The Modernization of Municipal Public Administration Project
Prefeitura Municipal de Bom Despacho

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
An estimate immediately after the local government’s inauguration showed that, together, corruption and inefficiency consumed between 15% and 40% of the municipal revenue. With so much recourse lost, there was no way to get results. In addition, the administrative methods were outdated and public servants had not been recycled to cope with new technologies. These hand-caps made the processes to flow slowly with an over-dominance of bureaucracy. Public service delivery were inefficient if rendered at all. There was more. City's past due debt corresponded to about 30% of the annual tax collection; 80% of the vehicle fleet was totally wrecked; there was garbage accumulated in the streets; school buildings were worn out, municipal roads were impassable; expenditures were unmanageable; resource allocation was inefficient, and the impacts of public policies could not be measured, which means they could not be effectively managed. Besides that, the structure was excessively bureaucratic, focused only on the processes themselves and the rendering of accounts to the controlling bodies. Nobody seemed concerned with the end results that the community was expecting from the local administration. There was no vision of the future. No planning. The administration was working guided by chance and external factors detached from its own goals, o long-term goals. Surviving one more day seemed to be the only that counted. Planning was a fiction put on paper only to fake compliance with the Republic Constitution that required certain documents to be prepared and made public. Centrally-produced Annual Budget had little relation with reality and did not take into account the practical needs of the society even in very important sectors like public health and education. Essentially, for the last several years, producing an annual budget was basically a mechanical operation consisting in multiplying previous year’s numbers by the previous year’s inflation. That was it. The accounting software used did not comply with the requirements of the Public Sector Accounting standards, which is required since 2014. Besides that, it had no security rules, was easy to be tempered with, and its output used to be inconsistent with both input data and business rules. Meanwhile, Brazil entered a deep economic recession that ensued persistent fall of the municipal revenue which is greatly dependent on tributes collected by the federal and state governments. Without deep changes that involved significant and immediate gains in efficiency, removal of corruption and wasteful expenditure there was no hope for recovery. With courage and will power, the administration introduced new methods, took people as the most important asset for change and offered to the public servants new opportunities for education and training. Their energy was redirected towards well defined goals that could bring results for the community, which would be the ultimate gauge. Expenditures had to payback in measurable ways as services for the tax payers. The changes put an end to unnecessary expenses, brought about more efficiency and secured palpable results for the community. This meant better quality of life for about the 50 thousand inhabitants. So, the problem to be solved was a mix of corruption, wasteful expenditures, lack of tools and lack of focus on strategic goals. Above all, lack of indicators that would allow us to measure the results achieved.

B. Strategic Approach

 2. What was the solution?
The solution involved a mix of technological tools comprised of both software and hardware, change of culture with public servant being encouraged to recycle themselves and find their new roles and goals as someone whose work should be targeted towards the community and not the organization itself. The adoption of a new accounting software, open, free and compliant with the applicable rules also worked as a opportunity to review internal and external work-flows, processes and methods, which entailed and supported the most-needed cultural changes. The solution also involved the creation of a municipal public servant school that continuously offers courses on public administration related issues, like public accounting, money management, administrative law, constitutional law and the like. With new technologies and the new power the public servants were endowed with, resources were better allocated, costs were reduced and tangible results were brought to the population.

