In-depth Solomon investigates the history of Constituency Development Funds, examining how the scheme was mismanaged from its inception and how recent reforms are reshaping its future.
by Ednal Palmer
It was originally termed the Rural Constituency Development Fund (RCDF), but was later changed to and now widely known as the Constituency Development Fund (CDF).
This controversial government funding scheme in the Solomon Islands was originally designed to decentralize development and improve rural livelihoods.
Administered through the Ministry of Rural Development, the fund provides substantial financial allocations directly to the country’s 50 parliamentary constituencies.
The evolution of the fund from its inception to the present day includes several key stages.
From its inception and early years, from 1989, RCDF was established by Prime Minister Solomon Mamaloni’s government. It was originally launched alongside the Solomon Islands Communities and Provincial Special Assistance Fund (SICOPSA) to help MPs respond to urgent grassroots needs.
The idea is that MPs should not just talk on the floor of Parliament, but should be seen as responsible for delivering services in their constituencies.
SICOPSA, on the other hand, was a funding mechanism for Provincial Assembly members to also support services in their respective wards.
SICOPSA, however, was cancelled after only two years of operation.
With the introduction of RCDF, each constituency (MP) was allocated a budget of $200,000 each year up to 2003, before the funding allocation was increased to $400,000 per year. Two years later in 2005, the allocation was increased to $600,000 per year.
As a result of those increases, total funding for each constituency from 1989 to 2005 was $4.2million.
Solomon Mamaloni, Former Solomon Islands Prime Minister: Credits: National Parliament of Solomon Islands.
The Grand Coalition for Change Government (GCCG), which came into power in May 2006, led by Manasseh Sogavare, then added a further $400,000 funding from the Poverty Alleviation Fund. This addition increases the allocation for each constituency to $1 million per year.
At this stage, the funding increasingly became a political tool – not only to help maintain the stability of the government, but also to give incumbent MPs a significant advantage over challengers during election campaigns.
As a result, RCDF allocations continued and steadily increased despite persistent public criticism.
This was largely because the National Parliament, which approves the national budget each year, had a direct interest in preserving and expanding the funding mechanism.
Despite the steady increase in allocations, the additional funding has failed to deliver tangible improvements at the grassroots level, according to the first audit in 2009 and a research paper, A Perspective on Constituency Development Fund in Solomon Islands, produced by the Australian National University’s (ANU) Development Policy.
Manasseh Sogavare, Former and longest serving Prime Minister of Solomon Islands.
The audit and research paper found that this was largely due to the absence of clear guidelines and strict rules governing the use of RCDF, allowing the funds to be distributed largely as handouts.
It noted that the money was frequently used as political patronage to secure voter support, rather than being invested in sustainable development projects. Instead, much of the funding went towards meeting short-term needs, including funeral expenses, wedding feasts, and other consumable items.
Establishment of MRD
The current Ministry of Rural Development (MRD) was established in September 2007 as the then Ministry of Rural Development and Indigenous Affairs.
This newly created Ministry included a Constituency Development Division with a mandated function to establish 50 Constituency Development Offices, one in each constituency throughout the country..
One of the visions of the newly created Ministry, as stated in its 2007 Annual Report, was “to be responsible in ensuring all development assistance (financial, resources etc.) gets to the rural populace through these Constituency Development Offices.”
The Vision also stated that: “in this manner and through this assistance the majority of people in the rural areas can be actively involved in the development process and benefit from the small-scale economic activities and improve living standards.”
RCDF formalized, first audit found widespread mismanagement
From 2007 to 2013, the fund evolved out of the Rural Community Development Fund (RCDF) into its formalized status as the Constituency Development Fund (CDF).
Facing growing public criticisms and budgetary commitments, Parliament passed the Constituency Development Funds Act 2013 to manage disbursements, although it lacked strict regulations and was primarily guided by operational manuals.
It was mainly passed only to give some structure and guidance to the process.
The Constituency Development Fund Bill was drafted in 2013 and passed by Parliament, but was not gazetted.
Discretionary use of the fund remains solely under the power of MPs, giving rise to a strong public sentiment that “MPs were elected to be legislators, not financial managers”.
Vote count in Honiara, during the 2024 National General election . Credits: Charley Piringi/IDS.
