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Planning should be a continuous process that establishes policy, strategies and priorities of the animal health service in relation to the needs of the community served. These needs vary not only from country to country according to the nature and economic importance of animal industries and the present disease situation, but also in response to such factors as trade, real or perceived threat of exotic diseases, environmental and other factors (see also Chapter 7, "Animal disease emergency planning").
Animal health services planning
To facilitate a strong animal health administration, it is crucial that the CVO have long and wide experience and strong managerial capabilities.
The respective managers, both at head office and at the provincial or district level, should have skills and management training over and above the technical animal health functions (financial management, personnel management, project formulation and implementation, etc.).
To help the other headquarters sections undertaking animal health activities, a separate section needs to be created to deal with data processing, statistical analysis and economic evaluation of projects, as well as the preparation, execution, monitoring and evaluation of the animal health activities.
If the animal health services are to get an adequate portion of the national budget they must convince national decision-makers of the importance of the animal health services to the well-being of the country and its economy. As large proportions of the populations of the developing countries are dependent on the livestock industry, their governments should give an adequate proportion of the national budget to the animal health services to control animal diseases and increase their productivity.
When the budget is discussed with the relevant government body, the importance of animal health services must be emphasized. In particular, the following points should be considered:
• the value of the livestock industry in the overall economy, its export earnings and role in the social structure of the country;
• disasters that may result should a major animal disease occur and spread, seriously affecting the whole livestock industry;
• problems that zoonotic diseases will cause in the human population if they are not controlled;
• the effect of reduced operations on the export of animals and animal products;
• lowered production as a result of chronic and enzootic diseases if advisory services and control measures are reduced or absent; beneficial and positive effects of animal health programmes and services.
Arguments to support or justify these assertions should be based on sound information with regard to:
• general government policy, both short- and long-term, especially in relation to individual animal industries. Some governments put high priority on strengthening the beef industry as a means of stimulating exports and associated earnings of hard currency, for example, while others may emphasize the importance of the dairy industry to stimulate milk production for local consumption;
• the socio-economic importance of the different animal industries;
• size and distribution within the country of different animal populations;
• the human population, its distribution and dependence on animals for food, fibre, transport, draught-power, etc.;
• the type of service demanded by the producers as necessary for the animal industry;
• animal diseases present in the country and an assessment of their socioeconomic and public health importance to the individual and the country as a whole;
• exotic animal diseases threatening the livestock population and the animal industries;
• examples of past success stories, including those from other countries with similar situations and conditions.
Based on the consideration of these and other factors, the major lines of the animal health policy objectives should be developed and detailed strategies suggested in order to attain these objectives. Careful consideration should also be given to inputs (infrastructure requirements, personnel and training, organizational structures and division of responsibilities, etc.) required to attain these objectives.
Other government entities and non-government bodies that may be involved in or related to the planning or implementation of the animal health service should be clearly identified and sound working links should be established:
• to determine industry needs and to maintain their active support, producer and animal industry associations being most important;
• with the agricultural economics/statistics service or unit to obtain accurate statistical data not available within the animal health service;
• with veterinary schools to develop trained personnel;
• with the human health services for better control of zoonotic diseases;
• for support during eradication or emergency operations the collaboration of different sectors may be needed (see Chapter 7).
Programme planning
Programme planning covers the regular planning of all routine activities of the animal health service to achieve its major objectives. This planning, which is usually done on an annual basis, follows a fixed pattern determined by the objectives and management structure designed to achieve those objectives. To ensure that no aspect is overlooked, this process is usually initiated at the lowest level (units or subunits) of the organizational structure, then consolidated at the next level up, and so on, until it arrives at the top. For the field service, for example, the process may start at district level, proceed through provincial and departmental levels and ultimately arrive at the responsible office in the National Animal Health Service Directorate. This office its proper balance and conformity with policy decisions before passing it on to the CVO of the animal health services. The CVO usually consolidates the planning documents from each of the different sections before approving the whole and submitting it to the appropriate central planning and/or treasury body of the government for consideration within the context of the overall national plan.
It is important that great attention is paid to detail and that the documentation is concise and easy to read and understand by non-veterinary senior staff. It is difficult to approve a programme if it is not clearly and concisely presented, and its justification should leave no room for doubt about its importance. The animal health services proposal is only one of a long list of proposals being submitted for funding. Not only does it have to compete with proposals from other departments within the Ministry of Agriculture, but also with proposals from other government departments, which, for one reason or another, may receive better support from the central planners.
