Spend it, but spend it right

THE 2012 budget, with its emphasis on education, tips the scales at K10 billion but, unfortunately, the new pro­vinces of Hela and Jiwaka have received nil allocations.
This is going to create all manner of problems for the new provinces which need the money in their first year to establish systems and structures.
But, it is not in the areas where money has not been allocated that we turn our attention to but in the areas where much money has been allocated.
We ask a simple question: Will all the money be spent?
Experience has shown us that it has not.
However well meaning the pronouncements by government and actual allocation of money in the budget, much of the money is diverted, or worse, it is not spent at all.
You do not have to take our word for it. Our impetus came yesterday from the very ministry and department responsible for half of the national budget, the development budget: the ministry of national planning and rural development and the Department of National Planning and Monitoring (DNPM).
At the budget lockup, the department made telling revelations pertaining to a number of problems that had affected the effective implementation of the 2011 deve­lopment budget. We dare say they are the same problems that have plagued successive budgets.
The department presented the following problems as the backdrop to its presentation of the 2012 budget.
lThere has been slow or no submission of annual work plans, cashflows and monitoring reports by implementing agencies to the department, thereby, delaying release of funds.
lThere has been untimely release of funds by national planning and monitoring and treasury on a monthly basis.
lThere have been inordinate delays in the preparation of simple documents such as trust instruments.
lAgencies have poor capacity to design, scope and manage the implementation of projects effectively. National planning and monitoring has been poor in monitoring projects.
lThere have been too many supplementary budgets which have stretched agencies’ capacity to implement and there have been lengthy procurement processes and funding of unbudgeted items.
lIn addition to poor expenditure under the government’s direct financing component, only 39% (K151.7 million) of projected concessional loan projects have been drawn down against the projected figure of K388.6 million.
lOf the K60 million projection for the tax credit scheme, DNPM has received 71 project submissions totalling K50.1 million. To date, 52 projects worth more than K34.2 million have been approved, with K10 million pending following receipt of more information from the developers.
lA large amount of funds appropriated under the 2011 development budget were still being held in trust accounts, totalling K542.2 million.
These revelations are staggering because the department charged with implementing K4 billion this year and K4 billion next year is admitting to critical failures in the implementation process.
It is admitting to not ha­ving the capacity to implement the budget.
It is admitting that deve­lopment is not taking place, not because there is lack of funds but that available funds are not being drawn down.
Nobody, least of all the government, should take this situation lightly. To do so would be to commit public money to a system that is not delivering and, more so, knows and admits to lacking the capacity to do so. No government should simply ignore that.
This is criminal negligence about which successive reports by the auditor-general and the parliamentary Public Accounts Committee have been harping about.
In its latest report, the PAC has recommended the abolition of the Department of National Planning and Monitoring and
for its functions to be distributed among other departments.
This is not an easy recom­mendation to make and would only come about if there was sufficient cause to believe that its very existence is counter to the welfare of the country.
Drawing up budgets is easy. Finding the money to bring the budget to life and, more especially, to fully implement it is the difficult part.
Repeatedly, PNG has failed in this aspect.
It behooves this government to ensure the development budget next year is implemented fully. To ensure this is done, the Department of National Planning and Monitoring needs drastic reorganisation.
It does not matter a wit just how big the budget is or where it is directed towards, it must be spent first and it must be spent right. That should be the number one priority.