Review of Primary Health Care Budgeting and Financing in Bauchi and Sokoto States, 2009-2013

Nigeria Targeted State High Impact Project

(TSHIP)Review of Primary Health Care

Budgeting and Financing in Bauchi and Sokoto States, 2009-

2013

Prepared by Connect-To-Health, LLC (May 2014)

AcknowledgementsTSHIPDr. Nosa Orobaton “ Abubakar Maishanu “ Habib Sadauki “ Benson Ojile “ Goli Lamiri “ Usman Al-RashidAbubakar MuazuNurudeen Lawal

John Snow, Inc.Matthew Osborne-SmithAlexander NosnikLEAD-RTI Project

Musa WamakkoGrace Okechukwu

Connect-To-HealthDr. Ibukun Ogunbekun “ Tiwalade Awosanya


Acronyms CSO - Civil Society

Organization FP/RH - Family

Planning/Reproductive Health LEAD - Leadership,

Empowerment, Advocacy and Development

LGA - Local Government Area LGSC - Local Government

Service Commission MDG - Millennium

Development Goal MNCH - Maternal, newborn

and Child Health NDHS - National

Demographic and Health Survey

NGO – Non Governmental Organization

NHIS - National Health Insurance Scheme

NHMIS - National Health Management Information System

NPHCDA - National Primary Health Care Development Agency

RTI - Research Triangle Institute

SMOH - State Ministry of Health

SMOLGA - State Ministry for Local Government Affairs

TSHIP – Targeted State High Impact Project

WHO - World Health Organization

WMHCP - Ward Minimum Health care Package

Overview

Five (5)-year project financed from grants from the USAID

- Launched in 2009- Managed by consortium of 5 organizations with John

Snow, Inc. (JSI) as Prime Contractor- Covers all 20 LGAs in Bauchi and 23 LGAs in Sokoto

State

Project focuses on improving and supporting:- Maternal, newborn and child health (MNCH)- Family Planning/Reproductive Health (FP/RH) - Quality of health care- Community engagement - Effective health systems


Characteristics of Target PopulationTargeted states have weak socio-economic and health profiles:

- High Infant Mortality Rates (109 and 91 per 1,000 live births in Bauchi and Sokoto states, respectively)

- Only 1% of children aged 12-23 months were fully immunized in both states in 2008

- Births supervised by skilled attendant = 16% (Bauchi) and 5% (Sokoto)

- High rates of youth unemployment and poverty

- Weak health systems – poor infrastructure, skewed human resource distribution, unpredictable financing poor quality of care


In 2009-2012: TSHIP and LEAD-RTI project assisted LGAs to develop strategic and operational plans and improve budgeting process

Additional support is required in the medium term to build institutional capacity at state and LGA levels

Study Rationale


Review trends in budget allocation, appropriateness and timeliness of release of funds for MNCH and FP/RH, and the adequacy of budgets

Project budgetary requirements for delivery of MNCH and FP/RH services in LGAs in Bauchi and Sokoto states from 2013 to 2015

Determine availability of funds for and gaps in resource allocation to MNCH and FP/RH services and commodities by govt. and partners

Specific Objectives


MethodsQuantitative and Qualitative approaches were used to obtain information – mostly the former

Sampling technique: Convenience sampling with uniform criteria adopted for both states to

enhance representativeness and comparability of findings

Data comprised the following: MNCH service delivery data (2012) – were used to segment LGAs into

low, medium and high utilization categories

Health finance (revenue & expenditure) data – covering the period 2009 to 2013

Health service utilization data (2012) – from 3 PHC centers and 6 HCs per LGA making a total of 12 HFs per state

Costing of PHC services – standard costs for scaling up health MDGs were adopted in the absence of costed WMHCP#


Methods Table 1: Profile of Selected LGAs, 2012

Bauchi State

Sokoto State

S/N

Dass

Katagum

Ningi

Bodinga

Sokoto South#

Wamakko&

1 Senatorial District South North Central South North North

2

Mid-year population (total)

107,397

353,404

462,327

208,126

243,129

214,029

3 Number of PHC centers 4 5 2 3 1 3

4 Other health facilities - clinics, dispensaries, maternity clinics@

27

32

50

26

16

40

5 % of expected births that occurred in health facility

42%

20%

14%

4%

69% 61%

6 Deliveries per midwife per month

-

-

-

31

32

39


Findings: Budgeting

Current ApproachIncrementalism: next year’s budget = this year’s budget

multiplied by a factor for revenue as well as expenditure

Total budget = Capital + Recurrent (Personnel + Overheads)

StrengthsClear guidelines on assumptions underlying budgets given –

circular from SMOLGA usually stipulates assumptions and scaling factor to be used; LG councils are expected to comply

