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Fiscal Economics and

Economic Management

Module 5: Public Expenditure Management-1:


Budget Preparation Process

Session 7: Ministry Budget Framework

Md. Mahiuddin Khan


Ms. Nazma Mobarek
M. Saiful Islam
Session Objectives
After attending this session and completing
the associated readings you should:
be familiar with the procedure for
preparation of Ministry Budget Framework;
know how to translate ministry objectives
into resource allocations;
be able to set medium term targets and
performance indicators.

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The Phases in MTBF Process

The MTBF process comprises three distinct


phases:
Strategic phase
Budget preparation phase
Budget finalization and approval phase
Ministry Budget Framework is prepared/updated
in strategic phase

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Developing/Updating the Ministry
Budget Framework

Each year line ministries develop/update their


Budget Framework
Ministry Budget Framework (MBF) is divided into
two major Parts and five Sections
Part-A is prepared by the Ministry or Division
Part-B is prepared by Departments/ Agencies
under the respective Ministry/Division

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Ministry Budget Framework
Part - A
Section-1: Mission Statement and Major Functions
of the Ministry/Division
Section-2: Medium Term Strategic Objectives and
Key Activities
Section-3: Poverty and Gender reporting
Section-4: Priority Spending Areas/Programmes
Form-1: Key Performance Indicators (KPI) of the
Ministry/Division
Form-2: Preliminary Revenue Estimates and
Projections
Form-3: Expenditure Ceilings for Departments and
Agencies
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Ministry Budget Framework
Part - B
Section-5.1: Recent achievements of the
Departments/Agencies under the Ministry
Section-5.2: Key Activities undertaken in relation to
specific Strategic Objectives, and outputs related to the
Activity
Section-5.3: Output Indicators and Annual Targets for
Department/Agency
Section-5.4: Forward Budget Estimates
Section-5.5: List of Programmes/Projects of the
Department/Agency
Form-4: Preliminary Expenditure Estimates for five years
for the Departments/Agencies under the Ministry
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Section-1: Mission Statement and Major
Functions of the Ministry/Division
1.1 Mission Statement of the Ministry/Division
To develop a clear mission statement the ministry
must consider the following;
What is the purpose of this ministry; what does it intend to
achieve,
By what broad areas of operation will the ministry do this,
and
Who the intended beneficiaries?
1.2 Major Functions of the Ministry/Division
Major functions of the ministry/division should be
summarised from the Allocation of Business.
These should be limited to a maximum of 8 functions.
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Section 2: Medium-Term Strategic
Objectives and Key Activities
Strategic objectives for the ministry/division should be
derived and summarized from the national level
and/or ministry/sector policy documents.
List of strategic objectives should be kept short by
combining some closely related objectives.
An activity is a description of what is to be done with
the inputs provided through the budget
Identify the key activities of the ministry/division
which are expected to contribute towards the
realisation of the strategic objective.
Key activities should be consistent with the functions
of the ministry/division.
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Section 3: Poverty and Gender
Reporting
3.1 Impact of Strategic Objectives on Poverty Reduction
and Women's Advancement
Make sure that the strategic objectives listed in this section are same
as in section 2.
Describe separately how the strategic objective and its associated
activities relate and contributes to the Governments wider objectives
of poverty reduction and womens advancement.
Follow the detailed instruction for completing the poverty and gender
information
3.2 PR&WA Related Spending
a table generated from the RCGP database identifying the poverty and
gender related expenditure allocations within the ministry/divisions
Budget

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Section 4: Priority Spending
Areas/Programmes
A priority spending area is a defined programme of
activities or works that makes a significant contribution
towards the realisation of the strategic objectives of an
organisation.
Identify and describe the main priority spending areas for
the ministry/division that are expected to have the greatest
impact on the achievement of ministry/divisions strategic
objectives.
These should relate to the main functions of the
ministry/division and should be ranked in order of priority.
Limit the number of priority spending areas to a maximum
of six .
For each priority spending area list the relevant strategic
objective to which it is expected to contribute.
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Key Performance Indicators (KPI) for
the Ministry/Division
Column 1: Identify key performance indicators (KPI) for the
ministry/division. Describe the KPI (outcome or higher level output)
against which progress towards attainment of the strategic
objectives can be assessed. Limit the number of KPIs between 6
and 9.
Column 2: Specify the Related Strategic Objectives mentioned at
Section 2.
Column 3: Specify and describe the unit of measurement for the
indicator.
Column 4 and 5: Specify the target value for 2009-10 and the actual
value of the indicator in 2009-10
Columns 6 and 7: Specify the original target for 2010-11 and
revised target value for 2010-11
Columns 8-12: Specify the medium-term target values for 2011-12
2015-16.
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Key Performance Indicators (KPI) for
the Ministry/Division (2)
KPIs should be consistent with the outcome indicators
identified in the NSAPR and/or ministry/sector policy
documents.
Key Performance Indicators (KPI) should meet the SMART
criteria:
Specific the indicator is clearly defined.
Measurable information and data are available.
Achievable the indicator targets are realistically set.
Relevant the indicator is relevant to the objective.
Time bound - there is a clear timeframe for achieving the target.

