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Targets and Results in Public Sector Management: Uganda Case Study

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Targets and Results in Public Sector Management: Uganda Case Study Working Paper 205 Targets and Results in Public Sector Management: Uganda Case Study Tim Williamson Centre for Aid and Public Expenditure, ODI March 2003 Overseas Development Institute 111 Westminster Bridge Road London SE1 7JD UK List of Working Papers Catherine Dom, Tim Ensor, Leon Bernard Suy: ‘Results-oriented Public Expenditure Management in Cambodia’, Working Paper 201, ISBN 0 85003 645 3 Carlos Montes: ‘Results-based Public Management in Bolivia’, Working Paper 202, ISBN 0 85003 646 1 John Roberts: ‘Managing Public Expenditure for Development Results and Poverty Reduction’, Working Paper 203, ISBN 0 85003 647 X Frans Rønsholt, Richard Mushi, Bedason Shallanda, Paschal Assey: ‘Results-oriented Expenditure Management: Country Study – Tanzania’, Working Paper 204, ISBN 0 85003 648 8 Tim Williamson: ‘Targets and Results in Public Sector Management: Uganda Case Study’, Working Paper 205, ISBN 0 85003 649 6 Marc Raffinot, Jean Muguet, Alhousseynou Touré: ‘Results-oriented Public Expenditure Management: Case Study of Mali’, Working Paper 206, ISBN 0 85003 650 X Sandrine Mesplé Somps, Marie-Eugénie Malgoubri, Jean Muguet, Blaise Zongo: ‘Results-oriented Expenditure Management: the Case of Burkina Faso’, Working Paper 207, ISBN 0 85003 651 8 Kojo Oduro: ‘Results-oriented Public Expenditure Management: Case Study of Ghana’, Working Paper 208, ISBN 0 85003 652 6 Aidan Rose: ‘Results-oriented Budget Practice in OECD Countries’, Working Paper 209, ISBN 0 85003 653 4 Related CAPE-ODI Working Papers John Roberts (2003): ‘Poverty Reduction Outcomes in Education and Health, Public Expenditure and Aid’, Working Paper 210, ISBN 0 85003 654 2 Tim Williamson (2003): ‘Performance Management and Fiscal Decentralisation’, Working Paper 211, ISBN 0 85003 655 0 ISBN 0 85003 649 6 © Overseas Development Institute 2003 All rights reserved. Readers may quote from or reproduce this paper, but as copyright holder, ODI requests due acknowledgement. ii Contents Acknowledgements v Acronyms vi Executive Summary vii Chapter 1: Background to the Study 1 1.1 Introduction 1 1.2 Purpose and rationale 1 1.3 Scope of study 1 Chapter 2: Scene Setting – Public Sector Reform in Uganda 3 2.1 Overview 3 2.2 National strategy, planning & budgeting 3 2.3 Local Governments and service delivery 9 2.4 Public service reform 10 Chapter 3: Indicators & Targets In Planning & Budgeting 12 3.1 Theory 12 3.2 Performance Based Planning and Budgeting 14 3.3 Results and the National Budget Process 23 Chapter 4: Performance Management from an Institutional Perspective 28 4.1 Differing perspectives – ROM & OOB 28 4.2 Results and central ministry performance 28 4.3 Results and local government performance 34 Chapter 5: Measuring and Monitoring Performance 45 5.1 Why monitor performance? 45 5.2 Monitoring, reporting on and reviewing budget performance 45 5.3 Monitoring the effectiveness and impact of public expenditure programmes 57 5.4 Independent verification of results 59 Chapter 6: Factors in the Success or Failure Performance Management 62 6.1 Use of performance information in decision making 62 6.2 Differing use of results 64 6.3 Contracting out using the private sectors 66 6.4 Leadership, management and incentives 68 6.5 Donor-government relations 70 Chapter 7: Implications of Uganda’s Experience and Future Reforms 73 7.1 The use of results in sector planning and budgeting 73 7.2 Improving agency performance 75 7.3 More efficient and effective government 79 Bibliography 81 Annex 1: Comparison of Results-based Practices In Sectors 83 iii Charts Chart 1: National Framework For Planning & Budgeting 4 Chart 2: Hierachy of Results 12 Chart 3: The need to tackle inefficiency – agencies within their production possibility 76 frontiers Boxes Box 1: Budget Formulation Process 5 Box 2: The structure of the budget 6 Box 3: Hypothesis: strategic planning in a results oriented context should involve: 14 Box 4: The Four PEAP Objectives 15 Box 5: Results influencing the PEAP: UPPAP and the Water Sector 18 Box 6: No Room to Invest in Post Primary Education? 21 Box 7: The Affordability of PEAP Targets 22 Box 8: Hypothesis: Results Oriented Budgeting 23 Box 9: Who produces which Outputs ? 