UNIVERSITY OF NAIROBI

COLLEGE OF EDUCATION AND EXTERNAL STUDIES FACULTY OF EXTERNAL STUDIES DEPARTMENT OF EXTRA-MURAL STUDIES

MASTER OF ARTS IN PROJECT PLANNING AND MANAGEMENT COURSE CODE: LDP 608 COURSE NAME: MONITORING AND EVALUATION LECTURER: DR. STEVE MOGERE GROUP 7 MEMBERS: WINNIE KAMAU MAINA WINNIE NJERI PETER MAINA KARUHI RICHARD MWIRABUA GITONGA LIMO WILSON KIPTOO LEWIS MURIMI GIBSON TOTT FREDRICK MACHARIA MAINA ALBERT JUMBA L50/72271/2011 L50/67896/2011 L50/68648/2011 L50/68835/2011 L50/68303/2011 L50/68212/2011 L50/72573/2012 L50/67241/2011 L50/71286/2011

QUESTION 7:
What are the challenges of achieving development through the use of extra budget funds like CDF, RMLF, LATF and CBF? Discuss also their sustainability.

INTRODUCTION Successive government regimes have always pursued decentralisation of development since independence. The Kenyatta government prioritised eradication of ignorance, poverty and disease. As stated in Sessional paper no. 10 of 1965 African socialism and its application to planning in Kenya, planning was to be extended to the provinces, districts and municipalities. The new government had just attained self independence which meant the destiny of Kenyans was now in its hands. The idea of development was premised on increasing production leading to higher standard of living, creation of employment opportunities and development of infrastructure. In 1982 during the District Focus for Rural Development (DFRD) program launch, former President Moi declared that henceforth each district would be viewed as the basic operations unit where each district team would become the major instrument for the design and implementation of rural development. Extra budget funds were thus set aside through such initiatives as LATF (1998), RMFL (1993) and DBF (1994). In 2003, President Kibaki embarked on both economic and legal reforms that were to become the engine of equitable development. Such initiatives that reflect devolvement of development to the regions include Constituency Development Fund, Free Primary Education fund, Constituency Bursary Fund, Economic Stimulus Programs. The current constitution (promulgated on the 24th of August 2010) can be cited as the best attempt to address the issue of resource distribution and sharing of the national cake through a legal framework with clear roles and responsibilities for each level of government. Currently there are more than ten devolved funds in operation in Kenya among them LATF, CDF, CBF, RMFL, HIV/AIDS whose key characteristic is the use of extra budget funds set aside by the National Treasury to address specific social economic issues that are not appropriately addressed through the normal budgetary lines. The catalyst behind these initiatives has been the perceived inadequacy of the popular practice of channelling resources through government departments and agencies to address local issues.

The question is how sustainable are these initiatives? Does the new constitution spell doom for these funds? The purpose of this paper is to examine the challenges of achieving development through these funds and the sustainability of these initiatives.

CONSTITUENCY DEVELOPMENT FUND (CDF)

The Constituency Development Fund (CDF) was established in Kenya through the CDF Act of 2003 in the Kenya Gazette Supplement No. 107 (Act No. 11) of January 9th, 2004 and later amended in 2007. It is an annual budgetary allocation by the Central government to each constituency whose main objective is to fight poverty and shift implementation of projects to the local communities. CDF is hence a bottom-up planning approach which stimulates local involvement in development projects. CDF ALLOCATION CRITERIA CDF comprises of an annual budgetary allocation equivalent to at least 2.5% of the governments ordinary revenue. While 3% is allocated to CDF Board for administration, 97% is allocated to all constituencies. 5% of this 97% is allocated to the Emergency Reserve which caters for emergencies that may occur within the Constituency such as drought or floods. CDF MANAGEMENT Constituencies Fund Committee (CFC): This is a select committee of the National Assembly whose main role is to oversee the policy framework and legislative matters that may arise in relation to CDF. Constituencies Development Fund Board: The CDF Board is a corporate body under the Ministry of State for Planning, National Development and Vision 2030 that is responsible for the effective and efficient management of CDF. Constituency Development Fund Committee (CDFC): This is a committee constituted by elected members of Parliament that deliberates and ranks, in order of priority, all project proposals in the constituency for purposes of funding. It also monitors the implementation of projects. Project Management Committees (PMC): This is the committee selected by the community and is charged with the responsibility of managing the development initiatives on their behalf. PMC assists in project identification, documentation and sensitizing the community on selected projects.

