The County Fiscal Strategy Paper (CFSP) is a document that is prepared every year to guide the county budget making process. The purpose of developing the CFSP is to dissect the past and present situation of the budget process with a view of informing the county budget for the next financial year. The CFSP provides strategic priorities and policy goals that a county government follows in preparing the budget for the coming financial year and over the medium term, 3-5 years.
Who Prepares the CFSP?
The CFSP is prepared by the County Treasury and submitted to the County Executive Committee (CEC) in charge of Finance and Economic Planning. Upon review, the CEC submits the CFSP to the County Assembly by 28th February each year. The County Assembly is required to make the CFSP public 7 days after the submission, for public input and approve it by 14th March. Upon approval, the CFSP can then be used by the County Treasury to prepare budget estimates.
What are the Components of a CFSP?
The CFSP has 4 key components namely performance, projections, priorities and ceilings. Studying the CFSP entails scrutinizing each of these components.
In most cases information relating to performance, projections, and ceilings is provided in table format because it contains figures. On the other hand, priorities are often presented in narrative form because they explain choices made in the sector ceilings as explained below:
This section provides up-to-date information on expenditure incurred and revenue collected by a county government. It helps to determine whether decisions made going forward on revenue collection and expenditure are realistic. Performance is usually presented per sector based on the previous financial year and the recent budget implementation reports produced during the 2nd quarter of the current financial year.
These constitute a key aspect of the CFSP and give an indication of the overall revenue and expenditure expected in the next financial year. The CFSP indicates expected deficit, how much revenue a county government expects to receive from the national government and how much it expects to raise from local sources.
It also indicates amounts a county expects to receive in form of donor funding, grants, and internal or external borrowing in the next financial year. In terms of projected expenditure, the CFSP indicated costs relating to recurrent expenditure, capital or development expenditure, debt repayment among others. The figures used in projecting revenue and expenditure ought to be as reasonable as possible.
This section of the CFSP shows the priority needs identified for financing by a county government. Often, this section explains choices made in the next financial year for the various sectors and shows how funds will be distributed to meet priority needs across sectors. CFSP priorities are informed by decisions made during sector hearings where citizens participate.
4. Budget Ceilings
These represent budget limits per sector. Budget ceilings determine the amount of money allocated to each sector and show how funds are distributed across different sectors. Ideally, budget ceilings should show the specific amounts a county will spend in meeting the identified priorities. In this section of the CFSP you will find sector allocations that enable you to identify areas or sectors with the highest as well as lowest allocations.