PUBLIC EXPENDITURE TRACKING STUDY

REPORT FROM PRICE WATERHOUSE COOPERS

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~..~L.""'~'~rt .f' uDL1L .t.AY£i~j)l fURE REVIEW:
HEALTH AND EDUCATION FINANCIAL
TRACKING STUDY
CONTRACT REFERENCE TANI06/4
VOLUME I - DRAFT FINAL REPORT: SUMMARY OF
OBSERVATIONS, CONCLUSIONS AND RECOMMENDATIONS

:YIARCH 1999
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" .:' rY"PENDITURE REVIEW: HEALTH AND EDUCATION
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VOLUME 1- DRAFT FINAL REPORT - SUMMARY OF OBSERVATION~
CONCLUSIONS AND RECOMMENDA TIO~S MARCH 1999 -
.- ..".
I Introduction 3 ~:

II Resources disbursed trom central government and donors to district councils 9 ,::
III Sources and management of resources at district councils .18 -
IV Sources and management of resources at primary schools 27
V Sources and management of resources at health facilities 34
VI Summary of conclusions and recommendations ""'" ..44
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Volu.",e J Health al/d Educalion Fmal/clol Tracicmt Srudl- . Summar\! of Observations. Conci'llsrons and RecommendotlOn!

Acknc".,r)edgements
I
This voJume reflects the results of the health and education financial tracking study
undertaken by PricewaterhouseCoopersbetween December 1998and February J999.
The team from PricewaterbouseCoopers responsible for th}s study wishes to. express their
appreciatien to the many individuah who. asststed with the work. Panicular thanks are due
to Mr P Lyimo (Treasury). Mr A Msangi (Treasury). Mr R Mukumbu (Ministry efHealth).
Mr 0 Mtey (Ministry of Regional Administration and Local Government) and Mr M
Machare (Ministry of Education and Culture) for their kind assistance with our initial
research, participation during the surveys and for information and advice offered
throughout the study.
The consultancy was commissioned by the Government of the United Republic of
Tanzania (GoT) and Department For International Development (DFID) of the British
Government. However, the views and recommendations expressed in this repert are solely
those of the consultancy team. and both GoT and DFID bear neither responsibility nor
commitment to this re ort.

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'1""0":', of ObservatIOns.
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. .- ConclusIOns and Recommendations

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J :;8T recognises that concentrating its limited resources in primary education is likely
to produce the greatest social returns and economic gains; specifically, that high quality
primary education contributes towards poverty reduction and promotes human
development. Since the mid-nineteen nineties GoT's commitment to these goals has been
demonstrated by substantial allocations as percentage of education sector resources being
allocated to basic education (see Table 1.1).
.
T able 1.1- BaSlc e d IIcatlon Sh ares 0f t h e e d ucatlon sector pu brIC resources
:
199~/95 1995/96 1996/97 1997/98
I
I
Actual Budeet I Actual Budeet Actual Budeet I

299.733 310.177 320.446 434.336 383.184 479.485

GoT total recun-"entand development expenditure' I

! I
i (jrand total cducation expenditure - TShs million 84.776 79.098
i 79.165 I 91.515 I 95.467 106.947
i
Spending on education as a % oftoul recurrent and 26.41%
I
i 27.33% 24.68% 21.07%
i 24.91% 22.30%
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dcvelopment expenditure i I

Basic education - TShs million 49.174 I 54.298 51.602 59.197

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I . 68.895
II
I I
I Basic education - as a % of total 62.1% ! 64.0% 65.2% 64.7% I - 64.4%
Source: Cnited Rcpublic of Tanzania. Public Expenditure Rcview July 1998 - Volumes I and II

2 In addition to the GoT allocations to education specified above, over the past few
years the sector has continued to receive considerable support from donors. It is estimated
that actual donor flows to education in 1996/97 totalled TShs 12.7 billion 1.This amounts to
13.3%ofthe total actual expenditure on education.
3 In the health sector, although GoT's policy is to shift priority to primary health care
(PHC), recent data indicate that hospitals still receive a substantial share of the health
sector's resource envelope. Specifically, PHC services (delivered at health centres,
dispensaries and districts) were allocated 41% of the total health budget (TShs 42.3 billion)
for 1997/98.
4 However, "donors have been willing to fund salaries and running costs for
preventative and PHC services..2. In particular. a survey undertaken during the 1997/98
Public Expenditure Review estimated that in 1996/97 donors allocated TShs 12.8 billion to

1
A Survey of Donor Flows To Tanzania - 1996197 - 2000/01
:
The Cmted Republic of Tanzania - Public Expenditure Review. Jul\" 1998

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Volume I- Hf!aith and EducclInn FU1o"riai jracklnfl Study -Summapv ofObser-vQlmns. Conci"mons orW Recommenc:;/iOl'ls t

health pr(:'grammes of whic'i 82% was for p"ev~r.t:.::\"ese:-vices. Donor resources cllocaled
in 1996/9i \Vere 28. 7~Gof ~rle :G~al health bucget.

5 However, despiTe the fact that GoT and donors have over the years allocated and
disbursed considerable fur,es to the social sectors, the impact of these resources is barely
discernible. For instance:
. Net primary enrolments declined from 6&% in 1980 to 48% in 1995 and the number
of primary school children selected to Form One dropped from 29.2% at
independence to 7.7% in 1997.
. In the health sector, "despite the progress achieved since independence and the
recent favourable growth experience Tanzania's social indicators present a dismal
picture. The infant mortality rate of 84 and the under-five mortality rate of 134 are
significantly high". Moreover, "average life expectancy is estimated at 51 years and
the total fertility rate is 5.8,,3.
P Furthermore, a poverty profile undertaken in 1993 indicated that the "35 percent of
those living below the absolute poveny line, the so-called "hard-core" poor, have received
no education whatsoever as compared to 19 percent of better off people"".
7 Evaluations undertaken in the health sector have concluded that the majority of
health problems can be attributed to the continued occurrence of preventable diseases.
"Community-based studies and provider reports indicate that virtually all major health
problems of infants, young children, and other vulnerable groups in Tanzania are
preventable. Major diseases affecting populations include malaria, HIV/ AIDS, respiratory
infections, water-borne and water washed diseases, such as typhoid, cholera and dysentery,
and parasitess". These outcomes suggest that the poor are not accessing public resources
and facilities.
8 At a practical level there is concern that budgetary allocations at the centre do not
translate to corresponding improvements in the flow of resources at service delivery units.
Another perspective centres on the problems of management and utilisation of resources at
the service delivery unit level, which may hinder the realisation of the anticipated impact
from the allocated resources.
9 Nevertheless GoT is committed to increasing the flow of resources to districts and
primary service delivery units with a view to improving quality and access to public
resources. In the light of the problems of centralised management and control of resources,
GoT has instituted a number of initiatives.

"'PID for the Tanzania - Health sector Reform Project, ~farch 1997
I
Tanzania Role of Government. - Public Expenditure Review, June 1994
~ Social Sector Strate!!\'

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-. (vernment Reform Programme (LGRP). This medium strategy

~ c! principles including the need to:

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instead enhance decision making at the local level so as to foster a framework
that provides quicker and better responses to problems. Allied to this, "the
directory of powers of central government vis-a-vis local councils will be
restricted to legal regulation with local government's decisions,.6.
. Promote local participation and inclusion by civil society.
. Ensure that local authorities observe the tenets of good governance by ensuring
that there is full accountability and transparency to the people.
. "Balance between equity and efficiency" during the resource allocation process'.
11 A key reform under LGRP that is well underway is the enhancement of financial
management processes at local government levels through increased autonomy over the
management of resources and performance. As of 1 July 1999, 35 "Phase I" Councils will
receive block grants from central government. Block grants will be used to finance the
recurrent costs of services (in health, education, agriculture, roads and water sectors).
Grants will be conditional only to the extent that they will be dedicated t9 a particular
service. Less emphasis will be placed on the control of inputs. Instead greater focus will be
placed on meeting pre-determined minimum standards of service.
12 Initiative 2 - The second category of initiatives, Sector Development Programmes
have also tried to address these problems by changing institutional frameworks for the
management of service delivery units. For instance, the Health Sector Programme is
promoting closer accountability at service delivery units, including the establishment of
district health boards, local committees and the direct channelling of donor funds to service
delivery units. In addition, modalities are being put into place to increase efficiency in
resource use and improve risk sharing. In this regard, it is expected that from I July 1999
GoT will introduce 50 percent cost recovery with respect to drugs prescribed in district
hospitals.
13 Piloting with community funds is being tested in education. Specifically, a matching
grant programme for primary schools has been designed to increase enrolment, the quality
of schooling and promote parental and community involvement in the mobilisation of
resources and monitoring school performance.
14 Initiative 3 - The Ministry of Finance is considering a major shift in its expenditure
framework. The ministry recognises that the traditional system of public sector financial
management which concentrates on inputs does not lend itself as an effective tool for

~,
Policy Paper on Local Government Reform, October J998
:\ Vision For Local Government In Tanzania- A Repon on the National Conference on "Towards a Shared Vision for Local
Government in Tanzania", Held at the While Sands lIotei ~lav 1996

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 -
VoLume J Heaith and Edl/cation Fmanciol Trock:ng SllIdy. SlImma,,' ofObse"'ol/on!. CO/'lclu!lon! and Recommendation!

making informed spending decisions nor does it help public sector managers to focus on
resuhs. .A.SG conseauence.
.. it is difficult to make imDJemt:i!:ng al!encies throughout
. .. - - -
governmem accountable for results. In the light of these constra~ms the Ministry of Fir.ance
is taking steps to improve financial integrity, program efficie:1cy and effectiveness within
the public sectOr through the introduction of performance budgeting. It is ant)cipated that
this new framework win emph:asise the imponance of planning by ensuring tbat agencies
can align budgetary resources witb desired outcomes and goals.
15 Many of the above initiatives may not bear significant outcomes unless the sy\tems
and mechanisms for the flow of funds between the centre (Ministry of Finance and donors)
are rationalised and streamlined to ensure efficiency, transparency and full accountability
of resources disbursed. In this context, there is a school of thought that leakage in the
systems of flow of funds from the centre to the service delivery points significantly
account for the apparent shortcomings in value for money currently obtained from public
expenditures on education and health. This is the subject of this study.

The financial tracking study

16 This study has been commissioned against the above background. Our Terms of
Reference require us to:
. Review previous studies of various budgetary formulae for the flow of,
allocation and control of resources for primary health and education to districts.
. Appraise alternative financial management, tracking and audit systems including
ongoing work by the Local Government Reform Task Force and district based
education! health support programmes.
. Undertake surveys at a district and service delivery unit level and ascertain their
ability to adequately spend and control resources.
. Ascertain the degree to which guidelines developed and issued from the centre
impact on decision making at a local level.
. Establish discrepancies between allocations and actual expenditures, and their
causes.
. Appraise the usefulness of financial reports particularly in assisting in the
identification of discrepancies.
. Conduct an institutional assessment with a view to identifying capacity building
needs in areas relating to financial planning, tracking and audit.
. Recommend any actions needed to ensure allocation and expenditure
,.
consistency.