Project planning
Over and above the routine day-to-day activities of the department/division/section, there are activities that are usually "one-off" and have a discrete time frame. These are frequently planned outside the normal planning schedule and may rely for some or all of their funding on non-government sources. Such an activity may be the eradication of a disease, the construction of a laboratory for the field service or the carrying out of a specific serological survey. These may be part of the long-term plan but require separate planning and budgeting or they may arise out of ongoing work and have no previous mention in the departmental plan.
These projects need to have separate justification, objectives, outputs, inputs and budgets. Examples would include:
• eradication of a disease;
• establishment of a new laboratory;
• determining the incidence of a specific disease of economic importance;
• establishing a disease-free zone to support a new export opportunity.
So far as these projects arise out
of the planned activities of established sections or units, they can usually be partly
absorbed in terms of personnel and budget within existing arrangements. However, careful
well-documented planning is essential to identify additional requirements, define new
responsibilities and establish the necessary communications with other units, either
within or outside the animal health service.
Budget
Based on the planning process discussed above, the directorate of animal health services has identified its work plan both for the long term and the short term. This has identified the work (routine, project) to be done and the input necessary to carry out the work plan. The financial implications must then be calculated and sources of funding identified.
The major source of funding is the government, which has the final responsibility for all funds even though some may come from sources other than the regular national budget. The following paragraphs deal, first, with the budgeting process as a regular programme operation, second, with the special budgets for projects and emergencies and, finally, with sources of funds.
Programme budgeting. The budget covers the normal expenses of running the animal health services and usually covers one financial year. It takes a set form in which the items of expenditure or budget lines are clearly itemized for each section/unit/activity/project included in the service's work plan. The format of the budget is standard from year to year and conforms to the norms established for all government departments.
The estimates for funds required to run the animal health services should be prepared well in advance of the beginning of the financial year in question. As indicated above, it starts at the lowest administrative level and is progressively consolidated until it is finally presented as one document to the ministry for inclusion in its consolidated budget, which in turn is part of the national budget.
The budget proposals must be accurately calculated and well-balanced. Requests for money must be backed up with sound justification and other supporting documentation.
Once the budget has been approved and the money allocated, care must be taken by the director and financial staff to ensure that spending remains within the limits of the funds allocated. Similarly the treasury should not cut funds that have been allocated to the department during the fiscal year, resulting in programmes not achieving their targets.
A typical recurrent budget should contain the following sections, often called votes, items or budget lines.
Salaries and allowances section. This section of the budget covers the salaries and allowances of all permanent workers in the service. There should be an agreed staff establishment, i.e. the maximum number of people who may be employed and for whom adequate operational funding is made. This is further broken down into numbers in the various grades, such as veterinary officers, meat inspectors, animal health assistants, etc. With careful calculation a reasonably accurate estimate of funds required for salaries can be made. It is very important that this agreed level of staffing should not be exceeded, otherwise severe funding problems will arise.
Operating section. All too often this section of the overall budget does not keep up with increases in staff levels and inflation. When funds are inadequate, governments find it extremely difficult to cut existing staff levels and so the cuts are made in the operating budget. Since less work can be done, people can be found sitting in offices, willing to work, but without the facilities to do so. In the animal health service, where most of the work involves contact with animal owners and their animal health problems, the operating budget should be comparable to the salary vote. In a number of developing countries salaries account for more than 90 percent of the total budget, leaving less than 10 percent for operations, which is totally inadequate. It is better to have fewer staff who can go out and operate adequately, rather than a large but office-bound staff.
The operating budget section should be split into various votes. It is better to have a few broadly based votes than many very specific ones, as this allows easier transfer of funds from one item to another.
The operating budget should be divided into at least the following:
• Transport. It is essential that adequate funds be provided to allow staff to travel, otherwise they will have to remain in their offices rarely respond to calls. Proper veterinary controls cannot be implemented if there is inadequate transport. When making the budget proposals, estimates should be made giving the number and types of vehicles required, as well as the reasons why they are needed. An estimate should be made of the distance needed to be covered by each vehicle to carry out the allotted tasks adequately and adequate funds to cover these costs should be provided. Provision should be made for insurance, maintenance, running and replacement costs.
• Subsistence or daily allowance. Staff travelling away from home stations on duty should be paid an allowance to cover the costs involved. All staff who travel should be paid their daily allowances for all authorized journeys in advance and not just when money is available.
• Office and miscellaneous. This vote should cover costs of running the various offices and buildings, post and telephones, furniture, printing and stationery. Any advisory leaflets could come out of this vote.
