HEALTH CARE FINANCING IN SOUTH SUDAN

Transcription

1 HEALTH CARE FINANCING IN SOUTH SUDAN Final Report Sarah Fox Alex Manu January 2012

2 Acknowledgements We would like to thank the many people who contributed to this report, most notably officials of the Ministry of Health, the State Ministry of Health of Central Equatoria and the State Ministry of Finance of Central Equatoria. We would also like to thank the World Health Organisation in Juba for their support during the mission and the Health Economics Unit, Division of Health Systems and Services Development, World Health Organization-Eastern-Mediterranean Regional Office (WHO- EMRO) for the valuable comments on the draft report. Finally we are grateful to all development partners who provided valuable information and gave their time to support this work. This assessment is being carried out by Oxford Policy Management. The project manager is Sarah Fox. Alex Manu is also providing technical support. For further information contact The contact point for the client is Dr Awad Mataria, Oxford Policy Management Limited 6 St Aldates Courtyard Tel +44 (0) St Aldates Fax +44 (0) Oxford OX1 1BN admin@opml.co.uk Registered in England: United Kingdom Website

3 Executive summary Introduction Oxford Policy Management (OPM) was contracted by the World Health Organisation (WHO) to provide technical support to the Ministry of Health in the area of health care financing. The assignment comprised of one two-week mission in November 2011 followed by report writing. The agreed objectives of the mission were as follows: To review and update the costing carried out in November 2010; To investigate the alignment between the health Sector Development Plan (HSDP) and the South Sudan Development Plan (SSDP); To support the ministry to develop templates to be used by the states when developing budgets for the operational plans; To gather information on the level of funding committed by donors as well as their funding modalities; To document the current health financing situation so that future consultancy work could be tailored to actual needs; and To provide recommendations. Overview of health financing in South Sudan Domestic sources of financing Budget allocation for health has seen an average year on year increase of 15% since At the same time, the portion of the government budget allocated to health has remained stable at about 4%, which is very low for the region. Budget outturns for health have also been low, at 55% in 2009 and 64% These rates are considerably lower than those for the government budget overall (111% and 73% respectively) which is suggestive of poor prioritisation of the health sector or perhaps weaknesses in financial management in health compared to other sectors. The government of South Sudan has committed to decentralisation of service delivery to state, country and payam levels. A portion of the budget for health is therefore transferred directly from the Ministry of Finance and Economic Development (MOFED) to the State Ministries of Finance (SMOF), from where an allocation is then made to the State Ministry of Health (SMOH). Two types of transfers are channelled in this way: conditional grants which are earmarked for salaries, operating and capital expenditures and block grants which can be used by the state according to their priorities. The South Sudan financial year runs from the 1 st of July to 30 th June. This marks a shift from a January to December financial year which was in place prior to independence. Due to the changes in the financial year and the delay in approving the budget, it has not been possible to develop a budget calendar to guide the budgeting and planning process. For the coming financial year, it will be important that this is communicated with all Spending Agencies and strictly adhered to. External sources of financing The health sector in South Sudan is in a transition period from humanitarian to development assistance. As such, a number of donors are currently in the process of gradually phasing out their support while new types of funding streams are coming on board. Some of the current funding mechanisms that are due to be phased out within the coming year include: the Basic Services Fund (BSF); Multi Donor Trust Fund (MDTF); Sudan Health Transformation Project (SHTP II); and the Office of U.S. Foreign Disaster Assistance (OFDA). In terms of planned funding mechanisms, i Oxford Policy Management

4 in order to avoid duplication of efforts, donors have come together and agreed on a split by geographic area. There will be three broad implementation modalities with each on covering a specified number of states. USAID will cover two states, the Health Pooled Fund (HPF) will cover six and the World Bank will be responsible for two states. The Republic of South Sudan is also the recipient of funding from global health initiatives such as the Global Fund and GAVI. With a number of sources of funding currently being phased out and others coming on board, it will be important to assess whether the new funding streams will cover previously funded services and activities while at the same time ensuring that funding is aligned with the HSDP and SSDP. It is also very important to be mindful of the varied nature of the services and types of expenditure being financed by the different funding agencies. For example, while the Health Pooled Fund and the support from USAID appear to be using a similar funding modality, the approach of the World Bank is rather different. The ministry should work collaboratively with donors in order to ensure that all gaps are covered and that none of the states are left behind. Support to the development of a budgeting template for the HSDP operational plan During consultations with the Central Equatoria State (CES) MOH and MOF, the following issues emerged, each of which will have a bearing on the development of the operational plan: States are already developing three year plans for health; The integration of the annual budget and three year plan needs to be strengthened; Unlike the annual budget, the format for the three year plan has not been defined; Information on off-budget funding at state level is weak; Central- and state-level planning is not coordinated; The SHOHs do not have a budget for capital expenditures. The following are the recommended principles to be considered when developing the operational plans and associated templates: Alignment: The guiding document for the operational plan is the HSDP, meaning that all activities must be fully aligned with the priorities set out in this document. Both of these documents span a period of five years. In addition, given that the first three years of the HSDP should be aligned with the SSDP, which is the overall strategic document of the government of South Sudan, there should be an automatic alignment between the operational plan and the SSDP. Consistency across templates: In line with the above point, the template used for the three year strategic plan and the HSDP operational plan should be one and the same and should be structured in such a way that the portion funded from the government budget can be easily extracted from this to form the annual budget. Comprehensive: The operational plan should capture each of the main sources of funding for the activities identified, including funding from the government budget, local revenues and development partners. HSDP Costing A preliminary costing model was developed in 2010 based on the most recent version of the HSDP at that time. It is a flexible model built in Excel that was designed to be updated by the MOH in line with evolving priorities and plans. It incorporates costs for the entire health sector and is not limited to a particular source of funding. Infrastructure and staffing needs are based on the 2009 version of the BPHS and the Framework for Hospital Services. ii Oxford Policy Management

