Integrated Results-Based Budgeting (RBB)

Replies to This Discussion

Permalink Reply by Arunaselam Rasappan on July 26, 2008 at 6:02pm

Dear Saruni,

Thanks for sharing the budget approach and features in Tanzania. It certainly looks like you have adopted some of the basic principles of the RBM system.

As for the issue of preparing parallel budgets, there is actually no need for this as these considerations should be factored into one main budget. Ont th matter of contingencies, it is how we plan for and budget for contingencies that is important. Under the RBB component under the IRBM system, the budget is split into ongoing policies, new policies, as well as one-offs, with the last catering for contingencies. All three still adopt and focus on a program approach and program results and there is a high level of integration between all three budget components.

The use of line-item and cash accounting systems are not compatible with or suitable for RBB - in fact, under the RBB, the line-item system detracts from looking at programs and diverts attention to items of expenditure rather than the entire intervention. A monthly cash budget is fine for purposes of cash flow management but is not suitable for holistic development planning and resources management/application.

You mentioned that all activities are costed which implies you have perhaps adopted micro-accounting but it would be interesting to hear more about whether the budgeting system makes use of such costing information and how that is factored into program, outcome, and output costing towards policy and program improvements.

Thanks again for sharing and hope you will be able to share more information on your approaches and systems in place.

Aru Rasappan

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Permalink Reply by Pamella Lakidi on September 9, 2008 at 10:27am

Dear Aru,
This is an interesting discussion. It is also my first time to really participate. But from now on I intend to be more active.

Currently, we are facing a challenge of how to support finance staff to adopt the RBM and reflect RBM in their finnacial reporting irregardles of the softwares they use for book keeping. My organization uses the ATLAS software, SUNSYSTEM as well as Solomon. Not in one place but in different parts of the organization. Please, do share with me any of your experiences working with these softwares and using them in RBM.

Thanks.

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Permalink Reply by Zaam Ssali on July 16, 2008 at 9:11am

Hello Arun,

Where do I find the articles you want members to comment on?

Zaam

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Permalink Reply by Arunaselam Rasappan on July 26, 2008 at 6:04pm

Hello Zaam - I believe you have downloaded the articles you mention above. We would be interested on your take on the issues presented in those articles.

Regards

Aru Rasappan

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Permalink Reply by Zaam Ssali on July 16, 2008 at 9:15am

Arun,

Sorry, I have found the papers please ignore my question. Will read papers and give comments.

thank you,

Zaam

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Permalink Reply by Arunaselam Rasappan on July 16, 2008 at 5:51pm

Dear Zaam - look forward to your feedback.

Aru Rasappan

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Permalink Reply by Dr. Rosa Muraguri-Mwololo on July 17, 2008 at 4:59am

Dear Aru,
I read through the papers and tried to understand as much as i could in regards to RBB- and i am starting to think of the complexity of using RBB in a developing country.
In most instances countries are planning for results against money that is not there, you lose track and attention to results as you seek funds. The political nature of the civil service does not guarantee that the officer who was there yesterday and who understands the expected results will be there tommorrow. As the governements works with the limited money it has- priorities are bound to change by the day. Sometimes we are throwing good money after bad money as we lose track of things with our young and feable monitoring sytems. RBB means putting money where we have the best chances of return in investment, or where we have data-evidence of emerging good results. How are developing countries coping with these turbulent realities and managing their budgets for results?

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Permalink Reply by Dr. Rosa Muraguri-Mwololo on July 17, 2008 at 5:11am

Dear Aru,
I know this might be beyond your TORs, but do you have any case studies (real or created) that demostrate in detail some of the challenges encountered in application of RBB and how the challenges were overcome? We learn best by listening to failure and success stories of others- why they succeeded, and for those who failed -why?

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Permalink Reply by Arunaselam Rasappan on July 27, 2008 at 5:59pm

Dear Rosa - you may wish to read the papers/articles posted by Koshy Thomas and myself on this forum about 2 weeks ago. Would be interested to get your feedback.

