Bucharest Workshop ~ OSI Partners17/18th October 2008

Teresa GuthrieCentre for Economic Governance and AIDS in Africa

Centre for Economic Governance and AIDS in Africa CEGAA aims to contribute to improved economic

governance, fiscal policy and financial management and accountability, with specific attention to improving the response to HIV and AIDS.

Through ~ economic and budget analysis research, training and capacity building, and advocacy activities

With ~ civil society orgs, independent research agencies, parliamentarians and Ministries of Health and National AIDS Commissions.

Overview of this PresentationPotential scope for budget monitoring and

expenditure trackingDifferent foci & methods in BMET

CostingBudget monitoringExpenditure tracking

Examples of evidence-based advocacy using BMET data

Key decisions in developing the Project TORs

Transparency & Accountability ~ Govt Allocation & Expenditure Processes

Govt Budget is a powerful economic policy tool to balance the revenue & expenditure, maintain fiscal discipline, and translate policies into services. Undermined by IMF/ WB conditionalities.

Budget allocation is powerful indicator of the priority accorded to health (or other issue), more than policy or legislation, and are key to the sustainability of programmes.

Participatory, transparent, accountable budget & expenditure systems indicate degree democracy in the country.

Budget Allocations do not equate to actual Expenditure

Monitoring of allocations & expenditure depends upon strong financial information systems!

BMET compliments policy & service analysis & strengthens advocacy

Policy

Services

BUDGET $$BUDGET $$Poli

cy A

nalys

is

Prog.E

valuatio

n

BMETBMET

Definitions Costing – determining required resources,

quantities, their costs and calculating total cost for an intervention

Budgeting – a plan to manage the available resources, within a specific timeframe (usually 1year) according to the project plan (intended allocations)

Expenditure – those resources spent on particular interventions

Adequacy – are the inputs sufficient to achieve intended goals – implies knowledge of how much is needed.

Efficacy / Effective – achieves its intended outputs or outcomes – implies programme plan.

Definitions cont. Efficient – achieves its outputs with the best use

of inputs/ resources – most cost-efficient. Allocative efficiency – best choice of type of

intervention between different types of intervention (eg. Prevention activities vs treatment activities.

Technical efficiency – best choice of intervention from same type of interventions (eg. Within treatment options, best and cheapest ARVs).

Operational efficiency – intervention is run/ implemented as efficiently as possible.

Programme outputs – immediate tangible products

Programme outcomes – results of the outputs Programme impact –longer-term effects (the

overall purpose for the intervention)

8

Fiscal Cycle ~ Different Phases & Methods

Assessment of Resource Need – costing analysis

Budget Allocations – indication of intended PUBLIC expenditure

Actual Expenditure – execution of budget. Can include

all sources of funds andby all service providers

PublicPrivateDonor

Budget MonitoringProcess

Actual amountsRevenue & taxSector analysis

Expenditure

Analysis

Process/finance channels

Actual amounts

Output analysis – interim indicatorscomparing with

objectives of expenditureOutputs

Social AuditingEffectiveness

Quality

Outcome analysis – long-term indicators.Impact assessment

Life years saved

Quality of lif

e

Reduced prevalence rates

Causal link

Effectiveness

(CEA/CBA/CUA)

Your use of the data

will influence all

these aspects

National

Provincial

District

How much was spentHow much was

allocatedHow much is needed

•Through government•Public•Foreign•Private

•Through private orgs/NGOs •In strategic programs

•Targeted IEC•Condoms•PMTCT•STI treatment•VTC•ARV treatment•IO treatment•Palliative services•Social Impact Mitigation•Staff training•Research

•Beneficiaries?•Outputs

•At global level•At national level

•MOH•Other ministries•NGO, CSO, CBO

•At province level•Tertiary, Secondary•Primary level•NGO, CSO, CBO

•At local level

•In strategic programs•Based on need (idealistically?)•Currently covered (reality?)•Financial / Programmatic gaps

Linking Resource Need Estimates to Allocation Analysis to Expenditure Estimates

$$

$

$$$

1. Costing Methods Costing - determining the expenditure

required to purchase the resources/ good/ inputs needed to achieve an activity or strategy

Budgeting - the allocation of resources to match requirements.

