A public health emergency is testing whether Gambian civil society can keep tabs on the national budget
The Start of a Change Agent
After decades of dictatorship, The Gambia had its first transfer of power by popular election in December 2016. This election brought hope, but unravelling decades of dictatorial rule has proven difficult. Government funds earmarked for public projects often end up in the hands of individuals with connections to politicians or used to benefit special interests.
Ahead of the watershed 2016 election, Marr Nyang resigned from his job at a well-regarded law firm to embark on a grassroots voter education and engagement campaign. Following the campaign’s success, he established Gambia Participates as a civil society organization to bolster good governance.
“I started Gambia Participates because I realized there were no organizations promoting fiscal transparency, doing anti-corruption work, or bringing the public into the fold,” Nyang said. “It was only done at the government level and inconsistently. I decided to start Gambia Participates in 2016 during that toxic political environment. After the change in government, I started pushing for fiscal discipline, transparency, and accountability. Fast forward and we’ve seen great improvements, but also have big challenges when it comes to the mismanagement of public wealth.”
The organization works to ensure budget transparency and a budget that “reflects the needs and aspirations of the people,” as Marr puts it. They also monitor and hold the government accountable for how it spends the budget. Over time, they have successfully nudged the Gambian government, and the Ministry of Finance in particular, to improve governance standards and budgetary reporting.
In December 2020, as part of its work to monitor and hold the government accountable, Gambia Participates sued the National Assembly for violating the budget process by forcefully inserting a US$1 million loan scheme for Members of Parliament in the 2021 budget. On 4 May 2021, the Supreme Court declared the move unconstitutional and the loan scheme was consequently removed from the enacted budget.
The Open Budget Survey as a Vehicle for Reform
The Open Budget Survey, published by the International Budget Partnership (IBP) in collaboration with partners in close to 120 countries around the world, helps local civil society assess and confer with their government on the reporting and use of public funds. The Gambia took part in the Open Budget Survey for the first time in 2019 thanks to Gambia Participates and its dynamic leader.
Since the country took part in the survey, the government signalled a willingness to make its budget documents more transparent. For the first time, the Ministry of Finance published the Executive’s Budget Proposal (EBP) on time and well before the enacted budget was approved. The EBP is the national budget that is tabled before parliament and is widely considered to be the government’s most important annual economic policy statement. Timely publication of the EBP is critical, as it can enable the public and CSOs to make submissions on their needs and priorities to their elected representatives before the budget is approved into law.
Prior to this, the EBP had only been made available in hard copy for the Ministry of Finance and National Assembly. By making the EBP and other such documents available to the public, the Gambia demonstrated its support for informed public debate on the budget. Furthermore, this is one of the key criteria used to assess and rank countries in the Open Budget Survey. The government also published the 2019 budget on the Ministry of Finance website for the first time.
These are significant wins for the people of The Gambia and for advancing global transparency norms. “I believe the Open Budget Survey was a wake-up call for the government to acknowledge its weaknesses and work towards improving them by collaborating with civil society,” Marr said. “In partnership with IBP we realize it is important for there to be a standard roadmap to ensure increased budget transparency, citizen participation in the budget, and accountability around the budget process.”
When COVID-19 hit, Gambia Participates leveraged the skills learnt from conducting the Open Budget Survey to analyze how COVID-19 emergency funds were being used and to hold the government accountable.
Pivoting during the Pandemic
The COVID-19 pandemic was the ultimate test of good governance in the country since the end of dictatorial rule. As the virus spread, the government created a $10 million emergency response fund to provide the medical sector with the tools to keep the pandemic under control. Gambia Participates leveraged the skills and knowledge obtained from its work on the Open Budget Survey to track where and how the emergency funds were being spent.
As the investigation into COVID-19 spending unfolded, field workers from Gambia Participates began noticing a lack of personal protective equipment among frontline workers throughout the country. They also discovered hospitals in major population centers lacked basic items, like overhead thermometers. Frontline workers that Gambia Participates interviewed said funds had been mismanaged just as they had been during the Ebola crisis of 2014-16.
Gambia Participates published an investigation titled “Corona, The Gambia, and the Millions,” in which it detailed the misappropriation of emergency funds. According to the investigation, only $3 million of the $10 million emergency fund had been spent. Moreover, much of the money that was spent had gone to “motor vehicles and hotels while treatment centers and isolation centers are in dilapidated conditions.”
