The programs in the cases studied are implemented by government officials at the operational level, e.g. directors, deputy directors, division chiefs. They are the ones who manage and implement those programs on a daily basis. What do they want to say about the programs and the sectors? What problems do they face in their daily work? How could aid coordination help to address those problems? In order to obtain insight into these questions, the study team organized thematic workshops on Education SWAp and Health SWiM and held a group interview on Public Finance TCAP during October-November 2003. The workshops and the group interview aimed to complement a series of individual interviews held in March-April and June-July 2003, from which the views of decision makers at the senior level (e.g., secretary of state, secretary general) and donor representatives and foreign advisors were gathered.

The proceedings of the workshops in Education and Health were organized as follows: (1) each participant wrote three problems that have constrained their daily work as well as effective service delivery on cards; (2) all the cards were posted on a big board and sorted by topic; and (3) participants identified root causes and consequences of the problems presented on the board, and discussed how to address those issues. In TCAP, information gathering took the form of a group interview guided by a set of key questions, as the number of participants was relatively small. The key findings from the workshops and the group interview are summarized below.

The thematic workshop on Education SWAp was attended by 15 MOEYS officials working at the operational level. The points for discussions and key findings are summarized below.

Planning and sector management

Problems raised in connection with the planning and monitoring process of education sector management include the following.

Participants at the workshop stressed that further capacity development, especially in the areas of financial management and accounting, is required to respond to the needs that have arisen since the introduction of the PAP in 2000.

Budget and financial management

The problems raised in connection with the sector budget are three fold: (1) increasing, but still insufficient allocation of government budget to the education sector; (2) delay in the release of allocated budget to the provincial and district levels, especially the PAP fund; and (3) lack of transparency in budget expenditures at spending units. In particular, the following views on the delay in PAP budget release were shared at the workshop.

Donor assistance

The problems and challenges in connection with the donor assistance to the education sector raised by the participants are as follows.

Human resources

Problems related to number, capacity and geographic distribution of human resources in the education sector were raised. Participants indicated that, after the introduction of PAP, each provincial and district education office is required to establish a Budget Management Center (BMC), but only 144 district offices among the total of 185 districts have established BMCs so far. The main reason for not having been able to set up BMCs in 41 offices is the lack of human resources.

As mentioned earlier, the capacity gaps in financing and accounting were pointed out as one of the issues to be addressed. It was also pointed out that the low salary of district office staff compared with teachers is one of the factors that make it difficult for district offices to recruit qualified financing and accounting staff.

Other key issues

Other problems raised during the workshop, but not discussed in detail, include the following.

The thematic workshop on Health SWiM was attended by 9 MOH officials working at the operational level. The points of discussion and key findings are summarized below.

Information sharing

The problem in collecting information on donor assistance was highlighted as the primary challenge of information sharing. The key issues in this connection are:

The participants stressed that this problem is the most urgent of all the sector issues that need to be addressed.

Human resources

Problems in terms of the number, capacity and geographic distribution of human resources in the health sector were described. Participants stressed particularly that there was a shortage of midwives in the public service. It was reported that MOH has been facing difficulty in increasing the number of midwives due to a regulation on civil service employment imposed by the Council for Administrative Reform.

The lack of accounting capacity was also raised at the workshop. It was pointed out that in many local offices accounting work is done by personnel who have not received professional training in this field, e.g. nurses. In addition, the question of how to increase the number of technical staff, such as doctors and nurses, in remote areas was indicated as another issue to be addressed.

Sector budget

The problems raised in connection with the sector budget include the following.

• The budget allocated to the health sector is not sufficient to achieve sector goals.

• The release of the budget (salary, PAP, ADD and other operational budget) to the provincial level tends to be delayed, especially during the first quarter of the year. This is partly because of management problems between MOH and MEF, as well as the shortage of cash at the national treasury.

• As earlier mentioned, there are capacity gaps in the area of accounting, especially at local offices.

There appear to be the gaps between MOH and donors in the perception of "disbursement rate." The disbursement rate used in the government’s official reports is interpreted by many donors as the rate of the budget actually spent at spending units. However, the government has been using this term as the rate of the budget that has been approved for release by MEF, or the rate of the budget that has been released from provincial treasuries to provincial BMCs.

National programs

Several issues around coordination among national programs and central departments were raised and discussed.

• Communication and cooperation has been insufficient between the national programs and the central departments of MOH.

