70pc of NGOs don’t file annual returns – report
Non-Governmental Organisations (NGOs) contributed Sh175.9 billion to Kenya’s economy and employed 71,096 people in the financial year 2021/22.
A report released yesterday stated that this was a 27 per cent increase in financial receipts, from Sh13.6 billion in the previous financial year.
The report, however, reveals that only 3,005 out of the 12,162 NGOs (30 per cent) registered in the country filed their returns for the 2021/2022 financial year.
Speaking during the launch of the Annual NGO Sector Report 2021/2022 yesterday, Interior Principal Secretary Raymond Omollo, revealed that the NGO sector in Kenya spent a total of Sh185.5 billion in the financial year.
Out of this, Sh118 billion was pumped into project implementation, Sh49.7 billion for personnel emoluments, Sh18.4 billion as administration costs and Sh4.4 billion on tangible assets.
Some Sh102 billion (86per cent) of the total amount spent was spent in Kenya with the remaining Sh16 billion in other countries.
The report also indicates that a total of 9,794 organisations were active, representing 80 per cent of NGOs cumulatively registered by the Board.
Out of the 12,162 NGOs that had been registered by June 30, 2022, some 2,468 have been deregistered, 130 reinstated and 30 dissolved. During the period, 272 new organisations were registered (217 national and 55 international).
The 3,005 NGOs which filed their annual reports receiving Sh175.9 billion – which contributed to the economy –, spent Sh185.5 billion, and also employed 71,096 people.
Illicit financial flows
Financial receipts improved by 27 per cent from Sh138.6 billion in FY 2020/21 to Sh175.9 billion in FY 2021/22.
Most of the funds were donated by affiliates of the NGOs at 28.8 per cent and foreign government agencies at 27 per cent.
The number of people employed decreased by 22 per cent compared to the previous year. Majority of the employees 66,687 (94per cent) were stationed in Kenya compared to 4,409 (six per cent) outside the country.
Omollo said all NGOs must file their annual returns and declare sources of funding as Kenya heightens its vigilance against illicit financial flows.
He described as “unacceptable” the low levels of compliance with the existing legal and regulatory frameworks, adding that it is enough reason to infer that the culprits are involved in shady activities, including financing terrorism.
“You must embrace transparency in your funding sources as well as expenditure,” he told the sector players.
“Your financial records should be an open testament to your integrity and reflect your dedication to ethical practices,” he added.
Omollo relayed the government’s undertaking to create a conducive environment for the sector players to thrive, with plans underway to operationalise the BPO Act.
He urged the organisations to reciprocate and honour their obligations as an affirmation of their commitment to the values that underpin the cause of service to humanity.
“You, as the torch bearers of change, must reciprocate the trust bestowed upon you by ensuring total compliance with our legal and regulatory frameworks. Those that have not yet registered must also formalise their status as the first critical step towards ensuring accountability, transparency, and legitimacy in their operations,” he added.
The activities are indicated in the Annual Reports submitted by individual NGOs in line with the Non-Governmental Organizations Co-ordination Act.
The report shows that 31 per cent of the money received was spent on implementing health-related projects, followed by children at 10.4 per cent and education at 10 per cent.
Nairobi county had the highest number of project and programme implementers (1,192), followed by Kisumu with (421), Nakuru (385), and Kiambu (372).
Five leading International NGOs in the utilisation of funds on projects are GiveDirectly Kenya (Sh6.6 billion), World Vision Kenya (Sh5.3 billion), Compassion International Inc. (Sh5.2 billion), Amref Health Africa In Kenya (Sh4.6 billion) and Catholic Relief Services (Sh3.5 billion)
According to the report, health was the most preferred sector of operation at 17.3 per cent (164), followed by Relief at 15.6 per cent (148) and Education at 14.5 per cent (137).
The launch of the report also coincides with the NGOs Week 2023, an annual event that brings together Civil Society Organisations (CSOs) and the public and private sectors to showcase their services and operations.