Tue 1000 Alvarez


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Fabián David Quirós Alvarez
General Sub-Director of the National Budget

Ministry of the Treasury
Costa Rica

December, 2008

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  • Tue 1000 Alvarez

    1. 1. <ul><li>Fabián David Quirós Alvarez </li></ul><ul><li>General Sub-Director of the National Budget </li></ul><ul><li>Ministry of the Treasury </li></ul><ul><li>Costa Rica </li></ul><ul><li>December, 2008 </li></ul>
    2. 2. <ul><li>Contents: </li></ul><ul><li>I. The budgetary process in Costa Rica </li></ul><ul><li>II. Primary innovations and advances in Financial Management: </li></ul><ul><ul><li>- result-oriented Budget : Methodology for planning and evaluation. </li></ul></ul><ul><ul><li>National system of Public Investment </li></ul></ul><ul><ul><li>Multi-year Budget and Base-Line Budget </li></ul></ul><ul><ul><li>Follow-up on budget execution </li></ul></ul><ul><li>III. Over-all View: The challenges. </li></ul>
    3. 3. I. The Budgetary Process in Costa Rica
    4. 4. The Budgetary Process in Costa Rica <ul><li>Levels of Approval </li></ul><ul><li>Central Government Budgetary Law approved by the Legislative Assembly </li></ul><ul><li>Decentralized Entities Budgets approved by the General Comptroller’s Office of the Republic </li></ul>
    6. 6. II. Primary Innovations and Advances in Financial Management
    7. 7. New Methodology for Budget Planning-Assessment
    8. 8. Changes in Budgeting: Orientation toward Results <ul><li>Advances in the strategic analysis of planning and in orientation toward results: </li></ul><ul><ul><li>Setting institutional priorities </li></ul></ul><ul><ul><li>Strategic objectives </li></ul></ul><ul><ul><li>Indicators of results, and </li></ul></ul><ul><ul><li>Multi-year goals. </li></ul></ul><ul><li>Pilot plans for strengthening the budget process toward results: synergy and complementarity of international technical cooperation (BID-PRODEV and Treasury Deparatment of the United States of America) </li></ul>BID/PRODEV – TREASURY
    9. 9. METHODOLOGICAL COMPONENTS <ul><li>I. Budgetary Planning </li></ul>II. Monitoring and Assessment III. Accountability National Development Plan Planning by Sectors Budgetary Planning with focus on results System of Management indicators and results Assessment of Results Report on the Annual Assessment of the Results of Management
    10. 10. <ul><li>Planning 2007 </li></ul><ul><li>Planning 2008 onward </li></ul><ul><li>Instituctonal </li></ul><ul><li>Institucional </li></ul><ul><li>Mission </li></ul><ul><li>Mission </li></ul><ul><li>Vision </li></ul><ul><li>Institutional Policies </li></ul><ul><li>Institutional Priorities </li></ul><ul><li>Budgetary Programs </li></ul><ul><li>Amount % </li></ul><ul><li>Goals for Institutional Improvement </li></ul><ul><li>Strategic Institutional Goals </li></ul><ul><li>Indicators of Results </li></ul><ul><li>Program </li></ul><ul><li>Program </li></ul><ul><li>Mission </li></ul><ul><li>Mission </li></ul><ul><li>Products </li></ul><ul><li>Products </li></ul><ul><li>I Half. II Half. </li></ul><ul><li>Users Beneficiaries </li></ul><ul><li>Product Goals. Product Goals </li></ul><ul><li>Goals for Improvement </li></ul><ul><li>Strategic Goals of the Program </li></ul><ul><li>Relevant Management Goals </li></ul><ul><li>Performance Indicators </li></ul><ul><li>Indicors of Performance and Management </li></ul><ul><li>Type Formula Real Projected Goal </li></ul><ul><li>Type Formula Result Source of Data </li></ul><ul><li>2007-2011 </li></ul>
    11. 11. According to the latest Statement of the General Comptroller’s Office of the Republic: <ul><li>“… </li></ul><ul><li>Improvements in budgetary planning and assessment after 2008 </li></ul><ul><li>Technical and methodological approaches for strategic sectorial and institutional planning (May, 2008), establish a gradual process of defining indicators of management and results of public agencies.” </li></ul>
