Financial Management Reforms in Khyber Pakhtunkhwa

The Government of Khyber Pakhtunkhwa has initiated a Provincial Reforms Programme (PRP) to improve the service delivery and governance of the Province. The Public Financial Management Reforms Strategy builds on the following objectives:

1. Making Budget Strategic by linking policy, planning and budgeting.
2. Making budget result oriented by introducing Output Based Budgeting.
3. Enhancing the capacity of line departments to prepare, execute and monitor their budget.
4. Improving Budget execution and reporting.
5. Improving Monitoring and Evaluation.

1. Making Budget Strategic By Linking Policy, Planning And Budgeting:

Budget is the instrument that translates the policy and priorities of the government into actual implementation. It is imperative that the budget making process is transparent, participatory and to encourage the elected representatives to ensure that the budget represents the will of the people. This year the following initiatives were taken to ensure linkage of budgeting with policy and planning.

Budget Strategy Paper was presented to the cabinet. Series of pre budget consultations were held with the members of the provincial assembly, civil society and donor community. · One to one meetings were held between the Finance Minister and other Cabinet members. · Many ideas were generated during the discussions which formalized into budget proposals.

2. Making Budget Result Oriented By Introducing Output Based Budget:

This year Output Based Budget was piloted in a total of 12 departments. The Output Based Budget brings together financial and non financial information and links budget spending with departmental outcomes, outputs, targets and indicators. This makes the budget document more transparent and an effective tool for accountability for results.

3. Enhancing the capacity of line department to prepare, execute and monitor Budget:

Improved budgetary processes require improved capacity of financial managers. To achieve this objective, Finance Department has imbedded Financial Consultants in the departments to help them improve their skills. In addition, business planning specialists are available to help departments link their policies and plans with budgeting.

4. Improved Execution And Reporting:

Budget execution and reporting is an important element of public financial management systems. Government of Khyber Pakhtunkhwa, through PIFRA systems is able to prepare real time budget execution reports. Recently with DFID support, Fiduciary Risk Assessment (FRA) of the Government of Khyber Pakhtunkhwa was completed. Finance Department is preparing a road map to take steps to mitigate the risks identified in the FRA.

5. Improved Monitoring and Evaluation:

A comprehensive monitoring and evaluation framework was approved by the Government of Khyber Pakhtunkhwa. In future, in addition to monitoring of development projects, the departments will also be required to provide monitoring reports against the activities and target committed in the Output Based Budget.

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