Budget Alignment
IATI Tag Meeting
Session 4
4 October 2010
Introduction & Session Agenda Key issue is integration of aid in and
reflection on budget Session Agenda
Introductions Agreement on meeting outcome Presentation
• Identify key discussion questions Discussion Conclusion
• Decisions• Action points
Partner country needs Timely, up-to-date and reliable information on current
and future aid flows. Detailed (where, when, by whom, how, on what and in
which sectors) Results Better coverage Conditions and terms With relevant documentation
Necessary for allocative and operational efficiency, mutual accountability, local accountability
Need to match information produced in the aid management cycle to the information requirements of the budget cycle and vice versa
High cost of manipulating information manually between formats: can IATI streamline reporting both ways?
Different information needs within government
Key differences between aid flows Different delivery channels
Delivery channel 1: treasury, in cash Delivery channel 2: recipient partner country
agency, in cash Delivery channel 3: through third party or
managed by donor itself, in kind Different channels have different
information needs for budget integration throughout the budget cycle
4 prioritisation assumptions
First ‘must have’ information to prepare and manage budgets at the centre
Accounting for financial flows necessary to account for results
Budget preparation information more important than budget execution
Functional classification critical because it can map to administrative / functional and programmatic (if in use) classifications at country level Economic classification also important,
particularly at spending agency level and for macro planning
Information needs
GENERAL INFORMATION REQUIRED FOR ALL AID FLOWS
+Critical - Critical
All information is required by PC financial year
All information needs to be accurate and timely
Information is critical for country programmable aid
The finance type of each flow
Currency and value in local currency
Degree of earmarking (BS, SBS, other)
Disbursement channel
Information on conditions
Accountable government institution
Expected outcomes and outputs
Actual results
Covered
COMMITMENT INFORMATION REQUIRED
+Critical - Critical
Forward commitments by donor at aggregate and sector level for the budget year and medium term (all aid)
Forward information on planned disbursements for budget year and medium term
For all: in-year updates on planned disbursements
For GBS: planned disbursements by donor
For SBS: planned disbursements by donor by sector
Covered
DISBURSEMENT INFORMATION REQUIRED
Information needs
Information needs
Planned disbursements
Actual disbursements
All disbursements, by donor, by project, by implementing institutions
All, disaggregated by intended purpose (functional)
DISBURSEMENT INFORMATION REQUIRED
+Critical - Critical Covered
For earmarked projects and programmes all channels
All, disaggregated by intended purpose (programmatic)
All, disaggregated by economic (high level)
All, disaggregated by economic (lower levels)
All, by geographical location
Beneficiaries of Channel 3 disbursements
Supply chain disbursements (service providers)
+Critical Covered
Information needs
By donor by project
By beneficiary institution
By implementing agency
By functional classification
ACTUAL EXPENDITURE OF AID
- Critical
For Channel 3 projects and programmes
By programmatic classification
By economic classification (high level)
By lower level economic classification
Key concerns remaining Channel of disbursement (nature of flow) Disaggregated information on allocation of flows in terms of
country budget structures Information on the actual use of fund
Selected key issues
Important to add identification of channel Information on actual use of funds for Channel 3 flows
will be important transparency gain Role of AIMS
Interface between aid and project management cycles and budget management
Comprehensive, up to date AIMS requires continuous cooperation
Recording, verifying and reconciling information Only 6 out of 29 cases uses country budget
classifications Country level choice
Key issue is coding of aid
IATI coding for country budget alignment Countries have different classification schemas, but at
lower levels of disaggregation significant commonality Donor systems use CRS classifications, at lower levels
of disaggregation significant commonality with country systems Some areas less developed
Countries require disaggregated information, whatever coding system is used Lowest unit of information is sub-programme
component level (see table) Where should standards apply, at donor HQ level (on
set of codes for all countries) or at country level (unique set of codes for each country)
4 Options Option 1
Use CRS codes for common sector identifier (3.12) across all donors and countries
Use unique country codes agreed at country level for each country (3.11)
Main benefit: high country budget alignment Option 2
Develop a common coding system using CRS disaggregated codes that can map to country budgets and to CRS
Same codes apply to all countries for budget alignment Main benefit: once off coding that roll up to CRS and map to country
budgets, simpler donor systems, higher likelihood of compliance/easier monitoring.
