Management Of Devolved Funds: A Case Study Of Kisumu Municipality

MANAGEMENT OF DEVOLVED FUNDS: A CASE STUDY OF KISUMU MUNICIPALITY

BY:
A network of civil society organization, under the leadership of Community Initiative Action Group-Kenya with Facilitation from Ufadhili Trust
The report was written and compiled By-Chris owalla

Management Of Devolved Funds: A Case Study Of Kisumu Municipality

TABLE OF CONTENTS
INTRODUCTION........................................................................................................ 3 CHAPTER ONE ........................................................................................................... 4 1.0 Types and purposes of devolved funds..................................................................... 4 i. Rural Electrification Programme Levy Fund....................................................... 4 iii. Local Authorities Transfer Fund ........................................................................ 5 iv. Constituencies Development Fund .................................................................... 5 v. HIV/AIDS Fund .............................................................................................. 6 vi. Roads Maintenance Levy Fund .......................................................................... 6 vii. Secondary School Education Bursary Fund .................................................... 7 1.1 Scope of the survey ................................................................................................. 7 1.2 Methodology of survey ............................................................................................ 7 CHAPTER TWO ........................................................................................................... 8 2.0 A situational analysis of projects within Kisumu Municipality ............................. 8 2.1 Kibuye Ward................................................................................................. 8 2.2 East Kisumu Ward ........................................................................................ 9 2.3 Aerodrome Ward .......................................................................................... 9 2.4 Railways Ward ............................................................................................ 13 2.5 Stadium Ward ............................................................................................. 14 2.6 Central Ward .............................................................................................. 16 2.7 South West Ward ........................................................................................ 17 2.8 North Ward ................................................................................................ 17 2.9 Market Ward ............................................................................................... 18 2.10 Milimani Ward ............................................................................................ 19 2.11 Kaloleni Ward ............................................................................................. 20 2.12 Kajulu East Ward ........................................................................................ 22 2.13 Kajulu West Ward ....................................................................................... 23 2.14 Kolwa Central Ward .................................................................................... 24 2.15 East Kolwa Ward ........................................................................................ 24 2.16 Manyatta Ward............................................................................................ 24 2.17 17. Nyalenda Ward ...................................................................................... 25 2.18 Management of Secondary Education Bursary Fund in Kisumu Town West .. 26 CHAPTER THREE .................................................................................................... 28 3.0 Challenges in Implementing Decentralised Funds .............................................. 28 3.1 Governance .................................................................................................... 28 3.2 Implementation .............................................................................................. 28 3.3 Monitoring and Evaluation .............................................................................. 28 3.4 Effectiveness and Efficiency ............................................................................ 29 3.5 Recommendations for improving management of devolved funds .............. Error! Bookmark not defined. CONCLUSION ........................................................................................................... 30

Management Of Devolved Funds: A Case Study Of Kisumu Municipality

INTRODUCTION
Good leadership is an important requirement for economic growth and enjoyment of human rights. Development is about people and can only be achieved through programmes that are responsive to public needs and aspirations. For that, planners of development projects are, therefore, expected to widely consult stakeholders and target beneficiaries in order to win acceptance and speed up implementation. In whatever capacity, good leadership champions for and rallies resources to the public and ensures such facilities are used only on intended purposes. Here, there is no distinction between political or any other form of leadership. For almost twenty years, Kenyas post-independence governments have sought to reduce the layers of bureaucracy that delay channeling of funds from the Treasury to different development projects. Yet history teaches us that efficiency and transparency are core pillars for building public trust in public institutions and processes. This study takes a critical look at projects earmarked for implementation through resources devolved from the centre to the periphery through seven different channels within Kisumu Municipality. It spotlights the use of the Rural Electrification Programme Levy Fund (REPLF), the Free Primary Education Programme (FPE), the Local Authority Transfer Fund (LATF), and the Constituencies Development Fund (CDF). Also reviewed are projects under the HIV/AIDS Fund, the Roads Maintenance Levy Fund (RMLF), and the Secondary School Education Bursary Fund (SEBF). The study concludes that although devolution of funds is a good idea, it requires wider public participation and scrutiny to safeguard the resources against misuse by those appointed as their custodians. That way, higher value for money is achieved, while only projects of utmost public good are implemented to tame wastage and vested interests.

Management Of Devolved Funds: A Case Study Of Kisumu Municipality

CHAPTER ONE
Like many other countries in the world, Kenya has embraced the policy of involving the public in selection and prioritization of development projects. This bottom-up strategy seeks to democratize the national budget and enhance wider acceptability by end users for sustainability and tighter scrutiny by concerned communities. There are indications that these funds are helping to provide services to communities that for many years did not benefit substantially from the Government. However, there are increasing concerns about their utilization. Given the importance of this resource devolution approach, an in-depth analysis of institutional, design and implementation factors that impact on the efficiency of the use of the funds is necessary. It is for the foregoing reasons that this project took a critical objective analysis of the status of projects supported by different devolved funds in Kisumu Town East and Kisumu Town West constituencies which comprise the Kisumu Municipality. The study was done between April and May 2007. That way, existing and potential causes of weaknesses in their management are addressed.

1.0 Types and purposes of devolved funds

i. Rural Electrification Programme Levy Fund

The Rural Electrification Programme Levy Fund (REPLF) was established in 1998 through amendments to sections 129 and 130 of the Electric Power Act (1997). It is used for financing programmes relating to the design, construction, equipping, operating, and maintaining electrification projects identified by rural communities. The institutional framework of REPLF comprises the Ministry of Energy, the Electricity Regulatory Board (ERB), Kenya Power and Lighting Company (KPLC - the implementing agency), District Development Committees (DDCs), Constituency Development Fund (CDF) committees and local community committees for specific projects. ii. Free Primary Education Programme

It was established in January 2003 through the National Alliance Rainbow Coalition (NARC) governments manifesto. The fund aims to address financing and quality challenges in primary education, and targets all Kenyan children attending formal and non-formal public schools. Children from poor families are emphasised. The fund comprises an allocation equivalent to Sh1,020 per child in a year, with the amount disbursed to a constituency/district based on the number of pupils enrolled in schools within that area. The first allocation is for the purchase of teaching and learning materials; the second for general purposes, while the third tranche is for operations and maintenance. Communities are expected to participate in the management and implementation through members of school committees. Respective head teachers and school committees make procurement decisions.

