FACTORS INFLUENCING THE EFFICIENCY AND EFFICACY OF
KENYA'S CONSTITUENCY DEVELOPMENT FUND: A CASE
STUDY OF SABATIA CONSTITUENCY '/
BY
EVUSA)ZABLON
REG: D53/CE/1230S/04
A RESEARCH PROJECT SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
THE DEGREE OF MASTER OF BUSI ESS ADMINISTRATION
(FINANCE) OF KENYATTA UNIVERSITY.
Zablon Evusa
Factors influencing
the efficiency and
111111111111111111111111111111111
2009/JJ8598
APRIL200S
DECLARATION
1 declare that this is my original work and has never been presented for a degree in any
other University.
Evusa Zablon
REG NO. D53/CE/12308/04
This research project has been submitted for examination with my approval as a
University Supervisor.
dwI·· Date: ______~~+_~L----------- __
Mr. Joseph Theuri,
Lecturer,
Department of Accounting and Finance, Kenyatta University.
This research project has been submitted for examination with my approval as the
Chairman ofDepartrnent.
. ~-UN·~~(f h~~T7To~~.,'i(~1!~ ~lX~ It:I~1
~'? r. J. M Muturi A.~.~. e & FINANCE ~~-;:/
o ~~ and Finance, Kenyatta University.
Date:--~-----------------------
II
ABSTRACT.
Kenya's Constituency Development Fund (CDF) is one of the ingenious innovations of
the National Rainbow Coalition (NARC) Government of Kenya. Unlike other
development funds that filter from the central government through larger and more layers
of administrative organs and bureaucracies, funds under this program go directly to local
levels and thus provide people at the grassroots the opportunity to make expenditure
decisions that maximize their welfare consistent with the theoretical predictions of
decentralization theory. Increasingly, however concerns about the utilization of funds
under this program are emerging. Most of the concerns revolve around issues of
allocative efficiency. My research aimed at establishing constituency characteristics that
impact on the efficiency and efficacy of CDF and also the utilization of the funds to
ensure that the program achieves its full potential. My research observed that CDF could
have negative outcomes because of fiscal illusion and reduced local fiscal effort. The
research also found out some political economy aspects associated with this program.
The study used both primary and secondary sources of data. The school and church
heads, contractors' and members of the management committee of Sabatia CDF were
consulted as the source of primary data The secondary data was obtained from written
reports about CDF use in Kenya and other development reports. The study used Cluster
random sampling to obtain the sample population from the target population. The study
was conducted through survey research design and was concerned with the efficient use
of CDF in Sabatia constituency. The survey research design generally entailed the use of
sample populations to analyze and discover occurrences of events. In data analysis the
1lI
study used the measures of central tendency (mean, mode and median), measures of
dispersion (Standard deviation) and variation coefficient The findings of the study, it was
hoped, will be useful as a benchmark for establishing whether funds are well managed
when decentralized to local levels or by the central Government
This was to be used as a guideline for future allocation of CnF and further establishment
of decentralized or devolution of resources.
IV
•••••••• 1..
DEFINITION OF TERMS
CDF Constituency Development Fund
CDFMC Constituency Development Fund Management Committee
LATF Local Authority Transfer Fund.
EFFICIENCY - Putting the disposable economical resources to the budget or
intended purpose. Can be quantified by comparing the allocation of
the economic resources to the various projects and the quantity or
proportion of work completed.
None - Governmental organization.NGO
v
ACKNOWLEDGEMENT
I would like to thank all the people who helped me make this research project a success.
First and foremost I wish to thank my supervisor, Mr. Joseph Theuri, for his time, gentle
and constructive criticism which has enabled me to successfully complete this research
project. I'm also indebted to the Kisii Campus Library staff who tirelessly assisted me get
the literature that was necessary for this project report.
Above all, I thank God for the gift of life and enabling me come this far.
VI
DEDICATION
I dedicate this work to my lovely wife Elizabeth, my daughter Patriciah and Son Johnny
for the patience they exercised when I took a lot of time off them to prepare this research
project.
Vll
LIST OF FIGURES
Fig 1: Conceptual Framework, factors influencing the Kenya's Constituency
Development Fund.
YIlt
LIST OF TABLES
Table3.0:
Table 4.0:
Table4.1:
Table4.2:
Table 4.3:
Table 4.4:
Table 4.5:
Table 4.6:
Table 4.7:
Table 4.8:
Table 4.9:
Derivation of the sample size.
Questionnaire return rate.
Number of head teachers aware of CDF.
Awareness level of Church heads about CDF.
Involvement of school heads in decision making as to projects preferred
for funding by CDFMC
Involvement of church leads in decision making as to the project to be
funded by CDFMC
Number of project funded in the various locations in the constituency and
amount spent upto end of 200617 financial year (Data from secondary
source).
Number of projects funded upto the end ofthe 200617 financial year (Data
from primary source).
Number ofNGO's and youth groups that applied for the CDF and number
of projects that were funded according to the CDFMC
The completeness of the CDF funded projects.
Number of projects actually seen started by the respondents in their
organizations, their completeness and usefulness of the completed
projects.
Table 4.10: Amount, approximately, disbursed to the CDF projects.
Table 4.11: The involvement of school leads in selecting members ofCDFMC .
. IX.
Table 4.12:
Table 4.13:
Table 4.14:
Table 4.15:
Table 4:16:
Table 4.17:
Table 4.18:
Opinions of school heads on who selected CDFMC.
Involvement of church leads in selecting CDFMC.
Opinion of church heads on who constituted CDFMC.
School heads opinions about efficiency and efficacy in use ofCDF.
Church heads opinions about efficiency and efficacy in use of CDF.
Educational level of CDFMC members.
School and church heads' comments on measures to enhance efficiency
and efficacy in CDF disbursed to projects.
x
TABLE OF CONTENTS
DECLARATION...... 11
ABSTRACT... III
DEFINITION OF TERMS , .
ACKNOWLEDGEMENT .
DEDICATION .
LIST OF FIGURES .
LIST OF TABLES .
TABLE OF CONTENTS .
CHAPTER ONE .
1.0 INTRODUCTION .
1.1 Background of study .
1.2 Statement of problem .
1.3 Objective of study .
1.3.1 Specific objectives of study .
1.4 Research questions , .
1.5 Significance of study .
1.6 Scope of the study .
CHAPTER TWO , .
2.0 LITERATURE REVIEW .
2.1 Introduction .
2.2 Conceptual frame work .
2.3 Main review .
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VII
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2.4 Critical review of major issue .
2.5 Summary and gaps to be filled .
CHAPTER THREE .
3.0 RESEARCH DESIGN AND METHODOLOGY .
3.1 Introduction .
3.2 Research design .
3.3 Target Population .
3.4 Sample and& sampling method .
3.5 Data collection instruments .
3.6 Validity .
3.7 Data collection procedures .
3.8 Data analysis procedures .
CHAPTER FOUR. .
4.0 DATA ANALYSIS AND PRESENTATIO OF RESULTS .
4.1 Introduction .
4.2 Questionnaire Return Rate .
4.3 Information Requested from various respondents .
CHAPTER FIVE .
5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS ..
5.1 Summary '" .
5.2 Findings of the study .
5.3 Conclusion .
5.4 Recommendations .
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5.5 Suggestionsfor further Research............ 39
REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
APPENDICES... 43
XlII
CHAPTER ONE
1. Introduction
This chapter contains background to the study, statement of the problem, purpose of the
study, research questions, significance of the study, and scope of the study.
Background of the study
For the previous four financial years, the innovative constituency Development fund, the
scheme that Kenya Government had conceived in 2003 has been used to push over $ 100
million into the rural areas for its constituency based rural development projects. In his
article posted to the internet on 13th Nov, 2006, Okungu (2006) observed that in a meeting
of African leaders held in Banjul Hall on 30th June, 2006, African leaders including South
African president Thabo Mbeki and Olusegun Obassanjo of Nigeria praised the Kenya's
CDF because they observed that it was the most effective way of equitably distributing
national resources throughout the country from the treasury without biases.
In Kenya, the constituencies themselves, under the chairmanship of their elected members
of parliament are required to manage the funds for the benefit of their respective
electorate (CDF Act, 2003). Special committees in individual constituencies are formed.
They write proposals suggesting projects that will benefit constituency, accompanied by
the expected budget. The projects are analysed by a special team under the leadership of
the MP of the constituency. Money is then allocated for the project that is a priority to
pick off. The projects started vary from constituency to constituency and the needs of the
constituents. Through this process, the central government has shifted the onus of
regional development to the locals themselves.
