introduction of performance budgeting (pb)

7/30/2019 INTRODUCTION OF PERFORMANCE BUDGETING (PB)

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INTRODUCTION OF

PERFORMANCE BUDGETING (PB)

MECHANISM

AT THE COMMUNITY LEVEL

TO SUPPORT THE ACHIEVEMENT OF MDGs

United Nations Development Programme


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Goal of the Project

The long-term goal is to support the

decentralization process in the country

through improving the LSG capacity ,ensuring citizen participation and an

accountable and measurable public

expenditure management (PEM).


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Aim of the Project

The aim of the Project is to support the

introduction of a Results

based/Performance Budgeting (PB)

methodology into planning, monitoring and

evaluation processes at the community

level.


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What is Performance/Result BasedBudgeting?

Budget Types:

Line item budget- is a financial document classified by

expenditure types, which defines the amounts that will

be or have been spent for each expenditure item.(What was purchased or how much was spent on

what?) Expenditures are classified into groups, such

as salaries, allocations, and purchased goods and

services- Program Budget- under this budget, funds are

allocated by activity types and programs; this budget

contains details of the expenditure items, prioritizing

the goals, rather than the process or means of

achieving them.


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What is Performance/Result BasedBudgeting?

Performance Budget- is a financial plan

providing a statement of the municipality

mission, goals, and objectives and a regularassessment of their performance as a part of the

budgeting process, which creates linkage

between the necessary inputs for the

implementation of the municipality strategicdevelopment plan and anticipated outcomes.


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Phases of Performance Budgeting Strategic planning process

Mission Statement Development

Information Collection and Analysis

SWOT Analysis

Formulation of strategic issues/problems by sector (social and

economic Infrastructure, administration, income generation,etc )

Setting strategic goals, objectives, targets and their costs

Prioritization

Selection of Prioritization methodology (pair wise assessment,

assessment based on criteria, etc) Prioritizing Targets in each sector based on criteria (impact on

poverty, number of beneficiaries, sustainability, gendermainstreaming, youth involvement, linkage with national levelstrategies, financial feasibility, etc )

Developing a list of prioritized targets from all sectors


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Phases of Performance Budgeting-continuation

Budgeting Estimation of Municipality revenues for three years

Initial estimation/costing of priority Targets/Projects

Development of List of long-term Priority Targets/

Projects with costs and cumulative costs for threeyears -2006-2008

Distribution of targets/projects by years and coding

Setting performance indicators for the projects

Development of annual 2006 municipality budget Approval of the Municipality 2006 budget by the

community council (public hearings)


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Phases of Performance Budgeting-continuation

Budget execution, monitoring and control,

Execution, internal and external accountability

(quarterly status reports for budget implementation)

Control, internal (municipality council) and external(NA, Governmant) control-assessment of actual

implementation of the budget upon planned budget

Provision of recommendations

Revision of budget expenditures based on therecommendations

Audit and evaluation


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Linkage between Local Development, HR andGender in Performance Budgeting process

Principals of Human Rights Based Approach Participation Empowerment of individuals

Encouragement of transparency and accountability

Principals of Performance Budgeting

Participation-through Civic forums, WGs and IGs Empowerment of individuals-discussions, ongoing

consultancies and actual budgeting process, which is a decisionmaking process

Encouragement of transparency and accountability-PB by its

nature is a transparent system Gender Mainstreaming

Women and men are equally involved in the decision makingprocess


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Performance Budgeting Manual Content

Budget Types

Essence of Performance Budget, Budgeting Principles,

Scope, and Cycle

Municipality Staff Structure and General Situation

Overview as Baseline for Performance Budgeting Budgeting Process Phases and Participants

Performance Budget Planning

Budget Execution and Controls Performance Budgeting Audit and EvaluationPerformance Budgeting Training Program


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Factors of success

Public participation and engagement: municipality staff

and council, WGs and IGs

Selection of Pilot Municipalities: size, sector and open

minded municipality heads Selection of Partners: Community Finance Officers

Association

Cooperation with donor organizations and programmes:

ASIF, CHF/USAID, US Treasury Department

Cooperation with national and local Governmentpartners: Ministry of Territorial Administration and

Ministry of Finance and Economy, Pilot LSGs

Effective cooperation between the Headquarters,

Regional Office and Country Office


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Acknowledgments

Many thanks to:

Ron McGillUN CDF- New York

Dafina Gercheva- UNDP Bratislava

Glendal Wright- UNDP Bratislava Semuel Coxsen- USAID/ RTI

Gail OstlerUS Treasury Department

Community Finance Officers Association

USAID/CHF Armenian Social Investment Fund

Government counterparts

introduction of performance budgeting (pb)

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