Management Of Devolved Funds: A Case Study Of Kisumu Municipality iii. Local Authorities Transfer Fund

This was established through the LATF Act No. 8 of 1998 and came into effect the following year. It aims to improve service delivery, financial management, and reduce outstanding debt portfolios of local authorities (LAs). Every year, Treasury allocates to LATF kitty an amount equivalent to 5 % of the total revenue collected by the Government per annum. Currently, LATF makes up approximately 24% of local authority revenues. At least 7% of the total fund is shared equally among the country's 175 local authorities; 60% of the fund is disbursed according to the relative population size of the local authorities. The balance is shared out based on the relative urban population densities. LATF monies are combined with local authority revenues to implement local priorities. An advisory committee comprising the private sector, the Ministry of Finance, the Permanent Secretary from the Ministry of Local Government, and the Kenya Local Government Reform Programmes secretariat, guides LATF operations. Its annual reports and other disbursement information are disseminated through newspaper advertisements. Some 60% of LATF allocations are released to a local authority if it met its set requirements. The remaining 40% is given out based on LAs performance measured through LASDAP and other indicators. Budgeted LATF allocations are gazetted but no disbursement is made unless LAs meet the requirements. iv. Constituencies Development Fund

The Constituencies Development Fund (CDF) was established through an Act of Parliament in 2003 and became operational on January 9, 2004 upon the publication of the Kenya Gazette Supplement No. 107 (Act No. 11). The fund aims to control imbalances in regional development brought about by partisan politics. It targets all constituency-level development projects, particularly those aiming to combat poverty at the grassroots. At its inception, the fund was allocated 2.5% of the government's ordinary revenue. This was increased to 3.2 per cent in the 2006/2007 national Budget. A motion seeking to increase this allocation to 7.5% of governments revenue was passed by Parliament last year, but has not been implemented. MPs had also sought to be allowed to use the fund to sponsor cultural activities such as sporting. However, Finance minister Amos Kimunya frowned on the new requests, saying a bloated CDF allocation would deny revenue to other important national projects. In any case, question marks have been raised over the way some MPs as patrons of their respective CDF have handled the kitty. A number of them have suffocated their committees with relatives and political cronies, while others have only implemented projects where they hope to harvest votes at the next General Election. Indeed, there are cases in courts of law pitting MPs against committee members or constituents for allegedly misappropriating the funds. In late March, the Parliamentary Service Commission recruited 210 CDF managers to handle the operations of the kitty

Management Of Devolved Funds: A Case Study Of Kisumu Municipality within the constituencies. Some CDF committees have been guilty of failing to submit their project proposals or account for implemented ones in time, thereby delaying the next allocation. Currently, 75% of the fund is allocated equally among all the 210 constituencies countrywide, while the remaining 25% is disbursed according to poverty levels in a constituency. A maximum 10% of each constituencys annual allocation may be used for an education bursary scheme. CDF is managed through four committees; two of which are at the national level and two at the grassroots level. According to the CDF Act, expenses for running constituency project offices should not exceed 3% of annual constituency allocations. Each constituency is required to keep aside 5% as an emergency reserve. The CDF is not to be used to support political bodies/activities or personal award projects. A sitting MP is not a signatory to the CDF bank account but convenes the CDF Committee in her/his constituency. The penalty for misappropriation of the Funds is a prison term of up to five years, a Sh. 200,000 fine or both. CDF project proposals are submitted to MPs who in turn forward them to the Clerk of the National Assembly. The approved project list is reviewed by the National CDF committee, which presents final recommendation to the Finance Minister. v. HIV/AIDS Fund

President (now retired) Daniel Arap Moi established the HIV/AIDS fund in 1999 through a Presidential order contained in Legal Notice No. 170. The move coincided with the declaration of HIV/AIDS as a national disaster, the formation of the National Aids Control Council (NACC) and the AIDS Control Committees (ACCs). The fund targets individuals infected with and affected by HIV/AIDS, with the focus being on long-term care and support. The fund is administered by NACC, which receives budgetary allocations and channels them to Aids Control Units and Constituency ACCs (CACC) before onward disbursement to Non-Governmental Organizations (NGOs) and Community based organizations (CBOs) for implementation. vi. Roads Maintenance Levy Fund

The Roads Maintenance Levy Fund (RMLF) was established in 1993 through an Act of Parliament. It caters for the maintenance of public roads, including local authority unclassified roads. The fund is made up from a fuel levy on petroleum products and transit toll collections. It is administered by the Kenya Roads Board, which was established in 1999. RMLF targets maintenance of roads under the control of the Ministry of Roads and Public Works, Kenya Wildlife Service and district roads committees. 60% of the funds annual allocation goes to international and national trunk and primary roads; 24% to secondary roads; and 16% to rural roads. The latter portion, which is managed by district road committees, is shared equally among constituencies within a district.

Management Of Devolved Funds: A Case Study Of Kisumu Municipality vii. Secondary School Education Bursary Fund

The Secondary School Education Bursary Fund (SEBF) was established in 1993/4 through a Presidential pronouncement. It aims to cushion the countrys poor and vulnerable groups against high and increasing cost of secondary education, therefore reducing inequalities. It also aims to increase enrolment in (and completion of) secondary school. The fund targets orphans and girl children as well as those from poor households and urban slums, who are achieve good results. Students send their applications through their respective school heads. SEBF is not based on a fixed share of the national budget. Allocations vary depending on the Ministry of Educations annual provisions, the number of students enrolled in secondary schools within each constituency, national secondary school enrolments and poverty indices. Since 2003/4, SEBF has been coordinated by Constituency Bursary Committees, which screen potential beneficiaries, coordinate and disburse the funds, and prepare reports to the Ministry of Education. Local community leaders are represented on SEBF committees. Affirmative action ensures a minimum of Sh.500,000 is allocated to constituencies in Arid and Semi Arid Lands (ASAL). The minimum annual allocation per beneficiary by school category is as follows: Sh.5, 000 for day schools; Sh.10, 000 for boarding schools; and Sh15, 000 for national schools.

