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Performance Budgeting - Key Performance Indicators -- Wojciech ZIELINSKI, OECD

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This presentation was made by Wojciech ZIELINSKI, OECD, at the 15th Annual Meeting of OECD-CESEE Senior Budget Officials held in Minsk, Belarus, on 4-5 July 2019

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Performance Budgeting - Key Performance Indicators -- Wojciech ZIELINSKI, OECD

  1. 1. 2018 OECD Performance Budgeting Wojciech Zieliński Senior Policy Adviser OECD/GOV Minsk, 4 July 2019
  2. 2. • Quick presentation of the survey on performance budgeting • OECD good practices on performance budgeting • Developing KPIs 2 Outline of the presentation
  3. 3. • Fifth OECD PB Survey • Coverage: 45 questions on Performance Budgeting Spending Review Evaluation • Respondents mainly from CBAs • Response rate: 33 countries (out of 35)  all 2018 data in this presentation is coming from the 2018 OECD Performance Budgeting Survey 3 2018 OECD Performance Budgeting Survey
  4. 4. 4 Performance Budgeting survey Use of performance frameworks continues to increase over time and are the norm across the OECD
  5. 5. 5 Performance budgeting survey What kind of performance budgeting? CAN EST FIN GBR ISL LVA MEX NOR AUT CHE CHLCZE FRA HUN IRL JPN KOR NLD NZL SWE AUS BEL DEU DNK ESP ITA POL SVK SVN TUR Managerial Performance Approach (8) Performance-Informed Approach (12) Presentational Approach (10)
  6. 6. 6 Performance budgeting survey Increased use of performance information - across a broad range of stakeholders – is observed over the last 5 years Number of countries
  7. 7. 7 Performance budgeting survey Spending Review information is becoming more important and is more likely to be used during budget negotiations
  8. 8. 8 Performance budgeting survey The greatest benefits are increased transparency about objectives, and the quality and usefulness of performance information
  9. 9. 9 Performance budgeting survey Coordination problems are the biggest challenge Main challenges for the implementation of performance budgeting (2018)
  10. 10. Budgeting within fiscal objectives Good practices for performance budgeting Context II: OECD Framework of Modern Budgeting Quality, integrity & independent audit Performance, Evaluation & VFM Comprehensi ve budget accounting Effective budget execution Alignment with medium- term strategic plans and priorities Performance, evaluation & VFM Transparency, openness & accessibility Participative, Inclusive & Realistic Debate Fiscal Risks & Sustainability Capital budgeting framework 10
  11. 11. • The rationale and objectives of performance budgeting are clearly documented and reflect the interests of key stakeholders. • Performance budgeting aligns expenditure with the strategic goals and priorities of the government. • The performance budgeting system incorporates flexibility to handle the varied nature of government activities and the complex relationships between spending and outcomes. • Government invests in human resources, data and other infrastructure needed to support performance budgeting. 11 Good practices for performance budgeting
  12. 12. • Performance budgeting facilitates systematic oversight by the legislature and civil society, reinforcing the government’s performance orientation and accountability. • Performance budgeting complements other tools designed to improve performance orientation, including programme evaluation and spending reviews. • Incentives around the performance budgeting system encourage performance-oriented behaviour and learning. 12 Good practices for performance budgeting
  13. 13. • Number and type of KPIs – what level of detail is needed? • The institutional set up and procedures for developing KPIs and setting targets • Quality standards in developing indicators • Measuring of horizontal/cross-cutting issues • Monitoring the performance • Accountability for achievements of set targets 13 Developing KPIs Dilemmas
  14. 14. 14 Number and type of KPIs – what level of detail is needed? Output or activities` related KPIs are the most commonly used Outcomes 16% Intermediate Outcomes 10% Outputs 31% Milestones 5% Activities 38% Types of indicators in budget submissions
  15. 15. • Number and type of KPIs – what level of detail is needed? • The institutional set up and procedures for developing KPIs and setting targets • Quality standards in developing indicators • Measuring of horizontal/cross-cutting issues • Monitoring the performance • Accountability for achievements of set targets 15 Developing KPIs Dilemmas
  16. 16. 16 Performance budgeting survey Target setting tends to be done by line ministries, and its coverage varies Coverage of performance targets (2018) Responsibility for target setting (2018)
  17. 17. • Number and type of KPIs – what level of detail is needed? • The institutional set up and procedures for developing KPIs and setting targets • Quality standards in developing indicators • Measuring of horizontal/cross-cutting issues • Monitoring the performance • Accountability for achievements of set targets 17 Developing KPIs Dilemmas
  18. 18. 18 Quality standards in developing indicators Many OECD countries do not implement centrally defined quality standards 17 12 Are there centrally defined quality standards or critieria re: selection and approval of performance indicators? Yes, for all indicators No
  19. 19. 19 Quality criteria important for the development of indicators Consistency with strategies is more important than benchmarking 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Consistency with national plan or strategy Consistency with ministry/agency plans or strategies Indicators facilitate comparison between agencies or implementing units Indicators are developed/owned by line ministries or agencies Consistency with national statistics Consistency with internationally recognized performance benchmarks Compliance with generic quality standards (SMART, etc.) Ready availability of performance data Operational usefulness/relevance for programme management Types of quality criteria for selection/approval of performance indicators Required Recommended Not required
  20. 20. • Number and type of KPIs – what level of detail is needed? • The institutional set up and procedures for developing KPIs and setting targets • Quality standards in developing indicators • Measuring of horizontal/cross-cutting issues • Monitoring the performance • Accountability for achievements of set targets 20 Developing KPIs Dilemmas
  21. 21. 21 Performance Budgeting Gender is one of the thematic objectives most likely to be systematically integrated into performance frameworks Indicators of cross cutting or thematic objectives in the budget (2018)
  22. 22. 22 Performance budgeting survey Sustainable Development Goals (SDGs) are not yet systematically reflected in performance frameworks Reflection of SDG targets and indicators in national frameworks (2018)
  23. 23. • Number and type of KPIs – what level of detail is needed? • The institutional set up and procedures for developing KPIs and setting targets • Quality standards in developing indicators • Measuring of horizontal/cross-cutting issues • Monitoring the performance • Accountability for achievement of set targets 23 Developing KPIs Dilemmas
  24. 24. THANK YOU !

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