This section will review some of the country case studies, particularly those countries that have successfully implemented a public expenditure tracking survey (PETS) to address questions of governance in the areas of efficiency and equity of public spending and service delivery. To date, PETS have been conducted in many countries including but not limited to: Albania, Cameroon, Chad, Ghana, Honduras, Indonesia, Kenya, Madagascar, Mali, Mozambique, Namibia, Nigeria, Papua New Guinea, Peru, Rwanda, Senegal, Sierra Leone, Tanzania, Uganda and Zambia. From these, the discussion below will review the cases of the African countries where a PETS has been conducted in the education sector. The findings will be discussed around three main themes: leakages, delays and accountability.
Findings on Leakage
Leakage refers to the misappropriation of funds whereby local officials divert education resources for other purposes or for private gain. It is perhaps the most significant and astounding finding from the various PET surveys conducted in Africa. As discussed earlier, Uganda was the first country to implement a PETS in 1996. The study revealed that on average, only 13 percent of the annual capitation grant6 from the central government reached schools between 1991 and 1995 (Reinikka & Svensson, 2001).
49 | District officials captured 87 percent for purposes unrelated to education. This level of leakage confirmed initial suspicions and led to policy changes. It also led other countries to emulate the PETS.
The Uganda Case-study is particularly interesting and inspiring for this thesis because it demonstrated clearly, the extent to which inefficiencies at the local level can allow for misappropriation of funds. What the study did not show strongly were the salient elements that allow leakage to thrive in specific contexts as evidenced by the case of Zambia. In Zambia, when funds were disbursed through “legislative” funding (a fixed amount of $600 per school), more than 90 percent of schools received their funding (Das, Dercon, Habyarimana & Krishnan, 2004). When funds were channelled to schools at the discretion of district authorities, less than 20 percent of schools received their funding. This showed that allowing districts to disburse funds at their discretion potentially facilitates misappropriation. There was also evidence that in-kind transfers also facilitated leakages. In the PETS experiences of Ghana and Madagascar, the propensity for leakage was greater for in-kind transfers rather than cash transfers (Gauthier, 2006). Additionally, in Madagascar, leakage was more rampant in schools that were far from the capital. Therefore, the more remote the location of a school, the greater the likelihood of funds being diverted for other purposes.
The PETS studies provided evidence that leakages can be rampant in countries that have a complex system of transferring funds. A PETS conducted in Tanzania in 2003 revealed leakage of less than 5 percent However, it turned out that the finding was a gross underestimation because it was not apparent to the consultants that two other ministries,
50 | in addition to the Ministry of Finance (Ministries of Education and Local Government) were also charged with disbursing education funds. Subsequently, what initially seemed like minimal leakage, turned out to be considerable leakage of approximately 40 percent. The study attributed leakage to Tanzania‟s complex system of transferring funds – one that involved three separate ministries as well as distinct transferring and reporting mechanisms and channels (Sundet, 2007).
Finally, the literature review of the country case-studies showed that information asymmetry, whereby schools are uninformed about decisions taken on education resources, can allow for extensive leakages, as was found in Madagascar and Tanzania. In Madagascar, only 35 percent of schools reported that they knew what they were meant to receive (Gauthier, 2006). In Tanzania, head teachers and school committees were not knowledgeable about their entitlements (Sundet, 2007). Of the 10,000 Tsh capitation grant, schools were entitled to 6,000 Tsh (with the remaining 4,000 Tsh to be used by local government to purchase books for the schools). When asked how much schools should be receiving, the average answer was 3,200 Tsh.
Findings on Delays
Delays and bottlenecks in the allocation of resources through public administrations have been identified in tracking surveys as a potentially serious problem affecting quality of services. In Tanzania, there was evidence of delays in disbursing school subsidies and the processing of non-wage funds, ranging from 6 to 42 days at the Treasury (Gauthier, 2006). When Rwanda conducted a PET survey in 1998, it was observed that delays in the payment of capitation grants occurred between the submission of a funding release request
51 | by the line ministry and the authorisation by the Ministry of Finance and most of the money arrived in the fourth quarter of the budget year (Fofack, Obidegwu & Ngong, 2003).Explanations for delays were linked to the unpredictable pattern of fund inflows to the Government due to the volatility of external budget support, the seasonality of revenues, and poor cash management in Ministry of Finance and the discretion of regional authorities.
The timeliness of payment of salaries varied among countries. In Rwanda for instance, about 13 percent of teachers did not receive their salaries regularly and 82 percent of teachers reported salary arrears in 2003 but, in Zambia, 95 percent of staff were paid on time (Gauthier, 2006). In Uganda, there was only anecdotal evidence of delays; by and large, salary payments were made on time (Ablo & Reinikka, 1998). None of the studies, however, assessed the impact of delays on education outcomes.
Findings on Accountability
Issues of accountability are vital in education. In the education sector, teachers are accountable to head teachers; head teachers to district and provincial education officers; these officers to education ministries; ministries to politicians and politicians to client- citizens (Reinnika & Smith, 2004). In most cases, schools are also accountable to parents as customers paying for a service. This is particularly true where parents are involved in school decision-making bodies. Public expenditure tracking surveys in education are instrumental in shedding light on the accountability links between schools, parents and government bodies.
52 | PETS are able to expose weaknesses in internal controls that allow for inefficiencies in public spending. The Rwanda PETS found rampant lack of accountability in these offices, with poor bookkeeping and lack of internal financial controls and auditing requirements (Fofack, Obidegwu & Ngong, 2003). Most education officials interviewed in the study (92 percent) indicated knowledge of instructions on the utilization of public funds but 25 percent found these instructions less than clear and many of the school administrators could not provide any copy of the instructions during the survey (Fofack, Obidegwu & Ngong, 2003). Lack of accountability mechanisms in the education sector, saw some schools in Kenya, receiving more allocations than required (Gauthier, 2006). The survey also revealed that schools in Kenya maintained poor records and that funds were diverted for personal gain at the schools As previously mentioned, Tanzania‟s complex system of disbursement made it difficult to monitor and enforce public financial accountability.
Lessons from Case-studies
It has often been the case that the prescribed solution to poor social services is to increase resources. What these case-studies have shown is that the solution does not always lie in increasing resources as there may be blockages in the public system and other governance constraints that prevent even well-meaning governments from achieving their goals. Governments need to periodically conduct tracking surveys to find out where the problems lie so that they can be corrected. Therefore, improving PEM as a whole, rather than just focusing on budget allocations, may be critical for effective service delivery. In terms of accountability, it is important to note that the failure of accountability does not automatically lead to a failure in service delivery as an inadequately financed or
53 | monitored agent can still perform well if motivated by a sense of duty (Reinnika & Smith, 2004). Nonetheless, the likelihoods are slim as agents may become demoralised if other colleagues are corrupt or non-performing.