1.1 Scope of the survey

The survey covered projects supported by devolved funds in all the following 17 wards within Kisumu Town East and Kisumu Town West constituencies: Railway South West Market Manyatta Kibuye Nyalenda Kaloleni Kolwa East Milimani Kolwa Central Aerodrome Kajulu East North Ward Kajulu West Kisumu Central Stadium Kisumu East

1.2 Methodology of survey

Different methods were used in conducting this study. Researchers scrutinized existing budgets and plans of the devolved funds from relevant offices within Kisumu Municipality. They also made field visits to confirm the efficacy of the information. The study sought to match the information in the books with the reality on the ground. Team members also conducted interviews with members of committees charged with prioritizing and implementing the projects. However, there were cases where implementation levels did not match the amounts alleged to have been spent, or even bizarre instances where the said projects were non-existent.

Management Of Devolved Funds: A Case Study Of Kisumu Municipality

CHAPTER TWO
2.0 A situational analysis of projects within Kisumu Municipality

The study analyzes projects within each and every ward within the Municipality; shedding light on levels of implementation and amounts of money used by the time the survey was conducted. 2.1

Kibuye Ward

A total of Sh.500,000 was allocated to construct a public toilet at the Kibuye Market. This was done without open tendering. Of the amount, Sh375, 840 was acknowledged as spent, while the remaining Sh.126,160 could not be accounted for. The construction was completed with six fixed doors but there is no running water, thus rendering its condition poor. The water for use is bought a few meters away by the toilets caretakers and stored in containers. Those who use the facility pay money which is ultimately spent as wages for caretakers and for maintenance. The Central Toilet was never rehabilitated and six doors are missing, reducing it to a health problem for traders at this busy market who normally use them. However, a sewerage system was dug and 6-inch PVC pipes laid, following a tender given to Mrs. Ghail Mojo who lacked plumber skills. She withdrew from the work midway, and the project is unfinished to date. Tendering information and documentation process was not found, but Kshs. 300,000 was spent. Also, 12 gates were supposed to be constructed at Kibuye market, but only five were built and the work is not going on. The residents do not know how much was spent in the project. Informal (Jua-Kali) traders are bitter because they feel they ought to have had the chance to make and build the gates. But records available from the council show that Sh 329,047,000 was spent. Following demands by traders for more gates, a tendering notice was advertised and local traders sent their bids, but no feedback has been forthcoming. The work at the Ward Office has not started. In the financial year 2006/2007, the CDF allocated Sh2 million and Sh1.5 million to Kibuye Wholesale Market and Kibuye Jua-Kali, respectively. The money has been spent on the following projects:(a) Wholesale Market latrines were repaired and users are charged although they lack running water. Some women traders use them to store hired chairs. Tendering process and amounts spent are unknown. (b) Jua-Kali shades are being built on a controversial road reserve. Amount allocated is not clear. Mr Isaiah Onoka is the contactor. (c) Wholesale re-carpeting is done. No information on contracts and tendering.

Management Of Devolved Funds: A Case Study Of Kisumu Municipality (d) Wholesale market shades work started but information about the contractor, tendering process and the amount allocated could not be traced. (e) Mr. Peter Odima Peter, the vice-chairman of the CDF committee was the one in charge of supply and contract of building the burnt Kibuye Market. He personally brought bricks and other building materials, including 100 iron sheets as compensation to the traders that never finished the work. It was completed by the traders themselves, but it was alleged Sh600,000 was spent. 2.2 East Kisumu Ward

LATF reports indicate Sh.200,000 was allocated to Dago-Kokore Primary School during the financial year 2005/2006 to buy desks; a claim that the institution refutes. The school, according to official documents, was double-funded by CDF and LATF at a tune of Sh200, 000 each. The boreholes at Dago-Kokore and Kanyakwar primary schools were allocated Sh800,000 by LATF in the financial year 2005/2006. Our findings indicate that the boreholes existing in the two schools are privately owned by women groups and individuals. Also, the 50 desks provided by the CDF to Dago-Kokore Primary school during 2004/2005 fiscal year were not prioritized by the institution, and they are of low quality. Riat Police Post/Chiefs Camp was allocated Sh.499,305 in the financial year 2004/2005 according to CDF reports, which explain that Sh419,738 had been paid and Sh57,445 is reflected as the outstanding balance. The implementation status report shows that the work is in progress at advanced stage and is to be completed through the engineers department. But our survey found out that the existing facility is a private premise for the police, constructed by an individual called Mr Abdullah. The businessman also pays for electricity and water, among other utilities. However, there are contractors invoices and payment vouchers for the project. The Chiefs Camp alleged to be under construction is an existing private premise. 2.3 Aerodrome Ward During the 2004/2005 financial year, LATF allocated Sh500,000 for the construction of Usoma Dispensary. The first contractor estimated the cost at Sh499,325, but later varied it upwards. Available LATF reports show that Sh.443,738 had been paid and the balance to date is Sh65,587. The implementation status shows that the work is in progress and is to be completed through the engineers department. Interestingly, additional Sh80,000 was allocated for the same project in the subsequent financial year, shooting its cost to Sh680,000. The committee overseeing this project is made up of cronies of the local councilor. Available invoices show that the project cost is fully paid, yet the work is incomplete. The committee officials were Joseph Okumu (Chairman) Joseph Omenda (Secretary), Willington Ochieng (Treasurer). Reactivation of piped water was estimated at Sh.600, 000 in the 2005/2006 fiscal year. So far, no payment has been made. The same applies to piped water at Bandani whose cost was put at Sh800,000.