•• n ..• t..
The Government has established the CDF with the following objectives. To finance the
development projects, to distribute among districts ( and therefore constituencies) funds
allocated to those projects and ensure these funds are equitably distributed to those
entities, to monitor the use of funds allocated to development projects in districts ( hence
constituencies) and to serve as an intermediary between the districts ( constituencies) and
the donors or agencies who specifically are involved in financing development projects in
these entities.
To achieve the above objectives, the government directly fund development projects in
every constituency to the tune of Kshs. 20 million a year with the sitting MP as the
overall boss. Because of the punitive measures that had been imposed on Kenyan
Government by donors countries, IMP and World Bank in 1990's the NARC Government
had to reduce it's reliance on donations. By the time year three budget of NARC
Government was read, donors were allocated a paltry 5% which even if they would not
honour would not have adversely affected government operations and development plans.
The government ahs trebled tax revenue in the country and this has made it possible for
the government to get funds for disbursement as CDF. But according to (KIPPRA, 2006)
this has been successfully and efficiently utilized in some constituencies. The following
constituencies have been rated amongst those that have utilized CDF efficiently. Bahari,
Lang'ata, Rarienda, Olkalou, Tetu. The following constituencies have been listed
amongst those that their constituents have complained over the efficient use of the CDF.
Alego Usonga, Embakasi, Nyeri town, Makadara, Sabatia. According to Daily Nation,
Thursday (23rd Aug 2007 pg 31, Nyeri Town CDF Management committee was sent
packing over Kshs. 26, 000, 000. An interim report by auditors from National
Management Committee of the CDF found that three illegal bank accounts had been
2
opened for three projects in Nyeri town constituency. Investigations had been prompted
by the Nyeri District Residence Association which claimed that there were ghost's project
being funded by the fund. They had argued that these include two Primary Schools.
However according to (KTN, 21 Aug 2007), Bahari Constituency (Coast Province) was
rated as having the best utilization of CDF and whose activities were visible. That up to
then it had received about Ksh. 189,000,00. But the survey carried out towards the end of
2006 and whose report was released on 21 st Aug, 2007 by transparency International, it
was indicated that CDF office i.e Management Committees were worsening in corruption.
The CDF office was ranked s" most corrupt institution in Kenya after the Police force,
transport licensing board, Public Universities, Immigration Department, Ministry of
Public Works and Local Authorities (Daily Nation, 22nd Aug 2007 pg 1).
Ruto S (2007), observed that the Kenya Bureau of statistics data used to allocate the CDF
illustrates wide regional disparities in poverty incidences, ranging from 31 percent in
Central Province to 43 Percent in Nairobi, 47 Percent in Rift Valley, 57 Percent in Coast,
58 Percent in Eastern, 60 Percent in Western, 64 Percent in North Eastern and 64 Percent
in Nyanza province. The difference in the rating of the constituencies in their
performance in the efficient and efficacy use of CDF brought about the questions as to
what factors may have influenced the efficient use of the CDF in the two categories of
constituencies.
Statement of the problem.
The Constituency Development Fund which was established in Kenya through the CDF
Act (2003) is one of the ingenious innovations of the NARC Government. While there are
3
several rules that govern the utilization of the fund (CDF Act, 2003) to ensure
transparency and accountability, decisions over the utilization of the funds are primarily
by the constituents. This has led to discrepancies in the utilization of the funds and the
development amongst the constituencies. Thus in some constituencies the funds has been
used efficiently while in other it has not. There has been a public outcry that the sitting
MPs have appointed their relatives and cronies to the CDF management committees
which has led to allocative inefficiencies and misuse of the fund. This study therefore
investigates the factors that influence the efficient utilizations ofCDF.
Objective of the Study
The main objective of this study was to establish the factors that influence the CDF
efficiency. The efficiency of the CDF will be measured by evaluating the level of
completion of the CDF project and the benefits accruing to the Tax payer from the CDF
projects.
Specific objectives of the Study.
The study was based on the following specific objectives.
• To establish factors influencing efficiency and efficacy ofCDF.
• To evaluate the use ofCDF allocated to development projects in the constituency.
Research Questions
The following Research Questions were used in the study.
1. Are the finances disbursed by the Central Government to the constituencies through
the CDF utilized to fund the intended development project?
4
___ -:_ 1.4
2. How often are the constituents involved In CDF projects decision making at the
constituency level?
3. What is the level of completion of the CDF established projects?
1.5 Significance of the Study.
1.5.1 Government
The Government in setting up the CDF aimed at enhancing development at the village
level. The study is significant in assisting the Government to establish whether the CDF
projects set have helped in developing the ordinary Kenyan and reduced the poverty
levels.
In both the Wako draft (2005) and the Bomas draft (2005), Kenyans indicated that they
needed the Decentralization of the National resources. The study acts as a bench mark for
such a move. i.e. it is to help establish whether the National resources can be managed
efficientlywhen decentralized to village level or centralized at National level.
1.5.2 National Management Committee
The study is significant in finding out whether the CDF finances were sufficient in
meeting the needs of the set projects. This was revealed by establishing the level of
completion of the CDF projects. This is to be a guideline in further allocations.
1.5.3 Constituents
This study was to assist the constituents in making the right choice of CDF projects
according to their priorities and the funds received from the Central Government. This
was to avoid situations where the constituents set up projects which couldn't be
completed by the funds available or which could not be a priority e.g. setting up a new
Secondary School in the neighborhood of another when the students population could
sufficiently be accommodated by the already existing Secondary School.
5
1.5.4 Members of Parliament
The studywas to provide a bench mark to the members of Parliament to indicate to them
activities which are likely to lead to inefficiency in the use of CDF and those which if
undertaken will assist in improving the development level and reduce poverty levels in
the constituencies.
1.5.5 Other Researchers
Knowledge is not an end in itself. Other researchers may be interested in finding the
relationship between other variables related to the ones under study. This study was
therefore to provide them with the prerequisite knowledge of their research activity.
1.6 Scope of the Study
The study was based in Sabatia constituency, Vihiga District. The study targeted the
constituency Development Fund (CDF) projects carried out between the years 2003 and
2007. The study target to involve the Constituency Development Funds (CDF)
Management Committees at constituency level, the CDF contractors' and the school,
churchheads' in the constituency. The study targeted only CDF funded projects i.e projects
establishedby other funds e.g. Charity Sweepstake were not involved in this study. Sabatia
constituency was sampled for this study because of its dense population. Sabatia
constituency is one of the constituencies that form Vihiga District. Vihiga District is the
most densely populated District in Kenya (with 886 people per square kilometer). The
dense population was believed to be composed of people with varied socio economic
characteristics. CDF was made to assist and alleviate poverty and improve development
amongst people staying in the various constituencies. Such fund targeted the residents of
constituency and not land mass. Thus, the CDF projects in Sabatia constituency could
easily be pin pointed unlike where the population density was too low e.g. Mt Elgon
6
constituencywith 143 people per square kilometer (Appendix G ). Also the researcher was
a resident of Sabatia constituency. He sampled Sabatia constituency because he was
directlyaffected with the use ofCDF and the projects established under this fund.
7
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
The constituency development fund (CDF), which was established in Kenya through the
constituency development fund Act of 2003 (The Kenya gazette supplement no. 107 (Act
no.11) of 9th Jan, 2004, is one of the igneous innovations of the National Rainbow Coalition
(NARC) Government of Kenya. While there are several rules that govern the.utilization of
\
the fund (CDF Act, 2003) to ensure transparency and accountability, decisions over the
utilization of the funds are primarily by the constituencies.
Unlike other funds, from the Central Government (KIPPRA. 2006 pg2) through large and
more layers administrative organs and bureaucracies, the funds under these programmes go
directly to local levels. In essence, the CDF provides individuals at the grassroots the
opportunity to make expenditure decisions that maximize there welfare inline with their
needs and preferences. To the extend that the local population is better informed about their
priorities, the choices made can be expected to be aligned to their problems and
circumstances. Thus the CDF can be considered a decentralized scheme that provides
communities with the opportunity to make spending decisions that maximize social welfare.
Initially, CDF comprised an annual budgetary allocation equivalent to 2.5% of the
Government's ordinary revenue. A motion seeking to increase this allocation to 7.5% of
Government's revenue was recently not passed in parliament. 75% of the fund is allocated
equally amongst all 210 constituencies. The remaining 25% is allocated as per constituency
povertylevels. A maximum 10% of each constituency's annual allocation may be used for an
8
educationbursary scheme. CDF is managed through four committees, 2 of which are at the
ationallevel and 2 at the grass root level.
