LAGOS STATE GOVERNMENT

Transcription

1 LAGOS STATE GOVERNMENT Circular No. MEPB/B/2012/6 The Deputy Governor of Lagos State, The Rt. Hon. Speaker of House of Assembly, Honourable Commissioners, Secretary to the State Government, Head of Service, Chief of Staff, Special Advisers, Permanent Secretaries/Tutors-General, Clerk of the House of Assembly Chairman, Civil Service Commission, Chairman, Judicial Service Commission, Chairman, Local Government Service Commission, Chairman, Health Service Commission, Chairman/CEO, Lagos Internal Revenue Service, Chairman, State Universal Basic Education Board, Heads of Extra-Ministerial Departments, Chief Executives of Parastatal Organizations, Chief Registrar, High Courts of Lagos State, CEO/Medical Directors of Hospitals Hospital Administrators, Heads of Tertiary Institutions. Ref. No. MEPB/ B.2006/S.20A/192/. Ministry of Economic Planning and Budget, The Secretariat, Alausa, Ikeja 23 rd July, 2012 YEAR 2013 BUDGET CALL CIRCULAR 1.0 INTRODUCTION 1.1 This is to inform you that the approval of the State Executive Council has been secured for the Y Medium-Term Budget framework (MTBF) to enable the Ministry of Economic Planning & Budget put in place a well-articulated Budget for Y This is aimed at consolidating the gains of the last five years. It is also to deepen the goals of job creation, poverty eradication and wealth

2 creation, among others, as well as ensure uninterrupted service delivery to the good citizens of Lagos State. 2.0 MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF) 2.1 As you are aware, Lagos State Government adopted the MTEF approach in year 2008, as an integrated approach to policy planning and budgeting within a multi-year framework. Moreover, its components which include the Medium Term Fiscal Framework (MTFF), Medium Term Budget Framework (MTBF) and Medium Term Sector Strategy (MTSS) allow for projection of revenues and expenditures within a multi-year framework. MTFF is essentially a top down estimate of aggregate resources available for a multi-year period MTSS is the bottom up aspect of costed programmes and projects prioritized within the available indicative budgetary resources. MTBF reconciles the aggregate resources available over a multi-year period with costed programmes and projects of sector ministries using the MTSS Framework. 2.2 With on-going efforts to conclude the MTSS of all the outstanding sector MDAs this year; MTEF has really come of age in Lagos State. 3.0 Y2012 BUDGET PERFORMANCE 3.1 As it is the usual practice, there is need to have a retrospective view of the performance of the Y2012 Budget along with our expectations for Y2013. The overall budget performance for the first half of Y 2012 (January June) was 75%. Revenue performed 85% of estimate, while Recurrent Expenditure recorded N88% of target. Capital Expenditure performance was 63%. 3.2 Consequent upon this, Ministries/Departments/Agencies (MDAs) are enjoined to review the strategies employed for improved revenue performance, project delivery and other services rendered by the State.

3 4.0 Y2013 BUDGET FOCUS 4.1 The focus of the Y2013 Budget will continue to be the provision and maintenance of key infrastructure in various sector of the economy, to further stimulate growth, support the private sector to create more jobs and improve the well being of Lagosians. Hence, the following identified focus areas: Power/Energy Agriculture (Food Security) Inter-modal Transportation system Housing Security (Law & Order) Water Rural/Urban Development Education Health Skill Acquisition/Micro-Finance 4.1 MDAs should ensure that proposed programmes and projects for Y2013 Budget are in consonance with the ministerial mandates, within the policy thrust of the State Government and reflect the focus of the budget. 4.2 In preparation of the Y2013 budget, MDAs should be guided by the following considerations: Sustained Internal Revenue Drive Settlement of Outstanding Liabilities Planned and Systematic Maintenance of existing/new infrastructural facilities Completion of On-going Projects Promotion of Public Private Partnership as a strategy in the delivery of infrastructure/services.

