Health Systems for Outcomes Publication 72897 PRIORITIES AND STRATEGIC OPTIONS FOR SUSTAINABLE HEALTH CARE FINANCING IN SOUTHERN SUDAN Kofi Amponsah, Samuel Mills, Wasunna Owino, Khama Rogo, Christine Ombaka, Olivia Lomoro and Bengt Herring August 2009 Table of Contents ACKNOWLEDGEMENTS .................................................................................................................................................... V ABBREVIATIONS AND ACRONYMS ...................................................................................................................................... VI EXECUTIVE SUMMARY ................................................................................................................................................... VII 1. INTRODUCTION ............................................................................................................................................. 1 Health System .......................................................................................................................................................2 Poor Health Status ................................................................................................................................................2 National Health Policy Statement on Health Financing ........................................................................................3 CURRENT MACRO ECONOMIC TRENDS ...............................................................................................................................3 Trends in the Composition of Government Sources of Revenue ...........................................................................4 THE STATE OF HEALTH SECTOR FINANCING .........................................................................................................................5 Trend in Government Funding ..............................................................................................................................5 Sectoral Comparison of the Health Budget (2008-2009) ......................................................................................6 Health Expenditure Indicators (2006-2009) ..........................................................................................................7 RATIONALE FOR THE STUDY ..............................................................................................................................................8 OBJECTIVES OF THE STUDY ...............................................................................................................................................8 METHODOLOGY .............................................................................................................................................................9 2. HEALTH SECTOR RESOURCE MOBILIZATION AND ALLOCATION ................................................................... 10 Budget Preparation Process at the GoSS and State Levels .................................................................................10 Budget Allocations to Health ..............................................................................................................................11 Multi-Donor Trust Fund and Other External Funding .........................................................................................13 Multi-Donor Trust Fund.................................................................................................................................................... 13 Other External Funding Sources ....................................................................................................................................... 14 Other external funding sources ........................................................................................................................................ 15 Sources of Funding for the SMoHs ......................................................................................................................16 THE FUNDING GAP .......................................................................................................................................................17 FISCAL SPACE ANALYSIS .................................................................................................................................................22 Fragile/Post-Conflict States Context ...................................................................................................................22 Creating Fiscal Space for Health .........................................................................................................................22 INTERGOVERNMENTAL FISCAL RELATIONS AMONG THE MOH-GOSS, SMOHS, AND CHDS ........................................................23 The MoH-GoSS and the SMoHs ...........................................................................................................................23 The SMoHs and the CHDS ...................................................................................................................................23 General Conditions of the SMoHs and CHDs Administrative Offices ............................................................................... 24 3. BUDGET EXECUTION AND FINANCIAL MANAGEMENT CAPABILITIES ........................................................... 25 BUDGET EXECUTION .....................................................................................................................................................25 The MoH-GoSS’s Budget Execution Process ........................................................................................................25 The MoH-GoSS’s Budget Execution Performance ...............................................................................................25 FINANCIAL MANAGEMENT CAPABILITIES OF MOH-GOSS, SMOHS AND CHDS ........................................................................27 Overview of an Effective Financial Management System ...................................................................................27 Financial Management Capabilities of the MoH-GoSS .......................................................................................28 Financial Management Capabilities of SMoHs and CHDs ...................................................................................28 SOURCES OF FUNDS AND FINANCIAL MANAGEMENT CAPACITIES AT THE HEALTH FACILITIES .......................................................28 Sources of Financing for Health Facilities ...........................................................................................................29 Selected Health Facilities by Levels of Care .........................................................................................................30 The Tertiary Hospitals .........................................................................................................................................30 Juba Teaching Hospital (Central Equatoria State) ............................................................................................................ 30 Wau Teaching Hospital (Western Bahr el Ghazal State) ................................................................................................... 31 Malakal Teaching Hospital (Upper Nile State) .................................................................................................................. 31 State and County Hospitals .................................................................................................................................32 ii Lui Hospital, Mundri East County, Western Equatoria State ............................................................................................ 32 Tumbura Civil Hospital, Tumbura County, Western Equatoria State ............................................................................... 33 Torit Civil Hospital, Torit county, Eastern Equatoria State ............................................................................................... 33 Kejokeji Civil Hospital, Kejokeji County, Central Equatoria State ..................................................................................... 33 St Luke International Medical Centre, Juba County, Central Equatoria State .................................................................. 34 Primary Health Care (PHC) Facilities ...................................................................................................................34 Bengasu PHCC .................................................................................................................................................................. 34 Yubu PHCC ........................................................................................................................................................................ 35 4. EXISTING MECHANISMS FOR GENERATING RESOURCES .............................................................................. 36 USER FEES ..................................................................................................................................................................36 User Fees Mechanism in Neighboring Countries.................................................................................................37 THE NATIONAL HEALTH INSURANCE FUND ........................................................................................................................38 5. POLICY RECOMMENDATIONS ...................................................................................................................... 40 REFERENCES ................................................................................................................................................................43 List of Figures FIGURE 1. MAP OF SOUTHERN SUDAN ...................................................................................................................................1 FIGURE 2. COMPOSITION OF THE GOVERNMENT’S SOURCES OF REVENUES 2005-2008 ..................................................................4 FIGURE 3. SECTORAL COMPARISON OF GOSS BUDGET ALLOCATION (2008) .................................................................................6 FIGURE 4. SECTORAL COMPARISON OF GOSS BUDGET ALLOCATIONS (2009) ................................................................................7 FIGURE 5. PERCENTAGE OF GOSS BUDGET ALLOCATED TO THE MINISTRY OF HEALTH ....................................................................13 FIGURE 6. SOURCES OF EXTERNAL FUNDING TO THE HEALTH SECTOR (EXCLUDING MDTF) (IN US$)-2008.......................................16 FIGURE 7. FISCAL SPACE FOR HEALTH IN SOUTHERN SUDAN .....................................................................................................23 FIGURE 8. MOH-GOSS BUDGET EXECUTION PROCESS ............................................................................................................26 FIGURE 9. ORGANOGRAM, MOH-GOSS ...............................................................................................................................45 FIGURE 10. ORGANOGRAM, SMOH ....................................................................................................................................46 FIGURE 11. TOTAL OUT-OF-POCKET PAYMENTS FOR HEALTH CARE SERVICES, 179 RESPONDENTS, EXIT INTERVIEWS 2008, SOUTHERN SUDAN (SDG) ........................................................................................................................................................52 List of Tables TABLE 1. POPULATION BY STATE ............................................................................................................................................2 TABLE 2. HEALTH INDICATORS IN NORTHERN AND SOUTHERN SUDAN...........................................................................................3 TABLE 3. INTERNATIONAL COMPARISON OF TOTAL GOVERNMENT EXPENDITURE ON HEALTH IN 2008................................................5 TABLE 4. HEALTH EXPENDITURE INDICATORS: OUTTURN VS. PLANNED (2006-2008) .....................................................................8 A TABLE 5. GOSS BUDGET ALLOCATION TO MINISTRY OF HEALTH 2006-2009 BY EXPENDITURE CATEGORY SDG) .............................12 A TABLE 6. GOSS BUDGET ALLOCATION TO MINISTRY OF HEALTH 2008-2009 BY PROGRAM AREA (IN SDG) ....................................12 TABLE 7. ORIGINAL AND REVISED FUNDING ALLOCATIONS TO THE UMBRELLA PROGRAM FOR HEALTH SYSTEM DEVELOPMENT (US$) ....14 A TABLE 8. GOSS BLOCK TRANSFERS TO STATES 2008 (IN SDG MILLION) ....................................................................................17 A TABLE 9. GOSS CONDITIONAL TRANSFERS TO STATES 2008 (IN SDG) ......................................................................................19 TABLE 10. HEALTH SECTOR FUNDING GAP ANALYSIS 2009-2011 (US$) ...................................................................................20 TABLE 11. MOH-GOSS AND GOSS OVERALL BUDGET EXECUTION PERFORMANCE 2006-2008 (US$) ...........................................27 TABLE 12. BACKGROUND OF SELECTED HEALTH FACILITIES IN SOUTHERN SUDAN..........................................................................29 A TABLE 13. USER FEES COMPARED WITH THE COST OF PROVIDING HEALTH CARE (SDG) ...............................................................37 TABLE 14. LIST OF HEALTH FACILITIES ...................................................................................................................................49 TABLE 15. BACKGROUND CHARACTERISTICS OF 229 RESPONDENTS, EXIT INTERVIEWS 2008, SOUTHERN SUDAN ...............................50 TABLE 16. OUT-OF-POCKET PAYMENTS FOR HEALTH CARE SERVICES, 229 RESPONDENTS, EXIT INTERVIEWS 2008, SOUTHERN SUDAN (SDG) ..................................................................................................................................................................52 TABLE 17. FINANCIAL MANAGEMENT CAPACITY OF THE SMOHS ...............................................................................................61 TABLE 18. FINANCIAL MANAGEMENT CAPACITY OF CHDS .......................................................................................................63 TABLE 19. AVAILABLE EQUIPMENT AT THE THREE TERTIARY HOSPITALS ......................................................................................64 TABLE 20. STAFFING AT THE THREE TERTIARY HOSPITALS .........................................................................................................64 iii A TABLE 21. USER CHARGES FOR SERVICES AT THE THREE TERTIARY HOSPITALS (IN SDG) ...............................................................64 A TABLE 22. WEEKLY, MONTHLY, AND YEARLY REVENUE FROM USER FEES AT JUBA, WAU AND MALAKAL TEACHING HOSPITALS (SDG) .65 A TABLE 23. WEEKLY, MONTHLY, AND YEARLY OPERATIONAL EXPENDITURE AT JUBA, WAU AND MALAKAL TEACHING HOSPITALS (SDG) 65 TABLE 24. STAFFING AT STATE AND COUNTY HOSPITALS ..........................................................................................................66 TABLE 25. AVAILABLE EQUIPMENT AT STATE AND COUNTY HOSPITALS .......................................................................................66 A TABLE 26. USER CHARGES FOR SERVICES AT STATE AND COUNTY HOSPITALS (IN SDG) ................................................................67 A TABLE 27. ESTIMATED WEEKLY, MONTHLY, AND YEARLY REVENUE FROM USER FEES AT STATE AND COUNTY HOSPITALS (IN SDG) ......67 A TABLE 28. ESTIMATED WEEKLY, MONTHLY, AND YEARLY EXPENDITURES AT STATE AND COUNTY HOSPITALS (IN SDG) ......................67 Boxes BOX 1. COMPONENTS OF THE UMBRELLA PROGRAM FOR HEALTH SYSTEM DEVELOPMENT .............................................................15 Annexes ANNEX 1. ORGANOGRAM OF MINISTRY OF HEALTH, GOVERNMENT OF SOUTHERN SUDAN, AND STATE MINISTRIES OF HEALTH ............45 ANNEX 2. KEY INFORMANT INTERVIEWS................................................................................................................................47 ANNEX 3. EXIT INTERVIEW FINDINGS ....................................................................................................................................49 ANNEX 4. FINDINGS OF THE FOCUS GROUP DISCUSSIONS .........................................................................................................53 ANNEX 5. UPHSD COSTS BY COMPONENT FOR PHASE I (US$MILLION) ......................................................................................55 ANNEX 6. UPHSD COSTS BY COMPONENT FOR PHASE II (US$MILLION) .....................................................................................57 ANNEX 7. IMPROVEMENTS IN THE MOH-GOSS’S BUDGET EXECUTION PERFORMANCE ..................................................................59 ANNEX 8. FINANCIAL MANAGEMENT CAPABILITIES OF THE MOH-GOSS .....................................................................................60 ANNEX 9. FINANCIAL MANAGEMENT CAPABILITIES OF THE SMOHS AND CHDS............................................................................61 ANNEX 10. SOURCES OF FUNDS AND FINANCIAL MANAGEMENT CAPACITIES AT THE HEALTH FACILITIES ............................................64 iv ACKNOWLEDGEMENTS We gratefully acknowledge Dr. Joseph Manytuil Wejang, the Minister of Health: Dr. Majok Yak Majok, the Under Secretary of Health: and Dr. Monywiir Arop, the Adviser to the Minister, for their direction, cooperation and enthusiasm in the development of this study. Our sincere gratitude goes to Dr. Olivia Lomoro (Director General for Research, Planning, and Health Systems Development), Dr. Henry Dieu (Director General for Administration and Finance), Dr. Samson Paul Baba (Director General for External Assistance and Coordination), Dr. Nathan Atem (Director General for Primary Health Care), Dr. John Rumunu (Director General for Preventive Medicine), Dr. Yatta Logor (Director General for Curative Services), Dr. Stanley Ambajero (Director General for Human Resource Development), Dr. Mayang Agoth (Director General for Pharmaceutical Services), Dr. Lul Riek (Director General for HIV/AIDS), Mrs. Janet Michael (Director General for Nursing and Midwifery), and Ms. Victoria Jabe Eluzai (Director General for Nutrition), and Mr. Adwok Yak (Director of Finance) for their unflinching support and encouragement in conducting this study. In addition, we gratefully acknowledge the Joint Donor Office (JDO), Juba, for supporting a consultant for the study. We are particularly grateful to Mr. Lawrence Clarke, World Bank Country Manager, Southern Sudan and Mr. Fredrick Yankey, Senior Financial Management Specialist, World Bank, Juba, Southern Sudan for providing technical support during the review of the study materials as well as planning of the study. We also express our gratitude to Mrs. Yvonne Nkrumah and Ms. Julie Ann Doherty of the World Bank Institute (WBI) for editing the report. We are thankful to Robert Yates (DFID, London, UK), Anna Vassal (Arnhem, Mott MacDonald, the Netherlands), Bill Bataillie (World Bank) and Gayle Martin (World Bank) who peer-reviewed the initial draft. Our exceptional thanks go to the following Ministry of Health of the Government of Southern Sudan (MoH-GoSS) staff: Barbara Kibos (Study National Consultant), Cicilia Konga (Study Data Entry Coordinator), James Makoi (Controller of Accounts), Martin Taller (Director of Human Resources), Alex Nyanga, Kenneth Warirah, John Mabeni Adrik (Director of Primary Health Care), Esther Keji (Deputy Director, Health Management Information System), Dr. Adut Chan (Sr. Inspector Health Systems) Valeriano Lagu Pierino (Deputy Director of Statistics), Manoah Cheng Abothou (Director of Environment). Also, Dr. George Rae (M&E Adviser), and Dr. John Alwar (PHC Adviser) for effectively collaborating the field work, data collection and entry. Our sincere gratitude go to Mr. Bimal Ghata, Mr. Wellington Masakari, Fredrick Nsemwa, Paul Kadonya, Raja Mirambo (former PWC staff), Kenneth Warirah, Alex Nyaga, Richard Macharia, and Elizabeth Kariuku of PricewaterhouseCoopers (PWC) who contributed immensely to data collection at State Ministries of Health (SMoHS), County Health Departments (CHDs), and health facilities. Finally, we are indebted to the following World Bank Staff: Evans Kijore (Resource Management Officer), Largo Olum (Accounting Assistant), Juliette Guantai, Millicent Ndolo, Anne Kinnox, Nancy Okita, Therese Tshamala (AFTH3), and Tomoko Horii (UNICEF Malawi) who, in diverse ways, provided assistance to the study team in the organization and planning of study activities. v ABBREVIATIONS AND ACRONYMS BCG Bacillus Calmette-Guérin CDC US Centers for Disease Control CHD County Health Departments CoM Council of Ministers CPA Comprehensive Peace Agreement DFID UK Department For International Development DG Director General DoB Directorate of Budget DoF Director of Finance DPT diphtheria, pertussis, and tetanus FGD Focus Group Discussions GoNU Government of National Unity GoSS Government of Southern Sudan GTZ Deutsche Gesellschaft für technische Zusammenarbeit IMC International Medical Corps MDG Millennium Development Goal MDTF Multi-Donor Trust Fund MoFEP-GoSS Ministry of Finance and Economic Planning, Government of Southern Sudan MoH-GoSS Ministry of Health, Government of Southern Sudan NGO Non-Governmental Organization NHIF National Health Insurance Fund PHCC Primary Health Care Centre PHCU Primary Health Care Unit RFP Request for payment SDG Sudanese Pounds SMoFEP State Ministry of Finance and Economic Planning SMoH State Ministry of Health SPLM Sudanese Peoples Liberation Movement UNFPA United Nations Population Fund UNHCR United Nations High Commission for Refugees UNICEF United Nations Children’s Fund UNOPS United Nations Office for Project Services UPHSD Umbrella Program for Health System Development USAID United States Agency for International Development VAT Value-Added Tax WFP World Food Program WHO World Health Organization vi EXECUTIVE SUMMARY Introduction Southern Sudan lies within the Nile basin and shares borders with five countries (Ethiopia, Kenya, Uganda, the Democratic Republic of Congo, and the Central African Republic). The Government of Southern Sudan has a three-tiered system of government consisting of 10 states at the first level, about 90 counties at the second level, and over 200 payams at the third level. The central Ministry of Health of the Government of Southern Sudan (MoH-GoSS) sets policies and guidance for the provision of health services. At the state level, the administrative authority is the State Ministry of Health (SMoH)--which supervises the County Health Departments (CHDs). The SMoHs coordinate the implementation of health programs within the state while the CHDs manage and implement health programs at the county level. Southern Sudan has a five-tier health care system consisting of tertiary hospitals, state hospitals, county hospitals, primary health care centers (PHCCs) and primary health care units (PHCUs). The tertiary hospitals are under the administration of the MoH- GoSS while the state hospitals are under the SMoHs. The CHDs run the PHCCs and PHCUs. Health financing in the health sector has not received much attention despite the fact that Article 35 of the Interim Constitution states, “All levels of government in Southern Sudan shall promote public health, establish, rehabilitate, and develop basic medical and diagnostic institutions and provide free primary health care and emergency services for all citizens�. The GoSS has not yet demonstrated sufficient budgetary commitment to improve the health status of the population. The health sector is constrained by chronic under-funding, weaknesses in resource allocations, budgeting and planning leading to poor health outcomes, acute shortage of health professionals, poor infrastructural development, very low health services coverage at all levels of the health system. Objective The overall objectives of the study were to provide analytical support to the MoH-GoSS in health care financing and to gain a better understanding of ways to increase overall resources for the health sector within the constraints imposed by the limited resource envelope allocated to the health sector. Specifically, this needs assessment sought to: (i) analyze the scale, composition, and management of health spending; (ii) examine various mechanisms for generating resources for health services delivery; (iii) assess the existing mechanism for allocating and managing health sector resources; (iv) examine relationships of GoSS, state, and local governments in health financing and governance; (v) recommend possible strategies for the health sector to achieve financially and economically sustainable development, which would further lead to improvement of overall health status of the people of Southern Sudan. Methodology Researchers held key informant interviews with representatives from the MoH-GoSS, SMoHs, CHDs, and the Ministry of Finance and Economic Planning for the Government of Southern Sudan (MoFEP-GoSS); representatives from the UN agencies, Non-Governmental Organizations (NGOs), and development partners; and health facility administrators. Additionally, 229 exit interviews were conducted to examine, among others, the extent of the implementation of the Government’s free health care policy, out-of-pocket payments at selected public and private health facilities, and users’ socio-demographic characteristics. To complement the data from the exit interviews, 10 focus group discussions were held with individuals who do not use formal health services. vii Key findings:  Low Budget Allocations for Health The budget allocations to the MoH, as a percentage of the overall GoSS budget, decreased from 7.9% in fiscal year 2006 (January-December) to 4.7% in fiscal year 2009 with the lowest allocation of 2.5% occurring in fiscal year 2008. Moreover, the total budget allocated to the health sector in SDG (millions) and in US dollars (millions) during this period were 219 (109.5), 165 (82.5), 140 (70), and 170 (85) in 2006, 2007, 2008, and 2009, respectively. The portion of the budget allocated to capital expenditure has decreased steadily from 77% to 31% while the salaries expenditure category has shot up from 10% in 2006 to 55% in 2009. The latter is intriguing given that provisional estimates of the total number of health workers has deceased steadily from 5,449 in 2006, to 2,359 in 2007, to 2,069 in 2008. By program area in the 2009 budget allocation, Secondary and Tertiary Health Care received the highest amount of SDG53 million (US$26.5million) as opposed to SDG6.7million (US$3.3million) for Primary Health Care. The latter is less than SDG0.8 per capita using an estimated population of 8.3 million. Given that the constitution stipulates free primary health care for all citizens, this allocation is woefully inadequate. It is expected that the Umbrella Program for Health System Development (UPHSD) of US$225 million, established after the 2005 Comprehensive Peace Agreement (CPA), would make up for the shortfall in the provision of the basic package of health services. In addition to the UPHSD, there are several other sources of health funding such as the UN agencies (including UNICEF, UNFPA, WHO, WFP, and UNHRC), bilateral agencies or donors (notably USAID), and international NGOs. The exact amount of this funding was unknown until 2008 when these international agencies and NGOs actively participated in the 2009 Budget Sector Working Group, providing detailed information on their funding for fiscal year 2008--estimated at US$427.9 million.  