Pakistan Tracing the Flow of Public Money

Tracing the Flow of Public Money Punjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector 2015
Pakistan
Macro Economics & Fiscal Management Global Practice
Pakistan Tracing the Flow of Public Money Punjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector 2015
Report No: ACS14224
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Government of Pakistan Fiscal Year: July 1-June 30
Currency Equivalents Currency Unit: Pakistani Rupees (PKRs. or Rs.)
US$1=104.86 PKR as of May 31, 2016
Regional Vice President : Country Director : Senior Director : Practice Manager : Task Team Leaders :
Annette Dixon Patchamuthu Illangovan Carlos Felipe Jaramillo Shubham Chaudhuri Muhammad Waheed / Syed Waseem Abbas Kazmi
ACKNOWLEDGEMENT i
INTRODUCTION ix
CHAPTER 1
SURVEY DESIGN AND SAMPLING METHODOLOGY 3 1.1 Survey Design 3 1.2 Sampling Methodology 5 1.3 EQSDS Instruments, Respondents and Sample Size 7 1.4 Implementation of Survey 8
CHAPTER 2
INSTITUTIONAL AND FUND FLOW ARRANGEMENT 11 2.1 Punjab Education Sector Institutional Arrangement 11 2.2 Punjab Education Sector Fund Flow Arrangement 15
CHAPTER 3
PUBLIC EXPENDITURE TRACKING SURVEY 29 3.1 Introduction 29 3.2 Dimension 1: Resource Allocation in the Sector 30 3.3 Dimension 2: Funds Reaching School (Primary Education Sub-Sector) 34 3.4 Dimension 3: Fiscal Decentralization and Budget Usage 42 3.5 Dimension 4: Equity and Discretionary Funds 44 3.6 Dimension 5: Employees Related Cost 47 3.7 Process Analysis 48 3.8 Conclusion and Recommendations 52
CHAPTER 4
QUANTITY OF SERVICE DELIVERY SURVEY 57 4.1 Introduction 57 4.2 Access to Primary Education Relatively Better from Official Statistics 58 4.3 Quality of Infrastructure and Missing Facilities 59 4.4 Quality of Education 67 4.5 Conclusions and Recommendations 68
Contents
CHAPTER 5
UNDERSTANDING THE DEMAND SIDE CONSTRAINTS 73 5.1 Introduction 73 5.2 Enrollments 74 5.3 Out of School Children 78 5.4 Conclusions and Recommendations 85
ANNEXURE I: Structural Points of Sampling Methodology 89
ANNEXURE II: Sample Intended & Achieved by Instruments 97
ANNEXURE III: Public Financial Management in Pakistan 102
ANNEXURE IV: Overview of Public Financial Management in Punjab 109
ANNEXURE V: District Government Overview 111
ACRONYMS AND ABBREVIATIONS ADP Annual Development Plan
AEDO Assistant Education District Officer
AEO Assistant Education Officer
BCC Budget Call Circular
CGA Controller General Accounts
CoA Chart of Accounts
DAO District Account Officer
DCO District Coordination Officer
DDC District Development Committee
DDM Deputy Director Monitoring and &E Evaluation
DDO Drawing and Disbursement Officer
DEO District Education Officer
DMO District Monitoring Officer
EDO Executive District Officer
EDO Executive District Officer (F&P) (Finance & Planning)
EMIS Education Management Information System
EQSDS Expenditure and Quantity of Service Delivery Survey
ERS Education Sector Roadmap
FTB Free Textbooks
FTF Farogh-e-Taleem Fund
FY Fiscal Year
GFR General Financial Rule
GoPb Government of the Punjab
GoP Government of Pakistan
IPSAS International Public Sector Accounting Standards
ISR Inventory Status Report
KII Key Informant Interviews
LGA Local Government Act
LGO Local Government Ordinance
MDG Millennium Development Goal
MoF Ministry of Finance
MoM Minutes of Meeting
MoS Measurement of Size
MTBF Mid-Term Budgetary Framework
NAM New Accounting Model
NFC National Finance Commission
OOSC Out of School Children
P&DD Planning and Development Department
PAC Public Accounts Committee
PAO Provincial Account Officer
PER Public Expenditure Review
PETS Public Expenditure Tracking Survey
PFC Provincial Finance Commission
PFM Public Financial Management
PLGA Punjab Local Government Act
PLGO Punjab Local Government Ordinance
PMF Provision of Missing Facilities
PMIU Program Monitoring and Implementation Unit
PPS Probability Proportional to Size
PSC Poverty Score Card
PSU Primary Sampling Unit
SC School Council
STR Student-teacher Ratio
TWH Tehsil Warehouse
UID Unique Identification
WB World Bank
Tracing the Flow of Public Money
iPunjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector
ACKNOWLEDGEMENTS This Report was prepared under a joint collaboration between the Government of Punjab, the World Bank, and the UK’s Department for International Development (DfID). The task was led by Muhammad Waheed (Senior Economist, GMFDR), and the report was prepared under the guidance of Shubham Chaudhuri (Practice Manager, GMFDR), Jose R Lopez Calix (Lead Economist) and Vinaya Swaroop (Lead Economist, GMFDR). It drew upon technical contributions from Minhaj ul Haque (Consultant, GMFDR), Hammad Younus (Consultant, GMFDR), and Amna Sehar (Consultant, GMFDR).
The report benefited greatly from the valuable comments and advice from many colleagues in the World Bank especially Hanid Mukhtar (Senior Economist, SASEP), Scherezad Joya Monami Latif (Senior Education Specialist, GEDDR), Umbreen Arif (Senior Education Specialist, GEDDR), Huma Ali Waheed (Senior Operations Officer, GEDDR), Syed Waseem Abbas Kazmi (Senior Financial Management Specialist, GGODR), and Khalid Bin Anjum (Senior Procurement Specialist, GGODR). Nikhat Ambreen (Consultant, GMFDR), Mirza Omer Baig (Consultant, GGODR) and Danish Butt (Consultant, GMFDR) provided valuable support. Laura Norris, Omer Mukhtar Khan, Javed Malik and Taimoor Baig, from DfID remained engaged and provided valuable inputs and insights, throughout the process. The report also benefited from the detailed comments and suggestions of peer reviewers Deon Filmer (Lead Economist, DECHD) and Jishnu Das (Lead Economist, DECHD). This task would have been impossible without the administrative support of Shabnam Naz (Program Assistant, SACPK), Amna W. Mir (Senior Program Assistant, SACPK) and Anwer Ali (GMFDR). The editorial support was provided by Ahmed Mukhtar and Agha Yasir (Consultant, GMFDR). The team would like to thank colleagues in CMU and VMU, especially Qamber Abbas (Security Specialist, GSDRS), for their untiring support during field work.
The team is grateful to Mr. Abdul Jabbar Shaheen, Secretary, School Education Department, Government of Punjab, for his guidance. Under his leadership, the province is striving to radically improve the governance of the education system. The team is thankful to Mr. Asim Iqbal, Project Director, Program Monitoring and Implementation Unit (PMIU) for providing guidance and intellectual direction during the course of this task. His unwavering commitment to this complex task at every step was instrumental in successfully gathering data, managing logistics, and gaining traction at various levels of governance. Special mention and thanks for Mr. Qaiser Rashid (Deputy Secretary, Planning and Budgeting, SED) and Rana Obaid Ullah Anwar (Deputy Director, Finance, PMIU) for their generous
ii Punjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector
support and time. In addition, this task could not have been completed without the enormous support from the numerous officials of PMIU, School Education Department, Punjab, Directorate of Staff Development, Punjab, and office of Accountant General who aided the efforts of the team. The gratitude of the team also goes to the respondents of this survey.
