We have located funding for the HIV programs, it’s the politicians’ move now

The budget of the Macedonian Ministry of Health provides possibilities for financing the harm reduction programs, yet it remains inexplicable why funds allocated for these programs in the 2017 Budget were significantly cut. Was the Ministry attempting to avoid support and consequently the obligations under the contract between the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Macedonian Government?   

Harm reduction programs in Macedonia have been financially supported by the Global Fund to Fight AIDS, Tuberculosis and Malaria since November 2004. The programs help provide health, social, legal, psychological and other services to people who use drugs. Finances are granted to the Ministry of Health, i.e. a separate unit working within the Ministry as the primary recipient, which further allocates specific amounts to secondary recipients (civil society organizations) that have previously signed detailed contracts with the Minister of Health, all towards smoother sustenance of the 16 harm reduction programs in 13 towns in Macedonia. The contract between the Global Fund and the Republic of Macedonia on financing harm reduction programs ends in June 30, 2017. The contract stipulates that after the Global Fund finishes its financial support, the Macedonian Government will resume the obligation. According to the estimations, harm reduction programs require a budget ranging from 27,392 MKD in thousands to 34,875 MKD in thousands, depending on the financing model, a minimum or an optimal one. However, the latest indications from the Government, confirmed with the latest 2017 Budget, revealed insufficient funds for financial support of the harm reduction programs.

What is in store for harm reduction programs after July 1? Can the Ministry of Health resume financing? Is the Macedonian Government, i.e. the Ministry of Health unable to adhere to the contract signed with the Global Fund?

The answers can be found in the Budget analysis, i.e. an analysis of the planned expenditures and realized budget of the Ministry of Health.

2011 – 2015 Term

The Ministry’s Planned Budget, i.e. planned expenditures shown in table no.1, continuously increased from 2011 to 2014, only to drop in 2015, when they were lower than the 2013 figure. With the revisions and rebalancing, the Ministry’s planned expenditures were decreased in 2011, 2012 and 2014. The 2013 planned expenditures were the highest, and apart from 2013, the 2015 figures were also above 6 million MKD in thousands. A drastic raise in the planned expenditures compared with 2011 occurred in 2012, when the numbers were increased for 2,292,907 MKD in thousands or 73.85%.      
Table no. 1: 2011 – 2015 Planned expenditures of the Ministry of Health (in MKD in thousands)
 
Year Voted Budget Rebalance/revision Difference
2011 3,128,808 3,104,708 -24,100
2012 5,529,529 5,397,615 -131,914
2013 5,977,749 6,397,806 420,057
2014 6,238,218 5,980,591 -257,627
2015 5,932,704 6,132,124 199,420
 
Regarding realization, is the only year when more finances than the planned were realized. The realized budget for 2012 amounted to 102.74 %, with 147,773 MKD in thousands spent more than planned.
 
Graph no. 1

The realized budget for 2011 was 85.30 % or 456,275 MKD in thousands less. For the period 2013 to 2015, the realization amounted to above 90 %. In 2013, the budget spent was 94.07 %, with 379,508 MKD in thousands remaining as unused, while in 2014, 92.97 % were realized, i.e. the unused budget amounted to 420,182 MKD in thousands. The largest amount of funds was realized in 2015, when as much as 95.41 % of the planned expenditures were spent. Due to the large percentage of realization in 2015, the amount of funds that remained unused was the smallest (281,295 MKD).

Trends in 2016 and 2017

The Ministry’s expenditures allocated for 2016 initially were the highest in the analyzed period, 2011-2016. However, the Central Budget was rebalanced twice in the course of 2016, affecting the planned expenditures, which led to a constant drop, and after the second rebalancing the amount decreased for 609,270 MKD in thousands compared to the initial expenditures, with the real figure dropping to 5,887,719 MKD in thousands at the end.
 
Table no. 2 Planned expenditures of the Ministry of Health for 2016 and 2017 (in MKD thousands)
 
Year Budget voted Rebalance no. 1 Rebalance no. 2
2016 6,496,989 5,915,777 5,887,719
2017 5,596,159 / /
 
With the revisions in 2016 and 2017, the Ministry’s planned expenditures were restored to the level prior to 2013. This decrease is inconsistent with the planned expenditures in the Central Budget according to budget users, which in 2016 with the last revisions were increased for 9,410,809 MKD in thousands in comparison to 2015, and for 13,670,524 MKD in thousands in 2017 in comparison to 2015.  
      
Harm reduction programs

The planned expenditures of the Ministry of Health are distributed to 11 (eleven) programs: 1. Administration; 2. State, Sanitary and Health Inspectorate; 3. Agency for Medication; 4. National Transplantation Program; 5. Health Protection; 6. Curative Health Protection for Prevention; 7. Radiation Detection and Safety; 8. Support for the implementation of the Roma Decade and Strategy; 9. Accreditation Agency; I. Health Reforms and К. Public Administration Reforms. Program 1. Administration covers the Ministry’s development programs, while programs I. Health Reforms and K. Public Administration Reforms are the Government’s development programs. The Harm Reduction Program is incorporated in Program 5. Health Protection, more precisely Subprogram 57. Protection of the Population from AIDS.

