MODULE 3: INSTITUTIONLA RESOURCE LEADERSHIP AND

MANAGEMENT
UNIT 1 PLANNING AND BUDGETING
Planning
Planning is defined as the process for stating the direction and financial objectives of an institution.
The planning components:
Strategic Plan: The long-range goals and objectives. These are both qualitative and quantitative in nature
Annual Plan: The annual plan provides the high level targets that guide the budget.
What is the linkage between planning, budgeting and forecasting?
You must ensure that you link planning to the budgetary process.
The linkage between planning, budgeting and forecasting is illustrated below:

Budgeting
(a). What is a budget
- Budgeting is a plan on sources of income, the anticipated expenditure according to different vote heads.
- In simple terms a budget is a plan that lays out what you will do with your money.
Components of a budget
(i). Revenue: Source of revenue includes how much money you have or will receive.
(ii). Expenditure: has two parts, namely, recurrent and capital/development expenditure:
Recurrent expenditure: the day-today running expenses e.g. electricity, fuel, maintenance and salaries.
Capital/Development expenditure: expenses on projects such as infrastructure development projects.
In a school’s situation the main expenditure falls under the following vote heads:
i. Tuition: include exercise books, textbooks, stencils, duplicating papers, chalk dusters, chemicals
ii. Boarding Equipment and Stores: foodstuff, cleaning material, mattresses, blankets, toilet paper.
iii. Repairs, Maintenance and Improvements: minor repairs to tuition and boarding equipment,
iv. Local Transport and Travel: travelling expenses of staff, board members school vehicles,
v. Electricity, Water and Conservancy:Electricity and water bills, fuel for generator and water pump,
vi. Activity: co-curricular activities such as the purchase of games equipment, trophies and awards,
vii. Medical; these include the cost of generic drugs and medicines and pupil emergencies.
viii. Personal Emoluments:payment of salaries for non-teaching staff workers employed by School
The budget has several purposes as discussed below:
⮚ It enables the institution to administer its activities.
⮚ It helps decision making in the institution.
⮚ It puts a ceiling on expenditures and cost control.
⮚ It provides linkage between the institution's mission and the expenses.
⮚ It prioritizes the institution's expenses to meet new demands and expectations.
A budget has the following benefits for the institution:-
⮚ Planning: budget is used to guide the institution through the upcoming fiscal year.
 ⮚ Achieve mission: institution needs a budget in order to achieve its mission through identified activities.
⮚ Allocation of resources: allocating limited resources among competing priorities within the institution.
⮚ Program implementation: institution to undertake its programs with effectiveness and efficiency.
⮚ Informative: provides information on revenue to be collected the activities on which it will be spent.
⮚ Growth: A budget is a road map that can help you get from where you are now to a financial goal
⮚ Reporting: The budget serves as the basis for your financial reporting.

Types of budgets
i) Surplus budget: projected income is more than the projected expenditure.
ii) Deficit budget: projected expenditure is more than the projected income.
Changing a balanced to a surplus budget can be done by;-
- Increase your income
- Decrease how much you spend.
iii) Balanced budget: projected income is equal to the projected expenditure.

Criteria for good budgets

⮚ Accurate forecasting
⮚ Based on organizational goals
⮚ Information is timely and accurate
⮚ Formed with multilevel input
⮚ Regular reviews are built-in

A good budget should also be SMART:

● Specific: The budget should provide fine details of the sources of revenue and avenues of expenditure.
● Measurable: It should be backed up by quantifiable performance indicators. e.g. finished laboratory
● Achievable: The budget should be achievable using the available resources
● Realistic: The budget should be realistic; it should take into consideration the available resources
● Time bound: The budget should be realizable within the plan period

Budgeting Process
Budget making process should focus on the institution strategic plan.
The budgeting processes involve:
⮚ Preparation
⮚ Approval
⮚ Implementation
⮚ Reporting
⮚ Monitoring and evaluation

a) Preparation:
This stage involves the following activities:
[Link] of a Budget Committee: -ensures budget proposals are in tandem with institution’s strategic plan.
[Link] to the strategic plan: -budgeting plan focus on the development interests of the institution.
[Link] to the performance contract:- integrates requirements Performance Contracts into the budgeting
[Link] proposals:-Departments prepare their budgets then submit to the Budgeting Committee.
[Link] of expenditure plan: -Departmental Proposals are combined to form vote head.
[Link] of Revenue: -The committee focuses on the sources of revenue for the expenditure plan
[Link] of the temporary Budget: - temporary expenditure agree with the revenue plan
[Link] of the Draft Budget: -reconciling the expenditure and revenue to a draft budget.

b) Approval of the Budget: -

- Discussed and approved by the BOM and the parents during (AGM) and this process is minuted.
- The budget is then submitted to the CEB for approval one month before beginning of the financial year.
- Communicating the budget requirements to the MoE so that it may be aware of how much is required

c) Implementation: -
The Principal should co-ordinate and control the implementation of the budget by: -
- Ensuring timely and optimal procurement decisions.
- Checking that various activities take place as scheduled and within approved financial limits.
- Organizing monthly meetings to review actual performance against budgets
- Ensuring timely investigation of budget variances and determination of their implications.
- Determining the most appropriate action in addressing unfavourable variances
- No virement from and to tuition account shall be allowed.

d) Reporting: -
Institution prepares termly and annual reports on the performance of the budget under implementation.

e) Monitoring and Evaluation: -

Establish at the end-year budget performance in terms of the attainment of the annual targets.

Difference between traditional and contemporary budgeting

Traditional Contemporary
1 Focus on control Focus on policy/performance
2 Centralized Decentralized
3 Private exercise of administration power Public sharing of information
4 Line item format Program format
5 Formulas Priorities
6 Minimal flexibility for managers Maximum flexibility for managers
7 Accountability for inputs Accountability for outcomes

The approaches used to prepare a budget

a) Expenditure Approach:
In this approach you list down both recurrent and non-recurrent expenditure.
- Recurrent expenditure that you incur periodically e.g. activity, electricity, water and conservancy etc.
- Non-recurrent expenditure could be construction of a laboratory, purchase of a school bus etc.
Using the expenditure approach, you sum up the expenditures then find means of financing them.

b) Income/Revenue Approach:
This is the approach where you first list your projected income.
The projected income is then matched with the projected expenditure.
This approach is preferred because it can result to surplus or a balanced budget.

Budget organization
National Budgetary System
As an education manager, you are expected to be familiar with the National budgetary system.
(a). The national budget:
It outlines the broad economic policies of the government and estimates of revenue and expenditure.
The aim of the national budget
- To ensure economic stabilization, social order and harmony.
- A means of government performance evaluation and accountability.
Phases of the national government Budgeting
a) budget preparation,
b) budget authorization/enactment,
c) budget execution and
d) accountability
The general stages of the budget cycle

Stages in the national budget process

i. planning process which shall include both long term and medium term planning;
ii. determining financial and economic policies at the national level over the medium term;
iii. Preparing Budget Policy be current and to make informed decisions.
iv. Be the legal owner and custodian of all the school property for which it has been appointed by the
minister of Education.
v. Be responsible for the management of the school capital development projects and other day-to-day
expenses in liaison with PTA.
vi. Source for the school‘s income.
vii. Implement the agreed projects/activities such as construction of buildings and purchase of equipment
and books and
viii. Control the use of funds so as to ensure that the limited funds are used economically as intended for
the benefit of the school.
The responsibilities of the National Treasury with respect to the Budget process;-
i. Prepares the Budget Policy Statement for approval by Cabinet and approval by parliament
- Set policy goals that will guide the national and county governments in preparing their budgets.
ii. Prepares the Budget Review and Outlook Paper and submits it to Cabinet for approval.
A Budget Review and Outlook Paper includes the following:
- Actual fiscal performance of previous financial year compared to the budget appropriation for that year
- Updated financial forecasts with information showing changes from the resent Budget Policy Statement;
 - how financial performance for the previous year affected the latest Budget Policy Statement;
- reasons for any deviation from the financial objectives together with proposals to address the deviation
The role of the Cabinet Secretary/National Treasury:
- Issues to all national government entities guidelines on the budget process to be followed by them.
- Prescribes procedures on how members of the public shall participate in the budget process
- Notifies the Intergovernmental Budget and Economic Council commencement of the budget process.
- submits to the Cabinet for approval—The budget estimates and other documents supporting the budget;
- Draft Bills required to implement the national budget.
- Submits to the National Assembly, following documents:
a) The budget estimates excluding those for Parliament and the Judiciary;
b) Documents supporting the submitted estimates; and
c) Any other Bills required to implement the national government budget.

The funds of the Ministry of Education consist of:–

i. Monies provided by Parliament for the purposes of the Department of education;
ii. Any funds provided by bilateral or multilateral donors, for the purpose of the basic education;
iii. Monies that may accrue in the in the course of the exercise of the education departments functions;
iv. Gifts, grants, donations or endowments as may be given to the Department of education;
v. Monies borrowed by the Department of education for the discharge of the functions of the Department;
vi. Fees for services rendered to any designated institution in terms of a service agreement.

Education budget
Before each financial year, the Cabinet Secretary to prepare estimates of revenue and expenditure of the
Department of Education.
The annual estimates are then approved by Parliament before the commencement of the financial year.
The role of boards of management in the budgetary process include:
i. Cause preparation for the school‘s annual budget.
ii. Ensure all the funds of the school are properly managed and accounted for by the head teacher.
iii. Cause the school to submit to the relevant authorities such information, returns and audited
iv. Hold the head of the school responsible for the effective operation of the school and the provision of
information to the board to enable it to be current and to make informed decisions.
v. Be the legal custodian of school property for which it has been appointed by the minister of Education.
vi. Manage the school capital development projects and other day-to-day expenses in liaison with PTA.
vii. Source for the school‘s income.
viii. Implement the projects such as construction of buildings and purchase of equipment and books and
ix. ensure that the limited funds are used economically as intended for the benefit of the school.

Free Primary Education (FPE) program

- FPE was introduced in 2003 as an incentive to achieving Millennium Development Goals
- Universal Primary Education as a critical component of the National Development Strategy.
Objectives of FPE:
i. To enhance access, retention, quality and relevance at primary education level.
ii. To reverse the declining enrolment rates at primary school level.
iii. To improve participation, progression and completion rates at primary level.
iv. To reduce the burden of the cost of education previously borne by the parents.
v. To implement universal conventions on the provision of education to which Kenya is a signatory.

The key objectives of monitoring/tracking FPE funds are to:

- Ascertain whether funds have been received in accordance with correct enrolment.
- Determine if proper procurement procedures were followed in obtaining instructional materials.
- Ensure that purchased instructional materials are in school and are being used properly.
- Ensure that care and storage of books is being adhered to.

Current limits of FPE funds and associated vote-heads:

 - capitation of Ksh.1, 020.00 per child in public primary schools,
- And Ksh.650 for non-formal schools that meet some set criteria.
- To receive the grant, school opens account with bank that has signed a MOU with the government.
- Signatories are the Head teacher, BOM Chairperson and an elected parent‘s representative.

The funds and the respective vote-heads in the two accounts are summarized in the tables below:
Account 1 (SIMBA)

Each public primary school to establish School Instructional Material Selection Committee (SIMSC).
The composition of the SIMSC:
1. Head teacher – Chairperson
2. Deputy Head teacher –Secretary
3. Senior Teacher –Member
4. Class Representatives (Class 1-8)-Members
5. BOM Chairperson-Member
6. Two (2) elected parents‘ representatives-Members
7. One teacher to represent SNE (where applicable)-Member
The SIMSC is charged with the following responsibilities:
- Carrying out stock taking to establish the needs and gaps. They then prioritize the school‘s.
- Choosing a supplier/book seller based on the criteria set by the ministry.
Ordering of the materials is prescribed forms from Ministry of Education and the latest Orange book.
- Procedures of receiving the materials to be adhered to and relevant documentations signed and filed.

The FPE management and accounting documents include:

- Primary School Instructional Materials: Governance and Management Handbook,
- Primary School Instructional Materials Training Manual
- National Textbook policy on publication, procurement and supply for primary schools;
- Primary Schools Order Forms,
- Stock Receipt/ Issue Register Orange Book (List of Approved Textbooks for pry and Sec Schools).
 - Procurement Manual for Primary Schools
- Financial Management Handbook for Primary Schools Guidelines/circulars.
Free Day Secondary Education (FDSE) program
- FSE was introduced in Kenya in 2008, in line with MDG goal of Education for all.
- under the country’s constitution every child in Kenya has a right to free and compulsory basic Education
- Basic Education Act of 2013 It is mandatory for all child to enroll for primary and secondary education
- The grant per student in public secondary school is currently [Link]. 22,244. .

Purpose of FDSE program

- promote pupil transition from primary to secondary schools,
- Retention and completion in secondary schools without discrimination.
- Provision of government subsidy on tuition fees, teaching and learning materials.
- Promoting cooperation between the Government, Parents and Sponsors to eradicating poverty.
The cooperation implies that the parents and sponsors still have to meet the costs related to the following:
⮚ School meals for day-scholars
⮚ School uniforms
⮚ Boarding fees
⮚ Transport
⮚ Infrastructural development
Management ofthe FDSE funds:
All schools are required to open and operate an account for FDSE funds.
The bank particulars is discussed and ratified by the school management meeting and minuted.
Details of the account are forwarded to the Ministry Headquarters through Sub-County Education Officers

Fee structure for national schools

UNIT 2: INCOME GENERATING ACTIVITIES
Who is an entrepreneur?
● Sees opportunity in the market, gathers resources to create a business venture to meet the identified needs.
● Entrepreneurs create new businesses in the face of risk and uncertainty for achieving profit and growth
● difference between those who have a managerial mindset and those that have an entrepreneurial mindset:

● It is therefore possible for education managers to be entrepreneurs.

● By engaging in projects they are entrepreneurs because they have seen an opportunity in the market and are
managing business ventures to meet the identified needs.

What is entrepreneurship?
● Identifying business opportunities, transforming it to successful businesses through innovative processes.
● It is being in business, and growing and developing a business.
● Recognize
Life cycle of entrepreneurial firms
⮚ There are three stages in the life cycle of an income generating project.
⮚ This includes the birth stage, breakthrough stage and the maturity stage.
⮚ These stages are illustrated below:

Qualities of successful entrepreneurs?

