1. Republic of Kenya
Ministry of Health
Public Expenditure Review
2007
Printed on: 14 November 2013

2. Contents
Contents..............................................................................................................................i
Abbreviations......................................................................................................................i
1 Background......................................................................................................................1
2 Government Spending on Health through the MoH...................................................25
Table 2.2.7 Total reported revenue collection by province and financial year (KSh
million)..............................................................................................................................39
3 Review of Projects/Programs related to the Ministry...................................................39
Table 3.3: Summary of programmes, goals, outputs and indicators.............................42
4 Pending Bills..................................................................................................................51
5 Analysis of Ministry outputs and corresponding performance indicators..................53
6 Public Expenditure Management (PEM).....................................................................57
7 Human Resources Development and Capacity Building.............................................60
8 Implementation of Recommendations of the 2006 PER..............................................65
9 Challenges and Constraints.........................................................................................67
10 Conclusions and Key Recommendations...................................................................68
11 Annexes........................................................................................................................71
12 References....................................................................................................................73
Abbreviations
Description
AIDS
Acquired Immune Deficiency Syndrome
CBS
Central Bureau of Statistics
GDP
Gross Domestic Product
HIV
Human Immunodeficiency Virus
MDG
Millennium Development Goals
MoH
Ministry of Health
i

3. NHA
National Health Accounts
NHSSP
National Health Sector Strategic Plan
PER
Public Expenditure Review
PRS
Poverty Reduction Strategy
MoF
Ministry of Finance
DHMTs
District Health management Teams
PHMTs
Provincial Health management Teams
FBOs
PRSP
SARS
HLA
Faith Based Organizations
Poverty Reduction Strategy Paper
Severe Acute Respiratory Syndrome
Human leukocyte Antigen
ii

4. 1
1.1
Background
Overall objective of the PER
The overall objective of the PER 2007 is achieving targeted results through
efficient public spending.
1.2
Objectives of the Ministry’s PER
The Public Expenditure Review (PER) for health is considered an integral
component of the budgeting process and as part of overall economic recovery
strategy yet be consistent with the general macroeconomic framework.
The overall objective of the review is to assess the extent of public expenditure on
health.
The specific objectives are as follows:
 Present the Government of Kenya's (GoK) policies and objectives in the health
sector, and the broad programmes and activities to achieve these over the next
three years, annually;
 To examine the distribution of public health expenditure by sub vote, and
economic categories;
 To assess the absorptive capacity of resource in the health sector,
 To assess the compliance of financial discipline in the health sector;
 Assess the extent to which the expenditures are aligned to policies and
objectives in the health sector;
 Review the effectiveness of expenditures;
 Identify budget related constraints and resource-use;
 Set out the broad annual financing requirements to implement planned
activities using existing facilities and capacity, but removing short-term
constraints while working to eliminate long-term constraints; and
 Establish priorities in recognition that there are constraints of financial,
technical and physical nature that have to be addressed if the country is to
improve its health outcomes.
 The efficiency of expenditures as measured by results achieved and their
coherence with the sector strategy targets;
 The equity of expenditures measured by their contribution to promote more
equal distribution of resources;
 Budgetary procedures and institutional arrangements.
/1

5. 1.3
Health Status Indicators
Kenya’s epidemiological and demographic landscape has not changes
significantly as the disease pattern is still dominated by communicable diseases.
However, lower total fertility rates have been witnessed. Since
1993, the number of children born per woman has declined from 6.7 1 in 1989 to
4.9 in 2003, KDHS (2003), and the infant mortality rate increased from 73 in
1998 to 77 live births by 2004.
Population growth is high by world standards, but has been declining, now
estimated at 1.8% per year (Central Bureau of Statistics, 2002) while the
contraceptive prevalence rate marginally increased to 41% by 2003 among
married women of reproductive age.
Communicable diseases (infectious and parasitic diseases) such as malaria and
tuberculosis continue to be prevalent. In addition, diarrhoea diseases, acute
respiratory infections, skin diseases and complications of pregnancy are also very
commonly seen.
Child malnutrition is reflected in the recent finding (2003) that 20% of children
were found to be moderately underweight for their age. On a favourable note,
though HIV is still a serious problem its prevalence seems to be declining - now
estimated at 6.1%? On the whole, there are wide regional disparities in health
status indicators, and significant differences between urban and rural areas [see
KDHS].
1.4
The Health Services Delivery System
The Ministry of Public Health (MoH) operates a four-tiered system 2 of health
care facilities, delivering primary health care in dispensaries and health centres
and (Levels 1 and 2) at the locational levels and secondary care at district and
provincial hospitals (level 4 and 5), and tertiary care at national referral hospitals
(Kenyatta and Moi) (level 6).
However, the system has been characterized by a number of serious problems—
many of which are addressed by the NHSSP II and briefly and discussed below.
Limited institutional capacity and lack of financing
The NHSSP II 2005 – 2010 addresses the problems arising from the weak
institutional framework of the health sector, which comprises an under equipped
and understaffed public health system and a rapidly growing (and largely
unregulated) private sector.
1
2
Excludes the northern part of the country
See the NHSSP II
/2

6. In the past, the MoH has been overly centralized and unable to coordinate
effectively its services. The core functions of the MoH are regulation, policy
analysis and planning, evaluation and monitoring, and management of service
delivery.
The centre (Ministry of Health) largely controls the disbursement systems,
while the District Medical officers of Health (DMOH) handles expenditures for
the lower levels, sometimes irrespective of their priorities. 3 There is, however,
decentralization initiative, to devolved authority for spending to rural health
facilities (health centres and dispensaries); one effect of this decision will be to
minimize opportunities for misallocation of resources as funds will be disbursed
directly to them. They in turn will be held accountable for the expenditures
incurred.
Efficiency in the allocation of scarce funds: Allocation of funds is highly
centralized, and has been directed to health facilities (hospitals, health centres
and dispensaries) using resource allocation criteria especially on operations and
maintenance.
Overall, the MoH spent about KSh 23 billion ( KSh 19.8 billion on recurrent; KSh
3.2 billion on Development) on health in 2005/06.
Lack of accessibility to facilities for most of the population
was due to limited geographic coverage compounded to some extent by lack of
access due to need for cash payments required to receive care: the indirect costs
of transportation to facilities are added to the direct costs of paying the fees
required for consultations and/or prescription drugs.
1.5
Linkage between ERS, NHSSPII
Acknowledging many of the challenges faced by the health sector, the NHSSP II
is an integral part of ERS, from which it is derived identifies several key
components of the ERS policy as it relates to the health sector include:
 Revisiting the financing of the sector: Introduce the National Social Health
Insurance Fund (NSHIF) in a phased approach to eventually achieve
universal coverage of free health care for the Kenyan population.
 Focusing on investments to benefit the poor: Reallocate resources towards
promotive, preventive and basic health services and enlist additional
capacity through partnership arrangements.
3
See financial flow to health facilities.
/3

7.  Increasing cross-sector cooperation: For MOH, strengthen ties and
collaboration across sectors in the areas of agriculture, water and
sanitation, education, roads, culture and social services, etc.
 Increasing efficiency and effectiveness: For MOH, adopt a programmatic
approach with all partners involved (sector wide) leading to a jointly
agreed strategic plan, financing mechanisms, M&E framework, and
procedures for annual sector programme review, together with a jointly
agreed medium-term expenditure framework (MTEF).
 Increasing GOK funding: Increase health sector funding from the current
level of 5.6% of total public expenditure to 12% by the end of the ERS
period.
The ERS identifies key policy actions necessary to spur the recovery of the
Kenyan economy and is based on four pillars reflecting the overall goals of our
society.
Firstly, the Government will seek to maintain revenues at above 21 per cent of
GDP to enable the bulk of Government expenditures to be financed from tax
revenues. Secondly, and more fundamental pillar is strengthening of institutions
of governance. The third pillar is rehabilitation and expansion of physical
infrastructure and lastly, the fourth pillar is investment in the human capital of
the poor.
Addressing health sector, in particular, the ERS identifies crucial efforts like
meeting the health challenge through the establishment of a comprehensive
National Social Health Insurance Fund (NSHIF) which will provide both in
patient and out patient services to all Kenyans; continuing the battle against the
HIV/AIDS pandemic by putting in place an integrated approach to prevention,
increasing community involvement and ensuring the special health care needs of
the infected are met, rehabilitation of existing health facilities; and overhauling
the system of procurement and distribution of drugs for public health facilities in
order to reduce cost of drugs and make them affordable and also to rationalize
the distribution system to ensure that drugs are supplied to areas where most
needed.
The ERS notes that provision of health services should recognize the people’s
needs and lifestyle. In this regard, the existing health facilities have to be made
more accessible, properly stocked, staffed and improved in terms of
infrastructure and equipment relevant to the social and physical environment. In
this regard, Government efforts will be directed at:
 Strengthening community-based health care programmes, and promoting
mobile outreach clinics for remote areas;
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8.  Ensuring that drugs and equipment meant for health facilities reach the
intended destinations;
 Intensifying immunization of vulnerable children and other members of
the pastoralist community and strengthening district capacity to detect
and contain epidemics; and
 Providing public health education to communities for preventive and
promotive health care.
1.6
NHSSP II - Key principles of AOP2
In keeping with the five broad policy objectives of the second National Health
Sector Strategic Plan for 2005–2010, AOP 2 was developed with four main
principles as guides. These are:
 Norms and standards for the various service delivery levels guided the
development of the implementation plan in the area of human resources,
infrastructure and commodities.

The move towards SWAp helped to strengthen synergies among the
various stakeholders contributing to the realization of the health targets.
For the first, time the outputs of major FBOs/NGOs in the health sector
have been included in the annual operational plan.
 The results-based management system introduced in AOP 1 highlighted
the need to define specified outputs for the various levels of health care to
ensure that performance can be monitored during implementation.
1.7
Strategic issues and policies of the ministry
1.7.1
Flow of funds to rural health facilities
The Government introduced the District Focus for Rural Development Strategy
in 1984, to act as a catalyst for harnessing and mobilising resources for maximum
utilisation in the development of the rural areas where 80 percent of population
lives. Under this Strategy accounting services were centralised within the District
Treasuries to enable them serve all the Authority to Incur Expenditure holders.
The District Treasury also became responsible for financial management of all
Government funds in the districts.
The Strategy though a noble one, faced various challenges including:
 Inadequate cash liquidity at District Treasuries to support district
activities;
/5

9.  Inadequate participation of communities and lower level administrative
structures in the planning processes;
 Lack of systems to ensure funds flow to the spending units.
Although Treasury has taken several measures to eliminate these challenges,
more reforms are required to ensure that funds flow to the spending units, are
utilised for intended purposes and communities get value for the money. The
2005 public Expenditures Tracking Survey shows that 45% of funds and
commodities earmarked for rural health facilities do not reach these units.
The inability of the rural health facilities to access funds on time has hindered
their operations and almost brought to a stand still the implementation of public
health activities. This, among others factors, may be the cause of deterioration of
health status in the districts.
The Government has increased the allocations to the health sector to 8.4% of the
total Government expenditure and this is expected to increase to 9.6% by
2008/9. These additional resources are intended to upgrade health
infrastructure, procure medical commodities and support implementation of
community strategy in line with the Ministry’s Second National Health Sector
Strategic Plan (2005-2010).
The implementation of the community strategy and focusing attention to the
lower level facilities will require modification of the financing arrangements for
faster resource flow. However any modification must be within the existing
Government financial regulations and procedures.
Given that the Ministry is looking forward to a Sector Wide approach (SWAp), as
a coordination framework for the provision of health care services in the country,
the flow of resources to health facilities and accountability is critical in achieving
objectives and vision of the Second National Health Sector Strategic Plan.
The rural health facilities provide the frontline avenue in the delivery of health
services in the country. There is need to ensure that financial resources are availed to
make these services effective.
The MoH has, therefore, developed a Paper therefore that defines the Ministry’s
position of disbursing funds to health facilities with an aim to create a robust
financial system to facilitate:
 Timely disbursement of funds,
 Production of timely financial returns; and
 Timely and accurate accounting for resources in the sector.
/6

