Budget Management and Financial Accountability: Overview

1
Budget Management and Financial
AccountabilityOverview

• Parminder Brar, OPCSFM Bill
  Dorotinsky, PRMPS
• Budget Management Course
• March 1-2, 2004

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Outline

• The challenge of budget management.
• Budget management cycle.
• Why is budget management important?
• Key challenges
• How to monitor progress for systemic improvements
  and budgetary outcomes?
• How to better support budgetary reform in client
  countries? What is the new approach?
• Can budget reform be achieved without a wider
  reform program?
• What impact will decentralization have on budget
  management?
• Organization of the course

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The challenge of budget management.

• Budgeting is a highly political process
• Budget reform is extremely challenging
  Tragedy of the Commons.
• Success has been much more modest than expected.
• Institutional incentives are key to budget
  reform.
• The principal-agent problem distorts budgetary
  outcomes.
• Budget is NOT an accounting document
• What are the incentives for compliance or non
  compliance?
• What are the lessons we can learn?

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Budget management cycle
What are the main impediments to reform and what
can be done to address them?
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Why is budget management important?

• Budget Management systems are weak in client
  countries.
• The MDGs cannot be achieved unless budget
  systems improve.

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New approach to support reform
Donor country Assistance Strategy
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Organization of the course

• What can we do in the short term to improve
  systems in client countries?
• What is the new approach to supporting country
  reform strategies?
• Why has been our experience with reform of
  Treasury Systems?
• What can be done to strengthen internal and
  external controls?
• Will decentralization improve budget management?
• How can transparency and accountability be
  improved?
• What are the links between budget management,
  governance and impact?
• Time for questions and discussion
• Evaluation