26 May 2000
Briefing Outline
Mission Budgeting Policy Evolution of Budgeting System The Future of Budgeting
Mission
Mission
We will accomplish this with:
Superior Stewardship and Prudent Investment of Public Funds A Financial Environment Conducive to Business and Enterprise Policies and Frameworks which Enhance Excellence in the Public Sector Practices and Results which distinguish MOF as a World Class Organisation.
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Budgeting Policy
What we want to do and Why...
Budgeting Policy
Promote sustained and non-inflationary economic growth Foster growth in the private sector Live within our means Invest in the future Safeguard our Reserves
Budgeting Philosophy
People at operations
are in the best position to decide
on the most effective and efficient use of resources to obtain the best value for money
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Key Questions
Are they allowed to do it?
Are they capable of doing it? Are they doing it?
Budgeting Systems
Past:
Up to 31 Mar 78 From 1 Apr 78 From 1 Apr 89 Line Item Budgeting Programme Budgeting Block Vote Budgeting Budgeting For Results
Present:
From 1 Apr 96
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Evolutionary Trends
General trends:
More flexibility and autonomy Greater accountability More focus on outputs, objectives and outcomes Greater overall fiscal discipline
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Budget evaluation mechanism difficult without mechanism to link things to be bought with things to be done
Programme Budgeting
How much money do you need?
Programme Budgeting
Programme Budgeting from 1 Apr 78: Emphasizes things to be done Adopted from the US Planning, Programming and Performance Budgeting System (PPPBS) Systematically identify the programmes and activities necessary to achieve the goals and objectives of each Ministry
Programme Budgeting
Programme Budgeting from 1 Apr 78: Funding based on resources required to undertake each programme
Programme Budgeting
Strengths: Greater awareness of goals to be achieved More flexible than Line Item Budgeting
gradually relaxed transfer of budgets between objects of expenditures and between activities/programmes
Programme Budgeting
Limitations: With the expansion of existing programmes and the introduction of new ones, there was no mechanism to ensure that the overall expenditure would not outgrow revenue collection.
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Resource Management
Management, deployment and utilisation of resources for maximal results
Resource Accounting & Budgeting
Based on Accrual Accounting
Accurate Costing & Pricing Enhanced Inter-Departmental Charging Net Economic Value
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Budgeting 21
Future envisaged
Proposals outrun resources Beyond least for output to most from input Expenditures grow at GDP rate MOF focuses on outcomes; ministries manage outputs for those outcomes
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Budgeting 21
Key features
Predetermined overall and sectoral budget ceilings Guaranteed baseline operating budgets for ministries Project worthiness distinct from funding Productivity dividend creates fund for inter-ministry bidding Funding by prioritisation within ministry and across ministries
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Summary
Line Item Programme Block Vote
Focus on greater management autonomy Addresses Are they allowed to do it?
Budgeting 21
Focus on outcomes and national priorities Addresses Are they doing it?
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Thank you!