● Independent
● Persistent
● Self-demanding
● Creative
● Self-confident
● Responsible
● Risk-taking
● Inquisitive
● Restless
● Goal-oriented
● Action-oriented
 – Economic dimensions: health and vitality of the
● Enthusiastic
economic system in which the organization operates.
Do you have the potential to be a successful
– Technical dimensions: the methods available for
entrepreneur?
converting resources into products or services.
⮚ Everyone has the potential to become an – Socio-cultural dimensions: the customs, values, of
entrepreneur. the society in which the organization functions.
How to strengthen your characteristics and – Political-Legal dimension: government regulation
entrepreneur skills: of business, relationship btw business and government.
– Read articles and books about entrepreneurs. – International dimension: the extent to which an
– Read about individuals who overcame organization is involved with other countries.
obstacles to achieve success.
– Watch films about business people who are Starting an income generating project
achievement-oriented. Sources of business ideas?
Benefits of Entrepreneurship – Consumers: Using formal and informal means
⮚ Entrepreneurship creates employment monitor potential ideas and needs from consumers.
opportunities. – Existing products and services: ways to improve
offerings that may result in a new product or service.
⮚ Development of more industries, especially in – Distribution channels: distributors of your products
rural areas or services can help suggest and market new products.
⮚ Increased income levels hence increased tax – Government: New product ideas can come in
collection and reduction of social problems response to government regulations.
such as crime. – Research and development: Business ideas may
emerge from research undertaken.
⮚ Higher productivity and economic growth:
using local materials to produce finished methods of generating business ideas?
goods. – Focus groups
⮚ Increase in exports and less dependence on – Brainstorming
imports – Problem analysis
Business environment – Problem solving
- Anything that surrounds a business
organization such as customers which affect How can you determine whether your business idea
the business. is feasible or realistic?
- All the factors that affect business decisions, i. Return on Investment (ROI):
operations and customers‘consumption habits. • You need to calculate your Return on Investment
Components of a business environment: (ROI).
Business environment consists of two interrelated sub- • You need to determine the investment that you will
environments: make i.e. what it costs to make and market a product.
i. Internal environment: • You then need to identify the percentage return you
All the factors within an organization which impart want from the investment.
strengths or cause weaknesses of strategic nature. • The profitable objective involves pricing products to
The components of the internal environment: obtain a certain % return on investment.
– Human resources ii. Market research:
– Company image and brand equity • To identify viable business opportunities in the
– Physical assets and facilities market that you aim to serve, you need to do market
– Research and development research.
– Technological capabilities • collecting and analyzing data relating to the demand
– Marketing resources for a good or a service in a specific market.
– Financial resources • Process of generating information for aid in making
ii. External environment: marketing decisions.
All factors outside the organization which provide • Marketing information is used to not only identify
opportunities or pose threats to the organization. marketing opportunities but also solve marketing
The components of the external environment problems, implement marketing plans, and monitor
include: marketing performance.
Turning your business idea into a business plan
• When you have identified the business idea you then Step 5. Competitive landscape: competitions
need to turn it into a business plan. including your strengths, weaknesses, and
Business opportunities
Step 6. Business and Revenue Models: business and
revenue model, overall business strategy, marketing
Plan
Step 7. Management Team: Describe your team and
its credentials.
Step 8. Financial Projections Funding: Provide 3-5
year financial projections for the project.
Step 9. Timeline: Provide a timeline that indicates the
Execution key milestones of the project.
What is a business plan? Step 10. Summary: Include what you want your
• A written document that provides details of the audience to remember about your business project.
proposed business, what you want to achieve and how.
• It should describe current status, expected needs, and
Marketing concepts
projected results of the new business. i. Selling: Selling brings the product to the consumer,
• The business plan is the entrepreneur‘s roadmap for a and is part of marketing.
successful enterprise. ii. Marketing: process where we profitably satisfy
• Every business should have a plan. customers by providing goods and services, they
Objectives of a business plan: demanded.
– It identifies the nature and context of the business iii. Marketing orientation: focusing efforts on
opportunity. continuously collecting information about
– It explains how the entrepreneur will develop this customers‘needs,
opportunity. iv. Market: This refers to all people with both the
– It identifies the factors that will most likely desire and ability to buy a specific product.
determine whether the venture will be successful. v. Market segmentation: subdividing a market into
clear subsets of customers with similar needs.
Benefits a business plan: vi. Customer value: benefits received by buyers i.e.
- Force the entrepreneur to view the venture quality, price, convenience, on-time delivery,
critically and objectively.
- subject the entrepreneur to close scrutiny of his
Marketing philosophies
or her assumptions about the venture‘s success.
- Entrepreneur develops and examines operating
strategies and expected results for outside
evaluators.
- Quantifies objectives, providing measurable
benchmarks for comparing forecasts with
actual results.
- Provides a communication tool for outside
financial sources, operational tool for guiding
the venture towards success. Marketing mix
How to develop a business plan • describes the combination of various elements which
Step 1. Introduction: Briefly introduce your constitute the core of a firm‘s marketing system.
institution. • These elements include product, price, place,
Step 2. Problem: State the problem or need in the promotion and positioning, commonly referred to as
market that provides a basis for your product or the 5Ps.
service. i. Product - anything offered by a business to satisfy
Step 3. Solution: Clearly and briefly describe your the customer’s needs or wants.
business product or service that will address the ii. Price - this is the monetary value of a Product
problem. iii. Place - strategically placing a product within the
Step 4. Market, Customers: management, staff and reach of the customer
customers, partnerships established; and market size, iv. Promotion - enable your customers know about
your product, like it, and buy it
v. Positioning - positioning of a product in the mind of Value addition and product development
a customer This is the process of improving the value of a
commodity through
- Processing by changing its form,
- increasing its shelf life or
- better presentation like packaging.
- Adding value to an otherwise standard product
example, adding value to dairy farm produce making
Market research butter, skimmed milk, ice cream and yoghurt from
• Your market research will help you understand your milk.
customer base or your potential customer base.
• It is the first thing that an entrepreneur must do, and Activity
it should be a continuous activity. Salama school has a leading food and beverage
• How information is collected/analysed on the basis of business on its farm. Its product mix includes soy
which marketing opportunities and problems products, coffee creamers, dips and dressing, pickles,
identified. sauce, ice cream, yogurt, sour cream and cottage
• It is carried out to reach a decision whether or not to cheese. Its fresh milk and cream product line includes
start, maintain or expand an enterprise. regular and flavoured milks, lactose-free milk, and
buttermilk.
What is a channel of distribution? i. Discuss the marketing strategy of the school in the
• This refers to the arrangement through which goods context of value addition and product development.
move from the producer to the final user/consumer.
• Every entrepreneur requires a channel to distribute Conclusion
products to the right customers at the right time and
cost. ⮚ In this unit, we have looked at the concept of
• It consists of all middlemen who distribute products incoming generating activities and how schools
and links the manufacturer and the consumer. can earn more revenue to supplement
government grants and fees paid by parents.
Types of distribution channels: ⮚ We have examined how one can become an
i. Direct distribution: When the producer sells entrepreneur and the business environment.
goods or services directly to the customer,
ii. Indirect distribution: Involving one or more ⮚ We have also looked at what needs to be done
intermediaries (moves products from to ensure that business ideas become viable and
manufacturer to user) how to effectively market the products.
⮚ We hope can now start successful income
Channels of distribution: generating activities in your school.
– Manufacturer directly to consumer
– Manufacturer to retailer to consumer UNIT 3: FINANCIAL ACCOUNTING AND
– Manufacturer to wholesaler to retailer to consumer REPORTING
– Manufacturer to agents to wholesaler to retailer to
consumer Financial Documents and Records
– Manufacturer to agents to retailer to consumer ● Documentation provides the basis and evidence
Elements of a good marketing plan: of transactions.
1. Describe your business
2. Conduct a situation analysis using a SWOT ● It helps to establish the audit trail for the
analysis. transactions and reflect the process followed.
3. Define your customer
4. Strategize your market entry Planning and budgeting documents includes
5. Forecast your sales or demand measurement ● Long Term Plan
6. Define your marketing budget
7. Integrate your marketing communication ● Medium Term Plan/ Strategic Plan
8. Identify sales channels ● Annual Plan
9. Track marketing activities
● Budget
10. Evaluate your progress
● Procurement Plan
The above planning documents should be supported by
● attendance register (physical daily attendance)
comprehensive minutes of the BOM.
should also be reconciled regularly to the class fees
register
Income/ Revenue Collection Documents and
Parents register
Records
⮚ Shows names of the parents/guardians, their
⮚ This are documents used to acknowledge and
contact addresses and names of respective
control the revenue/ cash received by an
students.
institution.
Income/ Revenue Collection Documents and ⮚ This register should be updated on a regular
Records include: basis.
● class attendance register
Bursaries register
● Fees register Parents' register
⮚ This register provides names of students benefiting
● Rent and service charge register from bursaries and the amounts.
● Commitments' register ● The payment voucher amount is credited to the
● Telephone calls' register cashbook in the cash column and extended to
the bursary column in the cashbook before it is
● Contracts'/suppliers' register posted (Debited) to the bursaries account in the
● Textbooks' register ledger
● Imprest register ● Each beneficiary should be issued with receipts
as evidence of payment.
● Claims' register
● Money Orders' register ● All bursary awards should be in accordance
with MOE and donor guidelines.
● Fixed assets' register
● Class registers Rent and service charge register
Fees register ● Should be in institutions where teaching/non-
⮚ Provides an analysis of receipts from each teaching staff occupy institutional houses.
student. ● Delays in receipt of such rents and furniture
The following information is shown: revenue should be followed up regularly by BOM.
● Name of the student
Money order and cheques register
● Student's admission number
● All money orders received by post will be
● The class /form recorded in an in-coming cheque and money
● Fees prepaid at the beginning of the year order register.

● Fees arrears ● Contain the date of order from whom it was

received, amount, and signature of receiving
● Amount paid officer.
● The receipt number and the date against the ● A receipt should be issued showing receipt
amount paid. number, date and signature of officer Issuing
● Refund of fee receipt.
● Amount of fees paid in advance for the year to be ● Receipt books should be recorded in the
carried over to the following year. counterfoil receipt register and handed over to
the head.
● The fees outstanding as at the end of each year Commitments register (vote book)
(end of the financial year).
● Its necessary in expenditure control
● Where a student has been absent for a term and the
fees has been waived, this information should be ● This is a control register that enables the head
provided against the student's name in the register of an institution to readily verify the amount of
to avoid being reflected as a sundry debtor. money available on a particular vote-head.
 ● All orders placed should be recorded as ● The original is issued to from whom funds is
commitment in the register serially with the received, duplicate filed triplicate for audit
anticipated expenditure entered in the purposes.
appropriate column.
● The official receipt book should be pre-
● When goods/services have been received and numbered.
paid for, the register will be completed by
● The features of a receipt include date of
entries of date, PV number, the amount paid,
receipt, source of funds, cheque number,
payee and available balance.
purpose of the funds, signature for receipt of
● The reference to the register will reveal that funds (where this is received), and the amount.
some items ordered would have either not been
received or paid for. Printing of receipt books
● This, being anticipated expenditure, will have ● Receipt books is printed by institution or the
to be taken into account when determining the County Education Board (CEB) or provided by
amount of money available. MOE.
● For instance, if the approved estimates for BES
was Shs 25,000 and expenditure incurred, (paid Safekeeping of receipt books
for and reflected in the cash book and ledger) is For security reasons, receipt books whether partially or
Shs 10,000 while the order placed for goods, wholly used must be kept under lock and key
but not yet delivered amounts to Shs 7000, the Cell phone register
balance available on this will therefore be Shs ● Used to record official calls made, name of
8,000 as follows: officer or the person making the call and their
– Approved estimates. 25,000 charges.
– Less: Payments made (10,000)
– Commitments (7,000) Text book register
– Balance 8,000 ⮚ This is a register showing all books received and
issued by an Institution.
Receipt books It should clearly show the following:
● An official receipt must be issued for all sums – Date of receipt
received as income, including grants and – invoice number
bursaries – the name of suppliers
– quantity received
● Receipt counterfoil numbers are shown in the – unit Cost & Total value
cashbook against the relevant revenue entries. – quantity issued
● Official receipt issued for fees should have the – quantity Missing, if any
student's admission number and class/form Imprest register
● This is important for accountability and as ● Imprest is issued to teaching and non-teaching staff
evidence of source of revenue for a specific purpose and any payments made.
● If an error is made cancel by writing the word
Payment Documents and Records
"cancelled" across the face of the original and
the copy. ● Used to document payments and control the
expenditure incurred by an institution.
● If the original has been removed it must be
glued back so that auditors can examine it with ● Below is a table describing the various
the duplicate. documents and records, main functions and
features:
● A receipt provides evidence of receipt of funds
by an Institution.
The Cash Book
● It is used to record receipt of funds in the
● A cash book is a daily summary of receipts and
cashbook.
payments.
● The transactions should be recorded daily.
 In addition, the following records/ source documents
● The receipts should be summarized and posted
are required to support/validate a transaction:
at the end of the day.
– Cash receipt
● Only the authorized payment vouchers should – Payment voucher
be entered in the cash book. – Suppliers' invoice
● The accounting officer should check the – Payroll for non-TSC teachers and support
transactions in the cash book and sign the same staff
to confirm the correctness and completeness of – Imprest warrant
the transactions entered. – Goods Received Note/Suppliers' Delivery
Note
● The cash book should be totaled and reconciled – LPO and LSO
at the end of every month. – Invitation letters to attend conferences,
● However, cash transactions should be attendance sheet, timetable and a report of
reconciled daily. the conference

Ledgers Imprest requisition form

● Contains summary of all business accounts ● Should be filled and a payment voucher
i. Cash Book Ledgers prepared in the name of the person applying for
imprest.
● This is a monthly summary of the cash book.
● The voucher is then entered into the cashbook
● It is used to summarize the monthly and Debited into the ledger under the officers'
expenditure incurred in the respective name, in a folio for "imprests."
accounts/ vote heads.
● When the imprest holder brings back cash sales
● Each column of the cash book is summarized and receipts, vouchers are prepared charging
in a page of the ledger called folio. the votes affected by the various cash
● It summarizes both the receipts and payments sales/receipts.
made in cash and bank in respective vote ● Then a receipt voucher is prepared for the
heads. imprest-holder for the total amount of the cash
ii. Stores ledgers sales/receipts.
● Used to document the items or goods upon ● This receipt is Debited into the cashbook and
receipt and monitor their movement or use in credited to the ledger under the officer's name.
the institution.
● Any balance unspent from the imprest taken is
● There are two types of stores ledgers: also receipted and treated in the same manner
a) Permanent equipment and expendable when surrendered by the imprest holder
stores ledger:
- Used to record items that have a life span Payroll
of more than 12 months e.g. buildings,
equipment etc. ● The payroll should be used for recording salary
b) Consumable stores ledger: expense and related expenditure.
- Is used to record items that are used on a ● It is prepared monthly and is analysed to show:
day-day basis e.g. stationery, kitchen items, – Staff number and name
detergents etc. – Basic pay
– Allowances
Documents used in payment – Deductions for PAYE, NSSF, NHIF, co-
The accounting records required include: operative unions and advances
– Payment vouchers – Net pay
– Expenditure support documents (such as – Signature and ID number of payee.
receipts, BOM minutes)
– Cheque book Payroll ● The Head of the Institution MUST certify the
– Cash book payroll as correct.
● The institution should avoid cash payments to
staff and efforts should be made with banks to
 facilitate direct transfers to staff accounts for
● Internal control is expected to provide
salary payments.
assurance that institution’s objectives are
● Cheques to staff can be used where direct achieved.
salary transfer arrangements have not been
● Internal control is geared to the achievement of
made.
institution’s objectives as outlined below:
– Operations – relating to effective and
NOTE: The Finance officer should ensure that the one
efficient use of entity’s resources;
third basic rule is complied with at all times
– Financial reporting – relating to preparation
of reliable published financial statements;
Internal controls
– Compliance – relating to the entity’s
● Process effected by management to provide compliance with applicable laws and
assurance regarding the achievement of regulations;
objectives in the following categories: – Safeguarding of assets.
- Efficiency of operations, reliability of
financial reporting, compliance with Internal Control Registers
applicable laws and regulations, and
● These are registers that are used in monitoring
safeguarding of assets against unauthorized
and evaluation.
acquisition, use or disposal.
● These are used mainly to monitor the financial
transactions in the institution.
●

The table below indicates some of these registers:

Managing cash and bank accounts
The main activities in management of Cash and Bank Accounts include:
– Opening and Operating Accounts
– Receiving Money
 – Handing Over Money
– Banking Money
– Withdrawing Money
– Updating the cashbooks
– Reconciling the cash book balance with bank balance
– Operating Petty Cash system

Opening and operating institutional bank accounts.

Each institution shall open three accounts namely:
– Tuition account,
– operations account and
– Fund/main account.
● Other accounts may be opened depending on ministerial guidelines from time to time. Fewer accounts
are meant to minimize bank charges and administrative costs.
● BOM should ensure that four members of BOM are signatories to the accounts.
● For any cheque payments three members should sign it, the principal’s signature being mandatory.
● Similarly other payments affecting bank accounts should be authorized by at least three members of the
BOM with the Principal’s signature being mandatory.
● Other financiers may state their conditions on bank signatories.
● Blank cheques should NOT be signed by any of the signatories in advance of anticipated payments.
● All supporting documents must be attached to the payment voucher before it is signed.
● The Signatories should appoint an officer as an agent to represent them in the bank.

Recording receipts in the analysis cash book

● All revenue received by an institution should be recorded in the cash column of the cash book and total
column analyzed as per the respective vote-heads, e.g. grants from MOE, tuition and examination
● To reduce the number of entries in the cashbook for individual fees revenue, it is advisable to sum the
fees collections of the day and post it to the debit side of the cash column as a block figure and extend it
to the total column for analysis.
● The head of the institution shall in writing, designate a staff member (Accounts Clerk/Bursar/Finance
Officer) to be responsible for receiving and recording of incoming cash.

Handing over funds to Head teacher/Principal

At the end of each day, all monies collected handed to the head of the institution for banking while intact.

Accounting and Financial Reporting

What are financial statements?
● A summary report showing how a firm has used the funds entrusted to it by its stakeholders.
● Shows organization's financial results, financial position, and cash flows.
● They are useful for the following reasons:
– To determine the ability of an entity to generate cash, and the sources and uses of that cash.
– To determine whether an entity has the capability to pay back its debts.
– To track financial results on a trend line to spot any looming performance issues.
– To derive financial ratios from the statements that can indicate the condition of the entity.
– To investigate the details of certain business transactions.
Legal and Policy Framework for financial accounting and reporting
 ● Accounting is the comprehensive recording of financial transactions pertaining to an institution.
● Process of summarizing, analyzing and reporting transactions to oversight agencies and regulators.
● Financial statements summarize financial position of institution over a particular period of time.
● The Accounting Officers are responsible for
- Prudent management of public funds entrusted to them.
- They should put systems in place which guarantee proper use of public resources.
- maintain financial discipline
● For educational institutions, the accounting officer is the Principal/head teacher appointed by the TSC.
● BoM of a public institution is required to keep proper records of accounts of the income, expenditure
● public officer vacating an office shall not be completed until the financial and accounting records kept
by him or her have been properly handed over in writing to an officer taking over his or her duties

International Public Sector Accounts Standards (IPSAS)

● aimed at promoting transparency, effective, prudent and efficient management of revenue, expenditure,
● The National Government and County Governments use cash Basis of Accounting.
● The public schools are required to report on Cash Basis of Accounting.
Differences between cash and accrual methods finance accounting

Below are two examples to help you understand the difference between cash basis and accrual basis accounting:

(i). Example 1: Contracting services

Cash basis accounting
Accrual basis accounting

ii). Example 2: Employee gratuity payments

Cash basis accounting

Accrual basis accounting

Financial accounting cycle

•IPSAS system was adopted because of its many advantages over cash based accounting
•Implementation of institutional budgets follows the accounting cycle indicated below:

Financial responsibilities of education managers

Accounting officers are expected to:
i. enforce transparency, effective management and accountability with regard to the use of public finances;
 ii. Ensure that accounting standards are applied;
iii. The implement Government financial policies in relation to public finances;
iv. Ensure proper management and control of, and accounting for, public finances;
v. Acting as custodian of the entity‘s assets,
vi. Monitor the management of public finances and financial performance in their institutions;

Financial Reporting
● Giving management and stakeholders financial information performance over a period of time.
● A financial statements should be comparable to those statements for other entities,
● To meet that requirement, they are prepared in accordance with Accounting Principles and Standards
● Accounting disclosures are as important as the actual numbers.
● The notes to the accounts are an integral part of the accounts.
● Annual financial statements must be approved by the governing body.
● accounts of the government entities shall record transactions which take place during a financial year
● The Kenya shillings shall be the unit of account for implementing the national budgets,

School financial statements are useful for the following reasons:

i. To determine the ability of an entity to generate cash, and the sources and uses of that cash.
ii. To determine whether an entity has the capability to pay back its debts.
iii. To track financial results on a trend line to spot any looming performance issues.
iv. To derive financial ratios from the statements that can indicate the condition of the entity.
v. To investigate the details of certain business transactions.

