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Information Flow For MTEF Operation and its implication to the Korean Government

Information Flow For MTEF Operation and its implication to the Korean Government . March, 19, 2004 Seoul, Korea Junghun Cho World Bank. MTEF, FMIS and Other PS Reforms – MTEF. 73% of OECD Countries Different Objectives of MTEF In Countries Sweden – Fiscal Sustainability

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Information Flow For MTEF Operation and its implication to the Korean Government

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  1. Information Flow For MTEF Operation and its implication to the Korean Government March, 19, 2004 Seoul, Korea Junghun Cho World Bank

  2. MTEF, FMIS and Other PS Reforms – MTEF • 73% of OECD Countries • Different Objectives of MTEF In Countries Sweden – Fiscal Sustainability UK - Sectoral Allocation • Korea : Linking Budgetary Allocation with National Policy Priority

  3. MTEF, FMIS and Other PS Reforms – FMIS • Source : World Bank Experience with FMIS Projects (Dorotinsky & Cho, 2003)

  4. MTEF, FMIS and Other PS Reforms FMIS for Performance Management Formulation Execution Reporting/ Evaluation FMIS for Medium Term Expenditure Framework (MTEF) - Central FMIS for Fiscal Decentralization Sub-national Government Sub-national Government Sub-national Government

  5. New Information Needs for MTEF Operation Updated cost estimate of existing policy/program Macro-economic forecasting Fiscal Target Total Expenditure Setting For multi years Sectoral Ceiling Setting for multi years Annual Budget Formulation New sectoral demand for t+2 (priority/cost) Sectoral Budget Preparation

  6. Information Flow For Budget Formulation (1) • Macroeconomic Forecasting • Fiscal Target and Total Expenditure Setting for Multi-Years • Sectoral Ceiling Setting for Multi-years • Annual Budget Formulation

  7. Information Flow For Budget Execution and Reporting • Relatively Few Changes • MPB’s In-year access to Line Ministries’ Detailed Spending Information • Information Coverage of Agencies and Sub-national governments • Budget Classification and Charts of Account

  8. Analysis of Current FMIS to Support MTEF (1) • Fragmented Systems Among Ministries, Agencies, and Sub-national Governments • Low Utilization for High-level Budgetary Decision Making • Lack of Capacity to Record/Monitor Costing and Performance Information

  9. Analysis of Current FMIS to Support MTEF (2) • Inappropriate Regulatory Framework - Complex budget classification and charts of accounts - Narrow budget coverage - Inappropriate government statistics for internal transfers

  10. FMIS Success Factors • Source : World Bank Experience with FMIS Projects (Dorotinsky & Cho, 2003)

  11. Implementation Strategy for Improving FMIS and MTEF • Leadership and Management Support • Inter-Ministerial Coordination • Institutional Mindset • Risk of Reform Fatigue

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