kpi in ukraine - feao.org.ua · objectives enhances the effectiveness and quality of economic and...
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KPI monitoring in Ukraine
Viktor Maziarchuk
Financial and economical analysis office at the VRU
Head
Timeline
2015.10 Start
2015.11 Letter of Intent
2016.02 Kick off event
2016.08 New team
2016.12 Mid term review
Part of VRU
2017.04 New structure
2018.05 New phase
Objectives
Enhances the effectiveness and quality of economic and financial legislation
being produced by the VRU
Increase the utilisation of financial information available
in Ukraine for effective oversight
and scrutiny
Beneficiary
Committee on
Economic Policy
Committee on
Industrial Policy and
Entrepreneurship
Budget Committee Committee on
Taxation and Customs
Policy
Committee on
Financial Policy and
Banking
Committee on Social
Policy, Employment
and Pension Provision
Committee on Fuel
and Energy Complex,
Nuclear Policy and
Nuclear Safety
Committee on State
Building, Regional
Policy and Local Self-
Government
StructureHead of Office
Budget cluster
1) Senior economist
2) Analyst
3) Analyst
Financial issues
1) Senior economist
2) Analyst
Economic issues
1) Senior economist
2) Analyst
Cross-Cutting Issues
1) Senior economist
2) Analyst
Communication manager
Legal expert Disainer
I) Committee on State
Building, Regional Policy and
Local Self-Government
II) Committee on Economic
Policy
III) Committee on Industrial
Policy and Entrepreneurship
I) Budget Committee I) Committee on Taxation
and Customs Policy
II) Committee on Financial
Policy and Banking
I) Committee on Fuel and
Energy Complex, Nuclear
Policy and Nuclear Safety
II) Committee on Social
Policy, Employment and
Pension Provision
Products & Services
Reactive (by request)
Proactive (working
plan)
FEAO products
I) Products:Quarterly budget review Budget best practices
II) Financial/economic synthesis (1 page):InfographicsAccounting chamber 1 page reportReports of State Agency reviews
III) OtherAnswers of State agency - Budget revenue and expenditureMethodology of financial and economic analysis of draft Laws
I) Products:Legal researchSocio-economic researchCost benefit analysisFinancial analysis
Products
Series budget infographics
1. General budget process2. Budget preparing3. VRU adopt State budget4. Budget execution
Communication Tools
Office space in the VRU
Materials available at:
i) FEAO website - 1416 people/month
ii) FB page - 1306 people
iii) monthly newsletter – 1380 people
Contributing to the parliamentary TV channel
Following the Committees’ agenda and participation in the Committees’ meetings
Networking with MPs’ service
Delivering advise to the Committees’ staff
Collaboration with media outlets and NGO
Law bases
Budget codeArticle 1. budget program passport - a document that defines the objective, tasks, and areas of use of budget funds, state authorities, effective indicators (KPI), and other characteristics of budget program under the budget allocation established by the Law on the State Budget of Ukraine (decision on a local budget);
Article 20.5. The effective indicators of a budget program are used to assess the efficiency of the budgetary program and include quantitative and qualitative parameters defining the outcome of the budget program, its progress, the degree of achieving its objective and performing its tasks. Such indicators shall be supported by the official state statistic, financial and other reporting, accounting information, and statistical and internal (managerial) reports. The list of effective indicators for each budget program is developed by key spending units according to the regulation by the central executive body, which ensures formulation of the State budget policy.
Law bases
Budget code
Article 6. The participants of budget process assess the budget programs performance throughout all the stages of budget process, which implies monitoring, analyzing, and exercising control over the use of budget funds in an efficient manner and for the intended purpose. The budget programs performance is assessed based on the analysis of budget program effective indicators, as well as other information contained in budget requests, breakdowns of costs, budget program passports, and reports on meeting breakdowns of costs and meeting the requirements of budget program passports. Organizational and methodological foundations of assessment of budget programs performance are defined by the central executive body, which ensures formulation of the State budget policy.
The results of assessment of budget programs performance give the grounds to make decisions on duly introducing changes to budget allocations of the current budget period, and corresponding proposals to the draft budget for the planned budget period and to the budget projections for the two budget periods following the planned one, including suspension of the respective budget programs.
Law bases
Budget code
Article 22. 5. A key spending unit:
6) develop and approve passports of budget programs and generate reports on their execution, analyze the performance indicators of budget programs (if Performance Program Budgeting method is used in the budget process), ensuring in the process the following:
Law bases
MoF order: KPI at PBP
The KPI quantity at the PBPcan be defined by stateauthority according to PBPspecific.
MoF order: Budget request
The KPI quantity should not beexcided more that 4 per one foreach KPI groups, in general.
Comment:
16 KPI max for a budget program =4 KPI for each of 4 KPI groups
Law bases
MoF special order: KPI at PBP
KPI criteria:
1. Realistic - determined taking into account the indicators of the current situations and existing needs of the economy and society, the indicators determined by the forward-looking documents on economic and social development and the possibilities of the resource of the state budget.
