Governors vs MCAs - Who controls the budget?

At the centre of the power struggle between governors and MCAs are hundreds of community development projects, ranging from water pipelines to cattle dips, classrooms, roads, surgery theatres and other infrastructure.

Critics of MCAs' bid for control of the money say that politicians simply have no appreciation for the level of technical coordination needed to deliver effective services to citizens.

Building a new clinic, for example, won't automatically solve local health problems because clinics need to be staffed by doctors and nurses, and also need to be stocked with everything from medical equipment, to medicines, catering for patients, bedding and laundry services, etc. Unlike construction of the building, the operating costs repeat month after month, forever afterwards … and that money has to be planned for.

But surely government can easily coordinate these kinds of things? Not if the current debacle in Nakuru is anything to go by, where 40 newly built clinics have stood empty for years because there wasn't proper coordination. That scandal involved Constituency Development Fund (CDF) projects, but the principle applies directly to WDFs as well.

So, just what are these WDFs (or lack thereof)? WDFs are a fund that some, but not all, of the counties set up to finance the development of specific projects at ward level. Counties that established WDFs include Baringo, Laikipia, Machakos, Meru, Murang'a, Nairobi, Nakuru, Nyeri and Siaya. They have allocated an increasingly large sum of money to the funds. For example, in the first year of devolution (2014-15) the Nairobi MCAs allocated themselves Sh2.9 billion (nearly 10 per cent of the county budget).

This year, the Nairobi MCAs claimed Governor Evans Kidero is "unfairly" withholding Sh1.7 billion development funds for implementing projects in the wards.

So, the question is, who is actually legally empowered to spend the Ward Development Funds?

PesaCheck has researched the issue, with input from the International Budget Partnership in Kenya. It found MCAs' claim that they control Ward Development Funds is FALSE for the following reasons.

Conflict of interest

Firstly, the Controller of the Budget has twice rejected the use of Ward Funds in Nairobi, ruling that the Nairobi Ward Development Fund Act does not conform with either the constitution or the Public Finance Management Act, which governs the use of funds by the national and county governments.

According to the constitution, county assemblies, including MCAs, can only play an oversight role in the use of public funds. Their role, according to the constitution, is to mobilise the residents of each ward to identify priority projects which they want financed by the fund. The MCAs then present this list of priority projects to the county executive, who must include them in the budget.

But MCAs want much more power: not only do they want to decide how much will be allocated to the WDF, they are also demanding a role in spending the funds on the projects.

By virtue of their positions, the MCAs are ex-officio members of WDF committees, where they can participate in discussions and decision-making. But this also means, in terms of the current flawed Act, that they have the power to directly implement the projects financed by WDFs.

The problem, the courts have highlighted, is that the MCAs have a massive conflict of interest because they cannot provide both oversight and implementation on projects at the same time. There needs to be a separation of powers.

Not constitutional

Secondly, the constitutionality of the WDFs is modelled after the CDF, whose legitimacy the High Court ruled unconstitutional.

The Nairobi county executive (or any other county faced with similar challenges) cannot, therefore, disburse these funds to the MCAs until the Act is amended to meet the constitutional requirements.

The Controller of the Budget has released guidelines to counties on how to institute and implement WDFs. The guidelines also make the role of the MCAs clear — to mobilise citizens and identify projects for implementation; and to monitor and play an oversight role in appropriation of the fund and ensuring the projects are implemented.

Unless they amend the law, the MCAs will be unable to see the projects in their wards implemented. Until this is done, we can expect yet another stalemate when the time comes to spend the Sh1.7 billion the Nairobi MCAs have allocated to their WDF in the 2016–17 budget.

Leo Mutuku is a PesaCheck Fellow. She is co-founder and chief executive at a boutique data-science consultancy in Nairobi, that works with the financial sector. PesaCheck is East Africa's first-ever media-focused budget and public finance fact-checking initiative.

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