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Recent achievement, Key Activities and Outputs of
the Departments and Agencies under the Ministry

5.1 Recent Achievements


Provide a brief narrative of recent achievements (during the last 3
years). The description should include recent data and provide a
good impression of the scope and scale of the activities
undertaken. Summarise the description within 100-120 words.
5.2: Key Activities, Outputs related to the Activity,
and related Strategic Objectives
From the activities that were identified by the ministry/division
in Part A Section 2, list those that are carried out by the
department/agency
Describe the main outputs to be achieved within the total life
time of the activity.
An output is the measurable result of the activities undertaken
by a department/project.
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Recent achievement, Key Activities and Outputs of
the Departments and Agencies under the Ministry(2)

5.3 Output Indicators and Targets


The section should include up to 5 indicators that best
reflect the key outputs of the department/agency.
Two separate indicators on poverty reduction and womens
advancement to be included for department/agencies
whose activities have a significant impact on poverty
reduction and/or womens advancement but the total
number of indicators shall not exceed 5.
Indicators should comply with the SMART criteria
5.4 Forward Budget Estimates
5.5 List of Projects, Programmes and Operational
units

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MBF Tables

Three Tables:
1. Preliminary Estimates for Revenue Receipts
2. Department/Agency wise Expenditure
Ceilings
3. Department/Agency wise Preliminary
Expenditure Estimates and Projections

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Form-2
Ministry/Division:
Preliminary Estimates for Revenue Receipts

Share of the concerned Department in Total Revenue


In Lakh Taka
Department/Agen Estimat Explanatory
cy Actual Receipts Budget Estimate Projection Budget Projection
e Remarks
2015-
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2010-11 2011-12 2012-13 2013-14 2014-15
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Preliminary
Revenue Target
for the
Ministry/Division
Secretariat
Department A
Department B
Department C
Department D
Department E
Grand Total
Above(+) / below
(-) the Target

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Form-3
Ministry/Division:

Department/Agency wise Expenditure Ceilings

Share of the concerned Department in Total Revenue


In Lakh Taka
Explanatory
Department/Agency Actual Receipts Budget Estimate Projection Budget Estimate Projection
Remarks
2012- 2013- 2014- 2015- 2012- 2013- 2014- 2015-
2008-09 2009-10 2010-11 2011-12 2010-11 2011-12
13 14 15 16 13 14 15 16
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Expenditure Ceilings for the


Ministry/Division
Secretariat
Non-Development
Development
Of which
Allocation for Approved
Projects
Lump Allocation for Un-
approved Projects
Total (Non-Development
+Development)

Contribution to
International
Organization

Directorate-A*
Non-Development
Development

Of which
Allocation for Approved
Projects
Lump Allocation for Un-
approved Projects
Total (Non-Development
+Development)
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Form-4

Department/Agency wise Preliminary Expenditure Estimates and Projections

Ministry/Division:
Department/Agency:

In Lakh Taka % of
Activity
allocatio % of
Number
Actual Expenditure Budget Estimate Projection n for allocation for Explanatory
Department/Agency (from
Poverty Women's Remarks
Section 2013-
2008-09 2009-10 2010-11 2011-12 2012-13 2014-15 2015-16 Reducti Advancement
5.2) 14 on
1 2 3 4 5 6 7 8 9 10 11 12 13
Expenditure Ceilings for the
Department/Agency

Non-Development Expenditure
1. General Non-Development
Expenditure
Pay of Officers
Pay of Establishment
Allowances
Supply and Services
Repair & Maintenance
Grants in Aid
Acquisition of Assets
Total-General Non-Development
Expenditure

2. Programmes financed from Non-


Development Budget
Approved Programmes*
Programme-A
Programme-B
Sub-Total
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Discussion Questions
What should be the basis for allocating the
ministry ceiling among the departments/
organizations under the Ministry?

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