1. Multi-Tier Government Synchronization (MTGS) Accountability in sub- national fiscal transfers

2. Agenda Expanding the governance agenda Sub-National Fiscal Transfers Challenges Barriers to Implementation Solutions ? Closing

3. PFM and Service Delivery Increasing effectiveness and good governance

4. Public Service Delivery National Government Provincial / State Local Government

5. Global Monitoring Report - 2006 Sustainability “Checks and balances institutions are important for the sustainability of effective governance… and (includes) accountable local governments.” Scaling up aid: Moving the agenda forward –“Governance is a critical part of this agenda.” –“transparent budget, administrative (systems) … are key to a well functioning governance system – and provide a straight forward basis for support (from donors).”

6. Public Service Delivery National Government Provincial / State Local Government Budget

7. Fiscal Flows Central Government Provinces Cities $$$ $ $ $ $ $ $ $ $ $ FA

8. Sub-National Fiscal Transfer Challenges

9. One size ? Accountability, Transparency and Timeliness Public Administration Policies and Procedures Financial Management HR ICT

10. National Government Provincial / State Local Government Budget Accountability Transparency Timeliness Public Administration

11. Policies and Procedures Clear rules on assignment, delegation, devolution, authority and responsibility Financial Management practices –Processes applicable at a central level may need to be more flexible at lower tiers –Capacity differences –Flexibility to streamline based on efficiencies

12. HR Does fiscal decentralization also includes personnel –Remuneration, retention and meritocracy Capacity and sustainability a significant challenge –Variability in capabilities across functional sectors and geographic/demographic regions

13. Districts States ICT Communes Local Government Provinces Districts Communes Local Government Communes Local Government Districts States Communes Local Government Districts Local IFMIS One Version – Standard policies, procedures and controls Version 1 Version 2 Ver 3 Version 2 Version 4

14. Barriers to Implementation Complexity and the Competition for scarce resources

15. Capacity and Sustainability Competition

16. Complexity $ Time Capacity Custom Leverage

17. Approaches?

18. Major Thematic Drivers Stand-alone installation capability Configurable business rules per implementation Standardized information flow –To Provinces / Central Government –From Central Government/Provinces to Local Government Multiple capacity versions with growth

19. Stand-alone but configurable

20. Bi-directional fiscal flows COA

21. Full IFMIS... but constrained

22. Success Factors … some highlights Technical –Ability to operate in mixed ICT environments –Designed for multiple scenarios Functional –Product designed only for governments Integrated fiscal, budgeting and commitment capabilities –Product designed based on switches

23. Success Factors (continue) Services –Personnel with extensive government specific experience –Builds on prior successful implementations Capacity –Designed for mixed capacity –Training is government specific. Order of magnitude in absorption rates. –Retention less an issue because of government only solution

24. Complexity $ Time Capacity Custom Leverage

25. Closing thoughts Complexity Capacity Sustainability

26. Thank you!