ATIONALCDF ALLOCATIONS
Fig. 1:
National CDF Allocations
:'.25
I
5.6
....•....•§,
'"..c:2 1.26
I I
03/04 04/05 05106
Source:CDF national management committee annual report, 2006.
According to the CDF Act, expenses for running constituency project offices should not
exceed3% of annual constituency allocations. Each constituency is required to keep aside 5%
asan emergency reserve.
TheCDF is not to be used to support political bodiesl activities or personal award projects. A
sittingMP is not a signatory to the CDF bank account but convenes the CDF committee in
his/herconstituency. The penalty for misappropriation of the funds (CDF) is a prison term of
5 years or Kshs. 200,000 fine or both.
Although the CDF takes relatively a small amount of national resources (2.5% of the
Government's ordinary revenue collected every year), its impact can be significant if the
funds are efficiently utilized. Because the funds benefit the communities directly, it
9
stimulates local involvement in development projects and as a result constituents are expected
to have more information about the projects funded under this programme. This is enhanced
by regular commentaries in the media and reports by members of parliament on the status of
the CDF projects. As a result of the involvement of communities in decision making and
monitoring resource use, this research study predicts that programmes such as CDF would
result in high levels of efficiency and that the selection of the projects would vary across
constituencies in line with development priorities. These efficiency outcomes largely arise
fromthe role that communities play in decision making and monitoring the use of funds.
However, constituencies are not created equally. Constituencies vary widely in vanous
aspects that may impact on the efficiency of CDF. Some of these aspects includes: size of the
constituency, population size, density and diversity, scope of economic activities degree of
urbanization, levels of education, poverty and so on ( See Appendix D).
Though these selected constituencies are categorized amongst the poorest in the republic, the
level of poverty may not be the same because of the differences in population density. Thus
suchdimension as poverty, population density/dispersion and level of education are expected
to impact on the project choices and the extent of prioritization because the transaction costs
of implementing such an allocation scheme would be extremely high. Given the diversity of
expressed demands for particular goods, project choices under CDF are expected to vary
across constituencies as communities prioritize those projects that have the highest marginal
impact on their lives within the budgetary constrains (Mwangi S. 2005). Citizens are able to
align their demands with resource allocations. Thus, there should be significant variations in
project consultations. An efficiency measures may be developed based on how close the CDF
projects reflect expressed priorities (CDF Act, 2003). Such a measure would help identify
whether CDF is generally associated with social welfare enhancing outcomes predicted by
decentralizing theory.
10
Howeverwide variations in the constituencies' characteristics may impact on the choice of
projectsand the mode of delivery and may enhance or impede on the efficiency of utilization
of CDF. Efficiency is primarily determined by the degree of involvement by local
communities and also the capacity for the beneficiaries to hold politicians and those in charge
of implementation of CDF accountable. Thus, constituency characteristics that impact on
these factors can be expected to affect efficiency and efficacy in the utilization of CDP
(Okungu, 2006).
Constituency characteristics that hinder participation of the beneficiaries or weaken their
capacity to monitor the utilization of funds can be expected to lead to more inefficient
outcomes. We expect to fund under divergences in the projects selected compared to
expressed priorities and the participation of the communities in decision making several
factorsthat may impact on CDP efficiency and efficacy include:
2.2Conceptual Framework
Factors influencing the efficiency of CDF
- Size of constituency/ population density and
dispersion
- Socio - economic characteristics/poverty and
helplessness. Efficiency and
Efficacy of CDF
- CDPMC members/ use of the CDP
- Strategic choice of projects to internalize benefits
Constituents'involvement Dependant Variable-
- Perceived voting patterns/political Economy of
CDF.
Independent Variables
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Population Density:
It is observed that, If the population in the constituency is dense and the size of land mass is
smallthem it may be expensive to run the CDF projects because acquisition of the land will
be too expensive. Even if the land is found, it may be too small to accommodate a project to
cater for the interest of many people. Even the choice of the projects undertaken may be a
problembecause of the divergence in the interests of the electorate. The dense population can
be used as labour in developing the projects and this should improve the productivity of such
anelectorate.
Socio-economic characteristics
Similarity it is observed that, the higher the poverty index, in the constituency, the higher the
level of helplessness and thus the electorate is likely to accept anything offered by the CDF
management team. Because of such, the electorates view such CDF money as free. Such
electorate may not be keen on the monitoring of such CDF projects. But if the poverty index
is high and the electorate understands the objectives of CDF, they are likely to keep an eye
and monitor the effective use of such CDF. This will consequently help them in reducing
their poverty level.
CDFMC Members:
CDFMC members will influence the utilization of fund. If the management of such
development projects is efficient and accountable, then CDF allocated to them will be used
effectively. This will help in improving the lives of residents of the constituency. However,
someCDFMC members utilize the CDF for their welfare without emphasizing the welfare of
members and the residents of the constituency. This will lead to inefficient utilization ofCDF
andconsequently will not help in improving the lives the constituents.
12
- - - - - -- 1ft I In,~ .~~T ~,
Strategicchoice of projects:
ChoiceofCDF projects should be strategic in that, they should be completed within the funds
available and within the shortest time for the benefit of the constituents. The constituents
should participate in choosing the projects but not for the constituency management
committee to impose the projects on the constituents. It is the constituents who should ensure
that the project is suitable and thus they should accept what they know they can sustain or
else the CDF projects will not succeed. This will affect the CDF efficiency and efficacy
becauseoflack of monitoring by the constituents.
Perceived voting patterns:
Somemyopic and visionless MPS have sought to punish clients perceived to be opposed to
their leadership (Okungu, 2006). Such clients have been ostracized by the MPS and punished
for lack of support in the last elections. As such, they have been excluded from all the
development projects for their political leanings. Schools, roads, and health centres and any
form of funding from the government have been diverted to clients more amenable to the
sitting MP. This does not provide for equitable distribution of CDF and thus inefficient
management of the fund. But some sitting MPs have accepted challenge from their political
rivals.They have therefore allocated the CDF as per the regulation provided by the CDF Act.
Sucha move has resulted in positive change in the development of the constituency.
Constituents Involvement
The constituents should play a critical role in decision making because they are the
beneficiaries of the projects and know well which projects are beneficial to them. These
projects should be community based. Thus the constituents should be involved at all stages of
projectImplementing and should provide feedback on the use of the project.
13
2.3MainReview
2.3.1 Size of constituencies/population density and dispersion.
Constituencies vary in respect to the size of the land mass, population density. All these
characteristics are expected to influence the choice of projects and the mode of delivery.
Some projects that could serve a large number of people in high density areas may not
optimal where the population is widely dispersed. The result of such differences may be
reflectedin the scale of projects (few large dispensaries versus many few clinics). Likewise, a
day secondary school could serve a large number of people in dense areas, such may not be
ideal for low density areas where investing in a boarding school would be more ideal. Even
though different communities prioritize provision of water, the mode of service delivery is
expected to vary depending on the constituency characteristic in regard to population
distribution. By developing measures of the characteristics of the population served by a
particular CDF project it is possible to identify the extent to which the constituency
characteristics influence the project choices efficiency in delivery of the chosen project.
2.3.2 Strategic choice of projects to internalize benefits:
From a theoretical stand point choice of projects is motivated by making sure that, benefits
are internalized by members of the constituency CDF are to be more of the "club - goods"
type as opposed to board public goods. Simply, there are projects that would have wide
spread spillover benefits to communities in the constituencies. While such projects may have
been ranked high amongst the priorities, they may not be selected because of the spillover
benefits e.g. a road that passes through a number of constituencies.
In Urban centre where students from different constituencies can attend a particular primary
school, there may be a tendency to avoid investing in school improvements because such
14
wouldexport the benefits to other constituencies. Thus there may be a tendency to invest in
projects whose benefits accrue generally to the resident's e.g public toilets and service
delivery like local security. A primary activity that would be undertaken is to establish
rigorousmeasures of the extent to which different projects internalize benefits.
However, according to KlPPRA (2006), most of the potential beneficiaries or the residents
arenot aware of how the decentralized funds e.g. CDF, Local authority transfer fund (LATF),
roadmaintenance (fuel levy) fund and so on are utilized. When the respondents were asked to
indicate their awareness of the decentralized funds, most indicated that they were aware of
free primary education fund. Similarly majority indicated that they did not know about the
other funds e.g. CDF, LATF and how they were utilized, (See Appendix F). This is expected
to influence the efficiency and efficacy of CDF.