Management Of Devolved Funds: A Case Study Of Kisumu Municipality

A nursery school at Pundo (Kombedu Market) was slated to be funded by CDF at Sh500,000. The project was initiated by the area councilor and the committee members are his cronies. The work, by Mr Owino, a CDF member, is complete, but poorly done. The CDF allocated Sh.500,000 to a borehole in Usoma. The work was done by drillers belonging to the area MP without consulting the local community and no open tendering preceded it. Community members had asked for piped water but not a borehole because the main pipe of water is within the area. Both the Usoma borehole and dispensary are public utilities but built on private land. This complicates matters should the land owner decide to fence it off or sue for trespass and encroachment.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

Different dimensions of Usoma Dispensary. Still at Usoma, the CDF allocated Sh125,000 to implement a community-driven public toilet project. The toilet was dug four feet deep. Bricks for the work were brought, then taken away. Ballast and sand were taken to the site but their use was later converted to construct a borehole. So, work on the toilet stalled. The development committees of these projects are made up of cronies of either the area MP or councilor.

Picture 2: Pupils learning in pathetic conditions at Usoma Primary School.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

Picture 3: A section of classroom at Usoma Primary School which was supposed to be built by CDF (2003/2004) to the tune Sh200, 000.

Picture 4: Current structural status of Usoma Primary School.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality 2.4 Railways Ward The Jua-Kali Public Toilets is a project funded by LATF at Sh495, 804. Amount paid is Sh412,526 while Sh82,278 is the balance. The implementation status shows that the work is in progress and is to be completed through engineers department. It is painted well with three bathrooms and toilets for men and one bathroom and toilet for women. There is also a urinal pit. Tendering was done by the municipal. There is a project committee. The project was finished by the engineers department after money allocated fell low because of unexpected expenditure on Value Added Tax. However, the facility was built on a road reserve and could be demolished. The materials used were sub-standard. The right tendering procedures were not followed, and the local community members feel they were not consulted. The contractors were local councilors and Liberal Democratic Party officials. LATF also set aside Sh.640,000 to build stores for local traders in Railways Ward. The project is non-existent. The area councilor says he has not seen the stores and refers us to the municipal council for any information related to the stores. The winner of the tender received information of the award verbally and as such did not know when to commence the work on site. According to plan, two containers were to be at Oile Park, while one container was to be set up opposite Easy Coach booking office. Another non-existent project was the one to construct a Sh.500, 000 garbage incinerator at Sh.500,000, to be funded through LATF. The Oile Park Public Toilets Project was completed at Sh.500, 000 with money from CDF; the project having been initiated by the local community. There was a consultative meeting and the composition of the development committees was done by the area MP. The committee meetings are held depending on the availability of agenda. The mode of funds disbursement and tendering process is only known by the MP and his team The toilet is complete and operational, and it is managed by the local community. However, the contractor is unknown, and the tendering committee consists of cronies of the area MP. The cost of fencing Oile Park was Sh.900,000 through CDF. The project is complete but the whole fence has come down, and it does not exist anymore. In any case, the community was opposed to the fence, saying it would deny them access to the Park. Also, stalls built at the Park were to have cemented floors but this is not the case. The project committee comprises MPs cronies, with irregular meetings, while tendering for the project was improper. The CDF built stalls behind the Kisumu District Hospitals at Sh1.3 million through a tender awarded to a politician close to the sitting MP. The project is complete but is sub-standard, and only benefits selected traders and politicians who are managing the stalls.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

Picture 5: A section of 64 Nyamlori kiosks build by CDF at Sh1.7 million. 2.5 Stadium Ward According to LASDAP report, LATF estimated the cost of the Stadium Wall at Sh.500,000. Of this, Sh.431, 700 has already been paid. However, the tendering was not made public, and it is unclear how Mr. Maika Wa Mulunda won it. The tendering was not made public and it is not clear how Alina Trail and Construction Company owned by Mr. Maika Wa Mulunda was awarded the job. The work had stalled when our team visited the project.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

Picture 6

Picture 7

Picture 6 shows the part of the Stadium Wall which has been renovated at Sh.500,000, while Picture 7 is of the section of the same wall that was brought down by strong winds. To date, no work has been done on it. Among other development programmes within the municipality, Sh.600,000 was to be spent on constructing a refuse chambers during the 2005/2006 financial year through LATF. However, nothing has been done on this front, and the status is unknown. According to the financial 2006/2007 report, Sh..800,000 was to go towards reactivating street lights within Kisumu City through LATF. Community members say such work has been done by Nakumatt Supermarkets. In the 2005/2006 fiscal year, CDF allocated Sh.750,000 to Kisumu Union Primary School to renovate toilets and improve its sewerage system. However, the institution only received Sh.250,000, and a misunderstanding arose between CDF committee members and parents over the balance. The CDF team wanted to handle the utilization of the funds, contrary to the needs of the school and parents. As a compromise, the school was given 100 desks by CDF committee which by then was under supervision of Mr. Orawo and Mr. Nashon who are members of the CDF team.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality Then there is the Sh.800,000 Arina Borehole Project, funded by the CDF at Sh.800,000.The tender was never identified but the status is reported to be complete. The project is nonexistent. The existing borehole belongs BAFOPE self help-group which was neither funded by CDF nor LATF. Kisumu Day Secondary School received Sh475,000 during the 2005/2006 financial year in form of a cheque, for which the school is grateful. However, the institution expected more money during the following year to complete the building which was at lintel level. The same Kisumu Day Secondary School was allocated Sh2.2 million by CDF to build classrooms in the 2005/2006 fiscal year. The project is listed as ongoing but that was contrary to the reality on the ground. Our survey established that the school received a cheque of Sh.700,000 in the second week of May, 2007. The fate of the cheque said to have been disbursed earlier is unknown. Another initiative is the Joyland Special School Water Project, funded by CDF at a cost of Sh100,000. The CDF report shows that the work is complete yet the project doesnt exist, and the school hopes someone would charge the CDF committee for falsifying the information. The only water project that is ongoing in the school is done by Salvation Army, Nairobi office. 2.6 Central Ward Kisian Primary School is said to have received Sh.300,000 during the 2005/2006 financial year; a benchmark prequalification for a donor who wanted to fund the schools projects. The institutions development committee was hand picked by the area MP, and area community members feel they were not consulted. Work on the classrooms is ongoing, done by Odima Contractors under Mr John Oyoo. At Ngege Primary School, there are classrooms being built. The chairman of the school, Jared Ochieng Owiti said the area MP gave the school a cheque of Sh.2 million and asked that it be taken to Pabari Hardware. The school has no idea how the money was used afterwards. There is no school or community committee that oversees this project. The head teacher has refused to sign the letter/certificate of completion which was brought to him by the area MP. Two of the six classrooms have been completed. A dispensary is being built at Rainbow Primary School on public land. However, there is no community member involved in the project and the chairman for the local development team was not aware of distribution of responsibilities in this project. The negative results of ignoring targeted beneficiary communities in project initiation is best proved by a dispensary built at Dr Robert Ouko Primary School but rejected by local people. At Akingli Primary School, the institutions management said CDF had constructed two classrooms said to have cost Sh.550,000. The same kitty also gave the school 115 desks in 2005. Our team was informed the area MP gave the school a cheque of Sh.1 million for classroom building project, with instructions to pass it to Pabari Hardware. Four classrooms were built with wire mesh windows that expose pupils to cold whenever it rains. Wachara Primary School got 50 desks from the CDF in 2004, while the neighbouring Wachara Secondary School was given Sh200,000 to build a laboratory. The funds were inadequate and the project has stalled.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