• Drugs and vaccines. In some countries all drugs and vaccines are purchased and distributed by the state. This puts a heavy burden on its finances. If adequate supplies are to be obtained and distributed, the government should supply vaccines for selected diseases of major national importance either free of charge or at a subsidized price. Such diseases, if not controlled, will have far-reaching effects on the livestock industries and, in some cases, on human health as well as the prosperity of the livestock owner. The livestock owner should pay for vaccinations and drugs for treatment of other diseases. These vaccines and drugs can be sold by the private sector. If this is to be done there should be proper registration of the products and evaluation of their quality and safety. Only products of high quality should be registered and used. These products can be distributed through registered veterinary or public health pharmacies.
In many developing countries the rural districts are not covered by pharmacies. In this case the animal health services should assist the livestock owner by selling drugs at reasonable prices. The profit made from the sale of drugs should be paid in to a revolving fund so that there are sufficient available to purchase further stocks. If money goes into the state's consolidated revenue, it is often difficult to get sufficient funds back from the government to purchase additional supplies of drugs.
• Equipment. Funds should be made available to purchase new equipment and, as appropriate, to replace old in order to keep the service functioning. This equipment should include all the very basic items of equipment required for field-work.
• Laboratories and research. This vote would be used to cover the cost of running the laboratory services in the country and can be linked to or separated from the research sector, depending on the size of the laboratory and research institutes.
• Vaccine laboratories. When a government operates a vaccine production laboratory, its budget should be separate from the rest of the animal health services votes. To make the government appreciate the cost of making vaccines and their qualitative value, vaccines produced should be "sold" to the control services. Even if this "sale" is merely a paper transfer from one budget to the other, it makes everyone appreciate the value of the vaccine. The laboratory should control production to meet the demand. Personnel in the field will in turn take better care of the vaccine. The laboratory, by having an "income", will have more chance of getting adequate funds and function as a "self-sustaining unit".
• Training. This item should, where applicable, cover the cost of training auxiliary staff, in-service training and farmer training.
• Other votes. There will be other votes within the budget, depending on the country and the circumstances. These may include: furniture, office equipment and stationery; quarantine stations; and compensation for animals destroyed in disease eradication.
It is essential that all estimates are calculated accurately and realistic requests for funds made.
Capital and development budget. This budget, sometimes called the investment or development budget, covers the cost of capital items. The definition capital items will vary slightly from country to country, but it generally includes items of a permanent or semi-permanent nature and not just the day-to-day running expenditure. This budget would cover the requirements for such items as: new buildings (offices, laboratories, housing for staff, etc.); disease-control fixtures, such as fences, dip tanks and inoculation races; quarantine stations and camps; training centres; vehicles; and equipment with a relatively long life, e.g. microscopes, incubators, refrigerators and other non-expendable equipment.
Items such as vehicles and equipment with a relatively long life may be considered as part of the operating budget in some countries.
The capital budget normally extends for more than one fiscal year, as happens with the ordinary or operating budget. This is because buildings and most items of a capital nature take more than one fiscal year to complete. It is important that expenditure is strictly controlled to ensure that work or purchases are kept within the allocated funds.
Project funds. In many developing countries donor-aided projects are an important source of finance and equipment for the animal health services. These funds are given for a specific project. The method of allocation of these funds will vary between donor and recipient country and even between projects.
It is better if an agreement (memorandum of understanding) is reached between the donor and recipient department so that payment can be made directly. All payments, whatever the system, must be subject to audit both by the donor and the official government auditor. It is important that proper expenditure control be kept on all donor funds. Donors have high standards of accountability at home and expect to have the same standard of accountability in aid projects.
Emergency funding. Budgeting for emergencies is difficult in most countries because of the uncertainty in the timing, type and nature of any emergency that may arise. The following procedure can be used.
• It should be assumed that animal health emergencies will occur. Therefore, there should be provision in the annual budget to allow the department to cope with the average emergencies. This may take the form of budgeting for short-term veterinary staff or transport facilities, drugs, vaccines, etc. Experience of recent years will indicate what type and quantity of inputs may be required for the average emergency.
• In exceptional circumstances, the animal health service may be faced with an emergency situation that cannot be funded as above. For example, dramatic losses due to the introduction and rapid spread of a fatal disease (such as rinderpest) may demand inputs (staff, transport, vaccines, etc.) that exceed normal requirements. The only way to meet this is a special vote and the department should be able to request support at short notice. To succeed, such a situation should be foreseen and agreement reached in advance on the conditions under which substantial emergency funds can be released by the treasury. In some countries, such emergencies may fall under the control of a national disasters/emergency unit for funding.
