This document discusses public expenditure data and coding systems in Kenya. It notes that reliable tracking of public resource allocation requires transparent expenditure classifications. While Kenya's open data provides budget details, definitions of sectors like agriculture are opaque and reporting formats vary. The document examines Kenya's classifications and budget process, finding that agricultural expenditure is underestimated without considering related ministries. It concludes coding systems need clear documentation to facilitate policy analysis from independent expenditure assessments.

1. Public Account and Coding System:
Government Expenditure in Kenya
Thursday, October 16, 2014
Bingxin Yu
Research Fellow
International Food Policy Research Institute
September 8, 2014

2. Introduction
• Public expenditure translate policy objectives
into actions through public service delivery
• Gov., develop partners and general public
increasingly request expenditure accountability
and transparency
• Track, monitor and evaluate the flows and
impacts of public resource allocation
• Reliable assessment and comparisons of public
expenditure
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3. Data Challenge
• Data access
• Opaque definitions of the agricultural sector: line
ministries, functions
• Different levels of disaggregation: sub-sector
• Diverse reporting formats designed by users
• In need of a transparent and user-friendly
coding system
• Detailed data along with clear documentation
• Kenya as a case study
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4. Common Budget Classifications
• Jacobs et. al 2009, Cooper and Pattanayak 2011
• Administrative: gov. organization (Who?)
• Functional: purposes and objectives, easy to
compare (What?)
• Economic: capital, salary, goods/service (How?)
• 3 classifications distinct, serve different needs,
independent of each other for each transaction
• Economic and functional defined in GFS, COFOG
• Other classifications like program, funding source
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5. Budget Process - Preparation
• Budget Outlook Paper: broad fiscal parameters
for the budget year and two years forward
• Budget Strategy Paper: firm sector and
ministerial spending ceilings
• Budget circular from MOF to line ministries: clear
technical guidance and timeline for budget
• line ministry submits budget to MOF for the
consolidated Appropriation Bill
• Budget Statement to National Assembly
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6. Budget Process - Execution
• Each line ministry sets up two mirror accounts
(recurrent and development) in the central bank
• A monthly spending limit set by MOF to ministry
• Accounts reported daily through mirror-accounts
• Quarterly Economic and Budgetary Review:
actual expenditure
• Financial Statements: final report from the
Auditor General
• Multiple versions of gov. expenditure: source,
timing, budget vs. actual
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7. Kenya Public Expenditure Data
• https://opendata.go.ke
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8. Data Structure
Variable Central Classification
Vote Name of Ministries
Sub-Vote Divisions within Ministry Administrative
Head Dept. within Divisions
Current or capital Capital, current, interest
Economic class. Economic classification Economic
Line item Description of activities
Estimates Budget
Revised Revised budget
Executed Executed spending
Budget Type Development or recurrent
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No functional classification
reconstructed from Head

9. Administrative Structure of MOA (code=10)
Sub-vote
code
Sub-vote Head code Head
10.100
General
Admin.
and
Planning
10.100.195
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Agri. boards and committees
services
10.100.191 Agri. attaches' offices
10.100.228 Finance and accounts department
10.100.190 HQ admin. and technical services
10.100.193 Development planning services
10.104
Inform.
Mgmt. for
Agri.
Sector
10.104.261 Kilifi institute of agriculture
10.104.254
Agri. business, market dev. and
agri. inform. services
10.104.257 Agricultural information centre
10.104.258 Embu agricultural college
10.104.259 Bukura agricultural college
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10. Economic Classification of MOA
Economic
classification
Line code Line
Capital
3110200 Construction of buildings
3110500 Construction and civil works
3130100 Acquisition of land
Wages and
salaries
2110300 Personal allowance - paid as part of salary
2110400
Personal allowance - paid as
reimbursements
Goods and
services
2211000 Specialised materials and supplies
2210800 Hospitality supplies and services
2211200 Fuel, oil and lubricants
2210100 Utilities, supplies and services
Grants 2620100
Membership fees and dues and
subscriptions to international organizations
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11. Functional Classification of Ag. (User Defined)
Functional class. (bill. Ksh) COFOG 2006/07 2010/11
Economic affairs 704 79.2 176.1
Agri., forestry, fishing & hunting 7042 19.6 38.6
Agriculture 70421 16.3 29.5
Forestry 70422 1.69 4.62
Fishing and hunting 70423 1.6 4.5
Transport 7045 30.4 70.1
R&D agriculture, forestry,
fishing and hunting
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70482 5.0 8.0
Environmental protection 705 1.1 2.7
Protection of biodiversity and
landscape
7054 0.1 0.12
Total 378.7 684.1
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12. Expenditure by Administrative Classification
Health
Education
20%
Environment
and water
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General public
services
Defense
Public safety
Agriculture,
fishery and
forestry
5%
Trade, tourism
and industry
Infrastructure
Social
service
2010/11