4 Implementation of Committee s recommendation on doing Business in Lagos State Sustainability of Programmes/Projects 5.0 SECTOR ALLOCATION ( ) 5.1The Ministry of Economic Planning & Budget will continue to maintain the established international standard 9- Sector Classification of Functions of Government (COFOG). This is done with a view to engendering effective tracking of the budget and a robust and critical evaluation of programmes and projects adopted, to add value to the well-being of the citizenry. More importantly, the performance of the State can be measured along sector lines, in accordance with international best practice and standards. 5.2 The order of priorities of the Administration is the basis of the sector allocation and determination of the MDAs indicative envelopes. This is also consistent with the aggregate resource availability, determined by the Medium Term Fiscal Framework. The thrust on Infrastructural investment is responsible for the priority position of the Economic Affairs Sector, while the Education and Health Sectors are gradually being notched up towards meeting international standards. 6.0 REVENUES AND CAPITAL RECEIPTS 6.1 Internally Generated Revenue (IGR) and Capital Receipts Consistent with the policy of this administration, the Y2013 Budget is revenue-driven. The State is striving to be less dependent on transfers from the federation account. In this wise, MDAs are enjoined to further deepen and expand their revenue base and institute strategies for efficient revenue generation. Well-guided monitoring mechanism must also be put in place to forestall leakages in the State revenues. Through these strategies, the State would continue to improve progressively on the reliance placed on IGR. In particular, collection of capital receipts should be intensified by the affected Agencies as this has shown unimpressive performance in recent times. Importantly, MDAs should note that the indicative figures for Revenue

5 represent the minimum possible and should endeavor to be innovative to exceed the limit to further expand the State s IGR. 7.0 DEDICATED ACCOUNTS/RETAINED REVENUES 7.1 The provisions in our circular ref. No MEPB/3/SA.39/15 of 29 th March 2010 on the operation of dedicated/ retained revenue accounts still subsist. Arising from the unimpressive performance recorded in the operation of these accounts, MDAs are further enjoined to adhere strictly to the provisions of the said circular as well as ensure prompt forwarding of monthly returns on incomes and expenditures in the approved format to MEPB on or before the 5th day of the following month. However, on no account should any MDA expend more than approved estimates from such accounts. In view of this, MDAs should try as much as possible to be more realistic in their revenue projections, as spending from these accounts will be limited to the amounts in the approved budget. 7.2 Hospital Units should endeavour to state clearly the expenditure items they accommodate under the Dedicated Accounts 8.0 RECURRENT EXPENDITURE A. PERSONNEL COST 8.1 In keeping with practice, MDAs are expected to liaise with the Ministry of Establishments, Training and Pension (MET&P) in the preparation of Y personnel cost proposals. The proposals must be defended and cleared in line with the guidelines as provided by that Ministry, to qualify for admission into the budget. Importantly, Agencies should ensure that the proposals on personnel costs recognize staff promotion, advancement, conversion and new employment, if envisaged, and more significantly, the Parastatal Organizations should ensure that any approved / envisaged salary regime is recognized in their proposals. This is in order to avoid extra-budgetary requests in the course of implementation of the budget; as such, requests would not be entertained in the Y2013 fiscal year. 8.2 MDAs are hereby enjoined to desist from persistent recruitment of different cadres of officers that have not been approved by MET&P and provision made in the budget in the course of the fiscal year.

6 B. OVERHEAD COST 8.3 The maintenance costs of Government machinery and built infrastructure have become a vital aspect of Government spending which cannot be overemphasized. This Administration is moving away from the era of just building infrastructure without maintenance plan and hence the emphasis on maintenance plans on all procurements of infrastructures. MDAs should therefore ensure adequate provisions for their Running Cost items, as well as their operational lines. 8.4 For the avoidance of doubt, the Running Cost items (referred to as Standard Lines) are: Travel & Transport; Utility; Stationery; Maintenance of Office Building; Motor Vehicle Repairs and Maintenance; Motor Fuel Consumption; and Miscellaneous. Nonetheless, for purposes of emphasis, MDAs are hereby advised against making excessive provision for the standard lines as expenditure requests on these lines are fixed to the approved monthly Running Cost of Agencies. Hence, expenditure requests on these lines would not be processed. 9.0 OUTSTANDING LIABILITIES 9.1 Outstanding Liabilities are payments yet to be made for goods and services already provided. It is imperative that all MDAs recognize their outstanding liabilities and commitments in the Y2013 budget and make sufficient provision in their budgets. Consequently, MEPB would not entertain any request for settlement of liabilities or commitments that were not captured by the MDA in its budget LOANS / GRANTS MANAGEMENT 10.1 MDAs intending to finance projects through loans should do so in consultation with the Debt Management Office (DMO) of the Ministry of Finance, while beneficiaries of Grants (Cash or Material) should liaise with the Development Partnership Department (DPD) of this Ministry. Such Loans/