 3. How did the initiative solve the problem and improve people’s lives?
Yes, the project brought effective, concrete and measurable gains for the local population. Improvements can be confirmed in a number of ways, including better school buildings, new libraries, twice as many doctors per 10,000 inhabitants, better infrastructure and improved sanitation. All this have been achieve through a change in management, with new technologies greater focus to results and a realistic strategic planning, in tune with the needs of the Municipality. Through this reasoning, the execution of the project was based mainly on the introduction of new working methodologies and a new vision for the public servants. The management model implemented had as initial mark and Administrative Reform, which organized the entire functional structure of the city hall. This Administrative Reform also allowed the sharing of the strategic goals with all the stakeholders. Another important innovation had to do with the new Municipal Multiannual Plan (MMP) established in 2013 for the next for years starting in 2014 and ending in 2017. For the first time the MMP was based on available evidences and had been integrated with URBEM, the free, open software system deployed by NCM. The Urbem system is the most important software tool among those adopted by the local administration. Using this software not only allowed the most needed changes to occur, but alto entailed an annual saving of about US$ 80 k because it is free. In order to copy with so many changes, it was necessary to change the public servants mindset. For this, the Administrative Reform also included the creation of the Municipal Public Servant School. Its main purpose is to train the municipal employees so they can take advantage of the new systems and new methodologies the new Administration had brought about.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Running a city hall is the bread and butter assignment of any mayor. But bringing about deep transformation in the people’s mind, empowering public servants, establishing tough to attain goals, and striving for efficiency without ever loosing the human dimension that must permeate each and every action carried out by any government is going beyond ordinary action, it is innovative. Also, it might not be true elsewhere – perhaps in towns and cities where a good local administration is well established – but here, quenching corruption, stopping wasteful expenditures and redirecting human resources towards practical results for the community is quite a feat. This is especially true when the country is facing the worst recession ever and the population is putting more and more stress on the government as if it were an infinitely capable provider. In fact, amid this historic financial difficulty Brazil is facing and the growing number of responsibilities transferred to municipal governments, in addition to the current economic crisis in the country, achieving effective gains for the population has become very challenging for municipal public managers. The fruits of individual voluntarism, chance, or genius of one or another administrator no longer occur. Therefore, it was necessary to innovate, modernize and professionalize municipal public administration. Bom Despacho performed this at a low cost, being a pioneer in Brazil. Methodologies were introduced with the aim of making municipal administration efficient, focused on results that meet the demands of the population. The management model implemented had as initial roadmark the Administrative Reform, which organized the entire structure of the City Hall. Budget strategic planning was created, with the participation of all departaments. We also created an “Office of Projects” whose objectives was to raise external resources and manage the City's strategic projects. This is why the administration paradigm initiated few year ago is creative and innovative: it capitalized on human resourcefulness, free software, tangible and sensible goals.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The initiative was implemented by the local administration which benefited about fifty thousand people, or about 100% of the population. This result is represented by better schools buildings, new public libraries (at least one per school), better rural roads, about 30 km of dirty streets converted to paved streets; extended sewage system, and the an upgrade from 8 family health teams to 18.
 6. How was the strategy implemented and what resources were mobilized?
Money wise, the strategy was quite inexpensive. First, because all the expenses involved could be covered by the savings generated by the changes themselves. Second, because, basically the strategies involved mainly paradigm shifts, new ways to perceive the reality and new ways do find better solutions. One example comes to mind. Interest rates set by the Brazilian Central Bank is very high in Brazil (about 14.25% last year). The municipal administration has a considerable amount of money flowing in and out. Using this fact judiciously and investing this floating money brought in an additional income that represented almost 2% of the annual income. Thats free money. But this revenue is only possible when you have cash flow under control. And for this to happen, you need people with the right knowledge and attitude, plus the right software tools. Anyway, the first step was to establish the goals for the next four years, reorganize the structure, making it flatter; establish priorities, change people’s mindset and put tangible results as the gold standard to measure success. On the most important step was the adoption of a software tool named URBEM that, besides being free and open, was also compliant with the new public accounting standards and provided an integrated vision of the several branches of public finances and administration. To make sure that things would move forward, two task forces were created and named, respectively, "Municipal Public Management Quality and Control Committee" and "Zero Waste – Program for Improvement of Public Spending. Everything in place, next step was to go after the tax evader. In 2013, IPTU (a property tax exacted by the municipality) had and evasion rate of 70%. Now it has been reduced to 8%. Finally, selected indicators were repeatedly applied to gauge the results. Things like infant mortality rate, number of children in school, age at which students learn how to read, students weight, number of dental cavities, number of senior citizens active in social programs, improvement on urban infrastructure, etc.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
The initial blueprint was designed by the mayor himself and promptly adopted and his direct aids and then by most of the public servants. By its own nature, the project implementation is dependent on the massive involvement and participation of the majority of the public servants. Without their commitment, there would be no way to make it fly. Besides that, it was supported by NCM (National Confederation of Municipalities) that provided the cost-free software tool (URBEM) which brought extraordinary efficiency gains to the municipal administration from 2014 on.

 8. What were the most successful outputs and why was the initiative effective?
The project was successful, first of all, because it took organizational cultural issues into account. That is, it put people first. From the beginning, one of the main concerns was to let people know what was expected from them and what kind of benefits the paradigm shift request from them would entail for the population the were supposed to serve. Next factor was a stepwise approach. This way, people could not only have time to learn and understand what had to be done, but also see the intermediate results and collect some fruits of their labor. Third, and equally important, was the fact that most employees could see understand what the long-term goals were. Most visible and successful results could be seen on the reduction of resources spent on bureaucratic activities with increased investment on end-results or services that the citizens could enjoy. Finally, an aspect that must not be forgotten is transparency. The software tools used by the administration know allow citizens to keep tabs on expenditures. This includes knowing where the money goes to, how much the local government pays for each item, be it brick, mortar, lunch for students, wages, utilities bill. An analysis conducted by the Federation of Industries of Rio de Janeiro - Firjan – in 2015 indicates that Bom Despacho improved its management. The analysis evaluated how the financial resources and payment of debts of Brazilian municipal governments are managed. Bom Despacho once again stood out. Among the 853 municipalities of the Minas Gerais State, the city placed 91st and in the national ranking it went up to 866th place among the 5,573 municipalities in the country. In the same year the Union General Comptroller raised Bom Despacho from its last position to 9th position in the municipal transparency ranking. With more efficient management, the investments made by the local government jumped from R$ 2.5 to R$ 6.2 million between 2012 and 2016, an increase of 148%. During the same period, the local income per capita jumped from R$ 17,4 thousand to R$ 20,5 thousand. Job creation kept positive even though the country and the state were consistently losing jobs. As a result, poverty and extreme poverty has decreased significantly between 2012 and 2016, from 1,856 in need of food stamp to 1,517 – down by 18.2%. Those were very positive results.

