Decentralization Support Activity Project

Transcription

1 Report of the DSA Project Activities: January 1 st to March 31 st, Project Report: Q 36 May 23 rd, Decentralization Support Activity Project THE NETHERLANDS MINISTER FOR DEVELOPMENT COOPERATION The DSA project is implemented by Harvard University and funded by Development Cooperation Ireland (DCI), The Royal Netherlands Embassy and the United States Agency for International Development (USAID)

2 CONTENTS ACRONYMS... 1 I KEY ACTIVITIES OF THE REPORTING PERIOD... 2 II OUTSTANDING ISSUES... 3 Funders Evaluation... 3 Strategy for the Completion of the DSA Project... 3 FY 1999 Federal Budget Preparation Process... 3 Gambella and Afar Introduction of the Accounts Reform... 4 Somali Introduction of the Accounts Reform... 4 Reinforcement of the Budget Reform in Afar, Somali and Gambella Regions... 4 Creation of New Weredas and New Zones... 5 Reporting in Somali Region... 5 Reporting in Gambella Region... 7 Closure of the FY 1996 Accounts... 7 DSA Steering Committee Meeting... 7 Duplication of a Project deliverable... 7 Senior staff turnover at BOFEDs, weredas, and the Federal Government and the Impact on the Reform Process... 7 III CORE ACTIVITIES A. ACCOUNTS REFORM Accounts Reform in the Federal Government Accounts Reform in SNNP Region Accounts Reform in Tigray Region Accounts Reform in Amhara Region Accounts Reform in Benishangul Gumuz Region Accounts Reform in the Addis Ababa City Council Accounts Reform in Oromia Region Accounts Reform in the Dire Dawa Administrative Council Accounts Reform in Harari Region B. BUDGET REFORM Budget Reform at the Federal Government Budget Reform in Tigray Region Budget Reform in SNNP Region... 22

3 Budget Reform in Oromia Region Budget Reform in Benishangul Gumuz Region Budget Reform in Amhara Region Budget Reform in the Addis Ababa City Council Budget Reform in Harari Region Budget Reform in the Dire Dawa Administrative Council Budget Reform in Gambella Region Budget Reform in Afar Region Budget Reform in Somali Region C. EXPENDITURE PLANNING REFORM Assessment of Planning Needs for the Medium Term in Oromia, Amhara, Tigray and SNNP Regions Introduction of Needs Based Transfer Formula in Tigray Region Public Expenditure Planning Module Developed Discussions Held for Fiscal Allocation Equation in Somali Region D. INFORMATION TECHNOLOGY IT Activities in the Federal Government IT Activities in SNNP Region IT Activities in Amhara Region IT Activities in Oromia Region IT Activities in the Addis Ababa Administrative Council IT Activities in Benishangul Gumuz Region IT Activities in the Dire Dawa Adminsitrative Council IT Activities in Harari Region IT Activities in Somali Region IT Activities in Afar Region IT Activities in Gambella Region IBEX Activities Other Activities E. OTHER ISSUES MOFED Assessment of the DSA Implemented Reforms ANNEX 1 SUPPORT TRIPS CONDUCTED DURING THE REPORTING PERIOD ANNEX 2 THE STATUS OF THE DSA DESIGNED IT SYSTEMS ANNEX 3 GOVERNMENT STAFF TRAINED DURING THE REPORTING PERIOD.57

4 ANNEX 4 NEW REPORTS PRODUCED DURING THE REPORTING PERIOD...58 A. ACCOUNTS REFORM B. BUDGET REFORM C. CASH MANAGEMENT...58 G. TRAINING STRATEGY FOR ACCOUNTS, BUDGET, PUBLIC INVESTMENT/EXPENDITURE PLANNING H. MISCELLANEOUS REPORTS I. PROJECT QUARTERLY REPORTS J. INFORMATION TECHNOLOGY M. OUTSIDE REPORTS INVOLVING THE DSA PROJECT... 61

5 ACRONYMS BDA 3 (A) BDA 3 (B) BIS BOFED CAD COA EMCP FY IBEX JBAR MOFED OFED PBS PIP PSNP RSB STS SNNP WPA Budget Disbursement and Accounts System for the new chart of accounts and existing single entry cash accounting system Budget Disbursement and Accounts System for the new chart of accounts and double entry bookkeeping, and modified cash accounting system Budget Information System Bureau of Finance and Economic Development Central Accounts Department of the Ministry of Finance and Economic Development Chart of Accounts Expenditure Management and Control Sub Program Fiscal Year Integrated Budget Expenditure System Joint Budget and Aid Review Ministry of Finance and Economic Development Office of Finance and Economic Development Protecting Basic Services Public Investment Program Productive Safety Nets Program Region Sector Bureau Single Treasury System Southern Nations, Nationalities and Peoples Wereda Performance Agreement

