The document outlines a 5-phase process for developing a performance budgeting framework in Indonesia, with Phase 1 involving 6 steps to set up a performance monitoring regime, including defining outcomes and programs, selecting indicators, specifying targets, and reporting. It provides examples from Australia of how to implement these steps in practice and highlights the importance of planning operational flexibilities and accountability arrangements after the initial performance framework is established.
Yemen: Methodology for preparing the new public financial management action planJean-Marc Lepain
This document outlines the methodology for preparing a new Public Financial Management (PFM) Action Plan in Yemen. It discusses the need for a new plan given the lack of strategic direction in PFM reforms since 2008. The new plan will address key PFM issues and be strategically important for restoring macroeconomic stability. A recommended approach is to group reforms into platforms covering budget credibility, accountability, budget execution, and fiscal decentralization. The plan preparation will involve different coordination levels and follow a two-phase emergency and consolidation strategy. A timetable is proposed for drafting the plan in consultation with development partners.
Yemen: Action plan for public finance management reformsJean-Marc Lepain
This document summarizes the key points from a government-development partners roundtable on public finance management reforms. It outlines an action plan with the following objectives: 1) restore fiscal sustainability and budget credibility, 2) prepare for fiscal decentralization, and 3) strengthen controls and accountability. The action plan focuses on quick wins for 2014-2015, with a new planning phase in 2015 to address more structural issues. Key areas of focus include integrating fiscal policy with budgeting, strengthening revenue collection, enhancing budget integration, and developing a roadmap for fiscal decentralization. The document concludes by noting the need to plan reforms beyond 2015 based on a public finance assessment.
This document outlines the purpose, concepts, methodology, design, and issues related to implementing medium-term expenditure ceilings. It discusses how ceilings can provide understanding of government costs over multiple years, separate baseline estimates from new policy impacts, and ensure realistic budgeting. The methodology section covers approaches for allocating funds across sectors and designing time horizons. Key issues addressed are scope, inflation adjustments, and managing uncertainty. Different country examples illustrate variations in coverage, specificity, time horizons, and frequency of updates.
Budget reforms, program budgeting and sub national budgeting in AfghanistanJean-Marc Lepain
The document discusses budget reforms and sub-national budgeting in Afghanistan. It outlines the process of integrating provincial budgets into the national budgeting process through program budgeting. Key points include:
- Line ministries will adopt program budgeting to better reflect provincial activities and priorities set in the Afghanistan National Development Strategy.
- Provincial budgeting will allocate resources across provinces equitably based on needs assessments to improve service delivery.
- Pilot line ministries and provinces will test the new budget integration and provincial budgeting processes.
- Provincial development committees will provide input to line ministries' provincial budgets and strategies to ensure local development needs are addressed.
The document proposes introducing a revenue sharing system in Lao PDR to apportion shared revenue between the central government and provinces. It outlines a methodology using a policy framework and macroeconomic model. The revenue sharing formula is based on population, land area, and a poverty index, with weights of 45%, 10%, and 45% respectively. The formula aims to correct disparities between provinces in an equitable, transparent, and pro-poor manner. Introducing this system will require the Ministry of Finance to improve analysis and forecasting of provincial economic and budget data.
The Australians Mid-Term Expenditure Framework (MTEF). Its Features and Its U...Oswar Mungkasa
The document discusses the key features and supporting institutions of Australia's Medium Term Expenditure Framework (MTEF). The three key features are: 1) budgeting for more than one year into the future, 2) only allowing adjustments for factors outside manager control, and 3) having annual appropriations despite multi-year budgeting. Supporting the MTEF are institutions like a cabinet process for multi-year decisions, economic and program parameters, definitions of program costs, independent costing verification, and a central budgeting system. The MTEF allows for linking budgets to long-term plans while maintaining fiscal discipline through its restrictions on adjustments to forward estimates.
An Introduction to the Australian Mid-Term Expenditure Framework (MTEF) and P...Oswar Mungkasa
This document provides an introduction to a workshop on the Australian Medium Term Expenditure Framework (MTEF) and Performance-Based Budgeting (PBB) reforms. The aims of the workshop are to help participants better understand MTEF and PBB, examine practical examples of their application, and start planning reforms. MTEF and PBB are tools for public expenditure management that involve planning, managing, controlling, and ensuring accountability of public finances. The rest of the workshop will cover setting up a performance system, features of Australia's MTEF, and planning MTEF and PBB reforms for Indonesia over the next five years.
Yemen: Methodology for preparing the new public financial management action planJean-Marc Lepain
This document outlines the methodology for preparing a new Public Financial Management (PFM) Action Plan in Yemen. It discusses the need for a new plan given the lack of strategic direction in PFM reforms since 2008. The new plan will address key PFM issues and be strategically important for restoring macroeconomic stability. A recommended approach is to group reforms into platforms covering budget credibility, accountability, budget execution, and fiscal decentralization. The plan preparation will involve different coordination levels and follow a two-phase emergency and consolidation strategy. A timetable is proposed for drafting the plan in consultation with development partners.
Yemen: Action plan for public finance management reformsJean-Marc Lepain
This document summarizes the key points from a government-development partners roundtable on public finance management reforms. It outlines an action plan with the following objectives: 1) restore fiscal sustainability and budget credibility, 2) prepare for fiscal decentralization, and 3) strengthen controls and accountability. The action plan focuses on quick wins for 2014-2015, with a new planning phase in 2015 to address more structural issues. Key areas of focus include integrating fiscal policy with budgeting, strengthening revenue collection, enhancing budget integration, and developing a roadmap for fiscal decentralization. The document concludes by noting the need to plan reforms beyond 2015 based on a public finance assessment.
This document outlines the purpose, concepts, methodology, design, and issues related to implementing medium-term expenditure ceilings. It discusses how ceilings can provide understanding of government costs over multiple years, separate baseline estimates from new policy impacts, and ensure realistic budgeting. The methodology section covers approaches for allocating funds across sectors and designing time horizons. Key issues addressed are scope, inflation adjustments, and managing uncertainty. Different country examples illustrate variations in coverage, specificity, time horizons, and frequency of updates.
Budget reforms, program budgeting and sub national budgeting in AfghanistanJean-Marc Lepain
The document discusses budget reforms and sub-national budgeting in Afghanistan. It outlines the process of integrating provincial budgets into the national budgeting process through program budgeting. Key points include:
- Line ministries will adopt program budgeting to better reflect provincial activities and priorities set in the Afghanistan National Development Strategy.
- Provincial budgeting will allocate resources across provinces equitably based on needs assessments to improve service delivery.
- Pilot line ministries and provinces will test the new budget integration and provincial budgeting processes.
- Provincial development committees will provide input to line ministries' provincial budgets and strategies to ensure local development needs are addressed.
The document proposes introducing a revenue sharing system in Lao PDR to apportion shared revenue between the central government and provinces. It outlines a methodology using a policy framework and macroeconomic model. The revenue sharing formula is based on population, land area, and a poverty index, with weights of 45%, 10%, and 45% respectively. The formula aims to correct disparities between provinces in an equitable, transparent, and pro-poor manner. Introducing this system will require the Ministry of Finance to improve analysis and forecasting of provincial economic and budget data.
