Paktiya Province Provincial Budget Briefx

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10 Νοε 2013 (πριν από 3 χρόνια και 5 μήνες)

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1

Provincial Budget Discussion

Paktiya Province

Lynda Roades, Provincial Budgeting Advisor

Joe Banavige, Provincial Budgeting Advisor


15
Jun
2010

Islamic Republic of Afghanistan

Ministry of Finance

Budget Department


2

Overview


Introduction


Update
on
1389
Budget (Joe Banavige)


1388
Issues


1389
Overview


Issues and Reforms


1390
Budget Formulation (Lynda Roades)


Budget Processes


Budget Cycle


Putting Project on Budget


Key Contacts


Discussion


3

Update on 1389 Budget


Joe Banavige


4


The national budget is a
political and strategic
development tool


Focused on achieving
Afghan National
Development Strategy
(ANDS) goals and
delivering services to the
people


Includes both core and
external budgets


Governed by the Public
Finance Expenditure
Management (PFEM) Law


Central line ministries
receive a budget, not
provinces

National Budget*

Core (
55
%)

External (
45
%)

Operating (54%)

Development (46%)

Discretionary

(23%)

Non
-
Discretionary

(77%)

*Percentages based on GIRoA
1388
budget

1389
Budget Overview


5


Election


New Cabinet ministries without ministers / teams.


Delay in MYR approval by Parliament


Low Capacity of Line Ministries in Planning and
Implementation


Security

1388 Issues


6



Total core budget $ 4.4bn (Afs 215.1bn)

$2.3bn

55%

$1.8bn

45%

$
2.0
bn

46
%

$
2.3
bn

54
%

1389
Budget Overview


7

Budget

Categories

Comments

1388

(millions)

1389

(millions)

Change

Core

Ordinary

Operating*

(Recurrent)


Salaries


Operating expenses


Disbursed through quarterly allotments to
provincial Mustofiats from Line Ministries

$1868

$23
97

+28%

Development

(capital)


Donor funding through the Afghanistan
Reconstruction Trust Fund


Disbursed through MOF central treasury to
central line ministries (portion spent in
provinces)


Discretionary projects identified through
consultative process


Non
-
Discretionary projects are earmarked
by donors


1389 includes carry forwards



$478


$ 1804




$475


$ 1562




-
11%

Total


Total core budget

$4150

$4434

+7%

External

Development


Disbursed by donors outside of Afghan
budget


Not necessarily tied to local priorities


Negative impact on fiscal sustainability


1389 = amount included in the budget
statement (actual amounts expected to
increase)

$3380


$
1051
(included in the
budget statement)

TBD

*Note: “Ordinary” and “Operating” are often times used interchangeably to describe the recurring portion of the GIRoA core b
udg
et

Summary of 1389 Budget


8

Core Operating

Budget by Sector

Core Development

Budget by Sector

Security

53
%

Education

17%

Infrastructure

17%

Agriculture

26%

Education

11%

Contingent

15%

Sectors & Provinces


9

Challenges


Lack of fiscal sustainability


Low capacity of budgetary units (planning
and execution)


Low absorptive capacity of line ministries


Lack of transparency in making provincial
allocations by respective line ministries


Weak budget formulation processes


Bottlenecks in procurement


Better understanding of problems in
executing the budget


External budget information not reported
timely and poor coordination with GIRoA


Donor projects not fully aligned with
national and sectoral priorities

Reforms


London Conference:


Goal


50
% of aid
delivered through
GIRoA budget in the
next two years


Conditional on:


Strengthening public
financial mgt
systems


Reducing corruption


Improving budget
execution


Developing a
financing strategy

Kabul

Conference

(July
2010
)

Challenges & Reforms


10

Timetable

Bottom Up

Process

1390 Budget Process


11

PRT Recommendations


PRTs should collaborate with
provincial officials and Mustofiats
on major steps of the 1390 budget
process


PRTs should ensure CERP and any
other programs are in line with the
ANDS and support GIRoA priorities
and processes and reported to the
government


Continue to support regional
budget conferences and
workshops.