6 I KEY ACTIVITIES OF THE REPORTING PERIOD A training of trainers program in budget execution was delivered to 20 core trainers selected by the Somali BOFED. A region wide budget execution training program was also delivered to 180 region sector bureau accountants in Somali region. Training on the accounts reform was delivered to 683 newly recruited wereda and zone accountants in SNNP region. An upgrade to the BDA 3(B) system was completed and work started on implementing this upgrade at every BDA 3(B) site in the country. This upgrade consolidates previous versions into a single standard version and enforces stronger financial controls. It also standardized reports across regions. FY 1996 accounts were closed by Gambella and Harari regions. The FY 1998 Budget Books were printed by Amhara, Afar, Harari and SNNP regions. The results of the DSA wereda capacity assessments workshops and surveys conducted in Tigray, Oromia, SNNPR and Amhara regions were analyzed and summarized, and a project report (M 67) was issued. The accounts reform was successfully introduced in Harari, Dire Dawa, Benishangul Gumuz and Oromia regions and post implementation support provided. The regions are reporting under the new accounting system. BDA 3(B) was installed in Dire Dawa and Harari regions. These regions have started processing the FY 1998 accounts using BDA 3(B). The DSA Project conducted a three day cash management and debt management workshop from February 1 to February 3 to Federal and Regional Treasury officials. A project report (C 7) on the findings and recommendations of the consultant was completed and issued to MOFED officials including members of the Treasury Department. The DSA Project provided eight man months of assistance to MOFED to evaluate the budget and accounts reforms. DSA Quarterly Report 36: January to March 2

7 II OUTSTANDING ISSUES This section summarizes the most important issues the project is facing that are affecting the reform. The issues are those that emerged during the reporting period and up through the date of this report. Funders Evaluation The funders of the DSA project have organized an independent assessment of the implementation, effectiveness and sustainability of the expenditure planning, budget and accounts reforms. This assessment has been proposed since October However, the bid and selection process of the evaluation team took longer than planned. The Project was informed last week that the evaluation team is scheduled to arrive in Ethiopia on June 12 th, for three weeks. The selection and award process was handled by USAID. Strategy for the Completion of the DSA Project The Government and the funders have requested that the Project prepare a strategy for completion. The Project has prepared and will circulate shortly the completion strategy (M 68). FY 1999 Federal Budget Preparation Process The DSA project procedural and IT advisors met on several occasions with the MOFED Budget Department officials to discuss the approach to the FY 1999 budget preparation process. The project also assisted the MOFED IT department to resolve several connectivity problems that hindered some officials from accessing the IBEX budget application on the MOFED network. An observation made by the project during this budget preparation phase is that the MOFED budget call letter issued early in February, did not instruct public bodies to submit their Requested Budgets in electronic format using the BIS system which is operational in 53 public bodies. This meant that the Federal Requested Budgets from these 53 public bodies were submitted in hard copy, and had to be re entered into IBEX, at MOFED, by budget experts creating an unnecessary increase of their workload. The lesson for the next budget preparation in FY 2000 is that the Budget Call letter must include a requirement that Requested Budgets be submitted in electronic formats. DSA Quarterly Report 36: January to March 3

8 Gambella and Afar Introduction of the Accounts Reform The following policy decisions are required to be implemented as prerequisites to implement the accounts reform: o Implementation of the single pool system at wereda and zone o Recruitment of qualified (degree/diploma) accountants to ensure that each budget institution and wereda has at least two qualified accountants The regions have been consulted on several occasions to expedite the above process. However, no decision has yet been made in this regard. Somali Introduction of the Accounts Reform The following policy decision is required to be implemented as a prerequisite to implement the accounts reform: o Recruitment of qualified (degree/diploma) accountants to ensure that each budget institution has at least two qualified accountants The region has been consulted on several occasions to expedite the above process. However, no decision has yet been made in this regard. Reinforcement of the Budget Reform in Afar, Somali and Gambella Regions From our experience of implementing the budget reform for FY 1998 in the above mentioned regions, we believe that budget preparation training should be delivered again on a region wide basis in FY 1999 to strengthen and consolidate the reform activities undertaken in FY 1998 and build wereda capacity to prepare their FY 1999 budget. The reforms need to be reinforced in these regions in FY 1999 because: o Staff capacity was inadequate to absorb and understand the reform in FY 1998 as qualified staff was either not assigned or recruited to fill in vacancies o Technical management and oversight of the reform was poor due to high staff turnover at wereda level and senior level management at all jurisdictions DSA Quarterly Report 36: January to March 4

9 A region wide training in budget preparation and management is being planned in Afar, Somali and Gambella regions for FY Each of the above regions has requested the DSA project to provide support on the budget reform. The reintroduction of the budget reform in these jurisdictions will significantly impact on the DSA plans, on the pace of reform implementation and the timeframe to ensure sustainability of the reforms. Creation of New Weredas and New Zones The Project s last quarterly report (for the period September 1 st to December 31 st, 2005) stated that Oromia had planned to increase its number of weredas by 50. However, more recent information from the Oromia BOFED indicates that the Oromia Council has decided to increase the number of weredas by 46 and the number of its zones by 3. Similarly, SNNPR is adding a zone and 29 weredas. Gambella is adding 5 weredas. Other regions are also planning to increase their number of weredas. A strategy for the introduction of the budget and accounts reforms at these new jurisdictions needs to be developed in conjunction with BOFEDs. The spreadsheet on the next page describes changes in number of weredas and zones in each region. About 80 new weredas were created in the past six months. Each of the above regions has requested the DSA project to provide support on the budget and accounts reforms as well as support for computerization, specifically, for the new jurisdictions. The increase in weredas will significantly impact on the DSA plans, its budget, the pace of reform implementation and the timeframe to ensure sustainability of the reforms Reporting in Somali Region o 12 weredas have not finalized and submitted the FY 1998 budget to BOFED o 39 weredas have not submitted any monthly reports for FY 1997 to BOFED o No wereda has submitted any monthly report for FY 1998 to BOFED The above statistics clearly indicate that Somali region needs significant levels of institutional strengthening and capacity building to create a conductive environment prior to reforms being implemented successfully. This will significantly impact on the DSA plans, its budget, the pace of reform implementation and the timeframe to ensure sustainability of the reforms. DSA Quarterly Report 36: January to March 5