The Principal should ensure that the following financial statements are prepared:
– The institution's trial balance
– A statement of Financial Performance (Income and Expenditure account)
– A statement of Budget Performance
– Statement of Assets and liabilities (Balance Sheet).
– Statement of cash flows

Cash Basis of Accounting

● Financial statements shall be prepared on cash basis.
● Under this accounting basis, revenue and costs are recognized as money is received or paid.
● Institutions shall maintain memorandum records containing details of Creditors, Debtors and non-
current (fixed assets) to facilitate preparation of Statement of Financial position, as appropriate.
Trial Balance
– The initial step in preparing final accounts involves extracting a Trial Balance from the general ledger.
 – Thereafter, Financial Statements can be prepared.

A trial balance is a list of balances of all accounts in the general ledger and cash and bank.
– Drawn monthly, before the preparation of Income and Expenditure Account and a balance sheet.
– The ledger accounts should also be balanced off each month
– A trial balance provides a check on the correctness of entries in accounting records, based on the basic
book-keeping principle that sources of funds should equal to the uses, (Assets = Liabilities + Owner’s
Funds).
– All items recorded on the Debit side total, equal all those recorded on the credit side of the accounts.

Preparing a trial balance

● All debit and credit balances are transferred from ledger accounts to credit and debit sides of the trial
balance.
● Post cash and bank balances as reflected in the cashbook to the
● Debit side of trial balance. The cash and bank balances must first of all be reconciled
● Cast both the debit and credit columns of the trial balance.
● Totals on both sides should be equal, but if they are not equal, then an error will have been made in
postings or casting.
● In schools when preparing the trial balance, the amounts received (income) for each vote head are
posted to credit side of the trial balance (credit balances) while amounts spent under each vote head are
debit balances.
● The closing balances of cash in hand and bank are debit balances in the trial balance.

Trial balance template

Statement of Financial Performance (Income and Expenditure Account)

● public educational institutions, this account is the equivalent of the profit and loss account.
● Income is credited and expenditure debited, and the balance represents either a surplus or deficit for the
period and it is carried forward to the balance sheet.
● Details of commitments entered into under individual sub-heads should be indicated so that expenditure
at any given time is realistic. Furthermore, approved estimates should be reflected prior to the debits and
credits.
Note:
● Cash balances should not be recorded in this account
● The Vertical Format should be adopted, in which the following ought to be reflected. Comparative
figures of the current and previous year's revenue and expenses should be indicated
● A budget execution statement for the current year should also be attached.
Income and expenditure Account

Entries to Specific Accounts

i. Tuition Account
● This account holds capitation received from the MoE under Free Day Secondary Education policy.

Income vote heads and expenditure vote heads in tuition account.

– Textbooks and reference materials
– Exercise books
– Laboratory equipment
– Internal exams
– Teaching / learning materials
– Chalks / Exams and assessment
– Teachers guides
Note: Virement of funds from vote heads in this account to other vote heads in other accounts is prohibited
ii. Operations Account
•This account holds funds received from government to subsidize the cost of running educational Institutions.
– Personnel emoluments
– Repairs, maintenance and improvements.
– Local transport and travelling
– Electricity, water and conservancy.
– Medical
– Administration costs
– Activity
– SMASSE
– Any other as approved by the MoE

iii. School Fund/Boarding/Lunch Account

⮚ This is the account that holds funds contributed by parents by way of paying school fees.
⮚ The income and expenditure items/vote heads are explained below:
a) Fees
● Fees charges may only be collected from parents based on the prevailing guidelines issued by MoE.
● However, other charges can be collected through specific authority from the Ministry of Education.
● Such authority may be granted where the grant from the Ministry is insufficient to meet approved costs.
 ● Fees contributed by parents is broken down into the following vote heads:
– Personnel emoluments
– Repairs and maintenance
– Local transport / travelling
– Electricity and water
– Medical
– Administration costs
– Activity
– SMASSE
b) Rental Income: Charges on staff occupying institutional houses for rents, furniture, electricity and water
c) PA/Development Fund: Contribution by parents for development authorised by the Ministry
d) Activity Fees: Funds collected to meet co-curricula costs such as ; music, Drama, Engineering Fair, Games,
e) Donations/Harambee Funds: contributions from donors, patrons, private sector, general public.
f) Boarding Fees: These are funds for boarding materials including furniture, beddings, and stores
g) Medical and Insurance: These are funds for group emergency cover injuries, accidents, first aid kits,

Other Receipts
These include incomes from other sources from within and outside the school.e.g.
– Income from farming activities
– Insurance compensation
– Income from Posho mill
– Income from Bus Hire
– Fee for hire of ground and equipment
– Income from grants and donations
– Interest income
The incomes may vary from school to school and therefore each type of collection should be clearly described.

Expenditure Accounts
● Personnel emoluments (PE): salaries paid to nonteaching staff who are not employed by the TSC
● Boarding Equipment and Stores (BES): payments for boarding materials e.g. beddings, foodstuffs
● Local Transport and Travelling (LT&T): payments of license, insurance, petrol, oil, spares,
● Repairs, Maintenance and Improvements (RMI): repair and maintenance of an Institution's building
● Electricity, Water and Conservancy (EW&C): water and electricity bills, running costs for generators
● Activity fees: Music, Drama, Science and Engineering Fair, Games, Activity Fund, Transport,
● Medical and Insurance: injuries, accidents, first aid kits, sanatorium/sick bay linen and medical cover
● Expenditures related to income generating activities: posho mill require costs such as electricity/fuel,
● Non- recurrent Expenditure: construction of buildings, purchase of equipment such as computers,
● These capital expenditures should be expended on cash basis and recorded in the receipts and payments
(cashbook) account while the corresponding asset will be captured in the fixed asset register

Statement of Financial Position (Balance Sheet)

● Statement that shows the financial status or position of an educational institution, as at a particular time.
● Shows values of Assets (on institution's possessions) and Liabilities (items institution is liable to pay),
● The assets and liabilities must have an identical total, i.e. they should balance.
● The surplus or deficit summary of the income and expenditure account, non-recurrent accounts balances
 ● Format of the Balance Sheet is the vertical type, with comparative figures of current and previous years.

Financial assets
These constitute cash and bank balances and accounts receivables (debtors).

Financial liabilities:
● These include account payables (creditors).
● The difference between the financial assets and liabilities will appear in the statement of assets and
liabilities as net financial assets.
● Names and signatures of the institution's Head, and BOM chairman shall appear on the balance sheet.

Property, plant and equipment.

Fixed assets will only be disclosed through the fixed assets register at historical cost.

Sundry Debtors
● Monies due to the institution e.g. fee arrears, interests that have accrued on special deposit accounts,
rents owing from institutional houses, surrendered imprests and money from other sources.
● In the course of preparing annual financial statements, the head will need to ascertain how much money
is due to the institution.
● Once this is done, it will be necessary to reflect those amounts in the final accounts for the year under
review.

Write-off of Debtors
 ● In special cases, the BOM should review the listing of sundry debtors and recommend to the Ministry
for approval to write them off.
● All write offs must be justified.

Fees Payments in Kind

● This is only allowed in exceptional circumstances.
● The BOM must control the quantity as well determine the price of the items based on the market rate.
● This includes but not limited to payment of school fees where money is not used as a mode of payment.
● Parents may bring foodstuffs such as maize, beans, milk, labour that are considered in settlement of fees.
● Should be valued and receipts issued and a payment voucher raised to account for the payment.
● The payment should be charged to Boarding, Equipment and Stores (BES).

Donations in Kind
● These include donations of assets which include vehicles, equipment or labour services.
● Their value can be determined by the donor through official communication on the value of the asset.
● This should be receipted in donation vote head and a payment voucher is prepared charging donation
vote head to pay out and recorded in the statement of receipts and payments both as revenue and as an
expense in equal and opposite amounts, otherwise the contribution is not recorded.

Sundry creditors
● These are debts incurred by an educational institution by end of the financial year in respect of services,
works or goods received for payments which will be made in the beginning of new financial year.
● Other creditors may be brought forward from previous years which should be given priority in payment.

Prepaid Fees
● This is fees paid by parents in advance by the end of the financial year.
● should be considered as part of sundry creditors and be transferred to the income statement in the
following financial year.

Undisclosed Creditors
● These are creditors who do not appear in the final account’s balances or in handing/taking over notes
during transfer of teachers which may be genuine.
● These creditors should only be paid after verification by the management.
● An adjustment may also be required to adjust the financial statements with such errors.

Contingent Liabilities
● These are events that exist at the time the financial statements are approved by the BOM, whose outcome
will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events.
● Such events may include pending court cases involving school land, employees’ salaries or
suppliers'/contractors' disputes awaiting determination
● Where there is a high possibility that a contingent liability will occur, and likely to have material financial
effects, the contingency should be disclosed by way of notes to the annual financial statements.
● There should be an explanation for a proper understanding of the likely effects in terms of:
– The nature of the contingent liability.
– The expected uncertainties likely to occur.
– A prudent estimate of the potential financial statement that it is not possible to make such an estimate.

Suspense Account
● This is a temporary account opened to record payments which cannot for the time being cannot be
accounted for, or receipts for which the institution has no adequate authority to spend.
● Each suspense account should record a specific kind of transaction and not in general.
A suspense account may be used to record the following:
– Income tax and other deductions from staff salaries, which are ultimately payable to departments such as
income tax, NHIF and NSSF
– Salary advances and salary paid in advance
– The amount of any erroneous/irregular payments, which may or may not have been disqualified by an
audit, or overpayment made or received by the institution pending investigations
– The amount of any loss of money discovered (or any recoveries) pending investigations
– When the assets do not equal the liabilities for some unknown reasons, the balance is taken to the
suspense account pending investigations. This balance, if identified, may be cleared later through a
journal entry.
– Unexplained sources of money that need to be accounted for at a later date.
– The suspense account should not be used to carry forward unspent balances from one year to another.
– The net amount of the balances in the suspense account at the end of the financial year should be
recorded in the assets and liabilities statement

Statement of Cash Flows

● A Cash Flow Statement shows how much cash is generated and used during a given time period.
● It is one of the main financial statement’s analyst’s use in building a three-statement model.

The main categories found in a cash flow statement are the;

– operating activities,
– investing activities, and
– Financing activities of an organization and are organized respectively.

● The total cash provided from or used by each of the three activities is summed to arrive at the
total change in cash for the period, which is then added to the opening cash balance to arrive at
the cash flow statement’s bottom line, the closing cash balance.

Bank reconciliation statement

● The bank reconciliation reports on the differences between the balance on the bank statement and the
balance in the institutions financial records such as cheque register, cash book, general ledger cash
account, balance sheet etc.
● The reconciliation results in the true cash balance that will appear on the balance sheet.
● Bank reconciliation statement is a report which compares the bank balance as per the institution's
accounting records with the balance stated in the bank statement.
● It is normal for an institution's bank balance as per accounting records to differ from the balance as per
bank statement due to timing differences.
 ● Due to the timing difference, omissions and errors made by the bank or the institution itself, the balances
of the bank statement and the bank account in the cash book rarely agree.
● Bank reconciliation statements can be used to explain the reasons for the differences and to identify
errors and omissions in both documents, so that corrections can be made as soon as possible.

Reasons for differences between the cash book and the bank statement
i. Uncredited items: They are deposits paid into the bank too close to the cut-off date of the bank
statement and so do not appear on the statement. They will appear on the next statement
ii. Un-presented cheque: cheques issued by the institution that have not yet been presented to its bank
for payment.
iv. Standing orders: They are standing instructions from the institution to the bank to make regular
payments.
v. Direct debits: They are payments made directly through the bank.
vi. Bank charges: They are charges made by the bank to the institution for banking services used.
vii. Dishonored cheques: cheques deposited but returned by the bank due to the failure of the drawer to
pay.
viii. Credit transfers/direct credits: They are collections from customers directly through the bank.
ix. Interest allowed by the bank: They are interest received for deposits or fixed deposits.

UNIT 4: PUBLIC PROCUREMENT

Terms commonly used in public procurement

• Pre-qualification - Identifying and shortlist tenderers that are qualified, before the invitation for tenders.
• Procuring entity - means a public entity making a procurement or asset disposal to which this Act applies
• Supplier - person who enters into a contract with a procuring entity to supply goods, works or services.
• Tender - means an offer in writing by a candidate to supply goods, services or works at a price
• User department - unit of a procuring entity that requisitions the goods, works or services being procured

Legal provisions for public procurement

1. The Constitution of Kenya 2010 Article 227
2. Public Procurement & Asset Disposal Act 2015, .
3. Public procurement and Disposal Regulations 2020
4. The National Treasury and Ministry of Education Circulars issued from time to time
5. Public Procurement Manual for Schools and Colleges,2009

Objectives of PPAD Act, 2015

By implementing the Act, public schools are expected to achieve the following;
– Enhance transparency and accountability
– Promote competition and fairness
– Maximize effectiveness efficiency
– Promote integrity and fairness of procurement procedures
– Restore public confidence in the procurement process
– Facilitate the promotion of local industries

Importance of Public Procurement

• Procurement contributes greatly to the success of the institution, depending on how well it is conducted.

The Five Rights of Purchasing (the 5Rs).

1. Right quantities,
2. The right quality,
3. At right place,
4. From the right source is timely
5. Right delivery period
Thus procurement ensures acquisition of items is done in the most cost effective.

Objectives of Public Procurement

• Guide procurement entities.
• Enhance economy through competition.
• Enhance efficiency by providing alternative methods.
• Enhance transparency through formal written procedures.
• Increase transparency, integrity and public confidence.
• Ensure full accountability through management, monitoring delivery receiving and recording of processes.
Application of PPAD act, 2015
Public education institutions are expected to apply the Act during:
– Procurement activities
– Contract management
– Disposal of stores and equipment
– Appointment of an individual to a committee, the task force (if they are payment other than for expense)
– Renting of premises and acquiring real property
Procurement Process
• The process commences with procurement planning and ends with the disposal.

The procurement process involves the following the steps:

i. Preparation of the annual budget: outlines the identified needs of an institution and allocated funds
ii. Preparation of a procurement plan: to ensure that items captured have budgetary allocations.
iii. Receiving of requisitions from user departments
iv. Preparation and issuance of tender notice/quotation to prospective suppliers
v. Receiving Quotations/Tenders: All quotations are deposited in the tender box
vi. Opening of the Tenders
vii. Evaluation of Tenders
viii. Award notification: Communicate the results of an award to the successful and unsuccessful bidders.
ix. Appeals window: Allow days for appeals before signing the contract with the successful bidders.
x. The signing of the Procurement Contract: Sign a procurement contract if no appeals are submitted.
xi. Management of Procurement Contract
xii. Receiving, Inspection and Acceptance
xiii. Asset disposal Process

Procurement planning
Procurement planning is the process of deciding;
i. What and how much to buy
ii. When and from what source
iii. The procurement method to be used
iv. The expectations to be fulfilled
• The procurement plan is an instrument for implementation of the budget
• Should be prepared by the user departments to avoid delay to realize set objectives.
• The procurement plan must be integrated into the budgeting process.
• It should be based on the indicative or approved project budget.
• The plan shows the categories of
- items to be purchased,
- the procurement method,
- The estimated value,
- the vote to be charged,
- the schedule of supplies (time frames),
- Preferences and reservations.
• NB: procurement plan is mandatory for all public institution and any state or public officer who fails to
prepare procurement and disposal plans shall be subject to internal disciplinary action.
• Any goods, services and works required in a project must be captured in the plan
Importance of procurement planning
i. Efficiency in utilization of resources
ii. Prevention poor performance….ad hoc procurement
iii. Prioritization of procurement initiatives
iv. Serves as document for future reference
v. Enhancement of transparency and accountability
vi. Prevention of poor performance in schools.
How do you develop a procurement plan?
• A bottom up approach is recommended for the procurement planning process with each department
preparing and submitting their plans to the Head of the Planning Unit.
• The Head of the Planning Unit in turn prepares a consolidated annual procurement plan (APP) for approval
by the Accounting Officer and the Board of the Procuring Entity.
• Heads of Department are required to submit signed Annual Procurement Plan to their Accounting Officer at
least thirty (30) days before the close the fiscal year.
• Procurement plans for projects may be prepared on a multi-year basis, in which case they should be
integrated into the mediumterm budgetary expenditure framework.

