MINISTRY OF PLANNING AND INVESTMENT Increasing efficiency and effectiveness of Cash Transfer Schemes for improving school attendance Lessons from a Public Expenditure Tracking Survey of the implementation in Dien Bien Province of the Prime Minister s Decision 112/2007/QĐ-TTg of 20 July 2007 (D112) to support school attendance of poor and ethnic minority children Policy brief, March 2013
Summary In Viet Nam s province of Dien Bien, school attendance of poor and ethnic minority children has been stimulated through the D112 Cash Transfer Scheme from 2007 to 2011. A Public Expenditure Tracking Survey of this scheme identified a number shortcomings and bottlenecks, related to monitoring, accessibility, public awareness and management, which provide important lessons for the design and implementation of Cash Transfer Schemes with social performance objectives. Key recommendations of this policy brief include fine-tuning the institutional processes and adopting transparency and accountability measures. This policy brief aims to contribute to the debate on Cash Transfer Schemes with social performance objectives, as well as to inform and serve policy makers and policy implementers in Viet Nam. Key Recommendations 1 - Link transfers to social targets: Policymakers and designers of cash transfer systems at national and subnational level should integrate a program monitoring system in the program design and formulate specific attendance targets for which local authorities and schools can be made accountable. 2 - Increase accessibility for target beneficiaries: Policy designers should simplify registration procedures and foresee practical assistance to beneficiaries to access programs. 3 - Raise public awareness: Policy designers and implementing partners should launch initiatives to increase awareness and public participation in order to enhance the knowledge of households on the objective, rules and operational procedures of the program through intermediaries including parents associations, commune officers and village heads, among others. 4 - Institute solid financial management systems: National level policy makers should establish a transparent and easy public budget administration system for more effective allocation of the budgetary resources to the lower administrative levels that takes into account key indicators (such as precise identification of beneficiaries, timeliness and volume of support delivery, and improvement in achievement of the program outcomes) and increases accuracy in the identification of beneficiaries, adequate equity in the program coverage, well-defined types and modalities of assistance and high appropriateness of the public assistance. 1. The D112 Cash Transfer Scheme Despite significant progress towards achieving the Millennium Development Goals, including poverty reduction, there remains a large gap in Viet Nam between urban and rural areas (5.1 per cent poverty rate in urban areas versus 15.9 per cent in rural areas 1 ), and high poverty especially among ethnic minority groups (poverty rate of 50.3 per cent versus 9 per cent for the Kinh majority 2 ). Furthermore, despite increased public investments, the quality of education in minority areas remains poor and attendance remains low (94.9 versus 98.4 for primary education; 65.6 versus 83.7 for secondary education 3 ). 1 General Statistics Office Viet Nam (2011) General poverty rate by residence and by region on www.gso.gov.vn 2 Ministry of Planning and Investment and UNICEF (2012) Public Expenditure Tracking Survey Report in Dien Bien Province pp. 13-14 3 General Statistics Office Viet Nam (2012) Multiple Indicator Cluster Survey 2010-2011 pp. 160-163 2
The National Target Program 135 (P135) was launched by the Government of Viet Nam in 1998 to support the socio-economic development for communes with extreme difficulties in the mountainous and ethnic minority areas. One of the program s key targets was to increase the rates of school enrollment and attendance by children from P135 target households. However, there remained remarkable gaps in gross and net enrollment rates at all levels in the P135 communes compared to the national levels (85 and 78 per cent respectively, while national averages were 104 and 89 4 ). Hence, in order to narrow these gaps, the Decision 112 was signed by the Prime Minister in July 2007 with the main objective of providing support to improve access to key public services in the targeted communes. D112 consisted of four main components, including direct support through a cash transfer program to children from poor households who were studying at state schools (primary and lower secondary level) for the period of 2007-2011. Box 1: Public Expenditure Tracking Survey Public Expenditure Tracking Survey: how it works PETS is a tool used to track the flow of public resources from the highest levels of government to frontline service providers and beneficiaries in order to identify differences between the official and actual allocations and to determine the extent to which resources reach service providers. PETS provides information on budget flows and policy implementation, and can therefore help policy makers and civil society to understand funding mechanisms and make informed policy decisions based on their findings. The PETS tool consists of measuring the amount of in-and-out- resource flows and delays between hierarchical levels through sample based quantitative data collection instruments. Resources are then compared to assess leakage of resources, delays and other inefficiencies and equity issues in the resource allocation system. Data collection is organized through a series of questionnaires addressed to the different actors on the supply side of service delivery (service providers, central administration, province and district levels, etc.) and sometimes on the demand side (e.g. households, students). In this policy brief we review lessons of a Public Expenditure Tracking Survey (PETS) examining the D112 school attendance component in Dien Bien against four key characteristics that - when combined -ensure effectiveness of social cash transfer schemes and we formulate recommendations on each topic: Linking transfers to social targets; Accessibility for target beneficiaries; Public awareness; Solid financial management system. Recognizing the limitations of this PETS in terms of scope and representativeness, this brief aims to contribute to the reflections on cash transfer systems and to the wider socialization debate in social policy. 4 UNDP (2008) A Mid-Term Review of the implementation of Program 135-II 3