10 CHANGE IN NUMBER OF WEREDAS IN EACH REGION No. Region or Administrative Council No. of zones in FY 1996 No. of weredas in FY 1996 No. of zones in FY 1999 No. of weredas in FY Oromia SNNPR Amhara Remarks 39 weredas created in FY97 46 weredas were created in FY98 and will be functional from FY99 19 urban weredas created in FY97 29 weredas were created in FY98 and will be functional from FY99 5 urban weredas created in FY97 Study ongoing to consider additional weredas 4 Tigray urban weredas created in FY96 5 Benishangul Gumuz Gambella weredas will be functional from FY99 7 Afar Expected to be discussed in next council meeting 8 Somali Expected to be discussed in next council meeting 9 Harari 9 Kebeles Kebeles created in FY97 10 Dire Dawa 9 Kebeles Kebeles created in FY97 11 Addis Ababa 10 sub cities 100 Kebeles 10 sub cities 100 Kebeles DSA Quarterly Report 36: January to March 6

11 Reporting in Gambella Region o The FY 1998 budget for Gambella is delayed and is still under preparation o No wereda has submitted any monthly report for FY 1998 to BOFED The above statistics clearly indicate that Gambella region needs significant levels of institutional strengthening and capacity building to create a conductive environment prior to reforms being implemented successfully. This will significantly impact on the DSA plans, its budget, the pace of reform implementation and the timeframe to ensure sustainability of the reforms. Closure of the FY 1996 Accounts Addis Ababa and Afar have not yet closed their FY 1996 accounts. The delays in the closure of these accounts may adversely impact the pace at which reforms are introduced, supported and become sustainable. In addition, there may be delays in the country wide consolidation. DSA Steering Committee Meeting The DSA Project requested the Ministry to convene a Steering Committee meeting during the quarter. The Phase 4 Contract stipulates that such a meeting be held every fourth months. Only one meeting has been held (February 2005). Effective coordination of the reform between the Federal and the regional finance institutions would be promoted by these meetings. Duplication of a Project deliverable The Phase 4 contract stipulates the introduction of Performance Budgeting at the Federal level. The Project has not been formally notified by MOFED to delete this deliverable. Senior staff turnover at BOFEDs, weredas, and the Federal Government and the Impact on the Reform Process o Turnover of BOFED Heads, wereda and regional council officials Seven BOFED heads (from Addis Ababa, Amhara, Tigray, Oromia, SNNP, Somali and Harari regions) were moved to other assignments and seven new assignments were made in the past six months. DSA Quarterly Report 36: January to March 7

12 The change in management had a significant effect on the management of the reforms especially in the smaller capacity regions where these changes were frequent and tend to destabilize an already not so smooth reform implementation process characterized by lack of adequate staff to implement and manage the reforms. This reform poses a difficult management challenge and the turnover of senior managers significantly impairs this reform. Change of wereda and regional council officials delayed the policy and decision making processes; the budget approval and consolidation process in all regions was delayed this year because of this reason. To site an example, in Somali region, the block grant formula that was approved by the old Cabinet prior to the election was revised and approved by the new Regional Council. This entailed a significant delay in the budget process of the region. To date, 8 of the 52 weredas have not notified their budgets yet. Addis Ababa is yet another example. Although all region sector bureaus and sub cities submitted their budget requests to BOFED, the draft recommended budget was prepared and awaited approval by the new Council. Finally, in February this year, the budget was approved by the Provisional City Administration. o Reform awareness of the newly appointed officials at all levels of government in regions and training requirements The change of wereda and regional council members entails the requirement of awareness workshops in all regions, including the four large regions, to bring the newly appointed officials up to date with the reform status, implementation process and requirements. The Project is currently planning to carryout these workshops in all regions, specifically in Oromia, SNNP, Harari, Addis Ababa and Somali regions. Reassignment of key staff at weredas but also at regional levels required the provision of additional training. All regions have requested training to newly assigned/recruited staff, at wereda as well as region level. The Project has scheduled training for over 6,000 trainees during the period March 15 th to June 15 th. This figure does not include the training requirement in the newly created weredas and zones in regions. DSA Quarterly Report 36: January to March 8

13 o Senior Officials turnover in MOFED and its impact on the management of the reform To ensure stability and consistent coordination of reform activities it is necessary that turnover of senior staff at MOFED is minimized. However, over the last 15 months the Head of EMCP was changed three times, and over the last 6 months, the Heads of the Budget Consolidation, Accounts and Information Technology Departments have been changed. Again, this reform poses a difficult management challenge and the turnover of senior managers significantly impairs this reform. DSA Quarterly Report 36: January to March 9

