World Bank Group Public Finance Management in Health Service Delivery Challenges and September 2019 Opportunities in Guinea-Bissau Public Finance Management  Objectives of ‘PFM’ is a broad concept used to describe the ways PFM governments manage public resources and budgetary cycles. It deals with government revenue and expenditure effective allocation and the adjustment of these to achieve desirable effects. of public services Effective PFM systems can support service delivery achieve healthy through improvements in the budget cycle. fiscal discipline Information systems, communication allocate resources   t e c h n o l o g y,   p a r t i c i p a t o r y   to priority areas budgeting processes and monitoring platforms can promote a c c o u n t a b i l i t y. improve operational efficiency PFM challenges include equitable  resource allocation, reliability of remove inequality + financial transfers and efficiency of promote shared prosperity resource utilization. PFM Systems are Critical to Evidence Improve Health Service Delivery shows public spending on Health spending inefficiencies can be reduced through better budgeting. health is Greater policy attention is needed to guide the more government on where to prioritize public spending. Smooth data flow through better technology can improve effective in the effectiveness of public service delivery and better monitoring. PFM reforms are an integral element in the progress of governed developing nations to improve equitable access to countries. r e s o u r ce s a n d   s h a r e d pr o s p e r it y. Reforms can address inefficiencies in the four-stage budget cycle. Health service delivery involves operational funding, staff wages, procurement of medicine and equipment. These disparate sub-systems must come together with the right incentives in order to achieve quality outcomes. PFM reform impinges on each of these contributing sub- systems. Strong PFM systems allow for appropriate allocation of resources, smooth fund flows, minimized opaqueness and e n h a nce d t r a n s p a r e nc y a n d a cco u nt a bi l it y. 2 This policy brief summarizes the findings of a PFM Assessment in the health system of Guinea-Bissau.  The assessment was undertaken jointly by the Governance of Guinea- Bissau and the World Bank Health, Nutrition, and Population (HNP) Global Practice. The analysis applied the PFM instrument in a sample of 15 public health facilities in Guinea- Bissau, covering 5 of the 11 health regions of the country. The analysis identified PFM bottlenecks in health service delivery and suggested recommendations. Guinea -Bissau Governance matters. Strengthened financial systems improve fiscal sustainability, operational efficiency, accountability and service delivery outcomes in the health sector. World Bank is committed to strengthening PFM across its operations: in systematic country diagnostic; in country partnership framework; investment lending and program for results; in knowledge products and advisory work. Efficient and better governed PFM overall and in health sector result in benefits for people, especially the poor and vulnerable, through increased access to better quality health services. In poorly governed states, small PFM adjustments, addressing bottlenecks at the lowest levels of service delivery, can bring about quick improvements. Evidence shows that greater accountability and responsiveness play an important role in improving health service delivery outcomes, especially in communities with sufficient local institutional capacity and accountability. Engaging citizens and stakeholders in management of public finances can improve delivery and quality of public services, enhance the management of public finances and bring about greater access to health care for the poorest, resulting in tangible improvements in people’s lives. 3 Bottlenecks in Health Service Delivery in Guinea-Bissau · Lack of legal framework - at the Ministry of Public Health i.e. Ministerio da Saude Publica (MINSAP). The proposed organic law has not yet been approved of by the President. · Weak planning and budgeting process - lack of a clear strategic framework and methodology for the prioritization and implementation of government’s objectives. · Uncoordinated donor assistance – lack of tracking and consolidated financial reporting on the use of donor funds. · Underspend of budget - MINSAP budget execution was approximately 50 percent in 2014, 42 percent in 2015, 63 percent in 2016. The low execution rates indicate the limited government capacity to implement health policy actions and spend on capital investment. · Manual financial record keeping - Sistema Integrado de Gestao Financeira Publica (SIGFIP) is unavailable to MINSAP and other health sector facilities. · Weak procurement practices - in health facilities, no official procurement process is established. · Weak internal audit arrangements - Inspeção-Geral para Assuntos da Saúde, (IGAS) internally audits health, operations and PFM issues. The entity is understaffed and based on outdated internal regulation. · Poor management of out of pocket (OOP) payments - inadequate record keeping of user fees collected at the facility level. · Weak payroll procedures and controls - steps have been taken toward effective use of the HR and payroll system (SIGRHAP), however, this process has not yet been finalized. · Lack of adequately skilled and motivated staff - low health worker remuneration, inadequate supply of trained health workers, poor working conditions for health workers (especially in rural areas), weak human resources (HR) management, and lack of opportunities for continuing professional and personal development in the health sector. · Lack of resources due to poor planning - inadequate funding and limited fiscal space established by the Ministry of Economy and  Finance (MEF) for operational and maintenance costs in the health sector, poor management of internally generated revenue. · Inadequate infrastructure and equipment - inadequate budget from the MEF and sector budget for medical equipment, poor asset management and maintenance, poor access to roads infrastructure and lack of health facility standardization. 