Finally, the team would like to thank the DfID for its generous grant to undertake this ambitious study.
iiiPunjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector
EXECUTIVE SUMMARY 1. The main objective of the report is to provide recommendations for policy makers and sector managers to help improve service delivery and the resultant outcomes in primary education. The fundamental premise of this analysis stems from Punjab Social Sector Public Expenditure Review conducted in FY2013.1 It was found that despite greatly increased public expenditures, progress on social sector outcomes was less than desired. The Government of Punjab requested the World Bank to undertake a survey-based study which could shed light on the service delivery issues impacting the primary education sector2. For this purpose, the Bank employed a globally recognized analytical tool Expenditure and Quantity of Service Delivery Survey (EQSDS) which has three inter-linked components3, designed to capture both demand and supply side concerns, collected primary and secondary data using qualitative and quantitative instruments.
2. Central to the analysis is the comparison of data sources that cover several facets of primary education to provide insights into governance, institutional and operational challenges. The study employs a wide-ranging approach to identify and capture the hidden linkages between primary education, its financial flows, governance structures and service delivery mechanisms with a specific focus on highlighting numerous constraints hindering the success of primary education interventions despite large financial expenditure.
3. The study is based on findings from primary data collected through three integrated surveys at provincial, district, primary school and household levels. The study employed probability based 4-staged
1 The Punjab Social Sector Public Expenditure Review (PSSPER), undertaken by the World Bank and the Government of Punjab in FY13, analyzed some of the factors responsible for the relatively subdued progress in social sectors of the province, despite higher budgetary outlays. While making a broad analysis it concluded that inherent weaknesses in the planning, budgeting and execution hinder the provincial government from receiving the best returns on its expenditure. 2 A working group comprising officials from Program Monitoring and Implementation Unit (PMIU) of the Punjab Education Department, UK Government’s Department for International Development (DfID) and World Bank was formed to guide the survey. This working group was involved for six months of thorough up-stream work on design of the survey and customizing it to the government and local needs. 3 The three inter-linked components are;
(i) Public Expenditure Tracking Survey (PETS) - traces the flow of resources (financial and in kind) through various hierarchical levels of government down to service provider level i.e. primary schools;
(ii) Quantity of Service Delivery Survey (QSDS) - assesses the equity and efficiency, and performance in resource use at service delivery level; and
(iii) Household Survey (HHS) - provides the demand-side perspective of the parents of school-going and out-of-school children and their perception about service delivery at primary school level.
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sample design using multiple data gathering survey instruments [for detail of sampling design, please see Chapter 1]. It covered 12 districts (stratified geographically in to three regions), 450 schools and 7000 households across Punjab. Secondary data from the Government Financial Management Information System (GFMIS), Annual Schools Census, departmental execution reports, and numerous other sources are also used in this study.
4. The results of this report have been categorized in to three broad areas:
• The impact of increased spending to date on primary education infrastructure in terms of the equity and efficiency, and performance in resource use-the quantity of service delivery part.
• The effectiveness of the system in managing public spending in transparent and efficient ways-the public expenditure tracking part.
• The level of existing service utilization and reasons for out of school children-the household/demand part.
5. The study results showed that the government’s efforts have produced tangible results in addressing basic the infrastructure needs of primary schools. In keeping with the Education Sector Road Map, the government focus has been on improving facilities at primary schools. Major strides have been made in school infrastructure. More than 90 percent of surveyed/index schools have proper boundary walls, drinking water facilities, and functional toilets equally distributed in girls’ and boys’ schools. This is also true for rural and urban schools, however schools where Non-salary budget (NSB) has been increased recently rate higher in all elements of infrastructure than schools in non-NSB districts. The study also gathered details of parental views regarding the index school (surveyed school in their community). Parents responded to the availability and quality of infrastructure with a higher number of children attending index schools with better infrastructure. However, their perception of teaching quality in index school was not always accurate. The survey administered an abbreviated version of a standardised test to grade five students in index schools, and found that school enrollment from the community had no statistical correlation to test results.
6. The availability of public primary schools is equitable by gender, and allowing the opposite gender to single-gender schools has also improved access to school. The survey reveals that the government policy to reduce the gender gap in resource allocation has started to yield positive results. Overall, 57 percent of primary school in the sample are
vPunjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector
for girls but school observation showed that girls are also admitted in boy’s school (and vice versa). As a direct result of this, 84 percent of public primary schools are now accessible to girls, and 82 percent to boys. This policy increased school availability for both genders significantly in all regions. Equally impressive is the teacher attendance, which was about 88 percent on the day of the unannounced visits of survey teams. Overall, the household survey found that 77 percent of children in the age group of 5 to 16 years are currently attending a school. The benefit incidence of public primary schools is 52 percent, with results varying by region (43 percent in northern, 58 percent in central and 51 percent in southern district).
7. Out-of-school-children (OOSC) represent a significant portion of school-age children, with their parents showing varied reasons by region. Parents were asked about their willingness to send the OOSC to any school in the near future. This analysis divided parents of 5-16 year olds into three groups: A) Parents of children currently attending school (77 percent); B) parents of children who want to send their OOSC to school (17 percent) in future; C) parents of OOSC who do not want to send their OOSC to school in the near future (5 percent). Poverty is the main obstacle for group B, and social disapproval is the main barrier for group C. Alarmingly, group C is against conventional education, in particular for girls, and a majority of them reside in rural communities in the southern districts.
8. At the system level, the government efforts have been found wanting. The survey found that existing institutional arrangements in the education sector, more specifically the public financial management (PFM) system, are not capable of supporting the prudent and quality management of the sector. The prominent gaps include; lack of transparency in the budgeting process, blurred accountability arrangements, and a budget classification system that does not allow fund tracking to the service delivery unit (i.e., primary school) through GFMIS. For detailed discussion regarding these challenges, please see Chapter 3 of the main report. The survey has exposed the inability of the current public financial management system to detect and report budget leakages, and has observed considerable delays in the disbursement of funds. About 22.6 percent of leakages4 of the total funds spent on Provision of Missing Facilities (PMF) were observed. The local/district authorities are not represented at the policy table, and have no effective role in the planning process, despite the fact that they are the closest to service delivery units and have best knowledge of local needs.
4 Leakage is defined as the proportion of resources intended for identified beneficiaries that does not reach them. There are multiple modes of gathering and dissemination of financial information. Some of these modes are informal and ad hoc, thus may results in misclassification and misreporting.
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9. The establishment of Program Monitoring and Implementation Unit (PMIU) is one of the key interventions, which has reaped dividend. PMIU has been central in creating an information system and extensive monitoring network across districts within the education sector. The establishment of management information system is a commendable effort, which feeds upon data gathered through Annual School Census and monthly surveys conducted by Monitoring Education Assistants (MEAs). But this system is yet to be evolved into a well-functioning decision support system as it is not utilized to its full potential.
10. The achievements in education sectors without the well-oiled system, undoubtedly demonstrate strong political will to improve education outcomes. The establishment of parallel system such as PMIU stemmed from the belief that the existing system is outdated and plagued with pervert practices to the extent that it is difficult to achieve results through it. Not surprisingly, government had little incentive to invest upfront on the systems and building institutions. As a ready solution, the government implemented reforms through establishing PMIU with significant initial returns. However, the benefits of the reform program would eventually lose against the cost of carrying it in to long run. The road to sustainability hinges upon government’s commitment towards strengthening mainstream system. Therefore, the real challenge for the government is to institutionalize and mainstream these reforms for effective use of resources and sustainability of outcomes.
11. The key message for the government is to consolidate gains and develop a strategy to mainstream reforms. For future sustainable progress, the time is ripe for the government to focus on issues that emanate from the gaps and weaknesses in the governance mechanism, which may require sector-specific and province-wide reforms [See Chapter 3 for detailed recommendations]. The foremost decision is to determine the timing and cost to exit from program mode and integrate PMIU functions into regular education delivery system. But this must be preceded by functional/ organizational review of School Education Department to realign or restructure it, ensuring that it is remodeled to achieve education sector road map goals. It is important to have clear job descriptions with effective accountability mechanisms, goal congruency, and participatory planning.
