The "Civil Society Team" and Competent Persons Discuss the Two Reports on Running Costs and Transformational Costs in the Public Budget
Ramallah - The participants in the meeting held by the Civil Society Team for Enhancing Public Budget Transparency, for which AMAN Coalition represents the Executive Secretariat, recommended that the government should adopt an integrated public expenditure rationalization plan at various responsibility centers. Such a plan shall be based on a scientific and analytical approach for each responsibility center, consider the peculiarity of these centers, be committed to the principle of transparency in terms of transformational expenditures and to clarify the areas of expenditure at all responsibility centers in order to determine the most adequate aspects of rationalization.
The meeting- which was not attended by the Ministry of Finance, the key regulator of public funds management- was attended by legislative council members, representatives of the Ministry of Health, Ministry of Agriculture, Ministry of Social Development, Financial and Administrative Audit Bureau, Environment Quality Authority, Energy and Natural Resources Authority, Ministry of Education and Higher Education and other representatives of civil society as well as a group of academics and journalists, who stressed that it is necessary for the Ministry of Finance to follow the participatory approach with civil society. The participants called the Ministry for openness and to develop standards and controls for the spending. They also requested the development of an austerity and rationalization plan that can reduce the deficit and improve basic government services without prejudice to the rights of the poor and marginalized groups, especially after concluding that the government rationalization plan is unrealistic and does not reflect the real status of each responsible center.
The meeting was opened by Hama Zaidan, a member of the Civil Society Team and Director of Advocacy and Accountability Unit at AMAN Coalition- Coalition Secretariat, who commended the important role the Civil Society Team plays in highlighting public funds management issues and providing alternative plans to rationalize expenditures and improve the collection of revenues and services. Zaidan Also commended the development of specialized reports that dealt with several areas in the public funds management, namely: austerity and rationalization report, addressing the net lending item, salary gap in public service and the problem in medical transfers. She explained that the lack of clarity in the government's plan to achieve its austerity goal, in accordance with to the imagined budget developed by the government, motivated the Civil Society Team to prepare two reports on the reality of Running and Transformational costs in the public budget. Zaidan pointed out that the government's approach launched in 2015 towards austerity and rationalization did not touch the reality, but it increased the actually realized running costs in the past three years by more than one billion Shekels.
Member of the Civil Society Team, Moayad Afaneh, has presented the report on transformational costs in the public budget. The results of the report showed that there is a set of responsibility centers the actual transformational costs of which have increased, without any details on the criteria and the basis for the actual spending. The report also shows that the transformational costs allocated to poor households continue to decline, which threats thousands of poor people as well as the least fortunate and most marginalized groups.
Afaneh has, furthermore, presented some examples of the forcibly-added items that have nothing to do with the content of the Ministry and its entire work. Transformational costs are transferred to these items without harmonizing with the content of the ministerial body. He particularly mentioned the “2005 Appointments” at the Ministry of Social Development, which misleadingly inflates the Ministry’s share of transformational costs. The actual expenditure of the Ministry of Social Development for 2017 has amounted to one billion and two million Shekels, while the “2005 Appointments" have occupied 200 million shekels of which, or about 20% of the Ministry of Social Development budget.
The researcher also presented the reality of running costs in the public budget, which aims to study and investigate the reality of running costs in some responsibility centers occupying the highest share of the budget and to examine the rationalization aspects in these centers. The study has identified the Ministry of Health, Legislative Council, Palestine Broadcasting Corporation, Water Authority and Ministry of Foreign Affairs to study there running costs.
The results of the report showed that there was a trend by the government to reduce the running costs, but the actual realized data did not reflect this. The report also showed that despite the fact that the Ministry of Health has the lion's share of the total running costs, as the government spends about 11% of the total public expenditure to the Ministry of Health, the running costs allocated to the Ministry by the Ministry of Finance and Planning are insufficient for actual need and there is a gap between them and the financial needs stated in the National Health Strategy 2017-2022.
