This presentation was made by Ratanak Hav, Cambodia, at the 10th OECD-Asian Senior Budget Officials Annual Meeting held in Bangkok, Thailand, on 18-19 December 2014.

1. Strategic Direction of Cambodia
Budget System Reform 2013-
2020
OECD BUDGET MEETING
Bangkok, 18-19 December 2014
1By Mr. Hav Ratanak, Director of Department of Budget Formulation

2. Content
• Progresses in PFM Reform
• Direction Of Budget System Reform
• Strategic Approach for Budget System Reform 2013-
2020
• Action Plan for Budget System Reform
• Conclusion
2By Mr. Hav Ratanak, Director of Department of Budget Formulation

3. • Stage3: CAP3
(2016-2020)
• Stage4: CAP4
(2020-2025)
• Stage2: CAP2
(2009-2015)
• Stage1: CAP1
(2005-2008)
Platform 1:
Budget
Credibility
Platform 2:
Financial
Accountabil
ity
Platform 3:
Budget-
Policy
Linkages
Platform 4:
Performance
Accountabili
ty
Cambodia’s 4 Platforms 4 Stages
Approach
3

4. By Mr. Hav Ratanak, Director of Department of Budget Formulation 4
Progress in PFM Reform (1/2)
Building budget credibility (Stage 1)
Strengtheningrevenue
mobilization
Implementingsingle
treasuryaccountandcash
management
Outcome
1. Eliminating budget Arrears.
2. Creating annual budget surplus.
3. Increasing annual revenue by 20%

5. By Mr. Hav Ratanak, Director of Department of Budget Formulation 5
Progress in PFM Reform (2/2)
Creating financial accountability (Stage 2)Lineaccountability
Standard(NewCOA/
NewBudgetClassificationOutcome
1. Readiness of New Chart of Account/New Budget Classification.
2. Improvement of BSP, readiness of BE for pilot, and of full PB
Implementation.
3. The launch of FMIS Project
BudgetExecution
FMIS
Capacitydevelopment/
Training

6. By Mr. Hav Ratanak, Director of Department of Budget Formulation 6
Direction of Budget System Reform 2013-2020
2020
Two key directions of Budget System reform
Strengthening discipline of public financial management
(balance/sustainability),
Improving efficiency of budget allocation (allocation to policy priorities) and
Enhancing technical effectiveness of spending
Gradually transforming from Input and centralized based budget system to
Output based budget system (Output and Performance) accompanied with
appropriate Deconcentration and Decentralization

7. By Mr. Hav Ratanak, Director of Department of Budget Formulation 7
Budget System in 2020
1. Budget Formulation: Should be based polices, programs and indicators along with
clear legal framework and mechanism in order to link budget to policies and
measureable results, to ensure budget discipline (balance/sustainability), efficient
allocation of budget, technical effectiveness of spending
2. Budget Approval: Moving from Categories, Chapters, to policies, programs and
indicators.
3. Budget Execution: Ensuring effective and efficient implementation of budget by moving
from input based control to output based monitoring evaluation.
4. Result and performance monitoring and evaluation: ensuring transparency,
accountability and clear responsibility in order to implement framework and
mechanism for result monitoring and evaluation, from input monitoring to result based
monitoring and evaluating along with D&D

8. 8
Medium term framework and Annual Budgeting
National Policies (Rectangular Strategy/NSDP)
Macroeconomic policy and Public
Finance Policy
Sectoral Policies
Medium term framework of revenue
and expenditure
Budget Strategic Plan
Annual Budget Law
linking national Policies and Sectoral Policies
By Mr. Hav Ratanak, Director of Department of Budget Formulation

9. By Mr. Hav Ratanak, Director of Department of Budget Formulation 9
Linking Institutional Management Structure and Policy
Structure
Management and Policy Formulation
(Ministerial/Organizational Level)
Technical Level and program/strategic
formulation (Secretariat/General Dept) Strategies/Programs
Technical level and Formulation of sub-
program/activity cluster (Department) Sub-program/activity cluster
Technical level and implementation of
activities (Agency under supervision of
ministry)
activities
Policy Formulation
Policy Objectives,
Strategies/Programs
Formulation of
Strategy/program
Sub-program/activity cluster
formulation
Implementation of
activities
Management Structure Authority and Responsibility Policy Structure