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j methodology

. Identified the various mechanisms for allocating and channelling funds for
primary education and health. In addition, we interviewed a number of
stakeholders (in government, donors and NGOs) and where available collected
disbursement data.
. Developed survey instruments, which we used to track resources disbursed
under the various mechanisms to sample districts and service delivery units, In
addition, in the sample districts we undertook an evaluation of financial
management systems and institutional capacity.
18 Our survey scope was limited to three districts Kiteto, Kondoa and Hai, which are
respectively located in Arusha, Dodoma and Kilimanjaro regions. Three factors influenced
our decision to select those districts. First all three districts are included in the
government's ongoing Local Government Reform Programme.
19 The second factor was accessibility. The three regions share borders. Kondoa and
Kiteto are only 130 km apart. The distance between the two districts and Arusha is longer
(300 km) but still manageable. This facilitated better co-ordination of our enumerators.
20 The third factor is that they vary in terms of econ'omic circumstance, geographical
area and population. Hai District is considered the most well off economically. Whilst Hai
District's geographical area of 2,168 square kilometres is smaller than the other two, its
fairly densely populated with an estimated 240,000 inhabitants. On the other hand Kiteto a
relatively new district is the poorest one in our sample. Kiteto is also vast covering a
geographical area of 16,865 square kilometres, and sparsely populated with 120,000
inhabitants. Kondoa's economic wealth is somewhere in between the other two. It has
400.000 inhabitants spread over a geographical area of 13,200 square kilometres.
21 On the basis of om analysis of the results of the survey in the three districts, we have
made generalised obser\'ations and conclusions concerning the order of magnitude and
trends in the flows and management of financial resources to districts and service delivery
units. We wish to emphasise that our sample of districts and service delivery units is not
statistically representative. Therefore, our observations and conclusions do not have
statistic merit. Nevertheless, as conceived at the time of the survey design the sample
coverage provides a broad framework for deducing the order of magnitude of problems
and issues in the flow and management of resources to districts and service delivery units
in general.

Organisation of the report

22 We present our report in two volumes:

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flo!"",., J . Health and EducotlC" Fmonclol Trockmv. Study. Summary o[ObserwJ//ons. Conclusions and Recommeruiotions

. Volurne 1 - A S:;mn:a:,}'of Observations, Conclusions and Recommendations.

. \".oluliJe 2 - S1:~\,9~), Res:.:l::.

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 .'~I Tracking Study. Summary ofObserva/lons. ConclusIOns and Recommendations

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23 Our review of the systems and procedures for the flow .of resources from the centre
(MoF and donors) revealed that there are four mechanisms used for disbursing funds:
. Mechanism 1 - Subventions to district councils to meet recurrent expenditure
with respect to activities in the primary education, health, road and water sectors.
. Mechanism 2 - Amounts disbursed for development expenditure (construction
and rehabilitation of health and school facilities). Disbursements for
development expenditure are channelled to districts via the Regional
Administrative Secretariat.
. Mechanisms 3a and 3b - Disbursements to the Ministry of Education and
Culture (MoEC) and Ministry of Health (l\:loH) respectively for centrally
procured goods (e.g. examination papers, drugs and vaccines) which are
subsequently distributed to districts.
. Mechanism 4 - Disbursements made by donors via the two ministries for a total
-~J'\. of fifteen major programmes.
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',-,-w'" ',:::-,'3 24 \Ve set out the resulting data on disbursements under the various mechanisms above
:'L-Sk-."() in Table 2.1. In the remainder of this section, we describe the key features of each
mechanism.

i\lechanism 1 - Subventions for recurrent expenditure

25 From the information that \ve have been able to collect so far, subventions to district
councils are by far the highest amount received under the four mechanisms described
above (see Table 2.1). Subventions to district councils are classified as "protected
expenditure". Specifically, the Treasury has undertaken to ensure that budgeted allocations
to district councils and approved by the National Assembly are released in full and not on
the cash budget basis which is applied to ministries aRd regional-estimates!!.

M
'Ille government has been endeavouring to a.:hieve fiscal discipline through the introduction of a .:ash budget system. One of the
ramil1cations of this is that disbursements bear little relation to voted expenditure. Cnder the next two mechanisms therefore. we have
not analvscd disbursements against budgets in much detail.

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 VoZ;;iniI. Heajlha~ii Educa/l.on FinancIal Trackmf! Slud),:. Summa,,:,' OrObSC"W11IClI!, Conclusion! and Recommendallons

26 In 1996/9i, 1997/98 2nd 1998/99 budgeted subven:ior.s 10 all dis~:-ictsin Tanzania

amoumed 10 TShs 81.993 mil!ion, TSb~ H,38: miHion and TShs 104,560 million
respectively.
T..blc 2.1 - Disbursements made undcr four mechanisms

FiA:mciaJ "ear end rrShs '0(0)

31.12.96 I 31.12.97 I 3J.12.98 30.06.97 I 30.06.98 30.06.99'

~kcltanism 1 - Subventions 0 I 0 0 84.152.034 10\.165.020 43.414.720

,
\-Ie:hanism 2 - Do:velopment 0 0 0 12.142 762.185 0
; ~xpo:nditure I0

~!.:chanism 301 - Education. 0 0 0 400,000 424.046 457.410

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C~ntrall\' nrocuro:d 200ds I

~k.:hanism 3 -Ikalth. 0 I 0 0 4.500.000 7.440,000 4.000.000

Ccntrall\' procured I%oods.. I I

~Icchanism 4 - Donor 0 680,472 936.095 3,691,560 4.138.749 566.825

prOl!Tammes in Education
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i \t.:chanism 4 - Donor 971,739 1.263,073 .,215.169 5,094,791 2,548,011 4.104.224
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~ol!Tammes in Hcalthll
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,I Tolal 971.739 I 1.943.545 2.151.264 97.850.527 116.478.011 52.543.179

Source: ~!inistry of Finance. Sector ~Iinistries and Donors

27 In Table 2.2 below we provide an analysis of resources allocated to the health and
education sectors under budgeted subventions in 1996/97, 1997/98 and I998/99.

9
Data provided covers the period from I July 1998 to 31 December 1998.
10
Excludes Shinvanga Region data for 19%/97 and Iringa Region data for 1997/98, as appropriation accounts could not be found.
II
Data lor tho: vear ended 31 December 1996 for one programme in the health sector was not available at the time of writing this repon

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Education

~O.O6.97 ! Education 81.983 58.207 71% 52.617 90% 5.590 10%

.10.06.9K I Education 88.382 68.370 77% 65.684 96% 2.686 4%

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Health

~()()6.97 Health 81.983 18.180 22% 11.696 64% 6,484 36%

~O.O6.98 I Health 88.382 12.967 15% 94% 832 6%

30.06.99 I Health 104.560 14.706 14% 94% 838 6%

S»urce: Budget estimates

28 Over the last three years there has been a growing imbalance between resources
allocated to personnel expenditure and other charges. In the case of the education sector,
which receives the bulk of subventions, the greatest proportions of allocations go towards
the financing of teachers' salaries 12. The relatively .low allocation for other charges is
mainly set aside to purchase school materials; meet the costs of administering standards
four and seven examinations and pay for catering expenditure.
29 Allocations for health indicate a similar split to those for education. The only
exception is in the year ended 30 June 1997. Until 30 June 1997, district councils were
responsible for procuring their own drugs and vaccine supplies. In 1996/97 a budgeted
subvention of TShs 5,200 million was provided for drug and vaccine procurement
However, it is our understanding that the Treasury and other stakeholders in central
government identified that these funds were being diverted to other uses. It was therefore
decided to transfer responsibility for resources to MoH.

i:
Primary school teachmg requirements arc determined using a stream-based formula. Other charges should be allocated on the basis of
a standard cost per pUpIl. However, with the introduction of budget ceilings amounts allocated to other charges tcnds to be a residual
amount

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Ji..:-
Vol...",e I- Heal:h and Educal10n Fmanclol Trackml! Sludv. Summon' o(Obse,-vollom, ConciuSlonS'and RecommendatIOn!

30 The data on disbursemems that we co!!ected during this stUdy jndica!e that aggregate
subvemions were funded in full for the fina:1cid yea:-s ] 996/97 and 1997/98;3. In fact
amounts disbursed were higher th~n bucketed amounts by 2.7c;,oand] 3.5% in 1996/97 and
1997/98 respectively (rete~ 10 Table 2~})1';. Treasury provided for this higher level of
funding by issuing reaHocalion warrams from unutihsed ministerial supply votes to
Regional Administrative Secretariats' votes.

l\1echanism 2 - Development expenditure

31 For development expenditure (Mechanism 2), which is disbursed via Regional

Administrative Secretariats, less than 50% of budgeted allocations for local government
projects were funded in both 1996/97 and 1997/98. In panicular, out of budget allocations
amounting to TShs 1] 2 million and TShs 1,920 million in ] 996/97 and] 997/98
respectively, only 10% and 40% of the budget was funded in each year. Although
disbursements in 1997/98 were well below budget estimates, they represented a dramatic
increase over the previous year's disbursements.

Mechanism 3a - Education - Centrally procured goods

32 District councils also receive allocations of centrally procured goods (in-kind
contributions) from the social sector ministries. For primary education the Treasury
allocated around TShs 400 million each year to MoEC (Mechanism 3). MoEC disbursed
amounts to the National Examinations Council (NEC) as a subventjon. 1\TEC used
subventions to set, moderate, print and distribute, mark and process examination papers. In
1997/98 and 1998/99 NEC:
. Produced 1.7 million and 1.4 million Standard VII examination papers
respectively at a cost ofTShs 146 million and TShs 156 million respectively.
. Arranged for the distribution of papers to Regional Education Officers
throu!Zhout Tanzania at a cost of TShs 77 million and TShs 43 million
respe~tively 15.Thereafter, Regional Education Officers allocated and distributed
papers to their respective district councils. Allocations were based on
registration data (on the number of candidates to sit for examination) collected
from schools prior to printing.

