PUBLIC SECTOR REFORMS & PERFORMANCE
CONTRACTING
CASE STUDY: KENYA (2010)
DISCUSSED AND PRESENTED
BY
ERIC ODUOR OCHIEN’G
P.O BOX 19117-00501
NAIROBI-KENYA
Email: erokize@yahoo.com
November, 2010
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Table of Contents
1.0 INTRODUCTION ....................................................................................3
2.0 PERFORMANCE CONTRACTING ...................................................4
2.1 Definition of Performance Contacting ....................................4
2.2 Performance Contracting Processes ........................................5
3. SIGNIFICANCE OF PERFORMANCE CONTRACTING ..............8
4. CHALLENGES FACING PERFORMANCE CONTRACTING ... 10
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1.0 INTRODUCTION
Globally, governments have been known to be associated
with long bureaucratic procedures marred with inefficiency,
lack of accountability thus high level of corruption and
wastage of resources which translate into poor economic
performance.
Many governments have however been trying to put in place
measures to reverse this notion and the attitude towards
governments in service delivery that comes along with it. In
my opinion, Kenya’s Public Sector being one of the countries
that has suffered “damaged image” both locally and
internationally, resorted to reforms in the public sector to
gain the confidence of the public and change this “bad
image”. This article therefore focuses on Performance
Contracting; the Kenyan Context, its significance to the public
sector and the challenges.
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2.0 PERFORMANCE CONTRACTING
2.1 Definition of Performance Contacting
This is a mechanism under Public Sector Reforms that aims
at improving performance of the Public Sector through;
setting clear objectives, setting SMART (Simple, Measurable,
Accurate, Realistic and Time-bound) targets, specifying
agent performance in terms of results (outputs) & assigning
accountability for those results, increasing the transparency
of the accountability relationship in public institutions,
establishing clear reporting, monitoring and evaluation
mechanisms of the projects & providing a basis for
assessment of performance. It also provides a basis for
renegotiation for the performance (The first three Public
Institutions in every category is given presents as a reward).
The Performance Contracting process is normally done on
quarterly basis. At the end of every quarter, each Institution
should submit their quarterly reports and finally annual
report to their reporting agency. A feedback with comments
on the report is normally sent back to the Institution for
improvement.
The targets are majorly derived from the Institutions
Strategic Plan especially the implementation matrix section
in which it is expected that the time-frame for each activity is
outlined.
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2.2 Performance Contracting Processes
(a)Target formulation- The Institution formulates the
targets in accordance to the following categories in
descending order; Financial Indicators, Service Delivery
Indicators, Non-financial Indicators, Operational Indicators
and finally Dynamics Indicators
The targets in most of the categories are similar for all the
Public Institutions except the Operational Indicators which
are basically derived based on the mandate of the
Institution. In that way, the wider the scope of the Institution
in terms of service delivery, the many targets under the
Operational Indicators Category.
Before implementing the targets, the institution should
develop a Work-plan/implementation schedule based on its
Departmental Plans. The Plan should indicate detailed key
activities to be accomplished in order to realize the targets
at the end of the Contract Year. (It is on the basis of the steps
that the targets will be evaluated at the end of every quarter)
(b) Negotiations- The targets as set by the Institution are
verified on the basis of; available resources (both Financial
and human capital requirement), time-frame, relevancy to
the existing policy documents (Vision 2030, Medium-Term
Plan 2008-2012, Sector Plan and Institutions’ Strategic Plan)
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(c) Vetting Process- The targets are re-examined and
evaluated by checking their backgrounds i.e if it a new or a
continuing target. A target once started can be implemented
in phases based on it’s time-frame in the Institutions’
Strategic Plan.
(d) Signing- The Contract is normally signed for the sake of
accountability and show of commitment by the relevant
Senior Management Authority and the Institutions
Accounting Officers. In the case of the Ministries; The
Minister and the Permanent Secretary (the Accounting
Officer) signs, while for the State Corporations such as Public
University for instance; the Permanent Secretary of the
mother Ministry, the Vice Chancellor and chairman of the
council Signs while the Minister for Finance countersigns
(e) Implementation- The Institutions implements their
vetted and signed Contract following their commitment to
each target. Public Institution may realize some difficulty in
achieving some targets within the prescribed time-frame
due to financial problems (beyond the control of the
Institution) such as the grants money in which case the
Institution is expected to do all that it is within its control.
(f) Reporting- The Institutions normally report on
quarterly basis in addition to the annual report to their
Reporting Authorities Ministries and State Corporations
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Report to the Public Sector Reforms and Performance
Contracting Office in the Office of the Prime Minister
whereas the other downstream Institutions report to the
relevant Ministries.
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3. SIGNIFICANCE OF PERFORMANCE CONTRACTING
Helps in fast-tracking; Institutions Strategic Plan, the
aligned Sector Plan, Kenya’s Medium-Term Plan 2008-
2012 and the Kenya’s Vision 2030.
For achievement of the set targets, the institutions have to
develop intense monitoring and evaluation system hence
ensuring proper coordination of projects
It has instilled discipline to Public Institution’ Management
by ensuring adherence to work-plans, Strategic Plans,
Sector Plans and the Vision 2030.
Enhanced accountability in the pubic service as it defines
who does what, when and how.
It has led to enhancement of the efficiency in service
delivery as the Institutions set higher targets every
contract period.
It gives room for recognition of the Public Servants hence
improves the performance.
Some Public Institutions have realized that working to
achieve the set targets does not only help them perform
better but also aid in the institutions’ operations.
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It has led to a competitive Public Service as compared to
the old fashioned style and also enhanced their growth and
development.
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4. CHALLENGES FACING PERFORMANCE CONTRACTING
Lack of adequate skilled personnel in Performance
Contracting in most of the institutions
Lack of good-will by some Institutions where the Heads
have not appreciated the process
Rejection by some institutions (some institutions refuse to
be part of the process) though this has been changing with
time
The long bureaucratic procedures of Public Institutions
makes it hard for them to realize some targets especially to
institutions in the lower-stream as they may have to wait
long to receive funds from the headquarters (mother-
institutions). This may delay the execution of activities
within the stipulated time.
Thanks!!!
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