2013 Censof Global Conference
1 – 5 December 2013, Dubai
Performance Management in Public Sector:
Outcome Based Budgeting
Mohd Sakeri Abdul Kadir
OBB Project Team
Ministry of Finance Malaysia
1
Presentation outline
1
Malaysia’s budgetary system in perspective
2
Outcome Based Budgeting
3
Panning, Budgeting and M&E under OBB
4
MyResults application
5
Challenges
2
Malaysia’s budgetary reform initiatives
Integrated
Approach
Accountability,
flexibility &
delegation
1969 - 1990
Detailed
Controls &
Discipline
Prog. Performance
Budgeting System
(PPBS)
1957 - 1968
Traditional
Approach
• Incremental
line item
budgeting
Outcome Based
Budgeting (OBB)
1990 - 2012
• Program
Performance
• ProgramActivities
• Performance
Indicators
• Evaluation
Modified Budgeting
System (MBS)
• Disaggregated
Budget
MBS
Programs &
Performance
2012 ->
• Budget
Ceilings
• Program
Agreements
• Integration
• Alignment
• Budgeting
for results
• Results
Reporting
• Evaluation
• Exceptions
Reporting
• Evaluation
3
Factors taken into consideration in implementing
Outcome Based Budgeting (OBB)
Greater fiscal challenges that require effective & efficient
expenditure management
Greater demand for accountability, quality results, ‘doing
more with less’ & enhanced authority over resources
Limited strategic alignments and integrations
Existence of overlapping programs and increasing
redundancy
Rising expectation on excellent public service delivery
Budget based on outputs tends to skew more towards
compliance than performance
Lack of systematic monitoring and evaluation system
4
OBB plays a key role in linking the national transformation
pillars from implementation to RESULTS…
TRANFORMATION PILLARS
OBB ENVIRONMENT
RESULTS
Planning for
outcome
Government
Transformation
Programme
Economic
Transformation
Results
Reporting
Programme
Budgeting for
Outcome
• Strategic Reform
M&E
Initiatives
• National Key
Areas
• Economic
Strategic
management
VISION 2020
tool
for managers at all levels
• Structured mechanisme
linking national planning to
implementation at agencies
• Vertical alignments
• Horizontal linkages
Malaysia’s
• Integrated
Medium-term
Plan budgeting
(10th & 11th Plan)
5
OBB will focus on…
Planning for
Outcome
Performance
reporting and
policy formulation
Results
Reporting
Managing information
for monitoring,
evaluation & decision
support system
Developing the
strategic Results
Framework for the
Ministry
Budgeting
for Outcome
Monitoring
& Evaluation
Preparing the
resource
requirements to
drive the ministry
results
6
Integrated approach to results-based management

National Strategic Thrusts
National Key Results Area
National Outcome
 Key Performance Indicator
National Programme
Planning for results is
essential to enable:
• effective programmes
implementation &
better results delivery
• systematic monitoring
& performance
reporting
• structured programme
evaluation
Performance Planning
• better budget estimates
National level

Ministry level

Programme level
National Results
Framework
Ministry Executive
Ministry’s Outcome
Summary
Ministry’s
Results
 Key
Performance
Indicator
Framework
(MRF)
Programme
(of intervention)
Programme Outcome
Programme Perf.
 Key Performance Indicator Mgt. Framework
Activity

