000 0 % The legal framework for the loan scheme The legal framework is being fast- financial had not been finalized tracked. The bill and regulations institutions has been submitted to Kenya Law Reform Commission for review 12. R efurbishment of 6,100,000 6,099,987.00 100% 100% buildings 13. C onstruction of 18,912,134.00 16,458,789.00 87% Contracts were awarded a bit late Fast-track the award of contracts ICT centres 14. O ther 23,930,606 23930,604 100% - infrastructure and civil works Kitui County Budget Review and Outlook Paper, 2016 55 S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against (2015-2016) such risk in the future 15. S upply of ICT 15,583,863.00 10,842,730.00 70% Some centres were not fully complete Fast-track the completion of the Equipment and to necessitate supply of equipment centres. furniture to the ICT centres 16. P urchase of 6,040,065.00 6,040,646.00 100% - specialized equipment 17. E quipping the 15,921,797.00 7,925,000.00 50 % Invoice for the second batch of delivery The contractor to submit invoice honey processing submitted late as he/she delivers the equipment factories 18. T raining of co- 3,000,000.00 2,999,930 99.9% - operators 19. T raining of 1,433,900.00 1,430,750 100% - traders 20. 248,446,593 206,034,334 3718: Ministry of Culture, Youth, sports and Social Services S/No. Project/Program Budget Expenditure Absorption Explanation for the level of absorption Measures to safeguard against name 2014/15 FY (Kshs) (%) such risks in future (Kshs) 1. Support Youth 7,000,000.00 6,659,650.00 95.1% Reproduction of CDs for mass distribution This will be done in October 2016 Development on was not done for the Kamba Signature by Permanent Presidential Music Talent song. Commission Kitui County Budget Review and Outlook Paper, 2016 56 2. Resource Centers- 30,000,000.00 19,038,742 67% Certificates were not presented by the The Ministry will work more closely Contractors. Much of the money is for with the LIUD department to ensure greening of the stadium which starts by certificates are produced on time October on the onset of rains and work schedules are adhered to 3. Sports Grounds 65,132,148.00 36,121,522 55.4% This was mostly caused by delays in the The Ministry will monitor more completion of sports grounds. Reasons for closely the pace of works and this ranged from contractors not adhering to request periodic site meetings. schedules to delays in processing of payments 4. Youth 48,330,021.00 48,330,021.00 100% Infrastructure Savings and Investment Program 5. Socio-economic 15,229,324.00 15,229,324.00 100% empowerment and gender activities 6. Development of 8,927,823.00 8,927,823.00 100% cultural program for performing groups in schools and Cultural day 7. Culture-Other 6,155,606.00 6,155,606.00 100% infrastructure 8. Purchase of 1,200,000.00 1,200,000.00 100% agricultural material 9. Purchase of 3,179,606.00 3,179,606.00 100% Certified crop seed 10. P urchase of 1,000,000.00 1,000,000.00 100% animal and breeding stocks Kitui County Budget Review and Outlook Paper, 2016 57 11. Children 2,400,000.00 2,400,000.00 100% 12. S upport for Sports 18,391,972.00 18,391,972.00 100% activities Total 206,946,500 166,634,266 3719: Ministry of Environment, Energy and Mineral Investment Development ENVIRONMENT DEPARTMENT COUNTY BUDGET REVIEW AND OUTLOOK PAPER 2016 (CBROP) Project / Measure to safeguard Programme Expenditure Absorption Explanation for the against such risks in Name Activity descriptions Budget 2015/16 FY (Kshs) (%) level of absorption future Establishment of 3 Department shall be community tree supporting community nurseries, support of empowerement throught County tree planting Tree seedlings and tree the support for the exercise, purchase nursery equipments were establishment of tree and distribution of procured at once and nurseries, community tree tree seedlings to distributed to the champions & Tree growing public schools 3,712,217.00 3,694,276.00 99.52 beneficiaries demonstration plots Purchase and distribution of 2,000 stems of dryland Tree seedlings and tree bamboo, payment of nursery equipments were Department shall procure Rehabilitation casuals for bush procured at once and targeted tree seedlings of Mumaki clearing, pitting & distributed to the early in order to ensure Ecosystem tree planting 2,384,627.00 2,374,593.00 99.58 beneficiaries high survival rate The department is working with development partners in Climate Activities were order to build community Change Support feasibility implemented as per the capacities to adapt and Adaptation and surveys and workplan