The first RCDF audit
The Office of the Auditor General (OAG) conducted the first audit into the funds in 2009.
The Audit Objective was to assess whether the RCDF money has been administered by the Ministry of Rural Development in accordance with the relevant guidelines issued by the Ministry and verify the existence and progress of projects in selected constituencies.
One important purpose of this performance audit has been to inform the public about the extent and use of funding provided to all 50 constituencies each calendar year (Solomon Islands budgetary period). The audit covered the period 2009-2012.
The first 18 constituencies were audited for 2009 to 2011, whilst the remaining 32 were audited for 2010 to 2012.
It was considered important that the RCDF be audited on the basis that:
- The funds totalled approximately SBD100 Million for each year 2009-2012, and it was considered to be in the public interest to determine what was actually achieved with the money;
- The nature of the distribution of these funds to 50 constituencies each year;
- There is a certain amount of negative opinion expressed in the public arena, questioning whether these funds reached the people in the constituencies who needed it most; and
- It had been operating long enough for the OAG to make an assessment of its performance.
During the audit, the OAG obtained and reviewed relevant documents held by the Ministry of Rural Development (MRD). They also interviewed key officials from the Ministry,
Constituency Development Officers (CDO), Constituency Project Officers (CPO), as well as other relevant people – including the beneficiaries involved, villagers, including chiefs, and the Constituency Development Committee in the village where one existed.
Project verification at the project site were also undertaken and photographs taken as evidence.
Audit findings
Of the total possible claim of SBD109 million expended for 18 constituencies from 2009 to 2011, only payment vouchers relating to over SBD 62 million were sighted during the audit; 57.5% of the possible total.
Of the SBD62 million vouchers sighted, only acquittals valued at over SBD 53 million (85%) were sighted at the ministry. Thus, SBD9 million was not accounted for.
Regarding the funding and acquittal of funds for the other 32 constituencies, of the total possible claim of over SBD 222 million, only over SBD164 million worth of payment vouchers were sighted by auditors; 73% of the possible total.
Of the SBD164 million vouchers sighted, only over SBD142,624 million (86%) of the acquittals were found. Thus, SBD 21 million was not accounted for.
Thus, in total, some SBD31 million of public funds were unaccounted for over the audit period. The lack of accountability of public funds on this scale was not an acceptable situation, according to the OAG.
Other problems encountered during the audits include giving projects to people residing outside of the constituency.
This means voters reside outside of the constituency, resulting in projects not contributing to the development of the constituency.
Another issue identified was the lack of monitoring of project implementation due to the weak or non-establishment of constituency committees.
Spending of CDF in Honiara leads to a corresponding lack of support and development within the constituency.
Recipients in Honiara are developing the constituency in Honiara where they live, and there is no direct or indirect benefit at the community level of the project in the constituency.
Some of the CDF funded projects to local fisherman in Solomon Islands. Credits: MRD.
As the CDC failed to monitor and follow up on the project implementations, some of the projects that were delivered were not implemented.
This issue shows that the management of the CDF at the constituency level is not effective, as the goals and objectives of the projects and the CDFs are not met, and there is no value for money from the projects being funded.
The OAG emphasized breaching the “separation of powers” was another serious problem.
The separation of powers is a system for the governance of democratic states that divides the state into a number of branches, each with separate and independent powers and areas of responsibility.
A common division is one in which there is an executive, a legislature, and a judiciary.
The separation of powers is meant to reduce the risk of poor governance by limiting the authority of each branch of government.
This division also allows citizens to seek redress if one of the branches should act against their interests.
In the budget system of democratic states, the most important manifestation of the separation of powers is that the legislature (parliament) enacts the budget and evaluates, but is not directly involved in its implementation.
It (Parliament) determines the rules of the game and pronounces on whether these have been followed, but does not “play the game” itself – it is the executive that manages and spends the budget.
The OAG then concluded that the transparency, accountability, and governance of the RCDF fall well short of what was expected regarding public finances and that significant changes were required.
They further recommended that if the government decides to continue using RCDF, it is recommended that legislation be passed governing the use of RCDF based on the 2013 Act.
The new CDF Act 2023 and the current audit
With the passage and implementation of the CDF Act 2023, the government described it as a landmark reform in the management of the funds with the aim of improving transparency, accountability, and the effective delivery of development projects at the constituency level.
