August Camp Bells are Ringing

As you are probably aware, the students of the Ngong Road Children Association (NRCA) live mainly in the slums, where they live difficult lives and have limited exposure to good physical and social amenities. Because of this, the annual August Camp is truly the highlight of the year for our students. Thanks to generous sponsors, donations and volunteers that come every year, we have run very successful camps for the last ten years, and each year it gets better and better!

August Camp has many educational, well-being and social objectives, all set in a fun, learning environment. Camp strives to:

• Provide unique, fun educational experiences.
• Improve health and well-being.
• Create a close-knit, supportive community, where students develop a strong sense of belonging and where they are exposed to and taught about good personal values.  
• Develop leaders and teach leadership skills.
• Provide a new view of the world to all who attend camp, both students and international volunteers alike.
• Give students who live day to day lives in poverty and in difficult circumstances, the opportunity to just have fun and be kids in a safe environment.

The net result is an experience that changes lives – those of the students, and those of the volunteers both from Kenya and other countries.  

Our NRCA students are anxiously waiting for this year’s August Camp, which is scheduled for August 6th to 22nd. We are currently working on creating an exciting program of indoor and outdoor activities designed to challenge the students physically and mentally. Run in an environment that encourages openness, camp will include guest speakers who put emphasis on discipline and hard work as cornerstones for success, as well classes to help students develop key personal and life skills to prepare them for their future careers and help them grow up as responsible citizens.

I know our students are lucky to have both local and international sponsors and supporters who are touched by their plight and who generously sponsor their formal education. Camp goes beyond this and provides a means to develop the all-round person. As you can imagine, holding an off-site 17-day camp for our 377 students is costly. Against this background, in June we will be kindly inviting our enthusiastic supporters to make donations to ensure that every student gets the opportunity to attend this year’s camp.  

I would like to take this opportunity to wholeheartedly thank all stakeholders who have sacrificed their time and funds to ensure that previous camps have been successful. Be on the lookout to “Send a Kid to Camp” this June!

Maureen Mulievi
Programme Director
Ngong Road Children Association

Dear Friends,

By now you will have received an email from Amy Johnson updating you on the clean 2017 audit received by our sister organization in Kenya, Ngong Road Children Association. After discovering theft of resources in the 2015 audit, we have devoted considerable energy to reinvigorating financial controls and improving processes. I am very pleased Crowe Horwath has endorsed those efforts as having been effective by granting this clean audit.

I recently took an online course hosted by the Wharton School entitled “Corruption”. It has been proven that corruption can be significantly reduced by organizations through a combination of ethical leadership, active management/supervision and appropriate risk management processes. We will continue to discuss other best practices that would fit our circumstances and help us remain vigilant about this risk.

Friends of Ngong Road completed our last strategic planning process in 2015 and we are working throughout 2018 to tackle important strategic questions to revisit that process. Our expectation is to have a three-year strategic plan completed by the end of 2018 for 2019 – 2021. Here are just a few of the issues we are tackling:

• Karibu Loo has been profitable in the first four months of 2018 and is on target to provide $10,000 or more to Ngong Road Children Association this year, reducing funds we must raise in the U.S. to support the program. We are in discussion about how much and in what way Friends of Ngong Road should support Karibu Loo as it grows and becomes a contributor to the program’s funding needs.
• Succession is on our minds. I have communicated to the board that I expect to move into an emeritus status during this 3-year planning horizon. We have to decide how we are going to make that transition which raises issues about board composition, staffing, etc. And, we have several long-tenure board members who will also be transitioning in the coming years. Finding their successors is a high priority.
• Sponsor growth is another important topic to discuss. Our model for sponsor recruitment has been “friends and family”, however we are all running out of friends. What model for sponsor recruitment will be effective in the future?
• How much should we grow? If Karibu Loo can provide a significant contribution to the organization, and we have a healthy endowment fund, how much should we grow?

I look forward to sending you an update on our 2019 -2021 strategic plan at the end of the year.

In the meantime, we are excited to welcome Judy Nyaga to Minneapolis on May 14 and 15 and Kelvin Thuku the first half of June. Judy is a board member in Kenya and Kelvin is the Program and Technology Coordinator. We will host gatherings and meetings during their time in the Twin Cities and hope you will have the opportunity to meet these people who do so much to support student success in Nairobi.

