Government of India
Ministry of Health & Family Welfare
National Rural Health Mission
Financial Management Group
Last-Mile Financial Management:
Case Study of Indore and Dewas Districts of Madhya Pradesh
Study Conducted by:
Rajesh Kumar, National Consultant (Finance) &
Sushil Pal, Finance Controller
In the implementation framework of the National Rural Health Mission
(NRHM), the real theatre of action is the District, and levels below that, where the
actual programme delivery has to take place. Thus, it is the last-mile of the travel of
the funds which is most important. It is also the last mile which is largely ignored
while designing financial management processes for improving efficiencies in funds
transfer and reporting capabilities. Various reviews by FMG and the JRMs have
revealed that while the main-streams have been de-silted to a large extent,
distributaries at the end of the funds flow stream are still sluggish. Districts and
their subordinate institutions remain largely ignorant about the quantum of funds
available to them during the year. Budgetary capabilities are almost non-existent at
the District and sub-District levels. Payment mechanism to beneficiaries under
schemes like JSY still remains complicated at the ground level. Revolving funds at
the levels of PHCs/CHCs, ANMs-Sarpanches, though critical for the success of NRHM,
are not professionally managed. Periodic fund flows to PHCs/CHCs are not smooth.
Reporting delays from these levels are the main culprits for late reporting of
expenditure to the GOI. This, in turn, results in difficulties in releasing further grants
which is going to be a major bottleneck on the way to increasing health sector
1.2 Madhya Pradesh has been showing signs of appreciable growth in fund
utilization under NRHM since last year. The accelerated utilization of funds is
remarkable as from a mere Rs.26.29 Crores utilized during 2005-06, the utilization
reported in the year 2006-07 under RCH-Flexible pool has gone up to Rs.121.73
Crores. Similarly under the Mission Flexible Pool the utilization has reached Rs.47.74
Crores during 2006-07 as compared to Rs.0.68 Crores in the preceding year. Thus,
it can be seen that under RCH Flexipool the expenditure has gone up by almost 5
times during 2006-07 as compared to 2005-06. Under NRHM, although the
improvement looks dramatic, i.e., 70 times increase in fund utilization, the
negligible utilization during 2005-06 can be attributed to the fact that the activities
under Mission Flexible Pool in that year was basically in the planning phase.
1.3 These developments show that the State has focused its attention on the
management of financial and accounting processes. Since the learning from the
State can be replicated in other similarly situated States, this study was planned to
focus on the fund management at the District and primarily below district levels.
Impression at the District level: Indore and Dewas
2.1 The District Programme Management Support Units (DPMSUs) in the District
Health Societies of Indore and Dewas Districts are functioning in an excellent
manner. The DPM, DAM and Data Managers look integrated with the system and
seem to have the space and environment to function at their optimal level. Their
acceptance even at Block level was palpable when the team visited the block
medical offices. It can be said without doubt that the DPMSUs have become an
integral and very important part of the Mission, not only because of the role
envisaged for them, but primarily because they have performed beyond
2.2 The standard of record keeping was also appreciable. The District Health
Action Plan was seen sub-divided into Block Action Plan. Utilization of funds
earmarked to each Block was being monitored on the basis of clearly earmarked
activities for each block. The system of fund flow looked streamlined with the Block
Medical Officer being made in-charge of not only the funds going down to lower
level institutions, but also for reporting back of expenditure. The delay in approvals
for funds transfers and making other expenditures also looked non-existent, which
is perhaps one of the major reasons for better performance of Madhya Pradesh
under the Mission.
2.3 The accreditation of 20 private institutions (clinics) under JSY in Indore
district is an indication that the health functionaries are going out of their mundane
chores and trying to bring in the best out of the Mission. The institutions, especially
CHCs and PHCs also looked vibrant and refurbished for which the health
functionaries thanked the funds available under NRHM.
2.4 A system of pro-active monitoring of programme implementation by State
authorities through video conferencing was also found in place. This new technique
of visual contact for the monitoring purposes seems to have the desired effect as it
propels the implementing authorities at District level to perform or be exposed in
Structure of the Study
3.1 The present study has been segregated thematically, taking the most
important institutions and processes from the financial and accounting point of view
situated in the last-mile of fund flow under the Mission. These institutions and
processes have the potential of taking the Mission to the next higher level if they
perform as they should. Following observations and suggestions are oriented
towards this understanding.
Rogi Kalyan Samities: Drying up of Resources
A. Rogi Kalyan Samiti at the District Level:
4.1 The quantum of user charges being collected by the Rogi Kalyan Samiti of the
District Hospital, Indore is coming down and has been more pronounced in the last
two years (Figure-1). Pre-2004-05 data of the RKS, District Hospital could not be
collected. However, data from RKS, District Hospital, Dewas clearly shows that till
2003-04 there has been an increasing trend in collection of user charges, but since
then there has been a steep downward trend (Figure-2). Thus, the real decline in
receipts of RKS, District Hospital, Indore as the year 2003-04 as a reference point
when the earnings might have been the maximum, could not be assessed.
RKS - Distt. Hospital, Indore
Total Earnings through User Charges
Rs. in Lakhs
2004-05 2005-06 2006-07
RKS-Distt. Hospital, Dewas:
Total Earnings through User Charges
Rs. In Lakhs
2000-01 2001-02 2002-03 2003-04 2004-05 2006-07
Note: Calculations in these tables, and all the subsequent tables related to RKSs, take into
account figures of only self-generation of resources by the RKS. All funds given to the RKSs under
specific schemes of the Central and State Government such as JSY, Ayusmati Yojana, Deendayal
Yojana, etc. have been, thus, excluded. (Details at Annex-X).
