Public Administration Reform and Economic Management programme 1382 development budget submission

Transcription

1 Subprogrammes 1382 National Development Budget Public Investment Programme Public Administration Reform and Economic Management Public Administration Reform and Economic Management programme 1382 development budget submission The Public Administration Reform and Economic Management (PAREM) programme comprises three key sub-programmes: Public Administration Reform, Governance, and Economic and Financial Management. Each sub-programme has provided a separate development budget submission; all three are attached. The three sub-programmes replace the previous set of 5 that were listed in the 1382 Budget Preparation Guidance note. The sub-programmes and functions are as follows: Civil Service Reform and Training Financial/Macro Policy and Reform Governance Development and implementation of primary and secondary legal framework. Support and capacity building to develop systems and processes for: Projects to support gender analysis and balance across Government. Major activities Personnel management (payscales, policies, retrenchments, capacity building, personnel database). Streamlining of institutional and functional structures (of CSC and of central Government structures). Cabinet processes, policy formulation capacity building, and Machinery of Government systems. Administrative efficiency (reviews and IT) Operating / development budgets Office of the Minister for Finance MoF provincial offices Revenue (customs) office Da Afghanistan Bank Aid Coordination Unit Financial capacity of Govt (CFOs) Procurement Women in senior economic management National population census. Planning, preparation & implementation of Loya Jurga and election. Geodesy, cadastral and cartographic survey and mapping. Capacity building for CSO. Capacity Building Groups project (supporting all Ministries). Support for AACA. Coordination of national physical infrastructure of Government project (Kabul and provinces). Ministries CSC, Office of the President MoF, DaB MoF, CSO, CSC, MoWA, AACA, MoFA, Geodesy/Cadastre, Election Committee The PAREM programme aims to create an effective central Government that re-establishes national unity on the basis of strong institutions. This involves building broad-based and equitable community level participation and effective management at the local level, installing strong systems of financial and information management, and using the budget as an instrument of policy. Summary of budget by sub-programme SY 1382 SY 1383 SY 1384 Total USDm Total AFS (m) Public Administration Reform ,139 Economic Management ,013 Governance ,903 Total ,055 Summary of budget by Ministry SY 1382 SY 1383 SY 1384 Total USDm Total AFS (m) Central Statistics Office Ministry of Finance ,524 Ministry of Womens Affairs Election Committee Geodesy and cadastre Afghanistan Assistance Coordination Agency Civil Service Commission ,656 Office of the President Da Afghanistan Bank Ministry of Foreign Affairs Total ,055

2 1382 National Development Budget Public Investment Programme Public Administration Reform and Economic Management Public Administration Reform The Public Administration Reform sub-programme relates primarily to the reform of the civil service. The Civil Service Reform Strategy identifies seven key pillars (some of which sit outside the PAR sub-programme) that are central to the establishment of a reformed and effective civil service in Afghanistan. They include: 1. Civil Service legal framework (CSC). 2. Personnel management (CSC). 3. Institutional and functional streamlining and development (Office of the President; CSC). 4. Financial management and accountability (MoF 1 ). 5. Policy management and machinery of Government (Office of the President). 6. Administrative Efficiency. 7. Physical infrastructure improvement 2. Governance The Governance sub-programme contains a range of public administration priorities that do not fall within either the Public Administration Reform or the Economic Management subprogrammes. These include: 1. Projects which aim to improve gender balance and the participation of women (MoWA). 2. Population and housing census (CSO). 3. Coordination of central Government documents such as ID cards (MoF). 4. Loya Jurga and election (Electoral Commission). 5. Cadastral and mapping projects, and support to develop the Central Statistics Office. 6. Coordination of whole-of-government Capacity Building Groups and functions (AACA). 7. Venture capital fund to encourage private investment in State Owned Enterprises (MoF). 8. Renovation and upgrading of embassy grounds and properties (MoFA). Economic Management Key priorities in the Economic Management sub-programme include capacity building and support to develop: 1. The operating/development budget, the Office of the Minister for Finance, and the MoF provincial offices (MoF refer to footnote 1). 2. Revenue (Customs) office, Da Afghanistan Bank, and procurement functions (MoF, DAB). 3. Aid Coordination and Public Information Units (MoF, Office of the President). 4. Financial capacity of Government (Chief Financial Officers in Ministries) (MoF). 5. Women in senior economic management (MoF). 1 Economic Management sub-programme. 2 Governance sub-programme.