12. Demand side frictions needs to be taken care of while formulating sector strategy. It is recommended to include social determinants of education in developing policy continuum, which should be comprehensive, focused and based on evidence. The effective use of GFMIS is critical to implement education sector policies. The cost of policy is reflected in the annual budget, which is in turn executed through GFMIS. It is recommended to extend the use of GFMIS for budgeting and expenditure
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recording to the service delivery level especially for primary education. It is also important that the system should cater to social factors to enhancing citizen participation, which is critical to improving education sector outcomes and would generate demand for higher quality and quantity of service delivery. The study highlights that there are pockets of resistance including social disapproval to girls’ education in Southern Punjab, rural areas and poor households that need an immediate and differentiated (across regions) policy response. It is important to note that out-of-school children are not one group; therefore, local needs and social issues must be incorporated in any policy response.
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INTRODUCTION 1. Areas, like Health and Education, which are long term undertakings are often overlooked in favour of shorter term development projects. The service delivery aspect of the public sector is often marred by inefficiency, poor performance and therefore by inevitably poor outcomes. Generally, more visible interventions are preferred as an indication of current development priorities. This emphasis on the development side has often led to service delivery sectors, like health and education, being overlooked. Health and education outcomes, by their very nature, cannot be improved overnight and require continuous focus and sustained investment from public resources.
2. Measuring and sharing social indicators is a vital part of ensuring accountability and success in service delivery. One of the many factors spurring changes in the situation is the effective role played by international and regional organizations in regularly publishing reports on social indicators. These have helped in establishing tangible benchmarks for local media and the public to measure government performance in all facets. Service delivery sectors are human resource intensive and require consistently meeting certain recurrent costs, to maintain service delivery quality. The government delivers these essential services through a network of public facilities spread all across the region. This makes it challenging not only to allocate sufficient funds, but also to track those resources right to frontline service delivery units, as their ultimate beneficiaries.
3. Current and accurate statistics on both the supply and demand sides are essential to service delivery efforts. It has been unequivocally proven that the provision of up-to-date statistics improve performance at every level. Thus it is unsurprising that information requirements have increased across the board. The policy makers require analytical information to help them identify institutional, operational and governance issues that are slowing down the progress made on service delivery outcomes. The Expenditure and Quantity of Service Delivery Survey (EQSDS) is a combination of a Public Expenditure Tracking Survey (PETS) and a Quantity of Service Delivery Survey (QSDS), complemented by a Household Survey (HHS), to help in understanding the demand side. The EQSDS is a tool that delivers information on public expenditure and provider performance with a view to strengthening accountability in service delivery.
4. The need for the EQSDS became clear as progress on MDGs, particularly in primary education, did not match the increase in government spending in this area. It is a follow-up of the WB-DfID’s joint work, titled “Punjab: Social Sector Public Expenditure Review (SSPER)”,
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conducted during FY2012-13. The SSPER emphasised the increased flow of resources into the education sector over the years. It went on to highlight the fact that despite the increase, progress in achieving the MDGs in general and in school education in particular, has slowed considerably. It specifically drew attention to both the upstream (fiscal and financial management) and downstream (i.e. in the education sector etc.) levels of the expenditure management system. It went on to identify the causes of anaemic progress, and the inadequacy and/or inefficiency of funds. Beyond these ‘macro’ issues, there are a number of possible issues at the ‘micro’ level which are at least as important as ‘macro’ ones, if not more so.
5. The Government Financial Management Information System (GFMIS) provides feedback on government policy and is directly responsible for the government’s ability to track and report on resources delivered and consumed, without providing detail down to the service delivery level. It often contains information at the aggregate level without showing reports of the status at the provider level. Unfortunately however, the information reported through GFMIS is often incomplete, with certain biases which can result in misreporting. For instance, in the case of education, the information available in the GFMIS is recorded at the DDO level. This effectively means that the GFMIS does not capture budget and expenditure data at the service delivery level, for primary and elementary schools.
6. The EQSDS aims to address the challenges of optimal allocation of resources as well as the current leakages that prevent these from having the desired impact. The governance challenges adding to the complexity of the situation are the absenteeism of teachers; leakages of resources, both cash and in kind; and issues surrounding the efficiency and effectiveness of resource utilization and service provision at the service delivery point. Collectively, these challenges naturally impact the performance of the sector. There is a broad realization that budget allocations alone, are a poor indicator of the quality and quantity of public services delivered in countries with weak institutions. While the shifting of budgetary resources to priority sectors, like education, is vital as a first step to addressing this, it is just as crucial to ascertain where and how the allocated sum is spent and the corresponding quantity of services generated. The EQSDS has been designed to verify and validate that allocated resources, both financial and in kind, reach their intended destination and are used wholly and solely for the intended purpose. It is also used in measuring whether the commensurate quantity and quality of services has been delivered. It is, however, important to note that this is not an audit as it is not designed to reconcile the use of funds, and does not try to find missing resources or identify the persons responsible.
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7. The main objective of the EQSDS is to understand the system from an outside perspective, to help the government improve service delivery outcomes and ultimately to strengthen and provide safeguards for the existing systems as well. According to the PETS-QSDS guidelines, “the ultimate objective of these diagnostic and analytic tools is to improve the efficiency of public expenditures and quality of services, and their impact on the wellbeing of the population.”5 This tool enables policy makers to effectively and accurately allocate funds, to reconfigure the relationships between different government functionaries, strengthen the accountability mechanism, and ultimately improve government recording, reporting and monitoring systems. Moreover, it aims to help examine the efficiency of funds utilization and quality and equity of service delivery. Thus, PETS and QSDS take information directly from the provider and compare it with the records available at various administrative tiers, ensuring that the two match. In this context it complements other public expenditure monitoring tools, like Public Expenditure Reviews (PER) and Public Expenditure and Financial Accountability (PEFA) assessments.
8. This study approaches these issues by first developing a contextual framework to better understand the overall environment. One of its key features is to be on the alert for situations where the time is ripe for change, while remaining cognizant of the constraints. This has helped to direct efforts in a way that maximises returns. In its first step, the study identified the governance framework for the education sector in Punjab and the key players in the system. Its objective was to evaluate the adequacy of the legal framework in establishing an effective incentive- accountability relationship within the sector. By drawing a complete picture, the institutional contour of the educational sector and alignment of the institutional arrangements, along with the intended sector outcomes are made clear. To this end, established studies and benchmark ratings/scorecard reports have been used, to fully comprehend the political setting and prevalent public financial management fragilities.6
9. As the next step for microanalysis, the fund flow arrangements for all interventions, from province to districts, district to Tehsil, and Tehsil to school have been constructed. For the purpose of this study, a few of the relevant streams of funding have been chosen for close review. Based on these fund flows, questionnaires were developed to cover as many attributes as possible of the planning and execution. The Budget & Planning
5 Gauthier, B. and Ahmed, Z. (2012). Public Expenditure Tracking Surveys (PETS and Quantitative Service Delivery Survey (QSDS). 1st ed. [ebook] Washington, DC: World Bank. Available at: http://pets.prognoz.com/prod/GetGuidlinesDocFile.ashx?data=1 6 i) Democracy and legislative strengthening, PILDAT Publications; (ii) Education for All, SDPI; (iii) Report on Punjab assembly’s performance, FAFEN, (iv) Punjab School Education Sector Plan, 2013-17, SED, (v) Punjab PEFA assessment etc.
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Wing SED at the provincial level; the EDO Education and the EDO F&P Offices at the District level; the DDEO Office at the Tehsil level; and last in the chain, the primary school all contributed to the analysis for the PETS portion. During fieldwork, the questionnaires were turned around three times in each office. Interviewees, with a wide range of views, identified the need for very robust and centralized information management at the provincial level.
