The delegation from the Republic of Serbia will provide an overview of the changes that are being introduced in the budgeting process in the Republic of Serbia, specifically the major shift from a line budget to program budgeting. Presenters include: Mr. Ivan Maričić, Treasurer, Republic of Serbia Mr. Milorad Ivšan, Senior Advisor, Division Head, Republic of Serbia Ms. Danka Božić, Junior Advisor in the Public Debt Management Department, Republic of Serbia

1. 1. Making budget projections and setting ceilings for budget beneficiaries 2 . Collection of budget beneficiaries’ financial plans 3 . Preparation of the Draft Budget Law Budget Preparation and Monitoring Information System (BPMIS) enables : It represents one of the modules of the Republic of Serbia FMIS Republic of Serbia Ministry of Finance TREASURY BPMIS

2. 128 direct budget beneficiaries (DBBs) BPMIS facilitates direct communication between all budget beneficiaries and the Budget Preparation Department during the entire budgeting process Integrated Financial Management Information System (FMIS) Republic of Serbia Ministry of Finance TREASURY BPMIS Ministry of Finance Treasury

3. System Hardware Architecture BPMIS Database Server Cluster BPMIS Web & Application Server SW1 , SW2, ... Cisco 6513 FMIS Internet G ateway Server Online clients (Web browser) Online clients (Web browser) Offline clients (Windows forms) WAN M oF, DBBs and IBBs (indirect budget beneficiaries) DBBs and IBBs Republic of Serbia Ministry of Finance TREASURY BPMIS

6. Making Budget Projections Macroeconomic indicators Baseline ( previous budgets ) Indicators Output (projection of the new budget) Evaluation of results Republic of Serbia Ministry of Finance TREASURY BPMIS

7. Producing Complex Indicators When developing rules for the preparation of budget projections it is possible to define highly s о phisticated indicators , by combining basic macroeconomic indicators ( inflation , GDP , output growth ...) and complex mathematical formulas . It is possible to define a special rule to be applied for each budget component . It is therefore possible to define separate rules for payroll, separate ones for investments , subsidies, etc . Republic of Serbia Ministry of Finance TREASURY BPMIS

8. Pessimistic scenario Moderate scenario Optimistic scenario Version 1 Version 2 Version 3 Making Several Projections of the Same Budget By using the same calculation basis , it is possible to produce several scenarios by selecting appropriate indicators , thus creating various budget projections . Republic of Serbia Ministry of Finance TREASURY BPMIS Baseline ( previous budgets )

9. When making projections it is also possible to opt for multi-year budgets , projecting a separate budget for each year. Making Multi-Year Budget Projection Republic of Serbia Ministry of Finance TREASURY BPMIS

10. Output (projection of the new budget) Ceilings for DBBs After the appropriate budget projection is selected, ceilings for budget beneficiaries ar е set а ccording to the rules determined during the preparation of the selected projection . Completion of the Budget Projection Republic of Serbia Ministry of Finance TREASURY BPMIS

12. Preparation of the Beneficiaries’ Financial Plans PBMIS Web & Appp lication Server 128 DBBs Phase 2 Budget beneficiaries develop their financial plans via the WEB application which only requires an Internet browser and a realiable Internet connection , which reduces the beneficiaries’ system implementation costs to the minimum . Treasury Help- Desk support is provided to beneficiaries during the entire budgeting process Republic of Serbia Ministry of FInance TREASURY BPMIS WAN

13. Preparation and Collection of Beneficiaries’ Financial Plans Republic of Serbia Ministry of Finance TREASURY BPMIS Sending data to DBBs Collection of data from DBBs MINISTRY OF FINANCE Entering data Sending data to DBB IBB Setting ceilings for IBBs Sending data to all IBBs Collecting data from all IBBs Submission of data to MoF Entering data DBB Data creation for all IBBs

14. Preparation of the Beneficiaries’ Financial Plans When entering financial plans each beneficiary has access to the current budget data for that specific beneficiary (budget and outturn) , as well as the data from previous budgets. By analyzing the historical data beneficiaries can more easily plan the expenditures for the following year. Republic of Serbia Ministry of Finance TREASURY BPMIS Previous budgets