Columnists

What’s the future of performance contracting in public service?

ruto

President Dr William Ruto (centre), his Deputy President Rigathi Gachagua (left), and Prime Cabinet Secretary Musalia Mudavadi nominee at State House in Nairobi on September 27, 2022. PHOTO | EVANS HABIL | NMG

Last week this column ended with a call for the retooling of public service. In 2003, when the Narc government took over power, one of the tools they introduced was performance contracting and appraisal in the public service.

The tool required every public service entity to enter a performance contract with the government on its targets for the year. These would be the basis for their actions throughout the year.

The resources allocated to them would then be utilised to deliver on the targets which would be monitored continuously and reported on every year.

At the end of the year the overall performance of the agency, its management and governance organs would then be evaluated and form the basis for the subsequent year’s evaluation.

This system aimed at introducing a culture of delivery. When it was conceptualised, its rationale was that it was important to imbue a private sector mentality of value for money and accountability for and focus on results.

Twenty years later, a comprehensive assessment of the impact of the appraisal and contracting system must be undertaken.

In doing so, the government should ask itself several far-reaching questions. First is the timing of the contracting and appraisal system. As designed the process is aligned with the financial year of the country. Therefore, it starts on July 1 every year and ends on June 30 the following year.

Due to the process of negotiations and its linkages to the end of the appraisal for the following year to ensure that the targets consider one’s previous performance in the ending period, there is always a lag of a few months between one contracting period and another.

The result is the actual implementation period is shorter than the year for which commitments are made.

Implementation by every public agency is based on resource allocation and availability. The Constitution has set clear and elaborate public financial management standards, which call for prudence, responsibility, and accountability.

The contracting process is ideally supposed to be linked to the budgeting process. Agencies commit in accordance with their allocated resources and align their procurement plans accordingly.

This ideal is never practised for several reasons, the main one being that at the time of resource allocation, there is always less ambition as compared to performance contracting.

In-depth reviews of performance contracting targets since inception will most likely reveal a misalignment between the commitment and the resource allocation. If one plans for deliverables without adequate resources, then the implementation process cannot lead to the set target.

Related to this is the subsequent adjustments of budgets during the implementation period.

The writer is a law professor at the University of Nairobi’s School of Law