7 Grants and repayment schedule are to be reconciled on monthly/quarterly basis with the DMO or DPD as the case may be MDAs should also recognize only loans/grants that are anticipatory or have reached advanced stage of maturity in their budgets, in order for Government to make adequate provision for counterpart funding, where applicable. MDAs are to note that seeking for counterpart funding where the loans/grants have not been properly captured in the budget, would not be entertained CAPITAL BUDGET 11.1 The Y2013 Budget is designed to continually address the infrastructural deficit in order to sustain the growth rate, create more employment opportunities, improve incomes and improve the standard of living of our people, thereby, eradicating poverty. The subsisting Circular No. MEPB/B.2012/04 dated 16 th May, 2012 on Commencement of New Projects, stipulated that all on-going projects of any MDA must have recorded a minimum of 70% completion before such Agency embarks on any new project(s). MDAs are reminded to adhere strictly to this directive to avoid incidence of abandoned projects in the State. Adequate provision must be made for all on-going projects Similarly, only projects of MDAs that are specific, measurable, achievable, realistic and time-bound (SMART) would be admitted into the Y2013 Budget. For clarity purpose, projects to be admitted into the Y2013 Budget must have satisfied all the conditions expressed in the Capital Expenditure Readiness Checklist (Annexure X of this circular) Complying with these conditions would ensure quick delivery of critical projects, impact positively on the lives of the citizenry, improve on capital budget performance and finally expedite the pace of sustainable development in the State. MDAs should work harmoniously with the Government in its resolve to accord growth enabling Capital Expenditure priority over Recurrent Expenditure.

8 12.0 PUBLIC PRIVATE PARTNERSHIP (PPP) 12.1 Wherever expedient and feasible, MDAs are enjoined to embrace PPP as alternative strategy in the delivery of critical projects. The different options available include; - Build, own, operate and transfer (BOOT) - Concessioning - Joint venture - Franchising - Leasing, etc 12.2 MDAs are however, advised to liaise with the Office of PPP in the Governor s Office for further guidance on any of these arrangements they might be inclined to consider from the outset PARASTATAL ORGANIZATIONS / TERTIARY INSTITUTIONS 13.1 It behoves on all Parastatal Organizations/Tertiary Institutions to subject their programmes, projects, books of Accounts, including their monthly budget performance reports to the scrutiny of the Parastatal Monitoring Office (PMO), to guarantee effective and efficient performance. Recently, Government has committed enormous resources in response to the urgent need for accreditation of all State- owned tertiary institutions and also to consolidate on the gains already made Parastatals Organizations / Tertiary Institutions are therefore advised to improve and be more creative on revenue generation strategies, in order to supplement subventions. This would enable the government to gradually withdraw its funding, where possible, and apply the savings to other critical sectors of the economy, while at the same time enhancing the financial autonomy and independence of the organizations The subvented Agencies should ensure that adequate provisions are made for salaries and pensions of their staff, and desist from unauthorized recruitment of staff. It is also advised that the supervising Ministries should

9 properly endorse the proposed budgets of these Parastatals and Tertiary Institutions NEWLY CREATED/UPGRADED AGENCIES 14.1 All Agencies created/upgraded after the conclusion of the Y2012 budget that were funded from state-wide votes, should prepare their budgets in line with their ministerial mandates and enabling laws, to ensure optimal performance in the Year SECTOR ALLOCATION OF RESOURCES 15.1 In line with the Y2013 Budget focus and on-going budgetary reforms, this Ministry, as in previous years has taken a step further to produce the resources envelopes for each sector, within the projected aggregate resources of the State for the next three( 3) years. MDAs in each of the Sectors will now meet to disaggregate the sectoral indicative envelopes in accordance with the stated priorities of government for each sector. The Subvented Agencies are also to participate in this intra-sectoral arrangement In this wise, it is also imperative that by the way of strategic sector prioritization, every spending entity is advised to ensure that all activities that are germane to performance in Y2013 are included in the budget proposals within the allocated resources. On this note, it is imperative that MDAs achieve the right balance among competing needs Agencies may wish to provide to MEPB a list of projects / programmes deemed critical but which cannot be accommodated within the allocated resource envelopes Furthermore, MDAs should note that the Capital Expenditure indicative envelopes are to be allocated in the following priority order: Outstanding Liabilities On-going Projects New Projects 15.5 SECTOR ALLOCATION OF RESOURCES General Public Service Public Order & Safety