Weak Intergovernmental Fiscal Relations Among the MoH- GoSS, SMoHs, and CHDs The establishment of clear sector priorities and resource allocation mechanisms, as well as well- coordinated programs/activities at all levels of a health system leads to proper functioning of a decentralized health care system. In Southern Sudan, there are no budget collaborations between the MoH-GoSS and the SMoHs; the SMoHs are not involved in the budget preparation process of the MoH- GoSS. The MoFEP-GoSS requires states to prepare their own budgets and submit them directly to the MoFEP-GoSS. This situation does not facilitate strong budgetary ties between the MoH-GoSS and the SMoHs and therefore affects establishment of effective and efficient resource allocation mechanisms to meet the needs of the health sector.  Improved MoH-GoSS’s Budget Execution Performance After the CPA in 2005, the MoH-GoSS witnessed low budget execution performance in 2006 and 2007. This resulted in under-spending (outturn--budget allocation) of the budget in 2006 and 2007 at -42.8% and -60.2%, respectively. These figures are well below those for the total GoSS allocations. While the salaries component remained overspent in both fiscal years, there was reportedly consistent under- spending for the operating and capital expenditure items in the health sector. These low budget execution rates were due to weak financial management capacity of the Directorate of Administration and Finance and a weak procurement system. It was also due to the weak budget execution system of the MoFEP-GoSS at the time, resulting in lost requests for payments (RFPs), payments being made without financial coverage (leading to returned checks), and no reliable expenditure tracking system. This led to substantial overspending by certain ministries. After the MoH-GoSS and the MoFEP-GoSS viii took several measures during 2007 and 2008, the MoH-GoSS’s budget execution performance in 2008 improved with 78% of the budget spent as of December 31, 2008.  Weak financial Management Capabilities of the MoH-GoSS, the SMoHs, and the CHDs Prior to 2007, the Directorate of Administration and Finance of the GoSS, which is in charge of managing all the Ministry’s expenditures, had no proper system for managing and accounting for health spending—it lacked proper books of account and a record keeping system. Furthermore, the Directorate lacked the requisite modern accounting and financial management tools such as computers, accounting software, and calculators. It was characterized by weak internal controls and relatively inexperienced accounts personnel coupled with an inappropriate financial reporting system. Since late 2007, a computer-based accounting system has been implemented, accounts staff have gone through training in expenditure management, and the procurement unit has been strengthened with the installation of computers. Documenting expenditure reports from 2005 on a spreadsheet has tremendously improved budget execution and reporting. Financial controls have, also, improved significantly through the strengthening of internal audits and devolution of functions to two newly recruited deputy directors— one for administration and one for finance. Hitherto, there was only one director in charge of both administration and finance. In contrast, most SMoHs and CHDs do not keep records on funds received or expended from either the government or donors and financial controls are nonexistent in the administration and finance departments. Of particular concern is the background of the personnel working in the administration and finance departments of the health institutions; In many SMoHs and CHDs, persons in charge of budget execution have little or no accounting and/or financial background.  User Fees as a Mechanism for Raising Revenues for Health Care This study sought to assess whether: i) health care providers are providing services free of charge, ii) reimbursements from the GoSS for services provided to patients are adequate and timely, and iii) patients are able to afford the fees charged. The researchers obtained information on the first two study points through provider interviews while relying on exit interviews and focus group discussions (FGD) for the third point. Contrary to the free health care policy, of the 28 health facilities assessed, 19 (68%) reported collecting user fees. Facilities have established their own fee determination criteria, without reference to the MoH-GoSS, with charges that are, in most cases, arbitrary and not related to the costs of services. The lack of data on costs of services and the absence of clear guidelines on pricing have led to substantial variation in fees across different facilities. Health facility managers argue that the major reason for implementing user fees is the lack of funding for operating expenditures, capital expenditures and/or salaries. Exit interviews and FGD corroborate findings on the regular implementation of user fees at health facilities. Of the 229 respondents who completed the exit interviews, more than three-quarters paid for health services in June-July 2008. Further, 18% were not aware of the Government’s free health care policy while 24% were willing to pay for health services.  The Funding Gap Predictable sources of health sector funding for 2009-2011 include the GoSS budgetary allocation and the Multi-Donor Trust Fund (MDTF). Other sources of funding such as bilateral donors, NGOs, and UN agencies are off budget and, therefore, unpredictable. ix The MoH-GoSS budget covers salaries, operating expenses, and some capital expenditure. Under the funding arrangements for the second phase of the UPHSD, there is an anticipated combined contribution of US$165m from the GoSS and MDTF to cover additional expenditure items such as the provision of the basic package of health services. Nevertheless, of the expected US$80m contribution from the GoSS to the MDTF during 2009-2011, the 2009 budget only allocated US$15m to the fund. Without an additional allocation of US$65m in 2010 and 2011, the matching funds from the MDTF will decrease accordingly, jeopardizing the provision of essential health services. To forestall this, the GoSS budgetary allocation for 2010 will have to increase to about US$100m, up from US$85m in 2008. Further, the GoSS budget and MDTF will not be sufficient to cover other anticipated expenditure items such as constructing and equipping tertiary, state, and county hospitals. Of the US$862.4m estimated off-budget expenditure (not covered by the annual GoSS budgetary allocation and MDTF), construction and equipping hospitals, alone, will cost US$808.2m. The latter excludes primary health care facilities, with the expectation that they are covered under the regular GoSS budget and the UPHSD. Available data on medium term expenditure projections by donors, UN agencies, and international NGOs reveal that there will be additional financing of US$247.9m during 2009-2011. If the latter is taken into account, the estimated funding gap of US$614.5m (US$862.4m, less than the anticipated US$247.9m) is substantial and GoSS must take the initiative to address it. This implies that an additional US$200m of GoSS funding will be required each year (during 2009-2011) on top of the expected annual budget allocations. Policy Recommendations: Substantial investments at all levels of care will be required in order to ensure that the investments in health system strengthening reach beneficiaries. Providing requisite financial resources at all levels of care will improve the working conditions of health workers, enable upgrades of health facilities to acceptable standards, and strengthen institutional capacity of all health institutions. This study has illuminated some of the health care financing issues in Southern Sudan. The following recommendations, when implemented, will help improve the situation and make resources more available to health institutions at all levels of the health system. Improve the financial management capacity of the MoH-GoSS, the SMoHs and the CHDs  Build and maintain a highly qualified financial management workforce in the directorates of administration and finance for health at the national, state and county levels The study findings show that the MoH-GoSS, the SMoHs, and the CHDs all lack competent accounts and financial management personnel, to some degree. Sponsor comprehensive trainings and upgrade programs in financial management, including on-the-job trainings for budget managers and their staff, to improve their skills and knowledge. Additionally, recruit and increase the availability of competent accounting/financial personnel at all levels of the health systems.  Strengthen the financial information management of administration and finance directorates at all levels of the health system The study depicted poor records keeping and unreliable financial information at all levels of the health system. It is important to implement a well-equipped financial information system to ensure relevant, reliable, and timely financial information is available at all levels of the health system for effective planning and management. There should also be a periodic (monthly or quarterly) collation of financial information at all levels and sharing within the MoH-GoSS. In the x long-term, as the financial information system improves, a National Health Accounts (NHA) could be instituted. An NHA would be a framework for measuring total-public and private-national health expenditures; and would track the flow of funds through the health sector, from their sources, through financial institutions, to providers and functions.  Ensure effective financial controls at all levels of the health system The study depicted improved financial controls at the MoH-GoSS level; internal controls including expenditure tracking and auditing have improved substantially. However, at the state and county levels, there are no established mechanisms for ensuring proper financial controls. The SMoHs and CHDs need strengthened financial management systems. Instituting proper financial controls will facilitate the day-to-day operations of the finance departments and bring transparency into the system.  Strengthen the institutional capacity of procurement staff Since effective financial management goes in tandem with procurement activities, the procurement departments of the MoH-GoSS and the SMoHs need to strengthen their institutional capacity. Capacity building of procurement staff will give them hands-on training to speed up the budget execution process. The MoH-GoSS’s and SMoHs’ annual procurement plans should also be developed as part of the budgeting and planning process.  Improve and simplify the budget execution process to make it more responsive to the needs of program managers The study depicted a cumbersome budget execution process with expenditure claims passing through approximately sixteen steps before payment is effected. This causes delays in approval, authorization, and payment of claims. To speed up the process and make it more effective and efficient, the process needs to be simplified. This will require, among other things, eliminating steps considered duplicative at both the MoH-GoSS and the MoFEP-GoSS levels. Improve resource allocation at all levels of the health system  Increase resources to primary health care in line with the GoSS’s health care priorities The study showed that resource allocation by program area is skewed towards tertiary care, as opposed to primary care. In a typical post-conflict context, where all competing health programs are important, huge expenditures for curative services tend to crowd out primary health care expenditures. Given that the constitution prioritizes primary health care, the MoH-GoSS will have to consider reversing this trend by increasing the resources allocated to primary health care services while maintaining a certain level of expenditures for curative and other health services.  Build strong intergovernmental coordination and relationships among the MoH-GoSS, the SMoHs, and the CHDs The MoFEP-GoSS should reform its current system of separating the budget processes of the SMoHs and the MoH-GoSS and ensure that the two institutions collaborate effectively during the budget preparation process. Currently, there are no strong relations among the MoH-GoSS, the SMoHs, and the CHDs with respect to budget formulation and execution. The health sector’s budget process is uncoordinated with the MoH-GoSS preparing its own budget without collaborating with the SMoHs. Similarly, the CHDs are not involved in the budget preparation process at state level. This situation does not allow for development of appropriate resource allocation mechanisms for the sector to ensure that funds are effectively distributed to all levels xi of the health system. Creating the right incentives will help strengthen the relationships between different levels of government within the health system. This will require establishing an agreed upon resource allocation mechanism; consistently sharing useful information regarding budget formulation; dividing responsibilities among the various levels of government; and holding one another accountable for achieving defined performance outcomes–for which there are associated performance indicators that are accurately estimated and published.  Develop and institutionalize a Medium Term Expenditure Framework and a Public Expenditure Review as instruments for improving resource allocation A Medium Term Expenditure Framework (MTEF) will guide and improve resource allocation to the MoH-GoSS, SMoHs, CHDs, and health facilities. A public expenditure review (PER) would link spending to outputs and outcomes. Specifically, it would disaggregate spending on inputs and outputs at all levels of the health system, and clarify the extent to which spending has affected desired outcomes. The study depicted that, currently, the GoSS allocations to the states are equal regardless of the population size or the need at the state and county level health institutions. This creates inequities and inefficiencies in the system. The GoSS medium- and long- term goal, for the health sector, should be to allocate resources equitably to different population sub-groups taking into account factors such as poverty and geography. Population figures from the expected census results will provide the basis for allocating resources to states and counties, taking into consideration the population size. Additionally, the health facility inventory that is currently underway will also provide relevant data and the basis for allocating resources to health facilities. As the situation in health facilities improve, the GoSS can introduce utilization measures to allocate resources to the facilities and efficiency criteria, such as outpatient load index, bed occupancy rate, and average length of stay.  Harmonization of donor activities and funding The study revealed a plethora of donors and NGOs currently engaged in the health sector. However, the activities of these donors are fragmented and uncoordinated. The establishment of a Donor-NGO forum in the MoH has been a significant step in the coordination of donors’ activities in the sector. In close collaboration with the MoFEP-GoSS Aid Coordination Unit, and in line with GoSS aid strategy, the Directorate of External Assistance should develop a mechanism for effectively improving the coordination of all donors and NGOs in the sector. The Directorate of External Assistance should maintain up-to-date records of all donors, international agencies, and NGOs including activities and budget. On the financing side, the study showed huge donor inflows to the health sector, but most of these funds, apart from the MDTF, are off-budget and difficult to estimate. In conjunction with the Directorate of Administration and Finance, the Directorate of External Assistance should put in place a mechanism that will allow all donors to report their actual, committed, and projected spending on health on a regular basis and in a timely manner. This will enable the MoH-GoSS to determine the entire sector financing and analyze funding gaps. Most importantly, it will facilitate and provide inputs to resource mobilization and annual planning and budgeting processes. Effectively implement the GoSS’s free health care policy The current poor implementation of the GoSS’s free health care policy has resulted in health facilities charging arbitrary fees to make up for operational expenditure shortfalls. The majority of Southern Sudanese are not aware of the policy and an information, education, and communication (IEC) campaign is required in order to create awareness. The GoSS will have to increase budget allocation to primary health care services in order to meet the growing demand xii for primary health care created by the IEC. Alternatively, in the long-term, in order to ensure that the poor are protected from catastrophic illness, strengthen prevention, increase access to medicines for treatable diseases, and generate more resources for health, the GoSS will have to consider risk-pooling mechanisms, including health insurance schemes, with strong community participation to cater to the needs of the poor. xiii 1. INTRODUCTION Several decades of civil war ravaged Southern Sudan leading to horrendous loss of life, destruction of infrastructure, loss of economic resources, massive displacement of people, widespread insecurity, and untold suffering to the population. An Interim National Constitution was adopted following the Comprehensive Peace Agreement (CPA) on January 9, 2005 between the Sudan People’s Liberation Movement (SPLM) and the Government of Sudan. The constitution instituted a decentralized federal system with four levels of government: national, Southern Sudan, state, and local levels. This allowed the creation of the Government of Southern Sudan (GoSS) which governs 10 states in the south and the Government of National Unity (GoNU) in the north. Figure 1 depicts the 10 states of Southern Sudan. The GoSS has a three-tiered system of government consisting of 10 states at the first level, about 90 counties at the second level, and over 200 payams at the third level. Figure 1. Map of Southern Sudan Source: World Bank Map Design Unit Southern Sudan lies within the Nile basin and shares borders with five countries (Ethiopia, Kenya, Uganda, the Democratic Republic of Congo, and the Central African Republic). It covers an area of 640,000 km2, which is more than twice the size of Uganda. A fifth Sudan population and housing census for both the North and South was conducted in April, 2008. Table 1 shows the estimated population by state and the total population of Southern Sudan. 1 Table 1. Population by state Estimated population Central Equatoria 1,103,592 Eastern Equatoria 906,126 Jonglei 1,358,602 Lakes 695,730 Northern Bahr el Ghazal 720,898 Unity 585,801 Upper Nile 964,353 Warrap 972,928 Western Bahr el Ghazal 333,431 Western Equatoria 619,029 TOTAL 8,260,490 th Source: 5 Sudan Population and Housing Census, 2008. Health System The central Ministry of Health of the Government of Southern Sudan (MoH-GoSS) sets policies and guidance for the provision of health services in Southern Sudan. The organizational structure of the MoH-GoSS is shown in Annex 1. At the state level, the administrative authority is the State Ministries of Health (SMoH)--which supervises the County Health Departments (CHDs). The SMoHs coordinate the implementation of health programs within the state. The organizational structure of the SMoH is shown in Annex 1. The CHDs manage and implement county health programs. Southern Sudan has a five-tiered health care system consisting of tertiary hospitals, state hospitals, county hospitals, primary health care centers (PHCCs), and primary health care units (PHCUs). The tertiary hospitals are under the administration of the MoH-GoSS while the state hospitals are under the SMoHs. The CHDs run the PHCCs and the PHCUs. According to the list of health facilities compiled by the MoH-GoSS Directorate of Pharmaceutical Services and Supplies, there are 3 tertiary hospitals, 7 state hospitals, 14 county hospitals, 194 PHCCs, and 761 PHCUs in Southern Sudan as of January 2008. There is an ongoing comprehensive health facility mapping survey, which will provide the list and location of all health facilities when completed. Needless to mention, the existing health facilities are dilapidated, poorly equipped, and understaffed. International NGOs were active in Southern Sudan during the war providing humanitarian and emergency health care, which was largely fragmented and uncoordinated. The private-for-profit sector is almost nonexistent with a few private clinics operating in Juba. In this regard, the study team did not include the private sector in the analysis. In order to establish strong public-private partnership in the future, a thorough assessment of private sector involvement in the provision of health care will be necessary. Additionally, there are numerous traditional practitioners in Southern Sudan. Poor Health Status The poor state of the health system has resulted in poor health indicators, which are among the worst health indicators in the world. The 2006 Sudan Household Health Survey depicted stark differences between the health status of Northern Sudan and Southern Sudan. Table 2 provides comparable figures for key health status indicators of Southern and Northern Sudan. 2 Table 2. Health indicators in Northern and Southern Sudan Indicator Southern Sudan Northern Sudan Infant mortality rate per 1,000 live births 102 71 Under five mortality rate per 1,000 live births 135 102 Maternal mortality ratio per 100,000 live births 2037 534 % chronic malnutrition among children under 5 years 45 13 % children aged 12-23 months vaccinated 16 66 a BCG, measles, three doses each of DPT and polio vaccine Source: 2006 Sudan Household Health Survey The maternal mortality ratio of 2,037 maternal deaths/100,000 live births in Southern Sudan is the highest in the world. Malnutrition is widespread, vaccination rates are low, and tropical diseases, which have been largely controlled in other countries, account for a considerable proportion of the total burden of disease. Further, infectious disease epidemics are common with an annual incidence rate of tuberculosis at 325 per 100,000 people ranking among the highest rates in the world. National Health Policy Statement on Health Financing According to the Southern Sudan National Health Policy 2007-2011, the MoH-GoSS will, inter alia, design a health financing framework that will provide appropriate financial protection to the poor; develop a sound health sector financial management system; mobilize additional resources for health; and ensure expenditures are effected according to sector priorities and coordinated across sectors. The MoH will also reinforce coordination of different sources of financing and ensure effective monitoring of mechanisms for delivering health services. (Health Policy, Government of Southern Sudan 2007-2011). CURRENT MACRO ECONOMIC TRENDS Over the past fiscal year, Southern Sudan has witnessed depreciation in its local currency (the Sudanese Pound-SDG) against the U.S. dollar. During the first half of the 2008 fiscal year, the SDG to dollar exchange rate was 2.05, but the SDG began to depreciate and as of December 2008, the exchange rate stood at SDG2.20 to the dollar. Two main factors accounted for the depreciation of the SDG: i) as a result of the global financial crisis, the dollar has strengthened against the major currencies in the world and ii) the fall in oil prices in the world market in the latter half of 2008 has significantly reduced Southern Sudan’s oil revenue inflows. The net effect of the depreciation is that the domestic importers will find businesses more expensive compared to their external partners. Additionally, the country has experienced an increase in inflation over the same period. Figures provided by the Southern Sudan Commission for Statistics (which calculates the monthly Juba Consumer Price Index) indicate that annual inflation rose from 8.8% in April to about 21.7% in September 2008 due to an increase in the cost of food imported from Uganda. Southern Sudan is yet to have National Accounts data to enable it to calculate the Gross Domestic Product (GDP) to measure economic growth. Consequently, we did not obtain GDP figures, and therefore did not use GDP in our analyses. In 2009, the Commission for Census and Statistics & Evaluation will be required to collect, analyze and compute GDP figures for the measurement of the country’s economic progress1. 