List of Abbreviations and Acronyms

TANZANIA PUBLIC EXPENDITURE REVIEW

MULTI-SECTORAL REVIEW: HIV-AIDS

DECEMBER 2006

FINAL REPORT, MARCH 2007

Report prepared by Mick Foster and Rachel Smyth on behalf of HIV/AIDS PER Working Group, TACAIDS, Ministry of Finance and Government of Tanzania

TABLE OF CONTENTS

TABLE OF CONTENTS

LIST OF ABBREVIATIONS AND ACRONYMS

ACKNOWLEDGEMENTS

EXECUTIVE SUMMARY

LIST OF RECOMMENDATIONS

1. INTRODUCTION

2. STATUS OF RECOMMENDATIONS OF 2005 HIV/AIDS PER

3. HIV/AIDS EXPENDITURE AND FINANCING

4. DISTRICT AND COMMUNITY RESPONSE

4.1 Decentralisation and Devolution

4.2 Central Funding of LGA Spending on HIV/AIDS

4.3 LGA Plans and Budgets for HIV/AIDS

4.4 Funding CSOs and CBOs

5. IMPROVING THE ALLOCATION AND MANAGEMENT OF SPENDING ON HIV/AIDS

5.1 Issues to be Addressed

5.2 Improved Government and Development partner Coordination

5.3 Improving Budgeting And Expenditure Management

6. OPTIONS FOR FUTURE AID MODALITIES FOR HIV/AIDS

6.1 HIV/AIDS and Budget Ceilings

6.2 Aid Instruments

Sector Budget Support

Local Government Earmarked Block Grant

Support to CSOs

A Block Grant for Social Protection?

ANNEX 1: REPORT ON VISITS TO DISTRICTS

Hai District

Muheza

Mufindi

ANNEX 2. THE ROLE OF THE RFA

NCL/SACHITA Associates

RFA Kilimanjaro and Tanga region

ANNEX 3 STATISTICAL TABLES

ANNEX 4 NOTES ON STATISTICS

ANNEX 5 LIST OF PEOPLE CONSULTED

ANNEX 6 TERMS OF REFERENCE

ANNEX 7 LIST OF REFERENCES

List of Tables

Table E1: Public Expenditure on HIV/AIDS, and How It Is Funded: Actuals 2004/5 and Future Plans- TSh Billions

Table 3.1: Public Expenditure on HIV/AIDS, and How It Is Funded: Actuals 2004/5 and Future Plans- TSh Billions

Table 3.2 : HIV/AIDS Plans and Budgets, Selected MDAs TSh Bns

Table 4.1 CAG Audit Opinion on Local Councils

Table 4.2 : Transfers to the Districts for HIV/AIDS in 2005/2006, TSh Bns: Mainland totals

Table 4.3 Councils Supported by TMAP and by GFATM Round 3 Year 3

Table A1 LGA Performance Assessment Report for: Hai, Kilimanjaro, Report date: June 2006

Table A2 LGA Performance Assessment Report for: Muheza, Tanga Report date: June 2006

Table A3 :VCT in Muheza: Cumulative from 2002 to November 2006

Table A4 :Muheza District HIV/AIDS Budget and Expenditure TSh Mns

Table A5 LGA Performance Assessment Report for: Mufindi, Iringa Report date: June 2006

Table A6 : MUFINDI Proposed HIV/AIDS Budget 2006/7, TSh Mns

Table 1 Govt HIV/AIDS Spending by Vote TSh Billions Total

Table 2 Govt HIV/AIDS Spending by Vote TSh Billions Development

Table 3 Government HIV/AIDS Spending By Vote-TSh Billions Recurrent

Table 4 Central Government HIV/AIDS Spending By Vote-TSh Billions: MTEF

Table 5 Summary Data by Donor, Tshillings Billions

Table 6: Transfers to the Districts for HIV/AIDS in 2005/2006, TSh Bns: Mainland totals, and case study districts