Once the cost of an activity is determined, the total number of desired activities will then determine the desired funding (case of treatment).

1. Costing cont. In costing we identify and measure all the inputs and

all the outputs.

Costs are always related to the outcomes they produce. Outcomes can also be called benefits or output. There are intermediate and final outcomes.

Some examples:HIV treatment programmes: cost per life year

gainedHIV prevention programmes: cost per HIV case

prevented

At a more basic level, we often relate costs to certain activities, such as the cost of an inpatient day or the cost per outpatient visit

Costs to be included• DirectDirect – all the expenses incurred in delivering the

health service, including shared costs• Indirect costsIndirect costs – those additional costs, usually from the

perspective of the patient, in accessing treatment, eg. Transport, loss of productivity, etc

• Intangible costsIntangible costs – those difficult to identify and measure eg. The drawbacks due to illness, depression, loss of quality of life

• Recurrent costs Recurrent costs - Resources that are used up within one year or costs that are incurred on an annual basis

• Capital costs Capital costs - Resources that last for more than one year (buildings, medical equipment, furniture, training of staff on HIV medicine and ART etc).

• Shared costs Shared costs - resources will be used jointly by the ART programme and other programmes in the health facility

2. Budget Monitoring ApproachUsing the central and sub-national budget documentsUsing the available line-items for the intended

allocations for a sector (eg. Health), programme (eg. HIV/AIDS and STI), facility (eg. Hospitals/ clinics)

Undertake simple analysis with the nominal figures to ascertain:Amount allocated – nominal & real terms (adjusted for

inflation) Increases from previous year (or more) ~ trendsProjected increases (if uses MTEF)Proportional priorities ~ shares of total exp & GDPPer capita allocation ~ adequacy (requires costing), regional

comparison

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2000/1 2001/2 2002/3 2003/4 2004/5 2005/6

Mozambique

South Africa

Kenya

Abuja target

Namibia – Health specific

Namibia - Total for MoHSS

Source: Guthrie & Hickey, 2004. ABU, Idasa.

Prioritisation of Health ~ proportional analysis

3. Expenditures Tracking ~ What do we want to know?

To describe the financial flows and actual expenditures for HIV and AIDS:

Who has promised/ committed/ allocated what?Who pays (sources)?Who manages the funds (financing agents)?Who provides the services (providers)?What was provided (functions/ASC: prevention,

treatment, social mitigation, other sector activities)?

What are the budget components (Objects of expenditure)?

Who benefits from the spending (beneficiaries)?Compare the budgeted/ allocated/ committed /

transferred amounts with the actual expenditures

Data Required to Understand Spending

Programme/ Activity

Programme/ Activity

Programme/ Activity

Programme/ Activity

Programme/ Activity

Programme/ Activity

Programme/ Activity

Programme/ Activity

Adjusted from UNAIDS NASA approach.

A C

Source Provider

Functions

B

Objects of Expenditure Target Groups

Agent

4. Output MonitoringSocial AuditingCitizen Score CardsService Satisfaction SurveysQuality assessment of servicesCounting numbers of beneficiaries, staff

members, availability & quantity of drugsThese activities are better carried out by the

community members / beneficiaries of the services

Clinical data – life years saved, QALYs, DALYs

Eg. BMET : TB treatment in SAInitially institutionalisation of TB ptsAdvent of DOTS – needed evidence to prove was more

cost-effective than institutionalisationThen rolled out DOTSWith advent of HIV/AIDS, co-infection rates increasedNeeded evidence to prove that ART would be cost-

effective in reducing incidence of OIs (incl. TB), and that govt could afford to provide ARVs free to patients

Now calling for integrated treatment of HIV/AIDS and TB, and needing evidence to prove that TB prophylaxis for HIV-patients is cost effective

MDR-TB & XDR-TB… ?