Thank you!

Paula Meyer
President and Founder
Friends of Ngong Road

Dear Friends,

We thank you for your ongoing support for impoverished children in Kenya through Friends of Ngong Road (FoNR). In 2016 we faced the challenge of a theft by the Ngong Road Children Association (NRCA) Executive Director and we worked hard to keep you apprised as we worked through that issue. Today we are pleased to provide an update on the results of our activities to strengthen governance and financial control in Kenya. 

NRCA has now received a “clean” audit opinion on 2017 financial results from Crowe Horwath, the Kenyan auditor for NRCA. Sammy Anunda, lead auditor has shared a summary of their findings which amount to, in Sammy’s words, “…normal housekeeping issues that management has expressed commitment to address.” He recognized NRCA’s significant improvements in internal controls through creation of an improved procurement process and minimization of cash handling. Crowe Horwath noted that there are no specific high-risk findings to bring to NRCA’s attention.

I wanted to update you on the changes we have made to NRCA’s financial infrastructure that led to this clean audit.

Independent Audit by a Qualified Firm
In 2015 FoNR insisted on the replacement of the existing auditor, a small local CPA firm engaged by the former NRCA Executive Director, with Crowe Horwath, an internationally recognized public assurance firm, to audit NRCA in Kenya. In the March 2016 audit exit interview, we learned that money had probably been stolen, and this conclusion was corroborated by results of a forensic audit in April 2016. Subsequently, three employees including the former executive director were placed on leave prior to the forensic audit and then terminated in May 2016.

Outsourced Accounting to a CPA Firm
After an RFP process, in August 2016 NRCA outsourced accounting to KKCO East Africa, a third party accounting firm in Kenya. KKCO helped NRCA establish sound internal control processes and is responsible for payroll, accounts payable, reconciliation, financial statement preparation and tax management for NRCA. This has added oversight and controls to the financial practices in Kenya, as well as independent insight into best practices.

In September 2016, NRCA created a structured procurement program with support and oversight from KKCO. A procurement committee and policies were created, instilling discipline into the process of making significant purchases of goods and services needed to deliver the program. Acquisitions for items such as uniforms, books, office equipment and services are approved by a finance committee after the procurement team has collected three independent bids and reviewed additional qualitative elements such as conflicts of interest with potential providers.

Stronger Governance in Kenya
Throughout 2016, the NRCA board successfully recruited new volunteer members. They meet monthly and have taken a more active role in oversight of program activities than the previous board. NRCA board members include:

• Rajpreet Bains is the NRCA board chair and owner of a human resources consulting firm in Kenya. Rajpreet was trained in the UK, bringing extensive human resources leadership experience. She has been instrumental in recruiting new board members.

• Judy Nyaga is the Regional Head of Subsidiary Governance for Standard Chartered Bank in Africa.

• Robert Murimi is the Marketing Director and Chief Trainer at Impact Change, Ltd., a management training company.

• Anupa Sanghrajka was trained at the London School of Economics and worked in the UK for several years at KPMG. Upon returning to Kenya, she assumed leadership of a segment of a family-owned business that operates in the home construction industry. She takes the lead in Kenya for financial review.

• Steve Makimei owns an insurance agency in Kenya and serves on the boards of directors of two schools, bringing thorough understanding of Kenyan education.

Qualified Personnel Experienced in NGO Leadership
Also in August 2016, the board chairs of FoNR and NRCA interviewed and hired a new program director, Maureen Mulievi. Maureen came to NRCA from Planned Parenthood Global where she managed programs in East Africa. She has brought integrity, effective NGO leadership skills and clear commitment to the mission.

Enhanced Oversight by Friends of Ngong Road 
In 2017, we created a finance committee to govern and oversee financial activities in Kenya. Committee members include the partner at KKCO (NRCA’s accounting provider in Kenya), the CFO, treasurer and accountant of FoNR, board members from both FoNR and NRCA and the program director of NRCA. The committee meets monthly to review actual results versus budget, major procurement requests from the NRCA procurement process, planned funding and necessary adjustments, potential control issues and proposed remediation plans.

