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Bottom-Up Administrative Reform: Designing Indicators for a
Local Governance Scorecard in Nigeria Africa Region Working Paper
Series No. 68 June 2004 Abstract
This paper provides a historical overview of the role and
framework of governance assessment in World Bank operations, as
well as an informative, process oriented and technical description
of the design of such a framework in the Nigerian public
administration reform environment. The paper outlines the process
and rationale behind the development, modification and refinement,
by the World Bank and other international agencies, of governance
performance indicator categories, from the broadly defined “first
generation” indicators to the more precise, meaningful and
effective “second generation” ones. Through the Nigerian case
study, the paper also illustrates the integration of a governance
assessment scorecard into a community driven development operation,
and the analytical and participatory process through which the
scorecard was developed. Emerging findings explicit in this paper
suggest that governance indicators, both qualitative and
quantitative, ought to be simple, measurable, directly related to
specific areas of governance, based on accessible data, universal
to and acceptable by most government authorities in the particular
country in which the framework is applied.
The Africa Region Working Paper Series expedites dissemination
of applied research and policy studies with potential for improving
economic performance and social conditions in Sub-Saharan Africa.
The Series publishes papers at preliminary stages to stimulate
timely discussion within the Region and among client countries,
donors, and the policy research community. The editorial board for
the Series consists of representatives from professional families
appointed by the Region’s Sector Directors. For additional
information, please contact Paula White, managing editor of the
series, (81131), Email: [email protected] or visit the Web
site: http://www.worldbank.org/afr/wps/index.htm. The findings,
interpretations, and conclusions expressed in this paper are
entirely those of the author(s), they do not necessarily represent
the views of the World Bank Group, its Executive Directors, or the
countries they represent and should not be attributed to them.
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mailto:[email protected]://www.worldbank.org/afr/wps/index.htmAdministrator31271
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Africa Region Working Paper Series # 68
Bottom-Up Administrative Reform:
Designing Indicators for a Local Governance Scorecard in
Nigeria
Talib Esmail
Nick Manning Jana Orac
Galia Schechter
June 2004
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Authors’Affiliation and Sponsorship
Talib Esmail, World Bank. Email address: [email protected]
Nick Manning, World Bank. Email address: [email protected]
Jana Orac, Consultant Email address: [email protected] Galia
Schechter, Consultant Email address: [email protected]
The authors would like to thank the Trust Fund for
Environmentally and Socially Sustainable Development (TFESSD) -
formerly known as the Norwegian Trust Fund (NTF) - for their
support during the early stages of developing and testing the
governance
indicators. During the course of developing the various versions
of the scorecard, helpful comments were received from Gary Reid,
James Anderson, Michael Stevens, Elizabeth Moriss-Hughes, Peter
Papka and Andrew David. We are grateful to Yoshiko Masuyama for
formatting this paper and to Dirk Prevoo for agreeing to finance
the printing costs from the supervision budget of the LEEMP.
mailto:[email protected]:[email protected]:[email protected]:[email protected]
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Abbreviations and Acronyms CDD Community Driven development CY
Calendar Year DFID Department for International Development DAC
Development Assistance Committee ESW Economic and Sector Work FY
Fiscal Year IBRD International Bank for Reconstruction and
Development IDA International Development Association IMF
International Monetary Fund LEEMP Local Empowerment and
Environmental Management Project LGA Local government authority NGO
Non-governmental organization NPRS National Poverty Reduction
Strategy OECD Organization for Economic Cooperation and Development
PAC Public Affairs Center SIGMA Support for Improved Governance and
Management SPAI Stability Pact Anti-Corruption Initiative TTL Task
team leader UN United Nations
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Table of Contents
PURPOSE OF THIS PAPER
..........................................................................................
1
INTRODUCTION.............................................................................................................
2
PART I: HISTORICAL EVOLUTION OF GOVERNANCE INDICATORS...........
2 The emergence of a “first generation” of governance indicators
.................................. 2 The emergence of a “second
generation” of governance indicators..............................
4 Combining second generation indicators with scorecard methodology
........................ 6
PART II: THE NIGERIAN GOVERNANCE SCORECARD
..................................... 7
Objectives and potential benefits
....................................................................................
7 The scorecard development process
...............................................................................
9 The first version of LGA scorecard for
Nigeria............................................................
10 The indicators in the first version
.................................................................................
10 Constraints influencing the simplification of the scorecard
........................................ 12 The simplified version
of the scorecard ready for application
..................................... 13 The assessment
process.................................................................................................
15 Potential risks of implementing the scorecard
.............................................................. 17
Conclusion and Next Steps
...........................................................................................
19
References.....................................................................................................................
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Purpose of this Paper
A local governance scorecard was designed during the preparation
of a community driven development (CDD) project in Nigeria (Local
Empowerment and Environmental Management Project – LEEMP). The
scorecard was designed as a practical tool for operations. It is
not an instrument for empirical study, in which significant time
and resources can be spent on statistical sampling and
research.
The purpose of this paper is to lay out the logic and thought
processes leading up to the design of key governance-related
indicators (both quantitative and qualitative) that will be used by
LEEMP to further its intention of administrative reform of local
governments. As the application of the scorecard in Nigeria takes
place, this working paper will be updated with further analysis and
lessons learned regarding the indicators and methodology. The
authors hope that this paper will be of practical relevance to Task
Team Leaders (TTLs) of the growing number of CDD operations in
which local government administrative reform may not be the central
focus, but rather an important objective through which to
contribute to sustainable community development and improved
service delivery. This paper begins with a historical overview of
governance assessment in World Bank operations. It continues with a
description of the evolution of governance indicators from the
rather broadly defined “first generation” indicator categories to
the more precise and practical “second generation” indicators. We
believe that this background provides useful information which TTLs
may find helpful when explaining a similar methodology to their
clients. The second section of this paper presents a case study of
the evolution of the local governance scorecard in the LEEMP. It
describes the initial (or some might say utopian) set of indicators
that were developed and the rationale for their selection.
Following field testing of the initial set of indicators, the paper
describes how a much more simplified version of the scorecard had
to be developed as the implementation constraints became apparent.
The section ends with a brief conclusion and a description of the
next steps in the application of this scorecard.
1
Jana OracDo we still want to say this, given the low likelihood
it will actually happen plus the change in project staffing? Maybe
we can soften it to offer updates to the website note, if it still
up, or updates available via project documents/task manager. Or be
totally realistic and cut all reference to updates.
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Introduction
In contrast to many countries in Sub-Saharan Africa, Nigeria has
considerable wealth by virtue of its large petroleum reserves. It
is officially a “blend” country; eligible for both IBRD loans and
IDA credits. The stark reality, however, is that the IDA budget
envelop available to Nigeria (US$200 million for FY03) is trivial
compared to the overall public expenditure budget (about US$10
billion for CY03). Obviously, the most significant impact on
reducing poverty will have to come from increased efficiency and
effectiveness of public expenditures and not from IDA resources.
The LEEMP will provide about US$70 million in IDA resources to nine
States in Nigeria. Undoubtedly, the credit amount is not sufficient
to benefit all local governments and communities in all the
participating States. Therefore, the LEEMP has decided to establish
an incentive system that uses a local governance scorecard based on
second generation indicators to identify local governments whose
levels of competence and commitment qualify them to participate in
LEEMP. The aim of this approach is to provide incentives for local
governments to provide social and economic services to their
constituencies while encouraging communities to demand such
services from their local governments. In targeting its resources
to better performing local government authorities (LGAs), IDA thus
hopes to encourage government to emulate similar standards when
allocating public expenditure budgets.
Part I: Historical Evolution of Governance Indicators
The emergence of a “first generation” of governance
indicators
The World Bank’s attention to the role of governance in the
success and sustainability of development efforts emerged in the
early 1980’s. At that time, it became increasingly apparent that
the effectiveness of both adjustment and investment operations
among Bank borrowers was heavily impeded by governance factors
related to poor management. In 1989, a Bank publication entitled
Sub-Saharan Africa: From Crisis to Sustainable Growth: A Long Term
Perspective Study (1) drew attention to the crisis of governance in
Africa and reflected the growing interest in issues of governance
in general and, in particular, as they relate to economic
development. A more comprehensive analysis of the role of
governance in development was presented in the early 1990’s with
the issuing of a milestone World Bank publication entitled
Governance and Development (2). The paper further
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expanded the debate about the relationship between development
success and the quality of government action by proposing a
framework of performance categories for governance assessment.
