ATC131104: Report of the Standing Committee on Appropriations on its study tour to Uganda and Kenya from 29 June to 06 July 2013, dated 30 October 2013
Report of the Standing Committee on Appropriations on its study tour to Uganda and Kenya from 29 June to 06 July 2013, dated 30 October 2013
The Standing Committee on Appropriations having undertaken an international study tour to the Uganda and Kenya from 29 June to 06 July 2013, reports as follows:
The Standing Committee on Appropriations (the Committee) was established in terms of the Money Bills Amendment Procedure and Related Matters Act, No 09 of 2009 (the Act). In terms of section 4(3) of the Act, each House must establish a Committee on Appropriations whose powers and functions include considering and reporting on the following matters:
· Spending issues;
· Amendments to the Division of Revenue, the Appropriation Bill, Supplementary Appropriation Bill and the Adjusted Appropriation Bill;
· Recommendations of the Financial and Fiscal Commission (FFC);
· Reports on actual expenditure published by the National Treasury (section 32 reports); and
· Any other related matters.
In addition to the above mandate, the Committee has been given an extended mandate by the National Assembly Rules Committee on 1 November 2011, in terms of Rule 199 (b) to assume the legislative and oversight function over the Department in the Presidency for Performance Monitoring and Evaluation, including the National Youth Development Agency.
1.1 Delegation of the trip
The delegation from Parliament was as follows:
1. Mr EM Sogoni (Chairperson, African National Congress)
2. Ms R Mashigo (African National Congress)
3. Ms AT Mfulo (African National Congress)
4. Dr SM Van Dyk (Democratic Alliance)
5. Mr N Singh (Inkatha Freedom Party)
6. Ms Z Gobhozi (Committee Secretary)
7. Mr M Zamisa (Committee Researcher)
8. Mr E Bacon (Personal Assistant to Ms AT Mfulo)
The delegation from the Department was as follows:
1. Deputy Director-General, Ms N Gasa
2. Deputy Director-General, Dr I Goldman
3. Chief Director, Mr S Ntakumba
4. Deputy Director, Ms C Mangwane
1.2 Terms of Reference
The Department of Performance Monitoring and Evaluation (DPME) in the Presidency is responsible for South Africa’s Government-Wide Monitoring and Evaluation (GWME) system. DPME reports to the Standing Committee on Appropriations. Members of the Committee and staff from DPME undertook a study tour to Kenya and Uganda between 29 June and 6 July 2013. The purpose was to learn from these countries’ experience on Monitoring and Evaluation (M&E) and how Parliament uses M&E information. The team was led by Mr EM Sogoni, the Chair of the Standing Committee. The team met with Parliamentary Committees, Office of the Prime Minister, Ministries of Finance, and Planning, line Ministries and in Uganda visited a community feedback meeting, which is formally known as a Baraza.
1.3 Purpose and approach
The purpose of the study tour was for the Committee to gain an in-depth understanding of the issues underlying successful M&E systems, and in particular the appropriate role of Parliament in effective Performance M&E (PM&E).
Some of the learning questions include:
· How does the overall PM&E system operate, including the relationship between planning, budgeting and M&E – what are the successes and failures and why?
· What roles do different organizations play, how are these coordinated, how have the M&E institutional arrangements evolved, why and what are the lessons?
· What roles are Parliament playing in performance M&E? What are the lessons from this experience?
· How is the information from performance M&E fed back into decision-making, planning, budgeting, programming?
· Success factors, main obstacles and lessons learned in the path towards institutionalization of PM&E, including the role of a legal basis for PM&E, roles of the executive, Parliament, and other independent agencies (e.g. Auditor General) in ensuring a successful system.
· Specific aspects of PM&E in Uganda – evaluation and the Baraza system, in Kenya – the use of contracts and public expenditure tracking.
The delegation met with the following institutions in the two countries during the study tour:
· Office of the Prime Minister (Hon T Kabwegyere, Tim Lubanga);
· Ministry of Finance, Planning and Economic Development; Budget and Monitoring Unit (Margaret Kakande);
· National Planning Authority (Kasingye Kangala, Godfrey Kokot);
· Parliament of Uganda (Hon Jacob Oulanyah- Deputy Speaker);
· Committee on Presidential Affairs (Hon Fred Mwesigye + 3 other members of the Committee);
· Parliamentary Budget Office (Samuel Huxley Wanyaka, Sulaiman Kiggundu); and
· Local Government Accounts Committee (Hon Jack Sabit + 8 other members of the Committee).
· Ministry of Devolution and Planning (Peter Mangiti, Stephen Wainaina);
· Ministry of Devolution and Planning: M&E Directorate (Samson Machuka, David Kiboi, Viviene Simwa, Mary Kerema, Richard Munyitha, Geoffrey Odero),
· National Integrated Monitoring and Evaluation System (NIMES) (Swedish Institute for Public Administration, SIPU) (Birgitte Woel);
· Parliamentary Budget Office (Phyllis Ndunge Makau);
· Parliament of the Republic of Kenya (Eric Ogolo, Justin Bundi);
· Department of Performance Contracting (Justa Koroi, George Obai);
· Ministry of Health (David Njuguna);
· Ministry of Agriculture (CN Stephen); and
· National Treasury (Samuel Kiiru).
The main elements of the study tour included:
· Meeting with the Office of the Prime Minister, around the overall approach to performance monitoring and evaluation.
· Meeting with Parliament to understand the roles they play in PM&E, accountability processes and what agencies report to them in this regard. This includes a meeting with the relevant committee to understand the role they play.
· Meeting with central government departments directly involved in applying the M&E system (e.g. Ministry of Finance etc).
· Meeting with national government line departments/agencies to understand how they apply M&E, how they see issues and their relationship to Parliament.
· Visit to a Baraza community feedback process.
· Meeting with M&E Directorate, Ministry of Planning, around the overall approach to performance monitoring and evaluation.
· Meeting with Parliament to understand the roles they play in PM&E, accountability processes and what agencies report to them in this regard. This should include a meeting with the relevant committee to understand the role they play.