3 1382 National Development Budget Public Investment Programme Public Administration Reform and Economic Management Contents of PAREM submission This submission combines three sub-programme submissions which have been prepared separately. (1) Public Administration Reform (pages 4-12) (2) Governance (pages 13-14) (3) Economic Management (pages 15-20)

4 Public Administration Reform and Economic Management.doc Public Investment Programme Sub-programme on Public Administration Reform DRAFT - NOT FOR CITATION Submission for the National Development Budget Administrative Reform and Civil Service Commission 3 March 2003 Contents 1 Investment policy 1.1 Overall objective 1.2 Purpose 1.3 Programme background and status 1.5 Principles and strategy 1.9 Problems to be addressed 1.11 Budgeting period 2 Results and activities under each pillar 2.1 Expected results 2.2 Action plan 3 Investment budget by pillar and programme 3.2 Performance benchmarks 3.3 Future fiscal implications and timing 4 Management arrangements 4.2 Inter-Ministe rial Administrative Reform Group 4.3 Administrative Reform Secretariat 4

5 Public Administration Reform and Economic Management.doc Investment Policy Overall objective 1.1 This investment plan sets out a strategy for reform of public administration, whose objective is to build a sound, ethical and lawful public administration that can contribute to the future peace, stability and economic prosperity of Afghanistan, and the reduction of poverty among the Afghan people. Purpose 1.2 The specific objectives of the public administration reform programme are to: i. Establish a sound legal framework for a professional, ethical, equitable and politically impartial Civil Service; ii. Establish effective civil service management systems to attract, retain and motivate qualified employees on the basis of merit; iii. Develop functional structures and administrative procedures that enable the government to fulfil its commitments; iv. Develop managerial and administrative capacity within the Civil Service Programme background and status 1.3 After years of war and centralized state contro l the Civil Service is in a state of crisis. In SY 1381 there were an estimated 250,000 public sector employees although the total could be considerably higher than this and little is known about their status, competence or efficiency. Management and administrative systems and skills are lacking, and Government infrastructure has been severely damaged by war and neglect. Investment by Government and international cooperation partners in SY1381 has been poor and badly focused, and has not yet had a signific ant impact on the challenges of transformation. A major difficulty has been the lack of a clear focal point on the government side for developing and taking forward policy options for administrative reform. 1.4 The situation at the end of SY 1381 can be characterized by: pervasive patronage; inappropriate pay arrangements, with widespread and counter-productive salary top-ups; a chronic lack of professional capacity; probable over-hiring; fragmented and duplicated Government structures; poor policy analysis and weak implementation at cabinet level. A concerted and focused programme for renewal and transformation of public administration is urgently needed to remedy these shortcomings. Principles and strategy 1.5 The Administrative Reform & Civil Servic e Commission (ARCSC) has been designated as the focal point public administration reform, and has prepared this investment plan. The plan proposes a comprehensive and strategic approach involving the whole of government, and is based on the following prin ciples:?? The Civil Service must be (and perceived to be) loyal to the Government of the day and the people of Afghanistan.?? Short term priorities must be tackled first, and urgently?? Longer-term and deeper reforms must also be initiated.?? Implementation will be undertaken collaboratively, with close cooperation between the ARCSC and other key agencies. 1.6 The Government s success in implementing policy depends very substantially on the competence, efficiency and effectiveness of the Civil Service. This invest ment programme provides a strategic framework for reform of the public administration as well as the arrangements for managing it. The framework is constructed on seven interdependent reform pillars: I II Civil Service legal framework Personnel management 5