14 III CORE ACTIVITIES A. Accounts Reform Accounts Reform in the Federal Government Reporting for FY 1997 Of the 163 reporting entities required to submit monthly reports for FY 1997: 153 have submitted monthly reports up to June. 4 have submitted monthly reports up to May. 1 has submitted monthly reports up to April. 1 has submitted monthly reports up to January. 1 has submitted monthly reports up to November. 1 has submitted monthly reports up to September. 2 have not submitted any monthly reports. The processing of FY 1997 accounts is in progress. The Central Accounts Department plans to close the FY 1997 accounts during the next quarter using BDA 3 (B). Reporting for FY 1998 Of the 162 reporting entities required submit monthly reports for FY 1998: 32 have submitted monthly reports up to February 34 have submitted monthly reports up to January 16 have submitted monthly reports up to December 9 have submitted monthly reports up to November. 5 have submitted monthly reports up to October. 6 have submitted monthly reports up to September. 4 have submitted monthly reports up to August 2 have submitted monthly reports up to July. 54 have not submitted any monthly reports. All Federal reporting units located at Addis Ababa are processing their FY 1998 accounts using BDA 3 (B). DSA Quarterly Report 36: January to March 10

15 Country wide consolidation for FY 1994 The consolidation of the country wide accounts for FY 1994 are now completed, printed and distributed. Country wide consolidation for FY 1995 The draft country wide consolidation report for FY 1995 is prepared. The Central Accounts Department is reconciling and checking the draft report for accuracy. It is expected that the FY 1995 country wide consolidation report will be finalized during the following quarter. Cash management In response to a request from the MOFED Treasury Department, the DSA Project arranged for an international cash management and debt management expert to visit Ethiopia and work with the Treasury Department to analyze cash management issues, deliver training to Federal and Regional treasury officials, and prepare a report on cash management in Ethiopia. The consultancy started at the end of January and ended with a three day workshop that was delivered from February 1 to 3,. A report on the cash management consultancy together with recommendations was completed in March and copies were provided to MOFED officials including the Treasury Department (Report C 7). Wereda capacity assessment In December 2005, the DSA project carried out four regional wereda capacity assessment workshops in Amhara, Oromia, Tigray and SNNP regions. The Federal Government and its development partners have indicated that they are likely to significantly increase the funding levels for weredas via the block grant system, commencing early, using funding modalities such as Food Security, Productive Safety Net and Protecting Basic Services programs. The additional funding is likely to put increased pressure on the planning, disbursement and accounting capacities of wereda governments. The DSA project was therefore concerned to assess where any capacity shortfalls might appear and adjust its ongoing technical assistance to weredas. The results of these capacity assessment workshops and surveys were analyzed and summarized in March (Report M 67). DSA Quarterly Report 36: January to March 11

16 Status of Accounts Closure: Federal and Regional Governments Accounts closure status (Year) Federal Oromia Amhara Tigray SNNP Afar Gambella Harari A/A D/D Somali BGumuz Note: (1) Dire Dawa, Somali, Benishangul Gumuz, Oromia, SNNP, Amhara, Harari and Gambella regions have closed and submitted their FY 1996 accounts to MOFED. These regions as well as MOFED are currently working on the closure of their FY 1997 accounts. (2) Afar and Addis Ababa regions are currently working on the closure of the FY 1996 accounts. The processing of the FY 1997 accounts in these regions is also underway. National consolidation status FY 1995 work in progress (Draft Report Available) DSA Quarterly Report 36: January to March 12

17 Accounts Reform in SNNP Region FY 1997 accounts All reporting units in the region have submitted their FY 1997 accounts to BOFED. Accounts of all the 133 weredas have been consolidated at their respective zones. Zones have submitted the consolidated FY 1997 accounts to BOFED for consolidation at regional level using BDA 3 (B). It is expected that the FY 1997 accounts will be submitted to MOFED during the next quarter. FY 1998 accounts Of the 133 weredas required to submit monthly reports for FY 1998: All region sector bureaus have reported up to February 102 weredas have submitted reports up to January 21 weredas have submitted reports up to December 10 weredas have submitted reports up to November Accounts training for new recruits A training program in the new accounting system was delivered to 683 newly recruited staff from weredas and zones at the 14 zones. The training was delivered by staff trained by the DSA Project. Accounts Reform in Tigray Region FY 1997 accounts All reporting units in the region have submitted their FY 1997 accounts to BOFED. The accounts of all 47 weredas have been submitted to BOFED for consolidation, using BDA 3 (B). The FY 1997 accounts should be submitted to MOFED during the next quarter. FY 1998 accounts All region sector bureaus except one have reported up to February Of the 47 weredas required to submit monthly reports for FY 1998: 34 weredas have submitted reports up to February 11 weredas have submitted reports up to January 2 weredas have submitted reports up to December DSA Quarterly Report 36: January to March 13

18 All weredas and 7 region sector bureaus are processing their FY 1998 accounts using BDA 3 (B). Action plan Additional accounts reform training is planned for delivery to 100 wereda accountants and 40 region sector bureau accountants during the next quarter. Accounts Reform in Amhara Region FY 1997accounts All reporting units at the region have submitted their FY 1997 accounts to BOFED. All weredas have submitted their FY 1997 accounts to their respective zones. Currently zones are consolidating accounts using BDA 3 (B). Zonal finance offices are expected to finalize and submit accounts to BOFED during the next quarter. FY 1998 accounts Of the 116 weredas required to submit monthly reports for FY 1998: 24 region sector bureaus have reported up to February. 2 region sector bureaus have reported up to January. 105 weredas have submitted reports up to February. 6 weredas have submitted reports up to January. 2 weredas have submitted reports up to December. 1 wereda has submitted reports up to November. 2 weredas have submitted reports up to September. Post implementation support The accounts reform team from the Amhara BOFED visited the sub agencies of region sector bureaus located at 25 weredas and 10 zones, from February 14 to March 8, to assess the quality of implementation of the accounts reform, improve awareness on the different aspects of the reform and provide on the job training and technical support. Based on these field visits, directives were prepared by BOFED to correct common errors and reinforce concepts to support the reform. DSA Quarterly Report 36: January to March 14

