1. Islamic Republic of Afghanistan Independent Directorate of Local Governance An Analysis of Budgetary Resources for Provincial and District Governors’ Offices Presentation July 2009

2. PRESENTATION CONTENT Background Total Budget Per Province Estimated Operating Budget Per Administrative Unit Impact of Performance-Based Governors’ Fund Summary

3. This presentation identifies the budgetary resources available for each province, and for the administrative units within them PRESENTATION BACKGROUND: OBJECTIVES AND METHODOLOGY Objectives Methodology Provide understanding of budgetary resources available to offices of Provincial and District Governors Build awareness of need to - Increase budgetary resources available to PGO and DGO - Improve budget allocation and financial management processes for PGO and DGO Data is provided for the 1387 budget allocation for each province No data exists for the DGO budget allocation because - Each PGO uses its own system for allocating budget to DGO - Recording of allocation to DGO by PGO is not complete and not done consistently Therefore, presentation provides the estimated budgetary resources per administrative unit (EBPAU) - the total provincial budget, - divided by the number of administrative units (the number of DGOs/districts plus one, for the Province/PGO) EPAU is not the actual allocation for any district, but indicates a strong constraint on the actual allocation for each district

4. PRESENTATION CONTENT Background Total Budget Per Province Estimated Operating Budget Per Administrative Unit Impact of Performance-Based Governors’ Fund Summary

5. In 1387, each province received between $350,000 and $1.2m to cover the operating expenses of all of its Provincial and District Governors’ Offices ANNUAL PROVINCIAL & DISTRICT BUDGET 1387 FINANCIAL YEAR (USD,000) 21.6m provincial budget + 4.4 IDLG Centre Budget = 26.0m total

6. These budget allocations must be divided between the administrative units in the province (the PGO plus all DGOs), and this number varies greatly between provinces PROVINCIAL BUDGETS BY ACCOUNT CODE (USD, 000)

7. In the central provinces, the PGOs and DGOs have a combined budget of $200k-$400k for salaries, $200k-$300k for goods and services, and nearly nothing for asset acquisition Salaries & Wages Goods & Services Acquisition of Assets ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, CENTAL REGION (USD,000)

8. In the eastern provinces, salary budget has around the same variation, the goods and services budget can be as high as $470k, and again there is minimal budget for asset acquisition ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, EASTERN REGION (USD,000) Salaries & Wages Goods & Services Acquisition of Assets

9. Balkh receives a large budget for its salaries and goods & services, and also has a budget for acquisition of assets- the remaining northern provinces receive more typical allocations ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, NORTHERN REGION (USD,000) Salaries & Wages Goods & Services Acquisition of Assets

10. Badakshan is another province with a comparatively large allocation, while the other North- Eastern provinces receive allocations that are typical for smaller provinces ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, NORTH-EAST REGION (USD,000) Salaries & Wages Goods & Services Acquisition of Assets

11. The budgets for Provinces and Districts in the south are a little larger than typical levels, especially in Helmand and Kandahar ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, SOUTHERN REGION (USD,000) Salaries & Wages Goods & Services Acquisition of Assets

12. The budgets in the south-east are also somewhat large- most notably Paktika’s budget for Goods & Services ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, SOUTH- EASTERN REGION (USD,000) Salaries & Wages Goods & Services Acquisition of Assets

13. Herat received the largest total allocation in the Western Region, while the other three provinces received typical allocations ANNUAL PROVINCIAL/DISTRICT BUDGETS BY COST CODE, WESTERN REGION (USD,000) Salaries & Wages Goods & Services Acquisition of Assets Herat

14. PRESENTATION CONTENT Background Total Budget Per Province Estimated Operating Budget Per Administrative Unit Impact of Performance-Based Governors’ Fund Summary

15. These budget allocations must be divided between the administrative units in the province (the PGO plus all DGOs), and this number varies greatly between provinces NO. OF ADMINISTRATIVE UNITS PER PROVINCE

16. Administrative units in the Central Region can have estimated budgets around $2000 per month for salaries and around $10-$15 for acquisition of assets EST. MONTHLY BUDGET PER ADMINISTRATIVE UNIT, CENTRAL REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets

17. The estimated monthly salary budget for an administrative unit in Laghman is $2800 per month- and in Nangahar it is only $1800 per month EST. MONTHLY BUDGET PER ADMINISTRATIVE UNIT, EASTERN REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets

18. In the North, the estimated budget for goods and services for an administrative unit ranges from $2000 to $4000 per month EST. MONTHLY BUDDGET PER ADMINISTRATIVE UNIT, NORTHERN REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets

19. The administrative units in the north-east have an estimated average budget for goods and services of between $1000 to $3000 per month EST. MONTHLY BUDGET PER ADMINISTRATIVE UNIT, NORTH-EAST REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets

20. Helmand’s administrative units have an average monthly budget of $2000 for salaries and $2700 for goods and services- and only $11 for acquisition of assets EST. MONTHLY BUDDGET PER ADMINISTRATIVE UNIT, SOUTHERN REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets

21. The administrative units in the South-East have monthly budgets that are similar to or greater than the national average EST. MONTHLY BUDGET PER ADMINISTRATIVE UNIT, SOUTH- EASTERN REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets

22. Herat, one of the most developed provinces, has a monthly per-unit budget for acquisition of assets of only $11 EST. MONTHLY BUDGET PER ADMINISTRATIVE UNIT, WESTERN REGION (USD) Salaries & Wages Goods & Services Acquisition of Assets Herat

23. PRESENTATION CONTENT Background Total Budget Per Province Estimated Operating Budget Per Administrative Unit Impact of Performance-Based Governors’ Fund Summary

24. The impact of PBGF on the estimated monthly operating budgets of the administrative units is substantial- something in the order of 20-40% based on 1387 levels ESTIMATED MONTHLY BUDGET AFTER PERFORMANCE-BASED GOVERNORS’ FUND (USD,000)

25. On average, an administrative unit gains $2,600 per month as a result of PBGF- some may gain $5,000 a month, and some less than $1,000 a month IMPACT ON ADMINISTATIVE UNIT MONTHLY OPERATING BUDGETS (USD, 000)

26. PRESENTATION CONTENT Background Total Budget Per Province Estimated Operating Budget Per Administrative Unit Impact of Performance-Based Governors’ Fund Summary

27. Overall, the average administrative unit in Afghanistan in 1387 had an estimated monthly budget of $2,500 for salaries and $3,000 for goods & services SUMMARY: AVERAGE PROVINCIAL BUDGET AND ESTIMATED ADMINISTRATIVE UNIT BUDGET ESTIMATED MONTHLY OPERATING BUDGET PER ADMINISTRATIVE UNIT, AVERAGE (USD) AVERAGE BUDGET PER PROVINCE (USD, THOUSANDS)

28. It is beyond doubt that the level of budgetary resources for the subnational units must be increased very substantially DOCUMENT CONCLUSIONS The level of budgetary resources for the subnational administrations is obviously inadequate -$2,000 to $3,000 for monthly salaries is not enough to run a district properly, let alone a province -The budget for acquisition of assets, $29 per month on average, is essentially the same as having no budget This data identifies several needed reforms that IDLG recognizes and plans to implement, specifically -A direct system of allocation for DGOs based on rational, transparent criteria -Improved tracking of budget implementation at PGO and DGO level The Performance-Based Governors’ Fund will significantly increase operating budgets at subnational level but -Even after the increase, budgets will remain impractically low -A direct, District-Level version of the fund may be needed

29. THANK YOU