It also reinforces the separation of powers by limiting Members of Parliament to their legislative role, while constituency officers are responsible for implementing CDF-funded programmes.
The Act introduces a structured framework for allocating CDF resources, requiring that the largest share of funding be directed towards productive and resource sectors, with the remaining allocations supporting essential services, inclusive development initiatives, and social obligations such as disaster response and medical assistance.
It also requires all procurement and spending to comply with the Public Financial Management Act 2013, ensuring greater financial discipline.
To improve public accountability, the Act requires annual financial and implementation reports to be shared with constituents and provides for regular community participatory audits to monitor how public funds are spent.
It also establishes legal penalties for the misuse of CDF, making Members of Parliament, public officers, and other individuals involved in managing the funds accountable for any breaches of the law.
Current Audit
The 2019 census report by the National Statistics Office revealed a sobering reality: finding that 64.2 percent of Solomon Islanders do not believe the CDF has a positive impact on their communities.
The public perception is one of unfair distribution, abuse of funds, and a lack of good governance.
Furthermore, the past audits of national accounts have often found CDF reporting to be unreliable or outdated, making it of little use to the wider public.
The OAG, under Section 108(3) of the Constitution, which mandated them to audit
the public accounts of all Ministries, authorities, and provincial governments, coupled with the CDF Act 2023, Section 30, which explicitly names the Auditor General as the external auditor for these funds, OAG commenced the exercise in recent months on the accounts of the North Guadalcanal constituency.
Auditor General David Dennis Teika said that with the current huge funding of approximately $250 million annually disbursed, such oversight is no longer optional, but a constitutional and developmental necessity.
Years of public calls for greater transparency and accountability in the management of the CDF are finally being answered, as the new audit approach goes beyond paperwork and into communities.
Unlike traditional audits that primarily focus on financial records, the Citizen Participatory Audits (CPA) involve locally established Civil Society Organisations (CSOs) and community members in verifying whether development projects reported on paper have actually been delivered on the ground.
North Guadalcanal and East Are’are are the first two constituencies to voluntarily open their books and welcome auditors into their communities.
MP for North Guadalcanal Dr. Paul Bosawai and the audit team after setting a standard record of CDF Transparency in Solomon Islands.
While the audit of East Are’are Constituency is expected to commence in the coming months, the report on North Guadalcanal will be released soon.
The CPA focuses on both compliance and performance, assessing not only whether funds were spent according to regulations but also whether intended development outcomes were achieved.
Auditor-General Teika said the new participatory approach directly responds to growing public demands for greater scrutiny of constituency funds.
He explained that the Citizen Participatory Audit enables communities to play an active role in the auditing process by providing information and feedback on projects and services funded through the CDF.
Auditor General David Dennis Teika during the launch of the North Guadalcanal audit report recently. Credits: MRD
Minister for Rural Development Daniel Waneoroa described the initiative as a “game-changer” that offers a fresh perspective on public accountability.
“Traditional auditing often looks only at paper. Community Participatory Audits look at reality through the eyes of our people, who will form a significant part of the audit process,” Waneoroa said.
“Our constituents are the ones who see every day whether a water tank was delivered or a clinic was built,” he added.
Waneoroa said the involvement of CSOs and ordinary citizens provides auditors with valuable on-the-ground evidence, strengthening the credibility of audit findings.
“The approach taken by the Office of the Auditor General ensures that diverse voices, including marginalised groups, are represented in the oversight of public resources,” he said.
Minister for Rural Development Daniel Waneoroa. Credits: MRD.
Waneoroa added that the initiative sends a clear message to Constituency Development Offices, public officers, and communities across the country about the importance of participation, inclusivity, transparency, and accountability.
“Let’s welcome this exercise with open doors and open books,” he said during the launch of the audit exercise.
Today’s CDF in Numbers
50 Constituencies, $250m total annual budget, $5 million per constituency each year, $312 for each of the 800,000 citizens.
Of the $5 million for each constituency, $3.2m is to be used through the Preferred Suppliers Arrangement (PSA) procurement method, and $1.8m used through the Cash Grant method.
* This story was produced with funding support from PACMAS, an Australian Government aid program designed to strengthen and support the diverse, independent, and professional media sector across the Pacific.
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