Components of a procurement plan

• Detailed breakdown of the goods, works, consultancies and services required;
• A schedule of the planned delivery, completion dates for all goods, and services required;
• Estimate value of goods, and services and the source of funding, if different from other packages;
• Indication of items of the services that can be aggregated for procurement as a single package;
• Procurement method; and
• The time when the goods/items are expected to be delivered to the school

Methods of public procurement

• Education institutions are expected to follow the methods stipulated in the PPAD Act, 2015.
• Development partners and funding agencies may stipulate how they expect procurement to be conducted.
• Institutions should follow such stipulations as this may determine whether they will be continued funding
• MoE may also issue circulars on how procurement for development projects should be conducted.
• In the absence of such conditions, education institutions are expected to apply the PPAD Act, 2015.
• Procurement of goods or services in public schools is the responsibility of the head teacher/principal who is
expected to appoint committees and to oversee how they perform their functions.
• Accounting officer may conduct a prequalification procedure where applicable as a basic procedure before
adopting an alternative procurement method other than open tendering.
• Pre-qualification is carried out to identify a few best qualified suppliers for the subject procurement.
• Pre-qualification is mainly done for complex and specialized goods, work and services.
• Public procuring entities are classified into three categories A, B, and C. Public schools fall under category
C.

The table below indicates the threshold matrix for different procurement methods: (Public Procurement and
disposal regulations, 2020)
Value of package (Ksh) Procurement method Comments
1- 5000 Low value procurement Purchase without competitive bidding
5001-500,000 Request for quotations 3-10 applications without a need for
national advertisement
500,000- 3,000,000 Restricted tendering -3-10 quotations
-prequalification
-No national advertisement
Over 3,000,000 Open tendering Government portal
Institution website
No limit (but conditions Direct procurement -existing projects
to be met) Monopoly -Emergencies
-Special reason accepted by BoM
 Vckage (Ksh.) Procurement method Comments
i) Low value Procurements
• used when procuring low value items that are not procured on a frequent basis and are not covered in the
framework agreement.
ii) Request for quotations
• A procuring entity may request for quotations from the register of suppliers.
• The method is used for goods, that are readily available in the market, and whose costs are within the
prescribed threshold.
• Before awarding can be done 3-10 quotations should have been received.
iii) Restricted Tendering
• Involves invitation of only a limited number of prequalified suppliers. No national advertisement is needed
e.g. insurance services are offered by a few insurance companies
• Procuring entity may use restricted tendering if any of the following conditions are satisfied:
i. Competition for a contract is limited, because of the specialized nature of the goods, works or
services is restricted to prequalified tenderers.
ii. The time and cost required to examine and evaluate a large number of tenders would be
disproportionate to the value of the goods, works or services to be procured; or
iii. If there is evidence to the effect that there are only a few known suppliers of the whole market of the
goods, works or services;

iv) Open Tender

• Open Tender method is the preferred method of procurement because of its competitive nature.
• This is a competitive procurement method that is open to all eligible suppliers of goods, works or services.
• Done through Government Tenders' Portals/website, or a notice in at least two daily newspapers
• It helps the procuring entity to get the benefits of competition.

v) Direct Procurement
• is a non-competitive method whereby only one supplier is invited to supply goods, works or services.
• A procuring entity may use direct procurement if any of the following are satisfied:
– Monopoly; e.g. supply of electricity by Kenya power
– Emergencies
 – Special reason accepted by BoM or the funding agency
Vi) Request for Proposals
• Request for proposals can be used for the procurement of services or goods which are advisory or otherwise
of predominately intellectual nature e.g. architectural, physical planning and any other design scheme,
engineering, or graphic.
• Subject to any prescribed restrictions, a procuring entity may use a request for proposals in combination
with other methods prescribed in the procurement act.
vii) Framework Agreement
• means a pact between a procuring entity (school) and a selected supplier for a definite term to supply goods
works or service whose quantities and delivery schedules are not determinable at the beginning with a
commitment to order a minimum quantity of the required goods, works, or services;
A school may enter into a Framework Agreement through open tender if—
– The procurement value is within the thresholds prescribed under Regulations to this Act;
– The required quantity of goods, works or non-consultancy services cannot be determined at the time of
entering into an agreement e.g. general maintenance, laboratory maintenance, supply of stationaries, etc.
• A minimum of seven alternative vendors is included for each category.
• The maximum term for the framework agreement shall be three years and, for agreements exceeding one
year, value for money assessment undertaken annually to determine whether the terms designated in the
framework agreement remain competitive.
• When implementing a framework agreement, a school may;
– Procure through call-offs order when necessary; or
– Invite mini-competition among persons that have entered into the framework agreement in the
respective category
vii) Design competition:
• This refers to a procurement procedure for obtaining competitive bids for services which are creative in
nature and which require that part of the services be carried as part of the bid to facilitate evaluation of the
bids.
• Such services include architecture, landscaping, engineering, urban design projects, urban and regional
planning and fine arts.
viii) Request for Proposals (RFP)
• This method shall be used for procurement of services which are intellectual or advisory in nature.
• It is therefore suitable for procurement of consultancy services.
• The institution should obtain a minimum of six (6) proposals shall be shortlisted, but where less than six
proposals have been received, a minimum of three (3) RFPs shall be shortlisted through expression of
interest procedure.
ix) Two-Stage Tendering
• Adopted due to complexity and inadequate knowledge on part of procuring entity in order to obtain the most
satisfactory solution to its procurement needs.
• In the first stage;- tenderers submit initial tenders containing their proposals without a tender price.
• In the second stage, tenderers whose tenders were retained to submit final tenders with prices with respect
to a single set of specifications and in formulating those specifications, the procuring entity may modify any
aspect, originally set forth in the tendering document.
• The final tenders shall be evaluated and compared in order to ascertain the successful tenderer.
- When developing the specifications, the procuring entity may engage experts.
Electronic Reverse Auction
• The Authority (PPRA) may in exceptional circumstances approve a system of electronic reverse auction
method of procurement for goods, works or non-consultancy services by a procuring entity.
• However there are conditions for one to use Reverse Auctions.
• For an accounting officer of a procuring entity to be qualified to use the reverse auction method it shall
possess the following;
– Procurement portal
– Appropriate secure software with electronic procurement capabilities and functionalities approved by
the Authority.
• The prices of bidders within the prescribed time shall be visible to other bidders without revealing the
bidder's identity and the prequalified supplier shall not revise its bid upwards within the prescribed time.
• Subject to the reserve price set by the procuring entity, the successful bid shall be the bid with lowest price
at the bid submission deadline.

Public procurement structures

• Public procurement and Asset disposal is regulated by three main bodies;-
- National Treasury
- Public Procurement Regulatory Authority
- Public Procurement Review Board
The National Treasury
• The National Treasury is responsible for policy formulation on the public procurement and asset disposal.
• In the performance of this role, the National Treasury does the following:
a) Provides technical assistance to operation of the public procurement and asset disposal system.
b) Carries out review of procurement and supply chain management system to assist procuring entities
c) Facilitates affirmative action for disadvantaged groups in accordance with the Constitution.
d) Issues guidelines to public entities with respect to procurement matters
e) Performs such other functions as prescribed by this Act or any other legislation

Public Procurement Regulatory Authority (PPRA)

• This body replaced the Public Procurement Oversight Authority
The Function of the PPRA includes:
a) Monitoring, public procurement and asset disposal system to ensure that they respect the national values
b) Assisting in the implementation and operation of public procurement system by:
– Preparing and distributing standard documents to be used in connection with procurement.
– Providing advice and assistance to procuring entities upon request
– Training and professional development of persons involved in procurement.
– Issue procuring entities procurement proceeding and the dissemination of information on procurement.
– Ensuring that procuring entities engage procurement professionals in their procurement units
– Advising the Cabinet Secretary on international public procurement and asset disposal standards
– Developing a code of ethics to be followed when undertaking public procurement and disposal.

The functions of The Public Procurement Review Board

• Reviewing
• Hearing
• Determining tendering and asset disposal disputes
Public procurement Structures at the institutional level
• at the institutional level the responsibilities of officers involved in public procurement and structures that
should be established to ensure that public procurement is conducted according to the law,

The Accounting Officer

• The Accounting officer refers to a person with authority to incur expenditure.
The responsibilities of the principal include the following:
i. Ensuring that the procurement of goods, and services are within approved budget.
ii. Constituting all procurement and asset disposal committees in accordance with the Act.
iii. Ensuring that procurement plans are prepared and implemented effectively.
iv. Signing contracts for on behalf of institution and is responsible for contracts entered in.
v. Ensuring that procuring entity properly documents procurement proceedings and manages records.
vi. Ensuring that staff, Board, procurement committee and suppliers comply with the Act.

User Department
• The department that requires the goods, services or works in order for it to undertake its operational duties.
Responsibilities User Department:
i. Initiating procurement and disposal requirements and forwarding them to the procurement unit.
ii. Prepare specification for goods and services required and submitting them to the procurement unit.
iii. Participating in the evaluation of tenders, proposals and quotations.
iv. Forwarding details of any required variation of contract to the procurement unit for actions.
 v. Maintaining and archiving records of contract management

Functions of a Procuring Unit/Department in public educational institutions

i. Preparing, publishing and distributing procurement opportunities e.g. invitation to tender.
ii. Coordinating the receiving and opening of tender documents.
iii. Maintaining and safeguarding procurement and disposal documents and records
iv. Preparing any reports required for submission to the procurement committee/officer.
v. Inspection of goods, services to determine conformity with the specifications in the contract.
vi. Reporting any departure from the terms and conditions of the contract to procurement unit
vii. Making clarification on tender requirements for quotations and any other as it is required.
viii. Ensuring the issuance of goods, works& services received notes
ix. Assisting in the preparation of procurement and disposal plans
x. Submitting shortlists and lists of pre-qualified tenderers for approval.
xi. Issuance of procurement and disposal documents to candidates,
xii. Proposing the membership of the evaluation committee to accounting officer for approval.
xiii. Coordinating the evaluation of tenders, quotations and proposals.
xiv. Preparing and publishing notices of award and notices of tender acceptance.
xv. Preparing contract documents in line with award decision
xvi. Preparing and issuance of rejection and debriefing letters
xvii. Preparing contract variations and modifications to documents.
xviii. Recommending a negotiating team for appointment by accounting officer.
xix. Maintaining and archiving document and records of the procurement and disposal activities.
xx. Providing information as required for any petition or investigation under the review procedures.
xxi. Implementing the decision of the tender committees coordinating all activities of these committees.
xxii. Acting as a secretariat to the tender and disposal committee.
xxiii. Monitoring contract management by the user departments to ensure implementation of contracts in
accordance to terms and conditions of the contract.
xxiv. Reporting any departures from the terms and conditions of the contract to the accounting officer.
xxv. Preparing consolidated procurement plans
xxvi. Coordinating internal monitoring and evaluation of the supply chain function
xxvii. Carrying out market surveys to inform the placing of orders by the award committees.
xxviii. Approving the extension of the tenders’ validity period
xxix. Verifying stock levels before the initiation of the procurement process.

Procurement Committees under PPAD Act, 2015

a) The Tender Opening committee
• accounting officer shall appoint a tender opening committee specifically for the procurement in accordance
with the following requirements:
• The committee shall have at least three members; and
• At least one member shall not be directly involved in the evaluation of tenders.
Functions of the Tender Opening Committee
i. Check of the received quotations to ensure that they comply with conditions pre-set in request form.
ii. Preparing a list of all tender applications received and opened
iii. Preparing a list of all qualified applications
iv. Preparing a list of all disqualified applications
b) Tender Evaluation committee
• the accounting officer shall appoint an committee from within the members of staff, with relevant expertise.
• The committee shall comprise of 3-5 members appointed by the accounting officer on rotational basis
comprising of user department and two other departments or their representatives.
• The functions of the Tender Evaluation Committee are;
i. Assess the technical and financial aspects of bids
ii. Negotiations on the quoted prices with the bidder
iii. Assess proposals for prequalification, registration lists and expression of interest
iv. Any other role assigned to it.
c) Inspection and Acceptance Committee
• Its membership comprises of:
• Chairperson
• At least two others appointed by the principal upon recommendation by Procurement Unit
Functions of the Committee
i. Inspection of the goods received to ensure compliance with the specifications of the contract.
ii. Acceptance or rejection of delivered goods or works on behalf of the institution
iii. Determination of value for money. (Quality, Quantity, Timeliness,
iv. Proper documentation/manuals.
d) Asset Disposal Committee
The accounting officer is expected to establish a disposal committee in writing comprised of five members as
follows:
– Chairman- a member appointed by the principal
– Two heads of departments
– Officer in charge of stores
– Accountant/finance officer
The functions of the disposal committee are:
i. Disposal of unserviceable asset
ii. Disposal of obsolete asset
iii. Disposal of obsolescent assets
iv. Disposal of surplus stores
v. Verification of all disposal recommendations.
vi. Recommend the best disposal method to the accounting officer

Regulations governing public procurement

i. Split tenders: No procuring entity may structure procurement as two or more procurements for the
purpose of avoiding the use of a procurement procedure.
ii. Inflated tenders: Standard goods, with known market prices shall be procured at real market price.
iii. Qualifications to be awarded contract: only to person satisfies the criteria in the procurement
iv. Pre-qualification procedures: To identify qualified persons a procuring entity may use the results of a
pre-qualification procedure used by another public entity.
v. Limitation on contracts with employees: a procuring entity shall not enter into a contract for
procurement with an employee, member of board, committee of the procuring entity; or a public servant.
vi. Specific requirements: The procuring entity shall prepare specific requirements of goods, being
procured that are clear, correct and complete to allow for fair and open competition.
vii. Verification that one is not debarred: A tender, proposal or quotation submitted by a person shall
include a statement verifying that the person is not debarred from participating in procurement
viii. Termination of procurement proceedings: terminate proceedings without entering into a contract.
ix. Written communication: all communications shall be in writing.
x. Participation in procurement: Candidates shall participate in procurement without discrimination
xi. Corrupt/fraud: No person, agent or employee shall be involved in any corrupt practice or fraud
xii. Procurement Records: records for each procurement activity to be kept for at least six years.
xiii. Contracts: The Authority shall publish notices of the contracts awarded by procuring entities.
xiv. Amendments to contracts: is effective only if the amendment has been approved in writing by the
tender committee of the procuring entity.
xv. Interest on overdue amounts: Unless the contract provides otherwise, the procuring entity shall pay
interest on the overdue amounts in accordance with prevailing commercial bank rates
xvi. Inspections and audits relating to contracts: inspected by the Director-General, or audited by the
Controller and Auditor-General.
Stores Management
What are stores?
These are all movable property purchased from public.
What is storekeeping?
physical storage of materials carried into the storeroom in a scientific and systematic manner with a view of
safeguarding them from damages or losses.
Types of stores:
a. Consumable stores: These are stores that whose nature changes in use or are Such items shall include
stationery, foodstuff, drugs, fuel etc.
b. Permanent stores: These are items which have a long life span and also are expensive. For our purpose,
permanent items will refer to items with a value of Ksh. 5,000 and an expected life of 2 years.
c. Expendable stores: items which cannot be classified as permanent or consumable shall be placed in a
class of their own i.e. expendable items include tools, cutlery, bulbs, tube lights, rulers, staplers, lamps
etc. This category of stores does not need to be controlled from the stores and therefore there is no
permanent record for them in the stores.

Separate categories of stores

a. Administrative and stationery supplies: This includes office and computer supplies such as paper,
pens, toner, printer cartridges, notebooks, and CDs. Such stores may be kept in locked facilities within
the offices and do not require separate warehouse facilities.
b. Shelf life store items: These are characterized by an expiry date less than five years beyond which the
item cannot be used. These would include such items as drugs and medical supplies and chemicals
c. Durable store items: These items do not have expiry dates such as spare parts and equipment
consumables.
d. Foodstuff and other sensitive perishables: These items should be stored in a separate facility which
are clean and do not permit contamination from chemicals and other toxic pollutants.
e. Fuel and lubricants: These items should only be stored in special storage facilities approved
specifically for fuel and lubricants and should be subject to the highest standards of safety and protection
against environmental damage.
f. Assets such as stores of a capital nature: These include items such as plant, machinery, vehicles,
office and house furniture and equipment, books etc

Store managers
• As an education manager, you should be familiar with the roles of various stores managers in your
institution.
• This will help you to supervise them effectively.
• We shall discuss the roles of the head of procurement unit, head of stores and the storekeeper.
Role of the head of procurement unit:
The head of procurement unit shall ensure:
i. An officer is appointed to be in charge of stores.
ii. All stores purchased are actually received and taken on charge,
iii. arrange for occasional visits of inspection to the stores, at least twice in each calendar year, by himself
or by a representative in order to ensure that Storekeepers carry out their duties
iv. That stores are not allowed to suffer deterioration from any preventable cause,
v. That overstocking of any particular item is avoided,
 vi. That adequate fire-fighting appliances as approved by the relevant fire authority are installed in the store
premises, are maintained in good working order and are readily available for emergencies, and that
watchmen and staff are instructed in their use.

