A regular monitoring of performance of 16 districts by Sindh Chief Minister's inspection team for past two years reveals how denial of local fiscal autonomy is impacting adversely on financing of social and economic programmes.

In violation of the Sindh Local Government Ordinance 2001 (SLGO), the financial control of the district funds rests with the provincial government. The allocated money for the districts is not put in Account No.4 as required by SLGO and is released piecemeal depending on the availability of resources with the provinces.

Under the rules, the district governments are supposed to have easy access to their money from Account No. 4 and the unutilized amounts are not subject to lapses. For past two years, the Punjab government places district money in Account Number 4 from which the local development schemes are financed far more efficiently.

Delayed financial releases by the provincial government results in non-utilization of funds within the stipulated fiscal year and the unutilized amount lapses. It is a Herculean task to get the lapsed sum re-validated, district officials complain. One of the many outcomes is that district financial affairs are a shambles.

Efficiency and economy in expenditure is lost because of the bureaucratic hassles. The outcome is slow execution of projects. Completed projects also remain non-functional for want of doctors and medicines in hospitals and books and teachers in schools.

A review of Public Sector Development Programme 2003-2004 upto February 19, 2004 indicates the speed at which funds are made available, depending on sources of financing and consequently the flow of funds.

Official figures show that net releases to the district governments against total budgeted allocation on both capital and current accounts amounted to 69 per cent as against 61 per cent for the provincial annual development programmes.

The net releases for federal funded scheme in the province was a mere 13 per cent. These include both new schemes for which releases are slow and ongoing projects for which disbursements are faster.Both major and minor problems faced by the districts have been repeatedly and adequately highlighted by the Chief Minister's Inspection, Enquiries and Implementation Team (SCMIT) in its regular reports. Apparently, this has had no meaningful impact.

During its visit to Dadu between February 26-28 2004 to monitor development and non-development schemes in different sectors, the SCMIT came across many common complaints made by Nazims of rural districts.

For example, the SCMIT report on Dadu says:" Development and salary funds are still provided in Account No One, with the result that unutilised amount is reverted back to the provincial government. District governments have to virtually beg to get back the unutilized funds. This is causing problems in smooth working of the district governments."

The CMIEIT report has pointed out that there was an immediate need to release all funds to district governments in account Number Four in spirit of devolution plans and SLGO. It has been recommended that all financial releases made to Dadu and other districts and declared lapsed may be revalidated on priority basis so that the suspended work may be re-started.

Financial releases to Dadu district particularly in non-salary account is very poor. Against the budgeted amount of Rs30 million by about the end of February 2004, (nearly eight months of fiscal year) hardly 30 per cent of the amount was released. This is expected to affect the quality of service centres of district governments.

Town Municipal government has complained that it is not being provided funds for execution of on-going schemes of water and sanitation or for bringing into operation abandoned schemes.

More than 50 schemes in the district are incomplete and non-functional on which millions of rupees have been spent. Monitoring officials have proposed that funds for completion of water and sanitary projects should be provided on priority basis. Drinking water, they assert, is the basic right of the people which should be denied.

The SCMIT report has also noted that a very large and beautiful newly constructed building of District Health Development Centre(DHDC), located at four kilometres from Dadu, is not functioning.

The 18-room hospital is fully furnished with housing facility for staff including a bungalow. Twenty-five residential accommodations are occupied mostly by the police. In its report, the Chief Minister's monitoring team has asked the district government to make the hospital operational as millions of rupees spent on the project are going waste.

Supply of medicines to the general public is being affected due to delay in transfer of funds to district governments.Half of the budgeted amount for medicine has not been released though nearly eight months of the fiscal has lapsed.

As many as 179 schools are reportedly closed in the Dadu district due to non-availability of teachers and ban on appointments. Not a single rupee has been deposited in the assigned account of district government against an amount of Rs44.663 million earmarked for Decentralized Elementary Education Project.

In its visit to Jacobabad in January 2004, the team was informed in the first seven months of the fiscal year the district government had received only Rs35 million against allocation of Rs321.47 million. In all 327 schools were closed.

Since a major amount of transition funds were declared lapsed by the Finance Department of provincial government and was not revalidated on time,the district government could not establish offices of devolved departments and local governments.

No allocation, made for scholarship to middle school girls, was received by Jacobabad district by January with the result that no payment of Rs100 scholarship was made since June 2003. The scholarship was announced to check drop out of girls from school.

In the health sector, the district fares no better. Only 161 doctors are posted against a sanctioned strength of 249 i.e. 34 per cent of the posts of doctors are lying vacant. The monitoring team discovered that 42 post of lady medical officers were shown as filled through posting of nine male doctors, just a cover for the vacant posts.

The Hyderabad report expresses serious concern about the lapse of funds which were not renewed when the CMIT visited the district in late October. "One can imagine the seriousness of the issue that out of Rs151 million allocated for annual development plan, an amount of Rs144 million has lapsed and the entire amount of Rs125 million for Hyderabad Development Authority allocated last year has lapsed," says the report. As the amounts were not revalidated, the report asked the provincial and district governments to take necessary measures to resolve the outstanding issues.

A random look at CMIT reports on half a dozen districts unfolds a similar situation. On the core issue of placing district funds in Account Number 4, sources in the provincial government indicate that it would become effective from next fiscal year.

Perhaps, the root cause of the problem lies in a weak government (a house divided against itself) which was formed thorough a manipulated majority. The province lacks a shared vision, energy and drive which spring from democratic federalism, autonomy based on majority rule.

Unfortunately, seventy-five per cent of the bureaucrats are opposed to empowering of the district governments as they have been created by snatching their power and authority, says an official engaged in development planning.

Quite a sizable number of politicians feel threatened by local body leadership which may challenge them later in parliamentary elections on their record of performance at the district level. For the districts, it is an arduous struggle for survival and growth in the initial phase of their development. But time is on their side on devolution.