10. The school inventory questionnaire was, in effect, a precursor to the EQSDS survey, and collected detailed information about both physical learning environment and infrastructure. The results of this questionnaire were compared with fund flow numbers to explore the correlations between different variables. The aim was to explore the extent to which financial management gaps were translated into inadequacies in service delivery. It helped to provide the most complete picture possible of the supply side. Ultimately, the PETS indicator set was applied, although constrained by limited information about primary education, and further supported by process analysis.
11. Additional information has been collected, to help determine the effectiveness of service delivery at primary schools. This information covered teachers, student enrollment, school attendance and the interventions of non-government organizations. At the school level, teacher interviews have been conducted to assess teacher motivation. This included several questions regarding the teacher’s qualifications (both academic and professional), salaries, residential status, training and development, to enable the drawing of conclusions about the quality of learning outcomes. Moreover, at the school level, a Child Assessment was conducted, using an abridged version of the Directorate of Staff Development (DSD) test papers, to assess child learning outcomes as a product of the quality of service delivery.
12. The final aim of the study was simply to create the most complete picture and to understand the demand side perception of service delivery at the primary school level. To this end, the study compared the flow of resources to service centres, with the demand side constraints, such as parental perceptions about child schooling and the reasons for drop outs. Additionally, it also explored parental preferences regarding the issue of sending their out-of-school children to school. The study aimed to complement and enhance in-depth knowledge of resource flow, and allocation challenges, as well as utilization at service delivery points, and the role of community participation. This was accomplished through conducting key informant interviews with district and Tehsil level officials and School Council members.
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13. The results of the survey attempted to provide answers to certain key public policy questions. Chief among these were the reasons for public expenditures on average, having limited impact in improving education sector outcomes; and the ways in which to increase public expenditure efficiency in improving educational outcomes. Keeping in mind the influence of these factors on primary education, the study explored the ways in which the viewpoints of parents with out-of-school-children affected their decisions to enroll those children in school.
14. This report presents the main findings of the survey and is organized as follows: Chapter I details the sampling procedure and survey methodology employed. Chapter II gives an overview of the flow mechanism of primary education in Punjab. Chapter III reports the findings of the expenditure tracking survey, overall resource allocation and process analysis etc. Chapter IV presents the findings of QSDS on access, physical amenities, teachers, and learning outcomes. Chapter V provides demand side analysis and parents’ perceptions about educating their out-of-school children (OOSC). The report ends with a conclusion and recommendations for policy makers to adopt an action-oriented and targeted approach towards improving service delivery and education outcomes.
1Punjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector
Survey Design and Sampling Methodology
2 Punjab: Expenditure and Quantity of Service Delivery Survey (EQSDS) in Primary School Sector
CHAPTER 1
Survey Design and Sampling Methodology The EQSDS is a diagnostic, multi-dimensional, cross-sectional survey and this section provides an explanation of survey and sampling design adopted for this survey. There are 36,549 standalone primary schools in Punjab.7 The education delivery system and its sub-systems, along with complexity of resource flows, required a survey design that is comprehensive enough to capture both supply and demand side issues. Thus a cross-sectional survey design, employing both quantitative and qualitative techniques of data collection, was adopted. The main feature of this design is the detailed exploration of the flow of funds from the provincial level to districts and to schools, and to match the supply side issues with demand side issues captured through a household survey.
SURVEY DESIGN
The design phase of the EQSDS was guided by a comprehensive working group comprised of members from the PMIU, SED, DfID, and the finance department. The design phase started with the listing of flow domains and initial field visits to a district for preparing fund flow
7 Government of Punjab, (2013). Annual School Census.
Tehsils
charts. Later, the initial findings were discussed with the working group to seek their comments and guidance.
The survey design comprises three inter-linked surveys: the Public Expenditure Tracking Survey (PETS) to trace the flow of resources through various hierarchies of government down to service provider i.e., primary school; the Quantity of Service Delivery Survey (QSDS) to assess the quality and performance in resource usage at primary school; and a Household survey (HHS) to understand the household perspective. The qualitative survey consists of Key Informant Interviews (KII) with both district and Tehsil-level officials to gain in-depth knowledge on resource flow and allocation challenges. The KII were also conducted with school council members to help in fully comprehending issues of utilization at service delivery points as well as the role of community participation in education delivery. The comparison of data sources and analysis provided a comprehensive picture of public financial management systems, governance issues and barriers to education. Figure 1 presents the design framework of EQSDS.
Figure 1. The EQSDS Design Framework
Source: Expenditure and Quantity of Service Delivery Survey
HH Survey Find Demand Side Constraints
Probability-based sample of schools and HHs near school link demand and supply issues via school ID and HH community code
Access, cost, choice and quality ←→ Allocative efficiency, service delivery and utilization Value for Public Money
Universal Primary Education
The questionnaires developed in this survey follow the principles provided in the PETS/ QSDS guide8 and the analysis also follows the same pattern in preparing indicators. The main area of enquiry was the comparison public expenditure with its outcomes, particularly student learning, quality and quantity of service delivery and utilization. Reviews of public financial management systems and their weaknesses, delays and allocation principles were addressed under the theme of ‘how much money is buying how much quantity and quality of education’.
SAMPLING METHODOLOGY
Public Expenditure Tracking Survey (PETS)
The PETS requires multi-stage sampling of districts and administrative tiers that need to be selected in consultation with program managers to ensure the most accurate results from which a pattern can be extrapolated. In the PETS, 12 districts from 3 regions were sampled after stratifying all districts of Punjab by program/initiative (NSB versus Non-NSB districts), and based on the socio-economic, demographic and geographic characteristics of each district [See Annexure I for a full description]. In the second stage, a fixed number of Tehsils (i.e. two) were taken from each sample district, adopting a simple random sampling scheme (SRS). Expenditure tracking was done at the provincial, district, Tehsil (sub-district) and school level. The 12 district offices including the EDO (Education), EDO (F&P), DO Building and DMO were also selected for KII. Moreover, other secondary sources like the ADP schemes and PIFRA databases were consulted. Additionally, key informant interviews were conducted with the DCOs, EDOs, and AEDOs/DDEOs based on purposive sampling, maintaining a gender balance wherever possible.
Quantity of Service Delivery Survey (QSDS)
The primary school sample of QSDS was drawn on the basis of the Probability Proportional to Size(PPS) method using a four-stage sample design, so as to include both locations and elements of service delivery available. The PMIU’s annual school census database was used as the sampling frame. The school frame was stratified on the basis of the urban and rural locations of three regions. In addition, schools with missing facilities and those that incurred development expenditure were sampled to compare PETS and QSDS. The total enrollment in each public primary school
8 Gauthier, B. and Ahmed, Z. (2012). Public Expenditure Tracking Surveys (PETS) and Quantitative Service Delivery Survey (QSDS). 1st ed. [ebook] Washington, DC: World Bank. Available at: http://pets.prognoz.com/prod/GetGuidlinesDocFile.ashx?data=1
was used as a measure of size for sample selection purposes. In total, 450 schools were selected for a facilities-based survey with an equal number of boys and girls schools to ensure equitable representation of both genders.
Additionally, two sub-samples were also drawn from the selected schools. The first sub-sample involved teachers. All teachers (male and female) who were present on the day of an unannounced visit were selected for individual interviews. A total of 1,524 teachers were interviewed. The second sub- sample concerned students, who were required to take a small student test. To test a maximum of 30 students, all grade-five students who were present in the school were selected and wherever the number exceeded 30 students, simple random sampling was used to select 30. A total of 4,357 boys and girls currently enrolled in grade five at the sample school took the test in their classrooms.
Household Survey (HHS)
The primary objective of the Household Survey (HHS) was to capture the demand side issues pertaining to access, cost, quality and choice of schooling and match them with the supply side. The HHS was carried out in 12 Districts, 24 Tehsil and 450 purposively chosen communities. The HHS was conducted only in communities where a QSDS School was located or in communities in close proximity to the sampled school, therefore it allocated communities by region, in a manner similar to the QSDS survey. The aim was to establish linkages between the QSDS and HHS. The communities for the HHS were identified after selecting the school sample. In rural areas, these communities were adjacent to the sample school and it was easy to identify them. In urban areas, however, the survey team asked school teachers to identify the community from where the most students, whether currently or in the past, had attended the sample school. The survey teams then demarcated the area within one kilometre of the urban school. Subsequently, the survey teams proceeded to prepare a quick-count listing of all households.
