SEMINAR HARMONISATION DECENTRALISATION AND LOCAL GOVERNANCE SESSION FUNDING

SEMINAR HARMONISATION, DECENTRALISATION AND LOCAL GOVERNANCE SESSION FUNDING MODALITIES FOR LOCAL GOVERNMENT/LOCAL GOVERNANCE THE « ACORDS EXPERIENCE » By Jorge Rodriguez Bilbao, Technical Assistant ACORDS Programme 1. DECENTRALISATION IN MADAGASCAR: A VIRTUAL PROCESS!! 2. ACORDS: A LABORATORY OF DECENTRALISATION!! 3. MECHANISM TO HELP STRENGTHEN FINANCIAL MANAGEMENT SYSTEMS IN THE CONTEXT OF DECENTRALISATION 4. LESSONS LEARNED 5. PRACTICAL RECOMMENDATIONS q “GPS” OF A SUPPORT PROGRAMME IN THE ABSENCE OF A COUNTRY-LED STRATEGY FOR IMPLEMENTING DECENTRALIZATION; q DAY TO DAY MANAGEMENT OF A SUPPORT PROGRAMME. q ISSUES OF HARMONISATION, COORDINATION AND ALIGNEMENT : HOW TO DO IT IN THE ABSENCE OF A COUNTRY-LED STRATEGY FOR IMPLEMENTING DECENTRALIZATION

DECENTRALISATION IN MADAGASCAR: A VIRTUAL PROCESS!! POLICY 1. Political decentralization: 1994: Transfer of responsibilities to the local governments for the provision of a range of social services 2. Administrative decentralization: policy drawn up in 2005; 3. Fiscal decentralization: A decentralization against a background of concentraltion of budgetary resources: q Resources transferred to local governments= 3, 5% of total public expenditure; q The increase in the resources transferred to local governments is 0, 6% of total public expenditure/year = it would take 25 years before the 20% of the national budget would be decentralised IN PRACTICE 1. Practical implications have yet to be understood and implemented at the level of the central state : 2. A process without leadership; 3. Sector Ministries ignorent of municipalities. 4. Donors’ practice: q NGO’s don’t relate much to local governments although they are active in field of competency that have been assigned to local governments. q The projects undertaken by the sectoral ministries usually bypass the local governments;

ACORDS: A LABORATORY OF DECENTRALISATION PROCESS!! ENTRY POINT O SUPPORT DECENTRALISATION PROCESS Take into account in an effective and practical way that the legally responsibilities have been transferred to local governments for a range of social services and infrastructure provisioning (health, education, public markets, secondary roads…) in the context of decentralisation. IN PRACTICE Put the Money at the Center of the Approach!, The classical approach would have been to build capacities first and then transfer the financial resources for taking on those responsibilities. The approach recommended is the other way round: We provide funds for local governments’ from the outset and feed them directly into their budget. This will bring about: 1. A capacity building effect based on learning on the job; 2. A significant or even drastic change in the role of the Implementation Unit which will have to evolve towards becoming advisers and facilitators of a process of learning by doing.

MECHANISM TO HELP STRENGTHEN FINANCIAL MANAGEMENT SYSTEMS AND ACCOUNTABILITY(I) 1 - Transparency of budget allocation and use: üDisclosing budget information at regional, district and municipal level; üPromoting citizen’s involvement in budget tracking (workshops and training, publications, bulletins, radio programs at local level … in order to foster public access to local governments information, budgets and actions…) 2 - Mechanisms assuring direct funding for municipalities require: üthat all local governments have a Municipal treasury accountant ( “Secrétaire Trésorier Comptable) ” ; ülinkages between local governments and the territorial administration in order to ensure § Proper management of funds by municipalities) § Internal control (Council); § External control (“Contrôle de légalité), financial accountability and advisory services to be provided by the district. ürespect of deadlines of the budget process (including the preparation of accounts), their approbation by the Municipal Council. Budget and public accounts need to be published

HELPING TO STRENGTHEN FINANCIAL MANAGEMENT SYSTEMS AND ACCOUNTABILITY (II) 3 - ACORDS has developed a procurement guide tailored for local governments which has been adopted as a national guide. 4 - Capacity building based on a “learning on the job” approach: Practical learning: what needs to be done, how to do it and at what time. 5 - Conducting technical and financial audits on an annual basis; 6 - Holding public debates on the results of audits, involving the local governments executive and citizens’ representatives.

