An assessment of the Local Authority Transfer Fund as a tool for debt reduction: (A Case Study of Mavoko Town Council, Nairobi City Council and Kiambu Town Council)

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Kampala International University, College of Economics and Management.
The Local Authority Transfer Fund (LATF) was established in 1999 through the LATF Act No. 8 of 1998, with the objective of improving service delivery, improving financial management, and reducing the outstanding debt of local authorities (LAs). LATF, which comprises 5% of the national income tax collection in any year, currently makes up approximately 24% of local authority revenues. At least 7% of the total fund is shared equally among the country's 175 local authorities; 60% of the fund is disbursed according to the relative population size of the local authorities. The balance is shared out based on the relative urban population densities. LATF monies are combined with local authority revenues to implement local priorities. The researcher used descriptive research design. This design enabled the researcher to describe the state of efforts as it is in Mavoko town council, Kiambu town council and Nairobi city council in Kenya. The researchers administered the questionnaires to the respondents since vast areas are to be covered within Kenya's local authorities. The collected data was then measured, classified, analyzed and interpreted. From the responses given by the respondents, local authority through LATF still has room for improvements. Some of the factors considered important in improving service delivery included; provision of reports on completed projects and transparency, Local community involvement in planning and regular audits. LATF has achieved in a few ways such as improvement in service delivery and accountability but in small scale. It was also concluded that majority of the members of the public were not aware ofLATF. Recommendations made by the researchers were that the local authority should increase employee turnover so as to enhance transparency and be able to pay its debts since most of the employees had worked for a long period of time. Also to improve service delivery; provision of reports on completed projects and transparency were considered to be very important and also Local community involvement in planning and regular audits. Finally the role of LATF as a debt reduction tool needed to be well coordinated, transparent and free from political influence and corruption so as to achieve its roles.
A research dissertation submitted to the School of Business and Management in Partial Fulfillment of the Requirements for the Award of a Bachelors Degree in Business Administration of Kampala International University.
Local Authority Transfer Fund, Assessment, Nairobi City Kenya