It is clear that, while some funds enjoy a reasonable profile in the target districts, a great deal
of publicity and information work is indicated, particularly for Local Authority Transfer
Fund. This is of critical significance to the aims of the pilot programme, as awareness and
information must by nature be a precursor to effective public participation. There were no
significant variations between the different districts on the issue of awareness. Despite a large
increase in the funds allocation for the last few years, respondents gave a poor rating of the
impact of the funds. This study survey managed to raise awareness amongst the target
populations.
2.3.3 Political Economy ofCDFlPerceived Voting Patterns.
Unlike in pure fiscal decentralization which is characterized by both revenues and
expenditures, CDF is a one sided fiscal decentralization scheme since expenditure are not
linked to the local revenue sources of fiscal effort. Such partial decentralization can associate
with fiscal illusion which minimizes the extenc to wb\cb benel\cmne..:, mon\\m fue u..:,e0\
15
funds. Beneficiaries consider the funds as 'free" and thus are not motivated to monitor
utilizationof funds since they do not take into account the costs of the projects. Knowing the
levelof ignorance, poverty and helplessness, in their constituencies, some sitting MPS have
for all practical purposes made cronies believe that this constituency money is their money
given to them by the government to use as they see fit. Consequently, these MPS have
formed all sorts of companies using their cronies, relatives, and friends to defraud the public
of this fund. Harambees called by ordinary people have seen some local MPS writing
personal cheques as their contribution only to swap them with CDF cheques a clear theft of
public fund to gain popularity with the electorate (Okungu, 2006).
In other constituencies, Jerry Okungu, a political analyst, in his article titled," The beauty and
shame of Kenya's CDF" observes that some area MPS are so incompetent that to date four
years after the conception of CDF, have not managed to secure the release of funds from the
treasury due to the inability to identify viable projects and write business proposal for funds
to be released.
Thus, it is important to investigate the monitoring aspects associated with CDF and the
degree to which constituency characteristics may influence fiscal illusion and hence
inefficiencies in CDF.
2.3.4 CDFMC members participation:
The interest - group theory, of government suggests that well organized producer and
consumer, interests often influence the spending choices of the government. The CDF is also
subject to interest competition and that resources are likely to benefit well organized
constituencies.
In survey carried out by KlPPRA in 2006 in which respondents were asked to rate their
participation in relation to different kinds of involvement in the management of decentralized
16
funds, it was found that while 32.8% of them were involved to the extent of receiving
informationor listening and attending meetings to discuss specific issues, less than 5% were
involvedin decision making or in the setting of the development agendas for their areas (See
AppendixF).
It is therefore important that an evaluation of CDF efficiency involve investigation of the
extentto which the projects reflect the competition amongst local interests. This will require
a detailedunderstanding of the various constituents that are well organized and are capable of
capturingrents arising from the CDF. Very relevant is an understanding of the role of various
constituentsin the selection of the projects.
2.3.5 Diversity of preferences/socio - economic characteristics.
The theory of decentralization, teaches that the heterogeneity of preferences, IS a key
determinant of the efficiency of public goods provision. The utilization of CDF is also
expectedto be influenced by the degree of diversity. There are many parameters that capture
theheterogeneity of a community including income, economic activities, education and many
others. Diversity is expected to influence scope of project choices. ill homogenous
communities, projects could be few but much larger in scope. Community involvement is
also much higher in more homogeneous other things equal. Much more heterogeneous
communities are likely to select many diverse projects to cater for the diversity of
preferences.
Socio economic characteristics of a constituency facilitate community participation. Key
factors are those that impact on social capital. The average level of education in a
constituency is expected to influence the involvement of the community and also the extent to
which they are able to monitor the utilization of funds. CDF will be more in line with
prioritiesin areas where the average level of education is higher. Also religion may influence
thechoice of projects and cohesiveness of a community.
2.4Critical Review of Major Issue.
The major issue is the efficiency in use of decentralized funds. The Government has
undertaken a good project of letting the constituents and other citizens decide their destiny in
development by decentralizing the funds e.g. through LATF and CDF. Therefore, it is
worthwhile finding out whether there is any change in the live hoods of the constituents. It is
also possible that once the funds reach the constituency level then they are not use for
intended purposes and therefore not benefiting the constituents and the government.
2.5Summary and Gaps to be filled.
There is a gap in that funds are decentralized by the Central Government to the constituency
but then how is the efficiency of these funds monitored? Are the projects completed on time
and do they benefit the constituents? In the identifying the projects they require and assist in
implementation? All these questions once answered will have filled the gap in the study.
18
CHAPTER THREE
3.0RESEARCH DESIGN AND METHODOLOGY
3.1Introduction
This chapter expounds on the research design, target population, the sample and sampling
procedures, data collection and analysis procedures.
3.2 Research Design
This study was conducted through survey. The study was concerned with the factors that
influenced the efficiency and efficacy of CDF. It was specifically intended to investigate how
these factors influenced the effectiveness in the use of CDF. Such issues are best investigated
through surveying (Mugenda, 1999). Survey research design generally entails the use of
sample population to analyze and discover occurrences or events. It is suitable for extensive
research and provides the ability to understand populations from part of it (Krathwohl, 1988).
For purposes of this study, then survey design provided quantitative and numeric descriptions
of the sample population. The design suffered from lack of cooperation, lack of disclosure of
contractors' secrets and inability to reach some CDFMC members.
3.3 Target Population
The study targeted the CDF management committee in Sabatia Constituency, Vihiga District.
This is because they are directly involved in implementation of the CDF project and disburse
the CDF to the various projects in the constituency. There are 100 Church organizations and
the 250 Government Primary and Secondary Schools are also targeted. The contractors of
CDF funded projects are also targeted to provide information as to how tendering was done,
how they are paid for the projects they have completed and the approximate amount of
19
money they have been paid for the work completed. A presumption made IS that the
constituency is composed of people of different socio economic characteristics.
3.4Sample and Sampling method
Gay(1981) in his correlational studies indicated that a sample of 30 or more items or 5% of
the target population is necessary for any research study. The sample consisted of 50% of
Church Organization, 50% of the Government run schools, 50% of contractors and 50% of
CDFMC. The respondents were the leader or head of a church organization and the head
teacher of a government run school. The 190 respondents were taken for a fair representative
of the constituents of Sabatia constituency. Sabatia Constituency was divided into eight
locations. North Maragoli, Wodanga, Busali East, Busali West, Lyaduywa, Ezava North and
Chavakali. 50% of the CDF projects established in the 50% of the locations were sampled.
randomly. Each of the four locations represented a cluster from which a quarter of the
respondents for the study were selected. Thus after sampling the locations using schools from
each location sampled were identified for the study. Similarly, a quarter of the Church
organization were sampled randomly from each of the four location sampled for the study.
However, 50% ofCDFMC and 50% of contractors were randomly sampled for the study.
Table 3.0: Derivation of the sample population
Population Sample
CDF Management committee 10 10
members
Contractors 10 1x5=5
Church 100 1 x 50 =50
Organizations
Government schools 250 1 x 125 = 125
20
50% of the contractors and the entire CDFMC of Sabatia constituency were targeted. The
study employed cluster random sampling and convenience sampling techniques to select the
respondents for the church organizations, Government schools, contractors and CDFMC
member of clusters. Convenience sampling is a technique which groups the population into a
number of clusters. Convenience sampling is a technique that is applied where a group of
individuals who are conveniently available for the study are selected from the population.
3.5 Data Collection Instruments.
Three questionnaires were developed to facilitate the research study. The questionnaires
contained both open and closed ended questions. The questionnaires sought information
about factors that influenced the efficiency and efficacy of CDF. The questionnaire also
elicited information on possible remedies, to ensure that the CDF projects were fulfilling their
intended purposes, job creation, self sustenance, poverty reduction, rural- urban migration
reduction and rural development. Interviews and observations by the researcher were also
used for data collection. The choice of these tools of data collection was guided by the time
available and the objectives of the study. Such information was best collected using the
questionnaire and interview techniques (Sekara, 2003).
3.6 Validity
To ensure that the questionnaires were valid, they were pilot tested on three officials of each
school, members of the church organization, one contractor and one CDF management
committee official. Respondents used in the pilot test were not included in the actual sample
for the study.
3.7 Data Collection Procedures
The researcher approached the Vihiga District CDF management committee members in
order to get permission to approach the Sabatia Constituency CDF personnel. The Sabatia
21
Constituency CDF personnel then were requested to fill in the questionnaires as respondents.
