Analysis of Nairobi County Budget FY 2018/2019
By: Geoffrey Kerosi
Focus: Matching the Health Sector Ceilings with the Budget Estimates 2018/2019
The following are our main findings on our analysis of Nairobi County Health Sector in regards to budget ceilings compared to budget estimates:
- Nairobi City County Fiscal Strategy Paper (CFSP) 2018 set a ceiling of Ksh. 7.6 billion for the health sector. During the formulation of budget estimates, the total budget for health sector declined by Ksh. 664.4 million to a budget of Ksh. 6.9 billion.
- The Public Finance Management Act 2012 prohibits counties from violating sector ceilings. In case they have to violate those ceilings, the County treasury is required to table a report at the county Assembly providing reasons why the ceilings cannot be upheld. (Section 108 of PFM Act 2012).
- The budget estimates for Nairobi County does not have a narrative explaining the deviation from health sector ceilings.
- The Counties spend lots of resources in formulating documents such as CFSPs which serve no purpose. This is not in the spirit of Article 201 of the Constitution of Kenya which calls for prudent use of public resources.
According to the 4th Schedule of Constitution 2010, the health sector is a devolved function. Counties are in charge of: a) ambulance services, b) county health facilities and pharmacies; c) promotion of primary healthcare; d) licensing and control of undertakings that sell food to the public; e) veterinary services (excluding regulation); f) cemeteries, funeral parlors and crematoria and g) refuse removal, noise pollution and solid waste disposal.
The national government is in charge of health policy, national health referral systems and offering capacity building to the counties.
Since the advent of devolution, Nairobi County residents have reported a number of challenges facing the health sector which include lack of essential drugs and medicine at public health facilities; negligence; detaining of patients due to inability to pay hospital bills (high out-of-pocket expenditure) and detaining the death due to inability of kinsmen to clear medical bills. Basically, out-of-pocket expenditure has crippled many families’ financial status.
Does the budget estimates match the ceilings set out in the County Fiscal Strategy Paper (CFSP)?
Section 117 of the Public Finance Management Act 2012 calls for County Treasury to prepare and submit to the County Executive Committee the County Fiscal Strategy Paper for approval by County Assembly by the 28th February of each year. This is a very important county planning and budgeting document which contains sector ceilings, broad strategic priorities and policy goals among others to guide the county in formulating its budget estimates.
The funding allocated towards various sectors is not matching the amounts in the Nairobi City County Fiscal Strategy Paper 2018. For instance, the Nairobi City County Fiscal Strategy Paper (CFSP) 2018 set a ceiling of Ksh. 7.6 billion for the health sector. During the formulation of budget estimates, the total budget for health sector declined by Ksh. 664.4 million to a budget of Ksh. 6.9 billion.
Section 108 of Public Finance Management (PFM) Act, 2012 is clear on this matter. It states that: “A County government may, with approval of its county assembly, deviate from the financial objectives in the relevant County Fiscal Strategy Paper, but only on a temporary basis and only if the deviation is required because of a major natural disaster or some other significant unforeseen event.”
There is no narrative to explain why Nairobi County deviated from the health sector ceilings as set out in the County Fiscal Strategy Paper. This is the same observation we have made in other sectors as you can see in the table 1 below. This deviations from CFSP ceilings and lack of explanations makes formulation of CFSPs a futile exercise. It is a chase after the wind. There is nothing we gain by spending resources and energy formulating a CFSP which we are not going to adhere to eventually.
The PFM Act 2012 (Sec 108 (3)) further calls upon the County treasury to “provide a report to the county assembly regarding the deviation and its implications.” This report is expected to explain why the deviation was made; the implications for such deviation; proposals to address the deviation; the time the deviation is estimated to last and status of development projects initiated by county government and if any projects have been stopped and reasons for doing so. As at the time when we were conducting this analysis, the report was not available in the public domain.
|Program||CFSP 2018 ceilings||Budget Estimates 2018/2019||Deviation|
|COUNTY PUBLIC SERVICE BOARD||100,002,000||76,463,231||-23,538,769|
|OFFICE OF GOVERNOR & DEPUTY GOVERNOR||5,677,993,061||4,793,573,955||-884,419,106|
|ICT, E-GOVT & PUBLIC COMMUNICATION||457,873,828||470,579,519||12,705,691|
|FINANCE & ECONOMIC PLANNING||3,180,000,000||2,227,948,145||-952,051,855|
|URBAN PLANNING AND LANDS||823,020,633||590,585,332||-232,435,301|
|PUBLIC WORKS, TRANSPORT & INFRASTRUCTURE||6,109,771,008||6,202,000,000||92,228,992|
|EDUCATION, YOUTH AFFAIRS, SPORTS, CULTURE & SOCIAL SERVICES||1,742,990,000||2,053,845,497||310,855,497|
|TRADE, COMMERCE, TOURISM & COOPERATIVES||1,178,000,000||896,805,228||-281,194,772|
|PUBLIC SERVICE MANAGEMENT||2,368,000,000||2,407,454,801||39,454,801|
|AGRICULTURE, LIVESTOCK DEVELOPMENT, FISHERIES & FORESTRY||529,000,000||654,717,264||125,717,264|
|ENVIRONMENT, WATER, ENERGY & NATURAL RESOURCES||2,285,432,883||2,510,682,804||225,249,921|
|URBAN RENEWAL AND HOUSING||320,000,000||518,238,894||198,238,894|
|WARD DEVELOPMENT FUND||1,790,000,000||1,250,000,000||-540,000,000|
|LIQOUR LICENCING BOARD||0||346,036,000|
Table: Hakijamii’s calculations showing how Nairobi County’s budget estimates for FY 2018/2019 is deviating from the sector ceilings set out in the County Fiscal Strategy Paper 2018.
We call upon the Nairobi City County Government to respect the ceilings set out in the County Fiscal Strategy Paper (CFSP). Since you have already violated the ceilings as shown in the table above, the county Treasury has no option but to table a report at the County Assembly that provides detailed explanation on why the ceilings were not upheld as required by Public Finance Management Act. It’s our since hope that that report should be made available to the public before we meet for the public hearings on Nairobi County budget estimates for FY 2018/2019. Otherwise, we can declare that you are not using taxpayers’ money prudently as required by Article 201 of the Constitution of Kenya 2010.