Approaches to and Experiences with Meeting Urban Sector Capacity Enhancement Demands: Lessons from India and Sierra Leone Barjor Mehta World Bank Institute

Experiences from: Financial Institutions Reform and Expansion – Debt (FIRE-D), USAID-sponsored initiative World Bank Projects India Tamil Nadu Urban Development Project – II (TNUDP) Andhra Pradesh: Urban Reform and Municipal Services Project (AP:URMS) under preparation Sierra Leone Institutional Reform and Capacity Building Project (IRCB) under preparation

Upfront Clear Statements of Results is Absolutely Essential

FIRE-D Enable municipalities to raise capital from the national financial market (1995 – 1999)

Initially only one major city (Ahmedabad) signed on and became the project’s “Champion” All project resources concentrated there but dialogue and links with “wait and see” cities maintained and encouraged Local consultants/institutions “paired” with international consultants – process change (international accounting standards), knowledge development (how to/not to) International credit rating agencies “paired” with local rating agencies to develop an Indian system to rate municipalities

Every time Ahmedabad reached a milestone extensive publicity given “Champion” provided reference and knowledge to late comers A competition began between cities to become “creditworthy” Market for private consultants opened up Situation in 2003: Large number of cities now have credit ratings several have raised funds from the financial market active and growing private sector consulting and training market

TNUDP and (AP-URMS) : M ove resource management in municipalities from single entry system to accrual accounting system I mprove service delivery P rovide / upgrade existing city-wide infrastructure networks

Changing Accounting Systems Big challenge: 110 municipalities in TN -- need to design content for and continued training: –2,000 staff in (a) book keeping; (b) computer skills (c) financial reporting –> 4,000 elected councilors in new systems of (a) strategic planning; (b) budget formulation; (c) resource monitoring –8,000 municipal staff responsible for service delivery in (a) estimating budget requests; (b) soliciting private participation (tendering, contracting); (c) monitoring projects.

Accounting manuals prepared by local government auditors, commented upon by Indian Institute of Chartered Accountants Team of local government auditors became mentors (one auditor per five to seven municipalities) –Had to visit each municipality every two weeks and work with staff for two days; be available to answer questions over the phone (how do I?) –Ensure the local staff transfer cash-based ledgers into new accounting system based on standard manuals

Standard computer package chosen by the state TOR for computer skills training prepared by a partnership of experienced local accountants Skill benchmarks for staff clearly established (ability to independently use all modules of software) EOI/bids solicited from private computer training institutions in each municipality/region -- competition Computer skills training provided by locally-based trainers to municipal staff Mentors evaluated training w.r.t. skill benchmarks reached by staff

Improving Service Delivery Each city required to formulate its own “Citizen’s Charter” What every citizen should expect from the local government through precise statements –birth and death certificate to be issued within one hour; –property tax bill payment not to exceed 30 minutes; –garbage pick up every day –Complaint registration (15 minutes) and redressal (max. one day) Each municipality prepares an action plan including capacity building requirements on how to change/modify processes

Project PMU created a panel of pre-qualified consultants through competitive bidding Municipalities encouraged to “shop” for consultants to assist with process change and training Based on level of reforms / change achieved in accounting systems and service delivery, municipality qualifies for capital investment for city-wide infrastructure Cities eligible for investment envelope proportional to reform achieved

IRCB (Sierra Leone) Post-conflict country under stress (Re)Start Town Councils

Modest but strategic goals: End of first year –Valuation office completes input of Valuation Roll source data for all wards –Rates office able to produce Demand Notes from Rate Register –Cash & Deposit office able to post payments direct into town accounting system –Payroll sheets produced on a monthly basis Functional Town Treasuries

Town Clerk of Kampala to provide TA Informal association of Town Clerks, Treasurers to decide on standard formats and schedules Institute of Chartered Accountants of Sierra Leone contracted to provide “on the job” training (performance indicators) One/two CAs paired with each town council Town treasurer’s office staff “learning by doing” Skills training (book keeping, computers) provided “in office” when appropriate benchmarks are reached

Capacity Enhancement not an end in itself but in the context of pre-determined and agreed upon process of measurable change