4 Recommendations Adequate PFM arrangements have the potential to improve access, affordability and quality of care. The recommendations of the report are aimed at addressing the particular weaknesses in the health sector and call for greater collaboration between the Ministry of Public Health and Ministry of Economy and  Finance. Short Term Recommendations (within a year) Policy Recommendation Rationale Responsibility Recommendation 1: Establish and implement a There is no regulatory framework for health MINSAP, MEF and the regulatory framework for record keeping, facility procurement and financial management Project Coordination Unit financial reporting, and procurement (FM) so there is no basis to monitor compliance of (PCU) of the World Bank compliance in health sector. fund management (revenue and expenditures). health project. Recommendation 2: Roll out a nationwide PFM Providing basic FM training to designated officers MINSAP with support training program to implement the new at facilities who are currently performing such from the World Bank regulatory framework at central and tasks is essential for the improvement of the health project PCU. decentralized health facilities and strengthen quality and accuracy of accounting, reporting, and compliance with it. assets management functions. Recommendation 3: Design a simplified SIGFIP is being implemented under the World MINSAP and MEF with integrated financial information technology Bank-financed PFM program. Improving support from the World (IT) system for accounting and financial accounting and financial reporting in the health Bank health project PCU. reporting that mirrors the Sistema Integrado sector will help improve the FM, monitoring, and de Gestao Financeira Pública (SIGFIP) for compliance with the country PFM arrangements at hospitals and health centers in the capital and least in the bigger health facilities in Bissau and larger cities. other major cities. Recommendation 4: Strengthen the internal Controls around the collection and use of IGF’s are Inspector General controls oversight and accountability processes weak. Strengthening external oversight is (IG)/MINSAP with support for collection and use of Internally Generated imperative to ensure accountability and efficiency from the Supreme Audit Funds (IGFs), such as user fees and externally and to redirect these funds to immediate and Institution (SAI) and World received donations. prioritized service delivery needs of the facilities. Bank health project PCU. Recommendation 5: Allocate budget for basic Budget for basic equipment and logistics for Planning and budgeting at equipment (laptops) and logistics for oversight supervision trips is needed for the SAI and IG to MINSAP with MEF and control from the IG and the SAI. conduct periodic audits at the health facilities. support. Recommendation 6: Link financial incentive There are no incentives for health workers to DGASS/ MINSAP with payments with clear performance targets for improve performance under the  Direção Geral da support from World Bank health workers. Administração do Sistema de Saúde (DGASS). health project PCU. 5 Medium to Long Term Horizon Recommendations (Two Years and Over) Policy Recommendation Rationale Responsibility Recommendation 1: Automate and roll out SIGFIP is used for accounting and reporting The MEF and MINSAP with support the accounting, financial reporting, only at the central level and it is not an from the World Bank health procurement, and asset management integrated system, making the generation of project’s PCU and other PFM processes in the health sector, using SIGFIP financial reports a very cumbersome operations as the main financial IT system. exercise. Recommendation 2: Increase the number of There is a deficit of FM skills in the health HR/MINSAP with World Bank competent staff with adequate professional sector and a lack of accounting professionals health project PCU support training in FM. nationwide. Recommendation 3: Strengthen Planning and budgeting processes are weak Planning and budgeting at MINSAP, coordination and consolidation of strategic and require strengthening both at the MoF with World Bank health project PCU medium term and annual planning and and the health sector levels. support budget preparation processes in the health sector at the central and decentralized levels across health facilities. Recommendation 4: Evaluate the needs and Lack of funds allocated for commodities such Planning and budgeting at MINSAP provide adequate budget allocation for goods as drugs, medical equipment, water, energy, with MEF, donors,  World Bank and services, major repairs, and operations and major health infrastructure health project PCU needed for improved health service delivery. improvement hampers service delivery. Recommendation 5: Strengthen PFM and The FM and procurement capacity at the The MEF and MINSAP with support procurement capacity at both the MEF and MEF and more particularly in MINSAP is from the World Bank health MINSAP as well as the coordination of PFM weak for adequate monitoring of the FM project’s PCU and other PFM procedures between the MEF and the practices at the health facility level. operations MINSAP. Recommendation 6: Strengthen citizen Citizen participation will help improve the MINSAP, with support from the participation mechanisms in health care transparency of funds use and demand for MEF, the World Bank health project delivery and administration. improved health care. PCU, and other PFM operations The World Bank Group For more information, please contact Manoj Jain: mjain1@worldbank.org, Edson Correa Araujo: earaujo@worldbank.org, Maxwell Bruku Dapaah: mdapaah@worldbank.org. 6