1 Government of Southern Sudan, 2009 Budget Speech. Presented to the Southern Sudan Legislative Assembly by th H.E. Koul Athian Mawien, The Minister of Finance, December 10 2008. 3 Trends in the Composition of Government Sources of Revenue Until recently, the GoSS has mainly depended on the oil sector as a source of revenue. During 2006- 2007, the GoSS collected very little non-oil revenues. The GoSS dependency on oil revenues is estimated at over 99%. However, in 2008, the GoSS made significant progress in improving its revenue collection capacity; revenue collections were nearly SDG120 million (US$60) by the end of 2008, an increase of over 800% compared to the level of collections in 20072. Figure 2 shows trends in composition of government sources of revenues between 2005 to 2008. Figure 2. Composition of the Government’s Sources of Revenues 2005-2008 3,500,000,000 3,000,000,000 2,500,000,000 Amount (US$) 2,000,000,000 1,500,000,000 1,000,000,000 500,000,000 - 2005 2006 2007 2008 Oil revenue Non-oil Tax Revenue Non-tax Revenue Donor grants (MDTF) Source: Data from 2008 Approved Budget, MoFEP-GoSS and 2009 Budget Speech by Minister of finance Despite this impressive achievement, revenue collections from other sources (such as personal income tax, customs duties, Value-Added Tax (VAT), corporate tax, airport tax, and immigration and nationality fees) have had little impact on the GoSS’s oil dependency. Available statistics show that oil will continue to constitute the bulk of the GoSS’s revenues, accounting for over 98% of total budgetary resources. However, the GoSS is concerned about the effect the volatility in world market prices on its oil revenues. Oil prices plunged from over US$140 a barrel in mid-2008 to under US$50 a barrel at end of 2008. This trend could significantly limit the GoSS’s budget and expenditure management in 2009. For example, total gross revenues in 2009 have been estimated at SDG3.7 billion (US$1.8 billion) which is not 2 Government of Southern Sudan, 2009 Budget Speech. Presented to the Southern Sudan Legislative Assembly by th H.E. Koul Athian Mawien, The Minister of Finance, December 10 2008. 4 significantly different from 2008 estimates of SDG3.5 billion (US$1.7 billion). In order to address this situation and to ensure sustainability of government revenues, the GoSS is expected to implement a number of measures to improve resource mobilization from non-oil revenues (tax and non-tax revenues) during the course of the 2009 fiscal year. For example, the GoSS intends to: (i) increase customs rates at the borders; (ii) establish banking facilities to eliminate payment of customs revenues by cash; (iii) centralize the management of customs administrations; (iv) adopt the GoNU rate for VAT which has risen from 10% to 20%; (v) unify collection mechanisms across the South; (vi) revise the rates levied by GoSS agencies for fees and licenses; (vii) place MoFEP-GoSS officers in all GoSS agencies to enforce remittances of revenues they collect on behalf of GoSS; and (viii) insist on remittances of national revenues like immigration fees. The GoSS is also expected to enact and implement a Revenue Bill to allow the collection of excise duties on consumables such as soda, airtime, hotels, alcohol, 3 tobacco, and bottled water . THE STATE OF HEALTH SECTOR FINANCING Trend in Government Funding Over the past three years, the health sector has experienced a downward trend in total government allocation to health from US$109.4 million in 2006 to US$82.5 million in 2007 and to US$70 million in 2008, but increased to US$85 million in 2009. In per capita terms, the GoSS allocated US$8.5 in 2008 and US$10.2 in 2009 (using a population of estimate of 8.26 million) to health. These spending levels are well below international benchmarks--US$12 per capita (World Bank, 1993), US$34 per capita (WHO, 2000), and US$13 per capita (Joint Assessment Mission, 2005). As a percentage of the national budget, the sector received only 2.5% of the national budget in 2008 compared to the Abuja target of at least 15% (2001 Abuja Declaration). This trend, if not reversed, will not allow for effective provision of health services at all levels of the health system and, hence, achievement of the health-related Millennium Development Goals (MDGs). The downward trend of health spending over the past three years is largely attributed to volatility of oil revenues as the main source of domestic revenue and the MoH’s inability to spend all of its previous fiscal year allocations. Arguably, the trend shows the risk health sectors face because of external factors, especially the macroeconomic trends, and government-wide fiscal policy objectives. Limited funding is usually associated with shortages of drugs and pharmaceuticals, shortages of staff, and inadequate and poor maintenance of equipment, leading to low coverage of health services and ultimately worsened health status indicators. With the exception of Burundi, Southern Sudan lags behind other post-conflict countries (Congo, Timor-Leste, and Rwanda) in terms of per capita health spending (budget) and as a percentage of national budget as shown in Table 3. Table 3. International Comparison of Total Government Expenditure on Health in 2008 Country Per Capita health spending (budget) (US$) % of National Budget Southern Sudan 8.5 5 Republic of Congo 51 11.4 Timor-Leste 27.4 9.2 Burundi 1 4 Rwanda - 13.4 3 Southern Sudan Legislative Assembly , 2008 Approved Budget Book, December 20th 2008 and Government of Southern Sudan, 2009 Budget Speech. Presented to the Southern Sudan Legislative Assembly by H.E. Koul Athian Mawien, The Minister of Finance, December 10th 2008. 5 Source: Country 2008 budget statement Sectoral Comparison of the Health Budget (2008-2009) Compared to sectors such as education, security, and infrastructure, health receives a much smaller portion of the national budget. While health was allocated 4% of the national budget in 2008, education, infrastructure and security received 6%, 15%, and 15% of the budget, respectively. The same trend was repeated in 2009, with health receiving 5%, education 7%, infrastructure 18%, and security 29% of the national budget. Figures 3 and 4 show sectoral allocation of the national budget in 2008 and 2009 respectively. Figure 3. Sectoral Comparison of GoSS Budget Allocation (2008) Economic Functions Accountability 2% 2% Education Social & Humantarian 6% Affairs Health 5% Block Grants 4% to States 9% Infrastructure 15% Security 29% Natural Resources 6% Rule of Law Public Administration 15% 7% Source: 2008 budget book, MoFEP-GoSS 6 Figure 4. Sectoral Comparison of GoSS Budget Allocations (2009) Accountability 1% Economic Functions 3% Social & Humantarian Affairs Health 4% Block Grants to Education 5% States 8% 12% Infrastructure 17% Security 28% Natural Resources Rule of Law 5% 12% Public Administration 5% Source: 2009 budget book, MoFEP-GoSS Health Expenditure Indicators (2006-2009) An analysis of actual and planned government spending on health (including donor spending) has provided, for the first time, health expenditure indicators4 for Southern Sudan, which will help to measure the GoSS’s effort to improve the health status of its population. As shown in Table 4, the study analyzed and computed four main health expenditure indicators based on available data on actual (outturn) and planned expenditures. However, out-of-pocket expenditures as a percentage of private health expenditure and total health expenditure was not calculated owing to the dearth of data for private health expenditures. The results of the analysis show very low levels of per capita spending over the period 2006-2008. While the GoSS spent US$7.6 per head in 2006, it spent just US$4.0 per head in 2007, and increased spending to US$6.7 in 2008. In terms of planned expenditures, the GoSS was expected to spend US$13.2 per capita in 2006, but this fell to US$10.0 in 2007, and then to US$8.5 in 2008. These spending levels are far below the WHO’s standard measure of US$34 per capita for developing countries. The WHO’s Commission on Macroeconomics and Health calculated that a minimum total health expenditure of US$34 per person per year by 2007 (and US$38 by 2015) would be necessary to provide a package of essential health interventions (Commission on Macroeconomics, 2001). From these figures, it is understood that the GoSS would need to substantially increase and improve its spending in the health sector in order to improve the poor health status (reducing maternal mortality, under-five mortality, infant mortality, chronic malnutrition, etc.) of the people of Southern Sudan. 4 The indicators were not related to GDP due to lack of GDP figures. 7 Table 4. Health Expenditure Indicators: Outturn vs. Planned (2006-2008) Actual expenditure Planned expenditure Indicator 2006 2007 2008 2006 2007 2008 Per capita health expenditure 7.6 4.0 6.7 13.2 10.0 8.5 Government Expenditure on health as percentage of total government expenditure 3.4 2.2 2.3 7.9 5.6 2.5 Government Expenditure on health as percentage of total health expenditure 100.0 35.4 45.9 64.6 57.9 26.0 Donor expenditure on health as a percentage of total health expenditure 0.0 64.6 54.1 35.4 42.1 74.0 Out of pocket expenditure as a percentage of total health expenditure n/a n/a n/a n/a n/a n/a Out of pocket expenditure as a percentage of private expenditure on health n/a n/a n/a n/a n/a n/a Source: Authors’ own calculation from national expenditure data (2008 and 2009 budget books) Per capita health expenditure was calculated with estimated population of 8,260,490 million. RATIONALE FOR THE STUDY Health financing in the health sector has not received much attention despite the fact that Article 35 of the Interim Constitution states, “All levels of government in Southern Sudan shall promote public health, establish, rehabilitate, and develop basic medical and diagnostic institutions and provide free primary health care and emergency services for all citizens�. During the 2007 Government of Southern Sudan Health Assembly, some SMoHs presented unrealistic budgets, and in some cases, no budget was prepared. There was no adequate data on funding allocations and spending in the health sector, lack of capacity for planning, budgeting, and financial management at both MoH-GoSS and SMoHs. There is no adequate information on the budgeting and accounting processes at the SMoHs. Additionally, there is no baseline for health expenditures for proper regional and international comparison of health outcomes. It is against this backdrop that the 2007 Health Assembly recommended conducting a health financing study to unearth the underlying related issues and recommend ways of improving the overall health financing system. OBJECTIVES OF THE STUDY The overall objectives of the study were to provide analytical support to the MoH-GoSS in health care financing and to gain a better understanding of ways to increase overall resources for the health sector, within the constraints imposed by the limited resource envelope allocated to the health sector. Specifically, this needs assessment was intended to offer the GoSS and health policy makers of Southern Sudan a strategic overview of issues related to health financing and its impact on development of the health system. In this regard, the study sought to: (i) analyze the scale, composition, and management of health spending; (ii) examine various mechanisms for generating resources for health services delivery; (iii) assess the existing mechanism for allocating and managing health sector resources; (iv) examine relationships of GoSS, state, and local governments in health financing and governance; (v) recommend possible strategies for the health sector to achieve financially and economically sustainable development, which would further lead to improvement of overall health status of the people of Southern Sudan. 8 METHODOLOGY Various sources of data were employed as described below: Interviews of the health authorities/relevant line ministries (GoSS, state, and county levels): Key informant interviews were held with representatives from the MoH-GoSS, SMoHs, and MoFEP-GoSS (see Annex 2). To complement this, PricewaterhouseCoopers (PWC), the monitoring agent in charge of monitoring the Umbrella Program for Health System Development (UPHSD) in Southern Sudan, facilitated interviews on public expenditure review in the SMoHs, State Ministry of Finance and Economic Planning (SMoFEP), and 14 selected CHDs to track the flow of funds from MoFEP-GoSS and the central/states MoH-GoSS. Key informant interviews of representatives of NGOs and UN agencies: Several informant interviews were held with representatives from the UN agencies, Non-Governmental Organizations (NGOs), and development partners (see Annex 2) to obtain their perspectives on health care financing situation. The focus was on, among others, key strategies for external donor support, financial management, viability of pro-poor financing mechanisms, implementation of the government’s free services policy, and strategic options for financing health care in the near future. Key informant interviews of health facility administrators: Twenty-eight key informant interviews (see Annex 2) were conducted in public health facilities by the, PWC team as well as by other trained interviewers. Exit interviews: Exit interviews were conducted to examine, among others, the extent of the implementation of the Government’s free health care policy, out-of-pocket payments at selected public and private health facilities, and users’ socio-demographic characteristics. During June-July 2008, exit interview questionnaires were administered to 229 users of health facilities in three states: Central Equatoria (100), Western Bahr el Ghazal (49), and Upper Nile (80). All levels of care were covered in the sample: teaching hospital (9), state hospital (62), county hospital (71), PHCC (63), PHCUs (3), private clinic (10), and other facility (11). Regarding the operating authority of the health facilities, 175 were interviewed in the government facility, and the rest were as follows: NGO (30), private (15), religious mission (4), and other (5). The findings of the exit interviews are presented in Annex 3. Focus group discussions: To complement the exit interviews, focus group discussions (FGDs) were held with those who do not use formal health services to complement the data from the exit interviews. This involved men and women who were ill in 2008 but did not visit the existing health facilities. A total of 10 focus groups were carried out in three states, one each for the following counties: Central Equatoria state (Juba, Kajokeji, Lainya, Morobo, Terekeka, and Yei); Upper Nile state (Panyikang and Malakal); and Western Bahr el Ghazal state (Wau town, and Wau Village). In each county, purposive sampling was employed to select a community for the focus group discussion. The members in each group were similar in terms of sex and age and belonged to one of the following groups: men less than 20 years; men 20-30 years; men 30 years or more; women less than 20 years; women 20- 30 years; and women 30 years or more. The findings of the FGDs are presented in Annex 4. 9 2. HEALTH SECTOR RESOURCE MOBILIZATION AND ALLOCATION In increasing public expenditure on health, countries must take into account their available fiscal space (the budgetary room that allows a government to provide resources for desired purposes without prejudicing the sustainability of its financial position). Having determined its health budget, a country must allocate resources within the health sector in line with the following dimensions: i) by type of health service (preventive services, curative services, health promotion, education, etc.) to different levels of the health pyramid, as reflected in its health priorities; ii) to different levels of government (national and sub-national) in accordance with their respective responsibilities, as stated in the health policy document; and iii) among different population sub-groups, at all levels of the health system (Gottret and Scheiber 2006). In Southern Sudan, resources are allocated according to the first two dimensions. At the GoSS level, the MoH allocates its sector budget in line with the first dimension. However, there is no agreed upon sector resource allocation mechanism in place and allocating resources to different levels of care is done on an incremental basis. Allocation to the sub-national level of government (second dimension) is done on top-down basis, by the MoFEP-GoSS through the SMoFEP. The third dimension is yet to be implemented in Southern Sudan. This section describes the budget preparation process as an important exercise for allocating resources to various sectors of the economy at both national and state levels. Subsequently, it describes the GoSS’s budget allocation to the MoH-GoSS and SMoHs and other sources of funds, including donor support. Budget Preparation Process at the GoSS and State Levels In Southern Sudan, under the directives of the MoFEP-GoSS, the State Ministries--including other relevant government agencies--are required to prepare their own budgets and send them directly to the MoFEP-GoSS. The budget preparation at state level is guided by the SMoFEPs. The Central Ministries at the GoSS level also prepare their separate budgets with guidance from the MoFEP-GoSS. The budget process takes place in two-steps: the first part involves the preparation of budget sector plans (BSP), which occurs between June and September of the preceding fiscal year (the GoSS fiscal year is January-December). In this exercise, all Ministries and State Ministries prepare their respective budgets detailing sector objectives, achievements, and medium term expenditure projections based on sector ceilings provided by the MoFEP-GoSS. The MoFEP-GoSS sets dates and meets with each Ministry to review the BSP. It also organizes a meeting where all Ministries, including the Director-Generals from the States, participate and make presentations on their respective BSP. The BSP is then sent to the Council of Ministers (CoM) for review and approval. Under the review process at the CoM, the original budget ceiling of a sector could be reduced or increased depending on the sector’s past budget execution performance or government priorities towards certain sectors. The reduction or increase in a sector’s budget could be due to accommodated pressures5 as a result of a change in government priorities. 5 In public expenditure management, a government may reduce a sector’s budget ceiling by a certain amount and add it to other sectors it considers higher priorities. Sectors, which do not perform well in the execution of their budgets usually suffer from accommodated pressure considerations. Governments apply accommodated pressure mechanism when its fiscal space in a particular year is very limited and when higher priority sectors require more resources. 10 The second part of the budget process takes place in October. It involves the preparation of the subsequent year’s budget estimates in the form of expenditure categories (salaries, recurrent/operational, and capital expenditures). The BSP provides the basis for the budget preparation. The MoFEP-GoSS then organizes a training workshop for all line ministries, during which the procedures and modalities for preparing the budget are explained. In December, the Minister of Finance and Economic Planning presents the draft budget to the Parliament/National Assembly for review and approval. At the State level, the SMoFEPs coordinate activities of the budget preparation process. Budget preparation at the state level starts when the SMoFEPs issue a circular, similar to the MoFEP-GoSS circular to sector ministries at the GoSS level, to all state ministries to prepare their draft budget, and then tabled at the State CoM for approval. Once approved, SMoFEPs present the budget to the State Legislative Assemblies for discussion and approval. The approved budgets are then sent to the MoFEP- GoSS. Timing for the state budget preparation coincides with that of the GoSS. Budget Allocations to Health The budget allocations to the MoH as a percentage of the GoSS budget decreased from 7.9% in fiscal year 2006 (January-December) to 4.7% in fiscal year 2009 with the lowest of 2.5% occurring in fiscal year 2008 (Figure 5 and Table 5). For instance, in the original 2008 budget, health was allocated SDG 140 million (US$70million, using SDG 2 = US$1) out of the original total government resources of SDG 3,428 million (representing 4.1% of the total GoSS budget). However, with the increased in oil revenues in 2008 as result of increased oil prices, the Government’s budget was revised upward to SDG 5,506 million but the allocation of SDG 140million to health remained unchanged reducing the health sector’s share to 2.5%. Table 5 illustrates the trends in composition of health spending by category of expenditure. The total budget allocated to the health sector in SDG (millions) and in US dollars (millions) during this period were 219 (109.5), 165 (82.5), 140 (70), and 170 (85) in 2006, 2007, 2008, and 2009 respectively. The percentage of the budget allocated to capital expenditure has decreased steadily from 77% to 31% while salaries expenditure category has shot up from 10% in 2006 to 55% in 2009. The Government’s takeover of the management of the three tertiary hospitals in 2007 and the subsequent recruitment of health personnel for these hospitals accounted for the increased salary expenditure category (Table 6). The growing salaries budget is also a matter of concern and the Ministry is currently undertaking a head count at state and county levels to ascertain the true health sector workforce to improve efficiency of personnel spending. By program area in the 2009 budget allocation, secondary and tertiary health care received the highest amount of SDG53 million (US$26.5million) as opposed to SDG6.7million (US$3.3million) for primary health care (PHC) (Table 6). The latter is less than 0.8 SDG per capita using an estimated population of 8.3 million. This could probably be explained by the fact that donors pay for PHC whilst more GoSS funds are used for the larger hospitals. Given that the constitution stipulates free primary health care for all citizens, this allocation is woefully inadequate. It is expected that the Multi-Donor Trust Fund (MDTF) would make up for the shortfall in the provision of basic package of health services. 