Examining health sector application and utility of program‐based budgeting: County level experiences in Kenya

INTRODUCTION: In 2012, Kenya enacted a new Public Finance Management Act to guide the public‐sector planning and budgeting process. This new law replaced the previous line item budgeting, with a new program‐based budgeting (PBB) process. This study examined the experience of health sector PBB implementation at the county level in Kenya. METHODS: We carried out a review of the literature documenting the health sector application and utility of PBB in low‐ and middle‐income countries. We then collected empirical data to examine the experience of health sector application of PBB at County Level in Kenya. RESULTS: In the financial year 2017/18, counties utilised the PBB approach for health sector planning. The PBB approach was perceived by key stakeholders; to have improved the alignment of technical priorities with budgetary allocation, and to have increased transparency, accountability and openness of the process. Its challenges included lack of clear tools and guidelines to support implementation, low capacity at county level, political interference and the organisation of the public sector electronic financial management system around line item budgeting system. CONCLUSION: PBB is potentially a useful tool for aligning health sector planning and budgeting and ensuring the Annual Work Plan is more result oriented. However, realisation of this goal would be enhanced by the developing clear tools and guidelines to support its implementation, building capacity for county health sector managers to better understand the PBB application, and reforming the public‐sector budgetary management system to align it with the PBB approach.