Option 3 Develop common coding system and encourage additional country
coding Option 4
Do nothing for now, commit to resolve issue and publish raw information in the meantime.
ONCE-OFF CODING
OUTPUTS TO
BUT MORE DETAILED CODING THAN CURRENTLY USED IN PRACTICE
Analysis of options: BENEFITS
Country-specific coding Common Coding
Degree of Alignment Complete or near complete
Imperfect alignment – further work to align
Level of detail Country choice, so some can negotiate high disaggregation plus more dimensions
One size fits all – common denominator likely to be sub-vote level & functional and high level econ
Comprehensiveness Can include non-IATI donors, if country negotiates and peer pressure works
Non-IATI donors could follow, but unlikely to
Timeliness and (accuracy)
As it depends on many donors in many countries, timeliness could be problematic
Centralised control of
publication of data, more
timely
Country reporting Partner country reporting in partner country classifications
Partner country reporting can be aligned to donor-centric formats (trans cost)
Analysis of Options: RISKCountry-specific coding Common Coding
Compliance Enforcement at country level – unless HQs set up central quarterly checking system
Issue not multi-donor projects, nor Channel 1, but Channel 2 and 3. Will projects be known?
Peer pressure will operate at country level
Enforcement at HQ / international level
Peer pressure at international level
Higher likelihood of more complete datasets for IATI donors
Sustainability Can it be programmed into donor systems?
Updating and who can use
data?
Common coding more easily programmed into donor systems
Updating and who can use data?
Which system more likely to create conditions for compliance of (i) donors that have information, and don’t publish or (ii) donors who don’t have information
Analysis of options: SET-UP COSTS
Country-specific coding Common Coding
DONORS Agree coding for each country
Set-up and maintain coding system for each country
Adjust when country classification changes
Add more detail to some CRS codes in current systems
PARTNERS Agree coding framework
Set up systems to incorporate IATI info into country systems (AIMS or PFM)
Set up system (AIMS or
directly to PFM) to
translate IATI coding into
country coding.
Should recognise that donors are set up differently
Country-specific coding Common Coding
Donors Code programmes 1x for CRS and 1x for IATI
Country coding likely to be to be programme component – cannot roll up to CRS
Code programmes 1x output to CRS and to country budgets
Level of detail at which coding occurs will be programme component
Partner Countries Chase up donors and line ministries for info on programme commitments, disbursements and use of funds for IATI and non-IATI donors, unless full compliance in terms of timeliness, comprehensiveness and accuracy
Chase up non-IATI donors and line ministries for info on programme commitments, disbursements and use of funds
Check detail when necessary with IATI donors / line ministries
Analysis of Options: Continuous Costs
Analysis of options: Other
Country-specific coding Common Coding
Who will code Desk officers at country
level using country
specific coding (3.11)
Donor specific, but desk officers at country level using central system and 1 coding for all countries
Channel 1 Funds 80% of aid at country level may differ from 80% of aid at international level. If country can get information on 80% of aid, greater benefit than 80% compliance at international level
Better data across countries for comparison with country own spending
PRACTICE
SIDE BENEFITS
Discussion questions
What level of disaggregation are we aiming at? How will it work in practice – at which point will
coding occur? Analysis of country-specific vs common coding
Is cost benefit analysis right? What has been missed? What is risk of non-compliance, sustainability for both
types of coding? What are the key trade-offs?
• More info for more countries, less detail for some• Higher likelihood of compliance, less detail• IATI donors / non-IATI donors
What is way forward to December? Other?
Top Related