Continue transfer of CERP data to
Ministry of Finance databases to
improve transparency and
budgeting practices


Monitor cluster implementation

Major Resources

Websites


Ministry of Finance
(
http://www.budgetmof.gov.af
)


Afghanistan Reconstruction and
Development Services
(
http://www.ards.org.af
)


Procurement Policy Unit
(
http://www.ppu.gov.af
)


Ronna (
www.ronna
-
afghan.org
)


Donor Assisted Database

(
www.dadafghanistan.gov.af
)

Laws


Public Finance and Expenditure
Management Law


Procurement Law


Provincial Council Law


Municipalities Law

PRT Recommendations


12

1390 Budget Formulation


Lynda Roades


13

Introduction

We all share a common goal of a safe, and secure Afghanistan, but different
interpretations of the benefit in achieving that goal:


For the PRTs, you will return to your homes and families.


For us Afghans, a country for our children and their children, where they can
live in peace and enjoy opportunities for economic well
-
being.

Working together and coordinating our efforts will realize both short
-
term and
long
-
term objectives.

This presentation will update my Afghan colleagues and the PRTs on the:


Status of the
1389
budget


Upcoming
1390
budget cycle


Progress in moving US government funds onto the core budget


On
-
going public financial management reforms



14

Afghanistan is a unitary system of government


Provinces and districts are administrative units of the central government


There is ONE national budget, with provincial allocations under the line
ministries


Provinces and districts have no political, administrative, or budgetary
powers embodied in the Constitution.

This has significant impact on budget policy, planning, formulation,
execution, and reporting.

There is no provincial budget in the sense that there is one source
document describing provincial, much less district, budget resources.

Mustofiats

can answer many questions regarding allotments and
expenditures through reports generated through AFMIS.

Key Points


15

Provincial Development

Provincial development is a pivotal issue for Afghanistan reconstruction
and the credibility of the Government. Implementing provincial and
district level reforms has not proceeded as quickly as we had hoped in
1386 (2007
-
08) with the provincial budget pilot.

The public financial management reforms we have implemented will
form the foundation to:


Strengthen local involvement into development planning


Improve transparency and accountability in budgeting and expenditure

Our focus is to move these sustainable policy reforms from the center
to implementation at the local level and improve the efficiency and
effectiveness of public service delivery throughout Afghanistan. To
accomplish this requires communication, close coordination not only
within the Afghan government, but with the Afghan people, and the
international community.



16

The legal and regulatory framework of public finance:


Defines roles and responsibilities of key actors, as well as supporting
processes and procedures (i.e. transparency)


Describes oversight, monitoring, and control mechanisms


Provides the authority to incur commitments, expend public funds, and
collect revenues


Foundation of anti
-
corruption efforts (e.g., complaints, investigations, and
prosecutions)

Laws alone are not enough:


Enacted through regulations, guidance, instructions


Reinforced through supervision, training, and professional development


Supported through relevant tools (e.g., forms, databases, applications)


Legal/Regulatory

Framework


17

The budget process is composed of several steps:


Planning the staffing, resource, and investment (i.e. capital or
development)


Programming to complete the supporting documents to submit a budget
request


Budget Formulation


Appropriation


Budget Execution


Audit

In Afghanistan, planning, programming, and budgeting are compressed
into budget formulation.

Budget Process


18

1390 Budget Formulation

Budget formulation is a process of coordination, communication, and
compromise as shown in the following graphic. The result is a national
budget, reflecting:


National development priorities in ANDS


Fiscal discipline from the medium term fiscal framework


Donor prioritization and commitment

The budget formulation cycle for 1390 began with the approval of
Budget
Calendar by the Budget Committee

on April 14.

The process includes a period of consultation between the line ministries
(LM) and their provincial directorates, and with civil society organizations,
before the budget is drafted.


19

Linking with Local Priorities

The graphic below illustrates the navigation of provincial and district
priorities through this process:


Ministry of Finance

ناتسناغفا یلم فاشکنا یژینارتسا


20

Budget
preparation

Budget
financing

Budget
execution

Budget
approval

Budget Cycle


21

Highlights of the

1390
Budget Calendar

Two main outputs of the Budget Calendar:

1.
Medium
-
Term Budget Framework (MTBF), or ‘Pre
-
Budget Statement,’ which sets
out
budget priorities to be funded from the available resources (starts with Budget
Circular No

1
)


sets budget ceilings


ensures essential budget policies are sustainable


identifies desirable policy changes

2.
National Budget


for detailed budget costing and provinical allocation (starts with
Budget Circular No

2
)


requires detailed costing and project documents


ensures budget is cost effective


22

Budget
Committee
decision

Budget
Hearing

Budget submission by
Budgetary Units

BC
2

Preparation of budget priorities


by budgetary units

BC
1

provincial priorities
(provincial
development plan)