• The financial incentives for government officials provided by national programs (e.g. per diem, travel allowance) vary depending on which program they work for, and are not well coordinated at the health center level. This has created a feeling of unfairness among the staff. This practice has also distorted the allocation of staff to health centers in a way that does not reflect community needs.

• The information on donor assistance to national programs is difficult to collect. As earlier mentioned, provincial health offices have been unable to develop costed plans due to the lack of information on the donors’ inputs.

Staff salaries

The participants shared the view that low pay in the civil service is a root cause of a number of the problems in the health sector. For instance, brain drain of trained staff and the lack of staff motivation were raised as direct consequences of the low pay.

Participants discussed interim and long-term measures to address the low pay problem. The interim measures may include the contract-in scheme which will be implemented under the framework of the Health Sector Support Project. The long-term measure is obviously the increase of the government’s salary scale, which is being developed under the initiatives of the Council of Administrative Reform.

Poor people’s access to health service facilities

The opinion was expressed that poor people’s access to health facilities is often hindered by environmental and social factors. For example, the Equity Fund under the MOH’s strategies aims to promote access to health service facilities through the provision of subsidies, but this alone is not sufficient because some obstacles such as the lack of transport, poor road conditions, family duties, etc. constrain poor people from reaching the health facilities. Participants indicated that addressing those obstacles is beyond the mandate of MOH, and requires cooperation with other ministries and agencies, for example, Seila Program.

The study team organized a group interview for government officials at the operational level to discuss TCAP and technical assistance in general, and key issues and challenges of budget and public financial management. Five officials who work on TCAP Program as national experts attended the group interview. The main issues discussed are summarized below.

Technical advisors and technical assistance (TA) programs

• Technical advisors usually take about three months to learn the background of programs, local needs and conditions. This means advisors remain unproductive for the first three months. It is suggested that advisors learn Cambodian needs and conditions as well as program activities before their arrival in Cambodia. This practice will enable them to engage in productive work from the beginning of their assignment.

• When foreign advisors change, the new advisors often provide advice that is contradictory to that of the previous advisor. For example, the establishment of a unified budget system is an objective of the Budget Department, but one advisor applied a different approach from that of the former advisor. It is suggested that the change of advisors should be minimized; and if a change is necessary, those advisors should communicate better to ensure continuity and consistency of program activities.

• Although some advice provided by foreign advisors is based on suggestions by government officials, the contributions of the latter are often not acknowledged properly. Foreign advisors and government officials are expected to work together to achieve common program objectives. It is suggested that foreign advisors consider reporting their outputs jointly with national officers to the senior management of ministries.

• TA programs should pay much more attention to building the capacity of government officials.

• Many donors tend to assume that the capacity of all government officials is "poor" across the board. It should be recognized, however, that some government officials have significantly improved their capacity through work experience and training in the past decade. The UN standards of salary supplements for government officials, which were set for a long time ago, should reflect enhanced capacity. Donors do not consider this aspect properly and treat Cambodian officials as equally poor in capacity. TA programs should be designed to provide adequate incentives to national officers, in terms of both financial incentives and career development.

• One advantage of working with foreign advisors is that advisors’ suggestions are well received in senior management of ministries, and therefore can accelerate ministerial decision making.

TCAP

• TCAP has a comprehensive scope which cut across various activities on economic policy and public finance management, and yet it is well focused.

• The MEF has established a management system for comprehensive programs through TCAP. Therefore, the extension of TCAP is good option for pursuing public finance reform.

• Introduction of MTEF is one of major achievements of TCAP.

Public Financial Reform

• The reform of the budget system is a complex issue because it involves politics, and there will be winners and losers as a result.

• On the revenue side, all revenues for the government, including donor assistance, should be integrated into the national treasury. Donor cooperation is necessary to do so, but donors do not trust the current national treasury management systems in Cambodia. Another challenge is that each ministry has its own revenue sources that are not fully reported to MEF. These revenues should also be included in the national treasury. This will require the strong commitment of relevant ministers.

• On the expenditure side, investment and donors’ expenditures should be handled separately.

• The Budget Department and the National Treasury should share the same approach to budget management.

Other key issues

• Some conditionality of donor assistance is too difficult to implement, and often does not reflect reality on the ground. Donors should consider the feasibility, economic and political, of the conditions they attach to assistance.

• A post-audit system has been introduced in the budget system through PAP. Building on PAP, national budget management will gradually sfift from the current pre-audit to a post-audit system.

• TCAP has provided training courses on public expenditure management, in which officials at the provincial treasuries participated.

• The capacity building for budget management required for successful decentralization and deconcentration will be an important issue for budget reform in the future.