and annual mitigate effects of climate Resilience consultative meetings 2,100,238.00 2,001,953.00 95.32 targets change in Kitui County Support World County, National & Activities shall continue Environmental Environment Day, International events were to be implemented as education International Day of 3,512,345.00 3,475,348.00 98.95 held as planned planned Kitui County Budget Review and Outlook Paper, 2016 58 Forest & show events Research survey on The department shall High Value and Multi continue working with Environmental - Purpose Trees and Activities were research institutions such Policies, Shrubs (HVMTS) implemented as per the as KEFRI, SEKU and also Research & data collection and workplan and annual communities shall be Development consultative meetings 1,582,426.00 1,572,368.00 99.36 targets involved The department shall continue working with national government security institutions such Support sensitization as National Police and public Activities were Service, other county Environmental participation implemented as per the departments and also Compliance & meetings, inspection workplan and annual communities shall be Enforcement patriols and arrests 2,381,364.00 2,374,583.00 99.72 targets involved Total 15,673,217.00 15,493,121.00 98.85 Kitui County Budget Review and Outlook Paper, 2016 59 3720: Ministry of Tourism and Natural Resources S/No Project Budget Expenditure Absorption Explanation For The Level Of Absorption Measure To Safeguard Against (2015-2016) Such Risk In The Future 21. P urchase of 711,500 0 0.00%  The prices quoted by the prequalified  Consultations have been Certified Seeds supplier were illogical hence the completed to have prequalified ministry managed to get seedlings suppliers quote logical prices donated by community groups and per seedlings akin to what other planted them in riverine ecosystem organizations like KFS quote 22. P re-feasibility, 3,703,330 0 0.00%  Delays in the procurement process  The ministry has resolved to Feasibility and always kick-start procurement Appraisal Studies process early in advance to avoid any complications that might hinder implementation of projects 23. R esearch 3,500,000 0 0.00%  Planned research work proved more  There will be more money costly than the budgeted amount allocated to facilitate such research 24. O ther Infrastructure 5,667,222 5,666,955 100.00%  N/A  N/A and Civil Works 25. O ther Infrastructure 14,000,000 14,000,000 100.00%  N/A  N/A and Civil Works 26. K enya School of 7,000,000 0 0.00%  The planned training at the Kenya  Individual officers have already Government School Of Government was overtaken indicated the courses related to by events because the ministry needed improving efficiency that they officers to be trained as a single batch, would take and this will facilitate early engagement with Kenya school of Government 27. E stablish snake park 12,975,000 12,975,000 100.00%  N/A  N/A at Mutomo Plant Hill Sanctuary Kitui County Budget Review and Outlook Paper, 2016 60 S/No Project Budget Expenditure Absorption Explanation For The Level Of Absorption Measure To Safeguard Against (2015-2016) Such Risk In The Future 28. P re-feasibility, 4,987,500 0 0.00%  Delays in the procurement process  The ministry has resolved to Feasibility and always kick-start procurement Appraisal Studies process early in advance to avoid any complications that might hinder implementation of projects 29. R esearch On 2,487,500 0 0.00%  This budget line was to undertake Research  Measures Have Been Instituted Tourism Circuit On Tourism Circuit Design And Marketing To Ensure This Work Is Design And Strategy in conjunction with KTB and their Contracted To Other Private Marketing Strategy consultancy process took longer than Tourism Marketing Experts In expected The Vent That KTB Does Not Respond Positively In Time 30. N zambani Eco- 879,835 0 0.00%  Land Tussle at Nzambani following the  The ministry has resolved to halt tourism Centre 99 year lease hindered any activity at the all activity at the rock until (climbing structure, rock revocation by the National Land nature trail) commission is done 31. U pgrades of access 3,838,560 1,737,314 45.26%  Only access roads were done in MNR  Plans have been made to ensure roads and open up but SKNR was suspended because of that SKNR projects are not new roads in MNR security issues and the slow pace at delayed anymore and SKNR which the community has embraced operationalization of SKNR 32. E stablishment of 1,987,500 0 0.00%  This idea of renovating a picnic site was  There are plans to advertise