5 OPM was tasked with updating some aspects of this model based on the realisation that a) some of the unit costs had changed, particularly given the high inflation that was experienced over the past 12 months, and b) the HSDP has now been finalised. One of the main changes incorporated into the costing model related to infrastructure costs. This is a result of the large increase in the cost of construction that have occurred in the last 12 months and the fact that some of the plans for building, especially in relation to training institutes have been elaborated in more detail since last year. These changes have had a significant impact of the overall costs as well as the share of the costs accruing to capital investment. An attempt was also made to update the planned human resource requirements based on the latest version of the BPHS, which was finalised in July 2011 [6,7]. However, consultations with ministry staff revealed that the cadres outlined in the BPHS did not correspond with those currently used by the MOH. While amendments were made to the model, it is hoped that the staffing norms will be assessed and updated during the process of validating the BPHS as this will enable cost estimates for human resources to reflect more realistically the staffing plans. Given that the staff requirements in the latest BPHS are lower than those previously envisaged, the updated model shows a small reduction in the planned operating costs. Recommendations Some options in relation to future efforts in health financing and financial management include: a) Short term technical support for the development of costing of the HSDP operational plan, including: Providing assistance to states on the development of costed plans preferably through hands on support to the SMOHs in their office. Supporting the ministry to develop a reference document detailing unit prices of medical and non-medical equipment, drugs and medical supplies. b) Support to financial management of the MOH at central, state and county levels. Since a number of donors have signalled the need to provide support in this area, there is a need for strong coordination across actors, particularly among the MOH and donors active in this area. c) Developing a health financing research group. This group would be to be for a small number of people with interest in health financing to come together to discuss priorities and information gaps in the area of health financing. Some of the activities that could be carried out by this group include: Information mapping to assess what information is available Brainstorming on what are the research questions that remain unanswered and what are the research tools available to answer these questions. Some examples of studies that may be considered include: o National Health Accounts (NHA) to assess the total actual expenditure on health o Public Expenditure Review (PER) in Health to examine the efficiency and effectiveness of health expenditures including how they are aligned with national and sectoral priorities. o A health facility survey, including an exit interview component, to assess various aspects of health care delivery iii Oxford Policy Management

6 Table of contents Acknowledgements 1 Executive summary Table of contents List of tables and figures Abbreviations 1 Introduction 1 2 Overview of Health Financing in South Sudan Domestic sources of funding External Sources of funding Global Health Initiatives Trends in donor funding, past and future 11 3 Support to the development of a budgeting template for the HSDP operational plan Background information and current situation Guidelines on the development of the HSDP operational plan 14 4 HSDP Costing Costing Methodology Changes made to update the model Summary of Changes 19 5 Recommendations 21 References 23 Annex A People Consulted 24 Annex B Current Templates for Central Equatoria State 25 B.1 Template for the three year strategic plan 25 B.2 Budget Template (2012) 25 i iv v vi iv Oxford Policy Management

7 List of tables and figures Table 2.1 Budget allocation and outturns of Ministry of Health and Government of RSS 3 Table 2.2 Planned geographical focus of donor support 8 Table 2.3 Current status of Global Fund grants to South Sudan 10 Table 2.4 Total annual commitments and disbursements by sub-category from Table 4.1 Infrastructure requirements for training institutions 18 Table 4.2 Total estimated cost of construction of training institutions for Figure 2.1 Flow of funds in the health sector 4 Figure 2.2 Approved Annual Budgets for Health by type of Conditional Grant 5 Figure 2.3 Annual health budget by conditional grant for the MOH and the transfer to states 6 Figure 2.4 Central Equitoria SMOH Revenue Figure 2.5 Overview of donor funding for the health sector for selected donors from Figure 3.1 Alignment of the HSDP Operational Plan, the three year strategic plan and the annual budget 14 Figure 4.1 Original Costing Model 20 Figure 4.2 Revised Costing Model 20 v Oxford Policy Management