Subprogram 57. Protection of the Population from AIDS, as shown in graph no. 2, is financed from the General Budget of the Republic of Macedonia, Global Fund donations, and self-financing from 2014 to 2017. Most of the finances for Subprogram 57 were provided by the Global Fund, with more than 90% participation for the period covering 2011 to 2013. From 2014 to 2016, when the subprogram’s planned budget was the highest, the Global Fund’s participation dropped to 82.88% in 2014, 87.34% in 2015 and 77.64% in 2016. In 2017, the planned expenditures for this Subprogram are the lowest, as expected since the Global Fund is withdrawing from the country and its participation in the total planned expenditures is only 63.40%. On the other hand, Macedonia’s participation in the subprogram with funds provided from the General Budget is the following: only 6.62% in 2012, 6.39% in 2011, participation in 2013 and 2017 slightly increased to little above 9%, in 2014 it was the highest with 15.57%, while in 2015 the total amount allocated from the General Budget to the total planned expenditures of Subprogram 57 was 11.51%.
 
Graph no. 2

The total planned expenditures of Subprogram 57. Protection of the population from AIDS are a small part of the Ministry’s total planned expenditures, ranging from 1.32 % to 2.83 % for the timeframe 2011-2017.

Regarding budget realization, it was observed that more finances were spent for Subprogram 57. than the foreseen ones in 2011, 2014 and 2015. Most of this budget was granted by the Global Fund, while the finances allocated from the General Budget were insignificant, except in 2015 and 2014 when this budget was nearly completely realized. Furthermore, the budget realization from self-financing was very low.

Graph no. 3

The total budget realization for Subprogram 57. Protection of the Population from AIDS in the total budget realization of the Ministry of Health was minor. The realized budget of Subprogram 57 amounted to somewhere between 2.07% and 2.36% in the Ministry’s realized budget.

Conclusion

In the period from 2011 to 2015, the planned expenditures of the Ministry of Health increased, with the 2012 ones being significantly higher than the 2011. With the two budget rebalances in 2016, the planned expenditures were decreased to bellow the 2013 level. The same occurred with the 2017 planned expenditures as well, i.e. the 2017 budget voted in 2016 was less than the 2013 budget. The Ministry’s realized budget, except in 2012 when the budget realized was larger than the foreseen one, usually ranges from 85.30 % to 95.41 %, with the unused budget ranging from 281,295 MKD in thousands to 456,275 MKD in thousands.

From 2011 to 2017, Subprogram 57. Protection of the Population from AIDS was financed from three sources: the General Budget, self-financing (from 2014 to 2017) and donations. The donations were granted by the Global Fund, and from 2011 to 2015 ranged from 82.88% to 93.38%, Global Fund’s participation dropped to 77.64% in 2016, and to 63.40% in 2017, as expected since Global Fund is leaving the country on June 30, 2017. The Subprogram’s planned expenditures amount to somewhere from 1.32% to 2.83% in the Ministry’s planned expenditures. Regarding budget realization of Subprogram 57, the conclusion is that the Global Fund is leading in this aspect, while the Ministry ranges from 2.07 % to 2.36 %.

The optimal harm reduction financing model prescribes 34,875 MKD in thousands annually, or around 0.60% from the total 2011-2017 planned expenditures of the Ministry of Health. If we consider the unused budget (with the exception of Subprograms 56. Measures for Tuberculosis Prevention and 57. Protection of the Population from AIDS, both financed by the Global Fund), the harm reduction programs’ budget, pursuant the optimal model, was only 8.17% from the 2013 unused budget, 9.13 % from the 2014 one and 18.36 % from the 2015 one (the unused budget ranges from 281,295 MKD in thousands to 456,275 MKD in thousands). Therefore, the funds required to sustain the harm reduction programs present no burden to the Ministry of Health. Cutting on the planned expenditures of certain subprograms or a combination of several subprograms and different programs with remaining unused budget should be sufficient to sustain the harm reduction programs. Hence, with small corrections in the budget planning, the financing of harm reduction programs is possible. Why the 2017 budget of the harm reduction programs was significantly decreased remains unclear. The Government failed to provide funding and thus violated its obligations under the agreement signed with the Global Fund.      

Stefan Stefanov

The author was born and lives in Veles. He graduated at the Faculty of Economics in Skopje, Department of Financial and Accounting Management. In 2013 he acquired a master’s degree in Financial Management at the Institute of Economy – Skopje. From 2011 he has been working as a financial manager in HOPS – Healthy Options Project Skopje.