10. The Paper highlights crucial areas like: risk management, facility management
structures, minimum staff requirements, resource allocation criteria, and
mechanisms of the flow and accountability of funds, and lastly, monitoring and
evaluation.
1.7.2
Guidelines to financial flow to health centres and
dispensaries
In order to facilitate the implementation of the Position Paper on the flow of
funds to the health centres and dispensaries, comprehensive Guidelines have
been developed, in recognition of the importance of empowering the rural health
facilities management to make decisions on the use of the resources made available
to them.
As expected, the local community will enjoy good access to services, with ultimate
improvement in health status. The Guidelines aim at contributing to the
strengthening of rural health management capacity, with emphasis on financial
management.
The starting point in service delivery is to prepare work plans. The facility work plan
shows how services are organized as well as how resources (such as finances and
personnel) are combined to render the service.
Important components covered by the Guidelines include: resource management,
planning health facility activities, operating financial management systems,
procurement of goods and services, and documentation of accounting records.
Emphasise is given of the development of work plans and approved by the
management committees as a starting point in financial management. It will be
on the basis of the plans that financial resources will be released to the facilities.
1.7.3
Procurement position paper
The Government is committed to the attainment of the millennium development
goals (MDG) as well as the targets set in the Economic Recovery Strategy for
Employment and Wealth Creation (ERSWC). Revitalising the health sector in
order to improve service delivery and ensure community participation as well as
enhancing cooperation with all stakeholders in the sector is therefore being
undertaken.
A five-year Second National Health Sector Strategic Plan 2005-10 whose goal is
to reserve trends in health outcomes has been developed with an orientation on
output and performance. This is in line with the Government reforms that are
intended to institutionalise results based management approach in the public
service. The ministry has initiated processes aimed at implementing the Plan
through the Sector Wide Approach (SWAp).
/7

11. The position paper which outlines procurement improvement plan is part of the
preparation of the four year Joint Programme of Work and Funding, 2006-2010,
and provides critical analysis of the procurement capacities, competences as well
roles and functions of the procurement entities of the various levels within the
Ministry of Health. Public procurement is broadly defined as the purchasing,
hiring or obtaining by any other contractual means of goods, construction works
and services by the public sector.
The importance of government procurement from a development perspective is
self-evident, as the purchase of goods and services accounts for KSh 8 billion
(30% of MOH allocation) The need to enhance transparency in public
procurement cannot be over-emphasized within the framework of the
Programme of Work.
This position paper addresses the following issues and proposes the possible
interventions in order to facilitate a more efficient and effective procurement
function in the public health sector.
Some of the key issues addressed are:
a) Procurement responsibilities for goods, works and services at the different
levels.
b) To institutional arrangements for decentralization of procurement
responsibilities at the various levels in the health sector.
c) The special considerations for procurement of essential medicines and
medical supplies;
d) The suitable arrangements for procurement of works in the health sector;
e) Recommendations on procurement capacity requirements with respect to:
 Staffing and skills;
 Tools and procedures.
The development of the procurement position paper was based on four key pillars
in the procurement system. These are:
 Transparency
 Accountability
 Value for money
 Efficiency
The Paper highlights the procurement responsibilities at the various levels
(KEMSA, MOH Headquarters, various KEPH levels), institutional arrangement
for procurement like tender committees and procurement committees,
procurement capacity requirements, monitoring and evaluation.
/8

12. 1.8
MoH Collaboration with the Faith based organisations
Faith Based Organizations (FBOs) continue to be major player in health care
delivery in Kenya. Most of them are found in remote parts where people are poor
and cannot afford to pay for health care services when sick. In the 1980s, the
Government used to set aside funds, which used to be disbursed to FBOs as
grants.
The decline was a result of funding constraints in the Ministry of Health as a
result of improved staff emoluments, increased number of health facilities
supported by MOH and overall government budgetary allocation constraints to
MOH (9.4% of GOK allocation to health as compared to the Abuja’s target of
15%). The support to FBO was subsequently discontinued in mid 1990s.
To date, institutions namely, Kenya Episcopal Conference Catholic Secretariat
(KEC-CS) and Christian Health Association of Kenya (CHAK) coordinate the bulk
of not-for-profit non-government health providers. Table 1.1 shows the
distribution of facilities under the Government and FBOs.
Table 1.1: Health facilities by ownership, 2006
Facility type
Government
KECCHAK
CS
Hospital
147
44
24
Health centres
460
92
47
Dispensaries
1,630
281
311
TOTAL
2,237
417
382
CHAK/KCS
68
139
592
799
Despite the cessation of funding, the government has continued to deploy some
personnel to mission hospitals as well as some assistance with drugs, medical
supplies and equipment and vehicles but on an ad hoc basis.
Main source of support for the FBOs is currently the user fees which have
contributes over 80% of recurrent expenditure. This source, however, is
threatened due to decline in donor support to FBOs. Improvement of health care
services in public health facilities as resulted in influx of patients to them; this in
turn as resulted in reduced utilisation in FBOs facilities and hence reduced
revenues. According to a MoH study4 focusing on facility utilisation after the
4
Ministry Of Health: RHF Unit Cost/Cost Sharing Review Study & The Impact Of The 10:20 Policy,
2005.
/9

13. introduction of 10/20 policy on July 1st 2004, which set a standard fee of KSh 10
at the dispensary, level and KSh 20 at health centres, utilisation of services in the
sample facilities generally increased rapidly following the introduction of the
policy. However, this growth was not sustained. In the last quarter of 2004
many facilities generally experienced declining utilisation although the picture
varies by district and according to the type of service and utilisation remains, on
the whole, above levels in the first quarter of 2004. In the first half of 2005
utilisation of services at health centres appears to have increased and is now
roughly back at the levels experienced in July 2004. Utilisation in dispensaries
has seen a slight decline in 2005 although, again, it remains above levels before
10/20 was introduced. This may have led to the subsequent decline in utilisation
of FBO facilities and hence decline in their users fees revenue collection.
1.8.1
Current collaboration with FBOs
In the context of the Public Service Sector Reforms in general and the Sector
Wide Approach (SWAp) in particular, the Faith Based Organisation (FBOs) have
effectively participated in the development of the National Health Sector
Strategic Plan II (NHSSP II 2005-2010). The FBOs form an important strategic
partner in the implementation of the Plan of which collaboration is a key element
in its success.
There is need, however, to strengthen partnership and collaboration between
Ministry of Health and the Faith Based Health Services on a long-term basis.
In this regard, a technical Working Group (MOH/FBHS - TWG) comprising
MOH, CHAK, KEC, MEDS, and SUPKEM has been put into place. The Minister
for Health and Church leaders have approved the terms of reference (TOR) for
the Team. The TOR comprise 2 major categories:
a) Situation analysis study of FBHS vis-à-vis Health sector Services in Kenya
including assessment of Human Resources situation and the various
financing options
b) Development of a draft partnership policy document guided by SWAp
spirit
/10

14. 1.8.2
Progress report on MOH/FBHS - TWG on partnership
policy Development
a) The Group has been meeting regularly and discussing among other issues,
the Human Resources Crisis affecting the faith based facilities after recent
recruitment of staff by the Ministry of Health.
b) The Group was granted Technical Assistance by development partners for
the situation analysis study and has scheduled a 2-day retreat to meet
with the consultants to discuss and develop data collection instruments
for the study.
The situation analysis study outcome will inform the development of the draft
partnership policy document to give guidance in the long-term collaboration and
partnership.
Current Levels of Support to FBO
The Kenya Episcopal Conference (KEC) and Christian Health Association of
Kenya (CHAK) met His Excellency the President Hon. Mwai Kibaki on 12 th
September 2006 to discuss the crisis facing the Faith Based Organizations Health
Care Services in Kenya. His Excellency the President directed that Faith Based
Organizations discuss with the Ministry of Health on the level and modalities of
support and present their report in a month’s time.
In response, four technical committees were set up to deliberate and come up
with amicable solutions. The outcomes of these committees were as follow:
1.8.3
Immediate re-instatement of financial grant to church
Health facilities
The Ministry is not able to reinstate the grants to FBOs in 2006/7 financial year,
because of current freeze on increment of grants. However, the Ministry has and
will continue to support the FBOs in-kind. For example, the total support to
FBOs this year in form of drugs and seconded personnel is expected to be KSh
297 million or 1.4% of the Ministry’s recurrent budget. The Ministry will integrate
the grant to the FBOs in the MTEF and raise the same to a minimum of 2.8% of
the recurrent budget in 2007/8. This grant will be provided in form of drugs,
non-pharmaceuticals, personnel, equipments and cash to support operations and
maintenance of health facilities.
/11

15. Human Resource for Health issues
The biggest challenge, facing the FBOs is shortage of staff. Currently the FBOs
require an additional of 6,241 personnel across all medical cadres to close the
deficit. To close this deficit, KSh 854 million is required. The situation has been
made worse by the fact that the FBOS are having difficulty in paying their
workers enhanced salaries to match those offered by the Civil service
The Ministry recognizes that the Faith based Organizations are key partners in
health service delivery and its collapse will have negative impact on the health
sector. In order to support the FBOs, the Ministry has seconded 51 doctors and
44 nurses.
The Ministry will second 309 nurses to FBO health facilities this year. This will
increase the total support to FBOs in form of personnel to KSh 136 million in
2006/7. The FBOs on their part will use the savings derived from this support to
employ additional staff or top-up salaries for their staff to be comparable to those
in the Civil Service.
Other issues being considered
These include the exemption of taxes, licenses and levies
1.8.4
Support in kind through Drugs, Medical Supplies
Equipment and Ambulances
The Ministry will continue to provide to FBOs support with vaccines, family
planning commodities, HIV Test kits, ARV drugs, anti-TB drugs and diagnostic
supplies and anti-malarial drugs and ITNs.
The current ad hoc arrangement where individual FBO facilities are receiving
medical supplies from KEMSA worth KSh 166 million will be discontinued with
immediate effect and future support channelled through FBO Secretariats.
Twenty ambulances will be earmarked for FBOs in 2006/07 to be distributed to
institutions of their choice.
1.8.5
Legal Policy Framework
The process is on to develop and recommend partnership framework to be ready
by the end of the 2006 with the aim to:


/12
Harmonize FBOs activities in the health sector to reduce
competition and duplication;
Prioritise facilities in deserving or underserved areas to
receive full support from the Government;

