Gauging the effectiveness of AusAID programmes in Papua New Guinea

From PAUL OATES

* (This is the second in a series of reviews on matters raised in the recently publicised (19th April 2010) Review of Australian Aid to PNG on the following site:

http://www.ausaid.gov.au/publications/pdf/PNGAustralianAidReview.pdf )

In the recently released review of Australian overseas aid to PNG, the list of recommendations contains the following statement:

"Recommendations for the Government of Australia:

10.10 Greater use of monitoring and evaluation, extending beyond audit, would enable AusAID to establish not only that funds have  not been misused, but that they have been used effectively, and  provide a stronger evidence base for policy dialogue."
This statement appears to be fairly innocuous until the full import is considered. Closer examination of the Review would suggest that AusAID may be totally unable to efficiently monitor and evaluate whether aid funds are being used effectively or not.
The review then throws some light on the reasons why the effective monitoring and evaluation of aid expenditure is difficult.
  "Reporting of Australian aid on the PNG budget is comprehensive, and the focus on recurrent spending promotes fiscal sustainability.  Alignment of the Australian aid programme with PNG budget priorities is a fundamental requirement of aid effectiveness. Its achievement would ensure that greater aid funding does not lead to reduced domestic funding of development priorities, except by mutual agreement.
However, although repeated attempts to forge a tight link between aid and PNG Government spending have been made, they have not been sustained. The Australia-PNG Partnership for Development is a useful initiative, one which will help promote alignment and mutual accountability. However, the performance benchmarks in the Partnership schedules for transport infrastructure and basic education are undermined by large funding gaps. A multi-year expenditure framework is needed. This would indicate how funds would be allocated to major sectors in the coming years, and would provide a basis for setting realistic sectoral performance targets. It would pull together both development and recurrent expenditures of the PNG Government, and include aid commitments from donor partners."
Put simply, there appears to be no co-ordination between AusAID funding and the PNG government's method of managing and expending the PNG Budget. An indication of why co-ordination of AusAID programs and the PNG Budget is difficult seems to be contained in the following recommendation to the PNG government.

"Recommendations for the Government of Papua New Guinea:

10.8 Strengthened government leadership and coordination of the aid program by the PNG Government is critical for improved aid effectiveness. In particular, the Department of National Planning  and Monitoring should avoid assuming management responsibilities for sectoral projects and programs and focus its efforts on providing strategic guidance and oversight to the aid program."
The current PNG Minister for this department (Paul Tiensten) has been in the news recently with Prime Minister Somare first sacking him and then suddenly reinstating him after his department was at a loss to know if they were still operating or not.
In the AusAID Annual Performance Report for 2009 at the following site:
http://www.ausaid.gov.au/publications/pdf/appr-0809-png.pdf under the heading 'Major Challenges' further facts emerged as to why AusAID has difficulty in measuring its performance under the current arrangements with the PNG government.
" Overall, 2008 was a challenging year for the PNG aid program. The Flagship monitoring, evaluation and dialogue mechanism of the Development Cooperation Strategy-Performance Review and Dialogue ceased in 2008 because triggers for performance payments could not be agreed. This reduced opportunities to engage with Australia's key counterpart for aid, the Department of National Planning and Monitoring, on strategic policy and governance issues. The Decision by the department not to continue with the placement of a co-located AusAID officer also undermined the prospects for collaboration.
While Australia's support for strengthening the public service made some incremental improvements in some agencies, key processes for reforming the public sector stalled in 2008. These included the development of the public sector reform plan and the work of the implementation committee of the Public Expenditure Review and Rationalisation Programme (PERR). The former has been attributed to senior-level instability in central agencies and the weakening of central structures for coordinating policy. In the case of PERR, momentum was lost when the process among donors to refocus the PERR stalled. Another important reason for the lack of reform was the anticipated benefits of the LNG project, which are expected to cause the PNG Government to be even less focused on reform in 2009. Improvements in central agency coordination and a shared government vision for reform, together with coordinated support from donors, will be critical to progressing administrative reforms and governance more broadly."
All this indicates is that a co-ordinated approach to monitoring and evaluating the effectiveness of AusAID programmes in PNG is clearly not possible while ever there is obfuscation and a distinct lack of accountability within PNG government operations.
In summary, the 2010 Review of AusAID essentially echoes the 2009 AusAID Annual Performance Report.  The conclusions drawn from both voluminous reports (2008/2009 Review 59 pages and the AusAID Review 77 pages), are that it is not possible to achieve or measure any results from nearly half a billion dollars worth of annual Australian aid given to PNG because the funds and efforts are jumbled up with PNG government programmes. These PNG government programmes basically achieve very little and either cannot or are not apparently being effectively monitored.
This serious situation has been confirmed by the findings of the recent Commission of Inquiry into PNG government finances that found that almost all government departments and authorities were not able to manage their financial operations and only five were given some degree of approval by the Commissioners.
There is an inescapable conclusion to be drawn from the above situation. Australia's aid money to PNG must be separated and managed independently from the PNG government machine, at least for the time being.