Regards.
Aru Rasappan

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Permalink Reply by Bimerew Alemu on October 4, 2008 at 7:54am

Dear Aru
On this issue of budgeting I wanted to reflect my views on how we are trying to shift to results based budgeting.
It is obvious that a budget is, by definition, forward looking and it would not serve that purpose without an adequate past. It was later alleviated that performance budgeting as an all-inclusive concept embodying program formulation as well as the measurement of the performance of work in accomplishing program objectives.
In my country's case earlier we were using line item budgeting, when esource allocation as a whole didn't target the poor. Thanks to the different reforms these days around three quarters of the total Federal Government budget is allocated to poverty oriented sectors such as agriculture and food security, education, health, road and water sector developments. Simultaneously, we have shifted from line item budgeting to cost center and now we are starting to formulate program budgeting.
Since program budget encompasses a process it provides an opportunity for a better presentation of the spending agency's case. The process permits responsibility for developing the budget requests to be removed from the central office and to be placed with the program of the agency. This type of participation enhances professional support for the budget. Further, it is a process that provides numerous opportunities for the public to be actively involved both in budgeting and expenditure or implementation.

Nowadays actually the Government uses medium term macroeconomic frame work, which is used by the Government as a tool for establishing Resource Envelop inline with overall policy objectives and MDG targets. MEFF is an instrument by which three year rolling resources are identified on the bases of macroeconomic framework. The approach in MEFF is to start with a thorough assessment of available resources and to allocate them to sectors within this resource constraint. MEFF is used by the Gov’t as a tool for establishing Resource Envelop inline with overall policy objectives and MDG targets. MEFF is an instrument by which three year rolling resources are identified on the bases of macroeconomic framework.
The approach in MEFF is to start with a thorough assessment of available resources and to allocate them to sectors within this resource constraint. MEFF forecasts over a three year period: GDP, aggregate revenue (domestic and assistance) and expenditure (federal and regional), the split of aggregate expenditure between federal and regional level, the split of federal expenditure between capital and recurrent and the sectoral allocation of capital expenditures amongst the federal public bodies.
The MEFF is targeting to address MDG targets meaning Results Based and the Government is working hard on that. We are trying to evaluate performance not on how much is spent but what result is registered and the whole issue of the civil service reform is this. Donors and other development partners are also actively participating on such issues of transparency and accountability. As of implementation we cannot deny that on the ground there are challenges.

From our network members we need also want to know the experience of other countries

Regards

Bimerew Alemu
Development Planning and Research Department of MOFED
Ethiopia

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Permalink Reply by Arunaselam Rasappan on October 4, 2008 at 7:05pm

Dear Bimerew,

Thanks for sharing the budgeting experiences and currrent practices in your country. It is encouraging to note that you have moved away from the traditional line-item budgeting to the program-based budgeting. Certainly, the program budgeting system combined with the 3-year rolling budgets are a big change from the line-item budgeting system. The use of rolling budget covering 3 or more years is indeed useful. However, the use of program budgeting reflects a different structural approach to the budget. While the program budget is important and highly recommended, it should be married with a number of other budget principles and requirements. Even in the US, the program budgeting approach, which was introduced decades ago, has had only limited success due to several limitations. Many of these limitations are not being addressed by countries now adopting the program approach. I know at least two countries in Southern Africa which introduced program budgeting but after 1-2 years of implementation, are having problems.

Let's hear more experiences in other countries and then we can discuss the utility of the RBB system, which addresses most if not all of the traditional challenges to budgeting.

Regards

Aru Rasappan

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Permalink Reply by Pamella Lakidi on October 6, 2008 at 2:41am

Dear Aru,
I read your response with intense concentration, hoping to pick up something. But the very thing I hoped to pick up is what you withheld, i.e, the limitations of the program-based budgeting. I hope that it will not take a very long time before you share this with us.

In my institution, we have just completed a training on Results Based management for finance and adminstration staff. There are practical challenges associated with a change from "component" approach to budgeting and reproting on finances (WORLD BANK approach) to Result-based. This is why I was so eager to know what the limitations are with the program based approach.

Thank you.

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