Report by Janelle
Cox
SUMMARY
OF WEAKNESSES
Indications are
that there is at the concept level, a process for managing and implementing the public
sector investment programme. However, the system has weaknesses resulting from a lack of
adherence to procedures and committees not functioning as originally envisaged. These
weaknesses have contributed to poor project planning, design, management and
implementation. The authorities at all levels breaching the regulations have further
exacerbated this, which governs the system. The lack of sanctions- to apply at the various
phases, especially implementation, has only contributed to a breakdown in the process.
In conducting some
analysis, it was discovered that revoting of funds amounting to approximately $4.25
million took place on 51 projects for 1996. For financial year 1997, indications are that
revoting of funds amounting to approximately $7.57 million took place on 126 projects.
This represents a 78% increase, in monetary terms, over 1996 figures. This is an
indication of either poor project design and planning, inflating of project costs,
improper scheduling on projects or the lack of institutional capacity to implement and
manage projects.
Analysis of the
budget and the PSIP (1995-1998) reveals that approximately 67% of the budget is
locally funded. It is also these projects which do not undergo any testing or go through
the route of development and appraisal to determine if they are consistent with the
priorities of the government as well as the medium and long-term national and sectoral
plans. In so doing, the government is not in a position to determine if "it is
getting value for money", or to conduct any concrete evaluation to assess if
envisaged benefits are being derived and if the target group has accepted the development.
The institutional
capacity to effectively and efficiently manage the process is insufficient and this is
having a detrimental effect on the entire process. Changes may be recommended to the
system in an effort to improve it, however these changes will have no impact if the issue
of placing adequate and appropriate staff is not also addressed.
General
- There appears to be a lack of
knowledge of the procedures and policy guidelines for the effective operation of the
project cycle management system. It is therefore necessary for these to be re-established
and disseminated by DPU to the relevant officials at all levels. All ministries should be
notified from the highest authority that DPU has responsibility for coordinating and
seeing to the proper functioning of the project cycle management system.
- A review of the various committees,
which oversee project planning, and approval, and financial approval process reveals that
some committees operate at a level which is too high and which should be primarily
controlled by the technocrats. In such cases, the decisions of the technocrats should be
primarily reviewed by these higher bodies and ratified where warranted.
- Staffing constraints and inadequate
skills is a common complaint and is a contributing factor in the improper functioning of
the process. Ministries lack planners and properly trained staff to identify and monitor
projects; the PWD is overburdened; and the DPU cannot accomplish its functions with only
three Economists who are not very experienced in operations of a project cycle management
system.
Specific
- While it is acceptable for projects
to originate and be developed by different sources, it is important for the
planners to be involved in the process In this case, the DPU although being mandated to
develop and appraise projects, is being by-passed by the ministries/agencies who submit an
idea as a project to the ministry of Finance for inclusion in the budget. The Ministry of
Finance should re-direct these new projects/ideas to DPU for consideration. However, they
contribute to the breakdown in the process by allowing the projects to enter the budget.
if this practice continues, the Ministry of Finance will not have the moral authority to
reject projects from executing ministries which breach, the regulations. This practice has
also contributed to the technocrats (Permanent Secretaries, senior officials) not having
an indication as to the point in which a project enters the cycle.
- As a result of the above, projects
enter the budget at any time in the year, often through supplementary estimates. This does
not promote effective nor efficient planning from both an economic, social and fiscal
point and should be discouraged at all levels.
- There is not a formal selection
criterion for projects to enter the PSIP and eventually the budget. Selection criteria
developed by the DPU and based on government priorities should be passed to the ministries
to enable an in-house first round of prioritisation of project ideas by the Permanent
Secretary before they are submitted to DPU.
- Because the projects do not go
through the proper channels, there is an inadequate phasing of projects in the
PSIP, over-utilisation of physical resources, the incapacity of ministries and PWD to implement
projects and the resulting under-utilisation of financial resources.
- There is inadequate project planning
due in part to staff constraints and the lack of appropriate skills within the ministries
and DPU. Projects run the risk of not being consistent with macro/national and sectoral
plans and being poorly designed. Poorly designed projects lead to delays in project
implementation, stated objectives not being met, frequent reformulation and
re-scoping of
projects, as well as time and cost overrun. Time and cost over-run is evident among some
projects currently under implementation.
- A common complaint was the lack of
good project management skills within the ministries and PWD. Some managers are not
properly trained to manage large and complex projects. It was noted that it was the
same-engineers who have to manage and monitor the projects resulting in incomplete project
information, and improper monitoring of the projects. The executing ministries should in
fact be playing a more active role in the monitoring of their respective projects, while
allowing DPU and MOF to do monitoring of all projects at the macro level. It was also
reported that due to staff constraints at PWD, implementation for some projects have been
badly delayed as plans and drawings were not done despite the passage of the initial
start-up date.
- It was found that the lack of
information on projects at all stages of the project life cycle has contributed to poorly
planned and designed projects, unrealistic cash requirements (for both capital and
operating costs) and implementation plans, late intervention when projects are going
off-track and poor utilisation of resources.
- An information system to capture and
maintain relevant data on projects as they go through the various phases of their life
cycle is missing. It is extremely difficult to keep track of all projects manually. The
lack of a formal system can lead to wrong information on projects being used in the
decision making process and a replication of data, often not in the same time-frame. In
this regard, Ministry of Finance has access to the existing Accounting Information System,
while DPU does not and as such is lagging behind in knowledge of expenditure on projects.
This means that the DPU cannot readily advise government on the allocation projects should
receive for new financial/budget year on an ongoing basis.
- There is no standard format for
reporting-project ideas and as such one should be developed. . As previously suggested,
the logical framework used by the EDF is an effective. tool and should be
utilised. The
use of Project Dossiers to report on all projects should be encouraged and be enforced. It
is not satisfactory for the DPU to be the only body utilising this report. A library of
these documents should be maintained for reference purposes.
- Monitoring targets and mechanism
have not been identified in the system. The Ministry of Finance does not insist on a
detailed cash flow and implementation plan as a pre-requisite for receiving funding. If
monitoring targets are done for each project, then it will be easy to identify
work-actually done on a project and the associated cost.
- Project managers are reporting
percentage completion when it would be more accurate to report on the status of the
various components on the projects and the expenditure on each component to date. This
would greatly assist in alerting the authorities when projects are likely to experience
cost and time overruns. This is necessary now as the country is embarking on large,
complex and expensive projects.
- PPRAC appears to be focusing on
monitoring of projects instead of the planning process and the composition of the
PSIP.
PPRAC needs to be refocused and allow the Capital Projects Monitoring Committee to carry
out its function of monitoring capital projects.
- There is reported under-utilization
of funds on many projects. There are instances where more than 70% of funds allocated for
the budget year is not used by the project and so has to be revoted the following
year on the provision of adequate justification. This should not be allowed to continue as
this practice results in the "tying up" of resources which could be better
utilised elsewhere.
- The DPU has suspended preparation of
the PSIP. They should resume the preparation of the PSIP, as it is a valuable tool in
planning and sourcing financing for projects. It is understood that local financial
institution are interested in seeing the PSIP so that they can identify the areas they
would like to fund.
- There is not an integration between
the PSIP and budget to ensure there is not a large gap between financing requirements
envisaged in the previous year and that is recommended as the budget for the up-coming
year.
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