The Australians Mid-Term Expenditure Framework (MTEF). Its Features and Its U...Oswar Mungkasa
The document discusses the key features and supporting institutions of Australia's Medium Term Expenditure Framework (MTEF). The three key features are: 1) budgeting for more than one year into the future, 2) only allowing adjustments for factors outside manager control, and 3) having annual appropriations despite multi-year budgeting. Supporting the MTEF are institutions like a cabinet process for multi-year decisions, economic and program parameters, definitions of program costs, independent costing verification, and a central budgeting system. The MTEF allows for linking budgets to long-term plans while maintaining fiscal discipline through its restrictions on adjustments to forward estimates.
An Introduction to the Australian Mid-Term Expenditure Framework (MTEF) and P...Oswar Mungkasa
This document provides an introduction to a workshop on the Australian Medium Term Expenditure Framework (MTEF) and Performance-Based Budgeting (PBB) reforms. The aims of the workshop are to help participants better understand MTEF and PBB, examine practical examples of their application, and start planning reforms. MTEF and PBB are tools for public expenditure management that involve planning, managing, controlling, and ensuring accountability of public finances. The rest of the workshop will cover setting up a performance system, features of Australia's MTEF, and planning MTEF and PBB reforms for Indonesia over the next five years.
This document provides an outline and summary of a presentation on Agricultural Public Expenditure Reviews (Ag PERs). The presentation analyzes findings from six country case studies and two cross-country studies on agricultural public spending trends, determinants, and impacts. Major findings include that agricultural budgets often fail to link with development strategies and policies, spending patterns are not always pro-growth or pro-poor, and monitoring and evaluation systems are weak. The presentation proposes conceptual frameworks to analyze how government agricultural spending relates to development outcomes.
Laos: Evaluation of the Impact of Budget Norms on Budget Equalization Needs (...Jean-Marc Lepain
This document evaluates the macro-fiscal impact of introducing budget norms and equalizing funding needs across Lao PDR's general budget. It finds that disparities in per capita funding between provinces can reach 300% in some sectors and are not linked to objective criteria. Introducing budget norms over 6 years will close the initial 4.78% funding gap from equalization at less than 1% of the budget annually. However, absorbing increased budgets will require careful planning and monitoring to build absorption capacity in provinces. Budget norms face challenges from inaccurate provincial spending data and could require budget formulation and execution reforms. A phased-in 3-step implementation plan over 6 years is recommended.
This document provides a concept note for updating Yemen's 2005 PFM (public financial management) reform action plan. It outlines the need to develop a new, consolidated action plan to coordinate PFM reforms and donor assistance. The document discusses weaknesses in previous plans and outlines recommendations for the structure and management of an updated action plan. Key points include dividing the new plan into emergency and consolidation phases, focusing on budget credibility, streamlining budget execution, accountability, and fiscal decentralization. The document also recommends establishing management structures like steering committees and a PFM reform secretariat to oversee plan implementation.
Budget integration, program budgeting and reengineering of business processesJean-Marc Lepain
This document discusses budget integration and reengineering business processes in line ministries in Afghanistan. It outlines integrating development and operating budgets, introducing program-based and performance-based budgeting, and changing organizational structures. This involves merging administrative departments, decentralizing planning, and creating finance departments. The changes will require new budget classifications, gradual implementation, and significant change management to address cultural and process changes.
This document provides an overview of different approaches to budgeting in the public sector, including incremental budgeting, zero-based budgeting, and alternative techniques such as priority-based budgeting, performance-based budgeting, and participatory budgeting. It summarizes the key advantages and disadvantages of each approach and includes examples of their application internationally. The document concludes by noting the challenges of budgeting under uncertain conditions and adjusting budgets over time.
The document provides an overview of public investment plans (PIPs) and the PIP process in Ghana. It discusses:
1) The definition of key concepts like public investment, PIP, and public investment management. A PIP is a comprehensive framework to systematically plan public investment based on a country's fiscal capacity.
2) Common issues with development policies like lack of costing, financing assessments, and coordination that can hinder effective PIP implementation.
3) The requirements for an effective public investment management system including appropriate legal frameworks, clear institutional roles, processes, and information systems.
4) The objectives of the PIP which include establishing an investment framework, presenting prioritized projects, and linking
Yemen public financial management reforms: Background and way forwardJean-Marc Lepain
The document summarizes the background and issues with PFM reforms in Yemen. Key points include:
- Past PFM reform plans from 2005-2008 focused on an FMIS but failed to address broader budget credibility issues.
- A 2008 PEFA assessment found continued lack of budget credibility and weak PFM functions despite reform efforts.
- The new 2014-2015 reform plan aims to focus on restoring budget credibility and fiscal sustainability as pressing short-term priorities, while more ambitious long-term reforms require conditions like an elected government.
- PFM issues are closely tied to Yemen's deteriorating macroeconomic situation including heavy reliance on declining oil revenues and unsustainable subsidies. Comprehensive structural reforms are needed alongside any financial bail
The document discusses issues with Yemen's national budget, including a lack of integration between different budget components (operational, investment, subsidies, economic entities). It focuses on problems with the investment and economic entities budgets. The investment budget lacks feasibility studies and realistic costing, burdening future budgets. The economic entities budget treats state-owned enterprises as a single entity, obscuring deficits and risks. The document advocates separating commercial SOEs from budget entities and integrating all components into a unified, sustainable budget.
This document discusses the design of a budget entity regulatory framework. It begins by defining a budget entity regulatory framework and its objectives, which include organizing the budget system and transitioning to program and results-based budgeting. It describes identifying budget entities and their attributes across five dimensions: nomenclature and hierarchy, budget execution rules, fund transfer rules, budget formulation rules, and regulatory framework. The document outlines considerations for fiscal decentralization and program budgeting. It provides a methodology for developing the regulatory framework and discusses implementation, including linking it to the financial management information system and budget classification.
Cambodia, decentralization and deconcentration; progress and issues, august 2011Jean-Marc Lepain
The document summarizes the progress and issues regarding decentralization and deconcentration reforms in Cambodia. It discusses several key points: 1) The reforms aim to redefine powers and responsibilities at the provincial, district, and municipal levels but have focused more on deconcentration than fiscal decentralization. 2) There are inconsistencies between laws governing sub-national administration and public finance that need to be resolved. 3) While expenditures are decentralized, budgeting remains centralized, and the reforms have focused more on deconcentration than decentralization of service delivery. Revising expenditure and revenue assignments according to responsibility transfers is still needed.
Cambodia: Education Sector; A Short Fiscal AssessmentJean-Marc Lepain
The education sector in Cambodia has made progress but faces ongoing challenges. Enrollment has increased at primary and tertiary levels, and teacher qualifications have improved. However, education spending remains low, class sizes are still very large, dropout and repetition rates are high, and textbook provision is insufficient. Improving the education system will require increasing spending, training more teachers, expanding early education, reducing family costs, and improving performance incentives. While decentralization efforts have helped, school budgets are not always well-matched to needs between rural and urban areas. Addressing structural issues like these will require mobilizing more resources to close financing gaps.
