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Stefan Leiderer et al. to consolidate local and central monitoring efforts. At the planning stage, national and local processes are also poorly coordinated as there is no operational mechanism linking DDPs to national strategies and plans, in particular the MPRSP and the PSIP. Such a link, which needs to be both bottom up as well as top down at the same time, is indispensable if decentralisation is taken further ahead. However, a certain trade-off does exist between further devolution of government functions and concerted efforts by donors and central government to implement national development strategies such as the MPRSP. 6.4.4 Horizontal coordination at local government level This section analyses local institutions and stakeholders and their involvement in the PFM process. It pays special attention to procedures of financing mechanisms how they are coordinated with local institutions. Although the Government of Malawi and the donor community welcome decentralisation as an important reform, severe difficulties in Malawi’s public administration make local governance more vulnerable to informal procedures and render its institutions less credible. In-depth analysis of the qualitative data collected of local stakeholders involved in the PFM process suggests the following: 41 First, sound PFM at the local government level has not yet developed due to a poorly institutionalised local governance system, in which local stakeholders and PFM procedures are characterised by a high degree of uncertainty. In the course of decentralisation, new organised institutions collide with existing ones. This leads to undefined fields of responsibility and sometimes arbitrary and informal procedures. Second, uncertainty of local institutions and procedures is boosted by uncoordinated financing mechanisms of government and foreign donor funds. 41 Stakeholders involved in the analysis are: The District Assembly (DA) and its elected councillors, including committees; the DAs administrative body, the District Secretariat and its senior and minor staff; the Traditional Authorities (TAs) that have to be distinguished into Paramount Chiefs, Senior Chiefs, Chiefs, Sub-Chiefs, Group Village Headman, and Village Headman; local NGOs; donor agencies; and other influential stakeholders such as business people. 118 German Development Institute
Public Financial Management for PRSP Implementation in Malawi Especially the Malawi Social Action Fund (MASAF) does not adhere to the formal local government structures and thus undermines transparency, accountability and sound PFM at local government level. This is illustrated in the following section. Coordination with vertical funds – the case of MASAF The Malawi Social Action Fund (MASAF) was established by the government of Malawi in 1995. The World Bank funded the first two phases from 1995 to 1998 and from 1998 to 2003 with a credit of US$ 122 million. Because MASAF was introduced three years ahead of the Local Government Act and the National Decentralisation Policy the World Bank’s initial approach was to support the community level directly, circumventing the central state. Thus, like most social action funds, MASAF management units administer most processes related to identifying and financing community projects in a parallel structure to planning authorities of local governments. 42 In the case of Malawi this practice has in the past resulted in undermining local planning and budgeting processes and accountability mechanisms. In its latest phase MASAF III has realigned its institutional setup in order to provide a backstopping system for local Assemblies as they take over functions previously managed by MASAF itself. However, inadequacies in accounting for funds are frequent: financial queries remain unanswered, justification of funds takes a long time, and irregularities in the procurement processes occur (GFA 2005, 66 et seq.). All this leads to delays in the disbursement of subsequent project funding. 42 For example, MASAF has not used the DDPs and their Annual Investment Plans (AIP) as a basis to select activities and allocate resources to identified priorities. Instead, MASAF staff from MASAF zone offices and MASAF Justification Officers in the districts undertake a separate planning and identification process together with DEC members, in particular the District Planning Director, replicating planning activities. German Development Institute 119
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Studies Deutsches Institut für Ent
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Preface The present study on ‘Pub
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4 The Case of Malawi 44 4.1 Why Mal
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Bibliography 151 Annexes 157 Tables
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Boxes and Tables in the Annexes Box
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DS EHP ESAF EU GBS GDP GoM GRF GTZ
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TOR UDF UNCDF UNDP UNV USAID VAP VD
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