8 Abbreviations CHD BPHS BSF HSDP MDTF MOFEP MOH OPM PHCC PHCU RSS SHTP SMOH SSDP WHO County Health Department Basic Package of Health Services Basic Services Fund Health Sector Development Plan Multi Donor Trust Fund Ministry of Finance and Economic Planning Ministry of Health Oxford Policy Management Primary Health Care Unit Primary Health Care Centre Republic of South Sudan Sudan Health Transformation Project State Ministry of Health South Sudan Development Plan World Health Organisation vi Oxford Policy Management

9 1 Introduction Oxford Policy Management (OPM) was contracted by the World Health Organisation (WHO) to provide technical support to the Ministry of Health in the area of health care financing. The Terms of Reference for this mission were as follows: 1. Review the approved version of the Health Sector Development Plan (HSDP) of the Republic of South Sudan (RSS) and its preliminary costing estimates. 2. Identify health system development needs (as related to the various health system building blocks) required to ascertain the effective implementation of the plan and the associated investment costs. 3. Develop a costing framework of the HSDP integrating investment costs and first year operational costs, required to ascertain the effective implementation of the plan. 4. Submit a detailed report summarizing the findings from the above tasks. Sarah Fox was in Juba during the period 13 th November to 24 th November Upon her arrival she met with Dr Mohammed Abdi, Head of Office, WHO South Sudan and Dr Samson Paul Baba, Director of Planning, MOH RSS, to clarify the scope of the work and to agree on expectations of the mission. During these meetings, the precise scope of work was agreed upon, including the following key issues: A detailed costing of the draft HSDP was carried out over a number of months and finalised in November As this costing remains relevant to the final HSDP and was carried out in close consultation with the appropriate MOH directorates, the current exercise should build on this rather than starting something new. Given that one year has lapsed since the detailed costing of the HSDP was carried out, there was a need to verify some of the unit costs used in this framework, particularly those in relation to construction which have increased considerably. There was also a need to ensure that the depreciation of the Sudanese Pound is reflected in the costing framework. OPM was advised to consult with a number of key stakeholders in this regard including the ministry of finance, donors and some of the key NGOs. There was a need to investigate the alignment of the HSDP costing and that of the South Sudan Development Plan (SSDP) bearing in mind that the latter only covers a period of three years. It was agreed that since the operational plan is at such a nascent stage, it would not be possible to cost the first year of implementation of the HSDP. Instead, it was agreed that Sarah could support the ministry to develop a template to be used by the states when developing the budget for the operational plan. Finally, it was agreed that during this mission, Sarah would attempt to meet with each of the key donors to gather information on the level of funding committed in the coming years as well as, where possible, to document their respective funding modalities for the health sector. As part of the lead up to this assignment and in discussions held during the mission, the issue was raised about the need for future support in the area of health financing and financial management. This mission was therefore seen as an opportunity to collect information on the current situation so that future consultancy work could be tailored to actual needs. It should be noted however, given the very short duration of this assignment, this report does not provide a detailed picture of the health financing setting and only attempts to provide a broad overview. 1 Oxford Policy Management

10 This report begins with an overview of health financing in South Sudan including both domestic and external resources (Section 2). The next section (Section 3) provides some commentary on the development of a budget template for a HSDP operational plan. Section 4 outlines the changes made to the costing framework of the HSDP and Section 5 provides some recommendations. 2 Oxford Policy Management

11 2 Overview of Health Financing in South Sudan 2.1 Domestic sources of funding The budget allocation to health has increased progressively since 2008, with an average year on year increase of about 15%. However, the budget outturn has been significantly lower than the budgeted amount, at only 64% in In 2008 and 2009 the execution rate of the total government budget exceeded 100%, which suggests that the low execution rate of the health budget cannot be explained by a shortfall in government revenue in those years. In addition, the lower execution rate for health compared to the overall budget may indicate that health is not being prioritised compared to other sectors when it comes to actual expenditure, though it may also be indicative of weaker financial management in health compared to other sectors. Further investigation is required to understand why the execution has been low and how it can be resolved in future years. Table 2.1 Budget allocation and outturns of Ministry of Health and Government of RSS Ministry of Health Government of RSS Govt. Health Health budget as Budget per Year Budget Outturn % Budget Outturn % % of total capita (SDG) (SDG) (SDG) (SDG) budget (US$) ,000, ,896,475 78% 5,506,330,718 5,712,662, % 2.5% ,000,000 93,457,737 55% 3,606,312,239 4,012,011, % 4.7% ,260, ,943,922 64% 5,629,539,871 4,113,520,984 73% 3.7% ,260,000-5,718,507, % 9.04 The allocation to health as a share of the total government budget has oscillated around 4% for the last four years, which, based on the WHO Global Health Observatory Data, is very low for the region. Similarly, the government budget per capita on health is low at only $9 in 2011, compared to an estimated per capita expenditure on health of $19 in Ethiopia, $23 in Kenya,, $40 in Yemen and $116 in Egypt [9]. It is worth noting that the health expenditure as a percentage of total government expenditure for 2008 and 2009 are much less than the 4% average indicated in the table above. This is because whilst the outturn of overall Government budget exceeded the budget in both years the outturns for health expenditure were 78% and 55% respectively against budget. The percentage of healthcare outturn as against the total budget outturn was 1.9% in 2008, 2.3% in 2009 and 3.2% in As outlined in the interim and transitional constitution, the government of the Republic of South Sudan is committed to the decentralisation of service delivery to the state, county and payam levels. A portion of the budget for health is therefore transferred directly from the Ministry of Finance and Economic Development (MOFED) to the State Ministries of Finance (SMOF), from where an allocation is then made to the State Ministry of Health (SMOH). There are two types of transfers received by the SMOH from MOFED, conditional and block grants. Both of these types of grants are channelled through the SMOH. Conditional grants are for a number of priority sectors, including Health, and are earmarked for salaries, operating and capital expenditures, while block grants can be used by the state according to their priorities and are not earmarked by the central level. The central ministry of health only receives conditional grants [see Figure 2.1 below]. 3 Oxford Policy Management