· Meeting with centre of government departments directly involved in applying the M&E system (e.g. Ministry of Finance etc).
· Meeting with national government line departments/agencies to understand how they apply M&E, how they see issues and their relationship to Parliament.
2.1 Structure of the State
Uganda became independent in 1962. Uganda has a national government and 111 district governments (referred to as Local Council or LC5). There is a presidential system with the President both head of state and head of the government. Cabinet is appointed by the President from among elected legislators. Cabinet is formed of the President, the Vice President and such number of Ministers as may appear to the President to be reasonably necessary for the efficient running of the State.
Most districts have populations between 100 000 and 400 000. Below the district there are constituencies (LC4), sub-counties at LC3 which are local governments, parishes (LC2) and villages (LC1). Both parishes and villages have elected committees. There has been a system of decentralisation to districts and later to sub-counties. Local staff such as agricultural extension officers is part of sub-county administrations. Most development services such as agriculture, health, education, public works, fall under the district with district staff.
The Local Governments in a city are The City Council and The City Division Council. The Local Governments in a Municipality are: The Municipal Council and The Municipal Division Council. The Town Council is also a Local Government.
2.2 Parliamentary system
There is a unicameral system with sessional and standing committees. Parliamentary business in Uganda is carried out through two types of committee’s i.e. sessional committees which conduct oversight over departments and are concerned with policy and action programmes and standing committees which handle issues of accountability, financial oversight, and human rights. There are 13 standing committees and 16 sessional committees and each Member of Parliament must belong to 2 committees (1 standing committee and 1 sessional committee). Most committees have about 20-30 members, and all accountability committees are chaired by opposition parties. There is no specific committee responsible for monitoring and evaluation however that function is built-in within the mandate of sessional committees.
It was also observed that there is no Standing Committee on Appropriations and that budget monitoring is conducted by sessional committees which monitor the resource envelope, expenditure incurred and outputs realised on a quarterly basis. Emphasis is on the effective utilisation of resources therefore committees can also conduct on the spot value for money assessment audits. Committees also engage in quarterly field budget monitoring trips where physical inspection of projects takes place. Through such trips committees are able to determine value for money for funds spent, receive comments from public regarding progress of government projects, and interact with local government managers who manage public funds.
2.2.1 Roles of Relevant Committees
188.8.131.52 Committee on Presidential Affairs
The delegation visited the Committee on Presidential Affairs which oversees the Presidency (which has 5 departments); Office of the Prime Minister (which has ten ministries), and the Kampala City Council Authority. Some of the Committee’s functions are to:
- Examine and comment on policy matters affecting ministries under its jurisdiction
- Initiate and evaluate action programmes;
- Examine Bills brought by government and backbenchers before they are debated;
- Examine government recurrent and capital budget estimates and make recommendations to the House; and
- Monitor the performance of ministries and departments.
The Committee has 19 members of which 12 are from the ruling party, 3 from opposition, and 4 are independents. Committee support staff consists of 5 officers: clerks, lawyers, and research assistants.
It was observed that the Committee does not conduct overall monitoring and evaluation but its M&E role is limited to those programmes within this sector. The Committee indicated that interaction with Monitoring and Evaluation department is demand driven, however the Committee does use the Government Bi-Annual Performance Report which is published by the M& E department.
The Committee cited capacity challenges due to many ministries falling under its jurisdiction.
184.108.40.206 Local Government Public Accounts Committee (LGAC)
The main function of the Committee is to look at the financial management of local governments. Local government generates own revenue and receives transfers from national government. Transfers to local government account for about 20% of the entire national budget and in Local Government financial management is legislated by Local Governments Act, Local Government Financial and Accounting Regulations, Public Procurement and Disposal of Assets etc.
The Committee’s support staff constitutes of clerks, research assistants, lawyers and Criminal Investigation Department (CID) police The Committee hands over matters of mismanagement to the CID police for investigation and further action. The Committee has constitutional powers to summon any witness in relation to matters raised by Auditor-General (AG).
The work of the Committee is informed by the report of the Auditor-General (AG) which is tabled at Parliament. The report is then referred to the different public accounts committees. Once the report is referred, the Committee convenes to consider the report. They write to individual Accounting Officers of all districts requesting them to prepare responses to the Committee on issues raised by the AG Report. The Committee plan their work based on these responses. Districts are then either called to Parliament or field visits are conducted by the Committee for further engagement on issues raised by AG. If there are major problems the AG is requested to do a forensic audit.
Thereafter the Committee drafts a report highlighting strengths and weaknesses identified during engagements with Accounting Officers. Reports are discussed and debated in Parliament, and some of the Committee’s recommendations are approved and then sent to the Executive for implementation. The Executive then answers back to Parliament via Treasury Memorandum highlighting actions taken. If some issues are left out of the Memorandum by the Executive, the Committee requests the Auditor General to go through them and report back so that issues can be raised again.
Some of the recommendations that have been approved concern the dismissal of accounting officers and other officials, increasing or decreasing of funds, and recovery of funds from officials guilty of mismanagement. It was reported that approximately 50-60% of the Committee’s recommendations are acted on however issues which are political are more difficult.
The Committee’s responsibilities have been based on financial audits, but following the worldwide trend on emphasis of value for money, they are beginning to also look at this critical aspect of the use of resources including undertaking field visits. For example they have done one on National Agricultural Advisory System (NAADS).
The Committee indicated that there are District Public Accounts Committees (PACs) but they were not always effective. They are supposed to report to the District Council, and also through the Ministry of Local Government to Parliament. One member who had been on a council says that a report was never tabled.
One of the main challenges is that the AGs findings seem to continue despite action of the Committee. If action is needed it is not the responsibility of the Committee to take it forward. Often no action is taken to get the recommendations acted on. They do sometimes use the CID to take forward investigations.
The other big challenge is that every year there are reports from all the Sub-Counties, Municipal Councils and Districts as well as national government, resulting in a lot of work to be completed in a short period of time thus there is a backlog in reports.
