1 Ministry of Education Budget Execution March 28, 2010 As of

2 Approved Operating budget and Execution Rate in 1388 (as of 28/03/2010)

3 Operating budget expenditure percentage in diagram

4 Approved Development Budget and Expenditure Rate in 1388 as per decree (as of 16/03/2010)

5 Approved Development Budget and Expenditure Rate in 1388, as per actual available budget (as of 28/03/2010)

6 Development budget expenditure percentage in diagram

7 Development Budget Execution Rate in the last three years (%)

8 Development Budget Execution Rate in the last three years (million dollars)  The nominal amount of budget expenditure in 1388 is 42% more than 1387

9 Processing the allotment by finance department Processing the allotment in education sector at MoF Budget Execution by MoF Allotment Execution Process

10 Finance Department Allotment for Advisors and Operating Expenditures Allotment for constructing companies Preparing a checklist receiving supporting documents and work progress reports from construction department Peshneshad, Invoice and Allotment Preparing M16 according to allotment and approving that by the authorized head Control Sending the documents to treasury department of MoF Sending the cheque to Da Afghanistan Bank then transferring the money to personal bank accounts Payment Process

11 Major reasons for low expenditure rate in development budget (Internal reasons)  Accurate and detailed program plan and budget documents are not prepared in due time  Unrealistic plans - fail to implement full plan  Excessive delays in preparation of programs/ procurement documents  Late submission of the documents thorough programs / procurement for allotments execution  Shortage of Technical Capacity in some programs (planning, budgeting, procurement)  Delay in extension of the construction companies contracts

12 Major reasons for low expenditure rate in development budget (Internal reasons)  Submission of uncompleted payment and allotment documents by programs and procurement.  Weak communication skills of some programs staff in conveying the message and issues properly & clearly.  Weak coordination between programs, procurement and finance department, for example, late contracts submission to World Bank.  Weak M&E system (program, budget, procurement)- combined periodic reports (program + budget execution) is not produced and shared regularly

13 Major reasons for low expenditure rate in development budget (external reasons)  Contract approval for more than one year: many development budget contracts are for long-term and can not be completed in one year. Thus, expenditure of mentioned contracts will take two or more than two years. For example development budget of teacher training program is for three years but the whole budget is included for one year in the budget decree.  Late approval of the budget annex in 1388: budget annex approved in 30th of JAWZA – delay of Three months in all the carry forward allotments which make a big share of the budget.  Unavailability of physical Cash with donors: 1388 approved budget is only included in the budget decree based on the donors commitment in the beginning of the year, but after approval of the budget, the whole committed budget was not available to MoE and it is supposed to decrease the amount in the mid year review.

14 Major reasons for low expenditure rate in development budget (external reasons)  Long-term process of procurement: Donors (World Bank, etc) procedures, no objections In 1388 procurement law of Afghanistan caused obstacles in implementation. Breaking procurement is small lots - teacher training service contract divided in four separate lots throughout Afghanistan for total cost of 55 million. Procurement process of teacher training program started in 1387 and completed in end of Ministry of education couldn't pay first installment of this program.  Allotments process through ministry of economy: based on ministerial council decision (cabinet) in 1388 and Afghanistan government decree, development project allotments should be executed through ministry of economy. This caused allotment delay from 3-15 days.

15 Major reasons for low expenditure rate in development budget (external reasons)  Allotment process in accordance with work progress: New procedure introduced in 1388 (processing allotment based work progress) It is more time consuming due to additional report/document preparation requirements. Implementation of new procedure was taking up to 21 days for allotments (previous one was 7 days).  Lower technical capacity in provinces and MASTUFIATS: Lower technical capacity in provinces and MASTUFIAT causes delay budget execution.  Various procedure of various MASTUFIAT:  Unavailability of physical cash in Banks

16 Suggestions and solutions to improve budget execution in 1389  On time approval of budget (preferably 1 month before the start of the year).  Establish plan, finance, procurement units within the official structure of each program.  Prepare technical guideline & Training material & train related program staff on planning, budgeting, procurement and monitoring and reporting.  Develop and implement quality control measures to ensure complete set of documents correctly prepared are sent to procurement, finance & Accounting department while requesting for procurement, allotments and payments.  Preparation of realistic and technically sound proposal, plans and budget by the relevant programs.  MoE to ensure that MoF record the annual budget of program in the budget decree not the total budget of the program if for more than one year

17 Suggestions and solutions  Prepare annual procurement plans (based on program and province) before the start of the new year  Prepare M&E plans and integrated periodic reports (achievement of targets and execution of budget) and address the issues on time.  Support development of M&E systems and use of systems  Develop technical capacity of programs and department across ministry (national and sub-national) by recruiting enough number of capable TAs.  Provide suitable working environment for staff.  Establishment of an authorized problem solving and coordination committee participated by a focal point from each program.  Establish regular coordination meetings with MoF

18 Thank You!