prudence in managing committee budgets vis ‘a

8/8/2019 PRUDENCE IN MANAGING COMMITTEE BUDGETS VIS A

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PRUDENCE IN MANAGING COMMITTEE

BUDGETS VIS A VIS PLANNED ACTIVITIES

AND FINANCIAL TRANSACTIONS.

Hon. Sebuliba Mutumba, Deputy Chairperson,Committee on Commissions, Statutory Authoritiesand State Enterprises/MP Kawempe Division South

12/13/2010


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INTRODUCTION

Planning can be defined as;

An organized, conscious and continual attempt to select thebest available alternatives to achieve specific goals.(ALBERT WATERSTON, 1965) or

The application of scientific methods to policy making or

(FALUDI, 1983)

A process for determining appropriate future actionthrough a sequence of choices (DAVIDOFF AND REINER,1983)


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WHY PLANNING?

Planning is carried out at various levels in order to;

Reduce uncertainty

Integrate some rational methods and technologies into the problem

solving process and decision making process

Provide the chance and blue print to control and monitor the Committee

efforts from time to time.

Increase participation from the Members on decision making, at least

widening the horizon of the Committee exponents and;

Mobilize resources and allocation.


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ELEMENTS OF PLANNING:

Planning involves 8 major elements namely;

1. Goals

2. Priority and objectives3. Time frame

4. Constraints

5. Capital and resources, and its allocations

6. Implementation policies and strategies7. Implementing agencies and human resources

8. Monitoring, evaluation and control mechanism


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BUDGET AND BUDGETING

A budgetis a plan of action matched by resourcesrequired to implement the plan.

A Budget can also be defined as an estimation of therevenues and expenses over a specified future periodof time

Budgets are an element of an organizations financialmanagement;

As a common organizational element, budgets emergefrom the goals and objectives of institutions anddirectly support the mission statement, goals andobjectives of the organization/institution.


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The purpose of budgeting;

Budgeting is done as a means to control

public/private funds and accountability to

public/private authorities.


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Role of budgets

Budgets direct everything a

government/institution does. Their processes

arbitrate over the allocation of scarce

resources among the competing demands of

agencies whose business it is to see public

needs fulfilled


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A budget is a plan that sets out;

The objectives and strategies of the Government/institution in a budgetyear

The programmes and activities that would be carried out to execute theStrategies to achieve the overall objectives,

The respective objectives of these programmes and activities that reflectThe disaggregation of the overall objectives of government/institutions

The resources allocated across these programmes and activities

Performance targets; in a timely and cost-effective manner that wouldneed to be achieved to meeting the sub-objectives and, thereby, theoverall objectives of the institution


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Characteristics of a good Budget

Transparency and accountability

Comprehensiveness of budget

Predictability of resources & policies

Flexibility

Existence and sharing of information


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BACKGROUND

In the Parliament of Uganda, Committee budgets havebeen decentralized to specific Committees where by theyare managed and controlled by Committee Chairpersons inclose consultation with the Clerk to Parliament who is the

designated accounting officer of the institution.

Note that budgets should be managed by determiningobjectives based on overall goals and close cooperationbetween a Chairperson and his/her technical staff (Clerk,

Researcher, Budget Officer or Legal Counsel).

Further still the actual expenditures of the budget shouldbe accounted for and assessed for effectiveness.


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Obstacles to budget decision making;

1. Lack of goal clarity

2. Confusion of the Committee interest with that

of Chairpersons, Members, or Technical staff3. Rigid conservatism (in the sense of strict

adherence to rules, procedures, and past

practices)

4. Separation ofPlanning from Management;-


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Obstacles Contd

Committee planning methodologies have distinguishedthe planners of activities from the Committeeadministrators. The former have been seen as high-powered analysts, politicians whose 'Tools becametheir power' while the latter have been classified asmere Implementers who only need to follow the Plan.

This has led to an underestimation of the contributionof good management to Committee performance andof the complexity of creating management capacity.


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Weaknesses in Budget Execution that may

hinder planned priorities from being realized.

The cash-based payments system in operation inParliament is a major constraint to effectiveservice delivery. Increasingly, budget execution

has suffered from delays and an unpredictablerelease of funds due to cash constraints. Thisundermines operational planning and leads tothe build-up of work overload. The system is also

plagued by deficiencies in the reporting systems,resulting in a weak control environment andincreasing opportunities for corruption.


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Weaknesses Contd

Limited Committee discretion, in particular

the inability of Committees to reallocate

spending across line items in response to

emerging needs.

Provincial discretion regarding execution,

which may differ from agreed and approved

allocations.


