BUDGETING FOR RESULTS

Transcription

1 A BUDGETING FOR RESULTS Simplify Complex Management Processes

2 2 IDEA-SOLUTIONS SUITE A BUDGETING FOR RESULTS WHAT IS THE IDEA-SOLUTIONS SUITE? A suite of management processes and computer software to facilitate the implementation of Results-Based management (RBM) in the public sector. WHAT IS B4R? A process and a software that helps implement step-by-step budgeting for results and conduct budget scenarios analysis. B4R ENABLES TO: - Elaborate a consistent program architecture and formulate a clear Performance Measurement Framework (PMF) - Build unit costs matrices and individual program budgets - Articulate the results targets of strategic plan and the budget allocations for programs and projects - Elaborate and analyze various budget scenarios in terms of development results - Generate a set of reports, including the multiannual fiscal framework, sectoral medium-term expenditure frameworks, and yearly budget estimates WHO ARE THE USERS OF B4R? For high-level officials in the public sector who need up-to-date and accurate information for decision making and accountability. For managers and professionals to better plan, budget, and monitor the implementation of programs and projects. IDEA-Solutions and B4R are registered trademarks of IDEA International, Canada.

3 3 POSITION OF B4R IN THE RESULTS-BASED MANAGEMENT CYCLE The Results-Based Management (RBM) cycle includes several phases: (i) planning, (ii) programming and budgeting, (iii) implementation, and (iv) monitoring & evaluation with a feedback loop to the next cycle. One needs also to take into account that the RBM cycle is implemented at several levels: strategic, programmatic and operational. The figure below presents this cycle with phases in columns and levels in rows. Planning Programming and Budgeting Monitoring, Evaluation, and Reporting Strategic level Programmatic level Operational level Strategic Planning Program Architecture Program and Project Planning Fiscal Framework Multi-year Programming and Budgeting Elaboration of nnual Work Plan and Budget (AWPB) Budget ceilings Output unit costing Results targets costing Program budgets Medium Term Expenditure Framework (MTEF) Articulation MTEF Yearly Budget Performance Measuring Framework (PMF) AWPB Implementation High Level Key Performance Indicators Monitoring Programs and Projects Monitoring AWPB Monitoring The B4R process focuses on the programming and budgeting phase of the RBM; and enables to concretely implement the Planning, Programming and Budgeting System (PPBS). It starts with a definition of budget ceilings on the basis of public revenue projections. Then program budgets are elaborated over the next three years with a clear connection between budget allocations and results targets, and the use of a unit cost matrix. The Medium-Term Expenditure Framework is then articulated with the yearly budget. The aggregation of program budgets enables to produce a Medium-Term Expenditure Framework which is articulated with the yearly budget. Finally, the user can simulate a number of budget scenarios.

4 4 B4R GENERIC PROCESS PHASES ACTIVITIES INDICATIVE DURATION 1. Diagnostic and preparatory work - Analysis of the budget preparation process and budget information systems - Revision of program architecture and formulation of the Performance Measurement Framework (PMF) - Elaboration of unit cost matrices 1-2 months B4R PROCESS IN THE CASE OF THE STATES OF MICHOACÁN AND TABASCO (MEXICO) 1) Short training in RBM and B4R 2) Diagnostic of the existing budgeting system with the A4R application 2. Software design - Improvement of relevant existing information systems - Incorporation of B4R modules to respond to the client s needs - Preparation of user s guide and administrator s guide 2 months 3. Software Implementation - Setting-up B4R modules on the desired server - Testing of B4R - User training 1 month 3) Preparatory work to revise the PMF and collect the necessary data for B4R 4) Adjustment of the B4R application to the institutional context of the two States 5) Use of the adjusted B4R application to elaborate an expenditure framework for 2 pilot sectors

5 5 PROGRAM ARCHITECTURE B4R facilitates the definition of a detailed program architecture. This architecture enables a vertical articulation from strategic level objectives to operational sub-programs and projects. It also helps articulate horizontally public service delivery sub-programs, investment projects, and development projects. PERFORMANCE MEASUREMENT FRAMEWORK B4R facilitates the elaboration of a Performance Measurement Framework. This framework operationalizes a Theory of Change through the articulation of results chain indicators and targets.

