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Title page 1

Contents 6

Acknowledgements 4

Acronyms 5

Executive Summary 8

1. Introduction 10

2. Conducting a FinHealth Assessment 12

2.1. Identification of Health Service Problem(s) 14

2.2. Mapping Organizations, Funding Flows, and PFM Rules Relevant to Selected Health Service Problem(s) 17

2.3. Causal Analysis: Identifying Bottlenecks and Their Root Causes 19

2.4. Formulating Recommendations 26

3. Guidance on Diagnosing PFM Bottleneck and Root Causes 31

3.1. Budget Preparation and Appropriation Bottlenecks 32

3.1.1. Integration of Planning and Budgeting is Inadequate 32

3.1.2. Inadequate Scrutiny of Baseline or New Spending 35

3.1.3. Budget Classification does Not Facilitate Allocation According to Government Priorities 36

3.1.4. Misalignment of Multi-year Budgets with Sectoral Needs 38

3.1.5. Lack of Budget Credibility 40

3.1.6. Rigidities in Budget Appropriations 43

3.1.7. Inadequate Planning and Budgeting for Public Sector Employment and Compensation 47

3.2. Budget Execution Bottlenecks 50

3.2.1. Flow of Funds Difficulties and Delays 50

3.2.2. Inadequate Budget Execution Controls 54

3.2.3. Deficiencies in Procurement Processes 55

3.2.4. Inadequate Inventory Management Practices 57

3.2.5. Weak Asset Management 58

3.2.6. Inadequate Capital Project Contract Management 60

3.2.7. Budget Supplementation is Too Difficult to Obtain 61

3.2.8. Challenges with payroll Implementation 63

3.3. Ex-post Reporting, Audit and Evaluation Bottlenecks 66

3.3.1. Inadequate Ex-post Financial Reporting 66

3.3.2. Absent or Weak Results Monitoring and Evaluation 67

3.4. Cross-Cutting PFM Bottlenecks 68

3.4.1. Multiple PFM Requirements are Associated with Different Funding Sources 68

3.4.2. PFM Mechanisms are Inconsistent with Strategic Purchasing Needs 69

3.4.3. Failure to Adequately Apply Formula-based Funding Models across Levels of Government 70

3.4.4. Dysfunctional Budgetary Transfers to Purchasers 72

References 74

Annex 1. Guidance on Mapping Organizations, Financing Flows and PFM Rules and Processes 77

Mapping Flows and Capturing Rule Environments 77

Mapping Funding Flows 77

Mapping PFM Rule Environment 78

Health System Mapping Definitions 80

Funding Source Definitions 83

Annex 2. Health Service Problems and Associated Bottlenecks Identified by FinHealth 1.0 Country Assessments 84

A2.1. There are demographic and/or regional inequalities in the provision of health services 84

A2.2. Patients remain untreated or experience long waiting times 85

A2.3. Adequate staffing is not available for health facilities and there is low staff productivity 87

A2.4. There is shortage and wastage of medical supplies 91

A2.5. Medical equipment is lacking and not fit for purpose 95

A2.6. Facility infrastructure is poorly maintained 98

Annex 3. Additional Reading regarding PFM Bottlenecks 101

Tables 18

Table 2.1. Health System and Financing Landscaping Exercise 18

Table 2.2. Summary of Health Service Problems and Potential PFM Bottlenecks to Explore 20

Table 2.3. Elements to Consider when Developing Recommendations 30

Table 2.4. Sample Recommendations Table 30

Table 3.1. List of PFM Bottlenecks 32

Figures 12

Figure 2.1. Four Step FinHealth Assessment Process 12

Figure 2.2. Mapping Health Service Problems to PFM Bottlenecks and Root Causes in a Fishbone Diagram 13

Boxes 13

Box 2.1. Visualizing the Analysis of Health Service Problems, Bottlenecks, and Root Causes 13

Box 2.2. Is it a Health Service Problem, PFM Bottleneck, or Health Outcome? 14

Box 2.3. Available analytical frameworks from the literature to help identify service delivery problems 16

Box 2.4/Box 2.5. Illustrative Example: Translating a Bottleneck into a Recommendation 29

Annex Tables 81

Table A1.1. PFM rule environment 81

Annex Figures 79

Figure A1.1. Sample flow of funds to service providers 79

Annex Boxes 80

Box A1.1. Illustrative example for capturing PFM rule environment 80

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