From the medium term fiscal frameworkto ministries' ceilingsJean-Marc Lepain
This document discusses the methodology for constructing medium-term expenditure ceilings and allocating budgets to ministries in Brunei. It begins by explaining the purpose of medium-term ceilings, which is to link fiscal and sectoral policies, prioritize spending, and conduct fiscal adjustments in an orderly manner. It then covers the methodology, including setting aggregate and sectoral fiscal targets, disaggregating budgets to ministries, and addressing issues like time horizons, coverage, and managing uncertainty. The document concludes by emphasizing the importance of understanding baselines versus ceilings and the demands this system places on both ministries and the Ministry of Finance.
Budgeting system, Line-Item, Lump sum and PPBSrey castro
This document discusses different government budgeting systems, including line-item budgeting, lump sum budgeting, and program-planning budgeting. It provides examples and discusses the strengths and weaknesses of each system. Line-item budgeting lists expenditures by object without regard for programs, while lump sum budgeting uses broad expenditure categories. Program-planning budgeting stresses linking planning and budgeting to achieve national development objectives. The document also discusses the Philippine experience with these different budgeting approaches.
Developments in performance budgeting - Zulkhairil Amar Mohamad, MalaysiaOECD Governance
This presentation was made by Zulkhairil Amar Mohamad, Malaysia, at the 14th OECD-Asian Senior Budget Officials Meeting held in Bangkok, Thailand, on 13-14 December 2018
The PPBE process involves 4 concurrent and overlapping phases: Planning establishes long-term strategic priorities, Programming translates priorities into programs within budget constraints, Budgeting prices programs and develops the budget submission, and Execution monitors program spending. The process links strategic vision to resource allocation and ensures programs balance capabilities with available funds.
Strengthening provincial planning and budgeting capacity (laos 2010)Jean-Marc Lepain
The document discusses strengthening provincial planning and budgeting capacity in Laos. It identifies several issues with the current budgeting process such as a lack of predictability, unrealistic budgets, and imbalance between recurrent and capital budgets. It proposes introducing budget norms to allocate funds more transparently based on expenditure needs. The objectives of budget norms would be to correct imbalance, ensure basic needs are met, reduce fees, and balance operational and investment costs.
This document provides an agenda for a five-day conference on performance budgeting for government held from June 22-26, 2009 in Washington, DC. The conference consists of three interactive courses that will teach participants how to 1) navigate the budget process, 2) implement performance-based budgeting, and 3) utilize activity-based cost management. Each day focuses on a different course and includes sessions on concepts, case studies, and application exercises. Participants will learn frameworks and best practices for aligning resources with strategic goals, justifying budgets, and measuring program costs and efficiencies. The agenda provides a detailed schedule of presentations, topics, and activities for each day of the conference.
This document provides an outline and summary of a presentation on Agricultural Public Expenditure Reviews (Ag PERs). The presentation analyzes findings from six country case studies and two cross-country studies on agricultural public spending trends, determinants, and impacts. Major findings include that agricultural budgets often fail to link with development strategies and policies, spending patterns are not always pro-growth or pro-poor, and monitoring and evaluation systems are weak. The presentation proposes conceptual frameworks to analyze how government agricultural spending relates to development outcomes.
Laos: Evaluation of the Impact of Budget Norms on Budget Equalization Needs (...Jean-Marc Lepain
This document evaluates the macro-fiscal impact of introducing budget norms and equalizing funding needs across Lao PDR's general budget. It finds that disparities in per capita funding between provinces can reach 300% in some sectors and are not linked to objective criteria. Introducing budget norms over 6 years will close the initial 4.78% funding gap from equalization at less than 1% of the budget annually. However, absorbing increased budgets will require careful planning and monitoring to build absorption capacity in provinces. Budget norms face challenges from inaccurate provincial spending data and could require budget formulation and execution reforms. A phased-in 3-step implementation plan over 6 years is recommended.
This document provides a concept note for updating Yemen's 2005 PFM (public financial management) reform action plan. It outlines the need to develop a new, consolidated action plan to coordinate PFM reforms and donor assistance. The document discusses weaknesses in previous plans and outlines recommendations for the structure and management of an updated action plan. Key points include dividing the new plan into emergency and consolidation phases, focusing on budget credibility, streamlining budget execution, accountability, and fiscal decentralization. The document also recommends establishing management structures like steering committees and a PFM reform secretariat to oversee plan implementation.
Budget integration, program budgeting and reengineering of business processesJean-Marc Lepain
This document discusses budget integration and reengineering business processes in line ministries in Afghanistan. It outlines integrating development and operating budgets, introducing program-based and performance-based budgeting, and changing organizational structures. This involves merging administrative departments, decentralizing planning, and creating finance departments. The changes will require new budget classifications, gradual implementation, and significant change management to address cultural and process changes.
This document provides an overview of different approaches to budgeting in the public sector, including incremental budgeting, zero-based budgeting, and alternative techniques such as priority-based budgeting, performance-based budgeting, and participatory budgeting. It summarizes the key advantages and disadvantages of each approach and includes examples of their application internationally. The document concludes by noting the challenges of budgeting under uncertain conditions and adjusting budgets over time.
The document provides an overview of public investment plans (PIPs) and the PIP process in Ghana. It discusses:
1) The definition of key concepts like public investment, PIP, and public investment management. A PIP is a comprehensive framework to systematically plan public investment based on a country's fiscal capacity.
2) Common issues with development policies like lack of costing, financing assessments, and coordination that can hinder effective PIP implementation.
3) The requirements for an effective public investment management system including appropriate legal frameworks, clear institutional roles, processes, and information systems.
4) The objectives of the PIP which include establishing an investment framework, presenting prioritized projects, and linking
Yemen public financial management reforms: Background and way forwardJean-Marc Lepain
The document summarizes the background and issues with PFM reforms in Yemen. Key points include:
- Past PFM reform plans from 2005-2008 focused on an FMIS but failed to address broader budget credibility issues.
- A 2008 PEFA assessment found continued lack of budget credibility and weak PFM functions despite reform efforts.
- The new 2014-2015 reform plan aims to focus on restoring budget credibility and fiscal sustainability as pressing short-term priorities, while more ambitious long-term reforms require conditions like an elected government.
- PFM issues are closely tied to Yemen's deteriorating macroeconomic situation including heavy reliance on declining oil revenues and unsustainable subsidies. Comprehensive structural reforms are needed alongside any financial bail
The document discusses issues with Yemen's national budget, including a lack of integration between different budget components (operational, investment, subsidies, economic entities). It focuses on problems with the investment and economic entities budgets. The investment budget lacks feasibility studies and realistic costing, burdening future budgets. The economic entities budget treats state-owned enterprises as a single entity, obscuring deficits and risks. The document advocates separating commercial SOEs from budget entities and integrating all components into a unified, sustainable budget.
This document discusses the design of a budget entity regulatory framework. It begins by defining a budget entity regulatory framework and its objectives, which include organizing the budget system and transitioning to program and results-based budgeting. It describes identifying budget entities and their attributes across five dimensions: nomenclature and hierarchy, budget execution rules, fund transfer rules, budget formulation rules, and regulatory framework. The document outlines considerations for fiscal decentralization and program budgeting. It provides a methodology for developing the regulatory framework and discusses implementation, including linking it to the financial management information system and budget classification.