Among the numerous categories proposed, four primary areas of
governance were identified as consistent with the Bank’s mandate to
promote sustainable economic and social development: (3) • Public
sector management – establishing a direct correlation between
prospects of development and the capacity of the public sector
to manage the economy and deliver public services;
• Accountability – involving the transparent and consistent
correspondence between public policy, successful implementation,
efficient allocation and use of public resources;
• The legal framework for development - creating an enabling
legal infrastructure that is conducive for growth oriented economic
actions and efficient use of resources; and
• Information and transparency - enhancing open access to
information and credibility of public sector management while
reducing uncertainty among all stakeholders regarding risks
associated with development endeavors.
The decade of the 1990’s was characterized by a great deal of
effort by international agencies, commercial firms and NGOs to
clearly define characteristics, incentives, and obstacles to and
overall conditions of good governance. Such efforts played a key
role in the development and expansion of the “first generation” of
indicators that pointed to broad weaknesses and problematic areas
of government and its operating environment. For example, in cases
of national government assessment, evaluators could apply a “first
generation” indicator such as “corruption” to examine government
accountability, and would consequently attribute an aggregate score
to overall government performance in that area. Such indicators
were instrumental in defining some of the broad areas of governance
initially proposed, and in enabling the drawing of comparative
analysis of the quality of governance across nations. They were
also helpful in the analysis of political risks associated with
government performance faced by foreign investors. Additional types
of “first generation” indicators continued to emerge as research
and analysis were conducted to identify the relationship between
decentralization and quality of governance. In 1998, a World Bank
working paper entitled Applying a Simple Measure of Good Governance
to the Debate on Fiscal Decentralization (4) further proposed an
elaborate governance assessment framework. The framework proposed a
measurement of quality of governance based on the impact of its
exercise of power on the quality of life enjoyed by its citizens.
While somewhat similar to the one cited in Governance and
Development, the new framework elaborated upon the broad categories
of performance and added several more narrowly defined indicators.
The four observable governance dimensions proposed by this expanded
framework included the following: • Citizen’s voice - ensure
political transparency and voice for all citizens; • Government
orientation - provide efficient and effective public services; •
Social development - promote health and well being of its citizens;
and
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• Economic management - create a favorable climate for stable
economic growth.
Other quantitative analyses have linked governance to a variety
of development outcomes using subjective and broad indicators of
corruption or the rule of law (e.g. Ades and DiTella 1996; Chong
and Calderon 1999; Hall and Jones 1999; Johnson, Kaufmann, and
Zoido-Lobaton 1998; Kaufmann, Mehrez, and Schmukler 1999; Knack and
Keefer 1995; Mauro 1995; Rodrik 1997; and Tanzi and Davoodi 1997;
Wei 1997). (5)
The emergence of a “second generation” of governance
indicators
Such an evolving range of “first generation” of governance
indicators drew attention to the crucial role of governance in
development. However, these indicators were quickly realized to be
of limited value in identifying high-payoff reforms and in building
ownership for reform by developing country governments. Indeed, in
March 2000, a joint UN/OECD/World Bank/IMF forum reached a
consensus that “first generation” indicators and frameworks of
analysis had a meaningful but limited value, and that “these first
generation governance indicators have helped to draw attention to
the right issues, but the explosion in their numbers has not been
accompanied by improved insight into practical ways forward for
reforming governments.” (6) More specifically, a paper (7) prepared
for the 2000 Forum explicitly argued that the existing indicators
indeed point to problems in governance, and yet a “6.2” aggregate
score in transparency, or a “5.34” aggregate score in corruption
are unhelpful in identifying operational solutions and thus leading
to performance improvement and capacity building. “For example, a
low score on a rule of law index implicate multiple policy and
institutional culprits. It is undeniably a problem but it does not
naturally suggest what the solution might be or even who should
implement it. (8)” The most critical problems associated with
“first generation” indicators were identified to be the
following:
• They often do not provide precise and objective measurement of
governance
related challenges and performance trends; • They do not point
to particular institution or institutional arrangements as the
cause of governance challenges; • They do not isolate particular
causes to broad problems; and • Information provided is
insufficient to facilitate the identification of
appropriate operational solutions and performance improvement
processes.
Thus, with the help of the Department for International
Development, United Kingdom (DFID), the World Bank started work in
the Fall of 2000 on the development of institutionally specific and
transparently generated governance and corruption indicators. This
paper summarizes some modest, but significant progress within this
project that seeks to lower the temperature on a key question in
governance: ‘how can it be measured in a way that promotes
constructive change?’
4
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The work has been undertaken in collaboration with the
Development Assistance Committee (DAC) of the OECD. The DAC has
been working to establish indicators that measure movement towards
the meeting of major UN conference goals since the early 1990s. In
"Shaping the 21st Century: The Contribution to Development
Cooperation" (OECD 1996), the DAC confirmed the goals and set out
the areas of democratic governance that it saw as essential for
achieving these goals. These areas are good governance (including
public sector management, rule of law, corruption and military
expenditure); human rights; and democratization and participatory
development. In 1996, the DAC ad hoc working group reported that it
had failed to forge a consensus around some core indicators for
these issues. Demand for measurements of progress increased
significantly, particularly from the development agencies, and a
DAC proposal to a joint OECD/UN/World Bank meeting on Agreed
Indicators of Development Progress in February 1998 re-launched the
process. However, at the Joint UN/OECD/World Bank/IMF International
Development Forum hosted by OECD/DAC in March 2000, there was again
a consensus that there was not yet a meaningful set of indicators
of participatory democracy and good governance that was politically
acceptable to governments. Nevertheless, there was strong sentiment
that disciplined work on identifying meaningful and acceptable set
of “second generation” indicators should continue, as it was
recognized that the alternative was the increasing use (at least
outside DAC) of indicators that were non-transparent and/or
unacceptable to governments. To qualify as pragmatic, transparent,
particular, and result oriented, second generation indicators had
to comply with certain established standards. Among the standards
proposed by Knack, Kugler and Manning (2001) are whether: • the
indicator implicates particular institutional arrangements; • it
describes characteristics of good governmental processes; or • the
indicator lends itself to valid and reliable measurement.
The development of “second generation” indicators intensified as
part of the World Bank’s contribution to the good governance pillar
of the Balkans Stability Pact Anti-corruption Initiative (SPAI). As
part of the Pact, South East Europe became a pilot region for
testing the feasibility of gathering sufficient data on more
specific, replicable indicators to construct governance
“scorecards.” Bank economic and sector work on the Balkans
countries and other sources were comprehensively reviewed to gather
information to construct the indicators. In June 2001, a joint
World Bank/OCED-SIGMA mission to the region sought data directly
from governments. This work provided some indication that
governmental transparency with regard to data collection and
dissemination can itself be a useful indicator measure of
accountability. Although data were obtained only for the Balkans
countries that are participating in the SPAI, initial evidence from
this data collection and analysis effort suggests that
accountability tends to be associated with pro-poor outcomes.
However, the governance scorecard approach for monitoring
governance via peer review mechanisms has not been implemented by
the SPAI, due to a combination of dissatisfaction among
participants with the proposed indicators, the scorecard peer
monitoring approach, or with the SPAI itself.
5
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As types and examples of “second generation “ indicators began
to emerge, these have been integrated into several recent World
Bank operations. For instance, two public sector reform loans in
Albania and Macedonia have used “second generation” governance
indicators in monitoring the progress of public administration
reforms. The Government of Albania has adopted a comprehensive
policy reform program to strengthen Albania’s weak institutional
and governance capacity. This policy reform program was supported
by a $45 million Structural Adjustment Credit approved by the World
Bank in June of 1999, followed by an ongoing $9 million Public
Administration Reform . The objective of the project is to provide
required resources for technical assistance, training, goods and
incremental operating costs that are needed to implement the
Government’s Institutional and Public Administration Reform agenda
effectively. The project will include a number of performance
indicators, some of which are intended to focus the Government’s
attention on the longer term objectives of its reform effort, and
others are intended to capture the more immediate and concrete
progress that can reasonably be expected to be achieved during
project implementation. Similarly, a $15 million Public Sector
Management Adjustment Credit project in Macedonia includes
provisions for monitoring progress using indicators such as the
public sector wage bill, vertical compression of civil service
salaries. Another example of the integration of “second generation”
governance indicators is found in Cambodia’s National Poverty
Reduction Strategy (NPRS) for 2003-2005, which provides for
monitoring progress via objectively-measured indicators, including
some in the area of “institutional strengthening and good
governance.” Some of the progress indicators include increases in
civil service salaries, reductions in the number of civil servants,
in the size of the armed forces, and in defense expenditures.
Because of the emphasis on promoting gender equity in the NPRS, the
progress indicators in the area of governance also include
increasing the number of female prosecutors, and increasing the
share of parliamentary seats held by women.
Combining second generation indicators with scorecard
methodology
The concept of the scorecard was pioneered by the Public Affairs
Center (PAC) in Bangalore, India in 1993, and has since been
broadened in scope and applied both nationally and internationally.
In fact, it has emerged in recent years as a highly effective
empirical means of measuring the performance of service providers,
relying on public awareness and participation to generate
collective action and bottom up pressure against poor service
delivery and rent seeking. The scorecard methodology is usually not
intended to replace a more comprehensive, government specific
diagnostic, but rather is utilized as a tool for comparative and
systematic assessment and change catalysis of governments based on
participation, awareness and collaboration. (9) The use of the
scorecard as a monitoring mechanism by the SPAI represents an
innovative application of second generation governance indicators
through a simple, pragmatic and participation-based tool for
government assessment. The scorecard methodology has been used
successfully to provide policy makers and
6
Jana OracHave we clearly described what exactly this concept is?
If not, I suggest a very succinct line, maybe inserted right into
this sentence. Something along the lines of: “ The scorecard
methodology – an independent assessment that draws upon feedback
from various stakeholders and is periodically updated and
publicized – is usually not …..”
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their constituents with an opportunity to independently evaluate
performance associated with the provision of basic public services.
The marrying of the scorecard methodology with second generation
indicators has, therefore, been a natural evolution of the efforts
to apply a mechanism for both assessment and reform of governments.
Specifically, two main commonalities exist between the scorecard
approach and the evolutionary thought process leading to the second
generation of governance indicators: • Civic engagement and
participation: One of the common links between the
scorecard and the emergence of second generation indicators is
their mutual focus on civic participation. Not only do emerging
second generation indicators and elements traditionally used in
scorecards focus to a great extent on government’s responsiveness
and accountability to its citizens, but also, and even more so, the
methodologies involved in identifying and applying the appropriate
indicators, and the expected process of consequential behavior
change within government relies extensively on citizen
participation and engagement.
• Incentive based performance improvement: While many changes
occurred
throughout the years in the definition of good governance and
its corresponding indicators, it has been consistently agreed that
governance is a continuum, requiring incentives and constant
tending in order to improve. The role of citizens, therefore, is
critical in demanding and influencing good governance through
awareness, education, mobilization and participation. The scorecard
methodology too, has been designed on the premise that public
expectations motivate governments while placing certain constrains
on its actions. The scorecard, therefore, encourages citizens,
particularly the poor, to express their preferences and to hold
public officials accountable for translating their preferences into
results. The utilization of scorecard methodology with objective
and transparent second generation indicators is, therefore,
expected to provide civil society and stakeholder communities with
a mechanism for influencing governance and the policy making
process.
Part II: The Nigerian Governance Scorecard
Objectives and potential benefits
There are a total of 36 states and 774 LGAs in Nigeria – an
average of 21 LGAs per state. Following the enactment of the
Constitution of the Federal Republic of Nigeria (1999), democratic
elections were held for the first time at all three tiers of
government. All local governments have been established on the
“presidential model” – the chair of the LGA is directly elected by
eligible voters in the local government area, and governs with the
assistance of commissioners who are appointed to head local
government departments. The local government council is the
legislative arm of the LGA. Members of the council are elected from
single member wards (i.e. districts). The term of both the chair
and council of the LGA is currently three years. LGAs constitute
the weakest tier of government in the federal system. However,
there is considerable variance in performance amongst LGAs.
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Although administrative reform is not its principal focus, LEEMP
recognizes the tremendous impact that all levels of the public
administration have on community development and service delivery.
Since local governments are closest to the citizenry and receive
significant public funding, improved performance at this level has
particular potential to contribute to sustainable community
development. As part of its design, LEEMP strives to change the
paradigm that currently dominates community-local government
relations. The credit seeks to empower communities to view local
governments as entities that should serve and be accountable to the
electorate, and to demand that local governments act accordingly.
Likewise, local governments that wish to participate in LEEMP must
demonstrate an orientation toward public service and a willingness
to work in partnership with communities. Through the assessment and
selection process the scorecard will serve as a tool to distinguish
governments that are heavily corrupt and/or dysfunctional from
those where administrative systems governing policy making,
budgeting and basic service provision might be insufficient but are
essentially present. The local government scorecard has been
specially developed to advance these objectives. The scorecard will
be used to identify local governments for participation in LEEMP.
As a community-driven development project, LEEMP will channel funds
directly to selected communities within those LGAs (only) that pass
the scorecard assessment, without going through LGA accounts. LEEMP
funds would not go through LGA accounts because they lack financial
and accounting systems, as well as staff capacity. Bank Financial
Management Specialists were skeptical as to whether any LGAs would
meet the necessary fiduciary requirements (at least initially) to
enable funds to flow through their accounts. However, even without
funds flowing through their accounts, local governments will
benefit from the prestige of participation, as well as having the
opportunity to build stronger relationships with communities and
further enhance their own administrative capacities. Selected
communities will be able, with external facilitation and in
coordination with their LGAs, to identify, manage and implement
their own development priorities within a pre-assigned budget
envelope. The scorecard may also serve some secondary objectives.
These include:
• Gathering information that can be used to target LEEMP’s local
government
capacity building efforts; • Encouraging modest behavioral
changes by mandating specific steps (related
to scorecard criteria) that local governments must undertake,
once accepted, in order to remain active participants;
• Potentially, encouraging behavioral changes by local
governments that wish to improve their performance in order to be
accepted to LEEMP in future; and
• Informing decisions about the type and level of LEEMP-specific
responsibilities that a local government should be assigned.
The scorecard may bring more general benefits:
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Increase the voice of rural communities by explicitly
considering their feedback in LEEMP’s selection of local
governments; Educate governments and citizens in participating
states about how local governments should behave; and Communicate
to local government politicians and officials that they are under
real scrutiny, and that their performance can have real
consequences. The extent to which these secondary objectives and
general benefits are met will become evident only after the
scorecard is launched.
The scorecard development process
The scorecard’s development included interviews of communities,
LGAs, and non-governmental organizations in several states (August
2000), analysis and review by World Bank staff, consultative
workshops with stakeholders from six states and field visits
(November 2001), and field testing (May 2002).
• Initial interviews: In an effort to understand what were the
key constraints to
local governments fulfilling their constitutionally mandated
role, a short questionnaire was developed covering a variety of
topics related to planning, budgeting, service delivery, reporting
and governance. The purpose of the questionnaire was to guide Bank
staff (who were not necessarily public sector management
specialists) in consistently asking the “right” questions when in
the field. As part of a Bank preparation mission, staff carried out
semi-structured interviews with communities, NGOs, local government
chairmen, local government councilors, state level civil servants
and others stakeholders. Whenever possible, responses were
triangulated in order to verify their authenticity.
• Analysis and review by World Bank staff: Interview results
were analyzed
over a period of three months with the aid of a public sector
management specialist. Knowledge gaps were partially filled through
semi-structured interviews with other members of the Country Team
from a variety of sectors. In some cases, on-going economic and
sector work (ESW) on Nigeria was used to gain further insight into
issues such as the state governance environment. The outcome of
this stage was an embryonic scorecard based on five primary
categories of performance indicators (described in full in section
below and also in Annex 1).