I]
The nex't section provide a more detailed analysis of disbursements against budget by region and for the three districts included in the
survey
14
Amounts disbursed are likely to have been higher than approved estimates because the July salary awards are not included in the
hudget
15
We have not as vet been able to ohtain a breakdown ofNEC's expenditure on primarv education for 1996197

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 .,.'~ -: Sns 201 minion and 258 million on marking and processing results.
.
- <;:sincurred during this stage included allowances for markers, stationery and
) expenGlture

. ':,chanism 3b - Health - Centrally procured goods

33 Since 1996/97 the Treasury has allocated resources for the procurement of drugs and
hospital supplies to the MoH (Mechanism 3b), The Medical Stores Department offers
revolving credit facilities to MoH. In each financial year MoH was therefore able to
procure drugs and hospital supplies worth more than amounts disbursed by the Treasury
(see Table 2.3). As at 30 November 1998, the government owed the Medical Stores
Department TShs 4.7 billion for drugs and hospital supplies procured on credit
34 Under this arrangement two types of medical kits are procured for health centres and
dispensaries, blue kits and yellow kits respectively. The Medical Stores Department
distributes kits to each district's medical store. It is each district council's responsibility to
arrange for kits to be distributed to health centres and dispensaries. Each kit is expected to
last for a month. For accounting purposes the Medical Stores Department maintains
individual accounts for all district councils.
35 A different arrangement applies to district hospitals. MoH allocates a block amount
to each district hospital. District Medical Officers in-charge of hospitals can procure drugs,
vaccines and other hospital supplies from the Medical Stores Department up to the
allocated amount. The Medical Stores Department distributes orders to Zonal and/or
Regional Stores where hospitals are required to arrange for their collection. For accounting
purposes the Medical Stores Department maintains individual accounts for all district
hospitals.
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!
: (TShs 'lICit)) 1996/97 I 199719R 1998/99'.
! :.891,037 4,037.820 1,570.090
i Drug kits t(,r h~alth ~~ntr~sand dispensaries I

I
I 3,925,479 4,868,000 1,819.000
Ii Drugs and mcdical suppli~s for regional and district hospitals

ITShs milli<)fJ'I I
I
I 6,816.516 8.905.820 3.389.090
i Tmal ,,,cnt I

Source: ~lcdical Stores Dcpartment

I'criod to 30 :-\ovember 1998.

"

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 -
~'olume J Healln and Ea-ucallor. .C'monc/Qi7!"dtiffn1! Sluliy - Summc'V ofOb~ervo/lon~,
'"
Conci:'!lon~ ond"RecommendOllons

Mec:hanism 4 - Donor programme disbursements iB educarioB and

bea Ith
36 During the financial tracking study we also undertook a survey of alternative
fi.nancial management, tracking and audit systems used by donors (Mechanism 4), We
looked at nine programmes it} the heahh sector and six programmes in the education
sector. Programmes are run centrally by the health and education ministries and have
variety of objectives as shown in Table 2.4 below,

Healtll Child Survival

. Contribute to achieving the country programme goal of
reduced monality by improving the quality and utilisation of
Protection and
basic health services for children and women
Develo mem

Tanzania Food and

.. Ad\'ise government on all matters penaining to food
Disseminate food and nutrition infonnation to the public
Nutrition
.. Conduct research in matters relatin to food and nutrition
Eradicate polio by the Year 2000
Nationallmmunisation
Davs

National Aids Control

. Control the spread of AIDS by: providing extended
information; promoting a multi sectoral approach involving
ministries, NGOs and communities; and ensuring that
resources are channelled to re ional and district levels

Primary Health Care

. Decentralisc hcalthcare expenditure

Services

National Tuberculosis
. Contribute toward tllCimprovement of health and thc well
being of the nation by reducing the occurrence of TB and
and Leprosy
leprosy cases until they are no longer a public health problem
Pro rarnme
Pharmaceutical
. Ensure constant availability of drugs and medical supplies in
public health facilities
Support
. 1m rove harrnaceutical services countrvwide

Expanded Progr.unme
. Reduce childhood morbidity and mortality through the
pro\'ision of vaccines against the six immunisable diseases -
on lmmunisation
Tuberculosis. Measles. Polio, Tetanus, Whooping Cough and
Di htheria

Community Health
. Start a prepaymem scheme that would enable the rural
population to have greater security of access to health care
Fund
. Empower households and communities in health care
decisions
. Promote cost sharing with strong local participation
. Provide a stimulus to local health care roviders

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c"ny documenlslhcalth and Cdu"UOII financial trackU1B .rudy\6naI reportllina! report.doc

 ""'~ "

.. -~::!' SIU~\I' Summary o[ObseMlalions. Conclusions and Recommendallons

i-ro ram me name:

. :- ';'~:::-2;jon
Education Co-
. Decentnllise the selection and procurement of educational
materials to districts! schools
ordirunion
~('~yv,!~
,. ~._,~ ,~_.~.~.

Book Management
-.'
h.'_'--

._u- ~~',:""''''C\'~ :"'.h\"~i.::a] faciJjtje~

"-"""-"--'~'~.~.' ~--
ar ~e!ec~-;~

Plan and co-ordinatethe provisionof educationalmaterials to

t'r1m2~'

schools and colleges

. Ensure that the quality of educationalmaterialsmeets

International
. exoected standards
Promote conditions which would enable the government to
progressively regulate. restrict and prohibit child labour with
Programme for the
iI a view to bringing about observance of International Labour
Elimination of Child
I
Organisation standards on minimum age admission to
II Labour
employment and work
!
"
.
'
I
District Based Support
to Primary Education
. Improve quality and access to primary education
Improveperformanceof district education.staff. teachers and
i pupils in targeted districts through supporting quality
I interventions
Child Survival
.. Improveprimary school enrolmentrates
Increase primary school completion rates
Protection and
Development
Community Education
. Increase enrolment
community involvement
quality of schooling and parental and
in monitoring school performance
I Fund
37 The institutional and administrative arrangements with respect to programmes in
health and education are fairly similar. We describe them in brief as follows: . <

. Nine out of fourteen of these programmes have set-up special units (based in
ministries) to run the initiatives. Between 1 January 1996 and 31 December 1998
such programmes spent an estimated TShs 1 billion on local cost compensation
on programme staff salaries (see Table 2.5).
. The Child Survival Protection and Development Programme is administered
centrally by a special unit at UNICEF.
. All programmes except the Expanded Immunisation Programme maintain
special accounts with commercial banks. Donor (DANIDA) funds for the
Expanded Immunisation Programme are channelled through the Treasury. The
Treasury informs MoH that funds are available by issuing a Warrant of Funds
and Exchequer Issue in the same way as it. does for disbursements from
internally generated revenues.
. Most programmes maintain fairly simple manual accounting systems. For
instance:

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 Volume 1 - Health and Educa/lon Financlo! TrocklflR StutJ.v - Summa~' ofObJenlal/ons. ConclusIons and Recommerl/:Jo/ions

The National Aids CORtrol Programme maintains a simple receipts and

paymems bookkeeping system. In addition programme per~onne~ maintain a
simple cash book for each donor to enable tnem to report on receipts and
utilisation on a donor by donor basis.
Similarly, the Book Management Unit u~s a spreadsheet package to record
cash receipts and payments. Spreadsheet data are extracted monthly,
quarterly cmdannually and used in report preparation.
. Other programmes use more sophisticated accounting systems to record, control
and report on resources received and expended. For example, The National
Tuberculosis and Leprosy Programme is in the process of computerising its
accounting system. An off the shelf package "Platinum" has been procured. It is
anticipated that the new system will comprise a flexible report writer to meet the
requirements of MoH as well as those of various donors supporting the
programme. This package is being introduced to all government departments as
the standard government accounting system.
38 Ten (67%) of the programmes surveyed have disbursed funds and/or in-kind
contributions to districts over the last three years. Out of the TShs 15.2 billion and TShs
10.0 billion disbursed (between 1 January 1996 and 31 December 1998) under the above
programmes in health and education respectively, local councils received cash worth TShs
5.7 billion. In addition local councils received in-kind contributions (e.g. drugs, vaccines,
educational materials etc.) worth TShs 10.9 billion (refer to Table 2.5).

J.;~(;;.;.
--:,"-"""

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e\my documcnlSlhcaJth and .due.bon finan~I.IIr..king stUdylfinai ,cponltinal,.pan.doc

 HOr.~ .. ~
. ~
- -.- -<-.-,.-

..
-
':::"-'"'110:' ~" dassification

TShs '000 % of total TShs '000 % of total

i I I expenditure I expenditure
i
j Expenditure incurrcd bv special units: I I

i Local cost compensation I 913,411 6% I 218.364 2%

!, Subsistcnce allowanccs 1.118.846 7% I 5.280 0%

'I Travel expcnses I 130.544 I 1% 478.145 5%

I
! T rainin!! 434.115 30;{) 95.401 1%
I
: Fumllurc and cQuipment 120.984 , 1% 85.719 1%
\ I
: I

: Construction!
II I
n:habilitatlOn I 240.00R I 2% I 10.703 0%
i
: Monitorinl! expcnses I 33.873 I 0% 95.401 1%
,
I Consultancv and audit 323.875 I 2% I 115.714 1%
I
\ Office sundrics 214.143 1% I 8.703 0%

I
i Othcr 341.436 I 2'1/0 534.139 5%

I Total expcnditurc incurred bv special units 3,871.235 25% I 1.647.569 16%

I
In-kind contributions to districts: I I

I
-- : Dru!!s and vaccincs
r---
4.522,147 30%
I
0 0%

C old chain operations , 3.321 I , 0% I 0 0%

! ()
Cold ~hain,,'quipmem 3.945 0% I 0%
I
I
! Educational materials 262.875 2% 6.019.645 60%
i
i Distribution costs I 64.18] 0% I 212229 2%
I
I! T IIta I' 10- k''10 d contrl 'b' utlOns to d"IstrlCt5 , 4.856,469 32% I 6.231.874 62%
i
! Cash disbursemcnts:
i
I I
I Cash disbursements to districts I 3.576.050 I 24% I 2.134.257 21%,
I I
I
Cash disbursements to rc!!ions I 2.893254 19% I 0 0%

i Total 43%
I
cash disbursements I 6,469.3114 2.134.257 I 21 %
: Total 15.197.008 100% 10.013.700 100%

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 -
Volume / Heal,h and Educallon FinancIal Tracking S,udy -
Summary ofObservallon:s. ConclusIons and R~commendolions

III Sources and mana2ement of resources at district

"-
councils

Introduction
39 The objectives of the survey of sources and management of resources at district
councils were to ascertain the potential sources of revenue available to district councils;
and examine control systems in place to safeguard the utilisation of, accounting for and
accountability over resources. In this section we set out the key survey findings
(highlighted in italics) under four headings:
Potential sources of revenue.
Utilisation of funds.
Accounting for funds.
Accountability.
40 In addition we set out recommendations to resolve key issues in bold and italics.

Potential sources of revenue

41 Our survey results indicate that district councils in addition to revenue from their
own sources have four potential sources of revenue: government subventions; development
expenditure; donor contributions; and parental contributions.
....