Cambodia, decentralization and deconcentration; progress and issues, august 2011Jean-Marc Lepain
The document summarizes the progress and issues regarding decentralization and deconcentration reforms in Cambodia. It discusses several key points: 1) The reforms aim to redefine powers and responsibilities at the provincial, district, and municipal levels but have focused more on deconcentration than fiscal decentralization. 2) There are inconsistencies between laws governing sub-national administration and public finance that need to be resolved. 3) While expenditures are decentralized, budgeting remains centralized, and the reforms have focused more on deconcentration than decentralization of service delivery. Revising expenditure and revenue assignments according to responsibility transfers is still needed.
Cambodia: Education Sector; A Short Fiscal AssessmentJean-Marc Lepain
The education sector in Cambodia has made progress but faces ongoing challenges. Enrollment has increased at primary and tertiary levels, and teacher qualifications have improved. However, education spending remains low, class sizes are still very large, dropout and repetition rates are high, and textbook provision is insufficient. Improving the education system will require increasing spending, training more teachers, expanding early education, reducing family costs, and improving performance incentives. While decentralization efforts have helped, school budgets are not always well-matched to needs between rural and urban areas. Addressing structural issues like these will require mobilizing more resources to close financing gaps.
From the medium term fiscal frameworkto ministries' ceilingsJean-Marc Lepain
This document discusses the methodology for constructing medium-term expenditure ceilings and allocating budgets to ministries in Brunei. It begins by explaining the purpose of medium-term ceilings, which is to link fiscal and sectoral policies, prioritize spending, and conduct fiscal adjustments in an orderly manner. It then covers the methodology, including setting aggregate and sectoral fiscal targets, disaggregating budgets to ministries, and addressing issues like time horizons, coverage, and managing uncertainty. The document concludes by emphasizing the importance of understanding baselines versus ceilings and the demands this system places on both ministries and the Ministry of Finance.
Budgeting system, Line-Item, Lump sum and PPBSrey castro
This document discusses different government budgeting systems, including line-item budgeting, lump sum budgeting, and program-planning budgeting. It provides examples and discusses the strengths and weaknesses of each system. Line-item budgeting lists expenditures by object without regard for programs, while lump sum budgeting uses broad expenditure categories. Program-planning budgeting stresses linking planning and budgeting to achieve national development objectives. The document also discusses the Philippine experience with these different budgeting approaches.
Developments in performance budgeting - Zulkhairil Amar Mohamad, MalaysiaOECD Governance
This presentation was made by Zulkhairil Amar Mohamad, Malaysia, at the 14th OECD-Asian Senior Budget Officials Meeting held in Bangkok, Thailand, on 13-14 December 2018
The PPBE process involves 4 concurrent and overlapping phases: Planning establishes long-term strategic priorities, Programming translates priorities into programs within budget constraints, Budgeting prices programs and develops the budget submission, and Execution monitors program spending. The process links strategic vision to resource allocation and ensures programs balance capabilities with available funds.
Strengthening provincial planning and budgeting capacity (laos 2010)Jean-Marc Lepain
The document discusses strengthening provincial planning and budgeting capacity in Laos. It identifies several issues with the current budgeting process such as a lack of predictability, unrealistic budgets, and imbalance between recurrent and capital budgets. It proposes introducing budget norms to allocate funds more transparently based on expenditure needs. The objectives of budget norms would be to correct imbalance, ensure basic needs are met, reduce fees, and balance operational and investment costs.
This document provides an agenda for a five-day conference on performance budgeting for government held from June 22-26, 2009 in Washington, DC. The conference consists of three interactive courses that will teach participants how to 1) navigate the budget process, 2) implement performance-based budgeting, and 3) utilize activity-based cost management. Each day focuses on a different course and includes sessions on concepts, case studies, and application exercises. Participants will learn frameworks and best practices for aligning resources with strategic goals, justifying budgets, and measuring program costs and efficiencies. The agenda provides a detailed schedule of presentations, topics, and activities for each day of the conference.
Pengalaman Pelaksanaan SANIMAS RW I Lingkungan Balongcok Kelurahan Balongsari...Oswar Mungkasa
Bahan disampaikan oleh Riani (KSM Sanimas Balong Asri) dalam Seminar SANIMAS bertema Pengarusutamaan Pendekatan Sanitasi oleh masyarakat (SANIMAS): Pembelajaran dari Pengalaman.
Hak Atas Air. Percik Edisi III Tahun 2010 Bagian PertamaOswar Mungkasa
Majalah Air Minum dan Penyehatan Lingkungan yang diterbitkan oleh Kelompok Kerja Air Minum dan Penyehatan Lingkungan. Kali ini dengan edisi Air sebagai Hak asasi
Dokumen tersebut membahas pengelolaan air berbasis masyarakat, termasuk definisi, karakteristik, prasyarat, peran pemerintah, upaya peningkatan kapasitas, bentuk dukungan, alasan pendekatan berbasis masyarakat diperlukan, prinsip-prinsip kebijakan, variasi implementasi, dan contoh proyek.
Praktek Terbaik untuk Inovasi Pemenuhan Pelayanan Publik PerkotaanOswar Mungkasa
tanpa sumber penulis, disampaikan pada Seminar nasional Kebijakan dan Strategi Perkotaan Nasional (KSPN). Mewujudkan Kota Masa Depan Indonesia. Jakarta 13 Desember 2012
State of the World's Cities 2012/2013. Prosperity of Cities.Oswar Mungkasa
1) The document is a report titled "State of the World's Cities 2012/2013: Prosperity of Cities" published by UN-Habitat.
2) It advocates shifting from a narrow focus on economic growth to a broader concept of urban prosperity that includes quality of life, infrastructure, equity, and environmental sustainability.
3) The report introduces a new tool, the City Prosperity Index, and conceptual matrix called the Wheel of Prosperity to help measure and guide policies toward urban prosperity.
Australian Performance Based Budgeting (PBB) – an outline of the steps taken ...Oswar Mungkasa
The document outlines the 5 stages Australia took to implement performance-based budgeting reforms over 20 years:
1) Initial implementation of program budgets with performance indicators in the mid-1980s.
2) Financial management training of agencies in the late 1980s.
3) Introducing operating cost flexibility for agencies in the late 1980s and 1990s through expanded running cost budgets and new financial laws.
4) Changing evaluation frameworks over time to focus more on outcomes.
5) Increasing accountability requirements through new laws and reporting to Parliament and strategic reviews by Cabinet from the 2000s.
Strategic direction of cambodia budget system reform 2013-2020 - Ratanak Hav,...OECD Governance
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.
The document discusses performance management and measurement best practices and recent initiatives. It covers four main topics: 1) strategic, expenditure, and management performance measurement; 2) evaluation in the Government of Canada including background, policy features, problems with policies, and the new evaluation function; 3) Australia's capability review program; and 4) challenges for evaluation/performance including linking to resource allocation, whole of government strategies, delivery/implementation, control/guidance, and accountability.
