Asian Regional Seminar on Public Financial …...Asian Regional Seminar on Public Financial Management; 25-26 Nov 2014, Cambodia, Koshy Thomas 6 Budget Integrating Planning, Budgeting

Asian Regional Seminar on

Public Financial Management

PFM Reforms: The lessons learnt -promises and

tears

Session 2: Performance Management and Budgeting Reforms: Necessity or Bridge too

Far

Mr. K. Thomas, Dy. Director, Budget, Malaysia

25th November

Fulfilling the Promise of Performance

Budgeting-lessons on what to do and not to do

Koshy Thomas National Budget Office

Ministry of Finance Malaysia

Asian Regional Seminar on Public Financial Management; PFM

Reforms: The Lessons Learnt-Promises and Tears

25-26 Nov 2014, Phnom Penh, Cambodia

Presentation Will Cover

• The Integrated Model in RBM

• Some Challenges with the Current

Framework

• What’s not so Good

• What’s Looking Good

• Critical Success Factors (must have)

Asian Regional Seminar on Public Financial Management; 25-26 Nov 2014, Cambodia, Koshy Thomas

4

Integrating Planning, Budgeting and M&E Cycle

Macroeconomic Planning

MTF

Results Based Budget

Formulation

Program Implementation

Performance Monitoring

Evaluation


Human Resource

Requirements

5

Issues in Planning, Budgeting and M&E


MTF


Formulation



Evaluation

Revenue

Debt

Setting Nat’l Priorities &

Goals Fiscal Policy

• Linking two Tier Process of National

Planning, Medium term and Annual Plans

• Weaknesses in Strategic Alignment of

National Priorities to Sectors/Ministries

• Dichotomous Capital and Operating

Budgets

• Insufficient Data to Determine Aggregated

Performance

• Lack of Coordination, focus on Activity


6



MTF


Formulation

Outcome based

Planning for Performance

Budgeting

Expenditure Management

Delegation and accountability

• Redundancy and overlapping Programs

• Working in Silos, shared outcomes

• Lack of Clarity and Alignment in the

Role and Contribution of Program

Managers to Ministry’s Goals and

National Priorities

• Difficulty in Establishing Accountability

for Results

• Lack of Performance Orientation among

Program Managers

• No Demand for Evaluation Information

by Budget Office


7



MTF




Formulation

• Lack of Systematic Monitoring System in

Place for Programs

• Performance Monitoring limited to

Development Projects

• Information Focuses on Institutional

Performance

• Program Performance not linked to

Resources

• Lack of information for Decision Making

• Poor Expenditure Management


Performance Reporting

8



MTF




Formulation

Evaluation

Formative

Summative

Program Rectification

• No Data Management System

• Evaluation carried out on an Ad- hoc

Basis

• Lack of Capacity to Undertake Evaluation

• Lack of Clear Alignment Impedes

Establishing Causality

• Evaluation Information seldom used for

Policy Decisions


9



MTF


Formulation



Evaluation

Revenue

Debt

Formative

Outcome based

Planning for Performance

Budgeting

Summative

Setting Nat’l Priorities &

Goals

Program Rectification

Expenditure Management

Delegation and accountability

Performance Reporting

Fiscal Policy


1957 - 1968

Detailed Controls & Discipline

1969 - 1990

Programs & Performance

1990 - 2010

Accountability, Flexibility and

Delegation

2011 -2015

Integrated Approach

Traditional

Incremental Line Item Budgeting

Modified Budgeting System

• PPBS • Delegation • Budget Ceilings • Accountability • Exceptions

Reporting

Outcome Based Budgeting

• PPBS/MBS • Integration • Alignment • M&E focus • Perf Reporting

Program Perf Budgeting Sys

•Program Performance •Program-Activities •Perf. Indicators •Evaluation


Addressing Critical Issues

Focus on Outcomes

Vertical Alignment of National and Ministry

Priorities to Operational Levels

Managing Cross Cutting Initiatives

& Shared Outcomes

Coordination of Operating and Development budgets

under a Program

Accountability in the Public Sector and

Authority over Resources

Systematic Monitoring and

Evaluation System


What’s not so Good

• Performance Culture

• Broad based Implementation, challenging

• Understanding Program-based Approach

• Linking Performance to Resources

• Establishing Clear Accountability (Outcomes

Hierarchy)

• Managing Shared Outcomes

• Quality of Performance Data


What’s Looking Good: Leveraging on the Strengths

• Legacy of MBS since 1990

Use of Performance Agreement

Delegation of Authority

• Buy-in at the Highest Level (political &

administrative)

• Use of an Integrated Model

• Adoption of Program-Activity Structure

• Fiscal Policy Committee and Strategy

• Reform Initiative Driven through the Budgetary

Process


Critical Success Factors

• Everyone need to understand & buy-in to the model

• Data Integrity (GIGO); with strong integrity your data will be your biggest asset

• Ability for Data Analysis; Business Intelligence skills

• Set a Culture of Continuous Improvement; It drives purposeful ongoing innovation and change

• Performance Information must be demand driven

• Well Trained Budget Officers

• Coordination between Aid and Development Agencies

• Evaluation must be in place concurrently


thank you

terima kasih

Koshy Thomas National Budget Office

Ministry of Finance Malaysia

[email protected]

Asian Regional Seminar on Public Financial Management; PFM

Reforms: The Lessons Learnt-Promises and Tears

25-26 Nov 2014, Phnom Penh, Cambodia

Documents

Asian Regional Seminar on Public Financial …...Asian Regional Seminar on Public Financial Management; 25-26 Nov 2014, Cambodia, Koshy Thomas 6 Budget Integrating Planning, Budgeting