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OF COMMUNITY MEDICINE PGIMS, ROHTAK Health Budgeting in India Contents: Introduction Health expenditure in India Health in union budget 2012 Overview of f inancial m anagement under NRHM Planning and budgeting in NRHM Fund flow arrangements Delegation of financial p owers Re-organization of health facilities and their grants Allocation, release and expenditure in NRHM Budgeting in National AIDS Control Programme ContentsIntroduction: Introduction What is a budget ?: It is a tool to relate planned resource consumption to a period of time . It is stating in financial terms, the physical activities that have to be performed during any future period, to achieve the objectives/ purposes of the organization. Main features: Developed before an event has occurred Includes a broad range of resources Relates to a specific period of time What is a budget ? Why have a budget ?: To aid in planning of annual operations Coordinate activities of various parts of organization Control activities Evaluate performance Why have a budget ?Preparing budgets: General guidelines: Prepared on a realistic basis Past actuals should be consulted Obsolete items to be deleted Lump sum provisions to be avoided Preparing budgets: General guidelines Health expenditure in India: Calling for the 12th Plan to be specially focused on health, the Prime Minister promised that funds would not be a constraint in the important areas of education and health. Government has decided to increase its total health expenditure to 2.5 per cent of GDP by the end of the 12th Plan. Health expenditure in India Health in Union Budget 2012: Health in Union Budget 2012 S.N . Allocation for FY 2012-2013 in union budget ₹(in crores) 1. Total allocation for Health and Family Welfare (An increase of 14% from last FY) ₹34,488 2. Allocation for NRHM (60% of total) ₹20,885 3. Allocation for National Aids Control Organization (NACO) remains same as that of last year(5% of total) ₹ 1,700 4. Pulse polio program ₹ 789 5. Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, SABLA ₹ 750 6. Indian Council of Medical Research (ICMR) ₹ 710 7. Rest will be allocated for Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) and for the launch of National Urban Health Mission (NUHM) etc. Centrally Sponsored Disease Control Programmes (Current Scenario): Centrally Sponsored Disease Control Programmes (Current Scenario) As a part of NRHM Independent of NRHM ambit Reproductive and Child Health (RCH) Programme Vector Borne Disease Control Programme Tuberculosis Control Programme Leprosy Elimination Programme Iodine Deficiency Disorder Control Programme Blindness Control Programme Drug-addiction Control Programme National Program for Prevention and Control of Cancer, Diabetes, Cardiovascular Disease and Stroke Tobacco Control Programme Mental Health Programme Under Department of AIDS Control National AIDS Control ProgrammeOverview of Financial Management Under NRHM: Overview of Financial Management Under NRHMPowerPoint Presentation: Programme Implementation StructureFinancial management structures at GOI level: In order to ensure efficient financial management a separate Financial Management Group (FMG ) has been formed at the GoI level which is supported by respective finance units/staff at state, district and sub-district levels . The group is headed by the Director (NRHM-Finance), who is supported by one Under Secretary , one Section Officer, two Accounts Officers and various finance consultants. All these finance consultants including Finance Controllers, Finance Analysts and Finance Assistants report directly to Director (NRHM-Finance). F inancial management structures at GOI levelFinancial management structures at GOI level: Broad role FMG are: Process timely release of approved funds to State Health Societies. Monitor utilization level at states/districts and identifying gaps. Monitor submission of SOEs/ financial reports/UCs from States . Carry out monitoring through financial management indicators, state visits for review and providing support. Formulation of financial policies and guidelines time to time. Monitor the audit arrangements at the various SHS and ensure timely appointment of Statutory and Concurrent auditors . Claim reimbursement from the Development Partners. Training of finance and accounts personnel of states/districts Financial management structures at GOI levelPowerPoint Presentation: Programme Implementation Structure (State Level) SFM- State Finance Manager SAM-State Accounts Manager SDO- State Data OperatorFinancial management structures at state level: Each State has a State Health Society (SHS) headed by the Mission Director(NRHM). Each SHS consists of a State Programme Management Support Unit (SPMSU). The State NRHM Finance must be headed by Director Finance, who is assisted by the State Finance Manager (SFM), the State Accounts Manager (SAM) and State Data Officer (SDO). The broad roles of State finance personnel are: Ensure timely fund releases to the District Health Societies. Maintenance of books of accounts as per the guidelines. Monitor the expenditure and assess the requirements of funds and then prepare budget estimates . F inancial management structures at state levelFinancial management structures at state level: Develop / Refine guidelines for management of funds in the state/ districts/peripheral level. Monitor timely