16. 1.8.6
Donor support to the Health Sector
The MOH in collaboration with Development and Implementing Partners is
developing Sector Wide Approach Strategy (SWAps) that will ensure better
harmonization and coordination of planning, implementation and monitoring of
activities in the Health Sector. The FBO health facilities, as key implementing
partners, will have their Annual Plans and needs included in the Health Sector
Annual Operational Plans (AOPs) and supported through the SWAps financing
arrangement.
1.9
The Scope and Organization of this Public Expenditure Review
This Public Expenditure Review (PER) introduces and then discusses the major
dimensions of public financing and expenditure of the health sector in Kenya. It
will serve to provide accurate public health spending data for Kenya.
In addition to its incorporation of the findings and data of previous PER (2006),
this PER provides an update on the public health spending for the five-year
period 2001/02 through 2005/06, and analyses several of the important policy
issues that are raised and highlighted in these data.
This PER concludes by offering some recommendations. Data presented here
were gathered and processed by the Central Planning & Monitoring Unit
(CP&MU) team in collaboration with Accounts and Finance divisions.
This report is divided into twelve parts. Following this Chapter One, which gives
relevant background information on Kenya’s health sector, Chapter Two displays
and discusses, in summary and in detail, public spending on health during the
five-year period 2001/02 through 2005/06. Chapter Three addresses particular
issues in review of core poverty/programmes,Chapter Four addresses issues of
on-going and stalled projects, chapter Five deals with issues of resource
requirement 2007/08-2009/010, Chapter Six analysis the ministry’s out-put and
related indicators,Chapter Seven deals with issues of Pending Bills,Chapter Eight
deals with public expenditure management (PEM), Chapter Nine deals with
issues of human resource development and capacity building, Chapter Ten
addresses the implementation of 2006 PER, Chapter Elveen
gives the
conclusions and recommendations while chapter Twelve concludes with findings
and recommendations that derive from the foregoing analyses of the data
presented and the policy issues raised and discussed.
/13

17. 1.10 The Ministry’s Mission Statement and Core activities
The vision of MoH as envisaged by the Kenya Health Policy Framework for 1994–
2010 is an efficient and high quality health care system that is accessible,
equitable and affordable for every Kenyan, which remains appropriate as a guide
for NHSSP II.
The MoH mission is to promote and participate in the provision of integrated and
high quality promotive, preventive, curative and rehabilitative health care
services to all Kenyans. Linking to the ERS and MDGs, the mission of the MoH
translates into the following set of policy objectives:
•
•
•
•
•
•
Increase equitable access to health services.
Improve the quality and responsiveness of services in the sector.
Improve the efficiency and effectiveness of service delivery.
Enhance the regulatory capacity of MOH.
Foster partnerships in improving health and delivering services.
Improve the financing of the health sector.
There are a number of parastatals in the Ministry, namely Kenya Medical
Research Institute (KEMRI), Kenya Medical Training College (KMTC), Kenyatta
National Hospital (KNH), Moi Teaching and Referral Hospital, Kenya Medical
Supplies Agency (KEMSA), and the National Hospital Insurance Fund (NHIF).
These parastatals complement the services provided by health centres,
dispensaries and district and provincial hospitals.
1.10.1
Kenyatta National Hospital
Kenyatta National Hospital through its mandate as provided for in the Legal
notice No. 109 of 1987 has the core functions of providing specialised quality
health care; facilitation of training and research and participation in national
health planning and policy. The hospital has the vision to be a regional centre of
excellence in the provision of innovative and specialized health care. The hospital
has developed a strategic plan to guide it through 2005 to 2010.
Staffing: The hospital has staff strength of nearly 4,700 against an approved
establishment of 6,200. This has resulted in understaffing of certain critical
areas, such as the nursing department where the patient to nurse ratio is way
below the WHO recommended ratio of 1:6. The Plan recognises that it is the staff
that will ultimately make the plan a reality. The Plan’s strategic interventions are
expected to achieve the following:
 Well motivated and committed employees;
 More skilled staff;
 Right staff for the job;
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18.  Competitive advantage;
 Increased revenue; and
 Overall improved health care delivery.
The increased revenue collection will, no doubt, have important implications for
the MoH budget. Currently, 12.2% of total MoH budget (13.2% of recurrent and
10.2% of development) is allocated to KNH. The development allocations are a
one time support to KNH to support upgrading of equipments. The Poverty
Reduction Strategy Paper (PRSP) proposes reduction of the budget allocation for
Kenyatta National Hospital, as a share of the total MOH recurrent budget to 10%.
Although efforts have been made to reduce allocations to KNH, the current award
of salaries to unionisable staff (over Ksh 386 million is required to implement the
award) may reverse the gains made so far.
Workload: There has been a steady in the inpatient and outpatient workload in
the hospital (figure 1.1) resulting in increased pressure on physical, financial and
human resources. However, it is apparent that the figures are falling probably as
a result of decongestion of the hospital after operationalisation of the Nairobi City
Council health facilities through secondment of staff by the MoH.
/15

19. Figure 1.1: In patient and Out patient workload
No. of patients (in '000)
800
600
400
200
0
2000 2001 2002 2003 2004 2005
Outpatient
Inpatients
1.10.1.1 Financing
As seen in Table 1.1, the GoK funding has been below the projected budgetary
requirements of the hospital, resulting in non-availability of development funds
and inadequate financing of the recurrent expenditure. In 2005/06, out of the
KSh 2.9 billion grant from MoH, KSh 2.5 billion was utilised on personnel
emoluments while the remaining KSh 0.40 million was used for development and
operations and maintenance.
The total budget for KNH (including cost sharing) was about 24% of the Ministry
of Health Recurrent budget in 2005/6.
Table: 1.1
KNH proposed budget and Actual allocations
FY
Proposed
Actual
Cost SharingTotal
Budget
Allocations
Collections Allocations+
(MOH)
CSF
1999/00
2,075.2
1,359.1
404.5
1,763.7
/16

20. 2000/01
2001/02
2002/03
1,754.2
5,283.9
5,289.7
1,349.6
1,865.2
2,327.0
534.8
807.1
596.5
2003/04
5,788.0
2,448.0
2,659.0
952.4
2004/05
2005/06
9,733.4
917.2
1,852.1
1,884.5
2,672.4
2,923.5
3,400.4
3,576.2
4,710.1
6,358.0
2,858.0
Source: KNH- Strategic Plan 2005- 2010
As can be seen from the above table the revenue collections at the hospital
doubled from Ksh 917 million in 2004/5 with the initiation of computerizations
of the collections process. The increased revenue and prudent management
enabled the hospital to return a surplus of Ksh 423 million.
The impact of this inadequate funding has led, among others to:
 Inefficiency in provision of diagnostic services
 Prolonged length of stay of patients, for example, in the orthopaedic wards
as the hospital is unable to procure required items, thus leading to
congestion;
 Inability to replace, rehabilitate medical equipment;
 Backlog of patients requiring open-heart surgery operations.
1.10.1.2 Impact of Poverty on the hospital
The high poverty levels in the country have serious implications on KNH, as
majority of patients visiting the hospital are unable to pay for services received.
This has threatens hospitals efforts of being self-sustaining, thereby reducing its
dependency on the exchequer.
Table 2.0: Waivers and exemptions 1999/00- 2003/04
Year
Amount
(KSh million)
1999/00
128.4
2000/01
146.1
2001/02
130.5
2002/03
180.1
2003/04
98.5
Total
683.6
Source: KNH- Strategic Plan 2005- 2010
/17

21. Insert figures for 2006/07
As a result of streamlining the waiver issuance process, the levels of waivers
heave gone down to 5.2% of the cost sharing revenue in 2003/4.
1.10.1.3
Restructuring Programme
The hospital management has developed a restructuring programme to
streamline hospital operations. This will include staff rationalisation,
computerisation of hospital operations and out-sourcing of non core activities.
1.10.2
Kenya Medical Research Institute (KEMRI)
The vision of KEMRI is to be a leading centre of excellence in the promotion of
quality health, which will be achieved through research. KEMRI has developed a
Strategic Master Plan which also seeks to contribute to the realisation of the
MDGs. The Plan also ties with the NHSSP II 2005-2010 whose theme is to
reverse the downward trends in Kenya’s national health scene. The new Kenya
Essential Package for Health (KEPH), under the Plan puts emphasis on health
(rather than disease), on rights (rather than needs) and on revitalisation of health
particularly at community level. This ties up well with the KEMRI Strategic
Master Plan whose view is to improve not just health but quality of human life.
Financial Resource: KEMRI has in 2005, an annual budget of KSh 3 billion.
The Government of Kenya provided 50% of the budget while collaborating
research partners and organisations provided 45%. The remaining 5% is raised
from the Institute’s own internal sources.
1.10.2.1 Achievements
Some of the key achievements that have a bearing on the improvement of health
status in Kenya as well as contributing to the core activities of the MoH include:
 Through the Institute‘s advice to the MoH on rational use of drugs, the
malaria drug Daraprim was withdrawn from the market. Chloroquine was
withdrawn as a first line drug in the treatment of malaria.
 The development of national disease surveillance and rapid response
capacity for major disease outbreaks. It is this capacity that has enabled
the nation to respond quickly and effectively to yellow fever, rift valley
fever and viral haemorrhagic fever outbreaks in Kenya. It is also this
capacity that keeps outbreaks, including those for catastrophic diseases
such as the Ebola, Marburg, SARS and others away from Kenya.
 Development of Insecticide Treated Bed nets (ITN s) for use in the control
of malaria.
/18

22.  Development of treatment regimens that have reduced the treatment
period for leprosy from 18 months to 1 month (which has almost
eliminated leprosy in Kenya); tuberculosis (TB) from 18 months to 3
months and leishmaniasis (Kalazar) from 30 days to 10 days.
 Unique contributions in health research technology which includes the
development of the KEMRI Hepcell kit for diagnosis of infectious
hepatitis, the Particle Agglutination (PA) kit for the diagnosis of HIV and
the HLA tissue typing techniques for kidney transplants.
 Development of various formulations for treatment of HIV/AIDS and
opportunistic infections. KEMRI has also developed a comprehensive
training module for HIV/AIDS education awareness at the workplace
towards strengthening of HIV/AIDS information, education and
communication control initiatives.
 KEMRI is a World Health Organization (WHO) collaborating centre for
HIV/AIDS, polio immunization, viral haemorrhagic fevers, leishmaniasis,
leprosy and antimicrobial resistance.
1.10.3
National Health Insurance Fund
NHIF was established through an act of parliament in 1966 with the main
objective of financing health care in Kenya. Membership to NHIF is
compulsory with a monthly salary of KSHS. 1,000. The current act provides
for outpatient and inpatient benefits to members. However, the fund
provides inpatient benefits to members only. In line with the Health Sector
Strategic Plan II and the ERS objective of improving access to health care,
the Government intends to transform NHIF into a social health insurance. In
pursuant to the above objective of improving access to health care, NHIF
has also enhanced the benefit package to members by establishing a
comprehensive inpatient package by extending coverage to include
consultation and diagnostic.
/19

23. 1.10.3.1
Contributions and benefit payment
Over the years, revenue collection by NHIF has continued to increase.
Revenue from contribution from members increased from Kshs. 2.5 billion in
fiscal year (FY) 2002/03 to over Kshs. 3.5 billion in FY 2005/06. This can be
attributed to mechanisms put in place by NHIF to enhance revenue
collection that include enrollment of new members both from the formal and
informal sector. During FY 2005/06, NHIF registered a total of 181,583
new members with 10,543 coming from the informal sector. Reimbursement
to accredited hospitals also increased from Kshs. 820,000 in FY 2002/03to
Kshs. 1.1 billion in FY 2005/06. However, in FY 2003/04 and 2004/05, the
reimbursements were on a downward trend due to better claim management
through decentralization of operations. The significant increase in
reimbursement in FY 2005/06 was attributed to the enhanced rebates to
contributors. However, as a percentage of total revenue, reimbursements
decreased from 30% in FY 2002/03 to 21% in FY 2004/05. It then
increased to 30% in FY 2005/06.
The administration5 component of the expenditure recorded a minimal
decline over the period under review decreasing from Kshs. 1.62 billion in FY
2002/03 to Kshs. 1.53 billion in FY 2005/06. The administration component
has been consuming a significant portion of the total revenues. The
administrative component as a percentage of the total revenue recorded a
downward trend, dropping from 59% of the total revenues in FY 2002/03 to
42% of the total revenues in FY 2005/06. However, this is still way above
the international recommended level for health insurance-10%—12%.
5
Includes personnel and other admin expenses
/20

24. 