19 In addition, a three day refresher training workshop is planned to be delivered to accounts staff at the region sub agencies to further strengthen understanding of the technical aspects of the reform and discuss reform implementation issues. Wereda support unit Wereda support units were established at 10 zones in the region. Members comprising staff from weredas and zones are to provide on the job training and technical support to weredas and sub agencies of region sector bureaus operating in weredas. Accounts Reform in Benishangul Gumuz Region FY 1997 accounts All reporting units at the region have submitted their FY 1997 accounts to BOFED. The accounts of all 21 weredas have been submitted to BOFED for consolidation using BDA 3 (B). The FY 1997 accounts should be submitted to MOFED during the next quarter. FY 1998 accounts Of the 21 region sector bureaus required to submit monthly reports for FY 1998: 14 region sector bureaus have reported up to February. 6 region sector bureaus have reported up to January. 1 region sector bureau has submitted reports up to December. Of the 20 weredas required to submit monthly reports for FY 1998: 5 weredas have submitted reports up to February. 9 weredas have submitted reports up to January. 6 weredas have submitted reports up to December. Post implementation support The wereda support units established at all zones are providing support to all weredas. BOFED is coordinating the work of the support units. Teams comprising staff from DSA and BOFED visited Kamashi zone and 5 weredas to assess the implementation, improve awareness on different aspects of the reform and provide on the job training and technical support. DSA Quarterly Report 36: January to March 15

20 Based on these field visits, directives were prepared by BOFED to correct common errors and reinforce concepts to support the reform. In addition, a twoday refresher training workshop is planned to be delivered to 183 accounts staff from the weredas and region sector bureaus in the next quarter to further strengthen understanding of the technical aspects of the reform and discuss reform implementation issues. Accounts Reform in the Addis Ababa City Council Meetings and visits to BOFED and sub cities Regular meetings were held with senior BOFED staffs and frequent visits were carried out to each of the 10 sub cities to support and follow up the closure of the FY 1996 and 1997 accounts as well as the processing of the FY 1998 transactions. FY 1996 accounts All region sector bureaus and sub cities have submitted their FY 1996 accounts to BOFED. BOFED is expected to close the FY 1996 accounts using BDA 3 (B) in the next quarter with the assistance of the DSA Project. FY 1997 accounts All region sector bureaus have submitted monthly reports to June. 4 of the 10 sub cities have submitted their FY 1997 accounts to BOFED FY 1998 Accounts Of the 32 region sector bureaus required to submit monthly reports for FY 1998: 9 RSBs have submitted monthly reports up to February. 8 RSBs have submitted monthly reports up to January. 5 RSBs have submitted monthly reports up to December. 1 RSBs have submitted monthly reports up to November. 3 RSBs have submitted monthly reports up to September. 6 RSBs have not submitted any monthly reports so far. All sub cities are using BDA 3(B) to close FY 1997and process FY 1998 accounts. DSA Quarterly Report 36: January to March 16

21 Accounts Reform in Oromia Region FY 1997 accounts All RSBs have submitted monthly reports up to June 2005 and data entry into BDA has commenced. 3 zones have finalized their accounts using BDA 3 (A) and submitted to BOFED. The other 11 zones are expected to submit their FY 1997 accounts to BOFED during the next quarter. Out of 236 weredas, 217 weredas have submitted their FY 1997 accounts through June 2005 to their respective zones. The other 19 weredas are expected to submit their FY 1997 accounts to their respective zones during the next quarter. FY 1998 accounts All RSBs have submitted monthly reports up to February 118 weredas submitted accounts up to February 36 weredas submitted accounts up to January 30 weredas submitted accounts up to December 24 weredas submitted accounts up to November 13 weredas submitted accounts up to October 9 weredas submitted accounts up to September 6 weredas submitted accounts up to August BDA 3 (B) is installed at all zones. Zones are using BDA 3 (B) to process their FY 98 accounts. Wereda support units Wereda support units were established at 14 zones and these support units are functional and providing on the job training and technical support to weredas. Members of these wereda support units are drawn from weredas and zones. Post implementation support Teams comprising DSA and Oromia BOFED staff completed the first round of field visits to all 14 zones and 236 weredas to assess the implementation of the single treasury system, improve awareness on different aspects of the reform and provide on the job training and technical support. DSA Quarterly Report 36: January to March 17

22 The zones and number of weredas visited are detailed below: # Zone # Weredas 1 Arsi 24 2 Bale 22 3 Borena 9 4 East Hararge 20 5 East Shoa 19 6 North Shoa 14 7 West Hararge 13 8 East Wollega 23 9 West Wollega Iluababor Jimma South West Shoa West Shoa Guji 9 Total 236 Based on these field visits, directives were prepared by BOFED to correct common errors and reinforce concepts to support the reform. In addition, a fourday refresher training workshop is planned to be delivered to accounts staff from the weredas and zones during the next quarter to further strengthen understanding of the technical aspects of the reform and discuss reform implementation issues. A second round of visits were conducted by teams comprising staff from DSA and Oromia BOFED to 4 zones and 62 weredas to discuss issues that impact the implementation of the single treasury system and provide technical support to expedite the monthly reporting. The zones and weredas visited are detailed below: # Zone # Weredas 1 Borena 9 2 East Shoa 7 3 East Wollega 23 4 West Wollega 23 Total 62. DSA Quarterly Report 36: January to March 18

