Across the world, governments are the major sponsors of multi-year multi-million projects. Most government projects, whether infrastructure like hospitals or roads or developmental like vaccination or HIV intervention program often do have well defined project development objectives (PDO) and well supported investments from lending agencies such as World Bank or Asian Development Bank. Many of these projects expect to gain from improved processes and capacity building at various governmental units. In several cases the lending organizations tie the loan component to specific areas of improvement termed tied loans. In cases where the institutional arrangements are satisfactory, lending organizations allow block grants that may be used at the discretion of the users and the government agencies. The assumption in block grants is that consumption units can prioritize their areas of improvement, plan and allocate funds in line with their prioritization. Despite noble intentions, many lending organizations realize the funds are misused. In China World bank funds were diverted to speculative investments. Uganda and Zambia governments reported misuse of debt-relief funds to non-scheme areas. Scams in construction, animal welfare, healthcare and other schemes in India and the subcontinent are clear indication to the misuse of development loan funds. Administrative reforms projects, including judiciary have seen large scale misuse of funds from Philippines, Russia, Sri Lanka, Ukraine and Greece.
What is the weak link in the execution of government sponsored projects. Our analysis of several World bank lent projects reveal absence of a tight leash on the PDO, activities and outcomes is the real culprit. While World Bank and other lending organizations insist on describing in detail the project context, developmental objectives, design, key indicators , safeguards and implementations, many a slip happens between the project fund allocation and implementations. It is not uncommon to see many department heads putting their heads together in stitching a formidable Implementation completion report (ICR) to the lending agencies for their approval or extensions. While World Bank and other lending organizations insist on using result based management framework to capture YoY outputs, Outcomes and Impact, many a gaps exist in the government organization and limited knowledge of junior consultants sent by lending organizations. No formal analysis and alignment of outcomes and secondary effects are planned ahead by the implementation agency. The result, many assets and works get completed without significant long-term effect. Lending organizations must insist on a strong M&E organization within the government departments. Formal and up-to-date data analysis must be conducted before release of YoY grants. Half yearly reports detailing the nature of assets being created or programs planned is a good indicator of what would be the expected outcomes and impact of the investments. World Bank consultants must seek an intermediate completion report with sufficient use of latest ICT technologies including images, and videos. New age institutional lending requires lending organizations deploying more investments in M&E to reduce fiduciary compliance.