Draft for discussion. The OECD Performance Budgeting Framework provides building blocks to guide countries in developing
or strengthening their approach to performance budgeting.
This document provides a monitoring and evaluation framework for the Economic Development Department of an unnamed city. It outlines the legislative and policy context for monitoring and evaluation in the local government. It describes the methodology used to develop the framework, which included a literature review, reviewing department documents, and consulting with staff. The framework is intended to establish common understanding of key monitoring and evaluation principles and provide the foundation for tracking the performance of the department and its projects in achieving their objectives. It outlines the planning, monitoring, evaluation, reporting, and feedback phases to put the framework into practice.
The EPA presented a workplan to strengthen nutrient credit trading and offset programs in the Chesapeake Bay watershed. The plan has four components: addressing issues identified in program assessments, developing an oversight program, providing program guidance, and increasing outreach. Initial projects include assigning leads to work with states, inventorying trades, and developing guidance on baselines and credit calculation. The majority of guidance documents will be completed in 2013, with some projects extending into 2014.
PowerPoint presentation of 10 Principles of Budgetary Governance including background, consultation process and key contributions. The principles are currently being considered as a draft Recommendation of the OECD Council, underpinning their importance for good governance and inclusive growth.
For further information, please visit: www.oecd.org/governance/principles-budgetary-governance.htm
OECD best practices for performance budgeting - Jon BLÖNDAL, OECDOECD Governance
The document outlines draft OECD best practices for performance budgeting based on decades of experience in OECD countries. It aims to distill lessons learned and offer guidance to countries updating or newly adopting performance budgeting systems. It provides 7 key recommendations: 1) Clearly defining objectives and stakeholders, 2) Linking budgets to strategic goals, 3) Adapting to policy needs, 4) Managing performance information, 5) Creating supporting infrastructure, 6) Ensuring evaluation and oversight, and 7) Incentivizing performance-oriented behavior. Each recommendation includes further context and considerations.
PEFA assessments provide valuable information for improving public financial management (PFM) systems in Latin America and the Caribbean. Several countries have used PEFA assessments to inform PFM reforms, develop action plans, and monitor progress over time. PEFA data also supports the preparation and monitoring of World Bank-financed projects focused on strengthening PFM. While limited data is available, aggregate information indicates that accounting and auditing indicators lag other areas of PFM performance in the region.
The document discusses introducing financial management and control (FMC) reforms in Georgia. It outlines several key points:
1. The current financial control system focuses solely on budget compliance and does not consider value for money or managerial accountability. Introducing FMC would address these issues.
2. The main problems with the current system are weak organizational management and a lack of managerial accountability. FMC would establish clear responsibilities for managers to improve performance.
3. Introducing FMC should be done gradually in three stages - financial control, managerial control, and then full financial management. Each stage requires pilot testing before full implementation. The goal is to improve value for money and financial awareness over time.
National budget (philippines setting) by Ms. Merafe A. Ebreomerafe ebreo
The document discusses the national budgeting process in the Philippines. It defines what a national budget is as the government's estimate of income and expenditures for the fiscal year. There are two major sources of money for the national budget: revenues and borrowings. The budget process involves four phases - preparation, authorization, implementation, and accountability. The national budget is allocated to fund various government programs and projects, operation of offices, payment of salaries, and debt payments. It is categorized into current operating expenditures, capital outlays, net lending, and debt amortization.
CMA Part 1: Planning, Budgeting and Forecasting Mohsin Munir
This document provides an overview of Section A of the 2010 CMA Part 1 exam, which covers planning, budgeting, and forecasting. It discusses key topics that will be covered in this section, including planning concepts, types of budgets, budget methodologies, forecasting techniques, and standard costing. The document also summarizes best practices for budget development, characteristics of effective budgets, and considerations for setting standard costs for direct materials, direct labor, and overhead. It emphasizes the importance of linking budgets to company goals and objectives and involving managers in the budgeting process.
This presentation was made by Ratanak Hav, Cambodia, at the 14th OECD-Asian Senior Budget Officials Meeting held in Bangkok, Thailand, on 13-14 December 2018
Performance Budgeting: Lessons and Challenges from Korea by Jangro LeeOECD Governance
Presentation by Jangro Lee at the 10th annual meeting of the Senior Budget Officials Performance and Results Network held on 24-25 November 2014. Find more information at http://www.oecd.org/gov/budgeting
Priority Based Budgeting - How to respond to Downturn and AusterityMalcolm Anthony
Priority Based Budgeting [PBB] is a robust, participative process that enables organisations to achieve a balanced financial plan, even in the most challenging environments.
PBB has been helping organisations achieve challenging financial and operational goals for over thirty years. Unsurprisingly it has seen a significant resurgence in interest and uptake since 2008 as organisations, around the world, have sought to manage the implications of downturn and fiscal austerity.
PBB teaches managers, at all levels in an organisation, to manage their own destiny and deliver change that they and their teams truly believe in. Change which also, collectively, results in the achievement of the organisations wider goals.
The opening balance for October would be $600, which was the projected balance at the end of September.
Cash flow budgets are prepared on a rolling basis, with the closing balance from one period becoming the opening balance for the next period.
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Getting started on the PBB reform agenda in Indonesia – a practical outline of the steps to be taken in setting up a framework
1. Getting started on the PBB reform agenda
in Indonesia – a practical outline of the
steps to be taken in setting up a framework
Presented by Pat McMahon
Budget Advisor,
Australian Department of Finance and Deregulation
2. Aims of this session:
• Examine some practical examples of how PBB
could be applied here at the implementation
stage. This is only the setting up stage.
• This afternoon, after we have looked at MTEF,
we shall start addressing the plan, and
practicalities, involved in moving to a mature
PBB
3. 5 phases in developing a performance
budgeting framework
1. The “Set-up” stage of defining:
– outcomes & programs
– selection of indicators/specifying targets &
benchmarks
1. Financial management training
2. Introduce operational flexibilities
3. Introduce evaluation and monitoring
4. Review and refine frameworks
4. Phase 1 - Six steps in “setting up” a
performance monitoring regime
There are six basic steps to setting up a performance monitoring
regime:
A. Defining outcomes and programs for measurement
B. Selecting indicators
C. Specifying targets, benchmarks and reference points
D. Data collection
E. Analysis & assessment
F. Reporting
5. Step A. Defining outcomes, programs and
activities – Examples from DG Budgets
• Outcomes & Program structure
– Government objectives needs to be defined along with the means
(programs/outputs) necessary to achieve those objectives.
