The Second Kenya Devolution Support Programme – Kajiado County – KDSP II

Kenya Devolution Support Program (KDSP II)

The Kenya Devolution Support Program (KDSP II) is a four year program of USD 200M financed by the World Bank to support capacity building and technical assistance at the county level.
The program support capacity building and institutional strengthening in the five key result areas as identified in the national capacity building framework. The NCBF was developed in 2013 to identify the capacity needs of county goverments.it was further revised in 2015 to cover emerging areas of capacity building like technical assistance, on the job learning and knowledge and learning exchange programs.

Performance Based Grants

KDSP is a performance-based grants — from the central government to counties. The 2015 Budget Policy Statement (BPS) states that the national government will design a performance grant framework “to support county governments as the centres for service delivery and economic expansion, especially in the areas of public financial management (PFM), good governance practices and supporting the counties to be fully operational,” as well as to enhance fiscal responsibility principles. The draft 2016 Budget Policy Statement builds on this proposal:

“Counties will be free to ‘opt into’ the grant, which will entail agreeing to prepare and implement a capacity building plan, an annual performance assessment, reporting on grant funds received, among other ‘conditions’. In the first year (2016/17), participating counties will receive a basic allocation shared out as follows: 50 percent using the equitable share formula and 50 percent equally. In subsequent years, well-performing counties will receive an extra allocation shared out using an index combining the equitable share formula and [their] performance scores. Counties will be able to invest proceeds from the capacity/performance grant on a range of eligible development projects as per their approved County Integrated Development Plans (CIDPs).”

The Program Development Objective (PDO) is to strengthen capacity of core national and county institutions to improve delivery of devolved services at the county level.

5 Key Result Areas (KRAS)

KRA 1 – Public Financial Management:
- County Revenue Management
- Budget
- IFMIS
- Financial Accounting, Recording and Reporting
- Procurement
- Internal and External Audit
KRA 2 – Planning and Monitoring and Evaluation :
- County Planning and updated County Integrated Development Plan (CIDP) Guidelines.
- County M&E – including County Integrated Monitoring & Evaluation System (CIMES) guidelines.
KRA 3 – Human Resources and Performance Management:
- County Developing county staffing plans
- Competency frameworks, efficient systems, processes and procedures, and performance management systems.
KRA 4 – Devolution and Inter-Governmental Relations:
- Introduction of a new performance-based conditional grant.
- Investment management including Social and Environmental safeguards.
KRA 5 – Civic Education and Public Participation:
- Civic education.
- Public participation, including means to enhance transparency and accountability.

Program Financing

The KDSP is a program of USD 200M supported by the World Bank. The government is expected to put in additional USD 87.3M as counterpart funding over the program period making the total funding at USD.287.3M

The Key Program Principles

Result based Disbursements – Disbursement of funds follow a set of national and county level results which are well defined and converted into measurable indicators.

Strengthening Existing Government Systems – All program activities are aligned with existing departmental and county level planning and budgeting system including monitoring and evaluation. It also works through the governmental, intergovernmental and county level institutions. The Capacity and Performance Grant flows from NT to the County Revenue Fund (CRF), and be executed as part of the regular county planning, budget and execution cycle, subject to the provisions of the PFMA. Counties will be required to develop implementation reports and financial reports providing details of capacity building activities completed against the annual capacity building plans.

Support National Capacity Building Framework - The KDSP support implementation of the NCBF through a complementary set of activities. Since 2013, both National Government and Development Partners have designed and implemented a range of activities to support achievement of NCBF results. The program therefore introduce a comprehensive package of activities to create a step-change in NCBF implementation by:

Introducing a robust annual assessment of progress towards NCBF and MTI results to better inform government and development partner activities;
Building on ongoing National Government capacity building activities to deliver a more comprehensive, strategic and responsive package of activities;
Strengthening the design, coordination, targeting and implementation of counties’ own capacity building activities;
Strengthening the linkage between capacity building ‘inputs’ and capacity ‘outputs’ through stronger incentives for improved performance.

Funds Flow to strengthen inter-governmental fiscal structure – The program supports fund transfer directly to counties realizing the vision of government for fiscal transfer by way of a performance grant from the national government to counties.

Joint Oversight of the program – Joint Steering Committee co-chaired by a county governor and Cabinet Secretary of MoDA provide strategic leadership and broad oversight of the program.

Independent assessment of Results – The Program support the introduction of an Annual Capacity & Performance Assessment (ACPA) and support strengthening of the timeliness and coverage of the audit of the counties’ financial statements, which be important inputs to the performance assessments. The new system establish a unique relationship between funding for capacity building and service delivery, strengthening of the incentives and capacity building support.

The Program duration is from 2016 to 2020. The Program’s budget framework be defined as follows: Total KDSP expenditures over the implementation period are estimated at USD 287.3 million, of which USD 200 million is to be provided by the World Bank (IBRD/IDA funding).

USD160 million will go to counties through new Capacity & Performance Grants while USD 40 million to national government to strengthen devolution support (guidelines, training, in-county TA)
Level 1 capacity building grants: Ksh. 20 – 50 Million
Annual allocation for qualifying county = Fixed amount (KShs 15 million) + Variable amount depending on equitable share .Size of grant depends on equitable share formula
Level 2 capacity and performance grants: Approx. Ksh. 30 – 900 Million
Annual allocation for qualifying county = Total annual amount X Relative weighted performance. Size of grant depend on equitable share formula and performance score.

Implementing Institutions for KDSP

The Ministry of Devolution and Asal (MoDA)
The National Treasury (TNT)
Ministry of Public Service, Youth and Gender Affairs (MoPSYGA)
County Governments
Office of the Auditor General (OAG)
Kenya School of Government (KSG)

Disbursements

The Ministry through the National Treasury has so far disbursed the first tranche of level 1 capacity building grants amounting to kshs 1.41B to the counties in February 2018. The World Bank has also released kshs 2.1B to the National Treasury for National Government Agencies results achieved in the FY 2016/17.