12 Figure 2.1 Flow of funds in the health sector The flow of funds described above is in line with the decentralised nature of the Constitution of the Republic of South Sudan. This is not dissimilar to other Federal countries in Africa (e.g. Nigeria). There are however some potential problems with this allocation methodology: 1 The Central Ministry of Health s ability to coordinate national health policy will be undermined. This is because the SMOH s will want to focus on their local priorities and will not be held accountable for achieving priorities identified by the Central Ministry of Health. 2 As a consequence, there may be duplication of initiatives and inefficient use of resources as the Central Ministry of Health may be forced to intervene directly within States to implement programmes. This issue is currently being experienced in Nigeria where both Federal and State Health Institutions operate within each State. The total conditional grants for health have increased significantly since 2006 with the most of the increase found in salary payments, while the budget for capital expenditures has fallen [Figure 2.2]. 4 Oxford Policy Management

13 Figure 2.2 Approved Annual Budgets for Health by type of Conditional Grant SDG Salaries Operating Capital Figure 2.3 compares the conditional grant for the MOH and the total transferred to the ten states during the last three financial years. It can be seen that the central ministry received a significantly higher portion of the conditional grant than the states during this period, though since this does not include the block grant, it does not provide the complete picture of government allocations to state ministries. It is nonetheless interesting to note that the majority of the conditional transfer to the states is used for salaries with very little left for operating and capital expenditures. In 2010 and 2011, the SMOHs did not receive conditional transfers for capital expenditures. Instead, all capital transfers were allocated to the central MOH. Conditional Transfers for operating expenditures were allocated to each State. The same amount applied to each state without taking into consideration population size, number of facilities, geographic distances or variation in costs. 5 Oxford Policy Management

14 Figure 2.3 Annual health budget by conditional grant for the MOH and the transfer to states Capital Operating Salaries MOH 2009 States 2010 MOH 2010 States 2011 MOH 2011 States During the mission a visit was made to the Central Equitoria State Ministry of Health to gather information on their budgeting and planning process. A review of the various sources of revenue received by this state revealed that, including both block and conditional grants, 90% of revenue was used for the payment of salaries with only 3% for operating expenses, none for capital expenses and 7% as grants from international organisations. Figure 2.4 Central Equitoria SMOH Revenue % 7% Block Grants (salaries) 34% 56% Conditional Grants (salaries) Conditional Grants (operational) Grants from international organisations The Budget Process According to the Transitional Constitution, the South Sudan financial year runs from the 1 st of July to 30 th June. This marks a shift from a January to December financial year which was in place prior to independence. The approved budget for is expected to be announced in late 2011 and this will run until the end of June taking into account claims that have been made since October The budget ceilings are based on the 2011 approved budget which means that there will only be minimal changes from the 2011 budget. 6 Oxford Policy Management

