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Copy of Understanding Programme-Based Budgeting: Toward Improved Bud

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Delaine McCullough

on 23 April 2014

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Transcript of Copy of Understanding Programme-Based Budgeting: Toward Improved Bud

Understanding Program-Based Budgeting:
Toward Improved Budget Transparency in Kenya

The budget will be tabled on 30 April
Question: What kind of information do these actors need about the budget to engage?

shift from executive-led to parliament-led process
public input possible in May and June
From inputs to outputs…
line item budgeting
no narrative
inputs-based
no link between allocations and outputs
Program
Based Budgeting
Program Based Budgeting
=
international best practice
Step forward but…

PBB in 2013/14 suffered from a number of weaknesses:
- Figures presented were too highly aggregated
- Indicators without targets; not clearly linked to programs


- Coherence of the narrative needs considerable improvement

= decline in transparency
What We Did...
compared 2012/13 line item budget to 2013/14 PBB
compared 2013/14 PBB in Kenya for health to 2013/14 PBB in South Africa for health
made recommendations for better PBB in Kenya for 2014/15
PBB: Concepts and Practices
focus on inputs, not outputs
Did you deliver the services effectively?
Narrative information clearly linked to tables
Organization around set of programs/subprograms with clear policy objectives (e.g.  "Reduced crime and greater security of persons and property" (Crime Prevention Program)
Indicators, targets with clear baselines and timeframes
Economic classification that identifies different categories of expenditure:
e.g. personnel, goods and services, or infrastructure with sufficient detail
Comparing Kenya and South Africa’s PBB for Health in FY 2013/14
Kenya
South Africa
limited in scope, limited in information
Weak narrative
Programs are not clearly distinct
e.g. targets suggest HIV intervention programs in all three health programs
More coherent and extensive narrative detail
Narrative Information
Targets and Indicators
Kenya
South Africa
No timeframes for achieving targets
not all indicators have targets
no clear logic linking objectives to indicators
lists goals
has indicators to measure w/ clear baseline
has targets and timeframe for goals
provides info on selected performance indicators
Identify major spending priorities
Kenya
South Africa
no link between priorities and allocations/indicators
e.g. "reverse the downward trend in health related outcomes."
links priority areas directly to financial data
e.g. info on areas that receive bulk of spending, which areas MoH will focus on.
Indicators/Targets in the Kenyan PBB
Indicators/Targets in South Africa’s budget
detailed info on focus of capital expenditure
type of project, names, current stage, and initial cost
Example: South Africa
Kenya
South Africa
Info on Key Personnel and Costs
only has "Compensation to employees" at program level - no breakdown
2013/14 not as detailed as line item budgeting in 2012/13
info on staff salary levels and number of added posts
info on costs for current year and medium term plus average growth rate
Programs, Subprograms, and Further Disaggregations
Kenya
South Africa
no subprograms or breakdown beyond program level
objectives not as clear as the South Africa budget
subprograms are linked to specific allocations
a) Economic Classifications
Kenya
South Africa
uses standard classification of compensations, good and services, transfers and acquisitions of non-financial assets
lack of clarity
e.g. meaning of "other recurrent" and "other development"
five classifications - in addition, payments for financial assets
detailed breakdown under each classification (NOT available in Kenyan budget)
b) Appropriations in Aid
Kenya
South Africa
current year and medium term projections, but no details on funding sources
info on appropriations in aid included in transfers and subsidies
separate table for donor funds
info on type of donor, name of project, and departmental program
Other Details Included in South African Budget but Missing from Kenyan Budget
info on expenditure on training expenses
conditional grants to provinces and municipalities
public private partnerships in various departments
info on donor funds with details on type of donor/project and department responsible
information on infrastructure expenditure
Recommendations
Major programs broken down into subprograms
Improved narrative details: ensure clear alignment between narrative, programs, spending, indicators, and targets
Indicators should be clearly linked to a specific program and to specific program objectives
Every indicator should have a clear target, including a baseline and a time period for meeting the target
Recommendations (cont'd)
Info on distribution of compensation to employees should be RESTORED; including overall spending on wages and allowances

Economic classifications could be further broken down for all categories; with attention to target of transfers and replacing vague categories
Restore info on revenues, greater detail on Appropriations in Aid and donor funding for specific programs
Data on past years' spending down to subprogram level, including audited and provisional figures
Summing Up
Changes will enhance the ability of the public and the Parliament to:
- debate the budget estimates
- provide oversight to budget implementation
these issues affect most sectors, not just health budget
We applaud the Kenyan government's ambitious and timely reform of budget presentation
We encourage the Ministry of Finance to consider our recommendations as it seeks to improve the transparency and clarity of the budget
Thank you
Example: Kenya
Programmes in Kenya 2013/14 Health Budget
Full transcript