For the church organizations and government run schools the researcher will approach the
assistant chief of the area under the study who assisted him in linking him to the required
respondents. The researcher then administered the questionnaires. The constituency CDFMC
members were interviewed where the questionnaire was not the best tool to gather the
required data.
3.8 Data Analysis Procedure
Data was analysed using both qualitative and quantitative procedures. The researcher
categorized the data into homogeneous groups and summarized quantitative information into
tables and percentages. Qualitative data was consolidated and narrative report used to depict
respondents' views about the factors that influenced the efficiency and efficacy ofCDF. The
data was presented using tables and percentages.
22
CHAPTER FOUR
4.0DATA ANALYSIS AND PRESENTATION OF RESULTS.
4.1 Introduction to Data Analysis.
The chapter deals with data analysis and presentation of results. The purpose was to analyze
data and present the results of the factors influencing the efficiency and efficacy of Kenya's
CDF: A case ofSabatia Constituency.
4.2 Questionnaire Return Rate
The government schools and church organizations heads' questionnaire was the main
instrument while the CDFM members and the contractors were used to support the
government and church organizations heads'. The number of questionnaires issued and
returned by the various categories of respondents and rate of return of the questionnaires was
as per Table 4.0 below.
Table 4.0: Questionnaire return rate.
Respondent No. of Questionnaires No. of Questionnaires Percentage return rate I
Issued returned dully filled
Government 125 91 72.8%
Schools
Church 50 34 68.0%
Organization
CDFMC 8 4 50.0%
Contractors 4 2 50.0%
ITOTAL 1_18_7 --'----11_31 1_70_.0% _
23
Overall, the return rate was 70.0% which was considered to be adequate because a return rate
above 50 Percent is considered a good response when using the questionnaire as an
instrument of data collection (peil, 1995).
4.3 Information Requested from Various Respondents.
Government schools heads, church heads and other public utilities heads were requested to
provide information concerning their awareness ofCDF, their involvement in deciding which
project to be funded by CDF, the number of projects they've seen started in their
organizations and whether the projects were completed or not, if the projects completed are
useful to the constituents, whether they were involved in selecting members of the
constituency CDF and to comment on how the efficiency of CDF funds in their constituency
could be enhanced.
CDFMC members' were requested to provide information concerning the position they held
in the CDF committee, their level of education, their involvement in making decisions as to
which projects to be funded by CDF, reasons for non- funding of some CDF proposed
projects, kind of projects they preferred, whether the projects funded were complete, and if
complete, how useful they were to the constituents, reasons for non-completion of some CDF
funded projects, ways the committee gets feedback from the community on the proposed and
the implemented projects, the criterion that was used to have them on the CDF committee,
the number of NGO's and youth group that applied and the number that was funded, the
person or company that evaluates or monitors the quality of work done and comment on what
could be done to enhance the efficiency and efficacy ofCDF in the constituency.
24
The contractors' were requested to provide information on the number of CDF projects they
had been awarded to construct in the constituency by CDFMC since 2003 - 2004 financial
year, whether they had completed the projects and if not, the level of completion they had
reached, an estimate of the amount spent on undertaking the projects, criterion used to award
them the contracts, ways they used to monitor or evaluate, the quality of work they did, how
they sourced their manpower for labour intensive projects and comment on ways the CDFMC
could improve on CDF efficiency and efficacy.
Table 4.1: Number of Head Teachers Aware ofCDF
Izava Busali North
South West Maragoli Wodanga Total Percentage
Aware 21 19 19 32 91 100%
Not Aware 0 0 0 0 0 0%
Total 21 19 19 32 91 100%
Percentage
awareness 100% 100% 100% 100% 100%
Percentage
not aware 0% '0% 0% 0% 0%
Results from the study indicated that most of the respondents (head teachers) in Sabatia
constituency were aware of CDF (100%). This indicated that the constituents were available'--
for involvement in CDF development projects.
Table 4.2: Awareness level of church heads about CDF
Izava Busali North
South West Maragoli Wodanga Total Percentage
Aware 8 10 9 7 34 100%
Not
Aware 0 0 0 0 0 0%
Total 8 10 9 7 34 100%
Percentage
awareness 100% 100% 100% 100% 100%
Percentage
not aware 0% 0% 0% 0% 0%
25
Table 4.3: Involvement of school heads in decision making as to projects preferred for
funding by CDFMC.
LOCATION NUMBER PERCENTAGENot
Involved Involved Total Involved Not involved
Izava South 10 11 21 47.6% 52.4%
Busali West 0 19 19 0% 100%
North
Maragoli 5 14 19 26.3% 76.7%
Wodanga 17 15 32 53.l% 46.9%
From the above table 4.3, it can be deduced that apart from Wadonga location, school heads
in the other location had very little involvement in decision making as to the preferred
projects to be funded by CDFMC. Only 35.2% of the 91 respondents were involved in
deciding which Projects were preferred for funding by the CDFMC.
Table 4.4: Involvement of church heads in decision making as to the project to be
funded by CDFMC.
LOCATION NUMBER PERCENTAGENot Not
Involved Involved Total Involved involved
Izava South 0 8 8 0% 100%
Busali West 1 9 10 10% 90%
North
Maragoli 0 9 9 0% 100%
Wodanga 1 6 7 14.3% 85.7%
Total 2 32 34
Percentage 5.9 94.1 100
26
The table 4.4 shows that majority of church heads (94.1) were not involved in deciding the
projects to be funded. It can also be deduced from the table 4.4 that in all the locations the
involvement of Church heads was below 15%.
Table 4.5: Number of projects funded in the various locations in the constituency and
amount spent upto end of 200617 financial year (data from secondary sources).
Total
Administrative Public Cattle Water Amount
Location office Schools utilities Churches Roads Bridges dip Spring (Kshs)
Izava
South 1 15 6 0 4 1 1 2 11,962,083
Busali
West 1 12 3 0 1 0 1 0 6,896,908
North
Maraooli 1 18 4 0 2 3 1 0 5,540,920
Wadanga 0 17 6 0 2 3 2 2 8,727,785
Source: Sabatia constituency CDF location allocations report for 2003/07 financial years.
All the four members of CDFMC who returned their questionnaires dully filled indicated that
they were involved in decision making as to the projects preferred to be chosen and
implemented. However, they noted that some projects could not be found because:
The constituency was huge and the funds allocated inadequate, some projects didn't have
accurate quotation and some projects were individual and not community based. They also
indicated that preference was given to education, health, water and preference was given to
education, health, water and provincial administration projects. But they appreciated that
those completed were very useful in the constituents. 50% of the contractors indicated that
they had completed more than 67% of schedule, majorly, because of inadequate funds,
mismanaged funds and poor workmanship.
27
,.
Table 4.6: Number of projects funded upto the end of the 200617 financial year (data
from Primary source)
Administrative Public Cattle Water
Location office Schools utilities Churches Roads Bridges dip Spring
Izava
South 1 13 4 0 0 1 1 2
Busali
West 1 13 2 0 1 0 1 0
North
Maragoli 0 17 2 0 0 0 0 0
Wadanga 0 17 6 0 I 4 2 2
Total 2 60 14 0 2 5 4 4
Public utilities include self-help groups, dispensaries, fishponds, electricity and football kit
projects. The table 4.6 shows that mostly schools were funded. Table 4.5 presents data that
was gotten from Sabatia CDF office (report) while Table 4.6 present data from the field.
Notice that while in table 4.5 the number of schools funded in Izava South, Busali West,
North Maragoli and Wadanga were 15, 12, 18 and 17 respectively table 4.6 shows that the
schools funded in these locations in that order were 13, 13, 17 and 17. This discrepancy was
not accounted for by the CDFMC.
Table 4.7: The number ofNGO and youth groups that applied for the CDF and number
of projects that were funded according to the CDFMC.
Respondent Number applied Number Funded
Number NGO Youth Groups NGO Youth Groups
1 - - - -
2 2 Above 10 2 10
3 2 10 2 8
4 - Above 4 - 4
28
Criteria for funding were that the projects were to be community and not individual based,
quotation was to be accurate and realistic and able to assist solve community problems.
From the table 4.7 above, it can be deduced that many youth groups and NGO's applied for
funding but a few were funded. The CDFMC members noted that most youth and NGO
projects funded failed because of Bad weather e.g. mushroom project and poor management.
Table 4.8: The completeness of the CDF funded projects.