2.2.2 Institutions Supporting Committees
220.127.116.11 Parliamentary Budget Office
The Ugandan Parliamentary Budget Office (PBO) was established 12 years ago by the Budget Act and was mandated to provide Parliament and its committees with objective, timely and independent economic and financial analysis of the economy and the national budget in order to enhance Parliament’s budget oversight role. The PBO is staffed with 23 officials who have expertise in the finance field (economists, accountants, and statisticians) and its functions are structured according to Macroeconomics, Sectoral and Fiscal Analysis, and a Financial Programming section. It was observed that the PBO supports all parliamentary committees by deploying a PBO official to each committee however some PBO officials serve more than one committee.
The objectives of the PBO are as follows:
- Providing general advice on the national budget and the economy;
· Providing budget-related information in relation to each committee’s jurisdiction;
· Submitting reports on economic forecasts, budget projections and options to reduce the budget deficit;
· Identifying and recommending on Bills that provide an increase or decrease in revenue and budget;
· Assessing impact of local government mandates;
· Providing information on long-term budgetary pressures and policy options;
· Preparing analytical studies of specific subjects such as financial risks posed by Government sponsored enterprises and financial policy;
· Evaluating government programmes, policies, operations and performance; and
· Engaging with relevant agencies to help guide efforts towards achieving positive national budgeting.
The Ugandan PBO has contributed significantly towards the empowerment of Parliament to be actively and continuously involved in the budget cycle. In addition, the PBO has been instrumental in the shaping of output oriented budgeting in order to enable the monitoring of value for money for allocated resources. As a result thereof, there have been improvements in the accuracy of the budget and the nature of reporting on the budget and budget implementation. The PBO has also been integral in identifying inefficiencies within departments and in the improvement of the accuracy of the budget.
Notwithstanding the above achievements, the following challenges were cited by the PBO with regard to Parliament’s budgetary oversight role:
- Limited time for interaction between parliament and sectors during budget implementation;
- Sometimes the executive does not effect recommendations of parliament relating to re-allocations affecting sector performance targets;
- Failure by ministries to report quarterly to parliament on how funds were appropriated (These reports indicate specific data on value for money on expenditures involved);
- Information reported on sectoral outputs is not clearly related to funds allocated;
- Some sectoral outputs are reported in calendar years and on a six-monthly basis versus fiscal year; and
- Inconsistencies in expenditure and output plans in Ministerial policy statements over the Medium Term Expenditure Framework (Disjointed reporting).
2.2.3 Institutions Supporting the Executive
18.104.22.168 The Office of the Prime Minister
The Office of the Prime Minister (OPM) covers about ten departments and has a directorate focusing on M&E. OPM provides leadership across government sectors and ensures proper coordination and oversight of government M&E activities. It reports to Cabinet periodically on Government performance and results. The role of the OPM includes:
- Harmonizing and standardizing M&E procedures, practices and mechanisms across government sectors;
- Providing technical support and oversight to Planning Units in Ministries, Departments and Agencies (MDAs) and Sector Wide Groups in the operation of monitoring and statistics functions, and the designing and implementation of 5-year rolling evaluation plans;
- Designing, commissioning, quality controlling and dissemination of public policy;
- Supporting evaluations in line with the 5-year rolling evaluation agenda of Cabinet; and
· Monitoring of the implementation of the M&E Policy.
22.214.171.124 The Ministry of Finance, Planning and Economic Development
The Ministry of Finance, Planning and Economic Development (MFPED) coordinates the preparation and presentation of the national budget and reports periodically to Cabinet and Parliament on budget preparation, execution and performance. The MFPED conducts performance contracting, budget reporting and budget monitoring to improve accountability and as part of wider efforts to improve service delivery. A performance contract is a signed agreement between the Accounting Officer of a spending agency and the Permanent Secretary of the Ministry of Finance declaring the intended use of public funds. Each quarter a Performance Report must be submitted to the Ministry of Finance outlining progress against a work plan.
MFPED also produces a budget performance report comprising of financial and physical performance (outputs) on a semi-annual basis. These reports are compiled using quarterly performance reports submitted by departments to the Ministry of Finance. These quarterly reports outline financial and physical/output performance both by quarter and cumulatively and also show progress against the work plan in the performance contract. Uganda utilises an in-house automated database called Output Budgeting Tool (OBT) to systematically link funds with output. The OBT provides the framework for budget formulation and execution and it incorporates performance contracts and performance reports. Line ministries report to MFPED through the OBT.
In terms of Budget Monitoring, there is the Budget Monitoring and Accountability Unit (BMAU) which works with OPM on monitoring but with a focus on tracking the budget and the flow of funds. Uganda utilises an Integrated Financial Management System for monitoring cash flow where they can see the movement of funds by departments but they are not able to track funds directly with local governments. However they are currently working on a system to ensure that money goes directly from Treasury to the beneficiaries, e.g. schools or health facilities, rather than having to go via a number of intermediaries. This system has already been implemented in Education.
BMAU does not cover all the departments but selects areas of focus in key sectors such as infrastructure (roads and energy), agriculture, health, education, information and communication technology (ICT), microfinance, water and sanitation. They track major spenders but also have ongoing follow up with those departments or entities experiencing challenges. They look at performance at two levels –efficiency and effectiveness. They look at allocative efficiency to determine whether money is allocated to the right places e.g. recurring expenditure vs. development priorities. They also look at cost efficiency in terms of unit costs, e.g. cost of constructing a classroom. However the challenges is that there are no standard unit costs so people exploit this, e.g. through tenders.
They also look at effectiveness through physical inspections of actual outputs. This element of performance verifies that the budget spent is as per plan whereby the plans specify details on the quantity, quality and location for each programme. They use subject matter specialists who have their areas of expertise plus M&E. They train their specialists in M&E skills. They will look at bills of quantities, specifications, and quality vs. expectation. However, they don’t do very in-depth value for money work. Departments do have internal auditors who are supposed to look at value for money. They make recommendations for what should happen. There is also an independent Public Procurement Department, which looks at value for money in contracting. There have been instances where contractors were blacklisted as a result of substandard work.