23 Accounts Reform in the Dire Dawa Administrative Council FY 1997 accounts BOFED has submitted its FY 1997 accounts to MOFED. FY 1998 accounts Of the 33 region sector bureaus required to submit monthly reports for FY 1998: 13 RSBs have submitted reports up to the end of February 12 RSBs have submitted reports up to the end of January 2 RSBs have submitted reports up to the end of December 2 RSBs have submitted reports up to the end of November 2 RSBs have submitted reports up to the end of October 2 RSBs have submitted reports up to the end of September The region is processing the FY 1998 accounts using BDA 3(B). Post implementation support Support teams from BOFED and sector offices visited public bodies to assess the implementation, improve awareness on different aspects of the reform and provide on the job training and technical support. Based on these visits, directives were issued from BOFED to region sector bureaus and kebeles to correct common errors and support the reform. In addition, a two day refresher training program is planned to be delivered to accounts staff during the next quarter to further strengthen understanding of the technical aspects of the reform and discuss reform implementation issues. Accounts Reform in Harari Region FY 1996 accounts BOFED has submitted its FY 1996 accounts to MOFED. FY 1997 Accounts All public bodies have submitted their FY 1997 accounts to BOFED. The data from these public bodies are being entered into BDA. DSA Quarterly Report 36: January to March 19

24 Post implementation support Support teams from BOFED and sector offices visited public bodies to assess the implementation, improve awareness on different aspects of the reform and provide on the job training and technical support. Based on these visits, directives were issued from BOFED to region sector bureaus to correct common errors and support the reform. In addition, a two day refresher training workshop is planned to be delivered to accounts staff during the next quarter to further strengthen understanding of the technical aspects of the reform and discuss reform implementation issues. FY 1998 All RSBs have submitted reports up to February. The region is using BDA 3(B) to process the FY 1998 accounts. DSA Quarterly Report 36: January to March 20

25 B. Budget Reform Budget Reform at the Federal Government FY 1999 budget preparation MOFED has issued the FY 1999 budget call to federal public bodies. 97 public bodies have submitted their budget requests to MOFED. Currently MOFED is reviewing and analyzing the budget request to conduct budget hearings. Furthermore, budget experts are using the IBEX to process the FY 1999 budget. Budget classification scheme The Budget Departments of MOFED have indicated their plans to create a new budget classification structure for use from FY 2000 planning year onwards and based on GFS To initiate the review of the new budget classification structure, the DSA Project prepared a concept paper on the broad issues that should be considered (B 205). However, the design of a budget classification scheme based on GFS 2001 is outside the scope of the Phase 4 deliverables and can not be undertaken by the end of the contract. Budget Reform in Tigray Region FY 1999 budget preparation BOFED has issued the FY 1999 budget call to 40 region sector bureaus and 46 weredas. 36 out of 40 public bodies submitted their budget request to BOFED. Currently BOFED is reviewing and analyzing the budget request to conduct budget hearings. Staff from BOFED visited weredas to discuss issues, improve awareness on different aspects of the reform and speed up the budget preparation process. Based on these visits a refresher training workshop will be conducted in the next quarter to further strengthen the understanding of the technical aspects of the reform and discuss reform implementation issues. In addition, budget reform training is to be delivered to newly assigned/hired wereda and region sector bureau staff in the next quarter. DSA Quarterly Report 36: January to March 21

26 Budget Reform in SNNP Region FY 1998 budget preparation The region wide budget consolidation for FY 1998 was completed using BIS. BOFED has printed its Budget Books. FY 1999 budget preparation Additional budget reform training is planned for delivery to newly assigned/hired staff at wereda as well as region sector bureaus levels in the next quarter. Budget Reform in Oromia Region FY 1998 budget preparation All 14 zones have completed data entry into BIS and submitted the budgets in soft copy to BOFED. BOFED has finalized the region wide consolidation using BIS and the budget book will be printed in the next quarter. FY 1999 budget preparation 3 new zones and 45 new weredas have been established in Oromia. BOFED is in the process of preparing a subsidy formula for the new jurisdictions after which it plans to issue the FY 1999 budget call to region sector bureaus and weredas. Budget Reform in Benishangul Gumuz Region FY 1998 budget preparation BOFED printed the FY 1998 Budget Books. FY 1999 budget preparation BOFED has issued the FY 1999 budget call to all 40 region sector bureaus and 20 weredas. DSA Quarterly Report 36: January to March 22

27 Action plan A BOFED team visited weredas to assess the implementation, discuss issues, improve awareness on different aspects of the reform, and to speed up the budget preparation so as to adhere to the financial calendar. Based on these field visits, additional budget reform training will be delivered to newly assigned/hired staff from weredas and region sector bureaus in the next quarter. Budget Reform in Amhara Region FY 1999 budget preparation BOFED has issued the FY 1999 budget call to region sector bureaus and weredas. Additional budget reform training will be delivered to newly assigned/hired staff from weredas and region sector bureaus in the next quarter. Budget Reform in the Addis Ababa City Council FY 1998 budget preparation The City Administration Council has approved the FY 1998 budget. BOFED notified the approved budget to region sector bureaus and sub cities. Subsequently, sub city finance offices notified the approved budget to sector offices and kebeles using IBEX. BOFED has finalized city wide consolidation of the budget using IBEX and the FY 1998 budget book is now ready for printing. FY 1999 budget preparation BOFED issued the FY 1999 budget call to all 53 region sector bureaus and 10 subcities. Budget Reform in Harari Region FY 1998 budget preparation The FY 1998 budget book was printed. FY 1999 budget preparation BOFED issued the FY 1999 budget call to all 31 region sector bureaus and 9 kebeles. DSA Quarterly Report 36: January to March 23