Citizens: As the main beneficiaries of CDF, citizens role is to provide opinion on specific development projects to be funded by CDF, provide membership to the PMCs and the CDFCs, monitor / sustain CDF projects and be the whistle blowers on any corruption. MILESTONES ACHIEVED BY CDF CDF has contributed significantly to the development of the country through: 1. Empowerment of communities by direct involvement in selection, implementation and procurement of projects in their local areas hence encouraging local initiative, ownership and accountability. 2. Better and easier accessibility of basic services by Kenyans. 3. Creation of employment within the communities through awarding of contracts to local artisans and sourcing of local materials. 4. Improvement in the physical infrastructure of most constituencies such social, education and health facilities. 5. Reduced student dropout rate in secondary and tertiary institutions, especially among orphans through the bursary component of CDF. CHALLENGES FACED OF ACHIEVING DEVELOPMENT THROUGH USE OF CDF Since its inception in 2003, the implementation of CDF has encountered a number of operational and policy challenges as discussed below. However, these challenges can be rectified for sustainability of the fund. Poor community participation and contribution to projects: High community expectations and the subsequent unwillingness of communities to give support to projects being implemented in their localities has led to high project failure rates where there are many small projects undertaken that have had little or no impact on the communities welfare. For these development projects to be sustainable, the communities need to be sensitized on the importance of their involvement so to attain self reliance which is in line with the realization of the Kenya Vision 2030 and the District Development Plans. Mismanagement of funds: A report by the National Taxpayers Association (NTA) showed that up to Kshs. 2 billion meant for CDF could either have been misappropriated by politicians funding personal agendas, remained unused or unaccounted for which raised questions on accountability and transparency in the government. The CDF Board should hence review the

existing institutional framework and put in place strategies to strengthen it in order to promote accountability and transparency in the administration of the CDF. Lack of proper dissemination of information from the government on policies: Most communities are still unaware of the existing policies governing administration of CDF and their specific roles as key players (and that of other CDF officials involved) in the effective coordination and management of the fund in their areas. Planning Minister Wycliffe Oparanya, while speaking during the launch of the CDF Board 2010 - 2014 strategic plan and service charter in April 20th 2011, stated that there was need to amend the CDF Act to make the management of the new proposed 47 counties under the new constitution easier, ensure prudent management of the fund and efficient utilization of the CDF resources hence achieving sustainability. Low utilization of completed facilities: Many educational & health institutions and cattle dips are largely underutilized due to lack of collaboration with line ministries especially on staff requirements and their remuneration. The government should thus ensure that these facilities are used for their intended purpose by allocating the needed resources so as to benefit the people at the grass root levels. An interface between CDF and other devolved funds should also be established where both can leverage and reinforce each other for maximum impact. Non-adherence to laid-down government procedures, rules and regulations: Politicians have been known to forcefully yield their power so as to fuel personal agendas where they award procurement or construction tenders to relatives instead of following the necessary documented procedures. To avoid conflicts and corruption emanating from such deals, the government should heavily penalize or imprison individuals who disregard CDF policies. Poor management of transition during elections: Coming into office of different CDF management members, especially newly elected members of parliament, can lead to stalling of ongoing projects hence the government should have regulations put in place to allow for continuity and completion of existing projects even if there is a change in committee members. Weak capacity to identify viable projects: Sub standard proposals and lack of government commitment to participate in identification and implementation of development projects has led to the implementation of non beneficial projects hence wastage of both financial and material resources. The government should thus consider the appropriateness of the existing CDF

allocation criteria including the poverty indexes and their application, assess the adequacy & usage of the 2.5 percent CDF allocation and review the coverage of eligible projects and programs. Low technical capacity to implement development projects: Low utilization of technical officers in the implementation of projects has led to substandard projects and constructions which can be rectified if qualified and professional technicians are contracted to handle these projects for long lasting purposes.