• Be clear who is to be held responsible for performance
– Alignment of program responsibility with responsible officers on the
organization chart
• Distribution of expenditures
– All expenses need to be distributed among the various program
activities that make up the program
6. Step A. Outcomes, Programs, Activities and Responsibilities– An Example
Management
and
“Budget Management and Reform”
Direction
Program
1. Review of line ministry budgets
Program Activities
implement budget
4. Prepare annual
monitor non-tax
3. Establish and
2. Develop and
system reform
summaries
policy and
collection
budget
Outcome/Objective:: To manage the state budget process to assure that the
government’s goals and priorities are translated into annual budgets
7. Australian example and some similarities
Fi g u r e: Ou t com e 1 – con t r i b u t i n g ou t p u t s
8. Distribution of all expenditures to programs
Current Main Programs (8 )and DGs Proposed Programs (12) and DGs
1. Revenue Increase and Fund Safeguarding 1. Budget Management and Reform ( DG Budget)
DG Taxes Non-tax Revenue Increase and Fund Safeguarding
DG Customs and Excises Budget System Implementation and Improvement
DG Assets Management State Expenditure Effectiveness
Secretary General
2. Debt Financing and Management (DG Debt)
2. State Expenditure Effectiveness
DG Budget 3. Fiscal Policy and Macro-economic Analysis (Fiscal Policy Board)
DG Treasury Finance and Economic Stabilization
DG Central-Local Fiscal Balance
4. Revenue Policy and Management (DG Tax)
3. State Financial Accounting
DG Treasury 5. Intergovernmental Fiscal Relations (DG Fiscal Balance)
4. Financial Institutions Development 6. Customs and Excises Management (DG Customs)
Capital Market and Financial Institutions Management Board
Secretary General 7. Capital Market and non-Bank Financial Institutions Regulation (Capital Markets Board)
5. Financial and Econmic Stabilization 8. Management of State Assets (DG Asset Management)
Fiscal Policy Board
Capital Market and Financial Institutions Management Board 9. Treasury Affairs (DG Treasury)
State Financial Accounting
6. Debt Financing and Management State Expenditure Effectiveness
DG Debt Management
10. Inspector General
7. Budget Systems Implementation and Improvement
DG Budget 11. Training and Continuing Profesional Education
DG Treasury
12. Central Management and Direction
8. State Assets Management Tax Court
DG State Assets Management Secretary General
Public Accounts and Appraisal Regulation
Supporting Programs (5) and DGs Center for IT Finanical System
9. State Apparatus Accountability Center for Policy Harmonization
10. Manpower Management
11. State Apparatus Infrastructure
12. State and Government Leadership
13. In-Service Education
Many DGs involved in each supporting program
9. Step B. Selecting performance indicators
Remember performance indicators demonstrate that the government's
requirements are met. There are two types of indicators:
Effectiveness indicators
– Effectiveness indicators reflect how effective the outputs are in
achieving the outcome.
Efficiency indicators
– Indicators of quantity, quality and cost reflect the efficiency of the
department’s performance in delivering its outputs.
11. In choosing output group indicators and targets,
agencies should aim to answer ‘yes’ to all of the
following questions:
1. Is it possible to demonstrate the relationship between the indicators
and the outcomes the Government wants?
2. Are the indicators easily understood by non-technical stakeholders?
3. Are the indicators and targets:
a Specific – clear, concise and precise;
b Measurable – quantified;
c Achievable – practical and reasonable;
d Relevant – to stakeholders (including Government, Parliament, customers,
beneficiaries); and
e Time bound – related to a period of time or time limit?
12. In choosing output group indicators and targets,
agencies should aim to answer ‘yes’ to all of the
following questions (continued):
4. Do the indicators provide sufficient and balanced representation of actions
taken, and goods and services delivered by the program/activity/service?
5. Do the indicators adequately capture the intended relationship between
Government programs/services and outcomes (or, if not, is there a robust
means of monitoring and evaluating the contribution of Government
programs/services to the outcome)?
6. Will the results of measuring programs/services be available for evaluation
and reporting in an appropriate form when needed for a reasonable cost?
7. Is there a mechanism for review and revision of program/services
measurement to ensure that it remains appropriate and sufficient for
agency and Government needs?
13. Step B. Testing some early Performance Indicators
defined for Budget Management & Reform
Outcome/Objective: To manage the state budget process to assure that the
government’s goals and priorities are translated into annual budgets
Activity 1. Review of line ministry budgets
• 1. Parliament adopts line ministry budgets with only minor changes
Activity 2. Develop and Implement budget system reforms
• 1. PBB implementation (no. of line ministries) / 2. MTEF
implementation (no. of line ministries) / 3. PBB and MTEF guidelines
issued and training provided to line ministries
Activity 3. Establish & monitor non-tax policy and revenue collection
• 1. Actual non-tax revenues as a % of projections
Activity 4. Prepare annual budget summaries
• 1. Quality “I” accounts are produced in a timely manner
14. Step B. Performance indicators for DG Treasury
activities – indicators serve different purposes:
accountability, analysis and decision-making
Activity 1. Budget execution
• 1. Annual number of disbursements made/ 2.Annual number of
budget execution documents processed
Activity 3. Financial management of public service institutions
• 1. Number of public service institutions managed
Activity 7. Financial accounting and reporting
• 1. Annual number of financial accounting reports issued
15. Step C. Specifying targets, benchmarks & reference
points – Examples from Australian Customs
Output 2: Trade facilitation and revenue collection
16. Step C. Specifying targets, benchmarks &
reference points – Testing of other earlier
prepared indicators not endorsed by DG Customs
Outcome/objective: To execute state laws and regulations on imports and
exports and to collect taxes
Activity 1. Development of customs technical procedures
• 1. Number of technical procedures revised and issued/Number of new
technical procedures issued
Activity 2. Management and operation of customs facilities
• 1. Number of individual facilities maintained and operated/Total square
metres of facilities maintained and operated/Square metre cost of
maintaining and operating
Activity 3. Excise policy and procedures
• 1. Number of new or revised procedures issued
17. Step C. Specifying targets, benchmarks &
reference points – testing of indicators continued
Activity 4. Enforcement and investigations
• 1. Number of investigations initiated / 2. Number of investigations
completed/
3. Average cost per completed investigations
Activity5. Conduct of audits
• 1. Number of audits initiated/ 2. Number of audits completed/ 3. Average
cost per completed audits/ 4. Average number of completed audits per
auditor
Activity 6. coordination with international agencies
• 1. Number of agreements concluded
Activity 7. Preparation of customs and excise regulations
• 1. Number of new and amended regulations issued
18. Step F. Reporting
• Internal reporting for Agency Management
– Management’s requirements ideally issued
through the Chief Executive Officer of the
Agency
• External reporting for Parliament
– Government’s requirements ideally issued
through Minister for Finance
19. More this afternoon - Planning the introduction of
“operating cost flexibilities” and revised
accountability arrangements
• Defining outcomes, programs and performance
indicators is only the start.
• Performance will be limited unless there is proper planning of operating cost
flexibilities. The preliminaries before any reforms in this area must include:
• Training
• Defining running costs (where operational flexibilities are introduced) and
non running costs (related to expenditures over which the Government
has total control and where operational flexibilities cannot be applied)
• Grouping costs within running cost to groups where flexibilities could be
granted and planning the staging the degree of flexibility granted
• Planning the audit, review and evaluation mechanisms to be used
Editor's Notes
Examine some practical examples of how PBB could be applied here at the implementation stage. This is only the setting up stage. This afternoon, after we have looked at MTEF, we shall start addressing the Plan and the practicalities involved in moving to a mature PBB (3 rd Session).
If you take the Australian example there are at least 5 stages in developments of any performance budgeting framework. They should not occur all at once. I want to focus on the first three of these as these are the most critical early steps.