6 Public Administration Reform and Economic Management.doc III IV V VI VII Institutional & functional streamlining & development Financial management & accountability Policy management & machinery of government Administrative efficiency Physical infrastructure improvement 1.7 This paper covers Pillars I-III, V and VI. Pillars IV and VII are covered in separate papers. 1.8 There is a series of reform programmes within each pillar, prioritised to ensure that the most urgent problems are tackled first in SY This will provide some stability to the public sector, and will arrest further deterioration. It will also pave the way for the longer term strategy, with planning undertaken for institutional reform and capacity-building, pay and grading reforms, reform of personnel and financial management policies and procedures, machinery of government reforms, and government infrastructure improvements. 1.9 This means that: in the short term (SY 1382) : there will be concrete progress on:?? Developing a new Civil Service Law and secondary legislation on Civil Service employment;?? Initial restructuring and upgrading of critical government functions;?? Pay: o an interim additional allowance for specified posts in departments who are carrying out urgent restructuring and reform of critical functions o phasing out donor top -ups o a nominal roll of civil servants and establishment controls o research and design of a comprehensive Civil Service pay and grading review;?? Building the capacity and resources of the Administrative Reform and Civil Service Commission to enable it to fulfil its mandate;?? Initial work on the development of modern personnel management policies and practices?? Preparatory work on future retrenchment arrangements;?? Clarification of central roles and responsibilities for administrative reform;?? Establishing requirements for a long-term Civil Service Management & Administration training facility; and?? Improving policy formulation and machinery of government mechanisms. in the medium term (SY ): the investment plan commits the government to a more comprehensive set of reforms to tackle the deep-seated and long-standing problems afflicting public administration. These include institutional reform and rationalisation of Ministries and streamlining administrative procedures. Each of the reforms will include a capacity-building component. Problems to be addressed 1.10 The need for administrative reform is clear:?? There is a risk that patronage -based appointments will become standard practice in Afghanistan s public sector.?? The current pay and grading system is inadequate to attract, retain, and motivate skilled civil servants.?? Seasoned professionals are needed in government immediately to help the state respond quickly to the dislocation and desperate poverty faced by millions of Afghans.?? Government s ability to manage its workforce has been undermined by the practices of international agencies and NGOs that have hired civil servants, under separate pay arrangements, to work in ad hoc development activities. 6

7 Public Administration Reform and Economic Management.doc ?? There is significant over-hiring as many agencies are paying more staff than have been authorized in the budget, and many government enterprise staff are now on the central government payroll.?? Government structures are fragmented and many functions are overlapping or unnecessary.?? Ministerial accountability is unclear as there are significant overlaps between ministries and with the Office of Administrative Affairs. Support for Cabinet needs to e strengthened Despite the seriousness of these problems, the government is conscious that Afghanistan s long administrative tradition stretches back many years before the conflicts and turbulence of recent years. In implementing the Reform Programme, the government will seek to build on the best aspects of these traditions, while introducing modern policies and practices which will serve the country well in the future. The government also recognises that most civil servants themselves are keen to see improvements, and believes that their views should be taken into account. The government will actively promote the participation of civil servants in the reform process. Budgeting period 1.12 This investment programme presents the budget and expenditure plans for the fiscal year of SY 1382 which runs from March 21, 2003 to March 20, 2004, together with estimates for the following two years (SY 1383 SY 1384). The latter figures must be regarded as indicators, since many resource requirements will only emerge once the longer-term issues have been identified in detail during SY Results and activities under each pillar Expected results 2.1 The anticipated results for each pillar are presented below. Priority activities to be completed during SY1382 are asterisked. ACTIVITY EXPECTED RESULTS Pillar I: Civil Service legal framework (Budget Sub -programme 1) *Civil Service law & employment regulations Clarity about the role and functions of the Civil Service; the principles and the ethical standards governing its activities; and the basic terms on which Civil Servants will be employed Pillar II: Personnel management (Budget sub-programme 2) A: Pay & grading *Interim additional allowances for key staff *Phasing out of donor top-ups *Development of comprehensive government payroll system *Labour market surveys Pay and grading structure review Job classification High calibre staff appointed to key posts on the government payroll Regularisation of donor -supported posts within the government payroll A nominal roll of all government employees and timely payments in Kabul and the provinces Realistic comparators for Civil Service pay Pay & grading structure which reflects fiscal realities and provides career incentives to all civil servants All existing posts assigned to new grading structure B: Personnel policies & procedures A personnel management handbook proving instruction & guidance on the application of common standards of good personnel practices across the Civil Service 7