Role of head of stores:

The head of stores shall ensure:
i. All stores purchased are actually received and taken on charge
ii. Occasional visits of inspection to the stores
iii. Stores are not allowed to suffer deterioration from any preventable cause
iv. Overstocking is avoided,
v. Adequate fire-fighting appliances
vi. Security arranged
vii. Separate explosive and inflammable stores
viii. Ensure FIFO (First In First Out) is applied when issuing stores
ix. Keep tally cards

Inventory Management
how inventory management is undertaken.
(a). Re-order level
• Managing inventory involves ensuring that stock levels are sufficient to allow institution operations to
run normally.
• When dealing with consumable stores for example, the storekeeper must not wait for complete stock-
outs to start re-order process.
• There are established models that are available to manage inventories.
• One of the models that are easy to use is the re-order level (ROL) system.
• Under this system, the decision to re-order will be triggered when the level of physical stock plus
inventory already on order fall below an established re-order level.
• The re-order level is calculated by adding the best estimate of demand to cover the lead time duration to
safety stock quantity.
• Reorder Level System calculation is achieved by: ROL = (Rd X L) + S
Where:
– Rd = Rate of demand/usage (per day/per week) – this refers to for example how many kilograms of
beans are used per week
– L= lead time (in days/week) – This is the time it takes between the time an order is made to when the
goods are received
– S = safety level of stock – this refers to the minimum amount of items that stock must not fall below.
Other models that are used are include; Economic Order Quantity (EOQ) and Periodic Review Systems.

Effective stock control

For the purpose of effective stock control, the following must be carefully considered.
a) Stock Control: This is maintenance of stocks at the appropriate levels to satisfy customer requirements at
the minimum costs.
b) Lead Time: This is the length of time from the notification of nonavailability of an item to the time the
item is purchased and is in the store.
c) Reserve (Buffer Stock): Extra stocks for critical items to take care of increased demand or lengthened lead
time. It is calculated and specially approved.
d) Dues-in: These are orders which have been placed but the deliveries have not been made.
e) Dues-out: These are items which have been requisitioned for but cannot be issued because there are no
stocks in the store or any other reason.
f) Re-order level: This is the quantity of stock for a particular item when action to place a new order is taken.
g) Minimum stock level: This is the quantity of stock below which stocks should not be allowed to fall
before a new delivery is received to replenish the stocks.
h) Maximum stock level: This is the highest quantity of stock which is expected to be achieved when a new
delivery for replenishment of stocks is received.
 i) Provisioning period: This is the duration to be considered to be covered by the new order to be placed. It
shall be arrived at taking into considering the average monthly issue rate (MIR) and lead time.
j) Contingency reserves: These are special extra stocks which may be authorized from time to time to meet
such unexpected calamities as epidemics, draughts, floods and other natural disasters and specific
situations of the procuring entity.
Deletion of Stock
• Stocks of slow-moving items which are not otherwise determined to be eligible for stocking should be
eliminated through normal attrition and should not be replenished.
The successive actions indicated should be taken, as necessary to remove stocks of inactive items from
inventory through:
a) Transfer stock to other users where needed within the public entity.
b) Normal disposal as surplus stocks.
Annual Stock taking and verification of stocks
• A procuring entity should carry out annual stocktaking of the stores, equipment and property; and should
submit the annual stocktaking reports to the PPOA upon request.
• Stock taking shall be conducted by independent staff and not the stores officers.
• A procuring entity should carry out stock verification, as a continuous exercise.
• Stock taking will be undertaken annually by appointed independent stock takers.
• The duty of the Stock takers will be to make a physical check of the stores and to compare them with the
ledger balances and record to the position.
• The Stock takers will prepare the Report, and any surpluses or deficiencies should be documented.
• The storekeeper concerned will sign the form indicating his acceptance of the surpluses or deficiencies.
• The Stock taking Report will be forwarded to the Head of Procuring Entity.
• The Head of Procuring Entity should reply to the observations of the Stock taker the soonest possible.

Stores records
• It is not possible to manage stores without records. Any officer receiving store items should have access
to relevant sores documents such as a copy of the Local Purchase Order,
• Delivery note, Invoice or purchase receipts.
• The aim of this process is to ensure that the institution receives stores of the right quantity and quality as
was expected.
• Once the storekeeper is satisfied with everything he/she should stamp the documents that the store items
have been received in good order and condition.
• Once the officer has verified the quality and the quantity he/she must record the store items in a stores
ledger
• A Stores Ledger is used for recording receipts and issuance of store items.
• The ledgers will be opened according to the nature of store items - permanent, expendable or consumable.
• Each department charged with receiving and storage must have stores ledger for accountability.
• Once the store items have been received and recorded, they should be issued to users when the need arises.
• Each user requesting to be issued with items must have written authority from the relevant section head.
• Such authority could be in form of requisition form which should be retained and filled by the stores in
charge.

The following instructions for keeping stores • Electronic records shall be managed in a
records should be observed: similar manner.
• The headings or descriptions of articles will Safeguarding stores
be arranged alphabetically or numerically as • Safeguarding stores is the best insurance for
appropriate. Except where self indexing any organization that wants to ensure that
ledger cards or loose-leaf sheets are used the wants to ensure that its success levels are
ledger will be indexed so as to permit ready sustained.
reference to any particular article in the • This is applies to education institutions. In
store. this section, we focus on the management
• At the top of each column of the ledger, or and care of Government vehicles and
folio if there will be a separate one for each machinery, temporary removal and missing
article, the unit of quantity will be shown as property and safety and security of stores.
well as the maximum and minimum (a). Management and care of motor vehicles and
permissible stock, and the stores will be equipment:
taken on charge and issued in that unit, or Government vehicles and machinery should be:
recognizable fractions of that unit. 1. Properly maintained and repaired,
• Receipts and issues should be recorded in 2. Driven only by authorized employees,
the ledger on the day of their receipt or 3. Used only for authorized trips and
issue. 4. Parked in safe places and protected against
• When not in use the ledgers should be kept theft and loss; and
under lock and key in a safe place. 5. Properly licensed and insured at all times if
• The Stores Ledgers must be closed and required.
balanced on the last day of each fiscal year 6. Not be used for private use, waste, abuse
and whenever a survey or handing over and neglect
takes place. The following documents should be maintained for
Government vehicles and machinery:
 i. Work ticket recording the route of each • Such precautions should include but not be
vehicle or a machinery recording book limited to:
ii. Monthly cost sheet that records the fuel, i. Ordering periodic fumigation where
lubricants and maintenance costs; and and when necessary;
iii. Log book which shall include catalogue ii. Ordering periodic firefighting drills;
of tools, spare parts and movable iii. Ensuring that water is stored
equipment. exclusively for the use of
Temporary removal and missing property firefighting;
• Public property may be temporarily iv. Ensuring the availability and regular
removed from the public entity‘s premises servicing of firefighting equipment.
with written permission from the appropriate v. Ensuring that all windows and doors
• Department Head, when it is integral to a are securely locked when the Stores
person‘s role for which they have been hired are not being manned
or aids them in accomplishing their primary vi. Ensuring availability of protective
mission. gear for staff.
• When there is a unique or special task or Layout and organization of stores facilities
circumstance, outside of a person‘s regular • Stores facilities should be organized for easy
duties, and it is determined that the access to the storage and retrieval of items.
temporary removal of property will advance • The layout should facilitate the
official programs or activities, written implementation of a simple item location
permission may be granted by the system to properly record the identification,
appropriate Head of the User Department. description and location of all stored items.
• Permission should include a description of • The Stores facilities should accommodate
the equipment, condition, any serial number, bin card holders next to each item bin.
and the property tag number with a copy • The Stores facilities should be ventilated,
kept on file by the department. well lit and free of all obstructions.
• The person or official representative of the • The following should also be noted on
entity to which the property is temporarily storage facilities.
assigned must utilize the property for a) Some items do not need to be stocked and in
Government- related business or activities, such circumstances, they are operated under
and agree to assume responsibility for the Just in Time procedures (JIT).
property during the time it is removed. b) The citing of the store must be convenient
• Furthermore, the person or entity to which and not prone to flooding
property is assigned, specifically for a task, or c) The design of the stores should be prepared
peripherally in their role, may be liable for any taking into consideration he type of stores,
losses, damage or destruction, or impairment of quantities and handling equipment to be
function or useful life of the equipment that may used in the stores.. Preferably, the stores
result due to negligence or carelessness. facilities should be considered when a
• If property is discovered missing, an immediate building is being designed.
request should be made of the Internal Auditor d) The facilities should be well lit and
to have the loss investigated. ventilated.
• A check must be made to see if there is e) The doors and windows should be
insurance coverage for the loss. preferably be burglar proof and lockable for
• A note that the property is missing should be security.
inserted into the asset register and a copy of the f) Large stores facilities should be secured
police report kept on file. with a perimeter wall or fence. And guarded
• Appropriate action should then be taken in g) Appropriate stores handling equipment
accordance with the procedure for handling should be provided
losses in Public Financial Management. h) Offices should also be made available for
Safety and Security of Stores: the stores staff with the facilities.
• The Head of the Procuring Entity should ensure i) Cleanliness of the facilities should be
that all the necessary safety, precautions and observed.
security is provided during storage and UNIT 5 RISK MANAGEMENT
transportation of goods.
Introduction to risk management
• Every organization has to live with risks.
● Quick grasp of new opportunities
• Managing risks well is therefore a vital element
of good governance and management. ● Enhancing communication between
departments
What is a risk? ● Reassuring stakeholders
• This is a threat or possibility that an action or
event will adversely or beneficially affect an ● Reduced costs by limiting legal action
organization‘s ability to achieve its objectives. ● Improved reliability leading to an enhanced
• Risk regarding the possibility of loss can be reputation
especially problematic.
• If a loss is certain to occur it may be planned for ● Helping focus internal audit program
in advance and treated as a definite, known ● Robust contingency planning
expense. Types of risks:
• When there is uncertainty about the occurrence There are 3 types of risks
of a loss, risk becomes an important problem. i. Internal risks: These are risks linked to the
internal environment, e.g. operational risks
Risk landscape in running a project or activity. These risks
• Risks are expressed in terms of causes and will largely be within the sphere of influence
effects. of the organization, and need to be
• If the organizational risks are poorly managed proactively managed.
there will be consequences in terms of integrity, ii. External risks: These are risks linked to the
performance etc. external environment, e.g. political risks
• The causes of risk must therefore be understood associated with the organization. These risks
so that solutions to these issues can be will largely be outside the sphere of
identified. influence of the organization and may
• The effects of risk must also be understood so require robust contingency planning; and
that the best possible contingency plan is iii. Internal and External risk interface:
developed. These are risks linked to the interface
between one or more organizations (internal
Risk Management and external risks). Managing these risks
• This is the systematic process of managing an requires close cooperation with
organization‘s risk exposure to achieve stakeholders.
objectives in a manner consistent with public Internal risks
interest, human safety, environmental factors, Strategic, programmatic
and the law. Operational Operations/business process
• It is a proactive attempt to recognize and Management and information
manage internal events and external threats that Organizational/general administration
affect the likelihood of an institution‘s success. Human capital/people risks, integrity
• Risk management focuses on the following Information technology
issues: Financial
– What can go wrong (risk event) Internal and External risks interface
– How to minimize the risk event‘s impact Relationships and partnerships
(consequences) External risks
– What can be done before an event occurs Political Economic
(anticipation) Socio-cultural
– What to do when an event occurs Technological
(contingency plans) Legal or regulatory
Benefits of risk management Environmental and
● Supporting strategic and business planning Security
● Supporting effective use of resources Stages of risk management
● Promoting continuous improvement ● There are four major stages in risk
● Fewer shocks and unwelcome surprises management.
 The following are the steps that will guide you as
● These include risk identification, risk
you develop a Risk Assessment Plan for your
analyses, risk response development, risk
institution.
response control.
– Define a Risk Framework
1. Risk identification:-Generate a list of
– Identify the risks
possible risks through brainstorming,
– Identify probable risk owners
problem identification and risk profiling
– Evaluate the risks
2. Risk analyses:-Risk analysis includes
– Set acceptable levels of risk
analyzing the risk and measuring frequency,
– Identify suitable responses to risk
severity and impact.
– Implement responses
3. Risk response development: After
– Gain assurances about effectiveness
analyzing the risk then decide how the risk
– Embed and review
will be controlled.
a) Mitigating Risk: Reducing the likelihood
i. Define a risk framework: When initiating a
an adverse event will occur. Reducing
risk management program the first stage is
impact of adverse event.
to set a framework that takes into account:
b) Avoiding Risk: Changing the project plan
context, objectives, constraints, techniques
to eliminate the risk or condition.
to be used, policies and any legal or
c) Transferring Risk: Paying a premium to
compliance requirements.
pass the risk to another party. Requiring
ii. Identify the risks: This is where the range
Build-Own-Operate-Transfer (BOOT)
of risks that may affect a particular new
provisions.
activity, existing operational activity or
d) Retaining Risk: Making a conscious
project is listed. A risk is any event that
decision to accept the risk.
could prevent the project from progressing
Risk response control: This involves risk control
as planned, or from successful completion.
and establishing a change management system.
iii. Identify probable risk owners and a risk
● Risk control: This involves execution of the coordinator: The responsibility for
risk response strategy, monitoring of managing risk is shared amongst all the
triggering events, initiating contingency stakeholders of the program. However,
plans and watching for new risks. authority should be sought for implementing
mitigation strategies that have cost
● Establishing a change management
system: This involves monitoring, tracking, implications.
and reporting risk, fostering an open iv. Evaluate the risks: Risk assessment is the
organization environment, repeating risk act of determining the probability that a risk
identification/assessment exercises and will occur and the impact that event would
assigning and documenting responsibility have, should it occur. This is basically a
for managing risk. ―cause and effect‖ analysis.
The probability that the risk will occur can
Risk Assessment Plan
A Risk Assessment Plan is a critical ingredient in be measured using the following template:
risk management.
Activities in the institution Frequent Likely Occasional Seldom Seldom
1
2
3
4
5
6

The impact of risk can be measured using the following template:

Activities in the Insignificant Minor Moderate Moderate Moderate
institution
Set acceptable levels of risks:
● The overall level of risk or 'exposure' that an organization or part of an organization is prepared to
tolerate needs to be determined.
● This level may be different for different risks and the level may change depending on circumstances.
● Once determined, risk thresholds provide triggers for action, changes in monitoring regime and can help
determine what information is escalated to senior management.
● The thresholds are determined in the same way as the risks, using the impact and likelihood scales.
● Although each risk should have a threshold a global threshold also assists in monitoring the risk
severity. Where a risk score increases and passes the global threshold action is triggered.
● The global threshold currently applied is 15/25.
● Using the scales above these are the risks that are 'High' and 'Very High' and they should be closely
monitored.

Identify suitable responses to risk:

● During this stage a range of practical responses to each significant risk should be identified. There is
likely to be a number of responses (controls) in each case.
● There is a range of responses (controls) to a risk:
● Reduce - taking action to reduce either the probability of the risk crystallizing further, or its impact.
● Accept - when the probability and impact are low and it would be too expensive to mitigate a risk.
● Transfer - transferring the risk to a third party, e.g. insurance.
● Terminate - identifying actions to eliminate the risk such as withdrawing from the activity.
● Contingency - having a plan of action to be implemented when a risk crystallizes further or passes
through a risk threshold or goes beyond the global threshold.
● Prevent - identifying measures to prevent a risk having an impact on an organization.

Implement responses:
● During this stage the most appropriate responses to each risk must be selected and implemented.
● The risks that have been prioritized and the most serious risks should be dealt with first.
● The responses to be implemented should be those that bring the most serious risks below the risk
tolerance thresholds determined earlier (both individual and global thresholds).
● Once implemented the responses (controls) should be monitored to see if there are any knock-on effects
on other activities and amended as necessary.
Gain assurances about effectiveness:
● In this section the risks responses implemented above are assessed for effectiveness, that is, are the
controls keeping the risk within the agreed tolerance levels?
● The risk owners should determine this through their own monitoring.
● A risk-based internal audit program can provide further assurance on effectiveness as can external
auditing.
● If the total risk score has increased it would indicate further controls may be necessary or, if the risk is
outside the school‘s control and deemed too risky, withdrawal from the activity altogether.
● If the total risk score has reduced, a relaxation of control may be required in order to prevent any loss of
opportunity.
Embed and review:
● The risk management arrangements should be reviewed on an annual basis.
● The report should assess the risk management culture, its processes, its effectiveness and suggestions for
improvement or development.
Credit risk management
● Now that you have been introduced to the concept of risk management, you are ready to focus on credit
risk management.
● Managing credit risk is a challenge in many institutions.
● Below are terms related to credit risk management:

Credit: Credit occurs when you provide services or goods to another person without them paying for them
immediately.
Debt: Debt, on the other hand, occurs when you get services or good without paying for them.
Credit risk: The potential for loss due to failure of a debtor to meet his/her contractual obligation to repay a
debt in accordance with the agreed terms. It is the potential loss due to the nonperformance of a financial
contract, or financial aspects of nonperformance in any contract.
● Bankruptcy or insolvency: In this case the legal entity is dissolved having been declared bankrupt or
insolvent by a commercial court
● Failure to pay: The legal entity is not able or does not make the contractual payment
● Government action: Any action(s) by a government or an agency of government that results in
outstanding claims becoming unenforceable
● Moratorium on debts: The legal entity declares a standstill on its existing debts and interest payments
● Obligation acceleration: A contractual obligation becomes payable before its due maturity due to
default by the legal entity. This is similar to, but not identical to, cross default since it refers to a direct
obligation with an affected party, whereas cross default refers to a third party.
● Obligation default: An event of default has occurred in the legal entity‘s obligations.
● Repudiation: The legal entity disaffirms or disclaims its debts.
Assessing credit risk
- This requires you to determine the probability of the other party defaulting fully or partially.
- Based on this assessment you can thereafter decide to either extend credit or refuse credit.

