Funding is not the only problem… Provincial expenditure on all MTDS core sectors

1. Funding is not the only problem…Provincial expenditure on all MTDS core sectors Assuming a Province gives equal priority to all core MTDS sectors, and spends all revenue only on those sectors, this is the percentage of essential costs in MTDS sectors that the province could meet

2. Health Spending Includes HSIP, which accounts for 30% of spending • Health spending declined from 2005 to 2006 in seven provinces Assuming a Province gives equal priority to all core MTDS sectors, and spends all revenue only on those sectors, this is the percentage of essential health costs that the province could meet

3. How to address the “priority gap” • Clarify service delivery responsibilities • Improve budget formulation • More conditional funding • Emphasise priority of recurrent goods and services • Improve budget execution • Monitoring of implementation (not just performance) • Forensic analysis of blockages in funding flows

4. Governance and efficiency trade-offs • In absence of ex-post controls (good monitoring), focus is on ex ante controls which are more time intensive • Focus on ex-ante compliance controls means money moves much more slowly, eg. • Warrant not released unless report presented = delay • CFC not issued until manager requests funds to spend = delay • Requisitions require PA to sign = delay • Incorrect paperwork – start again = delay • Wait for cheque run = delay

5. Making sense of districts • Clarify district-level responsibilities • As distinct from provincial-level ones (likely to be different in different provinces) • Encourage use of DSIP for recurrent (at least maintenance) • Highlight recurrent cost implications of capital spending • Evaluation of district-level spending by NEFC • Likely to reveal little or no national-level information on spending • Sound analysis of HR requirements at different levels