8 Public Administration Reform and Economic Management.doc ACTIVITY C: Personnel management capacity building EXPECTED RESULTS Senior managers and personnel staff trained to apply personnel management policies & procedures D: Retrenchment Affordable arrangements which effectively and considerately enable rightsizing of government institutions *Development of retrenchment arrangements Implementation of retrenchment arrangements E: Personnel Management Information System *PMIS specification & design Installation and operation Agreement on financial, re -training & redeployment options for retrenched staff Retrenched staff are retired, retrained or redeployed A comprehensive database to support Civil Service personnel planning and training, sustainable on a long-term basis Personnel management information needs assessed and system designed PMIS system installed and operational Pillar III: Institutional & functional streamlining & development (Budget sub-programme 3) A: *Centre of government responsibilities for administrative reform A decree establishing the respective roles and responsibilities for administrative reform of central government agencies B: ARCSC capacity building ARCSC is fulfilling its remit efficient ly and effectively *Development of human resources and systems within ARCSC *Work programme development Training & mentoring Key staff in post and senior staff recruitment procedures developed Work programmes for ARCSC units developed and agreed ARCSC staff are carrying out their duties effectively C: Ministry reviews Ministries are structured and staffed appropriately to fulfil their responsibilities *Methodology Programme Methodology and prioritised review programme developed and agreed Rolling programme of reviews conducted and implemented E: Management & Administration institutional capacity building *Review of requirements and funding options for Civil Service management training Establishment of Civil Service management training institution/s Agreement on affordable and sustainable institutional arrange ments for Civil Service management training Management & administration training & development provided to key staff across the Civil Service Pillar V: Policy management and machinery of government (Budget sub -programme 4) *A: Effective policy formulation structures and systems at the centre of government and in Ministries *B: Head of Government s office review Timely and well-informed policy decisions are made and implemented effectively, and the legislative programme give precedence to priority issues. Structure, staffing & administrative systems enable HoG to focus on priority issues and provide well-informed advice to 8

9 Public Administration Reform and Economic Management.doc ACTIVITY EXPECTED RESULTS focus on priority issues and provide well-informed advice to support decision-making *C: Machinery of government review Capacit y created to provide objective and informed advice to HoG on machinery of government issues Pillar VI: Administrative efficiency (Budget sub -programme 5) A: Administrative efficiency reviews Government business transacted more economically, efficiently and effectively B: IT enhancement Affordable, timebound and prioritised IT improvement programmes implemented leading to increased efficiency & effectiveness of government business Action plan 2.2 In collaboration with key agencies, the Administrative Reform & Civil Service Commission will develop and publish a timebound action plan for the reform activities to be undertaken during SY Investment budget by pillar and programme 3.1 The pillars forming this investment programme are different from the classification provided in the 1381 budget. Each pillar focuses on a different broad aspect of reform, but they are all interdependent and should not be regarded as separate silos. Likewise, the individual programmes clustered under each pillar are closely related. While some activities will proceed more rapidly than others, progress is required across the board in order to achieve the overall goal of efficient and effective public administration. The Government wishes to consolidate international cooperation partner assistance around the attainment of these programmes. Performance benchmarks 3.2 The government recognises that the Administrative Reform Programme represents a significant challenge but believes that with the support of international coope ration partners demonstrable progress can be achieved over the forthcoming financial year. With this in mind, the government has set itself six benchmarks by which progress will be assessed. These are: a. Payroll and establishment control?? A comprehensive an d accurate nominal roll of civil servants?? Effective arrangements for controlling Civil Service numbers?? Improved timeliness, regularity and accuracy of salary payments b. A Civil Service Law and subsidiary regulations governing Civil Service employment c. Strengt hening of the Administrative Reform and Civil Service Commission d. Interim additional allowances to secure the services of high calibre Afghan staff for key posts e. Substantial progress towards phasing out donor top-ups f. Accelerated budget execution and transfer of funds to the provinces. Future fiscal implications and timing 3.3 This investment budget includes an estimate for the cost of implementing a future retrenchment programme, but does not include the likely increase in operational costs arising from the implementation of a future comprehensive pay and grading reform programme, both in terms of salaries and pensions. Preparatory work on labour market and cost of living surveys to be undertaken in SY1382, and the completion of a nominal roll will assist the 9