sites picnic site reversed because it was resolved that to investors who would then leasing it to a private investor wold be take them over the best for the county 33. C onstruction of 13,183,636 13,182,568 99.99%  N/A  N/A revenue gates at Kaningo and in south Kitui game reserve Kitui County Budget Review and Outlook Paper, 2016 61 S/No Project Budget Expenditure Absorption Explanation For The Level Of Absorption Measure To Safeguard Against (2015-2016) Such Risk In The Future 34. A cquisition of Land 3,760,000 1,240,000 32.98%  The money was budgeted to cater for  Prior consultations with owners two parcels of land but there arose in areas where land is to be complications regarding the second acquired as been set as a parcel prerequisite before budgeting is done 35. A kamba handicraft 992,222 0 0.00%  Land Tussle at Nzambani following the  The ministry has resolved to halt centre at Nzambani 99 year lease hindered any activity at the all activity at the rock until ecotourism centre rock revocation by the National Land commission is done 36. 79,673,805 48,801,837 63.75%   3721: Ministry of Finance & Economic Planning S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against (2015-2016) such risk in the future 37. C ounty Treasury 21,126,159 0 0  The design of the building was redone and  New design already out and hitch block BoQ revised to accommodate Supplies not expected to recur Chain Management. This meant the project never kicked off Operationalization 15,805,328 1,327,100 9% The assigning of this project to a cross- County ministry seeking greater of LAIFOMS in ministerial committee added to implementation control Mutomo and implementation red-tape. Tseikuru Ministry to kick off implementation early. Revenue Mapping 2,307,487 2,304,550 100% Project implemented Project successfully implemented Kitui County Budget Review and Outlook Paper, 2016 62 S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against (2015-2016) such risk in the future Integrating the 10,000,000 9,926,023 99% Project implemented Project successfully implemented Finance Act into LAIFOMS Execution of budget 14,787,419 14,496,172 98% Project implemented Project successfully implemented making 3723: County Assembly Service Board S/no Project Budget Expenditure Absorption Explanation for the level of Absorption Measure to Safeguard against such (2015-2016) risk in the future Non-Residential 147,648,897 150,105,543 102% Need to speed up completion as a result of Ensure adherence to set targets Buildings delay caused by court case (Construction of Chamber) Other Infrastructure 31,913,517 1,612,674 5% It has been difficult to identify suitable piece Continue with the search for land & Civil Works of land where the project can be undertaken 3724: Kitui Town Administration S/No. Project Budget Expenditure Absorption Explanation for the Level of Mitigation (2016/17) Kshs. Rate Absorption Kshs. Kshs. Kitui County Budget Review and Outlook Paper, 2016 63 1. Kitui-Ithookwe- 133,451,698.60 0 0%  Contractor is on site.  Contractor on site and instructed to Airstrip Road expedite in project management Upgrading to meeting. Bitumen Standards. 2. Street/Security 117,174,330.08 0 0%  Contractors on site and work is in  Contractor on sit and good Lighting progress. progress noted. 3. Town Road 60,300,707.92  BoQs and procurement approvals  Awarded and site handover been Grading and obtained, and now in the organised. Gravelling. procurement process. 4. Renovations of the 2,030,945.40 2,030,945.40 100%  In the payment process.  Site handed over and contractor Slaughter House instructed to move with speed. 5. Kalundu Market 4,703,238.00 0 100%  Contract and site handover  Site handed over and contractor Renovations planned for Friday this week. instructed to move with speed. 6. Renovations of 4,361,670.00 0 0%  Contract awarded and the  Site handed over and contractor Kitui Town contactor committed to start work instructed to move with speed. Administration by Monday next week. Block. 7. Purchase of 2 24,000,000 0 0%  One skip-loader is procured and  Skippers and skipper loader ready; Skipper-loaders and due for delivery in two weeks’ transportation for delivery being 20 Skippers. time, and the other is in the organised. Expected to be procurement process. delivered in a week’s time. 8. Street/security 4,000,000 2,000,000 50%  Some worth Ksh.2M already  Part of the gadgets delivered and lights maintenance delivered awaiting payment, while the rest under procurement. kit. the rest is in the procurement process. 