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Budget Execution: Tracking Progress and Controlling Funds - Case Studies. Parminder Brar, FM Anchor Budget Management and Financial Accountability Course March 1-2, 2004. Outline.

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Budget execution tracking progress and controlling funds case studies l.jpg

Budget Execution: Tracking Progress and Controlling Funds - Case Studies

Parminder Brar, FM Anchor

Budget Management and Financial Accountability Course

March 1-2, 2004


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Outline Case Studies

  • Case Study 1: India : Why India? Bank lending of around $1.5 bn. Is 1.29% of GoI’s budget, and around 0.6% of general government spending. Supporting budget management reform is critical for achieving MDG’s. Budget Management System based upon Treasury Single Account and reimbursement to commercial banks.

  • Case Study 2: Nigeria : Why Nigeria? Cash management crucial for budget management. Role of CBN in budget management. Budget management based upon cash advances and multiplicity of bank accounts and banks for each agency.

  • Conclusion


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Case 1: India – Expenditure Trends Case Studies

  • Annual expenditure trends are remarkably similar.

* Rs. 1 crore = Rs.10 million.


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Case 1: India – Expenditure Trends Case Studies

  • Annual expenditure trends are remarkably similar.


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Case 1: India – Overall Expenditure Case Studies

  • Around 75% of GOI expenditure is recurrent (Non Plan) and the rest is capital (Plan) *.

* There could be some overlap in capital and recurrent expenditure between Plan and Non Plan.


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Case 1: India – Non Plan Trend Case Studies

  • Annual trends of recurrent expenditure are remarkably similar.



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Case 1: India - Plan expenditure Case Studies

  • Around 40% of capital expenditure is spent in the last quarter.



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Case 1: India - Ministry trends Case Studies

  • The Indian Rope Trick:


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Case 1: India - Ministry trends Case Studies

  • The Peaks:


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Case 1: India - Ministry trends Case Studies

  • The Rolling Hills:


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Case 1: India - Ministry trends Case Studies

  • The Stress Reliever:


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Case 1: India - Receipts Case Studies

  • Tax receipts account for 60% of GOI receipts


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Case 1: India - Receipts Case Studies

  • Receipt trends are remarkably similar.


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Case 1: India - Receipts Case Studies

  • Tax receipts have been overestimated for the last 7 years.


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Case 1: India - Receipts Case Studies

  • Budget Management challenges are partly due to overestimating receipts every year.


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Case 1: India - Receipts Case Studies

  • GoI’s receipts flow into a Treasury Single Account in the Reserve Bank of India.


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Case 1: India - Disbursements Case Studies

  • Disbursements are on the basis of reimbursement of funds to commercial banks. One Ministry deals with one bank.


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Case 2: Nigeria - Receipts Case Studies

  • Cash management is based on funds available in the CRF.


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Case 2: Nigeria - Expenditures Case Studies

  • Disbursement system operates on the basis of cash advances to numerous banks.


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Case 2: Nigeria – CRF Receipts Case Studies

  • 77% of receipts are on account of Treasury Bonds.

* Provisional unaudited data


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Case 2: Nigeria – CRF Expenditures Case Studies

  • 79% of disbursements are on account of Treasury Bonds.

* Provisional unaudited data


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Case 2: Nigeria – Net TB Support Case Studies

  • In FY 03 - in ten out of twelve months NTB operations reduced monthly cash balances.

* Provisional unaudited data


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Case 2: Nigeria – Non NTB Disbursements Case Studies

  • In FY 03 – Cash constraints severely impacted capital and recurrent expenditures.

* Provisional unaudited data


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Conclusion Case Studies

  • Poor budgeting can aggravate stress of budget management (India).

  • Unpredictability of fund flows can severely impact project performance (Nigeria).

  • Multitude of bank accounts result in sub optimal cash management (Nigeria).

  • Are there robust systems for linking financial progress with physical progress?

  • Does flow of funds result in better outcomes?


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