Many documents that the MTR team will receive will refer to the "Kenya issue" of delayed disbursement of funds. It will feature in discussions on Kenya Progress, and in discussions on Regional Interactions. The discussion notes are full of Tanzanian and Ugandan examples - Kenya is just starting. This note is designed to provide an introduction to the issues behind delays, and to set out the ramifications of the problem.

The problem arose in Kenya, where UNDP (and many other donors) expressed concern at the patterns of financial disbursement and financial reporting through the Kenya Treasury - ie National Execution (NEX) Modalities. This Project is executed through National Execution Modalities in all three countries. It is only in Kenya that there are no clear manuals setting out how NEX is to work.

Because of these concerns - and lack of specific feedback to the concerns - UNDP decided to stop disbursement for all NEX projects - including this one. In fact this project had a longer period of disbursement than many others. The problem for Treasury was exacerbated by the stoppage on IMF funding and consequent budgetary shortfalls. Project funds were taking over two months to pass through the PayMaster General Account in Treasury. Unlike some other projects - this cross-borders project had no outstanding audit queries nor delays in reporting.

Disbursement ceased. The Regional TPR in September 1999 noted the issue, and Kenya said they would attempt to move the disbursement process. The project in Kenya and the Regional Office made representations to Treasury to try to speed up the process (see letters from the RTA to UNDP and Kenya Government in late 1999). A round table meeting did take place between the Kenya Project, Ministry of Natural Resources, RTA and Treasury at which a number of reforms were proposed. A new Treasury Circular was issued - setting out some of the reforms.

The project then suggested to UNDP that these reforms could allow the disbursement process to continue. UNDP was not satisfied - and did not want to break the slowdown until all matters had been met including auditing and reporting for a big backlog of projects. We used the argument that this project was not UNDP funds, but GEF funds passed through a Trust Fund disbursement via UNDP. Eventually UNDP agreed to open our project funding - as a special case.

As a result there were no funds in Kenya from September 1999 to September 2000, bar salaries for senior staff. Other staff were kept going via advances from the Regional Office and Ministry. BUT - there were no funds to do things in the field.


The Implications of the Delay.

There were several!

1.      Lack of faith and belief in the project with many partners in Kenya (see the note on Kajiado in Kenya - showing how the project attempted to maintain momentum).

2.      The delay in starting site planning processes (beyond an absolute minimum with funds advanced from the Regional Component). This led of course to a delay in implementation on the ground, which could not take place until site plans were developed.

3.      Delays in building regional linkages across site boundaries (compare sites out of Kenya, with the Rakai - Bukoba site). This led to concerns from Steering Committees in Tanzania and Uganda that the principles of the regional cross-borders project were being hurt by delays in Kenya.


Coping with the Delays and Catching-Up.

The last Kenya National Steering Committee and TPR discussed how to catch up in detail - which led to the "5 Ps" plan: Pragmatism, Prioritisation, Performance, Partnership, and Pesa (meaning funds!).

The Kenya component stated the series of delay issues at the Regional Tri-Partite Review in mid December 2000, which included the funding impasse, but also secondary issues such as frequent office moves, lack of empowerment for simple administrative tasks such as reconnecting emails, vehicle insurance etc. These are not problems in the other two countries. Added to the funding issue - these other activities exacerbated the delays in activities in Kenya.

In January 2001 the Ministry showed great concern at these delays - triggered by the frank - and asked for a review of how Kenya was going to catch up. A meeting on 25 January 2001 (UNDP, Ministry, Project, Treasury, RTA and Regional Planning Consultant) suggested ways to do it - it could be done!

Funds are flowing, site-planning is underway, lessons are being learned from the other two countries. The "five Ps" are to be followed. We all look forward to a Kenyan component that is back on track.

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