1. Austrian Experience Performence Budgeting
Friederike Schwarzendorfer
Austrian Federal Ministry of Finance

2. Performance Budgeting
Objectives and Benefits of Performance Budgeting
Establishes comprehensive linkages between outputs & outcomes with existing budgetary resources
Facilitates priority setting in policy-making
Strengthens performance accountability
Enables transparent presentation of results achieved by the government and its administration for the public and the parliament

3. Impact-Oriented Budget Management – Definition of Roles
Minister (Chief Budget Officer): responsible for performance budgeting and performance controlling on ministry level
Budget managing bodies: responsible for budget management of their “detail budgets” including implementation of measures to achieve performance objectives
Ministry of Finance: defines the framework for impact-oriented budget management incl. performance budgeting
Federal Chancellery: responsible for performance controlling on federal level
Court of Audit: responsible for annual financial statements, audits, advisory role to the government. New element: recommendations from recent audits may be included in the budget statement on global budget level

4. The role of the Ministry of Finance in developing GRB
The Ministry of Finance has a leading role, as it sets the formal standards to present performance goals in the budget.
Outputs and outcomes for each ministry are not defined by the Ministry of Finance but by the respective line ministries.

5. Performance Budgeting on the Different Budget Levels
P e r f o r m a n c e C o n t r a c t s

6. Performance Budgeting

7. Annual Budget Statement as of 2013 per Chapter

8. Annual outcome statement – budget chapter „Defence“
Providing a solidary contribution to international peacekeeping, humanitarian aid and desaster relief
Why this outcome?
Austria admits itself to an active policy in the fiields of security and developing aid. This comprises taking part in actions of peacekeeping, humanitarian aid and desaster relief as well as search and rescue abroad through making militäry ressources available.
What is being done to achieve this outcome?
Holding rapid reaction forces in readiness for deployment in peacekeeping actions, humanitarian aid and desaster relief
Doing public relation to convince the Austrian people of the necessity of all the actions taken by tghe Austrian army abroad.
What would success look like?
A system of holding in readiness for being able to deploy at least 1,100 soldiers in average per year (Objective 2013: 1,400; current status 2011: 1,300 deployed abroad)
Improving the percentage of the Austrian people having a positive attitude towards the actions abroad (objective 2014: increase of 2%; current status: enquirement to learn the actual percentage)

9. Annual Budget Statement as of 2013 per Global Budget
Comment: On global budget level, total expenses (operating statement) and total expenditures (cash flow statement) are legally binding.

10. Annual output statement – global budget „armed forces“
Contribution to Outcome No.
What is being done? Outputs:
Target 2013 (milestones/performance indicators)
Status 2011
(milestones/performance indicators) 3
Training and equipment for the troops being deployed for action at home and abroad
2013: 12,500 soldiers for deployment at home
2013: 1,000 of them in high readiness to be deployable in 24 hours time
2013: 1,400 soldiers for deployment at home
2012: 10,800 soldiers for deployment at home
2012: 1,000 of them in high readiness to be deployable in 24 hours time
2012: 1,300 soldiers for deployment at home
...

11. Gender Budgeting Definition by the Council of Europe*
Gender budgeting is an application of gender mainstreaming in the budgetary process. It means a gender-based assessment of budgets, incorporating a gender perspective at all levels of the budgetary process and restructuring revenues and expenditures in order to promote gender equality.
*Council of Europe (2008): Gender Budgeting - Practical Implementation. Handbook, CDEG(2008)15, Link “Gender Mainstreaming”.

12. How to implement Gender Budgeting?
Why Gender Budgeting?
To foster gender equality: Focus on the most important levers.
Budget decisions are KEY decisions: Government policy put into numbers.
Therefore: Use the budget as a lever for gender equality!
How to implement Gender Budgeting?
Gender Budgeting is an integrated part of the new performance budgeting system

13. Objectives of Gender Budgeting
Gender aspects as part of the budget policy
Giving information on gender effects of public expenditures and revenues
Taking into account the special needs of men and women
Restructuring public expenditures to bring forward the effective equality of men and women
Focussing on the economic independency and equality of women
Giving the opportunity for women to participate equally in all fields of social and economic life and decision making