In the HHS, 7200 households were selected using systematic sampling with a random start. Within the selected communities, 16 HHs were sampled per community. While the communities were identified purposively (near the school), the household sample was probability-based and was independent of both schooling status and presence of children in the HH. In cases where there was a child (boy or girl), aged 4 to 16 years old, parents or a responsible adult in the household was interviewed. In cases where there was no child, the HH questionnaire was filled for all other sections (roster, economic activity and education status of adults). Out of the 7,200 contacted HHs, 81 percent (5,743 HHs) had one 4 to 16 year old child. These included children who were in or out of school as well as those who had never attended any school.
EQSDS INSTRUMENTS, RESPONDENTS AND SAMPLE SIZE
Table 1: EQSDS Instruments, Respondents and Sample Size
Data & Information Gathering Instruments
1 PETS-Provincial questionnaire SED, PMIU Officials, Annual School Census and PIFRA databases, official records
1 P + 36 D
12 D + All Tehsils
3 PETS-Tehsil questionnaire DDEO/AEDO, official records 24 T + 19-20 school sheets
4 zz school inventory questionnaire Headmaster/mistress of boys and girls school, school records 450 schools
5 QSDS-Teacher’s questionnaire Male/female teachers. All present on the day of team visit 1,524 teaches
6 QSDS- Students’ test Male/female students. All grade 5 students present in school. 4,357 students
7 HH-Household questionnaire HH Head/responsible adult living in the community nearest to sampled school.
7,200 households
8 HH-Community questionnaire Community notables. Communities where HH and school are located.
450 Schools
9 HH-SC member key informant interview (KII)
Male/female community members of SC 36 members
10 PETS-Officials KII Male and female District level official 12 officials
11 PETS-Officials KII Male and Female Tehsil officials 24 officials
Note: P = Provincial, D = District, T = Tehsil Source: Expenditure and Quantity of Service Delivery Survey
IMPLEMENTATION OF SURVEY
The survey was carried out in 24 Tehsils of 12 districts of Punjab. A 12 member team was formed to conduct the PETS, a 24 member team was allotted 450 schools, and a 120 member HH team worked in coordination with the school team to correctly identify index school and index child9 [See details in Annexure].
9 For this report index school means the school visited by the school team where QSDS was done. Index child means a child who ever or *currently attending the index school. The word index and sampled school is used interchangeably in this report. Also the term school community means the 450 communities where HH survey was done and where the school is located.
Punjab Education Sector Institutional And Fund Flow Arrangement
Punjab Education Sector Institutional and Fund Flow Arrangement
CHAPTER 2
PUNJAB EDUCATION SECTOR: INSTITUTIONAL ARRANGEMENT
School Education Department—Context
The School Education Department (SED) is responsible for education from pre-school to 12th grade in the public sector. It is headed by the Secretary, and supported by three Additional Secretaries and a number of other officers and staff functioning at the Secretariat. SED has a number of attached departments and autonomous bodies functioning under it. The Executive District Officers (EDO) for Education, who are part of their respective
Province
Districits
Tehsil
ii. Development Budget
iii. School Council
iv. Free Textbooks
v. Farogh-e-Taleem Fund
Source: Adapted from: V. Doris & K. Kaiser (2009), “Follow the Money: Public Expenditure Tracking Surverys (PETS) for Impact” Public Sector Governance Group, PREM, The World Bank.
district government, are responsible for primary, elementary and secondary schools in their own districts.
The main functions performed by School Education Department (SED) are the enforcing of regulations, policy formulation and planning for Primary, Elementary and Secondary & Higher Secondary education. The SED has the following 11 departments attached to it:
1. Autonomous Institutions i. Punjab Education Foundation ii. Punjab Textbook Board iii. Punjab Examination Commission iv. Punjab Teacher Foundation v. The Punjab Danish School and Centre of Excellence
2. Attached Department i. Directorate of Staff Development ii. Punjab Education Assessment System iii. Children Library Complex iv. Directorate of Instruction (Secondary Schools)
v. Directorate of Instruction (Primary Schools) 3. Special Institutions
i. Sadiq Public School Bahawalpur
The total provincial budget for FY 2013-14 of the SED was Rs. 41.7 billion. The Development budget accounted for Rs. 26 billion and Rs. 15.7 billion was allocated to the Non-Development Budget. The provincial government has continued to allocate funds to education facilities/initiatives, for which the districts are directly responsible.
FUNDING STREAMS OF PRIMARY EDUCATION IN PUNJAB
The focus of this Expenditure and Quantity of Service Delivery Survey (EQSDS) is primary education in the province of Punjab, which is financed by both provincial and district governments. Additionally, the provincial government has begun certain initiatives for improving education outcomes under the Punjab Education Sector Reform Program (PESRP). Although the GoPb provides funding for these initiative, they are implemented by the district governments. The PESRP portfolio includes the following initiatives:
1. School Non-Salary Budget 2. Teachers’ Recruitment 3. Improver’s Program 4. School Council 5. Monitoring & Evaluation 6. Stipend to Girls School 7. Free Textbook
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PUNJAB EDUCATION SECTOR: FUND FLOW ARRANGEMENT
The District Government’s Non-Development Budget
The non-development budget for primary education is financed by the district government’s budget with the Provincial Governments transferring a single-line budget, from the Provincial Consolidated Fund (Account-I) to the Provincial Account in District (Account-IV), in accordance with the formula devised by the district’s Provincial Finance Commission. The District Provincial Account is monitored and controlled by the Executive District Officer, Finance & Planning. The district government’s accounts of their receipts and expenditure are maintained by a District Accounts Officer (DAO)-the treasurer of District. The DAO performs a pre-audit of all payments from Account-IV before approving fund disbursement.10
All major development expenditure at the district level is financed through the provincial budget, with the district governments chiefly being responsible for non-development expenditure. Consequently, in the case of primary education, the district budget, mainly including salary costs, are both derived from and constitute the lion’s share of the non- development budget.
The EDO for Education prepares the annual budget for the district education department in consultation with Tehsil level formations. In these formations, Drawing and Disbursement Officers (DDOs) submit their budgeting requirement to EDO Education, who after consolidation submits the budget proposal, in turn, to EDO F&P. The EDO F&P reviews the budget and, in keeping with the available fiscal space, recommends adjustments. The final budget proposal is submitted to the District Coordination Officer (DCO) for approval. The budget is entered into the PIFRA system (country financial management information system) by EDO F&P at the detailed object level.
The non-development budget for primary education is prepared by the Deputy District Education Officer (DDEO). This official is the DDO of all Tehsil level primary (or elementary) schools. Similarly, the functional classification for ‘pre-primary and primary school education’ includes the salary expenditure for primary as well as middle schools teachers.
10 For complete understanding of public financial management arrangement in Pakistan, please refer to Annexure III.
The Provincial Government makes a monthly disbursement into Account IV according to the Public Finance Commission (PFC) share. The EDO F&P in each district then enters the budget releases for each department into the PIFRA system, in keeping with the available budget in the system (ex-ante budget control). In the case of salary, which forms a major portion of the non-development budget, it is processed through the PIFRA system11. Each DDO is responsible for submitting a reconciled payroll sheet of their cost centre to the respective DAO. The payroll controls are adequately provided in the system with a complete payroll record (not including human resources) of the each employee. The salary is paid either through direct transfer into the employee’s bank account or by issuance of cheque.
The non-salary budget consists mainly of administrative expenditure for the DDEO office and, in some cases, is used to reimburse utilities bills of schools. Each DDEO maintains a separate bank account where non- salary funds are disbursed by the DAO, against the approved bills submitted by the DDEO office. The DAO issues a cheque in the name of the DDO for the requested amount. The DDEO office maintains complete records of the fund utilization and the bank account.
11 Project to Improve Financial Reporting and Auditing (PIFRA) system is the Government Financial Management Information System (GFMIS). Monthly payroll of all government employees is generated through this system.
Figure 2: Non-Development Fund Flow of District Education Department
Source: Expenditure and Quantity of Service Delivery Survey, Authors’ depiction
Key Budget Share Elected Officials & Civil Servants
Bank Account or Accounts
1. Passes annual budget law
3. Calculates share for each district based on pre-determined formula
5. Approves budget as administrator
4. District prepares budget according to allocated share
6. Provincial FD makes Quarterly / Monthly releases to District Account IV
8.1 Consists of office expenditure of EDO Edu., DEO & AEO
8.2 Monthly processing of Salary through PIFRA system.
9. Cheque issued
DCO
7. Enters department-wise budget and also makes releases in the PIFRA system
THE PROVINCIAL GOVERNMENT’S DEVELOPMENT BUDGET
The entire development budget for primary education is financed through the provincial Annual Development Plan (ADP) and involves the provision of missing facilities under the Punjab Education Sector Reform Program (PERSP). The development planning, firmed up each year, is based on the Annual School Census conducted on 31st October 2014. The Program Monitoring and Implementation Unit (PMIU), which is an attached department of School Education Department, has a key role in implementation of PERSP. The Annual School Census, aids the PMIU in collecting and compiling complete data for missing facilities. PMIU has a network of District Monitoring Officer (DMO) spanning all of Punjab’s districts.
After the school census conducted by PMIU, the SED identifies priority schemes, and prepares budget estimates accordingly on the basis of census results. The scheme, after approval from the Planning and Development Department (P&DD), becomes a part of the Annual Development Plan (ADP). The development budget for primary education (091) is functionally classified under Secondary Education (092)12.
The PMIU in conjunction with the EDO Education initiates the joint survey of the sites and work requirement for the priority schemes, and based on this survey DDC may change the scheme if it is not technically feasible. PC-1s are required for all schemes exceeding Rs. 1.5 Million. The Sub-Engineer of Building Department, the Monitoring and Evaluation Officer (MEO) of PMIU, and the Assistant Education Officer (AEO) of EDO Education Office, conduct the joint survey. The joint survey is used to develop rough cost estimates for the development of PC-1s. The EDO education office is responsible for preparing the PC-1 and it is placed before the EDO F&P, before its submission to the District Development Committee (DDC). The DDC is chaired by the DCO and its members includes the EDO F&P and the EDO of the relevant department. The DDC may approve the PC-1 or recommend changes in any scheme which lacks viability.
The development budget in each district is spent through the Special Drawing Account (SDA) which is especially maintained for development projects. Although the SDA is opened in Provincial Account-I, the EDO F&P and DCO of the relevant districts have the authority to operate it, and
12 091 and 092 are the functional classification for Primary and Elementary Education and Secondary Education respectively in budget charts of accounts.
to utilize funds from their respective SDAs. The EDO Education and the EDO F&P send requests to the Provincial Finance Department, to release development funds into the SDA. The Provincial Finance Department, keeping in view the fiscal space and provincial priorities, releases funds into the SDA. The SDA is a ring-fenced arrangement where funds are released for each budget item. The operators of the SDA are required to submit detailed object expenditure classification along with the cheque, to the Treasury Officer/DAO, for endorsement. The release pattern for development projects is determined by the FD, and as such may vary from one year to another. The SDA is lapsable and before the year’s end, the remaining balance is required to be surrendered. However, with the approval of the provincial FD, this unutilized balance of SDA may be transferred into district Account- IV, which is non-lapsable.
The expenditure is recorded in the PIFRA system at scheme level, rather than for each primary education facility. The PC-1 contains the list of schools included in the given scheme; however, this information is not recorded at time of entering the budget or booking of the actual expenditure. Thus, development expenditure at the service delivery level cannot be tracked through the national FMIS, and information can only be sought from the EDO F&P office in each district.
The development work regarding missing facilities is executed through the district Building and Works department, or in a small number of cases, the School Council is allowed to carry out civil works with the approval of the provincial government. In the case of Schools Council carrying out civil works, funds are transferred into the commercial bank account of the SC and all payments are then made through this bank account. The School Council transactions are not recorded in the country FMIS. The SED monitors development schemes and maintains a financial reporting mechanism on fund utilization for each scheme, however this mechanism is outside the purview of the country FMIS and reports.
Figure 3: Development Fund Flow District Education Department
Account-IV
FD
1. Annual School Census on 31st October
9. Joint Survey by AEO, MEA and Sub eng. of BD
10. Rough cost estimates prepared by Building
Department sub engineer
13. DDC may approve or if required change scheme based on the information
on ground
FD for release of fund against approved project
11. Prepares & sends PC-1 back for EDO Edu review
2. Compilation of information and entry into
PMIU system
developed
17. FD releases development funds against ADP as per provincial fiscal position
18. Before the year end funds may be transfered to Account-
IV to avoid surrender
5. Identification of Scheme and budget estimate for year
6. Scheme entered into ADP as per available budget ceilings for education sector
ADP
DMO
office for joint survey
7. Shares scheme with
19. Payment through cheque
PMIU Bank Account ContractorKey
THE SCHOOL COUNCIL FUNDS
Under the Punjab Education Sector Reform Program, almost 56,000 School Councils (SC) have been constituted, which are at work in public sector schools in every district of Punjab. The school councils are being provided annual grants to meet the needs of the schools at the local level. These grants amount to Rs. 20,000 each for Primary Schools, Rs. 40,000 each for Model Primary Schools and Rs. 50,000 each for Elementary Schools.
The School Council budget is financed through the provincial current budget, under PMIU. At the planning stage, the Deputy Director of Monitoring and Evaluation (DDM&E) at the PMIU of each district submits complete information about Schools Councils to the SED. This information is based on monthly inspections carried out by the DMO. The SED determines the total budget requirement for the year and submits a corresponding budget request to the FD.
The EDO Education is the one who is largely responsible for the formation and monitoring of the School Council. The formation process starts with the AEO supervising the election process of the School Council. The AEO notifies the School Council members and enters their particulars into the School Council register, which is maintained at the DDEO’s office. The School Council communicates any change in membership to the AEO, who, upon verification, updates School Council membership register. For monitoring purposes, each SC submits its financial report to a circle (a primary school heading a group of 5 to 6 schools) on a monthly basis. The circle reports to the AEO, who in turn consolidates and submits reports to the DDEO. In addition, the DDM&E Officer of PMIU also monitors SC accounts during monthly inspection visits.
Around October-November each year, the FD makes lump-sum transfer for the School Council budget into the SDA of the relevant district. The SDA is operated by the EDO Education, and based on the approved list of School Councils in a district, disburses funds into the bank accounts of School Councils. The government has issued financial management and procurement guidelines for School Council expenditure management. The head teacher of the school is the chairman of the School Council and is also responsible for maintaining books of accounts. The head teacher and one of the council members are signatories of the bank account. The expenditure details of School Council funds are not recorded in the country FMIS and thus not traceable in the system. In some districts, donations received by the school have also been deposited into the School Council bank account.
Similarly, in some selected schools, caregiver funds provided by the Directorate of Staff Development (DSD) were also transferred to School Council. Thus, the SC bank balances vary to a great degree across schools.
Figure 4: School Council Formation and Monitoring Process
AEO monitors the SC formation process
School Council notified by AEO
Communicates details of members to AEO
Makes call to SC members for feedback
Monitors expenditures by SC during monthly visit
Cancellation and new entrant. SMC database maintained at DDEO office on manual registers
School Council
schools
DDEO
AEO
Abacus
Figure 5: School Council Fund Flow
Key
Bank Accounts
1. Demand for Grant for SC is sent by SED
4. Funds are disbursed via cross-cheque in the name of SC
5. SC authorises each expenditure. Each decision is documented in the minutes of the meeting register.
6. Chairman SC (head teacher) & one other SC member are cheque signatories
7. Payments are processed by head teacher
4.1 Funds for caregiver disbursed into SC bank account @ Rs. 3800 pm2. Budget allocation
for SC under current budget Secondary Schools (0092)
3. FD releases 100% of funds in September
3.2 SDA maintained by EDO Edu.
3.1 Releases are made in SDA on the basis of updated school data
On the basis of monthly inspection, data is collected by DDM&E of PMIU
Expenditure is first incurred by head teacher
Expenditure includes uniforms, minor repairs, temporary teachers.
Audit conducted by OAGP but with varied frequency
Head Teacher writes the Cash Book
Funds are then drawn out of SC Bank Account
At PMIU, school data is updated and communicated to SED
For each district, SED sends a request to FD for release of funds
FREE TEXTBOOK
The Free Textbook initiative is financed through the provincial current budget provided under PMIU. Each year the School Education Department is responsible for the printing of textbooks from its attached department, the Punjab Textbook Board. The printed books are received at a central warehouse in Lahore13 from where they are distributed to districts. The textbooks are allocated to each district based on the annual census with an addition of 10 percent. The Tehsil warehouse receives books from the central warehouse in December, to distribute onward to schools. Each School collects books from the Tehsil warehouse as per the distribution plan prepared by the DDM&E. This distribution plan is based on the enrollment figures obtained through the annual census.
The movement of books is documented right from the central warehouse to the students through the creation of various forms (D1-Receipt by Tehsil warehouse, D2-Return by school, D3-Receipt by school and D4-Receipt by student). The Tehsil warehouse maintains an inventory of the textbooks and prepares the inventory status report (ISR) at the end of each month. The ISR indicates the number of books received and issued during a particular period, along with the opening and closing balance for each class of books.
One of the issues highlighted is the frequent change in syllabus, which results in recalling the already distributed books and subsequently redistributing the new ones. The stocks of outdated books are maintained at the Tehsil warehouse with no clear policy on their disposal. Redistribution, too, requires timely documentation and updating of the ISR, so that books can be tracked from the central warehouse to the students in schools.
13 Capital city of the province of Punjab.
10. Supplementary demand for books sent DMO office due to short supply in early delivery
13. School report shortage directly to TWH
Figure 6: Free Textbook Inventory Flow and Management
FD
DMO
Role of DMO Office in Distribution Role of Store In-charge
1. Allocation under current budget (092)
2. SED send order for printing
12. Return excess book on D2 form
11. Books received from other warehouse on basis of re-allocation
3. Books are bound into jackets for each class comprising different subjects
4. Books are allocated to each district based on annual survey + 10%. Books are distributed to districts around December each year for the next year’s course.
5.1 Books are received on D1 form. Form is handed over to district warehouse person in Lahore
6.1 DMO Office prepares schedule for distribution, as direction from PMIU is to make disbursement by 31st March
8. Monthly ISR report sent by 5th of each month.
7. On D4 form schools receiving from parents. This D4 remains at the school and is checked by ME&A upon school visits.
Additional Requirement 6.5 If enrollment figures disagree with ME&A, then school person will present the enrollment account duly signed by the Head Teacher and AEO.
Inventory Status Report 6.6 Four copies sent to (i) DEO Elementary, (ii) ADE, (iii) DMO Office, (iv) Retained by Store In-charge.
9. At DMO Office inter- Tehsil warehouse position is reviewed & books are re- allocated against excess and short supply
6.3 School Person brings latest enrollment figure and signed D3 form along to Store In-charge
6.2 At the time of distribution ME&A is present at warehouse. ME&A also bring Annual Census proforma for cross check.
6.4 Inventory Status report maintained in Excel.
5.2 Afterwards, books are dispatched via NLC with a voucher stating the stock of the books
5.3 Books received are entered into ISR by the person in- charge of the store (generally a teacher) ISR is maintained in Excel
SED
Schools
Schools
in Tehsil
Tehsil Warehouse
THE FAROGH-E-TALEEM FUND (FTF)
The FTF is generated from schools’ own resources, such as student fees to be spent on the non-salary operating expenses of the school. The schools have separate bank accounts for the FTF; however, in some districts there is a single bank account for both FTF and SC funds. The head teacher is authorized to incur expenditure from the FTF and is required to maintain a separate cashbook for FTF funds.
The general control over the FTF is weak as there is a lack of guidance, and poor financial management arrangements for the use of the FTF. There are instances where funds are transferred from the SC bank account to the FTF and vice versa. The bank balances are reported on a monthly basis, to the AEO, along with the transaction movements. The MEA of PMIU also monitors the FTF funds during the monthly inspection visit.
Figure 7: Farogh-e-Taleem Fund Flow
Head teacher collects fees and deposits them into a separate bank
account
Expenditure originally borne by teacher and then claimed from FTF
bank account
Annual Census Survey also
school level
along with bank statements
DDE consolidate at Tehsil level and send
report to DEO
funds
35 items in a list issued by SED for FTF expenditure
ME&A monthly inspection / survey
Audit by OAGP
Public Expenditure Tracking Survey PETS is to trace the flow of resources (financial and in-kind) through various hierarchical levels of government down to service provider i.e., primary school, (Leakages, delays, information asymmetry)
CHAPTER 3
INTRODUCTION
While the government of Punjab has been successful in implementing an extensive information collection system through a network of monitoring officers in each district, this information database is not used for analytical purposes and all reporting is on an ad hoc basis. In the case of financial information, at best, reports are prepared on excel and communicated to the reporting authorities via email. No record of these reports is maintained, nor are any versions retained. One of the major issues faced in this tracking survey was the information management at each tier of government. For the purpose of the PETS, several sources including PIFRA; PMIU School Census data; DO building progress reports; EDO F&P budget execution reports; EDO Education ad-hoc reports; and SED informal reports have been used to prepare the analysis. This study is constrained by highly fragmented and largely aggregated financial information, particularly at the level of primary education. Wherever possible, however, the survey has constructed indicators for primary education.
Five major dimensions of the education sector have been analyzed using PETS indicators in keeping with standard World Bank methodology: (i) resource allocation; (ii) funds reaching schools; (iii) fiscal decentralization; (iv) equity; and (v) employee related costs. According to the budgetary framework of the SED, there are six different fund flow streams for each type of budget category14. For the purpose of this survey, four streams have been tracked: (i) development budget; (ii) non- development budget; (iii) School Council funds and (iv) non-salary budget. The selection is based on availability of information, the amount of the budget involved and the criticality of the program in the future plan of the government. The selection process was discussed and agreed upon with the government, at the time of launching of the PETS.
DIMENSION 1: RESOURCE ALLOCATION IN THE SECTOR
Resource allocation in the education sector has become more complicated with transition to a system of devolved provincial. The education sector is the country’s single largest service delivery network. The 18th Amendment to the constitution has not only devolved responsibility for the education sector to the province but has also made it mandatory for the state to provide free education from the age of 5 to 16 years. Out of 54,760 public schools delivering education, 36,549 are stand alone primary schools15 with almost 105,000 primary school teachers16. This makes primary education service delivery one of the largest networks of facilities across the province. Although, several studies noted the province’s improvement in primary education performance, apparent in enrollment, accessibility and survival rate; at the same time gaps in gender parity, missing facilities and equity have also been noted.17
14 Cost elements are Non-development budget, Development Budget, Free Text Book, School Council funds, Non-salary Budget and Farogh-e-Taleem Fund. 15 Primary education is also imparted in elementary and high schools. For the purpose of this survey only those primary schools are considered which go up to grade 5. 16 Authors’ calculation based on Annual School Census 2013 database. 17 Education Sector Operational Strategy 2013-17, Government of Punjab
Source: Data from CGA, Authors’ calculation
Figure 8: Education Sector Budgetary Allocation
15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5%
FY 2011-12 FY 2012-13 FY 2013-14
Proportion of Planned Budget Proportion of Executed Budget
Overall Budget Allocation (Analysis at the Sectoral Level)
Allocations for the education sector have been increasing in keeping with its declared priority. The incumbent government in Punjab is now in its second consecutive term in office. Over the past decade, the Punjab government has identified education as one of its high-priority sectors. The government launched the School Education Reform roadmap in 2011 and has developed an Operational Strategy (2013-17) for its implementation. The annual allocation for the education sector has been around 17 percent of Punjab’s total budget for the last three years. The government manifesto before the March 2013 General Election clearly identified education as its single highest priority and has committed itself to declaring an education emergency in the coming years. The sector has witnessed a budget execution rate of more than 90 percent, in the last three years, which is a notable performance across all sectors in the province.
