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METHODS OF EXPENDITURE TRACKING. Collaborative Africa Budget Reform Seminar. 1 st to 3 rd December 2004 FARM INN, Pretoria, South Africa. OUTLINE . Introduction Planning and Budgeting Budget Execution Expenditure Tracking Challenges Conclusion. Introduction.

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Methods of expenditure tracking
METHODS OF EXPENDITURE TRACKING

Collaborative Africa Budget Reform Seminar.

1st to 3rd December 2004

FARM INN, Pretoria, South Africa


Outline
OUTLINE

  • Introduction

  • Planning and Budgeting

  • Budget Execution

  • Expenditure Tracking

  • Challenges

  • Conclusion


Introduction
Introduction

  • Increased expenditure does not automatically translate into improved service delivery

  • Limited revenue increases do not allow increased allocations to priorities

  • Hence the need for improved efficiency and effectiveness in resource use


Planning and budgeting
Planning and Budgeting

  • Strategic Allocation based on the Priorities (Allocative Efficiency)

  • Linking Budgets to Outputs and Outcomes

  • Unit Cost

  • Monitoring Indicators developed to measure implementation progress


Budget execution
Budget Execution

  • Work-plans (Annual/Quarterly)

    • MoUs

  • Financial Performance Reports

    • Actual vs Planned Expenditures

  • Physical Performance Reports

    • Actual vs Planned targets


Budget execution cont d
Budget Execution Cont’d

  • Transparency

    • Wide participation of stakeholders in planning and budgeting

    • Publication of releases

    • Popular versions

      • PEAP

      • Citizens’ Guide to the Budget Process

      • Budget at a Glance


Expenditure tracking et
Expenditure Tracking (ET)

  • Why Expenditure Tracking?

    • To ensure that funds reach the intended target beneficiaries

    • Complements the existing monitoring system

    • Provides a rigorous review of expenditure

    • Highlights issues of operational efficiency due to in-depth analysis


Expenditure tracking cont d
Expenditure Tracking Cont’d

  • Review of processes and systems

    • How funds channelled including the banking system

    • Systems and capacity for recording and reporting on expenditure

  • Linkage between Inputs and outputs – Efficiency & Economy

  • Outcomes – Effectiveness/Incidence


Expenditure tracking cont d1
Expenditure Tracking Cont’d

  • Budget Performance Reports (Quarterly, Biannual and Annual)

  • Public Expenditure Reviews

  • Expenditure Tracking Studies

  • Value for Money Audits

  • Surveys (HH, DHS, Impact studies, NSDS, PPAs + voices of the poor)

  • Civil Society – Independent monitoring


Expenditure tracking cont d2
Expenditure Tracking Cont’d

  • Examples of Expenditure tracking studies

    • Education

      • Initial studies focused on reach of expenditures

      • Recent studies have in addition to expenditures focussed on other aspects such as quality and drop out rates

    • Health

      • Focussed on flow of funds

      • Who benefits and accountability


Expenditure tracking cont d3
Expenditure Tracking Cont’d

  • Value for money audit in water focussed on:

    • Sector planning and management capacity

    • Procurement process

    • Contract supervision and monitoring

    • Functionality of the O&M of structures

    • Financial Management, reporting & accountability

    • Average cost of outputs


Challenges
Challenges

  • Availability of skills

  • Availability of data particularly on outcomes/impact

  • Some systems/processes are difficult to change eg bottlenecks related to access to banking services

  • Difficulty in reducing the unit costs in the short run


Challenges cont d
Challenges Cont’d

  • Expenditure Tracking Studies may be expensive

  • Lack of good reporting mechanisms especially on physical performance


Conclusion
Conclusion

  • Increased expenditure alone may not result in improved service delivery

  • Linking budgets to outputs/outcomes and clear unit costs is a pre-requisite for improved ET.

  • Expenditure tracking does not replace monitoring but complements it


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