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Benefits accruing from Budgeting

Budgeting being an essential tool to translate

abstract or general plans into specific action

oriented goals and objectives by adhering to

the budgetary guidelines; the expectation is

that the identified goals and objectives can be

fulfilled.


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Benefits contd

Budgeting communicates the expectedoutcomes and provides detailed scripts tocoordinate all of the specific activities to work

in tandem hence achieving the Committeemandate.

The budget provides the benchmarks againstwhich to judge success or failure in reachinggoals and objectives and facilitates timelycorrective measures.


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Benefits Contd

Budgeting provides for allocation

responsibilities hence introducing the concept

of "responsibility accounting." Under this

concept, Committees are held accountable for

transactions and activities under their direct

influence and control. This philosophy pushes

the budget down to a personal level, andmitigates attempts to pass blame to others.


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Benefits Contd

The budget process is the device by which thegreater goals are mutually agreed upon, and thebudgetreflects the specific game plan that is to

be followed in striving to reach these goals. Budgets are also instrumental in identifying

constraints and bottlenecks.

The budget is a basis for financial accountability

and transparency. When everyone can see howmuch should have been spent and received, theycan ask informed questions about discrepancies.


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Challenges faced in carrying out Committee

Planned activities against Financial Transactions

Difficulty in planning for activities which arise as aresult of directives from the Floor of the House toCommittees.

Uncertainty when planning for Committeeactivities as Committee allocations follow noparticular pattern.

Unexplained budget cuts to Committee funds

Risk of self-referentiality- In this case, the budgetcontrollers may fail to recognize that theirindividual needs are subservient to the largerinstitutional/Committee goals.


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Discrepancies between the allocated budget andthe Committee ambitions and workloads.

Some planned activities turn out to be more

demanding in terms of resources than earlierplanned.

In the event of budget cuts over the course of theyear, line item categories tend to be affectedacross-the-board, without differentiating toprotect planned activities.


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Challenges Contd

Delays in approving planned activities

budgets is a big challenge, as Committees fail

to perform planned activities on time due to

unavailability of the signatory in this instance,

Chairpersons who may by nature of their roles

and responsibilities be out of the work station.


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RECOMMENDATIONS

Funds to cover activities which arise as a result ofdirectives from the Floor of the House to Committeesshould be sourced from the general pool.

Committee Chairpersons should be consulted beforecuts to Committee budgets are done.

In order to curb self-referentiality, budget data shouldbe available on both allocations and execution to theCommittee.

There should be effective communication between theCommittee technocrats and the Committee leadership.


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Recommendations Contd

In the case of discrepancy between the allocated budget and theCommittee ambitions and workloads, Committee funds should beallocated according to the activities the Committee intends to carryout.

Theres need to ensure that Committee policy decisions and

financing are consistent with the Committee mandate. Thisdemarcation should further be consistent with the comparativeadvantages of the Committees, given their respective associationswith Government departments and sectors.

Priority activities should be more fully defined and should beconsistent with the existing programs already identified under

priorities before embarking on resource allocations. This should becomplemented by other kinds of analysis, including cost-benefitanalysis.


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Recommendations Contd

The priority criteria should further be used to guidecapital spending as this will increase the transparencyand accountability of Committee resource allocationsagainst executed expenditures.

Guidelines should be developed drawing clarity to howpriority activities and expenditures will be protectedduring execution in the face of revenue shortfalls.

The need to build capacity within Committees throughtraining and skills upgrading, for Members as well astechnical staff should not be ignored if Committees areto realize to their full potential in the oversight rolesand to undertake relevant analytical work.


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CONCLUSION

Prudence in the management of Committee

budgets vis avis planned activities and

financial transactions should be unprecedented

in its openness and transparency, and should

have a strong focus on results, in order to be

able to be used to align the substantial external

resources which the Parliament receives fromdonor partners.


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However for successful implementation of the budgetsvis avis planned activities, full engagement of allCommittee Members is critical, unlike the currentarrangement, whereby procedurally development andapproval of financing of Committee activities fallssolely to the Chairperson.

On the other hand monitoring and consultations withCommittee Members is a very promising avenue to

address a number of the key weaknesses that havebeen identified in this paper.


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Further still, transparency should be ensured

when dealing with Committee funds. This is

specific to allocation and utilization

Committee funds.


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Finally in order for Committee budgets visavis planned activities and financialtransactions to become more meaningful,

there is need for a more predictable flow offunds, so as to allow the various Committeesplan and schedule activities, and to ensurethat operating and maintenance requirements

are estimated and allocated together withcapital funding decisions for the effective andefficient execution of their mandate


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Thank you!

prudence in managing committee budgets vis ‘a

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