11 Table 5. GoSS Budget Allocation to Ministry of Health 2006-2009 by Expenditure Category SDG) a Expenditure 2006 2007 2008 2009 category a a a a SDG % SDG % SDG % SDG % Salaries 22,038,040.00 10 32,344,128.00 20 26,564,694.00 19 82,803,975 49 Operating 27,246,050.00 13 43,302,300.00 26 47,826,306.00 34 34,405,735 20 Capital 169,407,260.00 77 89,353,572.00 54 65,609,000.00 47 52,790,290 31 Total 218,691,350 165,000,000 140,000,000 170,000,000 a Sudanese Pounds (SDG where 2SDG=1US$) Sources: 2008 and 2009 approved budget, MoFEP-GoSS Table 6. GoSS Budget Allocation to Ministry of Health 2008-2009 by Program Area (in SDG) a 2008 Budget 2009 Budget Program Area Salaries Operating Capital Total Health System & Human Resources 5,692,216 1,970,077 2,802,659 2,120,756 6,893,492 Development Primary Health Care, with emphasis 6,130,522 605,639 1,954,039 2,528,088 5,087,820 on Reproductive Health & Nutrition HIV/AIDS 1,334,532 300,927 463,594 412,006 1,176,527 Secondary & Tertiary Health Care 29,241,486 38,175,072 9,895,663 5,064,800 53, 135, 535 Control of Communicable Diseases 5,156,588 585,994 2,699,046 1,320,400 4,805,440 Pharmaceutical Supply and 28,732,776 471,934 5,004,007 259,200 5,735,141 Management System MDTF Contribution 41,000,000 - - 30,000,000 30,000,000 General Administration 17,186,720 1,484,091 9,286,673 296,280 11,066,044 Total GoSS Programs 134,474,840 1,484,091 9,286,673 42,001,530 51,606,625 State Transfers 5,525,160 39,210,240 2,300,000 10,789,760 52,300,000 Total for Health sector 140,000,000 82,803,975 34,405,735 52,790,290 170,000,000 a Sudanese Pounds (SDG where 2SDG=1US$) Source: 2008 and 2009 approved budget, MoFEP-GoSS 12 Figure 5. Percentage of GoSS budget allocated to the Ministry of Health 9.0 8.0 7.9 7.0 6.0 5.6 5.0 4.7 4.0 3.0 2.5 2.0 1.0 0.0 2006 2007 2008 2009 Sources: 2008 and 2009 approved budget, MOFEP-GoSS Multi-Donor Trust Fund and Other External Funding In addition to the GoSS budget allocations, the other sources of funding to the health sector are the MDTF, the UN agencies, and bilateral donors. The health sector is the only GoSS sector that receives more funding from donors than the GoSS budget allocation. Multi-Donor Trust Fund Following the 2005 Comprehensive Peace Agreement, noted earlier, an MDTF administered by the World Bank, was established for donors to channel financial resources for the development of Southern Sudan. The Umbrella Program for Health System Development (UPHSD), the Government of Southern Sudan’s health sector development program, was signed in March 2006 and became effective in July 2006. The overall objective of the UPHSD is to develop core health sector systems and capacities and increase the population’s access to basic health services and interventions. The total UPHSD cost of $225 million was originally expected to be funded by the GoSS and MDTF with a ratio of 2:1 respectively (MDTF US$75 million, GoSS US$150 million). This ratio was revised to 1:1 in 2008 so that the MDTF could supplement the GoSS budget allocation with additional funding (Table 7). During 2009-2011, the GoSS is expected to allocate US$80 million out of the annual budget allocations to the MoH-GoSS to match the MDTF expected contribution of US$85 million. However, given that the GoSS allocated US$20.5 million and US$15 million in the 2008 and 2009 budgets respectively, there could potentially be a shortfall in the Government’s contribution to the UPHSD. The annual GoSS budget allocations to the MoH supplement or support expenditure items such as salaries that are not covered by the MDTF. The main components and subcomponents of the UPHSD are shown in Box 1. Indeed, the provision of basic health services is a key component of the UPHSD and was allocated 66.8% of the total funding of $165 million for Phase II of the UPHSD (see Annexes 5 and 6). 13 Table 7. Original and Revised Funding Allocations to the Umbrella Program for Health System Development (US$) Period MDTF GoSS Total Original Phase I Apr-Dec 2006 20 40 60 Phase II Jan-Dec 2007 25 50 75 Phase III Jan-Dec 2008 30 60 90 Total 75 150 225 Revised Phase I July 2006-Sep 2008 20 40 60 Phase II Oct 2008-Dec 2011 85 80 165 Total 125 100 225 Other External Funding Sources In addition to the MDTF, there are several other sources of funding to the health sector such as the UN agencies (including UNICEF, UNFPA, WHO, WFP, UNHRC), bilateral agencies or donors (notably USAID) and international NGOs. However, the exact amount of funding was unknown until 2008 when these international agencies and NGOs actively participated in the 2009 Budget Sector Working Group, providing detailed information on their funding for fiscal year 2008, and proposed budgets for 2009. The external funding to the health sector (excluding the MDTF) in 2008 amounted to US$427.9 million (Figure 7). Of the latter, the highest of US$159 million was in the form of donor projects implemented by several organizations. NGO projects and UN agencies’ projects were US$146.7 million and US$49.7 million respectively. It was noted that some of the donor projects were implemented by NGOs and UN agencies making the distinction among donor, NGO, or UN projects blurred. Additionally, direct funding from NGOs and UN agencies that not reflected in the project numbers totaled US$63.9 million and US$8.5 million, respectively. Apart from the MDTF, the largest sources of external funding were: USAID (US$35.2 million); The Global Fund to Fight AIDS, Tuberculosis and Malaria (US$15.7 million); CHF International (US$14.5 million); DFID (US$13.3 million); Italian cooperation (US$4.4 million); and the CDC (US$3.0 million). Regarding actual spending, donors reported US$64.7 million out of a total budget of US$188.9 million including the MDTF in 2008. 14 Box 1. Components of the Umbrella Program for Health System Development The Umbrella Program for Health System Development focuses on developing core health sector systems and capacities and increases the population’s access to basic health services and interventions. The following points summarize the 3 components and 8 sub-components: Component 1: Development of Core Health Systems a) Development of core institutional capacities of the public health administration (build capacity of MoH in planning, budgeting, and financial management) b) Phased implementation of an infrastructure and equipment investment plan (renovate/construct/equip health facilities) c) Development of a pharmaceutical management, supply, and distribution system d) Health human resource development (policy and strategy, recruit qualified personnel, and train and retain more health personnel) Component 2: Expansion of Delivery of Basic Health Services e) Expansion of the coverage of basic health service delivery (provide basic package of health services in all ten states) f) Provision of selected high-impact health interventions (implement community level interventions to combat major communicable and neglected diseases) Component 3: Effective Implementation and Focus on Results g) Effective project implementation of program activities (strengthen the coordination and communication of the activities of the MoH, UN agencies, and NGOs) h) Development of M&E capacity, including measurement of the performance of this program Other external funding sources In addition to the MDTF, there are several other sources of funding to the health sector such as the UN agencies (including UNICEF, UNFPA, WHO, WFP, UNHRC), bilateral agencies or donors (notably USAID) and international NGOs. However, the exact amount of funding was previously unknown until 2008 when these international agencies and NGOs actively participated in the 2009 Budget Sector Working Group (BSWG). They provided detailed information on their funding for fiscal year 2008, and proposed budgets for 2009. The external funding to the health sector (excluding the MDTF) in 2008 amounted to US$ 427.9 million (Figure 6). Of the latter, the highest of US$ 159 million was in the form of donor projects implemented by several organizations. NGO projects and UN agencies projects were US$ 146.7 million and US$ 49.7 million respectively. It was noted that some of the donor projects were implemented by NGOs and UN agencies making the distinction between donor, NGO or UN projects blurred. Additional direct funding from NGOs and UN agencies that was not reflected in the projects are US$ 63.9 million and US$ 8.5 million respectively. Apart from the MDTF, the largest sources of external funding were USAID (US$35.2 million), The Global Fund to Fight AIDS, Tuberculosis and Malaria (US$15.7 million), CHF International (US$14.5 million), DFID (US$13.3 million), Italian cooperation (US$4.4 million), and CDC (US$3.0 million). Regarding actual spending, donors reported US$64.7 million out of a total budget of US$188.9 million including the MDTF in 2008. For fiscal year 2009, donors (excluding MDTF) have pledged US$131 million, which exceeds the budget allocation of US$85 million in some 97 projects. As noted earlier, health receives more donor funding than GoSS budget allocations (2009 GoSS Budget Speech) compared to other sectors. It is estimated that 15 there are 90 NGOs, donors, and UN agencies operating in the health sector. However, coordinating these diverse projects in the health sector has been a nightmare for the MoH. Figure 6. Sources of External Funding to the Health Sector (excluding MDTF) (in US$)-2008 Donors projects 159 NGO projects 147 Other funding to NGOs 64 UN projects 50 Other funding to UN 9 0 50 100 150 200 Millions Source: Health Sector Budget Working Group 2008 Sources of Funding for the SMoHs The GoSS’s budget is the main source of revenue for the SMoHs. The MoFEP-GoSS has two major forms of transfers to the states (block grants and conditional grants). In a federal system of government, a block grant is a large sum of money granted by the federal government to the sub-national government with only general provisions of its use. On the other hand, conditional grants are funds transferred for a specific purpose that may not be used for any other project. Each year the MoFEP-GoSS sends a block grant of equal amounts to the 10 States, irrespective of population size. In 2008, the GoSS made block grants of SDG30.8 million (US$15.4 million) to each state (Table 8). In the 2009 budget, the block grant was increased to SDG44.1 million (US$22.05 million) per state but the GoSS specifically allocated a total of SDG20 million (US$10 million), SDG2.0 million (US$1.0 million) per state, directly to the counties in order to develop local government systems. Further, the GoSS hopes to use the recently released census figures in making future block grants to states and counties. Preliminary census figures indicate that Warrap State has the third highest population but has no state hospital and might need higher funding. Regarding conditional transfers, the MoFEP-GoSS allocated conditional grants in the 2008 budget to key state ministries to cover salaries, operating, or capital expenditures. For the MoH, the conditional transfer in 2008 amounted to SDG552,516 (US$276,258) per state, mainly to cover salaries (Table 9). There were no conditional transfers to the SMoHs to cover operating or capital expenditure. Nevertheless, the conditional grant per state will increase 10 fold to SDG5 million (US$2.5 million) per state in the 2009 budget allocations to cater to salaries as well as capital expenditure (purchase of 6 ambulances) . 6 GoSS, 2009 Budget Speech, presented by the Minister of Finance & Economic Planning, December 10, 2008. 16 In addition to the GoSS budget allocations, some states and counties receive support from external sources most of whom are NGOs. However, information on external funding are descriptive with no financial data available to justify actual donor funding. Table 8. GoSS Block Transfers to States 2008 (in SDG million) a State State Council General Block Assembly of Ministers Grant Total Central Equatoria 3,800,000 1,000,000 26,000,000 30,800,000 Eastern Equatoria 3,800,000 1,000,000 26,000,000 30,800,000 Jonglei 3,800,000 1,000,000 26,000,000 30,800,000 Lakes 3,800,000 1,000,000 26,000,000 30,800,000 Northern Bahr el Ghazal 3,800,000 1,000,000 26,000,000 30,800,000 Unity 3,800,000 1,000,000 26,000,000 30,800,000 Upper Nile 3,800,000 1,000,000 26,000,000 30,800,000 Warrap 3,800,000 1,000,000 26,000,000 30,800,000 Western Bahr el Ghazal 3,800,000 1,000,000 26,000,000 30,800,000 Western Equatoria 3,800,000 1,000,000 26,000,000 30,800,000 Three Areas 10,000,000 10,000,000 TOTAL 38,000,000 10,000,000 270,000,000 318,000,000 a Sudanese Pounds (SDG where 2SDG=1US$) SCoMs=State Council of Ministers, GBG=General Block Grant Source: 2008 approved budget, MoFEP-GoSS THE FUNDING GAP The predictable sources of funding to the health sector during 2009-2011 are the GoSS budgetary allocation and the MDTF. Other sources of funding such as bilateral donors, NGOs, and UN agencies are off-budget and, therefore, unpredictable. Table 10 shows the anticipated expenditures, sources of funds, and resource gaps in the health sector to cover fully all programs during 2009-2011. The MoH-GoSS budget covers salaries, operating expenses, and some capital expenditure. Under the funding arrangements of Phase II of the UPHSD, the GoSS and MDTF combined contribution of US$165m is expected to cover additional expenditure items such as the provision of a basic package of health services. In addition, there is a separate MDTF fund of US$34m solely for HIV/AIDS, but this funding is not limited to the health sector since the HIV/AIDS program is multisectoral. Nevertheless, of the expected US$80 million GoSS contribution to the MDTF during 2009-2011, only US$15m was allocated in the 2009 budget. If the shortfall of US$65m is not allocated in 2010 and 2011, the matching funds from the MDTF will decrease accordingly, which will jeopardize the provision of essential health services. To forestall this, the 2008 GoSS budgetary allocation of US$85 million will have to be increased to about US$100m in 2010. Further, it was noted that the GoSS budget and MDTF will not be able to cover other anticipated expenditure items such as constructing and equipping tertiary, state, and county hospitals. Of the US$862.4m estimated off-budget expenditure (not covered by the annual GoSS budgetary allocation and MDTF), constructing and equipping the hospitals, alone, is estimated at US$808.2 million. The latter excludes primary health care facilities, which are expected to be covered by the regular GoSS budget and under the UPHSD. Available data on medium term expenditure projections by donors, UN agencies, and international NGOs reveal that there will be additional financing of US$247.9 million during 2009-2011. Nevertheless, 17 these additional funds are irregular. Moreover, these external sources of financing do not typically cater to infrastructure development, indicating that the GoSS will have to find other means to finance health infrastructure. To efficiently and effectively utilize these additional sources of funding, the MoH-GoSS will have to coordinate with donors and NGOs to minimize duplication of the activities that have already been taken care of in the GoSS or UPHSD budgets. For instance, NGOs are currently providing health services in all 10 states but the extent of coverage is unknown. After the ongoing health facilities mapping exercise is completed, MoH-GoSS will have to jointly plan with the NGOs to ensure judicious use of the US$110.1 million allocated in the UPHSD for the expansion of health service delivery. All the same, the estimated funding gap of US$614.5 million (US$862.4 million - US$247.9 million) is huge and the GoSS has to take the initiative to address it. This implies that approximately US$200 million in GoSS funding per year (during 2009-2011) will be required in addition to expected annual budget allocations indicated in Table 10. 18 Table 9. GoSS Conditional Transfers to States 2008 (in SDG) a Salaries Operating Capital Education Health Animal Resources Gender Culture Agriculture Commerce Agriculture Cooperatives Anti-corruption Total No. of No. of No. of SDG Staff SDG Staff SDG Staff Central Equatoria 24,750,832 4,507 552,516 33 841,044 77 29,000 11,825 44,580 20,000 45,000 98,000 80,000 26,472,797 Eastern Equatoria 16,613,402 1,928 552,516 33 841,044 77 29,000 18,500 44,580 20,000 45,000 18,000 80,000 18,262,041 Jonglei 16,199,329 2,709 552,516 33 841,044 77 29,000 16,500 44,580 20,000 45,000 98,000 80,000 17,925,968 Lakes 17,368,429 2,240 552,516 33 841,044 77 29,000 17,500 44,580 20,000 45,000 98,000 80,000 19,096,068 Northern Bahr el Ghazal 21,565,387 3,026 552,516 33 841,044 77 29,000 16,000 44,580 20,000 45,000 18,000 80,000 23,211,526 Unity 10,841,539 1,953 552,516 33 841,044 77 29,000 16,000 44,580 20,000 45,000 18,000 80,000 12,487,679 Upper Nile 17,540,792 2,648 552,516 33 841,044 77 29,000 12,500 44,580 20,000 45,000 18,000 80,000 19,183,431 Warrap 13,680,214 2,546 552,516 33 841,044 77 29,000 16,500 44,580 20,000 45,000 18,000 80,000 15,326,854 Western Bahr el Ghazal 9,536,011 1,468 552,516 33 841,044 77 29,000 13,000 44,580 20,000 45,000 18,000 80,000 11,179,150 Western Equatoria 18,676,901 3,567 552,516 33 841,044 77 29,000 17,000 44,580 20,000 45,000 18,000 80,000 20,324,040 TOTAL 166,772,836 26,592 5,525,160 330 8,410,440 770 290,000 155,325 445,800 200,000 450,000 420,000 800,000 183,469,555 a Sudanese Pounds (SDG where 2SDG=1US$) Source: 2008 approved budget, MoFEP-GoSS 19 Table 10. Health Sector Funding Gap Analysis 2009-2011 (US$) 2009 2010 2011 Total Proposed UPHSD expenditure by component to be covered by MDTF Development of policy and capacity of the public health administration 2,692,000 192,000 - 2,884,000 Investment in infrastructure and equipment 12,312,458 - - 12,312,458 Pharmaceutical system capacity and supply 6,656,489 10,000,000 - 16,656,489 Health human resource development 1,500,000 1,500,000 1,200,000 4,200,000 Expansion of health service delivery 28,147,561 41,000,000 41,000,000 110,147,561 High-impact health interventions 5,000,000 - - 5,000,000 Program implementation 350,000 350,000 300,000 1,000,000 Monitoring and evaluation 1,865,000 1,500,000 1,500,000 4,865,000 Others 7,934,492 - - 7,934,492 1 Total from MDTF 66,458,000 54,542,000 44,000,000 165,000,000 Expenditure on health from the GoSS budget Salaries 41,401,988 41,401,988 41,401,988 124,205,963 Operating expenditure 17,202,868 17,202,868 17,202,868 51,608,603 Capital expenditure Furniture & General Equipment 392,795 392,795 392,795 1,178,385 Vehicles & Other Transport Equipment 795,200 795,200 795,200 2,385,600 Specialised Plant, Equipment & Machinery 1,574,220 1,574,220 1,574,220 4,722,660 Project Preparation, Design & Supervision 181,450 181,450 181,450 544,350 Construction & Civil Works 1,300,000 1,300,000 1,300,000 3,900,000 Rehabilitation & Renovation of Assets 1,756,600 1,756,600 1,756,600 5,269,800 Capital Transfers to State Governments 5,394,880 5,394,880 5,394,880 16,184,640 2 Transfer to MDTF Projects 15,000,000 30,000,000 35,000,000 80,000,000 Total from GoSS budget 85,000,000 100,000,000 105,000,000 290,000,000 Expenditure items not covered by GoSS budget or MDTF Development of policy and capacity of the public health administration 3,111,000 1,037,000 1,037,000 5,185,000 Investment in infrastructure and equipment - - - - 3 Medical equipment for 7 state and 3 teaching hospitals 20,373,090 20,373,090 20,373,090 61,119,271 3 Medical equipment for 30 county hospitals 59,040,650 59,040,650 59,040,650 177,121,950 Construction of 2 teaching, 7 state and 30 county 4 hospitals 190,000,000 190,000,000 190,000,000 570,000,000 Pharmaceutical system capacity and supply 10,629,637 10,629,637 10,629,637 31,888,911 Health human resource development 2,650,000 2,650,000 2,650,000 7,950,000 Expansion of health service delivery 471,040 471,040 471,040 1,413,120 High-impact health interventions 2,574,300 2,574,300 2,574,300 7,722,901 Total required expenditure to be covered by donors or other sources 288,849,718 286,775,718 286,775,718 862,401,153 Current & planned donor expenditure by source UNDP 16,111,000 12,853,994 13,193,090 42,158,084 20 2009 2010 2011 Total USAID 24,381,000 - - 24,381,000 UNICEF 17,500,000 17,500,000 17,500,000 52,500,000 WHO 1,502,570 1,500,000 1,500,000 4,502,570 UNFPA 3,530,000 4,530,000 6,030,000 14,090,000 Italian Development Cooperation 1,522,000 1,000,000 750,000 3,272,000 Global Fund-WHO - - - - Norway 1,800,000 1,200,000 800,000 3,800,000 Japan 16,000,000 16,000,000 13,000,000 45,000,000 World Vision Australia, Canada, and UK 415,000 300,000 100,000 815,000 Swiss Red Cross 500,000 1,000,000 - 1,500,000 MSF-F&Private Funds 6,849,744 6,849,744 6,849,744 20,549,232 Other donors and NGOs 24,631,188 5,050,128 5,652,154 35,333,470 5 Total 114,742,502 67,783,866 65,374,988 247,901,356 Sector Resource Gap 174,107,216 218,991,852 221,400,730 614,499,797 1 Of the total of US$165m it is expected that the GoSS will contribute US$80m and US$85m from MDTF 2 GoSS allocated only US$15m to the UPHSD in the 2009 budget. It is assumed the remaining US$65m will be allocated 2010-2011 3 Detailed specifications and costs have been developed 4 The estimates for construction will be available after the architectural study in all 10 states is completed 5 This might increase since funding from other agencies and NGOs could be higher than stated 21 FISCAL SPACE ANALYSIS Fiscal space is the budgetary room that allows a government to provide resources for desired purposes without prejudicing (damaging) the sustainability of its financial position. A country can create fiscal space by implementing the following measures: i) raising domestic revenues through widening of the tax base and improving the collection of nontax revenues; ii) obtaining more external grants through improved donor commitment for predictable grant inflow; iii) reprioritizing expenditures by cutting down unproductive ones, improving efficiency of expenditures through reduction of spending on unproductive sectors, and increasing that of productive sectors as well as eliminating corruption and programs considered as wasteful; and iv) securing both domestic and foreign loans by borrowing from both domestic and external sources. Nevertheless, in all these measures, a government must make sure that its economic and fiscal sustainability is not damage (Heller P., IMF, 2005). Fragile/Post-Conflict States Context In a fragile/post-conflict context, such as Southern Sudan, there is generally a low or limited revenue base, which constraints revenue generation over the medium term. A fragile/post-conflict state also has limited government functions, which would hamper its ability to improve efficiency and, hence, obtain fiscal savings. Moreover, a fragile state’s ability to borrow is negligible. The main option for a fragile state is to create fiscal space through predictable external grants with no conditionality attached (Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund, 2006). Creating Fiscal Space for Health In the health sector, a government can create fiscal space to finance health programs by significantly increasing its allocation to health using the 2001 Abuja Declaration as a benchmark; securing more external grants; enhancing revenues from out-of-pocket expenditure through improvement of private sector participation, with strong public-private partnerships; and future borrowing specifically for health programs. In the Southern Sudan context, the 15% Abuja commitment was used to measure the GoSS’s ability to increase resources to the health sector from its own budget (Figure 7). Fiscal space frontier (red diagram) was contrasted and used to explore the possible ways of increasing fiscal space for Southern Sudan’s health sector under the assumptions that the GoSS would i) use the 15% Abuja benchmark to increase, substantially, its allocation to the health sector; ii) mobilize more resources up to about 80% of its total expenditure on health (THE) from donor grants (including MDTF); iii) enhance resource generation through out-of-pocket expenditure to about 30% of its THE at the tertiary care level, while maintaining its free health care policy at the primary health care level; and iv) obtain external resources (loans) as an option for mobilizing resources to about 20% of its THE in future. The blue diagram within the fiscal space frontier illustrates the GoSS’s current levels of spending (see Table 4) with respect to health expenditure as a percentage of total government expenditure (TGE) (2.7%), donor grants as a percentage of THE (74.0%), out of pocket expenditure as percentage of THE (0%) and external resources (loans) (0%) as a percentage of TGE. It appears that the GoSS could consider creating fiscal space for health through increased donor grants (including the MDTF), while improving its domestic resource mobilization efforts, particularly from non- oil sources, enhancing out-of-pocket expenditures by generating resources from tertiary and secondary care facilities. The GoSS should not consider increasing resources to health through loans until it is fully capable of doing so. 22 Figure 7. Fiscal Space for Health in Southern Sudan GoSS exp on health as a % of TGE 80.0% 60.0% 40.0% External Resources 20.0% Donor Grants (loans) 0.0% as % of THE % of TGE Private out of pocket exp as % of THE Source: Authors’ own calculation and analysis INTERGOVERNMENTAL FISCAL RELATIONS AMONG THE MOH-GOSS, SMOHS, AND CHDS The establishment of clear sector priorities and resource allocation mechanisms as well as well- coordinated programs/activities at all levels of a health system leads to proper functioning of a decentralized health care system. In its broad sense, intergovernmental fiscal relations involve how a central government provides adequate resources to a sub-national government and how it holds them accountable to the use of the resources. This section describes how the MoH-GoSS, SMoHs and CHDs relate to each other during annual budget preparation processes. It does not, however, discuss the accountability aspect due to the dearth of expenditure data and relatively weak institutions at SMoHs and CHDs levels. The MoH-GoSS and the SMoHs There are no budget collaborations between the MoH-GoSS and the SMoHs; the SMoHs are not involved in the budget preparation process of the MoH-GoSS. In order to ensure sector priorities are budgeted and coordinated at all levels of the health system there should be a comprehensive sector budget, incorporating inputs from all levels. However, this is not the case in Southern Sudan. The MoFEP-GoSS requires states to prepare their own budgets and submit them directly to the MoFEP-GoSS. This situation does not facilitate strong budgetary interrelationship between the MoH-GoSS and the SMoHs and therefore affects establishment of effective and efficient resource allocation mechanisms to meet the needs of the health sector. The SMoHs and the CHDS At the state level, the SMoHs are expected to involve the CHDs in each year’s budget pre paration process. However, the majority of SMoHs prepare their respective budgets with no consultation and collaboration with the CHDs. When asked whether, they were involved in 2007 and 2008 budget preparation process, almost all of the CHDs responded that they did not receive information on budget preparation. For instance, all the respondents in the Ezo, Yambio, Tambuka, Anzara, and Ibba county health departments stated that their needs were not taken into account because they were completely left out of the budget preparation process. Some CHDs, however, prepare their personnel emoluments budget for salaries but they do not regularly receive funds for the salaries budget. For those counties, 23 which receive salaries, funds do not get to them on time with delays ranging from between 3 to 6 months. General Conditions of the SMoHs and CHDs Administrative Offices Lack of funding for operational and capital expenditure, as noted earlier, has undermined smooth operations of the SMoHs and the CHDs. This section highlights the poor conditions of the SMoHs and CHDs, because of underfunding, with respect to human resources, infrastructure and equipment, transport, and pharmaceutical distribution. The human resources situation is bad in almost all the SMoHs and CHDs. Most SMoHs and CHDs lack the requisite public health personnel to enable them to carry out their planned activities. There is an acute shortage of staff and the few staff on board are not motivated due to unreliable payment of salaries. The infrastructure situation is a matter of concern. Some SMoHs and CHDs do not have offices and are obliged to use part of the health facilities’ buildings as offices. For those who have offices, they are poorly equipped, furnished, and maintained. The SMoHs and the CHDs have the problem of lack of adequate transport facilities. This has severely affected transport of drugs and pharmaceutical supplies to health facilities. Some CHDs, with support from NGOs, have to rent vehicles to transport medical supplies to the health facilities in their operational catchment areas. . 