Showing posts with label LATF. Show all posts
Showing posts with label LATF. Show all posts

Thursday, June 19, 2008

Local Authorities 9.2 Billion Shillings Payout: Who will account for our money?

In April 2008, a routine yet significant event went unremarked at the Local Government Ministry. The first 2008 allocation of the Local Authority Transfer Funds (LATF) totaling Ksh. 3.2 billion was paid out to the 175 local authorities in the country. A further Ksh. 1.32 billion was due by April 30th 2008.

Save for a full-page advert (click image) in the main dailies listing the amounts per council, there’s not been a single serious commentary or analysis regarding this money from our mainstream media houses. This being one of the most opaque and least understood public funds in Kenya, it’s important that we pause for a minute and ask ourselves a few pertinent questions regarding this money.

Are members of the public aware that these big sums of their own money have been given out to their ward Councillors?

Are members of the public aware that these funds are meant to initiate and complete various projects in their wards this year?

Are the taxpayers aware that their Councillors do not have ward committees (akin to the CDF committees) to oversee the use of these funds in the ward?

Are Kenyan voters aware that these funds have consistently been paid out to civic authorities every year since 1999?

Above all, can Kenyan voters confidently point out past LATF projects in their respective residential wards?

In attempting to answer these questions, I would like to begin by castigating the mainstream media in Kenya for failing in their duty to inform us regarding the LATF funds and their use over the years. In yet another classic example of this gross abdication, no journalistic enquiry worth talking about has been conducted by leading media houses to examine these funds, even after their disbursement this year.

The result is that few people are aware that public money is available for various development projects at the ward level, besides the much talked about CDF. Even fewer are aware that their elected Councilors have been entrusted with the authority to use this money as they deem fit within the wards. Incidentally, they are expected to do this in consultation with the ward residents.

Nairobi City Councillors receive the highest LATF amounts

This may come as a shock to many Nairobi residents, but it is true that from the LATF allocations in the 175 local authorities, Nairobi Councillors receive the highest amounts based on population density compared to other councils. From the recent disbursments, Nairobi City Council has already received a whooping Ksh. 597 Million for use at the wards level.

This implies that each of the 75 elected Nairobi Councillors is currently in charge of almost Ksh 8 Million meant to initiate various projects within their electoral wards. To appreciate the seriousness of this issue, it’s worth noting that this disbursement is just the first allocation this year by the local government ministry. Two other payouts will follow by October 2008.

During the government budget speech read on 14th June 2007, Finance Minister Amos Kimunya explained: “Budgetary allocation under LATF more than doubled from KShs.3.0 billion in 2002/03 to KShs.6.5 billion in 2006/07 and is projected to rise to Kshs.9.2 billion in 2007/08.”

Indeed, this year’s budget has allocated Ksh. 9.2 billion to local authorities. Nairobi City Council will receive the biggest chunk of the fund at Ksh1.7 billion. I invite you to do the maths and see how much each of the 75 elected Nairobi Councillors will receive from this by the end of the financial year.

However, the big question for the rest of us remains: Who is going to watch over these big sums of our money?

Of great concern to the Kenyan taxpayers is the fact that these funds are not publicly supervised nor are they publicly audited. A most feeble attempt at public audit is captured on the local government full-page adverts in these words: “Citizens should demand regular progress reports from their elected local councils on the use of the funds.”

According to the LATF act of 1998, the closest the funds come to being audited is when the officer administering the Fund (PS Local government) “prepares, signs and transmits to the Controller and Auditor-General, in respect of each financial year and within four months after the end thereof, a statement of accounts relating to the Fund specifying the income to the Fund and showing the expenditure incurred out of the Fund.”

To the best of my knowledge, I’m yet to see, read or hear a government public audit report on these funds since 1999.

The urgent need for Ward Committees

During the civic election campaigns last year in Kileleshwa, my most important and consistent pledge to the voters was the immediate establishment of a ward committee if I got elected. This proposed committee would comprise residents’ association officials and other critical stakeholders, to supervise the use of LATF funds meant for Kileleshwa. This ideal remains even more valid today. (Read my contract with Kileleshwa voters).

It’s obvious that without this sort of accountability on the money and going by what we’ve seen in the past, the money will easily find ‘better’ uses for our Councillors. Indeed, stories abound of people who were financially strapped becoming overnight millionaires during their first terms as Councillors.

There’s no magic or brilliance to it. As Kenyan voters, lets not regale ourselves with these stories in 2012. It’s our money after all that’s enriching a few.