submission of Statement of Expenditure from the Districts. Preparation and timely submission of Financial Monitoring Report (FMRs), Statement of Fund Position (SFPs), quarterly/ monthly Management Information System (MIS), Utilization Certificates (UCs) and concurrent a udit executive s ummary to the MoHFW . Facilitate and monitor the Statutory and Concurrent audit by appointing auditors and ensuring timely submission of reports. Organize and conduct training for the district and peripheral units. F inancial management structures at state levelFinancial management structures at district level: At the district level, a District Health Society (DHS) has been set up to manage the programme activities. The finance and accounts activities are managed by District Accounts Manager (DAM) and a data assistant under the supervision of a Districts Programme Manager (DPM). F inancial management structures at district levelFinancial management structures at district level: The broad roles of District finance personnel are: Budgeting and Planning for programme implementation. Ensure timely fund releases to the Blocks/ CHCs/ PHCs/ SCs. Maintenance of books of accounts as per guidelines. Monitor timely reporting from the Blocks through Statement of Expenditure every month . Ensure timely reporting of expenditure to the State. Facilitate and monitor the Statutory & Concurrent Audit by providing relevant information to the auditors timely. Ensuring follow up on audit observations. F inancial management structures at district levelFinancial management structures at Block level: The implementation of the programmes starts at the Block level and the actual utilization of funds initiates from here . Block Medical Officer is supported by Block Accountant & Block Programme Manager (BPM). The Block Accounts Manager(BAM) is responsible for disbursing the funds to the implementing units (CHC/PHC / Sub Centre/ VHSNC) and monitoring their utilization. BAM is also responsible for maintenance of accounting records at the block level and reporting the utilization to the District. F inancial management structures at Block levelFinancial management structures at Block level: At CHC/PHC level, accounting and reporting activities are managed by accountants. At Sub Centre level and Village Health, Sanitation and Nutrition Committees, the fund management and reporting is controlled by the ANM and ASHA respectively . F inancial management structures at Block level Key Components of Funds: At CHC/PHC level, accounting and reporting activities are managed by the CHC/ PHC accountants. At Sub Centre level and Village Health, Sanitation and Nutrition Committees , the fund management and reporting is controlled by the ANM and ASHA respectively . Key Components of FundsPowerPoint Presentation: Financial Management CyclePlanning and Budgeting in NRHM: Planning and Budgeting in NRHMPlanning in NRHM: Under NRHM, a detailed planning and budgeting exercise is taken up every year to fix the annual targets for programme implementation and hence the required budget for them. To effectively implement and monitor the activities during the year, each Implementing Agency in the State is required to prepare a plan of action. This should indicate the targets and budgetary estimates in accordance with the approved pattern of assistance under the NRHM. Planning in NRHMPlanning in NRHM: These should cover all aspects of the programme activities for the period from April to March each year, and are sent by each State/ UT to the Ministry of Health & Family Welfare, GoI for approval well before the start of the year. It is important that the action plan is realistic, practically implementable and correlates the physical outputs with the cost estimates. Planning in NRHMPlanning in NRHM: NRHM follows a Bottom Up approach for planning and budgeting. The process begins at the block level, which prepares the “Block Health Action Plan” based on inputs/discussions with the implementing units and sends to the District. These Block Health Action Plans are then aggregated to form an “Integrated District Health Action Plan (IDHAP )” which is further sent to the State Level. The DHAPs of all districts are compiled and aggregated at the state level for framing the “State Program Implementation Plan (SPIP). All SPIPs are reviewed and compiled to estimate the next year's fund requirements for programme implementation activities under NRHM. Planning in NRHMPlanning in NRHM: This requires setting up of planning teams and committees at various levels i.e. at Habitation/Village , Gram Panchayat (SHC), PHC (Cluster level), CHC/Block level and District level. At Village, PHC and Block levels, broadly representative committees perform both planning and on-going monitoring functions. A similar committee at the District level would be involved in reviewing the plans, based on drafting by the specialized district planning team. Planning in NRHMPowerPoint Presentation: Hierarchy of plansResource Allocation: The MoHFW follows equity-based approach to allocate funds under NRHM to various States. The overall allocation is made on the basis of population of the states. An additional weightage has been assigned to the NRHM priority States to ensure enhanced allocation of resources to states with weak socio-economic and health indicators. The 8 EAG states have been assigned weightage of 1.3, North Eastern States have been assigned the weightage