The Gambian Ministry of Health cooperated with the investigation and publicly reported that the emergency funds had been spent on the procurement of medical equipment, the refurbishment of health facilities, as well as vehicles, training, and hotel accommodations for quarantined individuals. Field workers from Gambia Participates, however, painted a very different picture.
Everywhere they visited, health workers and stakeholders complained of a lack of training on COVID-19 protocols; unfurnished isolation centers; inadequate sanitary materials; fraudulent names on the list of frontline workers eligible for hardship allowances; and, above all, a lack of preparedness. In the initial phases of the emergency response, there was no plan or budget in place to determine the actual expenditure of funds.
Using the findings as a springboard, Gambia Participates offered policy reforms designed to prevent public sector corruption and strengthen the public finance sector and health facilities. While the Ministry of Health acknowledged the accusations of corruption and misuse of funds, it is yet to present solutions.
Hard Work Remains
In January 2021, Gambia Participates, with support from IBP, held a workshop with key stakeholders from the Ministry of Finance, the National Assembly, civil society organizations, and the media to identify opportunities for improving fiscal transparency, budget oversight, and public participation in the national budget. Participants reviewed recommendations from the 2019 Open Budget Survey and reflected on gaps in the budget process that hindered the country’s performance.
The outcome was a detailed roadmap that included a budget calendar to facilitate predictability and planning for the fiscal year. “When we designed the roadmap, each institution and stakeholder presented their challenges and opportunities, and then we discussed how to advocate for the roadmap to be part of the budget process,” Marr said. Gambia Participates sent the roadmap to the Ministry of Finance and the national audit office to ensure officials included it in their budget plans. All three stakeholders will hold discussions about how the government can start implementing the roadmap to fill in the gaps it has in budget transparency and public participation, and how Gambia Participates can collaborate with the government to implement the roadmap’s recommendations.
The tide is starting to shift in The Gambia when it comes to public access to and scrutiny of budget decisions. Between Gambia Participates’ scrupulous work and the government’s willingness to improve, attention is focused on building long-term budget practices that will prepare the country for the next public health or other crisis.
“The national budget is central to the socio-economic development of a country,” Nyang notes. “It is crucial for citizens to have a say in the budget process and to mainstream their priorities, which we continue to do at Gambia Participates by facilitating discussion between government officials and the electorate before and after the budget is approved.”
With IBP’s support, the work carried out by Gambia Participates demonstrates that when civil society is properly equipped, open budget practices can be championed even during the immensely challenging conditions of a pandemic. When community-led organizations galvanize citizens to hold their governments accountable, the voices of those most in need are centered.
In this section, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month, we talk with Elena Calistru, chair and founder of Funky Citizens, a Romanian-based NGO that builds research-based, data-driven advocacy tools. Funky Citizens was one of our research partners on the COVID-19 assessment.
Q: What inspired you to start working with budgets?
A: It was 2011 and I got a letter from the tax authorities demanding I pay extra money. And despite being a highly educated person who works in civil society, monitoring issues related to transparency, I couldn’t understand why I couldn’t find any publicly available information to help me understand why I owed this money. I ended up paying the tax without knowing why and promised myself that it would never happen to me again.
Together with people from various sectors, we started looking into government budgets. We went through thousands of tables, hundreds of PDFs, and made hundreds of public officials hate us with all the FOIA requests. But we managed to visualize data related to public budgets, sometimes did cooking shows just to explain budgets for the average citizens and worked with journalists to investigate government expenditures. Essentially, I took my vulnerability in the face of authority and decided to empower myself and others to understand where our tax money goes.
Q: What is Funky Citizens’ primary goals and mission?
A: Founded in 2012, Funky Citizens promotes active citizenship and encourages citizens to get involved in initiatives meant to make the state institutions more responsible. We often collaborate with investigative journalists, given our expertise on topics such as the judiciary, public administration and, of course, public budgets. We are well-versed in data-based advocacy, communication and civic education.
Q: What was the process you used for conducting research for the Open Budget Survey COVID study?