Government subventions
42 Subventions from central government constitute the major source of funding for
primary health and education in districts. Our survey results show that such funds were
deposited in each district's miscellaneous or deposit account. We further noted that as
subventions were deposited in aggregate to cover the four priority sectors (health,
education, roads and water), the most common practice was to transfer personnel
expenditure allocations and other charge allocations to the relevant sector accounts.
43 On the basis of our sample survey, we confirmed that monthly subventions were
disbursed to district councils in fu//. However, we noted one instance over a six month
period where disbursements made were understated by 0.8% (refer to Volume II - Tables
Al and A2). However we consider that this understatement is immaterial.
Development expenditure
44 The survey revealed that government disbursements for development expenditure to
districts are intermittent. The districts covered by the survey did not receive any
development funds in financial year 1996/97. In 1997/98 councils received amounts
ranging between TShs 4 million and TShs 7.4 million. However funds disbursed in
1997/98 were received towards the end of the financial year. At the time of the survey no

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 ..
',,,,a')' o.(Observallons. Conclusions and Recommendalions

.~. ... .
.
. .'
mem planS. :=\gamst tnIS
.'''''" :m:;r.g we recu:.
. .. C)~, ~ ..;~ ri:::
n",..di(~t{Jble h.. ~ d'
!' 01'('''.''''1 (>!1r should make m".'(' co"r,.;,1:u':'"''''

45 It is also significant that councils were not aware and Ministry of Finance could not
clarify if there is any objective criteria in the allocation of these funds between different
councils. In this conte.:"t therefore we recommend that the 1\.1inistryof Finance should
have transparent and objectl1'e criteria for the allocation of development funds.
Donor disbursements
46 In addition to subventions, donor contributions (from the centre combined with direct
donor disbursements) were the next major revenue source. The results of the survey
indicate that:
. Direct contributions from donors. NGOs and charitable organisations for
education and health to districts constitute on average 63% and 33%
respectively of other charges disbursed by central government.
. Donor cOlllributions from the cel1lre for education and health on average
constilllte 55% and 51 % qf other charges disbursed by central governmelll.
47 However we noted that direct donor colllributions appeared to favour better off
districts. In particular. the poorest district from the survey had the smallest contribution
from donors. Between 1996 and 1998 the poorest district surveyed received as little as 1%
and 9% indirect and direct donor support to health as a percentage of other charges
disbursed by central government. In view of the donors' commitment to combating
poverty they should collaborate between themselves and GoT to ensure that the
economical(v wor.'ieoff districts are priority beneficiaries of their contributions.
Parental contributions
48 For most districts the Universal Primary Education (UPE) levy is the only charge by
district cOllncils OIlparellls. In this respect district councils, surveyed on average retained
57 % of CPE contributions. On average UPE retained by the district councils amounted to
29% of government subventions for other charges.
49 In one of the districts covered by the survey however we found a sports levy, which
every pupil pays to the council through the schools. This levy was about TShs 1,500 per
pupil, \vhich is 50% higher than the UPE levy.
50 The MoEC policy is that beginning 1 January 1997 councils should nO! take any
parental contributions, especially from the lJPE levy. and that contributions should be
retained at schools. However, this policy directive has been ignored by most if not all
district councils.
51 The councils do not appear to recognise the authority of MoEC. However they
recognise the authority of the Ministry of Regional Administration and Local Government

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 I'ol..me J . Health and EducatIon Flnancla! Trackm9 Study. Summary' ofObservollofls, ConclusIOns aM Recom",endallons

(MRALG), Therefore we recommend that l\loEC with clear support from JHRALG
clarifies ami ensures compliance wiriiitJ policy ml parental JeJ'ies with respect to two
aspects:
. Reiterating that UPE levies are to be retained in s.chool~.
. Specifying, what proportion of spons or any other levy should be remitted by
schools to the councils.
Councils' own revenues allocated to education and health
52 the survey resulrs show that councils' own revenue resources constitute on average
18% oflOlal subventions and own resources (see Table 3.1).

; Re\'enuesource

Subventions for nditure 76%

Subventions for other char es 6%
;
Councils' o\\'n revenues 18%
; Total subvcntions and own resources 100%

Source: Volume II. Tables A1.1 and B1.2

53 Nearly half of those revenues are collected from taxes and user charges (see Table
3.2).

:
Table3.2- ContributlOn to own sources bv revenue catCl!orv
Revenue catc20rv ..
. .1...
Avera~ccoritributjon to total districtl'evcnue
Rates and Taxes I ~~%
Cess I 18%
Licences 6%
Fecs 22%
Fines 1%
i User chaqres 4'Yo
,
Propenv sales 3%
Investment 1%
i Miscellaneous 1%
;
, Total 100%
Source: Volume 11. Tables AU and BI.2

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C"/1IY docwnellls'h:alth and edue'bon tinane..i U.ekln~ 5!UdyI611a1 ",panlf , repon.doe

 .
-
, , districts covered by the survey do the councils use any of their own
(" ...;"" rH1dhealth activities. This result is consistent ~~th a previous

.
ocal ~.

councus ana their reasonabienes~. however, lhe fact lhat locai councus nave responslDHuy
for the delivery of several other services (e.g. community development and agricultural
extension services) which are not funded by central government is likely to result in
additional demands for the limited resources available.
. 56 Nevertheless it has come to the knowledge of the survey team that some districts in
Other parts of the country are making significant contributions to education and health
financing, and especially in promoting and supporting community initiatives. In the spirit
(~f supporting sw.tainahle social and economic development, councils should be
encouraged to earmark a proportion of their own revenue sources to support
programmes in health and education.

Utilisation of subventions

57 The Ministry of Finance disburses funds to districts on a monthly basis.

Disbursements are made in two tranches, one to meet personnel expenditure and the other
for other charges. Each tranche is aggregated to cover the education, health, water and
roads sectors.
Subventions to meet personnel expenditure
58 Subventions for personnel expenditure are based on the payroll, which is
administered at the centre. The Ministry of Finance transfers amounts to councils based on
the payroll. The council in-turn makes cash payments to employees.
59 The survey revealed the level of uncollected salaries in districts, as a perce11/age of
persollllel expenditure is low. In particular, on average the level of uncollected salaries
(over a six month period) as a percentage of personnel expenditure disbursed was 0.24%
(refer to Volume 11Table A1.3).
60 It is however significant that under a cash payroll system there is considerable scope
for payilll! ghost workers. This has previously been confirmed under the Civil Service
Reform Programme. Although the Civil Service Department has over the last four years
sustained efforts and achieved positive results with regard to control of personnel numbers,
expenditures and the elimination of ghost workers, this problem has by no means been

I0
D.:c~nlralisalion of Education and the Role of Education Managers in Tanzania - J.C.). Galabawa.October1993

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Volume I- Heal;h ond Educotlol'! FinancIal Tracking S:udv -Summo1".' ofObserWJllons ConcluSions and Recommendol,ons

removed]8. In fact this is going to be a continuous chaIJenge for personnel expenditure

comrols bOth at the cemre ~nd a. disuict counciis.
61 The implication of this is that \vith the current cash based system for salary payments
the risk of diversion to pay ghoSt workers wiU remain. The problem could get worse when
the councils assume responsibility of the payroll unless effective payron systems are
implemented]9. In this regard therefore it is imperative that:
. Councils move towards a bank-based system for the payment of salaries to
minimise cases of fraud
. Steps are taken to ensure that the internal controls for personnel e.xpenditure
are not undermined during the process of decentralisation of the payroll.
62 Evidence from the survey suggests that most teachers and health workers are paid
on time. Specifically the average percentage of employees that receive their salaries on
time in education and health are 59% and 64% respectively.
63 However in districts which cover large geographical areas, personnel employed at
stations away from the district councils tend to experience delays in receiving payment.
Our survey data shows that 011average sllch personnel spend up to three days a month
chasing salaries. Further, in extreme cases personnel can spend up to ten days a month
chasing salaries. Measures should be introduced to minimise tlelays in paying salaries
and avoid wasting 1'aluable resources.
64 The survey results also indicate that 50.3% of employees in the education and health
sectors have olltstanding salary arrears. On average salary arrears per employee are TShs
58,954. Arrears primarily relate to promotions (43%), transfer expenses (29%) and unpaid
leave (13%). According to the Ministry of Regional Administration and Local Government
district councils throughout Tanzania have on at least two occasions submitted reports on
arrears to the centre. However, to-date arrears do not appear to have been paid.
65 This is a serious problem not just for teachers and health workers. In the 1998/99
budget GoT has provided for salary arrears payments worth TShs 10 billion in the civil
contingency fund. Since teachers and health workers constitute about 50% of the payroll
the amount in arrears could be as much as TShs 2.5 billion. In this context therefore, we
recommend that government institute measures to eliminate current arrears.

IS
The ongOing Personnel Controls and Information Systems Project has recently compiled an interim personnel and payroll database
which eontams thirteen core data items. The database is expected to provide useful management information on personnel that was
rreviously not available. However this benefit may not e:\1end to district councils when decentralisation takes place.
9
We understand from the Local Government Reform team that in order to maintain a reasonable level of control during the transition
period council will continue to utilise central pavroll preparation on a bureau type basis.

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c \my documenlS'l1ealth and educ:allon financial tr..kU1g sl\ldyl6nal reportl6na1 repon.doc

 Of'.

. :;,..C,"..,~ , ofObservalions. Conclusions and Recommendations

~ A. .~ > -
< .' -"",ary
-

'. P'" u..~H aM. mamlenance expenditure (other charges)

Government provides subventions to meet other charges for the four priority sectors.
- -....'.:-:,:,:-~mer.t ~!2.T'Jning
. -""
DersDective the hi!.!hest amounts ........
-
gO to education
. . iollowed by health (24%). However, the survey indicates that once the funds are
u~rv~1Ied in the coffers of the district councils the matter of priority sectors is forgotten.
This is partly due to the fact that the Treasury rarely provides a breakdown of how
disbursements for other charges should be allocated.
67 During the survey we estimated the proportions of subventions for other charges
which were due to health and education items if councils were to allocate the funds
according to the priorities reflected in the national budget. The results of the survey suggest
a significant diversion offimdsfrom the priority sectors and items (see Table 3.3).
68 On an overall basis the survey suggests that:
. In education about 41% of thefimds due for other charges are diverted and as
much as 57% on a weighted average basis.
. In health on an overall and weighted average basis about 88% of thefimds due
for other charges are diverted.
Tablc 3.3 - The extcnt to which disbursements
.
for othcr char"cs are
. .
divcrtcd to othcr uses
. ... .. .
f'f?fd~~allo~~~i~nactuitU~K%o:?:ff~n~s p~s.si~ l~:di"c rtcd '"
. ..:" ... ..H ..':
Education ..i. H/soent "H''''

School matcrials 87% 13%

Catering 32% 68%
Examination expenses 57% 43% ",-; .
/~ K;'
() u
O\'crall a\'crat!e 59% 41% J

Wci!!htcd a\'era2e 43% 57%

Hcalth'
:
.
I
Hospital supplies 17% 83%
Hospital dict 7% 93%
O"crall a\'cra"c ,
12% 88(J!o
Wei2htcd a,'cra2e 12% 88%
Sourc~: \'olum~ II. Table A!.6

69 This result is consistent with the results from:

. The audits of donor programmes described in the previous section (mechanism
4) in which the diversion of funds was reported in 4 programmes (26% of the
programme surveyed).

