Public Account and Coding System; Government Expenditure in Kenya by bing yu

Thursday, April 13, 2023

Public Account and Coding System: Government Expenditure in Kenya

Bingxin Yu

Research FellowInternational Food Policy Research Institute

September 8, 2014

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Introduction

• Public expenditure translate policy objectives into actions through public service delivery

• Gov., develop partners and general public increasingly request expenditure accountability and transparency

• Track, monitor and evaluate the flows and impacts of public resource allocation

• Reliable assessment and comparisons of public expenditure


Data Challenge

• Data access• Opaque definitions of the agricultural sector: line

ministries, functions• Different levels of disaggregation: sub-sector• Diverse reporting formats designed by users• In need of a transparent and user-friendly

coding system • Detailed data along with clear documentation• Kenya as a case study


Common Budget Classifications

• Jacobs et. al 2009, Cooper and Pattanayak 2011• Administrative: gov. organization (Who?)• Functional: purposes and objectives, easy to

compare (What?)• Economic: capital, salary, goods/service (How?)• 3 classifications distinct, serve different needs,

independent of each other for each transaction• Economic and functional defined in GFS, COFOG• Other classifications like program, funding source


Budget Process - Preparation

• Budget Outlook Paper: broad fiscal parameters for the budget year and two years forward

• Budget Strategy Paper: firm sector and ministerial spending ceilings

• Budget circular from MOF to line ministries: clear technical guidance and timeline for budget

• line ministry submits budget to MOF for the consolidated Appropriation Bill

• Budget Statement to National Assembly


Budget Process - Execution

• Each line ministry sets up two mirror accounts (recurrent and development) in the central bank

• A monthly spending limit set by MOF to ministry• Accounts reported daily through mirror-accounts • Quarterly Economic and Budgetary Review:

actual expenditure• Financial Statements: final report from the

Auditor General• Multiple versions of gov. expenditure: source,

timing, budget vs. actual


Kenya Public Expenditure Data

• https://opendata.go.ke


Data Structure

Variable Central ClassificationVote Name of MinistriesSub-Vote Divisions within Ministry AdministrativeHead Dept. within DivisionsCurrent or capital Capital, current, interestEconomic class. Economic classification EconomicLine item Description of activities Estimates BudgetRevised Revised budgetExecuted Executed spendingBudget Type Development or recurrent

No functional classificationreconstructed from Head


Administrative Structure of MOA (code=10)

Sub-vote code

Sub-vote Head code Head

10.100

General Admin. and Planning

10.100.195Agri. boards and committees services

10.100.191 Agri. attaches' offices10.100.228 Finance and accounts department10.100.190 HQ admin. and technical services

10.100.193 Development planning services

10.104

Inform. Mgmt. for Agri. Sector

10.104.261 Kilifi institute of agriculture

10.104.254Agri. business, market dev. and agri. inform. services

10.104.257 Agricultural information centre10.104.258 Embu agricultural college10.104.259 Bukura agricultural college


Economic Classification of MOA

Economic classification

Line code Line

Capital3110200 Construction of buildings3110500 Construction and civil works3130100 Acquisition of land

Wages and salaries

2110300 Personal allowance - paid as part of salary

2110400Personal allowance - paid as reimbursements

Goods and services

2211000 Specialised materials and supplies2210800 Hospitality supplies and services2211200 Fuel, oil and lubricants2210100 Utilities, supplies and services

Grants 2620100Membership fees and dues and subscriptions to international organizations


Functional Classification of Ag. (User Defined)

Functional class. (bill. Ksh) COFOG 2006/07 2010/11Economic affairs 704 79.2 176.1

Agri., forestry, fishing & hunting 7042 19.6 38.6

Agriculture 70421 16.3 29.5Forestry 70422 1.69 4.62Fishing and hunting 70423 1.6 4.5

Transport 7045 30.4 70.1R&D agriculture, forestry, fishing and hunting 70482 5.0 8.0

Environmental protection 705 1.1 2.7Protection of biodiversity and landscape 7054 0.1 0.12

Total 378.7 684.1


Expenditure by Administrative Classification

In

General pub-lic services

Defense

Public safety

Agriculture, fishery and forestry; 5%

Trade, tourism and industry

Infrastructure

Environment and water

Education; 20%

Health Social service

2010/11


Expenditure by Functional Classification

General public services

Defense

Public order and safety

Agriculture, forestry, fish-ing and hunt-

ing; 6%Trade, tourism and

industryInfrastructure

Environmental protection

Housing and community amenities

Health

Recreation, culture and re-

ligion

Education; 25%

Social Protection

2010/11


Expenditure by Economic Classification

Capital18%

Compensa-tion of em-

ployees36%

Goods and services

15%

Grants28%

Other3%

2010/11


Comparison of Total Gov. Expenditure

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

100

100

200

300

400

500

600

700

800

IMFFAOIFPRI

Bill

ions

Ksh


Comparison of Agricultural Expenditure

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

100

5

10

15

20

25

30

35

40

45

50

IMF

FAO

IFPRI

GOV (3 ministries)

GOV (5 ministries)

GOV (6 ministries+R&D)

Bill

ions

Ksh


Agri.-related Expenditure by Ministry

Ministry of Regional Development

Ministry of Justice, National Cohesion and Constitutional Affairs

Ministry of Lands and Housing

Ministry of State for Special Programmes

Ministry of Fisheries Development

Ministry of Livestock Development

Ministry of Agriculture

0 3 6 9 12 15 18

Billion KSh


Agri.-related Expenditure by Sector

• Agriculture in GDP: 20%

• Agriculture in total expenditure: 6%

• Livestock in agricultural GDP: 47%

• Livestock in agricultural exp.: 15%

2010/11

Agricul-tureFis

hery

Fores-try

Livestock


Agri.-related Exp. by Economic Classification

• High capital investment (25-30% vs. total <20%)• Goods and services increases quickly• Large proportion as inter-gov. transfer

2002 2003 2004 2005 2006 2007 2008 2009 20100

10

20

30

40

50 Capital

Compensation of employees

Goods and services

Grants

Other


Agri.-related Exp. by Functions

2002 2003 2004 2005 2006 2007 2008 2009 20100

5

10

15

20

25

30

35

40

45

50

Administration Conservation Extension Flood and irrigation Food security Land settlement

Marketing Pest control Research Veterinary Services

Bill

ion

Ksh


Conclusion

• Gov. expenditure can be organized in different and independent classifications

• Administrative, economic, functional• Countries may only report some classifications• Kenya case study illustrates how to derive

functional classification that’s not reported• A useful approach to flexibly track gov. spending


Conclusion

• Mapping relationship between gov. agencies and functions is not one-to-one

• Expenditure goes beyond line ministries • Simple aggregates based on gov. admin.

structure can be misleading• Functional and economic classifications

preferred definition for comparison• Regardless of administrative structure change


Kenya Experience

• Open data• Data quality: design, implementation, report• Coding system with documentation • Aggregates from different sources could vary

substantially due to the definition, audit status and reporting agency

• Foundation for timely policy decision and analysis

Public Account and Coding System; Government Expenditure in Kenya by bing yu

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