To further strengthen our processes, FoNR hired a part-time, consultant CFO with experience working in the non-profit sector in the U.S. and internationally to ensure effective implementation of financial controls in Kenya and to monitor progress on audit findings from 2015 and 2016. She got up-to-speed on organization processes in September through November 2017 and spent ten days in Kenya in December 2017. During her seven month assignment she:

• Reworked the NRCA budgeting and financial reporting process to more closely mirror current management practices in Kenya.

• Strengthened the documentation and review processes for all key expenditures in Kenya, in which invoices are put on a shared drive and U.S. partners have visibility into them.

• Established electronic access to all financial tools in Kenya for U.S. partners to enable transparency and oversight of financial activities.

The clean audit results of NRCA’s 2017 finances are a welcome indicator that our leverage of highly qualified professional accountants and auditors, improved controls in Kenya and oversight from the U.S., engagement of experienced NGO leadership and more capable governance are working. We believe the environment now ensures all of your contributions will be devoted to the program you have so faithfully supported over the years.

We value your continued support and welcome any questions.

Sincerely,

Amy K. Johnson
Chief Financial Officer and Board Member

Karibu Loo (KL) has many exciting developments to report. Thus far in 2018, KL has gone from being a business struggling to secure long-term contracts to a business struggling with positive growing pains.

• Moving to profitability: KL has been profitable in each of the first three months of 2018, earning approximately $2,000 in January, $1,000 in February and $7,000 in March. April is on track to generate profits as well.
• Sound leadership from Maureen and Kenneth: The business has improved significantly due to more effective leadership (Maureen Mulievi), and the addition of a young, energetic sales professional (Kenneth Odongo). See all staff at Karibu Loo: https://www.karibuloo.co.ke/our-staff/
• Long-term business absorbing an impressive 46% to 94% of units: Maureen, Kenneth and the staff have been successful in securing more long-term contracts. The British Army (located in northern Kenya), has become an important client requiring extraordinary servicing and effort, contracting from 16 (currently) to 66 units at its peak in January. The construction business, with an April total of 17 units on monthly contracts, now includes Konza Construction, Nanchang Construction, TENSES, and Karen Construction. KL has retained the ongoing weekly Sunday-only rentals to three churches for seven units. Long-term rentals therefore absorb 17% (27% with the churches) of our units plus the highly variable British Army business, which puts absorption between 94% in January to 46% in April.
• More effective targeting: KL has learned that long-term rentals are primarily done by foreign corporations or government entities, and Kenneth is becoming effective at targeting important, long-term sales.
• Assets spread thin with inefficiencies costing over $15,000: Running the business has been a challenge as our assets are spread very thin. Current assets include 88 unit (including one VIP unit), a large truck, one exhauster and a pickup truck that can pull the VIP unit or the newly-built trailer to transport unit. KL had to pay for third-party trucks to transport the units to the British Army and is currently renting a large truck full-time (combined cost in Q1 was $14,000) to service the British Army business to which KL has dedicated the exhauster. All the units in Nairobi are serviced manually, which is unhealthy and unpleasant for our staff. The low number of available cabins has forced KL to rent units from competitors on occasion (Q1 cost = $615).
• Most urgent need – a reliable large truck. The biggest business challenge is currently the large truck, which has served KL well since the company’s inception but is now chronically breaking down. The portable sanitation business is not viable without a reliable truck and exhauster. We are working on plans to purchase a new truck, exhauster and 60 more loos and invite individual donations to make the purchase possible.

Today, KL employs five Ngong Road Children Association (NRCA) graduates full-time and has employed 57 high-school graduates part-time as Associates since inception. KL’s Associate Program allows recent NRCA high-school graduates to gain that very valuable first job experience and earn income. “Sales and Operations Associates” are hired to keep the cabins clean and stocked with materials at events and act as ambassadors for the organization. The Associates program teaches NRCA graduates how to be good employees – show up on time, do a good job, and dress properly – skills that students living in the slums never see demonstrated by adults in their lives yet are critical to the charity’s mission of transforming lives through employment. Associates make 500 Kenyan shillings a day plus transport and a meal. (For context, 500 Kenyan shillings covers about a quarter of a month’s rent in the slums). Almost 1,000 day-payments have been made, injecting $5,000 into the slum economy in earned wages.