A: We had been following COVID-19 allocations even before we started working with IBP on the COVID module of the Open Budget Survey. IBP’s call for transparency in the COVID-19 response and relief expenditures hit close home for us and prompted us to look early on at what was happening on the legislative front. This made it relatively easy to have a good understanding of the larger context, but also to choose the package that was most relevant as a case study for how the Romanian authorities responded to the pandemic.
In the end, even though there are numerous measures that could have been analyzed, we decided on the package that was passed relatively early (a budget revision with numerous measures ranging from fiscal stimulus to unemployment benefits or social assistance to rapid funds allocation for hospitals to the wider healthcare response). Starting from that package, we investigated follow-up to these measures, complementary resources and any changes to the initial package.
Q: What challenges did you face in the research process?
A: As in most countries that were assessed in the study, Romania suffered from a lack of transparency in the emergency response. For example, as part of the state of emergency regulations, FOIA response times were doubled, and given the fact that the Romanian authorities did not provide any regular updates on COVID-19-related spending, these restrictions made data collection difficult.
Q: Why should the average citizen care about budgets?
A: In an ideal world, the average citizen shouldn’t care about budgets. They would get good public services, decent infrastructure and a great quality of life from their tax money. But I think it is obvious for everyone that we live in a far from ideal world so monitoring what is happening with the budgets is necessary in the face of misspending and sometimes rampant corruption, even during times of crisis. But what we should have is an awareness that the transparency of the budgets is essential. Citizens should be sensitive to any attempt to hide any information related to public expenditures, even if that means that the data released about such expenditures will only be “consumed” by some activist data geeks or investigative reporters. Citizens should be the allies of people engaged in this work that can “translate” for the wider public, so they understand what is happening with the taxes that they are paying.
When the Covid pandemic broke in early 2020, there was near unanimous consent that a crisis of this magnitude required governments to act boldly and swiftly to meet the needs of their people. By the end of 2020, governments mobilized a staggering $14 trillion in fiscal policy responses of different types.
While welcoming these responses, a chorus of voices, including ours, urged governments to put in place the transparency and accountability arrangements necessary to ensure that the massive resources being mobilized did not go to waste. Responding to the crisis in an open and accountable manner was a way for governments to restore public trust and build back better.
Our assessment shows that more than two-thirds of surveyed governments are falling short of managing their fiscal responses in a transparent and accountable manner, thereby jeopardizing the effectiveness and impact of their responses to the crisis (Table of Results).
These shortcuts and limitations are neither necessary nor inevitable. Many countries across regions and incomes have chosen a different path. An urgent and speedy response does not have to come at the expense of accountability. There are three key findings in our COVID accountability report.
1. Governments have failed to adopt key measures to enhance accountability that many voices had demanded when governments began to announce their relief packages.
Only in about a quarter of countries assessed were auditors able to produce and publish audit reports on Covid fiscal packages before the end of 2020.
About half of the governments surveyed published little information on the implementation of policy initiatives.
Approximately two thirds of surveyed countries failed to follow transparent procurement procedures.
Despite this, some countries have shown a different way is possible. For example:
Paraguay has a one-stop-shop site that publishes information on all pandemic-related procurement.
In Jamaica, the Auditor General published three concurrent audit reviews of the government’s cash transfer program, and the Ministry of Finance worked closely with the national audit office to follow up on audit recommendations.
Recognizing the disproportionate impact of the pandemic on women, Canada, the Philippines and Sweden published a Gender Impact Assessment of their COVID-19 response. And in Togo, in a short period of 10 days, the government established a transparent platform for a cash transfer program that prioritized women.
2. The role of legislatures has been limited during the pandemic.
In almost half the countries in our assessment, governments introduced fiscal policy measures through executive decrees, side-stepping normal legislative and approval processes and preventing public debate. Not surprisingly, countries that bypassed their legislatures were also generally less transparent in their Covid-related spending.
Again, some countries showed that a better way is possible. For example:
In Nepal, the Parliamentary Accounts Committee investigated irregularities in procuring medical equipment and supplies to hold to account those responsible for these failures.
In the Philippines, weekly reports on COVID-19 response actions are sent to a Joint Congressional Oversight Committee that oversees implementation.
