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budget traditions

budget structure

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PERFORMANCE-INFORMED BUDGETING

For FY 2014 Adoption

OUTLINEo What is a Performance-Informed Budgeting?

o Why shift to Performance-Informed Budgeting? current Org’l. Performance Indicator Framework

(OPIF)

major features of the new budget template

o IMF Template

o DBM Template

o Considerations of the DBM Template

New Budget

Directions

New Budget

Traditions

DBM as a Driver of Reforms

• Re-introduction of the Zero Based Budgeting (ZBB)

• Mandatory Fiscal Transparency

• Faster and Efficient Budget Execution• Early Procurement• Account Management Teams (AMTs)• DPWH as principal infra agency

• Tighter Performance Management• OPIF• Results-based Performance Mgt. System• Performance-based Incentives

• Leveraging Technology thru GIFMIS and PhilGEPS

OLD

•Re-enactment of the previous year’s GAA

•Preponderance of lump-sum funds in the budget

•2 years validity of appropriations

•Several release documents

NEW

•Early enactment of the GAA by Congress

•Disaggregation of lump-sum funds in the budget

•1 year validity of appropriations (2013)

•GAA as release document (2014)

•New Face of the Budget or Performance-Informed Budget

What is a Performance-Informed

Budgeting?

IMF TECHNICAL ASSISTANCEON

“STRENGTHENING PERFORMANCE BUDGETING”

February 7 – 20, 2013

to advise DBM on developing a performance oriented and improved budget structure to make it more comprehensible and reader friendly.

Performance-Informed Budgeting

“ A set of integrated processes that aims to improve the efficiency and effectiveness of public expenditure by linking the funding to the results, making systematic use of performance information, although not solely, in resource allocation and management”

(IMF, TA. 2013)

Why Shift to Performance-

Informed Budgeting ?

General Appropriations

Act (GAA)

OPIF Major Final

Outputs/ Indicators

Present Scenario

OPIF Strength and Weakness

•OPIF is a building block to performance budgeting, but has limits.

•The strength of OPIF over the past budgeting system is also its weakness:

its performance information is solely output focused, lacks outcome information thus preventing analysis on the effectiveness of the programs.

•Output focus provides ease in establishing accountability but might displace goals of departments and their intended impact on the wider society

(IMF, TA, 2013)

OPIF Strength and Weakness (cont.)

•It could only focus on easy measurable outputs, but cross-cutting issues could be ignored

•Or worse, output-alone focus may lead to perverse incentives to program managers

•Lacks clarity between concepts of MFO, program and activity

(IMF, TA, 2013)

2014

2014

Features Performance-Informed Budget

•It should integrate both strategic planning and performance information:

•Program allocations linked to outputs and outcomes measures

•Department/agency mandates, vision, mission, objectives and sector outcomes (MTPDP/KRAs) are presented

(IMF, TA, 2013)

•Simpler presentation: •appropriations are at the program level•Allows agency greater flexibility in budget utilization, realignment

•Improves budget predictability: •two out years FEs will be shown

Features Performance-Informed Budget

(IMF, TA, 2013)

IMF TEMPLATE

IMF Proposed Budget Structure

Sec 1 - STRATEGIC OBJECTIVES

VISION:

MISSION:

KRA:

PDP SECTOR OUTCOME:

IMF Proposed Budget Structure

Sec. 2 - Program Expenditure

No. Program(MFO)

2012 Actual

Exp

2013 Approved

Budget

2013 Revised Estimate

2014 Budget

Estimates

2015 Forward

Estimates

2016 Forward

Estimates

001 Strategic Management Administration

01 • PS

02 • MOOE

03 • Capital-Domestic

04 • Foreign Assisted Projects

002 Program A etc.

01 • PS

02 • MOOE

03 • Capital-Domestic

04 • Foreign Assisted Projects

TOTAL BUDGET ALLOCATION /CEILING

• COE

• Capital - Domestic

• Capital - Donor

Sec. 3 - STAFFING RESOURCES (Funded Positions)

TOTAL AGENCY STAFF

Sec. 4 - PROGRAM PERFORMANCE INFORMATION

KEY TASKS FOR 2014:

KEY PERFORMANCE INDICATORS

2012 Actual

2013 Estimate

2014 Planned

2015Target

2016Target

OUTPUT INDICATORS

Program A

Indicator 1

Indicator n

Program B etc.