LESSONS 1 - Improvement of public service delivery & domestic accountability can only result through the collaboration among several types of actors Branch offices of the Relevant Ministries Technical services Administration territoriale Control « Ex-post » of municipal accounts Institutionnal backup of municipalities Coordination between municipalities and tthe Ministrries’ technical services EMPTY BOXES!! Local Government (executtif and Council) Technical studies and Works Private firms and Consultancy agancies THEY FUNCTION IN A RATHER « AUTISTIC » MANNER Has to be involved at everyy stage in a way to ensure accountability Planing Planning, implementing and managing public services Adivise and technical support for the municipalities Provide personnel (medical staff, teachers. . ) Ensure quality of service Population Local Governments behave randomly, like free electrons in an unfinished framework !!!!!!

LESSONS 2 - The Local Government’s responsibility for infrastructure, construction and financial management requires capacities that can only be acquired on the job and by learning from mistakes It’s like riding a bicycle 3 - Domestic accountability requires backup & control mechanism; 4 - Lack of domestic accountability problems = dysfunction within the State organizations and systems of checks and balances Physical constructions q The main problem remains the low quality of physical infrastructure provisioned by local governments q However, the quality of infrastructure built/provisioned by municipalities is not worse than that built/provisioned by in the context of the previous top-down system. q Substandard quality of infrastructure and buildings delivered to local governments is almost always due to the weak capacities and lack of professionalism of service providers (construction firms) and not due to incompetence on the part of local governments ; Domestic Accountability q Procurement systems not adapted to local realities; q Accountability tools used by Municipalities not harmonized q Municipalities not attached to the Public Treasury; q Administrative Courts still under construction; q Backup & control mechanisms based on Districts are not working properly

PRACTICAL RECOMMENDATIONS ROADMAP OF A SUPPORT PROGRAMME IN THE ABSENCE OF A COUNTRYLED STRATEGY FOR IMPLEMENTING DECENTRALIZATION 1. Put the money into the local governments budgets from the outset: This requires mechanisms for direct funding of municipalities: q. They should allow municipalities to assume in an effective and practical way the transfer of responsibility (health, education, public markets, and secondary roads…) as defined by law (decentralization framework) q. They should include in their functioning: Ønecessary linkages between local governments , sector ministries and territorial administrations a Øsupport, as a matter of preference, support mechanisms to local governments based on local institutions 1. Require measures that improve accountability and local governance of local governments • Capacity building approach based on learning on the job : §The starting point is the understanding of real situation at local level. §This understanding is continuously updated. 1. Tools and methods proposed should be tailored to the real problems and provide assistance at the right time

PRACTICAL RECOMMENDATIONS DAY TO DAY MANAGEMENT OF A SUPPORT PROGRAMME The SIX “commandments” 1. Adopting an « open approach » , 2. To avoid too much detail at the formulation phase: 3. The “conception” needs to be updated constantly 4. Consider each single project as an opportunity for learning on the ground. 5 - Human relationships are at the core of the Programme’s management. 6 - Implementation Unit= Facilitation Unit!! 1. ISSUES OF HARMONISATION, COORDINATION AND ALIGNEMENT 2. HOW TO DO IT IN THE ABSENCE OF A COUNTRY-LED STRATEGY FOR IMPLEMENTING DECENTRALIZATION ? 3. Encourage a public discussion on the question of WHY the decentralization process has been launched in the country; 4. Avoid the copying and pasting of experiences of other countries; 5. Promote an endogenous solution; Don’t leave it to the external consultants!!!; 6. Avoid creating financial mechanisms (ex. Municipal Founds) that don’t include in their functioning necessary linkages among local governments , sector ministries (at national and local level) and territorial policies.