Using Financial Information for Evidence-Based Political Decisions

Financial Sources for HIV/AIDS in EECA

Financial Sources for HIV/AIDS in EECA

Composition of HIV international sources – Swaziland (05/06 & 06/07)

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

Years

Em

ala

ngen

International not-for-profitorganizations and foundations

Multilateral Agencies servicingearmarked grants 

Direct bilateral contributions

International not-for-profitorganizations andfoundations

21,308,130 47,318,039

MultilateralAgenciesservicingearmarked grants 

205,340,217 153,449,193

Direct bilateralcontributions

12,872,474 20,049,518

2005/2006 2006/2007

Sources of HIV/AIDS Funds in Swaziland

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

Year

Em

alan

gen

n

Internationalfunds

Public Funds

International funds 239,520,821 220,816,750

Public Funds 32,835,809 136,915,968

2005/2006 2006/2007

Spending Priorities in Swaziland

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

2005/ 2006 2006/ 2007

YEAR

SZL

HIV and AIDS realatedresearch(Excluding operational research)

Enabling Environment and CommunityDevelopment

Social Protection and Social Services(EXCLUDING OVC)

Human Resources' recruitments andRetention Incentive - Human Capital

ProgrammeManagement andadministration strengthening

OVC

Care and Treatments

Prevention

Sources of HIV/AIDS Funds in Botswana (Pula)

AIDS Categories in Botswana

Proportional Spending Priorities 2005

0%

20%

40%

60%

80%

100%

Public sector Internat.Orgs

FN 8..HIV- and AIDS-Related Research

FN 7..Community Development &Enhanced Environment

FN 6..Social mitigation

FN 5..Human Resources for HIV andAIDS activities

FN 4..Prog.Devmt & HSS strengthening

FN 3..Orphans and Vulnerable Children(OVC)

FN 2..Treatment and care components Total

FN 1..Prevention Programmes

*Armenia 2007, Bulgaria 2006-2007, Croatia 2006, Georgia 2006, Kazakhstan 2007, Kyrgyzstan 2006, Latvia 2006, Republic of Moldova 2007, Tajikistan 2006

IDU Spending, Needs and Expenditures in EECA* 2006 and 2007

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Bulgaria Croatia Georgia Kyrgyzstan Latvia Tajikistan Armenia Bulgaria Kazakstan Republic ofMoldova

2006 2007

Total Expenditures Total Needs

Region (All)

Reporting_Year Country

Data

Opportunities for evidence-based political decisionsADEQUACY OF FUNDING – PUBLIC &

EXTERNALPublic commitments-meeting national/international

commitments ~ long-term sustainabilityComparison to costed NSP estimates of required

resources – funding gap analysisCentralised funding and spending with low funds

for the sub-national levelData not disaggregated according to national and

sub-national levelsDiscrepancies between allocations and actual

expenditures ~ measurement of absorptive capacity, leakages, transaction costs

Opportunities for evidence-based political decisions (2)ALLOCATIVE DECISIONS – PRIORITIES

Meeting national priorities (aligned to NSP?)Balance between programmes ~ unsustainability

of treatment costs without adequate prevention interventions ~ allocative efficiency

Equity in allocations ~ between geographical areas, providers, beneficiaries & according to need

EFFICIENCY OF SPENDINGProvides varying unit costs for interventions,

allows comparison of technical efficiencyIdentifies poor absorption capacity ~ allows for

exploration of factors: bottlenecks, dumping etc.

Opportunities for evidence-based political decisions (3)COORDINATION, HARMONISATION AND ALIGNMENT

Alignment of the actual HIV/AIDS spending to NSP – public and external

Agent analysis shows who determines use of fundsIdentifies poor harmonisation – duplicative financing &

reporting, high transaction costsINSTITUTIONALIZATION OF NASA

Within the Monitoring and Evaluation (M&E) frameworkUsing standardised financial information/ reporting

mechanisms

Opportunities for evidence-based political decisions (4)ENHANCED TRANSPARENCY,

ACCOUNTABILITY & ECONOMIC GOVERNANCE Increased pressure (& desire) for mutual

accountability by all playersPromotes a (legal) framework to ensure all

partners report through a national resource tracking system

Link framework to the National Resource Mobilisation and Management Strategy

Using the framework to harmonise standards of costing among different partners

Ensures transparent procurement systems & best pricing within and between countries & regions