4.2 From the records it seems that the main reasons for this decline in the case
of RKS, District Hospitals of Indore and Dewas are:
i. Almost ‘NIL’ collection of User Charges on delivery cases: Total slump in
collection of User Charges in delivery cases seems to be one of the major
causes of decline in earnings of the RKSs. After the launch of Janani Suraksha
Yojana (JSY) it has been perceived that when the hospital has to pay for
institutional deliveries to the beneficiaries, the idea of receiving user charges
from them is anachronous. As a result, the earnings through user charges in
delivery cases has come down from Rs.28,036 in 2004-05 to ‘Nil’ during
2006-07 in District Hospital, Indore. Similarly, in District Hospital, Dewas the
earnings have come down from a peak of Rs.4.4 Lakhs in 2003-04 to a paltry
Rs.24,000 in 2006-07. As an added indicator, the earnings from Gyne OT
charges have also come down from a peak of Rs.98,000 during 2003-04 to
Rs.1,150 during 2006-07. In District Hospital, Indore as well the overall
earnings through OT Charges have become half in 2006-07 as compared to
almost Rs.50,000/- in 2003-04. (Figures 3 & 4).
RKS - Distt. Hospital, Indore
Earnings through User Charges on Delivery Cases
Rs. in Thousands
2004-05 2005-06 2006-07
R K S - Dis tt. Hos pital, Dewas -
E arning s throug h Us er C harg es on Deliveries & G yne OT
400.00 428.80 439.75
R s . in L akhs
100.00 60.18 71.65
2000-01 2001-02 2002-03 2003-04 2004-05 2006-07
G yne O T De lev ery
ii. Other reason for a declining trend may be the fact that User Charges were
levied on all users till 2005. However, since then the State Government has
stopped collecting User Charges from BPL families.
iii. In case of RKS, District Hospital, Indore it is seen that while the user charges
collection through OPD Cards have almost remained constant and collection
through Investigation Charges have gone up marginally over the last 3 years,
the collections from IPD and OT charges have gone down contributing to
overall decline in earnings of the RKS. (Figure-5).
iv. In case of RKS, District Hospital, Dewas the picture is more stark. While
collection through OPD charges have gone up steadily, all other sources like
IPD, Non-Gyne-OT & Investigation Charges are steadily, and in the case of
Investigation Charges steeply, declining over the years. (Figure-6).
R K S - D is tt. H os pital, Indore -
E arning s throug h Us er C harg es
2.34 2.40 2.30
R s . in L akhs
0.50 0.26 0.27
2004-05 2005-06 2006-07
OP D IP D (A dmis s ion) OT Inves tigation C harges
R K S - D is tt. H os pital, D ewas -
E arning s throug h Us er C harg es
R s . in L akhs
2000-01 2001-02 2002-03 2003-04 2004-05 2006-07
OP D IP D (A dmis s ion) Non-G yne OT Inves tigation C harges
4.3 The impact of this declining trend is best depicted by the data collected
from the RKS of Mahatma Gandhi Zila Chikitsalaya, Dewas (Figure-7). While the
RKS spent on patient welfare over Rs.30 Lakhs per annum during 2002-2005, it
has been forced to almost halve its patient welfare measures during 2006-07.
This has been a result of almost 50% decline in earnings during 2006-07 as
compared to preceding 3 years, when the collections have declined from over
Rs.30 Lakhs per annum to Rs14 Lakhs in 2006-07. As a corollary the expenses
of the RKS has also declined in almost the same proportion.
4.4 The figures for 2003-04 for RKS, District Hospital, Indore is not available with
the team to analyse the data in similar manner. The initial data is available for
2004-05 when the collection in the case of RKS, District Hospital, Dewas had
already sharply declined as compared to 2003-04.
Income & Expenditure of RKS, District Hospital, Dewas
34.03 A decline of 58% as
35.00 32.37 32.30 compared to
Rs. in Lakhs
20.00 16.88 16.78
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2006-2007
4.5 If the first quarter generation of resources of the RKS, District Hospital,
Dewas is any indication, the generation of resources during 2007-08 is likely to be
even lesser than the year 2006-07. The Figure-7.a below shows that the earnings
may come down to Rs.11 Lakhs in 2007-08.
Receipts & Expenses of Rogi Kalyan Samiti, District Hospital, Dewas: April - June 2007
Amount in Rs
for the year
Item Receipt Expenditure Item 2007-08
(on the basis of
OPD 75000 21000 Medicine 300000
Visitor's Pass 10000 11200 Hosp. Contingency 40000
IPD 48000 29786 & Office Staff) 192000
X-Ray 43000 46000 X-Ray 172000
Electricity, Diesal &
Blood Transfusion 16500 50000 Water 66000
Path Lab 22500 55500 Path Lab 90000
Cycle Stand 10000 12000 Stationary, Xerox 40000
Shop Rent 7500 9000 Gas cylinder 30000
9000 News paper ads
28200 Cleaning Contract
Other receipts 35500 28063 Other Expenses 142000
generation) 2,68,000 4,22,249 TOTAL 10,72,000
NRHM Corpus Equipments from
Grant 500000 336751 NRHM Fund
Grand Total 7,68,000 7,59,000
4.6 The most interesting aspect of this finding is that this sharp decline in
earnings of RKS has almost coincided with the launch
of NRHM in 2005. It looks as if in anticipation of If a poor patient saves
receiving Corpus Grant to RKS under NRHM, the State Rs.2-3 on user charges,
he may have to cough up
Government has gone soft on collection of User Rs.300-500 in getting a
Charges. But, the figure-7 above clearly shows that chest X-ray or an
Rs.5 lakh grant from NRHM is clearly not the answer Ultrasound done from a
nearby private facility or
for the problem that the health sector is seeking to
a nearby city, if the RKS
address through the mechanism of RKS. The deficit of is not able to keep the
Rs.15 lakhs from 2004-05 to 2006-07 in the case of equipments in a running
District Hospital, Dewas is a case in point here. condition.