10 Public Administration Reform and Economic Management.doc government to reach a realistic view of what salary levels and pension arrangements are affordable and sustainable in the medium term. 3.4 Design of a new pay and grading system and options for implementation will be completed in SY1382, but full implementation is unlikely in the next 2 years, because the classification of individual jobs will be a lengthy process. In addition, the implementation of a retrenchment programme must await the development of a reliable nominal roll, and effective establishment controls, to avoid the dangers of staff leaving and re-entering. 4. Management arrangements 4.1 Responsibility for leading and managing the overall Public Administration Reform Programme rests with the Vice President and Chairman of the Administrative Reform and Civil Service Commission, but individual Ministries will be responsible for delivering specific elements of the Programme. This will require government-wide collaboration, cooperation and coordination. The following arrangements will be put in place to ensure the Programme is managed efficiently and effectively. Inter-Ministerial Administrative Reform Coordinating Group 4.2 The Vice President and Chairman ARCSC will chair a quarterly meeting of Ministers of key agencies involved in the Reform Programme to review progress and address any problems that may arise. The minutes of these meetings will be submitted to the President and circulated to all Ministries and to international cooperation partners. Administrative Reform Secretariat 4.3 A unit will be established within the Administrative Reform and Civil Service Commission to coordinate and manage the Programme, and to prepare quarterly monitoring reports for the Inter-Ministerial Group. The unit will also provide secretariat services to the Group. 10

11 Public Administration Reform and Economic Management.doc FORM P 1 Project Analysis US$ TOTAL Sub Programme 1 - Civil Service Legal Framework Project 1 Primary legislation 250, ,000 Project 2 Develop secondary legislation 250, ,000 Project 3 Communications campaign 100, , ,000 Sub Total 600, , ,000 Sub Programme 2 - Personnel Management Project 1 Pay & grading 1,740,000 2,750, ,000 4,740,000 Interim restructuring within ministries Phasing out top -ups Development of comprehensive government payroll 1,500,000 2,000, ,500,000 system Labour market surveys 150, , ,000 Pay & grading structure review 50, , ,000 Job classification 40, , , ,000 Project 2 Personnel management policies and procedures 150, , , ,000 Development of Procedures 100, , , ,000 Communications Campaign 50, ,000 75, ,000 Project 3 Personnel management capa city building 50, , ,000 Design/develop personnel management 50, , ,000 training/development programme Deliver personnel management training/development 0 350, ,000 programme Project 4 Retrenchment 50, , ,000,000 10,150,000 Develop financial compensation, re-training & 50,000 50,000 redeployment arrangements Implementation of retrenchment arrangements 100,000 10,000,000 10,100,000 Project 5 Personnel Management Information System 160, , ,000 Define specification 40, ,000 Design, develop & install system 120, , ,000 Prepare user guidance 30, ,000 Training for CSC & other staff 100, ,000 Sub Total 2,150,000 3,750,000 10,425,000 16,325,000 Sub Programme 3 - Institutional and Functional Streamlining & Development Project 1 Centre of government roles & responsibilities 40, ,000 Decree on roles/responsibilities for Admin Reform and 20, ,000 Relations Familiarisation campaign 20, ,000 Project 2 ARCSC capacity building 445, , ,000 Develop organisation chart & staffing levels 20, ,000 Develop functional terms of reference & job 20, ,000 descriptions Develop Senior Staff Recruitment procedures 50, ,000 Develop Civil Service Appeals procedures 45, ,000 Train ARCSC Commissioners in recruitment & 120,000 30, ,000 appeals procedures Develop work programmes for other ARCSC units 80,000 30, ,000 Train/mentor ARCSC staff 110,000 50, ,000 Project 3 Ministry reviews 100, , , ,000 Develop methodology for functional/structural/staffing 100, ,000 reviews Rolling programme of Ministry reviews 0 100, , ,000 Implementation of review recommendations 0 100, , ,000 Project 4 Management and Administration Institutional 75, , ,000 1,425,000 Capacity Building Identify requirements & funding options 75, ,000 Establish CS M&A training institution/centres 500, ,000 1,000,000 Develop curricula & commence operations 100, , ,000 Sub Total 660, ,000 1,350,000 2,920,000 Sub Programme 4 - Policy Management and Machinery of Government 11