Guidelines also given on proportion to be allocated to capital and recurrent expenditure – for 2013 budget, capital expenditure was pegged at 40-45% of actual revenues in previous year


Findings: BudgetingWeaknessesLack of consistency in reporting format among LGAs and

between LGAs & State – makes comparability of budgets difficult

Scaling factor applied to budgets bears little relationship to previous year’s performance or planned/strategic shifts in future service offerings

PHC departments submit budget proposals but may not be invited to defend proposals – practice varies across LGAs


Findings: BudgetingHow well did LGA councils adhere to 2013 Budget Guidelines? For Dass and Katagum LGAs (Bauchi State):

A fifteen percent (15%) increase was applied across the board using 2012 actuals as base

Capital expenditures were kept at 40% of total budget estimate Capital health expenditure estimates were 13% higher than

2012 actuals – this is tolerable considering that actual expenditures in 2011 were 102% of approved estimates

Overall, the findings are positive, suggesting that the investment

in training of budget officers is bearing fruitPrepared by Connect-To-Health, LLC (May 2014)

Findings: Expenditure TrendsEvidence, mostly from Bauchi State, show that:LGA revenues come mainly from federal govt.

allocations – these account for >95% of total revenues (Chart 1 below)

Internally Generated Revenue (IGR) is very low and declining - averaged only 2% of annual total revenue

2009 2010 2011 20120%

20%40%60%80%

100%120%

Chart 1: LGA Revenue by Source(Bauchi State)

Fed. Govt. Allocation - Dass

Fed. Govt. Allocation - Katagum

IGR - Dass

IGR - Katagum


Findings: Expenditure Trends Approved Estimates vs. Actual ExpendituresGap between approved budgets and actual expenditures

(budget variance) is large and fluctuates widely from year to year

In Sokoto State, actual state expenditure (all sectors) stood at around 44% of approved estimates for 2010 and 2011

Spending pattern appears more predictable at LGA level – in Katagum LGA, actual health spending averaged 97% of approved estimates in 2010-2012 (Chart 2)

2009 2010 2011 201220%

40%

60%

80%

100%

120%

140%

Chart 2: Katagum LGA – Trends in Health Expenditure, 2009-2012

Total LGA Expend. - Actual vs. Approved

Health Expend.- Actual vs. Approved

Capital Expend. as % of LGA Total

Year


Findings: Expenditure TrendsTable 2: Select Health Finance Indicators for Bauchi State,

2012

S/N

Indicator

LGAs Dass

Katagum

Ningi

i

Total LGA expend. per capita (ALL sources) - constant 2005 naira

4,573

7,237

-

ii

Capital costs as % of total LGA expenditure 47%

43%

-

iii

Hlth. expend. per capita - constant 2005 naira

-

1,135

-

iv

Capital health expenditure as % of total health expenditure

-

23%

-

v Personnel costs as % of recurrent health

expenditure

-

62%

-

vi

Overhead costs – Approved 2013 vs. 2012 -6%

-4%

-


Findings: Expenditure TrendsIn Katagum LGA:Approx. 18-20% of total LGA expenditure was

allocated to health (2010–2012); surpassed national benchmark of 15%

Health spending per capita grew by 3% per year from ₦1,031 in 2010 to ₦1,135 in 2012 – equivalent to an average of US$7.0 in real terms or US$12.5 in purchasing power parity (PPP) terms

Personnel costs averaged only 45% of total health expenditures (2011-2012) or 61% of recurrent health budgets – leaves a good margin for overhead costs


Findings: Expenditure TrendsThe evidence suggests an upward trend in PHC

financing.

Overall, spending per head is low but comparable to what other low-to-lower middle income countries spend (Table 3)

Table 3: District-level Health Spending in Select Countries

S/N

Country

Currency Code

Health Expenditure per Capita

National Currency

US$

1 Ghana (2008) GHC 5.52 5.22

2 Indonesia (2006) IDR 62,332 6.23

3 Nigeria (2010-12) NGN 1,072 6.96

4 Pakistan (2005/06) - Low PKR 15 0.25

- High

PKR 181 3.02


Findings: Expenditure Trends Likewise in Dass LGA:Total expenditure (all sectors) was up 73% (2009-

2012) – increase is attributed largely to growth in capital expenditures and overhead costs, which rose by 60% and 105%, respectively

Capital expenditure vote was overspent by 22% but only 76% of recurrent vote was spent (2009-2012) – probably due to inability to fill staff vacancies

For both LGAs:Total actual expenditures (All Sectors) were in the

range of 100% of total revenues received (see Chart 3 below)


