Recommendations

Incentives and sanctions. A few officers are hard-working and do their best to adhere to rules and regulations in the management of their local authorities’ operations. Promotions should target such officers and demotions and dismissals may be used to punish officers found to be mismanaging local authorities or who do not perform as opposed to mere transfers. Empowerment of PLGO Offices. Most PLGO officers have one finance officer responsible for well over twenty local authorities in large provinces. The Ministry should as a matter of extreme urgency consider recruiting at least one finance officer for every four to six lo- cal authorities. Further these offices should

be empowered with other resources such as

skilled subordinate staff, serviceable vehicles and adequate finances to be able to manage local authorities in their respective regions. Transformation of PLGO Office. The PLGO of- fice is staffed with officers who see their func- tion as supervisory and doing inspectorate work. This mentality should be eliminated by posting trained advisors working with the LAs rather than prefects who sometimes use their positions to condone and become part of the cover-up cartels in the LAs. Moreover, the PLGO and his team should be re-orientated

from that of an audit and inspection team to

be more of trainers and guardians in order to

steer the local authorities in the reform agen- da. Indeed, this should be a policy objective for that office.

Coordination of training. There are just too many trainers for LAs which lack coordination hence losing focus and creating confusion and a waste of time and resources. One depart- ment should plan and invite staff for training

and all programs should prepare their training

schedules for the year giving details of content, objective and timing of training programs. Rationalisation of staff. Highly qualified staff

are posted to small LAs while large ones lack

staff. The Ministry should consider matching workload with qualification, experience and salary scales.

Accounting officers. The Ministry does not act like it has any coherent objective criteria in the

management of the most important resource

at its disposal- staff. Officers are arbitrarily transferred sometimes at the behest of politi- cians without verifying the facts; most cases involve Clerks and no due consideration for on-

going programs is taken into account

Workshops. Some donor funded programs have a habit of wooing council staff with allow-

ances in order to attract high attendance rates irrespective of the benefits and relevance of the course content to individual officers. This has the effect of officers skipping relevant and use- ful training programmes that may benefit them individually and the council in general, simply because no allowances are paid for attending such training workshops. If programmes are residential and all expenses taken care of, there should be no token allowances payable. Management of seminars/workshops. Local

authorities staff are sometimes spending well over 50% of their time in Nairobi, Mombasa, Malindi and other big holiday towns drawing huge allowances attending all sorts of semi-

nars to the detriment of proper management

of their councils, The relevance, efficacy and

usefulness of these seminars need to be evalu- ated. Indeed one wonders when or whether these officers do their work and if they do how well do they do it.

Treasurer’s position. The staffing of the key position of Treasurer of a local authority needs to be occupied by a University graduate with relevant accounting skills and/or qualified ac- countants if the expected results are to be at- tained by the local authorities. This is impor-

tant if the intended reforms will work in local

authorities.

131 Financial Management in Local Authorities

Qualification. The qualification for middle level accounting staff designated accountant

in all scales should be the responsibility of the

PSC in order to reflect the true meaning of ac-

countant and should therefore be transferable

across local authorities.

LAIFOMS. LAIFOMS is a great way forward to- wards the improvement of financial manage- ment of LAs. However it has reached a stage

in its development whereby it needs proper

evaluation to ensure that fundamental issues on its development and implementation are

addressed to avoid clogging the system at the

time of its rollout to all the LAs. The LAIFOMS has the potential of being a package to provide total solutions in financial management in the

local government sector not only in Kenya but

also in East Africa and other part of Africa. In- deed, it is unique package which would attract consumers from different parts of the world. For successful implementation of LAIFOMS,

the following capacity issues should always be

taken into consideration:

o Availability of basic computer opera- tional and maintenance personnel as Systems Administrator. A number of LAs had problems in operating the

system because they had to rely on KL- GRP for full systems support.

o Adequate pre-installation training as the current training offered by KLGRP before installation is inadequate.

o Adequate training of the senior coun- cil officials like the Treasurers who are key in support of the system.

o Systems security measure properly

evaluated before installation to mini- mize the councils’ loss of sensitive data.

o Key to the operation of most of the modules in the LAs is how quickly they

could transfer their manual data into the system and hence it should have

been a requirement that the LAs pro-

vide enough budgets for such opera- tions.

o A computerized financial management

system for LAs should allow for selec- tion of modules to be implemented in a council, depending on need and budget.

