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					       Republic of Kenya




       Ministry of Health




Public Expenditure Review
          2007


         Printed on: 18 September 2011
Contents



Contents ........................................................................................................................... i
Abbreviations .............................................................................................................. iii
1      Background ........................................................................................................... 1
    1.1        Overall objective of the PER ................................................................... 1
    1.2        Objectives of the Ministry’s PER ........................................................... 1
    1.3        Health Status Indicators .......................................................................... 2
    1.4        The Health Services Delivery System ................................................. 2
    1.5        Linkage between ERS, NHSSPII ........................................................... 3
    1.6        NHSSP II - Key principles of AOP2 ...................................................... 5
    1.7     Strategic issues and policies of the ministry.................................... 5
      1.7.1     Flow of funds to rural health facilities .................................................. 5
      1.7.2     Guidelines to financial flow to health centres and dispensaries ....... 7
      1.7.3     Procurement position paper ................................................................... 7
    1.8     MoH Collaboration with the Faith based organisations ............. 9
      1.8.1      Current collaboration with FBOs ......................................................... 10
      1.8.2      Progress report on MOH/FBHS - TWG on partnership policy
      Development ........................................................................................................... 11
      1.8.3      Immediate re-instatement of financial grant to church Health
      facilities 11
      1.8.4      Support in kind through Drugs, Medical Supplies Equipment and
      Ambulances ............................................................................................................. 12
      1.8.5      Legal Policy Framework ........................................................................ 12
      1.8.6      Donor support to the Health Sector .................................................... 13
    1.9  The Scope and Organization of this Public Expenditure
    Review........................................................................................................................ 13
    1.10      The Ministry’s Mission Statement and Core activities .......... 14
      1.10.1      Kenyatta National Hospital .............................................................. 14
         1.10.1.1   Financing ......................................................................................... 16
         1.10.1.2   Impact of Poverty on the hospital ................................................ 17
      1.10.2      Kenya Medical Research Institute (KEMRI) .................................. 17
         1.10.2.1   Achievements .................................................................................. 18
      1.10.3      National Health Insurance Fund ..................................................... 19
         1.10.3.1   Financing Hospitals ....................Error! Bookmark not defined.22
      1.10.4      Kenya Medical Training College (KMTC) ....................................... 21
      1.10.5      Kenya Medical Supplies Agency (KEMSA) ..................................... 22
      1.10.6      Moi Teaching and Referral Hospital ............................................... 23
      1.10.7      Increasing Access ............................................................................... 24


                                                                  i
2      Government Spending on Health through the MoH ......................... 24
    2.1        Public Spending on Health: Context ................................................. 24
    2.2 Government Spending on Health: Aggregate Levels and
    Trends ........................................................................................................................ 25
      2.2.1     Total Spending on Health ..................................................................... 25
      2.2.2     Recurrent and Development Expenditure ......................................... 27
        2.2.2.1         Ministry of Health Recurrent Expenditure by Economic
        Category 27
        2.2.2.2         Ministry of Health Expenditure (Actual) by sub Vote .............. 27
      2.2.3     Budget Implementation Actual Expenditures versus Approved
      Budgets 30
      2.2.4     Appropriations in Aid (AiA) and Cost Sharing ( ) ............................. 37
      2.2.5     Appropriations in Aid (AiA) ................................................................. 37
      2.2.5 Cost Sharing.................................................................................................. 38
Table 2.2.7 Total reported revenue collection by province and
financial year (KSh million) ................................................................................ 39
3      3. Review of Projects/Programs related to the Ministry ........................................ 39
    3.1        Core poverty programs ........................................................................... 39
Table 3.1Summary of projects/programmes in the Ministry,
2003/04- 2006/07 .................................................................................................... 40
    3.2 Output/Outcomes related to expenditures........Error! Bookmark not
    defined.41
    3.3        Ministry’s On-going Projects ................................................................ 46
    3.4        Stalled Projects .......................................................................................... 50
    3.5 New projects TO BE INITIATED IN 2006/07 CHAO TO
    PROVIDE INFORMATION-CHERUYOIT TO FOLLOW UP – NO NEW
    PROJECTS SO FAR ............................................................................................... 51
    3.6 Weaknesses in project implementation – Cheruiyot to refer to
    notes attached to pending bills 05/06 ...........Error! Bookmark not defined.47
4      Pending Bills ....................................................................................................... 51
5 Analysis of Ministry outputs and corresponding performance
indicators ..................................................................................................................... 53
    5.1        Output targets ............................................................................................. 53
    5.2        Overview of Sector Performance Indicators and Targets ........ 54
    5.3        Links Budget allocation to Output Delivery ................................... 55
    5.4 Expected Outputs and Outcomes 2006/07 ..................................... 56
      5.4.1 Human Resource .................................................................................... 56
      5.4.2 Drug Procurement ................................................................................. 57
      5.4.3 Access to ARVs ....................................................................................... 57


                                                                  ii
       5.4.4         Restructuring of the Ministry ............................................................... 57
       5.4.5         Restructuring of Parastatals ................................................................. 57
6      Public Expenditure Management (PEM) ............................................... 57
     6.1      Budget Preparation Process ................................................................. 58
     6.2 Results-Oriented Public Expenditure Management ................... 59
       6.2.1 Results-Based Management ................................................................. 60
7      Human Resources Development and Capacity Building ................ 60
     7.1      Service Delivery Inputs........................................................................... 61
     7.2      Human resources situation .................................................................. 61
     7.3      Human resource disparities ................................................................. 63
     7.4      Impact of HIV/AIDS on Human Resources ................................... 65
8      Implementation of Recommendations of the 2006 PER ................ 65
     8.1      Action plans for implementation of 2006 MPER ......................... 65
     8.2      Activities and Supporting Actions ...................................................... 66
     8.3      Timeframes and targets ......................................................................... 67
9      Challenges and Constraints ......................................................................... 68
     9.1      Integrating NHSSP II and AOPs into the Annual Budget ......... 68
     9.2      Reviewing Targets ..................................................................................... 68
10         Conclusions and Key Recommendations ........................................... 69
11         Annexes ............................................................................................................. 72
CHERIYOT TO VERIFY- NAMES, % COMPLEION, COST OF
COMPLETION (Mr. Gitonga)................................Error! Bookmark not defined.70
     Annex 1: Inventory Of Stalled Building Construction Projects –
     D11-Ministry Of Health- CHERIYOT TO VERIFY ..................................... 72
12         References ........................................................................................................ 74




Abbreviations


                    Description
AIDS                Acquired Immune Deficiency Syndrome

CBS                 Central Bureau of Statistics
GDP                 Gross Domestic Product


                                                                iii
HIV     Human Immunodeficiency Virus

MDG     Millennium Development Goals

MoH     Ministry of Health
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    Faith Based Organizations
PRSP    Poverty Reduction Strategy Paper
SARS    Severe Acute Respiratory Syndrome
HLA     Human leukocyte Antigen




                                     iv
1     Background



1.1   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.




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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 6.71 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 system2 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
    Excludes the northern part of the country
2
    See the NHSSP II


/2
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.




3
    See financial flow to health facilities.


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      Focusing on investments to benefit the poor: Reallocate resources towards
       promotive, preventive and basic health services and enlist additional
       capacity through partnership arrangements.

      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:


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       Strengthening community-based health care programmes, and promoting
        mobile outreach clinics for remote areas;
       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:


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      Inadequate cash liquidity at District Treasuries to support district
       activities;

      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


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      Timely and accurate accounting for resources in the sector.

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



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service. The ministry has initiated processes aimed at implementing the Plan
through the Sector Wide Approach (SWAp).

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


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for procurement like tender committees and procurement committees,
procurement capacity requirements, monitoring and evaluation.

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         KEC-       CHAK                     CHAK/KCS
                                    CS
Hospital         147                44         24                       68
Health centres   460                92         47                       139
Dispensaries     1,630              281        311                      592
TOTAL            2,237              417        382                      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



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revenues. According to a MoH study4 focusing on facility utilisation after the
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




4
  Ministry Of Health: RHF Unit Cost/Cost Sharing Review Study & The Impact Of The 10:20 Policy,
2005.




/10
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.




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        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:

                    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;


/12
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
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;
         Competitive advantage;


/14
       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.


                                        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



/15
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
  2000/01       1,754.2         1,349.6     534.8       1,884.5
  2001/02       5,283.9         1,865.2     807.1       2,672.4
  2002/03       5,289.7         2,327.0     596.5       2,923.5
                                                        3,400.4
  2003/04       5,788.0        2,448.0      952.4
                               2,659.0
  2004/05       9,733.4                     917.2       3,576.2
  2005/06                                  1,852.1      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.


/16
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
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


/17
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.

       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.




/18
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.


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


5
    Includes personnel and other admin expenses


/19
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%.




/20
    Table: Growth of members’ contributions and reimbursements
                                           2002/03        2003/04      2004/05
    REVENUES
         Contributions                 2,523,876,081 2,639,883,578 3,117,241,202 3,4
                        6
         Other income                  210,992,974    72,358,041   157,349,232   188
    TOTAL REVENUES                      2,734,869,055 2,712,241,619 3,274,590,433 3,6

    EXPENDITURE
         Reimbursements                              822,014,878      713,297,431     685,490,051     1,1
          Administration
                1. Personnel                          776,263,163   827,258,377   1,040,765,820        1,0
                2. Other admin                        846,506,931   704,478,176   538,018,321          49
          Total admin expenses                        1,622,770,094 1,531,736,553 1,578,784,141        1,5
    TOTAL EXPENDITURE                                 2,444,828,033 2,245,033,984 2,264,274,192        2,6
    Reimbursements as % of total                                 30            26             21
    revenue
    Total admin as a % of total revenue                        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.


    1.10.4            Kenya Medical Training College (KMTC)


    6
        Incomes accrued from short and long term investments


    /21
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.

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


/22
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.

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


/23
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.