15 Due to the changes in the financial year and the delay in approving the budget, it has not been possible to develop a budget calendar to guide the budgeting and planning process. For the coming financial year, it will be important that this is communicated with all Spending Agencies and strictly adhered to. In addition to the annual budget preparations, Spending Agencies are requested to prepare a three year strategic plan and budgets based on sector priorities and the priorities laid out in the South Sudan Development Plan ( ) [1]. It is not clear whether guidelines have been provided for the development of these plans though it is understood that these plans are need-based and are not constrained by budget ceilings. At the State level, line ministries send their three year plan to the SMOF where a consolidated plan across each of the decentralised sectors is produced. 2.2 External Sources of funding The health sector in South Sudan is in a transition period from humanitarian to development assistance. As such, a number of donors are currently in the process of gradually phasing out their support while new types of funding streams are coming on board. The next section describes some of the current funding mechanisms that are due to be phased out within the coming year. These are followed by a description of the funding from global initiatives and finally an overview is provided of the planned funding mechanisms in the health sector. The sources of funding provided here are by no means exhaustive but give a broad indication of some of the current and planned financing modalities Current funding mechanisms soon to be phased out Basic Services Fund (BSF) The Basic Services Fund of the Government of the Republic of South Sudan (BSF) is a pooled funding mechanism targeting primary education, primary health, water and sanitation. It is currently funded by the Department for International Development (DFID), the European Union (EU); Government of the Netherlands (MINBUZA); the Government of Norway (NORAD); and the Swedish International Development Agency (SIDA). Following three phases of roughly 18 months in duration, the BSF is now in an Interim Arrangement (IA) that came to an end in December A final phase, called the BSF Bridging Arrangement is planned for January 2012 to December 31 st The management of BSF is carried out by a management consultant, Mott MacDonald, housed in the BFS secretariat in Juba. They are responsible for the disbursement of funds and providing support to grant recipients. There are currently 37 NGOs contracted to deliver primary health care under the BSF, made up of national NGOs, international NGOs and consortiums of both. BSF funding for primary health is used for service delivery at the PHCC and PHCU level including salaries, incentives, drugs, equipment, training and maintenance. Multi Donor Trust Fund (MDTF) Following the signing of the Comprehensive Peace Agreement (CPA), a Multi Donor Trust Fund (MDTF) was established for the six year interim period before voting on independence. It is administered by the World Bank and as of 2009 fourteen additional donors had contributed [1]. The health sector was one of the key recipients of MDTF funds through the Umbrella Programme for Health System Development (UPHSD), which was launched in This programme focuses on capacity building of the MOH, investment in infrastructure and equipment, pharmaceutical capacity and supply, human resources for health development and expansion of basic services. Three international NGOs Norwegian Peoples Aid, IMA World Health, and HLSP/Mott Mac Donald Limited were contracted as Lead Agencies (LAs) for the delivery of services. 7 Oxford Policy Management

16 Sudan Health Transformation Project (SHTP II) The USAID funded Sudan Health Transformation Project (SHTP) is in its second phase, marking a shift from relief to development. Beginning in 2009, this phase will come to an end in October Management Sciences for Health (MSH) have been contracted to manage the project, focusing on expanding access and coverage through the delivery of high impact interventions; community mobilisation and capacity building of CHDs and MOH. The project works through Sub Contracting Partners (SCPs) in 14 counties under the 10 states of South Sudan. Office of U.S. Foreign Disaster Assistance (OFDA) USAID also provides funding for the health sector in South Sudan through the Office of U.S. Foreign Disaster Assistance (OFDA). Covering approximately 182 health facilities OFDA provides health services in 25 counties across all states in South Sudan. Contracts are held with 12 NGOs who are responsible for service delivery. OFDA plans to transition out of basic services provision by the end of Planned funding modalities in the health sector In order to avoid duplication of efforts, donors have come together and agreed on a split by geographic area. As shown in Figure 2.2 below, there will be three broad implementation modalities with each on covering a specified number of states. USAID will cover two states, the pooled fund will cover 6 and the World Bank will be responsible for two states. Table 2.2 Planned geographical focus of donor support State Central Equatoria Western Equatoria Eastern Equatoria Northern Bahr el Ghazal Western Bahr el Ghazal Warrap Unity Lakes Upper Nile Jonglei Donor USAID USAID Pooled Fund Pooled Fund Pooled Fund Pooled Fund Pooled Fund Pooled Fund World Bank World Bank Health Pooled Fund (HPF) With many of the current funding streams coming to an end, a number of donors have come together and agreed on a pooled funding mechanism focusing on the six states outlined above. It will be led by DFID with support anticipated from CIDA, AUSAID, EC and SIDA. The HPF is currently planned for five years, though it is set within a longer term vision of up to fifteen years. The initial budget across all donors is for about 150 million. With a focus on high impact cost effective interventions, the HPF will focus on service delivery including primary care and county hospitals; capacity building and systems strengthening at central and decentralised levels; and transition to government managed health services. The latter will include a gradual handover of salary payments through government systems. 8 Oxford Policy Management