2. Relevant – consistent with the program and strategic documents, the strategicobjectives of the key managers, and the indicators of their performance in themedium term, characterize the most important aspects of the expected result
3. Social significance - highlight the effect that the economy and society receive through the activities, provide an opportunity to assess the impact on economic and social development, the efficiency of the provision of public services.
Law bases
MoF special order: KPI at PBP
KPI groups:
1. Expense
2. Product
3. Effectiveness
4. Quality
The KPI developed based on strategic goals of state authority in a midterm period.
KPI monitoring
Why we focus on KPI – hypothesis:
1) no linkage between expenditure and outcomes (KPI)
2) show “real picture”:• nobody know what is going on• collect and publish information• produce and promote analytics
3) instrument for MP and civil society
4) change focus of from budget “consumption” to outcomes
As a result budget expenditure system more efficiency.
Steps
1. Collect PBP reports from web-sites (less than 40%)
2. Send request to state authorities that not publish reports
3. Form template
4. Make data available to calculation (from pdf to excel)
5. Data classification
6. Analysis
Budget system
State budget
125 state authorities
481 passport of budget programs – PBP:
437 adopted
44 or 9% not adopted (2018-06-15)
10,742 KPI at the PBP
average 22 KPI per PBP
max 153 KPI per PBP Ministry of Defense
Local budgets
9618 local authorities
… PBP
… KPI
Key findings
General information for PBP 2016
85 from 458 budget programs not required MoF recommendation (19% of all program) for quantity of KPI
2,718 from 10,742 KPI in this budget programs (25% of all KPI)
32 KPI on average in this budget programs
Key findings
Government efficiency 2016
32% of KPI achieved
51% of KPI achieved
+/- 10% deviation
12% of KPI non achieved or
doubled:
8% of KPI not started
4% of KPI over
0
8
1 1 1 2 2 23
57
12
32
7
42 1 1 1 1 0 0 0 0
4
0
5
10
15
20
25
30
35
<-1
00
-10
0>-
10
0-9
0-8
0-7
0-6
0-5
0-4
0-3
0-2
0-1
0 01
02
03
04
05
06
07
08
09
0<1
00
10
0>1
00
Shar
e, %
Level of deviation plan vs fact, %
Key findings
Distribution last figure
9% of data could be not
reliable/ manipulated
-5
0
5
10
15
20
25
30
35
40
1 2 3 4 5 6 7 8 9
Shar
e, %
Figures
2016 KPI fact
Normal
Deviation
Key findings
Bernulli distribution and bid data (two last numbers)
Non normal distribution
Shift figures:
0 - 9
0,00,51,01,52,02,53,03,54,04,55,05,56,06,57,07,58,0
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
Shar
e, %
Two last figures KPI distrubution
% total
Probability, %
Key findings
Government efficiency 2016
0
200
400
600
800
1000
1200
1400
Level of deviation plan vs fact, %
Expendutire Product Efficiency Quality
Key findings
KPI groups
KPI expendutire; 2947; 28%
KPI product; 3856; 36%
KPI effichiency ; 2277; 21%
KPI quality; 1650; 15%
Key findings
Ministry of interior KPI distribution, 2012-2015
4 year
8 budget programs
1001 KPI
250 KPI per year
30 KPI on goal
7 KPI per year oriented on goal
Goal3%
Process50%
Environment46%
Non indentify1%
Key findings
Ministry of interior KPI distribution, 2012-2016
Normal distribution
2012 – 2016 MoI = const
0
5
10
15
20
25
30
35
<-1
00
-10
0
>-1
00
-90
-80
-70
-60
-50
-40
-30
-20
-10 0
10
20
30
40
50
60
70
80
90
<10
0
10
0
>10
0
Shar
e, %
Deviation fact vs plan, %
2016
aver 2012-2016
Key findings
Ministry of interior KPI distribution, 2012-2016
Normal distribution
2012 – 2016 non constant
Shift to over-fulfillment
0
5
10
15
20
25
30
35
40
45
-60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60
Shar
e %
Deviation plan vs fact КРІ, % (-/+ 60%)
2012
2013
2014
2015
2016
Key findings
Ministry of interior KPI distribution, 2012-2016
KPI split to:
1. money oriented
2. not oriented for money
KPI money oriented shifted to
over-fulfillment side
KPI not oriented for money
shifted to under -fulfillment
0
5
10
15
20
25
30
35
<-1
00
-10
0
>-1
00
-90
-80
-70
-60
-50
-40
-30
-20
-10 0
10
20
30
40
50
60
70
80
90
<10
0
10
0
>10
0
Shar
e, %
Level of deviation Government budget program KPI , %
KPI not money
KPI money
Important notes
FEAO prepare information notes for 29 Ministries (over 80% of budget programs)
1. General information about Ministry1. strategic goals
2. Tasks
3. Funding 2016 - 2020
2. Budget program information1. strategic goals
2. Tasks
3. Funding for 5 years
4. Select main KPI and present its fulfillments
5. Present information to MP
3. Present notes to MP at the budget discussion in Parliament Budget Committee