CONCLUSION There is no doubt that CDF is a novel concept that has and will continue to impact positively on development at the grassroots. A number of countries in the region have even been studying the Kenyan CDF model with the hope that they can legislate and emulate similar programs. A better understanding of CDF can thus further provide important information that would help in design of other successful decentralization schemes. It is therefore recommended that a rigorous in-depth analysis be undertaken to identify the main sources of concerns / weaknesses so as to propose concrete recommendations on reforms that would be required in all CDF projects for eective monitoring and evaluation. In terms of general management of the CDF program, the projects need to be synchronized with other development initiatives in the country. Development initiatives by different actors have not been in harmony at the district and constituency levels and it is the intention of the government to see development initiatives harmonized at all levels.

ROAD MAINTENANCE LEVY FUND (RMLF) INTRODUCTION RMLF was established in 1993 through the Road Maintenance Levy Fund Act. It caters for the maintenance of public roads including Local Authority unclassified roads. The fund, allocated by the Kenya Revenue Authority, is derived from a fuel levy on petroleum products and transit toll collections and is administered by the Kenya Roads Board which was established in 1999. The current change is Kshs. 9 per litre of petrol or diesel. RMLF targets maintenance of roads under the control of the Ministry of Roads and Public Works, Kenya Wildlife Service and District Road 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 rural roads are managed by District Road Committees and are shared equally among constituencies within a district. OBJECTIVES The main objective and purpose for which the Roads Board was established was to oversee the road network in Kenya and thereby coordinate its development, rehabilitation and maintenance; and to be the governments principal adviser in all matters related to maintenance of roads. It recommends to the government appropriate levels of road user charges, penalties, levies or any sums required to be allocated under the RMLF and paid into the KRB fund. It also recommends periodic reviews of the fuel levy as is necessary for the purpose of the fund and other potential sources of revenue for the development, rehabilitation and maintenance of roads. RATIONALE FOR RMLF

The user pay principle states that the full cost of providing and maintaining roads

should be recovered from the road user. Road costs to be recovered are generally of two types, namely marginal and fixed costs.

The fuel levy is a good marginal cost recovery instrument since there is a direct

relationship between the amount of fuel used and the distance travelled on roads. License

fees are a good fixed cost recovery instrument since it charges for access to the road network and is not traffic related.

Fixed costs are typically environmental related and not dependent on traffic demand. Therefore for the sake of fairness every vehicle owner should contribute to the fixed

They constitute 70% of the costs.

costs. A good example is if members set up a video club, they will need to charge annual subscription fee so that they are sure to cover the rent and salary of the attendant so that even if it is football season and nobody wants to watch videos, they can at least cover the fixed costs. They then charge for each tape borrowed to recover their recurrent costs and make a profit.

The road license itself has other important roles which are ensuring that all vehicles

have valid insurance, keeping track on vehicles ownership and providing statistics on road usage. CHALLENGES FACING RMLF

It does not compensate for the damage on the roads. The load related cost imposed by

an articulated truck is more than 10 times as much as that imposed by a small car, but only uses about 4 times as much fuel.

Political loyalties have led to unfair sharing of resources across constituencies / wards There is a general lack of transparency and accountability, probably due to the blending Poor marginilization, particularly for marginalized groups, results in poor priritization There are challenges in ensuring that all decentralized funds reach all the instructional

of suervisory and implementing roles

of profit and exclusion.

destinations in adequate time and that all funds allocated are actually utilized instead of being returned to the source. There has been talk of professional and technical supervision which has led to poor There is also low community participation in monitoring and evaluation due to Poor monitoring and evaluation has led to abuse of funds and fostered a sense of project quality. inadequency of data and general information about the funds. impunity amongest the perpetrators.