2     Government Spending on Health through the MoH
2.1    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


/24
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
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     0.8      7.1    16.5       20.1
Per Capita KSh                                           488.44   481.97   506.05 578.28   681.78
Per Capita $                                             6.28     6.29     6.52   7.48      9.47
Ministry of Health Expenditure
(Gross) as % of Total Government1
      Recurrent                                          8.23     8.69     7.76   7.66      6.29
      Development                                        17.18    5.12     2.77   2.01      3.73
      Total                                              9.01     8.33     6.99   6.1       5.73
Ministry of Health Expenditure
(Gross) as % of GDP
      Recurrent                                          1.38     1.4      1.41   1.41      1.29
      Development                                        0.27     0.09     0.09   0.14      0.21
      Total                                              1.65     1.49     1.51   1.55      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.




       /26
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


Table 2.3 Recurrent (gross) Expenditure by Economic Category KSh millions

                             2000/01       2001/02      2002/03     2003/04       2004/05        2005/06

                               Actual        Actual        Actual      Actual        Actual         Actual
Total Recurrent (Gross)      11,040.8      12,714.9      14,405.4    15,438.5      17,417.4       19,765.1
Salaries and Other
Personnel                     5,251.8       6,639.9       7,798.1     8,100.8      9,034.9       10,407.3
  as % Total Recurrent           47.6          52.2          54.1        52.5         51.9           52.7
Transfers, Subsidies and
Grants                          848.1       1,027.7       1,157.2     1,454.7       1,562.5        1,634.9
  as % Total Recurrent            7.7           8.1           8.0         9.4           9.0            8.3
Drugs and Medical
Consumables                   1,680.8       1,476.8       1,349.7     1,716.0      1,866.2        2,074.2
  as % Total Recurrent            15.2         11.6           9.4         11.1        10.7           10.5
Other Operations &
Maintenance                   1,749.9       1,324.0       1,257.4     1,285.2       1,756.0        1,481.0
  as % Total Recurrent           15.8          10.4           8.7         8.3          10.1            7.5
Purchase of Plant &
Equipment                       160.6            29.0       94.5         14.6         80.7          595.6
  as % Total Recurrent            1.5             0.2        0.7          0.1          0.5            3.0
Kenyatta National
Hospital                      1,349.6       1,865.2       2,327.0    2,409.0       2,659.0        2,858.0
  as % Total Recurrent           12.2          14.7          16.2       15.6          15.3            14.5
Moi Referral Hospital             0.0         352.3         421.5      458.1         458.1           714.1
  as % Total Recurrent            0.0           2.8           2.9        3.0           2.6             3.6




2.2.2.2      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           2001/2002 2002/2003 2003/2004 2004/05 2005/06
                                     Actual             Actual      Actual        Actual       Actual   Actual
    General Admin. And
110 Planning                             700.7           587.0       714.8        760.4       1,223.0 912.527

      Total as % Total MoH                 6.3              4.6        5.0           4.9          7.0        4.6
111 Curative Health                 6,080.9             6,758.6     7,677.6      7,768.0      8,639.5 9996.759


/27
      Total as % Total MoH         55.1      53.2        53.3      50.3       49.6     50.6
112 Preventive and Promotive     874.4      665.2      632.2      863.6      795.9 756.995

      Total as % Total MoH          7.9       5.2         4.4        5.6       4.6      3.8
113 Rural Health Services       1,121.4    1,378.1    1,436.4    1,687.6   2,041.5 2881.656

     Total as % Total MoH          10.2      10.8       10.0       10.9        11.7    14.6
    Health Training and
114 Research                     884.2    1,060.2     1,161.8    1,459.8   1,467.7 1511.916

     Total as % Total MoH          8.0        8.3         8.1        9.5       8.4       7.6
    Medical Supplies Coord
116 Unit                          29.6       48.3       34.2       32.0      132.6 133.177

     Total as % Total MoH          0.3        0.4        0.2        0.2        0.8      0.7
    Kenyatta National
117 Hospital                    1,349.6   1,865.2     2,327.0   2,409.0    2,659.0 2858.014

     Total as % Total MoH          12.2       14.7       16.2       15.6      15.3      14.5
    Moi Teaching and
118 Referral                       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      3.6

   Total MoH                   11,040.8   12,714.9   14,405.4   15,438.5   17,417.4 19,765.1

      Total as % Total MoH       100.0      100.0      100.0      100.0      100.0    100.0




/28
Table 2.5: Ministry of Health: Development Expenditures (gross) by Sub Vote KSh Millions.

Code         Sub-Vote            2000/2001   2001/2002    2002/2003    2003/2004 2004/05             2005/06
                                   Actual      Actual       Actual        Actual       Actual           Actual
             General Admin.
110          and Planning             16.9      1,193.2        432.5        196.9           158.7   357.213
              Total as % Total
             MoH                       1.6         47.4         45.8         19.6             9.1       11.0
111          Curative Health          98.0       637.2         120.1        206.5           162.0   702.779
              Total as % Total
             MoH                       9.5         25.3         12.7         20.6             9.3       21.7
             Preventive and
112          Promotive               386.2       134.0         183.4         87.9       934.0       1162.316
              Total as % Total
             MoH                      37.4          5.3         19.4          8.8            53.6       35.9
             Rural Health
113          Services                248.8        397.7        198.4        446.1       466.2          913.5
              Total as % Total
             MoH                      24.1         15.8         21.0         44.5           26.8       28.2
             Health Training
114          and Research            281.6        157.3         10.9         65.6           20.0         56
              Total as % Total
             MoH                      27.3          6.2          1.2          6.5             1.1        1.7
             Medical Supplies
116          Coord Unit                0.0         0.0           0.0          0.0               -        50
              Total as % Total
             MoH                       0.0         0.0           0.0          0.0               -        1.5
             Kenyatta National
117          Hospital                  0.0         0.0           0.0          0.0               -         0
              Total as % Total
             MoH                       0.0         0.0           0.0          0.0               -          -
             Moi Teaching and
118          Referral                  0.0         0.0           0.0          0.0               -         0
              Total as % Total
             MoH                       0.0         0.0           0.0          0.0               -          -

             Total MoH             1,031.5      2,519.4        945.3      1,003.0      1,741.0       3,241.9
              Total as % Total
             MoH                     100.0       100.0        100.0         100.0       100.0         100.0




           /29
      Table 2.6: Ministry of Health Total Expenditures (gross) by Sub Vote KSh Millions

Code Sub-Vote                2000/2001      2001/2002       2002/2003       2003/2004 2004/05            2005/06
                                  Actual         Actual          Actual          Actual       Actual       Actual
    General Admin. and
110 Planning                    717.6         1,780.2         1,147.3          957.3       1,381.7      1,269.7
     Total as % Total
    MoH                           5.9            11.7             7.5            5.8           7.2          5.5

111 Curative Health           6,178.9         7,395.8         7,797.7        7,974.5      8,801.6      10,699.5
     Total as % Total
    MoH                          51.2           48.5            50.8            48.5         45.9          46.5
    Preventive and
112 Promotive                 1,260.6          799.2           815.6           951.5      1,730.0       1,919.3
     Total as % Total
    MoH                          10.4             5.2             5.3            5.8          9.0           8.3

113 Rural Health Services     1,370.2         1,775.8         1,634.8         2,133.7     2,507.7       3,795.2
     Total as % Total
    MoH                           11.3           11.7           10.6            13.0          13.1         16.5
    Health Training and
114 Research                   1,165.8        1,217.5         1,172.7         1,525.4      1,487.7      1,567.9
     Total as % Total
    MoH                           9.7            8.0              7.6            9.3           7.8          6.8
    Medical Supplies
116 Coord Unit                   29.6           48.3            34.2            32.0        132.6         183.2
     Total as % Total
    MoH                           0.2            0.3             0.2             0.2          0.7           0.8
    Kenyatta National
117 Hospital                  1,349.6         1,865.2        2,327.0         2,409.0      2,659.0       2,858.0
     Total as % Total
    MoH                           11.2           12.2            15.2            14.7         13.9         12.4
    Moi Teaching and
118 Referral                      0.0          352.3           421.5           458.1        458.1         714.1
     Total as % Total
    MoH                           0.0             2.3             2.7            2.8          2.4           3.1

      Total MoH              12,072.3        15,234.3        15,350.7        16,441.5     19,158.3     23,007.0
       Total as % Total
      MoH                       100.0          100.0           100.0           100.0        100.0        100.0




               2.2.3        Budget Implementation           Actual Expenditures versus
                            Approved Budgets




               /30
                Table 2.7 shows the comparison between approved and actual recurrent and
                development expenditures by sub vote. While the approved budgets may
                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



                /31
                                                 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
      General
      Admin. and
 110 Planning            193     137      141     135      137     132      157     141      135      97      88       84
      Curative
  111 Health             153     100      180     154      159     152      152     152      177      99      100      98
      Preventive and
 112 Promotive           176     158      129     126      112      94      86       86      103      94      75       74
      Rural Health
 113 Services            36       35      39       34      33       33      33       34      44      102      96       96
      Health
      Training and
 114 Research            115     103      137     101      109     100      100     100      101     100      101     100
      Medical
      Supplies Coord
 116 Unit                70       87      106      83      52       50      46       46      79       98      97       97
      Kenyatta
      National
 117 Hospital            100     100      142     100      126     105      100     100      100     100      100     100
      Moi Teaching
 118 and Referral                         267     100      121     100      109     100      100     100      100     100
     Total               111     105      121     100      106     100      96       97     109       99      98       96



