Annual Performance Assessment for GPs and Municipalities

Annual Performance Assessment

As it was envisaged, the Performance grant had two phases. During the first phase in the first two years of the Project (2011-12 and 2012-13) Grama Panchayats and Municipalities were given grant subject to some basic fiduciary requirements. It included getting ‘clean’ audit certificate and submission of approved copy of annual plans. The LSGIs which cleared these conditions during these years qualified for receiving performance grant. In the second phase ,ie. during 13-14 and 14-15the distribution of PG would be on the basis of the Annual Performance Assessment of the LGs. Details of the APAs conducted are given below.

Annual Performance Assessment 2013-14

For the first time in the history of Kerala, a performance assessment system for Grama Panchayats and municipalities was designed and established by KLGSDP with the assistance of four consultancy firms in 2013-14.  Apart from the lead consultant, M/s.Sutra, three independent consultancy firms were selected by KLGSDP for conducting the Annual Performance Assessment. For the purpose of assessment, the State was divided into three regions such as North, Central and South and for each region, an independent consultancy firm was selected through a competitive basis.   M/s.JPS Associates (P) Ltd was entrusted to conduct the Performance Assessment in North region consisting of 319 Grama Panchayats and 19 Municipalities. The districts – Malappuram, Kozhikode, Kannur, Kasaragod and Wayanad were included in this region. M/s STEM, Bangalore was responsible for the Performance Assessment in the Central region consisting of 343 Grama Panchayats and 22 Municipalities in Idukki, Ernakulam, Thrissur and Palakkad districts. M/s.Mott Mac Donald conducted the Performance Assessment of the Southern region consisting of 343 Grama Panchayats and 19 Municipalities of Thiruvananthapuram, Kollam, Pathanamthitta, Alappuzha and Kottayam districts.

The PMU undertook systematic training to all LSGs to make them familiar with the performance assessment framework and process, documents to be kept ready for verification, criteria for qualifying for grant etc. The handouts prepared by the lead consultant was given to the LSGs.   Adequate training was also given to the field assessment teams. The field assessment started in the first week of October 2013 and it was completed in the last week of December 2013. The firms undertook assessment and collected necessary supporting documents required for the assessments. To establish the reliability of the performance assessment undertaken by the firms, Quality Assurance and Audit (QAA) was undertaken by the lead consultant. For QAA, a sample of 10 percent of LSGs was proportionately selected across districts and assessment teams. The assessment made by the teams in the sample selected was re-verified by the lead consultant. The minimum mandatory conditions prescribed for clearing the eligibility conditions are given below;

  1. Budget for the current financial year prepared and approved by the committee/Council of LSGD and copy availed to LSGD by the end of April of the succeeding financial year.
  2. Annual Plan for the financial year proceeding the assessment approved by both the committee/ Council and DPC
  3. Minimum 60% of the KLGSDP Performance grant, Development fund (General), Development fund (SCP), Central Finance Commission funds spent in the financial year preceeding the assessment.
  4. Capital works and acquisitions funded from KLGSDP Performance grant in the financial year proceeding assessment have taken place (work in progress/Completed)
  5. Compliance with the regulatory list from the ESMF process during preparation and execution of KLGSDP Performance grants projects in the financial year proceeding the assessment.
  6. “Clear” External Audit Certificate (not adverse or disclaimed) for immediately the year proceeding assessment as explained in PIM.
  7. External Audit for the immediately preceeding year of assessment but does not include serious audit observations.

Participation, Transparency and accountability

  1. Preparation of public report or the Annual Budget for the financial year
  2. Preparation of public report on the Annual Plan for the financial year preceding the assessment.

As regards Performance Benchmark, the minimum score that the LSGs must achieve was fixed as 50 marks. Wide variations are observed in the total score among LSGs. The average score in the performance benchmark was 57.3 marks. The highest average score was in Ernakulam district (59.7 marks) while the lowest average was in Kottayam and Palakkad districts (54.3 marks)

In the performance assessment 2013-14, 947 LSGs out of 1038 LSGs cleared all the nine mandatory conditions set for APA. Alappuzha district had the highest percentage of LSGs clearing all MMCs (94.9 percent) whereas Ernakulam district had the lowest (83.2 percent). Overall 91.2 percent of LSGs cleared all the nine minimum mandatory conditions. Out of 978 Grama Panchayats in the State, 908 Grama Panchayats have cleared all the MMCs and among the 60 municipalities, 39 cleared the same.