24 3. BUDGET EXECUTION AND FINANCIAL MANAGEMENT CAPABILITIES This section describes the MoH-GoSS budget execution process (commitment, authorization, and payment) and performance by tracing all steps associated with the budget execution process until a final payment is executed. However, due to lack of information, steps associated with budget execution at state and county levels are not described in this section. The section also examines financial management capabilities of the three levels of the health system (MoH-GoSS, SMoHs, and CHDs). We conclude that the Southern Sudan budget execution process is cumbersome and therefore needs to be simplified. Also, the financial management capacity of the three health levels, in particular the SMoHs and CHDs, need to be completely overhauled. BUDGET EXECUTION The MoH-GoSS’s Budget Execution Process The budget execution process is initiated at the MoH level and the MoFEP-GoSS authorizes and effects payments as shown in Figure 8. Within the MoH, each Director General (DG) is required to submit expenditure claims to the Under Secretary of Health (the Chief Accounting Officer of the Ministry). The budget execution process begins when a DG submits claims to the Under Secretary for initial review. After the review, the claims are sent to the Directorate of Administration and Finance. The DG for Administration and Finance then reviews, endorses and instructs the Director of Finance (DoF) to check each item of expenditure against the Directorate’s budget allocation. After reviewing the documents, the DoF sends them to the Deputy Director of Finance for further scrutiny and endorsement, who in turn sends the endorsed claims to the Head of Accounts to make the necessary entries into a tracking system, established in early 2008 by the Under Secretary. The reviewed claims are then sent back to the Under Secretary for further review and for preparation of the request for payment (RFP). The RFP is sent to the Office of the Under Secretary in the MoFEP-GoSS. The Under Secretary of Finance reviews and endorses the RFP and if there are no errors, approves and records the expenditure details in the MoFEP- GoSS tracking system. Eventually, payment is effected. Delays do occur if there is a liquidity problem at MoFEP-GoSS level or if the RFPs are not properly prepared. In addition, as shown in Figure 8, there are several steps associated with the budget execution process, which cause considerable amounts of delays. There is a need to simplify and improve the process. The MoH-GoSS’s Budget Execution Performance Over the period 2006-2007, the MoH-GoSS has witnessed low budget execution performance. Table 11 presents the budget execution performance during 2006-2007. There was under-spending (outturn less the budget allocation) of the budget during the two-year period following the CPA at -42.8% and -60.2% in 2006 and 2007, respectively. These figures are well below those for the total GoSS allocations. As shown in Table 11, while the salaries component remained overspent in both fiscal years, there was reportedly consistent under-spending for the operating and capital expenditure items in the health sector. The pattern of underspending has led to low budget execution rates in 2006 and 2007, respectively. The MoH-GoSS recorded a 57.2% budget execution rate in 2006, but saw a nosedive in execution rates to 39.8% in 2007. The low budget execution rates were due to weak financial management capacity of the Directorate of Administration and Finance and a weak procurement system. It was also due to weak budget execution system of the MoFEP-GoSS in the old system, resulting in the loss of RFPs, several payments being made without financial coverage (leading to returned checks), and no reliable expenditure tracking system. This led to substantial overspending by certain ministries. 25 Several measures, including capacity building, were taken by the MoH-GoSS and the MoFEP-GoSS during 2007 and 2008 to improve budget execution performance (Annex 7). This has improved the MoH-GoSS’s budget execution performance in 2008 with 78.5% of the budget executed in 2008 (Table 11). Figure 8. MoH-GoSS Budget Execution Process MOH-GoSS MoFEP Office of the 7 Under Secretary Office of the 1 Under Secretary Executing 8 Directorate 2 9 DoF MoFEP Exp. Commitment Tracking room room DG of Administration 10 and Finance DoB 3 DoF Sector Officer DG for 6 (MOH) Budget 4 DDoF 12 11 13 5 Treasury Internal Audit DGoA DoA 14 Senior IT A/Cs 15 CoA DoF Check to Transfer to 16 16 MoH-GoSS A/C supplier A/C, Accounts; DDoF, Deputy Director of Finance; DG, Director General; DoB, Directorate of Budget; DoF, Director of Finance; SIT, Senior Information Technologist; RFP, request for payment. 26 Table 11. MoH-GoSS and GoSS Overall Budget Execution Performance 2006-2008 (US$) Overspending/Underspending Budget execution rate Expenditure % of (outturn/total Category Allocation/budget Outturn Amount allocation budget) 2006 Salaries 11,036,520 11,839,422 802,902 7.3 10.8 Operating 13,623,025 8,285,563 -5,337,462 -39.2 7.6 Capital 84,703,630 42,424,000 -42,279,630 -49.9 38.8 Total (Health) 109,363,175 62,548,985 -46,814,190 -42.8 57.2 GoSS 1,377,133,607 1,649,722,944 272,589,337 19.8 119.8 2007 Salaries 16,172,064 17,171,491 999,427 6.2 20.8 Operating 21,651,150 5,438,995 -16,212,155 -74.9 6.6 Capital 44,676,786 8,519,320 -36,157,466 -80.9 10.3 Total (Health) 82,500,000 32,814,760 -49,685,240 -60.2 39.8 GoSS 1,485,610,945 1,468,247,776 -17,363,169 -1.2 98.8 a 2008 Salaries 13,282,347 13,536,924 254,577 1.9 19.3 Operating 23,913,153 21,356,925 -2,556,228 -10.7 30.5 Capital 32,804,500 20,054,389 -12,750,111 -38.9 28.6 Total (Health) 70,000,000 54,948,238 -15,051,762 -21.5 78.5 GoSS 2,753,165,359 2,856,331,033 103,165,674 3.7 103.7 Source: 2008 and 2009 approved budgets, MoFEP-GoSS FINANCIAL MANAGEMENT CAPABILITIES OF MOH-GOSS, SMOHS AND CHDS Overview of an Effective Financial Management System Financial management is an important component of what financial and program managers, in departments and agencies, do in delivering their programs or projects. Specifically, the role of financial management is to identify and manage financial risks; have available timely, relevant, accurate, and reliable information that allows sound decision-making; report on financial and operational results; and protect against fraud, financial negligence, violation of financial rules or principles, and losses of assets or public money. Effective financial management is, therefore, a critical capability that helps an institution/company to manage its financial risks, discharge its accountability obligations, and support strategic and operational decision-making (McRoberts, Hugh A, Sloan, Bruce C., 1998). There are three components of an effective financial management system: i) financial information; ii) financial controls; and iii) financial analysis and reporting. Under the financial information component, the MoH has to ensure financial information which is needed to support delivery of services and programs is collected, maintained, and provided on a timely basis. The financial control, including internal controls, emphasizes how the MoH carefully carries out its financial operations. The financial analysis component emphasizes the MoH’s capacity to support an integrated all-inclusive decision-making process, which involves analyzing and documenting operational information of different Directorates of MoH-GoSS, SMoHs, and CHDs. 27 In order to understand the issues related to financial management at all levels of the system, we assessed the capacity of Administrative and Finance Directorates/Departments of the MoH-GoSS’, SMoHs’, and CHDs’ to execute health expenditures. The assessment was conducted against the following four criteria: i) effectiveness of collating financial information; ii) existence of financial tools and the level of competence of accounts personnel; iii) existence of internal financial controls; and iv) financial analysis, including financial reporting. While the MoH-GoSS’s capacity to execute budgets improved remarkably in 2008, the SMoHs and CHDs capacities are extremely weak (Annex 9). Financial Management Capabilities of the MoH-GoSS Until the beginning of fiscal year 2008, the MoH–GoSS’s capacity to execute budgets had been extremely weak. The Directorate of Administration and Finance, which is in charge of managing all the Ministry’s expenditures, had no proper system for managing and accounting for health spending; no proper books of account; and no records keeping system in place. Furthermore, the Directorate lacked the requisite modern accounting and financial management tools such as computers, accounting software, and calculators. In addition, the Directorate was characterized by weak internal controls, and relatively inexperienced accounts personnel, coupled with inappropriate financial reporting system. Nevertheless, since late 2007, a computer-based accounting system has been implemented and the procurement unit strengthened with the installation of computers. Expenditure reports from 2005 have been documented on a spreadsheet and this has tremendously improved budget execution and reporting. Financial controls have improved significantly through the strengthening of internal audits and devolution of functions to newly recruited deputy directors of administration and finance. Hitherto, there was only one Director in charge of both administration and finance. Details of the financial management system at the MoH-GoSS are presented in Annex 8. Financial Management Capabilities of SMoHs and CHDs Financial management at the SMoHs and CHDs leaves much be to desired. Annex 9 presents details of the findings. In most SMoHs and CHDs, no records are kept for funds received and expended from either the government or donors. Further, financial controls are nonexistent in the administration and finance departments of the SMoHs and CHDs, leading to serious lapses. Of particular concern is the background of the personnel working in the administration and finance departments of the health institutions. In many SMoHs and CHDs, persons in charge of budget execution have little to no accounting and financial background. SOURCES OF FUNDS AND FINANCIAL MANAGEMENT CAPACITIES AT THE HEALTH FACILITIES Health facility administrator interviews of tertiary hospitals, state hospitals, county hospitals, and PHCCs provided insights into the sources of funds and financial management capacities of selected health facilities (Annex 8). Some of the health facilities at the county and primary health care levels are run by NGOs. The formal for-profit private sector is not well developed with very few private clinics, mainly in Juba--the capital of Southern Sudan. The medical director of one such private clinic was interviewed. Table 12 provides a summary of the background information on the 22 selected facilities. Yei Civil Hospital established in 1916 is the oldest among the selected facilities while Juba Military Hospital and Lui Hospital are the most recently established facilities (2007). This component of the study was to determine the effectiveness of key financing mechanisms and financial management capacities of health facilities. The study team focused primarily on sources of revenue, expenditure management practices, and financial management capabilities. Additional key areas of consideration include, among others, issues related to organization and staffing, internal 28 controls, reporting mechanisms to the MoH, accounting and records keeping practices, supervision and monitoring, and flow of funds. In spite of the intention to review related secondary data (via. revenue and expenditure statements, health facility annual budget statements, state transfer statements, key books of accounts, employee history records, monthly payroll statements, and operational manuals), the requisite information was not available and the study team had to rely heavily on interviews with the hospital administrators. Table 12. Background of Selected Health Facilities in Southern Sudan Facility Name State County Location Type Ownership Year Major Source of Est. Revenue Akuem Civil NBG Akuem Urban STATE Gov’t n/a Govt/User Fees Hospital Aweil Civil NBG Aweil Urban STATE Gov’t n/a Govt/User Fees Hospital Bengasu WE Yambio Rural PHCC Gov’t n/a Govt/User Fees Bentiu UNITY Rubkona Rural STATE Govt 2004 Gov’t Bor Hospital Jonglei Bor Urban STATE Gov’t n/a Gov/t EL Sabbah CE Juba Urban STATE Gov’t 1984 n/a Children Hospital Juba Military CE Juba Urban Gov’t 2007 Govt/User Fees Hospital Juba Teaching CE Juba Urban TERTIARY Gov’t 1927 Govt/User Hospital Fees/External-ICRC Kajokeji Civil CE Kajokeji Urban COUNTY NGO 1936 n/a Kator CE Juba Urban1 PHCC Gov’t 1978 Govt/User Fees Kodak U/Nile Fashonda Urban PHCC Govt n/a Govt/User Fees Lui WBEG Jur River Rural PHCC Gov’t 2007 Govt/User Fees Malakal U/Nile Malakal Urban STATE Gov’t n/a Govt/user Fees Teaching Hospital Maluth Civil U/Nile Maluth Urban COUNTY Govt 2005 Govt/User Fees Mapel WBEG Jur River Rural PHCC Gov’t 1994 External/NGO Morobo CE Morobo Rural PHCC Gov’t 1979 Govt/user Fees Nasir County U/Nile Zuakpiny Rural COUNTY Gov’t 2006 Govt/NGO Hospital Rumbek Lakes Rumbek Urban STATE Govt n/a Govt/User Fees Hospital Central Terereka PHCC CE Terereka Rural COUNTY Gov’t 1983 none Tonga U/NILE Panyikany Urban PHCC NGO n/a External NGO/User Fees Yei Civil CE Yei Urban STATE NGO 1916 Govt/User Fees Hospital Yubu WE Tambura Rural PHCC Gov’t n/a Govt/User Fees Sources of Financing for Health Facilities The GoSS provides a major source of financing for some facilities, with the support largely concentrating on salary payments and provision of medical supplies. While facilities such as Tumbura hospital acknowledged having received SDG46,344 (US$23,172) from SMoFEP for salaries, Wau Teaching Hospital received its support in the form of monthly petty cash payments of SDG30,000 from the MoH- 29 GoSS, but Torit Civil Hospital received SDG2,000 (US$1,000) from the SMoH to meet part of its operational costs. Neither of the PHCC studied (Yubu and Bengasu) reported ever receiving GoSS funding through the CHD, SMoH, or MoH/GoSS. About four-fifths of hospital administrators interviewed reported that the financial support provided to the facilities for operational and capital expenditures were grossly inadequate. Even when the support is available, it was not timely. As of July 2008 Tumbura Civil Hospital and Kajokeji, among others, had not received the 2008 budget allocation from the MoFEP-GoSS, a development largely attributed to logistical problems NGOs provide complementary support in several operational areas including technical and managerial support. The NGOs and international donors have provided timely complements the support by the MoH-GoSS and this has kept many facilities running when there are delays in the disbursement of funds from the government and/or when the funds from this source are insufficient. For instance, USAID has provided significant financial support to the Torit Civil hospital in the purchase of drugs and beds as well as maintenance of equipment in the pediatric ward, maternity ward, and the theatre. Similarly, Lui County hospital has benefited from the technical and management support from the Samaritan Purse, an international NGO. In spite of the latter withdrawing its support to the facility in December 2007, the NGO resumed operations about six months later when the GoSS could not take over the management of the institution immediately, due to budgetary constraints. In another instance, the International Committee of the Red Cross (ICRC) provided significant technical and management support to the Juba Teaching Hospital. It also supported the hospital in the rehabilitation and upgrading of buildings and equipment. In April 2007 the ICRC handed operations over to the MoH-GoSS. Selected Health Facilities by Levels of Care This section details issues affecting the smooth operation of the 10 selected facilities (three tertiary level facilities, five state and county hospitals, and two primary health care facilities) with regard to sources of financing and financial management capacity. The Tertiary Hospitals Juba Teaching Hospital (Central Equatoria State) Located in Juba, the Juba Teaching Hospital is pre-eminent among the three tertiary hospitals in Southern Sudan. As noted earlier, its management was under the International Committee of the Red Cross until April 2007 when it was handed over to the MoH-GoSS. The hospital infrastructure has been rehabilitated and upgraded but plans for equipping the hospital with modern equipment are yet to be implemented. Table 19 (Annex 10) provides the availability of selected equipment/infrastructure while Table 20 (Annex 10) presents staffing at the tertiary hospitals. Sources of financing: The GoSS budget allocations are the main source of financing for Juba Teaching Hospital. In spite of the fact that secondary and tertiary care was allocated the largest share (20.9%) of the MoH’s 2008 budget (Table 6), the respondent pointed out that the hospital lacks adequate funding for operational and capital expenditures. To ensure smooth operations of the hospital, the hospital authorities have implemented user fees as an alternative mechanism for raising revenues for the hospital. Patients are charged SDG100 (US$50) for inpatient care per day and between SDG3-10 for laboratory test (Table 21 in Annex 10). We did not obtained records of weekly, monthly, and annual revenues estimates from user fees in this hospital but the administrators confirmed that the fees collected are insufficient to meet the full running cost of the hospital. 30 Financial management capacity: The existing financial management system is extremely weak as evidenced by, among others, poor keeping of financial records. Although the respondent did not provide details of the background of accounts staff, he indicated a serious lack of skilled accounting personnel capable of managing resources. Despite maintaining financial records, it was difficult to obtain expenditure reports. There are no financial controls (internal checks and audits) or proper reporting systems in place. In view of these weaknesses, funds generated from user fees are not properly documented and it was difficult to track expenditures. Wau Teaching Hospital (Western Bahr el Ghazal State) Wau Teaching hospital is located in Wau County. Tables 19 and 20 (Annex 10) present the availability of selected equipments and staffing. According to the hospital authorities, the hospital will require 10 medical officers, 4 specialists, and 6 midwives to ensure adequate provision of health care. Lack of resources for operational and capital expenditures has had negative impacts on general infrastructure and equipment. The hospital buildings are dilapidated and certain equipment and facilities are outmoded and nonfunctional. Currently, the hospital is equipped with only three vehicles, one ambulance, one warehouse, one laboratory, and one blood bank. Distribution of drugs and medical supplies are not regular. The need to provide adequate and modern equipment to make the hospital more functional cannot be overemphasized. Sources of financing: The hospital’s major source of funding is the GoSS budget. It receives a monthly petty cash amounting to about SDG30,000 (US$15,000) from the MoH-GoSS. Nevertheless, the funds are not sufficient to meet the daily running costs of the hospital. As a result, the authorities collect user fees from patients as additional source of revenue. Charges range between SDG2 (US$1) to SDG100 (US$50) depending on the type of service provided (Table 21 in Annex 10). The hospital’s managers confirmed that a substantial number of patients could not afford the fees charged. The average total revenue from user fees is shown in the Table 22 (Annex 10). The hospital operates a bank account to deposit collections from user fees on a monthly basis, however, internally used funds are deducted from this amount. There is no information on funds expended or how funds are allocated to different departments of the hospital. Financial management capacity: The overall financial management capabilities of staff of the administration and finance department are weak. The department is comprised of a Director, a Head of Accounts, and four Accounts Clerks. Three of the accounts clerks possess secondary level education and one possesses a bachelor’s degree. The Director and Head of Accounts hold bachelor’s and diploma degrees respectively. An assessment of their background indicated a lack of accounting and financial management skills to perform sound financial transactions. Internal audits and controls are nonexistent and financial record keeping is generally poor. There is no effective reporting system in place to allow sharing of financial information with the MoH and key stakeholders. Malakal Teaching Hospital (Upper Nile State) Malakal Teaching Hospital is located in Malakal county. As shown in Table 19 (Annex 10), the hospital lacks basic facilities to make it more functional. The hospital is equipped with only 1 computer, 1 photocopier, 3 vehicles, 2 ambulances, 1 warehouse, 2 laboratories, and 1 blood bank. The hospital buildings are beyond repairs. Previous assessment by AMREF recommended the construction of a new hospital. In terms of human resources, there are 15 doctors, 497 certificate nurses, 1 pharmacist, 7 technicians, and 17 administration and finance staff. No information was provided about the hospital’s 31 staffing requirements to enable us to determine the current vacancies for other health professionals and specialists. Sources of financing: The GoSS is the main source of financing for Malakal Teaching Hospital. However, lack of funding for capital and operational expenditures has adversely affected the operations of the hospital. To ensure smooth operations of the hospital, the authorities have implemented user fees as an alternative source of revenue. As shown in Table 21 (Annex 10), patients are charged for a range of services such as outpatient consultation (SDG1), laboratory services (SDG3), X-rays (SDG2) and maternity/delivery (SDG15). According to the hospital authorities, the hospital collects SDG240,000 (US$120,000) annually from user fees, but the revenues are insufficient to meet the required expenditures. While it collects SDG240,000, it spends about SDG528,000 (US$264,000) annually indicating a shortfall of SDG288,000 (US$144,000). Financial management capacity: The hospital is characterized by feeble financial management capacity. The administrative and finance department is ill-equipped with requisite accounting tools to enable the staff to effectively perform financial transactions. Furthermore, internal controls are weak with no regular audits and checks for use of funds. The accounting and finance staff lack the required financial expertise to allow them to perform effective and efficient financial transactions. There is no proper keeping of financial information and data; and no proper (periodic or annual) reporting system in place. Relevant accounting transactions are kept manually, due to the lack of accounting tools such computers counting machines, and accounting software. The is a great need to equip the department with the right tools for performing financial transactions and to train the accounts staff on techniques of budget execution and general financial management practices. State and County Hospitals Lui Hospital, Mundri East County, Western Equatoria State Lui hospital is a County hospital supported and managed by the Samaritan Purse, an international NGO. The NGO pulled out in December 2007 but the GoSS delayed in taking over responsibilities. As a result, the hospital experienced a lack of resources over during the period from January to April 2008. The NGO later resumed operations upon receiving re-application from hospital authorities in May 2008. With the exception of one doctor working in the hospital on the day of the assessment, the entire human resources situation could not be assessed as no information was provided for staffing levels (Table 23 in Annex 10). Infrastructure and equipment are in poor shape at the hospital due to the lack of funding for capital and operational expenditures (Table 24 in Annex 10). With the exception of one laptop used by the NGO, the hospital has no computers. The hospital lacks good transport facilities with four vehicles onsite--two of which are nonfunctional. Electricity supply is irregular; there are two available generators but only one is working. Sources of financing: The GoSS budget was reported as the main source of financing for this hospital but the hospital authorities stated they had not received any funds from MoFEP-GoSS for 2008, as of the time of the interview. Under such circumstances, the authorities decided to charge use fees in order to raise revenues to run the hospital. Revenues from user fees mainly cater to salaries, fuel, general office supplies, and housekeeping. However, these revenues are inadequate to meet the high demand for health services. The breakdown of charges for various services is shown in the Table 26 (Annex 10). The hospital raises about SDG3,000 (US$1,500) per month from user fees (Table 27 in Annex 10). 