10 Economic Affairs Environmental Protection Housing & Community Amenities Health Recreation, Culture & Religion Education Social Protection 15.6 SECTOR CHAMPIONS It is to be noted that the underlisted officials have been approved by His Excellency, the Governor, as the Sector Champions for the disaggregation of Y2013 Budget Indicative Envelopes to MDAs under the corresponding Sectors: i Hon. Commissioner for. - General Public Service (GPS) ii Hon. Commissioner for. - Public Order & Safety iii Hon. Commissioner for. - Economic Affairs iv Hon. Commissioner for. - Environmental Protection v Hon. Commissioner for. - Housing & Community Amenities vi Hon. Commissioner for Health - Health viii Hon. Commissioner for. - Recreation, Culture & Religion viii Hon. Commissioner for Education.. - Education ix Hon. Commissioner for - Social Protection 16.0 IMPACT ASSESMENT OF PUBLIC EXPENDITURE 16.1 Since the primary objective of public expenditure is to improve the quality of life of the citizenry, it therefore follows that the need to periodically measure the effectiveness of Government Interventions cannot be overemphasized. In effect, MDAs are enjoined to clearly define their goals and objectives and identify the desired output and outcome of proposed interventions. In other words, it is mandatory for Agencies to identify measurable Key Performance Indicators (KPIs), to indicate the baseline value

11 (Y2011) and target for Y2013-Y2015 and liaise with the Monitoring & Evaluation Department of the Ministry of Economic Planning & Budget (MEPB), for further guidance SPREAD OF PROJECT AMONG CONSTITUENCIES 17.1 To achieve even development of the State, MDAs are enjoined to ensure that projects and programmes are, as much as possible, evenly distributed among the Forty (40) Constituencies in the State. Annexure VIIA and VIIB are intended to evaluate spread of proposed projects and programmes along constituency lines SUBMISSION AND DEFENCE OF BUDGET PROPOSAL 18.1 In ensuring consolidation on the gains of the preceding years and to justify the huge investment of the State Government on Oracle Software, MDAs are expected to upload versions of their Y2013 budget proposals at every level of consideration, into the Oracle System before submission of both hard and soft copies to MEPB. Some MDAs whose budget proposals comply satisfactorily with the stipulations of this Circular may NOT be invited for bilateral discussions Besides, MDAs are required to submit 10 hard copies and a soft copy of their proposals, which also include a detailed Activity report of the Agency for the outgoing year, as well as briefs on major projects intended for Y EXPECTATIONS FROM THE PLANNING UNITS SUBMISSION & DEFENCE OF BUDGET PROPOSAL Each Planning Unit is required to : Prepare the MDA s budget proposal Ensure internal democracy and consensus among the Departments in the MDA Complete all Templates Upload versions of proposal at every level of consideration into the Oracle System

12 Prepare briefs on projects intended for Y2013, indicating the KPIs Obtain the approval of the Political Head before submitting Submit ten (10) hard copies of proposal and a soft copy Submit the Activity Report of the MDA along with the Budget proposal Comply with the deadline of submission on or before Friday, 17 th August, 2012 Note the date and time as scheduled on the time-table Ensure attendance at the bilateral meeting as stipulated against the MDA 20.0 The prescribed templates for the proposal are as attached as Annexure I-XII 20.1 MDAs are advised to adhere strictly to these templates for the presentation of their Y2013 Budget proposals 20.2 All enquiries should be addressed to the Director of Budget COMPOSITION OF THE BILATERAL DISCUSSION TEAMS 21.1 TEAM A: MINISTRY OF ECONOMIC PLANNING & BUDGET (MEPB) Honourable Commissioner Special Adviser Permanent Secretary Director of Budget Director of Economic Planning Other Directors and Secretariat TEAM B: VISITING MDA Honourable Commissioner Special Adviser (where applicable) Permanent Secretary Director of Accounts CEO/Accounting Officer of Parastal(s) (if applicable) Planning Unit Officers

13 22.0 ATTENDANCE AT BUDGET BILATERAL MEETINGS 22.2 The Political Heads, Chief Executives and Accounting Officers are hereby urged to take ardent interest in the planning, resource allocation and budget process in their Agencies and ensure personal attendance at the meeting Kindly comply with the contents of this Budget Circular and give it the widest circulation it deserves Thank you. Bayo Sodade Permanent Secretary (MEPB)