No. of on - going No. of complete Total no. of
Location projects Projects projects
Izava South 22 8 30
Busali West 12 6 18
North
Maragoli 18 6 24
Wodanga 21 11 32
Total 73 31 104
Percentage (%) 70.2 29.8 100
From table 4.8, it is evident that most projects were incomplete (70.2%). Though from table
4.5 it can be revealed that Izava south location received the highest CDF funding table 4.8
shows it has the highest number of projects that are incomplete. This could be attributed to
the fact that most of the projects required a lot of funding which exceeded the amount
allocated or mismanagement of the funds.
29
Table 4.9: Number of projects actually seen started by the respondents in their
organizations, their completeness and usefulness of the complete projects.
No. of projects actually seen started in Are projects Usefulness of projects
Location their organizations Completed? Completed.
Over 5
Very Not
(several) none 1 2 3 4 Yes No Useful Useful Useful
Izava
South 2 0 12 2 3 1 5 15 12 4 2
Busali
West 1 3 9 3 2 2 8 12 1 14 1
North
Maragoli 4 0 9 1 0 1 4 15 5 16 1
Wodanga 11 8 1 5 4 1 6 26 7 20 3
Total 18 11 31 11 9 5 23 68 25 44 7
Percentage 21.2% 12.9% 36.5% 12.9% 10.5% 5.9% 25.3% 74.7% 32.9% 57.9% 9.2%
From the table 4.9 above, most projects funded were not completed (74.7%). This is in
agreement with table 4.8 which shows that the number of on- going projects stood at 70.2%.
Table 4.10: Amount, approximately, disbursed to the CDF projects.
Amount
(Kshs) Location
Izava Busali North
South West Maragoli Wodanga Total
0-50,000 1 1 0 4 6
50,001 - 150,000 10 9 10 7 36
150,001 - 300,000 13 5 3 3 24
Over 300,000 8 4 6 7 25
30
The table 4.10 shows that most projects received Kshs. 50001 - 150,000. This amount may
nothave been adequate and this could be the reason behind the high percentage of incomplete
projects (Table 4.8 and 4.9).
Table 4.11: The Involvement of school heads in selecting members ofCDFMC.
Involved in selecting CDFMC members
Location
Yes No.
Izava South 1 20
Busali West 0 18
North Maragoli 0 13
Wodanga 1 31
Total 2 88
Percentage 2.2% 97.3%
From the table 4.11 above, it can be deduced that majority (97.8%) of the school heads were
not involved in constituting the CDFMC.
Table 4.12: Opinions of school heads on who selected CDFMC.
Location Who selected CDFMC?
Sitting area MP Not aware School heads
Izava South 20 0 1
Busali West 18 0 0
North
Maragoli 13 6 0
Wodanga 31 1 1
Total 81 7 2
Percentage 90% 7.8% 2.2%
31
It can be deduced from the table 4.12 above that most respondents 90% felt it was the sitting
MP who constituted the CDFMC. A small percentage (7.8% was not aware of how the
CDFMC was constituted while 2.2% had been involved in constituting the CDFMC.
Table 4.13: Involvement of church heads in selecting CDFMC.
Involved in selecting CDFMC members?
Location
Yes No.
Izava South 0 8
Busali West 0 10
North
Maragoli 0 8
Wodanga 10
Total 0 34
Percentage 0% 100%
From the Table 4.13 above, it can be deduced that most church heads (100%) were not
involved in selecting the CDFMC.
Table 4.14: Opinion of church heads on who constituted CDFMC.
Location Who selected CDFMC?
Sitting area MP Not aware School heads
Izava South 8 0 0
Busali West 8 2 0
North
Maragoli 8 1 0
Wodanga 7 0 0
Total 31 3 0
Percentage 9l.2% 8.8% 0%
32
From the table 4.14 above, it can be deduced that most (91.2%) church heads felt it was the
sitting area MP that constituted the CDFMC. However, only 8.8% were not aware of how the
CDFMC was constituted.
Table 4.15: Schools heads opinions about efficiency and efficacy in use of CDF.
Are CDF
funds
used
efficiently? Opinions
Heads of Schools Transpar Project monitoring and
Location involvement ency evaluation
Yes No Lacking Adequate Lacking Adequate Lacking Available
Izava
South 4 15 16 3 17 2 19 0
Busali
West 1 17 17 1 17 1 16 2
North
Maragoli 6 13 16 18 18 1 17 2
Wodanga 3 20 23 0 21 2 22 1
Total 16 65 72 22 73 6 74 5
Percent 19.8
(%) % 80.2% 76.6% 23.4% 92.4% 7.6% 93.7% 6.3%
From the table 4.15 above, it can deduced that most heads' (80.2%) felt that the fund was not
utilized efficiently. This was also reflected in the reasons they gave for non - completion of
the CDF projects. Most (76.6%) of the heads' felt they were not involved in the utilization of
the fund (see table 5.1) 92.4% and 93.7% of the heads' observed that lack of transparency in
the use of the fund and lack of adequate project monitoring and evaluation respectively also
contributed to inefficiency. out of 4 i.e. 75% of CDFMC members who responded on how
they obtained feedback from the constituents on the proposed and the implemented projects
indicated that mostly they obtained this from the provincial administration (e.g. through the
Chiefs Baraza), a project implementation committees' and reports from the members of the
public. They also indicated that monitoring and evaluation was done by the CDF monitoring
33
committee and the National Management Committee, officers from the ministers to which the
projects are allied e.g. road construction projects are allied to the Ministry of Roads and
Public Works and technical officers from the government ministries e.g. district architect and
the District quantity surveyors.
Table 4.16: Church heads opinion about efficiency and efficacy in use of CDF funds.
AreCDF
funds
used
efficiently? Opinions
Heads of Church Project monitoring and
Location involvement Transparency evaluation
Yes No Lacking Adequate Lacking Adequate Lacking Available
Izava
South 0 8 7 1 8 0 7 1
Busali
West 0 10 8 2 9 1 8 2
North
Maragoli 0 9 7 2 9 0 9 0
Wodanga 0 7 7 0 7 0 7 0
Total 0 34 29 5 33 1 31 ,.,-'
Percent
(%) 0% 100% 85.30% 14.70% 97.1% 2.9% 91.2% 8.8%
The table 4.16 shows that most church heads' (100%) felt the CDF was not used efficiently.
Majority (85.3%) felt that this was due to lack of constituents' involvement in CDF matters.
97.1% felt there was no transparency in CDF management 91.2% felt the projects were not
well monitored and evaluated.
The four members of the CDFMC who included the youth representative (member),
secretary, treasurer and another member indicated that their educational and professional
training was as per the table 4.17 below.
4.17 Educational level of CDFMC member.
34
Educational qualification Frequency
University 0
A-level 0
a - Level 4
Primary level 0
Any other professional training for the officials or members of the CDFMC was limited only
one official had training in provincial administration.
Table 4.18: Schools and church heads' comments on measures to enhance efficiency and
efficacy in CDF disbursed to projects.
Involve constituents Train the Involve professional Projects
fully in selection of CDFMC in monitoring and
CDFMC members on management of evaluation be
fund CDF at done by
utilization. Constituency level independent
Location body.
lzava
South 16 7 5 8
Susali
West 10 8 9 8
North
Maracoli 9 12 10 11
Wodanga 13 14 12 10
Total 48 41 36 37
Percent
(%) 29.6% 25.3% 22.2% 22.8%
From the table 4.18 above, it can be deduced that majority of the heads observed that
constituents should be involved fully in the utilization of the fund. Few (22.2%) observed that
professionals be used in management of the fund at constituency level. A slightly larger
percentage (25.3%) observed that the CDFMC members be trained on fund utilization. 22.8%
indicated that the projects monitoring and evaluation be done by an independent body.
35
75% of the management committee members indicated that to improve on efficiency and
efficacy ofCDF in the constituency, the following measures be taken> C,-'
(i) Increase the amount allocated to the CDF kitty nationally, similarly, at
constituency level, the members observed that the amount allocated to the various
projects should be such that it is adequate to see the project through to completion.
(ii) Avoid politics in the fund management. The fund should have its independent
managers i.e the government should employ CDF managers in every district and
they be answerable to another person other than the area MP.
(iii) Ensure the managers of CDF at all levels have adequate knowledge and trainings
in financial management, project planning, implementation, evaluation and
appraisal.
(iv) Ensure that there is full participation of the constituents in decision making and
project choice.
