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PUNJAB MUNICIPAL SERVICES IMPROVEMENT PROJECT

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PUNJAB MUNICIPAL SERVICES IMPROVEMENT PROJECT Financial Aspects Graeme Lee, SASEI THE PRESENTATION The presentation has three sections: An outline of devolution in ... – PowerPoint PPT presentation

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Title: PUNJAB MUNICIPAL SERVICES IMPROVEMENT PROJECT


1
PUNJAB MUNICIPAL SERVICES IMPROVEMENT PROJECT
  • Financial Aspects
  • Graeme Lee, SASEI

2
THE PRESENTATION
  • The presentation has three sections
  • An outline of devolution in Punjab, Pakistan
  • Discussion of the proposed Punjab Municipal
    Services Improvement Project
  • Links with the National Improvement in Accounting
    and Reporting (PIFRA)

3
LOCAL GOVERNMENT IN PUNJAB, PAKISTAN
  • Devolution established by the Punjab Local
    Government Ordinance 2001 (PLGO)
  • The PLGO created District, Tehsil, and Union
    Councils, and allowed for Citizen Community
    Boards
  • Its overall objective to bring decision taking
    and accountability for services closer to
    citizens

4
RESPONSIBILITIES
  • Education and health functions were devolved to
    District Councils
  • Water Supply and Sanitation services were
    devolved to TMAs
  • Union Councils were set-up to provide grass
    roots political functions
  • A Framework was established for Citizen Community
    Boards to undertake local projects on a cost
    sharing basis

5
TEHSIL MUNICIPAL AUTHORITIES (TMAs)
  • 122 TMAs now exist in Punjab
  • Each comprises urban AND rural areas
  • Typically the TMA is located in the largest
    town/city, but includes other urban centers
  • It has often inherited some staff from the
    previous town/city government
  • Hence it has a core of relatively experienced
    local government officials

6
TMA SERVICES
  • TMAs provide municipal services such as
  • Water Supply and Sanitation
  • Solid Waste Management
  • Streets, street lighting and drainage
  • Parks and open spaces
  • They also are responsible for regulatory
    functions such as
  • Enforcement of municipal laws
  • Land use, sub-divisions, and zoning
  • Prevention and removal of encroachments

7
SOURCES OF FINANCE
  • TMAs are funded by
  • Own Revenues, such as water charges, fees for
    activities, and an annual property tax (collected
    by Provincial/District government)
  • Grants, for revenue and development purposes,
    including a grant in lieu of octroi, which was
    abolished by Federal Government in 1999

8
OVERALL FINANCIAL STATUS
  • TMAs earn a surplus on recurrent accounts, which
    is applied to development
  • The proportion of own revenue to total revenue
    varies. A small sample shows a range of 29 to
    71
  • Service standards are usually poor, partly due to
    a lack of basic infrastructure and partly due to
    inadequate OM

9
THE PROPOSED PROJECT
  • Intends to address service delivery standards
    head-on
  • Each TMA will make an informed choice about
    what service standard to improve
  • It will then become eligible to receive a

    performance-based matching grant to support
    implementation of its improvement plan

10
THE MATCHING GRANT
  • The grant would finance a proportion of the cost
    of physical investments, and/or
  • The full cost of capacity developments
  • It would be available in annual rounds, with
    eligibility initially based upon the quality of
    an application, and subsequently on performance
    in achieving the agreed performance improvement
    outcome

11
FINANCIAL CAPACITY IMPROVEMENT
  • TMAs have different initial capacities the
    quality of leadership, manpower, local wealth,
    natural resources, all vary
  • The type of assistance to develop financial
    capacity also varies
  • TMA finance staff often request training but
    sometimes this is in the application of
    regulations rather than in financial management

12
ANTICIPATED NEEDS
  • These vary from assistance to apply the basic
    regulations of the LGO to introducing
    computer-based information systems
  • Improved budgeting, with linkages to Development
    Plans
  • A move towards service costing is seen as
    essential to aid efficiency
  • Better management of the process of contracting
    out revenue collection services

13
PIFRA
  • PIFRA is a nation-wide effort to improve
    Government financial reporting and auditing
  • Initially it was focused at Federal and
    Provincial levels, but it now includes local
    government
  • In Punjab, the PLGO explicitly states that TMAs
    need not keep accounts as prescribed by the
    Auditor General till such time the adequate
    capacity is developed to conform to the national
    accounting system

14
PIFRA and The Project
  • So far the project shall not attempt to address
    this impasse
  • This decision limits TMAs ability to develop
    cost accounts
  • A follow-up PIFRA project includes a component
    specifically for TMA accounting
  • There are some indications that PIFRA II will be
    asked to resolve the problem soon

15
SUMMARY
  • So the municipal services improvement project
    intends to allow TMAs to choose their own
    interventions
  • A clear focus on the standard of service, and a
    way of monitoring progress is essential
  • It intends to benefit the users of local services
    by improving the outcome of TMA activities
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