     Development
     General
     Admin. and
 110 Planning            11       23      158      95      50       43      25       32      27       57      35       51
     Curative
 111 Health              11       22      75      107      14       23      26       60      23       38      46       41
     Preventive and
 112 Promotive           29       39      29       47      24       20       5       8       27       39      27       24
     Rural Health
 113 Services            20       25      27       27      10       9       30       25      26       43      38       47
     Health
     Training and
 114 Research            92       99              100       5       5       21       46       2       7       10       9
     Medical
     Supplies Coord
 116 Unit
     Kenyatta
     National
 117 Hospital
     Moi Teaching
 118 and Referral
     Total               26       37      71       67      20       19      20       26      22       39      33       33
     Combined
     General
     Admin. and
 110 Planning            140     123      152     105      82       74      76       83      92       90      62       71
     Curative
 111 Health              131     140      160     148      137     140      135     146      157      96      93       90
 112 Preventive and      69       82      82      98       62       51      35       47      41       54      36       33



                  /32
                                                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
    Promotive
     Rural Health
 113 Services           32       32      35       32      26       25      32       32      39       81      71       77
     Health
     Training and
 114 Research           108     102      158     101      92       85      86       95      58       85      76       74
     Medical
     Supplies Coord
 116 Unit               70       87      106      83      52       50      46       46      42       91      57       60
     Kenyatta
     National
 117 Hospital           99      100      141     100      126     105      100     100      100     100      100     100
     Moi Teaching
 118 and Referral                        267     100      121     100      109     100      100     100      100     100
    Total               87       91      108      92      84       79      78       83      81       87      76       76



                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
                    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              2005/06




            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




          /34
              Table 2.8: Budget Implementation by economic category: 2001/02 -
              2005/06

Economic Categories 2001/2002 2001/2002 2002/2003 2002/2003 2003/2004 2003/2004 2004/05     2004/05 2005/06 2005/06
                    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)                          121         100        106         100             96         97        109            99 98     96.30
Salaries and Other
Personnel                        121          97        102         100             98        100        122            101 102   100.24
Transfers, Subsidies
and Grants                      135          98         108         100             100       100            98         98 100    99.69
Drugs and Medical
Consumables                      87          99          93          92             80         80            94         94 83     90.17
Other Operations &
Maintenance                      121         120        108          98             102        95            99         99 90     74.09
Purchase of Plant &
Equipment                        85          80          99          98              73        74            95         95 86     94.52
Kenyatta National
Hospital                        142          100        126         105             100       100        100            100 100   100.00
Moi Referral
Hospital                        267          100        121         100             109       100        100            100 100   100.00




                                 Figure 2.7: Actual as share ofApproved Budget : economic category, 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


              /35
                         2001/2002 2001/2002 2002/2003 2002/2003 2003/2004 2003/2004                         2005/06 2005/06
                                                                                       2004/2005 2004/2005
Sub vote                 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      % of    as % of  % of
                          Printed Approved Printed Approved Printed Approved Printed Approved Printed Approved
General Administration
                            148       146      165       154       164         171       217.3      103.3     88.4     85.6
and Planning
Curative Health             209       169      179       170       171         172       208.6      100.0     106.1   103.6
Preventive and
                            177       163      132       121       114         115       116.7      93.9       71.8    74.9
Promotive
Rural Health Services       18        14        14        15        16         16         19.7      112.3     92.0     91.1
Health Training and
                            123       110      119       115       101         102       127.0      113.1     122.7    113.8
Research
Medical Supplies
                            80        73        30        28        23         23        24.7       85.6       77.5    74.2
Coordinating Unit
Total                       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                            2005/06
       General
       Administration and 141                  146         154           171               103.3             85.6
       Planning
       Curative Health    181                  169         170           172              100.0             103.6
       Preventive and
                          270                  163         121           115               93.9              74.9
       Promotive
       Rural Health
                          13                   14          15            16                112.3               91.1
       Services
       Health Training
                          117                  110         115           102                113.1           113.8
       and Research
       Medical Supplies
                          50                   73          28            23                85.6              74.2
       Coordinator Unit
       Total              101                  97          100           100              100.8             100.2




       /36
                            Figure 2.8: Wages and Salaries: Actual as share of Approved Budget



        300


        250


        200



      % 150

        100


         50


          0
                2000/01           2001/02             2002/03           2003/04            2004/05       2005/06



              General Admin. and Planning                              Curative Health
              Preventive and Promotive                                 Rural Health Services
              Health Training and Research                             Medical Supplies Coord Unit
              Total



2.2.4                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          252.9   505
                                                                                                 314.3   532.1
TOTAL                     227.2             1,343.8             575.0             385.2




/37
         2.2.6          Appropriations in Aid (AiA)
           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
           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

Total
Recurrent 158           156          199     100           113        111          101       100               39             39
Total
Development 53          47           16      13            10         14           6         12                15             11
TOTAL       55          49           18      15            12         16           8         15                16             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 Recurrent           Total Development         TOTAL




       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
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     Review of Projects/Programs related to the Ministry
3.1    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
                   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, 2003/04-
                   2006/07
Project             Year      Year    of   Total            Total            Estimated cost     Actual           Allocation      Proposed
Name          &     started   completion   Estimated        cumulative       of completion      expenditure      2006/07         allocation
category                                   Project cost     expenditure                         2005/06                          2007/08
                                                            up-to
                                                            2005/06
National Aids       Yearly    Continuous   9,609,115        9,125,563        483,552            9,125,563        10,684,547      11,401955
Control
Programme
Sexually            Yearly    Continuous   6,768,183        6,234,085.85     534,097.15         6,234,085.85     -               -
transmitted
Infection
District            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
Hospitals


Mental Health       Yearly    Continuous   135,427,831      127,476,542      8,051,289          127,476,542      82,776,738      84,571,083
Services
Spinal Injury       Yearly    Continuous   13,301,061       13,199,514       101,547            13,199,514       12,134,443      12,552,080
Hospitals
Rural Health        Yearly    Continuous   2,176,117,141    2,160,735,680                       2,160,735,680    3,588,338,473   4,937,453,015
Centres     and                                                              15,381,461
Dispensaries
Health              2001      2006         681,500,000
development
Project
(DARE))
Establishment       20005     20006        20,000,000                                                            22,000,000      22,000,000
&    equipping
for     parasite
center
(KEMRI)
Environmental       Yearly    Continuous   49,473,960       42,800,554       6,673,406          42,800,554       163,361807      222,0555,903
Health
Services
Communicable        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
& Vector borne
Diseases
Nutrition           Yearly    Continuous   4,661,174        3,958,733.75     702,440.25         3,958,733.75     4,669,173       5,088,932
Programme
Vector borne        2000      2006         11,477,511       10,781,196       696,315            10,781,196       -               -
Diseases
control
Family              Yearly    Continuous   46,875,193       45,669,477.90    1,205,715.10       45,669,477.90    46875192        49,918,562
Planning
Maternal
&CHC
Rural Health        Yearly    Continuous   43,672,013       42,305,246       1,366,767          42,305,246       43,680,732      52,569,087
Training      &
Demonstration
Centres
Drugs Control       Yearly    Continuous   1,516,091        67,347.10        1,448,743.90       67,347.10        1,448,898       1,447,696
Inspectorate
KEPI                Yearly    Continuous   339,809,001      205,278,124.45   134,530,876.55     205,278,124.45   487,136,131     488,769,942
National            Yearly    Continuous   100,576,800      100,440,937.10   135,762.90         100,440,937.10   100,590,800     120,624,355
leprosy
&Tuberculosis
Kenya Medical       2004      Continuous   185,000,000      50,000,000       135,000000         50,000,000       -               -
Supplies
Agency
(KEMSA)
Specialized         2005      Continuous   980,000,000                                                           1,647,144,236   1,470,500,000



                   /40
Project           Year      Year    of   Total           Total         Estimated cost   Actual        Allocation      Proposed
Name         &    started   completion   Estimated       cumulative    of completion    expenditure   2006/07         allocation
category                                 Project cost    expenditure                    2005/06                       2007/08
                                                         up-to
                                                         2005/06
Global Fund
Special Global    2005      Continuous   160,000,000                                                  393,777,140     379,479,000
Fund TB
Special Global    2005      Continuous   2,134,365,707                                                                1,587,294,225
Fund Malaria                                                                                          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
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/outcome          Indicator
District       Rehabilitation Improve the        Most health          Rehabilitation
Hospitals      and             capacity of all facilities             i.e. repairs,
               Construction    district          rehabilitated,       re-roofing, re-
               of facilities   hospitals         and improved to      painting,
                               infrastructure    acceptable and       fencing, etc
                               to deliver        working              in identified
                               quality health    conditions.          district
                               services and      Quality health       hospitals
                               strengthen        services             completed
                               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    All structures
Centres and    improvements health               rural      health    in rural health
Dispensaries   and             facilities in the centres       and    centres and
               rehabilitation  country to        dispensaries         dispensaries
               of rural        serve rural       improved      and    rehabilitated
               facilities      poor better       rehabilitated        and improved
               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
               distribution of and               in the pilot


/42
Table 3.3: Summary of programmes, goals, outputs and indicators
Programme      Description     Goal/Objective Output/outcome        Indicator
               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             Increased
Development    intervention to enabling          decentralized      immunization
Project        support         environment       organizational     coverage
(DARE)         strategies to   for               structures and     Increased
               better target   decentralized     management         contraceptive
               public          management        systems            prevalence,
               subsidies to    of integrated     operational to     etc
               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       Equipment in
Medical        situation of    capacity of       improve existing   most hospitals
Equipment      medical         district          equipment in       in better and
               equipment in    hospitals to      various district   working
               existing        offer             hospitals          condition
               hospitals       appropriate       Appropriate
                               diagnosis and     equipment
                               therapeutic       purchased and
                               services          delivered to
                                                 district
                                                 hospitals.
Rehabilitation Improvement     Improve           All mortuaries     New


