Public expenditure tracking and service delivery survey
In response to weaknesses in its public expenditure management system, the Royal Government of Cambodia initiated in 200 of the Priority Acton Program (PAP), which was intended to delivery resources t front line service delivery units in the priority sectors in a timely manner. To assess the impact of that system a Public Expenditure Tracking Survey was carried out for PAP 2.1 (school operating budgets) and for Chapter 11 (operation and maintenance). The survey covered 200 schools in seven provinces in 2004.
The survey found that reported leakage in PAP 2.1 is low, but also found that the PAP system is characterized by low quality record keeping, thereby limiting the robustness of the empirical findings on leakage. The survey also collected data on “facilitation fees” – informal cash payments to secure funds release – which were found to be widespread though relatively small. Though the findings suggest that schools may receive most of the funding to which they are entitled, they do not, however, receive it in either a timely or predictable manner, which has negative implications on operational efficiency.
The survey also found that compliance with key record-keeping requirements has been poor, especially at district and school levels, resulting in a system characterized by high fiduciary risk. The survey discovered that the social accountability mechanisms established at schools to monitor PAP spending are not very effective, particularly in small schools. Field inspections and follow-up activities to monitor PAP implementation are of limited reliability. Though the PAP reporting system is fairly well designed, the lack of incentives to comply with record keeping, reporting, and inspection activities has frustrated Government’s attempt to reduce fiduciary risk. With no apparent penalties for non-compliance, no reports of disciplinary sanctions applies, with no external oversight, and with extremely low wages and a lack of meritocratic promotion practices, civil servants do not have strong incentives to comply with the system.
Preliminary analysis also found that PAP had an impact: the allocation of PAP 2.1 funds is pro-poor and poorer schools are supposed to and do get more funds, though they suffer from the same problems as other schools in the lack of timeliness in the disbursements of funds. Moreover, there have been significant improvements in the basic education sector over the past five years, particularly in terms of primary net enrollment rates, and it appears that PAP 2.1 has contributed to this important outcome.
The survey also confirms the hypothesis that nearly all Chapter 11 resources are spent and consumed at the provincial level, despite the intention that Chapter 11 resources be used to complement PAP 2.1 funds in schools. From the fiduciary angle, there are serious concerns about spending controls, reporting, and oversight. The picture of Chapter 11 that emerges from the surveys is thus of a system that on all counts – timing and predictability of resources, results-oriented focus, and fiduciary risk – performs less well that PAP.
With the launch of the RGC’s Public Financial Management Reform Program (PFMRP) in December 2004, the challenge of making the budget on the lesions learned thus far, into the cornerstone of a medium term financial deconcentration program. However, at the same time, MEF recognizes that improvements in the design of PAP are necessary before it is mainstreamed.
(Source: World Bank Group in Cambodia: Working for a Cambodia Free of Poverty, 2005)
Popularity: 1% [?]