Table: Growth of members’ contributions
2002/03
REVENUES
Contributions
2,523,876,081
6
Other income
210,992,974
TOTAL REVENUES
2,734,869,055
EXPENDITURE
Reimbursements
Administration
1. Personnel
2. Other
admin
Total admin
expenses
TOTAL EXPENDITURE
Reimbursements as % of
total revenue
Total admin as a % of
total revenue
and reimbursements
2003/04
2004/05
2,639,883,578 3,117,241,202 3,458,847,816
72,358,041
157,349,232
188,463,585
2,712,241,619 3,274,590,433 3,647,311,401
822,014,878
713,297,431
685,490,051
1,105,875,734
776,263,163
846,506,931
827,258,377
704,478,176
1,040,765,820
538,018,321
1,030,516,535
496,191,147
1,622,770,094
1,531,736,553
1,578,784,141 1,526,707,682
2,444,828,033 2,245,033,984 2,264,274,192 2,632,583,416
30
26
21
30
59.34
56.47
48.21
Other medical benefits
In line with the funds mandate of enhancing access to health care, NHIF
donated 80 Ambulances to GoK hospitals to facilitate transportation of
patients from rural health facilities to hospitals where specialized care is
required. The fund has also in recent past held several free medical camps
in remote areas where access to health care is a major problem.
Recommendation
In line with the NHSSP II, the funds obligation is to raise benefits to
members. In addition, NHIF should strife to reduce administrative costs to
10-12% of the contributions and therefore be in line with acceptable
international standard.
In addition, NHIF should utilize surplus to pay for additional benefits.
6
Incomes accrued from short and long term investments
/21
2005/06
41.86

25. 1.10.4
Kenya Medical Training College (KMTC)
The KMTC, established in 1990, has the following core responsibilities:
•
•
•
•
•
Provide facilities, in addition to those of Universities other colleges, and
schools, for college education for health manpower personnel training.
Facilitate the development and expansion of opportunities for Kenyans for
continuing education in various disciplines of medical training.
Provide consultancy and technical advice in health related training and
research.
Develop health trainers with the capacity to conduct research, develop
usable and relevant health learning materials, and manage health-related
training institutions.
Provide guidance and leadership for the establishment of constituent
training centres and facilities.
Since its inception, KMTC has managed to establish a number of constituent
colleges in a number of district hospitals. These colleges have managed to train a
large number of students, many of whom are currently providing services in
different institutions in the country. KMTC relies on the government for up to
80% (or Ksh 593 million) of the funding, with the rest generated from student
fees, investments, and grants.
The proposed harmonisation exercise to equalise salaries and allowances payable
to KMTC staff to those in the Civil service will put pressure on personnel
allocations to the institution. A total of Ksh 90.8 will be required for the
harmonisation exercise.
1.10.5
Kenya Medical Supplies Agency (KEMSA)
In 2005, the Health Ministry took a significant strategic leap forward by
transforming the Kenya Medical Supplies Agency (KEMSA) from a medical store
to a semi-autonomous government agency to provide medical logistics to public
health facilities countrywide.
KEMSA is mandated to:
 Develop and operate a viable commercial service for the procurement and
sale of high quality drugs and other medical supplies;
 Provide a secure source of drugs and other medical supplies to public
health institutions; and
 Advise the Health Management Boards and the general public on matters
relating to the procurement, cost effectiveness and rational use of drugs
and other medical supplies.
/22

26. The National Health Sector Strategic Plan envisioned KEMSA to be “a secure
source of essential medicines for all public health facilities”, one of the four key
pillars in reducing disease burden and move closer to achieving one of the
millennium development goals—to reduce child and maternal morbidity. The
other pillars are rational drug use, affordable cost/price and sustainable
financing for drugs.
Procurement of drugs is based on the 2003 edition of the Essential Drug List. The
volume of commodities to be procured is determined by a quantification exercise
that is compiled annually by the program managers of MoH in collaboration with
KEMSA and the Chief Pharmacist of Ministry of Health.
In 2004/5 and 2005/6, KEMSA was enabled to procure the rural health facility
kits and hospital pharmaceutical worth Ksh 1.1 billion and Ksh 1.5 billion
respectively. it is expected that in 2006/7, all drugs and non-pharmaceuticals will
be undertaken by KEMSA in line with the Ministry’s position paper on
procurement.
Distribution: KEMSA Logistics function aims to deliver medical supplies direct
to all health facilities in Kenya consistently and efficiently. In partnership with
experienced third party transport service providers, KEMSA has set up a
distribution structure with the capacity to reach all public Hospitals, Rural
Health Centres and Dispensaries throughout the country.
By making timely deliveries against hospital orders with regular deliveries to
rural health facilities based on a mutually agreed schedule, KEMSA Logistics will
remain versatile and responsive to public customer requirements
A process has started aimed at integrating parallel programmes such as
Reproductive Health commodities, TB/Leprosy and ARV’s into KEMSA’s overall
distribution process. Ultimately, this will cut down on distribution costs and
ensure medical commodities are managed within one supply chain resulting in
greater reach and efficiencies whilst utilizing limited available resources.
The biggest challenge facing KEMSA is lack of funds for capitalisation and for
distribution. Discussions are on-going to use the current stocks to capitalise
KEMSA and pay for the medical supplies based on delivery. An allocation to cater
for distribution will also be made available in 2006/7.
1.10.6
Moi Teaching and Referral Hospital
Moi Teaching and Referral Hospital (MTRH) is the second national referral
hospital in Kenya after Kenyatta National Hospital (KNH). It was started in 1917
as a cottage hospital with bed capacity of 60, it has grown tremendously to a
national referral hospital with a capacity of nearly 500 beds.
/23

27. The teaching and referral facility status was accorded by Legal Notice No. 78 of 12
June 1998 under the State Corporations Act (Cap 446) and the first Board of
Management was gazetted on 29 June 1999. A three-year business plan prepared
by the Hospital Board of Management immediately after its inception became the
first document upon which the board based its actions.
The plan articulated the vision and mission of the hospital and set out the
organizational structure. It remains to-date the only authentic document guiding
major policies on financial management and control, recruitment, and hospital
capitalization.
However, due to the many challenges posed by rapid
developments in the hospital, a Strategic Plan for 2005–2010 has been
developed. The hospital is mandated to carry out the following functions:
 Receive patients on referral from other hospitals and institutions within
and outside the country for specialized health care;
 Provide facilities for medical education for Moi University, and for
research in collaboration with other health institutions;
 Provide facilities for education and training in nursing and other health
and allied professions;
 Serve as a national referral hospital in national health planning.
 It consumes 3.6 % 0f the total MOH recurrent expenditure
The 2005/6 allocations to the hospital amounted to Ksh 714 million or 3.6% of
the Ministry’s recurrent budget. The hospital will require an additional Ksh 131
million for salary and allowances harmonisation exercise.
1.10.7
Increasing Access
Improving access – geographically, financially and socio culturally – generally
facilitates increase in the utilization of health care services, as the services
become closer and cheaper for the client. This in turn may result in improved
health status of the population.
In order to improve on physical assess, during the financial year 2006/07, the
MoH will (has been) gazette (d), some 600 health facilities, mainly dispensaries
that have been constructed using the constituency development fund (CDF). Of
these, 300 will be taken over by the ministry and become functional.
/24

28. 2
2.1
Government Spending on Health through the MoH
Public Spending on Health: Context
Table 2.1 presents as an introduction to a detailed discussion of the trends in
Kenya’s public health spending, health economic data for selected countries in
the Eastern and Southern African region. Kenya ranks third on per capita public
spending and spends 7.2% of total Government spending on health, but this is
expected to increase with the recent increase in investment in the health sector.
Table 2.1: Total Public Spending on Health - Selected East and Central
African Countries, 2005
As a % of As % of Total
Country
Per Capital (US$)
GDP
Govt
Kenya
2.2
7.2
8
Tanzania
2.7
12.7
7
Uganda
2.1
10.7
5
Zambia
3.1
11.8
11
Malawi
4.0
9.1
5
Zimbabwe
4.4
9.2
14
Rwanda
3.1
7.2
3
Burundi
0.6
2.0
1
Ethiopia
2.6
9.6
3
Source:
 UNDP: Human Development Report 2005
 WHO: The World Health Report, 2006
2.2 Government Spending on Health: Aggregate Levels and Trends
2.2.1
Total Spending on Health
Total government spending on health has risen substantially during the five-year
period 2001/02 through 2005/06, increasing from KSh 15.2 billion in 2001/02 to
KSh 23 billion in 2005/06 (see Table 2.2). The expenditure growth was uneven.
But there is evidence of increasing rate over the previous year occurring since
2003/04- a 7.1% increase in 2003/04, a 16.5% increase in 2004/05, and a 20.1%
increase in 2005/06 for combined recurrent and development.
/25

29. Table 2.2: Ministry of Health Actual Expenditure (Gross) KSh million
2001/022002/032003/042004/05 2005/06
Recurrent
12,715 14,405 15,438 17,417
19,765
Development
2,519
945
1,003
1,741
3,242
Total
15,234 15,351 16,441 19,158
23,007
Increase (Recurrent) over previous year (%)
15.2
13.3
7.2
12.8
13.5
Increase (Recurrent + development) over previous year (%)26.2
Per Capita KSh
488.44
Per Capita $
6.28
Ministry of Health Expenditure
(Gross) as % of Total Government1
Recurrent
8.23
Development
17.18
Total
9.01
Ministry of Health Expenditure
(Gross) as % of GDP
Recurrent
1.38
Development
0.27
Total
1.65
0.8
481.97
6.29
7.1
16.5
506.05 578.28
6.52
7.48
8.69
5.12
8.33
7.76
2.77
6.99
7.66
2.01
6.1
6.29
3.73
5.73
1.4
0.09
1.49
1.41
0.09
1.51
1.41
0.14
1.55
1.29
0.21
1.50
However, these impressive nominal increases in public health spending in
2001/02, in 2003/04, and in 2005/06 did not constitute significant relative
changes in resource allocation to health when compared to two important
benchmarks - gross domestic product (GDP) and total government spending (in
all sectors) - because both grew at similar rates.
As a percent of total government recurrent expenditure, therefore, public heath
recurrent spending declined slightly over the period, being 8.23% in 2001/02 and
6.29% in 2005/06—even though it rose briefly to 8.69 % in 2002/03. On the
other hand, as a percent of GDP, total government health spending rose slightly
over the same period, being 1.65 % of GDP in 2001/02 and 1.55 % in 2004/05 of
GDP and 1.50% in 2005/06.
2.2.2
Recurrent and Development Expenditure
For the period 2001/02 through 2005/06 period, more than half ( ½) (52.7%) of
the MoH’s expenditure was on personnel emoluments, 7.5% spent on operations
and maintenance and, just about 3% spent on purchases of plants and
equipment (see Table 2.3). About 10.5% was spent on drugs and medical supplies
and about 26.4% on “transfers” to MOH parastatals.
2.2.2.1 Ministry of Health Recurrent Expenditure by Economic
Category
/26
20.1
681.78
9.47