/43
Table 3.3: Summary of programmes, goals, outputs and indicators
Programme      Description     Goal/Objective Output/outcome           Indicator
of Mortuaries  and face-       mortuary          country-wide          mortuaries
               lifting of all  services all      improved,             erected
               mortuaries      over the          functioning and       where they do
               country-wide    country           rehabilitated         not exist.
Environmental Health           Reduce the        Increased safe        Construction
Health         Services,       incidence of      water and             of
Services       sanitation,     environmental sanitation                demonstration
               vector control, related           coverage              facilities
               waste           diseases          Reduced vector        (latrines,
               management,                       borne diseases        domestic
               drinking water                    Improved human        water supply)
               quality,                          physical,             Disease
               housing                           biological and        surveillance,
               improvement,                      social                sanitary
               pollution                         environment           inspection
               control, and                      Improved              and law
               health                            sanitary              enforcement
               promotion                         dwellings, eating
                                                 and work places
Mental Health Provision of     To provide        All structures        Hospital
Services       mental health curative care       and equipment         buildings fully
               care services   services in       in the hospitals      renovated
               to mentally     Nairobi area,     rehabilitated.        Roads and
               sick patients   and help          Equip mentally        fences at the
               Renovation      decongest         sick patients         hospitals
               and             KNH, and serve with skills for          repaired
               rehabilitation  the densely       carpentry and         Sewerage
               of Mathare      populated         general repairs       system at the
               Psychiatric     eastern           of equipment.         hospitals
               Hospital, and   suburbs of        Improve the           overhauled.
               Gilgil mental   Nairobi.          health care           Community
               hospital                          services for the      health
                                                 mentally sick         workers
                                                 patients.             trained on
                                                                       mental health
                                                                       care
Spinal Injury   Operations and   Improve and        Deserving spinal   Operational
Hospital        maintenance      make               injury patients    requirements
                of individual    accessible         access health      for the
                spinal injury    affordable         care services.     hospitals such
                health           health care        Number of          as chairs for
                facilities       services for the   patients seeking   patients,
                                 population         care at these      drugs, etc in


/44
Table 3.3: Summary of programmes, goals, outputs and indicators
Programme      Description    Goal/Objective Output/outcome           Indicator
                              with spinal        hospitals            place.
                              injury.            increased.
Sexually       Reducing       Reduce the risk STIs reduced            Public
Transmitted    sexually       of STI                                  information
Infection      transmitted    transmission by                         messages, and
               diseases       providing                               education
               through        preventive                              programmes
               research,      services                                Drugs,
               clinical                                               supplies,
               services to                                            equipment to
               treat STDs.                                            support
                                                                      treatment for
                                                                      STDs
Communicable   Is an            Reduced           IDRS expanded       Districts
and Vector     integrated       mortality,        to cover up to      trained in
Borne          disease          disability and    80% of the          emergency
Diseases       surveillance     morbidity due     districts nation-   preparedness
               and response     to                wide                and response.
               involving        communicable      Communication       Most health
               disease          diseases          infrastructure      facilities have
               preparedness                       such as             case
               and response,                      telephone, radio    information
               data                               calls, faxes, and   on priority
               management                         email network       diseases
               and                                initiated in all
               information                        districts.
               dissemination,
               laboratory
               support
               services,
               training and
               communication
Nutrition      Reduce           Incidences of     Prevalence rate     Advocacy
Programme      prevalence of    micro-nutrients   of iodine,          conducted
               iodine,          deficiency        vitamin A and       IEC materials
               Vitamin A and    related           Iron deficiencies   on micro-
               Iron             diseases in       reduced.            nutrients
               deficiencies     mothers and                           deficiency
               among            children
               mothers and      reduced
               children
Food control   Food safety      Incidences of     Improved            Health
Administration control,         food borne        sanitary            hygiene


/45
Table 3.3: Summary of programmes, goals, outputs and indicators
Programme      Description    Goal/Objective Output/outcome                         Indicator
services       inspection and illness reduced dwellings, eating                     promotion
               licensing,                        and work places                    Law
               export                            Enhanced                           enforcement
               certification                     personal and                       Sanitary
               and law                           food hygiene                       inspections
               enforcement                                                          Disease
                                                                                    surveillance


3.3        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     BADEA
      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                        9,254,640   GOK
      10     Kapsabet D.H                                                           GOK
                                                             6,600,000.00
      11     Nandi Hills D.H.                                                       GOK
                                                             3,350,000.00
      12     Iten D.H.                                                              GOK
                                                             5,083,000.00
      13     Kapenguria D. H                                                        GOK
                                                             3,274,200.00
      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



/46
                  Table4.1: Ministry of Health's Ongoing Projects - 2005/06
                          Project                          KSh                Source
  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
  35                                                                      GOK
       Londiani SDH                                   7,158,650.00
  36                                                                      GOK
       Kericho District Hospital                      2,500,000.00
  37                                                                      GOK
       Kisumu District Hospital                       5,960,000.00
  38                                                                      GOK
       New Nyanza PGH                                 9,831,838.00
  39                                                                      GOK
       Kombewa SDH                                    7,000,000.00
  40                                                                      GOK
       Migori District Hospital                      10,622,430.00
  41                                                                      GOK
       Awendo SDH                                     1,500,000.00
  42                                                                      GOK
       Rongo SDH                                      1,500,000.00
  43                                                                      GOK
       Homa bay District hospital                     5,000,000.00
  44                                                                      GOK
       Siaya District Hospital                        4,180,000.00
  45                                                                      GOK
       Yala SDH                                       5,500,000.00
  46                                                                      GOK
       Nyando DH                                      7,500,000.00
  47                                                                      GOK
       Muhoroni SDH                                    500,000.00
  48                                                                      GOK
       Ogembo D.H                                     8,604,050.00
  49                                                                      GOK
       Bondo D.H.                                     7,628,200.00
  50                                                                      GOK
       Madiany S.D.H.                                 4,200,000.00



/47
                   Table4.1: Ministry of Health's Ongoing Projects - 2005/06
                           Project                          KSh                Source
  51                                                                       GOK
       Rachuonyo DH                                    5,262,000.00
  52                                                                       GOK
       Suba D.H                                        6,000,000.00
  53                                                                       GOK
       Kuria D.H.                                      5,000,000.00
  54                                                                       GOK
       Kisii D.H                                       2,000,000.00
  55                                                                       GOK
       Keumbu SDH                                      3,800,000.00
  56                                                                       GOK
       Nyamira DH                                      3,663,000.00
  57                                                                       GOK
       Nyeri PGH                                      14,926,345.00
  58                                                                       GOK
       Thika district Hospital                         7,116,330.00
  59                                                                       GOK
       Gatundu Hospital                                4,000,000.00
  60                                                                       GOK
       Muranga D.H                                     6,000,000.00
  61                                                                       GOK
       Muriranjas SDH                                  3,560,000.00
  62                                                                       GOK
       Karatina D.H                                    3,780,000.00
  63                                                                       GOK
       Mukurweini SDH                                  3,880,000.00
  64                                                                       GOK
       Othaya SDH                                      6,000,000.00
  65                                                                       GOK
       Kiambu District Hospital                        5,550,000.00
  66                                                                       GOK
       Tigoni SDH                                      5,450,000.00
  67                                                                       GOK
       Kerugoya District hospital                      5,809,477.00
  68                                                                       GOK
       Kimbimbi SDH                                    7,000,000.00
  69                                                                       GOK
       Nyahururu District Hospital                     7,378,210.00
  70                                                                       GOK
       Olkalou SDH                                     2,000,000.00
  71                                                                       GOK
       Maragua District Hospital                       9,288,608.00
  72                                                                       GOK
       Runyenjes SDH                                   6,000,000.00
  73                                                                       GOK
       Embu PGH                                        5,406,360.00
  74                                                                       GOK
       Nyambene D.H.                                  11,635,000.00
  75                                                                       GOK
       Miathene SDH                                    4,000,000.00
  76                                                                       GOK
       Chuka District hospital                         6,514,600.00
  77                                                                       GOK
       Magutuni SDH                                    4,000,000.00
  79                                                                       GOK
       Meru Central District                           8,752,600.00
  80                                                                       GOK
       Githongo SDH                                    2,000,000.00
  81                                                                       GOK
       Kanyakine SDH                                   2,580,000.00
  82                                                                       GOK
       Isiolo District Hospital                        3,800,000.00



/48
                    Table4.1: Ministry of Health's Ongoing Projects - 2005/06
                            Project                           KSh               Source
  83                                                                        GOK
        Marsabit District Hospital                      5,152,000.00
  84                                                                        GOK
        Moyale D. H                                     3,000,000.00
  85                                                                        GOK
        Garbatula S.D.H.                                4,975,000.00
  86                                                                        GOK
        Tharaka District                                8,240,000.00
  87                                                                        GOK
        Kitui District Hospital                         7,270,000.00
  88                                                                        GOK
        SiakagoD.H.                                     6,200,000.00
  89                                                                        GOK
        Ishiara SDH                                     2,000,000.00
  90                                                                        GOK
        Makueni D.H                                     2,200,000.00
  91                                                                        GOK
        Makindu SDH                                     6,500,000.00
  92                                                                        GOK
        Machakos General Hospital                       12,122,000.00
  93                                                                        GOK
        Mbooni SDH                                      2,000,000.00
  94                                                                        GOK
        Mwingi District Hospital                        8,024,952.00
  95                                                                        GOK
        Tseeikuru SDH                                   6,000,000.00
  96                                                                        GOK
        Kakamega PGH                                    1,740,000.00
  97                                                                        GOK
        Malava sub-district Hospital                    2,009,170.00
  98                                                                        GOK
        Lumakanda D Hopsital                            8,873,400.00
  99                                                                        GOK
        Mt. Elgon District Hospital                     3,236,000.00
  100                                                                       GOK
        Teso District Hospital                          8,943,885.00
  101                                                                       GOK
        Bungoma District Hospital                       24,664,360.00
  102                                                                       GOK
        Webuye SDH                                      4,500,000.00
  103                                                                       GOK
        Port Victoria SDH                               6,618,425.00
  104                                                                       GOK
        Alupe SDH                                       1,500,000.00
  105                                                                       GOK
        Vihiga District Hospital                        3,370,000.00
  106                                                                       GOK
        Butere District Hospital                        6,000,000.00
  107                                                                       GOK
        Busia District Hospital                         5,047,000.00
  108                                                                       GOK
        Coast PGH                                       10,586,865.00
  109                                                                       GOK
        Hola D.H.                                   -
  110                                                                       GOK
        Ngao SDH                                        16,000,000.00
  111                                                                       GOK
        Wesu D.H.                                       3,000,000.00
  112                                                                       GOK
        Voi DH                                          7,573,930.00
  113                                                                       GOK
        Taveta Hospital                                 2,396,114.00