Methods of evaluate credit risk:

i. Judgmental methods: Apply your experience of the case to the decision to extend or refuse credit
ii. Expert systems: Uses a panel approach to judge the case or formalizes judgmental decisions
iii. Analytic models: Use a set of analytic methods, usually on quantitative data, to derive a decision.
iv. Statistical models Use statistical inference to derive appropriate relationships for decision making.
v. Behavioral models: Observe behavior over time to reaching a decision.
vi. Market models: Rely on informational of financial market prices as indicators of financial solvency

Controlling credit risk

● A key issue for credit risk management is in controlling risk.
The following are the various approaches that are used to control credit risk:
– Loss Given Default
– Covenants and monitoring
– Diversification
– Risk pricing
– Loss provisioning
 i. Managing the Loss Given Default
● This is managing amount of loss if a default should take place, known as the loss given default (LGD).
● Done by ensuring the party being given credit provides a security such as collateral against the default.
● Using collateral means in the event of default, the lender can sell the collateral to recover the debt.
ii. Covenants and monitoring
● A covenant is a requirement imposed on the other party, and agreed to under the terms of a contract.
e.g. - the other party is requested to bring a guarantor to guarantee the party.
- asking the other party to use liquid assets orworking capital as a guarantee for credit.

Activity
According to the Basic Education Act (2013) Section 18, the Board of Management (BOM) is allowed to take a
loan and make proper provision for the payment of the loan, interest and other charges as per the terms and
conditions of the loan or order of the Cabinet Secretary.
Discuss the risks that education institutions face as they acquire loans and how these risks could be managed.

iii. Diversification
● Diversification allows the credit grantor to spread its risk.
● For instance, a school that allows different parents dependent on the same source of income such as
agriculture to access education on credit has undiversified risk.
● If these farmers experience hard times, it will affect their ability to pay the school fee arrears.
iv. Risk pricing
● Credit risk could be controlled by taking into account expected losses in transactions.
● For instance, education institutions that engage in income generating activities must ensure that the
goods or services they offer are inclusive of administration fees, establishment costs, the institution‘s
desired profit and other costs of being in business.
Loss provisioning:
● This method requires you to make a provision against expected losses.
● This provision is a mechanism used to recognize in a timely fashion impending losses on troubled credit.
● Meaning that institution has acknowledged and accepted that a certain proportion of credits will default.
● This means that the institution would need to have a reserve for expected bad debts.
● When institution finds that it is impossible to collect a debt that debt should be written off as a bad debt.
● A provision for bad and doubtful debts may be made if there will be problems in recovering a debt.

Age analysis of credit:

- This is simply a list of the persons who owe money, showing the total amount owed and the period
of time for which the money has been owed.
- The age analysis of creditors can be used to help decide what action should be taken about debts that
have been outstanding for longer than the specified credit period.

Why Credit policy manual

- to formalize its decision processes regarding the day-to-day management of credit decisions and the
resultant collection challenges when accounts are slow to pay, or fail to pay amounts when due.

Mission Policies
Responsibilities Goals
i. Mission: provides a summary of the overall objectives of the credit risk management process
ii. Goals: These include the goals of the credit management process.
 iii. Responsibilities: This includes the responsibilities of staff involved in credit risk management.
iv. Credit management policies: policies and processes that govern the credit management process.
v. Additional Policies: for issues such as compliance and the law regarding lending and credit.
Government debt management system
Functions of the Public Debt Management Office:
The functions of the Public Debt Management Office shall include—
i. Carrying out the government's debt management policy of minimizing its financing cost.
ii. Maintaining a reliable debt data base for all loans taken by the national government.
iii. Prepare the annual medium-term debt management strategy and debt sustainability analysis;
iv. implement the national government borrowing plan international practices benchmarked to the debt
management offices of including servicing of outstanding debts;
v. Acting as the principal in the issuance of government debt securities on behalf of national treasury;
vi. Monitor debt-related transactions to ensure they are within the guidelines.
vii. Process the issuance of loan guarantees and management of risks in national government guarantees;
viii. Transact in financial instruments in accordance with best of other governments

Role of Cabinet Secretary in Public Debt Management Office:

The Cabinet Secretary/ National Treasury is required to:
i. Develop the policy and financial framework in accordance with Constitutional principles within
which the Public Debt Management Office operates;
ii. Delegate to the Head of the Public Debt Management Office the operational decisions on borrowing
and debt management and the day-to- day management of the Office;
iii. Ensure that the Public Debt Management Office has the resources and skills to manage the debt and
borrowing according to international best practices for liability management; and
iv. Be accountable to Parliament for the work of the Public Debt Management Office.

Auditing
⮚ This is an independent examination of financial records of a reporting entity by an auditor in pursuance
to appointment and compliance to any relevant statutory obligation.
Audit Documents: books of accounts and financial statements to the Schools Audit Units should be submitted
by the 31st January of the ensuing year.
Internal auditors individual companies investigates the effectiveness of company operations for management.
● Independent auditors are certified either by a professional organization or government agency.
● Auditor qualification criteria: auditor should have professional, people skills and personal attributes.
● Evidential matter: This is any information that corroborates or refutes an assertion

Auditing serves the following functions:

i. Good governance: mechanisms for accountability with regard to the finances and assets of the entity;
ii. Internal control: strengthening internal control mechanisms for achievement of the strategic objectives
iii. Asset management: Verifying the existence of assets and ensuring they are proper safeguarded
iv. Good practices: ensure policies and procedures and good business practices are followed
v. Decision making: Evaluating the adequacy and reliability of information for making decisions

Types of auditing
i. Internal auditing
- To ensure regular and frequent checking on an institutions financial transactions and records.
- Serves to check whether all financial transactions have taken place according to budget,
- Promote efficiency in the institution's financial control and management.
ii. External auditing
- Conducted by an external auditor who gives report on the financial performance of the institution.
- To establish the truth and fairness of the accounts.
- It gives added credibility to unaudited financial statements and records of the institutions.
Phases of the auditing process – Discuss action taken by since the previous
1. Opening meeting audit
2. Execution of audit – Explain/reiterate purpose of audit
3. Auditors meeting – Explain/reiterate audit procedures
4. Closing meeting – Avail all staff members for the audit
Opening meeting: inspection
– Instruct officers to surrender books and
● Introduction of members and observers and
properties under their care for inspection as
recording of those present
and when required
● Confirm objectives, scope, basis, reasons – Instruct all officers to respond to audit
and benefits of the audit observations
● Review audit plan Hold exit conference with audit team for
findings
● Explanation of the audit method and – Offer explanations for errors/offences
documentation to be used – Agree audit recommendations plan with
● Explain the tasks of the accompanying audit team
auditee‘s representatives [Link] audit Stage:
• Request for draft report before release
● Confirm method of communication • Respond to final report within statutory period
● Confirm availability of facilities (30 days)
Common audit queries
● Explain closing meeting/format – Misappropriation of funds
● Issue of confidentiality are discussed – Embezzlement of funds
Execution of audit – Misapplication of funds
– Non-acquittal of payment vouchers
● Must be done according to timetable – Un-presented /missing payment vouchers
● Only factual questions are asked – Incomplete programs
– Unused funds
● Answers are verified through observation – Mis-procurement
● Audit trail is followed. – Deficiencies in store records
Auditors’ meeting – Undue retention of withholding tax
– Personnel/payroll irregularities
⮚ Compilation of findings/observations – Refusal/failure to payback staff advances
⮚ Recording of non-conformities
Responding to audit queries
⮚ Preparation of summary report You are required to respond to auditors queries
⮚ Formation of opinion to be presented at within a required timeframe.
closing meeting Below are suggestions on how you can respond to
Closing meeting audit queries effectively:
– Introductions and recording of attendance – Set up a committee to study the report
– Principles of sampling followed during the – Tease out relevant sections for
audit are mentioned concerned/technical staff to respond
– Audit observations are presented (positive, – Collate and comprehend responses from
general observations and nonconformities) concerned/technical staff
– Corrective actions and corrective action – Committee to review draft responses
dates discussed – Responses/explanations should be relevant
– Agree on follow-up date Valid, complete and accurate
– Close meeting – Responses/explanations should be supported
Role of management in the auditing process by relevant source documents
i. Pre-audit Stage: – Reply submitted to auditors within the
- Liaise with auditors for management‘s specified timeframe
concerns and expectations to be – File copies of report
addressed by the audit
ii. On-site audit Stage: Auditor’s opinion
– Meet audit team for entrance conference:
 – This is a statement recorded in an auditor's carrying out its activities and their capacities
report by the external auditor. and potential for performing them.
What is human resource management?
Types of auditor's opinion • involves getting the right number and kind
i. Unqualified opinion: The of workforce for organizational performance
auditor has no material as well as developing, motivating and
reservations regarding the utilizing them for improved performance.
financial statements as a whole. • It is about creating and implementing an
ii. Qualified opinion: The auditor enabling framework for staff to improve
is satisfied that the financial performance.
statements present a fair and • This is making the most productive use of
accurate picture of the institution human resource to the greatest benefits of
and comply with generally the organization and individuals.
accepted accounting principles. What is human resource planning?
A qualified opinion contains • The aim of human resource planning is to
exceptions, which may include gain insight in the number and type of
the scope of the audit. personnel needed in the short and long term,
iii. Adverse opinion: The auditor taking into account developments in the
has accumulated enough labor market.
evidence to indicate that the • Drafting a human resource plan requires
financial statements, as a whole, comprehensive data about the workforce.
are not fairly presented. • To that end, personnel information should
iv. Disclaimer (denial) of opinion: be up-todate.
The auditor is unable to form an • HR planning is carried out in five steps:
opinion on the financial i. Forecasting labor demand - requirements
statements as a whole due to a ii. Forecasting labor supply – availabilities
scope limitation. iii. Conduct environmental scans – by
tracking trends and developments in the
UNIT 6: HUMAN RESOURCE external environment
MANAGEMENT iv. Determine employment gaps by
Human resource planning comparing projections
v. Developing action plans to address the
⮚ Human resource implies both the number of
gaps
people employed in the organization for

What is succession planning

• Process for identifying and developing internal workforce with the potential to fill key leadership
positions in your organization.
 • It increases the availability of experienced and capable employees that are prepared to assume these
roles as they become available.
• Effective succession management concerns itself with building a series of feeder groups up and down
the entire leadership progression.
• Instead of waiting until the employee will be leaving, start planning now.
Document the policies: Succession planning is being able to effectively and promptly re-fill a position,
- Be sure all key positions are defined well, and then find out the best person to fill the position.
Management responsibility: The best succession planning results from a working partnership between
management and employees to accurately define the employee‘s role and current priorities.
Quality: Quality in managing succession plans depends on the quality of employees.
- Ensures the organization will get an employee who successfully fills the position for the long-term.

Recruitment and selection

Recruitment: attracting individuals with the right skills and at appropriate times to apply for open positions
within the organization.
- The alternatives to recruitment;-outsourcing, part-time employees, paying overtime to existing staff.
Selection: choosing suitable candidates through recruitment process.
Selection can be done using various tests such as:
• Interviews
• Cognitive aptitude tests which measure reasoning, vocabulary, verbal and numeric skills.
• Job knowledge tests which measure knowledge regarding a particular job.
• Work sample tests which allow candidates to demonstrate how they would work on the job.
• Psychomotor abilities tests which assess the skill level of tasks required on the job.
• Personality tests which assess traits and personal characteristics.
• Vocational tests which identify occupations in which the candidate is most interested.
• Honesty and integrity tests which try to measure a candidate‘s truthfulness.

Steps in the recruitment and selection process

Defining the vacancy

⮚ Focusing on the job requirements: job analysis to understand why a need is felt to hire a candidate.
⮚ Drafting a job description: training, setting Key Result Areas, evaluation, and performance review.
⮚ Searching process decide on whether the position will be filled internally or externally
(i). Methods of recruitment: Recruitment of suitable candidates to vacant positions can be done from both
inside (internal environment) and outside the organization (outside the environment).
Internal environment: Recruitment from within can be done through promotion.

Pros and cons of internal recruitmentA dvantages atages

Advantages Disadvantages
Promotion as a reward for good work. Must fill the position vacated by the
promoted employee.
Motivational tool for other employees. Lack of new ideas and creativity that may
come from a new person
Lack of new ideas and creativity that may Jealousy from those not promoted.
come from a new person.
External environment: The external environment is governed by labor market conditions.
- When the economy is strong, there is difficulty in hiring. Conversely,
- When the economy is weak, there are too many applicants.
(ii). Advertising:
• Utilize accurate platforms like newspaper advertisements, recruitment websites, job forums, job fairs,
POSITION ANNOUNCEMENT
• Title and agency affiliation
• Salary range
• Description of duties and
• responsibilities
• Minimum qualifications
• Special conditions
• Application procedures
• Equal opportunity employment
• Classification
• Career potential
• Special benefits
• Tme and place of applications
(3). Selection procedures
i. Initial screening and selection process: by comparing the CV of the candidate with the job
description. You can also conduct aptitude and psychometric tests on the candidates
ii. Sorting applications and short listing candidates: Based on their CV, results of the tests along
with personal and professional information form
iii. Reference: get the references mentioned by the candidates verified from an external agency.
iv. Selecting candidates and making an offer: make an offer based on the industry standards and
experience of the candidate. Negotiate the salary till you reach the median which will be in the best
interest of the institution and the candidate.
(4). Employment induction
i. Onboarding and induction: get the newcomer acquainted with the resources, information, culture,
facilities, and benefits of the organization.
- Effective employee onboarding also makes a new employee feel welcome and comfortable.
ii. Assistance and evaluation: a mentor system where an existing employee introduces the new
employee to others and helps him/her to get acquainted with the organizational culture.
- Offer your assistance and encourage him/her to ask questions in case of a query.

What is motivation?
• This is the intensity of a person‘s desire to engage in an activity.
- Motivation is concerned with WHY people do (or refrain from doing) things.
• A motive is a need or a driving force within a person.
- Process of motivation involves choosing between alternative forms of action in order to achieve
some desired end or goal.

Motiv es or neeelected
Types of motivation
(i). Intrinsic motivation: driven by an interest or enjoyment in the task itself, and exists within the individual
(ii). Extrinsic motivation: performance of activity in order to attain an outcome from outside of the individual.

The traditional “carrot and stick”‖ idea is still used in the workplace – the “carrot” often being money and
the “stick” being fear.
- Note that basic need for money will only make a worker turn up and do the acceptable minimum.
- Money is a motivator if it is used for commissions and bonuses or as positive incentives such as
welfare amenities, holidays etc.
- Use of fear is an outdated method of motivation.
- Fear instills short term motivation but in the long-term it demotivates the workers.
Models of motivation
i. Needs models: Hierarchy of needs and the Motivationhygiene theory
ii. Behavioral models: Theory X and Theory Y
iii. Process models: Equity theory

Abraham Maslow’s - Hierarchy of needs

- suggests that behavior of individuals at a particular moment is usually determined by their strongest need.
i. Physiological: the need for food, drink, shelter, and relief from pain.
ii. Safety and security: the need for freedom from threat; the security from threatening events or surroundings.
iii. Belongingness, social, and love: the need for friendship, affiliation, interaction, and love.
iv. Esteem: the need for self-esteem and for respect from others.
v. Self-actualization: the need to fulfill oneself by maximizing the use of abilities, skills, and potential.
⮚ People are motivated first to satisfy the lower-order needs and then the higher-order needs.

Fredrick Herzberg’s - Motivation-hygiene theory

⮚ Intrinsic factors are related to job satisfaction while extrinsic factors are associated with dissatisfaction.
⮚ hygiene factors;-company policy, supervision, interpersonal relations, working conditions, and salary
a) Hygiene factors are needed to ensure an employee does not become dissatisfied. They do not lead to higher
levels of motivation, but without them there is dissatisfaction.
b) Motivation factors are needed in order to motivate an employee into higher performance. These factors
result from internal generators in employees.
Douglas McGregor’s - Theory X and Theory Y of motivation.
• In the X theory, management assumes employees are inherently lazy and will avoid work if they can and
that they inherently dislike work.
- Thus workers need to be closely supervised and comprehensive systems of controls developed.
• In the Y theory, management assumes employees may be ambitious and self-motivated and exercise self-
control.
- It is believed that employees enjoy their mental and physical work duties.
- Have ability to solve problems, but their talents are underused in most organizations.
- Theory Y managers likely than Theory X managers to develop the climate of trust with employees
Elliot Jacques’ - Equity theory
• Employees compare their efforts and rewards with those of others in similar work situations.
• Equity exists when employees perceive that the ratios of their inputs (efforts) to their outcomes
(rewards) are equivalent to the ratios of other similar employees.
• Inequity exists when these ratios are not equivalent.

Application of motivation theoriesotivatio

Focuscus
Motivation model focus Focus
Hierarchy of needs Motivate by providing staff their strongest needs.
Motivate by providing Be hygienic: By focusing on implementing institutional policies, effective
staff their strongest supervision and interpersonal relations, provision of good working
needs. conditions and salaries so that staff are not dissatisfied.
Be motivational: By focusing on enhancing achievement, recognition, job
enrichment, career growth, and added responsibilities to achieve motivation.
Theory X and Be more of a Theory Y manager than a Theory X manager by seeing your
theory Y staff as ambitious and self-motivated and exercising self-control.
Equity theory Be a fair manager by treating your staff equitably including the way you
reward them.