30. Table 2.3 Recurrent (gross) Expenditure by Economic Category KSh millions
2000/01
Total Recurrent (Gross)
Salaries and Other
Personnel
as % Total Recurrent
Transfers, Subsidies and
Grants
as % Total Recurrent
Drugs and Medical
Consumables
as % Total Recurrent
Other Operations &
Maintenance
as % Total Recurrent
Purchase of Plant &
Equipment
as % Total Recurrent
Kenyatta National
Hospital
as % Total Recurrent
Moi Referral Hospital
as % Total Recurrent
2.2.2.2
2001/02
2002/03
2003/04
2004/05
2005/06
Actual
11,040.8
Actual
12,714.9
Actual
14,405.4
Actual
15,438.5
Actual
17,417.4
Actual
19,765.1
5,251.8
47.6
6,639.9
52.2
7,798.1
54.1
8,100.8
52.5
9,034.9
51.9
10,407.3
52.7
848.1
7.7
1,027.7
8.1
1,157.2
8.0
1,454.7
9.4
1,562.5
9.0
1,634.9
8.3
1,680.8
15.2
1,476.8
11.6
1,349.7
9.4
1,716.0
11.1
1,866.2
10.7
2,074.2
10.5
1,749.9
15.8
1,324.0
10.4
1,257.4
8.7
1,285.2
8.3
1,756.0
10.1
1,481.0
7.5
160.6
1.5
29.0
0.2
94.5
0.7
14.6
0.1
80.7
0.5
595.6
3.0
1,349.6
12.2
0.0
0.0
1,865.2
14.7
352.3
2.8
2,327.0
16.2
421.5
2.9
2,409.0
15.6
458.1
3.0
2,659.0
15.3
458.1
2.6
2,858.0
14.5
714.1
3.6
Ministry of Health Expenditure (Actual) by sub Vote
Table 2.4: Ministry of Health Recurrent Expenditures (gross) by Sub Vote KSh Millions
Sub-Vote
2000/2001
2001/20022002/2003 2003/2004 2004/05 2005/06
Actual
General Admin. And
110Planning
Total as % Total MoH
111Curative Health
Total as % Total MoH
112Preventive and Promotive
Total as % Total MoH
113Rural Health Services
Total as % Total MoH
Health Training and
114Research
Total as % Total MoH
Medical Supplies Coord
116Unit
/27
Actual
Actual
Actual
700.7
587.0
714.8
760.4
6.3
4.6
5.0
4.9
6,080.9
6,758.6
7,677.6
7,768.0
Actual
Actual
1,223.0 912.527
7.0
4.6
8,639.5 9996.759
55.1
53.2
53.3
50.3
49.6
50.6
874.4
665.2
632.2
863.6
795.9
756.995
7.9
5.2
4.4
5.6
4.6
3.8
1,121.4
1,378.1
1,436.4
1,687.6
10.2
10.8
10.0
10.9
884.2
1,060.2
1,161.8
1,459.8
8.0
8.3
8.1
9.5
8.4
7.6
29.6
48.3
34.2
32.0
132.6
133.177
2,041.5 2881.656
11.7
14.6
1,467.7 1511.916

31. Total as % Total MoH
Kenyatta National
117Hospital
0.3
0.4
0.2
0.2
1,349.6
1,865.2
2,327.0
2,409.0
Total as % Total MoH
Moi Teaching and
118Referral
12.2
14.7
16.2
15.6
15.3
14.5
0.0
352.3
421.5
458.1
458.1
714.072
Total as % Total MoH
0.0
2.8
2.9
3.0
2.6
11,040.8
12,714.9
14,405.4
3.6
19,
765.1
100.0
100.0
100.0
Total MoH
Total as % Total MoH
/28
0.8
2,659.0 2858.014
15,438.5 17,417.4
100.0
0.7
100.0
100.0

32. Table 2.5: Ministry of Health: Development Expenditures (gross) by Sub Vote KSh Millions.
Code
111
112
113
114
116
117
118
General Admin.
and Planning
Total as % Total
MoH
Curative Health
Total as % Total
MoH
Preventive and
Promotive
Total as % Total
MoH
Rural Health
Services
Total as % Total
MoH
Health Training
and Research
Total as % Total
MoH
Medical Supplies
Coord Unit
Total as % Total
MoH
Kenyatta National
Hospital
Total as % Total
MoH
Moi Teaching and
Referral
Total as % Total
MoH
Total MoH
Total as % Total
MoH
/29
2000/2001
2001/2002
2002/2003
Actual
110
Sub-Vote
Actual
Actual
2003/2004 2004/05
Actual
2005/06
Actual
Actual
16.9
1,193.2
432.5
196.9
158.7
1.6
47.4
45.8
19.6
9.1
357.213
1
1.0
98.0
637.2
120.1
206.5
9.5
25.3
12.7
20.6
162.0
9.
3
702.779
2
1.7
386.2
134.0
183.4
87.9
37.4
5.3
19.4
8.8
934.0
53.
6
1162.316
3
5.9
248.8
397.7
198.4
446.1
24.1
15.8
21.0
44.5
466.2
26.
8
913.5
2
8.2
281.6
157.3
10.9
65.6
20.0
56
27.3
6.2
1.2
6.5
1.1
1.7
0.0
0.0
0.0
0.0
-
50
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1,031.5
2,519.4
945.3
1,003.0
100.0
100.0
100.0
100.0
-
1.5
-
0
-
1,741.
0
100.
0
0
3,24
1.9
10
0.0

33. Table 2.6: Ministry of Health Total Expenditures (gross) by Sub Vote KSh Millions
CodeSub-Vote
111
Curative Health
Total as % Total
MoH
Preventive and
112 Promotive
Total as % Total
MoH
113 Rural Health Services
Total as % Total
MoH
Health Training and
114 Research
Total as % Total
MoH
Medical Supplies
116 Coord Unit
Total as % Total
MoH
Kenyatta National
117 Hospital
Total as % Total
MoH
Moi Teaching and
118 Referral
Total as % Total
MoH
Total MoH
Total as % Total
MoH
2.2.3
2001/2002
2002/2003
Actual
General Admin. and
110 Planning
Total as % Total
MoH
2000/2001
Actual
Actual
2003/2004 2004/05
Actual
717.6
1,780.2
1,147.3
957.3
5.9
11.7
7.5
5.8
6,178.9
7,395.8
7,797.7
7,974.5
51.2
48.5
50.8
48.5
1,260.6
799.2
815.6
951.5
10.4
5.2
5.3
5.8
1,370.2
1,775.8
1,634.8
2,133.7
11.3
11.7
10.6
13.0
1,165.8
1,217.5
1,172.7
1,525.4
9.7
8.0
7.6
9.3
29.6
48.3
34.2
32.0
0.2
0.3
0.2
0.2
1,349.6
1,865.2
2,327.0
2,409.0
11.2
12.2
15.2
14.7
0.0
352.3
421.5
458.1
0.0
2.3
2.7
2.8
12,072.3
15,234.3
15,350.7
16,441.5
100.0
100.0
100.0
100.0
Budget Implementation
Approved Budgets
Actual
Expenditures
Actual
1,38
1.7
Actual
1
,269.7
7.2
8,8
01.6
4
5.9
1,73
0.0
5.5
10
,699.5
9.0
2,5
07.7
1
3.1
1,48
7.7
8.3
3
,795.2
7.8
13
2.6
46.5
1
,919.3
16.5
1
,567.9
6.8
183.2
0.7
2,65
9.0
1
3.9
45
8.1
0.8
2
,858.0
2.4
19,15
8.3
10
0.0
3.1
23
,007.0
versus
Table 2.7 shows the comparison between approved and actual recurrent and
development expenditures by sub vote. While the approved budgets may
/30
2005/06
12.4
714.1
100.0

34. constitute the blueprint for spending, the actual expenditures reveal the true
allocation and application of public resources.
In a few sub votes there is variance between actual expenditures with the
approved budgets. In order to establish where these differences were significant,
they were calculated and are presented in Table 2.7, which shows differences by
sub vote.
It is seen that, while actual recurrent expenditures were either much below or
much above the printed and approved budgets in the period 2001/20 to
2003/04, the gap tended to become narrower in 2004/05 indicating that
financial management has improved.
A comparison between approved expenditure allocations across the main sub
votes of expenditure and actual expenditures shows deviations ranging from 5%
to 267%. The same significant variations were observed when printed estimated
are compared with the actual expenditures. This is however in exception of the
2004/05 financial year.
Table 2.7: Actual Expenditures Compared to Approved Annual
Budgets for Expenditures on Health, Ministry of Health, and 2001/02
-2005/06.
Budget Implementation 2000/01 - 2005/06
2000/01 2000/01 2001/02 2001/02 2002/03 2002/03 2003/04 2003/04 2004/05 2004/05 2005/06 2005/06
Actual Actual as Actual Actual as Actual Actual as Actual Actual as Actual Actual as Actual Actual as
as % of
% of
as % of
% of
as % of
% of
as % of
% of
as % of
% of
as % of
% of
Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved
Code Sub-Vote
Recurrent
General
Admin. and
110Planning
193
/31
137
141
135
137
132
157
141
135
97
88
84

35. Budget Implementation 2000/01 - 2005/06
2000/01 2000/01 2001/02 2001/02 2002/03 2002/03 2003/04 2003/04 2004/05 2004/05 2005/06 2005/06
Actual Actual as Actual Actual as Actual Actual as Actual Actual as Actual Actual as Actual Actual as
as % of
% of
as % of
% of
as % of
% of
as % of
% of
as % of
% of
as % of
% of
Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved
Code Sub-Vote
Curative
111Health
Preventive and
112Promotive
Rural Health
113Services
Health
Training and
114Research
Medical
Supplies Coord
116Unit
Kenyatta
National
117Hospital
Moi Teaching
118and Referral
Total
153
100
180
154
159
152
152
152
177
99
100
98
176
158
129
126
112
94
86
86
103
94
75
74
36
35
39
34
33
33
33
34
44
102
96
96
115
103
137
101
109
100
100
100
101
100
101
100
70
87
106
83
52
50
46
46
79
98
97
97
100
100
142
100
126
105
100
100
100
100
100
100
267
100
121
100
109
100
100
100
100
100
111
Total
Combined
General
Admin. and
110Planning
Curative
111Health
Preventive and
112Promotive
Rural Health
113Services
/32
121
100
106
100
96
97
109
99
98
96
11
23
158
95
50
43
25
32
27
57
35
51
11
22
75
107
14
23
26
60
23
38
46
41
29
39
29
47
24
20
5
8
27
39
27
24
20
25
27
27
10
9
30
25
26
43
38
47
92
99
100
5
5
21
46
2
7
10
9
26
Development
General
Admin. and
110Planning
Curative
111Health
Preventive and
112Promotive
Rural Health
113Services
Health
Training and
114Research
Medical
Supplies Coord
116Unit
Kenyatta
National
117Hospital
Moi Teaching
118and Referral
105
37
71
67
20
19
20
26
22
39
33
33
140
123
152
105
82
74
76
83
92
90
62
71
131
140
160
148
137
140
135
146
157
96
93
90
69
82
82
98
62
51
35
47
41
54
36
33
32
32
35
32
26
25
32
32
39
81
71
77

36. Budget Implementation 2000/01 - 2005/06
2000/01 2000/01 2001/02 2001/02 2002/03 2002/03 2003/04 2003/04 2004/05 2004/05 2005/06 2005/06
Actual Actual as Actual Actual as Actual Actual as Actual Actual as Actual Actual as Actual Actual as
as % of
% of
as % of
% of
as % of
% of
as % of
% of
as % of
% of
as % of
% of
Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved
Code Sub-Vote
Health
Training and
114Research
Medical
Supplies Coord
116Unit
Kenyatta
National
117Hospital
Moi Teaching
118and Referral
Total
108
102
158
101
92
85
86
95
58
85
76
74
70
87
106
83
52
50
46
46
42
91
57
60
99
100
141
100
126
105
100
100
100
100
100
100
267
100
121
100
109
100
100
100
100
100
108
92
84
79
78
83
81
87
76
76
87
91
Table 2.8 shows the trends in actual spending as proportion of the printed and
approved budgets by economic categories. There has been improvement for most
of the categories, resulting in an improvement of actual expenditures nearly
converging to 100% for both printed and approved budget.
/33