The same kittys records indicate that Bar Union Primary School was allocated Sh.500,000 to build a library in 2005 financial year, while 29 orphans at the same institution got bursaries. The headmistress of the school, Mrs. Roselyn Ochieng said she had not received such funds. Sidika Primary School got Sh.200,000 in 2005 financial year from CDF. Mr. Joram Kyat; the schools head teacher used this money to build two classrooms. The work is incomplete. 2.7 South West Ward In the financial year 2004/2005 LATF allocated Sh500, 000 for the construction of classrooms at Osiri and Bara secondary schools. The work began at Bara and Sh398, 092 has been paid, with Sh101, 908 is the outstanding balance. Implementation status shows that the work is in progress and to be completed through the engineers department. The cost of building classrooms and one block toilet at Osiri was Sh.680, 000.There is no report on the amount paid and the implementation status .The same applies to construction of Oyiengo classrooms and construction of Aigo drift at a cost of Sh580, 000 and Sh700, 000, respectively. At Kibwayi Primary School the community was asked to give 10% of the total cost of the project. In return, they gave sand, gravel and other materials. The MP gave the school Sh200, 000 .The mode of disbursement was not clear. There is no evidence if the money was used in the school project. Nyawara Primary School was built by the same donor who put up Kibwayi Primary School. CDF gave the school Sh1.5 million which was withdrawn the same day. Of the total amount, Sh.100,000 could not be accounted for. Rota Primary School was allocated Sh.250,000 out of which Sh.100,000 was meant for desks. Only 25 desks were delivered, and their cost was exaggerated. Although CDF allocated Sh.600,000 to Ojolla Market for fencing and water supply, the work on the ground doesnt justify that expenditure. The contractor was Mr Isaiah Onoka. Rural electrification at Ogal Beach was allocated Sh.100,000 and is indicated as ongoing. However, the project, just like the Sh600,000 for Ojola Market shades, does not exist. The Ober Kamoth Health Centre was built in mid 1980s and the local community sought help from the area MP to have it rehabilitated. Instead, they got a borehole project that they did not ask for. Neither were they involved in its initiation. 2.8 North Ward Repairing the Obunga Bridge is claimed to have taken up Sh100,000 from the CDF kitty, but the work was poorly done, and without following open tendering and involving the local community. The area MP handpicked a committee to oversee the project. Some Sh.450,000 from CDF was spent on constructing fish-drying shades, but the structures were later destroyed by the town council because they were located on a road reserve. Community participation was lacking, and so was the link between the CDF committee and the Town planning office. Kudho Primary School reports indicate that four classrooms were built and only two were completed from an existing foundation. Instead, the school received 100 sub-standard desks.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality And at Manyatta Arab Primary School required two classrooms and placed its request with the CDF committee, but got what was not its priority: renovations, paintings, and partitioning of classrooms, plus 30 substandard desks. The tendering and implementation procedures were not disclosed to the schools management. LATF allocated Sh.600,000 to the Nutrition Centre; an institution whose future remains uncertain because the owner of the land on which it stands claims he was underpaid. On Manyatta Arab Estate, a community water project was implemented without open tendering, and its actual cost is, therefore, unknown. And over at Obunga, funds were allocated to build a dispensary. However, the project was abandoned at the foundation level because it is located in a road reserve

Picture 8: Abandoned foundation of the proposed Obunga Dispensary.

2.9 Market Ward There is an office and hall being managed by Jubilee United Development Group. The same group is managing the public toilet at the market. The traders want a permanent store built outside the bus park while the area councilor and his team want containers to be used instead. The only existing container is privately owned. CDF cash was spent on putting up sheds for shoe shiners and used clothes traders without open tendering. Therefore, the cost is unknown, and information on the contractor unavailable. A cold storage for fish exists but there is no electricity, rendering the facility unusable. Tendering for the project was not done, thereby making it impossible to establish its cost.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality A total of Sh180,000 from LATF was used in renovating the Rotary Youth Polytechnic and supplying electricity to one block without allowing the institution to make use of its personnel to reduce expenditure. As a result, poor quality materials were used. For example wire mesh was used instead of grilled windows. Records at the municipal offices show that Sh.97,300 from LATF was spent on providing electricity to Ondiek Primary School. However, the institutions management maintains it received only Sh.30,000. Only five classrooms and not the entire school were connected with power, leaving the rest of the school in darkness. Other benefits to the school came from CDF in form of one classroom and 100 desks through unknown procurement procedures, making their cost impossible to establish. According to CDF books, the kitty used Sh.400,000 in connecting Anderson Estate with electricity during the 2003/2004 fiscal year, but the project does not exist. On other matters, the CDF painted a public toiled that had been built by a parliamentary aspirant, Mr. John Olago-Aluoch, only to brand it as a project of the kitty. And as if in a sweetheart deal, an aide of the politician won a Sh1.5 million to provide environmental renovation of the Jubilee Market by constructing a dry fish store and a poultry shelter. 2.10 Milimani Ward

Picture 9: This is the Milimani Ward office built by LATF. It was lumped together with supply of electricity to Joel Omino Secondary School and both costed at Sh.489,728 during the 2004/2005 financial year.

