ALIGNING PRS REPORTING WITH DOMESTIC REPORTING PROCESSES

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ALIGNING PRS REPORTING WITH DOMESTIC REPORTING
PROCESSES
Francisco Sa Benevides Vice Ministers for Agricul
ture , Flores and Fisheries And Antonio Freita
s Director of Budget Timor Leste Forum National
Plans and PRSP East ASIA April 4-6 2006 Vientiane
Lao PDR
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CONTENTS

• I BackgroundII The Budget in Timor-Leste
  systemIII Linking the budget to programmed
  IV Capacity Constraints
  
• V Making Adjustment

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Map of East Timor  
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I Background

• Timor Leste has a population of 1,000,000
  people in an area of 14609.38 square kilometers.
  It is made up of 13 Districts, 64 Sub districts
  and 442 Villages
• In the referendum of 1999 the people of Timor
  Leste voted to separate from Indonesia
  
• Timor Leste became the first new nation of the
  21st century on 20 May 2002, after four centuries
  of colonial rule and a quarter century of
  occupation and conflict

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Some basic features

• mainly agrarian nation76 of inhabitants live in
  rural areas.
  
• poverty line per person estimated US16.50 per
  month or 0.55 per day (calculated in September
  2001)
  
• Natural resources include oil fields (Timor Sea),
  coffee, forests (some sandalwood), possibly some
  minerals, mountains and sea

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Demographics

• Total Population approx 1.000.000 people
• 80 Original
• 10 Indo Portugal
• 5 Chinese
• 5 Others

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Religion

• 90 Catholic
• 6,5 other Christian
• 1 Muslim
• 1 Hindu
• 0,5 Other or no specified religion

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II. The Budget in Timor-Leste

• The Ministry of Planning and Finance is
  responsible for public expenditure management for
  the Democratic Republic of Timor Leste.
  
• The Budget Office is responsible for delivering
  the national budget.
  
• The budget office establishes and maintains an
  efficient and timely combined sources budget that
  supports Government's national priorities within
  a sustainable medium term fiscal framework that
  is prepared and managed by national staff.

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Components of Total Public Sector Expenditure in
Timor-Leste
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The State Budget (CFET Budget)
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Budget and Planning Cycle
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Budget and Planning Cycle

• The Governments planning and budget cycle
  commences in November when we establish fiscal
  envelopes.
  
• Ministries submit their budget submission and
  draft annual action plans for analysis by the
  Budget and Planning Departments.
  
• A sub committee of the Council of Ministers
  called the Budget Review Committee (BRC) is
  established.

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Budget and Planning Cycle

• The BRC reviews each submission looking at the
  draft annual plan, and current budget execution.
  The Budget and Planning Departments prepare a
  green brief to inform the BRC about issues in
  the submission.
• Following on from the BRC the Budget Department
  provides the Council of Ministers with a draft
  budget for their consideration and approval.
  
• This is then presented to a) development partners
  at the Timor-Leste Development Partners
  Conference , and b) the National Parliament for
  consideration.

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III. LINKING THE BUDGET TO PROGRAMMES

• In Timor-Leste the appropriations are provided on
  a Division/Programmed basis. For example in the
  Ministry of Agriculture, Forestry and Fisheries,
  money is appropriated to the livestock division
  which runs the livestock programmed, fisheries
  division which runs the fisheries programmed.
• The annual action plans are also developed by
  division. In this way we link the budget with
  the annual action plan
  
• The Government receives Quarterly reporting on
  the annual action plans and also receives
  quarterly updates (which go to the National
  Parliament) on Budget Execution.

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IV. CAPACITY CONSTRAINTS

• There is a need to improve the staff
  understanding of their annual action plans and
  linking these to the general targets from the
  National Development Plan and the Millennium
  Development Goals.
• There is also a need to improve familiarity with
  the financial system of the Government. This
  means better understanding the budget and
  planning process, the procurement process and the
  Treasury process.

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V. MAKING ADJUSTMENTS

• We implement the budget in July. We review our
  revenue position twice a year, to inform the
  Government and the National Parliament. On this
  occasion we take the opportunity to adjust the
  expenditure for any further urgent needs
• ( For example last year we sent a number of
  Timorese students to Cuba to learn medicine but
  we had no budget for their costs of living, this
  was an example of an unforeseen occurrence which
  needed to be accommodated).