The budget Principles, Structure and Statutes by icecube

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									   MINISTRY OF FINANCE
   FINLAND

      The budget:
Principles, Structure and
        Statutes

       by Dr. Tuomas Pöysti
        Ministerial Adviser




                              10.2.2009/1
       MINISTRY OF FINANCE
       FINLAND

      Governance tools of
   performance management
• Acts and Decrees
    – Quality targets
    – Structure of the management system
• Budget
• Planning documents
   – Government’s programme statement
      (Constitutional)
   – (Government’s strategic portfolio)
   – Budget guidelines
   – Operational and economic plans
        • Performance or target contracts
   – Administrative decisions
• Follow-up and measurement documents
    – Accounts
    – Annual reports



                                            10.2.2009/2
      MINISTRY OF FINANCE
      FINLAND

   Performance objectives
       defined by law

• Decree on State Budget; structure of
  the performance planning, budgeting
  and accounting
• Sectoral target principles expressed
  in legislation
   – Planning legislation, legislation setting
     up administrative agencies, other
     legislation
   – General quality objectives
   – Main rule: no numeric targets/indicators
     in the Acts of Parliament
   – Numeric monetary commitments
     appear in delegated legislation
                                          10.2.2009/3
        MINISTRY OF FINANCE
        FINLAND



  Purpose of the operational
     and economic plans
• Section 8 of the Decree on State Budget
• to link operational policy of each Ministry / agency
  to the general strategic policies of the Government
• to link economic policy-making to the guidance of
  administrative branches & agencies
• to produce information to the Government for
  economic and fiscal policy-making and guidance of
  state administration




                                                  10.2.2009/4
       MINISTRY OF FINANCE
       FINLAND




Operational and economic plans

• Agency-level plans established by each agency
• Plans for administrative branches of each Ministry
  established by respective Ministries
   – Ministry of Finance is empowered to give
      instructions on the structure of plans
• Legal base: Act on state budget, section 12 &
  Decree on state budget, section 8
• Performance indicators, appropriations
• Foundation for decision on budget framework and
  budget preparation
   – summary of the plan of each administrative
      branch to be forwarded to the Ministry of
      Finance




                                                 10.2.2009/5
        MINISTRY OF FINANCE
        FINLAND



Budget and the performance
  oriented management


• Flexibility - reduction of the amount of budget lines
• Targeted results in budget decisions and
  explanatory notes clarifying the appropriations
   – use of performance indicators
   – each budget division defines the main
      qualitative and quantitative goals of each
      branch and agency




                                                   10.2.2009/6
      MINISTRY OF FINANCE
      FINLAND

 The role of different actors
  in performance oriented
         budgeting
• Budget decided by the Parliament
• Bill decided by the Government (Conseil
  des Ministres) on the proposal of the
  Ministry of Finance
• Proposal prepared on the bases of the draft
  budgets for each administrative branch by
  the Ministry of Finance
• Each Ministry drafts a proposal for the
  Ministry of Finance for their respective
  administrative branches
• Ministry of Finance is empowered to give
  instructions on the form and substance of
  the budget proposals

                                          10.2.2009/7
      MINISTRY OF FINANCE
      FINLAND

 Implementation of the budget
• Autonomy of each ministry in their
  respective administrative branches
• Decision on the budgetary accounts and on
  the performance targets of each
  administrative branches
   – performance contracts
• Decision is made by each ministry
   – to be forwarded for information to the
      Ministry of Finance
   – the Government (Conseil des Ministres)
      can give instructions on the
      performance targets
• Decision by each ministry concerning the
  performance targets of each agency
   – availability of financial resources
• Legal bases: chapter 3 of the Decree on
  state budget
                                        10.2.2009/8
      MINISTRY OF FINANCE
      FINLAND

       Towards increased
    accountability / efficiency
• Performance-oriented management is a
  continuous process towards improved
  efficiency and better services
• Actual topics
   – Improved accounting
   – Introduction of formal decision-making
      at the level of Ministry / government on
      the bases of the accounts and reports of
      each administrative agency /
      administrative branch
   – Increased use of performance and
      efficiency indicators and evaluation
   – Horizontal evaluation of efficiency and
      horizontal priority transfers
   – Real performance-based budgeting
                                           10.2.2009/9

								
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