/49
                      Table4.1: Ministry of Health's Ongoing Projects - 2005/06
                            Project                            KSh                Source
  114                                                                         GOK
        Kwale D.H.                                       10,500,000.00
  115                                                                         GOK
        Kinango SDH                                       5,000,000.00
  116                                                                         GOK
        Msambweni S.D.H                                  13,460,560.00
  117                                                                         GOK
        Kilifi D.H.                                       2,000,000.00
  118                                                                         GOK
        Malindi D.H.                                      2,000,000.00
  119                                                                         GOK
        Port Reitz D.H.                                   2,000,000.00
  120                                                                         GOK
        Lamu D.H.                                         2,000,000.00
  121                                                                         GOK
        Garissa DH                                        6,467,952.00
  122                                                                         GOK
        Wajir D.H                                         4,245,450.00
  123                                                                         GOK
        Masalani D.H                                      6,000,000.00
  124                                                                         GOK
        El Wak SDH                                        6,215,000.00
  125                                                                         GOK
        Rhamu SDH                                         9,655,700.00
  126                                                                         GOK
       Mandera D.H.                                    4,000,000.00
       TOTAL (KSh)                                   1,036,180,801
  Source: 2005/06 Estimates of Development Expenditure

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
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 .


/51
The larger proportions (96%) of the pending bills were for development costs,
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               2005/06
Vote head/type
                         Description          mount (KSh)          Amount (KSh)
                         Utilities
                         (mainly               57,781,145            35,275,301
Recurrent                water)
                         Telephone            11,000,000             4,527,230
                         Other                 25,449,434
Total recurrent                               94,230,579            39,802,531
Development                                    3,447,390          118,479,103.30
Total (recurrent +
                                              97,677,969
Development)                                                     158,281,634.30
% of Total MOH
                                                   0.5                  0.07
expenditure




5.1 Recommendations

                    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.



/52
                         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




5      Analysis of Ministry outputs and corresponding performance
       indicators



5.1     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
    The BOP did not extend the targets to 2008/09.
8
    Current status(achievements)


/53
3. Proxy for Percentage of ANC 54              56             65   70
Maternal     coverage (4 Visits)
Mortality

4. Proxy for Inpatient     malaria 19          18             15   14
Burden of morbidity as percentage
Disease      of    total in-patient
             morbidity




5.2   Overview of Sector Performance Indicators and Targets

Overview of Sector Performance Indicators and Targets, NHSSP
II/AOP 2, 2006/07




/54
                                                                         Achievement
                                                                 Achievement
            Indicators                              National          for        Projected    Performance
                                                    Targets       reporting       national      against
                                       Baseline      05/06       districts (61) achievement      target
Below 80% Achievement
%Deliveries conducted by skilled
health staff                              42%          51%           15%           15%           30%
District Aqua Laboratories in place                    80             28            28           35%
# School children correctly de-
wormed at least once in 2005/06           25%          35%            7%           13%           36%
# HIV+ve patients starting with ART      8,000        95,000        38,320        38,320         40%
% Pregnant women sleeping under
LLITN                                     0.44         44%           20%           20%           45%
# LLITN distributed to children
under 5 yrs                             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%
# Condoms distributed (million)        80,000,000   90,000,000    37,422,850    66,030,516       73%
% Children < 1yr vaccinated against
Measles                                   74%          84%           64%           64%           76%
Above 80% Achievement
% Children fully immunized at 1 year
of age                                    58%          68%           56%           56%           83%
Blood collected screened for HIV          0.98          1              1             1           100%
Regional Food/Bacteriological Lab.
Established                                             8             7             8            100%
% Newborns that receive BCG               84%          90%           99%           99%           111%
# Health Facilities providing
Basic/Comprehensive Emergency
Obstetric Care (BEOC / CEOC)              9%           15%           18%           18%           122%
# Houses sprayed with IRS                2,500       200,000       367,000       367,000         184%
% Pregnant women received IPT 2x          4%           20%           43%           43%           214%
LLITN distributed to pregnant
women                                    55000       200000        251,872        456,771        228%
% House Holds implementing
hygiene practices                                      25%           58%           58%           234%
# HF providing treatment as per
IMCI guidelines                           2%           10%           35%           35%           353%
# HF offering Youth Friendly Health
Facilities                                 5            5             47            47           940%
# CORPs selected and trained                           100          10024         10024         10024%




5.3     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
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.


/56
5.4.2          Drug Procurement
The process of drug procurement need to be made transparent in order to ensure
the public gets value for money. Enhancing transparent and reducing
opportunities for rent seeking are some of the conditions precedent to Kenya
accessing the Millennium Challenge Account funds. The ministry will put
mechanisms top ensure that information on drug tenders are published and
hosted in the website.

5.4.3          Access to ARVs
User fees charged to HIV/AIDS patients are hindering access and constraining
the attainment of the 3 by 5 objective. In order to remove this barrier, user fees
have been reduced to Ksh 100 per month. It is expected that this policy initiative
will enable us provide ARVs to more than 95,000 people by 2006.The ministry is
putting in place measures to ensure access for children suffering from
HIV/AIDS.Currently 10000 children are on ARVs

5.4.4          Restructuring of the Ministry
The current structure of the Ministry is not appropriate for efficient delivery of
services. In the restructuring process, the focus will be to have a leaner centre,
which will provide policy and regulation, while building capacity at the district
level to deliver healthy care services. To improve access to health care the
Ministry will develop a policy based on facility workload, distance to the facility,
human resource deployment and catchment area. The new organogram will be
part of the Ministry five-year strategic plan.




5.4.5         Restructuring of Parastatals

The ministry will ensure that the performance contracts are adhered to. The
Ministry is also exploring ways of converting KNH to a fully-fledged teaching
hospital


6     Public Expenditure Management (PEM)

Public expenditure management (PEM) is a central instrument of economic and
development policy. Key goals of PEM are fiscal discipline, strategic resource


/57
allocation and good operational management. Effective PEM is also a key
component in good governance, which rests upon the 'four pillars' of
accountability, transparency, predictability and participation.

Accountability holds officials responsible for their actions. Transparency involves
ensuring access to relevant information. Predictability results from an
environment in which laws and regulations are clear, known in advance, and
uniformly and effectively enforced. Participation requires the existence of
channels through which reliable information is provided, enabling all
stakeholders at all levels to be involved in the consultation and decision-making
process.

On the whole the PEM framework pursued by the MoH is based on the following
objectives:
    Fiscal discipline, or living within the available resources;
    Allocative efficiency, or spending money on the right things; and
    Operational efficiency, or obtaining the best value for money.

It is proposed that monitoring of the budget will be done by conducting a Public
Expenditure Tracking Surveys (PETS), which will provide quantitative and
qualitative evidence on budget execution and accountability and transparency of
transactions.

The Public Expenditure Review and PETS can assess the effectiveness of public
expenditure and makes recommendations as to how public funds can be better
spent.

Another way of monitoring the over all use of resources in the health sector is the
use of a National Health Account (NHA). A NHA is a tool for gathering and
analysing health expenditure data for a given period. It asks the fundamental
questions: who pays, how much and for what? NHAs link ultimate sources of
funds to financial agents and claims on pending by different users. ―Users‖ can be
classified as providers (e.g. government health centres, or private practitioners),
functions (curative, preventive), service delivery level, (tertiary, secondary),
inputs (transport, salaries), different socio-economic groups (rural/urban,
wealth, gender, age), geographical locations and disease profiles.

6.1   Budget Preparation Process

The budget preparation process should aim at (i) ensuring that the budget is
appropriate to macro-economic objectives and that expenditures are controlled;
(ii) allocating resources to programs that fit the policy objectives in the health
sector; and (iii) securing conditions for operational efficiency. During budget
preparation, trade-offs and prioritisation among programs are made to ensure
that the budget fits government priorities.



/58
Treasury in consultation with stakeholders prepares the Budget Outlook Paper
(BOP) ready for release in December. This Paper is necessary because it provide
the ceiling for each ministry.

The BOP provides three-year medium-term spending projections by sector. These
are necessary to demonstrate to the public the desired direction of change. By
illuminating the expenditure implications of current policy decisions on future
years budgets, multi-year spending projections allow sectors to evaluate cost
effectiveness and to determine whether they are attempting to undertake more
than they can afford.


NHSSP II reinforces the decentralization process, with lower levels setting their
own priorities according to their own needs and subsequently developing
appropriate interventions. This is in line with both the Kenya Health Policy
Framework for 1994–2010 and the government‘s decentralization policy,
articulated in the District Focus for Rural Development Strategy.

In this regard, the development of AOP 2 adopted a bottom-up planning process,
beginning with revision and preparation of guidelines and planning tools. The
district health plan format was re-designed to respond to the KEPH concept. This
was followed by dissemination of NHSSP II to DHMTs, PHMTs, and the central
divisions and programmes. An extensive training programme provided the
necessary support to build the capacity of all participants to carry out their tasks.
It is envisaged that this approach will greatly strengthen the various planning
levels and in addition promote ownership of developed plans.

6.2 Results-Oriented Public Expenditure Management


Public Expenditure Management (PEM), as a major component of the
reform Programme, continue to make use of the following mechanisms:

    Use of the budget as instrument for ensuring desired results;
    Strengthening of existing structures to advocate and implement reforms;
     and
    The establishment of clear targets and assessment mechanisms to ensure
     transparency.

