Budget Integration, Program Budgeting and Reengineering of Business Processes in Line Ministries Jean-Marc LEPAIN Budget Adviser Public Finance Specialist Ministry of Finance, Kabul [email protected]
Apr 22, 2015
Budget Integration, Program Budgeting
and
Reengineering of Business Processes
in
Line Ministries
Jean-Marc LEPAIN Budget Adviser Public Finance Specialist Ministry of Finance, Kabul [email protected]
Budget Integration
Budget Integration has two aspects:
Integration of two documents: Ordinary and Development Budget;
The creation of a fully integrated organization through the integration of two processes.
New Budgeting Concepts
Program based budgeting
Performance based budgeting (through performance based indicators and output and outcome tracking)
Provincial budgeting
A complex consultative Process
Budgeting becomes multi-organizational: ANDS
CGs
MoF
Line Ministries
MoEco
Provincial Development Committees
Provincial council
Parliament
Organizational Issues
Consultation and cooperation with many organizations, stakeholders and decision makers becomes essential.
All line-ministries must have a common organization. It means that the integration process must be controlled by MoF and validated by the Steering Committee.
Culture change is a major challenge.
Organizational Changes
Organizational Changes have two aspects:
Organizational changes resulting from budget integration;
Organizational changes resulting from the introduction of program budgeting.
Strategy toward Program Budgeting
Each Ministry will have to develop a three year strategy toward program budgeting.
Implementation will be gradual.
Modification of the new budget classification will come first
Merging of administrative department into a support program covering finance, human resources, IT, procurement, etc., will be gradual.
Program Structure
Programs must cover the Ministry’s mission statement;
Programs must be limited in number (5 to 7);
Programs must have a relative managerial autonomy;
Programs must have independent resources (finance, human resources, assets);
Programs must be integrated in the overall ministry strategy;
Programs must not overlap.
Process Mapping
Programs are made of sub-programs, activities and projects. A seminar on program designing will be organized within a month;
Program designing might beneficiate from modern Business Process Reengineering such as process maping and wotkflow analysis. MoF will provide assistance in such areas.
Line-Ministries Management Structure
An Administration Program will provide support to all other programs and will cover, planning (mostly consolidation of program planning activities), Finance (including budgeting, payment processing, accounting and reporting), Procurement, Human Resources, IT, etc.
The integration of asset management (mostly buildings and vehicules) is still under discussion;
The Planning Department can integrated into a Policy and Coordination Department under the Administration Program, but must planning activities will be decentralized and the responsibility of programs;
A Finance Department supervising and controlling all financial affairs must be created, including budgeting, grant management, budget execution, accounting and reporting
Provincial budgeting will require a dedicate unit
Other issues: HR and payroll
Policy and Coordination
Updating of sector strategy
Definition of program and sub-program
Project structure
Definition of targets and performance indicators
Coordination with other ministries
Technical assistance to provinces
Monitoring of provincial implementation plan
Tashkil
Finance Department
Aid Coordination
Budget Unit
Budget Execution Unit
Procurement (To be discussed)
Accounting
Reporting
Program Structure
Decentralized model (MRRD / Project Implementation Units) versus centralized model
Level of integration with the Policy and Coordination
Department
Level of integration with the Finance Department
Level of integration with the HR Department
Human Resources
Recruitment
Career path
Training
Payroll management
Administration
Logistic
Legal Affairs
Public relations
Small procurement
IT
Change Management
Change Management requires a Change Strategy.
Change is not just about organization, it is about people and mind set.
Change Management requires unity of vision.
Change Management requires a strong leadership.
Key Strategic Issue
Gradual approach
Big Bang approach
Change Strategy
A written change strategy must be prepared. The Change Strategy must cover:
Implementation Team
Communication Plan
Capacity Building Plan
Training Plan
Consultation seminars
Work Plan
Reporting
Communication Policy
Communication is an important element of Change Management. Communication must be:
Planned in advance
Controlled and authorized
Timely
Targeted
Work Plan
Three phases:
(1) Analysis
(2) Design and Planning
(3) Physical restructuring
Analysis
Clear definition of the objectives (project mission statement)
Process Mapping and workflows
Identification of new requirements and of their organizational impact
Identification of all unit affected
Assessment of the existing capacity and of new capacity need
Change Management structure
Identification of HR issues (recruitment, pay scale, etc.)
Design and Planning
New process map
New organization chart
ToR of business unit
Job Descriptions
Training plan
Define outputs and design reports
Revised Work Plan
Physical Integration
Define time horizon
Manage the project by phases
Act quickly on HR issues
Bring all people in one physical location
Provide regular on the job training
Budget Circular
Should make reference to the Public Finance Management Law
Outline the implementation team mission
Define the responsibility of the Finance Department
Define expected results at the end of the Fiscal Year