Building budgeting capacity of Health Facility Managers to enhance facility financial autonomy: lessons from Nakuru county, Kenya.

This qualitative case study of Nakuru County, Kenya, demonstrates that enhancing health facility financial autonomy through budgeting capacity building requires a sustained, multi-year, and adaptive approach that tailors support to facility levels, combines training with standardized tools, and embeds strong monitoring and leadership mechanisms.

The Gist

The Big Picture: Giving Hospitals Their Own Wallets

Imagine the healthcare system in Kenya is like a massive school district. For a long time, the "Principal" (the County Government) held all the money in a giant safe. If a specific school (a Health Facility) needed new books or a repaired roof, they had to ask the Principal for permission and cash.

This worked, but it was slow. Sometimes the Principal didn't know exactly what the school needed, or the paperwork took too long.

The Change: The government decided to give each school its own wallet (Financial Autonomy). Now, if a clinic earns money from patients or insurance, they can keep it to fix their own problems. This is called the Facility Improvement Financing (FIF) Act.

The Problem: Just handing a wallet to a teacher doesn't mean they know how to manage a budget. Most of these clinic managers are doctors and nurses. They are experts at saving lives, but they aren't experts at balancing checkbooks. They didn't learn how to write a budget in medical school. Without a plan, they might spend the money on the wrong things, or break the rules, which could get them in trouble.

The Solution: The "Budgeting Bootcamp" in Nakuru

Nakuru County decided to fix this by teaching their clinic managers how to be good financial managers. They didn't just throw a manual at them; they ran a four-phase training program (a "Bootcamp") tailored to different types of schools.

Here is how they did it, step-by-step:

Phase 1: The Big Schools First (Level 4 & 5 Hospitals)

• The Analogy: Think of the big teaching hospitals as University Campuses. They are huge, have lots of staff, and already have a finance department.
• The Action: The county started here because these places were already somewhat used to managing money. They taught the managers how to write a proper budget that followed the law.
• The Result: It worked well. Because these hospitals had accountants and administrative staff, the managers could learn the skills and then delegate the work. The budgets got approved faster.

Phase 2: The Middle Schools (Level 3 Health Centers)

• The Analogy: These are like High Schools. They are smaller and have fewer resources.
• The Action: The county realized these places didn't have dedicated accountants. The manager was often just a nurse in charge of everything. So, they changed the training. They made it simpler and brought in the accountants from the big "University" hospitals to act as Mentors.
• The Result: The High Schools started getting their budgets on time, thanks to the help from the big schools.

Phase 3: The Small Classrooms (Level 2 Dispensaries)

• The Analogy: These are tiny Rural One-Room Schools. Often, there is only one teacher who does everything: teaches math, fixes the roof, and cooks lunch.
• The Challenge: This is where things got tough. The "teacher" (the clinic manager) was so busy treating patients that they had no time to sit down and do paperwork.
• The Action: The county tried to teach them, but the training had to be super simple. They also tried to get the local "Sub-county" leaders to help.
• The Result: Progress was slow. It wasn't that the managers were bad at math; it was that they were too busy working to do the paperwork. They needed more hands on deck, not just more training.

Phase 4: The Rulebook and the Coach

• The Analogy: You can't just teach a class once and hope they remember forever. You need a Coach and a Scoreboard.
• The Action: The county created standard forms (so everyone fills them out the same way) and started holding monthly meetings to check the "scoreboard" (monitoring). They also helped the clinics pay off old debts (pending bills) by setting aside a specific part of their new budget for it.

What Did They Learn? (The Lessons)

1. One Size Does Not Fit All: You can't teach a University Professor the same way you teach a one-room school teacher. The training had to change based on how big the clinic was and how many staff they had.
2. Political Support is the Engine: The Governor of Nakuru really wanted this to work. He made it a priority. Without a leader who says, "This is important," the project would have stalled.
3. Training Isn't Magic: You can teach someone how to drive, but if you don't give them a car (or in this case, enough staff to do the work), they can't drive. The small clinics still struggle because they are understaffed.
4. Teamwork Wins: The big hospitals helping the small clinics was a game-changer. It's like the older students helping the younger ones with their homework.

The Bottom Line

Nakuru County showed that giving clinics their own money is a great idea, but it only works if you teach the managers how to use it.

• Success: Big clinics got better at managing money quickly.
• Struggle: Tiny clinics are still trying to keep up because their managers are overwhelmed.

The Takeaway: To make healthcare work better, we need to give clinics money, teach them how to spend it, and make sure they have enough staff to actually do the work. It's not just about handing over the wallet; it's about teaching the person holding it how to count.

Technical Summary

1. Problem Statement

The study addresses the critical gap between facility financial autonomy and the managerial capacity required to exercise it effectively within Kenya's devolved health system.

