Yamini Aiyar Accountability Initiative July 2009

1. Tracking the RupeeAn Overview of Expenditure Tracking Work in India : Gaps, Challenges, Opportunities and the PAISA Project Yamini Aiyar Accountability Initiative July 2009

2. The Great Indian Paradox

3. 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

4. The story so far: Many innovations, many tools • 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

5. The story so far: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

6. Why do expenditures matter? 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’

7. But….. Getting to expenditures requires some serious detective work The Sarva Shiksha Abhiyan Example

8. Institutional design of SSA + Central Releases State Releases State Society Spillovers + Funds outside AG District Implementation Unit Block Resource centre School Cluster Resource Centre Village Education Committee

9. Information bottlenecks 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

10. Information bottlenecks 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

11. Information bottlenecks 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

12. Information bottlenecks 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

13. How does one get to the bottom of this? 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

14. So what is PAISA all about? Collecting Information + Building Capacity

15. The PAISA Plan Objectives • 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

16. PAISA Activities 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

17. Planning:Analysis of Bihar State AWP Planning Capacity Constraint Total AWP size increased from Rs.3145 crore to Rs.5429 crore

18. Expenditure: 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 www.accountabilityindia.org

19. PAISA Activities 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)

20. PAISA Activities: Challenges 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?

21. PAISA Activities 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

22. PAISA Activities 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

23. PAISA Activities: Challenges 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?

24. And Finally 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!