• Stakeholders consultation workshops: In October of 2001, a
series of
workshops took place inviting community, NGO, LGA and state
representatives of six states (one from each geo-political zone in
Nigeria). The primary aim of these workshops was to test the
reaction to the indicators in the embryonic scorecard and, if
possible, to reduce the number of indicators and obtain greater
specificity in measuring performance. Considerable time was also
spent on discussing how the scorecard might be implemented in order
to prevent collusion amongst those being assessed in an effort to
subvert the objectivity of the assessment. With hindsight, the
stakeholder workshops were not particularly cost-effective in
achieving their
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objectives. However, they did serve to convince federal
government of the overall acceptability of the scorecard approach
by states and local governments.
• Field application and testing: In May of 2002 extensive field
testing of the
proposed indicators and the assessment methodology took place in
several of the LEEMP participating states in Nigeria. The primary
objective of the testing was to determine which indicators would be
most effective given the constraints. It was also designed to
refine the methodology and adjust it as necessary to reflect local
conditions. The outcome of this process was a significant reduction
in performance categories and indicators with a much leaner and
simpler scorecard.
The first version of LGA scorecard for Nigeria
The initial set of indicators was largely based on a combination
of subjective (perception based) criteria from an analysis of field
interviews with multiple stakeholders, as well as objective
(empirical) criteria based on tested second generation indicators
and international good practice concerning administrative reform.
We consider it useful to present these indicators here to
demonstrate their breadth of coverage and the rationale for
choosing them. While subsequent iterations of the scorecard
drastically reduced the number of indicators, the long list
presented here and also in Annex 1 may assist TTLs in making
informed choices as to which are more applicable to their
particular context.
The indicators in the first version The set of indicators
initially proposed covered the following broad categories: a. State
governance environment for the LGA; b. Budget formulation,
execution and reporting; c. Participation and planning; d. Project
implementation capacity; and e. LGA personnel capacity.
The following are examples of indicators prescribed under each
category, and the overall rationale for their application: (A
complete table of indicators and their rationale and performance
classification categories is available in Annex 1). State
Governance environment for the LGA: Suggested indicators for this
category included the following: a. Effective legal framework; b.
Agreement on inter-governmental revenue transfers (state to LGA);
c. Autonomy; and d. Relationship with state ministry of local
government affairs or equivalent. The overall rationale for these
indicators was based on the assumption that sustainable capacity
and effective performance of local governments are directly
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related to the consistency, transparency, extent of
collaboration, and support between local and state governments.
More specifically, in order to operate effectively and
systematically, local governments must have a supportive and
effective legislative environment, a reliable and consistent system
of resource transfer, and a decentralized and autonomous
operational environment based on which LGAs can effectively respond
to local interest. Budget formulation, execution and reporting:
Suggested indicators for this category included the following: e.
Formal and comprehensive budget; f. Effective project
prioritization; g. Effective revenue collection of both taxes and
users fees; h. Appropriate flexibility in budget allocations; i.
Effective accounting and audit; and j. Sound financial management
practices.
The overall rationale for these indicators was based on the
premise that formal and comprehensive LGA budget planning and
administration, ingrained in a realistic and effective revenue
collection and expenditure monitoring system, ought to provide the
mechanism for identifying clear and realistic priorities, and
matching them with available resources. Additionally, by
maintaining some flexibility in the budgeting system and applying
effective auditing practices, LGA staff should be able to respond
to changing budgetary constraints while ensuring effective and
transparent use of funds.
Participation and planning: Suggested indicators for this
category included the following:
k. Consultation, responsiveness and redress vis-à-vis
communities; and l. Effective LGA Council
The overall rationale for these indicators was based on the
premise that consultation with communities and extensive
communication and collaboration with community members enables LGAs
to serve their constituencies in an accountable, responsive and
transparent manner, thus truly reflecting community interests and
priorities. Such participation ought to be consistent and
systematic with credible oversight by the elected LGA Council.
Project Implementation capacity: Suggested indicators for this
category included the following:
m. Community participation in project implementation; n.
Involvement of community based organizations and
non-governmental
organizations; o. Transparent and open procurement; p. Active
monitoring and evaluation of projects; and q. Hiring of community
members. The overall rationale for these indicators was based on
the premise that community participation and involvement in project
design and implementation
11
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of LGA financed investments may foster a sense of ownership and
commitment among community members toward development efforts, will
enable community members to compete fairly and openly for
procurement contracts, enable the LGA to benefit from knowledge and
experience of civil society organizations, and thus promote overall
quality and sustainability of development efforts and community
empowerment. Personnel and administration: Suggested indicators for
this category included the following:
r. Appropriate staffing levels; and s. Administrative structures
and processes are well regulated and based on
sound principles.
The overall rationale for these indicators was based on the
premise that a LGA should be a responsible and efficient employer
ensuring appropriate levels of employment within the context of
realistic needs, overall priorities, and budget constraints.
Additionally, transparent and reliable government functioning are
critical factors in overall quality and consistency of
performance.
Constraints influencing the simplification of the scorecard
During the consultation workshops and field testing using the
above set of indicators, a number of constraints were highlighted
which necessitated a substantial revision and simplification of
indicators for the scorecard.
Local governments are embedded in state and federal contexts
(political, legal and administrative) that heavily influence their
operations, including the extent to which even a willing local
government can improve its operations in certain areas. Some
notable examples of intra-governmental influence include the fact
that local governments rely for most of their funding on transfers
from the federal account whose timing or (more usually) amount can
vary significantly from what was expected; that salaries of senior
LGA officials are set at the federal leveli; and the nature of
relationships between the state and LGAs can often be characterized
as unbalanced, arbitrary or based on party political
considerations. This meant that indicators related to the State
governance environment for LGAs were not acceptable despite the
view of many public sector specialists that the extent of
contextual constraints on local government performance were some of
the most important elements used to distinguish between bad and
well performing governmentsii. Politicization of local governments:
After years of military dictatorship and severe politicization,
Nigeria’s administration -- including local governments -- has an
entrenched culture of rent-seeking and self-interest, with little
incentive to focus on serving the public. As a result, local
governments are generally
i In early 2001, the federal government approved a many fold
increase in LGA councilors’ salaries, with the result that salary
expenditures largely exhaust LGA budgets. ii Such constraints
placed by higher authorities often encourage mechanisms of
transparency, auditing and accountable reporting that are
significant contributors to good governance - Getting a grip on
governance using “second generation” indicators/ (World Bank:
Knack, Kugler, Manning, Dec. 2000)
12
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distrusted and held in low esteem by the public, due to past
experience with service failures and mismanagement. Data
availability and reliability: In general, in Nigeria reliable data
and information on government operations (at any level) are
difficult to obtain. This restricted the ability to use reports and
publications for establishing objective and quantitative
indicators. Complexity of indicators: It was evident that the
framework of categories and indicators were often not meaningful
and understandable for non public sector management specialists in
government who would be required to oversee implementation of the
scorecard. Difficulty in identifying human resources with
appropriate skills to carry out the assessment: One of the most
important challenges requiring indicator simplification was the
insufficient number of national consultants/enumerators with the
right skills to understand the scorecard and to carry-out the
assessment.
The simplified version of the scorecard ready for
application
The initial set of indicators have undergone several revisions.
It was apparent during field testing in May 2002 that, due to the
constraints mentioned above, effective implementation of the
assessment would only be feasible if there was a substantial
simplification in the range of indicators. Therefore the following
areas of LGA performance were identified as most appropriate for
inclusion in the scorecard:
t. Financial management and budgeting practices; u. Outreach to
communities; and v. Effective implementation of projects that
benefit communities.
Detailed questions were evolved under each of the categories
listed above. The key considerations were that, collectively, the
questions needed to be consistent with the methodology for building
second generation indicators, namely: (i) the indicator must
implicate particular institutional arrangements; (ii) it must
describe characteristics of good governmental processes; and (iii)
it must lend itself to valid and reliable measurement. In order to
form an accurate picture of each LGA, information will need to be
gathered from multiple sources. Taken together, these would form
important checks and balances on the information from any one
source. The main sources of information are: w. Official data
budget: A set of indicators will be calculated from formal
budgets and actual outturns. Figures will be taken from the
approved budget estimate (published by the LGA and obtained from
the state Ministry of Local Government or equivalent) for the most
recent year available.