Results-oriented (or ‗performance‘ or ‗output‘) budgeting is the planning of
public expenditures for the purpose of achieving explicit and defined results.
These results may be policy objectives (‗outcomes‘), or the ‗outputs‘ of routine
public service activities intended to contribute to policy goals, or ‗intermediate
outcomes‘ which represent major stepping stones in service delivery towards
these goals.



/59
Performance budgeting and management help to:
         a. Clarify policy priorities,
         b. Focus expenditures more tightly on priorities,
         c. Inform and motivate programme managers and service Providers,
         d. Identify the causes of good and bad performance and thereby
            reduce waste and increase impact, and
         e. Facilitate cross-institutional working. They are easiest to apply and
            most fruitfully applied to the production of services for the public.




6.2.1              Results-Based Management

The GOK has adopted the results-based management (RBM) approach as a
leading principle in its efforts to enhance the productivity and improve the
performance of the various ministries. The MOH is one of the ministries where
RBM was introduced in an early stage, when the previous Permanent Secretary
(PS) signed a performance contract spelling out the targets and outputs the MOH
had to achieve within one year (2005/06).

7 Human Resources Development and Capacity Building
Human resource development is increasingly being recognised as key to
improved health service delivery and health sector transformation. Policies do
acknowledge that health is a human system, and that reforms have to address
themselves centrally to the personnel staffing the service, improving planning,
capacity and management. Yet, there is concern about the equitable distribution
of the key health personnel.

By far, the most significant component of any health system is its health
personnel. Without a foundation of skilled human resources, health care systems
cannot function adequately or effectively, particularly in the public sector and at
the primary level of care.

No doubt, health systems can improved in their performance when there are
improvements in the deployment and orientation of health personnel towards
major health problems and improvements in the effective use of staff time.
Research from other countries shows a correlation between quality of care, health
care outcomes and the availability of health personnel 9, 10.


9
 Mercer H, Dal Poz M, et al. Human Resources for Health: Developing Policy Options for Change. Geneva:
World Health Organization; 2002. URL: http://www.who.int/entity/hrh/documents/en/
Developing_policy_options.pdf
10
  ICN. Position Statement: Nurse Retention, Transfer and Migration. Geneva: International Council of Nurses;
1999.




/60
7.1     Service Delivery Inputs


The NHSSP II recognizes that human resources, infrastructure and commodities
are the primary tangible inputs into the delivery of health care services.

Availability of skilled human resources in adequate numbers is critical for the
realization of the sector mission to deliver quality and accessible health services,
more so if KEPH is to be implemented as planned.

There is an apparent gap in human resources when compared with norms and
standards and the targets to be achieved in the next four years. A recent survey of
the MOH personnel showed a necessary staff establishment of 44,813, of which
35,627 posts are filled (80%).

The same survey also brought out important disparities in the distribution of
staff, with rural and isolated areas having very few staff. Moreover, the
environment in which health personnel work is considered poor. In particular,
the physical infrastructure is inappropriate and much of the equipment is lacking
or non-functional. Other constraints include:

       MOH cannot control the number of staff it has, as human resource
        management functions are decided at the level of the Directorate of
        Personnel Management (DPM).

       There is currently an embargo on the recruitment of new staff, although
        special funds (like the Global Fund to Combat AIDS, Tuberculosis and
        Malaria – GFATM – and the President‘s Emergency Plan for AIDS Relief –
        PEPFAR) allow for additional staff on a temporary basis.

       There is under utilization of staff in some areas (rural and isolated), excess
        workload in others (district and provincial hospitals), and critical
        shortages in level 2 facilities (50% of the dispensaries had only one staff
        member managing the health facility).

       Attitude of staff is not always positive (due to long hours, low salaries, lack
        of equipment, low morale). This has an effect on staff–patient relations.
7.2     Human resources situation

Kenya faces a variety of health personnel problems. These include an overall
inadequate number of personnel in key areas of the health sector; an inequitable
distribution of those health personnel who are available; and an attrition of
trained personnel from the health sector and from the country. Yet the challenge
is even more daunting when seen in the light of the additional health facilities
that are being put up under CDF and the MoH expected to take over and staff and
equip them. But all in all, MoH is committed to fundamental reforms to improve


/61
        efficient of health services in the health system, including its human resources.

        The mal-distribution of health care personnel occurs mainly between:
            Public and private sectors;
            Urban and rural areas;


           In a number of instances, key health personnel shortage is more as a result of
        mal-distribution of human resources rather than actual or absolute numerical
        shortages. The human resource disparities occur in terms of:
                      Geographical spread; and
                      Professional category

           Inequitable distribution of human resources is an inter-provincial as well as
        an intra-provincial problem. Table 7..2 shows the distribution of the MoH health
        personnel. Of all health professionals working in Kenya public health sector, the
        North Eastern Province has:
                1.3% of all doctors;
                2.0% of all nurses

Table 7.2: Total Number of Personnel by Profession and Province in 2004-2005
                    Nairobi                                                                         Rift Valley

                                                                                                 Moi
                                                                                  North
                               Rest of              Central Coast       Eastern           Nyanza Referral Rest of                 Western Total
                    KNH                Total                                      Eastern        &        Rift    Total
                               Nairobi
                                                                                                 Teaching Valley
                                                                                                 Hosp
Staff type
Doctors                218        328      546         156     115         178        20     104         55        231     286        81     1,486
Clinical officers         61      125      186         278     212         336        78     285         69        651     720       221     2,316
Registered
nurses                 866        250     1,116        561     343         487        87     341       206         775     981       257     4,173
Enrolled
nurses                 824        670     1,494       2,313   1,099       2,365      262    1,599      285        3,210   3,495     1,526    14,153
Pharmacists               10      104      114          25      12          21         1      12          3         28      31         9          225

Pharmaceutical
technologists             45       31          76       22      26          47        18      25         23         72      95        21          330
Laboratory
technologist           115        132      247         216     102         201        26     179         35        315     350       132     1,453
Laboratory
technicians               30       69          99       37      93          69        19      40         10        168     178        45          580
Radiographers             35       18          53       49      27          50         9      41         22         75      97        22          348
Health
administrative
officers                  32       14          46       24      13          26         1      14         30         24      54        16          194
Public health
officers/public
health
technicians               20      228      248         652     340         664       118     505         10       1,370   1,380      376     4,283
Nutritionists             56       50      106          64      29          42         9      24         31        119     150        26          450
Social workers            28       10          38        1          -        2         -       2         22          5      27         4          74



        /62
 o) All others    2,476   1,321   3,797    1,356     736     1,473   149    1,280    1,010   1,718   2,728      686    12,205
 TOTAL            4,816   3,350   8,166    5,754    3,147    5,961   797    4,451    1,811   8,761   10,572    3,422   42,270



         7.3     Human resource disparities

         Table 9.1 shows that mal-distribution of professionals is worse in provinces with:

                       Sparsely populated areas characterized by vast distances,
                        especially North Eastern province,

                       Deep-rural and remote districts with lack of general
                        infrastructure

                       Various types of health facilities, particularly dispensaries

        Table 9.2: Selected health personnel, Rates per 100,000 population
 Staff type          Nairobi Central Coast Eastern North Nyanza Rift Valley Western Total
                                                   Eastern
 Doctors             546     156     115 178       20      104  286         81      1,486
Number           per 19.8    3.9     3.9 3.5       1.4     2.1  3.4         2.1     4.4
100,000 population


Clinical officers     186            278           212      336      78             285      720              221        2,316
Number            per 6.8            6.9           7.2      6.6      5.4            5.8      8.6              5.7        6.9
100,000 population


All         Nurses 2,610             2,874         1,442 2,852       349            1,940    4,476            1,783      18,326
(Registered      &
Enrolled)
Number         per 94.8              71.2          49.3 55.7         24.3           39.5     53.5             45.9       54.8
100,000 population

Pharmacists        114               25            12       21       1              12       31               9          225
Number         per 4.1               0.6           0.4      0.4      0.1            0.2      0.4              0.2        0.7
100,000 population

         Source : Human resource Mapping 2003

         Table 9.1 reveals inequities in access to health professionals in the public sector.
         Nairobi, including KNH (19.8 per 100,000 population) and Central (3.9) and
         Coast (3.9) provinces are better staffed with doctors than the other provinces.


         /63
        In Western and Nyanza provinces, there is one public sector doctor for
         every 47,000 population. In the North Eastern Province the ratio is
         much worse with one doctor for every 72,000 people in the public
         sector.


        The North Eastern Province has one public sector nurse per 4,100
         populations, compared to central province, where there is 1 nurse for
         1,400 people, and for every 1050 population in Nairobi,
        There is only one public sector clinical officer for every 18,400 people
         living in the North Eastern Province, for every 14,500 people in central,
         and for every 13,800 people in the coast province.


It should be notes that although Nairobi is comparatively well resourced with
doctors, many of these doctors work at tertiary level (KNH).

A number of strategies have been implemented to increase the number of key
health personnel in the public sector including employment of more key health
personnel e.g. nurses; laboratory personnel under the PEPFAR /Clinton
Foundation arrangement.

As seen from Table 9.3:
 A total of 7,450 staff has been recruited during the period 2001- 2006

   There was no discrimination in the recruitment.



Table 9.3: Number of Staff employed by year and type
Cadre             2001 2002 2003 2004 2005 2006                         Total
Clinical Officer    119   158     93    201     24     272               867
Enrolled Nurses     536   362   240     400   220    1,791              3,549
Nursing Officers    229   236    169    356     94    542               1,626
Medical Officers    116   158    261    162   248     309               1,254
Medical               0     0      0      0      8     146               154
Laboratory
Technologists
TOTAL            1,000    914   763 1,119     594 3,060                 7,450




/64
7.4       Impact of HIV/AIDS on Human Resources

Any human resource plan for health in Kenya must take into account the
increased load placed on existing staff due to HIV/AIDS, and the attrition of
health care workers due to AIDS related mortality.