3. Public participation in the formulation and execution of COVID policy responses is virtually non-existent.
This has not only excluded the public from having a voice in decisions on priority-setting during the pandemic but it has also deprived governments of inputs which could greatly improve the effectiveness of their actions. Only 10 out of 120 countries made any meaningful efforts at engaging with their populations in the design and oversight of relief monies.
Even as governments largely kept the public at bay, civil society groups have been active in mobilizing local communities and amplifying their needs to government. One of the most successful examples of civil society and government collaboration is the Asivikelane initiative in South Africa which is giving an active voice to informal settlement residents in major cities who are faced with severe basic service shortages during the crisis. Through targeted advocacy and campaigns, the initiative has already secured improved access to water, sanitation and waste removal services from municipal governments affecting more than one million people.
There are practical steps governments and donors can take to bolster accountability as part of the ongoing response and to build back better.
Governments can adopt reforms now such as publishing monthly progress report and disclosing procurement details in open formats. They can plus up resources for national auditors to conduct expedited audits and take remedial measures in response to their reports. They can take actions to restore legislative oversight. Further, they can also leverage existing mechanisms in the executive, legislatures and within national audit offices to facilitate citizen participation in the formulation, approval and execution of new Covid-related packages.
Over the long-term, governments can strengthen systems in the annual budget cycle to be better prepared for future crises. These include reforming legal and regulatory frameworks to clarify roles and responsibilities in areas such as procurement, oversight and participation. They can also integrate innovations that emerged from this crisis, such as providing user-centered information.
The international donor community can play an important role in advancing accountability norms in emergency spending. As part of their assistance, donors should urge and support country-led efforts to publish more information about what governments are spending and its impacts and to facilitate oversight by legislatures, auditors and citizens.
The COVID crisis is far from over. We must keep mobilizing resources for the global COVID response, including filling the funding gap for COVAX to ensure everyone has equitable access to vaccines. But if we are serious about equity and justice, we must simultaneously get serious about accountability. This is about ensuring assistance reaches those who need it most. When governments do not deliver as promised, underserved communities bear the brunt.
In this section, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month, we talked with Rongai Leakwara, a budget champion from one of the smallest and marginalized ethnic minority communities in Kenya, known as the Ilchamus community.
Q: What inspired you to start working with budgets?
A: I became involved in budget work to help my community better organize and engage in county budget making processes. As a person with a disability from the Ilchamus community, I became an active member of a support group for people with disabilities. It was through them that I was introduced to the Centre for Enhancing Democracy and Good Governance (CEDGG), a civil society group that works to empower vulnerable and marginalized citizens to engage with development and governance processes. CEDGG has truly played a big role in making me who I am today. Through CEDGG, I was able to learn about and engage in county budget processes to push for our community needs to be included in the county annual budgets.
Q: What skills and tools have you learned from your partnership with IBP that has helped your budget work?
A: I have learned about the county budget process such as the decisions that are being made, important dates in the process, the people involved and the role of citizens. I have also gained skills in analyzing budget documents, community organizing and facilitation of budget deliberations at the community level and engagement with government officials. More importantly, I have gained advocacy skills that have enabled me to engage government officials and follow up on their commitments to hold them accountable.
Q: How has becoming a budget champion in your community changed your life?
A: Being a community budget champion has raised my social status in the community and I am now recognized and respected in my community as a resource. Even men, who had previously looked down on women and people with disabilities, now call on me to educate them. For example, the Ilchamus Council of Elders has invited me to consult on their decision-making regarding development in our ward. In addition, government officials, media and research institutions reach out to me for my opinion on various development concerns within the Ilchamus community. In 2019, I was recognized and rewarded by the Baringo County government as a community heroine for championing for the rights of people with disabilities, women and the Ilchamus Community. However, what pleases me the most is when I see my community members accessing water, health and other services as a result of the budget advocacy work that I and my fellow budget champions have done.
Q: Why is it important for women to have a voice in budget processes?
A: Women play key social roles at the family level ranging from overseeing health care for the family to ensuring water is available for the household. Women end up shouldering the many costs that come with health care needs such as travelling to health care clinics and the purchase of medicine. Therefore, if only men participate, they may not remember to prioritize water projects or health services since they do not appreciate the struggles we go through. When men and women participate, budget decisions are likely to be balanced.
Q: Why should the average citizen care about budgets?