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Volume 1- Heallh and Educarior: Fmer. -
:! Tracking SIUQV Summary o(Observallo1lS. ConclusIons and Recomm~ndallons

. A previous study, which found that "some education grams, especiaHy the per
capita grams, are divened to other non-educational expenditures,,2o. One of the
reasons that has been given for non-compliance is that "there .are no incentives
for efficiem use of grants nor are there disincentives for inefficient users".
However, ar:other reason for non-compltance may be that councils require the
resources to meet other obligations.
70 With respect to the possible diversion highlighted above there is need for better
guidance from the centre on how to prioritise other charges. Under the ongoing Local
Government Finance Reform Project there is a proposal that the Ministry of Finance
disburses block grants via a special account administered by the Ministry of Regional
Administration and Local Government (MRALG). So far a framework has been developed
that outlines disbursement and monitoring processes. To compliment this effort, we
recommend that:
. Information requirements amlflows between ministries and to district councils
and monitoring arrangements are specified. This includes for example:
The documentation to be provided to districts to ensure that they understand
what disbursements relate to. In this respect we noted earlier in this section
that current documentation used by the Treasury to notify Accounting
Officers of fund releases is not comprehensive enough. We believe that
more detailed information should be generated to support each
disbursement. Such information should specify: the sector-grant category;
amount to be disbursed; and details of cumulative disbursements. This
information would also be of use to sector ministries
The reports to be generated by MRALG. For instance we understand that
MRALG will have the power to withhold disbursements to districts if they
fail to comply with laid out procedures. To promote good cash flow
management and transparency, it will be important that MRALG keeps
the Treasury informed of any balances resultingfromfumls with heltl.

In-kind contributions from the centre

71 Regarding textbooks, we confirmed that there were no significant holdings of

inventory in district council stores. We found that most textbooks had been distributed to
schools. We noted that the only textbooks that had not been distributed were outdated due
to changes in the curriculum. We also found some drugs in the district stores which had
expired. Our findings suggest that there are no significalll incidences of poor storage or
utilisation of what is received in kind.

cO
D~centralisation of Education and the Role of Education Managers in Tanzania - lC.J. Galabawa. October 1993

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 ~" .',U::..a.iV'."'U
-

.
f'xpenditure

...2... ..i./:;Dursements for development expendilllJ:e reach district

:.:~,ui.~Dursemems appear to be used for their intended purpose, which is to
.
. .. .,' :~'1d healthfaci/ities.

Accounting and accountability for funds

73 The survey confirmed that most district councils:

. Are not keeping complete records of their transactions. In this regard:
Cash books for example are not updated to reflect the receipt of funds. The
absence of complete and/or accurate records raises serious concerns as to
the accuracy and completeness of financial information produced by the
district councils and therefore compromises their ability to be fully
accountable.
We are of the view that poor record keeping is exacerbated by inadequate
supervision by District Executive Directors and Treasurers who are often
not aware of backlogs.
. Have weak internal colltrol systems. This includes the fact that cash book
balances are not reconciled to bank balances and the failure to produce
appropriate financial statements.
. Have weak accounting capacity. Capacity for accounting and financial
management in district councils appears to be low considering that in the three
councils visited there were no qualified accountants.
. Are !lOt subject to any monitoring. In this context 1\1RALG and the other
ministries do not undertake an active role in monitoring the performance of
councils in terms of both financial performance and technical output.
. Are /lot subject to regular audits. Our survey findings indicate that capacity
constraints in the Controller and Auditor General's (CAG) office have resulted
in audit backlogs21, This combined with a failure on the part of district councils
to submit financial statements to the CAG have reduced the levels of
accountability at a district council level.

:1
However. we understand that recently the CAG had made efforts to complete the audit backlogs. In paru.:ular the most recent audit
report issued hy the CAG covers the audits of si"..y- tour local authorities for financial periods ranging between 31 December J993 and
:\ 1 Decemher 1996 .

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~.
~olume J . Health Qna Edt/callol'! Fmanclal Traclcm.~ Studv. ~",mar.. ofObservaTJOns. ConcillS/ons and RecommendaTions
."..-.

74 It is noteworthy that the survey findings are consistent with:

. Audit findings from the fifteen programmes surveyed in health and education
(mechanism 4). Specifically, record keeping at a district council was reponed to
be inadequate for 8 programmes (53% of the survey sample). For example, the
audit report on the National Aids Control Programme for the year ended 3 1
December 1996 identified that no registers were maintained for recording
imprests and advances. Another example is the District Based Support to
Primary Education, which identifies the maintenance of stock records as a
weakness.
. A recent review of financial management capacity in Phase I councils, which
only rated three councils (8.6% of councils) as high in terms of their financial
management capability22. Interestingly all three were municipal councils.
Moreover most rural councils (66%) received a low rating. A "major area of
weakness identified amongst the low scoring councils was the lack of up to date
bank reconciliations". The report goes on to say that "in several cases these are
completed only at the year end".
75 Some of the issues identified during the survey have been incorporated under the
ongoing Local Government Finance Project as follows:
. MRALG plans to provide district councils with technical backup. It is
envisioned that technical support will be organised into zonal and regional
teams. Teams are expected to train and support finance personnel in the Phase 1
councils.
. A standard simple to implement accounting and finance system has been
designed for use by Phase I councils. These proposals are currently under
discussion among the various stakeholders. It is anticipated that once agreement
is reached, reports will be incorporated into a training pack and accounting
procedures for the Phase I councils. In addition, stakeholders will receive
training on how to use the reports.
76 To enforce compliance by councils we recommend that the CAG po.uibly with the
support (~rlocal(v contracted profe.';sionals undertake the following:
. Clear tlte autlit backlogs.
. Conduct a sun'ey of maintenance of internal controls by district councils.
. Conduct periodic surprise and interim audits.

::
Local Government Finance Reform Project - Rcview of Local Authority Financial Management Capacity. Price Waterhouse -
December 1998

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 . -., ... lees and management of resources at primary
-
~ L <") 1". , C

u',:erView

77 In this section we set out the key survey findings (highlighted in italics) and
recommendations (highlighted in bold and italics) on the sources of resources available to
primary schools,
78 Major sources of resources for primary schools are government subventions and
donor contributions disbursed through the district council, direct donor contributions to
schools and parental contributions at primary schools.

Resources from central government and donors

79 The survey of primary schools revealed that with few exceptions there are no cash
disbursements from central government or local councils or donors. The in-kind
contributions from government and donors take the form of:
. Teachers.
. School materials largely financed by donors.
. Parental contributions.
Teachers
80 Teachers constitute one of the most significant contributions to primary education.
The survey revealed that on average the Pupil to Teacher Ratio (PTR) for the districts
surveyed is equivalent to the national average PTR of 1:37. :3
81 At the same time the survey results indicate significam disparities in PTR between
schools. In the sample surveyed the school with the:
. Lowest PTR of I: 10 had seventy-nine pupils enrolled, eight teachers and three
classrooms. This school is located in the wealthiest district.
. Highest PTR of 1:145 employed one teacher. The school was opened in 1998,
but had pupils enrolled in standards one to six.
82 The survey suggests that it is generally the case that the nearer the school 10 the
district headquarters the lower the PTR and this is a major factor (see Table 4.1). A

:3
Basic Statistics in Education - 1997. Ministrv of Education and Culture. June }998

(27)
"'~""'"
Volume I . Heallh and Edwcallon Fmanclal Trackmg Study - Summon" ofObservallons" COl'ICluslons and RecommendorlOns

.
conseauence of this is that teachers in mOTe remote areas tend to have a heavier teachinsz
-
load"
Table 4.1 - :\\'era1!e PTRs cate!.!orised/b\' dista.nce from districts' headouaners

I...Distance from dist.ricts'. ..

! head uaners(Krns)/
I Less than 30 27 26 28
Over 30 41 42 43
Source: Volume II. Table DI.7

83 The disparity in PTR is more significant in terms of the location of the school from
the distric: headquaners than it is between districts. This conclusion is panicularly
significant because until now the issue of deployment and efficient utilisation of teachers
in Tanzania has focussed on district comparisons24,
84 While there is a large PTR disparity between districts there is a greater disparity
between schools" This may explain why there would be political pressure from districts
with relatively low PTRs for more teachers. In fact the survey results revealed that districts
with high PTRs were generally not the beneficiaries of newly recruited teachers in 1997. In
panicular, our survey suggests that some needy schools have benefited from the
deployment of newly qualified teachers, especially in those cases where teachers were
responsible for more than one class.
85 Another imponant conclusion from the survey results is that the inefficient
deployment of teachers the most significant government contribution to primary education
has a high degree of waste. In this context for example, the survey team came across cases
where IlOschooling was taking place at all (see Box 4"1). In addition, the survey team saw
other cases where there are more teachers than classrooms resulting in loul reaching
hours"
Box 4.1 - 1m act of inefficient teacher de lovment
I

i One school \'isited is located 56 km from the district headquaners. The school has a PTR of I:52. seven
I streams. employs 4 teachers but only has 2 permanent classrooms. The schoors management has built four
makeshift classrooms using cOITUgatediron sheeting. In addition multi-shirt-teaching methods are practised
'
' for Standards I and II. However. at anyone time at least two classes do not ha\'e a teacher" Further. when any
I
of the teachers arc absent from the school students are told not to bother allending until their return"

86 On the other hand rhe survey team came across particularly commendable efforts by
school management in terms of initiatives and innovations in making the best of a bad
siluation. For example in one school located 138 km from the district headquaners there
are five teachers and five classrooms available for the 244 pupils enrolled in eight streams,

~~
This issue of PTRs. efficiency and d~plo~ment of teachers in district comparisons is discussed in several documents including PERs
and Education Sector documents

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<'Jny doc,un.n"lh.aJth and .dueauon financial tJaekU1~ ,rud)'\finaJ rcport\6na1 ,.pun.doc

 , ,~;"d,v. Summary o;ObservarlOns, ConclusIons and Recommendalions

0-
'" ---"'" lb''''''''.!':

-w~;' i and IV.

Q- D - c;ed on the issues identified during the survey we recommend that the
, ,~. r,
l..
'

. Institu'tes measures to rationalise teacher deployment. In this context it I:Y1ay

be
necessary for the government in addressing the issue of efficient use of teachers
to change focus from inter-district to intra-district and inter school comparisons
of PTRs. This should be facilitated by the decentralisation of teachers'
employment to local councils.
. Avail incentives/or teachers in schools located more than 30kms/rom the
district headquarters.
Supply of school materials
88 The survey indicates very low direct government contributions to schools in terms of
raw materials, which would ordinarily be disbursed as other charges (see Section II, Table
2.1). The average government contribution per pupil is TShs 198. On average the largest
contribution is on examination expenditure.
89 During the survey we noted that non-salary disbursements do not appear to be based
on any rational formula. Expressed in terms of expenditure per pupil, the differences
between districts are considerable (see Table 4.2). These differences cannot be justified on
equity grounds.
Table 4.2 - Annual GoT contribution to school materials ex
TShs MiDimum '
. Median
51 199 351
31 ~6 51
125 296 629
69 271 34~
Sourcc: Volumc 11. Tables .4.1.6. A1.12 and D1.1

90 The survey confirmed that donors supplement GoT in the supply of school materials.
On average donor contributions receivedfrom the centre amounted to TShs 165 per pupil.
91 The survey data also suggest that donor contributions to school materials are not in
quantifies adequate to meet school requirements. We undertook a physical count of the
availability of Standard VII textbooks in each school. The survey confirmed that there were
schools in -which there were virtually no books for pupils in Standard VII. Table 4.3
indicates the magnitud~ of shortfalls in terms of school materials at the time of the survey.
92 .\nalysis of the survey results suggests a significant correlation between availability
of textbooks and examination pass rates. The schools with highest number of textbooks in
Standard VII had the highest average pass rates out of the schools surveyed.