• Use regular programme budget, reducing or cancelling some animal health programmes or activities.
Other sources of support. While the main source of financial support for animal health services is the government, it is not the only one. It is important to explore all avenues of funding. Frequently, funds are available from various national and international sources and these should be utilized as opportunities arise.
National sources other than government. These sources include:
• national agricultural and commercial banks, either directly to individuals or to cooperatives;
• some aspects of the department work may be suitable for privatization. Herd health programmes and treatment of farm and companion animals could be done by private veterinarians if the livestock industry is economically viable;
• philanthropic institutions may support specific issues/projects;
• individual livestock industries may fund (or co-fund) specific research or disease control/eradication programmes;
• different cost recovery schemes (see the section "Cost recovery and its financial control" in this chapter);
• contract research for industry.
International sources. These sources include:
• international agencies, such as the United Nations Development Programme (UNDP), FAO, WHO, the United Nations Industrial Development Organization (UNIDO), the World Bank and the United Nations Capital Development Fund (UNCDF), may provide grants, investment (buildings) or loan funds to support specific projects or programmes. Each agency has its own specific conditions for supporting projects and the local office of the funding organization should be contacted for information;
• bilateral donors, usually national aid agencies of developed countries, also offer similar direct support for projects and programmes in individual countries, regions or subregions. Again, each agency has specific conditions and specific national or regional preference for support of this type;
• certain non-government organizations, which may have a national or international funding base, make funds available for animal health projects or programmes.
Financial control
Financial control procedures are usually standard for the whole government. However, tight financial control is necessary and should include the following measures.
Accounting. If budgets are to be meaningful they should be very carefully delivered and controlled. Even if the government has not allocated what are considered to be sufficient funds, the cost of running the animal health services must remain within that allocation. Only when there is an exceptional outbreak of a major disease are there grounds for going back to treasury and asking for additional funds.
In dealing with government funds, strict accounting and reconciliation of spending must be done. Misuse of such funds should not be tolerated.
In order to keep control of expenditure, the CVO should meet frequently with the accounts section. These meetings should be held at least once a month to review the spending to date, which should include committed expenditure, and ensure that there will be sufficient funds to complete the financial year.
If it appears that one vote is going to be overspent, timely application should be made to the treasury or other competent authority to transfer funds from a vote with surplus funds so that the shortfall is made up. This system of having to get permission from the appropriate authority for transfer of funds appears irksome, but it is necessary. When money was allocated in the first instance, it was given to be spent in a particular manner. For example, money allocated for the purchase of vaccines should not be used to purchase office furniture, no matter how desirable this may be.
Auditing. The departmental account should be regularly audited by an approved agency of the government.
Internal auditors. Internal auditors should visit every animal health office at least once a year, and while there they should check:
• all monies collected, including cost recovery items, and ensure that proper banking procedures are carried out;
• stocks of drugs and vaccines and ensure that they tally with inventories;
• security items, receipt books, requisition books, etc.;
• movable assets, i.e. ensure that all the equipment on charge to the station is in fact there;
• general running of the office, and ensure that all the necessary financial and administrative instructions are being carried out;
• the financial administration of donor-aided projects, ensuring that correct financial controls are being implemented and all materials and equipment are properly accounted for;
• any other relevant items, e.g. livestock on charge to the office.
The internal auditor should not only check that the accounts and asset control measures are being implemented correctly, they should assist the staff by teaching them accounting procedures and controls. The internal auditors, during their auditing visits, should look at the methods of financial and inventory control and, if necessary, make recommendations to the head of the department on ways to improve the system.
External auditors. The central government usually has an audit department that controls all government revenue and expenditure. It is essential that proper auditing of all offices takes place at regular intervals to ensure that proper financial control is being implemented. With regular auditing, any deviation from accepted accounting procedures will be detected early and corrected before major errors are made or funds misappropriated.
Cost recovery and its financial control
There are increasing pressures for individual units not only to be more cost-effective but also to be more self-sufficient in generating their own sources of funds. This means that the animal health services of many countries are being forced or encouraged to find ways of generating income to meet at least some of the expenses incurred by the services. The funds so raised should be placed in a livestock development fund and used to support livestock services. This "cost recovery" takes various forms, for example:
• charging for certain services (laboratory diagnostic tests, dip fees for tick control, consultancy services, etc.);
• establishment of revolving funds for certain specified purposes (purchase and supply of drugs, purchase and disposal of experimental animals, production and supply of vaccines, etc.);
• an insurance premium or levy per animal may be gathered from individuals or cooperatives;
• a levy may be charged on imports of subsidized animal products;
• charges for issuing certificates for the import and export of animals and animal products.