Annual Performance Assessment 2014-15

The Second Annual Performance Assessment (APA) was conducted in 14-15.  The methodology was the same which followed in the first APA.  The eligibility condition fixed was to clear all the Minimum Mandatory Conditions (MMCs) and attain the minimum score fixed (50 marks) for the Performance Benchmarks.

As mentioned earlier the Minimum Mandatory Conditions which the LSGIs were expected to fulfil are related to their performance in the areas such as Planning and Budgeting, Project Execution and Service Delivery, Accounting, Financial Reporting and Audit and Participation, Transparency and Accountability.

The details of the MMCs are given below.

  • Budget for the year 2014-15 should be prepared and approved by the Committee/Council of LSGIs before 31st March 2015.
  • Annual plan for the year 2013-14 should be approved by both the Committee/Council of LSGIs and DPC.
  • Minimum 80% of the fund available to LSGIs from five sources such as Performance Grant of KLGSDP, Development Fund, SCP, TSP and fund from Central Finance Commission should be spent before 25.01.2015.
  • Compliance with the regulatory list from the ESMF in DPR process during preparation and execution of KLGSDP Performance Grant projects during the financial year 2013-14.
  • KLGSDP Performance Grant projects for the financial year 2013-14 are permissible works allowed by the Government of Kerala as directed in the GO No.173/1/2011 dtd. 20.07.2011.
  • Status of the KLGSDP Performance Grant projects in the year 2013-14 (work in progress/completed).
  • External audit certificate of the LSGIs for the year 2012-13 is not ‘Adverse’ or ‘Disclaimed’ and it does not include ‘Serious Audit Observations’, as explained in the PIM of KLGSDP.
  • LSGIs should have prepared a public report on the annual budget for the year 2014-15 and on the annual plan for the year 2013-14.

The performance of LSGIs in service delivery was examined with reference to the availability as well as the status of certain factors. In this regard, 10 criteria were identified. These were related to the status of crematorium/burial ground, slaughter house, waste management system, public toilets and resting places, front office of LSGIs, fish and vegetable markets, street lights, access to safe drinking water, Anganawadis and basic infrastructure facilities in the Scheduled Caste/Scheduled Tribe colonies. Along with the above mentioned criteria, factors such as whether transparent and appropriate methods of procurement was followed and documented in the projects taken up under KLGSDP were also examined. The compliance with ESMF procedure in KLGSD Projects and unqualified audit opinion for the year 2012-13 were also included as performance bench marks.

The framework for APA was first discussed at PMU level. Discussions were held with Sutra Consultants, the World Bank and the Government. After making appropriate modifications, the Government approved the same. A schedule for APA was developed and a pilot study conducted in the selected LSGs. One day workshop was arranged at KILA, Thrissur to finalise the schedule prepared for APA. The representatives of Sutra Consultants, PMU and the investigators of the pilot study participated in the workshop.

After finalising the tool for APA, the training programme of five days for Technical Assistants of LSGIs to familiarise the tool and impart training on software was arranged at KILA, Thrissur. The representatives of all LSGIs participated in the training programme. Training was provided for three days to the officials of the performance audit wing.

The data entered by the technical assistants of LSGIs were re-examined and approved by the officials of the Performance Audit Wing. Quality Assurance Assessment was conducted by Sutra Consultants to ensure accuracy of the data (in 10% LSGD) Reassessment was made in such cases where wide variations in the data approved by the State Performance Audit Wing and Quality Assurance Assessment were observed.

It was envisaged that a system of appeal and remedial process would be useful to resolve any objection that LSGs might have in relation to the performance assessment process. The Government of Kerala vide GO (Rt) No.2881/13/LSGD dated 25.11.2013 constituted the first and second Appellate authorities for dealing with the appeals of the LSGIs.