(29)
 Volume I. Healtn and EducQlIon Finom:/a/ TrackmI1Slud\'. Summary ofObservollons. ConclusIOns and Recommenaollons
~'-

Maths Kiswahili Science

\

i
! Avcra c I . 6 5 6 % 13
Source: Volume 11. Table D1.21

93 In addition, on average direct contributions from donors, NGOs and charitable

organisations to schools in the sample surveyed amounted to TShs 6,984 in 1998.
However, the survey also showed a wide disparity of materials between schools. In this
regard, as many as 56% of schools in our survey did not benefit from any direct donor
disbursements.
94 Considering the significance of school materials for the learning process, there is
needfor a:
. Substantial increase in government and donor contributions for school
materials.
. l\t[ore transparent and r{ltional criteria by donors and government for the
distribution of school materials.
Parental contributions
95 Parents make two kinds of contributions to primary education for their children:
. Contributions made to schools.
. Indirect contributions.
96 By far the largest part (94%) of parental contributions is earmarked for indirect
contributions. In many of the schools surveyed parents make more direct contributions per
pupil than donors do. Direct parental contributions amount to about TShs 1,900 per pupil.
However these contributions are only a fraction of the household budget for education.
Contributions made to schools
97 771ehurden of parental contrihutions has increased substantially over the last two
years, although actual collections are considerably less than the fees levied (see Table
44). Our survey results suggest that this under collection could be attributed to a number
of factors:
. Parents had not finished making payments on instalments. III this respect 80% of
the schools surveyed accepted instalments.
. In-kind contributions were not reflected ill the reported figures for actual.
collections. 24% of the schools surveyed allowed parents to pay fees in-kind.
. In poorer districts up to 58% of parents could not afford fees.

(30)

c'my documenL<lhealth and education IinanciailrackUl8 siudyllinal repon'Iin.1 'epon.doe.

 :-eeping (refer to the sub-section on accounting).
. ,-
,,---A::G(,:'1t:1t "-Dove fmdmgs we u:~:ommena 111m ;;;:: '
~ .-. i~ .,",/. "I.
"': "';"'

. .. .
>. " ~:,
"L
comrl 'b utlOns nc:- Dum!
. .. ... .

TShs per pupil :AveJ"aeesehoolcollcctions': "'StandaHirate :':Ulidettol1eet i~ns "

"
Universal Primarv Education 567 1.000 43%
School building fund 185 1.000 82%
School fund 316 500 37%
Examination expenses 70 500 86%
Soons 435 1,500 71%
Others 325 600 46%
I Total 1,898 5,100 37%
Sourc~: Volume II, Table DI.12

99 As mentioned in the previous section, in spite of the 1997 circular permitting schools
to retain parental contributions, many schools contimle to remit them to the district
authorities. In addition, of the parental levies remitted to the district authorities. on
average less than half is spent directly 011the schools themselves. Significantly, there are
wide inter-district variations in the proportion of these remittances used to meet school
expenses.
100 Of the parental contributions retained in schools, schools surveyed appear to use the
hulk of their resources on school facility construction andfurniture (see Table 4.5). During
our visits to schools we physically verified the existence of school facilities constructed.
On average we rated school facility cOllstruction as 79% complete. In addition, we noted
that most children (94%) regardless of the distance of their schools from districts were
sealed at desks. Clearly this reflects the priorities of the schools.

, Table 4.5 - Avera2c utilisation :7",,"',-

of narcntal contributions
......',. ,,' ,,'.
I Uses '
"",""""",,-,,,,' d,,:',, .: 1':10': " ',',,,,,, .,' ,1997:, 7>:~"" ,,' ',,", ':" .i-
',.' ~7:'O ',"
I Build classes 22% 30% 21%
I Build latrines 1% 4% 13%
Build teachers houses 0% 1% 4%
Buy instructional 10% 4% 4%
i
materials
Bu\" textbooks 3% .1% 1%
Food purchases 0% 0% 10%
Make desks 22% 38% I 33%
I Stauoncr\' 3% 1% I 1%
I Other 40% 20% 14%
Total 100% 100% 100%
Source: \'olume II, Table D 1.15

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 Volume I. Healrh and EducoC/on Fmo1'lC:ioi Trackinfl STudy -Summar\' ofObservation.f. Conclil3ions and RecommendatIons
~'.;..'...O><'.

Indirect parental contributions

101 Despire the facr rhat household incomes are low ill rural areas, parenls appear to
make lhe largest contribution 10 education. A survey of 450 parents revealed that they
spend on average additional amounts tOtalling TShs 3.1,16& per annum, with parents in
poorer districts spending up to TShs 135,100 as op.J)osedto a maximum of TShs 132,400 in
richer districts (see Table 4.6). Additional costs were ma.inly used to purchase textbooks
(32%), exercise books (21%) and uniforms (36%).
Table ~.6 - Additional

TSbs) ..

: TShs 31.168

Source: \'olume II. Tables Dl.l1 and D1.l3

Accounting and accountability for resources

102 The survey also included a check on the schools management of funds. Neither
pare Ills nor district officials covered in the survey suggested widespread fraud. However,
during the survey it was revealed that a number of head teachers had been interdicted for
misuse of school funds, in the main parental contributions.
103 Surprising revelations from the survey are that:
. As many as one third of schools do not maintaill bank accounts. In such cases
the custodian for the funds are the Head Teachers or Village Executive Officers.
. -/2% of lhe schools surveyed do not mai1llain rudimentary accounting records.
This practice is a cause for considerable concern when revenues collected and
retained at the school level are increasing. This result is consistent with the
outcome from monitoring activities with respect to the Community Education
Fund (CEF). The CEF, which disburses funds to a number of pilot schools notes
that parental contributions are less than pledges made. The monitoring team
attributes this under-reporting to poor record keeping.
. A number of schools do not maintain inventory registers. In particular, we found
that schools ill the survey were ullable to cOllfirm the receipt of 28% of the
textbooks sent to them by the district council.
. The level of accountability in schools is weak in a number of respects. A major
finding in this respect is that reporting of collections and expenditure in schools
which deposit funds with the Village Executive Director is almost non-existent.
Furthermore although the Local Authority Auditors should audit school
accounts, our survey findings suggest that this procedure is 110tenforced.

(32)

e:\my doeumcnlslhcalth and eWealion onancial tnckmR $lUdylfmal reportllinal report.doc

 p,.~ ,..
. . ..~;:dv - Summary ofObservallons. Conclusion.r and Recommenckll1ons
'-.-
"

v findings indicate that poor financial management is a weakness in the

'Tding school funds. In this context therefore we recommencl that:
"

'!:c' ". 'c"jui.rcd to open bank accounts.

. , y
~ ". . ... r,.. r ..,. -.,.,'r ~ . c
~~ ."..~;..'... '~._, ~~ ', '; ,.. .'" ~.':..-".. !.-.~,
,"..' . ~ _t'_- ! r,-..~'
,''''. .l:.'..'" .";''''...,: .-' " ''''''''''-''..:.'"'6~-. ..' " 4' ",' ~''-'''''j

(Jut information on how to manage, account for and report on school funds.
The handbook should at the minimum set out procedures for: using four books
of account, the cash book, fee register, expenditure register and inventory ledger
(standardised formats should be included for consistency); extracting data from
books of account for reporting purposes. The financial management handbook
could initially be used to train head teachers as part of the school management
component planned under the Education Sector Development Programme.
. Schools Inspectors or Auditors from the CAG on an annual basis, to test and
confirm the accuracy of financial records maintained at schools.

(33)
Volume 1- Health and Educo/lon Finonc/ol Trackmg Study -Summo'" ofObservo1/ons. Cone/us/ons and Recommendotions

V Sources and mana2ement .......

of resources at health
facilities

Introduction
105 In this section we set out the key survey findings (highlighted in italics) and
recommendations (highlighted in bold and italics) on the sources of resources available to
health facilities, and how well health facilities use and account for such resources.
106 Major sources of resources for health facilities are government subventions and
donor contributions disbursed through the district council, direct donor contributions to
health facilities and user charges.

Resources from government and donors

107 The balance of contributions from the centre (government and donors) generally
takes the form of in-kind contributions (see Table 5.1). These are:
. The wage bill.
. In-kind contributions of medical supplies and equipment.

.ln~kindcontributions Wage biD Total resources

DnJgs Vaccines Materials Equipment Total in-kind received from
the centre
!Ins itals 34% 12% 6% 4% 55% 45% 100%
I kahh C~ntrcs I 13% 35% 3°0 0% 71°0 29% 100%
Dis ~nsari~s I 55% ..~O'/0 40. 10'.0 64% 36% 100% J
Source: Volume II, Table C 1.7 and C 1.9

\Vage bill

108 The survey show.\' that hospitals receive -/5% of their contributions by w~v of wage
hill paymeJ1lS met by the government. The ratio of wage bill to other resources at PHC
facilities is significantly lower at about 30%.
109 Health workers constitute the highest GoT contribution to primary health care. The
survey revealed that on average the highest proportions of health sector employees in
districts are deployed at district hospitals. District hospital based workers consume around
60% of the personnel expenditure disbursements received from central government.
110 In addition the survey also revealed that district hospitals tend to have the majority of
skilled staff (particularly registered nurses and ~ssistant nurseJ~ (see Table 5.2) As a
result staff deployed at health centres and dispensaries tend to be less skilled. This
skewedness in staffing is perceived to adversely affect the efficient and effective utilisation

(34}

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 . . ._- ~- ~._- -".-- _._~-~
- - -.. - ,'.