The BMAU functions as an early warning mechanism because they have ongoing interaction with implementers of budgets so that remedial actions can be instituted as problems arise. Where departments are not able to absorb funds or spend the budget they cut allocations or reduce cash flow. However this is done bearing in mind the nature of the programme and its impact on service delivery or citizens. If mismanagement or misuse of funds and excessive spending with poor quality outputs is detected in departments BMAU passes the information to other agencies such as the ICD for further investigations etc.
BMAU produces budget monitoring reports on a quarterly basis and Parliament is a key client in helping to ensure accountability. Another key client is the Auditor General (AG) whereby BMAU detects areas where a forensic audit may be needed. BMAU shares information with the Office of Prime Minister e.g. in terms of 6 monthly reports and also prepares briefing papers for policy makers.
126.96.36.199 The National Planning Authority
The National Planning Authority’s (NPA) primary function is to produce comprehensive and integrated development plans for the country, elaborated in terms of the Perspective Vision, long and medium–term plans. They are responsible for preparing results-orientated medium and long-term plans at national level and assist Ministries and Local Governments in preparing results-orientated plans and budgets. The NPA has about 60 to 70 planners across all the specialities. It analyses progress in tackling constraints to national development in line with the National Development Plan and reports periodically to the Executive and Parliament on national development. The NPA also works with Ministry of Finance, Planning and Economic Development (MFPED) in the preparation of the annual budget, medium and long-term expenditure frameworks to support the national plans.
The NPA previously produced poverty reduction strategy papers. They produced the first National Development Plan (NDP) in 2010/11, and also have a national vision to 2040. The NPA is currently carrying out the mid-term review of the NDP.
2.3 The Legal Framework and Evolution of the Planning, Budget and PM&E system
The Constitution provides the power of the NPA to develop a NDP, further developed in the National Planning Authority Act 15 of 2002.
The Draft National Monitoring & Evaluation Policy (2010) lays out the roles, responsibilities and relationship of public institutions in respect to performing M&E. The key role in the M&E system is played by the Office of the Prime Minister which coordinates M&E on the implementation of government policies and programmes.
The first NDP was produced in 1962-67 but then there was a coup. There was a period of some turmoil until 1986 when the National Resistance Movement came to power. In 1997 Uganda had its first Poverty Reduction Action Plan, then the Millenium Development Goals, and then Poverty and Employment Action Plan (PEAP) was developed, functioning as the NDP. In 2007 Cabinet decided to get a 2040 vision. They started in 2008 with a very consultative process which took time. After producing the NDP in 2010 they then went back to formulate the Vision. The theme of the current Ugandan NDP Vision 2040 is Growth, Employment and Social Transformation.
2.3.2 Budget process
The Budget Policy and Evaluation Department within the Ministry of Finance, Planning and Economic Development manages the budget process.
In Uganda, parliamentary committees have an active participatory role in the budget process. The budget cycle was amended to afford Parliament the opportunity to be involved in the budget process at an earlier stage. Members of Parliament participate in setting budget priorities through the Budget Consultative Workshop, Sector Working Groups and Sector Working Group retreats. Participation in budgeting for priorities is facilitated through sessional committees which also monitor the performance of the budget in line with priorities and budgeted figures.
To kick start the budget process, preliminary estimates of revenue and expenditure for the next financial year are submitted by the Ministry of Finance, Planning and Economic Development (MFPED) by 15th February and referred to the budget committee and each sessional committee. Sessional committees consider these preliminary estimates then submit reports to the budget committee no later than 25th of April. The Budget Committee then scrutinises the preliminary estimates together with reports from sessional committees and submits its recommendations to the Speaker who then submits to the President by 15th of May for the attention of the Minister of Finance. By 15th of June, the Minister of Finance tables the estimates of Revenue and Expenditure of Government (Budget Speech) before Parliament. Thereafter the tabling of departmental policy statements commences and sessional committees engage in the process of reviewing the policy statements followed by the consideration and processing of the Appropriations Bill by the Budget Committee.
2.3.3 Monitoring and Evaluation
The key role in the M&E system is played by the Office of the Prime Minister which coordinates M&E of implementation of government policies and programmes. The largest focus of monitoring is against the sectoral outcomes.
The OPM has established a national evaluation function and a National Integrated M&E System (NIMES). NIMES aims to fulfil five key objectives:
- Ensuring that sound evidence based data and information is available to inform decision making in national policy frameworks such as NDP frame works;
- Ensuring efficient and effective use of public resources in the implementation of strategic priorities;
- Enhancing Monitoring & Evaluation capacity in Uganda;
- Ensuring that key stakeholders have a forum for articulating Data and Information needs; and
- Coordinating M&E initiatives in Uganda by providing mechanisms that align the existing M&E initiatives with identified data and information needs.
They have a comprehensive monitoring database of all projects in the country. Such a database helps them track project procurement, implementation timelines, budgets, contract management and key outputs. They also manage a community-based accountability programme known as Barazas, to give citizens an opportunity to hold their district leaders/technocrats accountable.
Critical products are the Government Half-Annual and Annual Performance Report. A Government Evaluation Facility has been established but is implementing only 3 evaluations a year. There is a capacity development programme which South Africa could link to.
The Baraza is a recent M&E initiative initiated by the President and launched in 2009 by the OPM. The Baraza brings together central government (policy-makers) and local governments (public service providers) to report to citizens (public service users) on services and projects and citizens have an opportunity to ask questions. The Baraza experience is relevant to the citizen-based monitoring project that DPME is initiating.
A National Monitoring and Evaluation Technical Working Group (NMET-WG) is primarily responsible for guiding and overseeing the development and implementation of the National Policy on Public Sector Monitoring and Evaluation. The NM&ETW meets once every quarter.