The first list of LSGIs qualifying Performance Assessment and eligible for grant was published in the KLGSDP website on 19th February 2015. Out of the 978 Grama Panchayats and 60 Municipalities in Kerala, 491 Grama Panchayats and 22 Municipalities were declared passed in the first list published. Hearing by the first Appellate authority was organised on 28th February 2nd, 3rd 6th and 7th March 2015. After the first appeal hearing, 812 LSGs qualified for the Performance Grant. During the first appeal process 286 Grama Panchayats and 13 Municipalities qualified. In the second appeal 71 grama Panchayats and 11 municipalities were declared as eligible for grant. Finally out of 978 Grama Panchayats 848 and out of 60 Municipalities 46 qualified for Performance Grant. (Total LSGIs qualified for grant are 894 out of 1038 i e 86.12 percent).

An overall 86.1 percent of LSGIs has cleared all the MMCs in 2014-15 which is marginally lower than 91.2 percent of LSGIs clearing all the MMCs in 2013-14. Out of 978 Grama Panchayats 848 (86.7%) have successfully cleared the MMCs. 46 Municipalities (76.7%) out of the total 60 Municipalities in the State have been successful. The Grama Panchayats in Thiruvananthapuram District have been more successful with 94.5 percent of them qualifying the MMCs while the Grama Panchayats in Wayanad districts have been the least successful. The Municipalities in Idukki, Kannur, Kollam and Wayanad district have been successful in qualifying the MMCs.

Extension of the Project

As per the initial agreement the project was supposed to be closed in December 2015.  But due to various reasons the amount allocated to the LGs could not be spent in time and also a savings was anticipated as balance amount, the project was extended till June 15th, 2017.   Based on the calculation of expected expenditure under the project during the project period 2011-2015, it was anticipated that the project would incure a saving around USD 60-65 million due to multiple factors which includes dollar/rupees rate fluctuation also.  The Mid-Term review of the Mission of the World Bank January 18th– February 5th 2014, also arrived at the same conclusion based on the past and expected expenditure pattern and the current exchange rate of dollar/rupees.   Anticipating such a huge saving, the Mission suggested that PMU in consultation with the Bank need to agree on avenues towards utilisation of savings and to submit a proposal for the same to DEA and the Bank.  Keeping this in view, a proposal was submitted to DEA and the Bank by PMU through Government of Kerala.  The proposal included additional one time support to backward Panchayats, revenue deficit Municipalities and Grama Panchayats having tribal clusters.

Ultimately it was decided to spent the whole amount by the extended period and also it was decided that the amount shall be distributed to the local body in two ways-1 another of performance assessment and 2 an additional assistance of special grant to the 60 identified backward local bodies.  As per this decision it was finalised that another round of performance assessment shall be conducted in 2015-16 to identified the local bodies for distributing the fifth round of Performance grant

Annual Performance Assessment – 2015-16

For this, third APA it was stipulated that the LSG should clear all the Minimum Mandatory Conditions (MMCs) and attain the minimum score fixed (35 marks) for the Performance Benchmarks for being eligible for the Performance Grant of 2016-17.  This APA was conducted by the performance auditing under LSGD. The MMC followed for the assessment are given below;

Budget for the year 2015-16 should be prepared and approved by the Committee/Council of LSGIs before 31st March 2016. Annual plan for the year 2014-15 should be approved by both the Committee/Council of LSGIs and DPC.

Minimum 80% of the funds available to the LSGIs from five sources such as Performance Grant of KLGSDP, Development Fund General, SCP, TSP and funds from Central Finance Commission should be spent before 31.03.2016.

Compliance with the regulatory list from the ESMF in DPR process during preparation and execution of KLGSDP Performance Grant projects during the financial year 2014-15 & 2015-16.

KLGSDP Performance Grant projects for the financial year 2014-15 & 2015-16 are permissible works allowed by the Government of Kerala as directed in the G.O.No.173/1/2011 dtd.20.07.2011.

Status of the KLGSDP Performance Grant projects in the financial year 2014-15 & 2015-16 (Work in progress/completed).

External audit certificate of the LSGIs for the year 2013-14 is not ‘Adverse’ or ‘Disclaimed’ and it does not include ‘Serious Audit Observations’, as explained in the PIM of KLGSDP.

LSGIs should have prepared a public report on the annual budget for the year 2015-16 and on the annual plan for the year 2014-15.