Opportunities for evidence-based political decisions (5)

STANDARDIZATION & COMPARABILITYEnsures standard classification of spending &

activities within & between countries & regions• Provides comprehensive list of possible

interventionsResource needs estimates

• Classification standardised with NASA• Package of interventions• Future requirements (funding gap) by programmes• Comparison of TFRR & TE

So how to go about it….Broad consultation to discuss and decide

what are the key issues requiring advocacy to bring about change

And how can budgetary and expenditure data strengthen the advocacy campaign

Be clear about your purpose

Determining the purpose & intended outcomesWhat are the key issues that you feel require an

advocacy response?What is your advocacy goal & intended outcomes?What data is required to provide evidence to

support the advocacy strategy?Who will be the key audience of the findings? Who

will be the likely supporters and the likely opposition?

What will be the focus/ topic of the project – OST, IDUs, HIV/AIDS, TB, health generally, health systems strengthening, ART?

Planning the Project – Terms of ReferenceThe scope of the project:Which phase/s of the budget are being considered (need

assessment, costing, resource allocation, processes), budgeted allocations analysis, expenditure analysis, output analysis, impact analysis)

Which years are to be coveredWhich sources of funds (public and/or external and/or private,

OOPE)Which providers of services – all, only central or only district

level, specific facilities, eg hospitals/ schools, etc etc?Will the outputs and outcomes measured? Against what?Efficiency analysis? (CBA, CEA, CUA?)Is analysis of the beneficiary groups required?Is analysis of the objects of expenditure required?

Resource Tracking ProcessThe broad steps in expenditure analysis:1. Developing the project ToR ~ agree on

purpose (advocacy goals), scope & methods & partners

2. Planning and preparation3. Training & capacity building4. Data Collection, Processing & Analysis5. Preliminary findings validation & identification

of advocacy campaigns / strategies6. Final Report & Dissemination7. Advocacy campaign implementation8. On-going BMET by organisations involved

Possible Country-Level Partnership ArrangementsThe CORE Team could be made up of:An organisation/s with economic or research skills A Community level organisation &/or a strong advocacy

orgAssociation of PLWHAs or PLWD/ Chln & Youth / Gender

network (depending on your focus)Members of the CORE team should be able to commit 2 or

3 people, 50% of their time, for at least 2yrs, hopefully 3yrs.The REFERENCE group could include other key

stakeholders whose input /assistance is necessaryBroader stakeholder group to identify issues, advocacy, etcSelect one org to be the country Co-ordinating agent Identify suitable organisations to provide the tech. support

Challenges in Monitoring Allocations & Expenditure

Budget documents:Do not give detailNot actual expenditureNon-standardisedSome donor contributions

off-budgetLimited CS participation

in allocative decisionsAllocations not based on

need/ equityNot used as a planning

tool

Expenditure records:Not available/ accessible to

CSNot disaggregated (by

programme/ facility / district)

Donors do not provide actual expenditure by recipients (vs commitmts/ disbursmts)

NHA data impt but not detailed sufficiently (esp.public sources)

FOI laws in few countries or not used for accessing public expenditure records.

CSO Challenges in BMETStronger on advocacy side

but often lacking technical capacity on ‘number-crunching’

Stronger on the social auditing, citizen score cards, survey satisfaction surveysbut lacking skills for assessing efficiency of

spending, absorptive capacityBMET requires long-term commitment ito of HR

and building capacity and transferring skillsLack human capacity and usually over-stretchedReliant of project-based funding – unreliable,

unsustainable, no investment in institutional devmt

Thank You

For more information contact:Teresa GuthrieCentre for Economic Governance and AIDS in

Africa Email: teresa@cegaa.orgTeresa.cegaa@gmail.com Tel: +27-82-872-4694Fax: +27-21-425-2852