Getting the basics right from the beginning is important. You might recall from the Australian experience we did an evaluation of our performance framework some 7 to 8 years after implementing our version of PBB. I want to focus on what can be done to avoid our errors at this crucial set up stage. There are 6 elements to setting up a performance monitoring regime – as listed above. I want to concentrate on some of these in the context of Indonesia
The obvious starting point is to define outcomes and programs. Defining Outcomes and programs requires great care and is very important. Getting this wrong will likely mean that the wrong performance indicators are defined, the wrong data is collected and used and the information available is not optimal for decision makers (i.e.managers, ministers, government and parliament). The other obvious point is that in any performance framework it must be clear who is to be held responsible for performance. Without this, there can be limited accountability. For this reason great care is taken to ensure responsibilities for administering programs are clearly defined and very few programs in Australia are therefore shared across agencies. The distribution of all expenses to programs that are used to achieve the outcomes sought by governments (ie their priorities) are particularly important when we measure costs over time in achieving those objectives. It is clear that if not all costs are recorded then performance measures that incorporate costs or unit costs will be very misleading.
No doubt this will look familiar to many of you. This is borrowed from slides presented by the World Bank that has aligned organisational structures to Programs and Activities. It has since been used fairly widely by the Ministry of Finance and Bappenas to discuss program structures and how they should align with Echelon 1s in order that there be clarity as to who is responsible for the performance of programs. The program name is shown in red – Budget Management and Reform. The activities that feed into this program are shown in yellow. The organisational structure is shown in the white boxes. All of these feed into the outcome which is shown in italics at the bottom in the purple box. The outcome is meant to be what the Government wants to achieve, and performance indicators should always be developed to measure whether or not the outcome is being achieved. It is a very good start, but there are some comments I want to make. Remember that an Outcome or the objective should be what the Government is trying to achieve . Carefully defining the government’s desired outcomes as the program objective is very important as it will define what performance indicators are necessary. This will become apparent as we go through this presentation. There are two other comments that I want to highlight by reference to the next two slides.
I said that in relation to the previous slide that the DG Budgets example was a good start and I will say why now by reference to the similarities with the Australian equivalent. Regard the outcome as the government’s objective – namely “sustainable government finances” – sustainable in the sense that the Budget is setting up medium term fiscal outcomes that are sustainable which leads to confidence in the government’s ability to manage the economy and to growth. 2. Regard the output group as the program – in this example there are two programs feeding into the achievement of the Government’s objective of sustainable government finances (i.e. the Budget and Financial Management) 3. Regard the sub outputs as the activities (Budget advice, financial reporting, financial framework etc). If you do this you can see definite similarities with the previous slide for DG Budgets. While the Australian example does not show the organisational structure you can envisage that the organisational structure will align readily to the output groups and sub outputs. I can assure you that they do – the head of Budget Group is responsible for the Output Group called “Budget” and the head of Financial Management Group is responsible for the Output Group called “Financial Management”. Note also the sub outputs shown are equivalent to what you call activities. They tend to align with organisational structures. This alignment with organisational structures makes it very clear who is responsible for which activity and which output. However there is a further point I want to make in the next slide that organisational structure and program structure should not always be mirror images of each other.
This slide is likely to be familiar to you. It is taken from the same source I refered to earlier. It is used as an example to say that the current structure needs to be redefined so that there are no programs which have many DGs. My apologies if people cannot read the detail. IT IS AN EXCELLENT START The point I want to make here is that organisational structures and program structures do not have to be perfectly aligned , and in some cases it would be a mistake to call the activities of a corporate nature (even though delivered by an Echelon 1) a “program”. Take the two examples in the bottom of the right hand column - item 11 “Training and Professional Education” and item 12 “Central Management and Direction”. Many of the activities in these items are corporate support activities for all the other programs listed above these items. It is clear, therefore, that this program structure will mean that not all expenditures will be distributed properly. This could become a significant problem, particularly for assessing program cost and efficiency. This is why “Management and Direction” (ie corporate support activities were recognised as an activity that contributes to the Program output and the outcomes desired by Government but is an activity managed elsewhere in the organisation) So my recommendation is that you maintain whatever organisational structure works efficiently for you BUT remember that supporting areas are inputs to other “programs”. The allocation of all costs to the relevant programs should be made if performance measures are to used. This allocation is not a difficult problem. For example, if 20% of the training and professional education is in respect of staff in DG Budgets, then for performance measurement attribute 20% of the costs to the Budget Management and Reform Program.
PERFORMANCE INDICATORS: The aim of using performance indicators is to demonstrate that an agency has addressed the government's requirements in an efficient way, demonstrating overall value for the community. There are two types of indicators used in Australia: Effectiveness indicators Effectiveness indicators reflect how effective the outputs are in achieving the outcome. Efficiency indicators Indicators of quantity, quality and cost reflect the efficiency of the department’s performance in delivering its outputs. Efficiency indicators will play a large role in managers decisions on how to allocate and in Parliament’s assessment of whether the funds have been properly managed to get the best result at least cost. If you can recall the 5 phases of development of a performance framework, these indicators will be limited in usefulness until Phase 3 – introduction of operational flexibilities – actually commences. Lets now look at some examples of indicators and how they relate to outcomes or government objectives
The first point to note from this slide is that the performance indicators for outputs relate to the outcome and its description. The objective of the Government from funding the activities of the Australian Department of Finance is to achieve sustainable government finances (i.e a sustainable fiscal environment that leads to confidence and growth in the economy). The description relates how the activities of the Department contribute towards assisting the Government to meet that objective and include: whole of government advice on expenditure and procurement policy; assisting the government prepare the Australian Government Budget; providing whole of government financial reporting The very first performance indicator is about how effective the activities of the Department are in assisting the government to meet its fiscal objective - the minister and the government must be satisfied with the quality, relevance and timeliness of our advice for Australian Government decision making. The other indicators about quantity, quality (including timeliness and accuracy) along with cost reflect the efficiency of the department’s performance. Accuracy is important because if the estimates of the deficit or surplus that the government is aiming for are wildly inaccurate the markets can lose confidence with adverse effects on the economy – such an outcome would be contrary to the aims of the Government. Let us now turn to Performance indicators for Indonesian activities, but before I do I would like to digress and pose a number of questions which could be used to assist you in determining whether you have chosen meaningful and useful outcome statements and performance indicators.
The task ahead for Indonesian agencies is to define their outcomes, outputs and performance indicators. From the Australian experience we know that outcome statements and performance indicators can require a great deal of thought and that sometimes we may not do it well. It helps however if we can pose a series of questions the answers to which will tell us whether we have done a good job or otherwise. In this and the next slide are some 7 questions that the designers of performance indicators should ask (this set of questions are taken from the guidance material included in your folders on how to set up a performance framework).
Let us now apply some of these questions to the KPI developed for the Ministry of Finance by the World Bank consultants. I should emphasise however these are hypothetical performance indicators that have not been endorsed by the Ministry of Finance.
