MANAGEMENT AND CONTROL OF GOVERNMENT EXPENDITURE

I will now update the House on what is being done by Government to achieve greater accountability and control over public expenditures.

Budgeting for Results

Last year, I informed the House that we have embarked on a process of financial management reform called Budgeting for Results or BFR for short. Under BFR, funds are allocated and greater managerial autonomies granted to a Government organisation in exchange for clearly defined pre-specified outputs. By making public servants more focused on the outputs to be delivered and more customer-oriented through BFR, we hope to enhance the performance of the public sector. BFR will be an improvement over the existing budgeting system, which is largely input driven and puts little pressure on ministries to review their outputs or requirements or to reallocate resources between activities. There are also currently no clear performance targets nor incentives for staff to be more productive in the use of public funds.

Fundamental to the BFR process is the identification of output and performance targets. Departments have already been asked to do this. Clearly defined outputs and performance targets should in turn lead to greater accountability and value for money from the organisation.

Several concepts are being worked out in connection with the implementation of BFR. They relate mainly to the financial, procurement, and personnel managerial flexibilities that can be devolved to departments under BFR. To foster entrepreneurial behaviour, we are also exploring the feasibility of allowing departments to fund their operations from receipts and to charge other departments for their services. Once we are ready with some workable arrangements, these would be implemented in selected ministries and departments.