Know Your Budget Making Process

1. The anchor laws on the budget and budgeting making process are Constitution of Kenya, 2010 and The Public Finance Management Act, 2010;
2. Budget calendar stipulates timelines for a number of key activities to be undertaken in order to finalize the Budget and submit it for approval by 30^th April of each financial Year.
3. The budget calendar is contained in the Treasury circular issued in accordance to Section 36 of the Public Finance Management Act, 2012.
4. The Treasury Circular provides guidelines on the processes and procedures for preparing the subsequent financial year and the Medium-Term Budget.
5. The budget-making process in Kenya begins from August of the current financial year and ends in December of the coming financial year. For example, the next budgeting process will commence in August 2023 and end in December 2024.
6. A financial year or fiscal year or budget years is the period that governments use for accounting and budgeting and financial reporting.
7. The Budget process is cyclic involving four main stages as follows: Formulation, Approval, Implementation and Audit and Evaluation
8. The Budget process is cyclic involving four main stages as follows: Formulation, Approval, Implementation and Audit and Evaluation
9. Budgeting process occurs at both the national and devolved levels of government.
10. The Budget process involves preparation and submission of documents known as budget documents which must be approved by cabinet and parliament.
11. Every of the four stages of the budget process has unique documents. 

Formulation stages

Done by the executive arms of both national and county governments.

The formulation stage entails medium-term and long-term planning, determining the financial and economic priorities, preparation of the overall as well as budget estimates.

At this stage we cannot underscore enough the needs for meaningful public participation by the public.

The key budget documents at the formulation stage include:

At the national level:

• Budget Circular
• Budget Review and Outlook Paper
• Budget Policy Statement – contains estimates national government revenue and expenditure.
• The Budget Estimates

At the County level:

• Budget Circular
• The Annual development Plan
• County Budget Review and Outlook Paper
• The County Fiscal Strategy Paper – contains estimates national government revenue and expenditure.
• Budget Policy Statement
• The Budget Estimates

Approval stage

Done by Parliament the national level and County Assembly at the county levels

with each level having the Budget Policy Statements and County Fiscal Strategy paper adopted respectively.

Amendments and approval of the estimates by Parliament and County Assemblies takes places at this stage followed by the enactment of the Appropriation bills that allows expenditures.

Key documents under this include the Finance Bill and Appropriation Bills.

Implementation stage

This stage entails execution the approved budget proposals by the executive of the national and county governments. Parliament and County Assemblies will exercise oversight over the implementation.

Key budget documents here entail quarterly budget implementation review reports by Controller of Budget as well as quarterly budgets implementation reports by the national and county governments.

The Audit and Evaluation stage

The Offices of the Auditor General and the Controller of the Budget are in charge of the audit and evaluation stages respectively. Audit reports look to confirming whether public funds were expended prudently by both the national and county governments. The Audit reports are tabled before Parliament’s and County assemblies for debate and consideration after which they should take appropriate action. Debate and consideration s of the reports should be done within three months of tabling of the report by the Office of the Auditor General.

The Controller of Budgets on the other hand reviews the budget estimates of the previous financial years and tables a quarterly budget report to the Parliament and County Assemblies

Key budget documents include: the Auditor General’s reports for both levels of government and a review of the Budget Review and Outlook Paper (BROP and CBROP) which forms the basis for evaluation by the COB.