1. METHODS OF EXPENDITURE TRACKING
Collaborative Africa Budget Reform Seminar.
1st to 3rd December 2004
FARM INN, Pretoria, South Africa

2. OUTLINE Introduction Planning and Budgeting Budget Execution
Expenditure Tracking
Challenges
Conclusion

3. Introduction
Increased expenditure does not automatically translate into improved service delivery
Limited revenue increases do not allow increased allocations to priorities
Hence the need for improved efficiency and effectiveness in resource use

4. Planning and Budgeting
Strategic Allocation based on the Priorities (Allocative Efficiency)
Linking Budgets to Outputs and Outcomes
Unit Cost
Monitoring Indicators developed to measure implementation progress

5. Budget Execution Work-plans (Annual/Quarterly)
MoUs
Financial Performance Reports
Actual vs Planned Expenditures
Physical Performance Reports
Actual vs Planned targets

6. Budget Execution Cont’d
Transparency
Wide participation of stakeholders in planning and budgeting
Publication of releases
Popular versions
PEAP
Citizens’ Guide to the Budget Process
Budget at a Glance

7. Expenditure Tracking (ET)
Why Expenditure Tracking?
To ensure that funds reach the intended target beneficiaries
Complements the existing monitoring system
Provides a rigorous review of expenditure
Highlights issues of operational efficiency due to in-depth analysis

8. Expenditure Tracking Cont’d
Review of processes and systems
How funds channelled including the banking system
Systems and capacity for recording and reporting on expenditure
Linkage between Inputs and outputs – Efficiency & Economy
Outcomes – Effectiveness/Incidence

9. Expenditure Tracking Cont’d
Budget Performance Reports (Quarterly, Biannual and Annual)
Public Expenditure Reviews
Expenditure Tracking Studies
Value for Money Audits
Surveys (HH, DHS, Impact studies, NSDS, PPAs + voices of the poor)
Civil Society – Independent monitoring

10. Expenditure Tracking Cont’d
Examples of Expenditure tracking studies
Education
Initial studies focused on reach of expenditures
Recent studies have in addition to expenditures focussed on other aspects such as quality and drop out rates
Health
Focussed on flow of funds
Who benefits and accountability

11. Expenditure Tracking Cont’d
Value for money audit in water focussed on:
Sector planning and management capacity
Procurement process
Contract supervision and monitoring
Functionality of the O&M of structures
Financial Management, reporting & accountability
Average cost of outputs

12. Challenges Availability of skills
Availability of data particularly on outcomes/impact
Some systems/processes are difficult to change eg bottlenecks related to access to banking services
Difficulty in reducing the unit costs in the short run

13. Challenges Cont’d Expenditure Tracking Studies may be expensive
Lack of good reporting mechanisms especially on physical performance

14. Conclusion
Increased expenditure alone may not result in improved service delivery
Linking budgets to outputs/outcomes and clear unit costs is a pre-requisite for improved ET.
Expenditure tracking does not replace monitoring but complements it