A: We expect the government to implement development projects and improve services such as water and health services in our communities. But as a budget champion, I have come to learn that it is only through the budget that the government brings development to our community. We may continue complaining about poor services but unless they are factored in the budget, we may never see the improvements we want and need. Citizens also pay taxes which finance government activities, so we should care because it is about our money.
On November 17-19, members of the Addis Tax Initiative (ATI) will gather virtually for their Global Assembly. The ATI was set up in 2015 at the Third International Conference on Financing for Development in Addis Ababa, Ethiopia, as a multi-stakeholder partnership that aims to enhance domestic revenue mobilization (DRM) in developing countries. Its members include donor countries interested in supporting tax reforms, developing country governments committed to enhancing revenue collection and improving tax administration systems, and supporting organizations, including multilateral organizations, regional tax administration bodies, private philanthropic foundations, and international civil society groups.
As of October 2020, IBP has formally joined the initiative as a supporting organization, as part of its efforts to strengthen the role of civil society in promoting more equitable taxation in developing countries. IBP’s own Tax Equity Initiative has started working in three areas: (a) creating a better knowledge base to build the field of CSO tax work; (b) fostering tax transparency and participation; and (c) supporting CSO engagement with domestic tax reforms in developing countries through training, technical assistance, peer learning and more. ATI provides an important venue for discussion and coordination efforts in all of these areas.
We are honored to be formally joining the effort as the ATI adopts its new 2025 Declaration, which innovates and pushes the DRM agenda. It explicitly recognizes that it is not enough for governments to raise additional revenue, they need to do it in a more equitable way. Second, it supports the important role that “accountability stakeholders”—including legislators, the media, the public, and civil society groups—can and should play in ensuring that tax policy and administration are equitable and effective. It also highlights the importance of promoting transparency and accountability around tax expenditures, something that IBP has been working on through a regional project with a number of Latin American CSOs.
In coming years, we plan to contribute to ATI and its mission, bringing to bear our rich experience in working with civil society groups, governments and other actors in promoting more general reforms in budget policies and processes. We will support CSO tax work at country level, continuing our engagement on tax expenditures in Latin America and launching a new program to support civil society engagement with tax reforms in Africa. And we will work with the Global Initiative for Fiscal Transparency in promoting more transparency and citizen participation in tax policies and processes.
Most of our initial efforts, have focused on building a better knowledge base for the work that civil society organizations can do to promote more equitable taxation.
A few weeks ago, we published a comprehensive literature review of the political economy of domestic tax reforms, and a companion piece offering “reflection points,” or questions and suggestions for civic actors to consider as they plan work around tax reform.
Today, we are publishing the results of a global scan that aims to map, globally, civil society engagement with domestic taxation issues. This scan resulted in both a paper and an online dataset.
The dataset contains information on 171 civil society organizations working on domestic tax issues across 66 countries. It was populated mostly by drawing on IBP’s own partner network and the networks of other international NGOs such as Oxfam, Christian Aid, ActionAid International and the Global Alliance for Tax Justice. The dataset, based on information drawn from the websites of these organizations, describes broadly for each organization what types of tax issues they work on, what types of activities/work they are engaged in, a description of their approach, memberships in international or regional networks, and their main publications on tax from recent years.
The paper summarizes the key findings from the dataset, and goes a few steps further, drawing on results from an online survey and a series of in-depth interviews with well-established CSOs in this field, to provide a clearer picture of the main characteristics and challenges of CSO work on domestic taxation. In the paper, we identify key entry points for organizations entering this work and the key constraints that they face. It is a snapshot of the current moment in an evolving and expanding field, and by looking at where it is and where it has come from, we look at where it could move, and what needs to change to make that happen.
ATI members can use these publications in shaping their future work with civil society actors. By getting to know better what the field looks like, they can identify potential partners in the countries, regions and policy areas of their interest. And by recognizing how far CSO tax work has come in the past two decades, they can realize how important it is for ATI’s own mission, and support it in ways that address capacity constraints and strengthen the field.
In the coming weeks we will also be releasing the first set of in-depth case studies on how civic actors have engaged in tax policies, covering eight cases of CSO-led tax reform campaigns in Latin America, Africa and Asia. A synthesis of these cases, and short summaries of each, will be available soon. In addition to showing how CSOs can contribute to more effective and equitable taxation, this project will generate lessons for other civic actors interested in engaging with tax reforms.
