Managing public money
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This document discusses Pakistan's budgetary system and reforms. It covers topics such as the budget preparation process, public expenditure management, reforms like the Medium Term Budgetary Framework and Medium Term Development Framework, and decentralization efforts. The objectives of public expenditure management are outlined as fiscal discipline, strategic allocation of resources in line with priorities, and good operational management. Annual budgets aim to be comprehensive while allowing some flexibility. Management controls, auditing, and evaluation aim to promote accountability and improve spending quality over time.
Managing public money
- 2. TOPICS: Introduction (Revenues and Expenditure) Public Expenditure Management Budget Preparation process in Pakistan Budget execution Management control and audit Budgetary reforms in Pakistan Vision 2030 NFC award Public sector development Pakistan’s Current budget(2011-2012)
- 3. SOURCES • www.planningcommission.gov.pk • www.pildat.com • Public Management in Global Perspective
- 5. Vision 2030 Developed, industrialized, just and prosperous Pakistan through rapid and sustainable development in a resource constrained economy by deploying knowledge inputs
- 6. Following are the list of budgetary reforms: Poverty Reduction Strategy Paper (PRSP) perspective plan 2001 - 2011 Medium term budgetary framework in federal and Punjab Medium term development framework Project for Improving Financial Reporting and Audit (PIFRA) Performance budgeting in Punjab Decentralization and creation of local government
- 7. Budgetary reforms Various reforms in the budgetary systems are creating opportunities for gender responsive budgeting. includes a number of steps through which resources are allocated to various policy priorities and spent to achieve their objectives Exercises on five year plans have been replaced by work on PRSP and MTDF.
- 8. Poverty Reduction Strategy Paper (PRSP) The PRSP was formally announced on 31 December 2002. World Bank and International Monetary Fund. PRSPs describe the country's macroeconomic, structural and social policies and programs over a three year to promote broad-based growth and reduce poverty.
- 9. Perspective Plan 2001-2011 abandoned after 1998. In 2000 work was carried out on a ten year perspective plan with three year rolling plans for its implementation With improvements in macroeconomic indicators Visions 2030 and the MTDF processes took over.
- 10. The Medium Term Budgetary Framework MTBF is an approach to budgeting which links the spending plans of government to its policy objectives. main objectives of the MTBF are to: Strengthen the allocation of federal resources to the government’s strategic priorities Improve operational efficiency, by strengthening the capacity of federal line ministries to prepare and manage their budgets effectively.
- 11. Medium Term Development Framework together with Vision 2030 a five year plan has been developed called the MTDF. MTDF is an ongoing process, with periodic updating, and will keep providing policy direction to development in the country in an ongoing manner
- 12. Decentralization and Creation of Local Governments: These are as follows: Decentralization of expenditure units: Decentralization of revenue items: Local level legislative role in budget making: Accounting: Performance budgeting Integration of recurrent and development budgets Punjab Planning Manual Intergovernmental grants
- 13. The role and objective of public expenditure management: policy objectives require financial resources which can only come from the public in the form of taxes and fees four components of good governance: Accountability Predictability Participation Transparency
- 14. The objective of public expenditure management: three objective of good public expenditure management: Fiscal discipline (expenditure control) Allocation of resources consistent with public priorities ( strategic allocation) Good operational management
- 15. Budget systems, annuality and comprehensiveness: The legislature could authorize the executive to: Spend for certain programs up to a certain amount, without specific time limit. Enter into commitments up to a certain amount, within the fiscal year only. Make payments on the exposed expenditures, within the fiscal year only.
- 16. The first type of authorization produces an obligation budget The second type of authorization produces a commitment budget The third of authorization produces a cash budget reconciling the government fiscal operations with monitory and balance of payments developments.
- 17. Annuality of the budget: the budget covers twelve months (the fiscal year), and the authority to collect revenue and make expenditure expire at the end of the fiscal year desirable balanced between the need of legislative control and the need of the executive to adapt to changes
- 18. Budget comprehensiveness: The major issues are two: First if the budget excludes major expenditure, there is no assurance that scarce resources are allocated to priority programs. Second, if a category of expenditure is not included in the approved budget, the amount is itself likely to be uncertain and opaque.
- 19. Extra budgetary funds: Extra budgetary funds are expenditure programs that are not subject to the annual budgetary approval process, but are financed by approved multi year allocation or by dedicated revenues. road funds to black lung disability, hazardous substances super funds, and oil spill liability funds.
- 20. Management control, audit and evaluation: Management control and internal audit: Management control also called internal control is the policies and procedures To be effective the management control system must have the strong support of the entity’s leadership. Internal audit can assist senior managers in assessing risks and developing more effective control system.
- 21. External audit supreme audit institution normally independent of the executive branch of government and reporting its funding to legislature as well as to the audited agency itself. . Weak governance and accountability requires a concentration on compliance and financial audit In developed countries, external audit should look more and more in efficiency and effectiveness issues.
- 22. Evaluation: good evaluation close the programming loop by feeding into the preparation of the next budget relevant information concerning the execution of the previous one. evaluation of the results of public spending is important both for accountability and to improve the quality of expenditure over time.