12 Public Administration Reform and Economic Management.doc Project 1 Policy management capacity building 400, , ,000 1,300,000 Develop structures/systems for policy, legislation & 200, , , ,000 Cabinet decisions Restructure existing organisational arrangements 200, , ,000 Familiarisation & training programme 100, , ,000 Project 2 Head of Government's office capacity building 270, , ,000 Review organisation/management of the Head of 120, , ,000 Government's Office Implement new arrangements 150, , ,000 Project 3 Support for machinery of Government 200, , , ,000 Identify support to Head of Government on 'machinery 100, ,000 of government': Implement arrangements to provide machinery of 50, , ,000 government advice Prepare Ministerial Code setting out Ministers' generic 50,000 50, ,000 responsibilities Awareness and familiarisation campaign for the 100, , ,000 Ministerial Code Sub Total 870,000 1,300, ,000 2,570,000 Sub Programme 5 - Administrative Efficiency Project 1 Administrative efficiency reviews 50, ,000 1,000,000 1,300,000 Identify cross-cutting administrative systems and 100, ,000 procedures Develop efficiency review methodology and 0 100, ,000 programme Conduct efficiency reviews and implement , ,000 recommendations Training/development in new administrative systems 50,000 50, , ,000 Project 2 IT enhancement review 540, , ,000 1,490,000 Conduct IT needs assessments for Kabul and Provinces 50, , ,000 Develop programmes to enhance use of IT 200, ,000 Implement IT capacity building programmes 490, , ,000 1,090,000 Sub Total 590, ,000 1,500,000 2,790,000 Total Bid 4,870,000 6,760,000 13,675,000 25,305,000 12

13 1382 National Development Budget Public Investment Programme Governance (Public Administration Reform and Economic Management) Public Administration programme 1382 development budget submission Governance sub-programme This budget submission reflects the Governance sub-programme of the Public Administration Reform and Economic Management programme. The Public Administration Reform and Economic Management sub -programmes will be presented to Cabinet in a separate document. There are 14 projects presented in this submission, including the preparation of the Loya Jurga and election, and major census and statistics activities. Investment budget by sub-programme & project Governance Sub-programme A1 Sub-programme summary Governance SY 1382 SY Total USD m Total AFS ($m) Total ,013 A3 Inputs economic category Table A3 has not been completed. A4 Expenditure by Ministry SY 1382 SY Total USD 000 Total AFS ($m) Central Statistics Office Ministry of Finance Ministry of Womens Affairs Election Committee Geodesy and Cadastral services unit Afghan Assistance Coordination Authority Civil Service Commission ,632 Ministry of Foreign Affairs Total ,013 13

14 1382 National Development Budget Public Investment Programme Governance (Public Administration Reform and Economic Management) P1 Governance summary of projects SY 1381 SY 1382 SY Total (USDm) Total (AFS m) Gender analysis of civil service staffing, recruitment, placement, training and promotion Gender responsive planning, programming, budgeting, monitoring, and evaluation Gender impact assessment of public enterprise/administration reform policies and processes National directive and technical assistance package on gender mainstreaming in policy making, planning, programming, monitoring and evaluation Pilot project on gender mainstreaming of budget analysis focusing on the implementation of Budget SY 1382 in health and rural development sectors Population and Housing Census - Phase I Population and Housing Census - Phase II Coordination of Government certificates and ID cards Planning, implementation and management of December 2003 Loya Jurga and June 2004 election processes Geodesy, cadastral and cartographic technical assistance and support Support for the Central Statistics Office Capacity Building Groups project (support for all Ministries) Support for AACA (Afghan Assistance Coordination Authority) Physical Infrastructure of Government ,574 Venture Capital Fund Foreign Affairs Total ,373 P2 Service delivery standards and project outputs (by project) Please refer to the outputs by project in the P-5 forms which follow. P3 Inputs economic category Not provided (refer to A3). P4 Expenditure by Ministry The proposed investment for the Governance sub-programme by Ministry is presented in the table below, which is provided in $USD (thousands), with $AFS (millions) identified in the right hand column. SY 1382 SY Total USD 000 Total AFS ($m) Central Statistics Office Ministry of Finance Ministry of Womens Affairs Election Committee Geodesy and Cadastral services unit Afghan Assistance Coordination Authority Civil Service Commission ,632 Ministry of Foreign Affairs Total ,013 14