Activity level
Activity Outcome
 Key Performance Indicator Activity Perf. Mgt.
Framework
Activity Output
 Performance Indicator
7
Strategic planning using program logic
Outcome
Outcome Hierarchy
Analysis
Management
tool
Problems/Needs
Clients/Stakeholders
Problem Tree Analysis &
Objective Tree Analysis
ProLL is used in identifying
problems/needs and defining
the hierarchy for the outcomes
at Ministry, Programme &
Activity levels
Outcomes are
the changes
we are bringing to
a problem or
need situation
linked to
our clients and
stakeholders
So, what are the Outcomes?
8
Programme logic and linkages (ProLL) model
CLIENTS/ STAKEHOLDERS
NEEDS/PROBLEMS
POLICIES
DEMAND
ANALYSIS
Needs Fulfillment /
Problem alleviation
(rate / level)
IMPACT
PROGRAMME
EFFECTS
TERTIARY
OUTCOMES
Outcome Achievement
(rate/level )
“Purpose in Life”/
Mission/Goals/ToR
PROGRAMME
RESULTS
Perfomance
Indicators
INTERMEDIATE
OUTCOMES
PRELIMINARY
OUTCOMES
STRATEGIES
PROGRAMME
PROGRAMME
DELIVERY
PROGRAMME
OUTPUTS
PROCESS OUTPUTS
PROCESS/ACTIVITIES
INPUTS
ProLL© 2010 Rasappan, Arunaselam & Winston, Jerome, CeDRE International
9
Monitoring plan: identifying right indicators
KPI:
target
variance
tolerance
limit
baseline
• Indicators describe evidence which may be used
to report on the achievement of certain aspects
of a programme result
• Under OBB, KPIs are identified for preliminary
outcomes at all levels
How to measure performance?
KPIs based on
SMART principles
Specific
Measurable
Attainable
Realistic
Time bound
10
Linking planning and budgeting under OBB
Integrated
national plans to
achieve long
term objectives
National programs
needed to achieve
integrated national
plans
Activities required
Ministerial Programs
to complete the
linked to complete
ministerial
national programs
programs
National Level
Ministry/Agency Level
MES
National
Program 1
Budget
National
Budget
National
Program 2
Budget
National
Program N
Budget
Ministry 1
Budget
PPMF
Program 1
Budget
Program 2
Budget
Program N
Budget
Ministry 2
Budget
Ministry N
Budget
APMF
Activitiy1 Budget
Activity 2 Budget
Activity 3 Budget
Activity N Budget
OE & DE
Program 1
Budget
Activity 1 Budget
Program 2
Budget
Activity 1 Budget
Program N
Budget
Activity N Budget
11
Program logic and results framework
IMPACT
TERTIARY OUTCOME
INTERMEDIATE OUTCOME
PRELIMINARY OUTCOME
CLIENTS’/
STAKEHOLDERS’
PROBLEMS/
NEEDS
ROOT
CAUSES
OUTPUT
PROCESS
INTERVENTIONS
INPUT
PROGRAMME
12
MyResults application
Data is for discussion
purposes only, not to be cited
PLANNING FOR
RESULTS
National Strategic Thrust
National Key Results Area
National Outcome
National Programme
Ministry
Outcome
National
level
Profiles
Source of authority
Clients
Stakeholders
Needs
Ministry
level
Problems
Outcome
KPI
13
MyResults application
Data is for discussion
purposes only, not to be cited
BUDGETING
Operating
Expenditure
General
Object
(accounting
codes)
Policies:
1. Existing policy
2. New policy
3. One-off
Development
Expenditure
Project list
14
MyResults application
Data is for discussion
purposes only, not to be cited
PERFORMANCE
MONITORING
Target
Minitry-level
Outcome & KPI
Actual
achievement
< 60%
60-79%
80-99%
> 99%
15
Focuses on ‘outcome’ in strategic planning
and budgeting will…
1
Align ministries to
national priorities
• Establish vertical linkages between Ministry-level outcomes
and national-level priorities
Enable prioritization
• Use outcomes as basis of prioritization and guiding point for
resource constraints and optimization
2
3
Eliminate wastage
4
Encourage
innovation
5
Foster value-formoney mindset
6
Promote effective
fiscal management
• Address cross-cutting issues through identification of
overlapping programs/activities and shared outcomes
• Encourage innovative ideas through balancing cost
efficiency and achievement of intended results
• Change budget reviewing process to focus on program
performance and results delivery, not on input utilization
• Consolidation of important information into MyResults
application
• Provide multi-year view of performance and budgeting data
to support decision-making process at all levels
16
Challenges in implementing OBB
OUTCOMES
 Understanding the concepts
 Role of management in strategy building
OUTPUTS
 Quality of information in the results
framework
 Redefining the roles and functions of budget
review officers
PROCESS
INPUTS
 Sustainable capacity building and frequent
movement of OBB trainers
 Identifying the right IT solution and translating
business requirements into an IT system
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thank you
terima kasih
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[email protected]