Problems of people at work

 (i). Alienation: The individual feels that he is surrounded by obstacles that prevent him from making progress.
(ii). Anomie: state of mind which arises in the individual from unsatisfactory work situations.
(iii). Status: Social status refers to the amount of respect paid to an individual e.g. salary, title of job, dress,
(iv). Stress: strain experienced by an individual over time which impairs the ability to perform his role.
.
Performance Management System (PMS)
• This is a systematic Process for getting better results from an organization, teams and individuals by
managing performance within an agreed framework of planned goals, objectives and standards.
- Allows for maximization of the performance of employees and institutions.
- provides employees understanding of job expectations; regular feedback about performance;
- Advice for improvement; rewards for good performance; and sanctions for poor performance.
- Measure employee performance and achievement of intended results for the organization.

Performance Appraisal System

• To maximize performance, you need to know how to appraise their performance of employees.
Performance appraisal:
• assessing someone‘s work accomplishments during a specified period of time and providing feedback.
- Founded on work planning, setting of agreed performance targets, feedback and reporting.
- Ensure appraisals are only used for performance management, and must be free from any biases.
• employee performance can also be appraised by customers, peers, self, subordinates etc

Objectives of performance appraisal:

• Manage and improve performance by enabling staff participation in planning, delivery and evaluation of
work performance.
Other objectives include:
i. Link individual performance with organizational performance
ii. Enable supervisors and appraisees to continuously assess work together.
iii. Assess the training and development needs of staff on a timely basis
iv. Promote accountability
v. Promote communication and encourage continuous feedback between appraise and supervisor.
vi. Set the basis on which officers‘performance is monitored and evaluated
vii. Improve the quality of work through better planning.
viii. Provide information for decision making on administrative and human resource issues.
Performance appraisal process:

i. Performance appraisal planning:

• Planning takes place by, or shortly after, the beginning of the performance appraisal period.
• At that time, you should meet with your employee to discuss the duties of the job and the performance
expectations/requirements and specific goals/targets.
ii. Performance monitoring and coaching:
• This is an ongoing process throughout the appraisal period.
• As the supervisor, you are expected to regularly keep track of job performance.
• You need to let the employee know how he/she is doing through periodic performance discussions.
• These discussions promote two-way communication and may be done anytime during the rating period.
• discussions to let the employee know his/her strengths and/or areas needing improvement.
• Base your discussions on the employee's job performance
iii. Completion of the performance appraisal:
• This is the last phase.
• It comes at the end of the rating period.
• This is when you evaluate the employee's performance for the entire rating period and must by
completing the appraisal forms and conducting the performance appraisal meeting with the employee.

Performance appraisal systems will only flourish in an organization where there is:
i. Personal growth culture: Where there is a culture for personal growth and corporate development,
ii. Team work and creativity: clarity of mission, innovation, growth and empowerment
iii. Integral part of organization: be consistent with internal practices and procedures.
iv. Commitment: needs to be supported and both parties can put their trust.
v. Ownership: Everyone in the institution must be fully aware of their roles

Why performance appraisal systems fail

Role of the manager in the Performance Appraisal System (PAS):

– Setting objectives
– Discussing expectations and performance standards
– Identifying goals
– Providing feedback
– Evaluating results
The following discussion tips could be useful in your appraisal discussions:
• Clearly state the purpose of the meeting and explain the process
• Tell the staff member what may come out of meeting, including future assignments,
• Help the staff member feel at ease and receptive
• Avoid criticism of personality or personal traits
• Use listening skills to separate facts from opinions
• Conclude with a summary of the main points of the discussion
• Inform staff member of the option to respond to the appraisal
• Have employee sign the form, or set a mutually agreeable date for signing the final form

Employee Remuneration and benefits

 • Compensation programme is an important human resource management function.
• Use it as a tool for effective management of Human Resources to achieve organizational objectives.
• Develop policies on salaries and benefits to employees for deriving commitment to the organization.
• They also reward superior performances with incentives and bonus payments.
• Reward employees with recreational benefits;- sport facilities, social clubs, flexible in working hours.
• When employee compensation issues are effectively handled and in line with market competitiveness,
employees are motivated and works towards achievement of institutional goals.

Training and development

definition of terms used in training and development:
i. Development: preparing for change in the form of new jobs, new responsibilities/requirements.
ii. Employee development: formal education, job experiences, to help employees prepare for the
future of their careers.
iii. Training: planned effort to facilitate employees‘learning of job-related competencies.
iv. Training and development: continuous effort to improve employee competency and performance.
v. Learning organization: continuous performance-related training and development

Importance of training and development

• Jobs and technology changes
• New staff needs special training
• Promoted staff requires new skills
• Training and Development increases staff motivation and retention
• It increases staff efficiency
• It improves employee career prospects and;
• Staff become multi-skilled and can do more interesting jobs.
The training and development process
Training/evelopme

a. Training and development needs assessment: This is undertaken to determine the training and
development needs of employees through methods such as:
– Interviews
– Questionnaires
– Performance appraisal or review
b. Establish objectives: These are the desired end results of the program. They must be clear and concise
objectives.

c. Methods of training includes:-

• Induction Training: new recruits are familiarized with the organizations, departmental activities
• On-the-job Training: Efforts made to increase knowledge sharing between senior and junior staff,
• Coaching: Involves regular reviews of an employee's progress.
• Off-the-job Training: Off-the-job Training: training done when not at the workplace.e.g.
– Day release
– Distance learning/Evening classes
– Block release
– Sandwich courses
– Sponsored courses
 – Self-study
d. Implementing the program: This implies change.
- Qualified trainers must be available and they must understand the institutions objectives.
e. Evaluation: seeks to determine whether the objectives have been accomplished.

Stress management
• Stress at work is a relatively new phenomenon of modern lifestyles.
• Professional stress or job stress poses a threat to physical health.
What is stress?
• Stress is the body‘s automatic response to any physical or mental demand placed on it.
• stress is any outside force or event that has an effect on our body or mind.
• Stress is the reaction people have to excessive pressures or other types of demand placed upon them.
• It arises when they worry that they can‘t cope. It is the ―wear and tear‖ our minds and bodies
experience as we attempt to cope with our continually changing environment
Is stress good or bad?
• Too little stress: This may result in boredom.
• Moderate stress: Moderate levels of stress may actually improve performance and efficiency.
• Too much stress: This may cause an unproductive anxiety level.

Symptoms of stress:
– Physical – headache, back pain, fatigue, aches and pains
– Mental: difficulty concentrating, increased errors, poor decision making
Causes of workplace stress:
i. Job Insecurity: Reorganizations, takeovers, mergers, downsizing and other changes
ii. High demand for performance: Unrealistic expectations, on the employee,
iii. Technology:expansion of technology has increased expectations for productivity, speed and efficiency,
iv. Workplace Culture: Adjusting to new institution various aspects of workplace communication patterns,
v. Personal and family problems: people with issues take personal problems to their workplace.
vi. Gender related stress: Employees may suffer from mental, physical, Sexual harassment in

Negative effects of stress:

(i) Physical effects of stress include:
– Weight gain/loss
– Unexpected hair loss
– Heart palpitations
– High blood pressure
(ii) Emotional effects of stress include:
– Mood swings
– Anxiety
– Can lead to depression
– Can also lead to unhealthy coping strategies (i.e. alcohol, drugs, etc.)

How to reduce work related stress:

(i) Recognize what is stressing employees. gather information on what exactly is pushing the buttons
(ii) Know what employees are thinking. Thoughts that influence their feelings and behavior.
(iii) Relaxation strategies. Relaxation can help one to rest and recuperate – regenerating batteries
- You can sensitize employees on the following:
• Sitting straight and comfortably, and trying breathing exercises. This will relax nerves and muscles.
• Relaxing and counting backwards (20, 19, 18, 17, 16, 15….)
• Avoiding giving in to alcohol, smoking and other substance abuse while under constant stress.
(iv) Time management. Procrastination could also be avoided if tasks are prioritized.
(v) Developing positive attitude. Encourage employees to give up negative mental traits;- fear, anger

Work Life Balance and stress management

• Ability to stay productive at work while maintaining a happy, healthy home life with sufficient leisure.
 • Prioritizing between "work“ (career and ambition) and "lifestyle" (health, pleasure, leisure, family).
• Work life balance can be achieved through self-management, time management, stress management,
technology management and leisure management as discussed below:
- Self-management entails personal discipline that ensures one gets proper sleep, exercise and
nutrition. Time management is a function of self management.
- Technology management is the ability to manage technology so that it is not abused or overused.
- Leisure management – Employees need to take time off to relax however complicated you career is.

The following tips may help you achieve work-life balance:

• Don‘t overbook your appointments.
• Prioritize ruthlessly
• Learn how to say no diplomatically.
• Organize yourself effectively.
• Use technology…but don‘t overdo it
• Know it won‘t always be perfect

Retirement and stress management

• Some people determine who they are by their titles: Education officer, Quality Assurance and Standards
Officer, principal, head teacher, deputy principal, deputy head teacher etc.
• After retirement, they are afraid they will not be relevant. All these fears often cause stress for those that
are about to retire.
• While working, retirement can therefore seem like an upcoming burden rather than a distant paradise.

Financial guidelines to minimize the negative effects of stress associated with retirement;-
• Start saving on the first day of your employment: Make savings for your retirement a priority.
• Estimate your financial needs upon retirement: you will need about 70 percent of your preretirement
income to maintain your standard of living when you stop working.
• Contribute to your employer’s retirement plan: e.g. civil service scheme, or NSSF
• Consider basic investment principles: Know how your savings or pension plan is invested.
• Put money into an individual retirement account; you can contribute more if you are 50 or older.
• Attend retirement seminars organized by your employer: You will learn of various options available

Emotional wellbeing guidelines:

• Having satisfying relationships
• Ensure mind / body fitness
• Staying young at heart
• Get involved in charity work
• Visualize who you want to become
• Gradually implement lifestyle changes
• Share your new plans and goals with family, colleagues, and friends
• Use your emotional intelligence: by recognizing it takes conscious effort, time, and perseverance to evolve

Employee discipline
- One of the major roles education managers should play is maintaining discipline in the workplace.
Definition of terms
(i). Misconduct: This is deliberate violation of employment expectations, failure to follow rules and regulations
(ii). Discipline: This is a tool used to maintain an effective, efficient, and orderly workplace.
Disciplinary offences:
(i). Immoral behavior, including but not restricted to —
• Sexual intercourse
• Sodomy
• Lesbianism and
• Sexual harassment or flirtation
(ii). Professional misconduct including but not restricted to-
• Negligence of duty
• Lateness to duty
• Chronic absenteeism
• Desertion
• Incitement and
• Insubordination
(iii). Infamous conduct including but not restricted to-
• Drunkenness
• Fighting
• Conduct or behavior which contradicts the spirit and tenor of Chapter six of the Constitution
• Forgery
• Mismanagement and embezzlement of public funds
Disciplinary action by employer:
• Teachers who violate the provisions of the Code of Regulations for Teachers and the TSC Code of Conduct
and Ethics will face disciplinary action which may include warning or interdiction.
• The Teacher Service Commission (TSC), after interdicting a teacher, may take the following disciplinary
actions against a registered teacher—
– Issue a warning letter
– Surcharge
– Suspend for such period not exceeding six months
– Cancel a registration certificate and remove the name of the teacher from the register
– Retire in the public interest
– Dismiss
– Terminate services
– Undertake any other lawful action as it may consider appropriate
Disciplinary action at school level:
• The school head may initially issue a verbal warning or caution the teacher in writing on minor breaches.
• In case of persistent misbehavior, the teacher may be required to “show cause‘” why disciplinary action
should not be taken against him/her. From the teacher‘s response, the head of institution may serve the teacher
with a warning or present the case before the agent.
• The school head is required to:
– Investigate and assemble relevant evidence.
– Invite the accused teacher in writing to defend himself/herself against specified allegation.
– Call witnesses to give evidence in the presence of the accused teacher.
– Allow the teacher to cross-examine each witness.
– In case of desertion where teacher‘s whereabouts is unknown, the agent will interdict without any delay.
– After the preliminary hearing the agent may reach any of the following decisions;
– No case to answer.
– Warn the teacher administratively.
– Interdict the teacher.
Note it!
Interdiction: An interdicted teacher should write a defense statement within 21 days from the date of
interdiction and provide contact address. A case will normally be heard within three months after interdiction.
In case of delay the teacher is advised to make enquiries. Teachers interdicted on cases of incitement,
insubordination, infamous conduct and negligence of duty will be paid half salary during the period of
interdiction
Common errors in discipline enforcement
• Allowing problems to continue
• Failure to communicate rules and requirements (awareness)
• Inconsistent enforcement
• Transferring the problem
• Incomplete investigation / facts
• Inconsistent penalties
• Trying to ―go it alone
Industrial Relations
• In this section, we shall look at the role of industrial relations and attractive working environment in
enhancing employee productivity. Industrial relations has become one of the most delicate and complex
problems of modern industrial society.
• It is in the interest of all to create and maintain good relations b
What are Industrial Relations?
• This is the relationship between the employer and employee within the organizational settings.
• It is meant to enhance the welfare and to safeguard the interests of both the employer and employees.
• In this relationship, trade unions play a vital role that normally leads to collective bargain in line with the
existing labor laws.

Legal and Institutional Framework on Industrial relations

(i). The Labor Relations Act (2007): The labor relations act represents the main legal foundation for
collective bargaining and labor relations
- Promote employment relations and labor peace in the country.
- encourages the parties to engage in good faith bargaining
- Reaffirms, the role of the Industrial Court in approval of collective bargaining agreements.
(ii). The Employment Act No 1 of 2007: This law seeks to discourage the possible recourse to a typical forms
of employment.
- It provides that casual workers cannot be in this type of employment for more than 30 days of continuous
employment. The Act converts “casual”employment‖ to “term contract
- extends the maternity leave period to 3 months, and recognizes two weeks‘ paternity leave
- Prohibits workplace discrimination on grounds of HIV harmonizes the provisions on child labor.
- The law raises the age of a child from 16 to 18 years.
- provides for an insurance benefit scheme for employees who suffer redundancy,
- safeguarding workers‘dues in the event of an employer‘s insolvency.
(iii) The Labor Institutions Act No 12 of 2007: This law creates a number of important bodies for the
effective functioning of the labor market.
- National Labor Board that seeks to strengthen tri-partism, review on general labor relations, strikes and
lockouts;
- The law reaffirms the Wages Councils system which is the foundation for minimum wage.
- It provides for a reinvigorated Industrial Court, with enhanced respect.
- The court has powers, to arrest and conviction of a disobedient party.
(iv) The Work Injury Benefits Act No 13 of 2007: This law provides for payment of injury benefits
depending on the severity and/or length of disability.
- Related to this is Occupational Safety and Health Act, seeks to secure safety and health for workers
- The law prohibits employment of children under the age of 18 years, where their safety is at risk.
- Promotes safety culture in workplaces, through training in occupational safety and health.
- Encourages entrepreneurs to set achievable safety targets for their enterprises,
.
Industrial Disputes
• Conflict of opinion between management and workers on the terms of employment.
What are some causes of industrial disputes?
⮚ economic causes ; issues relating to wages, bonus, allowances, and conditions for work, working hours,
⮚ Non-economic; victimization, ill treatment, politics, indiscipline, Non-implementation of agreements,

Effects of Industrial Disputes:

• Stoppage of production, increase in cost of production since fixed expenses continue to be incurred.
• Lead to a fall in sales and the rate of turnover, leading to a fall in profits.
• Employer may be liable to compensate his customers with whom he may contracted for regular supply.
• Loss of prestige, alienation of the labor force, psychological and social consequences may also arise.
• Destruction of property, personal injury and physical intimidation or inconvenience also arises.
• Loss of income leads to great hardship may be caused to the worker and his family.
• Employees also suffer from personal injury if they indulge into strikes and picketing
• Psychological and physical consequences of forced idleness.
 • The threat of loss of employment in case of failure to settle the dispute

Resolution of Disputes:
• In the event of an industrial dispute, conciliation, adjudication or arbitration may be used to resolve.

The role of Trade Unions

- Securing benefits including maintaining and improving the conditions of their working lives.
- They also protect the economic, political and social interests of their members.
- It regulates the relations between employees and employers or between employee and employee,
- Imposing restrictive condition on the conduct of any business, and includes two or more trade unions.
- A union may even engage in political activity where legislation affects their members.

Some of the unions in the education service industry include:

• Kenya National Union of Teachers (KNUT)
• Kenya Union of Post Primary Teachers (KUPPET)
• University Academic Staff Union (UASU)
• Kenya Union of Domestic Hotel and Educational Institutions,
• Hospitals and Allied Workers (KUDHEIHA)
• Public Service Trade Unions of Kenya (PUSETU)
• The Central Organization of Trade Unions (COTU)
Functions of trade unions
Trade unions perform a number of functions to achieve their objectives:-
• Achieving higher wages and better working conditions
• Raising the status of workers as a part of industry
• Protecting employees against victimization and injustice
• Trying to foster a spirit of cooperation and promote friendly industrial relations
• Welfare measures for improving the morale of workers and generate self confidence among them.
• They also arrange for legal assistance to its members, if necessary.
• undertake many welfare measures for their members, e.g., school for the education of children,
• Some trade unions even undertake publication of some magazine or journal.
Staff welfare
• Maintaining safe work environment and staff motivation are critical issues for every workplace.