To enhance efficiency, the church heads observed that the CDF managers or officials should
be knowledgeable and trained in financial management, project planning, monitoring,
evaluation and implementation. They felt that the fund by the government be increased from
the 2.5% ofGDP.
On source of labour for the labour intensive projects, the contractors indicated that they
majorly used the youth who hailed from the areas in which the projects were being
implemented. The contractors observed this was in line with the objective of the government
to increase employment opportunities for the youth.
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
The purpose of the study was to investigate the factors that influence the efficiency and
efficacy of CDP. A case study of Sabatia constituency. The study attempted to answer the
following research questions:
1. Are the finances disbursed by the central government to the constituencies through the
CDP utilized to find the intended development projects in the constituencies?
11. How often are the constituents involved in CDP projects decision making at
constituencies?
ill. What is the level of completion of the CDP established projects?
To answer the above questions, three questionnaires were used, one for the church and
government schools heads, one for CDPMC members and one for project contractors'.
Each questionnaire required one to give information on their involvement in CDP utilization,
factors influencing CDP use and efficiency, measures to enhance efficiency and completeness
of the projects funded.
5.2 Findings of the study
Government schools and church heads observed that they were not involved in selecting the
CDPMC and this provided for political manipulation of the committee. Because of this, the
head felt they rarely had input in the projects choice, implementation, monitoring and
evaluation. They also noted that the CDPMC members were not transparent and accountable
because they only reported to the sitting MP (see table 4.5). They observed that to enhance
efficiency in CDP management, the members of CDPMC should be knowledgeable and have
adequate financial training. They also observed that most of the CDP funded projects were
37
incomplete and that finding should be such that it is adequate to complete the project, del ink
the MPs from the fund and have independent managers of the fund.
The CDFMC members observed that majority of the funded projects were still ongoing (see
tables 4.8,4.15 and 4.16) and thus there was need to increase the amount allocated to the
national CDF committee so that allocations to the constituencies could be increased. They
also noted that the CDF should have its own independent managers delinked from the area
MPs. They also felt that managers of CDF should have adequate knowledge and training in
fund management. They also called for full participation of the constituents e.g. by electing
those who should be members of the CDFMC. They also cited lack of effective monitoring
and evaluation hence poor workmanship.
The CDF proj ect contractors observed that the funds were not adequate and that the fund
should be increased to ensure the projects funded were completed on time. They also
observed that most projects funded were still on going because of inadequate funding. Further
more, most interest groups (i.e. NGO's and church organizations) were not involved in
decision making on project choice and appraisal (see tables 4.6 and 4.7)
5.3 Conclusions
From the study findings it has been found that school and church heads felt political economy
ofCDF affected efficiency ofCDF because the sitting MP would constitute a CDFMC full of
his cronies even if they lacked the necessary credentials.
The CDFMC members observed that most interest groups that were organized e.g youth
groups and NGOs were not funded and those that were funded had problems in implementing
their projects because of mismanagement of the funds and bad weather. They also observed
that strategic choice of projects, population dispersion and diversity of preferences affected
38
the efficiency of CDF. They felt that this was the reason for non completion of most projects
because some projects chosen were too big that the amount allocated could not be adequate.
The contractors observed that the amount set aside for the fund should be increase so that it
could assist in completion of the projects.
5.4 Recommendations
In order to enhance the efficiency and efficacy of CDF in Sabatia constituency there is need
to implement the following measures:-
1. The government needs to employ independent managers of the CDF and delink its
management from the MPs. By so doing, the fund will be managed by already qualified
personnel and costs on training such personnel may be reduced.
11. The government needs to involve the constituents in matters concerning the CDF e.g.
the members of CDFMC should be vetted vigorously or election be carried out to elect
those potential officials.
111. There is need to increase the amount allocated to the CDF. The government through
parliament should increase the fund from the 2.5% of GDP. Projects should be
implemented after being sure that the amount allocated for the project will be adequate
to complete it.
IV. Lastly, the government should ensure there is adequate monitoring and evaluation of the
projects to avoid situations where projects are completed with poor workmanship.
5.5 Suggestions for further research.
On the basis of the findings of this study, the researcher recommends the following for
further research.
1. The study can be replicated to a larger sample of school and church heads, contractors
and CDFMC members in the district or in the country to see if similar results will be
attained.
39
2. A study can be done to investigate whether the other four locations that were not
sampled for this study experienced similar inefficiencies in CDF because of the
factors studied.
3. A study can be done to establish the contribution of the constituents to the efficiency
and efficacy ofCDF.
40
REFERENCES
Central Bureau of statistics (Kenya); Kenya population census, August
1999;http//www.cbs.go.ke.
Gichohi P.; The Constituencies Development Funds; The Role of the National
Committee; www.cdfgo.ke.
Government of Kenya: The Kenya Gazette Supplement No.107 (Act Noll), 9th January,
2004; Government printer.
Government of Kenya; Economic Survey Report 2005; Government printer,
www.cdfgo.ke.
Government of Kenya; CDF ACT (2003); www.cdfgo.ke
Government of Kenya: Gazette Supplement No. 27; The Constituency Development Fund
Act (No. 10 of 2004).
Guba, E.G.(1991), Element of a Proposal. Paper presented at UCEA meeting, Chapel
Hill, NC.UK.
Kibui, p.1995. A comparative study of the factors that influenced the Examination
performance of public and private schools. Unpublished M.ED Thesis, Kenyatta
University.
Kihika P; The Constituencies Development Fund; A blank Cheque for MPs?
KIPPRA (2006); The Democratic Governance Support.
Programme(DGSP);htpp:/ /www.kippra.org
Krathwohl, D.R(1988); How to prepare a research proposal, guidelines for funding and
dissertations in the social behavioral sciences. Syracus. NY; Syracuse University press.
KTN(2007); Report on CDF use in Bahari constituency and preparation for the 2007
general election, Nairobi.
41
Ministry of Finance, (Kenya), Circular on Implementation of Constituencies
Development Fund Projects (AGI16/06/vo/viii(2».
Muchiri G, "CDF Committee Dissolved" daily nation, 23rd August, 2007.
Mwangi S. (2005), Efficiency and Efficacy of Kenya's Constituency Development Fund:
Working paper.
Ndura Y.; The Constituencies Development Fund; An overview of key concerns,
www.cdfgo.ke.
Nyambuti. J. (2005); Factors influencing the performance in Kenya certificate of
Primary education (K.C.P.E); case study ofNyamaiya division.
/Okungu 1. 2006; The Beauty and Shame of Kenya's CDF. http;l/www.afroarticles.com.
Sekara, Uma(2003); Research Methods for Business; A skill building approach, (4th
edition) Singerpore; John Wiley and sons.
42
APPENDICES
APPENDIX A
KENYAlTA UNIVERSITY
SCHOOL OF BUSINESS
DEPARTMENT OF BUSINESS ADMINISTRATION
7Ei' 8109:.)119 FA.75/-..·.'.;::, 57.JJ!J
FAX: 81.1455/811575
Po. BOX 4384-1,
NAIROBI;
KENYA.
Website: ku.ac.ke, E-mail: i>uvc(cilnbneLco.ke ", . ./. ..,./2007
'.
SUB.JECT: INTRODUCTION LETTER
.... J .. 1 ••• *' ••••••••••••••••••••••.••• r•.~" •••••••••.•.: ••:; ••.•••••••••.•••.•.••••.•••••.•••.•.••", .•.•.•••.•••••••••••.••••••••••.••.•.••••••.•••••••••••••••
This is to confirm that the above named is a student undertaking Master of Business
Administration, in the Department of Business Administration, School of Business,
Kenyatta University. The student would like to 'let information from your instrtution.
The information will be used for' education purposes only,
Any assistance you may accord him will be highly appreciatect.
Thank you.
1\11<,D, K NGABA
CHAIRMAN, DEPT. OF BlJSJNESS Af)MINISTJ{,\ TlON
('f}lI/lI/iff('d t(l C'rcativit v, l ",,'IIc'll<" '" ,\~·{t·R,'Ii/lIJ{'<'
43
APPENDIXB
FACTORS INFLUENCING THE EFFICIENCY AND EFFICACY OF CDF: A CASE
STUDY OF SABATIA CONSTITUENCY.
CHURCH AND SCHOOL HEADS QUESTIONNAIRE.
The purpose of this questionnaire is to help collect data for an MEA project in Kenyatta
Univeristy. All responses will be treated as confidential.
Designation .
Respondent
Please answer the following by placing a tick ( ) where necessary in the spaces provided.
1. (i) In which of organization are you?