Box 1: Status of Recommendations of November 2005 PER

Box 2 march 2006 Joint Review – Finance and Administration Milestones

Box 3.1 Purpose of TACAIDS Transfers in 2005/6

Box 4.1 GFATM Round 3

Box 4.2 An RFA View on LGA Plans and Budgets Related to HIV/AIDS

Box 6.1: Simplifying the HIV/AIDS Grant to LGAs

LIST OF ABBREVIATIONS AND ACRONYMS

AIDSAcquired Immune Deficiency Syndrome

AMREFAfrican Medical and Research Foundation

ARVAntiretroviral

CARFCommunity AIDS Response Fund

CBOCommunity Based Organisation

CHACCouncil HIV/AIDS Coordinator

CMACCouncil Multi-sectoral Aids Committee

CDC(US) Centre for Communicable Diseases

CHMTCouncil health management Team

CMOChief Medical Officer

CSSC

DACDistrict AIDS Coordinator

DMODistrict Medical Officer

DOTDirectly Observed Therapy

FBOFaith-Based Organisation

GDPGross Domestic Product

GFATMGlobal Fund against AIDS, TB and Malaria

GOTGovernment of Tanzania

GTZGerman Agency for International Development

HAARTHighly Active Antiretroviral Therapy

HIVHuman Immunodeficiency Virus

IECInformation, Education and Communication

IMFInternational Monetary Fund

LGALocal Government Authority

LGRPLocal Government Reform Programme

M&EMonitoring and Evaluation

MAPMulti-Sectoral AIDS Project

MCMunicipal Council

MCHMaternal and Child Health

MDAMinistry, Department or Agency of Government

MKUKUTAMkakati wa Kukuza Uchumi na Kuondoa Umaskini Tanzania

MNHMuhimbiliNationalHospital

MOECMinistry of Education and Culture

MoHMinistry of Health

MCDGCMinistry of Community Development, Gender and Children

MLYDSMinistry of Labour, Youth Development and Sports

MSDMedical Stores Department

MTEFMedium Term Expenditure Framework

MUCHSMuhimbiliUniversityCollege of Health and Science

NACPNational AIDS Control Programme

NGONon-Governmental Organisation

NSGRPNational Strategy for Growth and Reduction of Poverty

OIOpportunistic Infection

OVCsOrphans and Vulnerable Children

PEPersonal Emoluments

PEPFAR(US) Presidents Emergency program for AIDS Relief

PERPublic Expenditure Review

PLWHAPeople Living with HIV/AIDS

PMTCTPrevention of Mother to Child Transmission

POPSMPresident’s Office, Public Service Management

PORALGPresident’s Office, Regional Administration & Local Government

RFARegional Facilitating Agency

SIDASwedish International Development Agency

STDSexually Transmitted Disease

STISexually Transmitted Infection

TACAIDSTanzania Commission for AIDS

TB Tuberculosis

TOT Training of Trainers

UNDP United Nations Development Programme

UNICEFUnited Nations Children’s Fund

USAIDUnited States Agency for International Development

USGUnited States Government

VCT Voluntary Counselling and Testing

VMACVillage Multisectoral HIV/AIDS Committee

WHO World Health Organization

WMACWard Multisectoral HIV/AIDS Committee

ZAC Zanzibar AIDS Commission

ACKNOWLEDGEMENTS

A team made up of Mick Foster of Mick Foster Economics Ltd of England (UK) and Rachel Smyth of TACAIDS undertook the HIV/AIDS PER update for FY06. The work was funded by Swiss Development Cooperation.

The consulting team would like to thank the HIV/AIDS PER Working Group members for their guidance and support. The team would like to thank all the stakeholders – government, donor agencies, NGOs, CBOs and FBOs – for their time and information regarding HIV/AIDS interventions within their areas of jurisdiction and beyond. TGNP and REPOA provided constructive comments on the first draft.

Particular thanks are due to Milton Lupa of TACAIDS, who accompanied us on the district visits, and to Fundi Makhana and colleagues in the Accountant General’s Office in the Ministry of Finance, for generating the data on Government expenditure on which much of the report is based. A similar debt is owed with regard to data on donor expenditure to the External Aid Department of the Ministry of Finance. The authors alone are responsible for errors of fact or interpretation in the use of the material, and for the opinions expressed.

1

EXECUTIVE SUMMARY

Introduction

This is the fifth public expenditure review on HIV/AIDS. Unlike previous PERs, the main focus was on the district and community response, including short visits to three districts (Hai, Muheza, and Mufindi).

Status of Recommendations of the 2005 PER

Last year’s PER made over 30 recommendations, but they can be grouped into eight main themes:-

1. Establish an effective annual process to direct Government and donor resources towards filling priority gaps in the NMSF;
2. Increased priority to prevention, and to the district and community response;
3. Clarify roles and improve coordination between MOH/NACP responsible for health, and TACAIDS responsible for overall coordination and the multi-sector response;
4. Improve TACAIDS communication and information retrieval;
5. Make longer term and more predictable aid commitments;
6. Launch budget support for HIV/AIDS, including allocation of funds to LGAs through the budget, based on objective criteria;
7. Decentralise planning and budget responsibility, with TACAIDS withdrawing from involvement in the details of fund use by MDAs and districts with respect to MAP and GFATM funds;
8. Review the approach to monitoring and evaluation.