There is general misconception by community members that funds are free or are the Tension between fund managers over money management and recommendation has led Lack of transparency in procurement system has affected the cost effectiveness of Increased dependancy on the funds compromises quality by creating excessive demand

personal gifts from political leaders. to delays in the release of funds.

projects. for services such as the free primary education has created. CONCLUSION RMLF has failed to overcome a number of challenges that have prevented it from realizing its potential and impact positively on the quality of life population. This is partly due to inadequate allocations and communities reduced awareness and involovement of projects. Communities have questioned the various processes in identification, implementation, monitoring and evaluation of projects as well as funds and are generally unsatisfied about accountability and transparency. Answers must be obtained against these questions if the noble objectives of poverty and inquality reduction are to be realized. This calls for education of communities on the role of the various funds, procedures for applications as well as the use of the allocated funds. There is also need to train the fund managers and community / organizations on the procedures for utilization of the funds. New regulations and restructuring of the current funds are necessary to meet the needs of the targeted beneficiaries. They should comprise better legal and institutional framework for improved administration of the funds. Finally, there is need to mitigate barriers to effective implementation of projects such as the interruptions in the governemnt or the privatization of funds by certain fund managers.

LOCAL AUTHORITIES TRANSFER FUND (LATF) LATF was launched in 1999 after the passing of Local Authorities Transfer Fund Act of 1998 with the objective of improving service delivery, improving financial management and reducing the outstanding debt of local authorities. LATF, which comprises 5% of the national income tax collection in any year, makes up approximately 24% of the local authorities revenue. The mode of sharing is 7% equally among the 175 authorities, 60% is disbursed according to relative population size while the balance is shared on the basis of relative population densities. OBJECTIVES OF LATF LATF monies are combined with local authority revenues to implement local priorities such as health projects, markets, roads, education, sanitation and solid waste, bus parks and housing projects. The funds should ideally be used to address needs identified through a participatory process called Local Authority Service Delivery Plan (LASDAP). The release of the funds is pegged on specific conditions being met:

60% is released if councils follow laid down fund rules. 40% on submission of documents which include a statement of actual revenues and

expenditures, a statement of debtors, a debts repayment plan, an abstract accounts / cash balances, a revenue enhancement plan and a Local Authority Service Delivery Action Plan (LASDAP). CHALLENGES

The extent of citizen participation is low. There is no clear role and responsibility in

other levels of project cycles after project identification and as a result, the quality of citizen engagement is very poor.

Communication strategies are inadequate which should involve mobilization through Councillors are left to decide on behalf of the people. Duplication of projects due to differing administration of CDF and LATF. Lack of monitoring and evaluation where the NGO sector is left to undertake this role Growing population in urban areas has outlived the impact of these funds

local churches, chief barazas and advertisement in the media.

and who are sometimes accused of interference by the local politicians.

LATF funds are lumped together with other local authority resources making it difficult

to isolate their impact on development. CONSTITUENCY BURSARY FUND (CBF) HISTORY In 1993/4, the government established the Secondary School Education Bursary Fund (SSEBF) to cushion households from impacts of poverty, unstable economy and the effects of HIV/AIDS by increasing access, retention and completion rates in secondary schools. The bursaries were administered by the Ministry of Education, Science and Technology through secondary school heads and education officers. From 2003 however, the government changed the system by establishing Constituency Bursary Committees to administer the Fund. The allocation to each constituency is based on the secondary school enrolment, constituency poverty index, overall national secondary school enrolment and the countrywide poverty situation. In 2004 for example, national enrollment stood at 786,129 students, while the poverty index showed that 65% (471,674 students) were poor and needed bursary support. OBJECTIVES The fund was established with the aim of:

Cushioning the income poor and the vulnerable groups against negative effects of Increasing access of poor households to secondary schools. Ensuring retention and completion rates of those who enrolled in secondary schools. Reducing disparities / inequalities in the provision of secondary education. Promoting transition rates i.e. from primary to secondary and eventually to the tertiary

increasing cost of secondary education.

level. The objectives of CBF are to increase access to secondary school education, ensure students remain in secondary schools, promote transition and completion; and reduce disparities and inequality in the provision of secondary school education. AWARDS In awarding bursaries, four conditions are considered:

Family status: Ranked as totals orphan, partial orphan, single parent or needy parents.

