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Tracking the Rupee An Overview of Expenditure Tracking Work in India : Gaps, Challenges, Opportunities and the PAISA Project. Yamini Aiyar Accountability Initiative July 2009. The Great Indian Paradox. People want change: Growing demand for transparency and accountability.

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Tracking the RupeeAn Overview of Expenditure Tracking Work in India : Gaps, Challenges, Opportunities and the PAISA Project

Yamini Aiyar

Accountability Initiative

July 2009

People want change growing demand for transparency and accountability
People want change: Growing demand for transparency and accountability

  • From ‘vote’ to ‘voice’

  • India’s civil society space a hub of innovation: RTI, Social Audits, NREGA

  • Accountability: a new buzz word

The story so far many innovations many tools
The story so far: Many innovations, many tools accountability

  • Tracking outlays:

    • Budget analysis – gained prominence in 1995

    • Focus on outlays from a social sector perspective: CBGA – centre, Disha, BARC, CBPS – state level

    • Sector specific outlays: Gender budgeting, child budgeting, dalit budgeting

  • Monitoring Outcomes:

    • ASER (education outcomes)

    • Citizen report cards

    • Performance evaluation of MPs and MLAs

  • The story so far gaps and challenges
    The story so far: accountability Gaps and challenges

    Relatively little focus on expenditures – social audits in NREGA the exception

    Sporadic efforts at PETS and Absenteeism surveys (PROBE II and WB study are underway now)

    Limited scale and co-ordination

    Links between micro and macro level work not very strong

    Why do expenditures matter
    Why do expenditures matter? accountability

    Helps identify systemic inefficiencies: utilization levels, timeliness of fund flows, procedural complexities

    Helps identify leakages

    Creates transparency in procedures

    Better planning: Linked with needs and performance

    Citizens ‘right to know’

    But getting to expenditures requires some serious detective work
    But….. Getting to expenditures requires some serious detective work

    The Sarva Shiksha Abhiyan Example

    Institutional design of ssa
    Institutional design of SSA detective work


    Central Releases

    State Releases

    State Society



    Funds outside AG

    District Implementation Unit

    Block Resource centre


    Cluster Resource


    Village Education Committee

    Information bottlenecks
    Information bottlenecks detective work

    Central Government

    • Release treated as ‘expenditure’

    • Annual Physical and Financial Progress reports include ‘spillovers’. Thus no information on ‘real expenditures’ for specific financial years

    • Data disaggregated by state NOTdistrict

    • No incentive to collect ‘real expenditures’: SSA plan size increases (33% between 2004-07) even when information on actual expenditure not available

      State Government

    • Data on states shares not easily available

    • Physical, financial monitoring done by implementation society

    Information bottlenecks1
    Information bottlenecks detective work

    State Implementation Society

    • Monthly physical and financial reports BUT

      • Does not account for ‘spillovers’

      • Fund transfers bear no connection to expenditures hence no incentives to track

      • No investment in maintaining good MIS systems

      • Some states report district level transfers on their websites but these are not regularly updated

    • Audits undertaken by private auditorsBUT

      • Reports not made public

      • Complex and difficult to understand

    Information bottlenecks2
    Information bottlenecks detective work

    District Implementation Society

    • Annual Work Plan (AWP) do not report annual expenditures

    • Monthly progress does not account for ‘spillovers’ and do not highlight variations in release

    • Significant delays in reporting as utilization certificates not received on time

    • Audits undertaken by private auditors BUT

      • Delays are common

      • No uniform auditing pattern: some audit reports provide balance sheets of assets and liabilities + income and expenditure; others disaggregate by budget heads but NOT by AWP

        Reports are complex. Need de-mystifying

    Information bottlenecks3
    Information bottlenecks detective work

    Cannot disaggregate from district to the service provider level

    No publically available data on what happens after the district.

    When and how to funds get transferred to the service provider? How much gets spent? Do UCs reflect ground realities?

    This requires primary ‘physical-financial’ verification

    How does one get to the bottom of this
    How does one get to the bottom of this? detective work

    You need to investigate:

    • Center, state and district: yearly allocations, releases and expenditure data to identify spillovers

    • State and district: AWPs, release calendar, expenditure registers, audit reports

    • Service provider: primary surveys

    So what is PAISA all about? detective work

    Collecting Information + Building Capacity

    The paisa plan
    The PAISA Plan detective work


    • To enhance accountability in public expenditure management for basic service delivery in India by:

      • Collecting and widely disseminating data related to planning processes, resource allocations, expenditures and institutional arrangements for service delivery

      • Build capacities for primary stakeholders to effectively participate in planning and resource tracking

        First phase focus on Elementary Education

    Paisa activities
    PAISA Activities detective work

    Understanding the big picture:

    Plans, Allocations and expenditures

    Desk-based research

    • Allocations and releases at the central level: Budget Briefs

    • Unbundling fund flow systems at the local level: Resource mapping tool-kit

    • Assess annual work plans

    Planning analysis of bihar state awp
    Planning: detective workAnalysis of Bihar State AWP




    Total AWP size increased from Rs.3145 crore to Rs.5429 crore

    Expenditure: detective work

    Pattern of Utilization of SSA

    • The components that seem to be most affected are:

    • Civil works

    • Teacher training

    • Grants to school

    • Innovative activities

    • Between 60 and 70% of total plan allocation

    Source: Budget Brief on Education Sector, Accountability Initiative

    Paisa activities1
    PAISA Activities detective work

    Understanding Expenditures at the Service Delivery Point

    Expenditure tracking study

    • Primary data collection: District level surveys to track fund flows from the district society to the school: Survey of 100 schools in Nalanda, Bihar, planned survey in Sehore, Madhya Pradesh (details to follow in tomorrow’s presentation)

    Paisa activities challenges
    PAISA Activities: Challenges detective work

    Data access (despite RTI): strong links with the local administration can help

    Poor record keeping

    Skill level of surveyors, data analysts (not everyone’s cup of tea)

    Time and resource intensive when thinking of scale

    Partnerships: A possible opportunity?

    Paisa activities2
    PAISA Activities detective work

    Capacity Building for VECs

    Developing a tool kit to improve local decision making and planning

    • Resource Flows

      • Strengthening VEC understanding of financial norms and procedures

      • Equipping VEC with tools to access data on school level budgets and expenditures (Based on data collected through expenditure tracking)

    • Planning and Decision Making

      • Strengthening VEC understanding of the roles and responsibilities of the VEC

      • Enhancing VEC capacity to develop plans and programs for the school

      • Encourage discussions on learning outcomes

    Paisa activities3
    PAISA Activities detective work

    Sehore, Madhya Pradesh VEC intervention

    • Baseline completed in May 2009

    • Tool kit for resource mapping and roles and responsibilities tested

    • First intervention: VEC meeting, meeting with Panchayat president and meeting with the village completed

      To early to tell but the first intervention seems to have made some impact

    Paisa activities challenges1
    PAISA Activities: Challenges detective work

    Community mobilization – strong local presence essential

    Local dynamics and politics

    Multiple interventions- time and resource intensive which makes scaling up a question mark

    Links with the state, an opportunity for scale?

    And finally
    And Finally detective work

    In the final analysis implementation is the key binding constraint to achieving outcomes. PETS and Absenteeism studies hold the key

    There are many challenges but the environment is ripe and the opportunities are endless

    This is the most important job in the world

    Good Luck!