32 Financial management capacity: The Hospital Management Team, on a monthly basis, reviews accounts and reports to the Hospital Board of Directors. Although the NGO has computerized accounting records, no reporting arrangements have been established among the hospital, the SMoH, and the MoH-GoSS. Overall, financial management is performed by the NGO and there was no evidence of knowledge transfer to local staff. Tumbura Civil Hospital, Tumbura County, Western Equatoria State Tumbura Civil Hospital is a county hospital supported by International Medical Corps (IMC), an NGO. Table 24 (Annex 10) shows the skill mix at the hospital. Some of the staff are employed directly by IMC while incentives are given to those on the GoSS payroll. In addition to receiving medical supplies from the GoSS Central Medical Stores in Juba, IMC donates medical supplies to the hospital. Sources of financing: Although the major source of financing for the hospital is stated as the GoSS budget, operational and capital expenditures do not reach the facility. As of June 2008 the hospital had received only SDG46,344 (US$23,172) from MoFEP-GoSS for salaries. There was no data on the expected amount for the year. As is the case for the other facilities mentioned earlier, the hospital introduced user fees in July 2008 to raise additional revenue. According to the hospital officials, some patients are not able to afford the supposedly low fees (Table 26 in Annex 10). Table 27 (Annex 10) shows the revenue generated from user fees. Financial management capacity: The administration and finance department’s capacity to execute its budget is weak. The total number staff in the department is six. Of this number, one is a bookkeeper who has not undergone any training in budgeting. Internal controls are weak because there is no internal auditor that would monitor and review day-to-day transactions. Additionally, there is no proper system of financial record-keeping and reporting in place, as there are no accounting tools in place. Torit Civil Hospital, Torit county, Eastern Equatoria State The USAID supports the Torit Civil State Hospital with drugs, beds, and equipments for the pediatric ward, maternity ward, and the theatre. Tables 24 and 25 (Annex 10) show the staffing and equipment levels at the hospital. Sources of financing: The GoSS budget is the major source of funding for the hospital. The hospital also collects revenues from issuing medical certificates, but no data on amount collected was available. In July 2008, the hospital received SDG2,000 (US$1,000) from the SMoH to meet part of its operational costs, but did not receive any funds from GoSS. In order to raise additional resources, the authorities have recently introduced user fees (Tables 26 and 27 in Annex 10). According to the hospital, poor patients are unable to afford these charges. Financial management capacity: The employees of the administration and finance department have very low capacity to execute expenditures. The department has no good recording system and they do not keep proper books of accounts. As a result, we did not obtain data on expenditures and revenues from user fees. Kejokeji Civil Hospital, Kejokeji County, Central Equatoria State IMC runs this county hospital. It has a relatively large staff, a few of whom were seconded by the MoH (Table 24 in Annex 10). IMC was expected to hand over the management of the hospital to MoH in August 2008. The Hospital structure and facilities are in poor condition and therefore need to be rehabilitated and equipped. Regarding drugs and consumables, the hospital gets its supplies from both 33 IMC and MoH-GoSS. Supplies from the GoSS are received on a quarterly basis but there are sometimes delays due to logistical problems. Sources of financing: Although the GoSS is stated as the major source of funding, the hospital had not received funds from the GoSS for the 2008 fiscal year, as of July 2008. The IMC finances most of the activities of the hospital. Unlike other facilities, this hospital has not implemented any user fees and therefore has no other source of revenue. Financial management capacity: IMC has in place a sound financial management system. The accounts and finance department keeps proper electronic records as well as hard copies of financial documents and personnel. They maintain proper financial records and perform regular internal controls. What was not clear is whether knowledge is being transfered to local counterparts by way of capacity building. St Luke International Medical Centre, Juba County, Central Equatoria State St Luke International Medical Centre is a private clinic established in 2007. It provides outpatient and inpatient services and minor surgery. Apart from the initial inspection and licensing of the premises, the clinic has no formal contact with the MoH-GoSS in terms of sharing information or reporting. The clinic receives drugs and supplies from Kampala, Uganda since there is no outlet for drug purchase in Juba. The government provides drugs free to patients in public facilities there is no incentive for private suppliers. The medical director indicated that taxes on drugs at airport are high and suggested that the GoSS be more supportive of the private sector. Sources of financing: The main source of revenue is user fees with no funding from GoSS or external sources. The charges for services are much higher than at the public facilities (Table 26 in Annex 10). About 80% of clients are able to afford the user fees, while the remaining 20% are indigent and are treated for free (free consultation, laboratory tests, and drugs). There was no information on the criteria for determining who is indigent. Some organizations such as Oxfam International, UNOPS, Home and Away, and GTZ have signed a memorandum of understanding for their staff to be catered for in this clinic. At the end of the month, an invoice is sent to the respective organization. The monthly revenue is about SDG9,600 – 24,000 (US$4,800 – 12,000). Financial management capacity: This clinic keeps proper financial records. There is an invoice, receipt, and payment voucher for each patient seen. All internal controls are properly performed and it is envisaged that the financial records will be computerized in the near future. Primary Health Care (PHC) Facilities Given that the financial capabilities of PHCCs and PHCUs were expected to be low, only a couple of PHCCs were assessed. Bengasu PHCC Bengasu PHCC is located in Yambio County in Western Equatoria State. Its staffing levels are as follows: one nurse, 3 traditional birth attendants (TBAs), 2 security personnel, and 2 cleaners. The general conditions of the facility are very poor. The facility lacks drugs for effective service delivery and is poorly equipped. Sources of financing: The MoH-GoSS is putatively the main source of funding but it has never received any funds from the GoSS. To ensure that the facility meets some of its core operational expenditures, the administrators collect revenues through user fees. Patients are charged SDG1 (US$0.50) for 34 outpatient consultations, but some patients cannot afford this small fee. About 25% of the revenues collected are sent to the CHD and the remaining 75% is used for running the facility and providing incentives to staff. The monthly revenue from user fees is about SDG20 (US$10) Financial management capacity: Except for patients’ registers and a monthly report on drug use to CHD, there are no accounting and financial records, due to the nonexistence of staff with sound financial and accounting background and the lack of requisite accounting and financial tools. Yubu PHCC The Yubu PHCC is located in Tumbura County, Western Equatoria. It has a total of 17 staff: 4 nurses, 1 pharmacist, 1 technician, 3 administrative staff, 6 TBAs, 1 midwife, and 1 maternal and child health worker. The facility is supported by IMC, which pays incentives to staff members and donates medical supplies. The PHCC received medical supplies from CHD twice last year and once this year. Generally, infrastructure and equipment are in poor condition. Sources of financing: The facility did not receive any funding from the GoSS over the study period. It, therefore, relied heavily on the IMC who provided funding and services to patients free of charge. Financial management capacity: Employees of the finance and administration unit have not received training in budgeting and expenditure management. All financial transactions and records are performed and maintained by the IMC. To ensure the PHCCs operate effectively, it is crucial to build the capacity of the finance staff. 35 4. EXISTING MECHANISMS FOR GENERATING RESOURCES This section assesses the two provider payment mechanisms (user fees and the National Health Insurance Fund) currently operated in Southern Sudan against the backdrop of the GoSS free health care policy. Key issues that the study seeks to address are whether these mechanisms raise significant additional resources for the health sector and if they are affordable enough to make health care more accessible to the poor. The study shows that, contrary to the GoSS’s free health care policy, user fees are being implemented in nearly all facilities across Southern Sudan and that the National Health Insurance Fund has very low coverage--therefore it does not benefit the poor. USER FEES Article 35 of the Interim Constitution stipulates, “all levels of government in Southern Sudan shall… provide free primary health care and emergency services for all citizens�. This study sought to assess: i) whether health care providers are providing services free of charge, ii) the adequacy and timeliness of reimbursement from the GoSS for services provided to patients, and iii) whether the patients are able to afford fees charged. We obtained information on the first two from provider interviews while information on the last topic was obtained through exit interviews and focus group discussions. As noted in the previous section, our findings revealed that, contrary to the free health care policy, of the 28 health facilities assessed, 19 (68%) reported collected user fees (Table 13). The facilities have established their own fee determination criteria, without reference to the MoH-GoSS. The charges are, in most cases, arbitrary and not related to the costs of services. The hospitals’ cashiers normally collect the funds and forward them to the accounts office. Generally, no receipts are given for fees collected and records are rarely kept. The lack of data on costs of services and the absence of clear guidelines on pricing have led to substantial variations in fees across different facilities (Annex 10). The health facility managers argued that, the major reason for implementing user fees is the lack of funding for operating expenditures, capital expenditures and/or salaries. The findings of the exit interviews described in Annex 3, corroborate the findings that user fess are implemented at health facilities. Of the 229 respondents who completed the exit interviews, more than three-quarters paid for health services in June-July 2008. Further, 18% were not aware of the Government’s free health care policy while 24% were willing for pay for health services. Similarly, focus group respondents also indicated that user charges were a barrier to the utilization of health services (see Annex 4). To inform policy makers about the consequences of charging patients user fees, we assessed the effectiveness of this mechanism by comparing the revenues generated with the cost of providing health care in selected facilities (based on cost estimates provided by the facilities). Table 13 shows the annual revenues from user fees, annual revenues from GoSS, and annual expenditures for selected health facilities for which data was available. As noted earlier, some health facilities do not receive funds from the GoSS. The combined revenues from user fees and the GoSS might be below the annual expenditures for most health facilities. The fee levels are well below full cost recovery. Needless to mention, the revenues generated have formed an important source of discretionary expenditures in public health facilities. The funds are used, in some cases, to cater for stationery, detergents for cleaning the facilities, charcoal for sterilization, partial compensation for health personnel, and transport/fuel costs. Community in-kind contributions, 36 on the other hand, come in the form of cleaning the facilities and infrastructural development including rehabilitation and purchase of building materials. Table 13. User Fees Compared with the Cost of Providing Health Care (SDG)a Health Facility Revenues from Revenues from Total Revenues Annual user fees per year GoSS per year per year expenditure Akuem Civil Hospital 29,120 n/a n/a 22,360 Aweil Civil Hospital 67,200 n/a n/a n/a Bengasu PHCC 260 n/a n/a n/a Bor State Hospital n/a n/a n/a n/a Juba Teaching Hospital n/a n/a n/a n/a Kator 8,000 n/a n/a n/a Kodak 1,560 300,600 302,160 n/a Lui Hospital 36,000 n/a n/a n/a Malakal Teaching Hospital 240,000 n/a n/a 528,000 Maluth Hospital 108,000 22,000 130,000 n/a Morobo n/a n/a n/a n/a Rumbek Hospital n/a n/a n/a n/a St Luke 115,000-288,000 n/a n/a n/a Tonga 7,200 n/a n/a n/a Torit Civil Hospital 10,464 2,000 12,464 10,416 Tumbura Civil Hospital 9,600 46,344 55,944 n/a Wau Hospital 11,400 360,000 371,400 240,000 Yei Civil Hospital 26,880 n/a n/a n/a Yubu PHCC n/a n/a n/a n/a n/a indicates data not available a Sudanese Pounds (SDG where 2SDG=1US$) User Fees Mechanism in Neighboring Countries The user fee mechanism in Southern Sudan is quite different from that in other countries in Africa as documented by Di McIntyre et. al. 2008. For instance, Malawi operates a free medical services policy in the public health sector but the tertiary health facilities have the option of charging fees for services. The FBO/Mission and private sector hospitals also charge for services, except for maternal and child health services. In the case of the latter, co-payments, usually calculated as a proportion of the total fee, are charged for those with insurance and for services outside the insurance benefit package. In Namibia, a system that has faced many implementation challenges, has implemented fees-for-services in all public sector facilities--with a provision for exempting the poor,. On the other hand, South Africa operates user fees in all the public hospitals, with those seeking primary health care services being eligible for exemptions. As in the case of Namibia, the system of exemptions for the vulnerable, including the income poor, has been difficult to implement. Tanzania provides an example of one of the countries in Africa that started off with the provision of free medical services and it was not until 1993 that the country introduced user fees, starting with the referral hospital. The policy was later rolled down to the regional hospitals (1994), district hospitals (1995) and later health centers and dispensaries. A system of waivers and exemptions is available but it faces challenges similar to the other countries noted. On its part, Uganda took drastic steps to abolish user fees in public facilities in March 2001, providing an option of payments at the ‘private wards’ in these hospitals. Eventually, many clients have 37 turned to the payment system because of the perceived poor quality of services and lack of drugs, functioning machines and equipment. User fees in Zambia’s public sector have been placed at the tertiary and secondary facilities and in the urban-based districts. A waiver system is in place for the children under five, the elderly (over 65 years), pregnant women, and emergency (trauma/injury) cases. Based on the evidence from African countries and other regions, as reported in publications such as Gottret P. and Sheiber G, 2006, and Di McIntyre et. al. 2008, the GoSS have to weigh carefully options for financing health care in Southern Sudan. The success or failure of the current free policy of GoSS is, however, open to debate. Presently, there are no systems to track the user fee payments in Southern Sudan, providing great potential for leakages. All revenues generated are spent at the source and are not banked as many of the facilities do not have bank accounts. Based on the experience of other countries, the poor and other underserved populations are likely to be denied access to services if cost sharing were to be made a policy by the GoSS. If unchecked, the implementation of user fees could create distortions in the financing of health services, and become a significant barrier to expanding access to and coverage of health services to the poor. There will be need to be a careful review of the Government’s health financing options to ensure that the poor have access to basic health services, given that 90% of the population in the Southern States lives below $1 a day. THE NATIONAL HEALTH INSURANCE FUND As documented by Pablo Gottret and George Schieber (2006), there are several health insurance mechanisms available to pool health risks in any country, namely, government funded systems, social health insurance, voluntary or private health insurance, and community-based health insurance. Of these, the Government of National Unity (GoNU) operated some form of Social health insurance, otherwise referred to as National Health Insurance Fund (NHIF), for the country before the war. The system that exists in Southern Sudan is an offshoot of the one based in Khartoum7. The idea of establishing the Fund was mooted in 1973 based on the Islamic principles of ‘Social Solidarity’ and it was, eventually, implemented through an Act of Parliament in 1995 to pool health risks in the country and provide financial protection to their populations. At inception, the Fund was dependent on mandatory earmarked payroll contributions (that is, 10% of the employee’s salary); 4% from employees and 6% from the employer. The funds generated were generally regarded as nonprofit and administered by the government. In turn, the scheme gave the members (mostly government employees and their families) the right to a defined health benefit package, which included the costs of medical consultations, laboratory services, surgical operations, dental services, antenatal care, and 75% of the cost of drugs/medicine. These services have been contracted to government facilities, with a provision for the referral of more complicated cases to Khartoum and Jordan-based hospitals. The exclusions to the scheme included dentures, non-life saving drugs/medicines, and plastic surgery (that is, for curative purposes) and multivitamins (except for pediatricians). According to the Director of the NHIF, in June 2008 the scheme had a coverage of about 9,000 workers (22,118 including their families) in Southern Sudan, largely drawn from the greater Equatoria (East, Central, and West). This represents about 0.00119% of the population. Though gloomy, 7 The findings in this section are largely based on discussions with Dr Nixon Barnaby Bali, the Director of the National Health Insurance Fund 38 the situation is similar to many other countries in Africa. According to Di McIntyre et. al. (2008), for instance, the proportion of the population covered by community health insurance schemes in Tanzania and Uganda stand at less than 0.2% and less than 1%, respectively. Even for the high and middle income groups covered by private-for-profit health insurance schemes and individual medical schemes, the proportions remain low—Malawi (1%), Namibia (12.5%), South Africa (15%). Largely, the study pointed to heavy dependence on tax funded services by the poor; low-income, informal sector workers; the unemployed; and other vulnerable groups --Malawi (99% of the population), Namibia (87.5%), South Africa (85%), Uganda (99%), Zambia (95%). The limited coverage of the population by any form of health insurance mechanisms is attributed to the fragmentation of risk pools in the region. More often, more of the risk pooling is reported only in individual schemes and, not between the schemes. Similarly, there is a lack of risk pooling between the tax funded pool and the existing medical schemes Going by the available evidence, it will be a challenge for the country to direct the available tax revenues and donor funds into some form of pooling arrangement, public or private, to provide financial protection to the population. The challenge is even greater considering the lack of an appropriate structure to implement such a scheme and the existence of many factors that provide a constraint to the implementation of the scheme. These factors include: i) the failure of the Government of National Unity to remit the 4% employees contribution since 2006; ii) the government’s gradual withdrawal of its hospitals/health facilities from the scheme; and iii) the lack of an established system to rollout the initiative countrywide. In addition, members of the NHIF see the benefits package to be unattractive with regard to the additional costs they have to incur for admissions and treatment. Further, there is a lack of political will and commitment by the top leadership to implement the scheme in its present state. The problem is compounded by the adverse socio-economic status of the population, which provides a weak tax base for the scheme. A majority of the population are unemployed, poor, and/or cannot afford the premiums. There is also a lack of information and awareness among the population about the operations of the scheme. In our interviews, about 90% of the informants attending the health facilities were unaware of the operations of any health pre-payment scheme in Southern Sudan, including the NHIF Overall, the NHIF has great potential to become an important financing mechanism for the GoSS and to serve as a growing source of revenue for public and private health facilities, more so, given that the country places high value on equity and solidarity. The contributions from the Fund alone will, however, not be adequate to fully fund health care costs and there may be a need to leverage additional funds from the GoSS 39 5. POLICY RECOMMENDATIONS Substantial investments at all levels of care will be required in order to ensure that the investments in health system strengthening reach beneficiaries. Providing requisite financial resources at all levels of care will improve the working conditions of health workers, enable upgrades of health facilities to acceptable standards, and strengthen institutional capacity of all health institutions. This study has illuminated some of the health care financing issues in Southern Sudan. The following recommendations, when implemented, will help improve the situation and make resources more available to health institutions at all levels of the health system. Improve the financial management capacity of the MoH-GoSS, the SMoHs and the CHDs  Build and maintain a highly qualified financial management workforce in the directorates of administration and finance for health at the national, state and county levels The study findings show that the Moh-GoSS, the SMoHs, and the CHDs all lack competent accounts and financial management personnel, to some degree. Sponsor comprehensive trainings and upgrade programs in financial management, including on-the-job trainings for budget managers and their staff, to improve their skills and knowledge. Additionally, recruit and increase the availability of competent accounting/financial personnel at all levels of the health systems.  