Rogi Kalyan Samiti at Block CHC, Sonkatch, Dewas:
4.7 Data for only 2 years (2004-05 & 2005-06) was made available to the team.
Similar declining trend in earnings of the RKS was not observed during 2005-06 as
compared to 2004-05. However, it needs to be compared with data of earlier years,
as it is in comparison of the year 2003-04 that the declining trend is discernible in
the case of RKS at District Hospitals.
Rogi Kalyan Samiti, PHC, Bichouli-Hapsi:
4.8 Income of the RKS for 42 Months, i.e., from October 2003 to March 2007,
was analysed (Annex-A). Declining trend in receipts experienced at District level
was not found in this PHC. The average earning of the RKS during this period has
been Rs.729 per month. The total collection of user charges during this period has
been Rs.30,629. Out of this, an amount of Rs.16,722 has been utilized by the RKS.
4.9 However, the most noticeably disturbing feature of this utilization has been
that the entire amount of Rs.16,722, with a singular deviation involving Rs.100, has
been spent on paying Electricity Bill of the PHC, resulting in the State Electricity
Board being the sole beneficiary of the RKS.
4.10 The PHC-in-Charge is not to be blamed for this as this has at least ensured
uninterrupted supply of electricity to the PHC. The situation cannot be helped as for
the last couple of years no fund has been coming to the PHC from State
Government budget to meet the expenses like, electricity bill, stationary, repairs &
maintenance, POL, and other miscellaneous expenses.
4.11 This impression was also supported during visit to PHC, Bhaunrasa, Block
Sonkatch, District Dewas. It was found that the Income of the RKS was around
Rs.1,500 per month and the a major part of the earning was going towards paying
electricity bill, sweeper charges, etc. as contingency funds have been totally stopped
by the State Government for the last couple of years.
4.12 The objectives of RKS and functions and activities envisaged in GOI
Guidelines on RKS (relevant portion enclosed at Annex-B) never imagined that the
RKS would be pressed into paying bills for electricity, phone and water charges
which have been being paid by the State Governments since the inception of the
public health system. The idea was to bring qualitative improvements in health
delivery system and processes directly benefiting the patients, hence the name
‘Rogi’ Kalyan Samiti. However, the
4.13 What was surprising that even though regular meetings of the RKS has been
taking place in case of PHC, Bichauli-Hapsi, members of the RKS, especially the
participants from the community, have never demanded more from the Samiti. This
clearly indicates that the Community has not been briefed about the objective of
establishment of RKS.
4.14 This problem has been apparent at the PHC level, while at the CHC and
District Hospital levels, the expenses of the RKS seems more in line with the
objectives of the RKS mechanism.
4.15 Funds under NRHM (including RCH, BEmONC, CEmONC, etc.) have come
handy in this situation. However, the absence of State Government budgetary
support is marked. The impression that the team got was that the State
Government has drastically reduced budgetary support for meeting contingency and
operation costs after RKS have been formed at all levels (District Hospital, CHC &
PHC) under NRHM. However, lack of funds under contingencies has become more
apparent after the State Government made the provision of not charging user
charges from BPL families.
Recommendations for RKS Mechanism:
4.16 Following recommendations are made in the case of RKS mechanism:
i. Declining trend of self generation of resources of RKS, which has all
the makings of crippling the RKS mechanism over the years, needs to
be arrested. The corpus grant under NRHM to RKS can only help in this regard
to a limited extent. The importance of self-generation of resources by the RKS
can not be overemphasised as under NRHM the expectations from the public
health establishment is going to increase manifolds, requiring the RKS to
provide not only larger quantitative, but also qualitative services to the
ii. Under Janani Suraksha Yojana (JSY), the beneficiaries are paid a fixed
amount of sum for institutional delivery. However, the guidelines
never contemplated not charging of user charges from the
beneficiaries. On the contrary the payment capacity of beneficiaries has gone
up due to the fact that now they get a sizable amount of money for coming to
the hospital. Therefore, the charging of user charges on delivery cases may be
reinstated. The same logic holds good for Gyne-OT charges. This will result in
additional earning of around Rs.5 Lakh per annum (base year 2003-04 when
the hospital earned around Rs.4.35 Lakh from Deliveries and Rs.1 Lakh from
Gyne-OT) for a hospital like Mahatma Gandhi Hospital, Dewas.
iii. All other associated user charges like IPD, Non-Gyne-OT & Investigation
Charges, etc. may also be made applicable in the case of JSY beneficiaries as
they have paying capacity more than ever before. Seeing the geometrically
expanding base of beneficiaries under this scheme, this has potential to
become a major source of generation of resources for the RKSs.
iv. Revival of User Charges at a very nominal rate in the case of BPL as a token of
providing them with a sense of ownership of the health facilities may be
explored. This will not only mean additional resources for the RKS, it will also
help them demand better services.
v. Establishment cost for regular running of hospitals like electricity bills,
phone bills, honorarium, POL, etc. may be paid from the State
Government budget as has been the practice over decades and the RKS may
not be burdened with these routine expenses which otherwise adversely affects
the RKS’s ability to bring qualitative changes for which it has been constituted.