The act needs to be revised by our MPs to enable the formation of ward committees and annual public audits. LATF is at par, if not more critical than CDF when it comes to uplifting the infrastructural and economic conditions of Kenyans at the grassroots.

Used well, these funds have the potential to catalyze some serious development projects in the wards. More so if targeted at informal small-scale business people, agricultural initiatives and the time-bomb that is the ever growing number of unemployed youth.

In concluding, I submit that due to an incredible omission in the local government act, the LATF funds remain a blank cheque given to our Councillors. Its high time taxpayers woke up from their ambivalence to start demanding accountability for their money.

As usual, your views and comments on this subject are most welcome.

Email me: dmuhindi@gmail.com

Saturday, June 2, 2007

Local Authority Transfer Fund: The public fund that Councillors are not talking about

If there’s one Kenyan fund that has remained hidden from public scrutiny since its inception, then it must be the Local Authority Transfer Fund (LATF). It’s one of the eight operational decentralised funds whose aim is to reduce socio-economic disparities and improve the well being of citizens.

Among the eight are the well-known Constituency Development Fund (CDF) and the Free Primary Education (FPE) established in 2003. The most recent is the Youth Development Fund (YDF) established in 2006. Others are the Secondary School Education Bursary Fund (SEBF), Road Maintenance Levy Fund (RMLF), Rural Electrification Programme Levy Fund (REPLF) and the HIV/AIDS Fund.

However, for the purposes of this forum, I’ll restrict myself to discussing the LATF.

This fund was established in 1999 through the LATF Act No. 8 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 (approx. Ksh 15 Billion in 2006), currently 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 (Ksh 1.05 Billion). 60% of the fund is disbursed according to the relative population size of the local authorities (approx. Ksh 9 Billion). This implies that Nairobi receives the highest amounts.

The balance of 33% (approx. Ksh 4.95 Billion) is then shared out based on the relative urban population densities. LATF monies are combined with local authority revenues to implement local priorities. (Source - Kenya Institute of Participatory Policy Research Analysis - KIPPRA).

The whole idea of having funds such as these is based on the belief that government at the local level has a better understanding of community needs, and is more capable of delivering improved, responsive and relevant services.

The question that begs an urgent answer is whether LATF has been able to fulfill this aspiration over the last 8 years.

Low awareness levels
A survey carried out by KIPPRA in 2006, established that LATF was the least known fund in the country. Free primary education was the only fund that recorded consistently high levels of awareness (at over 90%) with Local Authority Transfer Fund being the least visible fund at less than 30%.

Similarly, the Free Primary Education Fund recorded the highest rating for impact, with over 90% reporting a positive impact. Guess what, the fund that was rated as having the least impact is…you guessed it right ….the subject of our blog today.

As a citizen of this country and a taxpayer, I have to say that the picture painted by this survey is simply deplorable. If the leadership at the grass roots level is not able to enlighten community members on the benefit of these funds, then what is their mandate as elected leaders?

My understanding is that LATF funds are given out every year to elected local government officials to finance priority projects within the ward. Unfortunately, the law vests discretionary powers on the Councillors to decide what to do with the funds. Residents are hardly consulted and in fact, most people I’ve talked to regarding these funds are not even aware of their existence.

So, what have Nairobi Councillors and specifically the current Kileleshwa Councillor been doing with these funds? Kileleshwa voters need to start asking these questions because it’s their right to know how money provided on their behalf has been spent in the Ward.

Just to give you an idea of how much money we are talking about, my research has established that Nairobi Councillors receive the highest amount of LATF in the country. This is in the region of Ksh 4M per year to undertake at least one project in the Ward.

As I close this post and open it up to discussion with my fellow Kileleshwa residents and indeed other Nairobi voters, lets take a moment to ponder the words of Hon. Charles Kilonzo of Yatta Constituency.

“I would like to touch on the issue of Local Authority Transfer Fund (LATF) money. The LATF is like a country called Alaska. Everybody knows about it and nobody wants to go there. Why? Because Councillors have taken LATF money to be their pocket money.”

This is taken from the Parliamentary Hansard report of 2nd August 2006.

My fellow Kileleshwa residents, if you give me the mandate of representing your interests at City Hall this year, my first priority will be to establish a ward committee comprising community leaders and officials from residents associations. This committee will determine priority needs that can be met through the LATF funds.

I’m currently moving from court to court discussing this issue and others touching on the welfare of the Ward. Am open to invitations to discuss more civic issues face to face at your courts, residents association meetings or any other forum.

To arrange this, please feel free to write to me at this address: dmuhindi@gmail.com.