37. Figure 2.6: Actual expenditure as % of Approved Recurrent budget by sub vote
180
160
140
120
%
100
80
60
40
20
0
2001/2002
2002/2003
2003/2004
2004/05
General Admin. and Planning
Curative Health
Preventive and Promotive
Rural Health Services
Health Training and Research
Medical Supplies Coord Unit
Kenyatta National Hospital
Moi Teaching and Referral
Total
Table 2.8: Budget Implementation by economic category: 2001/02 2005/06
/34
2005/06

38. Economic Categories 2001/20022001/20022002/20032002/20032003/20042003/20042004/05
2004/05 2005/062005/06
Actual as Actual as Actual as Actual as Actual as Actual as Actual as % Actual as Actual Actual as
% of
% of
% of
% of
% of
% of
of Printed
% of
as % of
% of
Printed Approved Printed Approved Printed Approved
Approved Printed Approved
Total Recurrent
(Gross)
Salaries and Other
Personnel
Transfers, Subsidies
and Grants
Drugs and Medical
Consumables
Other Operations &
Maintenance
Purchase of Plant &
Equipment
Kenyatta National
Hospital
Moi Referral
Hospital
121
100
106
100
96
97
109
99 98
96.30
121
97
102
100
98
100
122
101 102
100.24
135
98
108
100
100
100
98
98 100
99.69
87
99
93
92
80
80
94
94 83
90.17
121
120
108
98
102
95
99
99 90
74.09
85
80
99
98
73
74
95
95 86
94.52
142
100
126
105
100
100
100
100 100
100.00
267
100
121
100
109
100
100
100 100
100.00
Figure 2.7: Ac tual as share ofA pproved Budget : ec onomic c ategory, 2001/02 2005/06
140
120
%
100
80
60
40
20
0
2001/02
2002/03
2003/04
2004/05
2005/06
Total Recurrent (Gross)
Salaries and Other Personnel
Transfers, Subsidies and Grants
Drugs and Medical Consumables
Other Operations & Maintenance
Purchase of Plant & Equipment
Kenyatta National Hospital
Moi Referral Hospital
Table 2.9: Budget Implementation - Actual as % of Printed and Approved Personnel emoluments by sub vote 2001/02 - 2005/06
Sub vote
/35
2001/20022001/20022002/20032002/20032003/20042003/2004 2004/200 2004/200 2005/062005/06
5
5

39. Actual as Actual as Actual as Actual as Actual as Actual as
Actual as % Actual Actual as
Actual as %
% of
% of
% of
% of
% of
% of
of
as % of
% of
of Printed
Printed Approved Printed Approved Printed Approved
Approved Printed Approved
General Administration
and Planning
Curative Health
Preventive and
Promotive
Rural Health Services
Health Training and
Research
Medical Supplies
Coordinating Unit
Total
148
146
165
154
164
171
217.3
103.3
88.4
85.6
209
169
179
170
171
172
208.6
100.0
106.1
103.6
177
163
132
121
114
115
116.7
93.9
71.8
74.9
18
14
14
15
16
16
19.7
112.3
92.0
91.1
123
110
119
115
101
102
127.0
113.1
122.7
113.8
80
73
30
28
23
23
24.7
85.6
77.5
74.2
121
97
102
100
98
100
122.1
100.8
102.3
100.2
Table 2.9.1 Actual as % of Approved- personnel emoluments by sub vote 2001/02
- 2005/06
2000/01 2001/02 2002/03 2003/04 2004/05
General
Administration and 141
Planning
Curative Health
181
Preventive and
270
Promotive
Rural Health
13
Services
Health Training
117
and Research
Medical Supplies
50
Coordinator Unit
Total
101
/36
2005/06
146
154
171
103.3
85.6
169
170
172
100.0
103.6
163
121
115
93.9
74.9
14
15
16
112.3
110
115
102
113.1
73
28
23
85.6
74.2
97
100
100
100.8
100.2
91.1
113.8

40. Fig ur e 2.8: W ag es and Salar ies: A ctual as shar e o f A ppr o v ed Budg et
300
250
200
%
150
100
50
0
2000/01
2001/02
2002/03
General Admin. and Planning
Preventive and Promotive
Health Training and Research
Total
2.2.4
2003/04
2004/05
2005/06
Curative Health
Rural Health Services
Medical Supplies Coord Unit
Appropriations in Aid (AiA) and Cost Sharing ( )
Table 2.2.5 shows the trends in total recurrent and development Appropriations
in Aid (A in A), Table 2.2.6 the Appropriations in Aid implementation while
Figure 2.9 illustrates the actual expenditure as a share of the printed estimates
and approved expenditure respectively.
2.2.5
Appropriations in Aid (AiA)
Table 2.10: Appropriations in Aid (KSh million)
2000/01 2001//002 2002/03 2003/04 2004/05 2005/06
Total Recurrent 73.0
66.3
90.0
57.1
61.4
27.1
Total
development
154.2
1,277.5
485.0
328.1
TOTAL
227.2
1,343.8
575.0
385.2
252.9
314.3
505
532.1
/37

41. 2.2.6
Appropriations in Aid (AiA)
2001/02 2001/02 2002/032002/03 2003/042003/04 2004/052004/05 2005/062005/06
Actual Actual asActual Actual asActual Actual asActual Actual asActual Actual as
as % of%
ofas % of%
ofas % of%
ofas % of%
ofas % of%of
Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved
Total
Recurrent 158
Total
Developmen
t
53
TOTAL
55
156
199
100
113
111
101
100
39
39
47
49
16
18
13
15
10
12
14
16
6
8
12
15
15
16
11
12
fig 2.9Actual as share of Approved
1200
1000
800
%
600
400
200
0
2000/2001
2001/2002
2002/2003
2003/2004
2004/05
2005/06
-200
Total Rec urrent
Total Development
TOTA L
2.2.5 Cost Sharing
Cost sharing in public health sector was mooted in the 1984/88 Development
Plan and implemented in December 1989 to supplement and complement
government resources allocated to the health sector. The revenue collecting
health facilities are allowed to retain 75% for use in the improvement of their
health care service provision. The remaining 25% of the revenue collected go
towards financing the promotive and preventive services in the district. This is in
addition to AiA funds. Reporting rates are crucial in providing accurate picture of
trends in all cost sharing revenue collection aspects. Facilities are supposed to
/38

42. submit monthly reports on revenue collections, banking, payments and
commitments, fee schedules, workloads, financial and workload targets.
Trends in cost sharing revenues
Table 2.2.7 shows the cost sharing revenue collection trends by province and
year. During the financial year 2003/2004, the reported collected revenue was
KSh 1,004.93million increasing to KSh 1,099.47million in 2004/05 and further
to KSh 1,468.80 million in 2005/06. The rising trend in revenue collection can
be attributed to increased reporting rates by facilities; enhancement,
strengthening and efficiency improvements in revenue collection through among
others, installation of cash registers in some hospitals with heavy workloads as
well as, to a small extent, increases in fee levels. Eastern, Central and Rift Valley
provinces dominated the total collections each accounting for nearly a half of
total revenues collected in 2005/06.
Table 2.2.7 Total reported revenue collection by province and financial year (KSh
million)
Province
2001/2002
2002/03
2003/04
2004/05
2005/06
Central
178.79
217.16
238.27
267.63
324.80
Coast
140.12
162.91
128.42
160.01
151.90
Eastern
141.55
201.37
212.12
207.50
393.40
Nairobi
24.85
35.06
28.88
36.30
64.70
North
5.43
7.20
8.62
17.32
22.50
Eastern
Nyanza
93.87
121.47
94.28
128.24
131.10
Rift Valley
181.92
217.53
227.82
210.22
281.10
Western
16.83
70.23
66.52
72.25
99.30
Total
783.37
1,032.94
1,004.93
1,099.47
1,468.80
The Ministry of Health through the Division of Health Care Financing continues
with activities geared towards enhancing and strengthening revenue collection
and efficiency improvements. The activities include installation of cash registers
in hospitals with heavy workloads.
3
3.1
Review of Projects/Programs related to the Ministry
Core poverty programs
The ministry of health for sometime has not changed her list of core poverty
projects/programmes neither the list of those programmes related to the
achievement of the MDGs. Most of these projects /programmes are recurrent in
nature i.e. yearly or continuous, therefore their expenditure is from GOK. Table
3.1 below shows the trend of the expenditures of the projects/programmes in the
/39

43. ministry. It also reveals that what the projects/programmes spends is much
below what they are allocated, these hinders the completion of the planned
activities of these projects/programmes.
Table 3.1Summary of projects/programmes in the Ministry, 2003/042006/07
Project
Name
category
Year
started
Year
of
completion
Total
Estimated
Project cost
National Aids
Control
Programme
Sexually
transmitted
Infection
District
Hospitals
Yearly
Continuous
Yearly
Mental Health
Services
Spinal Injury
Hospitals
Rural Health
Centres
and
Dispensaries
Health
development
Project
(DARE))
Establishment
&
equipping
for
parasite
center
(KEMRI)
Environmental
Health
Services
Communicable
& Vector borne
Diseases
Nutrition
Programme
Vector borne
Diseases
control
Family
Planning
Maternal
&CHC
Rural Health
Training
&
Demonstration
Centres
Drugs Control
Inspectorate
KEPI
National
leprosy
&Tuberculosis
Kenya Medical
Supplies
Agency
(KEMSA)
Specialized
&
Estimated cost
of completion
Actual
expenditure
2005/06
Allocation
2006/07
Proposed
allocation
2007/08
9,609,115
Total
cumulative
expenditure
up-to
2005/06
9,125,563
483,552
9,125,563
10,684,547
11,401955
Continuous
6,768,183
6,234,085.85
534,097.15
6,234,085.85
-
-
Yearly
Continuous
2,452,381,485
1,179,867,848
1,282,513,637
1,179,867,848
1,972,992,347
2,044,496,217
Yearly
Continuous
135,427,831
127,476,542
8,051,289
127,476,542
82,776,738
84,571,083
Yearly
Continuous
13,301,061
13,199,514
101,547
13,199,514
12,134,443
12,552,080
Yearly
Continuous
2,176,117,141
2,160,735,680
2,160,735,680
3,588,338,47
3
4,937,453,015
22,000,000
22,000,000
15,381,46
1
2001
2006
681,500,000
20005
20006
20,000,000
Yearly
Continuous
49,473,960
42,800,554
6,673,406
42,800,554
163,361807
222,0555,903
2000
Continuous
8,828,638,073.
109,013,022.60
8,719,625,050.40
109,013,022.60
150,900,005
189,851,105
Yearly
Continuous
4,661,174
3,958,733.75
702,440.25
3,958,733.75
4,669,173
5,088,932
2000
2006
11,477,511
10,781,196
696,315
10,781,196
-
-
Yearly
Continuous
46,875,193
45,669,477.90
1,205,715.10
45,669,477.90
46875192
49,918,562
Yearly
Continuous
43,672,013
42,305,246
1,366,767
42,305,246
43,680,732
52,569,087
Yearly
Continuous
1,516,091
67,347.10
1,448,743.90
67,347.10
1,448,898
1,447,696
Yearly
Yearly
Continuous
Continuous
339,809,001
100,576,800
205,278,124.45
100,440,937.10
134,530,876.55
135,762.90
205,278,124.45
100,440,937.10
487,136,131
100,590,800
488,769,942
120,624,355
2004
Continuous
185,000,000
50,000,000
135,000000
50,000,000
-
-
2005
Continuous
980,000,000
1,647,144,236
1,470,500,000
/40