Employee’s welfare objectives include;

• Improvement of employees’ loyalty and morale
• Labor turnover and absenteeism reduction.
• Goodwill and public image of the enterprise improvement.
• Helps to improve industrial relations and industrial peace
• Improves employee productivity
Role of Management in Employee Welfare
• Institutions provide welfare facilities to their employees to keep their motivation levels high.
The employee welfare schemes can be classified into two categories namely;
⮚ Statutory e.g. PAYE, NHIF,
⮚ Non-statutory. e.g. SACCO deductions among others.
Personnel Records
• All organizations collect data relating to their employees;- pay levels, sickness absence, hours worked.
• These records are often referred to as HR records and can be stored in hardcopy or electronically.
• It is important to keep the information organized so that it complies with legislation easily retrieved.
• A filing system should be used to ensure that all the necessary data in available in an individual’s file.
• Due the confidential nature of information they are stored securely in lockable cabins.

UNIT 7: PROJECT MANAGEMENT

Project:
•This is a series of tasks directed towards a specific outcome/goal.
•It is a set of activities which must be implemented in a logical sequence in order to achieve a well-defined
objective which usually addresses the needs of an institution.

Project management:
⮚ This is the process of combining systems, techniques, and knowledge to complete a project within
established goals of time, budget and scope.

Project scheduling:
- Involves splitting the project into tasks and estimate the time and resources required to complete each task.
- It involves organizing tasks concurrently to make optimal use of the workforce.

Project milestone:
•This is a predictable state where a formal report of progress is presented to management.

Project plan:
•The project plan sets out the resources available to the project, the work breakdown and schedule for the work.

Factors that affect project management

⮚ Most projects have a specific time limit, budget, and scope.
⮚ Combination of elements (time, money, and scope) that are referred the triple constraints of a project.
⮚ If you adjust any one side of the triangle, the other two sides are affected.
For example, if you decide to adjust the project plan to:
– Reduce the scheduled time - you might end up with increased costs and a decreased scope.
– Reduce the project budget - the result might be a longer schedule and a decreased scope.
– Increase scope - your project might take more time and cost more money in the form of resources, such
as workers.
Factors influencing success of a project:
(i). Controlling
– Having a documented change management in place
– Holding regular and frequent meetings
– Avoiding scope creep
– Taking regular measurements of performance

(ii). Leading
● Ensuring the support of senior management
● Obtaining customer involvement
● Maintaining realistic expectations
● Encouraging and sustaining a sense of owner ship by all participants
● Having commitment and cooperation of all participants.

(iii). Defining
● Dividing the project into manageable pieces
● Keeping the scope well defined
● Having a clear definition of requirements
● Focusing on customer/client
● Having a clear mission and objectives
(iv). Planning
– Focusing evenly on technical and business issues
– Developing meaningful plans
– Having more frequent project milestones
– Having shorter flow time

(v). Closure
Releasing people correctly to minimize impact on morale and performance.

Activity
•Describe one project in your institution that has been completed.
•Identify the key elements in the success of this project

Project management cycle

i. Programming:
⮚ Identifying problems, constraints and opportunities which the project could address.
⮚ The purpose is to identify and agree on the main objectives and priorities for the project.
ii. Identification:
⮚ In this phase, ideas for projects are identified and screened for further study.
To identify what a project will focus on, we need to find out who should benefit and what their needs are.
● A ―needs assessment‖ will give an overview of the institutions problems.
● A ―capacity assessment‖ will help identify which problem the project should address.
● This involves consultation with the intended beneficiaries of each action, an analysis of the problems
they face, and the identification of options to address these problems.
iii. Formulation:
● In the formulation phase relevant project ideas are developed into operational project plans.
● Beneficiaries and other stakeholders participate in the detailed specification of the project idea that is
then assessed for
- feasibility (whether it is likely to succeed) and
- Sustainability (whether it is likely to generate long-term benefits for the beneficiaries).
● On the basis of this assessment, a decision is made on whether to draw up a formal project proposal and
seek funding for the project.
[Link]:
● The financing phase requires for project proposals to be examined by the funding agency and a decision
is taken on whether to fund the project.
● The funding agency agrees on the modalities of implementation and formalizes these in a legal
document which sets out the arrangements by which the project will be funded and implemented.
[Link]:
● During this phase, the project is mobilized and executed.
● This may require the tendering and award of contracts for technical assistance or works and supplies.
● During implementation, and in consultation with beneficiaries and stakeholders, project management
assesses actual progress against planned progress to determine whether the project is on track towards
achieving its objectives.
[Link]:
● Evaluation should be carried out at or after project completion.
● The funding agency assesses the project to identify what has been achieved, and to identify lessons that
have been learned.
● Evaluation findings are used to improve the design of future projects or programs.
[Link] handover, closure and review:
● The last major phase of a project's life cycle is the close-out.
● This involves formally terminating and concluding all tasks, activities, and component parts of a
particular project, or phase of a project.
● involves the transfer, acceptance, and approval of the final deliverables to the assigning party, or, in the
event the activity did not end up taking place, initiating and completing the cancellation process.

Activity
Discuss how each phase of project management might impact on the success of a project.

Principles of Project Cycle Management (PCM)

i. Adherence to the phases of the project cycle to ensure a well-informed decision-making process.
ii. Client orientation formulation of the Project Purpose in terms of sustainable benefits to be
delivered to beneficiaries.
iii. Incorporation of aspects of sustainability into project design to ensure sustainable benefits.
iv. Use of the Logical Framework Approach to ensure a consistent analytical approach to project
design and management.
v. An integrated approach which links the objectives of each project into the objectives of the
institution and education at a national level.
PCM Planning and Management Tools:
In this section we will focus on two project planning tools: Logical framework approach (log frame) and the
Gantt chart.

(i). Logical Framework Approach (LFA):

– This is an effective technique for enabling stakeholders to identify and analyze problems and to define
objectives and activities which should be
– Undertaken to resolve these problems.
– Using the log frame structure, planners test the design of a proposed project to ensure its relevance,
feasibility and sustainability.
– In addition to its role during program and project preparation, the LFA is also a key management tool
during implementation and evaluation.
– It provides the basis for the preparation of action plans and the development of a monitoring system, and
a framework for evaluation. Below is a log frame matrix:

[Project Name] LOGFRAME

objectives indicators Means of verification Assumptions
Goal 1
Outcome 1
Output 1.1
Output 1.2
Output 1.3
Activities may often be included Inputs/ resources Inputs/ resources
in separate document (activity
schedule) for practical purposes
Gantt chart
– This is a graphical representation of a Project that shows each task as a horizontal bar whose length is
proportional to its time for completion.
– A Gantt chart is a horizontal bar chart that illustrates a Project schedule.
– In the Gantt chart time is displayed on the horizontal axis and the tasks/ activities are arranged vertically
from top to bottom, in order of their start dates.
– A detailed Gantt chart for a large project might be quite complex and hard to understand.
– To simplify the chart Project manager can combine related activities into one Task.

Below is an example of a Gantt chart template.

Task Persons YEAR Cost
Responsible Quarter 1 Quarter 2 Quarter 3 Quarter 4 (Kshs)
Task 1
Task 2
Task 3

Practical project management

– In order to practically engage in project management you need to first of all get started (initiation),
define your project, plan your delivery and finally close down the project.
– We‘ll examine these steps one by one in details:

A. Getting Started – Initiation

1. Develop a solid business case for your project. Developing a business case will identify whether it is
worth working on.
2. Ensure your project fits with the key organisational or departmental agenda
3. Carry out risk analysis at a high level at the initiation stage.
4. Identify key stakeholders. Consider how much you need to consult them at the business case stage.
5. involve finance people in putting the business case together.
B. Defining Your Project
6. Produce a written project definition statement (PID) and use it to inform stakeholders
7. Use the project definition statement to prevent creep (going beyond the scope of the project)
8. Identify what will and will not be included in the project scope. Avoid wasting time
9. Identify who fulfills which roles in your project. Include a paragraph to show what each person does.
10. Identify who has responsibility for what in the project helps reduce doubt in the life of the project.
11. “Team Selection‘Analyse whether they have skills required to enable them to carry out their role?
12. Form group of Project Managers. Give support to each other by forming group of Project Managers.
13. Identify who the stakeholders are for your project – those affected and ‘impacted‘by the project.
14. Recognize what is driving the project. Is it a drive to improve quality, reduce costs or hit a
particular deadline?
15. Hold a kick off meeting with key stakeholders, sponsor, and project manager project team.
16. Review the project–involve your sponsor or senior manager in this process. Remember to check
progress against the business case.
C. Delivery Planning
17. Create a Work Breakdown Structure for the project. A WBS lists out all of the activities you will
need to undertake to deliver the project. Post it notes can be a great help in developing your WBS.
 18. Group tasks under different headings once you have a list.
19. Identify dependencies (or predecessors) of all activities.
20. Estimate how long each activity will take.
21. Identify the critical path for the project. The critical path identifies those activities which have to be
completed by the due date in order to complete the project on time.
22. Communicate- Delivering a project effectively means you need to spend time communicating with a
wide range of individuals. Build a communication plan and review it regularly
23. Are you involved in a major change project? If you are, think through the implications of this on key
stakeholders and how you may need to influence and communicate with them.
24. Conduct Risk Assessment – carry out a full risk analysis and document it in a risk register. Appoint a
person to manage each risk.
25. Develop a Gantt chart and use it to monitor progress against the plan and to involve key stakeholders
in the communications process.
26. Draw up a milestone plan. These are stages in the project. You can use the milestone dates to check
the project is where it should be.
D. Project Delivery – Monitoring and Reviewing Your Project (Project Governance)
27. Have a clear project management monitoring and reviewing process – agreed by senior managers -
the project sponsor and the project Board, if you have one.
28. Ensure your organisation‘s corporate governance structure and your project management monitoring
and control structure are compatible. If you do not know whether this is the case then seek senior
management involvement.
29. Be aware early in the project what will be monitored, how they will be monitored and the frequency.
30. Agree to a system for project changes – have an agreed system for monitoring and approving
changes. Use change control forms and obtain formal sign off (agreement) by the sponsor, before
action a change. Look for the impact of the change on the project scope as well as the ―key driver‖ -
quality, and cost and time.
31. Appoint someone to be responsible for project quality especially in larger projects. Review quality
formally with the client at agreed milestone dates.
32. Make certain you have agreed who can sanction changes in the absence of your sponsor. If you
haven‘t agreed this, what will you do in their absence?
33. Set a time limit for project meetings to review progress. Have an agenda with times against each
item and summarise after each item at the end of the meeting.
34. Produce action points against each item on the agenda and circulate within 24 hours of the meeting.
Use these action points to help in the creation of your next agenda.
35. Review the items on the critical path checking they are on schedule. Review risks, review yours
stakeholders and your communication plans and whether you are still on track to deliver on time, to
budget and to the required quality standard.
36. Set a tolerance figure and monitor e.g. a tolerance figure of ±5% means as long as you are within the
5% limit you do not have to formally report. If exceed the 5% limit (cost or time) then you need to
report this to the agreed person – probably your sponsor
37. Report progress against time at the end of a stage – are you on schedule? Time, cost or quality?
Ensure that if something is off schedule look for ways to bring it back on time, within
38. Develop an issues log to record items that may be causing concern. Review at your project meetings.
39. See whether you are still delivering the original project benefits when reviewing your project. If not,
consider re-scoping or if appropriate abandoning the project. Do not be afraid of abandoning a
project. Better to abandon now rather than waste valuable time, money, and resources working on
something no longer required. If you close a project early – hold a project review meeting to identify
learning.
40. Produce one-page reports highlighting key issues. Agree on the areas to include with the Sponsor
before writing a report.
41. Use a series of templates to support the monitoring process, e.g. milestone reporting, change control,
log, planned v. actual.
42. Apply traffic lights to illustrate how you are progressing – red, amber and green. Use these in
conjunction with milestone reports.
 43. Engender honest reporting against specific deliverables, milestones, or a critical path activity. If you
do not have honest reporting imagine the consequences.
E. Closedown and Review
44. Agree well in advance on a date to hold a post project review meeting. Put this onto the Gantt chart.
45. Invite key stakeholders, sponsor, and project team to the post project review.
46. Focus your meeting on learning – identifying what you can use on the next project
47. Check whether you have delivered the original project objectives and not gone out of scope.
48. Make sure that you have delivered against budget, quality requirements and the end deadline.
49. Understand how well you managed risks and your key stakeholders.
50. Prepare a list of unfinished items. Identify who will complete them and circulate to any stakeholders.
51. Hand over the project formally to another group - if appropriate. You may need to build this into the
project plan and involve them early in the plan and at different stages throughout the project.
52. Write an end of project report and circulate. Identify in the report key learning points.
53. Close the project formally. Inform others who is now responsible for dealing with day to day issues.
54. Celebrate success with your team! Recognise achievement, there is nothing more motivating.

Project proposals
– It is an implementation schedule of a project and justification document forwarded to the donors or
project sponsors.

Proposal writing tips

i. Use clear and simple language.
ii. Explain points clearly and avoid verbosity.
iii. Attach verification and further explanations in the appendix.
iv. Present a problem that has been agreed upon by all stakeholders.
v. To describe the project background, research properly about the issues in question.
vi. Include only the information that is relevant to the project.
vii. Some donors or sponsors have their own guidelines on proposal writing; enquire first before writing.
Contents of a project proposal
I. Front cover and title page: This will include:
⮚ The project title, which should preferably be a single line.
⮚ Location and name of the organization or institution.
⮚ Names of key people in the project.
⮚ The cover, which should look professional.
[Link] summary (Project overview or abstract)
⮚ This section summarizes the key information on the project, and should be 1 to1 ½ pages.
⮚ It includes the problem, short description of the project, resources required, and the design of the project
⮚ It justifies the need of the project and tries to give the reader a positive impression of what is proposed.
⮚ It is written last.
[Link] information/Introduction
⮚ Explains why the project is needed and shows that it can be completed within time and budget provided.
⮚ It covers information on the situation analysis.
⮚ It defines the problem, its seriousness and who are affected.
⮚ The extent of solving the problem so far is explained.
⮚ Give a brief history of the problem, and cite previous projects and studies similar to the proposed one. It
indicates how the problem to be addressed will help the potential funding agency in fulfilling their own
objectives.
⮚ It indicates the steps you have already taken.
[Link] description
⮚ This section spells out the goals and objectives of the project.
⮚ A goal is a statement indicating the change expected. The goal should be general and long-term.
Objectives should be SMART i.e. specific, measurable, attainable, realistic and time bound.
– Goal: To reduce infant mortality
– Objective: To reduce incidences of malaria from 70% to 25% within 3 months. Objectives will form
basis of activities and provide basis for the project.
• Ensure that there is a relationship between the goal and objectives, and those of the funding agency.
[Link]/target group
⮚ It describes both direct and indirect beneficiaries of the project. Who and what is the involvement, etc.
⮚ It indicates that the beneficiaries have participated in the selection and planning.
⮚ Verification of this claim can be attached.
⮚ It indicates how assisting the target group is in the best interest of the funding agency.
[Link]
⮚ Describes the resources needed, including people, describes those who will be paid and the volunteers.
⮚ It describe facilities that will be used, and whether purchased or rental.
⮚ It describe existing facilities e.g. classrooms if it is a local institution.
• It lists the equipment needed. E.g computers, desks, chairs, tables, telephone, photocopying machine etc.
⮚ Methods of implementing the project should be related to its objectives.
⮚ State how they will fulfill the objectives, and should include information on collaborative relationships
with other Groups/projects.
[Link] of the project
• The proposal should describe the organization and its management i.e. authority relationships, broad
objectives of the organization and Structures to achieve the objective, and the composition of
management groups.
• It should describe the personnel requirements e.g. qualifications, experience, numbers, volunteers, the
numbers present and those required. It should clarify their roles and their relationship in relation to the
success of the project, and briefly describe the relationship with other projects.
• It should indicate who will be responsible for which tasks.
[Link] of the project
⮚ The proposal must explain the viability of the project after the financiers withdraw or if not show that it
is for a short duration only, or that other donors will take over.
[Link] (costs and benefits)
• This section describes the personnel costs, materials, supplies and expenses.
• Costs will include;- interest rates, cost of nonmonetary contributions i.e. environmental degradation.
• Benefits will include increased income, literacy levels, etc.
• A comparison should be made between costs and benefits, if positive on benefits, and then it provides
justification for the project.
• The budget should be presented in summary and include all sources of funds for the project.
• It should show some personal initiative in funding i.e. contributions from the community in terms of
facilities, personnel and money.
• Foot notes can be used to explain various aspects of the budget if necessary.
[Link] and evaluation
⮚ This section should show that the monitoring and evaluation process will be participatory, and describe
how these will be carried out.
⮚ It should describe how the decision that the project is successful will be made.
⮚ include samples of questionnaires in the appendices, showing both formative and summative methods.
[Link] and reporting
⮚ It indicates how you will be reporting the project results in monitoring and evaluation and of the
outcomes. It should include the groups that will receive the reports.
⮚ It should consider the donors, as they usually have their own reporting requirements. The type of reports
and frequency of reporting should be clearly stated.
[Link]
⮚ This is a brief summary of what the project is to achieve and a
⮚ Justification why the funding is needed. It also briefly explains the
⮚ Viability of the project.
XIII. Appendices
⮚ Detailed documents described in the report should be included in the appendices. These may be:
⮚ Dissemination plan: Plan for dissemination of information such as newsletter, workshops etc.
⮚ Time line: Indication of the time frame for the project
⮚ The evaluation instruments used.