Municipal service delivery: new accounting software improves transparency in Kerala, India

The financial transparency of urban local bodies (ULBs) in the south Indian state of Kerala has increased thanks to an Asian Development Bank (ADB) project. The municipal corporations of Cochin and Trivandrum now publish their financial accounts online.

The ADB technical assistance (TA) project “Capacity Building for Municipal Service Delivery in Kerala” (2006-2008) assisted municipal corporations and selected municipalities to (i) improve their capacity to organize, record, update, and manage financial and other information on a routine basis; (ii) increase the efficiency and integrity of the data being collected; and (iii) promote good governance in relation to financial management. The TA project aimed to help ensure the sustainability of the investments under the Kerala Sustainable Urban Development Project (Loan 2226-IND), a $221.2 million loan approved by ADB on 20 December 2005 and which became effective on 19 March 2007.

The TA project successfully installed and implemented municipal accounting software in five municipal corporations and two municipalities. As a result of continuous recording, updating and managing financial information on a routine basis using accrual-based double-entry accounting, they managed to publish their financial statement regularly.

Some of the major lessons are:

• Accounting system alone does not do anything – it is just software. It became meaningful when the necessary financial information is entered in accordance with the new accounting policy, which had to developed. The necessary financial information includes the past income and expenditure, assets and liability, and cash flow statement for the last five years. In ULBs, there are backlogs in accounts for four to five years. Recovery of the backlogs and data entry tasks absorbed enormous amount of ULB staff’s and consultants’ time.

• Feeding income and expenditure information can be computerized by connecting the accounting system with the Payroll module and the demand collection balance (DCB) module. Staff salary is the largest expenditure item in the ULB and computerization by the payroll module will bring efficiency in accounts work. The DCB module compares (a) demand: how much to be collected, (b) collection: how much actually collected, (c) balance: how much is still due. This will help ULB in capturing the amount of the uncollected in tax and charges for urban service delivery, which is a good start for ‘management accounting.’ However, the amount of data entry is the same as the number of households in one ULB—again, this requires enormous amount of time and labour.

Read the full Technical Assistance Completion Report

Transparency: public accountability through “Citizens’ Voice” initiative, Cape Town, South Africa

The “Raising Citizens’ Voice in the Regulation of Water Services” is a public education initiative driven by the National Regulator (currently within the Department of Water Affairs and Forestry [DWAF]). It supports a bottom-up approach to water services regulation by actively involving citizens in the local monitoring of water and sanitation services.

It aims to empower citizens to hold local government accountable through:

• Training citizens about their rights and responsibilities, and then
• Setting up “User Platforms” which serve as monthly meetings between the municipality and the community for ongoing civil society water services monitoring and problem solving.

The initiative aims to build partnerships between the three spheres of government (national, provincial and municipal levels) and civil society.

Important lessons learned so far are:

• the need to secure political support, through getting endorsement and providing training to local government officials;
• after citizens are trained, User Platforms should be established as soon as possible to keep them engaged;
• ensure citizen ownbership of User Platforms and not let them become a public relations vehicle for local government.

Read the full story in the WIN-SA lesson series no. 20 “Public accountability through “Citizen’s Voive”: City of Cape Town shares good practice (March 2009).

Community kiosks: learning from water supply failures in Malawi

The Lilongwe Water Board is the sole water supply authority in Malawi’s capital city. However, its service suffered from inadequate response to system and community problems and lack of transparency in water billing. In response to a request for assistance from the community, WaterAid Malawi developed a strategic partnership with the Lilongwe Water Board, aimed at improving management of water services in unplanned low-income neighbourhoods.

An [April 2008] paper from WaterAid Malawi describes its partnership with the Lilongwe Water Board and a local non-governmental organisation – the Centre for Community Organization and Development (CCODE).

WaterAid research indicated that the system to distribute water through water kiosks was not working. Poor households owed huge sums to the Lilongwe Water Board – the monopoly water provider. They were paying far too much: prices at communal kiosks in low-income areas were twice as high as those in high-income areas. Charging systems were inconsistent and billing was not transparent. Some households paid equal monthly fees for different levels of consumption while others were paying per bucket.

Political and traditional leaders corruptly controlled kiosk management committees and failed to pass on funds they collected from communities to the Lilongwe Water Board. The private operators who were able to pay their utility bills resold water to poor people at high and unregulated tariffs. Many meters were vandalised but even those still working were often not read for over a year. The water board charged customers for estimated, not actual, consumption. Without consultation with users, the utility factored in arrears into water bills to cover money misused by community leaders.

Further problems included: illegal installation of boreholes, failure to check water quality, dependence of on unsafe sources when kiosks were disconnected, high leakage rates

[Following a reform programme] the utility now regards itself as a public service provider with obligations to consult users and to extend the network to unserved communities, while also embracing private sector principles to improve the efficiency of billing, debt collection and reduction of water losses.

Reform has also involved:

• establishing a focal point within the Lilongwe Water Board to whom community kiosk users could take their grievances: the Kiosk Management Unit regulates prices and promotes timely reporting of faults and prompt action to fix them
• WaterAid providing technical and financial advice and funding to rehabilitate communal water kiosks, replace meters, construct meter boxes and improve drainage facilities at kiosks
• building CCODE’s capacity to mobilise communities’ capacities to identify kiosk management options, settle debts, monitor the utility and promote hygiene education.

Source: id21, 01 March 2009

Urban sanitation: putting people at the centre of informal settlement upgrading in Pakistan

The Orangi Pilot Project (OPP) has transformed sewage systems in low income, informal settlements (‘katchi abadi’), where 60 percent of Karachi’s population lives. OPP has challenged development approaches, which are very technical and overly-dependent on government and donor support. Such approaches treat poor communities as objects, rather than drivers, of development.

A report for the International Institute for Environment and Development, in the UK, explores how OPP has expanded from a focus on the ‘katchi abadi’ of Orangi to become an important voice on issues related to sewerage, drainage sanitation and informal settlement upgrading across Karachi.

[...] OPP has achieved credibility over years of rigorous mapping and documentation. [...]. OPP’s model of low-cost sanitation gives residents the responsibility of building household and lane-level sanitation infrastructure. Municipal authorities are responsible for building and maintaining secondary infrastructure. [...] Infant mortality rates have declined dramatically.

[...] In order to ensure individuals are driven by ideals, not [...] financial reward, OPP salaries are lower than those of other NGOs.  [...] OPP does not seek large-scale funding from donors. High standards of openness and financial transparency are central to building relationships. Staff numbers are kept low by training community members as activists and mappers, and encouraging them to work themselves.

OPP rejects all form of subsidy, believing it inevitably leads to dependence [and] increases costs and causes waste. When the community contributes towards a project – [..] costs are immediately cut: designs are simplified, methods of construction are cost-efficient, and profiteering, kickbacks and professional fees for contractors, engineers and supervisors are eliminated.

OPP’s experience shows that:

• It important to work on a single issue – or only a small number of issues – comprehensively before taking on related issues.
• In order to influence government it is vital not to be confrontational: it is necessary to work patiently over a period of time with department staff and build trusting relationships with civil servants.
• Meticulous documentation of findings, observations and processes, leading to the preparation of alternatives is critical to being taken seriously by decision-makers.

Source: id21, 01 March 2009