    12. 12. <ul><li>Dynamism is seen in the number of indicators from the different ministries, suggesting a process of improvement. </li></ul><ul><li>There are indicators of efficiency, effectiveness, economy, quality, and management. </li></ul><ul><li>A tendency remains favoring indicators of effectiveness at the cost of indicators of economy (.7%), quality (2.4%) and efficiency (1.2%). </li></ul>The General Comptroller’s Office of the Republic in its Technical Report on the Budget for 2009 recognizes that:
    14. 14. NATIONAL SYSTEM OF PUBLIC INVESTMENT (SNIP) “ LA GACETA No. 162 of Friday, August 22, 2008 Nº 34694-PLAN-H DECREE: Regulation for the Constitution and Functioning of the National System of Public Investment Artícle 1— On Location . The National System of Public Investment is part of the National System for Planning and its implementation and operation will be the responsibility of the Ministry of National Planning and Economic Policy, with the objective of achieving optimum utilization of public funds for meeting government objectives, tied to the principles of economy, efficiency, effectiveness, gradualness and quality of the investment. El Sistema … .. Artícle 5— On specific objectives. . The SNIP has the following specific objectives: a)  Succeed in assuring that public monies intended for public investment yield the greatest economic-social and environmental benefit to the country. b)  Implementation of an integral system of analysis, follow-up, and assessment of public investment, following the life cycle of projects. c)  Plan public investment and manage it efficiently. d)  Provide sufficient quality information for making decisions about investments. e)  Strengthen the ability of the entire public sector in the formulation and planning of public investment, as well as in the socio-economic, environmental, and risk management for disasters, and physical and financial execution of investment projects. f)   Facilitate annual and multi-year planning of public investment. g)  Mantain an up-to-date inventory of all public investment projects.”
    16. 16. Multi-Year Fiscal Scenarios <ul><li>In the 2008 budget, for first time, there were multi-year fiscal scenarios -> with different projections of expenditures and income for the central government. </li></ul>
    17. 17. <ul><li>The Ministry of the Treasury has developed a model of macro-economic consistency among the different variables associated with the Costa Rican economy, in order to be able to have an analysis structure at the time of generating multi-year scenario indicators. </li></ul><ul><li>COMPONENTS OF THE MODEL </li></ul><ul><ul><li>Mid-term trends of the real sector. </li></ul></ul><ul><ul><li>Monetary and Exchange Aspects. </li></ul></ul><ul><ul><li>Fiscal Performance and Debt Dynamics. </li></ul></ul><ul><ul><li>Consistency of the External Sector. </li></ul></ul>Multi-Year Fiscal Scenarios BID/PRODEV – TESORO
    18. 18. Scenario 1* Multi-annual Budgetary Scenarios, 2009-2012 Millions of colons and percentages
    19. 19. Multi-Year Fiscal Scenarios <ul><ul><li>For 2009 an update is presented of the scenarios for projected fiscal income and expenditures, first presented in 2008 and include projections. This document includes projections up to 2012. </li></ul></ul><ul><ul><li>The Ministry of the Treasury has continued working on the study of this topic through on-going work in assessment and improvment, and has reviewed the experiences and orientations that other countries have carried out and within the legal structure that governs us. </li></ul></ul>
    20. 20. Multi-Year Fiscal Scenarios <ul><ul><li>Budget estimates are published for the medium term by the CentralGovernment, which will be developed through the “Base-Line” Concept </li></ul></ul><ul><li>“ Base-Line” will reflect future income and expenditures and the results in terms of deficit/surplus by continuing existing government policies and programs and applicable law. </li></ul><ul><li>The “Base-Line” is a technical exercise and a neutral measure to determine the fiscal path of the government and measure the impact of alternate policy proposals. </li></ul>
    21. 21. Base-Line: It is an automatic pilot that sets the fiscal path
    22. 22. <ul><ul><li>New program of oversight for the year 2008, which includes aspects of operational audit as well as compliance. </li></ul></ul><ul><ul><li>Better coordination and communication between the areas of budgetary execution and formulation . </li></ul></ul><ul><ul><li>Greater openness on the part of the ministers and oversight entities. </li></ul></ul>Follow-up and Oversight of Budget Execution
