Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
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<strong>Public</strong> <strong>Financial</strong> <strong>Management</strong> <strong>for</strong> <strong>PRSP</strong> Implementation in Malawi<br />
The DDF is a (mostly donor funded) municipal development fund accessible<br />
only to rural districts. 22 Its allocation is partly <strong>for</strong>mula-based, with 30 percent<br />
equally distributed between districts and 70 percent allocated according to<br />
population and poverty indicators (GTZ 2004, 1; Boex et al. 2001, 18).<br />
The DDF is managed by the NLGFC and serves to channel funds to finance<br />
small-scale projects and activities emerging from the District Development<br />
Plan. In order to access project funding from the DDF certain minimum conditions<br />
apply (GFA 2005, 57):<br />
— A Director of Development and Planning, two Accounts Clerks and a<br />
Works Supervisor must be in place<br />
— Quarterly progress reports and monthly financial statements must<br />
be produced by the DA and sent to the Decentralisation Secretariat/Ministry<br />
of Local Government and Rural Development<br />
— An annual investment plan must be approved by the Assembly by the<br />
end of January each year<br />
— three quarters of the projects approved from the previous planning period<br />
must be successfully completed.<br />
It is the NLGFC’s responsibility to ensure that resources provided through<br />
the DDF are properly managed (Simwaka 2003, 5).<br />
There<strong>for</strong>e, in theory, the institutional setup of Malawi’s PFM system, as<br />
outlined in Figure 5, is relatively well designed Responsibilities are to a large<br />
extent clearly defined and distributed between actors. However, as seen in the<br />
next section, this <strong>for</strong>mal framework bears little relevance <strong>for</strong> actual PFM<br />
practice in Malawi.<br />
22 At the time the research was undertaken UNDP/UNCDF, the African Development Bank<br />
(AfDB), NORAD, DANIDA, CIDA and DFID among others (including non-governmental<br />
organisations) were channelling significant funds through the DDF to support Malawi’s development.<br />
(Gama et al. 2003, 30; GTZ 2004, 1; GFA 2005, 56). Currently, with strong<br />
support from German Development Cooperation, a Local Development Fund (LDF) is being<br />
drawn up, which will integrate the different funding mechanisms into one single financing<br />
mechanism <strong>for</strong> local governments in Malawi, open to towns and districts as well. The<br />
LDF will be managed by a special unit within NLGFC.<br />
German Development <strong>Institut</strong>e 73