350,022,590 4,030,945.4 1.15% 3725: Mwingi Town Administration S/No Project Budget Expenditur Absorptio Explanation for the level of Absorption Measure to Safeguard against such (2015-2016) e n risk in the future 1. Renovation and Contractor delayed submission of claim for Put more pressure on Contractors to Repair of Mwingi second instalment which was eventually submit their claims early enough 2,198,300.00 1,759,708 80% Slaughter House. locked out during yearend closeout process, plus 10% defects liability retention 2. Town beautification Contractor delayed submission of claim for Put more pressure on Contractors to Between 2000 and 3,525,137.60 2,850,655.60 81% second instalment which was eventually submit their claims early enough KCB Boulevard locked out during yearend closeout process, Kitui County Budget Review and Outlook Paper, 2016 64 S/No Project Budget Expenditur Absorptio Explanation for the level of Absorption Measure to Safeguard against such (2015-2016) e n risk in the future plus 10% defects liability retention 3. Drainage works at Contractor completed work ahead of Continue with proper management of Cabro-paved Old 2,105,991.66 2,105,991.66 100% schedule contracts. Kitui Stage 4. Improvement of Contractor delayed submission of claim for Put more pressure on Contractors to storm water second instalment which was eventually submit their claims early enough drainage system locked out during yearend closeout process, 3,494,946.70 2,755,899.74 79% RHS – Equity Bank plus 10% defects liability retention to Sunkar Hardware. 5. Construction of Contractor delayed submission of claim for Put more pressure on Contractors to 2No market sheds payment which was eventually locked out submit their claims early enough 2,483,766.00 0 0% in Mwingi town. during yearend closeout process, plus 10% defects liability retention 6. Construction of a Contractor delayed submission of claim for Put more pressure on Contractors to public toilet outside payment which was eventually locked out submit their claims early enough 2,674,664.00 0 0% Parkside Hotel. during yearend closeout process, plus 10% defects liability retention 7. Rerouting of street Unavailability of armored cable in the Diversify specification of the cable so lighting at Old 366,511.65 0 0% market. that it may be acquired from several Kitui stage. manufacturers. 8. Walkways at Old Contractor delayed submission of claim for Put more pressure on Contractors to Market payment which was eventually locked out submit their claims early enough 2,959,975.71 0 0% during yearend closeout process, plus 10% defects liability retention 9. Street lights – Unavailability of armored cable and KPLC Diversify specification of the cable so Current Nzeluni postpaid meters in the market. that it may be acquired from several 6,965,400.96 0 0% Road to Br. David’s manufacturers. junction 10. Street lighting – Br. Unavailability of armored cable and KPLC Diversify specification of the cable so David’s junction to postpaid meters in the market. that it may be acquired from several 6,958,434.00 0 0% Mang’ara’s manufacturers. junction Kitui County Budget Review and Outlook Paper, 2016 65 S/No Project Budget Expenditur Absorptio Explanation for the level of Absorption Measure to Safeguard against such (2015-2016) e n risk in the future 11. Street lighting – Unavailability of armored cable and KPLC Diversify specification of the cable so Mang’ara’s postpaid meters in the market. that it may be acquired from several junction to 7,039,854.86 0 0% manufacturers. Southern end of Kalisasi Market 12. Town Mwingi Contractor completed work ahead of Continue with proper management of Beautification schedule contracts. 1,941,081.20 1,941,081.20 100% General at various Location. 13. Proposed Contractor delayed submission of claim for Pressurize Contractors to submit their installation of Solar second instalment which was eventually claims as soon as appropriate stage of 6,601,304.80 4,290,849.00 65% Security Lighting in locked out during yearend closeout process, construction is completed. Mwingi town. plus 10% defects liability retention 14. Repair and Contractor delayed submission of claim Pressurize Contractors to submit their renovation of 40No payment which was eventually locked out claims as soon as appropriate stage of 1,260,530.24 0 0% Market stalls- during yearend closeout process, plus 10% construction is completed. Mwingi town defects liability retention 15. Construction of 5 Residents’ resistance to several suggested Discuss and firm up project sites with temporary transfer 2,246,224.00 1,543,625.20 69% sites for one of the transfer stations. affected residents well in advance stations. before tenders are awarded. 