Declining State Government Budgetary support:
A. Office of Civil Surgeon-cum-Hospital Superintendent, Indore
5.1 A study of the trend of State Budgetary support to the Office of Civil
Surgeon-cum-Hospital Superintendent, Indore revealed that the district hospital has
been reeling through fund crunch not only due to declining trend in resource
mobilization by the Rogi Kalyan Samiti, as evident in the above paragraphs, but the
State Budgetary support has also been cut down significantly during the recent
years (Figure-8). This would mean that burden of these routine activities, being
met from the State Budget earlier, will shift to the Rogi Kalyan Samiti, and due to
drastic reduction in the capability of the RKS to mobilize resources, this would also
mean reduced level of delivery of the services being funded through State budget
5.2 Figure-8 below reveals that for routine activities such as Light & Water,
Bedding & Clothing, Liveries, Medicine, & Machine Equipment, the State budgetary
support to the Office of Hospital Superintendent, Indore has gone down from
67-100% in 2006-07 as compared to 2004-05. The decline under these four items
itself is around Rs.25 Lakhs with the year 2004-05 as a reference.
Declining Budget Trends for Various Activities : O/o Civil
Surgeon-cum-Hospital Supt., Indore
2004-05 2005-06 2006-07 2007-08
Light & Water 3.77 1.26 1.67 1.05
Bedding & Clothing 2.06 3.72 0.06 0.00
Liveries 1.53 1.38 5.42 0.00
Machine Equipment 2.91 1.26 4.48 0.00
Medicine 22.65 45.08 17.49 7.42
5.3 The Civil Surgeon-cum-Hospital Superintendent, Indore corroborated these
findings during his interview when he informed that once he had to take a loan of
Rs.1 Lakh from Indore Collectorate to meet his regular expenses.
5.4 With such decline in State budgetary support, coupled with a RKS which
is mobilizing less and less resource, quality of care is going to definitely suffer
in the most important public health institution of the District. Our study has
similar findings at the sub-district level institutions as well, as documented in
the preceding paragraphs. The net result of reduced availability of fund at the
institution level is lesser facility to the patients and beneficiaries. These
findings have special significance in the context of NRHM, which aims a
paradigm shift in quality of care in these institutions and prescribes an Indian
Public Health Standard (IPHS).
5.5 Similar trends observed in CHCs & PHCs where it was observed funds from
State budget for regular content expenses have almost dried up, especially since the
launch of RCH-II and NRHM.
B. Office of Chief Medical & Health Officer, Indore
6.1 The declining trend casts its shadow even on the Office of CMHO. In the
District of Indore the State budgetary support has gone down by almost 31% during
2006-07 as compared to 2002-03 (Figure-9). Salary constituted around 49% of the
total budget of the CMHO, Indore in 2002-03. In contrast during 2006-07, it
constituted 93% of the total budget for the year. As a result of overall decline in
budgetary support and increasing salary component, budget for all other important
activities have gone down (Figures-10 & 11).
T otal S tate B udg et of C MH O, Indore
7.55 7.73 7.55
R s . in C rores
8.00 6.82 7.02
6.00 5.35 5.07
2.00 1.35 1.10 0.79
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007
T otal S alary POL Medic ine
B udg et for Medic ine: C MH O, Indore
R s . in C rores
0.40 0.24 0.21 0.21
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007
B udget E xpenditure
P O L B udg et: C MHO , Indore
R s . in L akhs
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007
6.2 In this scenario in which State budgetary support has been declining in the
case of almost all the institutions of the public health setup, NRHM funds will not be
able to even sustain the present level of standards in the long run, what to talk of
qualitative improvements. Funding under the Mission is supposed to supplement the
resources available from the State budget. However, if the state budgetary support
goes down, the NRHM funds, rather than being harbinger of qualitative changes, will
only flow to fill the vacuum and produce results bereft of standards.
Untied Funds, Annual Maintenance Grants to Hospitals
7.1 It was observed that the Untied Funds & Annual Maintenance Grants under
NRHM being given annually to all District Hospitals, CHCs and PHCs are kept in a
separate bank account of the Hospital In-Charge or Hospital Superintendent, and
not in the RKS account as prescribed under NRHM. This has been done to avoid
delays in meeting regular and emergent expenses as under RKS mechanism the
decision making process may be lengthy.
7.2 However, the intension of the Mission was to put all these institution level
funds under the scrutiny of the Rogi Kalyan Samities which has community
participation. It is suggested that even though the bank accounts for these annual
funds/grants are kept separate for ease of taking out funds from the bank, the
decision making process for deciding on the activities to be funded from these
grants must be subjected to the RKS mechanism for community empowerment and
feedback on usage of these grants. During our visits to various institutions it was
observed that decision to spend these grants are being taken unilaterally by the
officials of the institution concerned.
RKS: Implementation bottlenecks
9.1 During our interaction with MO, Deepalpur Block it was found that RKS is
having lots of implementation bottlenecks with regard to sanction and utilization.
As each and every proposal needs to be cleared by SDM, proposals gets delayed or
abandoned. MO in charge of RKS who is responsible and accountable for the better
upkeep of the hospital does not have say in the spending proposal of the RKS. The
same problem was noticed in the Sanchi Block also during our last visit to MP.
9.2 It is recommended, that the Executive Committee of RKS should approve the
plan for the RKS for the full financial year. Thereafter, MO in charge of Block/PHC
need not approach any body if the spending proposal is as per the plan approved by
the Executive Committee of RKS. MO should approach the Chairperson or the
Executive Committee if there is any deviation from the plan already approved by the
Executive Committee of RKS. Since MO in charge of Block/PHC is accountable for
the upkeep of the hospital, therefore, after the approval of the plan only he should
be responsible for the implementation as well. In short, Decision Making (plan
proposals) should rest with Executive Committee but the Bank Account operation
should only be with the Medical Officer in charge of PHC.