17 The approach used by the HPF will represent a shift from a facility-based to a county-based approach, while also recognising the need to harmonise across states. One organisation will be contracted per state and will be responsible for strengthening CHDs and supporting front-line service delivery and community outreach. This approach has been investigated by the Division of Health Systems and Services Development (DHS-EMRO) in other countries of the Eastern-Mediterranean Region and is currently being piloted in selected districts/counties. As this service delivery arrangement is rolled out in South Sudan, it is very important that the appropriate evidence is gathered, so that if it does result in a more efficient use of resources it can be replicated in the other states. World Bank The World Bank is in the process of preparing a two year project (Jan 2012 Dec 2013) to support the health sector. This project will go to the board for approval in December The project will focus on two areas: (1) the delivery of basic services in two states, Upper Nile and Jonglei; and (2) support to the stewardship function of the MOH, focusing on monitoring and evaluation. The total budget for this project will be $28 million over the two years, with $23 million for the delivery of basic services ($10 million for Upper Nile and $13 million for Jonglei) and $5 million for support to the stewardship function. For the service delivery component in Jonglei and Upper Nile, one lead organisation will be contracted out to support the state MOH to implement the programme. The MOH will select either the Interchurch Medical Association (IMA) or the Norweigan People s Aid (NPA) for this role. It is currently envisaged that the management agency will have direct contracts with health facilities rather than contracting NGOs as will be done in other states. The World Bank currently plans to implement a Performance Based Financing (PBF) pilot in a few counties in one state. It is estimated that $3 - $4 million will be allocated to the implementation of this pilot. A feasibility study of PBF was carried out in September 2011 [1]. While this study anticipated that user fees would be re-introduced in the pilot areas, this element has now been revised and services will continue to be provided for free in line with the Transitional Constitution, 2011 [3]. It is understood that Cordaid has planned to undertake a follow-up study of PBF to help finalise the design. USAID As part of the agreed geographic split, USAID will cover two states, Central Equitoria and Western Equitoria. While the funding has not yet been approved for the coming year, the planned budget for health is about US$50 million per year. The funding will be targeted primarily at a sub-set of the Basic Package of Health Services including training, supportive supervision and some rehabilitation. Drugs will not be funded and the payment of salaries will be gradually handed over to the Government. The timeline and process for this is yet to be agreed. USAID plans to contract NGOs to oversee service delivery in the two states. 2.3 Global Health Initiatives Global Fund The Republic of South Sudan is also a recipient of grant funding from the Global Fund, with current grants for HIV, TB and malaria. Based on the most recent data available, Table 2.3 provides an overview of the grants currently in progress. The malaria and HIV/AIDS grants are in their first phase which means that more funding is approved for the second phase. Based on the amounts already disbursed, a further $30.5 million will be available for HIV and US$18.3 for malaria. The TB grant, however, is already in its second phase which is due to come to an end at the end of Oxford Policy Management

18 Table 2.3 Current status of Global Fund grants to South Sudan Component (Round) Grant Title Principle Recipient Start Date (Current Phase) End Date (Current Phase) Total Budget US$ (Current Phase) Amount Disbursed US$ (Current Phase) Last updated on: Malaria (7) Scaling-up coverage of malaria prevention and control interventions in S.S. PSI 01/12/08 30/11/13 33,512,896 46,229,289* 18/5/11 TB (7) Improving and Expanding TB control in SS UNDP 31/12/10 31/12/13 5,000,208 2,606,313 22/11/11 HIV/AIDS (9) Health Systems Strengthening in S.S. UNDP 01/10/10 30/9/12 22,056,398 16,311,744 11/8/11 Source: * The disbursement here is higher than the budget for this phase which means that the additional amount will be taken from the budget for the second phase. The broad area of focus of each of these grants is as follows: Malaria: Scale-up of preventative and curative malaria interventions targeting the most vulnerable including children under-five and pregnant women. TB: Strengthening existing TB diagnostic treatment centres through expansion of DOTS, addressing issues relating to multidrug resistant TB, and capacity building through the establishment of a TB control department in the MOH. HIV/AIDS (HSS): Health System Strengthening focusing on health workforce development; access to safe and effective drugs; strengthening the Health Information System (HIS) and other health-system services such as blood banks, antenatal services and community level services. Global Alliance for Vaccinations and Immunisations (GAVI) South Sudan has received funding from GAVI since 2007, when its proposal for Immunisation Services Support (ISS) was approved. Later in 2009, funding for Health Systems Strengthening (HSS) came on board. No GAVI funding is currently approved beyond 2012 [see Table 2.4]. 10 Oxford Policy Management

19 Table 2.4 Total annual commitments and disbursements by sub-category from Immunisation Services Support Commitments $1,193,449 $1,019,125 $2,038,250 $84,500 Disbursements by programme year $1,193,449 $1,019,125 $2,038,250 Health Systems Strengthening Commitments $2,628,000 $2,707,000 Disbursements by $2,607,654 programme year Source: Trends in donor funding, past and future With a number of sources of funding currently being phased out and others coming on board, it will be important to assess whether the new funding streams will cover previously funded services and activities while at the same time ensuring that funding is aligned with the HSDP and SSDP. Figure 2.5 Overview of donor funding for the health sector for selected donors from ,000, ,000, ,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000, GAVI Global Fund (Malaria) Global Fund (TB) Global Fund (HIV) USAID WB HPF OFDA SHTP II MTDF BSF Figure 2.5 illustrates the levels and sources of funding for the health sector from 2006 to While this picture is not complete as figures were not available for all years and not all donors are included, it does give an idea of the dramatic shift in sources of funding over the next year (see colour change in graph) as well as an indication of the total volume of funding, which based on current plans will increase in 2012 and fall rather significantly after that. Using the HSDP cost 11 Oxford Policy Management