• Interviews with communities: In each LGA, three communities
will be
interviewed regarding the LGA’s public service orientation, as
well as
13
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evidence of effective project implementation. The interviewees
will be recognized leaders: the traditional ruler; an executive
member of the Community Development Association or Town Union; the
leader of a women’s organization; and a representative of an ethnic
minority or vulnerable group such as the physically
handicapped.
• Interviews with senior career staff of LGAs: In each LGA, the
director of
administration, treasurer, and internal auditor will be
interviewed regarding compliance with important financial and
administrative procedures, and quality of LGA operations.
• Interviews with state officials, and state records on LGA
reporting:
Relevant senior state officials will be interviewed at the
outset regarding LGA performance, including reporting compliance.
The extent to which an LGA submits key reports in a timely manner
will also be examined using records of the Ministry of Local
Government’s Inspectorate and Monitoring unit or equivalent.
• State audit reports: The State Auditor General will be asked
to classify
each LGA as acceptable, marginal, or unacceptable, based upon
the most recent completed annual audit.
Assigning scores based on responses Scores would be assigned to
sets of questions that focus on the same issue. After all the field
work is completed and reports are compiled for each LGA, each
individual respondent’s responses to each distinct set of questions
will be assigned a score of 0, 1, or 2.
• 0 indicates a negative situation • 1 indicates a
marginal/indifferent situation • 2 indicates a positive or
promising situation
The overall score of each LGA would be based upon a simple
formula comprising of: (a) an average score from all three
communities to yield a Responsiveness to Communities (RC) Score;
(b) an average score for LGAs based on respondent responses will
yield an overall Administrative Operation (AO) score; (c) financial
and budget indicators will be rank-ordered prior to assigning a
point score and the average score on all indicators will yield a
Financial & Budgeting (FB) score; and (d) Information on
Reporting compliance (R) will be scored on the same scale as
interview responses.
14
Jana OracI can’t remember why it was necessary to state this,
but in any case, no harm. We’ll have to remind the international
consultants to develop questions for state officials, and think
about whether their responses should be a separate element of the
formula, or be integrated into each existing element as the state
response. Or considered separately from the formula. Any
thoughts?
-
The overall scoring formula is: LGA score = (2RC + 1 AO)/3 +
FBiii + R
LGA feedback is weighted less heavily than community feedback in
order to account for cases where senior LGA staff do not give frank
responses, and to emphasize the importance of community
satisfaction. Placement of LGAs in performance categories Local
governments will be placed in one of three categories of
performance based on the following rationale: • Acceptable / most
promising: Reasonable goodwill and cooperation between
LGA and communities. LGA complies reasonably well with the most
important state standards for reporting and procurement; Evidence
that LGA has participated in or facilitated at least some
beneficial projects in communities; Minimal or low levels of
mismanagement, fraud, or theft of public funds; Communities in
accepted LGAs from this category will be considered for active
participation in LEEMP (i.e. qualified communities can access LEEMP
financing); Staff of all LGAs in this category will be eligible to
attend LEEMP-sponsored training.
• Marginal: Communities are indifferent to the LGA. Few projects
in
evidence, or projects are not fully acceptable to communities;
Fraud, theft or mismanagement of public funds are not uncommon; No
communities will be eligible for LEEMP financing; However, staff of
these LGAs may be eligible to attend LEEMP-sponsored training.
• Unacceptable under any circumstances: Antagonistic
relationship with
fundamental absence of goodwill and cooperation between LGA and
communities, and serious dysfunction within the LGA itself; Lack of
meaningful cooperation between LGA and state, due to LGA failures;
Credible allegations of large-scale, outright fraud, theft or
severe mismanagement of public funds; LGA attempted to interfere
with objectivity of the scorecard assessment; Staff of these LGAs
are ineligible to participate in LEEMP-sponsored training, since
the LGA’s extreme dysfunction indicates that it is not receptive to
such efforts.
The assessment process
Apart from simplifying the scorecard, it was also agreed with
the federal implementing agency for LEEMP that it would contract a
Nigerian consulting firm (or NGO), as well as international
consultants (preferably one to three individuals) to handle
implementation of the assessments in the nine states. The Nigerian
consulting firm will be responsible for recruiting qualified,
capable interviewers to carry out the assessments; cooperating
closely with international consultants; ensuring quality and
objectivity of fieldwork; and preparing detailed
iii The Financial & Budgeting component may include scores
for audit performance. Alternatively, audit issues may become a
separate component in the formula, in order to stress the
importance of audit compliance.
15
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assessment reports on each LGA as well as a draft
ranking/classification of LGAs based on assessment findings. As a
quality control measure, the final payment will be subject to a
satisfactory independent check on the completion and quality of the
assessments. The international consultants will be responsible for
reviewing the draft design of the entire scorecard process as well
as the technical instrument (i.e. scorecard questionnaire) and
making any refinements necessary to finalize and implement the
scorecard; designing and delivering training sessions for field
interviewers; and overall quality control of implementation of the
technical instrument. The assessment process is, therefore,
designed to be conducted by a trained team of qualified individuals
and to be based on qualitative and quantitative indicators,
administrative and survey based information collected from
community and LGA members, as well as official records. The
scorecard will be used first for a baseline evaluation of all rural
governments in the participating states, and for subsequent follow
up evaluations. A follow up evaluation will be done mid-way through
the credit’s five year term, and at the end, if a follow up credit
is approved. Local governments that do not qualify for active
participation in LEEMP in the course of the baseline evaluation
will still be able to benefit from project funded technical
assistance and practical training seminars.
The assessment team ought to be multi-sectoral, objective and
well trained. A Nigerian consulting firm will be responsible for
recruiting qualified and capable interviewers to carry out the
assessment process while ensuring quality and objectivity of the
entire assessment process, and preparing detailed reports in each
LGA as well as draft ranking/classification of LGAs based on the
assessment findings. The methodology through which data will be
collected will include a combination of administrative and survey
based research.
The administrative approach would be applied to public
indicators related to such elements as financial management and
reporting standards. The survey approach on the other hand, would
be primarily applied toward more private indicators such as those
associated with participation and planning. The collection of
administrative data regarding each LGA will take place prior to and
during the assessment process, and particular information to be
collected is to be related primarily to budget analysis and audit
and reporting practices. Scoring is to be based for the most part
on a simple and easily quantifiable scale representing a continuum
of bad to good performance. Survey data was designed with the
following key criteria for the development of specific questions:
(i) a clear rationale exists for inclusion of each variable in the
questionnaire; (ii) the questions that will be asked in order to
measure that variable ought to be readily understood by survey
respondents, and their responses ought to capture the variable
intended to be measured; and (iii) the variable should exhibit a
reasonable amount of variation across LGAs. Although possibly
quantifiable, survey questionnaires were designed as a qualitative
source of data for assessment purposes.
16
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Separate from issues of the design and application of the
scorecard as a technical tool -- and thus largely outside the scope
of this paper -- there remain questions regarding how the results
of this technical exercise will be managed by each participating
state and the federal government. Such issues are particularly
important since participating states are effectively borrowing
LEEMP funds from the federal government. As such, they have an
important voice in setting an objective and appropriate process for
managing the technical results of the scorecard exercise. It is
foreseen that officials responsible for LEEMP at the federal and
state levels will jointly devise sample options for this process,
as well as specifying steps that the weakest categories of LGAs
will be required to take in order to improve their performance.
Each state will then chose the most appropriate option for its own
process. All states will be required to publish the details of the
process they selected, as well as the findings of the
assessment.
