Strategic Planning for Effective Budget Management in Public Administration

1. GOOD PRACTICES ANDREFORM OF PUBLIC ADMINISTRATION “Budget Reform and Reform of Public Administration” THE MINISTRY OF ECONOMY AND FINANCE Budget Department Conference on Good Governance and Public Administrative ReformBucharest, 6 December 2007

2. REQUIREMENT FOR THE IMPLEMENTING OF • STRATEGIC PLANNING SYSTEM • The requirement for the implementing of strategic planning system is necessary for: • The effectiveness of public expenditure management; • Efficient administration of non-reimbursable financial allocation from European Union under structural instruments, for projects and programs prepared and integrated in the medium –term framework.

3. SCOPUL ŞI IMPOETANTA SISTEMULUI DE PLANIFICARE STRATEGICĂ 2. AIM AND IMPORTANCE OF STRATEGIC PLANNING IN THE BUDGET PROCESS • It makes linkage between the sector public policy formulation of the Line Ministries and the elaboration of annual budget draft, outlined in a medium - term framework in order to: • getting the performance results; • efficient use of existing resources to achieve objectives assumed by Romania in strategic documents; Budget planning process should be focused on the quality of public fund use through the: - improving program budgeting ; - defining the SMART objectives (Specific; Measurable, Achievable; Realistic; Timely); - assessment of the result effects; - elaboration of the procedures for monitoring indicators. • it provides information for the decisional process of Romanian Government in the public finance area.

4. 3. ACTIVITIES UNDERTAKEN BY THE MINISTRY OF ECONOMY AND FINANCE IN THE STRATEGIC PLANNING AREA TILL NOW • In 2006, The Ministry of Economy and Finance launched with the support of World Bank a strategic planning exercise during March –May period, whose purpose was: • Preparation of Line Ministries to using concepts with regard to public policies and correlation of these concepts with the objective to be achieved and the budget resources for the efficient and responsible spending of budget funds; • Synthetic Presentation of : • - priority policies established for the 2007-2010 period; • - estimations with regard to financial need of line ministries; • - financing sources for the priority policies identified by the ministries.

5. In Marth 2007 , Ministry of Economy and Finance , taking into consideration the experience it accumulates in 2006 in the strategic planning area, drew up ,, Methodological Guidelines concerning strategic planning stage” including : • The main requirements concerning the sector public policy formulation of the Line Ministries; • Technical issues with regard to formulationofbudget fund proposals allocated for the implementing of public policies during 2008-2010; • detailed forms designed to underlie the budget funds: • Synthetic Fiche for the budget proposals and estimation of budget funds during 2009-2011 period; • An Annex consisting of three parts: • General information regarding the mission and vision of line ministries activities; • description of public policy area; • description of the programs, projects and activities.

6. Information with regard to public policies, formulated by the line ministries during 2008-2011 horizon have been used in three stages of budget process in 2008, as follows: • The Statement regarding the objectives of fiscal and budget policy for the budget year and for the next 3 years of line ministries to elaborate budget draft for 2008 and the estimations for 2009-2011 period; • The Framework –Letterspecifying the macroeconomic context for the budget draftsand also the methodologies for their elaboration during 2008-2011 period and expenditure ceilings for the spending ministries; • The Reportconcerning the macroeconomic situation for the year 2008 and its forecast for 2009-2011, which accompanies budget law draft.

7. Strategic planning process is a very complex one, it should join in a medium term framework the following issues: • The priority public policies established by the Government; • The programs through which these policies are implemented; • The resources allocated to this purpose.

8. 4. THE DEVELOPMENT AND CONSOLIDATION OF STRATEGIC PLANNING IN THE NEXT PERIOD • Ministry of Economy and Finance together with General Secretariat of Government and the Line Ministries will formulate 2009 budget draft using two instruments of strategic planning: • Institutional Strategic Planning consisting of two components: management and budget component;; • Strategic Planning , as a stage of budget calendar. The following steps: • The revision of the legal framework in the public finance area through the incorporating of Strategic Planning in the budget calendar and up- dating of the Instructions concerning the content and the structure of the programs formulated by the spending ministries.

9. BUDGET CALENDAR including strategic planning stage National Commission of Forecast The Ministry of Economy and Finance The Ministry of Economy and Finance Romanian Government The Ministry of Economy and Finance Romanian Parliament Strategic Planning February 20- March 20 Year n-1 Macroeconomic indicators Martch 31 Year n-1 Statement concerning the objectives of fiscal and budgetary policy and expenditure ceilings 1 mai year n-1 Framework letter June 1 st Year n-1 (Sector Public Policies Document, Strategy and Coordination of Structural Policies) Approval of budgetary law and report. September 30 year n -1 - Pas the bill and the annual budget October 15 –December 28 Year n-1 1 2 3 Primary Credit Orderers Primary Credit Orderers Primary Credit Orderers Primary Credit Orderers 1. Information provided by the strategic planning stage are used for the policy formulation included in the Statement concerning the objectives of fiscal and budgetary policies. 2. Information provided by the strategic planning stage are usedîn the elaboration of Sector Public Policies Document, Strategy and Coordonation of Structural Policies, în which public policies are formulated. 3.The budget Report îs drawn up based on the policy proposals included în the Sector Public Policies Document, Strategy and Coordonation of Structural Policies.