The Effect of Medium Term Expenditure Framework on Operational Efficiency of the Governance, Justice, Law and Order Sector in Kenya

Abstract

The Medium Term Expenditure Framework (MTEF) was introduced in Kenya in 1998 and it was first implemented in the budget in the financial year 2001/2002 after the failure of the Forward Budget Review Program, the Budget Rationalization Program and the Public Investments Program , The main aims of the Program were to increase fiscal discipline, Political accountability and public participation in financial matters and improve efficiency of government operations through the introduction of Budget Ceilings, Sector Working Groups and frequent Expenditure Reviews (PER, 2010). This study sought to investigate the relationship between medium term expenditure framework and operational efficiency in the Governance, Justice, Law and Order Sector (GJLOS). The specific objectives of the study were to establish the relationship between MTEF and budget balance in the GJLOS, MTEF stakeholder participation and fiscal discipline in the GJLOS, MTEF flexibility and allocative efficiency in the GJLOS and MTEF program focus and technical efficiency GJLOS. The study utilized a descriptive survey approach in collecting data from the respondents. The target population consisted of all the sectors of the Governance, Justice, Law and Order Sector (GJLOS). Data collected was both primary and secondary data. Data was analyzed by the use of descriptive statistics using SPSS and presented through percentages, means, standard deviations and frequencies. Further the data was regressed to obtain t - values , p-values , specific coefficients and intercepts, standard errors among other values at given significance levels. The study found that MTEF allows the linkage of budget planning decisions in the light of emerging needs and also based on the available resources. It also found that MTEF provide a platform where various stakeholders are involved in presenting their decisions over what they consider is appropriate. The study concluded that MTEF ensures flexibility of expenditure and that it is linked to the revenue projections thereby minimizing budget deficit. The study recommended that MTEF be broken down to specific, achievable and measurable targets, which can be used to directly assess its impact on Government operations and also to discourage the mentality that keeps the budgeting process sinking back to incrementalism.