Potential risks of implementing the scorecard
The challenges and risks in applying such an instrument in the
Nigerian environment are great. Interventions such as the scorecard
must proceed with care, and be ready to reorient rapidly in
response to actual developments. The scorecard should be used
cautiously, with the intent to do good but also a commitment to do
no harm. The following is a list of the most critical risks and how
the LEEMP has sought to mitigate some of these:
Biased responses from LGAs. Since selection of specific LGAs for
project participation depends on their assessment using the
scorecard, there is a risk that members of LGA will be reluctant to
reveal true information about any negative performance. Mitigation
means: (i) Information based on interviews with LGA chairman will
not be directly factored in the overall assessment; (ii) Meetings
with senior civil servants will be held in private. Additionally,
senior civil servants are usually appointed by the state, therefore
there is a great likelihood that such individuals will speak their
mind freely; and (iii) For the purposes of scoring LGAs, the weight
given to information collected from LGAs is less than that
collected from communities. Biased responses from communities.
Communities may also be inclined to provide unrealistic and
favorable information about the performance of their LGAs in order
to increase the likelihood of their participation in the project.
Mitigation means: (i) There is no immediate connection between the
communities that are interviewed and the ones that are eventually
selected from within the jurisdiction of selected LGAs. Once LGAs
are approved for participation, the selection of communities will
depend on several additional criteria, including poverty level,
ability to organize themselves, etc.; (ii) Multiple members of the
community, representing various interest groups will be
interviewed; and (iii) From field experience thus far it appears
that communities are not hesitant to speak out truthfully about
their LGAs.
17
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Reliability of budget reports. As budgeting is not a robust
practice among LGAs in Nigeria, there is some risk that the budget
information collected will be composed of pro-forma numbers that
are not very meaningful. Mitigation means: (i) Audits will be
assessed to cross check budget information; (ii) information will
be collected on reporting compliance; and (iii) LGAs will be
assessed in comparison to others in their states that follow the
same rules of analysis and reporting. Unreliable information. There
is a risk that any one of the sources of information and actual
items of information collected will be unreliable. For example, it
is known that while in some states in Nigeria the audit reports are
up-to date, it is also clear that in some states they are not.
Mitigation means: Information is collected and is cross-checked
through multiple sources. Thus even if some sources or types of
information turn out to be unreliable in a given state, the
remaining information should be sufficient to draw conclusions.
Quality of assessment process. There is a chance that the quality
of the assessment process will be poor and/or captured by various
interest groups. Mitigation means: (i) The assessment process is
designed to be conducted by trained consultants rather than by
government employees; (ii) final payment to consultants will only
be made after a random check of the results of an LGA in each state
by international consultants from a different firm than recruited
the enumerators; (iii) consultants, both mangers and field
interviewers, will be trained and guided regarding recruiting
standards and work in the field; and (iv) selected consultants are
expected to comply with certain ethnic and linguistic standards
that will facilitate their work in diverse environments.
Non-cooperative local governments. Some LGAs may refuse to
participate in the assessment process. Mitigation means: No LGA is
forced to participate. Each can simply withdraw eligibility for the
project. Negative distortion of LGA performance: There is a risk
that the types of questions asked could indirectly encourage biased
mismanagement (negative distortion) in future performance of LGAs
depending on the perception of LGAs’ assessment process and timing,
and given the availability of “shortcuts” or quick unsustainable
“fixes” that could be assumed just in time for the next assessment.
Mitigation means: Each question’s potential to result in negative
distortions was considered, and as much as possible, questions were
designed so that the behavioral responses they might plausibly
inspire in LGAs would be positive or, at worst, neutral.
Additionally, budget analysis will be conducted based on assessment
of formal documents rather than interview questions that can give
misleading ideas to LGAs regarding quick, unsustainable
corrections.
18
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Conclusion and Next Steps
Administrative reform is a complex and long-term process. Even
when significant political commitment and resources are brought to
bear, it does not come easily and is easy to subvert. There are few
easy answers or simple instructions. Many general principles have
been identified, but these require intensive work and perseverance
in order to be transferred into actions and results on the ground.
The LEEMP Local Governance Scorecard will be applied immediately
after project effectiveness in the autumn of 2003. This is
strategically timed following the general elections in Nigeria
during April 2003 so as to avoid any disturbances,
misinterpretation or misuse of the scorecard for short-term
political purposes. Results of the first round of LGA assessment
will be analyzed and provided as an update to this working paper by
the Autumn of 2004. Consistent with the LEEMP’s LGA selection
procedures and built-in incentive structure, the scorecard will be
reapplied prior to the project’s mid-term review.
19
Jana OracClearly, this time frame has been superceded. Can we
get an update from the new task manager?
Jana OracIn keeping with earlier comments – I’d vote for not
making any unrealistic promises re updates, and certainly this date
is untenable.
-
Annex: 1 -1st Draft of Scorecard: Full List of Indicators, their
Rationale and Performance Classification
A. State governance environment for the LGA
Rationale Weak Neutral/average Positive
1
Effective legal framework Sustainable capacity within LGAs
requires an effective legislative framework, consistent with the
constitution.
Legal arrangements that determine the political control of LGAs,
the administrative responsibilities (particularly including hiring
and firing of employees) and the intergovernmental fiscal relations
are either absent, contested or ignored in practice.
Necessary legal arrangements are present but sometimes
flouted.
Necessary legal arrangements are present and generally followed
in practice.
2 Agreement on inter-governmental revenue transfers (State and
LGA; also relevant for federal government)
Compliance with explicit transfer requirements improves
predictability of funding to LGAs, enabling them to tackle medium-
to long-term objectives and activities, rather than focusing only
on short-term/small-scale needs or emergency measures.
State and LGA largely fail to transfer revenues (e.g. percentage
of state planning fund, income taxes collected by LGA, ) to other
level of government, as required by law. Timing of transfers is
highly unpredictable, and amount often differs from what was
promised; LGA ability to plan and undertake activities and
contracts severely restricted. Revenue predictability is in the
bottom quintile of all LGAs in that state.
Some revenue transfers are carried out according to regulations
(timing, amount), while others are not (or not consistently). LGA
able to undertake reasonable level of activities, but prevented
from doing some larger-scale projects principally due to such
uncertainties. Revenue predictability is neither in the top nor
bottom quintiles of all LGAs in that state.
Requirements for revenue transfers (timing, amount) generally
respected in practice. Budget transfer process does not pose major
problems for implementing activities and contracts. Revenue
predictability is in the top quintile of all LGAs in that
state.
3 Autonomy Effective decentralizationrequires that sub-national
governments have the autonomy (disciplined by accountability) to
respond to local interests.
The combined effect of the legal arrangements, the arrangements
for intergovernmental transfers, and the nature of political
control is to produce a LGA that has little or no genuine autonomy
from the state government .
LGA exercises reasonable amount of autonomy, although problems
persist in some areas.
LGA enjoys full autonomy envisioned by the constitution and
federal and state laws.
20
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A. State governance environment for the LGA
Rationale Weak Neutral/average Positive
4 Relationship with state Ministry of Local Government Affairs
or equivalent (State and LGA)
Cooperation between State and LGA levels facilitates effective
decentralization and service delivery.
LGA has little or no contact with state government. State
excludes or provides minimal support to LGAs that are of different
political affiliation or lack personal connections. LGA disregards
state guidelines and requirements. Persistent lack of communication
between states and LGAs results in significant overlapping
activities, or gaps in coverage, in areas where the two levels
share responsibility.
Some channels for LGA-state communication and cooperation exist,
and there are regular attempts to use them. However, weaknesses in
these mechanisms commonly result in overlap/gaps in activities.
Political affiliation remains a significant influence on standard
administrative processes and relationships.
Regular and effective communication between LGA and state. State
and LGAs inform each other of actions, participate in joint
planning when needed and communicate to resolve gaps or overlaps in
cases where they share responsibility for a particular service or
area. Both state and LGA fulfill their responsibilities toward each
other (e.g. in budget submission process). LGA has voice in state
policy and specific LGA-related processes.
B. Budget formulation, execution and reporting
Rationale Weak Neutral Positive
5 Formal and comprehensive budget
A formal and comprehensive LGA budget (including all
revenues/expenditures and entities) provides the mechanism for
matching priorities with available resources.
No formal budget other than an account of the transfers from
state or federal government.
Formal budget but covering only a small proportion of LGA
activity.
There is a LGA budget that encompasses great majority (80-90%)
of the LGA activities, with relatively few extra budgetary funds
and with donor funds generally included in the budget.