20 estimates as an indication of resource needs, there is a real danger that the aims of the HSDP will not be achieved as level of funding will fall far short of the resource requirements to implement the plan. It may be necessary therefore to prioritise based on available resources. It is also very important to be mindful of the varied nature of the services and types of expenditure being financed by the different funding agencies. For example, while the Health Pooled Fund and the support from USAID appear to be using a similar funding modality, the approach of the World Bank is rather different. The ministry should work collaboratively with donors in order to ensure that all gaps are covered and that none of the states are left behind. 12 Oxford Policy Management

21 3 Support to the development of a budgeting template for the HSDP operational plan While the TOR anticipated that the costing of the first year of the operational plan could be carried out as part of this assignment, this was not possible for two reasons: 1. The HSDP operational plan is at a very early stage of development, with a workshop to launch the process planned for January 2012; and 2. The detailed budget for the operational plan can only be developed by SMOHs or MOH directorates and cannot be carried out by an external party. Instead it has been agreed that OPM will support the process, albeit at an early stage, by contributing to the design of the budgeting template and supporting the development of guidelines. Before moving on to these details, the next section provides an overview of some of the important information gathered in relation to this process. 3.1 Background information and current situation During consultations with the Central Equatoria State (CES) MOH and MOF, the following issues emerged, each of which will have a bearing on the development of the operational plan: States are already developing three year plans for health Each state is requested by central government to develop a costed strategic plan across 6 priority sectors, including health. In contrast to the HSDP which spans five years, the strategic plan is for three years and is amended on a rolling basis each year [see Annex B for format of strategic plan used in CES]. Based on the discussions held, the three year strategic plan that is currently being developed is not based on or guided by the HSDP. The integration of the annual budget and three year plan needs to be strengthened While the annual budget is constrained by a budget ceiling, the three year medium-term plan is needs-based and is funded from a variety of sources including from development partners. This is fine so long as the strategic plan clearly shows which part is to be funded from each source and that for the first year, the portion to be funded by the government must be equal to the next year s annual budget. It is not evident from the documents that we have seen that this is the case. The format for the three year plan has not been defined While there is a clear format for the development of the annual budget, a specified structure for the strategic plan has not been provided to the states. Moreover, there is a clear need to provide training and support in the development of these plans so that staff understand their purpose and are able to set targets and budget each of the activities. Information on off-budget funding at state level is weak Funds from donors and NGOs are not captured at the state level and donors have not until now been included in the state planning process. Central- and state-level planning is not coordinated While the process of joint planning among CDHs and the Central Equatoria SMOH appears to be reasonably effective, there seems to be a total disconnect between planning processes at state and central level. This was of great concern to the SMOH who felt that without their participation in the planning process, the central ministry is planning in the dark. 13 Oxford Policy Management

22 The State Ministries of Health do not have a budget for capital expenditures For the last two years, none of the SMOHs have received a development budget allocation. 3.2 Guidelines on the development of the HSDP operational plan The HSDP operational plan will have a time horizon of five years ( to ), thus spanning a longer period than the three year strategic plan that are currently being prepared. It is very important, however, that the preparation of each of these is not seen as separate exercises - the three year strategy is simply the first three years of the HSDP operational plan. By the same token, the annual budget should include all planned expenditure whether funded by Government, donors or through other local revenue sources.. Figure 3.1 shows the different time periods covered by each of the planning documents used at the state level. Each of these should be entirely consistent with each other. Figure 3.1 Alignment of the HSDP Operational Plan, the three year strategic plan and the annual budget Year 1 Year 2 Year 3 Year 4 Year 5 Operational Plan (HSDP) Strategic Plan Annual Budget The following are the recommended principles in the development of the operational plans and associated templates: a) Alignment: The guiding document for the operational plan is the HSDP, meaning that all activities must be fully aligned with the priorities set out in this document. Both of these documents span a period of five years. In addition, given that the first three years of the HSDP should be aligned with the SSDP, which is the overall strategic document of the government of South Sudan, there should be an automatic alignment between the operational plan and the SSDP. In practice, however, the fact that the HSDP spans a longer time period than the SSDP and that the SSDP was developed after the HSDP has meant that the two are not perfectly aligned. While this is understandable in a period of transition, it is very important that a decision is made about which document takes precedence in terms of operational planning so that a coherent planning process can get underway. b) Consistency across templates: In line with the above point, the template used for the three year strategic plan and the HSDP operational plan should be one and the same and should be structured in such a way that the portion funded from the government budget can be easily extracted from this to form the annual budget. In order to do this, the template should include a column in which to insert the budget category associated with each line item. For example, the purchase of vehicles using government funds should 14 Oxford Policy Management

