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PUBLIC EXPENDITURE MANAGEMENT (PEM) REFORMS

PUBLIC EXPENDITURE MANAGEMENT (PEM) REFORMS. PUBLIC EXPENDITURE MANAGEMENT: OBJECTIVES. Aggregate Fiscal Discipline living within our means Allocative Efficiency spending on the “right things” or “right priorities” Operational/Technical Efficiency obtaining the best value for money.

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PUBLIC EXPENDITURE MANAGEMENT (PEM) REFORMS

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  1. PUBLIC EXPENDITURE MANAGEMENT (PEM) REFORMS

  2. PUBLIC EXPENDITURE MANAGEMENT:OBJECTIVES • Aggregate Fiscal Discipline • living within our means • Allocative Efficiency • spending on the “right things” or “right priorities” • Operational/Technical Efficiency • obtaining the best value for money

  3. A. Medium Term Expenditure Framework (MTEF)

  4. MTEF • The MTEF shall be the government planning-budgeting framework to underpin a strategic and policy-based approach to budget preparation. • The MTEF provides a more credible approach for resource allocation and predictability in funding to national government agencies, encouraging efficient use of resources within budget constraints.

  5. MTEF (Cont.) • It adopts a medium term perspective to decision-making that considers future costs of existing policies to determine the budget space for new programs/projects.

  6. Two Main Components of MTEF • Forward Estimates (FE) • Paper on Budget Strategy (PBS)

  7. FORWARD ESTIMATES (FE) • The MTEF was initially implemented in 2006 for the 2007 budget preparation through the formulation for 2007-2009 of Forward Estimates (FEs), or the estimates of the future costs of existing policies. • The FEs were matched with revenues to determine the budget space, available for new policies and priorities.

  8. FE (Cont.) • The FEs also served as validation instrument for determining the reasonableness of agency proposals on existing P/A/Ps. • For 2008, a new set of FEs for 2008-2010 has been formulated upon consultation with concerned departments/agencies.

  9. FE (Cont.) • The first out-year, which is based on the 2007 GAA, represents the cost of continuing existing polices and programs at currently approved levels of activity and forms as the base for the next budget. The 2008 FEs become the indicative ceiling for 2008. • This new set of FEs shall be rolled out to future years and updated for policy changes, new program approvals and updated macroeconomic projections.

  10. Paper on Budget Strategy (PBS) • A paper on budget strategy (PBS) initially prepared in 2007 will continue to be the principal tool in integrating policy and strategic resource allocation. • The PBS aims to assess and relate the progress in meeting development objectives with resource allocation.

  11. PBS (Cont.) • Following last year’s procedure, the decisions of the DBCC and the President on the allocation of the fiscal headroom shall be communicated to concerned departments, including the screening criteria for new spending proposals.

  12. B. ORGANIZATIONAL PERFORMANCE INDICATOR FRAMEWORK (OPIF)

  13. OPIF • The OPIF is an approach to expenditure management that directs resources towards results or Major Final Outputs (MFOs) and measures agency performance by key quality and quantity indicators.

  14. OPIF (Cont.) • The OPIF is a process that demonstrates the direct relationship between agency programs and activities and the goods and services that the agency is mandated to deliver to its external clients to achieve organizational outcomes as well as sectoral and societal goals under the MTPDP.

  15. OPIF (Cont.) • The development of logframes and Performance Indicators (PIs), which were completed last year for twenty (20) Departments in time for the 2007 budget preparation has been cascaded down to the level of individual attached agencies for the formulation of the 2008 national budget.

  16. OPIF (Cont.) • These departments/agencies/OEOs shall ensure the alignment of their programs, projects and activities with their MFOs.

  17. OPIF (Cont.) • DepEd Logframe (Department wide)

  18. OPIF (Cont.) • DepEd Logframe (OSEC)

  19. OPIF (Cont.) • DepEd-OSEC Performance Indicators (PIs)

  20. Thank You!!!

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