1. Budget Integration, Program Budgeting
and
Reengineering of Business Processes
in
Line Ministries
Jean-Marc LEPAIN
Budget Adviser
Public Finance Specialist
Ministry of Finance, Kabul
jlepain@yahoo.fr

2. Budget Integration
Budget Integration has two aspects:
 Integration of two documents: Ordinary
and Development Budget;
 The creation of a fully integrated
organization through the integration of
two processes.

3. New Budgeting Concepts
 Program based budgeting
 Performance based budgeting (through
performance based indicators and output
and outcome tracking)
 Provincial budgeting

4. A complex consultative Process
Budgeting becomes multi-organizational:
 ANDS
 CGs
 MoF
 Line Ministries
 MoEco
 Provincial Development Committees
 Provincial council
 Parliament

5. Organizational Issues
 Consultation and cooperation with many
organizations, stakeholders and decision makers
becomes essential.
 All line-ministries must have a common
organization. It means that the integration
process must be controlled by MoF and validated
by the Steering Committee.
 Culture change is a major challenge.

6. Organizational Changes
Organizational Changes have two aspects:
 Organizational changes resulting from budget
integration;
 Organizational changes resulting from the
introduction of program budgeting.

7. Strategy toward Program
Budgeting
 Each Ministry will have to develop a three year
strategy toward program budgeting.
 Implementation will be gradual.
 Modification of the new budget classification will
come first
 Merging of administrative department into a
support program covering finance, human
resources, IT, procurement, etc., will be gradual.

8. Program Structure
 Programs must cover the Ministry’s mission
statement;
 Programs must be limited in number (5 to 7);
 Programs must have a relative managerial
autonomy;
 Programs must have independent resources
(finance, human resources, assets);
 Programs must be integrated in the overall
ministry strategy;
 Programs must not overlap.

9. Process Mapping
 Programs are made of sub-programs, activities
and projects. A seminar on program designing
will be organized within a month;
 Program designing might beneficiate from
modern Business Process Reengineering such as
process maping and wotkflow analysis. MoF will
provide assistance in such areas.

10. Line-Ministries Management
Structure
 An Administration Program will provide support to all other programs and
will cover, planning (mostly consolidation of program planning activities),
Finance (including budgeting, payment processing, accounting and
reporting), Procurement, Human Resources, IT, etc.
 The integration of asset management (mostly buildings and vehicules) is
still under discussion;
 The Planning Department can integrated into a Policy and Coordination
Department under the Administration Program, but must planning activities
will be decentralized and the responsibility of programs;
 A Finance Department supervising and controlling all financial affairs must
be created, including budgeting, grant management, budget execution,
accounting and reporting
 Provincial budgeting will require a dedicate unit
 Other issues: HR and payroll

11. Policy and Coordination
 Updating of sector strategy
 Definition of program and sub-program
 Project structure
 Definition of targets and performance indicators
 Coordination with other ministries
 Technical assistance to provinces
 Monitoring of provincial implementation plan
 Tashkil

12. Finance Department
 Aid Coordination
 Budget Unit
 Budget Execution Unit
 Procurement (To be discussed)
 Accounting
 Reporting

13. Program Structure
 Decentralized model (MRRD / Project
Implementation Units) versus centralized model
 Level of integration with the Policy and
Coordination
 Department
 Level of integration with the Finance
Department
 Level of integration with the HR Department

14. Human Resources
 Recruitment
 Career path
 Training
 Payroll management

15. Administration
 Logistic
 Legal Affairs
 Public relations
 Small procurement
 IT

16. Change Management
 Change Management requires a Change
Strategy.
 Change is not just about organization, it is about
people and mind set.
 Change Management requires unity of vision.
 Change Management requires a strong
leadership.

17. Key Strategic Issue
 Gradual approach
 Big Bang approach

18. Change Strategy
A written change strategy must be
prepared. The Change Strategy must
cover:
 Implementation Team
 Communication Plan
 Capacity Building Plan
 Training Plan
 Consultation seminars
 Work Plan

19. Communication Policy
Communication is an important element of
Change Management. Communication
must be:
 Planned in advance
 Controlled and authorized
 Timely
 Targeted

20. Work Plan
Three phases:
(1) Analysis
(2) Design and Planning
(3) Physical restructuring

21. Analysis
 Clear definition of the objectives (project mission
statement)
 Process Mapping and workflows
 Identification of new requirements and of their
organizational impact
 Identification of all unit affected
 Assessment of the existing capacity and of new capacity
need
 Change Management structure
 Identification of HR issues (recruitment, pay scale, etc.)

22. Design and Planning
 New process map
 New organization chart
 ToR of business unit
 Job Descriptions
 Training plan
 Define outputs and design reports
 Revised Work Plan

23. Physical Integration
 Define time horizon
 Manage the project by phases
 Act quickly on HR issues
 Bring all people in one physical location
 Provide regular on the job training

24. Budget Circular
 Should make reference to the Public Finance
Management Law
 Outline the implementation team mission
 Define the responsibility of the Finance
Department
 Define expected results at the end of the Fiscal
Year