28 Action plan Additional budget reform training is to be delivered to newly assigned/hired staff at kebeles and region sector bureaus during the next quarter. Budget Reform in the Dire Dawa Administrative Council FY 1999 budget preparation BOFED issued the FY 1999 budget call to all region sector bureaus and 9 kebeles. Additional budget reform training is planned for delivery to 34 newly assigned/hired staff at kebeles and region sector bureaus during the next quarter. Budget Reform in Gambella Region FY 1998 budget The FY 1998 budget notification forms were submitted by all zones and weredas to BOFED. BOFED is finalizing the region wide budget consolidation using BIS. The FY 1998 budget book will be printed in May. FY 1999 budget preparation BOFED issued the FY 1999 budget call to all region sector bureaus, 3 zones and 12 weredas. Action plan Additional budget reform training is planned for delivery to 500 staff at weredas and region sector bureaus in the next quarter. DSA advisors visited BOFED from February 22 to March 1 and March 21 to March 28, to: o assess the status of the budget execution. o support the consolidation of the FY 1998 budget o follow up the closure of the FY 1997 accounts o prepare a training strategy for budget training o discuss key policy decisions required to implement the accounts reform namely the single pool system and the recruitment of qualified staff at all budget institutions. DSA Quarterly Report 36: January to March 24

29 FY 1996 BOFED has closed its FY 1996 accounts and submitted to MOFED FY 1997 accounts The FY 1997 accounts have been submitted to BOFED by all weredas, zones and region sector bureaus. The region will close the FY 1997 accounts next quarter. FY 1998 accounts All region sector bureaus submitted reports up to February None of the zones and weredas have submitted any reports for FY 1998 Awareness workshop for Senior Officials A one day workshop was conducted in Gambella, on January 21, at the Conference Hall of the Regional Council for more than 200 officials. The purpose of the workshop was to enhance the awareness about the reform for officials from the region, zone and wereda levels for better understanding and support its implementation. The participants included regional council members, regional cabinet members, zone administrators, wereda council members, wereda administrators, zone finance office heads, wereda OFED heads, RSB heads and BOFED staff (M 63). Budget Reform in Afar Region FY 1998 budget preparation The region s FY 1998 Budget Books were printed. FY 1999 budget preparation BOFED issued the FY 1999 budget call to 39 region sector bureaus and 29 weredas. Budget preparation forms required for FY 1999 budget for region sector bureaus and weredas were quantified, printed and distributed with the support of the DSA project. Action plan A BOFED team visited weredas to assess the implementation, discuss issues, and improve awareness on different aspects of the reform and to speed up the budget preparation to adhere to the financial calendar. DSA Quarterly Report 36: January to March 25

30 Budget reform training is planned for delivery to 290 newly assigned/hired staff at weredas and region sector bureaus in the next quarter. In addition, a refresher training program on the budget reform is planned for delivery to 174 wereda budget experts to further strengthen the understanding of the technical aspects of the reform and discuss reform implementation issues. FY 1996 accounts All region sector bureaus and 2 zones have submitted their FY 1996 accounts to BOFED. The other 3 zones are working on the closure of their FY 1996 accounts which they are expected to finalize in May with the support of the DSA project. The region will close the FY 1996 accounts during the next quarter. FY 1997 accounts Of the 39 region sector bureaus required to submit monthly reports for FY 1997: 20 region sector bureaus have submitted accounts up to June 19 region sector bureau have submitted accounts up to May Of the 29 weredas required to submit monthly reports for FY 1997: 24 weredas have submitted accounts up to June 3 weredas have submitted accounts up to May 2 weredas have submitted accounts up to March FY 1998 accounts Of the 40 region sector bureaus required to submit monthly reports for FY 1998: 13 RSBs have submitted reports at least up to the end of September 27 RSBs submitted no monthly reports None of the 29 weredas have submitted a single monthly report for FY BDA 3 (A) was installed. The region has started processing the FY 1998 accounts using BDA 3 (A). DSA Quarterly Report 36: January to March 26

31 Budget Reform in Somali Region FY 1998 budget preparation and execution Out of 52 weredas, 40 have submitted the notified budget to BOFED. The other 12 weredas are expected to finalize their FY 1998 budget during May. Budget execution training was delivered to 20 core trainers for 4 days from February 27 to March 3 at the Regional Management Institute in Jijiga. These 20 core trainers will deliver training to wereda accountants in 7 training sites Jijiga, Gode, Shinile, Kebridahar, Liben, Afder and Degahabur starting April 24,. Meanwhile, budget execution training was delivered to 180 region sector bureaus accountants from March 11 to March 19 at the Regional Management Institute in Jijiga town. The budget execution training is designed to assist in the processing of the FY 1998 accounts using the new budget structure, new chart of accounts and the single entry bookkeeping system. Issues that have negatively impacted the implementation of the FY 1998 budget preparation and budget execution include: o high staff turnover of senior staff at BOFED. o approval of ceilings by Cabinet was delayed up to November 2005 o delayed budget approval and notification at all jurisdictions o non delivery of budget execution training at region wide level o Poor and/or lack of staff capacity at weredas o Poor infrastructure and security concerns in some areas DSA advisors visited the region several times to facilitate the resolution of the issues. Closure of the FY 1997 accounts 40 out of the 44 RSBs have submitted reports up to June out of the 44 RSBs have submitted reports at least up to March out of 52 weredas have submitted reports up to June out of 52 weredas have not submitted any reports for the year DSA Quarterly Report 36: January to March 27