We hope that ATI members—and many others interested in DRM and related areas—will benefit from these publications, and we invite everyone to engage in discussions and in action on how civil society can help promote more equitable taxation across the world.
As governments continue to implement COVID-19 response and recovery programs, many civil society groups are asking how the crisis will impact governments’ ability to spend money effectively and deliver essential services. For civil society groups that are following the COVID-19 money trail, there are critical questions about budget credibility, or whether governments will actually spend the money allocated in their budget during their fiscal year.
The unpredictable impact of the COVID-19 crisis on government revenues and expenditures could create understandable reasons why governments may deviate from their planned or adjusted budgets in the coming months and years. At the same time, a lack of budget credibility can increase the risk that shifts in spending priorities may also result in cuts to essential funding for non-emergency services that people need—such as for education and routine health services.
One way of identifying potential risks for budget implementation in the current context is to look at the impact of previous health emergencies, such as the Ebola crisis that impacted several West African countries in 2014 and 2015. Reviewing lessons from two of the most impacted countries—Sierra Leone and Liberia—can help understand how government budgets change in response to a crisis and how these changes can impact budget credibility. Drawing on available budget documents and PEFA assessments that cover the Ebola crisis years, here are three key lessons about what we see—or do not see—in terms of government budget credibility during that crisis.
1. Transparency is needed to understand budget credibility during a health emergency.
During the Ebola emergency, governments were making critical decisions about where to spend and where to cut. But what were those decisions and how did they impact government services?
These questions should be answered in government budget documents that provide an official account of how public resources were raised, allocated and spent, along with explanations of changes and deviations in the budget during the year. Unfortunately, good practices on budget transparency were not in place for the countries impacted by the Ebola crisis. The Open Budget Survey (OBS) assessment covering this period in Liberia and Sierra Leone found that both countries’ transparency scores declined as compared to the previous assessment. Moreover, critical budget execution documents were not published online or were published late. In Liberia, the government was producing these documents but released them only years later, far too late to be of use to civil society organizations (CSOs) that were monitoring the government response.
Availability of budget execution documents assessed in OBS 2017
Even published budget documents had significant gaps in information, such that they did not allow comparisons between actual spending and budgeted allocations. For example, Sierra Leone’s In-Year Reports, the monthly Statement of Fiscal Operations, showed expenditures by overall sectors (functional classification) and type of spending (economic classification), neither of which is comparable to the initial budget, which is approved by each ministry (administrative classification).
One area with stronger accountability during the Ebola crisis was the rapid auditing of emergency spending. The supreme audit institutions (SAIs) in both Sierra Leone and Liberia conducted and published rigorous audits of emergency funds, which uncovered waste and mismanagement of spending during the crisis and led to governments addressing some of the problems identified. In contrast, regular audits of government spending did not fully investigate impact of the crisis. Neither of the audit reports for government financial statements in Sierra Leone or Liberia explained changes made to budgets, in part because the SAIs did not receive this information from the government. In Liberia’s case, the regular audit report for 2014/2015 was also delayed in publication, undermining transparency for the rest of government spending – released only four years later.
2. Credibility is an ongoing issue during a crisis.
As governments responded to the Ebola health emergency, they adjusted their budgets in similar ways to what we see in recent months in response to COVID-19, prioritizing the emergency response and economic stimulus efforts. Even with these revised priorities, budget implementation practices followed similar trends as in earlier years.
Budget execution data for the years of the Ebola crisis can be found in in the PEFA reports for Sierra Leone (2018) and Liberia (2016). PEFA assessments examine budget credibility in terms of aggregate expenditures and the composition of the budget (spending by ministries) from the central government: in Liberia, this included on-budget donor expenditures, while in Sierra Leone donor expenditure data was not available.
The PEFA report shows that the government in Liberia struggled with accurate revenue forecasts before the crisis that led to underspending, but budget credibility trends varied by sector. In spite of more pronounced underspending in the health ministry when compared to education or defense, the overall execution rate in Liberia actually improved during this period.
For Sierra Leone, the PEFA report shows that overspending was the norm before the crisis, and this continued to a lesser degree during the Ebola response years. Like Liberia, deviations varied by sector – for example, despite overspending in health and defense sectors in Sierra Leone, the budget for the education ministry was underspent.