 9. What were the main obstacles encountered and how were they overcome?
The first obstacle was the cultural resistance offered by the municipal public servants to the changes that had to be introduced. This was expected and handled from the beginning with candid transparency and open discussion whenever an opportunity came by. Also, the offering of several courses in the local public servant school were instrumental in overcoming the cultural resistance. Another challenge was to find qualified technicians in the area of information technology. An experienced professional was hired to manage and train the IT team of the and it worked, in spite of the difficulties arising from the software tool that was not completely tested and mature. But this was to be expected since this was a pioneering project that had never been tried before in Brazil. In summary, NCM cooperation was fundamental in overcoming the technical issues and an open and democratic relationship with the municipal employees was fundamental in overcoming the issues entailed by cultural changes.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
Bom Despacho's innovation and modernization project has brought many benefits to the population, starting with a more efficient administration. This means less money wasted or ill-invested. It also means better tax collection and better planned investments with well thought out priorities. All in all, local tax collection tripled in four years. This result does not com from tax raise, but avoiding tax evasion. As said before, public money does not sleep unproductive on the safe, it is now invested in the money market. This way the municipal treasury has accrued more than R$ 2.2 million more. Also, with proper government procurement based on rigorously defined public tenders, the price of services, goods and constructions have seen an important decrease since the project was implemented. This is attributable not only to the systematic combat the to the local cartels and collusions, but also to the fact that bidders now know that they will receive their money as soon as they have delivered whatever is expected from them. A combination of theses factors allowed the local administration to pave about 30 kilometers of public roads and streets, raise the Municipal Education Development Index - Ideb from 5.9 to 6.1, increase per capita health investment from R$ 299.64 to R$ 738.86 (a whopping 146,5%) and to reduce infant mortality from 12.56 per thousand to 10.58 per thousand. This is only in three years. Every school building have been refurbished, three new kindergarten and four new Basic Health Unit have been built and Family Health Teams have gone up from 8 to 18. The municipal fleet have been modernized, rural roads have been recovered and new bridges constructed.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Poor management and corruption are the two main cause of ill-expended public money. Nevertheless, it is essentially useless to try to fight corruption whithout improving management. This is so because corruption will only thrive where there is poor management and lack of transparency. Conversely, good management and transparency keep corruption at bay. The adoption of good practices and better systems was complemented by other measures like the daily publication of an official gazzette where every relevant information about the municipal administration is made available to any one who whishs to receive it on hist or her e-mail. We also offer an ombudsman service and offer an web portal that make available to the general public salaries, expenses and every kind of expenses. With good practices and with better systems in place accounts integrity and rendition became way better.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Yes, some measures were directed specifically towards children, women and the poor and vulnerable. Part of the money accrued and saved was invested in new schools and kindergarten. This benefit both mothers and young children. There were also significant investments to support pregnant women not only during pregnancy, but also after deliverance. This means providing the layette, and teaching mothers how to care for their children, when to vaccinate them, where to get help when needed, so on and so forth. Mothers and unemployed fathers could also take several tens of different workshops and courses that taught them a profession so they could have a better chance to find a permanent job. For the elderly, we offered recreational gymnastics workshops, ballroom dancing and handicrafts focusing on self-esteem. There are also measures to support women victims of domestic violence, Today, in the public administration women represent 79,1% of the working force. Considering both public administration and private sector women represent 42,3% of the working force.

Contact Information

Institution Name:   Prefeitura Municipal de Bom Despacho
Institution Type:   Local Government  
Contact Person:   Rogério César Corgosinho Corgosinho
Title:   Economist  
Telephone/ Fax:   +553735214207
Institution's / Project's Website:  
Address:   Praça Irmã Albuquerque, número 45, Centro
Postal Code:   35600-000
City:   Bom Despacho
State/Province:   Minas Gerais

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