Examining the Influence of the Budget Formulation Structures and Processes on the Efficiency of County Health Systems in Kenya

Abstract

IntroductionPublic Finance Management (PFM) processes guide the translation of government resources to services and determine health system efficiency. PFM processes are implemented within the budget cycle which entails the formulation, execution, and evaluation of government budgets. We examined how the budget formulation structure and processes influence health system efficiency at the county level in Kenya.MethodsWe conducted a mixed methods case study using counties classified as relatively efficient (n=2) and relatively inefficient (n=2) as our cases. We collected qualitative data through document reviews, and in-depth interviews (n=70). We collected quantitative data from secondary sources, including budgets and budget reports. We analyzed qualitative data using the thematic approach and carried out descriptive analyses on quantitative data.ResultsBudget ceilings were historically allocated, insufficient, late, or not availed at all. This led to development of budgets that were unresponsive to health system needs. Counties developed both programme-based and line budgets with line budgets as the functional budgets. Line budgets limited accountability and flexibility to reallocate resources. County health funds were fragmented resulting in duplications and wastage. Limited stakeholder participation compromised priority setting and social accountability. Priority setting that was not evidence-informed limited efficiency. Finally, budget changes at the budget approval process compromised alignment of plans to budgets.ConclusionThis study has highlighted six aspects of the budget formulation process in Kenyan counties that ought to be strengthened to enhance health system efficiency: budget ceilings, budget structure, participatory budget formulation, pooling of health funds, priority setting processes and the budget approval process.HighlightsLate and Insufficient budget ceilings lead to development of poorly formulated budgetsPoorly developed and unused programme-based budgets limit health system performanceFragmented health system funding results in duplication and wastageLimited stakeholder involvement compromised priority setting and accountability

Budget monitoring, accountability practices and their influence on the efficiency of county health systems in Kenya: a qualitative case study

“…First, weak monitoring and accountability mechanisms potentially reduce the effectiveness of the budget formulation and implementation processes of the budgeting cycle which turn affects the e ciency of county health systems. Our previous work has demonstrated aspects of budget formulation that in uence health system e ciency including, budget ceilings, the budget structure, participatory budget formulation, the pooling and allocation of resources, and budget approval processes (22). We also found that the following aspects of budget execution may in uence health system e ciency -budget credibility, cash disbursement processes, procurement processes, provider autonomy, and nancial management information systems (12).…”

“…PFM happens within the annual budget cycle which entails the formulation, execution, and monitoring and accountability of the budget (5). Our previous papers discuss how the budget formulation (11) and execution (12) processes in uence health system e ciency in Kenya. This paper focuses on how the budget monitoring and accountability processes in uence county health system e ciency in Kenya.…”

“…Lack of feedback from accountability processes such as audits denied the health system important information to inform budget decisions. Budget decisions that were not evidenceinformed in uenced health system e ciency by allocating resources with limited consideration for health system needs and priorities (11). Besides, monitoring and accountability processes and actors created patterns of behavior for (in)e ciency.…”

The autonomy of public health facilities in decentralised contexts: insights from applying a complexity lens in Kenya

“…What we see in Kenya is similar tensions between the county government and subcounty levels that include public health facilities. At the county level, control over resources is concentrated at the county treasury, with other departments, including the county department of health and units under it, such as health facilities having limited power and control over resources 25 26. Given that public health facilities are one of the key sources of locally generated revenues at the county level, county-level actors are reluctant to relinquish control over these resources to public health facilities (figure 1).…”

“…These capacity challenges have manifested in suboptimal budget formulation, execution and monitoring challenges that have affected health facility autonomy (figure 1). 25 26 Capacity challenges as impediments to de facto autonomy have been documented elsewhere 5 6…”