Enhancing State Monitoring of the Local Government System

Objective: This component will strengthen the system of performance monitoring of GPs and municipalities in Kerala.

This component will comprise four sub-components: (a) a database of basic GP and municipal level information; (b) service delivery survey; (c) evaluations and studies for Project: and (d) the Decentralization Analysis Cell (DAC) which, among other things, will be responsible for (a) and (b).

Database of LSGs and Municipalities information.

The project will establish a database of LSGs information which will store basic information regarding LSGs and municipal profiles: population, vital statistics, livelihoods, employment, education, water and sanitation, budget expenditures and physical assets. The data will be collected from existing datasets such as the 2001 and 2010 census, administrative records, state audits, and line department routine data. As more information becomes available through the project and other surveys, relevant LSGs level data can be added to the system. The database will be web-based and available to the general public. DAC will be responsible for operating and updating the system, including generating reports on LSGs profiles and aggregating data annually.

LSG Service Delivery Survey. The second sub-component is a survey to gauge trends on LSG service delivery performance and citizen satisfaction throughout the state. The survey, to be contracted to an external survey firm/s, will examine delivery trends statewide in sectors where LSGs and municipalities have some responsibility, explore citizen satisfaction and usage of basic services as well as awareness of LSG planning and budget processes. The survey will use a stratified sample of LSGs. It will take place every two years with baseline, mid-term and final rounds. The DAC will produce a 39 report of findings after each round, and will disseminate the findings on the web and through the media.

Project Evaluations – In addition, the project is planning two evaluations to evaluate the quality of the capacity building efforts (Component 2) and block grant investments (Component 1): Capacity Building Evaluation. Given the importance of the capacity building component, the project will want to monitor, evaluate and document the training activities carefully. Aspects for review are: the number and types of persons undergoing training; the appropriateness of delivery methodologies such as formal institutional training and mentoring; suitability and effectiveness of the curriculum; duration of capacity building interventions; levels of effort by the training institutions and trainers, and feedback from participants. These evaluations will be done in Years 2 and 4.

Service Delivery Technical Evaluation. This study will examine a random sample of ten percent of GPs and review their service delivery outputs related to physical assets issues. The evaluation will examine in depth: the technical quality of public goods financed by the project; cost effectiveness (value-for-money); use of goods; operations and maintenance, and safeguard issues. This evaluation will be completed in Years 2 and 4.

Decentralization Analysis Cell (DAC). The DAC will play two key functions: (i) asmentioned above, it will collect, store, compile and report LSGs level and servicedelivery data; (ii) the DAC will also carry out a policy advisory function providing independent analysis on the performance of the State’s intergovernmental fiscal system and service delivery system and provide ongoing policy advice to GoK and the SFC on local and intergovernmental fiscal and institutional issues. The core activities of the policy advisory function will be preparation of annual fiscal report, just-in-time policy advice to the GoK and policy studies on key policy issues (e.g. property taxation, municipal borrowing, analysis of intergovernmental transfers, etc.). The key clients of DAC’s outputs will include the Department of Local Self Government (LSGD), Department of Finance (DoF), State Finance Commission (SFC), LSGs, and citizens. The DAC has been established in the Gulati Institute of Finance and Taxation (GIFT), formally the Centre of Taxation Studies. GIFT falls directly under the Taxes Department of the State Government but DAC funding will come directly from Department of Local Self Governments (LSGD) through the PMU to GIFT. The DAC will fall under the overall governance structure of GIFT; however a Steering Committee headed by LSGD and comprising DoF, GIFT, PMU and DAC (Director) will provide overall strategic oversight for the DAC and will approve its annual work plan. The DAC will submit a report on its annual work plan to the PMU which report to the LGSD and the World Bank on DAC activities.