Bestandsaufnahme und Perspektiven des Haushalts- und Finanzmanagement

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Bestandsaufnahme und Perspektiven des Haushalts-
und Finanzmanagement

• Deutsche Hochschule für Verwaltungswissenschaften
• Speyer 25-27/02/2004

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Public Budgeting in OECD States An overview

• Miekatrien Sterck
• Public Management Institute
• Catholic University of Leuven, Belgium

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Introduction

• Common trend to results-oriented budget reforms,
  but variation between OECD-countries in the way
  these reforms are implemented
• Several definitions of results-oriented
  budgeting Osborne Gaebler (1992), GAO (1993)
  (1999), Hatry (1999), Lynch (1995)
• Purpose classification of results-oriented
  public budget systems

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Research project

• Research objective to describe, declare and
  predict the modernisation of financial and
  management systems
• Subject of research ministries of central
  government level
• Research method
• International comparative (Australia, Canada, New
  Zealand, Sweden, the Netherlands, UK, US)
• Qualitative analysis of secondary and primary
  data

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Outline

• I. Trends in public budgeting
• II. Challenges of implementing results-oriented
  budget reforms
• II. Conclusions

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I. Trends in public budgeting

1. Increased use of output and outcome information
2. Evolution towards accrual budgeting

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1. Output and outcome information

• Analytic dimensions
• Outcomes/outputs
• Purchasing/Linking
• 72 of OECD countries uses outcome and output
  information in the budget (OECD World Bank
  Survey 2003)
• Three clusters
• outcome budgeting
• output budgeting
• outputs and outcomes informing traditional
  appropriations

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Cluster I. Outcome budgeting

• Parliamentary appropriation of outcomes
• Australia (Outcomes and Outputs Framework)
• the Netherlands (VBTB)
• UK (Spending Review)
• Sweden (VESTA)

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Example Australia
Budget Bill PBS
Portfolio Family and Community Services X
Agency Department for Family and Community Services X
Outcomes Stronger Families Families, young people and students have access to financial assistance and family support services X X
Output Groups Family assistance X
Departmental Items Policy advice Performance Indicators Ministers and ministers offices satisfied with the quality of policy advice and Department meets standards for policy advice X
Administered Items Services for Families with Children Performance Indicators of families with children under 5 years of age participating in playgrounds X
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Cluster II Appropriations for outputs

• Appropriations for outputs instead of outcomes
  because of importance of external factors
• New Zealand Estimates of Appropriations

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Example New Zealand
Estimates of appropriations Estimates of appropriations Estimates of appropriations
Statement of objectives and trends Statement of Appropria tion Explanation
Vote Transport X X X
Key Government Goals Grow an inclusive, innovative economy for the benefit of all X
OutcomesIncreased opportunities and flexibility for International Air Service operators and users, Safe maritime operations at reasonable cost X
Departmental output classes Policy Advice X
Non-departmental output classes Maritime Safety Regulation and Monitoring X
Output class measuresNumber of Parliamentary Questions, of recreational craft safety activities carried out in accordance with ISO quality procedures -          X
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Cluster III outcomes and outputs informing
traditional appropriations

• Information about outcomes and outputs is not
  contained in the authorised budget but in
  explanatory documents
• Canada Reports on Plans and Priorities (Improved
  Reporting to Parliament)
• United States performance plans (Government
  Performance and Results Act)

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Example Canada
Main Estimates Part II RPP
Portfolio Agriculture and Agri-Food X
Department of Agriculture and Food X
Votes Program Expenditure Votes, Operating Expenditure Votes, Capital Expnediture Votes, Grants and Contribution Votes, Non-budgetary Votes X
Statutory Items Payments in connection with the Farm Income Protection Act X
Governments Priorities The Government of Canada will help strengthen the profitability of the sector and ensure consumers around the world recognize that Canada's agri-food products are second to none. X
Strategic outcomes Security of the Food System X
Agricultural Policy Framework Priorities Food Safety and Quality X
Programs Improving Food Safety Systems and Quality Recognition X
Performance measures Rate of compliance for federally registered establishments and food products (domestic, imports and exports) X
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2. Accrual budgeting

• Cash and accrual as two endpoints of a spectrum
  of methods of charging
• Analytic dimension stage of reform
• 8 of OECD countries full accrual, 24 modified
  accrual (OECD World Bank Survey 2003)

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Cluster I Full accrual budgeting implemented

• Appropriations based on full cost
• Cash information remains important (e.g. net cash
  requirements UK)
• New-Zealand Public Finance Act 1989
• Australia Accrual Outcomes and Outputs Framework
  (1999-2000)
• United Kingdom Resource Accounting and Budgeting
  (2001)

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Cluster II Accrual budgeting planned

• Plans to move to an accrual budget
• Sweden VESTA Performance budgeting project
  alignment of accrual accounting system with
  accrual budgeting system

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Cluster III accrual budgeting actively considered

• Canada
• Accrual accounting since 2001-2002
• Implementation of accrual budgeting actively
  considered to align the budgeting and accounting
  system

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Cluster IV accrual budgeting not actively
considered

• United States accrual budgeting not actively
  considered despite of accrual accounting
• The Netherlands plans to move to an acrual
  budget (Eigentijds begroten 2001) are recently
  given up

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II. Challenges

1. Competing budget functions
2. Competing budget processes
3. Competing budget formats

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1. Competing budget functions

• Financial control versus results-oriented
  budgeting
• e.g. US, the Netherlands
• Political accountability versus administrative
  accountability
• e.g. Sweden
• Authorization function versus management function
• e.g. Australia

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2. Competing budget processes

• Top-down versus bottom-up
• e.g. Sweden
• Executive versus legislative dominance
• e.g. Australia, US

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3. Competing budget formats

• Outcomes versus outputs
• e.g. New Zealand
• Quality of output and outcome information
• e.g. UK audit of performance information By NAO

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III. Conclusions

• Common trend to results-oriented budgeting, but
  huge variation between countries
• Two main evolutions
• Increased use of output and outcome information
  in the budget documentation
• Evolution to accrual budgeting
• Challenges to implement budget reforms competing
  functions, procedures and formats

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Evolution in the format of the authorized budget
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Evolution in the format of the total budget
documentation