Strengthen the financial information management of administration and finance directorates at all levels of the health system The study depicted poor records keeping and unreliable financial information at all levels of the health system. It is important to implement a well-equipped financial information system to ensure relevant, reliable, and timely financial information is available at all levels of the health system for effective planning and management. There should also be a periodic (monthly or quarterly) collation of financial information at all levels and sharing within the MoH. In the long- term, as the financial information system improves, a National Health Accounts (NHA) could be instituted. An NHA would be a framework for measuring total-public and private-national health expenditures; and would track the flow of funds through the health sector, from their sources, through financial institutions, to providers and functions.  Ensure effective financial controls at all levels of the health system The study depicted improved financial controls at the MoH-GoSS level; internal controls including expenditure tracking and auditing have improved substantially. However, at the state and county levels, there are no established mechanisms for ensuring proper financial controls. The SMoHs and CHDs need strengthened financial management systems. Instituting proper financial controls will facilitate the day-to-day operations of the finance departments and bring transparency into the system.  Strengthen the institutional capacity of procurement staff Since effective financial management goes in tandem with procurement activities, the procurement departments of the MoH-GoSS and the SMoHs need to strengthen their institutional capacity. Capacity building of procurement staff will give them hands-on training to speed up the budget execution process. The MoH-GoSS’s and SMoHs’ annual procurement plans should also be developed as part of the budgeting and planning process. 40  Improve and simplify the budget execution process to make it more responsive to the needs of program managers The study depicted a cumbersome budget execution process with expenditure claims passing through approximately sixteen steps before payment execution. This causes delays in approval, authorization, and payment of claims. To speed up the process and make it more effective and efficient, the process needs to be simplified. This will require, among other things, eliminating steps considered duplicative at both the MoH-GoSS and the MoFEP-GoSS levels. Improve resource allocation at all levels of the health system  Increase resources to primary health care in line with the GoSS’s health care priorities The study showed that resource allocation by program area is skewed towards tertiary care, as opposed to primary care. In a typical post-conflict context, where all competing health programs are important, huge expenditures for curative services tend to crowd out primary health care expenditures. Given that the constitution prioritizes primary health care, the MoH-GoSS will have to consider reversing this trend by increasing the resources allocated to primary health care services while maintaining a certain level of expenditures for curative and other health services.  Build strong intergovernmental coordination and relationships among the MoH-GoSS, the SMoHs, and the CHDs The MoFEP-GoSS should reform its current system of separating the budget processes of the SMoHs and the MoH-GoSS and ensure that the two institutions collaborate effectively during the budget preparation process. Currently, there are no strong relations among the MoH-GoSS, the SMoHs, and the CHDs with respect to budget formulation and execution. The health sector’s budget process is uncoordinated with the MoH-GoSS preparing its own budget without collaborating with the SMoHs. Similarly, the CHDs are not involved in the budget preparation process at state level. This situation does not allow for development of appropriate resource allocation mechanisms for the sector to ensure that funds are effectively distributed to all levels of the health system. Creating the right incentives will help strengthen the relationships between different levels of government within the health system. This will require establishing an agreed upon resource allocation mechanism; consistently sharing useful information regarding budget formulation; dividing responsibilities among the various levels of government; and holding one another accountable for achieving defined performance outcomes–for which there are associated performance indicators that are accurately estimated and published.  Develop and institutionalize a Medium Term Expenditure Framework and a Public Expenditure Review as instruments for improving resource allocation A Medium Term Expenditure Framework (MTEF) will guide and improve resource allocation to the MoH-GoSS, SMoHs, CHDs, and health facilities. A public expenditure review (PER) would link spending to outputs and outcomes. Specifically, it would disaggregate spending on inputs and outputs at all levels of the health system, and clarify the extent to which spending has affected desired outcomes. The study depicted that, currently, the GoSS allocations to the states are equal regardless of the population size or the need at the state and county level health institutions. This creates inequities and inefficiencies in the system. The GoSS medium- and long- term goal, for the health sector, should be to allocate resources equitably to different population sub-groups taking into account factors such as poverty and geography. Population figures from the expected census results will provide the basis for allocating resources to states and counties, taking into consideration the population size. Additionally, the health facility 41 inventory that is currently underway will also provide relevant data and the basis for allocating resources to health facilities. As the situation in health facilities improve, the GoSS can introduce utilization measures to allocate resources to the facilities and efficiency criteria, such as outpatient load index, bed occupancy rate, and average length of stay.  Harmonization of donor activities and funding The study revealed a plethora of donors and NGOs currently engaged in the health sector. However, the activities of these donors are fragmented and uncoordinated. The establishment of a Donor-NGO forum in the MoH has been a significant step in the coordination of donors’ activities in the sector. In close collaboration with the MoFEP-GoSS Aid Coordination Unit, and in line with GoSS aid strategy, the Directorate of External Assistance should develop a mechanism for effectively improving the coordination of all donors and NGOs in the sector. The Directorate of External Assistance should maintain up-to-date records of all donors, international agencies, and NGOs including activities and budget. On the financing side, the study showed huge donor inflows to the health sector, but most of these funds, apart from the MDTF, are off-budget and difficult to estimate. In conjunction with the Directorate of Administration and Finance, the Directorate of External Assistance should put in place a mechanism that will allow all donors to report their actual, committed, and projected spending on health on a regular basis and in a timely manner. This will enable the MoH to determine the entire sector financing and analyze funding gaps. Most importantly, it will facilitate and provide inputs to resource mobilization and annual planning and budgeting processes. Effectively implement the GoSS’s free health care policy The current poor implementation the GoSS’s free health care policy has, resulted in health facilities charging arbitrary fees to make up for operational expenditure shortfalls. The majority of Southern Sudanese are not aware of the policy and an information, education, and communication (IEC) campaign is required in order to create awareness. The GoSS will have to increase budget allocation to primary health care services in order to meet the demand for primary health care created by the IEC. Alternatively, in the long-term, in order to ensure that the poor are protected from catastrophic illness, strengthen prevention, increase access to medicines for treatable diseases, and generate more resources for health, the GoSS will have to consider risk-pooling mechanisms, including health insurance schemes, with strong community participation to cater to the needs of the poor. 42 REFERENCES Abuja Declaration on HIV/AIDS, Tuberculosis, other related infectious diseases, Abuja Nigeria 24-27 April, 2001 OAU/SPS/ABUJA/3 Commission on Macroeconomics and Health: Investing in Health for Economic Development, Report of the Commission on Macroeconomics and Health, 2001 Di McIntyre et. Al (2008), Key issues in equitable health care financing in East and Southern Africa, Regional Network for Equity in Health in east and southern Africa (EQUINET) in co-operation with Health Economics Unit, University of Cape Town, EQUINET DISCUSSION PAPER 66, July (With support from IDRC Canada and Training and Research Support Centre) EQUINET (2007), Reclaiming the Resources for Health: A Regional Analysis of Equity in Health in East and Southern Africa, Regional Network for Equity in Health in East and Southern Africa, Regional Network (EQUINET), Training and Support Center (TARC) in Zimbabwe, Kampala: Weaver Press Gottret P. and Sheiber G, 2006, Health financing revisited: A practitioner’s guide, Washington D.C: The World Bank. Government of National Unity, Government of Southern Sudan. 2006. Sudan Household Health Survey. Government of Southern Sudan. Approved Budget 2008. Approved by the Southern Sudan Legislative Assembly, December 2007 Government of Southern Sudan. Approved Budget 2009. Approved by the Southern Sudan Legislative Assembly, December 2008 Government of Southern Sudan, 2009 Budget Speech, presented by the Minister of Finance & Economic Planning to the Southern Sudan Legislative Assembly, December 10th, 2008. Government of Southern Sudan, Health Sector, Draft Budget Sector Plan 2008-2010, Submitted to MoFEP, August 2007 Government of Southern Sudan, Health Sector, Draft Budget Sector Plan 2009-2011, Submitted to MoFEP, August 2008 Government of Southern Sudan, Ministry of Health. 2007. Health Policy for the Government of Southern Sudan, 2006-2011. Revised Version, 2007 Government of Southern Sudan, Ministry of Health. 2007. Report of the First Government of Southern Sudan Health Assembly, “Towards a Decentralized Health Care System in Southern Sudan�, 18 - 21 June 2007, Juba. Government of Southern Sudan/State Ministry of Health (GoSS/SMoH), MDTF-S Southern Sudan Umbrella Program for Health Systems Development: SMoH Accounting and Reporting Procedures for Health Facility Rehabilitation Funds, December, 2007. 43 Hagopian A., Thompson M.J., Meredith F., Karin E.J., Hart G.L., 2004, The migration of physicians from sub Saharan Africa to the United States of America: measures of the African brain drain, Human Resources for Health 2004, 2:17 Heller P., Back to Basics -- Fiscal Space: What It Is and How to Get It. Finance and Development, Quarterly Magazine of the IMF, June 2005, Volume 42, Number 2 Joint Assessment Mission. 2005. Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries, Fiscal policy for Growth and development, An Interim Report, April 6, 2006 McRoberts, Hugh A., & Bruce C. Sloan, 1998. Financial Management Capability Model, International Journal of Government Auditing World Bank, 1993, World Development Report: Investing in Health, Washington D.C. World Bank World Bank, 2007. Report to the Southern Sudan Multi Donor Trust Fund (MDTF-S) Administrator, 2nd Quarter Report (April 1-June 30, 2007). World Bank, 2007, Sudan Public Expenditure Review, Synthesis Report, Report No. 41840-SD, Poverty Reduction and Economic Management Unit, Africa Region, December. World Bank, 2008. World Development Indicators, Washington D.C. World Bank World Health Organization, 2000, World Health Report: Health Systems, improving performance, Geneva, WHO 44 ANNEXES Annex 1. Organogram of Ministry of Health, Government of Southern Sudan, and State Ministries of Health Figure 9. Organogram, MoH-GoSS Minister of Health, GoSS Under Secretary Director Director Director Director Director Director Director Director Director Director Director Executive General General General General General General General General General General General Director Admin External Research, Preventive Pharma. Curative Human Primary HIV/ Nutrition Nursing Medical and Assist Planning & Medicine Services Medicine Resource Health AIDS and Commissio Finance and Health Sits & and Debt Care Midwifery n Cord Debt Supplies Source: Health Policy of the Government of Southern Sudan, 2007-2011. 45 Figure 10. Organogram, SMoH State Minister of Health Director General Director Director Director Director Director Director Director Director Director Admin Planning Preventive Pharma- Curative Human Primary HIV/ Medical and and Medicine cortical Medicine Resource Health AIDS Commission Finance M&E Services Debt Care Source: Health Policy of the Government of Southern Sudan, 2007-2011. 46 Annex 2. Key Informant Interviews Representatives of MoH-GoSS, SMoH, CHD, MoFEP-GoSS, and SMoFEP  MoH-GoSS: Undersecretary Health  MoH-GoSS: Director General of Research Planning and Health System Development  MoH-GoSS: Director General of External Assistance & Coordination  MoH-GoSS: Director General of Finance and Administration  MoH-GoSS: Procurement Advisor  MoFEP: Adviser, Economic Planning, Ministry of Finance, and Economic Planning, GoSS  Central Equatoria State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning, Yei River CHD  Eastern Equatoria State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning, Magui CHD, Torit CHD  Jonglei State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning, Duk CHD, Twic East CHD  Lakes State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning  Northern Bahr el Ghazal State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning, Aweil East CHD  Unity State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning  Upper Nile State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning  Warrap State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning, Tonj East CHD, Tonj South CHD, Twic CHD  Western Bahr el Ghazal State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning  Western Equatoria State: Director of Finance and Administration and Planning, State Ministry of Health, and State Ministry of Finance and Economic Planning, Anzara CHD, Ezo CHD, Ibba CHD, Tambura CHD, Yambio CHD Interviews of Representatives of NGOs and UN Agencies  AMREF  ARC  Global Fund  MSF/Belgium  MEDAIR  National Health Insurance Fund  Sudan Health Transformation Project  Tearfund DMT  UNAIDS  UNICEF  USAID  WHO  Zoa/ICC 47 Key Informant Interviews of Health Facility Administrators A total of 28 interviews were conducted in health facilities:  9 in Central Equitoria State (Juba Teaching Hospital, Juba Military Hospital, Morobo County Hospital, El Sabbah Children Hospital, Yei Civil Hospital, Terekeke PHCC, Kator HC, St Luke International Medical Centre, and Kejokeji Hospital)  1 in Eastern Equatoria State: Torit Civil Hospital  1 in Jonglei State: (Bor State Hospital)  1 in Lakes State: (Rumbek Hospital)  2 in Northern Bahr el Ghazal State: (Aweil Civil Hospital, Akuem Civil Hospital)  1 in Unity State: (Bentui Hospital)  6 in Upper Nile State (Malakal Teaching Hospital, Kodok Hospital, Maluth Hospital, NASIR County Hospital, Tonga PHCC, and Malakal PHCC).  4 in Western Bahr el Ghazal State (Wau Teaching Hospital, Lui Hospital, Mapel PHCC, and Jur River County)  3 in Western Equatoria State: (Tambura Civil Hospital, Bengasu PHCC, Yubu PHCC) 48 Annex 3. Exit Interview Findings Table 14. List of health facilities Name of facility County State Amal Clinic Baliet PHCC Bailiet County Upper Nile State El Sabah Children Hospital Juba County Central Equatoria El-Salam Clinic Gistabwo Clinic Juba Military Hospital Juba County Central Equatoria Juba Police Hospital Juba County Central Equatoria Juba Teaching Hospital Juba County Central Equatoria Kajokeji Civil Hospital Kajokeji County Central Equatoria Kator PHCC Juba County Central Equatoria Kodok Hospital Fashonda County Upper Nile State Lainya PHCC Lainya County Central Equatoria Lokoloko Health Centre Wau Town County. Western Bahr El Ghazal Malakal Teaching Hospital Malakal County Upper Nile State Malakia PHCC Malakal County Upper Nile State Maluth Civil Hospital Maluth County Upper Nile State Morobo PHCC Morobo County Central Equatoria Mroro Clinic Nasir Civil Hospital Zuakpiny County Upper Nile State Renk Civil Hospital Renk. County Upper Nile State Sikka Hadid Terekeka PHCC Terekeka County Central Equatoria Tonga PHCC Panyikany County Upper Nile State Wau Military Hospital Wau Town County. Western Bahr El Ghazal Wau PHCC Panykang County Western Bahr El Ghazal Wau Teaching Hospital Wau Town County. Western Bahr El Ghazal Yei Civil Hospital Yei County Central Equatoria Background Characteristics A total of 229 health facility users completed exit interviews during June and July 2008 in three states: Central Equatoria (44%), Upper Nile (35%), and Western Bahr el Ghazal (21%). Table 14 presents selected background characteristics of the respondents. Of the 229 users, 18% were aged below 20 years, while a similar proportion did not know their age. Moreover, 41% had no formal education. Respondents were predominantly Christians (88%) and over three-fifths were married. A third of respondents were not employed in addition to 13% who were involved in farming, mainly subsistence. Of the 229 users, the ratio of outpatients to inpatients was 2.5:1. 49 Table 15. Background Characteristics of 229 Respondents, Exit Interviews 2008, Southern Sudan Characteristics Number Percent State Central Equatoria 100 43.7 Upper Nile 80 34.9 Western Bahr el Ghazal 49 21.4 Age (years) <20 42 18.3 20-29 64 28.0 30-39 42 18.3 40-49 20 8.7 50-59 10 4.4 60+ 10 4.4 Don’t know 41 17.9 Sex Male 123 53.7 Female 106 46.3 Education None 95 41.5 Primary 72 31.4 Secondary 46 20.1 Tertiary 16 7.0 Religion Traditional 7 3.1 Christian 201 87.8 Muslim 16 7.0 No religion 5 2.2 Marital status Never married 53 23.1 Married 144 62.9 Living together 10 4.4 Separated/divorced/widowed 22 9.6 Residence Rural 80 34.9 Urban 149 65.1 Occupation No work 74 32.3 Farming 30 13.1 Trading 28 12.2 Craftsmanship 4 1.7 Office work 40 17.5 Student 19 8.3 Other 34 14.8 Type of service Outpatient 163 71.2 50 Characteristics Number Percent Inpatient 66 28.8 Recipient of care Respondent 176 76.9 Child 53 23.1 Availability and Quality of Health Services The highest qualifications of the health care providers who attended to the selected 229 users were as follows: Doctor (47.2%), Clinical Officer (38.0%), Nurse (11.8%), Midwife (2.6%), and Traditional Healer (0.4%). Given that the MoH-GoSS is not certain of the qualifications of health personnel working at the various health facilities, these figures might not be accurate. Of the 229 respondents, 74.2% reported that the health care provider informed them of the diagnosis. Three fifths indicated the illness was adequately treated. To gauge their level of satisfaction with the treatment at the health facility, they were asked what they would do if they did not completely recover or the illness got worse. Nearly three- fifths (59.0%) indicated they would return to the same health facility (59.0%) while the rest gave the following responses: go to other government health facility (15.7%), go to other private health facility (10.9%), wait (4.4%), go to a traditional healer (3.1%), and other (6.9%). This shows that users are more likely to utilize these or similar facilities in future. Respondents were of the view that the major problem with health services in their communities are: lack of health facilities (35.8%), lack of qualified health personnel (16.6%), inability to pay for health services (16.2%), lack of medicine and supplies (11.8%), poorly equipped facilities (5.2%), health facility too far (5.2%), attitude of health personnel (1.7%), and others (7.4%). Distance to the health facilities influence their utilization. When respondents were asked whether the health facility was close to or far from their homes, 37.6% said it was close and remaining indicated it was somewhat or very far. Further, majority (57.2%) came to the health facility on foot while the rest came by the following means of transport: public transport (13.5%), motorcycle (8.3%), bicycle/tricycle (7.9%), private car (3.9%), taxi (3.9%), donkey/horse (1.3%), and other (3.9%). Out-of-Pocket Payment for Health Services As shown in Table 15 and Figure 11, 78.2% of respondents reported they paid for one service or the other during the index visit. Nearly seven-tenths paid for registration, consultation, or tip to the health care provider. In 2008, MoH-GoSS purchased drugs and distributed to both Government and NGO run health facilities in Southern Sudan. It is therefore intriguing that 36.7% of respondents reported that they purchased medicines at the health facility. The question is whether the drugs prescribed by the health personnel were out of stock or not among the list of drugs supplied by the MoH-GoSS. Of those who paid for services, 81% of respondents indicated they or their spouse settled the bill while 71% indicated they used available cash to pay for the services. Regarding the availability of any health insurance scheme or any pre-pay plan in their community, 27.1% said yes while 14.8% participate in such a scheme or plan. When asked whether medical care at government health facilities in Southern Sudan were free of charge, only 22.7% were aware of the Government’s free health care policy, 54.6% indicated no while 22.7% did not know. When asked the question, do you think that patients should pay for health services at government clinic/hospitals, only 18.3% indicated yes. Additionally, 24% of respondents were willing to pay for medical care at government health facilities. These findings indicate that although majority of Southern Sudanese are not aware of the free health care policy that is their expectation. 51 Table 16. Out-of-pocket Payments for Health Care Services, 229 Respondents, Exit Interviews 2008, Southern Sudan (SDG) Paid for services Numbera Percent Mean Median paymentb paymentb Registration 111 48.5 5.06 2.00 Consultation 26 11.4 20.80 10.00 Tip to health personnel 19 8.3 16.11 9.00 Laboratory test 89 38.9 12.79 6.00 Medicines and supplies at health facility 84 36.7 31.31 15.50 Medicines and supplies outside health 72 31.4 48.18 20.00 facility Transport 62 27.1 22.34 10.00 Food or lodging 64 27.9 56.34 12.50 Any of the above 179 78.2 81.11 21.00 a Some did not pay for services b Sudanese Pounds (SDG where 2SDG=1US$) Figure 11. Total Out-of-pocket Payments for Health Care Services, 179 Respondents, Exit Interviews 2008, Southern Sudan (SDG) 1,000 800 600 Total Payment 400 200 0 179 of the 229 respondents who paid for services. th th Mean is SDG81.11; 25 percentile, SDG6.00; median, SDG21.00; 75 percentile, SDG78.00 52 Annex 4. Findings of the Focus Group Discussions Reasons some individuals go to the hospital or clinic when they are sick Juba County, Central Equatoria State – for prompt treatment but go to traditional healer if treatment at health facility fails. Kajokeji County, Central Equatoria State – hospital first but if illness persists traditional healer is consulted. Lainya County, Central Equatoria State – health center first but if illness persists traditional healer is consulted. Malakal County, Upper Nile State – most prefer to see the doctor since the doctor can make appropriate diagnosis and treat but some prefer to consult a traditional healer first. Morobo County, Central Equatoria State – hospital first but if the person does not recover, he/she is sent to a traditional healer or to neighboring Congo. Yei County, Central Equatoria State – majority prefer to go to the hospital when sick while a few prefer traditional healer. Reasons some individuals do not go to the hospital or clinic when they are sick Juba County, Central Equatoria State – high cost of services; lack of drugs; absenteeism of health personnel; tribalistic attitude of some health personnel. Kajokeji County, Central Equatoria State – long distance; lack of transport; during rainy season roads are impassable; lack of drugs; irregular health personnel salaries; inability to afford services; late opening of health centers; fear of being tested for HIV/AIDS; lack of specialists such as surgeons; long queues. Lainya County, Central Equatoria State – lack of transport; long distance to health facilities; lack of drugs; irregular health personnel salaries resulting in absenteeism; inability to afford services; poor infrastructure. Malakal County, Upper Nile State – no confidence in treatment provided at health facilities; high cost of services; fear of injections; long distance to health facilities; lack of transport during rainy season roads are impassable; some community members already know signs and symptoms of certain illnesses and would rather go directly to the chemist to purchase drugs; attitude of personnel; expensive drugs; long queues. Morobo County, Central Equatoria State – lack of drugs; lack of equipments; irregular health personnel salaries; inability to afford services; long distance; lack of public transport; long queues; attitude of health personnel. Wau Town County, Western Bahr el Ghazal State – witch doctor preferred because some believe that if someone dies at the hospital the person will reincarnate; cheaper services; lack of drugs; attitude of health personnel; inability to afford services. Yei County, Central Equatoria State – attitude of health personnel; inability to afford services; long queues; tribalistic attitude of some health personnel; the free drugs provided by the government are sold by health personnel. Awareness of and views on the government’s free care policy Juba County, Central Equatoria State – Yes, they were aware of the policy but indicated that the services are not free since they even pay for the free drugs that government provides to health facilities. Kajokeji County, Central Equatoria State – Yes, they were aware of the policy but contend that the government is not able to implement it. Lainya County, Central Equatoria State – community members should not pay for services since the government provides free drugs to health facilities. However, in reality, patients pay for services and the health facilities use the small amounts collected to purchase soap and disinfectants. 