Budget Circular 2 is the
instruction to prepare
detailed costs and
outputs, within budget
ceilings


Budget Circular
1
is the
instruction to submit
estimated costs for
programs and priorities
of budgetary units


Provincial budget
submissions

Budget Formulation


23

submissio
n of
circular
No. one

22
Apr.
2010

conducting workshop for
budgetary units to prepare
budget

26
Apr.


budgetary
priorities
preparation

22 May

budget approval
by budget
committee

12
Jul.

first phase of
donor financial
review

17
Jul.


mid
-
term
fiscal frame
-
work and
budget ceiling
preparation

02
Aug.


submission of
circular No.
two

15 Aug.

budget
submission
preparation by
budgetary Units

14
Oct.

budget
submission
assessment by
budget committee

16
Oct.


Budget Timetable


24

10
Nov.

tripartite
meetings on
finalizing funds

20
Nov.

conducting
budget hearing
sessions

20
Nov. to
15
Dec.

finalizing
budget draft by
budget
committee

03
Jan.
2011

first phase of
donor
financial
review

13
Jan.

budget submission
to national
assembly

20
Jan.

budget approval by
national assembly

30

توح

budget draft
submission to
council of
ministers


Budget Timetable


25

Required Information

For the line ministries, there are two important tasks to comply with
BC1:


Calculate the baseline cost of existing level of activities and identify existing
output levels


Indentify and estimate costs for no more than five new spending initiatives to
meet output targets from their ANDS results framework. Ministries/budgetary
units may submit separate supplementary requests but these will only be
reviewed in the event of funds being available

The results from BC1 submissions will be used to identify priorities,
determine budget ceilings and prepare the Pre
-
Budget Statement
(MTBF) that will be adopted by Cabinet in mid
-
August and form the
basis for BC2 submissions.

The deadline of the BC1 submission to the Ministry of Finance is 22
May 2010.


26

In August, BC
2
will be released with the budget ceilings established in
the MTBF. The LM’s will then consult with their provincial and district
officers to develop the ministry’s budget request.

To prepare for these consultations, provincial directors should:


Identify their baseline costs to continue current level of activity (e.g., operating
budget estimates, follow
-
on costs for on
-
going development projects)


Ensure that priority projects are documented in the PDP

The Provincial Budget Unit has drafted a local development plan template which
will be released after consultation with key stakeholders.

Provincial Level Impact


27

The Ministry of Finance is revising the format of the Provincial Development
Plan (PDP) to make it a more useful document for budgeting.
The new format
will included in the provincial resource allocation pilot with the Ministry of
Education. The proposed changes will:


Standardize submissions


Strengthen the linkages with national, sectoral, and ministerial priorities

Ministry of Finance

Afghanistan National Development Strategy

Identifying Projects


28

The Budget Committee has established criteria to put a project “on
-
budget:”


Completion of project preparation and documentation


Completion of feasibility study (if required) and project design


Completion of procurement plan, cost, and time estimation


Readiness of contract for signature


Donor (for non
-
discretionary projects) and Budget Committee agreement

Line ministries are fully responsible for managing development projects, to
include procurement, monitoring project activities, and reporting on cash
management to donors.

Working with provincial directors to “jumpstart” project documentation, and to
obtain commitments from donors, will smooth the process.



Putting Projects On Budget


29


Discretionary funds deficit


Low capacity of budgetary units (planning and
execution)


Donor projects not fully aligned with government
priorities


External budget info not reported timely


Decrease role of Provinces in budget formulation and
execution

Challenges


30


Implementing program budgeting by
1390
FY


Designing national programs initiative


Strengthening budget implementation by province


Simplifying budget execution procedures


New plan of Developmental cooperation with donor
countries


Improving financial system


Improving performance monitoring


Need for timely donor information on DFR


Recommendations


31

Key Contacts

Budget Department, Ministry of Finance

Ahmad Jalali, Director General (Budget)

Email:
ahmad.j.jalali@gmail.com


Aid Management Directorate

Coordination

Hamid Jalil, Director (Aid Management & Coordination Directorate)


Email:
hamid.jalil@yahoo.com



Cell: +93 (0) 700 229 148


Provincial Budget Unit

Najimullah Qasimi, Manager (Provincial Budgeting Unit)


Email:
najimullah@gmail.com



Cell: +93 (0) 700 774 524







32

Discussion