14. How Austria Implements Gender Budgeting
Gender Budgeting is enshrined in the Austrian Constitution:
Art. 13 of the Austrian Constitution requires: “Federation, States and Communes are to strive for the effective equality of women and men in their budget management.”
According to the Austrian Constitution the Austrian Federation has to apply Gender Budgeting as an integral element of Performance Budgeting: Art. 51 of the Austrian Constitution states: „In the budget management of the Federation the fundamental principles of impact orientation, especially considering the objectives of the effective equality of men and women, […] are to be observed.“

15. Categorization of budget lines
Austria does not explicitly categorize budget lines by relevance in regard to gender equality.
Gender Responsive Budgeting (GRB) is a general topic included in every dimension of budget work.
No special allowances for GRB – aspects. To be more flexible GRB is steered by general objectives. Jumping point: GRB should not lead to increasing, special GRB allowances. Existing allowances have to be used meaningful after GRB – principles, to regard gender impacts by reaching gender objectives.
In spite of this Austria categorizes budget lines according to two different main principles.

16. Lines of action (LOA)
All allowances are categorized in 22 lines of action (according to COFOG (Classification of the Functions of Goverment) – created by OECD 1999, standard classification of the UN).
This categorization lies above the borders of Budget Chapters.
One line of action can combine allowances from different budget chapters. Allowances can be framed out even if they are situated in different Budget Chapters.

17. Lines of action (LOA)
Examples: LOA 25 (Defense), LOA 31 (Police), LOA 82 (Culture), LOA 86 (Sports), LOA 45 (Traffic), LOA 99 (Fundamental research), LOA 92 (Secondary schools)
„Defense“ can be one LOA in different budget chapters: e.g. in budget chapter 14 – defense, budget chapter 10 – chancellery (National Security Council), budget chapter 11 – interior (Secret Service)

18. Gender Budgeting
Integrated approach: Gender dimension is considered on all budget management levels such as strategy report (medium term), budget chapters, global budgets etc.
Does not mean to allocate separate budgets for men & women
Implementation of gender budgeting:
Requires gender analysis
Definition of objectives (external/societal versus internal/ministry specific)
Formulation of activities in order to achieve the objectives
Monitoring

19. Performance Budgeting/ Gender Budgeting
may be oriented towards
External/sociopolitical outcome objectives; i.e. objectives and activities in the ministry’s portfolio contributing to gender equality
Internal/ministry specific outcome objectives; i.e. objectives and activities regarding ministries’ human resource policy contributing to gender equality

20. Performance Budgeting/ Gender Budgeting Information Requirements
Relevant: essential and significant contents, priorities
Consistent: between the objectives on the different budget levels
Comprehensible: for parliament and public
Linked: to the core competences of the ministries and the government programme
Comparable: over several years to show developments
Verifiable: measurable results

21. Performance management cycle

22. Performance management cycle
Multi-annual strategic plan elaborated by each ministry every spring. It is laid down in the Strategy Report on the Medium-Term Expenditure Framework and further specified for each financial year in the
Annual Federal Budget by outcome statements (setting out the effects to be achieved in society) and
Output statements (priorities to be set and measures to be taken to achieve the desired outcomes). These priorities within the administration are implemented by

23. Performance management cycle
4. Performance contracts setting out the operative work plan of an adminstrative unit for the following four financial years, which means: defining policy aims at different levels and ensuring their achievement through
5. Management by objectives defining each employee‘s contribution to achieving the respective public body‘s objectives.
6. Evaluation of outputs in regular intervals to detect any deviation from the plan in time and take corrective steps.
7. Evaluation of outcomes to show whether the intended effect has been achieved.

24. Performance management cycle
The evaluation of outcomes may show potential for increasing the effectiveness and efficiency of public administraion activity.
Evaluation results are therefore taken into account when elaborating the next
Strategic plan (see point 1.)

25. Example for a Gender Objective in the Budget Documents of the Ministry of the Interior

26. Strategy Report Gender objective:
Improvement of protection against violence towards women, underage persons and elderly people.