Audit issues concerning Rogi Kalyan Samities:
Districts not sending the UCs (SoE) based on Audited Accounts of RKS
8.1 It was observed both in Indore and Dewas districts that District staff were not
aware whether audit of RKS of CHCs & PHCs, within the district has been completed
or not. The expenditure reported in the Audit of District Health Society was taken on
the basis of unaudited SoE taken from the RKS. Accounts for the year 2006-07 of
many RKS was not audited. MOs of RKS were not aware about the financial
guidelines of RKS.
8.2 At the stage of annual audit of DHS, expenditure of RKS of all the institutions
within the district should be taken on the basis of audited statement of accounts of
the RKS of PHC, CHC & District Hospitals. Monthly/Quarterly SoE from RKS is
sufficient for the purpose of monitoring the grants-in-aid given to the RKS. But at
the time of closure of the financial year when the audited Statement of Accounts for
DHS is being prepared, then it is advisable that audited figures of expenditure from
RKS is accounted for.
8.3 District Accounts Manager should have complete status of audit of all the RKS
of PHC, CHC and District Hospitals within the district. It is also desirable to keep a
copy of the audited accounts. District Accounts Manager should adequately brief the
CMO & MOs about the guidelines for accounts and audit of RKS so that auditors are
appointed in time and follow up with the concerned RKS can be done well in
advance. Deadline for completion of RKS should be before the deadline for
completion of audit of District Health Society (i.e. 31st May of subsequent financial
Need for Remuneration Cards for ASHAs:
10.1 Interactions with ASHA in Agra village of Indore District, Banedia village of
Deepalpur block of Indore District brought out that ASHA are not aware about the
complete compensation package which they can access. Our interaction with ASHA
Trainer in the District Headquarters of Dewas confirmed this observation as the
trainer herself was not aware of any consolidated list under which ASHAs are
supposed to be compensated. ASHAs are normally aware about only 3 interventions
which would result in to any financial incentives to them. These are: (i) Incentive for
Immunization, (ii) Incentive for Family planning services and (iii) Incentives for
Delivery (JSY). In fact, as we have seen during deliberations at NRHM PIP appraisal,
ASHA can get incentives not only for above three activities but host of other
activities under various health care programme (like RNTCP, Blindness Control
Programme, NVBDCP etc) and even for construction of household toilets, etc. But
ASHAs were completely unaware about these duties and linked incentives.
10.2 In Indore District whoever came with the JSY beneficiary to the institution, be
it ASHA, Dai, Anganwadi Worker, all got the funds reserved for ASHA under JSY. On
the contrary, in Dewas District the money is being only given when the beneficiary
is accompanied by ASHA. If Dai or other grassroots functionaries accompanied the
beneficiary, no money is being given to the accompanying functionaries.
10.3 Keeping in mind the awareness levels of ASHA it is proposed that a card
showing the activities expected out of ASHAs and it’s linked financial incentives may
be prepared and made available to all the ASHAs. This will not only make ASHAs
aware about their financial incentives but also make them aware about the duties
they have to perform. In the performance linked system for ASHAs, there could be
no better way to help ASHAs remember the tasks assigned to them than making
them aware about the financial incentives linked to each activity performed by
10.4 A uniform policy may be implemented in each District for paying money to
the grassroots functionaries accompanying beneficiaries of JSY.
DAM to play key role in providing training to Sub-district level:
11.1 It was observed that District Accounts Managers are not actively involved in
training the finance and accounts personnel in the blocks, PHCs, ANMs in Sub-Health
Centres and even ASHAs in the villages. Although District Accounts Manager
provides informal feedback in various meetings but the financial guidelines about
the programme have not been formally communicated by the District to the lower
units. As a result, Districts are facing serious problems in getting the vouchers from
the blocks and PHCs. This is resulting in substantial delay in financial and physical
reporting of the programme. In fact, at certain places, VHSC expenditures are not
even reported back to the PHC or the Block.
11.2 In view of the highly decentralised nature of the programme it is imperative
that all the concerned officials/personnel in the sub-district levels are familiar and
trained in the financial and accounting of the programme. Madhya Pradesh has
taken the initiative of training not only District personnel but also the Block Medical
Officers and the Accountants at the Block Level.
State Health Society (SHS) may initially organise the training of finance and
accounts personnel of all the Districts.
For the Sub-district Levels: District Accounts Managers (DAM) should play a
key role in providing training of all the finance and accounts personnel in the
blocks, PHC, ANMs in Sub-Health Center and ASHAs as well. DAM should
draw out a training calendar for each block (including the Sub-health centers
and VHSCs). This will help DAM to draw out a time bound plan for the
training. Infact, State Health Society should ask for a time bound training
calendar from all the DAMs and should monitor it closely so that awareness of
the financial and accounting requirements reaches last mile at the earliest.
Fund Flow Mechanism: Banking solution needs to be broad based
12.1 Following were the main observation on the fund flow processes:
i. Funds from State to District are sent by Bank Drafts which takes 2-3 days for
clearing apart from the transit time from State Capital to the District.
ii. Districts are sending the funds to the Blocks and PHCs through the Cheques.
Blocks Medical Officers complained that these cheques takes substantial time
(15-20 days) in clearing resulting in delayed fund transfer to the Blocks and
iii. The Demand Draft issued by SBI is not honoured by State Bank of Indore at
the Block level.
iv. SBI also charging DD making charge and Cheque Book issuance charges from
the District Health Societies.
v. Banks at CHC/PHC level are not able to meet suddenly stepped up
requirement of Cheque books due to JSY payments.