The biggest constraints to M&E capacity and use are in the policy and institutional environment that surrounds the M&E function; in particular, decision-making practices and public service management culture. There are examples of where M&E data is being used e.g. Government bi-annual and annual reports and local government performance assessments. It is not clear how much of this is for donors and how much for government use.
3 Committee Observations in respect of Uganda:
- M&E in Uganda is linked closely to planning and is highly institutionalised because every ministry has an M&E unit that is responsible for the collection of data on all the indicators and reports on a quarterly basis to the Office of the Prime Minister.
- Uganda has a National M&E Policy which is being considered by Parliament and they regard this policy as the legal framework for M&E.
- The Office of the Prime Minister (OPM) utilises the Prime Minister’s Integrated Management Information System (PMIS) which enables interfacing with all relevant and expected government information systems to facilitate the fulfilment of its M&E mandate. It also serves as a single point of storage of all M&E information.
- The Ministry of Finance, Planning and Economic Development (MFPED) have an automated Output Budgeting Tool which provides a systematic link between funds and outputs. The OBT is a reporting mechanism for all departments to the MFPED and the OPM and it provides the framework for budget formulation& execution, performance reports, and performance contracting. The tool enables them to track budgets, expenditure, key outputs, project procurement, implementation timelines, contract management and progress against the work plan as per performance contract.
- The Office of the Prime Minister does reporting bi-annually to reduce the reporting load.
- The Ugandan budget cycle was amended to afford Parliamentary Committees an active participatory role in the budget process. In addition, there are plans of bringing the budget process to complete prior to the beginning of the financial year.
- Uganda has successfully reconciled the financial years between national and local government for better reporting, oversight and accountability.
- The Ugandan Parliamentary Budget Office (PBO) has contributed significantly towards the empowerment of Parliament to be actively and continuously involved in the budget cycle.
- The PBO has been instrumental in the shaping of output oriented budgeting in order to enable the monitoring of value for money for allocated resources. As a result thereof, there have been improvements in the accuracy of the budget and the nature of reporting on the budget and budget implementation. The PBO has also been integral in identifying inefficiencies within departments and in the improvement of the accuracy of the budget.
- There is some evidence that recommendations from parliamentary committees in Uganda are quite strong and that a significant proportion of recommendations are implemented by the executive authority e.g. Public Accounts Committee’s recommendations for recovery of funds from officials.
- Uganda utilises the Baraza system as a public accountability forum which brings together central government (policy-makers) and local governments (public service providers) to report to citizens (public service users) on services and projects and citizens have an opportunity to ask questions. The Baraza experience is relevant to the citizen-based monitoring project that DPME is initiating.
4 Kenya’s role in performance monitoring and evaluation
4.1 Structure of the State
Kenya gained its independence in 1963. Originally it had 7 provinces but without local government. In the 1980s the economy was not performing, and in the 1990s Kenyans were calling for reforms. In August 2010 a new Constitution was passed, with general elections held in March this year creating two spheres of government, national and 47 counties. It is now a Presidential system rather than a Parliamentary system with the President Head of State as well as the Head of Government, and directly elected. The President and Deputy President are not Members of Parliament.
The new Constitution says there cannot be more than 22 ministers. One of the major actions of the new government has been to reduce 40 ministries to 18. The President appoints Ministers (now called Cabinet Secretaries like in the US), who are not politicians, but technocrats (only two of whom were ministers in the previous government and in this case they had to agree to cease being involved in politics). The Treasury Cabinet Secretary was working in Finance, and some have come from the private sector. So the whole of Cabinet are now technocrats not politicians. In addition the President appoints the Principal Secretaries (formerly Permanent Secretaries). The Presidential nominations for cabinet and principal secretaries are vetted by Parliament, with the public able to observe. The list is then taken to Parliament and the whole house then discusses.
4.2 Kenya’s Parliamentary system
The Parliament of Kenya is in transitional phase in terms of implementation of the new constitution (2010), new system and new standing orders. According to the new constitution the executive are not members of parliament. This system is different to South Africa where the Cabinet excluding the President are Members of Parliament.
There is a National Assembly and Senate which are independent of the executive. The National Assembly represents the people of the constituencies and special interests in the National Assembly. It also deliberates on and resolves issues of concern to the people and enacts legislation. It is further empowered to review the conduct in office of the President, the Deputy President and other State officers and initiates the process of removing them from office; and exercises oversight of State organs. In relation to budgeting, the National Assembly: determines the allocation of national revenue between the levels of government; appropriates funds for expenditure by the national government and other national State organs; and exercises oversight over national revenue and its expenditure.
The Senate represents the counties and serves to protect the interests of the counties and their government. It participates in the law-making function of Parliament by considering, debating and approving Bills concerning counties. In respect to budgeting, the Senate determines the allocation of revenue among counties. It also exercises oversight over national revenue allocated to the county governments. The Senate consists of 47 members directly elected by counties, 16 women Members of Parliament proportionally nominated by political parties; two youth representative Members of Parliament (one male and one female); two members of Parliament representing persons with disabilities (one male and one female).
In the past the introduction of legislation was predominantly an executive function whereby ministers introduced Bills, this process is now owned by parliament whereby Bills can only be introduced by the House, an individual Member of Parliament or through committees. Cabinet Secretaries bring Bills through committees then the committees introduce them to the House. All Bills must pass through the Budget and Appropriations Committee in order to factor financial implications. This Committee makes an assessment of budgetary implications of Bills.
4.2.1 Roles of relevant committees
188.8.131.52 Committee on Budget and Appropriations
The Budget and Appropriations Committee (BAC) is the largest Committee of Parliament. It consists of 51 members (including the Chairperson and Vice Chairperson) compared to other committees which consists of 28 members or less. In addition to other support staff, the Budget and Appropriations Committee receives support from the Parliamentary Budget Office.
