Public Expenditure Tracking in Uganda (and elsewhere) Budget Management and Financial Accountability Washington, DC March 2004 Magnus Lindelow The World Bank

The Ugandan experience Many improvements since 1992 Many improvements since 1992 macroeconomic stability and growth shift of public resources from defense to roads and social sectors decentralization Poverty Eradication Action Plan (PEAP) Poverty Eradication Action Plan (PEAP) Poverty reduced from 56% in 1992/93 to 35 % in 2000 Poverty reduced from 56% in 1992/93 to 35 % in 2000 Strong budget management Strong budget management MTEF, Poverty Action Fund (PAF) Sector level performance did not keep up Sector level performance did not keep up

Uganda Education PETS (1995) Data collected from different levels of administration, including 250 schools Data collected from different levels of administration, including 250 schools Only 13 percent of intended capitation grant actually reached schools ( ). Only 13 percent of intended capitation grant actually reached schools ( ). Large schools with wealthier parents and qualified teachers were able to obtain more of their budget allocation. Other findings Other findings Enrollment trends differed from published data. Importance of parental contributions.

Impact and follow-up Mass information campaign by Ministry of Finance (the press, posters) Mass information campaign by Ministry of Finance (the press, posters) A signal to local governments Lower the cost of information to parents Follow-up PETS in education in 2001 Follow-up PETS in education in 2001 Ministry of Education initiative and local implementation shows a major improvement (18% leakage) Broadening agenda: other sectors and broader focus (service delivery, integrity, etc.) Broadening agenda: other sectors and broader focus (service delivery, integrity, etc.)

Why new tools to analyze public spending and service delivery? Uganda survey stimulated similar surveys in other countries Uganda survey stimulated similar surveys in other countries Limited impact of public spending and external aid on growth and human development (WDR 2004) Limited impact of public spending and external aid on growth and human development (WDR 2004)  Inappropriate allocation of resources  Resources do not reach service delivery units  Poor quality of service delivery  Services are not used by the population New approaches to aid delivery (budget support, PRSCs, etc) New approaches to aid delivery (budget support, PRSCs, etc)  fiduciary and accountability concerns Lack of reliable data in many developing countries Lack of reliable data in many developing countries

PETS and Service Delivery Surveys Diagnostic tool for understanding problems in budget execution Diagnostic tool for understanding problems in budget execution Data collected from different levels of government, including service delivery units Data collected from different levels of government, including service delivery units Reliance on record reviews, but also interviews Reliance on record reviews, but also interviews Variation in design depending on perceived problems, country, and sector Variation in design depending on perceived problems, country, and sector Growing focus on service delivery and use of “hybrid” survey approaches Growing focus on service delivery and use of “hybrid” survey approaches Surveys to date CompletedUgandaTanzaniaGhanaRwandaMozambiqueZambiaPNGHondurasPeruBangladesh and more… OngoingEthiopiaNigeriaBrazilLaos

But tracking is often difficult… Data availability Data availability E.g. tracking not possible in health sector in Uganda 1995 E.g. tracking not possible in health sector in Uganda 1995 Data quality Data quality Reliance on records, but books may be “cooked” Reliance on records, but books may be “cooked” Multiple flows and different levels of execution Multiple flows and different levels of execution Schools and health facilities receive many resources in-kind Schools and health facilities receive many resources in-kind Undefined or changing allocations/norms Undefined or changing allocations/norms Often much discretion over resource allocation in budget process Often much discretion over resource allocation in budget process Different focus in some surveys Different focus in some surveys Timing of transfers, bottlenecks in budget execution, the use of discretion in resource allocation, etc. Timing of transfers, bottlenecks in budget execution, the use of discretion in resource allocation, etc.

An illustration from Mozambique Context and issues Context and issues National Health System: health sector dominated by public providers National Health System: health sector dominated by public providers Providers receive budgets and in-kind transfers Providers receive budgets and in-kind transfers Vague allocation criteria and guidelines Vague allocation criteria and guidelines Fragmented and unreliable reporting Fragmented and unreliable reporting Diagnostic survey Diagnostic survey 90 health facilities, 35 districts offices 90 health facilities, 35 districts offices Record reviews and staff interviews Record reviews and staff interviews Exit poll to capture user perceptions Exit poll to capture user perceptions Central Province District Facility Resource allocation Vague guidelines ?? ??

Delays and bottlenecks Delays in budget transfers to districts Delays in budget transfers to districts  Budget norm: January  Delays => low levels of budget execution (32%) and service delivery problems Other systems weaknesses Other systems weaknesses  Up to 90 day delays for re- stocking of drugs  Stock-out of drugs or material in 60% of facilities

Equity in resource allocation Push-based system of drug distribution Push-based system of drug distribution  Based on outpatient numbers In practice, very different… In practice, very different… Also “irrational” or inequitable allocation of other resources Also “irrational” or inequitable allocation of other resources Min. Mean Max. Aspirin Cloroquin Cotrimoxazol Mebendazol Metronidazole Paracetamol Number of tablets distributed to facilities per outpatient

Strengths and weaknesses of approach Useful tool for diagnosing and understanding problems in budget execution and service delivery, and monitoring changes over time Useful tool for diagnosing and understanding problems in budget execution and service delivery, and 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 useful for understanding PEM and service delivery system Process of designing and implementing survey is useful for understanding PEM and service delivery system But… But… surveys only provide part of the answer (intra-sectoral allocations, link with outcomes, etc.) surveys only provide part of the answer (intra-sectoral allocations, link with outcomes, etc.) Surveys should supplement rather than supplant routine information, control, and integrity systems Surveys should supplement rather than supplant routine information, control, and integrity systems Surveys are not audits Surveys are not audits Surveys provide information but don’t necessarily result in change Surveys provide information but don’t necessarily result in change