12.2 The following broad observations are made on the basis of our observations:
i. Fund transfers from State to District should be done electronically.
ii. Fund transfer to Blocks should ideally be electronic. Assuming that banks at
blocks level may not be technologically competent/upgraded for electronic
transfer, District must ensure that the funds to Blocks and PHCs are
transferred through Demand Drafts which will make the fund transfers faster.
iii. SBI should offer entire gamut of services to the Mission in Madhya Pradesh
absolutely free of cost. Since ICICI Bank offers all the services to the Mission
at the National and State level absolutely free of cost, no other bank may be
allowed to charge any cost what so ever.
iv. SBI should give an undertaking to the State Health Society that at no place
Demand Draft making charges and Cheque Book issue charges will be levied
to any bank account holder under NRHM.
v. Any e-Banking solution at this stage of technological advancement in the
banking sector should not only talk about fund transfers. The generation of
Financial Management Information System (FMIS) through the banking
channel should be made an integral part of the arrangements with the SBI in
vi. Considering the fact that that the State has given State-wide NRHM bank
accounts to the State Bank of India, SBI should be entrusted the task of
undertaking a study of banking requirements at block and village level and
come up with the solution for speedy transfer of funds and reporting the
utilization MIS back to management.
HRD Issues specific to DPMSUs:
13.1 NRHM has not just been prescriptive in its approach. It has tried to fill the
gaping requirements in the health delivery system too. One of the aspects of this
has been the Human Resources Development. Apart from doctors, nurses and
paramedics, management professionals have been laterally inducted into the system
to streamline the processes. District Programme Management Support Units are an
example of this exercise.
13.2 We made the following observations on the HRD issues related to DPMSUs of
Indore and Dewas:
i. The performance appraisal system for the DPMU staff seemed erratic at least
in the case of District Programme Manager (DPM), Indore. The DPM has been
rated on almost all parameters either ‘Good’ (no provision for rating ‘Very
Good’ in the form) or ‘Excellent’ by the Chief Medical & Health Officer and the
District Collector for the year 2006-07 (Annex-C). However, even then the
State Health Society has extended the contract period for only 6 months,
even as other DPMs have got extension for 2 years at a stretch.
ii. It was not understood as to why the extension was only given for 6 months
when the Performance Appraisal Form may be the sole feedback received at
the State level for assessing the performance of the DPM. This has resulted in
a major demoralising effect on the DPM whose work and sheer interest in the
work performed by her was appreciated as a role model by even this team.
iii. On interaction with the District Programme Managers (DPM) and District
Account Manager (DAM) in the districts, it was also learnt that State Health
Society (SHS) has extended the contract period of most of the DPMs and
District Data Assistants by a period of 2 years, while the tenure of District
Accounts Managers (DAMs) has been extended by only one year. This
differential treatment of extension of tenure did not go quite well with the
DPMU staff. DPMU staff work as a close-knit team. This differential treatment
was bringing in friction amongst DPMU staff. In fact, quite a many DAMs were
already on lookout for another job as they were not sure about their
retention even if their performance were rated as “very good” by CMHO.
iv. It was also noted that while DPMs have been given an increase in salary (by
way of Rs 1000/- for telephone and transport expenses), there was no
increase for DAMs.
v. TA/DA norms were also quite inequitable. TA/DA norms for DPMs were as per
Class-I officer of State government, while for DAMs it was as per Class-II
officers. This was also leading to a lot of friction amongst the DPMU staff.
13.3 On the basis of the above observations, following recommendations are
i. Performance appraisal system needs to be transparent. Personnel scoring
more than a cut-off mark set by SHS, should get their contracts extended by
the same period. Differential treatment of DPMU staff on the same
performance appraisal criteria brings in non-transparency in the system and
discord in the DPMU staff. DAMs do not have a clear reason as to why their
tenure was extended by 1-year period while for others it was 2 years.
ii. State may follow a policy of giving annual increment from 5% to 10% based
upon the performance evaluation. This would send a clear signal that the
increments have been given on the objective criterion.
iii. TA/DA norms may be made uniform for all the DPMU staff. Anyway, there is
no substantial difference in TA/DA of Class-I and Class-II officers of State
government. Making a uniform TA/DA norm for DPMU staff would give them a
sense of equity and fairness.
System of Concurrent Audit: Madhya Pradesh shows the way
14.1 Madhya Pradesh is the innovator here. It introduced this concept in the
public health sector for the first time and the results are already out. It is a success.
The GOI has adopted this system at the national level and has already advised all
the States and UTs to emulate Madhya Pradesh.
14.2 Following observations were made on the basis of our visit to the two districts
in this regard:
i. Concurrent Audit of District Health Society was taking place on monthly
basis. It has immensely improved the accounts maintenance in the DHS.
ii. Monthly Concurrent Audit was covering only the office of District Health
Society. No field units were covered.
iii. It was noted that concurrent audit was assisting the DPMU to the extent the
vouchers were received at DHS. Non-receipt of vouchers from the SHCs and
PHCs to Blocks and from Blocks to District was a big bottleneck in the timely
accounting and reporting.
14.3 On the basis of these observations, following recommendations are made:
i. From next year onwards, concurrent audit may be done on quarterly basis.
Quarterly concurrent audit should not only restrict itself to District Health
Society but also include certain field units i.e. Blocks CHCs, PHCs and Sub-
Health Centres etc on a sample basis.
ii. Also, District Accounts Manager should make frequent visits to those blocks,
which are not regularly sending the vouchers to the district. Recruitment of
Block level accountant would definitely help in timely compilation and
consolidation of vouchers at blocks and sub-blocks levels.
