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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/4175

Advisors: Isaac Paul
Keywords: Fiscal decentralization, Expenditure
assignment and Budgeting
Copyright: May-2011
Date Added: 30-Nov-2012
Publisher: AAU
Abstract: Fiscal decentralization is one component of decentralization that gives authority to local government to collect revenue through taxes and responsibility over spending decision. Fiscal decentralization has four components: expenditure assignment, tax assignment, intergovernmental transfer and sub-national borrowing (Bird, 2001). The overall objective of the study is to identify and analyze expenditure assignment practice and way of allocating budget to finance expenditure responsibility in the woreda. The study also aimed at identifying problems related with expenditure assignment in the woreda. Longitudinal research design was used to assess the existing expenditure assignment practice in the woreda. Both qualitative and quantitative data were collected through primary and secondary data collection instruments. Primary data were collected through interviews, questionnaire and focused group discussion. Purposive sampling technique was used to select four sector offices of the total 26 in the woreda. Again by using purposive sampling technique 10 respondents were selected from each selected offices and total of 40 respondents were selected from the total population of 244. Secondary data was collected from five year strategic plan report of the woreda (1998-2002), manuals and federal and regional level directives. The finding of Study showed that, budget allocation system used by the woreda has problem of planning. In addition, the pattern of expenditure after and before fiscal decentralization in the woreda shows that much of the budget assigned to local government was used as recurrent budget. Expenditure on capital formation for development was minimal. Furthermore, expenditure on the most favored sector by the government for poverty reduction in the country (education, health and rural road) has not shown an improvement after fiscal decentralization was commenced in the woreda. The main source for financing expenditure of the woreda was from regional government in the form of block grant budget. Domestic source (tax and non tax) has not shown significant improvement in the share of the total expenditure in the woreda. In addition, the devolution of expenditure excusion to the lower level of government has some problem in the study area. Some of them are unfunded expenditure assignment, lack of formal assignment to sector offices in the woreda and misallocation of capital and recurrent expenditure. With regard to service delivery, there is some improvement in the education and health sector offices. But the service provision in these sectors faces increasing number of service users. Therefore, to change the situation, government should have to improve planning and budgeting system in the woreda. Most importantly, lack of formal assignment for sector office should have to be improved by providing them with specific responsibilities.
URI: http://hdl.handle.net/123456789/4175
Appears in:Thesis - Regional and Local Development

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