25 Box 10: Hypothesis – Central Agencies and Results 28 Box 11: Pay Reform and Results 34 Box 12: Hypothesis: Performance Management in Local Governments 34 Box 13: Local Government Planning and Budget Tools 35 Box 14: Differing Performance of Bushenyi and Iganga 36 Box 15: The Relationship between Teachers and Parents 42 Box 16: Hypothesis – Performance Monitoring 45 Box 17: The Political Cost of Failing to Perform in Mubende District 50 Box 18: Examples of how results have been used to improve performance 62 Box 19: Results in the Draft Public Finance Act 73 Tables Table 1: Government go Uganda MTEF Outturns 8 Table 2: At a Glance – Strengths and Weaknesses of Long Term Plans 15 Table 3: Poverty Monitoring Priority Indicators 17 Table 4: Results in the Budget Process – Strengths, Weaknesses and Challenges 24 Table 5: Use of Results in Ministries 29 Table 6: Percentage of Budgets 30 Table 7: Monitoring Budget Implementation and Poverty 46 Table 8: Reporting, Monitoring and Reviewing Budget Performance 54 Table 9: Sources of Information for outcomes and outputs 58 iv Acknowledgements The author would like to thank all those in the Government of Uganda and donor agencies who provided information and gave generously of their time. In particular he would like to thank the officials of the Ministry of Finance Planning and Economic Development, Ministry of Public Service, and Bushenyi and Iganga District Local Governments whose ideas, and assistance enriched the study greatly. Responsibility for the views expressed and for any errors of fact or judgement remain with the author. The author would also like to thank DFID for making this study possible by their financial support. v Acronyms BFP Budget Framework Paper CAO Chief Administrative Officer DDP District Development Plan ESIP Education Strategic Investment Plan FDS Fiscal Decentralisation Strategy GoU Government of Uganda HIPC Highly Indebted Poor Countries HSSP Health Sector Strategic Plan LC Local Council LDG Local Development Grant (from LGDP) LG Local Government LGDP Local Government Development Programme MAAIF Ministry of Agriculture, Animal Industry and Fisheries (also Ministry of Agriculture) MoES Ministry of Education and Sports (also Ministry of Education) MFPED Ministry of Finance Planning and Economic Development (Also Ministry of Finance) MoH Ministry of Health MoLG Ministry of Local Government MoPS Ministry of Public Service MoWHC Ministry of Works Housing and Communications (also Ministry of Works) MTBF Medium Term Budget Framework MTEF Medium Term Expenditure Framework NAADS National Agriculture Advisory Services NGO Non Government Organisation ODI Overseas Development Institute OECD Organisation of Economic Co-operation and Development O&M Operation & Maintenance OOB Outcome/Output OPM Office of the Prime Minister PAC Public Account Committee PAF Poverty Action Fund PEAP Poverty Eradication Action Plan PMA Plan for Modernisation of Agriculture PRSC Poverty Reduction Support Credit PRSP Poverty Reduction Strategy Paper ROM Results-Oriented Management RSDP Roads Sector Development Plan SFG Schools Facility Grant SWAP Sector-Wide Approach SWG Sector Working Group TA Technical Assistance ToRs Terms of Reference UNHS Uganda National Household Survey UPE Universal Primary Education UPPAP Uganda Participatory Poverty Assessment Project vi Executive Summary Background Uganda is considered by many as a country at the forefront of reforming public expenditure systems towards the goal of poverty reduction. Through the Poverty Eradication Action Plan (PEAP), Uganda has developed a comprehensive framework for reducing poverty in the country, with clearly articulated priorities for achieving this goal. Through Sector Wide Approaches (SWAPs), sectors have developed long term strategic plans with common programming modalities and costed targets. Over the five years to 2002 there have been major shifts in the size of budgeted expenditures and shift in their composition towards priority PEAP programmes. Initiatives such as the Medium Term Expenditure Framework (MTEF) and the Poverty Action Fund (PAF) have helped in this reorientation. Uganda runs a very open and consultative budget process, where the Government’s near and medium term strategy for implementing the PEAP is discussed. Budget discipline in Uganda has been relatively good compared to its peers; however, disbursements against budget can vary significantly between sectors and agencies within those sectors. Uganda has a highly decentralised system of government with local governments responsible for the implementation of many government services; however, this has not been followed up with full fiscal decentralisation. The vast majority grants from central government are channelled to local governments as ‘conditional grants’, earmarked by central government to specific areas of primary service delivery in sectors, mostly under the PAF. Throughout the last decade the government has sought to address the need to improve the performance of the public sector through ambitious public service reform programmes. In the early 1990’s substantial progress in downsizing the public service and increasing pay was made. Also crucial have been efforts to improve the efficiency and effectiveness of public sector institutions through initiatives such as Results-oriented Management (ROM) and Staff Performance Appraisal
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