Madhya Pradesh Financial Management Report-2007..doc


Published on

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Madhya Pradesh Financial Management Report-2007..doc

  1. 1. 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 Introduction: 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 spending. 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
  2. 2. 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 expectations. 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 camera. 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: 2
  3. 3. 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. Figure-1 RKS - Distt. Hospital, Indore Total Earnings through User Charges 10.00 9.00 8.00 7.66 Rs. in Lakhs 6.00 6.91 4.00 2.00 0.00 2004-05 2005-06 2006-07 Figure-2 RKS-Distt. Hospital, Dewas: Total Earnings through User Charges 40.00 34.03 35.00 30.00 Rs. In Lakhs 25.00 23.71 24.83 22.24 20.00 15.00 19.28 10.00 14.26 5.00 0.00 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: 3
  4. 4. 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). Figure-3 RKS - Distt. Hospital, Indore Earnings through User Charges on Delivery Cases 30 28.36 25 Rs. in Thousands 20 15 10 5 2.81 0 0 2004-05 2005-06 2006-07 Figure-4 R K S - Dis tt. Hos pital, Dewas - E arning s throug h Us er C harg es on Deliveries & G yne OT 500.00 435.43 400.00 428.80 439.75 408.70 410.75 R s . in L akhs 300.00 200.00 88.90 97.75 100.00 60.18 71.65 35.80 24.04 0.00 1.15 2000-01 2001-02 2002-03 2003-04 2004-05 2006-07 G yne O T De lev ery 4
  5. 5. 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). Figure-5 R K S - D is tt. H os pital, Indore - E arning s throug h Us er C harg es 3.00 2.74 2.60 2.34 2.40 2.30 2.50 2.06 R s . in L akhs 2.00 1.50 1.00 0.71 0.49 0.59 0.48 0.50 0.26 0.27 0.00 2004-05 2005-06 2006-07 OP D IP D (A dmis s ion) OT Inves tigation C harges Figure-6 5
  6. 6. R K S - D is tt. H os pital, D ewas - E arning s throug h Us er C harg es 8.00 7.00 7.34 7.00 6.79 5.50 6.00 R s . in L akhs 5.00 3.99 3.99 3.71 3.51 3.42 3.21 4.00 2.96 2.90 2.70 2.59 2.57 2.20 3.00 1.97 1.84 1.85 1.27 2.00 1.06 0.81 0.69 0.35 1.00 0.00 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. Figure-7 Income & Expenditure of RKS, District Hospital, Dewas 40.00 34.03 A decline of 58% as 35.00 32.37 32.30 compared to 29.94 2003-04. 30.00 26.44 24.83 Rs. in Lakhs 23.71 25.00 22.24 19.28 20.00 16.88 16.78 14.26 15.00 10.00 5.00 0.00 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2006-2007 Income Expenditure 6
  7. 7. 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. Figure-7.a Receipts & Expenses of Rogi Kalyan Samiti, District Hospital, Dewas: April - June 2007 Amount in Rs Projected Receipt for the year Item Receipt Expenditure Item 2007-08 (on the basis of 1st Quarter) OPD 75000 21000 Medicine 300000 Visitor's Pass 10000 11200 Hosp. Contingency 40000 Honorarium (Security 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 Computerization 122500 (Contract) 9000 News paper ads 28200 Cleaning Contract Other receipts 35500 28063 Other Expenses 142000 TOTAL (Self 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, 7
  8. 8. 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 & 8
  9. 9. 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 beneficiaries. 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 9
  10. 10. 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 earlier. 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. Figure-8 Declin e 72% 100% 100% 100% 67% 10
  11. 11. Declining Budget Trends for Various Activities : O/o Civil Surgeon-cum-Hospital Supt., Indore 60.00 50.00 40.00 30.00 20.00 R h n k a s l i 10.00 0.00 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). Figure-9 11
  12. 12. T otal S tate B udg et of C MH O, Indore 12.00 10.98 10.02 10.00 7.55 7.73 7.55 R s . in C rores 8.00 6.82 7.02 6.51 6.00 5.35 5.07 4.00 2.00 1.35 1.10 0.79 0.12 0.35 0.07 0.10 0.08 0.03 0.21 0.00 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 T otal S alary POL Medic ine Figuer-10 B udg et for Medic ine: C MH O, Indore 1.60 1.35 1.40 1.20 1.10 R s . in C rores 1.00 0.79 0.79 0.79 0.80 0.60 0.47 0.35 0.40 0.24 0.21 0.21 0.20 0.00 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 B udget E xpenditure Figure-11 P O L B udg et: C MHO , Indore 14.00 12.29 12.00 10.00 10.00 R s . in L akhs 8.03 8.00 7.34 6.00 4.00 2.65 2.00 0.00 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 12
  13. 13. 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 Observation: 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. Recommendations: 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 Observation: 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. Recommendation: 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 13
  14. 14. 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 Observation: 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. Recommendations: 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 year). Need for Remuneration Cards for ASHAs: Observations: 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. 14
  15. 15. 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. Recommendation: 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 ASHA. 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: Observation: 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. Recommendation: 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. 15
  16. 16. Fund Flow Mechanism: Banking solution needs to be broad based Observations: 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 PHCs. 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. Recommendation: 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 Madhya Pradesh. 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 16
  17. 17. 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. Observations: 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. Recommendation: 13.3 On the basis of the above observations, following recommendations are made: 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. 17
  18. 18. 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. Observation: 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. Recommendation: 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 18
  19. 19. in Mussoorie for State level officials and one at Raipur for district functionaries of Chhattisgarh. Observation: 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 BMO. ii. Due to this disjoint, the financial monitoring channel will always underreport the actual progress on the ground. Recommendation: 15.3 On the basis of these observations following corrective measures are suggested: 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 responsibility. 19
  20. 20. 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) = Rs.1650 20
  21. 21. * 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 market. 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. Conclusion: 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. ***** 21
  22. 22. Annex-A Income & Expenditure of RKS, PHC, Bicholi-Hapsi, Indore Rs. Purpose of 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 Monthly Avg. 729 398 Annex-B Framework For Rogi Kalyan Samiti (RKS)/Hospital Management Society(HMS) Objectives the RKS / HMS 22
  23. 23. 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 services;  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 attendants;  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 / initiatives  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; and,  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. 23
  24. 24. Annex-X INCOME/ RECEIPTS OF RKS, DISTRICT HOSPITAL, INDORE in Rs. 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 in Rs. 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 G= 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