1. Challenging the Budget :- Creating incentives and driving for results
By Kenya Delegates

2. Introduction
The budget is the single most important vehicle/mechanism available to any government to use as a means to deliver its national agenda
The National Agenda can only be delivered if there is a strong link between the national goals, and the budget
The linkage only exists where there is a budget process that allows for comprehensive analysis with a forward looking review and is effective in delivering a budget that is based on outputs and outcomes.

3. Reforms in the Kenya Budget
Programme review and Forward Budget
Budget rationalization programme
Medium Term expenditure Framework
All the reforms were due to the in weaknesses of the budget process in delivering the national agenda

4. GOALS OF MTEF
Fiscal Discipline : Expenditure by line agencies must adhere to hard budget ceilings in order to remain within aggregate resource constraint.
Allocative Efficiency: expenditure allocation should address national development priorities
Operational (technical efficiency: public expenditure should achieve explicit targets at least cost by applying performance targets of output relative to inputs

5. Basic Requirements to Introduction of Performance Budgeting
The Budget structure:- The budget had to be reclassified into programmes
Capacity Building
Ownership of the process
Incentives
The legal Framework

6. Introduction of Performance Contracting
All Ministries signed up their performance contracts in 2005
Each Ministry had targets to achieve which were picked from the strategic plans
These targets were however predicated on the Ministry of Finance having to meet it targets on mobilization and releases of resources.

7. Linking the budget to performance
Introduction of programme based budgeting linked to the performance contracting. This is being done as the MTEF with the detailed budget having to be presented to parliament later.
Those activities not linked to outputs and outcomes that are part of strategic plans and the performance contracts to be phased out

8. Challenges to performance Budgeting
Incentives: It is quite a difficult job to identify incentives
A rigid budget structure: in particular the issue of the administrative and geographical coding
Lack of a functioning Integrated Financial Management system
Lack of an organic Budget law

9. What MOF is doing Working on an organic budget Law
Ownership of reforms: having to link performance to allocation of resources. Creating an MTEF reallocations line for incentives. All Staff of Ministries are signing up performance contracts and staff appraisals have been linked to outputs that are same as those of the budget
Creation of necessary capacity critical to the process

10. Conclusion
Budget reforms are about creating effective systems that guarantee that for any resource available it can be allocated to priorities, accounted for and ultimately there is value for money. The challenge is when that available resource is never available.