The report showed that despite the paralysis and non-functioning of the Legislative Council (PLC) since 2007, it consumes budgets and allocations from the public treasury, part of which for PLC staff salaries and another part that has no justification in light of the PLC's paralysis since 12 years, such as the maintenance and insurance of PLC members vehicles and office budgets. By reviewing the number of employees working for Palestine Broadcasting Corporation, either the fixed-term or contracted employees, it was shown that there is an army of human resources that is burdening the Corporation’s budget, which requires the reconsideration of the number of employees, especially that many of them are listed as contracted employees whose salaries are classified within the running costs although millions of shekels have been spent on buying foreign programs. The question here is why these programs are not being produced by this army?
Dr. Azmi Shuaibi, Advisor of the Board of Directors for Anti-Corruption Affairs at AMAN Coalition, pointed out that the absence of a clear plan and criteria for expenditure rationalization at each responsibility center and the persistent deficit in the public budget creates an environment conducive to corruption chances. The continued deficit leads to the allocation of expenditure priorities based on individual trends and compromises between the responsibility center and the Ministry of Finance, rather than being based on clear criteria and principles for prioritizing the expenditure.
Mr. Samer Jaber from the Ministry of Health has commented on the suggested economic analysis and he explained the reasons of imbalance in developing the budget for the Ministry of Health. He indicated that the curve represents wide difference between estimated and actual budget. He attributed this imbalance to the tribal/clan survey applied by the Ministry of Health, which he entitled as a “funding gap”. The sums the Ministry spends to purchase services is much higher than the allocated budget due to the sensitivity of the health services provided that cannot be postponed because of the right-based and humanitarian dimensions in the Ministry’s work. Jaber also referred to what he called "the need for rationalizing service localization” as the Ministry reduced external medical referrals as well as re-channeling and referring them to Jerusalem hospitals that provide the same service. With regard to cancer patients and the expensive cost of their medical treatment, Jaber announced a huge project under the Ministry's supervision, which is the establishment of Khaled Al-Hassan Hospital for Cancer Diseases, will clearly reduce the cost treatment abroad.
Jaber agreed that it is necessary to have a comprehensive national health insurance system that enables the citizen of access to his/her right to medical treatment. Jaber said that the provision of full medical coverage is listed on the Ministries priorities as the latest study in 2017 showed that 75% of the people are insured (95% in Gaza and 64% in the West Bank) hoping that the percentage of the insured people would reach 100% by adopting a new health insurance system.
In a comment by the Ministry of Social Development, Budget Director Ms. Hanadi Barahmeh said that the percentage of transformational costs to the Ministry’s budget has amounted to approximately 92%. This percentage is targeting the beneficiaries through the services provided by the Ministry on the top of which is the cash transfers program which serves about 112 thousand poor families. However, the percentage of the Ministry’s running costs is amounting to 5.7% of its budget, including the 1400 competent employees of the Ministry, 12% of whom are administrative and the rest are field cadres working in the directorates.
Barahmeh also highlighted the importance of allocating additional budget for social services, pointing out that some services depend on the availability of donor programs such as the UNICEF and UN funds women and population support.
Barahmeh highlighted the decline in controlling financial ceilings since 2015, saying that the expenditure rationalization plans should be studied and specialized for each sector, but these plans should not affect the Ministry of Social Development due to its mission, the programs it provides and its job description structure.
In her comment on the 2005 appointments, Barahmeh explained that there are 11,850 people listed in the "Gaza Strip 2005 Appointments" for political reasons. Other 60 names have recently been added, but the Ministry of Social Development knows nothing about them although they are listed as an item at the Ministry of Social Development.
By the end of the session, Legislative Council Member Najat Abu Baker, has criticized the running and transformational costs of the Legislative Council as the PLC’s transformational actually realized costs have reached about 12 million and 400 thousand Shekels all of which are salaries of PLC members. She mentioned the other costs such as the insurance and licensing of PLC members’ vehicles but not of other members whose salaries are cut for political considerations, in addition to other fake of unjustified travel (such as the PLC members and some staff visit to the NATO) as well as non-functional PLC MPs’ offices receiving expenditures that exhaust the public treasury without any justification for their existence. Abu Baker expressed her belief that it is necessary to stop all running and transformational costs of the paralyzed Legislative Council and transfer the funds to the Ministry of Social Development, particularly to the Poor Families Empowerment Program.
