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Doomed to fail? The trouble with special projects, funds

Sunday March 27 2016

Former Devolution and Planning Cabinet Secretary  Anne Waiguru addressing the media at Harambee house on June 18, 2015 on procurement investigations on the National Youth Service. Official estimates indicate that Sh791 million was lost at NYS. Special programmes and funds established by the government to support vulnerable groups have been making news but for all the wrong reasons. PHOTO | MARTIN MUKANGU | NATION MEDIA GROUP

Former Devolution and Planning Cabinet Secretary Anne Waiguru addressing the media at Harambee house on June 18, 2015 on procurement investigations on the National Youth Service. Official estimates indicate that Sh791 million was lost at NYS. Special programmes and funds established by the government to support vulnerable groups have been making news but for all the wrong reasons. PHOTO | MARTIN MUKANGU | NATION MEDIA GROUP 

WALTER MENYA
By WALTER MENYA
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Special programmes and funds established by the government to support vulnerable groups have been making news but for all the wrong reasons.

Created in a highly politicised environment ostensibly to support marginalised groups, the projects have become easy targets for government officials to loot.

The recent corruption allegations at the National Youth Service (NYS) and the Youth Enterprise Development Fund (YEDF), where millions of shillings are suspected to have been stolen, are good examples of what ails these programmes.

Official estimates indicate that Sh791 million was lost at NYS while the Youth Fund paid Sh180 million for a non-existent consultancy to Quorandum Ltd, a company believed to be linked to current and former officials at the Devolution Ministry. MPs suspect more money could have been lost.

Besides the recent cases, just two years after the 2007/2008 post-election violence, a former Permanent Secretary in the Ministry of Special Programmes, Mr Ali Mohammed, was named in a forensic audit report for flouting the rules on disbursement of the Internally Displaced Persons funds, leading to a loss of between Sh200 million and Sh500 million.

The report also accused a former provincial commissioner and 22 district commissioners.

Former Laikipia West DC Javan Ombasa was eventually charged in a Nakuru court with stealing Sh8.75 million meant for IDPs in Molo.

KAZI KWA VIJANA

It was the same story with the Kazi kwa Vijana programme that collapsed after funds were misappropriated.

The programme was run under the defunct Office of the Prime Minister, Mr Raila Odinga, to reduce the vulnerability of unemployed youth by offering a line of income for participating in infrastructure projects.

Following claims of corruption, the World Bank, which had offered a grant of Sh4.3 billion to support the scheme, demanded a refund.

With all these scandals, the question remains: What makes special projects so vulnerable to manipulation? “We are losing a lot of money through these scandals through mistakes of our own making,” opposition MP John Mbadi (ODM, Suba) said.

According to him, the origin of the crises is politicisation. “The projects are hurriedly conceived and implemented without going through the full cycle of project implementation, thereby creating loopholes for itchy fingers,” said Mr Mbadi, who is also the ODM chairman.

Former YEDF board chairman Gor Semelang’o concurred. He said the hurried nature of the projects, from conception to implementation, meant that they lacked adequate safeguards.

“YEDF, Uwezo Fund and Women Fund are products of political processes to appeal to key but vulnerable constituencies,” Mr Semelang’o said.

The same applies to NYS, which the Jubilee regime allegedly used to buy the support of the youth.

Initially, there were questions about increasing the budget to Sh25 billion in the last financial year without putting in place structures to absorb the funds and ensure accountability, but these were dismissed.

Eventually, at least Sh791 million was reported lost at the youth service, leading to the resignation of then Devolution Cabinet Secretary Anne Waiguru.

Her former Principal Secretary Peter Mangiti and NYS Director-General Nelson Githinji, among other people, have been charged with a range of offences.

The IDPs resettlement fund similarly had no clear structures. The central government appeared to have placed faith in the then provincial administrators. Despite the weak and highly politicised structures, accountability for such funds is left to a few individuals.

“The systems for measuring the success or failure of the projects also get lost in politics. The beneficiaries hire goons to terrorise wananchi in the name of supporting non-existent projects,” said Mr Mbadi.

The target groups, perhaps aware of the weaknesses, also take advantage. For instance, Mr Semelang’o disclosed that the recovery rate of the first Sh1 billion disbursed to YEDF was only about 15 per cent, because beneficiaries saw it as free money from politicians.

MANAGEMENT INSTABILITIES

Besides the weak structures, management instabilities have also been blamed for predisposing the special programmes to corruption.

The Youth Fund, for instance, has not had a substantive CEO since Juma Mwatata was sacked in 2013. Ms Catherine Namuye, who is at the centre of the alleged Sh180 million fictitious payments to Quorandum Ltd, was serving in an acting capacity until November 2015 when she was suspended. Her place was taken by Mr Emanuel Odero, who is also acting. 

A similar situation prevails at the Women Enterprise Fund (WEF), though it has not had adverse mention. The accounting officer, Mr Charles Mwirigi, and his two senior deputies are all serving in acting capacity.

“Having CEOs who are not substantive gives room to manipulation since it’s easy to instruct them to do a number of acts contrary to laws and regulations.

The CEOs are also liable to political interests that necessitate payment of political debts,” Mr Billy Mijungu, the outgoing chairperson of the National Youth Council (NYC), said.

The National Ethics and Corruption Survey 2015 by the anti-graft agency ranked Uwezo, Youth, Women and Elderly funds at position 10 out of 34 where bribes were demanded for services.

According to the Ethics and Anti-Corruption Commission (EACC), about two per cent of the respondents interviewed mentioned affirmative action funds as among the top services where bribes were required before one could be served.

Meanwhile, since these programmes are created to appease vulnerable groups, there is a tendency to appoint board members and management from the target group without regard to experience.

Mr Mijungu says the appointing authority retains immense power over these unqualified board members.