10. By Mr. Hav Ratanak, Director of Department of Budget Formulation 10
Basic Change of Budget Formulation and Budget Execution
Current budget system New Budget System
Category/Chapter Budget Amount (Million Riel) Policies Indicator/Goal Budget Amount (Million Riel)
Category #1 100, 000 (1) Policy #1 Indicator #1
Indicator #2
94,000
60 41, 000 1.1- Program #1 Indicator #1
Indicator #2
47, 000
61 14, 000 1.1.1- Sub-Program
62 13, 000 1.1.1.1- The numbers of Activity
64 32, 000 1.2- Program #2 Indicator #1
Indication #2
47, 000
Type #2 - 1.2.1-Sub-program
66 - 1.2.1- The numbers of activity
Type #3 22,000 (2) Policy #2 Indicator #1
Indicator #2
Indicator #3
141, 000
65 22, 000 2.1- Program #3 Indicator #1
Indicator #2
47, 000
Type 4 113, 000 2.1.1- Sub-program
63 113,000 2.1.1.1- The numbers of activity
2.2- Program #4 Indicator #1
Indicator #2
47, 000
2.2.1- Sub-program
2.2.1.1- The numbers of activity
2.3 Program #5 Indicator #1
Indicator #2
47, 000
2.3.1-Sub-program
2.3.1.1 The number of activity
Total 235, 000 Policy #2/Program #5 Indicator #5/10 235, 000

11. By Mr. Hav Ratanak, Director of Department of Budget Formulation 11
Strategies for Budget System Reform (1/2)
Five strategic approaches for budget system reform
First,
Strengthening the implementation and improving the effectiveness
of budget strategic plan (BSP).
Second,
Strengthening and implementing full program budgeting (PB) for
lines ministries, including Ministry of Economy and Finance.
Third,
Introducing and implementing budget entity (BE).

12. By Mr. Hav Ratanak, Director of Department of Budget Formulation 12
Strategies for Budget System Reform
Five strategic approaches for budget system reform
Forth,
Reviewing, Revising and implementing new budget classification,
new chart of accounts and financial management information
system (FMIS).
Fifth,
Introducing and implementing new budget system.

13. Action Plan for Budget System Reform (1/3)
I- Budget Strategic Plan (BSP)
- Strengthening and Enhancing the effectiveness of BSP.
- Working with line ministries to set policy objectives and indicators incorporating in
BSP and monitoring and evaluating performance of budget implementation.
II- Program Budgeting (PB)
- Fully implementing program budgeting for 10 ministries and expand to other line
ministries towards realization of full implementation of the program budgeting for
all ministries by 2020.
- Encouraging line ministries to voluntarily implementing program budgeting from
2015.
- Reviewing and developing guideline for and strengthening full implementation of
program budgeting for line ministries.
By Mr. Hav Ratanak, Director of Department of Budget Formulation 13

14. Action Plan for Budget System Reform (2/3)
III- Budget Entity (BE)
- Preparing for implementation of BE (2014)
- Piloting implementation of BE for 10 ministries in 2015.
- Reviewing and strengthening the strategy and extending the implementation of BE to
other line ministries.
- Fully implementing BE for all ministries by 2020.
IV- Budget Classification
- Preparing for step-by-step implementation of seven segments of budget classification.
- Fully implementing economic classification and partially implementing geographical
classification, functional classification, administrative classification, program budget
classification, financial source classification.
- Reviewing and improving its implementation for 2016 or 2017
- Fully implementing 7 segment of classification by 2020.
By Mr. Hav Ratanak, Director of Department of Budget Formulation 14

15. Action Plan for Budget System Reform (3/3)
V- Capacity building for Officials Involved
- Training for trainers (General Department of Budget; Financial and Budget
Department of Line Ministries.
- Training for responsible Officials
- Training for Officials of Line Ministries by trainers.
VI- Workshop and Seminar
- Conducting workshops to disseminate and consult regulatory frameworks related to
budget formulation and budget execution at both technical level and management
level.
By Mr. Hav Ratanak, Director of Department of Budget Formulation 15

16. Conclusion
I. Previous result and good preparation for budget system reform are
significant for ensuring that we are on the right track and thus move forwards
to the realization of the strategy.
II. Direction of budget system reform can be achieved through strong political
will and commitment, and leadership of the top management of all ministries.
III. Need to build human resource and institutional capacity to support the
implementation of new budget system as they are a key to the success and
sustainability of the implementation of budget system reform.
By Mr. Hav Ratanak, Director of Department of Budget Formulation 16

17. Thank you for your attention
By Mr. Hav Ratanak, Director of Department of Budget Formulation 17