23 include the budget code 2810 (Vehicles & Other Transport Equipment). This can be done using a drop-down menu in the Excel template. c) Comprehensive: The operational plan should capture each of the main sources of funding for the activities identified, including funding from the government budget, local revenues and development partners. Obtaining detailed information from development partners is likely to be the most challenging and will require considerable engagement during the planning process. A column should be included in the template to indicate the source of funding. The operational plans must also include both capital and recurrent expenditures for each year. It is worth noting that a good budget and annual plan should be needs based. Therefore it is important that the requirements to meet the health needs are fully costed separately from their funding sources. The funding for the budget will require stronger coordination with all donors to ensure that all resources are pooled to fund the priority needs identified within the plan. The establishment of a donor coordination unit within SMOH will assist in achievement of this objective. 15 Oxford Policy Management

24 4 HSDP Costing A preliminary costing model was developed in 2010 based on the most recent version of the HSDP at that time. It is a flexible model built in Excel that was designed to be updated by the MOH in line with evolving priorities and plans. It incorporates costs for the entire health sector and is not limited to a particular source of funding. Infrastructure and staffing needs are based on the 2009 version of the BPHS and the Framework for Hospital Services. The costing model provides a broad framework for the costs of delivering the HSDP. It is not intended to be used for budgeting purposes, nor does it take into consideration how each of the components will be funded, though practical considerations of absorptive capacity and resource availability are taken into account when factoring in how services can be scaled up. 4.1 Costing Methodology This section provides an overview of the methodology used to develop the costing model (for more details, refer to the technical note accompanying the original model [5]). The costing template is comprised of three overall categories of cost: 1. Operating costs: These include all costs associated with delivering services at each type of facility (PHCU, PHCC, County Hospital and State Hospital) and at the community and the costs of carrying out administrative functions at each administrative level (CHD, SMOH and MOH). In the spread-sheets, these costs are broken down into salaries, medical supplies and other operating costs. 2. Health System Strengthening (HSS): This is the annual cost of developing and implementing the systems and structures required to support service delivery. It is broken down into six HSS functions: Leadership, governance and financing; Human resources; Infrastructure; Medical Supplies; Procurement; and Monitoring and Evaluation. The breakdown of these costs varies across each HSS function. 3. Capital Costs: These include the costs of acquiring goods with a life longer than a year including buildings, medical and non-medical equipment and vehicles. As was the case for operating costs, these are applied across each type of facility (PHCU, PHCC, County Hospital and State Hospital) and administrative level (CHD, SMOH and MOH). The costing is presented across a series of Excel Worksheets, grouped into four categories: Variables and Results (red) Charts Key Variables & Results Headlines Totals Unit costs Levels of Service (green) Community PHCU PHCC County Hospital State Hospital Teaching Hospitals County Health Health System Strengthening (gold) 1. Leadership & Governance 2. Human Resources 3. Infrastructure 4. Supplies 5. Procurement 6. Monitoring & Evaluation Other (blue) Staff Training and Recruitment Cadres Training Institutes Medical Supplies Population Facilities 16 Oxford Policy Management

25 Dept State MOH GOSS MOH Source: Costing Technical Note, Nov Attendance 2011 GOSS Budget 4.2 Changes made to update the model OPM was tasked with updating some aspects of this model based on the realisation that a) some of the unit costs had changed, particularly given the high inflation that was experienced over the past 12 months, and b) the HSDP has now been finalised. This section provides an overview of these changes but the details can be seen in the costing model itself. Exchange rate The exchange rate has been changed from 2.65 SDG/US$ to 2.96 SSP/US$ and all references to SDG have been changed to the new currency South Sudanese Pound (SSP). The central bank currently operates a fixed rate regime at this new rate, and this is not projected to change. In line with this, the SSP/GBP rate has been changed to 4.65 on the basis that the current USD/GBP exchange rate is 1.57 $/. Capital Costs One of the main changes incorporated into the costing model related to infrastructure costs. This is a result of the large increase in the cost of construction that have occurred in the last 12 months and the fact that some of the plans for building, especially in relation to training institutes have been elaborated in more detail since last year. A) Facilities The cost of construction of facilities has been updated based on recent cost estimates obtained from the procurement department of the MOH. These are based on the estimates provided by an architect contracted by the ministry to develop standard plans for PHCUs and PHCCs. The preliminary costing estimates for these prototypes are as follows: PHCU, including staff housing (2 self-contained rooms) SSP PHCC, including staff housing (but without parking and paving) SSP 3,012,530 Cost per square meter SSP 3,200 B) Training Institutions The total construction cost of training institutions were estimated through a series of consultations with the Director General of Training and Professional Development in the MOH. Building on the plans included in the SSDP, the infrastructural requirements for each institution was considered individually [see Table 4.1]. The costs were then calculated based on the construction costs provided above as well as actual costs used by UNDP and UNFPA for the construction of Juba College of Nursing and Midwifery. 17 Oxford Policy Management