A. Church organization c=J
B. Government schools c=J
.c. Any other c=J
(ii) If any specify
2 (a) Are you aware of CDF?
(i) Yes c=J (ii) No c=J
(b) If Yes, who informed you of it?
3. If yes in 2(a) above, are you involved, in any way, in deciding which projects to be
funded by CDF?
(i) Yes c=J (ii) No c=J
If yes, what criterion is used to select the project to fund?
4(a) How many projects have you seen started in your organization by the CDF?
(b) Are the projects completed?
(i) Yes (ii) No c=J
44
( c) For projects that have been completed, how useful are they to the constituents?
A. Very useful
B. Useful
C. Not useful
2. Approximately, how much was disbursed to your organization to finance the CDF
projects in Kshs?
A. 0 - 50,000
B. 50,001 - 150,000
C. 150,001 - 300,000
D. Over 300,000
6a Were you involved in selecting members of the constituency CDF management
committee?
(i) Yes c::::=J (ii) No c::::=J
(b) If yes, what management characteristics did you find in the person you selected/
(c) If No, who selected the constituency CDF management committee members?
7. Do you think the CDF is used efficiently in your village?
(i) Yes c::::=J (ii) No c::::=J
Comment: ------------------------------------------------------
8. How useful do you think the CDF project started by your organization above is useful
to the residents of the area within which it is situated?
45
Comment:
9. What do you think will assist in ensuring that the CDP disbursed to your organization
is efficiently utilized?
Comment: ----------------------------------------------------
THANK YOU VERY MUCH FOR YOUR CO-OPERATION
46
APPENDIXC
FACTORS INFLUENCING THE EFFICIENCY AND EFFICACY OF CDF:
A CASE STUDY OF SABATIA CONSTITUENCY.
CONSTITUENCY CDF MANAGEMENT COMMITTEE QUESTIONNAIRE.
The purpose of this questionnaire is to help collect data for an MBA project in Kenyatta
University. All responses will be treated as confidential.
Designation .
Respondent no .
Please answer the following questions by placing a tick ( ) where necessary in the spaces
provided.
1. What position do you hold in the CDF management committee?
2. (i) What is your level of education?
A. University c=J
B. A - Level c=J
C. 0- Level c=J
D Primary Level c=J
(ii) Which other professional training do you have?
3 (a) Are you directly involved in making decisions as to which projects are to be funded
by CDF?
(i) Yes (ii) No c=J
KE~~ATTAUN1VER
(b) If yes, state your role?
4. What are the reasons for non funding of some CDF proposed projects?
5. (i) What kind of projects does the committee give preferences to?
(a) _
(b) _
(c) _
(d) _
(ii) Are the projects above completed?
(a) Yes (b) No.
(iii) If yes, how useful are those CDF projects that have completed.
Very useful D
D
D
(a)
(b)
(c)
Useful
Not useful
(iv) If No, what is the course of not completing the projects?
6. How does the committee get feed back from the community on the proposed and the
implemented project?
(e) _
(D _
(g)---------------------
48
7. What criterion was used to have you on the CDF constituency committee?
8(a) How many NGOs and self help groups applied for financing from the constituency
CDF kitty to establish projects for the welfare of the constituents?
(i) NGOs _
(ii) Self - Help groups _
(b) How many of these NGOs and self help groups were funded from the constituency
development fund kitty?
(i) NGOs _
(ii) Self-Help groups. _
(c) What criteria was used to select the NGOs or self help groups that could be funded?
Comment: --------------------------
9(a) Who evaluates or monitors the quality and quantity of work done?
(b) How does he/she evaluate the quality of work done e.g. mixing the ingredients in
construction of a building like a classroom in a school?
10. In your opinion what do you think can be done to improve on the efficiency and
efficacy of CDF in your constituency?
THANK YOU VERY MUCH FOR YOUR CO-OPERATION.
49
APPENDIXD
FACTORS INFLUENCING THE EFFICIENCY AND EFFICACY OF CDF:
A CASE STUDY OF SABATIA CONSTITUENCY.
CDF PROJECT CONTRACTORS' QUESTIONNAIRE.
The purpose of this questionnaire is to help collect data for an MBA project in Kenyatta
University. All responses will be treated as confidential.
Designation .
Respondent no .
Please answer the following questions by placing a tick ( ) where necessary in the spaces
provided.
1. How many contracts have you been awarded by the Sabatia constituency CDF
Management Committee since 2003 - 2004 financial year?
a. 0-5 c=J
b. 6 -10 c=J
c. 11- 15 c=J
d. Over 15 c::::=J
2(a) Which project are you working on?
(b) In which location of Sabatia constituency is it situated')
3(a) Have you completed the CDF project assigned to you?
(i) Yes c==J (ii) No
50
(b) In which financial year was the project commissioned?
(i) 2003 - 2004 C=:J
(ii) 2004 - 2005 C=:J
(iii) 2005 - 2006 C=:J
(iv) 2006 - 2007 C=:J
(c) Specify the date of completion of the CDF project
(e) If No in 3(a) above, what percentage of work have you completed?
4(i) Approximately, how much has been spent in undertaking this CDF projects?
A 1 - 500,000
B 500,0001 -100,000
C 100,0001 - 200,000
DOver 200,000
(ii) Highlight any challenges you faced in the process of undertaking the project.
a)
b) _
c) _
d) _
5(a) Are you aware of the criterion that was used in awarding you the tender to undertake
this project?
(i) Yes C=:J
(ii) No C=:J
51
(b) If yes, highlight the criteria.
(c) What do you think gave you an advantage over your competitors for being
awarded this tender?
6. How did you monitor or evaluate the quality of work done?
7 For the labour intensive CDF projects, how do you source the man power?
(i)
(ii)
(iii)
8. In your opinion how can the constituency CDF management committee improve on
efficiency and efficacy of CDF?
THANK YOU VERY MUCH FOR YOUR CO-OPERATION
52
APPENDIXE
Homestead awareness of decentralized funds
lOll 1
~Q j
- I
~ij 1
70 i
~(t ~
Sf) I
HOU HOLD AWARENESS OF DECENTRALISED FUNDS
~3.r I--'
CJG!)(lIj C1A9~rsg$
c:::J Poor c::::::J [)) NotKnow
_Notst~d A'.'Jal"(tn~lle!rD) ~a.2! r....,G3'~1
~S.21
30
n r"""'! n In W n II I I ,...- •...... S3.1 I,...- ,...- ..-,....as ...- ,....r--- r--•.... ~r-- ..--,..... -
"'"'""- IL h- ""'""- - ~
10
o
'0 +r-T"1 .:- "" ~~ '0 t;- CC t:c t:',., 0 ct~[ c - III ! III (I:2~ mC ~ -c~ I- E~c+' •• ~ a- e III>%> C ::I I... ~ ;:- -s 0.. '",.P~ ~.;i :I: • '0 E:p o%-~•. e - C'c ::I1'lIII C Ill':- a! 1;. I1J-CL to' I'l ~...J It: t:I It~2 r, I- o'i C ""O~ ,:jf- ~! ':. ,t;;,,,)!5 '-' ·I-Il: .:-m llJ
Source: KIPPRA.2006
53
APPENDIX F, Source: KIPPRA 2006
'I ~ 1.•1r~!..t ••~rJ kt ',., ••"
1I
'J I
II).i
I
. ·1
I ·L··t
.,. ~ .
II,. ~
I
•
J
i
1
J ~
~'j
ilMBIlD.ARm i1lDN IN
P.INtBt:Nf OFDEIlNl1lUSBl RN)S
J ;
31',
;-t
~ I
i· I
•• j
j
J
1i
--,
III
I' I i.Jt.· "
I!
I
s.
n, ,
,1
KfNYATA U I
54
LIBRA .
APPENDLXG
Population by Area and Density by Districts
Land Density
No. of Area (Person per
District Males Female Total HHS (sq.km) sq km)
Bungoma 425,957 450,534 876,491 174,838 2,069 424
Busia 174,368 196,240 370,608 81,697 1,124 330
Mt. Eigon 66,783 68,250 135,033 25,529 944 143
Kakamega 290,343 313,079 603,422 125,901 1,395 433
Lugari 105,273 110,647 215,920 41,809 670 322
Teso 87,926 93,565 181,491 38,285 559 325
Vihiga 232,720 266,163 498,883 105,701 563 886
Buterel
Mumias 227,043 249,885 476,928 107,563 939 508
Key: I-ll-IS:Households
Source: Central Bureau of Statistics (August 1999 Kenya Population census)
55