Institutional Capacity Building to the Transport/Road Sector in Kenya (ICBTRS) – Financial Management Component financed by the European Union
The Institutional Capacity Building to the Transport/ Road Sector in Kenya project is part of the cooperation between the EU and the Government of Kenya (GoK) under the 10th EDF Country Strategy Paper and National Indicative Programme. The overall objective of the three-year project is to enable the transport infrastructure sector to contribute to improved conditions for national and regional economic growth and equitable poverty reduction. The purpose of the project is to support GoK with policy and institutional reforms through improved management of road networks at all levels (national, rural, urban) and improved road network condition and road safety. The ICBTRS is organized in five major components: (i) Component 1: Strategic Asset Management; (ii) Component 2: Financial Management; (iii) Component 3: Technical Support; (iv) Component 4: Road Safety; and (v) Component 5: Legal and legislative matters
Component 2 on Financial Management was to develop systems, processes and procedures that allow accurate financial planning, budget allocation and financial management throughout the roads sub-sector with a clear and recorded audit trail. Strengthening capacity in the area of financial management will be undertaken to ensure funds utilized by the road authorities can be adequately planned and managed as provided by the Kenya Roads Act of 2007 and other legal instruments, ultimately leading to greater financial efficiency accountability and thus improved service delivery in the road sub-sector. This change management role places emphasis on the upgrading of the financial knowledge and skills of the staff through training, a fundamental component in the commission as it serves as a media for: (i) Alignment of systems, processes and procedures internally within the sector, externally to international best practices and standards in public financial management; (ii) Effectively addressing emerging financial planning, expenditure and accounting issues in the road sub-sector; and (iii) Networking and information sharing.
CDC responsibility included the implementation of Financial Management systems (FMS) Component under the ICBTRS. To achieve these objectives the CDC requirements were to take the sector through total change management, whereby a lot of emphasis was placed on the upgrading of the financial knowledge and skills of the staff through training and capacity building on fundamental components of financial management, which include:
- Alignment of systems, processes and procedures (i) internally within the sector (ii) externally to international best practices and standards in public financial management including adaptation of IPSAS;
- Effectively addressing emerging financial planning, expenditure and accounting issues in the road sub-sector; and
- Networking and information sharing within the sector, nationally and regionally.
- Undertaking training to the sector financial staff on development of the accounting and financial policies and procedures manual based on the best practices. The selected team of champions from the sector were first trained on the IPSAS pronouncements focusing mainly on the IPSAS which materially affect the financial reporting of the road sector.
- As part of the harmonization of the FMS in the sector to ensure comparability of the financial reporting, sensitized the MoTI, RAs and KRB staff through various workshops where various presentations on good financial management practices were undertaken. This included a case study on cost benefit model showing the costs the subsector has been incurring under the current poor financial management system and benefits to be achieved through reforms in the FMS.
- Specifically trained the combined financial and technical staff of the sector on good practices on budgeting and budgetary controls systems including case studies based on practical information gathered from the institutions whereby harmonized budgets for the sector were developed and presented to the participants.
- Took through the sector in best practices of identifying an FMIS solution through the process of Best Value Analysis (BVA). Based on BVA the sector selected the Microsoft Dynamics AX ERP as the common solution to be installed in all the sector agencies. Further facilitated the working group team develop the ERP specifications which ultimately are to be used for the selection of the most competitive Microsoft Dynamics AX ERP supplier.