PFM In Local Governments – Resource Enhancement & Accountability Programme

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Objective 5 aims to strengthen the fiscal and PFM architecture for fiscal decentralisation, in order to empower Local Government to implement the fiscal decentralisation strategy, in collaboration with central government. This links closely with outcome 2.4, which rationalises inter-governmental fiscal transfers to provide more adequate resources for Local Government.

This objective also links to the DRM strategy, which will provide direction on steps to enhance local own-source revenue collections, which is also outlined below. Other key aspects requiring reform effort include local government procurement procedures, strengthening internal audit and clarity of the roles of local PACs and regional committees in audit scrutiny, and building capacity to improve the quality and coordination of planning and budgeting for local service delivery.

KRA 5.1 : Increased contribution of LG own-source revenue.

This outcome aims to address the weak performance of local revenue collections by providing support to review and enhance the legal and policy framework as well as administrative capacities for revenue collection.

Key interventions (outputs) include:
1. Enhance enabling environment for LG own-source revenue mobilisation, in line with DRM strategy;
2. Roll out Revenue management database to all Local Governments. This provides accurate information of tax payers and amounts to be charged and involve political leadership in revenue enhancement efforts.
3. Revenue management and collection capacity enhanced for local governments, in line with DRM strategy.

KRA 5.2 : Effective planning and budgeting at local governments

Key interventions (outputs) include:
1. Harmonize planning and budgeting cycles between LG and national budgets, in particular:
  1. Simplified development planning frameworks and formats developed and popularised;
  2. Review and disseminate NPA planning guidelines for local governments;
  3. A review of legal framework on LG budgeting cycles;
  4. NPA Certification of CG budgets to ensure that they are in line with priorities submitted by LGs; and
  5. Strengthen Planning Units in LGs.

Support planning, budgeting and execution processes (lessons from LGPA) including:
1. Support LGs in spatial planning and related Geographical Information System (GIS) equipment and software to strengthen evidence based strategic planning
2. Issue and orientation of LGs on sector grants, budgeting and implementation guidelines (including issues on social and environmental safeguards) on time;
3. Publicize Indicative Planning Figures (IPFs) for LGs on time;
4. Provide ample support to LGs to use the PBS and minimize changes to the budgeting and reporting systems;
5. Provide guidance and support to LGs to execute the physical planning function
6. Support in the development and use of Statistical Abstracts

Financial management and reporting: Improve linkages between the sector departments and the planning/PFM functions

KRA 5.3 : Improved quality of audit and coordinated follow-up of recommendations by LGPACs and regional audit committees

This outcome aims to strengthen the quality and resource allocation to the internal audit function and to strengthen follow up of audit (internal and external) recommendations, with consideration of the roles and coordination between LGPACs, Local Government Accounts Committee of Parliament and regional audit committees.

Key interventions (outputs) include:
1. Improved effectiveness and capacity of LGPACs and coordination with other audit committees. Includes developing policy, on roles and coordination of LGPACs, district PACs and regional audit committees;
2. Improved monitoring and reporting on implementation of LG audit recommendations. Includes development of a system to ease tracking implementation of audit recommendations for accounting officers; and
3. Enhanced quality of internal audit function at LG level. Including assessment, support, and incentives for Local Governments to allocate sufficient resources for the internal audit function.

KRA 5.4 : Enhance accountability and performance monitoring in delivery of services in key service sectors ( roads, education, health, and agriculture)

Key interventions (outputs) include:

Revise the LG Performance Assessment Manual and process. The revision will focus on timing of the assessment, sharpening some of the indicators and refinement of the weights and explanation on a few others.
Foster immediate Administrative Action based on review of the specific needs identified in line with recommendations in the FY2017/18 report. The Ministry of Finance, Planning and Economic Development shall issue a circular consolidating all issues for attention/redress by LGs including, among others the weaker core areas identified of urgent attention.
Performance Improvement of LGs. The performance improvement will be offered through a mix of mutually reinforcing approaches, including regional and district specific performance improvement clinics as well as local government specific hands-on support. The indicative areas for performance improvement, based on a review of the core weaker areas in the assessment that will be concretized into a Performance Improvement Plan. The support will focus on thematic areas of underperformance and low performing LGs as per the LG PA report.
Recognition of Accounting Officers from LGs. Public recognition/Incentives and acknowledgment of local governments that have complied with the six (6) accountability requirements (as well as the worst performing) as per the LG Performance Assessment.
Strengthen LG Governance and participation structures. Including ensuring functionality of community oversight and accountability structures – harmonization of guidelines, ensuring proper constitution and induction/training.
Develop and operationalise core government monitoring and evaluation system based on NDP, sector and MDA plans. Includes Impact evaluations for establishment of the effect of the planning and budgeting system on the desired results.
Enhance performance and accountability for service delivery at LG level. Including

KRA 5.5 : Enhanced integrity and value for money of local government procurement.

This outcome aims to address weaknesses in the local government procurement systems and procedures. In particular, the key interventions include strengthening the integrity of LG procurement procedures and developing an enhanced legal framework for LG procurement. The approach to strengthening integrity of procurement is framed by undertaking a procurement integrity survey at LG level with contractors, procurement officials, LG leaders and CSOs, to agree challenges and actions for improvement. On the basis of the survey, a national campaign to strengthen integrity of procurement at HLG level will be developed, including support to the procurement function, as required. The survey will be followed up in 2020 to assess the impact of the campaign.

Key interventions (outputs) include:
1. Strengthen integrity of LG procurement procedures. Including undertaking a procurement integrity survey at LG level with contractors, procurement officials, LG leaders, and CSOs to identify actions for improvement;
2. Enhance legal framework for LG procurement. Including review of legal framework for procurement at LG level and amendments.
3. Enhance procurement and contract management capacity. Including support to sector departments to appreciate and perform their roles related to procurement and contract management.