A non-existent Milimani Police Post was allocated Sh.400, 000 by CDF in the 2005/2006 fiscal year, and the status report indicates it is an ongoing project. During the same period, 19

Management Of Devolved Funds: A Case Study Of Kisumu Municipality the kitty put aside Sh3.5 million to be spent on urban mobility in Kisumu South West Ward without explaining this component. 2.11 Kaloleni Ward LATF allocated Sh.479,115 for the construction of a public toilet during 2004/2005 financial year. Its contractors have so far been paid Sh381, 946, while a balance of Sh.97,069 is outstanding. However the toilet is locked and abandoned; an indication that it is not a priority to the community (see picture 10 (below). During the same fiscal year, LATF records shows Sh.20,995 was spent on a TV set for the Kaloleni Hall. Our team established the public facility had received no TV. In the financial year 2005/2006 there was allocation for street lights to the tune of Sh620, 000. But community members we interviewed said the project was non-existent. The same LATF accounts for 2006/2007 fiscal, there is Sh.700,000 allocations for garbage removal; an activity the locals say does not take place.

Picture 10: Public toilet built in Kaloleni using LATF in 2004/2005 financial year at Sh.479,115. The project is incomplete, and is permanently locked. CDF records for fiscal year 2003/2004 speak of Sh800, 000 set aside to built a borehole in Arina Estate, but the project does not exist. Some Sh.500,000 CDF cash was spent on building a Police Post in Kaloleni during 2005/2006 financial year. The building, which was clearly over-quoted, is currently being used by an assistant chief. It is understood that the council has ordered that the building be 20

Management Of Devolved Funds: A Case Study Of Kisumu Municipality demolished because it is wrongly located. Another evidence that the local community was not consulted, leading to wastage of public resources.

Picture 10: The proposed police post in Kaloleni, built with Sh.500,000 CDF but now used by an assistant chief. Still in Kaloleni, the CDF allocated Sh.500,000 to build a public toilet. The building is completed but lacks water and drainage, rendering it a stinky facility that negatively affects lives of residents in the neighbourhood. The project is abandoned and a youth group charging users is trying to complete it. And that, contrary to CDF Act requirement that a project once started must be completed.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

Picture 12: A public toilet built by CDF.. 2.12 Kajulu East Ward LATF allocated Sh517, 000 for the renovation of Gita and Got Nyabondo dispensaries during the 2004/2005 financial year. Some Sh.488,511 have been paid, with a balance of Sh.28,489. The LASDAP report says the projects are completed, yet they are ongoing. Kianja and Oriang primary schools were to get two classrooms each from Sh.600,000 LATF support during the 2005/2006 fiscal year; works categorized as being in progress without indicating implementation status, amounts paid and outstanding balance. Elsewhere within Kajulu East, the construction of Gita Maternity ward was funded by LATF in the financial year 2006/2007 at Sh580, 000.Yet there is no report on implementation status. CDF allocated Nyamrongo Water Project was allocated Sh1.4 million in 2005/2006 fiscal year and the project is categorized as ongoing. In Kindu Primary School, CDF allocated Sh100, 000 for the financial year 2006-2007. The school was renovated by the Government through Free Primary Education programme in 2004, 2005 and 2006.The funds were used in the construction of two classrooms at Sh.400,000. The committee of the project consists of; The Chairman-Ezekiah Gor Secretary- Mr. Ogolla, Head teacher Assistant-Elisha Menya Treasure-Rose Onyango Margaret Adero

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality The committee is gender representative. The criterion used in getting the contractors was via community interviews. Tendering process was done through advertisements. The tendering committee consists of; The chief-Mark Odero Ass. Chief-Tom Ongadi Area Councillor-Peter Karogo CDF representative-Ben Muga Mzee Mbode Others, making total committee membership to 15. The CDF allocated Kianja School Sh,800,000 disbursed in two financial years starting 2006. The project was relevant to the community in order to reduce expenditure on building materials. The construction of classrooms was started in 2006 and was initiated by the MP .The work is not yet completed, but two classrooms have been occupied. The community also wanted health and training facilities as their primary project to improve peoples living standards. Consultation was done with parents and community members participated actively. The committee consists of: Chairman -Paul Ondiek Secretary -Head teacher Treasurer -Caren Amollo They committee meets monthly The contractor is a local resident called David Ochieng 2.13 Kajulu West Ward Obuolo Secondary received Sh2 million from CDF and this has been spent on building four classrooms. The walls are already developing cracks; an indication of poor workmanship for a project whose cost the public feels was inflated. The CDF committee used single sourcing and awarded the contract to Mr Benjamin Aching who is a relative of the area MP. The CDF gave the same school Sh.900,000 for electrification; a figure those in the know contend was exaggerated. They argue that only about 10 poles are required to connect the school to the main source about 2.5 kilometers away. The three-year old project has continued to be listed as ongoing. Okok Secondary school has been the highest recipient of electrification from the CDF kitty since 2003/2004 financial year to date, totaling a whooping Sh4.5 million. Yet the project has yet to be completed. An interesting arrangement exists at Obuolo Health Centre. It receives two different lines of funding through two names. Under LASDAP, it is called Simba Opepo Health Centre and has received Sh.499,300. On the other wing, the facility passes by the name Obuolo Health Centre in the records of CDF and has been allocated Sh.600,00 during 2004/2005 financial year. According to LASDAP reports, the health centre is a completed project, but it continues to get double funding. Also, the tenders for both Obuolo Secondary School and Obuolo Health Centre were awarded to the same Mr Oching for his political connections. Although the facility is not yet in use, members of the local community are already raising question marks on the quality of the works.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality There is also the matter of CDF projects in three different primary schools in the ward being awarded to one contractor believed to be closely linked to the area MP. The projects are at Ongadi (Three classrooms at Sh.700,000), Bukna (Nursery section at Sh.600,000), and Alango (Maintenance and fencing at Sh.500,000).