15 1382 National Development Budget Public Investment Programme Economic Management (Public Administration Reform and Economic Management) Economic Management sub-programme Public Administration programme 1382 development budget submission This budget submission reflects the Economic Management sub-programme of the Public Administration Reform and Economic Management programme. The Public Administration Reform and Governance sub-programmes will be presented to Cabinet in separate documents. Section 1 Programme Policy / Strategy 1.1 Vision The vision of the Economic Management programme is to create an effective central government that reestablishes national unity on the basis of strong institutions. This involves building broad-based and equitable community level participation and effective management at the local level, installing strong systems of financial and information management, and using the budget as an instrument of policy. 1.2 Programme background and status The contributing organisations to the Economic Management sub -programme are the Ministry of Finance and the Da Afghanistan Bank. The focus of the Economic Management programme is to provide support, direction and coherence to the Government of Afghanistan through key central departments. Major achievements in 1381 include:?? Reform of the monetary system including introduction of a new national currency.?? Development of a budgetary and financial management framework, including the1381 budget (and coordination of the associated donor conference), preparation of the 1382 budget, and development of a broad system for financial management across Government.?? Establishing a donor coordination function.?? Commencement of a range of capacity building activities across Ministries.?? Establishment of a range of human and technical capacity building projects in procurement, the Central Bank, the Treasury and revenue (Customs) areas, and various other aspects of the programme. 15

16 1382 National Development Budget Public Investment Programme Economic Management (Public Administration Reform and Economic Management) 1.3 Guiding principles?? The guiding principle of the Economic Management strategies is to ensure that the Government of Afghanistan is organised and funded in a manner that permits it to deliver the goods and services it needs to the Afghan people efficiently and effectively. The purpose of the sub -programme is to lay the foundations for economic growth through sound and equitable planning, financial management, and encouragement of private sector activity and investment in Afghanistan. 1.4 Problems to be addressed The major challenges facing the Economic Management sub -programme include: i. Building the capacity of the mustoufiates in provincial MoF offices across Afghanistan; ii. Establishing and improving revenue (Customs) operations in Kabul and all the provinces; iii. Bedding down the budget process, ensuring sound implementation of the 1382 budget, and further improvements in the 1383 budget; iv. Establishing a function to support all Ministries in undertaking feasibility studies and donor coordination activities. 1.5 Budgeting period The Economic Management budget submission focuses on the current budget year (1382), but also outlines plans and estimates for projects and finances in the forward estimates. 1.6 Goal The goal of the proposed Economic Management sub -programme investment plan is to establish a sound economic and financial management framework for rebuilding of Afghanistan and encouragement of strong economic growth. 1.7 Policy issues Key policy issues for Economic Management include: i. Developing and implementing a national customs/revenue policy and management system. ii. Bedding down of operational and development budget processes and systems. iii. Expansion of existing capacity building programmes to develop the capacity of the Ministry in Kabul and the provinces to operate with increasing effectiveness, and with decreasing dependence on international technical assistance. 16

17 1382 National Development Budget Public Investment Programme Economic Management (Public Administration Reform and Economic Management) Section 2 Results and activities by sub-programme 2.1 Expected results The fundamental results the Economic Management sub-programme expects to achieve over the budget and forward estimates period include: i) Implementation of a consistent national revenue management system. ii) Improved capacity in all Ministries to operate financial management and planning functions. iii) Functioning systems in the Da Afghanistan Bank. iv) Improved procurement systems for Government. v) Improved aid coordination and public information systems. vi) Improved opportunities for (and representation of) women in senior economic management positions. 2.2 Summary of main activities Key activities to support the achievement of results in the Economic Management sub-programme include capacity building and support to develop the following priorities:?? Operating/development budget;?? Office of the Minister for Finance?? MoF provincial offices;?? Revenue (Customs) office;?? Da Afghanistan Bank;?? Aid Coordination and Public Information Units;?? Financial capacity of Government (Chief Financial Officers in Ministries);?? Procurement; and?? Women in senior economic management. 17