of 3.2 and other states have been assigned weightage of 1. Resource AllocationResource Allocation: This approach ensures more resources to the States those are critical for achieving the objectives of NRHM . Under NRHM, probably a maximum of 10% of funds are to be spent at the State level, 20% at the District level and at least 70% at the block level and below so that maximum benefits of affordable and quality health care reaches the people at the grass root level. Resource AllocationResource Allocation: The states also need to allocate funds to the districts on an equitable basis. Socio-demographic variables like rural/urban distribution; proportion of SC/ST and vulnerable groups ; districts with adverse health indicators; difficult, most difficult and inaccessible areas etc . are considered while allocating resources to the districts. A combination of such criteria and a weighted measure of 1.3 to high focus districts and 1.0 to the other districts is used to allocate funds to the districts. Resource AllocationResource Envelope: The Resources allocated to a particular state for any given financial year is termed as the “Resource Envelope”. The resource envelope for a Financial Year consists of: Uncommitted Unspent Balance GoI Allocation proposed for the year State Share Contribution due for the year Resource EnvelopeDistrict Health Action Plan (DHAP): The DHAP depicts the resource requirements at various sub district level units for programme implementation in terms of infrastructure, HR, procurement, various schemes running etc. and provides an overall budget required for the District to execute those activities. The District Health Mission is responsible for the preparation of DHAP which needs to be done by constituting a Planning team responsible for providing overall guidance and support to the planning process . Preparation process of DHAP includes consolidation of the Block Health Action Plans. District Health Action Plan (DHAP)PowerPoint Presentation: Block Health Action Plan is the responsibility of the Block/CHC level Planning and Monitoring committee which constitute of Block Panchayat Adhyaksh , BMO, NGO/CBO representative and head of CHC level RKS. PHC level Health Plan are made by the PHC Health Monitoring and Planning committee which facilitate planning inputs from Panchayat representatives along with inputs from the community. Gram Panchayat level Health Plan are made by Gram Panchayat Pradhan , ANM, MPHW and few VHSC members VHSC is responsible for Village Health Plan Preparation of Block Health Action PlanKey considerations while drafting State PIPs: Funds released under NRHM do not lapse at the close of the Financial Year but are carried over to the next Financial Year. The states need to show the quantum of usage of funds in the previous year and the quantum of unspent funds lying with them. The previous year funds lying with the states need to be clearly demarcated and shown in the form of committed and uncommitted unspent balances. Key considerations while drafting State PIPsKey considerations while drafting State PIPs: Committed Unspent Funds : These funds are meant for those activities for which implementation have already started, are underway, or have been approved but not implemented fully. These balances need to be indicated by the state activity wise while proposing the PIP for the next Financial Year. Uncommitted Unspent Funds : The funds lying with Districts and sub district which could not be committed for utilization during the year should also be worked out and incorporated in State level unspent balances. Key considerations while drafting State PIPsKey considerations while drafting State PIPs: All the civil construction work should be taken up only after including the manpower & equipment requirements so that a large portion of public funds is not blocked in unutilized buildings. Ceiling on Programme Management Costs : A maximum of 6% of approved SPIP may be spent on programme management activities (Administrative Expenses) such as hiring of consultants coming under the ambit of programme management, monitoring and evaluation, audit expenses, mobility support, office expenses, purchase of computers, office furniture & fixtures, fax machines etc. Key considerations while drafting State PIPsKey considerations while drafting State PIPs: One FRU in each block : The basic aim of NRHM is to provide healthcare facilities in the remotest parts of the state. Hence, planning and budgeting of SPIP should meet the basic necessity of providing a functional FRU in each Block comprising of 1,20,000 population in plain areas and 80,000 population in hilly, tribal and remote areas of the State . Key considerations while drafting State PIPsKey considerations while drafting State PIPs: State's Share : The states participate with the centre in funding the NRHM programme. At present states are required to contribute 15% of the total amount released. From XIIth Plan (2012-2017) onwards, the relative share of the states may increase in due course. It should be ensured that there is no substitution of the state expenditure by Central expenditure. Key considerations while drafting State PIPsPowerPoint Presentation: Process of approval of PIPConcept of Sub-groups: Concept of Sub-groups has been introduced for the purpose of effective review & analysis of PIPs received from the States and efficient coordination with state level