In a study on human resources mapping, obtaining information on short-term
and long-term sickness proved very difficult during the survey with the MoH staff
reluctant to talk about staff affected by HIV/AIDS, yet AIDS and AIDS-related
illness is known to be affecting significant numbers of medical staff. All in all,
information about all sickness issues – whether short- or long-term is essential to
inform HR planning. A VCT centre has been established at the MOH
Headquarters and is operational. The facility is open to both staff and the general
public.

8     Implementation of Recommendations of the 2006 PER

The 2006 Ministry of Health PER is part of the continuing series of MPER, and
builds on the previous year PER. While its production was hampered by
numerous constraints, notably data and time, it made several key
recommendations that have been acted upon during the year by the Ministry of
Health. These are summarised in point form below as an Action Plan and the
Activities and Broad Actions to implement them.

.

8.1       Action plans for implementation of 2006 MPER

          The level of Government funding on health has increased in line with the
           ERS. However, the allocations are only 8.4 percent of the central
           Government allocation a figure far below the Abuja declaration targets.

          The personnel costs take 53% of MOH recurrent expenditure. In 2004/05
           spending on personnel represented 52 percent of the total recurrent
           funding. , suggesting that these costs may be stabilizing;

          Curative Health service accounted for about a half (50.6%) of the recurrent
           expenditure on health, although this share has been falling since 2000/01
           and stood at less than a half in 2004/05.

          The share of Kenyatta National Hospital decreased from 16.2% in
           2002/2003 to 15.3 percent in 2004/05 and further to 14.5% in 2005/06.

Substantial expenditure on Development were directed towards the rural health
services increased from 26.8% in 2004/05 to 28.2% in 2005/06 and about 54


/65
percent to Preventive and Promotive while just under 10% went to the
strengthening the Curative Health services.

Cost sharing accounted for about 12 percent of the ministry recurrent budget. The
bulk of these collections are in hospitals. The health facilities are witnessing an
increase on waivers and exemptions since patients are unable to pay. An
arrangement need to be made to compensate health facilities for loss in revenue.
There is need to critically examine utilization of these funds in light of the many
audit queries being raised by Controller and Auditor General. In response to this,
the Ministry has intensified monitoring and supervision systems on collection,
custody, control, programming and expenditure of funds. Corrective measures
have been taken on areas that funds have not been accounted for.

Release of money through AIEs to the districts has been a bottleneck to
expenditures at the district level. In 2005/6 Treasury allowed funds to be
disbursed on pre-financing arrangements. This has ensured that facilities receive
an AIE accompanied with a cheque to facilitated programmes implementation
and expenditures.

It is hoped that in future grants will be issued to health facilities once a legal
framework is developed. Currently, the Ministry has developed a position Paper
and Guidelines in the flow of funds to the rural health facilities.




8.2 Activities and Supporting Actions

      Develop a Geographical information system to provide district profiles on
      resource available, actors, and health indicators for better planning and
      resource allocation;

      Develop a manpower projection model and a decentralisation policy; and

           Review resource allocation criteria.
    Strengthen the DHMBs to oversee health care services at the district level;
   The BHMBs have been reconstituted and will be trained along with the management
   committees early in 2006.




/66
8.3 Timeframes and targets




/67
9         Challenges and Constraints
9.1     Integrating NHSSP II and AOPs into the Annual Budget

The introduction of the NHSSP II, AOPs, BFR and Performance Contracts in
2005 has changed the landscape for the Ministry of Health budgeting. The
challenge for the Ministry of Health is to ensure that the budget will reflect these
developments.

The development of the KEPH provides a set of programmes to deliver the long-
term goals of the Ministry of Health through the setting of short to medium term
objectives. These are centred on the life cycle interventions:

     Pregnancy, delivery and the newborn child (up to two weeks of age)
     Early childhood (3 weeks to 5 years)
     Late childhood (6 to 12 years)
     Adolescence (13 to 24 years)
     Adulthood (25 to 59 years)
     Elderly (60 years and over)and the five clusters of interventions
     Safe motherhood and reproductive health
     Child health promotion
     Malaria control
     HIV/AIDS/STI and TB control
     Sanitation and food safety

While these interventions will be delivered mainly through the three lower levels
of care: community, dispensary and health centre11, the KEPH targets also refer
to the delivery through district and other higher level hospitals.

The challenge is to integrate the five clusters of interventions to the budgets of
the delivery institutions and link them to the output indicators for the six levels of
the life cycle. This will then tie in the inputs in the budget to specific
programmes (cluster of interventions) through activities carried out in the
various institutions to achieve the output targets of the six elements of the life
cycle.

This will then link the annual budget to the objective of Results Based
Management as expressed in the AOP and the various Performance Contracts.
9.2       Reviewing Targets

There is plethora of targets established for the Health sector. Chapter 9 reports
on those set in the MTEF and ERS. Annexes I and II present those for KEPH and
Performance Contracts. In addition there are targets expressed in the MDGs,
although these are essentially subsumed in the MTEF and ERS targets.

11
     As reported in Chapter 1


/68
Table 9.2 of AOP II Leadership outputs has the following output as part of the
work programme, which has yet to be achieved.

                                                                           Time Frame
                         Outputs for 2005/06                                 2006/07

                                                                       I    II   III   IV

      6.1. Leadership outputs

    Indicators, targets and priorities are harmonised with NHSSP
 75 II, ERS and MDG.                                             X

The Performance Contracts are a mixture of process and procedural targets as
well as operational ones. The operational ones are similar in style to the KEPH
targets in that the measure output related to some heath indicator. However they
are not necessarily the same targets.

It will be important that operational targets set in KEPH and in the Performance
Contracts are the same given the challenge relating to the budget in the previous
section. Therefore, the review and harmonisation of targets established in AOP II
takes on a greater urgency and should be completed.

These are two challenges set out in this section. The constraints in achieving
them will centre on the allocation of sufficient skilled personnel to the task and
enough time for them to complete the task. This would suggest that a task force
be established, but properly resourced. The challenges are complex and should
not be hurried. They should be carried out in 2007 as inputs to the 2008 PER
and the 2008/09 Budget.

10     Conclusions and Key Recommendations

By the 1970s, Kenya had built a health sector that performed relatively well
compared to neighbouring countries, and some of its indicators were among the
best in sub-Saharan Africa. However, these substantial gains made during the
1970s and the 1980s have been eroded to reflect a downward trend in health at
the start of the new millennium. However there are important regional
differentials; North Eastern, Coast, Nyanza and Western Provinces having the
worst health indicators. Unless drastic actions are taken Kenya is unlikely to
achieve the MDGs.

Although the level of Government funding on health has increased in line with
the ERS, these allocations are only 8.73 percent of the central Government
expenditures a figure far below the Abuja declaration targets.




/69
The personnel costs take 53% of MOH recurrent expenditure. In 2004/05
spending on personnel represented 52 percent of the total recurrent funding. ,
suggesting that these costs may be stabilizing;
.

Curative Health service accounted for about a half (50.6%) of the recurrent
expenditure on health, although this share has been falling since 2000/01 and
stood at less than a half in 2004/05.

The share of Kenyatta National Hospital decreased from 16.2% in 2002/2003 to
15.3 percent in 2004/05 and further to 14.5% in 2005/06.

Substantial expenditure on Development were directed towards the rural health
services increased from 26.8% in 2004/05 to 28.2% in 2005/06 and about 36
percent to Preventive and Promotive while 22% went to the strengthening the
Curative Health services.

A comparison of the printed estimates and actual expenditures reveals that, the
disbursement rates of development expenditure have been low. However, for the
recurrent budget, the divergence between the printed or approved estimated and
the actual expenditures is small – within a range of ±10% - with large over-
spending in some sub votes have been cancelled out by large under-spends in
other sub votes. With respect to development expenditures, the pattern is
generally one of large under-spending.

Cost sharing accounted for about 12 percent of the ministry recurrent budget. The
bulk of these collections are in hospitals. The health facilities are witnessing an
increase on waivers and exemptions since patients are unable to pay. An
arrangement need to be made to compensate health facilities for loss in revenue.
There is need to critically examine utilization of these funds in light of the many
audit queries being raised by Controller and Auditor General. In response to this,
the Ministry has intensified monitoring and supervision systems on collection,
custody, control, programming and expenditure of funds. Corrective measures
have been taken on areas that funds have not been accounted for.

The findings of the 10/20 Policy study suggest that the overall impact has been
mixed. Utilization of services in the sample facilities generally increased rapidly
following the introduction of the policy. However, this growth was not sustained
due primarily to non availability of drugs. In the last quarter of 2004 many
facilities generally experienced declining utilization although the picture varies by
district and according to the type of service and utilization 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.



/70
There is a consistent theme running through the I-PRSP and the PRSP which is
to focus expenditures on rural health services and preventative and promotive
health services and reduce the share of the total that curative health services
consume. While this focus in not so specific in the ERSWEC, affordability and
accessibility of health services for the poor is emphasised. Both policies are
wholly consistent. However, the core poverty programmes in health sector are
not as focused and are much wider in coverage and need to be reviewed.

The Ministry of Health has a total of ---- 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. At the same time, there are a total of about --- stalled projects
whose cost of completion is estimated at Kshs. ---- billion. Most of these projects
are being completed through Ministry of Public Works using the KSh 3 billion
allocated for stalled projects in 2005/6.

Revised indicators and targets have been developed for the purpose of measuring
the budget performance and the Government is commitment to the health sector
in the Economic Recovery Strategy (ERS). These indicators form part of the
current budget outlook paper and will be used to access provided by some
Development Partners through budgetary support. The underlying policy
principle to attain these targets is the one underlying all policy statements on
health: shifting the focus from curative care to preventative care.