Financial & Physical Reporting – An Attempt at Co-relation:
15.1 Financial and physicals channels of reporting have been operating in separate
environments. One of the major thrusts of the Mission has been to bring in
convergence between the two to provide a holistic tool for programme monitoring to
the management. The Ministry has, thus, started an initiative to bring both the
professionals managing finance & accounts and MIS under the same roof by
organising common workshops. Two such workshops have already taken place, one
in Mussoorie for State level officials and one at Raipur for district functionaries of
15.2 Following observations were made on the issue of convergence of financial
and physical reporting channels in the study districts:
i. Separate reporting channels for reporting of physical and financial progress
was observed at the District level. There is no convergence of physical and
financial data even at the Block level. BMO sends the report on physical
parameters without sending the vouchers to the District. There is no
compulsion on BMO to send the vouchers to the District at the time of
reporting of physical progress, while he finds it quite easy to report the
numbers in the M&E format. As a result, there were huge variations (up to
50%) between the physical and financial figures. [For example; BMO
reports 100 JSY beneficiaries in physical achievement report, but the
vouchers received from BMO is only for 50-60 JSY beneficiaries]. Thus, it not
possible, even at the Block and District levels, to co-relate the physical and
financial figures as there is always a time lag, which may range from 2
months to 6 months or more depending upon the activity or inactivity of the
ii. Due to this disjoint, the financial monitoring channel will always underreport
the actual progress on the ground.
15.3 On the basis of these observations following corrective measures are
i. BMO should report only those physical achievements and financial
expenditures for which he has received the vouchers from the PHCs & SHCs.
This would force BMO to make efforts for collection of vouchers and their
timely receipt at the District level. The District Health Society must make
sure that there exists a correlation between the physical and financial
progress reported by the Block, rather than working out physical on a pro-
rata basis. This will mobilise the record flow from the lower units and would
ultimately show the actual progress of the programme.
Other Important Observations:
Accounting Unit of DPMSU needs strengthening:
16.1 Work load of the District Accounts Manager (DAM) seems to be growing by
the day. Not only the amount of money going down to the District has gone up
substantially, even the number of activities and concurrently the number of
transactions has also gone up significantly. Presently the DAM is handling the work
single-handedly. Gradually even the National Disease Control Programmes are
coming under the ambit of the DPMSUs and the District Accounts Managers. This
means that the DAMs should be provided with assistance to handle this growing job
16.2 One of the rationales for constituting an integrated Health Society at the
District and State levels was to synergise the manpower available under different
programmes to draw the maximum benefit. Thus, an exercise may be undertaken to
identify the finance and accounts personnel working under different programmes
like RNTCP, IDSP, NVBDCP, etc. and undertake a feasible reorganisation to
strengthen the accounting and finance unit of the DPMSUs.
Reporting periodicity at grassroots levels:
16.3 Under the reporting of expenditure the ANM sends the SOE once a year. No
periodicity has been prescribed, or it is not known to the functionaries, as to what is
the periodicity of sending SOEs by the VHSC. However, the VHSC functionaries felt
that they need to report half yearly.
16.4 It is suggested that as per the ‘Report of the Committee for Finalising
Financial Guidelines and Framework for Delegation of Administrative and Financial
Powers under NRHM” (already circulated to States and available on this Ministry’s
website), The VHSCs may send the SOEs half yearly to the Sub-Centres and the
ANMs in Sub-Center should send the SOEs to PHC/CHC on a quarterly basis to bring
in uniformity in reporting periodicity.
Village Health & Sanitation Committees are vibrant units:
16.5 It was observed that the Village Health and Sanitation Committees (VHSCs)
are vibrant, alive and kicking entities. The President of a VHSC in Madhya Pradesh is
a lady Surpanch (preferably). Its Secretary is ASHA, who is also a joint signatory of
its bank account. All the decisions to spend money are being taken locally and the
VHSCs seem confident of utilizing funds for the most pressing needs of the locality.
In the case of Banedia village in Depalpur Block, the VHSC got its Untied Fund of
Rs.10,000/- in March 2007. Within 3 months it had utilized Rs.6,000/- already.
Rs.2,000/- is kept in bank, while Rs.2,000/- has been kept in cash with the Mahila
Surpanch and ASHA (Rs.1,000/- each) for meeting emergencies.
16.6 Obviously, in such pro-active VHSCs Rs.10,000/-, annual support under
NRHM looks inadequate. Thus, there is a need to generate resources locally by the
VHSCs to supplement its resources. A mechanism for the same needs to be devised
by the State.
Rough calculation of JSY benefits:
16.7 All JSY funds are being distributed to the beneficiaries by bearer cheques.
Payments in all the cases verified were in order and by and large timely. During our
interaction with JSY beneficiaries in CHC, Sonkatch we calculated the distribution of
JSY funds given to them. The rough distribution is as under:
Transport charges while coming to Hospital: Rs.300 – Rs.400
Out of pocket expenses in Hospital: Rs.300*
Transportation while going back home: Rs.300 – Rs.400
Total expenses: Rs.900 – Rs.1100
Benefit available under JSY: Rs.1400 + Rs.250 (transport)
* In the CHC, Ciprofloxacin and an antispasmodic tables were provided free of cost. All
other medicine required in delivery cases were being purchased by the beneficiaries from
16.8 Thus, after meeting all the expenses, a JSY beneficiary is likely to have
Rs.550 to Rs.750 balance for spending on the care and nutrition of the mother and
child. This rough calculation is just to keep the JSY package in perspective for
programme managers at the State and Central level.
17.1 Madhya Pradesh is on track under NRHM. The present study, which
concentrated on the grassroots level fund flow and fund management, was intended
to see the nuances of vital financial and accounting processes at work in a better
performing State and also suggest improvements in the system which will redefine
the way programmes are implemented in the social sector milieu.
17.2 The suggestions in this study have pronounced community-centric bias in
consonance with the spirit of the National Rural Health Mission. Some important
aspects at the lowest implementational level have been analysed and corrective
measures for deviations from the Mission ideology have been suggested. In our
opinion if there is one State which is ready to take advantage of the suggestions
outlined in this study, it is Madhya Pradesh.
