Public Expenditure Public Expenditure Tracking in Uganda Tracking in Uganda

(and elsewhere)(and elsewhere)

Budget Management and Financial Budget Management and Financial AccountabilityAccountability

Washington, DCWashington, DCMarch 2004March 2004

Magnus Lindelow Magnus Lindelow (mlindelow@worldbank.org)(mlindelow@worldbank.org)The World BankThe World Bank

The Ugandan experienceThe Ugandan experience Many improvements since 1992Many improvements since 1992

macroeconomic stability and growthmacroeconomic stability and growthshift of public resources from defense to shift of public resources from defense to roads and social sectorsroads and social sectorsdecentralizationdecentralization

Poverty Eradication Action Plan (PEAP)Poverty Eradication Action Plan (PEAP) Poverty reduced from 56% in 1992/93 to Poverty reduced from 56% in 1992/93 to

35 % in 200035 % in 2000 Strong budget managementStrong budget management

MTEF, Poverty Action Fund (PAF)MTEF, Poverty Action Fund (PAF) Sector level performance did not keep Sector level performance did not keep

upup

Uganda Education PETS Uganda Education PETS (1995)(1995)

Data collected from different levels of Data collected from different levels of administration, including 250 schoolsadministration, including 250 schools

Only 13 percent of intended capitation Only 13 percent of intended capitation grant actually reached schools (1991-95).grant actually reached schools (1991-95).

Large schools with wealthier parents and Large schools with wealthier parents and qualified teachers were able to obtain more of qualified teachers were able to obtain more of their budget allocation.their budget allocation.

Other findingsOther findingsEnrollment trends differed from published Enrollment trends differed from published data.data.

Importance of parental contributions.Importance of parental contributions.

Impact and follow-upImpact and follow-up

Mass information campaign by Mass information campaign by Ministry of Finance (the press, Ministry of Finance (the press, posters)posters)

A signal to local governmentsA signal to local governmentsLower the cost of information to Lower the cost of information to parentsparents

Follow-up PETS in education in Follow-up PETS in education in 20012001

Ministry of Education initiative and Ministry of Education initiative and local implementationlocal implementationshows a major improvement (18% shows a major improvement (18% leakage)leakage)

Broadening agenda: other sectors Broadening agenda: other sectors and broader focus (service and broader focus (service delivery, integrity, etc.)delivery, integrity, etc.)

Leakage of non-wage capitation grant to schools

0%

20%

40%

60%

80%

100%

1991-1995 2001

Why new tools to analyze Why new tools to analyze public spending and public spending and

service delivery?service delivery? Uganda survey stimulated similar surveys in other Uganda survey stimulated similar surveys in other

countriescountries Limited impact of public spending and external Limited impact of public spending and external

aid on growth and human development (WDR aid on growth and human development (WDR 2004)2004) Inappropriate allocation of resourcesInappropriate allocation of resources Resources do not reach service delivery unitsResources do not reach service delivery units Poor quality of service deliveryPoor quality of service delivery Services are not used by the populationServices are not used by the population

New approaches to aid delivery (budget support, New approaches to aid delivery (budget support, PRSCs, etc)PRSCs, etc) fiduciary and accountability concernsfiduciary and accountability concerns

Lack of reliable data in many developing countriesLack of reliable data in many developing countries

PETS and Service Delivery PETS and Service Delivery SurveysSurveys

Diagnostic tool for Diagnostic tool for understanding problems in understanding problems in budget executionbudget execution

Data collected from different Data collected from different levels of government, including levels of government, including service delivery unitsservice delivery units

Reliance on record reviews, but Reliance on record reviews, but also interviewsalso interviews

Variation in design depending Variation in design depending on perceived problems, country, on perceived problems, country, and sectorand sector

Growing focus on service Growing focus on service delivery and use of “hybrid” delivery and use of “hybrid” survey approachessurvey approaches