Findings: Expenditure TrendsFinding is consistent with claims made by LGA officials that

they had no difficulty consuming allocated fundsIt is, perhaps, the strongest indication yet that more

funds need to flow to this level to accelerate development

Obvious limitation is that LGAs have virtually no slack – they are not in a position to respond to emergencies or take advantage of opportunities that may arise in any given year

2009 2010 2011 20120%

20%

40%

60%

80%

100%

120%

Chart 3: Total LGA Actual Expenditure as Percent of Revenue (2009-2012)

Dass

Katagum

Year


Findings: Expenditure TrendsData from Sokoto State indicated that:On the average, the State Govt. spent 6 out of every

10 naira received in revenue between 2009 and 2011 (Chart 4)

Whereas, actual spending on all sectors was just around 44% of forecasts for FY2010 and 2011, actual personnel expenditures averaged 80% of forecast

2009 2010 2011 -

10,000,000,000

20,000,000,000

30,000,000,000

40,000,000,000

50,000,000,000

60,000,000,000

31,557,253,50

3

51,334,896,73

2

47,941,592,25

3

12,987,645,50

0

36,819,060,09

3

33,211,041,929

Chart 4: Total Revenue vs. Expendi-ture

Sokoto State, 2009-2011 (Actuals)

Revenue

Expenditure

Year


Findings: Expenditure TrendsActual capital health expenditure as % total capital

expenditure shrank from 4.6% to 2.9% (2010-2011)

In Bauchi State :Percentage-wise and in per capita terms, health

spending at State level appeared even lower than that at LGA level

- In FY2010 and 2011, Total health expenditures at 6 months averaged only ₦470 per head (Table 1 above)

If the pattern held true for the entire year, per capita spending would be just ₦940 or US$5.8 (PPP)


Findings: What is Money Spent On?InfrastructureCapital projects development is joint State/LGA

affair - LGAs contribute 40% and state government, 60% of total costs but the state largely controls the purse

Multiple partners construct/rehabilitate PHC units and supply medical equipment but central coordination is weak – potential for duplication of assets and waste is considerable

Inadequate provision for (incremental) recurrent costs of new projects is a growing concern – undermines sustainability of service improvements


Findings: What is Money Spent On?Human Resources In general, greater balance is seen in allocations

to HR vs. the other two major cost categories (i.e. capital and overheads)

LGA personnel costs grew at a relatively slow pace between 2009 and 2012 despite salary increase for public sector workers

₋ In Dass LGA, personnel costs as share of total LGA expenditures hovered around 60%, whereas,

₋ Katagum LGA saw a decline from 57% to 48% (due in part to greater scrutiny over payroll accounts)


Findings: What is money spent on? Drugs, vaccines & medical supplies Spending on drugs, vaccines and medical supplies is

very low – accounted for only 3% of combined health expenditures for 2011 and 2012 in Katagum LGA (Approved estimates)

Drug Revolving Funds (DRFs) have not curbed supply chain problems:- In many LGAs, DRF is a push, not pull system

- In one community, the seed stock of drugs supplied cost more per dose than in retail pharmacies

- In others, items supplied did not match health facility requests


Findings: What is Money Spent On?Overheads

PHC facilities and LGA health depts. receive grossly insufficient funding:

- Bagarawa PHC (Bodinga LGA, Sokoto State) reports monthly imprest of ₦10,000 whereas Takatuku Health Center in same LGA claims to not receive any

State policy favors shifting resources from capital to overhead but response is mixed – approved estimates for Overheads in 2013 relative to 2012 ranged from -6% in Dass and Sokoto South LGAs to +6% in Wamakko LGA

WDCs bridge gaps in funding - in Sokoto South LGA, health facility needs costing more than ₦10,000 are referred to the WDC, which raises needed funds


Findings: What is Money Spent On?

Communal bore hole in health clinic premises, Sokoto South LGA – maintained by the WDC



Findings: LGA Budgets vs. Health Sector Strategic Plan

To examine how close LGAs came to meeting medium-term health financing goals, estimates of per capita and total health expenditures from the following sources were compared:

Local government council annual budgets (Actuals only)

Costed annual operational plans extracted from LGA health sector strategic plans

Cost estimates for scaling up the MDGs.