Income & Expenditure of RKS, PHC, Bicholi-Hapsi, Indore
Income Expenditure Exp.
1 Oct-03 1200
2 Nov-03 1400
3 Dec-03 620
4 Jan-04 575
5 Feb-04 462
6 Mar-04 558
7 Apr-04 580
8 May-04 674
9 Jun-04 740 787 Electricity Bill
10 Jul-04 888 113 Photocopy
11 Aug-04 1276
12 Sep-04 820 1393 Electricity Bill
13 Oct-04 615 200 Electricity Bill
14 Nov-04 602 200 Electricity Bill
15 Dec-04 736
16 Jan-05 478 100 Computer pere.
17 Feb-05 378
18 Mar-05 550
19 Apr-05 635 3651 Electricity Bill
20 May-05 672 1400 Electricity Bill
21 Jun-05 610
22 Jul-05 766
23 Aug-05 702
24 Sep-05 742 4273 Electricity Bill
25 Oct-05 560
26 Nov-05 488 852 Electricity Bill
27 Dec-05 454 381 Electricity Bill
28 Jan-06 622 452 Electricity Bill
29 Feb-06 690 407 Electricity Bill
30 Mar-06 610 93 Electricity Bill
31 Apr-06 630
32 May-06 620 526 Electricity Bill
33 Jun-06 842 623 Electricity Bill
34 Jul-06 1074 386 Electricity Bill
35 Aug-06 1116
36 Sep-06 1174
37 Oct-06 682 272 Electricity Bill
38 Nov-06 834 373 Electricity Bill
39 Dec-06 786
40 Jan-07 722
41 Feb-07 782 240 Electricity Bill
42 Mar-07 664
TOTAL 30629 16722
Avg. 729 398
Framework For Rogi Kalyan Samiti (RKS)/Hospital Management Society(HMS)
Objectives the RKS / HMS
The following could be the broad objectives of the HMS
Ensure compliance to minimal standard for facility and hospital care and protocols of treatment as
issued by the Government.
Ensure accountability of the public health providers to the community;
Introduce transparency with regard to management of funds;
Upgrade and modernize the health services provided by the hospital and any associated outreach
Supervise the implementation of National Health Programmes at the hospital and other health
institutions that may be placed under its administrative jurisdiction;
Organize outreach services / health camps at facilities under the jurisdiction of the hospital;
Display a Citizens’ Charter in the Health facility and ensure its compliance through operationalisation of
a Grievance Redressal Mechanism;
Generate resources locally through donations, user fees and other means;
Establish affiliations with private institutions to upgrade services;
Undertake construction and expansion in the hospital building;
Ensure optimal use of hospital land as per govt. guidelines;
Improve participation of the Society in the running of the hospital;
Ensure scientific disposal of hospital waste;
Ensure proper training for doctors and staff;
Ensure subsidized food, medicines and drinking water and cleanliness to the patients and their
Ensure proper use, timely maintenance and repair of hospital building equipment and machinery;
Functions and Activities
To achieve the above objectives, the Society shall direct its resources for undertaking the following activities /
Identifying the problems faced by the patients in CHC/PHC;
Acquiring equipment, furniture, ambulance (through purchase, donation, rental or any other means,
including loans from banks) for the hospital;
Expanding the hospital building, in consultation with and subject to any Guidelines that may be laid
down by the State Government;
Making arrangements for the maintenance of hospital building (including residential buildings), vehicles
and equipment available with the hospital;
Improving boarding / lodging arrangements for the patients and their attendants;
Entering into partnership arrangement with the private sector (including individuals) for the
improvement of support services such as cleaning services, laundry services, diagnostic facilities and
ambulatory services etc.;
Developing / leasing out vacant land in the premises of the hospital for commercial purposes with a view
to improve financial position of the Society;
Encouraging community participation in the maintenance and upkeep of the hospital;
Promoting measures for resource conservation through adoption of wards by institutions or individuals;
Adopting sustainable and environmental friendly measures for the day-to-day management of the
hospital, e.g. scientific hospital waste disposal system, solar lighting systems, solar refrigeration systems,
water harvesting and water recharging systems etc.
INCOME/ RECEIPTS OF RKS, DISTRICT HOSPITAL, INDORE
Various Schemes of GOI &
IPD Investigation Sub- State Govt. (Advance TOTAL
OPD (Admission) OT Delivery Charges Others Total received from CMHO) Income Total Exp Deficit
A B C D E F G H I J
234155 71365 49395 28360 260277 256817 900369 0 900369 1326463 -426094
206065 47985 25575 2810 239523 168810 690768 506000 1196768 1484872 -288104
230345 59085 26940 0 273895 175416 765681 2894090 3659771 4232898 -573127
INCOME/ RECEIPTS OF RKS, DISTRICT HOSPITAL, DEWAS
Various Schemes of
Investigat GOI & State Govt.
IPD ion (Advance received from TOTAL Total
OPD (Admission) Gyne OT Delivery Other OT Charges Others* Sub-Total CMHO) Income Exp
A B D C E F (A+B+C+D+E+F) H I J
2000-01 184208 296046 60175 428800 185275 370664 402818 1927986 0 1927986 1688152
2001-02 219842 258680 71650 408700 81425 699500 631615 2371412 0 2371412 2644231
2002-03 257412 270035 88900 410750 126850 679060 650485 2483492 0 2483492 3237330
2003-04 341952 290170 97750 439750 106025 734064 1393226 3402937 0 3402937 2994219
2004-05 399050 321410 35800 435425 69070 550207 413446 2224408 0 2224408 3229766
2006-07 399238 196518 1150 24040 35390 351257 418251 1425844 0 1425844 1678224
* mainly from shop rent during 2003-04