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Data Validation as a Key Step in Payment of Performance Based Financing Subsidies in Low- and Middle-Income Countries

Ogunseye OO

Data validation is a crucial processes in any performance-based financing (PBF) scheme as it a precursor to the payment of PBF subsidies to beneficiaries. Through literature review and collection of supplementary data from PBF scheme in Nasarawa State of Nigeria, this paper analyses key elements of the data validation process in PBF schemes in low- and middle-income countries (LMICs). Analysis shows that data validation is a rigorous, time-consuming and costly activity. Data validation in PBF is a combination of health facility level quantity and quality verifications and counter-verifications with variations in methodology and intensity according to country-specific preferences. In Nasarawa State PBF scheme, result shows that 19.7% and 11.9% of total earnings were retained as a result of counter-verification sanctions on health facilities while 44.5% and 41.0% of total earnings were retained due to counter-verification sanctions on administrative entities in the first and second quarters of 2018 respectively. Even though data validation is a rigorous, time-consuming and costly process, if applied strictly within the PBF framework, it could serve as a mechanism for fund recovery. Country-specific, cost-effective and robust data validation mechanism should be incorporated into the design of PBF schemes in implementing countries, while PBF schemes with weak data validation processes should be strengthened and enforced to check fraud, over-reporting and gaming.