Podgorica, 14-15 May 2007

1. Government of the Republic of Serbia Ministry of International Economic Relations Strengthening National Capacities for Efficient Management of External Assistance Linking donor funding to the state budget Gordana Lazarevic Assistant Minister Podgorica, 14-15 May 2007

2. Basic principles on government organization Tasks – what has to be done Responsibilities – who is doing what Coherence / Consultations/ Coordination DECISION MAKING Monitoring Reporting Gap analyses Improvements/ institutional adjustments/trainings

3. Key players in programming Case of GoS • MIER – programming/coordinating of development assistance • MoF – annual budget planning • Secretariat General – annual work plan of GoS • Ministry for Public Administration – uniformity od internal organization in the ministries

4. Key Tasks in Programming of International Assistance • Strengthening of capacities in LM for planning, project identification, drafting, monitoring and reporting • Towards institutionalization of planning and programming • Improved alignment of donor funded activities with national priorities • Ensure consistency and complementarities between donor programs and budgeting process • Increase of the aid predictability and integration in the operational planning and budget preparation process • Further improvement of the ISDACON IS as a planning and monitoring tool and linking with the budget preparation process • Implementation of the sector support concept in pilot sectors

5. Tasks of line ministries • Strategic planning and programming in the sector • Mid – term/annual planning (GOP) • Preparation of projects • Prioritization within sector/approval of sector priorities • Sector coordination/ focal point for coordination of planning activities, same start of processes

6. Mainin chalanges • Internal – introduction of programmatic budget – 2 years pilot program in place • External – introduction of IPA –new tasks and responsibilities of national government • How to achieve linking between external assistance and national goals

7. Government mandate MIER to coordinate all external assistance To increase the effectiveness of foreign aid in facilitating the achievement of Government policy objectives as set out in strategic documents Reaching sustainable solutions and mechanisms aiming at further improvement of foreign assistance delivery

8. MIER Institutional Respond Internal organization MIER/NIPAC DACU Programming IPA I and Bilateral donors CBC PCMU IPAII ISDACON IT support

9. MIER-relations with stakeholders EU partnership, MIPD, annual allocations of the funds EU Commission DG enlargement DEC Contracting, implementing, monitoring Contracting projects with final beneficiaries Setting priorities, planning, programming, project collection/evaluation. Submission to NIPAC and JMC MIER/DACU MINISTRY MINISTRY MINISTRY MINISTRY

10. Context • Improvement of coordination of various reform processes and progress towards integrated planning, budgeting (allocation of internal and external resources), monitoring and reporting, based on a result-oriented approach • Reform of the budget planning process by introducing programmatic classification during the budget preparation process • Strengthening functions of strategic and operational planning in public institutions, Obligations of donors and partner countries defined in the Paris Declaration on Assistance Effectiveness, which was adopted in Paris on March 2, 2005, in particular the strengthening of national ownership over the development process, harmonization of donors with national development strategies and prioritization, harmonization of donor activities and management with view of achieving results • Commitment to EU integrations, in particular the aims, procedures and capacities for using EU funds

11. Main Goals • Improved coordination and planning of development assistance • Improved aid effectiveness and efficiency • Improved coordination of internal and external funds planning • Alignment of development assistance with national priorities • Capacity building for funds management (especially EU funds)

12. Development Aid Coordination Unit MAIN ACTIVITIES • Programming of international assistance • Reporting on international assistance • Registering aid flows (ISDACON IS) STRATEGIC FRAMEWORK • Document “Needs of the Republic of Serbia for International Assistance in the Period 2007-2009” • Guidelines For Programming International Development Assistance for the Republic of Serbia in 2007 and Reporting on International Assistance • Action plan for programming of IPA 2008 • Piloting Sector support approach • Report on development programming processes of IPA 2007 – Gap analyses TOOLS • ISDACON IS • GOP • Task forces in line ministries including NBS

13. Programming of International Assistance • PROCESS • Introduction of joint Calendar for programming of international assistance • (identification of project ideas) based on the following: • Coordinated and joint project proposal identification phase • Targeting project proposals with the beginning of implementation expected in 2008 and 2009 • Calendar structured around IPA programming procedure, defined in Action plan for programming of IPA 2008 • Programming is sector based, including regular consultations with main stakeholders and the donor community

14. Programming of International Assistance

15. Programming of International Assistance • Priority project identification based on: • “Needs of the Republic of Serbia for International Assistance in the Period 2007-2009” document • Budget/internal resource financing possibilities • Information on expected donor support in the period 2007-2008

16. April Мay Programming of International Assistance-2007 Project ideas Јun July Aug Sep Оct Nov Dec DOCUMENT“Needs of the Republic of Serbia for International assistance for 2007-2009” Identification of project ideas Development of project proposals – IPA** 2008 Development of Project proposals according to IPA Format and consultations with the EC Delegation and EAR Adoption of MIPD* EC- IPA Implementing Rules Short listed and wider list of project ideas Action Planon programming Identification of project ideas Development of Logframe Guidelines for programming of internatio- nal aid TA by local experts for IPA programming-MIER Project Preparation Facility Administrative check Identification of donors Registration in ISDACON IS Short listed project ideas and development of project proposals training/ workshops on programming Development of project proposals – Other donors Project ideas, Logframe Consultations with ministries and development Partners on priorities and possible financing Drafting project proposals according to procedures and Timeframe and rules of individual donors *MIPD- Multiannual Indicative Planning Document **IPA- Instrument of Pre- accession Assistance

17. Co-ordinated planning, budgeting and foreign assistance programming processes Year 2007 (n-1) Year 2008 (n) Year 2009 (n+1) December January December January December January GoS Work Program GoS Annual Report Final Budget Memorandum and Budget Preparing draft Budget Memo (incl NIP) LM preparing Budget request Final Budget Memorandum and Budget Budget Execution LM final accounts MFIN final accounts Final LM GOP1 (07-09) Preparing draft GOP1 (08-10) in LM (EI, PRS, PAR and sector strategy) Prepare final GOP1 (08-10) for LM Implementation – Management by performance using GOPs Monitoring and Evaluation Needs Assessment Document (07-09) Update Needs Assessment document (n to n+2) Joint project identification by LM, MIER and donor community for 2008 (n) EU support IPA 2008 MIPD (n to n+2) drafting, Consultations and approval Programming of EU assistance including preparation of FICHE, negotiation, intern-agency consultations and signing of FA Detail design of projects / plan for implementation Implementation of projects/programme (36 months) Other international assistance Individual Assistance Strategy / Action Plans Programming including detail design and plan for Implementation Implementation of projects/programme The chart is based on the assumption of the 3 year rolling process where for each cycle one additional year is included. Hence to get fulloverview of activities the specific calendar year it is necessary to include activities from the previous two years. 1 GOP (Godisnji operativni plan / Annual Operational Plan): Three year rolling medium term planning document developed by line ministries (6 pilot ministries) comprising the detailed budgeted operational plan for the first year. GOP planning methodology is designed to be used as basis for development of Government’s annual Work Program, budgeting according to the programmatic classification, programming of international assistance, monitoring and reporting.

18. Coordinated planning, budgeting and foreign assistance programming processes • Improved coordination in planning external and budget resources • Annual operational action plans as the basis for budget planning and the NA • Consultative process (avoiding overlapping and Ensuring co-financing) • Next steps: Linking BPMIS with ISDACON

19. Building of Capacities for Planning, Budgeting and Aid Management Manuals/Guidelines prepared and adjusted to the internal governmental rules of procedure Training LM to use them Project management /project preparation – became as obligatory part of training of civil servants within HRD Tailored training support to LM- special facility to support project preparation STE and LTE Capacity building of NIER/DACU to be able to identify problems in the processes Focusing on external training within EU institutions or within MC- use of TA and Twining Coordinating bodies extends only limited and focused trainings Inclusion of HRD Offices in permanent training of civil servants