These and other devices for generating income for the veterinary services can be used effectively to get more return from the heavy investments the government has made in infrastructure and make it much more cost-effective. However, if the full benefit is to be derived from this type of initiative, care should be taken from the outset to make suitable arrangements for the appropriate handling of the funds generated and proper accounting of their use. A satisfactory way has proved to be the establishment of a special bank account to receive the funds, with strict regulations on the purposes for which the funds can be used and by whom. It is imperative that strict accounting and audit procedures be insisted on. Another way is for the funds generated to be put back into consolidated revenue. Frequently, if this is done, it is either impossible for the animal health service to have access to the funds or the procedures are so cumbersome that there is little incentive to apply the method.
Data processing
Records are essential whenever money
is handled. Proper accounting and auditing methods should always be applied. To keep these
records with the minimum of human error, and to allow the rapid and easy generation of
statistical and other types of reports and/or analysis of current and past years' budgets
and expenditures, modern accounting systems should be used wherever possible.
Sound technical and/or financial planning must be based on detailed technical and financial records and regular evaluation of the achievements of the animal health services. Such evaluations should assess not only the economic implications of animal health services for the community, but also any biological, social, public health and environmental impacts.
These assessments should be made at farm, animal health service and state levels.
Economic evaluation
Benefit/cost analysis should be treated as only one part of effective animal health planning and management. Simple comparisons of benefits and costs may be made with available data to obtain some idea of priorities in disease control, but results could be unreliable. Comprehensive economic and social analysis capabilities need to be developed in each country, and evaluation should cover problems of depressed animal productivity and subclinical disease, as well as specific infectious diseases. Other forms of economic analysis, such as cost-effectiveness, cost utility and consumer and producer surplus analysis, should also be considered.
Benefits need to be separated in to:
• the avoidance of direct observable "losses";
• "benefits not obtained", in the form of unrealized potentials for the improvement of animal productivity;
• direct benefits, such as gains in agricultural production, animal draught power, exports and import substitution;
• "unquantifiable benefits", including improved human health, welfare and prosperity.
An evaluation of an animal health programme requires a logical procedure that should comprise:
• rough estimates of the extent and impact of each problem under consideration, using existing data for preliminary assessment of priorities;
• population and herd/flock structure data, together with existing evidence of specific disease incidence/prevalence and production losses and, where necessary, the conduct of statistically designed cross-sectional or case-control studies to fill gaps in the information required;
• conceptual or diagrammatic models to illustrate the epidemiological characteristics and impact of the problem under consideration;
• biological models in mathematical form to estimate risks and extent of problems with and without control and to quantify and value the direct impact on animal production. Indirect benefits should also be incorporated;
• systematic quantification for each type of production "unit" - herd, flock or population grouping - of estimated gains in production achievable and control costs for each control or production scheme undertaken or proposed, using static or dynamic models to show cumulative results wherever feasible;
• the conduct of a "partial budget analysis" to ascertain the ratio of benefits to costs for individual farmers, which will influence their willingness to undertake and share the costs of health-control activities;
• the conduct of benefit/cost analysis so as to be able to compare, from the animal industry's and nation's points of view, returns to costs from health-control activity, having made appropriate price adjustments for such issues as import substitution, exports, subsidies and "opportunity costs" of resources. Within these evaluations, thorough "sensitivity analyses" should be undertaken to reveal the effect of errors in data and assumptions and possible variations in prices;
• the use of decision analysis, and particularly "decision trees", to reflect the impact of different decisions at key stages in the progress of a programme;
•a review of political, social, public health and environmental considerations, which can be quantified within the economic analysis in some cases or otherwise rated according to their importance in the course of discussions.
Political, social, public health and environmental impact
The impact of animal health services on these topics would include:
• improved income employment opportunities and living conditions contributing to social and political stabilities;
• reduction or elimination of the impact of zoonoses on humans;
• the contribution to better working conditions and the decrease in medical expenses incurred in the treatment of zoonoses;
• the qualitative and quantitative improvement in human nutrition;
• awareness that, although improvements in delivery of animal health services may have an impact on numbers and productivity of livestock, the full benefits of these improvements will only be achieved if the veterinary inputs are associated with better marketing and pricing of animal products;
• although the application of veterinary drugs, hormones, pesticides, etc., when used according to manufacturers' recommendations, do not lead to unacceptable toxicological contamination of the environment, care must be exercised by the animal health services to ensure that such products are properly used. Recommendations on this aspect are contained in the FAO/WHO Guidelines for pesticide use.