for the purpose of carrying out necessary revisions and approval of the PIPs. The sub groups constitute officers/ consultants from MoHFW and state level. Each group consists of a Group Leader, Nodal Officer, Assistant Nodal Officers and few members (including Deputy Commissioners, Assistant Commissioners etc .) Nodal officer is the contact person for the group and coordinates with the members of the group to carry out the tasks and responsibilities assigned to the group. Concept of Sub-groupsConcept of Sub-groups: The overall responsibilities of the sub groups: Studying the profiles of States/ UTs, past PIPs and RoPs of states/ UTs. Study the draft PIP submitted by the states/ UTs and furnish comments. Share the comments on the Draft PIP for revision of PIP . Examine the revised PIP with reference to decisions taken in the Sub-Group Meetings. Participate in National Programme Coordination Committee (NPCC) meetings and prepare Record of Proceedings ( RoPs ) of the NPCC meetings for the respective states. Concept of Sub-groupsTimelines: The Financial Year beginning from 1st of April is the enforcement date of the Annual Project Implementation Plans. Hence , the budget needs to be approved and communicated at all levels before this date. The success of budgeting exercise is dependent on adherence to time schedules. Delays in submissions and approvals can delay the finalization of the PIPs. Hence , NRHM specifies the dates by which submissions and approvals need to be carried out. TimelinesTimelines for submission of SPIP and DHAP: T imelines for submission of SPIP and DHAP Submitting Authority Approving Authority Date for Submission Date for Approval District State 31 st Oct 15 th March State Centre 31 st Dec 28 th FebPowerPoint Presentation: Detailed probable timelineRevision of budget: After the finalization of the RoP , the state can place an additional demand for funds for any specific purpose to the Ministry. After review and feedback from the concerned programme divisions, the Ministry may approve or disapprove the request. In case of an approval , a letter shall be issued to the state notifying the approved amount and the subsequent change in the RoP of the state. Revision of budgetFund flow arrangements: Fund flow arrangementsKey sources of funds: The funds given to the State Health Societies mainly consist of the following components: Grants-in-aid - Made by or through MoHFW , GoI Contribution by the State Government - As per NRHM Framework of Implementation, all States and UT Health Societies receiving grants from the Central Government will contribute in the ratio of 85:15. Key sources of fundsKey sources of funds: Key requirements in this regard are given below: The state contribution made by the State Government will be booked as expenditure in the State Budget at the time of its release to the SHS . For utilization, the state contribution can be proportionately utilized among the different programmes or the same can be utilized on any or all programmes/activities considering their priorities and requirement of funds for such programmes under intimation to the Ministry . Key sources of fundsPowerPoint Presentation: Timelines for release of fundsPowerPoint Presentation: Banking ArrangementsDelegation of Financial Powers: Delegation of Financial PowersPowerPoint Presentation: Authorized Signatories to Bank AccountsPowerPoint Presentation: Authorized Signatories to Bank AccountsRe-organization of Health Facilities : The Sub-Centres/ PHCs who are not designated as MCH Centres and do not conduct institutional deliveries shall receive Untied Funds and RKS Funds at the following scale: Sub-Centre Untied Funds – Rs. 10,000 Primary Health Centres Untied Funds – Rs. 25,000 RKS Grants – Rs. 25,000 Annual Maintenance Grants have been kept at same level for all health facilities Re-organization of Health FacilitiesDifferential Financial Approach for RKS Grants and Untied Funds: The Sub-Centres/ PHCs who are not designated as MCH Centres and do not conduct institutional deliveries shall receive Untied Funds and RKS Funds at the following scale: Sub-Centre Untied Funds – Rs. 10,000 Annual Maintenance Grants – Rs. 10,000 Primary Health Centres Untied Funds – Rs. 25,000 Annual Maintenance Grants – Rs. 50,000 RKS Grants – Rs. 25,000 Differential Financial Approach for RKS Grants and Untied FundsPowerPoint Presentation: Allocation, release and expenditure in NRHM New IPHS 2012Budgeting in National AIDS Control Programme: Budgeting in National AIDS Control ProgrammePerformance Based Budgeting (PBB): Performance Based Budgeting (PBB) NACO - Project Implementation SetupPowerPoint Presentation: Calendar of Annual action plan References: Operational guidelines for Financial Management in NRHM http:// mohfw.nic.in/showfile.php?lid=985 Financial Management guidelines NACO http://nacoonline.org/upload/Policies%20%26%20Guidelines/19,% 20Operational%20Guidelines%20forFinancial%20Management%20Final.pdf http :// health.india.com/diseases-conditions/union-budget-2012-13-healthcare-sector-highlights http:// articles.timesofindia.indiatimes.com/2011-11-19/india/30419399_1_health-sector-12th-plan-universal-health-coverage http://accountabilityindia.academia.edu/AvaniKapur/Papers/1712107/National_Rural_Health_Mission_2012-13 ReferencesThank You: Thank You You do not have the permission to view this presentation. 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