,,-.'!!S and vaccines) at health centres and dispensaries as staff diagnostic

;
cr~ge proportwns of doctors, nurscs and tcchnicians dcpk)"cd at health facilities

I
'D6ttors.HH. I Rei~Jr~d nuncs:,:A~~isi~riir1~f~a:'::M~dic~'tecl1~~ians'"
!
;
Hospitals I 80~ I 83~ 6~~ 64~
I
Health centres I 7~ I 9~ 14~ ll~
I
I.
Dispensaries I 13~ I 8~ 22~ 25~
i Total I 100% I 100% 100% 100%
Source: Volum~ 11. Table CI.9 and paragraph C, 13

111 The survey results also suggest that there is no rationale for the allocation of health
workers across the various service delivery celllres (see Table 5.3). Our survey data show
that the total number of government run health facilities per population is:
. The same (1 health facility to every 9,000) for the districts with the highest and
lowest staff to population ratios.
. Highest for the district with the median staff to population ratio.
Table 5.3 - Average staff to. 0 ulation ratios at health facilities
...:io\~4t stai~t()O::: ')'1~dianSta~to .:':'::::::::~~~itri~~st~fit()H
H

0 uJation ratio:::: ""OH ulationratio 'H" '0 uhltionratio .,:

; Hos itals 3,710 3.846 4.44~

i
,
Hcalth centres 2.258 3.600
: Dispensaries 1.865 2.375 3.846
Source: Volume 11. Table CU, CI.2 and CI.9

112 On the basis of the survey findings, we conclude that the deployment of health
workers has a high level of inequity and inefficiency. In this regard therefore, we
recommend tltat tlte gmlernment take steps to rationalise tlte deployment of /tealtlt
workers. This includes defining the standard staffing norms at each type of facility, re-
deploying staff at health facilities which are overstaffed to those with a scarcity of
manpower and, where necessary, upgrading the skills of health workers.
In-kind contributions
113 Government and donor funded programmes administered centrally use two systems
to channel in-kind contributions as follows:
. An indent system for district hospitals where they order drugs and medical
supplies from the Medical Stores Department based on their actual requirements
within pre-determined ceilings set by the Ministry of Health. The government

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Volume / . Health and Ethlcclltm Flf/ancla! Trackmg Study. Summa,...' of Observations. ConclusIons ond Recommen,hmons

finances most in-kind contributions received by district hospitals. In 1998,

medical supplies distribmed to bospita1s (included in tbe Ministry of Health's
- -
budget allocation Mechanism 3) on averaae amounted to 300.10of the averaae
-
total resources received by the district hospitals surveyed.
. A standard issue of blue and yellow kit ,is distributed every month to each health
centre and dispensary respectively. The survey revealed that government (53%)
and donors (47%) jointly financed kits disbursed in 1998. In addition, health
centres and dispensaries received vaccine supplies financed by government and
donors supporting the programmes under mechanism 4.
114 The survey covered a number of aspects under each system as follows:
. Whether in-kind contributions reach health facilities.
. The extent to which resource requirements are met.
. .-\vailability on the day of the survey with respect to a basket of commonly used
drugs.
Efficiency of systems for distributing medical supplies
115 The survey team found that medical supplies zmder both allocation systems reach
health facilities. Our survey findings are consistent with a much more extensive survey that
we undertook for GoT and DANIDA. The survey covered drug and vaccine distribution
from 1 July 1996 to 31 December 1997. With respect to the distribution of drug kits,
consultants reported an immaterial difference of 0.3% between drugs despatched from the
Medical Stores Department and volumes received at districts.
Extent to which resource requirements are met
116 Responses received from the management of the various health facilities surveyed
indicate that (see Table 5.4):
. Hospitals are more likely than health centres and dispensaries to have their
requirements for medical supplies met.
. Dispensaries tend to be better supplied with medical supplies thall health
centres. although there are significallt district variations. Also, the allocations
do not appear to be closely related to the current usage of health facilities.

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c"my documentslhealth and education financial tracking slUdyllinal repMlfinal report.doc

 . c JL.en-alions. Conclu3/ons and Ru:omme",Jalions

r.':':""'''''''''''''r'''
-,
,---
,--
-+8 I 95 3i uo i
I H~a]th centres I 39 71 34 38
I DisD~nsarics I 58 85 52 35
Source: Volume II. Table C1.8

Drugs availability
117 On the day of the survey we undertook a physical count of available drugs.
Specifically we measured the "number of drugs from a basket of drugs available in a
sample of health facilities, out of the tOtal number of drugs in the same basket"25. The
results of the survey are reflected in Table 5.5. Our survey results show that:
. All government facilities had drogs (e.g. Chloroquine) to treat malaria which
happens to be one of the top tell diseases.
. Government-nm facilities suffer from severe shortages of antibiotics (e.g.
Penicillin), antacids (e.g. Aluminium Hydroxide) and anti-diarrhoeal drugs.
118 We also collected data on drug availability in NGO health facilities and compared
data to government health facilities. Our survey results indicate that NGD nm health
facilities had slightly higher volumes of drugs available than the government ones visited.
119 According to personnel managing the Pharmaceutical Support initiative at the MoH
and previous studies, factors affecting availability at government run facilities include:
. An inadequate supply of drugs which is exacerbated by an ineffective referral
system. "The drug requirements at hospital level do not take into account the large
numbers of patients who bypass the PHC units in Tanzania, and who inflate drug
needs at a hospitallevel,,26. Further research and analysis is needed by MoB on
the supply and utilisation of drugs.
. Irrational drug use (refer to paragraph 133).

:,
WHO outcome indicator I
:. Cnited Republic ofT:mzania: Public Expenditure Review. \'olume II. Statistical Annexes. Julv 1998

(37)
 Volume I - Healrh a~d EducatIOn Financial Trac.lcinf? SwdJ' - Summary ofObservo/lons. Conclusions and RecommendO!lons

'fabte 5.5 - .o\"cr32e a"aHabilit,. of commonh' used dru~s at hcatth facitities

..... . ......... .....-.---.-- ..
. ........ .................. ..... .. ..................... .... ..../.. ........i. .'.........'..'.....l'iGO ...........i<... ...
Go\'emment

Oro,,!
.:.....
. ......
...
nos.,;t;)) . . !jl~alth C:entn: I . Disllensarv ..
I
~Bonita}. ..
I.J~thCenl~ DisucnsarV ..

Ac~tvJ5alicvlic I 19% 9% I 7% I 18% 17% I IS%

Aluminium Hvdroxide 0% 0% 4% I 0% 0% 5~'O

Arnoxvcillin 1% 1% 2% 11% 0% 12%
Benzvl Benzoate 17% ~~~5% 1% 17% 4%
Chloroquine 25% 25% 22% ] 3% 17%
I 16%
Fe Folic Acid 9% 37% 16% ]% 0% 5%
~Iebendazole 1% 7°~ 11% 9% 17% 7%
I :-'Ietronidazole 8% 15% 26% II % 17% 13%
19% 1% 5% I
l'aracetamol 23% 17% I 15%
! Phenol P~nicillin I 2% O~'o 1% 12% 0% I 7~~
I ]00%
i TOIal 100% 100% 100% 100% I 100%
I
'
Source: Volume 11- Table CI.I6 and CI.I7

120 Government spending on "other charges" should be much more dosely related to
the usage of facilities: that is, it should "follow" patients,

Direct donor disbursements

121 Our survey data show that over the three-year period between 1996 and 1998 health
facilities also received additional direct disbursements in the form of cash and in-kind
contributions from donors (refer to Table 3.2). The highest value of donations was in the
form of vaccines (64%), followed by cash donations (23%) and the lowest was in the form
of other medical supplies (0.3%).
122 In addition, the results of the survey indicate that on average direct donor funding
(}/1~~'
benefited 54% of health facilities ill the sample. Of the health facilities that benefited
from direct donor support our survey team were informed that health facility
administrators, local community representatives and the district council had played major
roles in soliciting donor support.

User charges levied at health facilities

123 Our survey also indicates that all district hospitals and all non-government run
health facilities le~:v user fees. In addition, incidences of levying user charges at
government dispensaries were found in only one district.
124 However, we found that many of the facilities surveyed do not maintain complete
records of collections, and were therefore unable to fully disaggregate contributions.
Nevertheless, from data collected at district hospitals, we noted that on average:
. /111998 revenue from user charges at district hospitals totalled 6% of resources
received from centre (Table 5./).

(38)

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'.
".'.

(
.,' ...~... ~._,.,..
. _.~..
" -~--. .- .~'4*>' '~'-

..est collections were from drugs and vaccines (43%), registration (20%)
"'; ,1fatiof1 fees (J 8%). ...

-: Tt\C2Jed that non-governmem health facilities are charging

.
'. . ~ ',! ~ ,:r-g~'s. For instance one NGO run dispensary which treats 500
outpatients a month collects substantially more revenue (280% more in 1998) than the
district hospital. Part of the difference is attributable to the fact the NGO dispensary has a
100% recovery rate on drugs. In this regard therefore, we consider that there is a need
for a study on optimal policies and strategies to guide the levying of user charges.

Utilisation of user charges

126 Government dispensaries that charge user fees in our sample do not retain them.
Instead dispensaries are required to remit collections to the District Medical Officer
(DMO). During the survey the DMO confirmed to us that he deposited such collections in
a special account called the "Health Services Fund Account". Further, our team also
discovered that funds from this account are used to purchase medical supplies for the
district hospital and not for dispensaries. This may act as a disincentive in terms of
maximising collection at dispensaries. It is recommended that dispensaries stop
subsidising seTYices at district hospitals. In addition, to provide incentives and ensure
maximum collection of user charges at dispensaries, it is essential they are allowed to
retain all or most of the user charges levied
127 Our survey revealed that on average district hospitals spend a considerable
proportion of revenllesjrom user charges collected on drug purchases (36.4%) and
equipment purchases (36%) (refer to Table 5.6).

i Total
Source: Volume 11. Table C 1.13

Drug and vaccine utilisation

128 The survey collected data on drug and vaccine utilisation. In determining the data to
CQ!j.:.::~
and measures To be used, we applied the following World Health Organisation
outcome indicators (OTs) and other indicators to evaluate the efficiency of drug use at
health facilities:-

(39)
 -
-
Volume I Health and Educotlon Financial TrQclcm~ Sludv. Summary of°b5ervations. Conclusions ond RecommendatIOns

-, ..,.~ A'\'erage stock Gut - we estimated the number of weeks taken to deplete blue
and yellow kits.
. OT6 - ExpiFed drugs which measures the "number of drugs beyond the expiry
date, out of the total number of drugs suJ"lleyed".
. OT7 - Rational Use of Drugs, which measures. the "average number of drugs
. .
per prescnptJon " .
. OT8 - Injection Use, which measures and the "number of prescription with at
least one injection, out of the total number of prescriptions surveyed.
. Vaccine use - we compared actual numbers of patients vaccinated against
standard numbers that should have been vaccinated.
129 Our survey results are as follows.
130 Average stock out-With respect to the utilisation of resources, we noted that most
facilities tend to run out of drugs within three weeks (refer to Table 5.7). All health centres
and dispensaries are allocated a single drug kit every month regardless of the volume of
patients seen. Our conclusion therefore is that the drug allocation system does not respond
flexibly to the needs of individual facilities.
Table 5.7 - Avera2e len2th of time taken to de lete commonlv used dru contained in kits
Tvpe
.. of facilitv 'A,'eraeIcn!!thoftimctakcntode
I","
" letekits .,'

Four weeks Three weeks I U to two weeks

DisDensaries 12.50% 70.83% 16.67%
Hcalth centres 50.00% 16.67% I 33.34%

Sourc~: Volume II. Table C 1.18

131 We also observed that the introduction of user charges in government PHC facilities
appears to reduce the demand for drugs, thereby decreasing the likelihood of stock Ollts.
We therefore conclude that user charging may assist the government in promoting more
rational drug use. However, "research indicates that to concentrate exclusively on drug
supply and cost recovery is a limited approach that fails to maximise the usage of health
facilities by vulnerable groups" 27. We therefore recommend that the government
llntJertake an assessment of health care needs taking into account community attitudes
and re.'iOUrceavailability, the outcome of which should be a rational basis on which
(Jrugs are al/ocated.
132 OT6 - Expired drugs. Our survey results indicate that the levels of expired drugs
particularly at health facilities are immaterial. In particular, the majority of health
facilities surveyed did not have any expired drugs.