The ministry support to the local authorities be enhanced. The Ministry of Local Govern-

ment has to do much more in the strengthen- ing of the management of the local authorities for improved service delivery to the residents. For the MoLG to succeed in this it requires in-

creased number of skilled personnel in all the

areas of financial management. It has to avail facilitation in terms of allowances and trans- port and others such as computers etc. All these will enhance the capacity of the Ministry to enforce the regulations/policy and monitor the performance of the LAS.

Formulation and enforcement of policies. The

Ministry of Local Government should come up

with a very clear policies on capacity building

rewards, and sanctions, standard accounting systems, schemes of service, financial regula- tions etc. This will guide the councils’ perfor- mance and lead to improved service delivery. Inclusion of local government law in its con- sumption. The law governing local authorities of Kenya should be entrenched in the constitu- tion to avoid the current situation where the Minister for Local Government and other in- terested parties keep changing the law to suit their interest. This was experienced when local authorities lost the grants for education, roads and other services in early 1980’s and subse- quent half-hearted measures aimed at improv- ing financial status of the councils e.g. services charge and the current LATF. This will also stop all other anomalies like haphazard creation of numerous unviable councils.

ties experience financial difficulties due to lack of adequate revenue base and poor revenue collection strategies. The MOLG can assist in

addressing the problem by stopping further

splitting of the LAs and merging the many un- available local authorities. It should also en-

sure that the LAs come up with strong revenue

collection strategies.

Haphazard or unplanned transfers of the se- nior local authority staff. The MOLG should come up with systematic and planned deploy- ment/transfers in the local authorities in order to curb the current disruptive and haphazard

transfers which have resulted in poor service

delivery.

Rewards and sanctions based on performance.

The LAs should come up with a clear policy on

rewards and sanctions guided by the MOLG.

The LAs that perform well should be rewarded

by giving them more government transfers/ grants (in the form of LATF, grants etc) and the poor performers are denied the funds. The LAs staff should also be subjected to sanctions and rewards based on the individual performance. Bonuses, salary increments and promotions should be used as recognition of good perfor-

mance while the poor performers should be

subjected to withholding of salary increments and demotions and in extreme cases dismissal

133 Financial Management in Local Authorities

this will stop the rampant impunity in the LAs. Accounting Systems. The MOLG should ensure

that the recently developed and approved ac- counting system is used by all the LAs. This calls for more vigilance on the part of the Ministry officials in monitoring the adherence of the LAs to the system.

REFERENCES

ALGAK, 2006: The Treasurers’ Manual, Prepared by the Association of Local Government of Kenya, Designed by

Jacaranda Designs Ltd

GOK, 1984: The Public Service Commission Regulations

GOK, Various: Ministry of Local Government

Circulars

KENAO Reports, various: The Local Authorities

Audit Reports: Published by the Kenya

National Audit Office

Laws of Kenya, 1969: Transfer of Functions

Act: Printed and Published by the

Government Printers, Nairobi Laws of Kenya, 1986: Local Government Act

Cap. 265: Printed and Published by the Government Printers, Nairobi

Laws of Kenya, 1988: Local Authority Service Charge Act: Printed and Published by the

Government Printers, Nairobi Laws of Kenya, 1998: Local Authorities

Transfer Fund, 1998: Printed and Published by the Government Printers,

Nairobi

MOLG 2007-09: Rural Service Delivery Advisors (RSDAs) Reports

MOLG, 1985: Budget Guidelines for use by the Local Authorities

MOLG, 2008: Baseline Report on the Status of the Local Authorities Financial Management Information Systems MOLG, 2008: Statutory Financial reporting Tem

plate for local authorities

MOLG, 2009: Internal Audit Manual for Local Authorities Internal Auditors

7

Local Authorities Performance: