Can the Government deliver?
File pic of farmers in Puttalam. Farmers can be instructed in the application of suitable manure after carrying out soil testing, choice of cultivable crops, selection of best planting material, new technology information, avoidance of waste, conjoining production and marketing by way of a cropping calendar. It is this way that the government can become a real active partner of the farmer.
You can’t improve what you don’t measure! What we want today is development that will raise the incomes and living standards of all the people in this country. The main responsibility of fulfilling this great expectation of the people rests in the hands of the government. People believe that the state machinery consisting of public servants from the lowest rank to the President of the country should be wholeheartedly dedicated to the achievement of development goals.
How best could the public service be assessed?
The first step is to know the work that was assigned and what was expected to be delivered, whether work was done at all, how much work was done and to what extent the quality of work was maintained. Secondly, we should know whether resources allocated for the work were overspent. Not only the objective but how it was achieved is also of equal importance. That is why it is necessary to see whether procedures have been followed.
It is essential that all Ministries, Departments and statutory bodies publish their role and what they are going to achieve with the funds allocated in measurable Key Performance Indicators (KPI). Performance indicators have to be prepared at different levels, national, provincial, district and divisional and at different phases short term and long term. In order to formulate KPIs the budget which allocates resources should be one of Planning, Programming and Budgeting (PPB). An annual work programme based on the budget is a prerequisite for performance review.
The objective of reviewing performance is to ascertain whether the huge state machinery was successful in achieving peoples’ expectations and to take corrective action whenever there is a gap between planned and achieved performance. Due attention has not yet been paid to this crucial aspect of government budgetary control. Attention has instead been paid to the compliance with procedures which fall under the purview of the financial audit the emphasis of which is the input control. However, the achievement of output/outcome is not reported or not emphasised enough. In some cases the output itself is the expected result. In some other cases one must go further to see the result.
Look at the elephant not the mahout’s hook
What now happens is the preparation of a financial report summing up the utilisation of money which is only one of the resources under the command of the entity. This financial report is audited by the Auditor General. Annual monetary allocation is only one key resource provided to activate the enormous resources, comprising human resources, physical resources (buildings, equipment, vehicles, etc) and other resources such as information network, experience, etc. There is no reporting as to how all these resources are utilized. As a result, underutilisation or even complete idling of resources goes unnoticed and undetected.
It is not possible to assess the work that could have been attributable to all the resources accumulated over the years by looking at the work done with the annual budget allocation. Looking at the annual budget is no different to looking at the mahout’s hook (henduwa) instead of the elephant. It is, therefore, necessary to make a significant change to government accounting by introducing a statement of financial position and accrual based accounting similar to those found in the commercial world. A statement depicting the utilisation of all resources by referring to each and every single resource or a group of resources used to generate a given output/outcome must be prepared. This will make it possible to identify any non-utilisation or under-utilisation of assets.
Zero- based budgeting
When government budgeting changed its format into Planning, Programming and Budgeting (PPB) in 1973 under the then Minister of Finance Dr. N.M. Perera the idea was to implement zero based budgeting and to ascertain the necessity and validity of each rupee spent.
But this had not been fully implemented and over time, the essence of PPB was forgotten and diminished and was limited only to a change of terminology. Budgeting has become in general, a function of adding or subtracting a few rupees to the preceding year. PPB can be implemented in its true sense only after drawing up a rational State Organisational Chart.
Government Revenue and Foreign Service
Performance monitoring should not be limited to recurrent and capital expenditure of the government, (the budgeted expenditure of the Ministries, Departments and other institutions). Performance Monitoring should be applied to Revenue Collecting Departments and agencies of the Government. The total revenue that can be collected should be recognised as a KPI and leftovers, mishandlings and siphoning outs should be thoroughly scrutinised.
Another area that should come under the microscope of Performance Monitoring is the external service (foreign service). KPIs in this case will take many facets. In addition to the objectives and goals of diplomatic services per se, targets with regard to export marketing and paving the way for Sri Lankan businesses to enter markets overseas must enter as KPIs. Encouraging foreign investments with annual country specific targets should also be added to the array of KPIs for the Foreign Service.
