1. Public expenditure monitoring with focus on women and children
Perspectives from the National Audit Office

2. Introduction
The Sustainable Development Goals (SDGs) and Addis Ababa Conference on Financing for Development open a new chapter on development finance and sustainable growth.
Post Addis Ababa, the debate on development finance has focused in large pat on the generation of the necessary additional resources to support SDGs. Improving domestic financial resources has been identified as the main pathway, yet it is only one policy option. Sound Public Financial Management (PFM) including tracking and monitoring expenditures at levels and all dimensions of the SDGs will be important to achieve the Sustainable Development Goals.

3. Investment in women and children are a natural priority for development finance and sustainable growth strategies. The economic and social returns of investment in women and children are well documented.
For instance, research published in the Lancet suggest that even a relatively small investment of US$5 per person in maternal and child health care would avert the preventable deaths of 147 million children and 5 million women and 32 million stillbirths in 74 countries by

4. Other studies suggest that increasing pre-school attendance, one form of early childhood development, would yield returns of anywhere between US$6 and US$33 per dollar invested depending on the economic contest and the number of children covered. These long term benefits provide a strong arguments for prioritizing investment in women and children within financing frameworks and sustainable development strategies outlined by the Addis Ababa agreement (UNICEF, 2015).

5. What is Public Financial Management (PFM)?
PFM refers to the set of laws, rules, systems and processes used by sovereign nations (and sub-national governments), to mobilise revenue, allocate public funds, undertake public spending, account for funds and audit results. It encompasses a broader set of functions than financial management and is commonly conceived as a cycle of six phases, beginning with policy design and ending with external audit and evaluation (Figure 1). A large number of actors engage in this “PFM cycle” to ensure it operates effectively and transparently, whilst preserving accountability.

6. Figure 1: The PFM cycle and the key actors involved

7. Why is PFM important?
A strong PFM system is an essential aspect of the institutional framework for an effective state.
Effective delivery of public services is closely associated with poverty reduction and growth, and countries with strong, transparent, accountable PFM systems tend to deliver services more effectively and equitably and regulate markets more efficiently and fairly. In this sense, good PFM is a necessary, if not sufficient, condition for most development outcomes.

8. A key element of statehood is the ability to tax fairly and efficiently and to spend responsibly. These are fundamental characteristics of ‘inclusive’ state institutions, which generate trust, promote innovative energies and allow societies to flourish. (See Acemoglu & Robinson, , ‘Why Nations Fail’ and Dani Rodrik, 2003, ‘In Search of Prosperity’.)
Improving the effectiveness of a PFM system may generate widespread and long-lasting benefits, and may in turn help to reinforce wider societal shifts towards inclusive institutions, and thus towards stronger states, reduced poverty, greater gender equality and balanced growth.

9. Perspective from the NAO
The NAO does carry out gender specific or child related audits. These audits are carried out as part of our general financial audits
Whilst the services of women and children cut across almost all MDAs, the Ministries of Health and Education bear the greatest responsibility in providing services to them
For practical purposes, these are the two Ministries where we examine the quality and quantity of service provided to women and children

10. The two Ministries have set minimum standards for the provision of services
Ministry of Education – Minimum Standards for Lower Basic, Basic Cycle and Upper Basic Schools
Ministry of Health – General Staffing Norms for Hospitals and Health Centres
These are the documents we use as a basis for our audits and as comparatives to international audits

11. Approach to monitor expenditure on women and children
Familiarity with the Standards set by the Ministries and quantum of services

12. Understand the administration and responsibilities for services benefiting women and children
In order to ensure comprehensiveness in tracking and monitoring expenditure on women and children. It is important to understand the country governance structure and allocation of services targeting women and children

13. Understand the country economy and public expenditure trends
Public expenditure on women and children is largely determined by the economy and overall levels of public expenditure in any given country. If a country has a small economy, there will be less money for the government to spend on women and children
If the economy or public expenditure is growing, there is stronger argument for increasing public expenditure on women and children
Particular indicators worthy of analysis are general government expenditure as a percentage of gross domestic product (GDP), and per capita expenditure as well as revenues.

14. Use actual rather than budgeted expenditure data
Budgeted expenditure often differs from actual spending. During budget execution, virement may be used to redirect spending from its budgeted purpose and revenue collected may be more or less than initially planned
The purpose of tracking and monitoring public expenditure on women and children is to understand the actual value of the services available to women and children. This demand demands analysis of actual expenditure rather than budgeted

15. Analyse expenditure on service delivery separate from policy, administration and regulation
Government activities that benefit children include development of policy, administration and regulation as well as actual delivery of goods and services
Expenditure on service delivery refers to the cost of providing the service to the user e.g. health facility and the school costs
Expenditure on policy, administration and regulation refers to the cost of designing policies and strategies and administering and regulating them.

16. Unless services are actually provided, women and children do not benefit from expenditure design, administration and regulation.
For this reason it is important to report expenditure on service delivery separate from the other associated costs.

17. Going Forward
The NAO has recently established a new department, called the Performance Audit Unit which carries out value money audits
Gender specific and children related audits shall be carried out by this Unit

18. What is Performance Audit?
Performance Audit is an independent assessment or examination of the extent to which an organisation, programme or scheme operates economically, efficiently and effectively. Performance Audit assesses:
Economy – economy is the minimising the cost of resources used for an activity, having regard to appropriate quality. Economy issues focus on the cost of the inputs and processes.

19. Efficiency – efficiency is the relationship between the output, in terms of goods, services or other results and the resources used to produce them. Efficiency exists where the use of financial, human, physical and information resources is such that output is maximised for any given set of resource inputs, or input is minimised for any given quantity and quality of output.
Effectiveness – effectiveness is the extent to which objectives are achieved and the relationship between the intended impact and the actual impact of an activity. Effectiveness address the issue whether the scheme, programme or organisation has achieved its objectives.

20. Performance Audits go beyond judgements of compliance and accuracy to also evaluate performance and the value for money obtained through government transactions.