Outcome Based Budgeting in Malaysia

Report
Outcome Based Budgeting
an integrated approach to public sector
performance management in Malaysia
National Budget Office
Ministry of Finance Malaysia
28 August 2014
LOGO
www.themegallery.com
Outcome Based Budgeting
an integrated approach to public sector
performance management
Presentation outline
1
Performance management & budgetary reforms
2
Factors taken into consideration under OBB
3
Integrated approach to OBB using Logic Model
4
OBB implementation journey
Critical Success Factors & Challenges in implementing
OBB
5
2
Performance Management in Public Sector
Setting National
Priorities &
Goals
Revenue
policy
Macroeconomic
Planning
MTF
Debt
policy
Summative
Evaluation
Formative
Program
Rectification
Program
Delivery
Results
Based
Budget
Formulation
Outcome
planning
Performance
Budgeting
Delegation and
accountability
Program
Implementation
Performance
Monitoring
& Reporting
Expenditure
Management
3
Budgetary Reforms in Malaysia
Detailed Controls
& Discipline
• Incremental
line item
budgeting
Programs &
Performance
• Program
Performance
• ProgramActivities
• Performance
Indicators
• Monitoring &
Evaluation
Accountability,
flexibility &
delegation
• Disaggregated
Budget
• Budget Ceilings
• Program
Agreements
• Exceptions
Reporting
Integrated
Approach
• Integration
• Alignment
• Budgeting for
results
• Results
Reporting
• Monitoring &
Evaluation
• Monitoring &
Evaluation
4
Presentation outline
1
Introduction
2
Outcome Based Budgeting
3
Integrated approach to OBB using Logic Model
4
OBB implementation journey
5
Challenges in implementing OBB
5
Why Change was required??
 Greater demand for quality results
 Need to rationalise government expenditure & improve public
sector services delivery
 Government has identified six transformation levers:
Focus on
outcomes
Systematic monitoring
and evaluation system
Accountability in the
public sector and
authority over
resources
SIX
LEVERS
Coordination of
operating and
development
budgets
Vertical alignment of
national priorities and
ministry activities
Managing cross
cutting initiatives
6
OBB Strategic Cycle
Performance
reporting and
policy formulation
Results
Reporting
Managing information
for monitoring,
evaluation and
decision support
system
Planning for
Outcome
Developing the
strategic Results
Framework for the
Ministry
Budgeting for
Outcome
Monitoring &
Evaluation
Preparing the
resource
requirements to
drive the ministry
results
7
OBB plays a key role in linking the national transformation
pillars from implementation to RESULTS…
TRANFORMATION PILLARS
OBB ENVIRONMENT
RESULTS
Planning for
outcome
Government
Transformation
Programme
Economic
Transformation
Results
Reporting
Programme
Budgeting for
Outcome
• Strategic Reform
M&E
Initiatives
• National Key
Areas
• Economic
Strategic
management
VISION 2020
tool
for managers at all levels
• Structured mechanisme
linking national planning to
implementation at agencies
• Vertical alignments
• Horizontal linkages
Malaysia’s
• Integrated
Medium-term
Plan budgeting
(10th & 11th Plan)
8
National Results Framework
STR. THRUST 1
STR. THRUST 2
STR. THRUST 3
Creating the Environment
for Unleashing Economic
Growth
Moving towards Inclusive
Socio-Economic
Development
Developing and Retaining a
First-World Talent Base
TERAS
STR. THRUST 4
STRATEGIK 4
Building an Environment
that Enhances Quality of
Life
TERAS
STR. THRUST 5
STRATEGIK 5
Transforming Government
to Transform Malaysia
KRA 1
KRA1
KRA 1
KRA 1
KRA2
KRA 2
KRA 2
KRA3
KRA3
KRA3
KRA4
KRA4
KRA 4
KRA 5
KRA5
KRA 1
KRA 2
KRA 2
KRA 3
KRA3
KRA 4
KRA 4
KRA5
KRA 6
5 National
Outcomes
4 National
Outcomes
5 National
Outcomes
6 National
Outcomes
4 National
Outcomes
5 National
Programmes
6 National
Programmes
5 National
Programmes
10 National
Programmes
4 National
Programmes
9
Source: EPU
9
Strategic Thrusts
10th Malaysian Plan KRAs
10th Malaysian Plan Outcomes
National Programmes
Ministry
Outcome 1
Min. Prog. 1
Activity 2
Project
Outcome 3
Min. Prog. 2
Activity 3
Activity 1
S/Activity
Outcome 2
Outcome n
Min. Prog. 3
Activity 5
Sub-Activity
Project
Activity n
Activity 7
Activity 6
Activity 4
Mini. Prog. n
Activity 8
Sub-Activity
Project
Ministry level Results Framework
National Results
Framework (NRF)
Programme-Activity Structure
10
Integrated approach under OBB
 Vertical alignments