Affirmative action or special circumstances: For example girl-child, boy-child, Discipline: Ranked as excellent, very good, good, fair or poor Academic performance: Ranked as excellent, very good, good, average or below

children from slums, marginalized communities, special needs or children with disabilities

average. Marks are awarded in each of these categories and scores given out of a possible total of 100. The children with the highest scores are then awarded bursary. The list of beneficiaries and the minutes of the CBF Committee signed by the chair, secretary and treasurer are forwarded to the District Education Officer who prepares payments and signs the cheques within one week. The cheques are sent to the AEOs office where the other two signatories sign the cheques before disbursement to respective schools. RELEVANCE / IMPORTANCE / RATIONALE The rationale of CBF is to create equal access to education by all school-going children in Kenya. The fund targets children from poor households, arid and semi-arid areas, orphans and those affected by HIV/AIDS. Five per cent of the allocation is set aside for the girl child and other children under special or difficult circumstances which may include children with disabilities or various medical conditions. CHALLENGES

Delayed disbursement of funds: The budgetary provision for the bursary fund is done

for a financial year which differs from the school academic (calendar) year. That is, the bursary disbursement programme has not been synchronized with the school programme. Secondly, because of the bureaucracy associated with the bursary fund, cases of delays in bursary disbursements to the schools of the affected students have been reported. This condition has the needy students staying away from school because of delayed payment of their school fees. This disrupts their learning and by the time they are aware of their bursary allocations, they have missed several days of learning. This phenomenon immensely contributes to poor academic performance among beneficiaries from poor families. This challenge is a serious impediment to the effectiveness of the constituency bursary fund.

Lack of transparency and accountability in allocation / awarding of bursaries:

Needy students end up getting less bursary allocation or none at all while those who are

better placed in the society including those from politically correct families end up getting big awards hence defeating the very purpose of the fund.

Duplication in award of bursary funds: While most kitties continue appropriating

funds towards education bursaries, little effort has been put in place to deal with multiple applications by students. Certain students end up getting bursaries from LATF, CDF and CBF.

Performance perception of the CBF Committees: According to a report released on

September 2011 by Youth Initiative on Research carried out in Kasarani, Embakasi and Starehe constituencies, there were differing perceptions on the performance of the Constituency Bursary Fund committees (CBFCs). Whereas the CBFCs consider themselves as being able to perform their function, most of the stakeholders believed they were operating at the whims of the local political leadership. In response to this political pressure and other extraneous considerations, the bursary committees often operated outside the policy guidelines given by the Ministry of Education.

Misguided perception of intended beneficiaries: Although the education officials in

the higher hierarchy believe that the fund reaches the poor and girls, study evidence from interviews at the point of impact i.e. schools, shows that allocation of the fund is greatly marred by conflicts of interest, politics and local network influences. As a result, the fund remains inefficient in targeting the intended groups of beneficiaries. The non-poor seem to have a disproportionate share of the fund primarily because they have the information and necessary networks to influence access to the fund.

Bursary Demand Gap / insufficient funds: Overall, the demand gap on the fund

remains high with the proportion of beneficiaries hardly reaching 20% of all applicants. This proportion could be much lower if all the potential applicants got the right information and were able to apply on time. RECOMMENDATIONS

Bursary kitty and award guidelines should be revised to reflect actual fee structures. Ministry of Education, Science and Technology should take up its leadership role. Monitoring and Evaluation institutional frameworks must be strengthened or The CBF should open doors for stakeholders to get in. The CBF should spearhead resource mobilization to revamp the bursary kitty.

established where they don't exist.

There is need for professionals only to be admitted to the CBF Committee (CBFC). Other CBFC members should be trained in essential skill areas. The Constituency Bursary Committees should develop strategic plans with program There is need for comprehensive data base of needy students at the national and CBF should create interactive communication channels with the community. There is need for effective record keeping at national and grass-root levels. Economic empowerment for households, especially women should be embraced. Schools should initiate Income Generating Activities (IGAs) to supplement secondary

-specific visions, missions, strategic objectives and core values. constituency levels.

education financing and that CBF should venture into post-secondary education financing.

