ADB Grant 0133-CAM Public Financial Management in Rural by dffhrtcv3

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									ADB Grant 0133-CAM: Public Financial
 Management in Rural Development
     Ministries (Component 1)

  Linking Strategic Plans with Budgets
            January 28, 2010
               Session 4: Day 4
           Contents of Presentation
                     EXERCISE 1

• Question 1: What is the meaning of NSDP and
  SDP? Define the relationship between NSDP and
  SDP, then highlight the main elements of SDP for
  your department/entity (under
  MAFF/MRD/MOWRAM)
• Answer 1a: NSDP is the National Strategic
  Development Plan (Ministry of Planning) SDP is
  Sector Development Plan MAFF/MOWRAM/MRD
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                Session 4: Day 4
            Contents of Presentation
                              EXERCISES

• Question 1: What is the meaning of NSDP and SDP? Define
  the relationship between NSDP and SDP, then highlight the
  main elements of SDP for your department/entity (under
  MAFF/MRD/MOWRAM)
• Answer 1b: The NSDP is the foundation for the SDPs and it
  is referred to in the MAFF SDP. However, in MRD and
  MOWRAM their mandates are quite specific and therefore
  they refer to mandates and sector policies – while MAFF
  plays a larger role is fulfilling the goals and objectives of the
  NSDP through it own Sector Development Plan (SDP).


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           Strategic Development Plans
       MINISTRY OF AGRICULTURE, FORESTRY & FISHERIES
                        2006-2010
• Answer 1c:
• Elements:
      – Review of the 2001-2005
      – Sub-sector analysis
            •   Rice & crop production
            •   Animal health & production
            •   Rubber production
            •   Fisheries activities
            •   Forestry activities
      –    Vision, Mission, Goals & Objectives for sector and sub-sector
      –    Strategy
      –    Action Plan
      –    MAFF Budgeting plan & Strategy

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           Strategic Development Plans

  MINISTRY OF WATER RESOURCES & METEOROLOGY
                   2009-2013
• Answer 1c
• Activities
      –    Irrigation – Construction & Rehabilitation
      –    Irrigation – Maintenance
      –    Dams – Maintenance
      –    Canals - Construction & Rehabilitation
      –    Drought Intervention, flood mitigation & Management
      –    Hydrology & Meteorology
      –    Human Resource Development

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           Strategic Development Plans

      MINISTRY OF RURAL DEVELOPMENT
• Answer 1c
• Vision and aims:
      – Rural poverty reduction
      – Capacity Building & Human resource development
      – Integrated local planning
      – Rural water supply
      – Primary health care & rural sanitation
      – Rural economic & rural community development

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Question 2: What is the meaning of Logical
              Framework?

• The log frame is a conceptual and analytical
  tool for undertaking sector analysis, project
  planning and project management.
• The log frame matrix layout is shown ….
              Meaning of terms
• Goal: the higher order objective to which a
  development intervention is intended to contribute
• Outcome (or Purpose): the likely or achieved
  short-term and medium-term effects of an
  intervention’s output
• Outputs: the products, capital goods, and services
  which result from a development intervention; may
  also include changes resulting from the intervention
  which are relevant to the achievement of outcomes.
• Inputs: the financial, human and material resources
  used for the development intervention
    Output       Priority     Key activities         Indicators         Source of Assumptions
                 ranking                                               verification and risks

1.4                 2       1.4.1               4000 FOs are        FO registration    Assumptions
Self-                       Facilitate the      registered by year 4records.           Registration
management                  transformation of                       Attendance         of FOs
and                         self-help groups to                     records from       becomes
empowerment                 farmer/villager                         self-              decentralized
in farmers                  organizations                           management         to the district
groups and                  (FOs)                                   capacity and       level.
village common                                                      skills training.
works is                    1.4.2              Participatory        Attendance         Risks
achieved                    Conduct            planning training    records from       FOs do not
                            participatory      conducted by year 3. participatory      collect
                            planning training Community projects planning              enough
                            for the            are implemented      training.          revenue to
                            implementation of using participatory Community            become self-
                            community          planning techniques project             supporting.
                            projects including by year 3.           planning
                            safety net                              document-
                            activities                              ation.
Original table
               Session 4: Day 4
           Contents of Presentation
                    EXERCISE 3
• Question 3: What is the meaning of budget?
  Explain its rationale?




6/8/2013         ADB Grant 0133-CAM: Component 1   12
Budget Structure of the Royal Government
              of Cambodia
      Answer 3: MEANING OF BUDGET & ITS
                     RATIONALE
 • Definition: A budget is a financial document
   used to project future income and expenses.
   The budgeting process is carried out by the
   government to estimate whether it can
   continue to operate service delivery and
   investment with its projected income and
   expenses.