53 Wau Town County, Western Bahr el Ghazal State – Yes, they were aware of the policy but it is poorly implemented. People exempted from paying for services Kajokeji County, Central Equatoria State – patients with leprosy. Yei County, Central Equatoria State – elderly, orphans, and widows should be given preferential treatment How services in the community can be improved Juba County, Central Equatoria State – put up more health facilities in remote areas; ensure availability of drugs; train traditional healers; proper supervision of health personnel. Kajokeji County, Central Equatoria State – recruit more specialists; upgrade health facilities; increase salaries; put up more health facilities; improve road network; ensure availability of drugs. Lainya County, Central Equatoria State – build county hospital with all departments/units; ensure availability of drugs; pay health personnel salaries and provide incentives to community health workers; improve road network. Malakal County, Upper Nile State – build more hospitals and equip them; ensure availability of free drugs; recruit more doctors; improve road network and transport; increase salaries of health personnel. Morobo County, Central Equatoria State – build hospital and health centers; recruit more health personnel; proper supervision of health personnel; check quality of drugs; improve sewage disposal; Wau Town County, Western Bahr el Ghazal State – proper waste disposal; provision of potable water; implement government policies; equip health facilities; train more health personnel. Yei County, Central Equatoria State – provide free services; improve roads; build more primary health care centers; ensure availability of drugs; collect taxes to improve health services; train more nurses and medical assistants; adequate water supply and proper waste disposal; increase number of schools. 54 Annex 5. UPHSD Costs by Component for Phase I (US$million) Item 2006 Actual Projection Component 1: Development of core health systems Subcomponent 1.1 Development of policy and capacity of the public health administration LATH: Capacity building of MoH-GoSS and states MoH on planning, budgeting, 5,209,817 and human resource development UNDP/IAPSO: Procurement of motor vehicles (49 in 2007, 50 in 2008) 1,922,781 Sub-total 4,500,000 7,132,598 Subcomponent 1.2: Investment in infrastructure and equipment Conduct architectural study and develop plans for construction of 1,500,000 warehouses, states and county hospitals, primary health care centers, and units Rehabilitation of states health facilities ($1 million per state) 2,065,508 Sub-total 8,900,000 3,565,508 Subcomponent 1.3: Pharmaceutical system capacity and supply Procurement of pharmaceuticals and medical consumables Mission Pharma 12,727,302 IDA 3,883,727 Jos Hansen 1,362,235 Surgipharm 652,437 EURO Health: Pharmaceutical Practices and Supply Management (capacity 2,249,190 building) Sub-total 5,700,000 20,874,891 Subcomponent 1.4: Health human resource development AMREF: Training program development 4,192,723 Sub-total 4,200,000 4,192,723 Component 2: Expansion of delivery of basic health services Subcomponent 2.1: Expansion of health service delivery Basic health services in the states to lead agencies Interchurch Medical Assistance Inc/USA: Jonglei Lead Agency contract 4,185,059 Interchurch Medical Assistance Inc/USA: Upper Nile 3,337,058 Norwegian Peoples Aid: Central Equatoria 5,454,645 Sub-total 24,800,000 12,976,762 Subcomponent 2.2: High-impact health interventions PSI: Social marketing (LLIN, waterguard, ACTs, ORS, zinc) 10,326,231 Sub-total 8,400,000 10,326,231 Component 3: Effective implementation of the program 55 Item 2006 Actual Projection Subcomponent 3.1: Program implementation Operating costs 173,146 Consultants including services, training & workshops 677,190 Goods for project implementation 30,956 Sub-total 1,100,000 881,292 Subcomponent 3.2: Monitoring and evaluation Church Ecumenical Action in Sudan (CEAS): Consultancy on inventory of 49,995 PHCU/PHCC status Sub-total 2,500,000 49,995 Total 60,000,000 56 Annex 6. UPHSD Costs by Component for Phase II (US$million) 2009 2010 2011 Total US$ % of Total Component 1: Development of core health systems Subcomponent 1.1 Development of policy and capacity of the public health administration Executive Assistant (3 years) 50,000 50,000 0 100,000 Transport Officer to Manage MoH Fleet 24,000 24,000 0 48,000 Monitoring and Evaluation/Research specialist (2 years) 144,000 144,000 0 288,000 Procurement specialist (2 years) 72,000 72,000 0 144,000 Vehicles for States Ministries of Health and County Health Departments 2,500,000 0 0 2,500,000 Sub-total 2,790,000 290,000 0 3,080,000 1.9 a Subcomponent 1.2: Investment in infrastructure and equipment Construction of 7 state warehouses 7,480,000 0 0 7,480,000 Provision of IT hardware (computers, photocopies, etc.), internet 2,900,000 0 0 2,000,000 connectivity, and telephone for central and states MoH and train staff Medical equipments 2,832,458 0 0 2,832,458 State emergency health facility rehabilitation 7,934,492 0 0 7,934,492 Sub-total 21,146,950 0 0 21,146,950 12.8 Subcomponent 1.3: Pharmaceutical system capacity and supply Procurement and distribution of essential medicines and other medical 6,656,489 10,000,000 0 16,656,489 items to public health facilities Sub-total 6,656,489 10,000,000 0 16,656,489 10.1 Subcomponent 1.4: Health human resource development Training program development 2,000,000 2,000,000 2,000,000 6,000,000 Sub-total 2,000,000 2,000,000 2,000,000 6,000,000 3.6 Component 2: Basic Package of health services Subcomponent 2.1: Expansion of health service delivery Basic Health services in the states to lead agencies Norwegian Peoples Aid: Central Equatoria 0 5,000,000 5,000,000 10,000,000 HLSP: Eastern Equatoria 3,343,511 4,000,000 4,000,000 11,343,511 Interchurch Medical Assistance Inc/USA: Jonglei Lead Agency contract 0 4,000,000 4,000,000 8,000,000 57 2009 2010 2011 Total US$ % of Total Lakes: Lead Agency contract 4,000,000 4,000,000 4,000,000 12,000,000 Northern Bahr el Ghazal Lead Agency contract 4,000,000 4,000,000 4,000,000 12,000,000 Unity Lead Agency contract 4,000,000 4,000,000 4,000,000 12,000,000 Interchurch Medical Assistance Inc/USA: Upper Nile 0 4,000,000 4,000,000 8,000,000 Warrap Lead Agency contract 4,000,000 4,000,000 4,000,000 12,000,000 Western Bahr el Ghazal Lead Agency contract 4,000,000 4,000,000 4,000,000 12,000,000 Western Equatoria Lead Agency contract 4,000,000 4,000,000 4,000,000 12,000,000 Refinement of PHC basic package for nutrition 148,300 0 0 148,300 Training for core nutrition activities 355,750 0 0 355,750 Refinement of PHC basic package for mental health and traditional 145,000 0 0 145,000 services Sub-total 27,992,561 41,000,000 41,000,000 109,992,561 66.7 Subcomponent 2.2: High-impact health interventions Malaria Indicator Survey & Complete Mapping of Neglected Tropical 1,000,000 0 0 1,000,000 Diseases Sub-total 1,000,000 0 0 1,000,000 0.6 Component 3: Effective implementation of the program Subcomponent 3.1: Program implementation Government of Southern Sudan Health Assembly 350,000 350,000 300,000 1,000,000 Sub-total 350,000 350,000 300,000 1,000,000 0.6 Subcomponent 3.2: Monitoring and evaluation External evaluation agency 1,000,000 1,000,000 1,000,000 3,000,000 Comprehensive Health Facility Mapping (service, infrastructure, and 712,000 0 0 712,000 human resources) Printing of M&E tool 842,000 70,000 0 912,000 Roll out of the M&E framework 500,000 500,000 500,000 1,500,000 Sub-total 3,054,000 1,570,000 1,500,000 6,124,000 3.7 Total 64,990,000 55,210,000 44,800,000 165,000,000 100.0 a The cost of infrastructure development will be known after the proposed comprehensive architectural study of health facilities in all ten states 58 Annex 7. Improvements in the MoH-GoSS’s Budget Execution Performance To improve budget execution, the MoH-GoSS undertook a capacity-building exercise during the second half of 2007 under the UPHSD. The accounts staff were provided on-the-job-training and a computer- based accounting system was introduced. To further strengthen budget execution performance; the MoH-GoSS established a month-to-month expenditure tracking system in early 2008 to instill fiscal discipline into the expenditure management system. In April 2007, a procurement unit was established within the Directorate of Administration and Finance to reinforce the budget execution system. Subsequently, a Director of Procurement was appointed to strengthen the management of all procurement activities. At the macro level, the MoFEP-GoSS implemented a number of measures which have helped improve the public financial management system and hence the overall GoSS budget execution performance in 2008. The MoFEP-GoSS, for the first time, started to enter and keep track of all payment requests into their own financial management system, a function which was hitherto performed by a Government Accounting Agent. Consequently, no requests were lost and the MoFEP-GoSS was able to produce, on time, monthly financial reports for all Ministries and other governmental agencies. The MoFEP-GoSS also formed a Cash Management Committee. The committee’s main function was to have regular meetings every morning to discuss, compare, and prioritize all RFPs with available funds to make sure funds are all the time available for non-discretionary expenditures such as salaries and transfers to states. The MoFEP-GoSS has also controlled the common practice of ministries charging expenditure to the wrong codes. All expenditures that were inaccurately charged were rejected for corrections. Additionally, the MoFEP-GoSS tracked all expenditures and monitored consistently all ministries’ budgets. As result of this measure, the MoFEP-GoSS was able to prepare a supplemental budget of SDG4.1 billion (US$1.9billion), in 2008, to cover all extra expenditures for the Parliament’s approval. Information contained in the 2009 budget speech report indicate that the MoFEP-GoSS will continue to improve the budget execution performance by making sure ministries spend funds on activities they planned for in their respective Budget Sector Plans. The MoFEP-GoSS will instruct ministries to quote activity number, as stipulated in the budget book. This will allow the MoFEP-GoSS to track expenditures against approved activities and budget line items and line ministries to adhere to the planning and budgeting process. To improve further the budget execution performance, the MoFEP-GoSS intends to work closely with the Ministry of Legal Affairs (MoLA) to make sure all contracts are verified against ministries’ budgets before they are signed. The MoFEP-GoSS will also develop a standard form that to be completed by both the MoFEP-GoSS and MoLA, before contracts can be processed. It is expected that these measures will enhance contract management and hence budget execution. 59 Annex 8. Financial Management Capabilities of the MoH-GoSS Effectiveness of Collating Financial Information and Existence of Accounting and Financial Tools The Directorate of Administration and Finance of the MoH-GoSS has been bedeviled with lack of a proper system of keeping financial records. Information on expenditures was kept manually and no proper filing system was established. Substantial numbers of the staff in the account department have accounting and financial background, but had little or no experience in budget execution. The accounting staff have recently had training in expenditure management; financial records filing and reporting have improved with the introduction of computer-based accounting system. At present, financial information and expenditure reports are prepared on a spreadsheet. Effectiveness of Financial Controls and Analysis Weak internal controls and lack of proper documentation of financial records characterized the Directorate of Administration and Finance until late 2007 when capacity building activities were undertaken by MoH-GoSS. In the event that funds were unavailable, payment vouchers accumulated. Disregard for maintaining proper financial records resulted in the loss of vouchers, which caused considerable delays in payment. Internal controls have since improved significantly and accounts are verified and entered in the treasury chest book (Finance Form a/c 19)8 on day-to-day basis by the Ministry’s Controller of Accounts. Level of Competencies of Accounts Personnel An assessment of the background and competencies of accounts personnel showed that the majority of accounts personnel have various degrees, qualifications, and experience levels in accounting. Nevertheless, their level of computer literacy was very low prior to 2007. As noted earlier, the accounting personnel have been receiving on-the-job-training. This has improved competencies of the accounts staff and facilitated the execution of day-to-day transactions. Effectiveness of Financial Analysis and Reporting As noted earlier, there is room for improvement and consistent training is required to bring the skills of or personnel in the Directorate of Administration and Finance up to acceptable standards. 8 The purpose of this form is to reconcile payment and bank accounts. At the end of the month, its figures are compared with those of the bank to identify if there are any discrepancies. It operates like the Cashbook. 60 Annex 9. Financial Management Capabilities of the SMoHs and CHDs Tables 21 and 22 present a summary of the financial management capabilities of the SMoHs and CHDs covered in this study. Effectiveness of Collating Financial Information and Existence of Accounting and Financial Tools at the SMoHs and CHDs Overall, the documentation of expenditure information is extremely poor across states and counties covered in this assessment. In most SMoHs and CHDs, no records are kept for funds received and expended from either the government or donors. This situation rendered tracking of health expenditures difficult. In order to keep proper financial records and information that will be useful for decision-making, certain accounting tools and materials must be in place. In the majority of SMoHs and CHDs there are no modern accounting tools such as computers and calculators for carrying out day-to- day transactions. Effectiveness of Financial Controls and Analysis in SMoHs and CHDs This study revealed serious lapses with financial controls nonexistent in the administration and finance departments of the SMoHs and CHDs. Level of Competencies of Accounts Personnel SMoHs and CHDs Of particular concern is the background of the personnel working in the administration and finance departments of the health institutions. In many SMoHs and CHDs, persons in charge of budget execution have little to no accounting and financial background. Besides this, they rarely obtain training to upgrade their skills in managing budgets and analyzing financial information. There is a need to train and build the capacity of these staff to perform proper and appropriate financial management. Tables 16 and 17 provide the background of budget managers in administration and finance departments of the SMoHs and CHDs respectively. Effectiveness of Financial Analysis and Reporting The SMoHs’ and the CHDs’ capacity to analyze, document, and report financial information is weak. The lack of requisite tools for performing financial transactions has resulted in poor to no financial records keeping in most SMoHs and CHDs. Even those who keep some form of financial information do so manually and records are generally not up-to-date. Table 17. Financial Management Capacity of the SMoHs State Person in Charge of Background of Financial Financial Financial Budgeting Budgeting Officer Records Controls Reporting Keeping (internal & external) Central Director of n/a n/a. Irregular n/a Equatoria Planning audits and reviews done by SMoFEP Eastern Director of Finance Holds secondary No financial Under No financial Equatoria and Administration level education records are takes no reporting kept regular controls 61 State Person in Charge of Background of Financial Financial Financial Budgeting Budgeting Officer Records Controls Reporting Keeping (internal & external) Jonglei Director of Finance n/a Keeps no Internal Prepares and Administration financial audits done monthly records monthly reports to and SMoF external audit annually. Lakes Deputy Director of Holds certificate in Does not Does not n/a Environment and public health. Has maintain any maintain Public Health received only 3 financial any months training in records accounting budgeting in 2001 records. Northern Bahr Director of Finance n/a Does not n/a n/a el Ghazal and Administration maintain any financial records Warrap Director of Finance Clinical officer & Financial Maintains Admin and and Administration Health records are and keeps finance Administration. Has kept on financial reports received no computers records prepared training in with back-up on monthly budgeting and hard copies. basis and planning submitted to SMOF only. Western Bahr Director of Finance Director of Finance No financial No financial Undertakes El Ghazal and Administration and records are controls no financial Administration. kept. Other reporting Holds a PHD in records are Economics. Has kept manually received training in planning and budgeting at MoFEP-GoSS. Western n/a n/a Financial No financial Undertake Equatoria records are controls no financial kept exist report manually. Unity n/a n/a n/a n/a n/a Upper Nile n/a n/a n/a n/a n/a 62 Table 18. Financial Management Capacity of CHDs County State Accounts Background of Financial Financial Financial Personnel Accounts Records Controls Reporting Personnel Keeping (internal & external) Ezo Western 1 Bookkeeper Secondary None None None Equatoria education, no training in budget management. Yambio Western 1 Accounts clerk Secondary None None None Equatoria education Tambura Western 1 Bookkeeper secondary None None None Equatoria education, no training in budget management. Anzara Western No accounts staff N/A None None None Equatoria Ibba Western 1 Bookkeeper Certificate None None None Equatoria holder, no training in budget management. Twic Warrap No accounts staff N/A None None None Tonj South Warrap No accounts staff N/A None None None Tonj East Warrap No accounts staff N/A None None None Torit Eastern No accounts staff N/A None None None Equatoria Magui Eastern No accounts staff N/A None None None Equatoria Aweil East Northern No accounts staff N/A None None None Bahr El Ghazal Twic East Jonglei No accounts staff Certificate None None None holder, no training in budget management. Duk Jonglei No accounts staff N/A None None None Yei River Central No accounts staff N/A None None None Equatoria Source: CHDs 63 Annex 10. Sources of Funds and Financial Management Capacities at the Health Facilities Table 19. Available Equipment at the Three Tertiary Hospitals Juba Wau Malakal Number Number Number Equipment/infrastructure Telephone 1 - - Internet port 1 - - Computer 4 - 1 Photocopier 3 - 1 Printer 3 - - Vehicle 3 3 3 Ambulance 3 1 2 Warehouse 1 1 1 Laboratory 1 1 2 Blood bank 1 1 1 Table 20. Staffing at the Three Tertiary Hospitals Juba Wau Malakal Category of Employees Number Number Number Doctors - 10 15 Certificate nurses - 200 497 Pharmacist - 7 1 Technician - 1 7 Admin/finance - 6 17 Medical officer - 6 - Specialist - 5 - Nurse trainee - 100 - Midwife - - - Table 21. User Charges for Services at the Three Tertiary Hospitals (in SDG) a Juba Wau Malakal Services Registration/access fee 2,00 2.00 - Outpatient consultation 3,00 5.00 1 Laboratory fee 2.00 2.00 2 X-ray 3-10 - 2 Maternity/delivery 15.00 15.00 15.00- In patient bed (for the entire duration 3 of stay) 100.00 5.00 Surgery- minor 50.00 50.00 - Surgery- major 100.00 100.00 - a Sudanese Pounds (SDG where 2SDG=1US$) 64 Table 22. Weekly, Monthly, and Yearly Revenue from User Fees at Juba, Wau and Malakal Teaching Hospitals (SDG) a Juba Wau Malakal Weekly - 2,375 - Monthly - 9,500 - Yearly - 11,400 240,000 a Sudanese Pounds (SDG where 2SDG=1US$) Table 23. Weekly, Monthly, and Yearly Operational Expenditure at Juba, Wau and Malakal Teaching Hospitals (SDG) a Juba Wau Malakal Weekly - 10,000 1,100 Monthly - 40,000 4,400 Yearly - 480,000 528,000 a Sudanese Pounds (SDG where 2SDG=1US$) 65 Table 24. Staffing at State and County Hospitals Lui Tumbura Torit Civil Kejokeji St Luke Bor State Aweil Civil Akuem Civil Rumbek Civil Civil Category of employees Doctors 1 1 7 1 1 7 9 - 4 Certificate nurses - 30 - 83 2 - - 6 100 Pharmacist - 3 2 4 - 1 8 Technician - 3 2 9 1 9 - - 15 Admin/finance - 6 2 3 1 - - - 3 Medical assistant - 2 - 26 - - Medical officer - - - - - Specialist - - - - Operating room 1 - - - attendant Nurse trainee - - - - Support staff 36 - 31 - (cleaners, cooks, security etc) TAB 3 - Table 25. Available Equipment at State and County Hospitals Lui Tumbura Torit Civil Kejokeji St Luke Bor State Aweil Akuem Rumbek Civil Civil Civil Equipment/infrastructure Telephone - 1 2 - - - Internet port 0 1 - - - Fax machine - - - - - Computer - 7 1 1 1 Photocopier - 1 - - - Printer 0 3 - 1 - Vehicle 1 2 1 - - Ambulance 2 1 2 3 1 Warehouse 1 3 - - 1 Laboratory 1 1 1 - 1 - Blood bank 1 - - 1 - 66 Table 26. User Charges for Services at State and County Hospitals (in SDG) a Lui Tumbura Torit Civil Kejokeji St Luke Bor State Aweil Civil Akuem Civil Civil Services Registration/access 2.00 1.00 n/a fee 1.00 Outpatient 2.00 n/a n/a 50 consultation 3.00 Laboratory fee 3.00 2.00 1.00 n/a 10 X-ray 15.00 2.00 n/a Maternity/delivery 0.00 free 10 n/a 20.00 n/a n/a 160 In patient bed day 1.00 (Entire stay) Surgery- minor 3.00 n/a Surgery- major n/a n/a a Sudanese Pounds (SDG where 2SDG=1US$) Table 27. Estimated Weekly, Monthly, and Yearly Revenue from User Fees at State and County Hospitals (in SDG) a Lui Tumbura Torit Civil Kejokeji Civil St Luke clinic Bor State Aweil Civil Akuem Civil Weekly 750 2,000 218 2,400 - 6,000 Monthly 3,000 800 872 9,600 – 24,000 Yearly 36,000 9, 600 10,464 115,200 – 288,000 a Sudanese Pounds (SDG where 2SDG=1US$) Table 28. Estimated Weekly, Monthly, and Yearly Expenditures at State and County Hospitals (in SDG) a Lui Tumbura Torit Civil Kejokeji Civil St Luke clinic Bor State Aweil Civil Akuem Civil Weekly 217 Monthly 868 Yearly 10,416 a Sudanese Pounds (SDG where 2SDG=1US$) 67 The overall objectives of the study were to provide analytical support to the MoH- GoSS in health care financing and to gain a better understanding of ways to increase overall resources for the health sector, within the constraints imposed by the limited resource envelope allocated to the health sector. Specifically, this needs assessment was intended to offer the GoSS and health policy makers of Southern Sudan a strategic overview of issues related to health financing and its impact on development of the health system. In this regard, the study sought to: (i) analyze the scale, composition, and management of health spending; (ii) examine various mechanisms for generating resources for health services delivery; (iii) assess the existing mechanism for allocating and managing health sector resources; (iv) examine relationships of GoSS, state, and local governments in health financing and governance; (v) recommend possible strategies for the health sector to achieve financially and economically sustainable development, which would further lead to improvement of overall health status of the people of Southern Sudan. 2009 © All Rights Reserved. Health Systems for Outcomes Publication THE WORLD BANK