 Horizontal linkages
 Integrated budgets
National level
National Strategic Thrusts
National Outcome
 Key Performance Indicator
National Programme
Ministry level
Ministry’s Outcome
 Key Perf. Indicator
Programme
Programme level
Prog. Outcome
 KPI
Activity
Programme level
Prog. Outcome
 KPI
Activity
Activity level
Activity
level
Activity Outcome
Outcome
 Activity
KPI
 KPIOutput
Activity
Output
 Activity
PI
 PI
Activity level
Activity
level
Activity Outcome
Outcome
 Activity
KPI
 KPIOutput
Activity
Output
 Activity
PI
 PI
NRF
Ministry level
Ministry’s Outcome
MES
 Key Perf. Indicator
Programme
Programme level
Programme level
Prog. Outcome
Prog. Outcome
 KPI
 KPI
PPMF
Activity
Activity
Activity level
Activity level
Activity
level
Activity
level
Activity Outcome
Activity Outcome
Activity
level
Outcome
Outcome
 Activity
KPI
 Activity
KPI
Outcome
 KPIOutput
 Activity
KPIOutput
APMF Activity
Activity
 KPIOutput
Output
 Activity
PI
 Activity
PI
Output
 PI
 Activity
PI
 PI
11
Presentation outline
1
Introduction
2
Outcome Based Budgeting
3
Integrated approach to OBB using Logic Model
4
OBB implementation journey
5
Challenges in implementing OBB
12
Linear Logic Model
Implementation
Outcomes are the changes
we bring to a problem or
need situation
INPUT
We have a
tendency to
focus on Inputs
PROCESS
OUTPUT
…and outputs
are assembled
based on inputs
OUTCOME
The focus
should be on
Outcomes
When Planning
13
Outcome Needs/Problem Triangulation
NEEDS &
PROBLEMS
ANALYSIS
OUTCOMES
Addressing Needs and Problems
14
FEDERAL TREASURY
(NATIONAL BUDGET OFFICE)
NOVEMBER
Determination of ET by Treasury
JANUARY
Call Circular
for New Year
Estimates
BUDGET CYCLE
March
Receive submissions
and BRO makes
Individual Study
Agencies Prepare
and Submit New
Year Estimates
MAY-JULY
Budget
examination
APRIL
Preliminary
Analysis
JULY - AUGUST
Approval of New Year
Estimates by the Minister of
Finance and Cabinet
SEPTEMBER
Budget Document
Printed and submitted
to Parliament
Disbursement/Reporting
by Accountant General
Budget Execution
by Agencies
END OF DECEMBER
Minister of Finance issues
Warrant of Expenditure
SEPTEMBER-DECEMBER
Parliament Debates and
Approves New Year Budget
Presentation outline
1
Performance management & budgetary reforms
2
Factors taken into consideration under OBB
3
Integrated approach to OBB using Logic Model
4
OBB implementation journey
5
Challenges in Implementing OBB
16
OBB Implementation Journey
2016 >
2014 - 2015
2012-2013
 Continuous data
quality refinement
 Focus on
monitoring &
 Roll out of OBB to all performance
ministries (Parallel in reporting
 Full implementation
of OBB
recommendations
including full systems
and institutions
 OBB Policy Circular
2010 - 2011
 Developed OBB
Conceptual
Framework
 Awareness
Programs
 Capacity Building
(Trainers and RLs)
2012)
 Initiate COE &
evaluation cycle to
 Data validation &
refinement (selected be operational
Min initiative)
 Budget prep. for
2016 to be fully
 Strengthening the
OBB compliant
role of MOIC in
Planning
 Developed Initial
Results Framework
for all Ministries
PHASE 1
PHASE 2
 Integrated
performance
monitoring &
reporting to be
17
Presentation outline
1
Performance management & budgetary reforms
2
Factors taken into consideration under OBB
3
Integrated approach to OBB using Logic Model
4
OBB implementation journey
Critical Success Factors & Challenges in Implementing
OBB
5
18
OUTCOMES
 Performance information must be demand
driven by stakeholders
OUTPUTS
 Leaders must empower their team and
execute strategy
 BROs must focus on program performance
PROCESS
INPUTS
and accountability
 Sustainable capacity building
 Report on performance through effective
monitoring and evaluation
19
Challenges in implementing OBB
 Understanding the concepts
 Role of management in strategy building
 Quality of information in the results framework
 Culturalising performance
 Redefining the roles of budget review officers –
focus on performance & accountability
 Sustainable capacity building and frequent
movement of OBB trainers
 Identifying the right IT solution and translating
business requirements into an IT system
20
MyResults: Performance Management System
Ministry/Agency
Planning
Budgeting
Monitoring
Evaluation
Reporting
Demand Analysis
21
thank you
terima kasih
[email protected]

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