Annual Assessments of Local Authorities: Tanzania and Uganda

1. Annual Assessments of Local Authorities:Tanzania and Uganda Matt Glasser AFTU1 29 March 2005

2. UG Local Government Development Programme I and II LGDP I was small scale pilot, LGDP II includes all Local Government Units (LGUs) TZ Local Government Support Programme Supports GoT’s new LG Capital Development Grant System Designed to be a pilot Parallel funding from many donors led to Big bang”– no pilot! TZ and UG: Similar Approaches

3. TZ and UG Objective: build intergovernmental transfer system • Premise: • Local capital investment decisions are best made locally, provided there is participation, accountability, and management capacity • Link between financing and performance • Formula-based transfers subject to annual assessment • LGAs that pass with minor defects receive lower amounts • LGAs that score very high receive extra amounts • LGAs that fail completely do not receive these capital grants

4. TZ: current and future intergovernmental transfer system CURRENT • Sectoral capital programmes • Sectoral operating transfers OBJECTIVE: • Local discretion as to capital investment priorities • Operating / equalization transfers

5. Tanzania LGCDG System • “Manual for the Assessment of Participating Councils Against Minimum Access Conditions and Performance Measurement Criteria” • Initially, assessments by independent accounting firm, with participation by PO-RALG • Eventually, assessments by PO-RALG staff, with post-audit by independent accounting firm • Capital grants paired with capacity building grants See: http://www.poralg.go.tz/systemic_reforms/lgcdg.php

6. TZ and UG: Minimum Conditions • Derived from existing laws, regulations and guidelines • Simple, quantitative, yes/no • Purposes: • Ensure minimum safeguards for public funds • Promote compliance with legal and regulatory framework

7. TZ: Performance Indicators • Reward for good performance, sanction for bad • Qualitative, evaluative, policy-driven • Financial management • Development planning • Procurement • Project implementation • Human resource development • Transparency • Accountability • Participatory planning • Pro-poor budgeting

8. Functional Area Pot’l Score Minimum for CG Minimum for bonus A. Financial Management 15 7 12 B. Fiscal Capacity 15 7 12 C. Development Planning 20 10 14 D. Transparency / Accountability 10 4 8 E. Interaction with LLG. 5 2 5 F. Human Resource Dev’t 10 4 8 G. Procurement 10 5 7 H. Project Implementation 10 4 7 I. Council Functional Processes 5 2 3 TZ: Performance IndicatorsWeights and scoring

9. TZ and UG: Capacity Building Grants • Only access criterion is the existence of a CB plan • Some rules about how spent: • Limited equipment • Limited degree programmes for officials • Intended to help LGAs address shortcomings identified in annual assessments

10. TZ: Initial screening vs. annual assessment • When LGSP was intended as a pilot, a universe of 47 potentially eligible was established through rough screening • First annual assessment undertaken for those 47 • 25 of these qualified for capital grants in the first year

11. UG: results to date • 42 LGUs now qualify (vs. 19 initially) • 16 now get bonuses (vs. 0 initially) • 89% have functional planning committees and LT development plans (vs. 30% initially) • Improved compliance with LG Act and accounting regulations (79% vs. 38%) • Improved LG revenue performance • LGUs generally spend on Government’s national priorities • Significant benefits perceived by affected residents in both services and transparency