Release of money through AIEs to the districts has been a bottleneck to
expenditures at the district level. In 2005/6 Treasury allowed funds to be
disbursed on pre-financing arrangements. This has ensured that facilities receive
an AIE accompanied with a cheque to facilitated programmes implementation
and expenditures. It is hoped that in future grants will be issued to health
facilities once a legal framework is developed. Currently, the Ministry has
developed a position Paper and Guidelines in the flow of funds to the rural health
facilities.

On human resources, considerable variation exists. North Eastern Province has 1
doctor per 100,000 populations compared to 4 each in Central and Coast
Provinces are significantly higher. Central province has more than double (73)
the number of nurses per 100,000 populations compared to North Eastern
Province (28). A rational deployment policy is necessary to minimise these
disparities in addition to decentralising the personnel functions to the districts.
The human assessment for attainment of MDGs work currently being undertaken
should form the basis for development of a long term manpower policy.

These achievements set out the basis on the way forward:

         Consolidate and strengthen these achievements;



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            Integrate the Annual Operating Plans and the Annual Budget (recurrent
             and development);
            Streamline outputs targets




11 Annexes


Annex 1: Inventory of Stalled Building Construction Projects – D11-Ministry Of Health

                                             %        Year
PROJECT NAME                                                     LOCATION     COST COMPL.
                                          Complete   Started
Minor Theatre Children Wd Magutuni H/C       10       1998     Meru South          3,300,000
Kapsabet Hosp. Renov.                        14        1993    Nandi                6,222,000
Kapsabet Hosp.                               14        1988    Nandi              26,266,000
Embu PGH HOSP.                               15        1984    Embu              250,000,000
Kipeto Disp.                                 15        1998    Kajiado              1,922,000
Lokitung Hosp.                               20        1989    Turkana            63,000,000
Bunyala Hosp.Female Ward                     30        1997    Bungoma             2,840,000
Tiva Disp.                                   38        1996    Kitui               2,000,000
Habasweni Maternity Ward                     40        1996    Wajir                1,610,000
Kisii Dist. Hosp. Renov.                     41        1991    Kisii              143,364,000
Pala H/C-Completion                          45        1992    Homa Bay             1,282,360
Bondo Dist. Hosp Phase 1                     45        1990    Siaya              30,000,000
Kaptarakwa H/C                               45        1997    Keiyo                    600,000
Simotwo H/C                                  48        1998    Keiyo                8,595,000
Kariko Disp.                                 50        1997    Nyeri               3,000,000
Nyagande H/C                                 50        1991    Kisumu               1,739,000
Migori Dist. Hosp.Type E Flat                50        1987    Migori                   947,000
Budeta Disp.1No cat F House                  50        1992    Busia                    730,000
Mariakani HC Service Block                   52        1990    KILIFI              2,500,000
Muuti-O-Kiama H/C                            60        1998    Meru North          14,465,783
Longisa Dist. Hosp. Phase II                 60        1990    Bomet              142,960,000
Msekewa H/C                                  60        1997    Keiyo                1,224,000
Busembe Disp.                                60        1992    Busia                    800,000
Agenga Disp                                  60        1998    Busia                    500,000
Iguhu H/C                                    60        1986    Kakamega             7,547,595
Narok Dist. Hosp.                            63        1994    Narok                3,612,000
Bondo Hosp. Fencing Works                    65        1997    Bondo                    747,000
Nanyuki Dist. Hosp. Renov.                   66        1992    Laikipia           24,000,000
Kapcherop H/C                                67        1988    Marakwet             3,985,000
Runyenjes H/C Completion of OPD              70        1986    Embu                5,490,000
Pumwani Nyayo Wards                          70        1987    Nairobi             66,565,000
OlenguruoneH/C                               70        1987    Nakuru             40,690,000
Kibish Disp.                                 70        1990    Turkana              7,975,434
Kiganjo H/C                                  73        1997    Nyeri               3,000,000




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Annex 1: Inventory of Stalled Building Construction Projects – D11-Ministry Of Health

                                             %        Year
PROJECT NAME                                                     LOCATION     COST COMPL.
                                          Complete   Started
Staff Houses Dirb Goma Disp.                 75       1996     Marsabit                 956,000
Nuu H/C Exts                                 75        1981    Mwingi               8,507,000
Kabarnet MTC                                 75        1991    Baringo           150,000,000
Sugutar Marmar H/C                           75        1990    Samburu              1,522,000
Vihiga Dist. Hosp                            75        1989    Vihiga              96,653,600
Upgrading-Gichira H/C                        80        1984    Nyeri              19,600,000
Nyamaraga Disp.                              80        1995    Migori                   262,000
Kagwa Disp.Fencing Work                      80        1997    Siaya                    247,000
Kapkatet Nyayo Hosp.                         80                Buret             210,000,000
Bugina H/C                                   80        1996    Vihiga              10,583,780
Kathiani Hosp. Renovation                    85        1989    Machakos             1,275,000
Yala Sub-Dist. Hosp.                         85        1990    Siaya               5,000,000
Chulaimbo RHTC Staff Houses                  86        1997    Kisumu              4,807,000
Isinya H/C Phase II                          88        1997    Kajiado              2,622,000
Milo Disp Type F House                       88        1996    Bungoma                  500,000
Mutito H/C Fencing Work                      89        1996    Kitui                    500,000
Renovation work Githiga H/C                  90        1981    Kiambu              3,870,000
Kunene Disp. Rehab.&Ext.                     90        1996    Meru N                   400,000
IPD &Service Block-Nyagoro                   90                H/Bay
CNV Female&Amenities Lodwar                  90        1997    Turkana                  540,000
Lodwar Comm. Nurses Training School          90        1988    Turkana            119,000,000
Busia VSCU                                   90        1991    Busia              10,000,000
Siaya Dist. Hosp.VSCU                        94        1991    Siaya                    500,000
Uyawi Disp.                                  94        1990    Siaya                1,804,000
Staff Houses at Kathiani Hosp.               95        1995    Machakos                 206,428
Kotulo Disp.&Staff Houses                    95        1997    Mandera                  766,000
Homa Bay Hosp.Maint. Workshop                95        1991    H/Bay                    726,000
Siaya Dist. Hosp.Renov.                      96        1996    Siaya                    120,000
Katito Disp.                                 97        1992    Kisumu                   400,000
Kangundo Nyayo Wards                         98        1993    Machakos             2,881,600
Mbeu RHDC                                    98        1983    Meru C              3,000,000
Ijara Disp. Completion of Ward               99        1996    Ijara                2,247,000
Kihara H/C                                             1996    KIAMBU             58,305,000
Muranga D. Hosp.                                       1997    Muranga              5,746,000
Rehab.&Ext.to Muriranjas Hosp.                         1991    Muranga             20,341,200
Kanyanyaini New Disp.                                  1984    Muranga              2,643,880
Karatina Dist.Hosp.Renov.                              1989    Nyeri                5,876,940
Karatina Hosp. Alt to Nyayo Wards                      1997    Nyeri               2,000,000
Gichichi H/C High Level Water Tank                     1985    Nyeri                1,200,000
Karatu H/C                                             1986    Thika              55,000,000
Mryachakwe Disp.Bock-Ganze                             1997    Kilifi               5,452,540
Completion of Cat.F at Mwanda                          1992    Kwale                    582,000
Ext. Kitui Dist. Hosp.                                         Kitui                    930,000
Marsabit Hosp. Office Block                            1996    Marsabit                 400,000
Mtito Andei H/C                                        1988    Makueni             14,741,000
Timau Disp                                             1987    Meru Central        13,047,000




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Annex 1: Inventory of Stalled Building Construction Projects – D11-Ministry Of Health

                                             %        Year
PROJECT NAME                                                    LOCATION      COST COMPL.
                                          Complete   Started
Mathare Nyayo Hosp.                                   1989     Nairobi           401,002,000
Medical Training Coll. Staff Houses                    1987    H/Bay                    40,000
Drugs Store for MOH                                    1988    Trans Mara               474,000
Cherangany Disp. Ext.                                  1997    Trans Nzoia              710,000
Webuye Hosp. Repair& Renov.                            1996    Bungoma              1,550,000
Bungoma Dist. Hosp. Amenity Wards                      1993    Bungoma             2,780,000


TOTAL                                                                          2,122,497,140


    Annex __: The list of core poverty Projects/Programmes

1      Health Dev. Project - IDA         11
       DARE                                   Sexually Transmitted Infections
2      Revolving Drug Fund               12   District Hospitals
3      Supply of Medical                 13
       equipment                              Mental Health Services
4      Decentralisation of District      14
       Health                                 Spinal Injury Hospitals
5      Health Sector Reform              15   Dental Health Services
6      Environmental Health              16   Communicable and Vector borne
       Services                               Diseases
7      Rural Health Centres &            17
       Dispensaries                         Nutrition Programme
8      Rehabilitation of District        18 Family Planning Maternal & Child
       Hospitals                            Health Care
9      Rehabilitation of Mortuaries      19 Rural Health Centres & Dispensaries
10     National AIDS Control             20 Rural Health Training and
       Programme                            Demonstration Centres



12 References

a) Ministry of Health. 2006. ―Public Expenditure Review, 2006.‖ Unpublished.
   Nairobi.

b) Ministry Of Health: RHF Unit Cost/Cost Sharing Review Study & The Impact
   Of The 10:20 Policy, 2005

c) Kenyatta National Hospital, Strategic Plan 2005-2010

d) Kenya Medical Research Institute, Strategic Master Plan 2005-1015. (2005);



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e) Ministry Of Health, Report On Human Resource Mapping And Verification
   Exercise

f) Central Bureau of Statistics (CBS) [Kenya], Ministry of Health (MOH)
   [Kenya], and ORC Macro. 2004. Kenya Demographic and Health Survey
   2003. Calverton, Maryland: CBS, MOH and ORC Macro


                     Sunday, September 18, 2011




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