A National Performance Monitoring Authority (PMA) should be set up by an Act of Parliament. There must be a Parliamentary Committee to receive and review the reports of PMA. The institutional arrangement will be similar in form to that of the Auditor General and the Public Accounts Committee (PAC) and Committee on Public Enterprises (COPE). It would be timely to enact legislation similar to Government Performance and Results Act (GPRA) in the USA.
The PMA report will induce action if it conveys the message that expected results have not been achieved by any government agency. This will encourage chasing after results ending up with a Result Oriented Government. PMA reports will highlight cases where resources are not utilised at all or utilised partially. Because of the PMA intervention it will certainly be possible to achieve all targeted results while at the same time saving substantial amount of resources. The functioning of the PMA should be independent of that of the Auditor General
Economic harvest of welfare expenditure
Motivating government officers to act fast in the best interests of the public is of prime importance. They should be very conscientious of the services to be provided to the public and of the resultant benefits that accrue to the economy. The benefits ad services that a government is expected to deliver to the public are multitudinous. These include Advisory, Regulatory, Health, Education, Law and Order and Judiciary, etc. If these services are provided in an efficient and effective manner the Gross Domestic Product will rise and the expenditure of maintaining the government services should decrease as a percentage of the GDP.
For example, if teaching in schools is up to the expectations, the expenses parents incur for tuition classes are saved. These expenses include not only the tuition fees but the transport costs and the time involved in transport by the elders. The money saved (by non-patronising tuition classes) will then be available for buying commodities and other services leading to an expansion of the domestic market resulting in more economic activities. The biggest gain in the process, however, is the influence it has on the child’s personality who rid of the tuition menace now develops a balanced personality. This would be the greatest achievement we can hope for in this century!
Another example is the agricultural extension services. Running these services at optimum level contributes to an increase of the harvest, meaning increased GDP. Farmers can be instructed in the application of suitable manure after carrying out soil testing, choice of cultivable crops, selection of best planting material, new technology information, avoidance of waste, conjoining production and marketing by way of a cropping calendar. It is this way that the government can become a real active partner of the farmer. The ultimate gains of this partnership will be:
(a) making the continuation of subsidies redundant,
(b) relative reduction of the food prices which in turn makes balancing of household budgets of the city dwellers and factory workers easier, and
(c) domestic market expansion for the industry through rising farmer income.
Downsizing – Not the best answer
Talk about downsizing the government to save costs is too superficial a thinking and it is a wrong conclusion reached from real facts. Downsizing per se, could be detrimental and in our context is not what is expected by a lean government. The fact very often overlooked is productivity. A productive government service will have a multiplier effect on GDP. Sometimes people tend to compare the cost of government service as a per cent of GDP between countries. We should enhance the output of the state services which in turn will be reflected in an enhanced GDP, the denominator of the equation. In other words, what we should target is the productivity of the state sector by improving the efficiency and not just resorting to cutting down the number of state employees.
Years back in the terrain of Bandarawela we carried out a research among the vegetable farmers and inquired from whom they get their advice regarding cultivation. “From the Nattamis (man who does loading and unloading of goods) in the town” was a frequent reply. Say, a certain crop develops a pest and its leaves get discoloured, the farmer treks to town, and consults a nattami who in turn recommends a particular pesticide and directs the farmer to a shop to purchase it. This implies that the project officers and farmers are strangers to each other and the expected services are not delivered. It is the government officer who should take the initiative. These officers should not only be advisers but work closely with the farmers. Otherwise the advisory mechanism simply wouldn’t work and remain non-functioning. Extension officers must be result- sensitive and their service recipients (farmers) must have a role in the evaluation process to which they are subjected to, for promotions and annual increments, etc.
(The writer is a Chartered Accountant and former Additional Secretary – Ministry of Cultural and Religious Affairs during 1994-2000)