Water Sector Boards Budget Planning
The Ministry of Water and Irrigation (MWI) has been engaged in implementing water sector reforms to ensure provision of reliable, sustainable and affordable water and sanitation services. Several new institutions were set up and according to Ministry of Planning and National Development regulations, all ministries and state corporations, including Water Service Boards (WSBs), were to elaborate a “rolling” budget until the end of January 2006 for the financial year 2006/2007 and the following two years. Also, the Water Act (2002) stipulated that all Water Service Boards were to prepare Business Plans for a 5-year period that linked to the Government of Kenya budgeting cycle.
This was the first budgeting process for these newly established water sector institutions, hence a need for assistance in establishing budgeting procedures, and in collecting necessary data and information. It was important, despite the short time frame, that support be more than a quick fix and embedded into a more comprehensive business planning process. The Kenya Water and Sanitation Programme (KWSP) had previously given support in preparing business planning guidelines and models which were designed to make business planning easy and transparent as possible for the new institutions in carrying out their budgeting process. Nevertheless, the data collection and information requirements of the guidelines were a challenge, not only because of limited institutional capacity, but also because of the missing or incomplete systems. For this reason, a practical approach for the first budget exercise with minimum information requirements was proposed.
The objective of this assignment was to assist in the preparation and implementation of 5-year Business Plans for each of 4 WSBs by the end of December 2006. The sub-objectives were to elaborate and finalise Business Planning Training Modules for the WSBs, assist the new water sector institutions create a market-oriented business climate and to introduce integrated business planning in their operations and at top management levels of the new institutions. The assignment was completed after an extension, since initially the objective was to assist the 4 WSBs prepare a 3-year budget proposal and business plans within a very short time frame by the end of December 2005, and follow up adjustments and harmonisation with the Ministry by end of January 2006.
The Business Plan Training Module was developed with the intention of being a guide to business planning, with the key considerations of developing the WSB to operate with a commercial perspective and that the training should impact commercial business thinking of the managers. The aim was to create a common understanding within and between the institutions of the fundamental ground for developing a business plan, and to facilitate business plans becoming a regular tool for planning in the new institutions.
Business planning capacity development was designed to address the emerging needs of WSB management in how: 1) to best use the investment plans and strategies in investing in the WSPs; 2) to specifically deal with unaccounted-for water (UFW) as a measure of their efficiency and effectiveness in the delivery of sewerage and water services; 3) to deal with the issue of capacity building recognizing that with the requisite staff complement the Business Plans would not be realized; 4) to deal with the issue of financial sustainability particularly as the Government role was now that of policy and so it was imperative that the CEOs become major fundraisers particularly after year 2009 when the KWSP programme runs its course.