The document outlines Cambodia's progress in public financial management (PFM) reform, focusing on program budgeting and its implementation stages. It emphasizes the need to define program budgeting clearly, the importance of adapting approaches for different government sectors, and addresses issues related to budget planning and execution. The way forward includes updating guidelines for performance-informed budgeting and revising financial system laws to improve efficiency and accountability.

1. PFM Reform and Program
Budgeting in Cambodia
By
Mr. LAY Sokkheang
Director, Budget Formulation Department
General Department of Budget
Ministry of Economy and Finance
12th OECD-ASIA Senior Budget Officials Annual Meeting
Bangkok, 15th December 2016
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2. Content
1. Progress in PFM Reform
2. Result of the Assessment of two Year PB Implementation
3. Other Issues
4. Way Forward for Cambodia’s Budget System Reform
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3. Content
1. Progress in PFM Reform
Our journey in
Public Financial
Management
Reform for a
better and
greater result.
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4. 1.1 PFM Reform Program
• Stage 3: CAP3
(2016 – 2020)
• Stage 4: CAP4
(2020 – 2025)
• Stage 2: CAP2
(2009 – 2015)
• Stage 1: CAP1
(2005 – 2008)
Platform 1:
Budget
Credibility
Platform 2:
Financial
Accountability
Platform 3:
Budget-Policy
Linkages
Platform 4:
Performance
Accountability
Cambodia’s Approach:
4 Platforms in 4 Stages
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5. 1.2 What we have done since 2005
Getting ready for stage 3
 Started developing a framework and guideline for piloting Program Based Budgeting (PB)
 Amended Public Financial System Law in 2008 to change budget cycle and allow PB implementation
 Introduced Budget Strategic Plan (BSP) in 2008
 Put in place a guideline for BSP
 Put 8 Ministries to pilot a partial PB (2008-2014)
 Put in place a General Guideline for PB Preparation
 Assessment on the PB implementation in 2012 and set direction for 2013-2020
 Introduced Budget Entity (BE) in 2013
 Put in place a guideline for BE
 Pilot Full Program Budgeting and Budget Entity in 2015 (starting with 10 LMs, 15 LMs, 11 LMs and Final 3 LMs,
in 2015, 2016, 2017 and 2018 respectively)
 Put in place a guideline for PB execution procedure in 2015
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6. 1.3 Budgetary Reform Initiatives
Line Items
(1993-2016)
Partial PB
Full PB
Programs
(2008 – 2014)
Performance
Accountability,
(2020 – 2025)
• Input based
• Incremental
• Detailed control
• Pre-Audit
• Policy lined budget
• Budget Ceilings
• Program Activities
• Performance indicators
• Monitoring/Performance
Report
• Program Activities
• Program indicators
• Pilot 8 Ministries
Programs &
Performance
(2015 – 2020)
• Performance
based budget
• Budget Ceilings
• Program
Agreements
• Monitoring &
Evaluation
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7. Content
2. Result of the Assessment of
two Year PB Implementation
Our journey in
Public Financial
Management
Reform for a
better and
greater result.
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8. 2.1-Lessons for Cambodia
1. Define what PB means for Cambodia
•PB is not a clearly defined concept.
Countries have often set expectations too
high.
•Recommend defining a modest set of goals
for PB in Cambodia and then tracking them.
Suggest focus on:
•Improving consistency between strategic
plans and budget
•Budget transparency – publish program
objectives and performance.
•Accountability for results (very limited)
•Program M&E – feedback loop to budget
decision making
2. Consider a Differentiated Approach
•PB is more relevant in some areas of
government than others. One size fits all
approach doesn’t work well.
•Recommend creating two tracks, “full PB”
and “PB light”, according to the program.
Full PB would apply to programs where
Government is the main service provider and
there are M&E frameworks in place: e.g.
roads, school education, health, water and
sanitation, rural development, tax admin. PB
light would apply to programs where the link
between spending and policy outcomes is
indirect or weak (e.g. foreign affairs,
women’s affairs, internal audit) 8

9. Content
3. Other Issues
Our journey in
Public Financial
Management
Reform for a
better and
greater result.
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10. Issues to be considered for CAMBODIA
 Cambodia’s Strategic Planning
• Lack of linkage between Ministry Level to National Level
• Integrated Budget Plans
 MTEF and BSP
• Top Down at National Level (MTEF ) vs Bottom Up at
Ministerial Level ( BSP)
 Budget Planning and Budget Preparation (E-Budgeting)
• Pre-ceiling
• Formulation of Budget Ceiling
• Budget Revision Stage
• Budget Formulation Stage
 Budget Execution ( GFMIS )
• High level of power delegation but Punishment on
slow disbursement
• Rules of Virement
• Carry-over budget managed by the Treasury
(Malaysia has no liquidation law)
 M & E (EV MIS) : Need a framework ( lead by GD of
Policy and GDB)
• Monitoring from Input to Process to output level
• Evaluation from Output to Outcome and Impact
level
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11. Content
4. Way Forward
Our journey in
Public Financial
Management
Reform for a
better and
greater result.
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12. 3.1-Way Forward for Cambodia’s Budget System
Reform
 Revisit the Concept note on Budget Strategic
System Reform (2013-2020) :
• A New Budget System Reform Strategy 2017-2025
 Updating the current guidelines to a new
guideline for Performance Informed Budgeting
• Merging the current BSP, PB, and BE Guideline into
a manual for budget preparation and execution
• Capacity building
 Review the Financial System Law (2008) :
• Having a new broad law with only basic principles,
and leave the detail for Sub-decree and Prakas?
Like Financial Act of 1959 of Malaysia, Thailand
• Having a comprehensive law with partial revision ?
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13. Thank you
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