Indicator 1

Indicator n

KEY PERFORMANCE INDICATORS

2012 Actual

2013 Estimate

2014 Planned

2015Target

2016Target

OUTCOME INDICATORS

Agency Outcomes

• Indicator 1

• Indicator n

Program Outcomes

Program A

• Indicator 1

• Indicator n

Program B etc.

• Indicator 1

• Indicator n

National Budget Memorandum 117 dated March 1, 2013

Adoption of the Performance-Informed

Budget Structure for the NEP/GAA

Modifications: Limit disruptions, without sacrificing information

IMF Template

• Translation of ‘Programs’ as defined by the IMF to MFOs

– MFO transitioning into program statements

• Treatment of GASS/STO and Projects (locally funded/FAPs)

– Strategic Management Admin.

(SMA instead of GASS & STO)

– Projects were allocated across Programs (not shown)

• By Allotment Class

DBM Template

•Use MFOs instead of ‘Programs’

- GASS ) - STO ) maintain the present

•Specific Projects are presented in the template

•By Allotment Class / Object

•Add Financial Expenses as 4th expenditure classification (if applicable)

Cont.. DBM ModificationsIMF Template

•Presentation in the budget docs:

– PAPs under the MFOs

– Details by Object of Expenditure

– Details of Staffing Resources

•Presentation of a 5-year Expenditure Program (2012-2016) in the NEP

DBM Template

- Projects and Activites to be presented in separate Volume

- Details by Object of Expenditure to be reflected in the BESF- Staffing Summary maintained as a separate document

•Presentation of a 3-year Expenditure Program (2012-2014) in the NEP, excluding the following:

– CY 2013 Revised Estimate– 2 out years for FEs (2015 & 2016)

•Expenditure Program (2014 only)

DBM TEMPLATE

DBM- Modified Budget Structure Template(NAME OF DEPARTMENT)

(NAME OF AGENCY)

STRATEGIC OBJECTIVES

MANDATE(source document – Agency Charter)

VISION: (source document – Citizen’s Charter)

MISSION: (source document – Agency Charter)

KEY RESULTS AREAS (source document – EO 43)

SECTOR OUTCOME:

(Updated PDP statement, if available or updated OPIF Logframe)

ORGANIZATIONALOUTCOME:

DBM- Modified Budget Structure TemplateSECTION 1: EXPENDITURE PROGRAM

(in pesos)

No. / Code

GASS / STO/ OPERATIONS /PROJECTS

2012 Actual

2013 Current

2014Proposed

General Administration and Support

PS MOOE COSupport to Operations PS MOOE COOperations /1 PS MOOE COProjects /2 PS MOOE CO

TOTAL AGENCY BUDGET PS MOOE CO

DBM- Modified Budget Structure Template

STAFFING SUMMARY

TOTAL STAFFING 2012 2013 2014

Total Number of Authorized Positions

Total Number of Filled Positions

DBM- Modified Budget Structure TemplateSECTION 1: EXPENDITURE PROGRAM

OPERATIONS BY MFO (please specify) /1

PROPOSED 2014

PS MOOE CO TOTAL

MFO 1

MFO 2

MFO 3

MFO 4

PROJECTS(specify the name of

projects) /2

PROPOSED 2014

PS MOOE CO TOTAL

Locally-Funded Foreign-Assisted

SECTION 2: EXPENDITURE PROGRAM BY CENTRAL/REGIONAL ALLOCATION(in pesos)

DBM- Modified Budget Structure Template

REGION PS MOOE CO TOTALCentral Office

Regional Allocation (net of CO):

NCR

Region I

Region II

Cordillera Administrative Region

Region III

Region IV-A

Region IV-B

Region V

Region VI

Region VII

Region VIII

Region IX

Region X

Region XI

Region XII

Region XIII

ARMM

TOTAL AGENCY BUDGET

DBM – Modified Budget Structure Template

SP No. 1

SP No. 2

SP No. 3

(other SPs)

SECTION 3: SPECIAL PROVISIONS

DBM-Modified Budget Structure Template

KEY STRATEGIES FOR 2014

MFO / PIs 2014 TargetsMFO 1: Performance Indicator No. 1 Performance Indicator No. 2 Performance Indicator No. 3

MFO 2 Performance Indicator No. 1 Performance Indicator No. 2 Performance Indicator No. 3

MFO 3 Performance Indicator No. 1 Performance Indicator No. 2 Performance Indicator No. 3

SECTION 4: PERFORMANCE INFORMATION

Considerations on the New Budget Structure

Considerations on the New Budget Structure (cont.)

Dir. Cita P. MahinayBTS, DBM

PAGBA - April 5, 2013