"How to investigate drug use in health facilities - Essential Drugs Monitor ~o 14 of 1993

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:,llshed the average number of drugs prescribed per encounter as 1.63. On average
c tend to prescribe fewer drugs per patient encounter than priI!1ary health care
.
'':'\'e;.\-e''es~t~e overa]] average number of drugs prescribed per encounter is
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134 OT8 - Injection Use. Our survey result shows that:
. Government hospitals. health centres and dispensaries administered an injection
in every 5 Ou!of60 (8%), 15 out of 100 (15%), and 81 out of 360 (23%) patient
visits respectively.
. Non-government dispensaries administered an injection in every 20 out of 140
(14.2%) patient visits.
135 This result suggests that injections are overused at government dispensaries28. On
this subject the MoH recommends that injection use should be limited to 15% or less for all
types of health facilities.
136 Injection use is discouraged for a number of reasons. Public health specialists
perceive that "from an economic viewpoint, the irrational use of injections imposes an
additional burden on limited household and health centre budgets, particularly in Africa
with its continuing economic crises"29. Further, research points to the fact that increased
injection use increases the risk of patients contracting local infections and the transmission
of HIV and Hepatitis B virus" 30.
137 To minimise injection use, the MoH should in future consider reducing the supply
of injections to PHCs. In addition, we recommend that district based medical staff:
should educate patients on the drawbacks of injections; use patient records to monitor
the levels of injection use.
138 Vaccine use - Our survey data indicates that there is a considerable wastage in
vaccine use (see Table 5.8). This wastage is particularly high in hospitals and dispensaries
where wastage ofBCG is 76% and 67% respectively.
139 These results imply that for each vial of BCG, DPT, Tetanus, Measles and Polio
vaccine provided to health facilities an average amount of TShs 577, TShs 68, TShs 295,
TShs 333 and TShs 585 is lost. In terms of vaccines distributed to the three districts
surveyed this represents 5% of total resources distributed to health facilities from the
centre.

:8
This result is similar to research findings with respect to government PHC facilities in Dar es Salaam, which estimated injection use as
28.7%,
29
30
'
Investigating popular demand for injections in Indonesia and Uganda -
Essential Drugs Monitor No 23 of 1997
ihid.

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 r'olume I . Health and EducatIon F"tor/cial Tracking Stud}'. Summary o{Observallons. ConciuSlons and Recommendations

140 We shared these survey fi~dings with officials in MoH managing the Expanded
-
Proaramme on lmmun:sation who are of the view that these results indicate higher wasta!!e
than would normally be expected. According to tbe MoH in general vaccine wastage rates
..

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should be between 200,10and 30%. The only exception to this is the BCG wastage rate,
which they would expect to be around 50%.
141 Further, the MoH were of the view that the high wastage rates reported during the
survey could result from one or more of the following:
. Inaccurate record-keeping at health facilities.
. Shortages of kerosene needed to run cold chain equipment. This is consistent
with findings reported by the Expanded Programme on Immunisation
(mechanism 4) which noted delays in disbursing funds for the purchase of
kerosene. This resulted in vaccines being destroyed or temporary cessation of
immunisation activities at PHCs as vaccines had to be sent back to the district
hospital for refrigeration.
. Oversupply from the centre. This is particularly the case for the polio vaccine.
We understand that perhaps under the recent National Immunisation Days
initiative (Mechanism 4) more vaccines were distributed to health facilities than
was actually needed.
. Unused vials where attendance is poor. However, health facilities (particularly
hospitals) are encouraged to send opened tetanus vials to out patient departments
as they can be used to treat accident victims.

T,' c of vaccine..
j Tetanus Measles Polio
76% 31% I 63% 40% 68'Yo
45% 25% I
I 49% 20% 47%
: Dispensaries 67% 18% 50% ~8% 62%
Sourc.:: Volum.: 11. Tabl.: C1.20

142 To improve the utilisation of vaccines we recommend thefollowing:

. Rational criteria ..;/wuld be developed by donors and government for the
allocation of vaccines to health facilities.
. Alter 1'llccine ses.fiion.fito days when health facilities expect to cover a large
population.
. E,zsure regular supply of kerosene to PRCs.
. Strengthen supervision by District Cold Chain Officers.

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,,;\.1or simply not recorded. With respect to:

... r Itt wa.\ c.. ~ - 0::' % of the health facilities surveyed that colJect user charges
grant exemptions to an estimated 34% of the patients treated.
. Incomplete revenue amounts - based on material differences between numbers
of outpatients treated at an NGO dispensary surveyed and district hospitals we
consider that it is likely that there are inefficiencies in collection processes.
144 We also found that district hospitals have in place comrols to ensure that funds
collected from user charges are safeguarded. In particular, hospitals have three account
signatories, the District Medical Officer, hospital accountant and a member of the District
Health Iv1anagement Team.
145 In addition, we tuund that district hospitals regularly report on revenue from user
charges and related expenditure using the Health Management Information System
(MTUHA). This finding is consistent with data contained in the MoH's 1998 statistical
abstract, which reports high district response rates to reporting requirements.
146 However, the survey revealed that the fOllr pilot dispensaries charging user fees do
not maintain bank accounts. Furthermore, collections are not deposited in safes. In this
regard, we recommend that all dispensaries charging user fees are required to open bank
accoullts and prepare regular statements of account.
147 Our survey also suggests that although hospitals should be audited semi-annually by
the respective Regional Internal Auditor and CAG, that there are backlogs in reporting
audit findings. In addition, our results indicate that no audits are undertaken at go~'ernment
PHCs,
I 48 To improve accountability over the collection and use of resources at health
facilities we recommend that the CAG:
. Clears any backlogs.
. Conducts periodic surprise spot checks at all PHCs to confirm the
completeness ami accuracy of collections.
. U'idens his audit scope to evaluate value for money in the use of drugs and
vaccines at PHCs.

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 I''oll<me I . Health and Educat:o" FinancIal Trackmfl, SIudv. Summon- ofObservalions. ConclusIOns and RecommendollOns

VI Summary of c<rnclusions and recommendations

Introduction
149 There is concern that there are problems of management and utilisation of resources.
at service delivery units. There is also concern that budgetary allocations for education and
health do not translate to corresponding improvements in the flow of resources at schools
and health facilities. This is perceived to result from inadequate systems and mechanisms
between the centre and service delivery units. This was the subject of this study.
150 In this section, we provide a summary of the study conclusions and recommendations
(in bold and italics).

Summary of conclusions and recommendations

151 The conclusions and associated recommendations from the study are that:
District council level
. 1 - The system for the flow of funds from the centre to district councils appears
~.,.) sound and subventions for recurrent expenditure are disbursed on a regular basis.
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.~ However, government disbursements for development expenditure are
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development expenditure more predictable.
. 2 - Ur:der the present cash payroll system used by local councils there is
considerable scope for paying ghost workers. It is imperative that councils
move towllTlls a hank-based systenL In addition, urgent steps s/zoultl be taken
to ensure that the, internal controls lITe not undermined by the proce.'iS of
decentralisation of the payroll
. 3 -Most education and health workers appear to be paid on time. However some
personnel in districts which cover large geographical areas spend an average of
three days chasing salaries. Measures s/l.Oultlbe introduced to minimise delays
ill paying salaries and avoilJ wasting valuable resource.'i.
. .. - Salary arrears are a serious problem for workers in the education and health
sectors. We recommend that gO\'ernment institute measures to eliminate
current arrears.
. 5 - Funds disbursed to district councils for other charges are diverted to other
uses. On average the proportions of funds diverted could be as much as 57% in
education and 41% in health. There is needfor increased monitoring from the
centre and better guidance on how to prioritise other charges.

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:1 - Direct
donor contributions appear to favour districts, which are economically
mOlt.: \->Jeiioff. in view of donors' commitment to combating poverty they
should collaborate between themselves and GoT to ensure that the more
economically worse off districts are priority beneficiaries of their
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. 7 - Some councils do not use any of their own resources to funa education and
health activities whereas others make significant contributions. In the spirit of
supporting sustainable social and economic development, councils should be
encouraged to earmark a proportion of their own revenue sources to support
programmes in health and education.
. -
8 There is a dearth of capacity at a district level particularly in the areas of
financial management and audit. Some of the issues identified during the survey
have been incorporated under the ongoing Local Government Finance Project.
To support the process we recommend that the Controller and Auditor General
with the support of locally contracted professionals conduct a survey of
maintenance of internal controls by district councils.
School level
. 9 - There is inefficiency in the deployment and utilisation of teachers. This is
demonstrated by significantly wide disparities in PTR between schools and to
lesser extent districts. We recommend that the government institutes measures
to rationalise teacher deployment giving particular emphasis to intra-district
and inter-school comparisons. In addition, we recommend that the
government avail incentives for teachers in schools located more than 30 kms
from the district headquarters.
. 10 - Resources allocated by government and donors for school materials appear
unrelated to need. Furthermore, school materials financed by government and
donors are not in quantities adequate to meet school requirements. There is need
for more transparent and rational criteria by donors and government for the
tlistribution of school materials.
. 11- Actual collections from parental contributions made to schools are
considerably less than fees levied. We recommend that the Ministry of
Education and Culture sets more realistic rates or gives autonomy to schools
to set levies.
. 12 -
Accounting and accountability for resources at a school level is poor. We
recommend that a simple financial management handbook is developed for
schools. In addition, schools should be instructed to open bank accounts.

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Volume i-Health and Edwcc/:o" F",aneial TradcinR Stud\! -Summary ofObserwlIIons. C onelusions and RecommendatIons'

Health fadrtty leve.

. -
13 District hospitals tend to have disproponionately more qualified staff then
other district health facilities. Funher there appears to be no rationale for the
allocation of health workeJs across the various types of health faci}ittes. We
recommend that the government take steps to ralionalise the deployment of
health workers.
. 14 -
Although medical supplies reach health facilities, the drug allocation
system does not respond flexibly to the .needs of individual facilities. We
therefore recommend that the government undertake an assessment of health
. care needs taking into account community attitudes and resource availability,
the outcome of which should be a rational basis on which drugs are allocated.
. 15 - Injections are overused at government dispensaries. To minimise injection
use, the JHinistry of Healtlz should in future consider reducing the supply of
injections to PHCs. In addition, we recommelzd that district bcued medical
staff educate patients on the drawbacks of injections; and use patient records
to monitor the lel'els of injection use.
. -
16 There is considerable wastage in the use of vaccines at hospitals, health
centres and dispensaries. A number of steps should be undertaken to reduce
wastage: the development of rational criteria for tlze allocation of vaccines;
increased targeting of patients to be vaccinated; strengthened supervision by
District Cold Chain Officers.
. 17 - A significant proportion of fees charged at hospitals are either being waived
or are not recorded. To improve accountability over the collection and use of
resources at health facilities. we recommend that the Controller and Auditor
General conducts periodic surprise checks.

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