Public Financial Management for PRSP - Deutsches Institut für ...

Public Financial Management for PRSP Implementation in Malawi
heads of the district hospitals and several health centres. Coordination between
these levels do not seem to be a major problem.
The education sector is organised in a different way. It is designed as a threelevel-system
with Education Division Managers at the intermediate level
between headquarters and District Education Managers (DEMs). There are
reportedly occasional problems with the construction, registration and staffing
of schools. The districts, together with the communities concerned, are
responsible for school construction, after approval by the MoE. 39 However,
communication and coordination failures have in the past repeatedly led to a
situation where newly constructed schools would not be registered by the
MoE and thus not be staffed with teachers. However, these appear to be only
isolated cases, as in general, relations in the sector are highly hierarchical and
responsibilities rather clearly defined. The deconcentrated units are mere
implementers, whereas headquarters are responsible for policies, guidelines,
recruitment of most of the staff and disciplinary measures. Headquarters issue
ceilings for the districts in the budget planning and formulation phase. The
districts prepare their budget estimates and submit them back to headquarters
where they are consolidated into the sector budget. 40
It remains to be seen, whether coordination problems gain importance in the
course of further devolution of sector responsibilities in the future.
6.4.3 Vertical coordination
Coordination between central and local government level is characterised by
a highly hierarchical system. This is especially evident in the way information
flows and how new PFM tools are introduced as well as in the dependency
on transfers from the central level. This system leads to delays and uncertainty
in the budget process and finally to informal practices at local government
level.
This section analyses what in this study is described by the term vertical
coordination, i.e. coordination between the central and local level of govern-
39 School construction is usually financed by donors. The DAs are responsible for applications.
40 In the education sector, the district budgets are first consolidated into division budgets,
which are then consolidated into the sector budget.
German Development Institute 113