 6/8/2013         ADB Grant 0133-CAM: Component 1   13
Budget Structure of the Royal Government
              of Cambodia
     Answer 3: MEANING OF BUDGET & ITS
                  RATIONALE
 • Rationale:
       – balanced budget a government’s use of resources
         for operating purposes does not exceed available
         resources over a defined budget period.
       – structural balance maintaining a balance between
         operating expenditures and operating revenues
         over the long term, not just during the current
         operating period.

 6/8/2013              ADB Grant 0133-CAM: Component 1   14
Budget Structure of the Royal Government
              of Cambodia
 Answer 3: MEANING OF BUDGET & ITS RATIONALE
 • Principles:
       – Comprehensiveness: the budget cover all government
         entities and institutions
       – Unity: captures all revenues and expenditures
       – Universality: No offset – no net positions
       – Specificity: Information must be in the format
         required
       – Balance: Proposals for expenditure must be countered
         with proposals for savings

 6/8/2013               ADB Grant 0133-CAM: Component 1    15
Budget Structure of the Royal Government
              of Cambodia
   Answer 4: STRUCTURE OF THE GOVERNMENT
                    BUDGET
 • Administrative Classification: The budget signifies
   this classification by ministry but not lower. For
   example MAFF is code 17, MRD is 20, MOWRAM is
   29
 • Economic Classification: Expenses, allowances for
   staff, staff salaries
 • Period: One year

 6/8/2013            ADB Grant 0133-CAM: Component 1     16
Budget Structure of the Royal Government
              of Cambodia
                   Answer 4: Main elements of budget
            {Article 13 of the Law on Public Finance System}
 • Current Revenue
       – Group 1: Real Revenue
              • Category 1: Tax Revenue
              • Category 2: Non-tax revenue
       – Group 2: Revenue by Order
              • Category 3: Revenue by order
 • Capital Revenue
       – Group 1: Real Revenue
              • Category 1: Revenue from own sources
              • Category 2: Revenue from external sources
       – Group 2: Revenue by order
              • Category 3: Revenue by order


 6/8/2013                          ADB Grant 0133-CAM: Component 1   17
Budget Structure of the Royal Government
              of Cambodia
                Answer 4: Main elements of budget
                   BUDGET EXPENDITURE 2007
 • Current Expenditure
       – Group 1: Real Expenditure
            •   Category 1: Operations & Maintenance
            •   Category 2: Financial expenses
            •   Category 3: Public intervention
            •   Category 4: Miscellaneous expenditure
       – Group 2: Expenditure for order and unforeseen expenditure
            • Category 5: Expenditure by order
            • Category 6: Unforeseen Expenditure

 6/8/2013                       ADB Grant 0133-CAM: Component 1      18
Budget Structure of the Royal Government
              of Cambodia
      Answer 4: Main elements of budget
           BUDGET EXPENDITURE 2007
 • Capital Expenditure
       – Group 1: Real Expenditure
            • Category 1: Repayment of borrowings
            • Category 2: Fixed assets
       – Group 2: Expenditure by order
            • Category 3: Expenditure by order




 6/8/2013                     ADB Grant 0133-CAM: Component 1   19
 Q5: Main points of correlation between
 Strategic Budget Plan and Annual Budget
1. SBP and Budget should be prepared using the
   same budget classification
   –   Preferably this should have dimensions for economic
       items, administration structure, programme
       structure, function and funding
2. Annual budget must link directly to the first year
   of the SBP
3. SBP should be a rolling three year plan..
   –   Work each year should focus on forecasts for year 3
       and minor changes for years 1 and 2, NOT a
       complete rewrite of the plan
 Q5: Main points of correlation between
 Strategic Budget Plan and Annual Budget

4. SBP should be a ‘living plan’, not just something
   that is prepared in April-May
   –   Agreed annual budget should be immediately
       reflected in the SBP
5. SBP must show future changes in recurrent
   costs that result from capital investment now
6. Estimates in the SBP should be backed up by
   good costing records.
7. SBP should distinguish ongoing committed
   plans, existing plans not yet started, and new
   plans.
      Q5: Advantages of effective linkage
  between program plans, SBP and annual budget
1. Making three-year SBP estimates reduces the
   need to set over-optimistic annual budgets.
2. Annual budgets are easier to set, because
   planning has already taken place for the
   program and SBP.
3. The annual budget is linked to strategic plans,
   not made on an ‘incremental basis’.
4. Hence sectors and ministries can plan to
   progressively improve their operations and
   achieve longer term objectives.
5. MEF can plan to allocate resources to sectors
   targeted in national strategic plans.
           Q5: Difficulties of linking
      program plans, SBP and annual budget

1. The master copies of three-year plans are
   often held at ministries, and are often
   significantly rewritten from year to year,
   which should be unnecessary.
2. Finance Ministry should hold master copy of
   agreed three-year plans. Submissions from
   ministries should focus on changes to this
   plan
3. Ongoing plans can be ignored if arbitrary
   budget cuts are made.

								
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