Safeguarding the Annual 2.5 Percent of the National Budget

By Fredrick Obwanda

Perhaps of all the efforts by successive governments to tackle poverty at the grassroots level, the constituency development fund (CDF), has had the most tremendous impact among the rural communities in Kenya.

From construction of school infrastructure such as classrooms, dormitories, buses, to revamping of police stations. Children from vulnerable families have also gone through school from primary to university, courtesy of the bursaries.

However, even as it continues to create impact, there is needed to safeguard it from mismanagement, which might stifle the fund’s potential. Recent prosecutions of members of parliament (MPs) show the constant threat of manipulation, despite them not having direct role in managing the funds.

Prosecution of MPs

Former Kasarani lawmaker Elizabeth Ongoro was first legislator to be charged on 4th November 2019. Together with six others including former CDF officials, she was charged with conspiracy to defraud the Kasarani CDF of Kshs. 48 million during her tenure.

Most recently, Director of Public Prosecutions approved prosecution of Lari MP Jonah Mburu Mwangi and five CDF officials. On 4th September 2020, they were charged with conflict of interest, conspiracy to commit corruption, abuse of office, willful failure to comply with procurement laws, dealing with suspect property and acting without authorization for trading with the National Government-Constituency Development Fund (NG-CDF) using companies they own.

A week earlier, Malindi MP Aisha Jumwa had also been charged with conspiracy to defraud the Malindi NG-CDF of Kshs.19 million, conflict of interest, money laundering, and acquisition of proceeds of crime. She was released on a Sh5 million bond with a surety of the same amount or an alternative of Sh2 million cash bail.

But as the law catches up with the legislators, a more worrisome picture of mismanagement presents itself at the constituency level. A review of the Auditor- General’s report raises serious questions, as several constituencies cannot account for millions of shillings spent in the financial years 2017/18, 2018/2019.

Funds unaccounted

A quick look at Juja constituency indicates Kshs. 27.6 million bursary disbursements not supported, meaning that institutions either received monies but did not document receipts or never received the said monies.

In Bondo, the National Constituencies Development Fund spent unauthorized reallocated bursary funds worth Kshs. 20 million. They simply by- passed the board approvals as stated in the NG-CDF Act of 2015 rendering the whole transactions null.

Meanwhile, in Mwala constituency, audit reports show that projects worth Kshs. 271.7 million stalled. Despite a book bank balance as at June 30, 2017, of the Kshs.13.2 million, the financial statements show a balance of Kshs. 9.9 million resulting in a variance that has never been explained to date.

In Mandera East, about Kshs. 223.7 million cannot be accounted for due to variance between cashbook balance and statements of assets, irregular procurement and unaccounted for bursary expenses.

In Samburu North, financial statements reflect disbursement of bursaries amounting to Kshs. 48.2 million against a projected expenditure budget of Kshs. 58.2 million. However, the constituency did not show any expenditure plans.

In Dagoretti South the fund budgeted Kshs.156 million but actual expenditure amounted to Kshs. 68.7 million resulting in an under-expenditure of Kshs. 87.2 million begging the question, do some constituencies need budget reviews against their actual plans?

In Ndaragwa, Kshs. 2.7 million that was alleged to have been disbursed to Gwa Kungu and Nyakinyua water projects for construction of water tanks and piping works could not be accounted for as well as Kshs.18.9 million for construction, completion and rehabilitation of administration blocks, classrooms, toilet renovations of various schools.

These are just few examples that are representative of the issues rife in the fund management.

The CDF as a boost to grassroots development

Fighting poverty at the grassroots level has been a key agenda for each successive Kenyan government since independence in 1963. Various programs to help towards this agenda include the special rural development programme, district development planning, rural development fund, and the district focus for rural development strategy with the aim of improving people’s wellbeing.

Most of these programmes failed to address the needs of local people due to lack of political will, inadequate government funding, lack of appropriate technology, neglect of institutional development, lack of beneficiary participation and poor coordination from top to the bottom.

However, after coming into government in 2003, President Mwai Kibaki introduced the constituency development fund (CDF). Its main purpose was to ensure equitable distribution of resources across regions in the country to spur development at the grassroots level.

At its inception, Members of Parliament (MPs) managed the implementation of the funds at their constituency level. However, this changed when on 20th February 2015, the High Court declared the CDF Act 2013 is unconstitutional hence invalid. The court stated in No. 139 of its ruling:

First, the Act establishes CDF as a mechanism that runs parallel to the constitutionally recognized governance structures. By charging it with local projects under section 22 of the CDF Act threatens to upset the division of functions between the national and county levels of governments and interfere with the county government autonomy. …

…By involving Members of Parliament in the planning, approval and implementation of the CDF projects, the CDF Act violates the doctrine of separation of powers between the executive and legislative functions. It also undermines some key national values and principles of governance including devolution of power, accountability and good governance.

The order was suspended for a period of (12) months, during which the court directed the National Government to either address the anomalies in the Act by amendments or repeal it. Consequently, the National Government Constituencies Development Fund (NG-CDF) Act 2015 replaced the CDF Act 2013 with effect from 19th February 2016.

Fund management

The NG-CDF Act of 2015 aligned the operations of the fund to the new constitutional dispensation, to ensure that the law strongly embraces the people’s participation and separation of powers. The main purpose of the fund is to address socio economic development of the Kenyan people at the constituency level in order to reduce poverty and enhance regional equity.

The CDF board at the national government level manages the fund in conjunction with the CDF committee at the constituency and the project management committee. The committee’s main functions is to development project proposals in consultation with the locals through periodic ward level open forums, thereafter submit them to the NG-CDF board for approvals and facilitation.

It is important to note that after projects are approved, the project management committee implements. The project manager must ensure compliance with the public procurement processes as per the Public Procurement and Disposal Act of 2015 until project completion to allow for auditor general overview and reporting. The parliamentary select committee on the NG-CDF also provides oversight of the projects.

The NG-CDF Act provides that at least 2.5 per cent of the revenue collected nationally be allocated to the CDF kitty. NG-CDF for the 2020/21 financial years was Kshs. 41.7 billion as it was in the 2019/20 financial years. Each of the 290 constituencies received Kshs. 117.9 million; up from the Ksh80 million they had been receiving.

Working structures

Indeed, it is evident that utilized properly, NG-CDF addresses the resource gaps at the grassroots level and has potential to improve the status of communities.

It is my view that the country still needs lots of work in order to help the local communities shepherd their value for money expectations in order to get services, even as their legislators learn to cope with the actual demands. There is need for further sensitizing the public on their role in the management of these funds.

Plans are to be executed within a legal framework that encompasses respect to the rule of law and meets the needs of the people, but for those who have lost taxpayers monies through pilferage, more prosecutions are needed to render justice.

Fredrick Obwanda is Programme Director at UWAZI Consortium

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