2.14

Kolwa Central Ward

LATF allocated Sh.674,000 for the construction of two classrooms at Renja Primary School and a bridge in the financial year 2004/2005. Of this, Sh.450, 000 has already been paid, leaving a balance of Sh.224,000. The implementation status report indicates the work is in progress, to be completed through the engineers department. In the financial year 2005/2006 LATF allocated Sh.300,000 and Sh.460,000 respectively for the construction of toilets at Nyamasaria and replace Kaloo Bridge since CDF was undertaking the same project. There is neither a report on the amounts paid nor any documentation on their implementation status. There is irregularity and lack of transparency in the CDF committee, with the kitty paying fees for children of some capable members. The area MP stands accused of hand-picking members to the CDF committee, and doing nothing to correct twisted allocation of Bursary funds to schools within the ward. A number of projects in the area have also stalled despite receiving CDF support over the last three years, yet others were allocated funds that were never disbursed. For example, Bwanda Primary School never received Sh.500,000 printed in the books as having been allocated to the institution, while Nyalunya Primary School is supposed to have spent Sh2.6 million on the construction of four classrooms. The cost of the project, the local community members argue, was inflated. More than Sh4.6 million had been spent on building a new Nyalunya Secondary School but part of the building collapsed even before it could admit its first batch of Form One students, occasioning additional expenditure. Nyamthoe Farming Project straddling Kolwa East, Central and West locations received a total of Sh4.2 million from CDF between 2003 and 2006 had not achieved much although it is run by a relative of Kisumu Town East MP Gor Sunguh. 2.15 East Kolwa Ward

In the financial year 2006/7 both St Marks and Kasagam primary schools got Sh.100,000 apiece. That was a reduction of Sh.100,000 on each school the previous year. However, disagreements over the utilization of the funds have pitied heads of the two institutions against CDF committee members. A project at Dago Primary School has been delayed by a contractor related to the area MP got an initial payment of Sh.397,000 but did not complete the work. Instead the committee gave him additional Sh.180,000 after he threatened to sue the committee over alleged contractual disrespect. The work is shoddily done. 2.16 Manyatta Ward

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality During the 2004/2005 financial year, LATF allocated Sh.500,000 to build Manyatta Market shades. So far, Sh.349,000 is reported to have been used, and that the project is still in progress, to be completed through the engineers department. Four out of the 10 pillars constructed two years ago at inflated rates are now on the verge of collapse. The project was not prioritized by the local community. LATF also allocated Sh.800,000 in the financial year 2006/2007 for two drifts at Auji. Theres only one constructed and the work done in the ground does not tally with allocated amount. Kosawo Primary School received Sh.200,000 from CDF between 2004 and 2006, but only one classroom has been constructed. Migosi Health Centre has been funded by both CDF and LATF. LATF (2005/2006) allocation was Sh.800,000, but work on the ground that not reflect that figure. In the CDF records, Manyatta Secondary School was allocated Sh2 million between 2003 and 2005 financial year, yet the institution has no building project. Another CDF beneficiary is Manyatta Primary School which got Sh.250,000, and additional Sh100,000 to replenish its library stock after it caught fire. However, it was not possible to establish how much was spent on repairing latrines. 2.17 17. Nyalenda Ward

The Nyalenda Kowino Dispensary, though completed, has not been officially handed over to the community for use. The ownership of its land is in dispute, while tendering for the work was not open. It is understood the project was completed by a second contractor after the first one had ditched it midstream. Learning institutions within the ward such as St Vitalis Nanga and St Marks Nyabera secondary schools were given Sh.150,000 each by the CDF for repairs following flooding. Nyamthoe canal project has been receiving funding from the constituency kitty over the last three years without finally clearing its path to the lake. Consultation with the local community is necessary. LATF allocated Sh.500,000 to clear and open up the course of Auji River to control perennial flooding but no tangible, positive results have been realized. Those in charge of the project declined to share documents with our team. The construction of the Nyalenda Ward councilors office has been praised as a LATF success story, having been allocated Sh.600,000 during the 2005/2006 financial year. Its tendering was done by the council and the work awarded to Dantom contractors.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

Picture 13: The Sh.600,000 LATF-sponsored Nyalenda Ward councilors office under construction

2.18

Management of Secondary Education Bursary Fund in Kisumu Town West

The records available on this fund for 2005/2006 fin ancial years reveal the following:Mr Adhoche who is a CDF committee member and personal assistant of area MP Ken Nyagudi has two children whose fees are paid by the kitty. For example, his daughter Sarah Adhoche who sat her Form Four national exams at Christian Secondary School last year (2006) received Sh14,000 in bursary from the fund. Another daughter of Mr Adhoche, Linet Aluoch and student of Lions High School has also benefited. Then there is Mr Samson Kodande (former Kisumu District Education Officer) whose relatives some not even residents of the constituency are also benefiting from the fund. They are Kevin Ouma Omollo, George Willis Omollo, and Dorine Anyango; all students at Raliewo Secondary School and not residents of Kisumu Town West Constituency, and could not apply for the bursaries. However, their uncle, Mr Kodande wriggled his way to ensure each got Sh.4,000 through cheque number 000496 of Bank account number 2012942400 dated September 4, 2006. Likewise, six students of Ramogi Achieng Oneko Secondary School in Uyoma where Mr Kodande is a governing board member, also got bursaries from the kitty of Kisumu Town

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality West. They were Bob Brian Odira, Raman O. Apollo, Ogweno W. Omondi, George Odhiambo, Ombura Omollo, and G.M Otieno. Mr Kodande hails from Uyoma. In the meantime, orphans from the constituency who applied for the bursaries were turned away. The included Ajwang T. Miriam Kireri, Jacob S.Ajwang of Ngere High School, and Faith Adhiambo of Lwak Girls High School. The following students were each awarded Sh.4,000 bursary yet they either did not need the money or were no longer students; Kenedy B.Ochieng (Kisumu Boys), John Angwenyi Ndiege (Lions High School), and Muslim Secondary School students Brenda A.Ogada, Mercy A.Ogonji , and O. M. Onyango. Indeed, the Kisumu Town West committee broke the rules by giving Sh.5,000 bursary to Leah Ouko, a Standard Eight pupil at Dago Thim Primary School. There are some bursary committee members holding positions in Parents Teachers Associations of private secondary schools influencing awards of bursaries to those institutions; something akin to insider trading.