• Context: Following the 2010 Constitution and the 2023 Facility Improvement Financing (FIF) Act, public health facilities in Kenya are increasingly allowed to retain revenue to meet local needs. However, the Public Finance Management (PFM) Act of 2012 mandates that these funds must be managed through approved, compliant budgets.
• The Gap: Most facility managers are drawn from clinical backgrounds (doctors, nurses) and lack formal training in financial management, budgeting, and procurement. Consequently, budgets are often treated as "wish lists" rather than strategic financial plans, leading to compliance risks, delayed approvals, and inefficient resource utilization.
• Specific Challenge: While higher-level facilities (Level 4 and 5) often have administrative support, lower-level facilities (Level 2 and 3) frequently operate with single-staff models where clinical duties compete with administrative responsibilities, exacerbating the capacity deficit.

2. Methodology

• Study Design: A qualitative case study approach utilizing process evaluation to examine the "how" and "why" of the intervention.
• Setting: Nakuru County, Kenya, a pioneering county that retained facility financial autonomy post-devolution (2013) and is actively domesticating the national FIF Act of 2023.
• Data Collection:
  • Participant Observation: Researchers were embedded within the County Health Department, observing planning meetings, training workshops, and implementation cycles between March and December 2025.
  • Document Analysis: Review of policy documents, budget templates, performance reports, and county fiscal strategies.
  • Reflective Sessions: Collaborative analysis among researchers and implementation partners to validate findings.
• Analysis: Data was coded and thematically grouped to identify motivations, implementation phases, outcomes, and contextual barriers.

3. Key Contributions & Intervention Strategy

The paper details a phased, adaptive capacity-building intervention designed to transition facilities from centralized budgeting to autonomous, compliant facility-level budgeting. The intervention was executed in four distinct phases:

• Phase 1: Foundations (Level 4 & 5 Facilities):
  • Targeted hospitals with existing administrative staff.
  • Focus: Sensitization on PFM/FIF Acts, adoption of standardized county budget templates, and training for accountants/administrators to mentor facility managers.
• Phase 2: Expansion (Level 3 Facilities - Health Centers):
  • Targeted facilities often managed by clinical in-charges without dedicated accountants.
  • Focus: Simplified training on revenue recognition, basic procurement, and peer mentoring by Level 4/5 staff.
• Phase 3: Comprehensive Sensitization (Level 2 Facilities - Dispensaries):
  • Targeted single-staff facilities (162 dispensaries).
  • Focus: Intensive 4-day workshops emphasizing simplified processes, step-by-step guidance, and the inclusion of Sub-County Health Management Teams (SCHMTs) to provide ongoing support.
• Phase 4: Institutionalization:
  • Established routine mechanisms including monthly performance reviews, standardized templates, and a county budget core team for continuous monitoring and feedback loops.

Key Innovation: The intervention moved away from "one-size-fits-all" training, instead tailoring content and support mechanisms based on facility complexity and staffing levels.

4. Results

• Differentiated Outcomes by Facility Level:
  • Level 4 & 5: Demonstrated strong improvements in timeliness, accuracy, and PFM compliance. The presence of dedicated administrative staff facilitated the uptake of training.
  • Level 3: Showed moderate improvement, particularly in submission timeliness and adherence to templates, though limited financial staff remained a constraint.
  • Level 2: Progress was slow. Despite training, single-staff managers struggled to balance clinical and administrative duties, leading to delays and lower-quality budgets. The study notes this is a structural (time/staffing) issue rather than a pure capacity issue.
• Addressing Pending Bills: The improved budgeting process enabled facilities to allocate funds strategically. A specific resolution allowed 15% of the FIF budget to be used for settling pending bills (down from a proposed 30% for development), leading to tangible progress in clearing arrears.
• Contextual Factors:
  • Enablers: Strong political will (Governor's Health Agenda), early adoption of FIF laws, and catalytic funding from technical partners (e.g., Hecta Consulting).
  • Barriers: Staff shortages at lower levels and the "juggling" of clinical/administrative roles.

5. Significance and Lessons Learned

• Decentralization Strategy: The study proves that financial autonomy cannot succeed without parallel investment in managerial capacity. Autonomy without competence leads to non-compliance and inefficiency.
• Tailored Support: Effective decentralization requires stratified support. Higher-level facilities need periodic reinforcement, while lower-level facilities require continuous, hands-on mentorship and simplified tools.
• Institutional Mechanisms: Training alone is insufficient. Success depends on embedding routine monitoring (monthly reviews), standardized tools (templates), and mentorship structures (pairing high-level with low-level facilities).
• Political Will: The alignment of political leadership with technical reforms (the Governor's agenda) was a critical enabler, contrasting with other regions where political actors resist autonomy to maintain control over revenue.
• Policy Implication: For counties implementing the FIF Act of 2023, the paper recommends integrating financial performance monitoring into routine management and addressing structural barriers (like staffing) alongside training to ensure sustainable financial autonomy.

Conclusion: The Nakuru County experience demonstrates that building budgeting capacity is a multi-year, adaptive journey. It requires a shift from viewing training as a one-off event to establishing a system of continuous learning, standardized tools, and strong leadership partnerships to enable responsive and autonomous health service delivery.