27. Annual Budget Statement for 2013
Outcome objective 3:
Improved protection against violence, especially towards women, underage persons and elderly people
Why this objective:
All sorts of violence have increased in our society. Especially women, underage persons and elderly people are victims of physical and psychological violence in close social relationships. The objective is to inform by means of violence prevention how to avoid situations of violence and provide solutions.
What is done to achieve this objective:
Effective and target-group-specific measures of violence prevention focusing on violence against women.
Protection of risk groups (underage persons and elderly people) against violence.
What would success look like:
Improving the percentage of compliance with the
prohibition of access (to the joint flat).

28. Annual Budget Statement of 2013 for the Global Budget “Security”
Activities/Outputs
Contribution to outcome objective/s no.
What is done to achieve the outcome objectives?
Activities/ Outputs:
What does success look like? Milestones/Indicators for 2013
Current status as at 31st Dec. 2011
Objective 3
Effective and target- group- specific measures of prevention of violence focusing on violence against women
Number of participants in prevention activities on the topic “violence against women” exceeds 3,000 in 2013
2,877 in 2011
Recommendation of the Court of Audit
Response of the ministry

29. Operational Performance Plan of 2013 for the Detail Budgets “Provincial Police Headquarters”
Objective 2: Protection of risk groups, especially elderly people, underage persons and women, against violent actions.

30. Performance Controlling
On ministry level:
encompasses all managerial levels along performance information stated in the budget and relevant performance contracts
to be set up by the minister
Federal Chancellery: offers support with setup and conduct of performance controlling
On federal level:
encompasses performance information on budget chapter and global budget level
encompasses internal audit/evaluation of rules and regulations as part of the regulatory impact assessment (RIA) system
Reporting requirement:
semi-annual report to the budget committee of the parliament, due within a month after 30th April and 30th Sept.
coordinated and presented by the Federal Chancellery

31. How to develop objectives/goals?
Basics:

32. How to develop indicators?
Bottom – Up:
Executive Entities develop indicators according to the basic principles based upon their concrete working field. These results are collected and summed up for Budget Chapters.
Top – Down:
According to the basic principles indicators are developed by high level entities and are imparted to the Executive Entities.
Mixed approach:
Bottom – Up and Top – Down: Basic strategic goals by high level entities are combined and harmonised with indicators and details developed by Executive Entities. These Entities, which are responsible for the operational implementation, use MBO (Management by Objectives ).

33. Assessment for objectives, goals and indicators
Done by the Federal Performance Management Office (FPMO).
FPMO: compiles an annual report until the 31st of october about the assessment of Performance Budgeting (objectives, measures, indicators)
Also by the parliamentary Budget Office: tracking of the implementation of gender goals of federal ministries.

34. Challenges in performance measurement
Complex and multi-causal relationships between outputs and outcomes
Output x
Output z
Output y
Outcome 1
Outcome 2
Outcome 3
Outcome 6
Outcome 4
Outcome 5
Externalities
Nature of public goods: Quantity and quality are often difficult to define and to measure (for example security)
Time: Outcomes can often only be measured in the medium/long term
Externalities: positive and negative ones such as economic growth
Bureaucratic overload: too many indicators ...

35. Don’t try to create a perfect system which covers everything
Don’t try to create a perfect system which covers everything. You would create a bureaucratic monster!
Focus on the most important issues.

36. Comprehensive regulatory impact assessment (RIA) system for rules and regulations
Introduced by the budget reform
For bills, other draft legal regulations, contracts, etc.
There has to be made an assessment on the main impacts in any case
adressing the financial impacts
the impacts on the equalitiy of men and women
Assessment is part of the explanatory notes to a bill

37. The role of the Ministry of Finance in implementing GRB
Participation of the Ministry of Finance in Outcome Oriented Impact Assessments (IA) for bills, other draft legal regulations, contracts, etc. in cooperation with the federal Chancellery.
There has to be made an assessment on the main impacts and an agreement concerning the financial impacts.
Assessment is part of the explanatory notes to a bill

38. The role of the Ministry of Finance Example
The Ministry of Justice (MoJ) wants to adapt a jail for a better penal system for women (Which are concrete GRB aspects – impacts, objectives?)
If this project has a total worth over 10 Mio. €:
The MoJ has to do an Outcome Oriented Impact Assessment (IA, including an evaluation) and send it to the Federal Chancellery
The Federal Chancellery does a quality check and can recommend changes, the MoJ has to follow a comply or explain – mechanism concerning these recommendations.
The MoJ has to send this assessment to the Ministry of Finance. If also the Ministry of Finance approves this assessment, the MoJ is allowed to start the project and has to fullfill its GRB/Performance Budgeting evaluation.