18 1382 National Development Budget Public Investment Programme Economic Management (Public Administration Reform and Economic Management) 2.3 Work plan A basic work plan for Economic Management in 1382, and an indication of plans and needs for future years, is provided in the table below. Goal 1382 plan Longer term plans and needs Operating/development budget MoF provincial offices Bedding down of operating and development budget processes based on preparation of 1381 and 1382 budgets. Implementation of financial management systems across Government. Commence project to improve operations of MoF Mustoufiates. Project will focus on 4-5 key provinces in 1382, and will involve establishing systems and processes, and building and equipment rehabilitation. Strengthened capacity of MoF to manage budget development processes. Improved and transparent systems for financial management and control for the Government of Afghanistan. Roll out Mustoufiates project across all provinces. Revenue (Customs) office Counterparting for Customs Commissioner to develop capacity and experience. Establishment of revenue collection systems for implementation in the provinces. Roll-out of revenue collection systems in all provinces. Da Afghanistan Bank Building refurbishment and implementation of an evaluation of DAB. Ongoing capacity building to support bedding down bank processes and systems. Ongoing capacity building in 1383 to support bedding down bank processes and systems. Aid Coordination and Public Further work to bed down current systems for coordination of Information Units aid and public information for Government, donors and the public. Financial capacity of Government Provide technical assistance and capacity building, in the form of Chief Finance Officers, to a number of Ministries (approximately 9 in 1382). Project ongoing, with further Ministries receiving assistance (a further 9 Ministries). Procurement Improve and develop current procurement systems, and commence capacity building. Major capacity building work to develop the procurement capacity of Ministries, and reduce pressure on MoF to undertake procurement on behalf of Government. Women in senior economic management Develop and implement a project to identify women who are Increased numbers of women working in MoF, building on potential leaders, and to encourage women to participate in jobs 1382 work. Ongoing training, development and marketing in MoF. activities to encourage womens part icipation at operational and more senior levels within the Ministry. 18

19 1382 National Development Budget Public Investment Programme Economic Management (Public Administration Reform and Economic Management) Section 3 investment budget by sub-programme & project Economic Management Sub-programme A1 Sub-programme summary The table below outlines the Economic Management development investment plan by sub-programme. SY 1382 SY Total USD m Total AFS ($m) Economic Management ,903 Total ,903 A2 Service performance measures Economic Management SY 1382 SY 1383 later years Total over period Development of national Customs policy Develop Full implementation Implementation of whole-of-government procurement procedures Implementation Improved financial management capacity of Ministries number of Ministries with CFO advisors providing capacity building and technical assistance Number of MoF mustoufiates developed and operating in line with national policies and procedures A3 Inputs economic category Table A3 has not been completed. A4 Expenditure by Ministry SY 1382 SY Total USD 000 Total AFS ($m) Ministry of Finance ,568 Da Afghanistan Bank Total ,903 19

20 1382 National Development Budget Public Investment Programme Economic Management (Public Administration Reform and Economic Management) P1 Economic Management project summary Project description SY 1381 SY 1382 SY Total USD 000 Total AFS (m) Women in senior economic management Treasury department assistance (Grants Management System, Financial Management Information System including payroll) Office of the Auditor-General: technical assistance Strengthening the Financial Capacity of Government (CFOs) Graduate training programme for Ministry of Finance Operating budget: support and capacity building Revenue collection: capacity building and technical assistance MoF provinci al offices: equipment and capacity building Development budget: support and capacity building Aid Coordination Unit and Public Information Unit: establish and develop Procurement: technical assistance and capacity building Da Afghanistan Bank: support and capacity building Da Afghanistan Bank: equipment and structural support Da Afghanistan Bank: Evaluation TOTAL ,250 P2 Service delivery standards and project outputs (by project) Please refer to the outputs by project in the P-5 forms which follow. P3 Inputs economic category Not provided (refer to A3). P4 Expenditure by Ministry The proposed investment by sub-programme and Ministry is presented in the table below, which is provided in $USD (thousands), with $AFS (millions) identified in the right hand column. SY 1382 SY Total USD 000 Total AFS ($m) Economic Management Ministry of Finance 26,849 25,324 4,893 57,065 2,568 Da Afghanistan Bank 4,408 3, , Total 31,256 28,362 4,893 64,511 2,903 20