Addressing the Agency Problem Among Ngos Dealing With Refugees in Kenya

Abstract

Non-Governmental Organizations (NGOs) play an important role in the implementation of refugee programs not only in Kenya, but also in various parts of the world and are involved in the disbursement of funds of a large magnitude. For the effective delivery of services, NGOs, like other organizations, have to minimize or eliminate the agency problem. This study, therefore, attempts to indicate the importance of donors taking more precautions in the selection of NGOs and to ensure that selected NGOs have adequate checks or controls to guarantee the achievement of objectives. The study was carried out not only on NGOs that received donor funds for refugee programs in 2003, but also on organizations that made these donations in the same period. Two structured questionnaires were administered to the Finance Managers of the NGOs and the Programme Officers of the donor agencies since their understanding of the issues involved could provide adequate responses to the questionnaire. The data was analyzed using percentages, frequency distributions and pie-charts. The results indicated that some NGOs have no financial contribution to the projects that they implement on behalf of donors. It was noted that most checks by donors were through physical monitoring and management meetings while financial audits and verifications were given comparatively less attention. The study also showed that NGOs do participate in the preparation of the budgets for