Performance of LSGIs in the service delivery is also examined by looking into the availability as well as status of certain factors. In this regard 10 criteria were identified. They are related to the status of Crematorium/Burial ground, Slaughter house, Waste management system, Public toilets and resting places, Front office of LSGIs, Fish and Vegetable markets, Street lights, Access to Safe drinking water, Anganwadi and Basic infrastructure facilities in Scheduled Caste/Scheduled Tribe colonies.

Together with the above mentioned criteria, factors such as whether transparent and appropriate methods of procurement is followed and documented in the projects taken up under KLGSDP, compliance with ESMF procedure in KLGSDP (Level 2) projects and unqualified audit opinion for the year 2013-14 were also included in the Performance Benchmarks.

The framework for APA was first discussed at PMU level. Discussions were held with the World Bank and the Government. The government approved the same after making appropriate modifications.

One-day training programme for the officials of the Performance Audit Wing was arranged at KILA once the tool/schedule for APA was finliased. The data entered by the technical assistants of LSGIs are re-examined and approved by the officials of Performance Audit wing. During the process of APA, Quality Assurance Assessment was conducted by officials of Performance Audit wing (in 10% of LSGIs) to ensure the accuracy of data.

According to the results, 512 LSGIs were qualified (Grama Panchayats – 484 & Municipalities – 28). LSGIs were given a chance to file appeal for the redressal of their grievances. Of 516 LSGIs which have not qualified after the Annual Performance Assessment, 498 have filed Appeals with necessary documents and the same were scrutinised during the hearing conducted by the Appeal Committee on 17, 18, 21, 22, 24, 25 and 27th of June 2016 at the PMU of KLGSDP. After completing the Appeal hearing process, 350 GPs and 36 Municipalities were also declared as eligible for Grant.

Finally of 941 GPs, 834 (88.63%) and of 87 Municipalities, 64 (73.56%) were qualified for Performance Grant. (Total LSGIs qualified for the Grant are 898 out of 1028 i.e., 87.35%).  Through out the project period as far 3 APA was conducted and the  number of LGs identified for providing the performance grant is given in the table below;

Eligible LGs identified under different APAs

 

Year

Grama Panchayats Municipalities Total Local Bodies
Total

GPs

Eligible GPs % of Eligible GPs Total

MNs

Eligible MNs % of Eligible MNs Total

LGs

Eligible LGs % of Eligible LGs
2011-12 978 976 99.80 60 60 100.00 1038 1036 99.81
2012-13 978 976 99.80 60 59 98.33 1038 1035 99.71
2013-14 978 908 92.84 60 39 65.00 1038 947 91.23
2014-15 978 848 86.71 60 46 76.67 1038 894 86.13
2016-17 941 834 88.63 87 64 73.56 1028 898 87.35

During the first year all the LGs except two GPs namely Vattavada GP and Melpaddy GP were not eligible.  This means these two could not satisfy the minimum fudiciary mandatory Conditions.  For the second year two GPs namely Vattavada GP and Pavaratty GP and Thrikkakara Municipality could not clear the conditions.  When the APA started from the third year onwards more LGs became ineligible.  The third year only 91.2% LGs were eligible and in the fourth year it still became lesser to 86.13% during the current APA 87.35% of LGs became eligible for the Grant.  During the phase the total number of GPs has reduced to 941(from 978) and the number of Municipalities increased from 60 to 87 due to the delimitation effected for the LG election in 2015.  One very interesting aspect to be noted is that even though criteria followed in the distribution of PGs and the APA process and so many training programmes were held, there are eight GPs and 4 Municipalities in the state that have not cleared any of the APAs.

APA Data Entry Online

APA Results 2013-14

APA Results 2014-15

APA Results 2016-17

APA Training Report

APA Report 2013-14

APA Framework

APA – ESMF Compliance

APA ToolkitFirst APA, Second APA, Third APA

APA Format

Documents to be attached along with Appeal

Format for filing Appeal

Minutes

Minutes of the meeting held on 15.12.2015

Minutes of the meeting held on 18.08.2015

Minutes of the meeting held on 18.02.2015

Minutes of the meeting held on 12.02.2015

Minutes of the meeting held on 26.06.2014

Minutes of the meeting held on 31.05.2014