44. Project
Name
category
&
Global Fund
Special Global
Fund TB
Special Global
Fund Malaria
Year
started
Year
of
completion
Total
Estimated
Project cost
2005
Continuous
160,000,000
2005
Continuous
Total
cumulative
expenditure
up-to
2005/06
Estimated cost
of completion
Actual
expenditure
2005/06
Allocation
2006/07
Proposed
allocation
2007/08
393,777,140
379,479,000
2,134,365,707
1,587,294,225
1,925,668,777
3.2 Analysis of the outputs/outcomes related to these expenditures
Execution of a number of the development core poverty programmes within the
MOH is likely to achieve the following outcomes: (a) support the ERS goal of
delivering pro-poor services by ensuring increased coverage and access to
health services; (b) strengthen and support the delivery of primary and
preventive services; and (c) reinforce the referral system.
/41

45. The matrix below summarizes the programmes, goals, outputs and indicators.
Table 3.3: Summary of programmes, goals, outputs and indicators
Programme
Description
Goal/Objective Output/outcom
e
District
Rehabilitation Improve the
Most health
Hospitals
and
capacity of all
facilities
Construction
district
rehabilitated,
of facilities
hospitals
and improved to
infrastructure
acceptable and
to deliver
working
quality health
conditions.
services and
Quality health
strengthen
services
health care
available closer
delivery at the to the
district level
community
through
consolidating
and reversing
the
deterioration of
physical
structures at all
facilities
Rural Health
Minor works,
Improve rural
All structures in
Centres and
improvements health
rural
health
Dispensaries
and
facilities in the centres
and
rehabilitation
country to
dispensaries
of rural
serve rural
improved
and
facilities
poor better
rehabilitated
nation-wide
Increased
coverage of
health services
for the rural
poor
Contribute to
decongesting
district hospitals
and bring
services closer
to the people
Revolving
Procurement
Improve drug
Drugs available
Drug Fund
and
procurement
and affordable
/42
Indicator
Rehabilitation
i.e. repairs,
re-roofing, repainting,
fencing, etc in
identified
district
hospitals
completed
All structures
in rural health
centres and
dispensaries
rehabilitated
and improved

46. Table 3.3: Summary of programmes, goals, outputs and indicators
Programme
Description
Goal/Objective Output/outcom
e
distribution of and
in the pilot
drugs at
distribution,
district and its
affordable
and
surrounding.
prices,
affordability
Success and
infrastructure
lessons from the
development,
pilot project
staff training,
replicated in
community
other districts
mobilization
Successful
and logistical
implementation
support
of the project,
and its
expansion to the
other districts
will strengthen
KEMSA and make
its cash and
carry system
effective
Health
Is an
Create an
Create
Development
intervention to enabling
decentralized
Project
support
environment
organizational
(DARE)
strategies to
for
structures and
better target
decentralized
management
public
management
systems
subsidies to
of integrated
operational to
the poor and
HIV/AIDS/TB
enhance
vulnerable
and
decentralization
Reproductive
strategy within
Health Services MOH
within the
districts.
Supply of
Improve the
Increase the
Purchase and
Medical
situation of
capacity of
improve existing
Equipment
medical
district
equipment in
equipment in
hospitals to
various district
existing
offer
hospitals
hospitals
appropriate
Appropriate
diagnosis and
equipment
therapeutic
purchased and
services
delivered to
district
/43
Indicator
Increased
immunization
coverage
Increased
contraceptive
prevalence,
etc
Equipment in
most hospitals
in better and
working
condition

47. Table 3.3: Summary of programmes, goals, outputs and indicators
Programme
Description
Goal/Objective Output/outcom
e
hospitals.
Rehabilitation Improvement
Improve
All mortuaries
of Mortuaries
and facemortuary
country-wide
lifting of all
services all
improved,
mortuaries
over the
functioning and
country-wide
country
rehabilitated
Environmental Health
Reduce the
Increased safe
Health
Services,
incidence of
water and
Services
sanitation,
environmental sanitation
vector control, related
coverage
waste
diseases
Reduced vector
management,
borne diseases
drinking water
Improved human
quality,
physical,
housing
biological and
improvement,
social
pollution
environment
control, and
Improved
health
sanitary
promotion
dwellings, eating
and work places
Mental Health Provision of
To provide
All structures
Services
mental health curative care
and equipment
care services
services in
in the hospitals
to mentally
Nairobi area,
rehabilitated.
sick patients
and help
Equip mentally
Renovation
decongest
sick patients
and
KNH, and serve with skills for
rehabilitation
the densely
carpentry and
of Mathare
populated
general repairs
Psychiatric
eastern
of equipment.
Hospital, and
suburbs of
Improve the
Gilgil mental
Nairobi.
health care
hospital
services for the
mentally sick
patients.
Spinal Injury
Hospital
/44
Operations and
maintenance
of individual
spinal injury
Improve and
make
accessible
affordable
Deserving spinal
injury patients
access health
care services.
Indicator
New
mortuaries
erected
where they do
not exist.
Construction
of
demonstration
facilities
(latrines,
domestic
water supply)
Disease
surveillance,
sanitary
inspection and
law
enforcement
Hospital
buildings fully
renovated
Roads and
fences at the
hospitals
repaired
Sewerage
system at the
hospitals
overhauled.
Community
health
workers
trained on
mental health
care
Operational
requirements
for the
hospitals such

48. Table 3.3: Summary of programmes, goals, outputs and indicators
Programme
Description
Goal/Objective Output/outcom
e
health
health care
Number of
facilities
services for the patients seeking
population
care at these
with spinal
hospitals
injury.
increased.
Sexually
Reducing
Reduce the risk STIs reduced
Transmitted
sexually
of STI
Infection
transmitted
transmission by
diseases
providing
through
preventive
research,
services
clinical
services to
treat STDs.
Communicable
and Vector
Borne
Diseases
Nutrition
Programme
/45
Is an
integrated
disease
surveillance
and response
involving
disease
preparedness
and response,
data
management
and
information
dissemination,
laboratory
support
services,
training and
communication
Reduce
prevalence of
iodine,
Vitamin A and
Iron
deficiencies
among
Reduced
mortality,
disability and
morbidity due
to
communicable
diseases
IDRS expanded
to cover up to
80% of the
districts nationwide
Communication
infrastructure
such as
telephone, radio
calls, faxes, and
email network
initiated in all
districts.
Incidences of
micro-nutrients
deficiency
related
diseases in
mothers and
children
Prevalence rate
of iodine,
vitamin A and
Iron deficiencies
reduced.
Indicator
as chairs for
patients,
drugs, etc in
place.
Public
information
messages, and
education
programmes
Drugs,
supplies,
equipment to
support
treatment for
STDs
Districts
trained in
emergency
preparedness
and response.
Most health
facilities have
case
information
on priority
diseases
Advocacy
conducted
IEC materials
on micronutrients
deficiency

49. Table 3.3: Summary of programmes, goals, outputs and indicators
Programme
Description
Goal/Objective Output/outcom
e
mothers and
reduced
children
Food control
Food safety
Incidences of
Improved
Administration control,
food borne
sanitary
services
inspection and illness reduced dwellings, eating
licensing,
and work places
export
Enhanced
certification
personal and
and law
food hygiene
enforcement
3.3
Indicator
Health
hygiene
promotion
Law
enforcement
Sanitary
inspections
Disease
surveillance
Ministry’s On-going Projects
As shown on Table the Ministry of Health has a total of 126 ongoing projects
mainly including rehabilitation and construction of buildings such as mortuary
facilities, non-residential and residential buildings in various hospitals, health
centres and dispensaries. These projects are those, which had allocations in the
budget in 2005/2006, the allocations totalling to KSh 1,036,180,801 million.
Table4.1: Ministry of Health's Ongoing Projects - 2005/06
Project
KSh
Source
1
AFYA House
45,000,000
GOK
2
Coast Provincial general Hospital
35,000,000
Japan
3
Embu Provincial general Hospital
110,000,000
4
Kianyaga Heath Centre
52,000,000
ADF
5
Ngano Health Centre
45,000,000
ADF
6
Kibuga Health Centre
45,000,000
ADF
7
Ngong Health Centre
45,000,000
ADF
8
Kenya Medical Research Institute
20,000,000
Japan
9
Rift Valley Provincial Gen Hospital
10
Kapsabet D.H
11
Nandi Hills D.H.
9,254,640
6,600,000.00
BADEA
GOK
GOK
GOK
3,350,000.00
12
Iten D.H.
13
Kapenguria D. H
/46
5,083,000.00
3,274,200.00
GOK
GOK

50. Table4.1: Ministry of Health's Ongoing Projects - 2005/06
Project
KSh
Source
14
Kitale District Hospital
8,800,000.00
GOK
15
Chebiemit District Hospital
7,158,650.00
GOK
16
Kabarnet District Hospital
3,240,000.00
GOK
17
Molo S.D.H.
3,200,000.00
GOK
18
Gilgil Hospital
3,000,000.00
GOK
19
Naivasha S.D.H
3,000,000.00
GOK
20
Kapkatet District Hospital
3,426,100.00
GOK
21
Nanyuki District Hospital
4,500,000.00
GOK
22
Eldama Ravine D. Hospital
4,000,000.00
GOK
23
Narok District Hospital
4,500,000.00
GOK
24
Kilgoris D.H.
7,000,000.00
GOK
25
Longisa D. Hospital
2,635,000.00
GOK
26
Kajiado District Hospital
4,000,000.00
GOK
27
Loitokitok Sub-District Hospital
3,950,000.00
GOK
28
Maralal D.H.
4,077,400.00
GOK
29
Baragoi SDH
4,000,000.00
GOK
30
Kapkatet District Hospital
5,021,000.00
GOK
31
Nanyuki District Hospital
6,000,000.00
GOK
32
Eldama Ravine D. Hospital
240,000.00
GOK
33
Lodwar District Hospital
3,274,200.00
GOK
34
Eldoret S.D.H.
8,800,000.00
GOK
Londiani SDH
7,158,650.00
Kericho District Hospital
2,500,000.00
Kisumu District Hospital
5,960,000.00
New Nyanza PGH
9,831,838.00
Kombewa SDH
7,000,000.00
35
36
37
38
39
40
41
42
43
44
45
46
47
48
/47
Migori District Hospital
10,622,430.00
Awendo SDH
1,500,000.00
Rongo SDH
1,500,000.00
Homa bay District hospital
5,000,000.00
Siaya District Hospital
4,180,000.00
Yala SDH
5,500,000.00
Nyando DH
7,500,000.00
Muhoroni SDH
Ogembo D.H
500,000.00
8,604,050.00
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK

51. Table4.1: Ministry of Health's Ongoing Projects - 2005/06
Project
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
79
80
81
/48
KSh
Bondo D.H.
7,628,200.00
Madiany S.D.H.
4,200,000.00
Rachuonyo DH
5,262,000.00
Suba D.H
6,000,000.00
Kuria D.H.
5,000,000.00
Kisii D.H
2,000,000.00
Keumbu SDH
3,800,000.00
Nyamira DH
3,663,000.00
Nyeri PGH
14,926,345.00
Thika district Hospital
7,116,330.00
Gatundu Hospital
4,000,000.00
Muranga D.H
6,000,000.00
Muriranjas SDH
3,560,000.00
Karatina D.H
3,780,000.00
Mukurweini SDH
3,880,000.00
Othaya SDH
6,000,000.00
Kiambu District Hospital
5,550,000.00
Tigoni SDH
5,450,000.00
Kerugoya District hospital
5,809,477.00
Kimbimbi SDH
7,000,000.00
Nyahururu District Hospital
7,378,210.00
Olkalou SDH
2,000,000.00
Maragua District Hospital
9,288,608.00
Runyenjes SDH
6,000,000.00
Embu PGH
5,406,360.00
Nyambene D.H.
11,635,000.00
Miathene SDH
4,000,000.00
Chuka District hospital
6,514,600.00
Magutuni SDH
4,000,000.00
Meru Central District
8,752,600.00
Githongo SDH
2,000,000.00
Kanyakine SDH
2,580,000.00
Source
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK

52. Table4.1: Ministry of Health's Ongoing Projects - 2005/06
Project
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
/49
KSh
Isiolo District Hospital
3,800,000.00
Marsabit District Hospital
5,152,000.00
Moyale D. H
3,000,000.00
Garbatula S.D.H.
4,975,000.00
Tharaka District
8,240,000.00
Kitui District Hospital
7,270,000.00
SiakagoD.H.
6,200,000.00
Ishiara SDH
2,000,000.00
Makueni D.H
2,200,000.00
Makindu SDH
6,500,000.00
Machakos General Hospital
12,122,000.00
Mbooni SDH
2,000,000.00
Mwingi District Hospital
8,024,952.00
Tseeikuru SDH
6,000,000.00
Kakamega PGH
1,740,000.00
Malava sub-district Hospital
2,009,170.00
Lumakanda D Hopsital
8,873,400.00
Mt. Elgon District Hospital
3,236,000.00
Teso District Hospital
8,943,885.00
Bungoma District Hospital
24,664,360.00
Webuye SDH
4,500,000.00
Port Victoria SDH
6,618,425.00
Alupe SDH
1,500,000.00
Vihiga District Hospital
3,370,000.00
Butere District Hospital
6,000,000.00
Busia District Hospital
5,047,000.00
Coast PGH
Hola D.H.
10,586,865.00
Source
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
-
Ngao SDH
16,000,000.00
Wesu D.H.
3,000,000.00
Voi DH
7,573,930.00
Taveta Hospital
2,396,114.00
GOK
GOK
GOK
GOK

53. Table4.1: Ministry of Health's Ongoing Projects - 2005/06
Project
114
115
116
117
118
119
120
121
122
123
124
125
Kwale D.H.
Kinango SDH
Msambweni S.D.H
KSh
10,500,000.00
5,000,000.00
13,460,560.00
Kilifi D.H.
2,000,000.00
Malindi D.H.
2,000,000.00
Port Reitz D.H.
2,000,000.00
Lamu D.H.
2,000,000.00
Garissa DH
6,467,952.00
Wajir D.H
4,245,450.00
Masalani D.H
6,000,000.00
El Wak SDH
6,215,000.00
Rhamu SDH
9,655,700.00
126
Mandera D.H.
4,000,000.00
1,036,180,801
TOTAL (KSh)
Source: 2005/06 Estimates of Development Expenditure
Source
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
GOK
3.4 Stalled Projects
At the same time, there are a total of about 86 stalled projects whose cost of
completion is estimated at Kshs.2.12 billion (Annex 1). These stalled projects
bear a number of distinct features:
• the list include a range of projects whose start up date is early as 1981, and
others as recent as 1998;
• the completion status is varied, and range from as low as 10% to over
90%;
• On average, the majority (almost 79%) of the stalled projects (whose status
is known) are 50% and above complete;
• Despite being incomplete, the rise in costs to completion may be
associated with interest on contract violations, and lack of budget
allocations to ensure they are completed.
However, a number of the stalled projects have not been abandoned since they
were included in the budget estimates for 2004/2005 as shown in Table 6 –
/50

54. 3.5
New projects TO BE INITIATED IN 2006/07 CHAO TO PROVIDE
INFORMATION-CHERUYOIT TO FOLLOW UP – NO NEW PROJECTS SO FAR
3.6 Weakness in Project implementation
Judging from the long list of stalled projects, the varied status of completion,
and amounts of money needed to complete them, including the large
difference between the original and current costs, a number of weaknesses
become apparent:
• A clear policy or decisions to check cost escalations on these projects
seems to be lacking. This may be a government-wide problem and not
MOH specific.
• Similarly mechanisms for monitoring and evaluating the progress of
projects seem to be lacking. Such a mechanism, if combined with an
appraisal process, would allow decisions to be made on current and
ongoing projects before new commitments are made, and additional
project costs included in the budget for the MOH.
•
The appraisal should include stiff criteria for verifying new projects.
Where possible, completion of ongoing projects ought to be part of the
criteria and conditions for initiating new ones.
4 Pending Bills
Unpredictability of the budget leading to, in particular, variations between the
budget, and budget out-turns leaves the wide gap between estimates and actual
expenditures. Together with delays caused by the existing capital project
procurement policy, the accumulation of pending bills has become a problem,
and to non-completion and stalling of development projects.
0.
As summarized in Table 5.1, the MOH accumulated a total of KSh. 158.3 million
in pending bills for both recurrent and development for the period under review .
The larger proportions (96%) of the pending bills were for development costs,
/51

55. mainly for rehabilitation and construction. It will be noted that pending bills
have increased by over 40% from last year and this is likely to increase further if
bills are not paid in advance. There is a down ward trend of bills under utilities in
the recurrent vote but with the development vote the trends is increasing. This
calls for more funds to be allocated to the development vote in order to finish the
planned projects in advance.
Table 5.1
2004/05
Vote head/type
Description
Utilities
(mainly
water)
Telephone
Other
Recurrent
Total recurrent
Development
2005/06
mount (KSh)
Amount (KSh)
57,781,145
35,275,301
11,000,000
25,449,434
94,230,579
4,527,230
3,447,390
Total (recurrent +
Development)
% of Total MOH
expenditure
97,677,969
0.5
39,802,531
118,479,103.30
158,281,634.30
0.07
5.1 Recommendations
•
•
•
•
•
/52
Further disbursements should be accompanied by
implementation guidelines especially for RHF’s
The DHMB’s should be enabled/empowered to oversee
implementation of projects and defect omissions/mistakes
early enough i.e not leaving every thing to the ministry of
Roads and public works alone
Processing of AIE’s and subsequent of funds should be done
within the 1st quarter of the Financial year allows proper
planning/adequate consultation with Management
Committees
Facilities that were not funded in 2005/06 should be
prioritized in 2006/07(see attached list).
Improving budget predictability.

56. •
•
•
5
5.1
Recognizing and increasing the budget for operation and
maintenance expenditures such as supplies, utilities,
communication, etc. At present, approved budgets are not
matched with timely release of exchequer funds by the
government.
A review of current procedures governing the release of
certified and voted funds is needed in order to avoid delays,
and to facilitate overall improvement in the implementation
of the budget.
As revenues and resources for health improve, the MOH
needs to add medical supplies, maintenance and repairs
especially at the rural health facilities to its list of protected
budget items as is the case for selected expenditures for core
poverty programs
Analysis of Ministry outputs and corresponding performance
indicators
Output targets
Table 5.1 shows the outputs and targets for selected indicators. These indicators
are intended to measure the performance of the MoH as past of its commitment
to the Economic Recovery Strategy (ERS).
Table 5.1: Health Sector Indicator Targets7
Indicator
Measure
Base 2005
2006
2007
line
Achieved8 Target Target
2003
(%)
1. Proxy for Fully
Immunized 57
61
67
70
Infant
Children (FIC) as a % of
Mortality
under-one population
2. Proxy for Percentage of pregnant 10.1
6.4
8.4
8
HIV/AIDs
woman attending ANC
prevalence
who are aged 15-24 who
are HIV-infected
7
8
The BOP did not extend the targets to 2008/09.
Current status(achievements)
/53

57. 3. Proxy for Percentage of ANC 54
Maternal
coverage (4 Visits)
Mortality
56
65
70
4. Proxy for Inpatient
malaria 19
Burden of morbidity as percentage
Disease
of
total
in-patient
morbidity
18
15
14
5.2
Overview of Sector Performance Indicators and Targets
Overview of Sector Performance Indicators and Targets, NHSSP
II/AOP 2, 2006/07
/54

58. Achievement
Baseline
National
Targets
05/06
Achievement
for
reporting
districts (61)
Projected
national
achievement
Performance
against
target
42%
51%
15%
15%
30%
80
28
28
35%
Indicators
Below 80% Achievement
%Deliveries conducted by skilled
health staff
District Aqua Laboratories in place
# School children correctly dewormed at least once in 2005/06
# HIV+ve patients starting with ART
25%
35%
7%
13%
36%
8,000
95,000
38,320
38,320
40%
% Pregnant women sleeping under
LLITN
# LLITN distributed to children
under 5 yrs
0.44
44%
20%
20%
45%
250,000
3,400,000
1,181,959
1,798,739
53%
% WRA receiving FP commodities
10%
20%
11%
11%
57%
% Pregnant women attending four
ANC visits
54%
70%
44%
44%
62%
80,000,000
90,000,000
37,422,850
66,030,516
73%
74%
84%
64%
64%
76%
% Children fully immunized at 1 year
of age
58%
68%
56%
56%
83%
Blood collected screened for HIV
0.98
1
1
1
100%
8
7
8
100%
90%
99%
99%
111%
# Condoms distributed (million)
% Children < 1yr vaccinated against
Measles
Above 80% Achievement
Regional Food/Bacteriological Lab.
Established
% Newborns that receive BCG
# Health Facilities providing
Basic/Comprehensive Emergency
Obstetric Care (BEOC / CEOC)
# Houses sprayed with IRS
% Pregnant women received IPT 2x
LLITN distributed to pregnant
women
% House Holds implementing
hygiene practices
# HF providing treatment as per
IMCI guidelines
# HF offering Youth Friendly Health
Facilities
# CORPs selected and trained
5.3
84%
9%
15%
18%
18%
122%
2,500
200,000
367,000
367,000
184%
4%
20%
43%
43%
214%
55000
200000
251,872
456,771
228%
25%
58%
58%
234%
10%
35%
35%
353%
2%
5
5
47
47
940%
100
10024
10024
10024%
Links Budget allocation to Output Delivery
Public management promotes a direct link between results based public health
sector management and the budgetary process. Health budgets are allocated
based on the variables of which some are outputs. The budgeting system quite
rightly assumes that budgets cannot be realistically based on the delivery of
outcomes. These are often medium term objectives and are influenced by a
/55

59. number of variables, some not within the control of the health sector; and their
monitoring is a very complex task.
The direction and strategies outlined in NHSSP II are to be implemented through
development and implementation of annual operational plans (AOPs). In
addition, a four-year Joint Programme of Work and Funding (JPWF), developed
concurrently with the plan, outlines the interventions the sector will focus on in
the medium term, their costs, financing and finance gaps. The JPWF also
describes the financing strategy the sector will use to mobilize the resources
needed to close the gaps. The linkages among NHSSP II, the JPWF and the
various AOPs are illustrated in Section 2.5.
Among others, the elements of NHSSP II are:
 Creating linkages from NHSSP II to the overall development objectives as
expressed in the Economic Recovery Strategy for Wealth and Employment
Creation 2003–2007 (ERSWEC), and the achievement of the Millennium
Development Goals (MDGs).
 Renewing attention to the right to health care and the importance of good
health at the household, family and community level.
 Introducing the Kenya Essential Package for Health (KEPH), which
integrates all health programmes into a single package to improve the
health of the population in the different stages in their life cycle and
incorporates the various systems that will support KEPH.
 Proposing to change the governance of the sector by institutionalizing and
improving the relations between MOH and all stakeholders.
 Starting to apply public sector reforms within the health sector (like
performance-based contracts for all those responsible in the civil service).
 Initiating a sector-wide approach (SWAp) in the health sector, through
joint planning and joint performance monitoring, as well as a process to
arrive at a harmonization of funding arrangements.
5.4
Expected Outputs and Outcomes 2006/07
5.4.1
Human Resource
In order to address the long-term manpower needs for the health sector, an
assessment is being conducted to identify the human resource requirements to
meet the MDGs. This report is expected to form the basis for a human resource
development policy including training need assessment.
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