32 The main problems in the closure of the FY 97 accounts are: o The fiscal devolution did not adequately address the issues of staff technical capacity to execute the functions of budget and accounting at weredas. o High levels of staff turnover have proved to be disruptive in the closure of the FY 1997 accounts o Huge amounts of suspense payment vouchers exist due to irregularities in effecting payments. These suspense payments need to be settled by the individuals who have taken cash and converted to formal payment vouchers. Closure of FY 1998 Accounts BDA 3 (A) was installed. The region has started processing the FY 1998 accounts using BDA 3 (A) 28 out of the 43 RSBs have submitted at least one monthly report to BOFED 15 out of the 43 RSBs have not submitted any monthly report to BOFED None of the 52 weredas have submitted any reports for FY The major issues for delays with the FY 1998 accounting and reporting include: o Poor staff capacity at weredas o High staff turnover o Delays by the region in the delivery of the budget execution training o Delayed budget approval and notification at all jurisdictions DSA Quarterly Report 36: January to March 28

33 C. Expenditure Planning Reform Assessment of Planning Needs for the Medium Term in Oromia, Amhara, Tigray and SNNP Regions James Warner, Steve Peterson and Anthony Higgins undertook a general assessment of planning needs for the short and medium term. This included trips to Amhara, Oromia, Tigray and SNNPR BOFEDs. While each region has unique planning challenges, similar themes emerged. These themes include strengthening their respective fiscal transfer allocation equations, wereda performance agreements, MTEF (medium term expenditure framework) and PEP (Public Expenditure Planning) and performance budgeting for public bodies. General agreement was reached that DSA would continue to provide technical support for these planning issues as requested. Introduction of Needs Based Transfer Formula in Tigray Region Steve Peterson and James Warner met with Tigray BOFED staff to discuss the possible implementation of replacing the population based wereda transfer formula with a needs based unit cost allocation equation. Agreement was reached that a draft equation would be developed by mid April. Both the DSA and BOFED officials agreed to contribute appropriate resources to attaining this goal and a planning team was created. Work was begun in early February. Data questionnaires were developed and four members of BOFED went to the weredas to collect the data. This was completed by early March and data compiling and cross checking (using sector bureaus and other sources of information) was undertaken with BOFED and DSA. No significant problems were encountered and a draft of a needs based equation will be prepared by mid April. The newly developed needs based unit cost allocation equation is scheduled to be presented to the Tigray Cabinet on April 14,. Public Expenditure Planning Module Developed After extensive meetings with individual planning experts in the Amhara BOFED, James Warner began to develop a training module that will increase fiscal planning capacity of BOFED staff. Specifically, planners will be trained to cost physical sector plans, place these plans within a broader resource envelope and improve forecasts of expenditure needs over a three year period. The material presented is similar to MTEF (medium term expenditure framework) and training will be given to both BOFED staff as well as relevant regional sector bureau experts. The overall objective of this training based approach is to increase local planning capacity and better institutionalize on going reforms. DSA Quarterly Report 36 January to March 29

34 The training will be given to Amhara officials in the next quarter. The Project has also planned to provide this training to other regions. Discussions Held for Fiscal Allocation Equation in Somali Region James Warner and Somali BOFED staff had discussions concerning the implementation of a population based fiscal transfer equation. Issues concerning general methodology, data requirements, data forecasts and what was needed to move to a unit cost needs based equation were raised. Agreement was reached on the data requirements needed for a population based equation and the region is to collect the data and present a potential allocation equation to the Project. A follow on meeting is scheduled for mid April. DSA Quarterly Report 36 January to March 30

35 D. Information Technology IT Activities in the Federal Government The FY 1999 budget preparation process The project is closely working with MOFED in supporting the FY 1999 Federal budget preparation process. It was mutually agreed that DSA would assume a smaller role in this year s budget preparation process and that MOFED would assume a greater responsibility. DSA is assisting the process in a number of ways including with the provision of refresher training for public body staff using BIS and MOFED staff using the IBEX Budget Module. In addition, an overview presentation was given to the MOFED on how to use the IBEX Budget Module to prepare the FY 1999 budget. DSA also provided startup support for FY 1999 to the 49 PBs where BIS is installed. Accounts closure The Project is supporting the CAD with the closure of the FY 1997 federal accounts. Work on the consolidation of the FY 1995 accounts is also underway. DSA is working towards a mutually agreed (with MOFED) deadline of May 1, for the production of the final nation wide consolidated accounts for FY PIP A new version of the PIP software was released for the preparation of the FY PIP books. This new version was installed and supported in the MOFED and the Ethiopian Roads Authority. Joint action plan with the MOFED IT Department Discussions were held with the MOFED IT department on a joint action plan to be presented to MOFED addressing the issue of how DSA and the MOFED IT department could work more closely together, and how the MOFED IT department could begin to assume more responsibility for the FIS developed and currently supported by DSA. The joint action plan is expected to be finalized in the next quarter. DSA Quarterly Report 36 January to March 31