6 6 FISCAL FRAMEWORK B4R helps clarify the medium term fiscal framework and the yearly budget ceilings per sector/institution. It can either use the results of an existing macro financial model or help elaborate simple projections of fiscal and non-fiscal revenues, future expenditures, surplus/deficit, and budget ceilings. UNIT COST MATRIX B4R helps elaborate a unit cost matrix for each output considered in the Performance Measurement Framework. A variety of methods to calculate unit costs are offered to the user based on the output category, data availability, time and budget constraints. PROGRAM BUDGETS B4R presents in a clear and structured way program budgets, showing the articulation between budget allocations and outputs/immediate outcomes target levels for every year of the medium-term planning and budgeting period. It also facilitates setting consistent levels of capital and operating expenditures.

7 7 PROGRAM FUNDING B4R presents in a clear and user-friendly way the budget needs per program, the available funding from various sources, and the financing gaps for each year over the planning and budgeting period.

8 8 MEDIUM-TERM EXPENDITURE FRAMEWORK AND ANNUAL BUDGET B4R aggregates program budgets to obtain a Medium Term Expenditure Framework presenting budget allocations per sector/institution and per year of the planning and budgeting period. It also presents the detailed annual budget according to various budget classifications. BUDGET SCENARIOS B4R enables to simulate various budget scenarios to facilitate budget hearings between the Ministry of Finance and line ministries. On the one hand, the software can calculate the implications of a given set of budget allocations on achievable results targets. On the other hand, it can calculate the financial needs to achieve a desired level of results. GENERATION OF STANDARD REPORTS B4R generates in a click a series of reports defined with the client, including for example the multiannual fiscal framework, sectoral medium-term expenditure frameworks, and yearly budget estimates. These reports can be saved as Word files and modified as desired. Data can also be exported as Excel files for further analysis.

9 9 MAIN TECHNICAL CHARACTERISTICS OF B4R SOFTWARE CORE MODULES: - Program architecture - Performance Measurement Framework - Medium Term Fiscal Framework - Unit cost matrix - Program Budgets - Program funding - Medium Term Expenditure Frameworks - Yearly budget - Budget scenarios - Standard reports generation The B4R generic software runs on a Microsoft.NET platform and follows a 3-tier architecture: ASP.NET for the web interface, C# for the business layer and SQL for the database layer. It requires a Microsoft Server and MS SQL Server version 2014 or newer. B4R can also be implemented on Oracle or Open source platforms. Typically, B4R is hosted on the client s server. B4R modules are interfaced with existing relevant information systems. Access rights and security standards can be adjusted and are defined by default according to the good practices in this field and adopted as standards by the Federal Government of Canada. After installation, a Software Assurance Plan is available for technical support and access to software upgrades and documentation.

10 10 TESTIMONIES The IDEA team introduced us to the B4R process and software to consolidate budgeting for results at the global level of the Secretariat of Planning and Finance, as well as at sector level with 4 pilot institutions. It was an applied experience, which demystified a reform with complex institutional and technical dimensions. All the actors who participated now have practical criteria for linking sector budget allocations with their result targets. AN APPLIED EXPERIENCE, WHICH DEMYSTIFIED A REFORM WITH COMPLEX INSTITUTIONAL AND TECHNICAL DIMENSIONS Socorro Centeno Director of International Cooperation, CGDRPE State of Tabasco Mexico We are applying the B4R process to move forward with budgeting for results in the public sector. We appreciate its structured, yet simple approach which guides us in the concrete implementation of budgeting reforms and the production of concrete reports such as program budgets and the preparation of a medium term expenditure framework in line with the fiscal framework. WE APPRECIATE ITS STRUCTURED, YET SIMPLE APPROACH Oscar Lovera, Economist Director General of Finance Ministry of Finance Paraguay

11 SOME PEOPLE TALK ABOUT RBM WE IMPLEMENT IT

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