6 Effective projectprioritization
Given budget constraints, projects should target clear
priorities. Project budgeting should address both capital and
recurrent costs, to ensure completion and operation – not
abandonment – of projects.
Selection of projects and allocation of budgets done with a
short-term (annual) time horizon, and does not adequately provide
for completion and operation of projects in future years.
Quality of project selection and funding allocation varies. In
some cases, medium- and long-term implications are considered and
provided for in the budget.
Project selection/funding decisions take into account operation
and maintenance costs, not just investment costs. Selection of
projects is not unduly influenced by political considerations or
personal ties.
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B. Budget formulation,
execution and reporting Rationale Weak Neutral Positive
7 Effective revenuecollection of both taxes and user fees
Local revenue collection, to the full extent permitted by law,
provides budgetary resources and encourages local accountability
and participation.
LGA fails to exercise revenue-raising powers assigned to it by
law, or is unable to exercise such powers effectively. Estimated
collection rates on indicative taxes/fees are in bottom quintile of
all LGAs in that state.
LGA exercises some but not all revenue-raising powers.
Collection rates (on indicative taxes/fees) are neither in the top
nor bottom quintile, and could be significantly improved through
better management.
LGA consistently exercises revenue-raising powers assigned to
it. Collection rates are in the top quintile, and are reasonable
for the context.
8
Appropriate flexibility in budget allocations
LGA staffs should be able to respond to changing circumstances
when these are well-justified, while otherwise maintaining
confidence that budget allocations will generally be respected.
Excessive flexibility or rigidity in allocating funds, with
management problem as a result. Audit reports show that the
deviation from appropriations is in the top quintile for all
eligible LGAs in that state.
Some instances in which excessive rigidity or flexibility lead
to administrative burdens, negative impacts on activities,
planning, etc. Audit reports show that the deviation from
appropriations is neither in the top nor bottom quintile.
Changes in budget allocations are possible with good cause.
Clear procedures regulate such changes, which are subject to a
reasonable but not excessively burdensome level of oversight Audit
reports show that deviation from budget appropriations is in bottom
quintile.
9 Effective accounting and auditing (no. 1)
Audit and accounts are essential links in the resource
management chain that promotes effective use of funds and good
services.
Generally poor quality of audits. Full accounts (including
financial statements) are not submitted at all, or submitted too
late, thereby hampering effective audit. Reliability of account
information is low. Regulations that specify audit frequency and
projects/accounts to be audited are not respected, and may also be
inadequate. No private independent audit available. The delay in
circulation of audited financials statements is in the top quintile
for all LGAs in that state.
Generally reasonable quality of regulations, audits and reports,
given capacity constraints, but could be improved. Enforcement
mechanisms need to be strengthened to promote compliance. Private
independent audit is available in certain circumstances, but not
used often enough (for cost or other reasons). Accounts are often
submitted incomplete or late; some information is unreliable. Audit
able to proceed in many but not all instances. Delay in circulation
of audited financial statements is neither in the top nor bottom
quintile.
Regulations meet generally-accepted standards for audit
coverage. Audits and reports are thorough and rigorous. Private
auditors can be used as necessary. Full, accurate accounts are
submitted in a timely manner. All (or almost all) projects and
accounts subjected to audits as required by regulations. The delay
in circulation of audited financials statements is in the bottom
quintile for all LGAs in that state.
22
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B. Budget formulation, execution and reporting
Rationale Weak Neutral Positive
10 Effective accounting and audit (no. 2)
Transparency andresponsiveness: Audit recommendations rarely or
never implemented. No sanctions in place or applied for failing to
implement recommendations. Audit findings available only to limited
audience. Reports not published, and not available to communities
in an accessible/comprehensible format.
Some recommendations are implemented. Enforcement could be
reasonably be strengthened without imposing undue burdens. Audit
findings are available in principle, but obtaining them in practice
requires effort. Presentation is not in a format useful to
communities.
Audit recommendations are discussed and implemented. Sanctions
applied if fail to implement recommendations without cause. Audit
reports published and widely circulated. Reports available to LGA,
state, communities and public in a reasonably comprehensible
format.
11 Sound financialmanagement practices
Financial management, including monitoring and control, is an
essential link in the resource management chain. It should include:
(i) quality and timeliness of reporting to local government
Council; and (ii) timely reporting from the LGA to State Bureau of
Local Government Affairs and State Assemblies.
LGA is lax in meeting its financial obligations (for reasons
unrelated to intergovernmental transfers) and in monitoring and
controlling its financial commitments. Significant arrears on
required payments. Required frequency of financial reporting is too
low, and excessive delays in submitting reports hamper the timely
identification and resolution of problems.
LGA often meets financial obligations but also fails to do so
with unacceptable frequency. Arrears are a fairly frequent
occurrence. Some monitoring and controlling of financial
commitments occurs on an ad hoc basis, but is not widely practiced.
Problems with financial reporting are commonly reported.
LGA meets financial obligations in a timely manner, and monitors
and controls financial commitments effectively to prevent overruns.
Arrears on required payments are rare. Financial reporting carried
out annually and in a timely manner.
23
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C. Participation & planning Rationale Weak Neutral Positive
12 Consultation,
responsiveness and redress vis-à-vis communities
Consultation enables LGAs to serve community interests, promotes
accountability and effectiveness of resource use, including
increasing viability of specific projects by tailoring them to
explicit community priorities. Clear, accessible channels for
feedback and redress increase the likelihood that community needs
will be addressed and promote accountability to constituents.
Consultation non-existent or rare. Narrow consultation, not
representative of broader community interests and stakeholders.
Segments of community (e.g. women, ethnic minorities, disadvantaged
groups) excluded. Community’s stated needs and preferences not
considered in project planning. Community reports lack of contact.
Communities neither involved in nor adequately informed of funding
allocation decisions, including cutbacks and other measures to
resolve budget shortfalls. Avenues for contesting decisions, filing
complaints or seeking redress are unclear or non-existent.
Communities rely significantly on personal connections to make
their case to LGAs, and believe formal channels to be largely
ineffective.
LGA makes good faith attempts at consultation though these may
not be as systematic, institutionalized or as far-reaching as would
be ideal. LGA solicits some community participation in some but not
all areas of budgeting. Level and/or extent of participation should
be increased. Some avenues for redress are in place and have some
credibility with communities. Formal channels may not be fully
defined or functional in practice, but informal methods mitigate
this shortcoming to some degree.
Regular, open consultation with a representative sample of
stakeholders, including official leaders, community-based
organizations, NGOs and citizens. Measures taken to include women,
minorities and disadvantaged populations. Community needs and
preferences are an important factor in selection and design of
projects. Community satisfied with level of involvement and
transparency. LGA requests and considers community input in budget
decisions. LGA informs communities of shortfalls and their causes,
and proposed means of mitigating them. Clear avenues exist for
contestability, grievance and redress related to LGA decisions and
activities. Communities are aware of and use channels for
communicating with LGA, report receiving responses, and believe
that their feedback is given serious consideration.
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C. Participation & planning Rationale Weak Neutral Positive
13
Effective LGA Council The elected council is the primary vehicle
for communicating community interests and concerns
LGA council plays no role in planning, or is seen to be
comprehensively captured by other interests or otherwise
unrepresentative
LGA council plays some role in planning, but is captured by
other interests on some issues.
LGA council plays an effective role in community consultation,
planning and budgeting.
D. Project Implementation capacity
Rationale Poor Neutral Positive
14 Community participationin project implementation
Participation fosters a sense of ownership, thereby promoting
quality and long-term viability of projects.
LGA manages project implementation without involving
communities. Significant number of projects abandoned or
under-utilized because they do not respond to community needs or
are not welcoming of community members. LGA does not solicit or
negotiate community contributions and buy-in even for those small-
and medium-scale projects that would benefit from community labor
or funds. Community communications to LGA regarding project
implementation go unanswered, or receive inadequate responses.
Community involvement is variable. Some communities are favored
by the LGA. Some LGA entities place importance on promoting
participation while others do not. Community contributions are
negotiated in some cases, but could reasonably be agreed in
additional instances as well. Community commitment and ownership
vary accordingly. Some communications are answered. Community may
need to resort to informal channels (e.g. personal contacts) or
repeatedly request information.
