The
National Audit Office's Report shows again and again that wastage and
unnecessary expenditures have continued unabated. It is unacceptable that at a
moment where everyone was bearing the brunt of the continuing global and the
consequent local slowdown, our Ministries and Departments and State-owned
enterprises were profligate with taxpayers’ money .
We do finally come face to face with the stark fact -- what most reports have rapidly glossed over or do not even bother to refer to -- that not much has changed; it is the same old way of doing business, the only difference that, along the way, we have also learned how to pack the same old wine in new more attractive, catchy bottles. We make it look grandiose. Our policy makers introduced the Programme-Based Budgeting (PBB) , a budget management process for enhancing fiscal discipline, bringing efficiency gains, greater accountability and promoting good governance in a more outcome-oriented public sector. The PBB which was implemented with a big-bang approach in 2007, against sound advice to proceed sequentially and gradually, has continuously struggled in “deliverology” and it is now being acknowledged that it has turned out to be another wish-list. The Big-Bang approach, not anchored in local realities, has reduced the PBB to a mere arithmetical instrument without any usefulness to solve practical issues.
The
programmes of ministries were not aligned with their main objectives or
functions. Ministries did not have strategic plans and that they could not use
the PBB as a strategic policy-based tool. There were no proper baseline budgeting methodology for the costing of
programmes and sub-programmes. We failed
to move up the learning curve in fine tuning our PBB especially in ensuring
that we are carrying out “real”
performance budgeting - a PBB that
secures delivery of Government’s major domestic policy priorities. This means not just including performance
information in budget documentation but linking expenditure to targeted
results, reporting performance against these targets and using the information
to make decisions on future resource allocation. Successful reform does not
only require published targets but clear, specific definitions of success. The PBB has remained very theoretical, a
mere textbook exercise failing to
deliver on, for example, improving the
performance of elementary schools, reducing wait times in our hospitals,
bringing about major reductions in crime and ensuring punctuality and fluidity
of our transport system. These are important to our citizens and would benefit
most from a more intensive focus and drive for implementation. It is here that
the PBB needed to deliver. We have had the wrong approach to
the PBB, from a strategic point of view and, consequently, its implementation
has suffered. We have looked at PBB as a tool for efficiency and effectiveness
of the budget, but only through indicators. The preparation of the PBB document
has wrongly been presented as a stand-alone document, unrelated to the
priorities of the country and the operations of the organization.
We do finally come face to face with the stark fact -- what most reports have rapidly glossed over or do not even bother to refer to -- that not much has changed; it is the same old way of doing business, the only difference that, along the way, we have also learned how to pack the same old wine in new more attractive, catchy bottles. We make it look grandiose. Our policy makers introduced the Programme-Based Budgeting (PBB) , a budget management process for enhancing fiscal discipline, bringing efficiency gains, greater accountability and promoting good governance in a more outcome-oriented public sector. The PBB which was implemented with a big-bang approach in 2007, against sound advice to proceed sequentially and gradually, has continuously struggled in “deliverology” and it is now being acknowledged that it has turned out to be another wish-list. The Big-Bang approach, not anchored in local realities, has reduced the PBB to a mere arithmetical instrument without any usefulness to solve practical issues.
If
the new Minister of Finance wants concrete results in terms of “deliverology”,
he will have to carry out a total clean-up for a new team that understands the
PBB and ensures that its implementation delivers on its promises- inter alia,
limiting costs of new project proposals, restraining cost overruns (ranging up
to 90 per cent) and reducing wastage and delays, which in turn were severely
affecting the budgeting process and its outcomes. The first step is to have
good policies that can only result from proper analysis. Review sectoral
policies and formulate 3-year strategic plans that are used as planning and
management tools while ensuring that proper economic analysis of programmes and
projects lead to the prioritization and the costing of programmes. This will
form the basis of the policy rationales behind the ceilings and allow for
greater acceptance of the ceilings by ministry policy makers.
No
significant budgetary reforms are likely to succeed unless a robust and
functioning accounting, reporting, monitoring , evaluation and implementation
facilitator/delivering system is in place. And the second step is to upgrade
the system of evaluation of projects and programs which is quite weak in many
ministries. Evaluation generally takes the form of financial audits. Few
examples of engineering and quality control assessments for major capital
projects exist. Similarly, there are rare examples of cost effectiveness
studies. The Project Plan Committee (PPC) unfortunately does not foot the bill.
Attempting performance audit without agreed performance benchmarks and proper
systems to record and track and evaluate performance is equally unlikely to be
effective. These are some of the basics that must be satisfied for the PBB to
be effective- “real” performance and policy-based budgeting - a PBB that
secures delivery of government’s major domestic policy priorities.
As
for our State-owned Enterprises, we can start by: (a) putting in place a
transparent nomination process for the directors of boards. The key element of
such a process should include developing clear selection criteria,
professionalizing the nomination process and enhancing public scrutiny of the
results; (b) establishing a framework for performance management. Government
needs to develop a framework for communicating government’s expectations to
each institution and to the public. The core of the process in most countries
is the establishment of a performance agreement; (c) reviewing performance and
holding institutions accountable, and (d) establishing performance incentives.
E-governance must become the centre stage of our institutions to reduce
physical contact and to enhance the quality of the delivery of our public
services. This will also minimize opportunities for corruption
The
PBB approach needs to be thoroughly reviewed, but it should not be
jettisoned. PBB, when properly
implemented with an effective monitoring and evaluation process, does confer
greater accountability and transparency to fiscal management.The sad thing is
that in the public sector, for the past seven years of PBB experimentation, we
have had very few thinkers but a lot of loud speakers, especially at the
Ministry of Finance. And the few thinkers that remain will either stop thinking
out of frustration or just leave for greener pastures where they can be
recognized.
