During December 2008, the Human Dynamics Team is kicking off its 21 month EU financed Project on „Improving Budget Processes in Croatia“.
The overall objective of this project is “to support the Government to build an efficient and sustainable budget management system designed and operating to European standards, through the modernisation of budget processes and increasing capacity for budget management”. More specifically, the project will be divided into four components aiming at:
Component 1: Multi-year budget framework:
The MTBF will improve resource allocation by effectively prioritizing all expenditures in accordance with the Government’s own priorities. It will also make public expenditures more efficient and effective, essentially by creating the opportunity for budget users to have greater flexibility in managing their budgets in the context of the overall budget constraints, programme goals and performance objectives.
Five particular results are required under this component including:
- The design of the MTBF format;
- The new budgeting procedures that should be adopted, an analysis of the legal framework and the extent to which it should be modified;
- The preparation of appropriate manuals.
Component 2: Performance indicators and modifications to the Treasury information system:
The aim is to shift the budget process from an input-based budget towards an output-based budget. The results to be achieved include a review of the current programme classification arrangements, that performance indicators are set up with procedures to monitor and report on them defined, that appropriate operational guidelines are drafted, and that modifications to the existing Treasury information system which allow the impact of the reforms to be captured are implemented.
Component 3: Streamlined Budget Execution Process:
The aim is to streamline the budget execution process by extending the TSA coverage, including coverage of foreign exchange transactions, to cover the transactions of third level budget users and extra-budgetary funds. Cash planning is to be improved, as are the arrangements for handling commitments including the accounting arrangements for commitments. Accounting methods are to be reviewed in order to ensure that both cash payments and unpaid expenditures will be reported and automated procedures established to compare the modified accrual based accounts with the cash based accounts.
Component 4: Training of MoF and line ministries’ staff:
The training will include a capacity assessment of MoF staff, establishment of training programmes/curricula and implementation schedules; elaboration of training materials; delivery of training and study tours/internships to EU countries. Technical level workshops are to be provided on performance indicators and information system modifications. Seminars are also required to be provided, particularly for Parliamentarians to raise their awareness of the developments which are proposed and the impacts that these will have on the budget process.