Enhancing transparency in local councils

At least much is known on how a national budget is developed, presented in Parliament, debated, passed, reviewed and tracked to ensure transparency. But little, on the same, is known in local government structures. EPHRAIM NYONDO writes about a project that wants to bridge the gap.

Tragedy has its own beauty.

In the kitchen of Malawi’s financial management, there have always been various players—each with its own utensil to ensure efficient financial management in the country.

But, until Cashgate struck, they remained unknown to most Malawians.

That is why some experts feel there is a silver lining in Cashgate revelations dark cloud. They argue the revelations stirred most Malawians from their cocoon of financial illiteracy, in the process, making them to be aware of the structures that manage their finances at Capital Hill.

Indeed, through Cashgate, Malawians reawakened their understanding of institutions of key financial institutions, among others, like that of the budget director, the Financial Intelligence Unit (FIU), the Reserve Bank of Malawi (RBM), Auditor General, Accountant General and the Parliament.

Not only that.

Financial management systems like the Integrated Financial Management Information Systems (Ifmis) became the centre of debate. In the process, it was becoming understood by many.

Arguably, Malawians might not have achieved the status of a financial management literate society. However, the country is not where it was before Cashgate revelations.

Despite such a feat that most Malawians are a bit advanced in understanding how their finances are managed at Capital Hill, the opposite is severe at local government structures.

The fear is that when there is little knowledge on how public finances are managed, as it was the case at Capital Hill something that led to Cashgate, issues of transparency and accountability become dismal, says RenfoldMwangonde, executive director for Citizen for Justice (CFJ), a local human rights organisation.

Mwangonde adds that what is critical in local councils is that most Malawians are not aware of budget and expenditure processes, something that affects issues of transparency and accountability.

It is against this that, with support from GIZ, government partnered with CFJ and came up with a project titled ‘Budget and Expenditure Transparency Project’ to enhance citizen participation in sound and prudent financial management in local councils.

The Open Budget Index 2012 noted that government budgets matter to all, and citizens want to know—indeed, have the right to know—what is in their country’s budget. In fact, the index added that there should be mechanisms for public participation and accountability to keep budgets on track.

Further, the country’s Constitution provides the need for government to ‘introduce measures which will guarantee accountability, transparency, personal integrity and financial probity and which by virtue of their effectiveness and transparency will strengthen confidence in public institutions’.

But why district councils?

Mwangonde says the project is part of enhancing national commitment to decentralisation. He further says district councils are a focal point for development planning, management and enhancing citizen ownership.

Councils, as such, expand opportunities for public participation in budget processes, he explains.

The project is being implemented in the following nine districts:  Chitipa, Karonga, Nkhata Bay, Nkhotakota, Kasungu, Mchinji, Chikwawa, Blantyre and Balaka.

According to Mwangonde, the districts were selected considering regional representation, urban and rural setting, budget constraints and also varying degrees of performance on financial management matters by the districts.

As noted by the Constitution and the 2012 Open Budget Index that there should be mechanisms for public participation and accountability to keep budgets on track, CFJ developed a Budget and Expenditure Transparency toolkit or check list, to guide the implementation of the project.

Budget transparency, according to Mwangonde, requires clear understanding of how budget decisions are made; availability of comprehensive, accurate, appropriate and timely budget information; and citizens’ capacity to analyse how the resources are used to deliver budget outcomes.

Through meeting with various stakeholders of the councils in the nine districts, the FCJ, using the toolkit, are gauging the extent to public participation in the budget processes of their respective councils.

So far, the CFJ has held orientation of local councils and stakeholders to obtain and consolidate budget and expenditure information. Further, they have also conducted orientation and training on budget and expenditure analysis.

Later this month, they are expected to launch a report of the findings gathered in the local councils regarding the project.

However, in their preliminary observations, CFJ notes some key issues that define the challenges with budget and expenditure transparency for local councils.

CFJ official Rachel Etter explains that oversight institutions face capacity constraints affecting budget approval and oversight.

She adds that National Local Government Finance Committee (NLGFC) is erratically and insufficiently funded.

She further notes that local councils lack funding, capacity and equipment for financial management and, most crucially, there is low community participation and knowledge on budget processes.