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality

CHAPTER THREE
Judging from the foregoing examples, it is clear that the devolved funds are being misused because public scrutiny is weak. However, it is important to explore reasons why such funds are largely going into uses they were not meant for. 3.0 Challenges in Implementing Decentralised Funds

Let us now examine some of the key public perceptions in relation to the various funds. 3.1

Governance

The Acts of Parliament that have created some of the funds give immense powers to sitting MPs. Corruption cases have been witnessed in the use of the funds, such as some councilors/MPs demanding that beneficiaries make advance contributions before receiving a fraction of the benefits due or allocate money to projects that favors them. CDF is seen as the most abused in this aspect, followed by the HIV/AIDS and bursary funds, in that order. Political loyalties have led to unfair sharing of resources across constituencies/wards. In addition, there is a general lack of transparency and accountability probably due to the blending of supervisory and implementing roles. 3.2

Implementation

Low awareness by communities and fund managers of their roles and responsibilities in the management of the funds has contributed to poor performance, and total failure in some cases. Poor participation, particularly for marginalized groups, results in twisted prioritization of projects and exclusion. The criteria for allocating secondary education bursary fund, for example has been found to be unfair to orphans whose multiple roles undermine their academic performance. No mechanisms exist to deal with projects such as roads, water systems, and schools that may cut across constituencies entailing shared benefits. No clear mechanisms exist to avert duplication of functions. Both CDF and the Ministry of Education offer education bursaries. There are also reported instances of a single project claiming support from different funds, with no checks to prevent double accounting. Finally, there are challenges to ensuring that all devolvement funds reach all parts of the constituency/ward in adequate quantities, and that all funds allocated are actually utilized instead of being returned to the source. 3.3

Monitoring and Evaluation

Professional and technical supervision of the funds are lacking, resulting in poor project implementation. This has not been helped by low community participation in monitoring and evaluation due to inadequacy of data and general information about

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality the funds. There is a general misconception by communities that the funds are free or are the personal gifts from political leaders and not taxes from the public. Poor monitoring and evaluation has led to abuse of funds and fostered a sense of impunity amongst perpetrators. 3.4

Effectiveness and Efficiency

Allocations from the various devolved funds are inadequate. In addition, tension between fund managers and technocrats over money management and remuneration has led to delays in the release of funds. Inappropriate professional and/or technical support, especially from Government ministries, has prevented funds from reaching target groups, while lack of transparency in procurement systems has affected cost-effectiveness of projects.

Summary of devolved funds injected from Treasury to Kisumu Town East and Kisumu Town West from 2003 to 2007 financial years
constituency Kisumu town west Kisumu town east Total Amount 1st tranch2003/4 1,000,000. 1,000,000 2,000,000 2nd tranch Additional 2003/4 2003/4 1,664,748 160,971 2,103,664 3,768,412 203,410 364,381 1st tranch 2004/5 1,304,052. 1,610,490 2,914,542 Admin.cost 2004/5 72,793. 72,793 145,586 Additional 2004/5 1,177,543 1,412,173 2,589.716 1st tranch 2005/6 1,000,000 1,000,000 2,000,000 2nd tranch 3rd tranch 2005/6 2005/6 1,394,703 1,313,774 1,423,881 2,818,584 1,385.977 2,699,751 Total

9,043,584 10,212,388 19,255,972

constituency Kisumu town west Kisumu town east Total mount

1 st Year 2003/4 6,000,000 6,000,000 12,000,000

2nd year 3rd year 2004/5 2005/6 23,389,766 27,942,234 20,620,405 29,193,227 44,010,171 57,135,461

4th year Total 2006/7 38,708,825 96,040,825 40,441,846 79,150,671 96,255,478 192,296,303

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality 3.5

Recommendations for improving management of devolved funds

An independent taskforce to shepherd projects implemented through devolved funding. Ministry of Public Works to uphold high moral probity levels in its staff for enhanced transparency in supervision of projects at the districts. The final report to be made public There should be a transparency boards erected at all ongoing projects, stating the contractor, the amount and the financial year. RML to be used to make road networks around markets within communities. Bursary fund information to be made public and accessible to residents, preference to be given to truly needy pupils/students. District development officers and District accountant should ensure disbursement of devolved funds is timely and transparent. All the devolved fund projects should have transparency board stating the name of the contractor, the project amount and the contact period. There should be special Audit Unit for the devolved funds and the another community audit assembly for the purposes of looking at issue of transparency

CONCLUSION
Kenyas seven operational decentralized funds face a number of challenges that have prevented them from reaching their full potential. Generally community awareness and involvement has been low, and the funds are seen to have had little impact on the quality of life of the population, partly due to inadequate allocations. Communities have questioned the various processes in identification and implementation of projects, as well as the monitoring and evaluation of projects and funds, and have expressed concerns about accountability and transparency. There is a great deal of work to be done to educate communities on the role of the devolved funds, together with procedures for applying for and accessing them. And the recent recruitment of 210 CDF managers is a positive move to not only professionalize the way the funds are used, but also enhance fairness in project identification and prioritization, away from the political favouritism and manipulation of sitting MPs. There is need for community forums to audit the leadership and resource management and allocation either monthly or quarterly New regulations and restructuring of the current funds are necessary to ensure that they meet the needs of the targeted beneficiaries. Development of a better legal and institutional framework is necessary for improved administration of the decentralized funds. In addition, cobwebs hampering implementation of projects such as changes in government or the privatization of funds by certain fund managers need to be cleared

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Management Of Devolved Funds: A Case Study Of Kisumu Municipality Further we conclude that more than 60% of the money meant for the community projects actually went into peoples pocket and there is need for more detailed study tracking all the projects to ascertain the level of corruption.

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