Surveys to dateSurveys to dateCompletCompleteded

UgandaUgandaTanzaniaTanzaniaGhanaGhanaRwandaRwandaMozambiqMozambiqueueZambiaZambiaPNGPNGHondurasHondurasPeruPeruBangladesBangladeshh

and and more…more…

OngoingOngoing

EthiopiaEthiopiaNigeriaNigeriaBrazilBrazilLaosLaos

But tracking is often But tracking is often difficult…difficult…

Data availabilityData availability E.g. tracking not possible in health sector in Uganda E.g. tracking not possible in health sector in Uganda

19951995 Data qualityData quality

Reliance on records, but books may be “cooked”Reliance on records, but books may be “cooked” Multiple flows and different levels of executionMultiple flows and different levels of execution

Schools and health facilities receive many resources in-Schools and health facilities receive many resources in-kindkind

Undefined or changing allocations/normsUndefined or changing allocations/norms Often much discretion over resource allocation in Often much discretion over resource allocation in

budget processbudget process Different focus in some surveysDifferent focus in some surveys

Timing of transfers, bottlenecks in budget execution, the Timing of transfers, bottlenecks in budget execution, the use of discretion in resource allocation, etc.use of discretion in resource allocation, etc.

An illustration from An illustration from MozambiqueMozambique

Context and issuesContext and issues National Health System: health sector National Health System: health sector

dominated by public providersdominated by public providers Providers receive budgets and in-kind Providers receive budgets and in-kind

transferstransfers Vague allocation criteria and Vague allocation criteria and

guidelinesguidelines Fragmented and unreliable reportingFragmented and unreliable reporting

Diagnostic surveyDiagnostic survey 90 health facilities, 35 districts offices90 health facilities, 35 districts offices Record reviews and staff interviewsRecord reviews and staff interviews Exit poll to capture user perceptionsExit poll to capture user perceptions

Central

Province

District

Facility

Resource allocation

Vague guidelines

? ?

? ?

Delays and bottlenecks Delays and bottlenecks

Delays in budget transfers Delays in budget transfers to districtsto districts Budget norm: JanuaryBudget norm: January Delays => low levels of Delays => low levels of

budget execution (32%) and budget execution (32%) and service delivery problemsservice delivery problems

Other systems weaknessesOther systems weaknesses Up to 90 day delays for re-Up to 90 day delays for re-

stocking of drugsstocking of drugs Stock-out of drugs or Stock-out of drugs or

material in 60% of facilitiesmaterial in 60% of facilities

0

2

4

6

8

10

12

Jan.

Feb.

March Ap

ril

May

June

Receipt of 1st budget transferNo

. dis

trict

s

Equity in resource Equity in resource allocationallocation

Push-based system Push-based system of drug distributionof drug distribution Based on Based on

outpatient outpatient numbersnumbers

In practice, very In practice, very different…different…

Also “irrational” or Also “irrational” or inequitable inequitable allocation of other allocation of other resourcesresources

Min. Mean Max.

Aspirin 1.1 4.6 16.8

Cloroquin 1.2 4.1 12.9

Cotrimoxazol 0.0 2.7 7.8

Mebendazol 0.5 1.6 6.2

Metronidazole 0.0 0.8 3.3

Paracetamol 0.0 2.6 7.8

Number of tablets distributed to facilities per outpatient

Strengths and weaknesses of Strengths and weaknesses of approachapproach

Useful tool for diagnosing and understanding Useful tool for diagnosing and understanding problems in budget execution and service delivery, problems in budget execution and service delivery, and monitoring changes over timeand monitoring changes over time

Validation of administrative data (financial and output)Validation of administrative data (financial and output) Process of designing and implementing survey is Process of designing and implementing survey is

useful for understanding PEM and service delivery useful for understanding PEM and service delivery systemsystem

But…But… surveys only provide part of the answer (intra-sectoral surveys only provide part of the answer (intra-sectoral

allocations, link with outcomes, etc.)allocations, link with outcomes, etc.) Surveys should supplement rather than supplant routine Surveys should supplement rather than supplant routine

information, control, and integrity systemsinformation, control, and integrity systems Surveys are not auditsSurveys are not audits Surveys provide information but don’t necessarily result in Surveys provide information but don’t necessarily result in

changechange