    23. 23. III. Overall Vision: The Challenges
    24. 24. Countries According to their GpR Development Beliz, Haiti, Paraguay, Surinam Low Argentina, Bolivia, Barbados, Costa Rica , Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Peru, Dominican Republic, Trinidad and Tobago, Uruguay Medium Brazil, Chile, Colombia, Mexico Advanced Countries Level of Development
    25. 25. PRODEV Pentagon for COSTA RICA
    26. 26. RESULT-ORIENTED BUDGET <ul><li>Assure support from above, participation from below o </li></ul><ul><li>Generate demand (A two-way street) </li></ul><ul><li>Determine realistic expectations and understand the necessary complementary gradualness and know how to wait </li></ul><ul><li>Coordinate and bring the actors into agreement: improving conversation with other actors in the process: external control and political control </li></ul>
    27. 27. RESULT-ORIENTED BUDGET <ul><li>Attempt to make the assessment go beyond the retelling of achieved physical goals and management, and reflect the substantial results of institutional management, especially benefits to the population. </li></ul><ul><li>Few and simple rules: Report in a simple way to citizens on the use and application of funds, respecting the committed goals and results obtained. </li></ul><ul><li>Continue working directly with those responsible for programs and formalize commitments with work plans. </li></ul><ul><li>Expand assistance to other ministeries and go beyond performance indicators. </li></ul>
    28. 28. NATIONAL SYSTEM OF PUBLIC INVESTMENT (SNIP) <ul><li>MIDEPLAN has information on the public investment projects of 69 institutions. </li></ul><ul><li>Up to the present date, it has not issued a National Plan of Public Investment for 2008-2010. </li></ul><ul><li>It is important that the allocation of resources in the budget for investment projects be available before 2011, but it is also necessary to refine SNIP and make it more precise. </li></ul>
    29. 29. <ul><ul><li>Strengthen the competence of human resources assigned to management and to the agencies. </li></ul></ul><ul><ul><li>Need to have an oversight manual that documents its policies and procedures and a program of oversight. </li></ul></ul><ul><ul><li>Exchange reports on oversight with auditing units and the General Comptroller’s Office: implement oversight software applications. </li></ul></ul>Follow-up and Oversight of Budget Execution
    30. 30. <ul><ul><ul><li>Advance to a fiscal strategy document that will discuss the macro-economic situation and fiscal direction for the medium term and will include an analysis on the sustainability of the debt. </li></ul></ul></ul><ul><ul><ul><li>The document will include base-line estimates of income, expenditures, and the deficit/surplus for the budget year (2010) and the following three years of planning. </li></ul></ul></ul><ul><ul><ul><li>Periodical publications on multi-year estimates for each ministry of the central government in accordance with the programmatic classification of the budget. </li></ul></ul></ul><ul><ul><ul><li>Guarantee, so far as possible, its simplicity and transparency </li></ul></ul></ul>Multi-Year Budget and Base-Line
    31. 31. Need for a Cost System for Goods and Public Services <ul><li>Accountability of public servants and politicians </li></ul><ul><li>Control (to prevent abuses and fraud) </li></ul><ul><li>Correct use of funds </li></ul><ul><li>Continuous improvement </li></ul>
    32. 32. Need for a Cost System for Goods and Public Services <ul><li>Information about costs – necessary for: </li></ul><ul><li>Detailed knowledge to meet goals </li></ul><ul><li>Financial information </li></ul><ul><li>Budget preparation (study of alternatives) </li></ul><ul><li>Surveillance of efficiency </li></ul><ul><li>Transparency </li></ul><ul><li>Control and assessment </li></ul>
    34. 34. <ul><li>Fabián David Quirós Alvarez </li></ul><ul><li>General Sub-Director of the National Budget </li></ul><ul><li>Ministry of the Treasury </li></ul><ul><li>Costa Rica </li></ul><ul><li>December, 2008 </li></ul>