13. Expenditure by Functional Classification
Education
25%
Recreation,
culture and
religion
Health
Housing and
community
amenities
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General public
services
Defense
Public order
and safety
Agriculture,
forestry,
fishing and
hunting
6%
Trade,
tourism and
industry
Infrastructure
Environmental
protection
Social
Protection
2010/11

14. Expenditure by Economic Classification
Grants
28%
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Capital
18%
Compensation
of employees
36%
Goods and
services
15%
Other
3%
2010/11

15. Comparison of Total Gov. Expenditure
800
700
600
500
400
300
200
100
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0
2002
2003
2004
2005
2006
2007
2008
2009
2010
Billions Ksh
IMF
FAO
IFPRI

16. Comparison of Agricultural Expenditure
50
45
40
35
30
25
20
15
10
5
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0
2002
2003
2004
2005
2006
2007
2008
2009
2010
Billions Ksh
IMF
FAO
IFPRI
GOV (3 ministries)
GOV (5 ministries)
GOV (6 ministries+R&D)

17. Agri.-related Expenditure by Ministry
Ministry of Agriculture
Ministry of Forestry and Wildlife
Ministry of Livestock…
Ministry of Science and…
Ministry of Fisheries…
Ministry of Water and Irrigation
Ministry of State for Special…
Ministry of Cooperative…
Ministry of Lands and Housing
Ministry of Development of…
Ministry of Justice, National…
Ministry of Planning and…
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0 3 6 9 12 15 18
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Ministry of Regional Development
Billion KSh

18. Agri.-related Expenditure by Sector
Livestock
Forestry
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• Agriculture in GDP:
20%
• Agriculture in total
expenditure: 6%
• Livestock in
agricultural GDP: 47%
• Livestock in
agricultural exp.: 15%
2010/11 Page 18
Agriculture
Fishery

19. Agri.-related Exp. by Economic Classification
50
40
30
20
10
Other
Grants
Goods and services
Compensation of employees
Capital
• High capital investment (25-30% vs. total <20%)
• Goods and services increases quickly
• Large proportion as inter-gov. transfer
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0
2002 2003 2004 2005 2006 2007 2008 2009 2010

20. Agri.-related Exp. by Functions
50
45
40
35
30
25
20
15
10
5
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0
2002 2003 2004 2005 2006 2007 2008 2009 2010
Billion Ksh
Administration Conservation Extension Flood and irrigation
Food security Land settlement Marketing Pest control
Research Veterinary Services

21. Conclusion
• Gov. expenditure can be organized in different
and independent classifications
• Administrative, economic, functional
• Countries may only report some classifications
• Kenya case study illustrates how to derive
functional classification that’s not reported
• A useful approach to flexibly track gov. spending
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22. Conclusion
• Mapping relationship between gov. agencies and
functions is not one-to-one
• Expenditure goes beyond line ministries
• Simple aggregates based on gov. admin.
structure can be misleading
• Functional and economic classifications
preferred definition for comparison
• Regardless of administrative structure change
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23. Kenya Experience
• Open data
• Data quality: design, implementation, report
• Coding system with documentation
• Aggregates from different sources could vary
substantially due to the definition, audit status
and reporting agency
• Foundation for timely policy decision and
analysis
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