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Geoff Dixon World Bank PPER consultant Mark Silins DFID Senior Consultant

Improving Budget Preparation in KR. Geoff Dixon World Bank PPER consultant Mark Silins DFID Senior Consultant. Government is reforming budget preparation. MTBF Program budgeting. BUT PEFA assessment of budget process is mixed Question: does this mean reform is not working well?.

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Geoff Dixon World Bank PPER consultant Mark Silins DFID Senior Consultant

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  1. Improving Budget Preparation in KR Geoff Dixon World Bank PPER consultant Mark Silins DFID Senior Consultant

  2. Government is reforming budget preparation • MTBF • Program budgeting BUT PEFA assessment of budget process is mixed Question: does this mean reform is not working well?

  3. Answer: YES! Reform is parallel and subordinate to deeply entrenched old budget preparation process Instead of good annual budget preparation we have three parallel processes • deeply entrenched input focused line item budgeting • beginnings of a program budgeting results focus • MTBF submissions which do not connect with either of the above

  4. Program budgeting has been a parallel process to budget preparation • line ministries are confused AND their capacity is over-stretched • MOF plays post office role

  5. Weak MTBF submissions • submissions fail to prioritize proposals due to weak sector strategies • costing is weak

  6. Consequences of parallel processes • Existing spending is reviewed each year from input perspective rather than results perspective • Resulting lack of budget flexibility means existing spending rolls forward year by year, crowding out new spending priorities

  7. Conclusion 1: Connectingthe parallel processes requires sector ministries to improve their internal spending planning • identifying results of their activities • assigning costs to these results • managing sector policy priorities ABOVE ALL line ministries need to use cost and results information in preparing their budget requests to MOF

  8. Conclusion 2: Connecting the parallel processes also requires MOF to • require both economic line item and results information in ministry budget requests • bounce submissions which don’t conform

  9. The necessary processes (program budgeting, MTBF) are in place. They now need to be used as intended.

  10. Four Separate Budget Processes - Reform in isolation

  11. Policy Driven Budgeting

  12. What is the Progress In 2005 • MoF led workshops with budget institutions focussing on linking the budget to strategic processes • Review of Programme submissions for compliance with the Budget Circular • In each of the five sectors in the MTBF process, improvements were noted in submissions for 2006

  13. Review of the MTBF • Seeking to better align the three budget formulation Processes • Focussing on presentation of baseline data – eg 2004/2005 data • Comprehensiveness of presentation –examine whether capital budgets can be allocated to sectors for presentation purposes

  14. 2006 • Better integration of the three budget formulation processes • Chart of Accounts anomalies addressed • MoF, with support of donors, will convene more bilateral educational processes around the budget cycle – these will be focussed on addressing practice rather than theory

  15. Early Thoughts on 2006 Budget Process

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