We return to most of these themes in the recommendations of this report, but we do not directly address monitoring and evaluation or the problems of weak communication and information retrieval. The monitoring and evaluation issues are being tackled with new and effective technical assistance, but dissemination of information remains a major problem. This should be a core function of TACAIDS, but each HIV/AIDS PER has suffered from the lack of systems in TACAIDS for collecting, storing, and retrieving hard or soft copies of key documents. The problem is exemplified by comparing the largely empty TACAIDS web-site with the informative and up to date PMO-RALG and Finance web sites.

Overview of HIV/AIDS Expenditure and Financing

Development partners accounted for close to 90% of total public expenditure on HIV/AIDS in 2005/6. PEPFAR alone accounted for 59% of public spending on HIV/AIDS. Total (Government plus donor partner) expenditure had been expected to nearly double in 2005/6, but actually increased by a little less than half, though Government recurrent spending nearly doubled. Spending is expected to continue to grow strongly in 2006/7, with donor indications consistent with a further 77% increase on 2005/6 levels. Total expenditure (including donors off-budget spending) was equivalent to roughly 5.6% of Government spending in 2005/6, and may reach 8% of Government spending and over 15% of expected Government revenue in 2006/07 (Table E1).

Table E1: Public Expenditure on HIV/AIDS, and How It Is Funded: Actuals 2004/5 and Future Plans- TSh Billions

Actual 2004/05 / Budget 2005/06 / Actual
2005/6 / Budget
2006/7 / MTEF
2007/8 / MTEF 2008/9
Estimated Total Public & Donor Expenditure on HIV/AIDS / 148.47 / 291.78 / 226.8 / 390.3 / 219.6 / 189.9
Total HIV spending as a % of:-
Total Govt Spending / 4.56 / 7.52 / 5.63 / 8.05 / 4.57 / 3.63
Total Revenue, / 8.37 / 14.12 / 11.0 / 15.9 / 7.9 / 6.0
Nominal GDP, / 1.14 / 2.02 / 1.65 / 2.49 / 1.33 / 1.09
Spend p.c. $ / 3.79 / 7.32 / 5.69 / 8.56 / 4.97 / 4.14

MOH and TACAIDS represented 95% of budgeted and 97% of actual spending in 2005/6. Some of the TACAIDS spending represents moneys transferred to other MDAs and to districts. Attributing TACAIDS transfers to specific MDAs would alter the picture a little, though the total spending by other MDAs would remain a tiny fraction of the total HIV/AIDS effort. Community development was the only other MDA that spent remotely near to the sums envisaged in the strategic plan. Even with some additional support from TACAIDS, the Ministry of Education continues to make slow progress in implementing the important scaling up that has been planned. We were unable to fully clarify spending by defence, much of which is financed with US support off budget, or the police, for whom the same comment applies.

Improving The Allocation And Management Of Spending On HIV/AIDS

No progress has been made in establishing an effective framework for annual planning, budgeting and review of HIV/AIDS spending, other than some limited coordination within the health sector.

The preparation of a revised NMSF to start in 2007/8 is an opportunity to address the issue. This requires:-

1. Sufficient consultation to ensure that those who are expected to provide the bulk of the funding are comfortable with the process for preparing the new NMSF and are committed to supporting the resulting framework.

1. An NMSF that has a much clearer link between output targets, the allocation of responsibilities for achieving them, and the programming of the required Government and donor resources. This does not mean top-down planning, and indeed an increased share of resources should be budgeted and managed by local authorities under their own discretion, but within policies established by Government.

1. A more explicit annual work plan and budget process that aims to steer both Government and donor resources towards the under-funded priorities of the NMSF. This will need to accommodate the restrictions within which some donors have to work, while using the more flexible sources of funding to ensure that the overall allocation of resources is in line with national priorities.

1. Closer involvement of NACP and the large donors supporting health sector spending on HIV/AIDS. The USG in particular should be encouraged to exert an influence within the development partners group that reflects the importance of their financing. The proposal for the US to assume the role of lead donor is a welcome move in this direction.

District And Community Response

The recent public expenditure and accountability assessment confirmed that public expenditure management by the districts has steadily improved, as reflected in the scores obtained in independent annual assessments and in the share of LGAs with clean audit reports, while the main problems they experience stem from unpredictable funding from the centre.