Prepared by Connect-To-Health, LLC (Apr. 2014)

Findings: LGA Budgets vs. Health Sector Strategic Plan

To finance the operational plan solely from own resources, Dass LGA would have needed to commit more than one-third (36%) of total annual revenues for 2011 to the health sector alone – a somewhat unlikely proposition

The proportion would drop to one-quarter if the LGA covered 69% of costs as proposed in the plan with the state government and development partners contributing 5% and 26%, respectively



Findings: Cost of Scaling-up MDGsDespite improvements in funding, health spending

in Katagum LGA appeared not to have kept pace with population need

- Deficit was of the order of US$2.86 (approx. ₦450) per inhabitant by FY 2012

Put in context, the deficit is almost half (48%) of the average amount spent per head per year by the Bauchi State government to provide health care in FY2010 & 2011


2009 2010 2011 20120.00

2.00

4.00

6.00

8.00

10.00

12.00

4.98

6.92

8.8810.10

4.36

6.86 6.79 7.24

Chart 6: Per capita health spending(Need vs. Actual, 2009-2012)

MDGs

Katagum

Year

US D

olla

r


Findings: Cost of Scaling-up MDGs

Even so, Katagum had met 72% of financing requirement for health MDGs as at 2012. Shortfalls in spending could thus be bridged via:

- Modest increase in spending annually to keep pace with inflation and population growth

- Review of investment priorities, and

- Reduction in waste - especially in relation to infrastructure and human resource development



Looking AheadAmple resources are available locally to support better planning, budgeting and management of PHC:

Inventory of health facilities, equipment and human resources in both states have been done and gaps quantifiedGIS mapping of health facilities in Sokoto State has been completedHR policy and strategic plan developed for Bauchi StateHealth sector strategic plans covering 2010-2015 developed

by LGAs in Bauchi StateNation-wide mapping of health resources is on-going

(courtesy of HS 20/20 project)

Tremendous opportunity exists currently to fast-track attainment of the MDGs!!



RecommendationsCost of Minimum PackageReview costing of WMHCP (first done in 2007)

– disseminate revised estimates widely

Revise LGA estimates for scaling up the MDGs – use data specific to Nigeria to refine MDG unit costs pending revision of cost of WMHCP



Recommendations

Quality of Budgets

Apply health service utilization data generated from facility-based and outreach services to improve demand forecasts and better plan infrastructure and human resource development

Further disaggregate social sectors data – separate health spending from education and other subsectors

Ensure adequate provision for recurrent costs of proposed capital projects



Recommendations

Quality of Budgets

Show actual revenues and expenditures for preceding period in proposed budgets with lag period no further than 2 years (e.g. 2014 budget to display actuals for FY2013 or 2012)

Institute budget performance reviews as part of the budget development process

Reclassify expenditures on drugs and medical supplies as “recurrent” rather than “capital”



RecommendationsResource Management

Establish formal platform for partners/stakeholders to meet quarterly or half-yearly to review investment priorities

Use GIS mapping to improve resource planning

Rationalize types and numbers of health facilities- To simplify management of health services particularly in such

situations where technical/management capacity is limited- To make the health system “leaner” and more functional

Reallocate Human Resources – a difficult but necessary step to complement investment in infrastructure and equipment


RecommendationsFinancing Options

Advocate for independent review of local government joint accounts – engage policy makers and key stakeholders in candid search for options

Revisit Community Based Health Insurance – cost is still an issue; according to the NDHS (2008):

- 56% of women aged 15-49 years stated that finance was a barrier to accessing care for self

- 41% cited the likelihood of not getting drugs, and- 36% felt distance was an issue

Define health finance indicators for LGA-level reporting on the NHMIS

- Initiate discussion with the FMOH on data requirement, indicators and benchmarks

- Enlist the help of other partnersPrepared by Connect-To-Health, LLC (May 2014)



ReferencesAshir G, Doctor H, and Afenyadu, G. 2013.

Performance based financing and uptake of maternal and child health services in Yobe State, Nigeria. Global Journal of Health Science; 5(3): 34-41

Bauchi State Ministry of Health. (2012). Human resources for health policy and planning, 2012-2015 (second draft), May 2012

Minis H, Jibrin A. (2011). An analysis of intergovernmental flows for local services in Bauchi and Sokoto States. LEAD project, RTI, Research Triangle, NC

Ministry of Health, Sokoto (2012) Standard Estimates for Health Resources Availability and Needs for Sokoto State, 2012



ReferencesNational Bureau of Statistics (2012). Millennium Development

Goals performance tracking survey result. 2012 Abuja, Nigeria

National Planning Commission. Nigeria Millennium Development Goals (MDGs): Countdown Strategy 2010:2015

National Population Commission and ICF Macro. (2009). Nigeria Demographic and Health Survey 2008: Key findings. Calverton, Maryland, USA: NPC and ICF Macro

Targeted State High Impact Project (TSHIP). (2010). Health facility rapid assessment: baseline survey report. TSHIP Central Project Office, Bauchi

WHO. (2009). Constraints to Scaling Up Health related MDGS: Costing and Financial Gap Analysis. WHO, Geneva



Thank You!

Documents

Review of Primary Health Care Budgeting and Financing in Bauchi and Sokoto States, 2009-2013