Primary education does not have separate a functional classification in the GFMIS even though it accounts for 48 percent of budgetary allocation within the education sector. Additionally, development expenditures in the area of primary education are wrongly classified under secondary education, making it even more difficult to analyse the primary budget and expenditure. Given its size and importance in the provincial government’s declared strategy, there should be separate classification for this sub-sector in the existing GFMIS18. As a result of this shortcoming, despite the preference to build indicators exclusively for primary education, the study sometimes had to use the overall education sector budget.
Overall, 84 percent of the total sector budget is recurrent, including personnel cost, which are about 78 percent of the total sector budget. The education budget is a mix of different funding streams financed from both the development and the current budget of the province. Except for missing facilities, which are financed from the development budget, all other streams are funded from current side of the budget to ensure uninterrupted fund releases during the year. The district government plays an important part in the provision of primary education and a significant portion of primary education expenditure is accounted for against the district budget appropriations.
Personnel costs are about 92 percent of the total recurrent budget, leaving behind only a paltry amount for the non-salary recurrent budget. The district government was made responsible for the provision of education services by the Punjab Local Government Act 2013. As a result,
18 Operation Strategic Plan 2013-17 has separate output and outcome indicators for primary education and has distinct action plan for primary education outcome.
funding streams flow through different administrative tiers and bureaucratic layers. The administrative expenditures, other than payroll, account for whatever that is left of the recurrent budget, naturally leaving behind almost nothing for the schools’ operational requirements.
Significant increases in payroll expenditures over last few years have greatly squeezed the operation and maintenance expenditures. These expenditures are crucial in terms of service delivery and the maintenance of existing infrastructure. Consequently, the inadequacy of the operational budget may negatively impact service delivery. During the last three years, the government has increased salary of government employees by 15-20 percent per annum. Like the other Pakistani provinces, Punjab primarily relies on fiscal transfers from the Federal Government, while the proportion of its own revenue is only about 16 percent. With the existing fiscal space, the government has not been able to proportionately increase the non-salary budget in line with increases in salaries, thus further diminishing resources for operational expenditures.
One of the mitigating strategies adopted by provincial government to address the dearth of space in the operational budget, under Punjab Education Sector Reform Program (PESRP), was to provide fixed grants to schools on account of their non-salary recurrent cost. These funds were in addition to the student fee collected by the school and are retained in a separate bank account. Schools are allowed to use these funds for their non-salary recurrent cost. During 1990s, the government first introduced School Council with the twin objectives of enhancing capacity of schools and empowering communities to manage school affairs. Under PERSP, the government issued financial management and procurement guidelines, and revived school councils. These fixed grants are transferred directly into School Council bank account to be used for operational expenditure items.
Figure 9: Budget Application
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100%
Investments (Development) Recurrent (Non-Development) Personnel (Non-Development)
The overall budgetary allocations in terms of the provincial GDP are not very healthy. The governing political party, before coming to office, had committed to a particular target in its manifesto, which would allocate 4 percent of GDP to education by 2018. The current sector budget to provincial GDP ratio stands at a meagre 1.9 percent, which is lower than national average of 2.49 percent and significantly less than that of other developing nations.19
The Education Sector Budget is growing but at a declining rate. Since the 7th National Financial Commission (NFC) Award in 2010, the fiscal space for provinces has expanded in which vertical distribution of resources from the Federal to the Provincial level was increased. The FY 2012-13, which was also an election year, witnessed a 24 percent growth in the total provincial budget (inclusive of districts). During the last three years, government budget allocation for education has shown positive growth. The growth rate of 11 percent and 8 percent during FY2011-12 and FY2012-13 respectively are less than the annual salary increase of 15-20 percent during the same years. Given that 78 percent of the total sector budget is personnel cost20, these growth increments have barely covered the additional salary expenditure in these years. During the same period, the government has successfully completed massive infrastructure projects, which have implications for the future recurrent budget. Except for the FY2012-13, the annual growth in total provincial budget is between 1-3 percent; consequently further squeezing the already narrow fiscal space available to other sectors like education.
19 Source: Institute of Statistics 2013, UNESCO and Authors’ calculation. 20 Personnel cost as percent of Total Sector Budget 78 percent; Personnel cost as percent of Total Recurrent Budget 92 percent, Personnel cost as percent of District Total Budget 94 percent, Personnel cost as percent of District Recurrent Budget 95 percent.
Figure 10: Education Sector Budget
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FY 2011-12 FY 2012-13 FY 2013-14
Total Education Budget Growth Rate
DIMENSION 2: FUNDS REACHING SCHOOLS (PRIMARY EDUCATION SUB-SECTOR)
The following section presents an analysis of Provision of Missing Facilities (PMF), SCs and non-salary budget in terms of leakages and delays in ‘Funds Reaching Schools’.
Provision of Missing Facilities (PMF)
The disconnect between planning (provincial) and execution (district) of the development budget makes it difficult to monitor the funds spent. As part of the survey, the study compared PMF budget executed (FY2013-14) at sample primary schools with the available facilities at those schools (survey questionnaire for schools). The information regarding budget executed at school level was not available in the country’s financial management system. Hence, the data for PETS is obtained from the District Education, Finance and Building Offices.
‘Leakages’21 are found in the execution of PMF and it is important to detect their cause as well as the areas where they are most common. Within a sample of 450 schools, expenditure relating to the ‘Provision of Missing Facilities scheme’ was incurred in 52 schools. Out of these schools, 29 did not have one or more of the following facilities: (i) electricity, (ii) toilet blocks, (iii) boundary wall, and (iv) drinking water, although funds have been utilized in these schools according to government record. The total amount spent on these 29 schools (under PMF) was Rs. 46.2 million; the survey revealed that 39.7 percent of this amount (i.e. Rs. 18.3 million), spent on missing facilities, could not be traced in these 29 schools. It was ensured that these schools did not suffer from any flood or natural disaster during the period between surveys conducted and budget executed (the gap was around 12 months). The amount of total leakage or loss could not be determined as the ‘monthly progress report’ is prepared
21 Leakage is defined as the proportion of resources intended for identified beneficiaries that does not reach them.
Source: Survey data, Authors’ calculation
Figure 11: Fund spent on Missing Facilities of Primary Schools -Leakage
- 2.00 4.00 6.00 8.00
M ill
io n
(R s.)
in varied ways and contains different levels of information.22 To illustrate this, we examine the case of schools in district ‘A’. The total budget executed was Rs. 10.4 million but the survey validated the existence of facilities with expenditure amounting to Rs. 5.1 million only. The remaining Rs. 5.3 million was spent as shown in government records but no actual facilities could be found corresponding to that expenditure. Similarly, in district ‘C’, out of a total expenditure of Rs. 11 million only facilities worth Rs. 4.84 million were verified. Therefore, the darker area in Figure 11 represents the risk portion of expenditure, which was not converted into the provision of facilities/services.
The links between planning and actual requirements of the school needs to be stre

Date post:	28-Mar-2022
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Pakistan Tracing the Flow of Public Money

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