Community members involved in all phases of LGA-sponsored
project, including monitoring and evaluation, operation and
maintenance. Community members utilize and are satisfied with
completed projects. When feasible (i.e. small and medium-scale
projects) Community contributes matching funds and labor to
projects, as agreed with LGA. Community feels ownership of project
and commitment to its sustainability. LGA has a functioning system
that responds to community requests, proposals or complaints in a
timely and appropriate manner.
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15 Involvement of
community-based organizations and non-governmental
organizations
Direct involvement of civil society organizations brings in
expertise and promotes government responsiveness.
CBOs and NGOs are present in the community, but LGA does not
involve them, or utilize them effectively in relevant projects.
Some involvement of CBOs and NGOs, and other civil society
actors. Opportunities for greater involvement exist.
CBOs and NGOS effectively involved in relevant projects. LGA
actively seeks partnerships.
16 Transparent and openprocurement
Competitive and open procurement processes increases the
likelihood of quality and affordability in contracting, and
accountable use of funds.
Procurement procedures are unclear or non-existent. Contracts
awarded based upon personal or political considerations rather than
merit.
Procurement procedures exist but fall short of what could
reasonable be done in the context. Procurement outcomes are often
acceptable but favoritism is often suspected.
Procurement processes conducted according to explicit and
publicized criteria, rather than based upon personal or political
favoritism. Multiple evaluators. Bidders notified of outcomes,
which are also available to public. Processes in place to handle
complaints.
17 Active monitoring and evaluation of projects
Careful oversight reduces the scope for abuse and facilitates
project quality.
Inadequate requirements and regulations. Regulations not
respected in practice. Records not kept or not reliable.
Mixed record on project monitoring and evaluation. In some cases
(e.g. certain types of projects or LGA entities, or certain staff)
it is adequate, but there is significant discretion and variation
in implementation.
For each project, there are clear arrangements and
responsibility assignments for monitoring and evaluation of
activities and expenditures. Monitoring and evaluation are carried
out to an acceptable standard.
18 Hiring of communitymembers
Employment brings direct economic benefits to the community,
promotes ownership and sustainability.
Community members are not considered for jobs on projects in
their community.
Some cases of community members being hired.
Community members receive fair consideration and are hired for
jobs on projects in their community.
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E. Personnel and
administration Rationale Poor Neutral Positive
19 Appropriate staffing levels Government should be a
responsible employer, ensuring that employment costs are restrained
to an affordable level without unduly harming performance.
Incidence of severe over- or under-staffing results in budget
problems (e.g. crowding out of operations and maintenance), rampant
inefficiency or inability to deliver services. Wage bill as a
proportion of total LGA expenditure is in the top quintile of all
LGAs in that state.
Pockets of over- or under-staffing exist or appear from time to
time. Such situations are remedied slowly or not at all. Wage bill
as a proportion of total expenditure is neither in the top nor
bottom quintiles of all LGAs in that state.
Staffing numbers are appropriate for organization’s mission.
Wage bill as a proportion of total LGA expenditure is in the top
quintile of all LGAs in that state.
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Annex: 2: Revised scorecard: Summary of principal indicators and
near-final interview questions
Original rationale Basis for inclusion Questions in near-final
technical instrument A. Financial
management; Budget formulation, execution and reporting
1. 2.
Effective accounting and response to audits. Sound financial
management practices
Audit and accounts are essential links in the resource
management chain that promotes effective use of funds and good
services. Financial management, including monitoring and control,
is an essential link in the resource management chain. It should
include (1) quality and timeliness of reporting to LG council and
(2) timely reporting from LGA to state.
In practice, state audits are outside of LGA control and vary in
timeliness and quality. However, where robust audits are available,
they – along with other information such as reporting and insider
feedback -- can provide insights into LGA financial practices: e.g.
compliance with regulations, generalquality of LGA accounts,
willingness to act on findings, instances of egregious financial
misconduct.
• If so, how often does this happen – often, sometimes,
never?
Auditor general • Based on the most recent completed audit,
would you say this LGA’s
compliance with financial regulations is: acceptable, marginal,
or unacceptable.
• When the audit points out problems, does this LGA make good
faith attempts to rectify those problems? Always, usually,
sometimes, rarely, never.
Director, State LG Inspection unit • How well does the LGA
follow financial regulations, and keep its accounts?
Acceptable, marginal, unacceptable Director of Administration,
Treasurer • In this LGA, have you ever been asked to co-sign a
check that you didn’t
believe was legitimate? Yes, No.
• In such cases, what happens if you point out the problem? Is
it rectified, or are you overruled?
• Did this situation – being pressured to issue or co-sign
illegitimate checks – ever arise in the other LGAs you served
in?
• Have you ever had occasion to point out to the chair that the
LGA’s proposed
actions would violate state or other regulations? • If so, how
often does this happen – often, sometimes, never? • In such cases,
are your remarks generally accepted or not? Was the problem
rectified, or were you overruled? • In general, how well do
staff of this LGA comply with requirements to return
unused money from advances, or submit receipts for expenditures
from such advances, by the appropriate deadline? That is, do you
have problems with people not returning money by the deadline, or
not submitting receipts after they have collected an advance?
(serious, moderate, or minimal problem)
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Original rationale Basis for inclusion Questions in near-final
technical instrument • What about the chairman and councilors?
(serious, moderate, or minimal
problem) Internal Auditor • In general, to what extent does the
LGA try to comply with key [the most
important and reasonable] financial regulations – almost always,
usually, never.
• Have you ever had occasion to point out to the chair that the
LGA’s proposed actions would violate state or other
regulations?
• If so, how often does this happen – often, sometimes, never? •
In such cases, are your remarks generally accepted or not? Was the
problem
rectified, or were you overruled? Director, State LG Inspection
unit • For each of the two key reports [insert specific title]:
o Based on your records, did the LGA submit the most recent such
report on time? Yes, No.
o If no to above: was the delay: acceptable, marginal,
unacceptable – or: minor, moderate, severe
Director of Administration, Treasurer • What is the date [month]
of the most recent [REPORT NAME] that you
submitted to the state? 3. Transparent and open
procurement
Competitive and open procurement processes increase the
likelihood of quality and affordability in contracting, and
accountable use of funds.
In practice, state procurement rules may have problematic
aspects (e.g. outdated thresholds, delays in approvals from higher
levels) but best efforts at transparent, competitive procurement
remain an important indicator of LGA’s financial practices and
accountability.
Director, LG Inspection unit • How well does the LGA respect
state procurement regulations, including
requirements to seek state approval? Acceptable, marginal,
unacceptable Director of Administration • In the specific area of
procurement, that is the tendering of contracts, would
you say that the LGA complies with procurement regulations or
not? This includes both thresholds/authority as well as other
processes, such as the involvement of various committees in the
selection process. Complies: Always, usually, sometimes, rarely,
never.
• How many tenders over 500,000 Naira has the LGA issued in the
past year (or, if in office less than a year, in the time since you
arrive here)?
• Could you show us copies of the announcements for these
tenders, and tell us how/where you publicized them?
• Did the LGA obtain state approval for all of these tenders? 4.
Formal and A formal and LGAs are required to Director of
Administration, Treasurer
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Original rationale Basis for inclusion Questions in near-final
technical instrument comprehensive budget [Sound and robust budget
process]
comprehensive LGA budget (including all revenues/expenditures
and entities) provides the mechanism for matching priorities with
available resources.
have a formal budget, and do produce this document, though not
always in a timely manner. However, the approach to budgeting and
the process followed are not necessarily robust – e.g. unrealistic
projections made for prestige reasons; under-funding of fundamental
priorities -- service-delivery needs -- in favor of overhead costs,
or excess employment. The budget process is within the LGA’s
control, and there are benefits to encouraging a more considered
and timely process. LGA borrowing is an opaque area. To the extent
it does occur, the scorecard probes compliance with state
regulations as well as restraint and soundness of borrowing, as
with other expenditure decisions – e.g. to cover a shortfall in
federal transfers in order to pay wages vs. financing
non-essential
• When [month only] was the budget for this year approved by the
LGA council?
• If the budget estimates have not yet been approved, what is
the r