Lets start with some KPIs defined by some consultants for the budget management and reform program but which have not been endorsed by DG Budgets. It is clear from this example that activities have been defined and performance measures for each of the activities have also been defined. This is a good start but can the designer of these performance indicators answer “yes” to all of the questions in the previous two slides? The very first question was “Is it possible to demonstrate the relationship between the indicators and the outcomes the Government wants?” The important point here is that if there is not clarity as to what the Government wants to achieve it is very difficult to define clear and meaningful performance indicators. What is apparent here is that the performance indicators fit loosely with the objective. Either there is a problem with the objective or a problem with the indicators or both.
These performance indicators are taken from the same source. Again they can be tested as they have not been endorsed by DG Treasury. Again the relevant question is whether the performance indicators shown here can generate a “yes” to all of the 7 questions shown in the previous slide. The other point I want to make is that d ifferent types of indicators serve different purposes. In selecting performance indicators agencies need to consider three basic principles about what to measure. These are: What is most important to the agencies and its stakeholders, particularly the Government and Parliament, in terms of performance or ‘success’; What is useful for accountability, analysis and decision-making; and What is cost effective to collect and report at the time it is needed by stakeholders. So the question is, are these performance indicators shown here useful measures, and are they the most important and if so to whom? Are they useful to program managers, or the Government and the Parliament? Do they indicate performance in terms of success? Are they useful in terms of decision making or program management or accountability? Should there be other measures? Remember, I said these are indicators developed by consultants but have not been officially endorsed by the Ministry of Finance. Perhaps if I were the DG Treasury I might find the per unit costs of disbursements made more useful than simply the number. Is the number of public service institutions managed a useful measure – is it useful for management, accountability or government decision making? Of course those who are in the best position to define performance indicators and to make the judgements against these type of questions are usually the agencies themselves, that is the Director Generals and their staff. But you also need some guidance to know if the indicators you have defined are the best – that is why using the check list in the earlier slides could be useful. I now want to turn to Step C in setting up a performance framework – that is defining targets
This slide shows how defining targets in your performance indicators can be useful measures of effectiveness. The examples here are those from the Customs Service in Australia which I would like to compare to KPI proposed for Indonesia in the recent work of consultants referred to earlier. The outcome stated in the Customs PBS is “Effective border management that, with minimal disruption to legitimate trade and travel, prevents illegal movement across the border, raises revenue and provides trade statistics”. From this slide it is clear that performance targets in relation to enforcement of border protection and revenues can be set. Similar targets ought to be possible for Indonesian Customs since the Government here would also want to protect its borders and facilitate the rapid processing of legitimate trade and passenger movements. Let us now look at the KPI defined for the Indonesian Customs Service by the consultants, particularly in terms of whether they specify targets or benchmarks.
This slide and the next slide show the activities that the consultants defined for the program “Customs and Excise Management” . The program objective has been defined in process terms rather than the aims of the government ie “to execute state laws and regulations on imports and exports and to collect related taxes”. A comparison with the previous slide might raise several questions. The striking feature of that comparison is that there are no measures in this slide or the next of targets. Moreover there is nothing in relation to targets for the quantity or quality of services provided to the public (i.e. Exporters, importers, passengers etc) in this list of Indonesian Customs performance indicators. So the question is why? Perhaps the measures are reflective of the stated objective, which is probably too narrow. Would the Indonesian government have objectives similar to the Australian Government of facilitating rapid clearances of trade and of people ( admittedly within the laws and regulations) as well as raising revenue?
In this slide there are some efficiency measures being proposed (remember when we looked at the DG Treasury KPI’s I said that for management purposes per unit costs of disbursements might be more useful than the number of disbursements). Here are some examples of per unit costs in the Customs area which were defined by the consultant. That is probably enough about outcomes, performance indicators targets etc. I want to acknowledge that this does require careful consideration and that building outcome statements and performance indicators is not easy, particularly if you start from the beginning. But, Indonesia should not re-invent the wheel. While I am not advocating that you adopt the Australian examples shown here, it is clear that a number of countries have defined performance measures for various agencies and that there may be some value in examining what has been done elsewhere when defining your outcomes, outputs and performance indicators. My advice is that after all your efforts to define performance indicators you should ask the question of whether they will be useful to you and your minister.
I have skipped Steps D and E which are about data collection and analysis and assessment. These are covered in the guidance provided. But I do want to talk about reporting. Under a Performance Based Budgeting system the reporting requirements for the Parliament and for Government and agency management will change from the current reporting frameworks. How they will change needs to be thoroughly thought through and dialogue with the Parliament and Government needs to occur to determine whether their requirements are being met under a new Performance Based Budgeting regime. Agency management will need to consider its needs and prescribe their requirements through their instructions to staff. The Government’s requirements under a Performance Based Budgeting regime will need to be issued to agencies, ideally through the Minister for Finance. All the Australian examples I have shown you today come from documents submitted by the Agencies to the Parliament at the time of the Budget through their Portfolio Budget Statements . What I have shown you is only a fraction of the performance information that the parliament receives from the agencies. The Parliament looks at financial and non-financial performance information at the time of the Budget, additional estimates (mid year) and at the end of the year through annual reports. Nowadays Parliament is not really at all interested in the inputs (unless there has been abuse and misappropriation) but is much more interested in the delivery of outcomes and at the lowest cost (value for money). The power of the various reforms in Australia over the last 20 years is that the Parliament has received more and more relevant information on which to judge performance and to hold governments and bureaucrats accountable.
We saw in the previous sessions on the Australian experience that “operating cost flexibility” refers to flexibility that program managers were given to change the use of inputs within a “running cost budget” to maximise government services or to minimise costs. A number of the reforms were phased over time in Australia but the key elements were to group together the budgets for various inputs with the aim of giving more flexibility to managers to substitute between inputs. The “quid pro quo” required with increased flexibility was (1) increased accountability and (2) more efficiency, and this efficiency was taken through an annual efficiency dividend repaid to the Government. It also makes sense to phase operating cost flexibility with requirements for increased accountability. There are at least three phasesh Phase 1 - Introduction of concepts and training Define expenditures into running costs and non running cost expenditures Group like expenditures in groups Provide financial management and performance training Phase 2 – Introduce modest flexibilities and stronger reporting and accountability arrangements Introduce modest flexibilities for substitution of inputs within groups Introduce new reporting and accountability requirements Strengthen audit and monitoring arrangements Evaluate the reforms Phase 3 – Introduce greater flexibilities and refine reporting and accountability arrangements Rolling groups together into a smaller number of groups “ Property Operating”, “Repairs and Maintenance”, “Legal” and “Minor new capital” expenditures into “Running Cost Budgets” (early 1990’s); Amending laws: New financial management and audit acts to give greater powers to CEOs of Departments (mid 1990s); Replacing “Running Costs” with “Departmental” (end of 1990’s upon the introduction of accruals budgeting). Operating cost flexibility refers to flexibility that program managers were given to change the use of inputs within a “running cost budget” to maximise government services or to minimise costs. A number of the reforms of the late 1980’s and 1990’s refer to grouping together the budgets for various inputs aimed at giving more flexibility to managers to substitute between inputs. The “quid pro quo” required was accountability for more efficiency, and this efficiency was taken through an annual efficiency dividend repaid to the Government.