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Where has all the money gone? Building a framework for accountability in public expenditures

Where has all the money gone? Building a framework for accountability in public expenditures. Yamini Aiyar and Avani Kapur Accountability Initiative 2 nd June 2009, CCS. Outline. Why budgets matter to us? What we should know about budgets? What we know about Budgets?

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Where has all the money gone? Building a framework for accountability in public expenditures

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  1. Where has all the money gone?Building a framework for accountability in public expenditures Yamini Aiyar and Avani Kapur Accountability Initiative 2nd June 2009, CCS

  2. Outline Why budgets matter to us? What we should know about budgets? What we know about Budgets? The Right to Information Act: An opportunity? What we can do?

  3. Why budgets matter? India a ‘miracle economy’: high GDP growth over the last few years Large increases in social sector spending (health, education) up to 6.27% of GDP (Rs. 294,412 crore) BUT despite all this spending, the results are dismal

  4. Why budgets matter? “About 27m Indians will be born this year. Unless things improve, almost 2m of them will die before the next general election. Of the children who survive, more than 40% will be physically stunted by malnutrition. Most will enroll in a school, but they cannot count on their teachers showing up. After five years of classes, less than 60% will be able to read a short story and more than 60% will still be stumped by simple arithmetic.” (Economist, May 23rd 2009) “of every one rupee spent on development only 15 paise reach the poor” (Rajiv Gandhi) Clearly, there is something very wrong with the way money is being spent…………. Inefficiency? Corruption? Where has all the money gone?

  5. Why budgets matter? And this is your money – even when you don’t pay income tax!

  6. Go back to the basics: What should we know about the budget? Availability: How much money do I have? And what for? Sources: Where is this money coming from? Timing: When did the money arrive? And how much arrived? Expenditure: How much is being spent and at what periodicity (monthly, quarterly)? When is the money spent and on what? Trends: Has the availability risen or fallen? Have expenditures changed? How much gets left over?

  7. Why do you need budget information? • Helps you plan better (That’s why you ask how much you’ll get paid every month in a job interview!) • Ensures transparency: • Helps you catch mistakes or inefficiencies (under spending, over spending) • Ensures that you know when money comes and goes • Identifies leakages – helps you catch the thief

  8. So, What do we know about budgets? Finding information on the Government’s budget requires Sherlock Holmes’ detective skills

  9. Many places to look but each tells the story a different way…. Overall budget • Reserve Bank of India: Big picture BUTno information on how money is spent • Budget (indiabudget.nic.in) and state finance departments: Who gets what (department/ ministry-wise) and how it gets spent BUT only after two years (expenditure data not always available) • Finance Accounts: Who gets what across departments (economic classification) and how it gets spentBUTonly after two years

  10. Many places to look but each tells the story a different way….

  11. Many places to look but each tells the story a different way….

  12. Many places to look but each tells the story a different way…. Budget details: Department websites: Report on specific activities. This is the place to come to if you want details (how much was sent out, when, how much got spent in real time) BUT You have to be a genius to find the budget on the website (eg. MHRD dept of higher education)

  13. But most of all its impossible to understand……unless you’re a whiz kid or a nerd! Lets look at a sample website…..

  14. Even if you do figure it out, data often doesn’t match! • MORD annual reports planned allocations not match with india budget!!!!! • And it doesn’t tell you enough - little information on how much money reaches the final destination and when it gets spent • No reporting on trends

  15. Information is neither regular nor reliable Mistakes in data uploaded

  16. Information is neither regular nor reliable Not updated regularly No system – adhoc – beg of month/ quarter…. Source: Department of School Education and Literacy , MHRD

  17. The Right to Information Act: An opportunity? Proactive Disclosure • RTI mandates the proactive disclosure of information by Public Authorities It shall be the constant endeavor of every public authority to provide as much information suomoto to the public at regular intervals through various means of communication including the internet, so that the public have minimum resort to the use of this Act to obtain information. (section 4 (2))

  18. Right to Information Act: An opportunity? • Reporting on the following parameters: • About organization • Subsidy programs • Directory of employees • Decision making • PIO information • Powers and duties • Electronic information • Concessions and permits • Rules and regulations • Norms • Domains in archives • BUDGETS • SALARIES • Public consultation etc

  19. But…as you have seen, the government is not very good about reporting Electronic audit of 91 Departments across the country

  20. Poor Reporting…… Incomplete reporting: 10-30% of requirement especially for budgets Undated or outdated information : Data 2-3 years old; budget, expenditure, and program project data is not even dated

  21. So what can we do? There is a law, a powerful law that government is mandated to follow There is some reporting BUT bad reporting There is some reporting BUT no one understands it Can we help them report better?

  22. Go back to the basics: What should we know about the budget? Availability: How much money do I have? And what for? Sources: Where is this money coming from? Timing: When did the money arrive? And how much arrived? Expenditure: How much is being spent and at what periodicity (monthly, quarterly)? When is the money spent and on what? Trends: Has the availability risen or fallen? Have expenditures changed? How much gets left over?

  23. There are lessons that can be learnt India: APREGS/ JNNURM Brazil: Transparency Portal

  24. Some things to consider No ‘one size fits all’ Identify the key activities in a sector – reporting should be along key activities Trends are always more interesting than bare facts. But what trends should we care about? How to ensure accuracy? Updation? Regular flows of information?

  25. One example: Education STEP 1: Identify key activities • Planning (setting standards/ Curriculum) • Operations (Teachers) • Wages • Training • Materials • Operations (non-teacher) • Infrastructure and mainantance • Text books • Subsidy’s • MDM • Wages (non teaching staff) • Monitoring and Evaluation

  26. Step 2: Identify process of receiving funds

  27. Step 3: Identify Reporting levels Department – District – Local body (Municipality) – final destination Activities for reporting at each level

  28. Step 4: Identify Parameters for reporting trends Amount allocated Vs amount received (over time- how many years?) Date when money should have arrived Vs when it does arrive at final destination When was it spent? On what?

  29. What will this tell you…..

  30. And now over to you……..

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