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Sample text

Second, the emphasis from the community's point of view is going to be on the delivery of timely, courteous, and efficient services, which in turn underlines the need for greater decentralization. Third, the spending agencies have to be made accountable for results, and appropriate devices such as the contract programs recently adapted in public enterprises need to be devised for them. Agencies can only be expected to manage their affairs if they are permitted to be managers. In the systemic area, greater emphasis is needed on policy planning that would facilitate a more precise identification of the financial implications of current policies and their macroeconomic linkages.

This allocative balance appears to have been further ©International Monetary Fund. Not for Redistribution 2: Management of Public Money • 33 skewed in the context of crisis budgeting as a result of arbitrary limits imposed on budgetary inputs. The process is also not generating data on the future implications of current policies, or on the operations and expenditures needed to maintain completed projects. Decisions are therefore piecemeal, some as part of the formal budget and some outside the process and the budget.

In the institutional area, immediate efforts are needed to improve the balance between the central and the spending agencies. Although several factors emphasize the general need for improved balance, three are particularly urgent. First, excessive centralization during periods of economic crisis has had the unintended effect of reducing financial consciousness in spending agencies and encouraging need- ©International Monetary Fund. Not for Redistribution 36 - A. PREMCHAND Table 3. Broad Area Policy planning Recent Improvements in Government Financial Management Systems and Techniques (a) Explicit recognition of resource realities (1) Envelope or portfolio budgeting (2) External legislative or constitutional limits (b) Resource planning and utilization (1) Global targets or ceilings on revenues, outlays, and deficits (2) Improved planning of impact of cuts in expenditure (3) Contingency planning Budget systems (a) Multiyear expenditure planning (b) Formulation of "core" and "noncore" budgets (c) Scrutinies and reviews (d) Improved budget guidance (e) Efficiency controls Organization improvements (a) Improved balance between central and spending agencies through delegation of enhanced powers and responsibilities (b) Improved fiscal reporting Budget implementation (a) Cash management system (b) Cost measurement (c) Improved evaluation less dependence on central agencies.

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