Prisons' cashless strategy to revamp troubled enterprises

The Kenya Prisons Service is going cashless in efforts to salvage its troubled business wing and seal loopholes unscrupulous staff use to siphon funds.

This is among steps the the Correctional Services department is taking in its drastic turnaround plan to make prison businesses viable.

Farm and industry managers at the country’s correctional institutions have signed commitments to ensure their enterprises are profitable.

The yearly targets, effective this financial year, will form part of the managers’ performance contract.  

Buyers of prison products will have to make a down payment of 75 per cent for any local purchase order.

Prisons will no longer procure materials from a central pool after concerns that such a system has been abused.

Each prison station will be required to come up with budget requests which will inform the amount of money they will be allocated.

In a bid to increase sales, correctional institutions across the country will serve as the primary market for enterprise products.

Correctional Services PS Zeinab Hussein communicated the measures to senior prison officers on Thursday.

The meeting brought together heads of departments, officers in charge of stations as well as farm and industry managers. Commissioner General of Prisons Wycliffe Ogalo was present.

Hussein said the industries will be modernised and fitted with better plant machinery, equipment and tools.

The government in its turnaround plan seeks to install irrigation facilities, mechanise farms and improve livestock breeds.

In the changes, industry managers will be responsible for the control of materials and funds as well as marketing the products.

Farm managers, on the other hand, are tasked with planning production cycles, control materials and funds, marketing farm produce and revenue collection.

The changes followed an internal audit of prison enterprises commissioned by the National Treasury.

It was revealed in the financial year 2018-19 review that the industries were on the verge of insolvency and could not sustain their operations.

Prisons managers are also turning their eyes on the loss-making vehicle number plate section in the revitalisation plan.

Auditors flagged it alongside livestock, which was found to have low returns. The vegetable section in Embu has been deemed a success, as well as a tea venture at Kericho prison.

The plan, management says, will bolster synergy between prison stations and the enterprise wing.

About 5,170 acres, spread across 88 prison stations, is being utilized for agriculture. About 40 per cent of the arable land is unutilized.

“This trend of declining farm and industry production needs to change drastically in order to cope with modern market in a globalized economy,” Hussein told the station chiefs.

The revitalisation plan is hinged on efforts to create autonomy in operations of the Prison Enterprise Fund, rebranding for product visibility, recovery of grabbed prison land and technology.

Outgoing Auditor General Edward Ouko in his latest report on the departments' accounts flagged profitability of the enterprises.

For instance, prisons projected to raise Sh246 million in revenue from the farms but only managed Sh147 million, which is a shortfall of over Sh98 million.

In addition, while the budgeted expenditure was Sh234 million, the actual expenditure amounted to only Sh130 million.

"This is an indication that public resources were not effectively used and the Fund, therefore, did not achieve a significant proportion of its planned goals during the financial year ended 30 June 2018," the auditor said.

To reverse the trend, officers were advised to ensure that resources within their jurisdiction are used not only lawfully but efficiently and transparently.

Those who abuse resources allocated to them or fail to account for the same within the periods specified in law will be held personally liable.