16. Installation of 32 Delayed submission of claim for second Pressurize Contractors to submit their refuse bins- Mwingi instalment which was eventually locked out claims as soon as appropriate stage of 725,479.31 0 0% town during yearend closeout process, plus 10% construction is completed. defects liability retention 17. Purchase 10M3 Late delivery by contractor hence could not Pressurize Contractors to submit their Exhauster 9,320,000.00 0 0% be paid. claims as soon as appropriate stage of construction is completed. 18. Procure 6,000-litre Late delivery by contractor hence could not Pressurize Contractors to submit their 14,925,720.0 Fire engine 0 0% be paid. claims as soon as appropriate stage of 0 construction is completed. 19. Gravelling and Delayed acquisition of County own Ensure machinery is always in good gabioning of Town 3,819,690.79 0 0% Roadworks machinery state of repair. Roads 20. Street lighting – Diversify specification of the cable so that it Diversify specification of the cable so Tyaa Kanginga 4,453,537.83 0 0% may be acquired from several that it may be acquired from several Oasis manufacturers. manufacturers. Kitui County Budget Review and Outlook Paper, 2016 66 S/No Project Budget Expenditur Absorptio Explanation for the level of Absorption Measure to Safeguard against such (2015-2016) e n risk in the future 21. Improvement of Contractor delayed submission of claim for Work with Contractors to submit drainage system at second instalment which was eventually their claims early enough 1,077,746.67 907,022.66 84% Mwingi bus Park. locked out during yearend closeout process, plus 10% defects liability retention 22. Repair and 10% defects liability retention No intervention required Renovation of 2,217,352.00 1,995,598.80 90% Mwingi town Offices. 23. Proposed Chain- Delayed submission of claim for second Work with Contractors to submit link Fencing of instalment which was eventually locked out their claims early enough 3,330,532.00 2,735,065.40 82% Ngwatano during yearend closeout process, plus 10% dumpsite. defects liability retention 24. Proposed Delayed submission of claim for second Work with Contractors to submit construction of instalment which was eventually locked out their claims early enough 3,992,893.79 3,282,142.60 82% Kathonzweni during yearend closeout process, plus 10% Vented Drift. defects liability retention 25. Street lighting – Diversify specification of the cable so that it Diversify specification of the cable so Cottage to 8,198,339.70 0 0% may be acquired from several that it may be acquired from several Kwakinyili manufacturers. manufacturers. 26. Street lighting – Diversify specification of the cable so that it Diversify specification of the cable so Happy Zone to 5,022,207.52 0 0% may be acquired from several that it may be acquired from several Ithoka/Stockyard manufacturers. manufacturers. 27. Street lighting – Diversify specification of the cable so that it Diversify specification of the cable so Nguni line - 5,578,632.07 0 0% may be acquired from several that it may be acquired from several KwaBen manufacturers. manufacturers. 28. Improve Global Delayed appointment of accounting officer Complete all FY2016/2017 tendering Vision Centre to hence tendering process:-LSOs were issued process by October 2016 to give Kathonzweni drift 2,974,433.33 0 0% 15th March 2015 thereby giving contractors contractors 7 months to complete road section insufficient time to implement and complete projects, and be paid by 30th June. projects and be paid by 30th June, 2016. 29. Supply of Equipment was supplied and payment Better cash flow projections Specialized 355,400.00 0 0% initiated but was eventually locked out equipment during yearend closeout process 30. Construction of Not awarded due to delayed appointment of Complete all FY2016/2017 tendering Guard house with accounting officer hence tendering process. process by October 2016 to give 1,138,983.81 0 0% store & toilet at contractors 7 months to complete town Admin offices projects, and be paid by 30th June. Kitui County Budget Review and Outlook Paper, 2016 67 S/No Project Budget Expenditur Absorptio Explanation for the level of Absorption Measure to Safeguard against such (2015-2016) e n risk in the future 31. Purchase and Fence Land was purchased and paid for from More coordinated budgeting process 4,500,000.00 0 0% land for dumpsite LIUD Grant Total 124,453,072 25,522,974 21% Kitui County Budget Review and Outlook Paper, 2016 68