Among others, the Committee is mandated to: investigate, inquire into and report on all matters related to coordination, control and monitoring of the national budget; examine the Budget Policy Statement; examine Bills related to the national budget. All Bills are submitted to the Budget and Appropriations for analysis in terms of their financial implications. Performance against the budget is monitored by departmental committees who then make recommendations to the BAC when budget allocations are considered. The Committee invites chairpersons of all Departmental Committees to make presentations on the budgets of their relevant departments during the consideration of the budget.
The BAC can amend the budget proposed by the Executive. This is in line with the Constitution of Kenya which also empowers the Parliament of Kenya to stop budget allocation to any institution. In fact the Budget and Appropriations Committee has in the past made amendments to the budget. The process of effecting amendments to the budget is, however, conducted through a consultative process with the Finance Ministry and other relevant stakeholders including the general public. It was also mentioned that, due to the system of government, the Appropriations Bill is signed by the Chairperson of the Budget and Appropriations Committee rather than the Cabinet Secretary responsible for Finance. However, accountability remains with the Executive given that the Appropriations Bill is initiated by the Executive and assented to by the President who is the Head of the Executive.
4.2.2 Institutions Supporting Committees
184.108.40.206 Parliamentary Budget Office
The Kenyan Parliamentary Budget Office was established in 2009 in terms of an Act of Parliament, Section 3 of the Fiscal Management Act (No.5 of 2009). Its primary function is to provide timely and objective information and analysis concerning the national budget and economy. It provides technical support on matters relating to Public Financial Management (PFM) and financial oversight to all Members of Parliament, Departmental Committees and Select Committees in addition to being a secretariat to the BAC.
The Kenyan PBO is mandated to:
· Provide budget related information to the Budget committee, the departmental committees and other financial select committees of the National Assembly;
· Provide services to the Budget Committee, the departmental committees and other financial select committees of the National Assembly within their budgetary jurisdictions;
· Prepare reports on budgetary projections and economic forecasts and options to reduce the budget deficit;
· Prepare analytic studies on specific subjects such as financial risks posed by government sponsored enterprises and financial policies;
· Sponsor such national and international forums as it may consider necessary;
· Study budget proposals and trends and where appropriate, suggest changes in the content or format of such proposals or trends;
· Propose, where necessary, alternative scenarios for various macro-economic variables in respect of any financial year;
· Establish and foster such relationships with the Treasury and with other national and international organizations, with interest in budgetary and economic matters, as is necessary for the efficient and effective discharge of our mandate; and
· Undertake independently, or in collaboration with any appropriate person or institution, any other study or activity likely to assist in carrying out the functions specified in this subsection.
The Parliamentary Budget Office is currently capacitated with 15 officers with skills ranging from public finance, accounting, taxation, forecasting and law. It was also mentioned that the PBO requires sector specialists to provide sector-specific analysis. The Director of the PBO emphasised that it takes time to establish a parliamentary budget office and the Kenyan Parliamentary Budget Office is still growing its capacity and obtaining the required expertise.
As part of fulfilling its mandate, every year before the annual Estimates are finalised, the Kenyan Parliamentary Budget Office releases the Budget Options. This is a paper which takes a critical look at the underlying economic variables and proposes various options that the National Treasury could consider in framing the annual budget and medium term targets. The Budget Options provides strategic priorities and policy options the government can consider while preparing the budget estimates for each financial year and the medium term.
4.2.3 Institutions Supporting the Executive
220.127.116.11 Ministry of Devolution and Planning (MDP)
This department falls under the Presidency, and is amongst others the midwife to the two tier system of government, as well as being the driver of socio-economic transformation. MDP is responsible for coordination, M&E of government policies, programmes and projects. There is a move for MED to become a semi-autonomous government agency, so that they are able to say clearly what is wrong and needs to be done.
Within MED there are 5 technical advisory groups, sixteen economists and three communications officers. Key products include a set of regularly monitored sector indicators; a set of core national indicators for outcome reporting; annual and Midterm Progress Reports (talks about achievements); methodological guidelines for M&E; Ministerial Public Expenditure Review (PER) and Comprehensive Expenditure Review (CER); research on areas of relevance to inform policy and planning; a M&E resource centre and website; project M&E standards; Project Management Information System and Quarterly project monitoring reports.
There is also a Department of Performance Contracting which is responsible for the Performance Management and Development System (PMDS). Public institutions’ performance contracts are based on their key priorities which are drawn from Kenya Vision 2030, Medium Term Plan (MTP) and the strategic plan among other policy documents.
18.104.22.168 National Treasury
National Treasury is responsible for the budget, monitoring expenditure, and taxation. They have a Public Expenditure Review programme 2010-12 supported by the World Bank. This includes instituting the Public Expenditure Tracking System (PETs) which examine the link between public spending and service delivery at facility level. A focus has been on Agriculture, Education and Health which together comprise a huge part of the budget. Treasury introduced 3 year Medium Term Budget Framework (MTBF) in 2001. They focus on six key processes of the budget:
· Budget reviews;
· Strategic planning linked to MTBF;
· Budget execution;
· Auditing; and
In 2005-6 they introduced performance budgeting, linking to outcomes and outputs as part of the public finance management reforms. They started off looking at the legal setup and processes. By 2008/9 they produced the first programme-based budget. They have now come up with the Public Finance Management Act (PFMA) – and this is the first budget which is output based. Planning is also enshrined in the PFMA. They want to move away from an input-based control system to an output-based one and to be able to look at the county level.
4.3 The Legal Framework and Evolution of the Planning, Budget and PM&E system
The Public Finance Management Act (PFMA) is the main Act governing finance matters. The government is trying to make sure planning links to budgeting and results. As they implement the performance M&E system, the state is looking to areas where it may improve. An M&E Policy has been developed and is currently under consideration by Cabinet.
Kenya has had 5 year development plan since independence. However in 2006 they developed Kenya Vision 2030, which started being implemented in 2008 as the first 5 year phase or the medium-term plan 2008-12. As a way of ensuring the sustainability of the plan, last year the Vision was taken to Parliament, and Parliament adopted it. So the Ministry is now finalising the second medium-term plan which will be launched by government. The plan will correspond with the terms of government.
