The Joint Oversight Committee of the Provincial Governance Strengthening Programme has released the final results of the annual performance assessment conducted in 2012 for access to Provincial Capacity Development Fund 2013/14. The JOC, chaired by the Permanent Secretary of the Ministry of Provincial Government and Institutional Strengthening Mr Stanley D. Pirione, presided over the results of the assessment on the 20^th of December 2012.

In 2012 annual performance assessment, provincial governments were assessed on seven (7) minimum conditions and eight performance measures with 100 indicators. For a province to qualify for funding from PCDF, it has to meet all seven minimum conditions. The 2012 assessment results have been highlighted in table 1 below. The amount of funds that should be allocated to each province has also been determined as indicated in the table.

Table 1: 2012 PCDF annual performance assessment results

In addition to Malaita Province, Rennell & Bellona Province was going to miss out from this year's funding but the province successfully appealed against minimum condition 6 (tabling of audit report in the provincial assembly).  The JOC heard the appeal from Renbel and approved the qualification of Renbel on the basis of evidences produced before the steering committee. The PCDF Operational Manual has a provision for provinces that do not meet certain minimum conditions to file an appeal directly to the JOC through the Permanent Secretary of MPGIS who is the chairman of the Project Steering Committee. The appeal is heard only when it is filed within a period of two weeks of the date of JOC announcing the results of the assessment.

For provinces that do not meet the minimum conditions, the Ministry ensures that support is provided to them in the form of capacity building in order to improve their financial management capabilities. Support is provided to all provinces though the capacity building initiative funded by Provincial Governance Strengthening Programme designed to improve public expenditure management system and good governance at the provincial level. In the case of Malaita Province, further assistance shall be provided in order to ensure that the province is back on track.

Performance measures

In terms of performance measures, the provincial government of Choiseul has been consistently leading the nine provinces since the performance assessment commenced in 2009. The overall trend analysis of the results shows that, on average, provinces have been improving their performance. Average score has increased from 40 in 2009 to 64 in 2012 assessment. Even though performance measures have been enhanced as a result of the revision that took place in 2012, the average score has improved.

About 50% of PCDF funds have this year been allocated to provinces based on performance. The remaining 50% is allocated based on basic allocation formula. Provinces that obtained higher scores in performance measures such as Choiseul and Isabel have gained more resources despite their low population.

This year, 20% of fixed service grant has been allocated to provincial governments based on their scores in the performance measures assessment for PCDF. Provinces that did well in the PCDF performance measures increased their allocations in the fixed service grant. The use of performance measures in allocating a portion of fixed service grant to provinces is an indication of the impact of the Provincial Capacity Development Fund mechanism of promoting sound fiscal reforms.

The Provincial Capacity Development Fund is a performance based grant which has been set up by the Solomon Island Government to provide provinces with investment for small scale infrastructure projects whilst at the same time promoting public expenditure management systems and public financial management systems at the provincial level. When the PCDF started in 2008, SIG and donors (EU, RAMSI, UNDP and UNCDF) contributed equally to the capital development fund accessed by provinces that meet the minimum criteria. For the first four years, the donors and SIG were each contributing about SBD5.4million but since 2011, the National Government up-scaled its contribution to SBD30 million per annum.

The Ministry hires four independent consultants annually (one planning expert, two accountants and one auditor) to carry out the assessment over a period of two months. The final reports of the assessors are first discussed by the Provincial Fiscal Grant Coordination committee (a committee that discusses fiscal issues of PGSP) and then later finalised by the Joint oversight Committee (project steering committee) based on PFGCC recommendations.

The next assessment to determine who should qualify for PCDF funding in 2014/15 shall be carried out in July 2013.

By: Stanley D. Pirione - Permanent Secretary, Ministry of Provincial Government and Institutional Strengthening and Chairman of PGSP Joint Oversight Committee (Project Board)