39. Impact dimensions Financial impacts Gender impacts
Impacts on the overall economy
Impacts on enterprises
Environmental impacts
Impacts in the field of consumer protection policy
Impacts on administrative costs for citizens and businesses
Social impacts
Impacts on children and young people

40. Process of IA in general
IA is part of the legal materials from draft version to coming into force!

41. Process of Quality Assessment in IA
Bills etc.
FPMO = Federal Performance Management Office in the Federal Chancellery
MoF = Ministry of Finance

42. Process of Quality Assessment in IA
Projects above 10 m.
FPMO = Federal Performance Management Office in the Federal Chancellery
MoF = Ministry of Finance

43. Quality criteria Relevant
Focused on ministry‘s priorities; providing meaningful information
Consistent
Linkage of outcomes and outputs, objectives and performance indicators
Comprehensible
Clearly formulated and easy to understand
Contextualised
Based on the Federal Government‘s Programme and the respective ministry‘s sphere of competence
Comparable
Consistent use of objectives and indicators
Verifiable
Using quantitative or
qualitative performance indicators

44. Tools Special IT-Tool for IA
Web-based IT Tool for performance management -> standardised form where line ministries have to make their outcome statements etc.

45. IT is an enabler IT-Tool offers… Guided process
Coherent approach to the assessment
Calculators and models
Standardised document including a consistency check
Context help

46. Coherent Approach Identify potentially affected impact dimensions
Yes/No-answers; pre-selection

47. Coherent Approach Significance Check
„informed estimate“ on extent of impact in certain sub dimensions
Aim: efficiency/proportionality – assess only substantial impacts in detail

48. Coherent approach In-depth assessment
Calculators, models, simulation models - interface
Guided questionnaires (qualitative/quantitative)

49. Report on internal evaluation of IA

50. More than 400 impact assessments since 01/2013
First experiences
More than 400 impact assessments since 01/2013
Easy to use -> acceptance is given
Helps to comply with new rules
Helps to ensure completeness of assessments
Standardised process and documents
Quality via procedural mechanisms
Improvements concerning usability
i.e. size of text boxes
What you see is what you get

51. Annual Federal Performance Report

52. Evaluation internal evaluation
What for: of rules and regulations, projects and programmes which have a remarkable financial impact
When: at least 5 years after putting regulations into force or having implemented a project or programme
What: achievement of objectives, actually realised impacts
Results of evaluation have to be transmitted to the Federal Chancellery

53. Conclusions: Performance Budgeting & Gender Budgeting
Challenges:
Budget changes its character: Not only decisions on resources (who gets what?) but steering resources and results (who gets what for which results?)
Requires relating budget to results
Exceeds the scope of mere budget management
Opportunities:
Facilitates targeted policy-making on political level
Enables the administrative level to present its results & achievements
Citizens are provided a better insight into where tax money is put

54. Result-Oriented Management of Administrative Units
Objectives:
Administration units (=budget managing bodies) should be enabled to achieve their financial and performance objectives
By that they can contribute to the performance of the ministry in the best way possible.
Important to implement the reform into the daily management
Multi-annual performance contracts on resources and output/outcome objectives

55. Result-Oriented Management of Administrative Units
Administrative units fulfill their tasks according to performance contracts incorporating resources and intended results, including gender
Administrative units are accountable for resources as well as for outputs and outcomes  improved integration of financial and performance management
Administrative units must be granted necessary budgetary flexibility and decision-making competences

56. Result-Oriented Management of Administrative Units
Incentives for public managers for an efficient use of resources: Possibility for building-up of reserves (unused funds may be carried forward by the respective unit), end-of-the-year flexibility, autonomous decision-making within certain ceilings/limits
Sanctions, if violations of budget regulations occur: Ministry of Finance may reduce the respective ministry‘s envelope accordingly; line ministry may be forced to obtain approval by the Ministry of Finance for particular expenditure on a reduced financial level

57. Thank you for your attention!
Contact address:
Friederike Schwarzendorfer
Deputy Director General
Directorate for Budget and Public Finance
Austrian Federal Ministry of Finance
Tel: