Geoff Dixon

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
• Connecting the 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 dont 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