At a more detailed level, budget variances can become extreme. For example, official data indicates that an administrative unit known as “Miscellaneous Services,” which includes contingency expenditures, was significantly overspent during the crisis, but no explanations were provided to explain why this happened or how the money was spent.
Sierra Leone PEFA: Actual spending in key sector ministries as a share of the initial approved budget
Liberia PEFA: Actual spending in key sector ministries as a share of the initial approved budget
Thus, on an aggregate level, the Ebola crisis for Sierra Leone and Liberia resulted in slight improvements in budget execution rates, rather than increased fluctuations, as might be expected.
However, these aggregate values can mask large shifts within budgets that potentially can undermine credibility. For example, In Sierra Leone, official data indicates that an administrative unit known as “Miscellaneous Services,” which includes contingency expenditures, was significantly overspent during the crisis, but no explanations were provided to explain why this happened or how the money was spent.
Contingency expenditure in Sierra Leone (in millions, PEFA)
In the same time period, Sierra Leone also increased their accumulation of payment arrears from one percent of expenditures before the crisis to 17 percent of expenditures in 2016. These arrears, which are obligations where the government is late or delayed on payment, are often not reported in budgets and can potentially hide overspending practices. Such changes make it hard to track in government reports where the money goes and how it is being used and can mask credibility problems in the overall budget or specific programs.
3. Altered systems for emergency spending make it harder to track budget credibility.
The need for a rapid response in the Ebola crisis led governments to use different public financial management arrangements during their response. In both countries, the PEFA reports document shifts that governments made in their budgets during the emergency response, but with varying degrees of accountability and transparency. In the case of Liberia, these shifts were discussed with the legislature before being implemented and were not large enough to warrant a formal supplemental budget. In Sierra Leone, overspending was large enough to require a supplemental budget from the legislature, but after 2014 no supplemental budgets were submitted or approved.
In addition to revising public spending, governments were also setting up extra-budgetary funds to manage emergency spending. Extra-budgetary funds promised rapid delivery of services that could circumvent the slower machinery of government systems, including normal oversight practices. In many cases, new extra-budgetary funds were created due to the demand of donors. However, such funds also obscure the total amount of public resources directed to the crisis. By the end of the crisis, only 23 percent of donor financing was disbursed directly to all affected countries public finance systems, with the majority channeled either in extra-budgetary funds or implemented directly through development partners. Off-budget donor funding also has the additional challenge that government auditors in Sierra Leone and Liberia either did not have the mandate or access to donor accounts to audit where and how donor funding was spent.
How should lessons from the Ebola emergency inform the COVID-19 response?
As governments begin implementing their COVID-19 response efforts, often using similar tactics to those used during the Ebola response, we should watch out for similar pitfalls. These include:
Lesson 1: Transparency can regress. Lack of transparency makes it very challenging for CSOs and other stakeholders to conduct timely analysis of emergency spending practices and thereby seek remedial actions from the government during the period of the crisis. CSOs and other stakeholders must insist that governments prioritize transparency and the timely publication of data—transparency and accountability build the trust that is needed to combat the virus.
Lesson 2: Governments tend to use new instruments and PFM arrangements during a crisis. These include supplemental budgets, extra-budgetary funds, contingency reserves or funds and increases in expenditure arrears. Civil society should track these changes and monitor potential risks in these new systems. A special series of notes on COVID-19 from the IMF is a good resource for learning about how PFM systems are changing and what good practices should be adopted.
Lesson 3: Prioritized audits of emergency spending measures can come at the cost of routine audits of government spending. Auditors should formulate audit plans that ensure that all public funds are assessed. Routine audits of government financial statements—which will still account for most government spending—should look at spending deviations during the crisis. Additional support and funding to SAIs will allow them to take on this expanded mandate. CSOs and other stakeholders that are demanding that SAIs conduct expedited audits should also insist that regular audits continue, especially for programs at risk of mismanagement.
Lesson 4: Trends in deviations can continue during times of crises. Importantly, these trends hold true not just for aggregate budgets but also for the budgets of individual ministries and sectors. CSOs can use evidence of previous spending patterns to push back against unjustified claims made by government that budget deviations are only due to the crisis.