4.3.2 Budget process
The financial year starts annually at the beginning of July. The Estimates of Expenditure and Revenue are laid in the house two months before the budget. Each Cabinet Secretary presents their legislative proposals as a money bill to the Budget and Appropriation Committee and then to departmental committees. The departmental committees make proposals to the Budget Committee which then proposes to the House. Then there are public hearings. Close to 50% of resources go to Health, Education and Agriculture.
4.3.3 Monitoring and Evaluation
M&E systems in Kenya came into effect in 2004 with the establishment of the M&E Directorate whose mandate is to coordinate the implementation of the National Integrated M&E System (NIMES). The objectives of NIMES are to:
1. Build a M&E system for reporting at both central government and devolved level;
2. Promote a culture and practice of M&E at all levels of government and civil society;
3. Increase the use of M&E for planning and implementation;
4. Provide timely and reliable feedback to the budget preparation process; and
5. Provide regular, timely and reliable reporting of the effectiveness of government programmes.
The Kenyan M&E system tracks implementation of policies, programmes and projects, creates a culture and practice for monitoring and evaluation to promote accountability, and enhance public service delivery. It is designed to operate on three-tier relationship, namely: the Monitoring and Evaluation Directorate; the Central Project Planning and Monitoring Units based in each line Ministry; the District Planning Units based in every district (now county).
The M&E directorate promotes electronic reporting and are making all information on projects available on-line through the electronic Project Monitoring Information System (e-ProMIS). The development of e-ProMIS was in conjunction with the Treasury and has enabled the government to track progress on implementation of various activities based on the funding allocated to determine funding levels in the subsequent years. The e-ProMIS is currently being upgraded to have more indicators as well as a dash board which will show projects that are stalled, complete and those lagging behind.
The M&E directorate (MED) conducts resource flow analysis that assists the Treasury to track resource requirement submitted by the line ministry through the sector working groups against the provided allocations by the Treasury. This financial flow analysis revealed that in certain occasion, some ministries received more than requested while others were allocated lesser amounts than requested. This tracking includes performance based on the Annual Progress Report (APR) of the Medium Term Plan of the Kenya Vision 2030 which also helps the Ministry of Finance budgetary allocation for the next financial years. In addition, based on the PER and APR produced by MED, Treasury is now able to measure the efficiency and effectiveness in the use of finances and project implementation by the various ministries.
Some of the initiatives taken in Kenya to strengthen M&E systems include performance contracting and Public Expenditure Tracking Surveys (PETS). The Government has adopted performance contracting as a key strategy to ensure maximum accountability and transparency in the management of public resources. A performance contract is a performance agreement between Government, acting as the owner of an Agency, and the management of the Agency. It therefore specifies expected levels of achievement, timelines, evaluation and reporting methodologies - accountability for results. Kenya currently has 480 public sector institutions that are linked to performance contracts. Evaluation of performance is carried out by external experts who are not public servants. The main purpose of involving external experts is to ensure integrity and objectivity to the system. Performance contracting seems to be having an impact in improving public sector performance and building public trust.
Kenya introduced PETS in 2004 as an expenditure tracking system for those ministries receiving large allocation of resources and has been implemented in the Health, Education and Agriculture ministries. These surveys enabled the Ministry of Finance to identify leakage points along the system and have led to the direct disbursement of funds to the facilities. It is expected that the surveys will now be cascaded to all the line ministries.
Several achievements and the impact of M&E can be seen:
· A clear standard reporting format has been developed, which is now being used by all ministries when reporting on their performance and M&E information.
· Quality and timely M&E reports are now being produced by the various Ministries Department and Agencies;
· Before there were no indicators to track performance of the ministries, departments and agencies, now ministries are ranked in terms of performance for awards based on indicators developed by the M&E Directorate;
· Public Expenditure Reviews (PERs) have been used in sector workgroups when developing programmes and budgets; and
· There is a culture of continuous improvement.
4.3.4 M&E Tool: Public Expenditure Tracking Survey (PETS)
The delegation interacted with the Ministries of Health, Education and Agriculture in order to gather more information on the PETS, its implementation and impact. PETS is a monitoring tool that tracks the flow of public resources (financial and non-financial) by determining how much of the originally allocated resources reach the targeted service level. PETS are co-ordinated by the Ministry of Planning to ensure consistency in the framework.
22.214.171.124 PETS in Health Sector
The Ministry of Health’s approach to PETS comprises of 3 components namely:
1. A tracking component that seeks to assess delays and shortfalls in the execution of approved budgets for health services;
2. Identification of any leakage of financial resources at various levels of the health care system; and
3. Assessment of the impact of delays and leakages on health service delivery.
These components are aimed at giving effect to the following objectives:
· Provision of quantitative evidence on the volume of budgeted funds actually reaching their intended destination;
· Provision of quantitative evidence on delays in transfer of resources from Treasury to district and facility level;
· Provision of quantitative evidence on leakages of resources at national, district and facility level;
· Provision of baseline data and diagnostic information on important health characteristics;
· Assessment of quality and efficiency in service delivery;
· Provision of evidence on the differences in performance across facilities;
· Assessment of the impact of delays and leakages on the funds disbursed by the government or from other sources;
· Identification of the disbursement profile of district resources (establish bases for HSSF) – only in the 2008 and 2009 PETS; and
· Suggestion of areas for further research.
Data used in these PETS consist of both facility and administrative data and descriptive techniques are applied in the analysis or assessment. The tracking analysis covers aspects such as cost sharing, medical personnel, medical supplies (tracer drugs), non-medical supplies, and government allocations to health facilities.
It was reported that the use of PETS has had a major policy impact in the health sector. For instance in the 2004 PETS, some of the deficiencies or inadequacies identified with regard to medical supplies were attributed to a top-down approach whereby the medical requirements of health facilities were planned and procured at national, provincial or district level with no participation from the relevant health facility management. As a result of these findings there have been changes made in the Kenya Medical Supplies Agency’s (KEMSA) distribution system and acquisition of medical supplies is now bottom up.