Government policy is to decentralise and devolve more responsibility to local government, with the role of the centre focused on policy, facilitation, capacity building, and monitoring. This is not happening with respect to HIV/AIDS. TMAP and GFATM Round 3 have been the main sources of funding of LGA budgets. Funding has been unpredictable with respect to both timing and amount, and decisions on what would receive funding have been made by TACAIDS rather than reflecting locally selected priorities. The geographical distribution of funding has also been highly distorted, with a third of districts receiving no funding from either GFATM or TMAP.

It is ironic that the least problematic programmes of support appear to be those using parallel project procedures to provide largely in-kind support to council programmes. There is a marked contrast between the arbitrary approvals, unpredictable timing, and lack of consultation that characterizes those programmes coordinated by TACAIDS, and the joint planning, avoidance of interruptions in treatment, and good follow-up that was reported to us in respect of the project support to the care and treatment plans. The usual objections of high transactions costs and lack of institutional sustainability exist, but instruments that are better harmonized with national processes will only be preferred if they succeed in generating a predictable flow of resources.

The intention in 2006/7 was to address these problems by introducing a new conditional cash grant to fund planned HIV/AIDS activities within LGA budgets. The proposed allocations were based on the health basket formula, and included in the Budget Guidelines issued in March 2006. The district MTEFs produced following the issue of the budget guidelines are the first real opportunity to judge the capacity of councils to produce prioritised HIV/AIDS plans and budgets because, as far as we are aware, this was the first occasion when LGAs were informed of the ceilings within which they should be planning. Although the districts we visited may not be representative, their plans seemed in general reasonably well focussed, with a strong emphasis on economic and social support of OVCs and PLWHAs . Even if other districts are weaker, however, the process of having predictable resources with which to plan and budget would help them to improve over time.Unfortunately, the proposed conditional block grant for HIV/AIDS was not included in the eventually approved budget, and no funding for implementing the plans has been received, damaging further the already minimal credibility of the budget process.

In the three districts visited, CMACS, WMACS and VMACs are in existence and actively involved, with a strong focus on economic and social support to both OVCs and PLWHAs. The CSOs are adhering to the agreed national process by which Village councils identify most vulnerable children for support, and everyone we met stated that the process is effective in identifying those households in greatest need, and prioritising very limited resources towards them.

Although many of the activities are happening at ward and village level, the procurement and fund management appears to be centralised at the district. School fees are paid direct to schools, other forms of support tend to be procured by the district rather than cash being provided to ward or village level. It seems probable that there are some inefficiencies as a result.

Funding CSOs and CBOs

Districts are not funding CSOs from their own budgets, but are closely involved in working with the RFA on allocation of the CARF, and appear to be well informed as to CSO activities. In the districts we visited, the main complaint by the MACs at all levels was that it is sometimes difficult to focus CSO activities on the priorities as perceived by the communities, and there is a desire to be more in control of the allocation and monitoring of public resources channelled via CBOs and CSOs. The CSOs complained at the short-term nature of the funding they received from CARF and the RFA, making it difficult to sustain services to cohorts of PLWHAs or school-children. PEPFAR projects try to ensure continuity even where projects are re-tendered, though in Mufindi there appear to be some teething difficulties in communicating the follow-on arrangement to CSOs.

The RFAs have a dual role of administering grants, and building capacity of local authorities and of CSOs. With each RFA having just a handful of staff to cover two regions, neither role can be performed cost-effectively. The RFA is an expensive mechanism for disbursing funds to CSOs, costing almost $1 for each $1 disbursed. Cost-effectiveness might be improved if more funding was channelled via the RFAs, but other donors have opted not to use the RFAs. Meanwhile, the capacity building role is undermined by the need to focus on managing disbursements. Training has so far focused on grant-related training in writing proposals and managing funds, with most of the training very short term (rather dismissed by council and CSO staff as ‘seminars’ rather than training.) The ability of the RFAs to carry out functions such as vetting CSOs and appraising and monitoring projects is both limited and highly dependent on drawing on the resources of the districts, with key tasks delegated to ‘assessment teams’ drawn mainly from the council officials on the CMAC.

It is intended that the responsibility for financing CSO interventions for HIV/AIDS will pass to the LGAs at the end of the three-year RFA contract period[1]. To enable this to happen, we recommend:-

1. From 2007/8, earmark a share of the district block grant for support to CSOs, for an initial period until councils acquire the habit of directly financing CSOs and CBOs.
2. Making it as easy as possible for LGAs to contract CSOs, by amending local Government financial regulations in order to include explicit procedures adapted from those developed by the RFAs.
3. Defining the support and monitoring role of the Regions, and the staff required to exercise it.

HIV/AIDS And Budget Ceilings