2. Monitoring school attendance The D112 Scheme is clear about its objectives: to increase school attendance for children from poor and minority households. In its design and implementation, however, the direct link with school attendance has eroded. At household level, cash transfer is unconditional to school attendance, contrary to formal guidelines. Households report multiple uses of program support due to the fungible nature of program transfers. At school or village level, data collection about school attendance is lacking, which makes it difficult to set policy targets and to review policy impact. Therefore, it is recommended to integrate a program monitoring system in the program design and to formulate specific attendance targets for which local authorities and schools can be made accountable. Box 2: Public Expenditure Tracking Survey in Dien Bien Province PETS in Dien Bien Province In Dien Bien, the pilot PETS was designed to collect quantitative information on the cash transfer program at all administrative levels down to service providers and beneficiaries in order to get feedback on challenges and opportunities faced in delivering services. The survey implemented in December 2011 and January 2012 in two districts (out of nine) of the Dien Bien province collected information among program officials at all administrative levels, 65 primary and lower secondary schools, 293 households. The study monitored program implementation and resource transferred during two academic years of 2009-2011. 3. High threshold for registration Complex procedures for identifying, selecting and approving eligible children create a heavy burden for poor households and raise equity issues. In particular, the D112 requirement for households to provide three notarized photocopies of their yellow card (poor status card) to school officials constitute an important constraint to poor and remote households and possibly exclude some poor households access to program s benefits. Simplified registration procedures and practical assistance could lower the threshold for the most remote and vulnerable beneficiaries. 4. Limited public information Citizen information about the program objectives, timing and level of transfers is very limited. Only a minority of the respondents say they know somewhat about the program. Awareness raising and public participation are needed to enhance knowledge of households on the objective, rules and operational procedures of the program. This would also reduce leakages related to ignorance about entitlement levels and procedures. Possible communication channels can be parents associations, commune officers and village heads. 4
5. Delays and leakages reported Delays Important delays in cash disbursements to households are observed, further undermining the conditional nature of the transfer and reducing student attendance incentives. Delays in program disbursements are in large part explained by poor compliance with D112 timeline regulation for budget preparation, at almost all administrative levels. The most serious delay in disbursement was observed in the stage of resources transfer from the central government to the provincial treasury; some delays are also observed at school level in cash transfers to beneficiaries. Table 1: Delay per transfer (Ministry of Planning and Investment and UNICEF, 2012: 26-38) Transfer Central to Province Province to Districts Districts to Schools Schools to households Delay Long Short Short Long Leakages Although between most governance levels the observed cash transfer equals 100%, average amounts of cash transfers reported by beneficiaries are significantly lower than official amounts stipulated by program s regulations. Beneficiaries report receiving 9 to 31% lower program support than officially allocated. The use of the funds that are not accounted for remains unclear. Table 2: Percentage of transferred funds per transfer (Ministry of Planning and Investment and UNICEF, 2012: 39-49) Transfer Amount Central to Province 100% Province to District 100% Districts to Schools 92-100% Schools to households 69-91% Payments of informal commissions are reported by a majority of beneficiaries in both districts. 30 to 70% of beneficiaries report having paid an informal commission to intermediaries (i.e. local or school officials) in order to collect their cash support. Households also report that program support was further reduced by (unofficial) school fees imposed when receiving cash transfers. Resource leakage could also exist through school officials practice of not returning program surpluses to the district treasury after transfers to beneficiaries. Despite clear budget regulation regarding surpluses, unused funds not distributed by schools to households were not returned to district treasuries and accumulated in cash at school level. 5
Transparent budget administration Given these observations, it is recommended that provincial authorities establish a transparent and easy public budget administration system for more effective allocation of the budgetary resources to the lower administrative levels. In doing this, important indicators like precise identification of beneficiaries, timeliness and volume of support delivery, and improvement in achievement of the program outcomes should be taken into account. High accuracy in the identification of beneficiaries, adequate equity in the program coverage, well-defined types and modalities of assistance and high appropriateness of the public assistance should be strictly ensured. Moreover, the budget administration should be combined with a strong and reliable system of monitoring, evaluation, supervision, internal auditing, and reporting of the Program s activities. For each resources transfer, the related authorities and schools should report at a minimum the name of the beneficiary, the amount and dates of financial support transferred and received. Reports of independent auditors should also be made available upon requests. 6. Conclusions and recommendations Despite the general positive perception by its beneficiary households and local officials, the D112 cash transfer scheme has been diagnosed with a number of shortcomings related to the linkages between the scheme and its social objectives, accessibility for targeted households, public information, and the program design, management and supervision. Cash transfer schemes like D112 can be made more efficient and effective in stimulating school attendance for poor and ethnic minority children for which they are designed and therefore it is recommended to: define clear targets for school attendance and integrate a system for monitoring this in the program design; simplify registration procedures and provide registration assistance; provide public information on the objective, rules and operational procedures of the program; set up a transparent budget administration system including instruments to monitor, evaluate and report on the Program s activities. References: General Statistics Office Viet Nam (2011) General poverty rate by residence and by region on www.gso.gov.vn General Statistics Office Viet Nam (2012) Multiple Indicator Cluster Survey 2010-2011 Oversees Development Institute (2012) Public Expenditure Tracking Survey Manual: A social audit tool to monitor the progress of Viet Nam s Social and Economic Development Plan Ministry of Planning and Investment and UNICEF (2012) Public Expenditure Tracking Survey Report in Dien Bien Province UNDP (2008) A Mid-Term Review of the implementation of Program 135-II 6