Furthermore, PETS revealed that delays in health implementation programmes were due to expenditure bottlenecks caused by the Authority to Incur Expenditure (AIE) System whereby AIEs were issued to districts without the disbursement of funds. In addition the release of funds by Treasury was based on reimbursement. Some policy shifts that have been implemented to address these findings include the elimination of redundancies in the authorization and approval process of AIEs, the issuing of cheques to accompany the AIEs and the direct transfer of funds to rural health facilities.
Some of the challenges reported are as follows:
· Record keeping and record filing systems on sources of revenue and expenditures are very weak in most of the health facilities visited;
· Inadequate time to undertake a thorough review of AIEs, review documents, exchequer issues from Treasury, and then use the information in tracking the flow of funds to various facility levels;
· Challenges in obtaining accurate profile of all resource flows within the studied facilities;
· Constraints at the design and training stages which resulted in unclear understanding of the data requirements by some research assistants resulting in collection of redundant data and failure to collect some required data; and
- Most of the gaps identified in the previous PETS have not been addressed.
126.96.36.199 PETS in Education Sector
About 20% of Kenya’s budget is allocated to the education sector. Public spending on primary education is through a Capitation grant of KSh 1,020 per school child (approx. US$120). Overall disbursements to public primary schools have increased from KSh 7.3 billion in 2008/09 to KSh 9.7 billion in 2011/12. It was indicated that the flow of funds is directly from the Ministry of Education to the schools and the financial management responsibility lies upon school management committees consisting of parents, teachers, and representatives from education district offices. However the Head of School is accountable to the District Office. The procurement of school supplies including textbooks is done directly by school management committees. PETS in this sector focused on secondary school bursaries and funds disbursed for most vulnerable children in primary schools. The PETS are therefore intended to:
· Provide understanding on the management and composition of public spending on primary education with the aim to ultimately improve learning outcomes at primary schools; and
· Examine the link between public spending and service delivery at the facility level in order to understand effectiveness and accountability of public expenditure in education sector.
The primary education PETS is managed by a Steering Group comprising of representatives from the MPD, the Ministry of Education, the Canadian International Development Agency (CIDA), and the World Bank. Financial assistance has been provided by the World Bank and CIDA. Data collection, capturing and processing is done by consulting firm.
Data was collected on budget allocations and actual expenditure on primary education across ministry, provincial, district and schools levels. Survey instruments encapsulating Service Delivery Indicators (SDI) were developed and administered at sample schools. The SDIs comprised of 6 modules:
Module 1: School information (school types, facilities, school governance, student numbers, school hours);
Module 2: Teacher roster (Observation based in order to measure absence rates and teacher characteristics);
Module 3: School finances (Administered to Head of School);
Module 4: Classroom observation to assess teaching activities;
Module 5: Pupil test to measure learning outcomes in mathematics and languages;
Module 6: Teacher test;
Module 7: Capturing of financial flows from central and local government.
The survey was conducted in 20 counties (out of 47) and covered 400 out of 27 000 schools which included both public and private schools. The PET tracked financial flows from national and local government, constituency funds and development partners. The survey was administered to the head teacher of every school and documented how funds were accessed by the school, schedules of disbursements, recording and monitoring of disbursements. Each of the schools was visited twice and the first visit was pre-announced. Data analysis for the PETS has not yet been done and it is therefore not possible to comment on its impact.
188.8.131.52 PETS in Agricultural Sector
PETS in this sector were introduced in 2011 as a collaborative effort between the Ministry of Agriculture and the German development corporation: Gesellschaft fϋr Internationale Zusammernarbeit (GIZ). It was reported that the focus has mainly been on the formation of the working group/secretariat, the development of work plan and budget for the survey including survey tool, the training of enumerators and data collection. Pending activities for PETS include data cleaning, entry and analysis, report writing and report dissemination and advocacy. It was indicated that the following challenges were experienced with the implementation of the PETS:
· Logistical challenges such as transport, stationery, man power etc;
· Difficulties in managing collaboration thus room for cases of misreporting etc;
· Availability of staff on continuous basis – long process involving many players.
5 Committee Observations in Kenya:
· Portfolio committees in Kenya have a stronger link to the budget or appropriations process by making submissions on their relevant departments’ budget allocations to the Budget and Appropriations Committee. In addition, the Budget and Appropriations Committee has a large number of committee members which enables it to review all submissions and thus be more efficient and effective in its oversight role.
· The Budget and Appropriations Committee is able to make amendments to the budget because of the Parliamentary Budget Office’s support and the close link with portfolio committees.
· Kenya has developed a number of tools for M&E, including performance contracts of Cabinet Secretaries and Public Expenditure Tracking Surveys which are a useful form of economic evaluation. They also conduct Ministerial Public Expenditure Review (PER) and Comprehensive Expenditure Review (CER) which are used by sector workgroups when developing programmes and budgets.
· There seem to be efforts to ensure integration of systems e.g. e-Promis, to enable easy tracking of the implementation and performance (financial and non-financial) of various government programmes.
6. Observations for the South African context
6.1 There is a need to strengthen the participatory role of portfolio committees during the appropriations process. Portfolio Committees should be encouraged to make submissions on their relevant departments’ budget allocations to the Standing Committee on Appropriations.
6.2 There is a need to increase the membership capacity of the Standing Committee on Appropriations in order to enhance its effectiveness in the budget process and in its oversight role for performance monitoring and evaluation.
6.3 The reporting systems of departments should be refined to integrate financial performance with outputs or non-financial performance in order to enable the assessment of the efficiency and effectiveness of government spending.
6.4 The Department of Performance Monitoring and Evaluation should investigate the integration of government M&E information systems to enable easy tracking of various government programmes.
6.5 Evaluation tools like the Public Expenditure Tracking Survey should be utilised by Parliament in order to track the flow of resources for major public services such as education and health.
Report to be considered.
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