CRITIQUE ON EXTRA-BUDGET FUNDS LIKE THE CDF, RMLF, LATF AND CBF Lack of coordination in the funds management: Since there is no proper and central coordination between the extra budget funds which are involved, in education for instance

LATF, CDF and CBF listed students end up exploiting all the kitties at the same time and denying opportunities to others. There is poor harmonization of the projects especially on LASDAP funded projects hence major projects end up getting duplicated in the same area. Poor planning which results in giving the citizens a raw deal: Despite the existence of planning and harmonization committees, which includes District Development committees and the District project committees, planning and harmonization of the funds is virtually nonexistent. In a Nairobi audited report, it showed that some projects were initiated independently of other financing agencies without consultations leading to duplicated project as well as idle projects too. The absence of an overall strategic development framework to guide these expenditures results to substandard deals in the community as far as development is concerned. Corruption: There are numerous projects that are affected by corruption in the local areas resulting mainly in stalling of projects. This is marred by nepotism where the projects leaders opt to contract and employ their own people who reap heavily from the substandard work that they do. CDF, for example, continues to operate in very controversial, illegal and arguably unconstitutional circumstances where the concerned parliamentarians have choose to ignore these facts simply because the status quo benefits them. It is thus seen that projects are implemented selectively and not for the interest of the locals at large. The communities watch from a distance as projects are being implemented without their approval and in the long run, there has very little to show for the billions of shillings utilized so far by CDF. L Lack of involvement by the concerned citizens: Despite the existence of numerous decentralized funds over years, citizen involvement in planning, prioritization and monitoring remains low. In most decentralization initiatives in the country, citizen interaction with local officials is also low. Most depend on interpersonal networks and media to obtain information on local development in their area. Two audited reports from Nairobi and Mombasa have identified low citizen participation as a stumbling block to optimal utilization of devolved funds. A cross-cutting trend in most constituencies has been involvement of the public at the identification and initiation stages only to exclude them at the vital stages of procurement, implementation and monitoring. Moreover, poor awareness by community members and fund managers of their roles and responsibilities in the governance of funds has contributed to poor performance and in some cases, complete failure of the initiated projects.

CONCLUSION It is noted that almost all the extra budget funds are marred with corruption, lack of accountability, lack of coordination and poor planning. In order to curb these challenges and ensure its sustainability, there is need to design and adopt accountability mechanisms. These m mechanisms include: Monitoring and Evaluation by Project Management committees These committees should have proper audits and monitoring systems utilized on a regular basis to ensure that every objective is met, be it in poverty alleviation or economic empowerment. There should be centralized tracking systems of the progress in the funds allocation of which every fund allocation should match the initial objective. Sensitization and awareness creation to encourage community ownership of projects This is where the people view any of the projects as just government initiative which they have nothing to do with. There has been a citizen report card which is a mechanism that gives feedback from the users on public services. If a road is being constructed using money from RMLF, they should be part of the project and should be in a position to support the project and report any anomalies. Good management practice - This entails having good leadership and governance in the management of the funds in order to erase corruption and cases of nepotism as seen in the fund management. Total support is needed from the government - Despite these funds being initiated by the government, there is need for complete, independent and comprehensive follow up on the projects. For instance in the CDF, the government disperses the monies to the constituencies and there is little follow up on the same which leads to misuse or underutilization, where some monies are returned to the ministry unused yet poverty is rampant in the same constituencies.

REFERENCES Centre for Governance and Development Report: National development funds, institutional structures and procedures.

Constituencies Development Fund Board website. Institute of Economic Affairs, National Council of Churches of Kenya and Diakonia (2011): A Guide for Understanding Decentralization in Kenya. Kituo cha Sheria (Mombasa office): A guide to community participation. National Taxpayers Association (NTA) research findings (2010). Obudho, R.A, Akatch, S.A and Aduwo, G.O (1988): The District Focus for Rural Development: An Empirical Application of Bottom-up Concept special issue. Planning Minister Wycliffe Oparanya (June 2009): Taskforce on CDF Amendment Act Review Press release. Public Policy Monitoring of Devolved Funds: The case of Local Authority Transfer Fund (LATF) in Mombasa, Kenya UN Women (2011): Gender Responsive Budgeting in the Secondary Education Bursary Fund. Wachiye, H. and Nasongo, J. (2010) Access to secondary school education through the Constituency Bursary Fund in Kanduyi Constituency, Kenya.