Budgeting for Service Delivery Consolidating intergovernmental transfers to
Budgeting for Service Delivery Consolidating intergovernmental transfers to local government MINISTRY OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT August 2015 1
Structure of the presentation 1. Overview 2. Recurrent Work Plan • Salaries and wage-related costs • Lower Local Services • Higher Local Services 3. Development Work Plan • Capacity development • Administrative and service delivery infrastructure 2
1. Overview 3
Overview • Sector Work Plan is the basis of the LG BFP and Budget Estimates • New rules will give greater flexibility over budget decisions • To guide decisions there are: • General guidelines which cut across all grants and sectors • Grant and Budget Information Papers with specific budget requirements for each sector • Compliance will be checked and Performance Contracts will not be signed by the PS/ST unless these are adhered to 4
Structure of guidelines and GBIP • General budget guidelines • Key stages in budget preparations • Managing the budget process (LG call circular, LLG processes, etc) • Preparation of department work plans • Grant and Budget Information Papers • • • Roles, responsibilities and mandate of LG Purpose of transfers Grant structure and draft budget Grant-specific information and requirements Expenditure budget structure and performance indicators 5
Grant and Budget Information Paper Part 5 details Workplan and Budget requirements • • Allocating resources between budget categories Salaries and related costs (wage and non-wage recurrent) Budgeting for Lower Local Services (non-wage recurrent) Budgeting for Higher Local Services (non-wage recurrent) HLG Sector Management and Monitoring (non-wage recurrent) Capacity development (development) Infrastructure (development) 6
2. Recurrent 7
Salaries and related costs • There will be a ceiling (maximum) for: • Technical, administrative and service delivery staff • In addition, the budget for salaries should: • • be based on a verified payroll/staff lists submitted to Mo. PS/Mo. LG cover existing staff commitments, including vacancies and new posts provide staff to operationalise new infrastructure being delivered NB: any staff recruited outside staff ceilings must be a) hired on contract or b) be funded from locally raised revenues, donor funding or the UCG • Some sectors may have guidance on: • How should staff be allocated to LLGs and service units? • How should other staff related costs be handled? • Any excess budget (below ceiling) may be reallocated within sector limits. 8
Lower local services • A floor (minimum) allocation for • Lower Local Services • In addition, the budget for lower local services should: • Fund existing commitments for lower local services, before starting new ones • Some sectors may have guidance on: • How are responsibilities in the sector going to be split? • How should LGs make allocations to LLGs and service units? • Any excess (above minimum) may be reallocated within sector limits • All LLS allocations to LLGs will be transferred directly by Mo. FPED on the basis of the LG’s budget allocations 9
Higher local services • There is no floor or ceiling for higher local services. • However, the budget for higher local services should: • Fund existing commitments for higher local services, before starting new ones • Reflect the main national priorities expected to be delivered by HLGs • Some sectors may have guidance on: • Required minimum levels of a service to be carried out • Minimum allocations to a service delivery output/input (e. g. medical supplies) • How are responsibilities in the sector going to be prioritised? 10
HLG Sector Management Processes • A ceiling (maximum) allocation for • management, support and monitoring set by sectors, • with core processes set out which must be adequately provided for. • The budget allocation will need to cover provisions for: • • HLG support teams (e. g. DHO, DEO) Special committees (e. g. District Roads Committee) Community participation Human resources management • As well as, sector monitoring: • Monitoring LLGs and Service Units (e. g. verification visits) • Maintaining sector information (e. g. HMIS, EMIS) • Other monitoring requirements requiring a budget allocation • Any excess (above minimum) may be reallocated within sector limits 11
2. Development 12
Capacity development • Capacity building activities will be coordinated by management in a LG • The LGs will spend maximum 10% of the DDEG allocation for capacity building activities • In addition, each of the sectors will be encouraged to allocate part of the development grant for LG Capacity Building. • The funds for capacity building will be used for: • discretional skills development – minimum 80%; and • career development for technical staff which are a requirement for confirmation or promotion – maximum 20% • All capacity development activities will be: • incorporated in a comprehensive LG capacity building plan • budgeted at the HLG but address the needs of both HLG and LLGs 13
Infrastructure • Division between service delivery and administrative infrastructure • Discretionary Development Equalisation Grant (DDEG) • Capital investments for service delivery – minimum 65% • Capital investments for administration – maximum 15% • Other development activities/expenditures – minimum 10% • Sector conditional grants will have guidelines in the grant and budget information paper • Vertical allocation of resources: • DDEG will be shared between HLG and LLGs using a standard formulae • 100% of the sector development grants should be allocated to the HLG (districts and municipalities) unless specified otherwise in the sector budget requirements • The budget for each of the infrastructure outputs either for DDEG or sector development grants will provide for investment service costs, up to a maximum level • Allocations should adhere to the positive and negative lists provided in the respective sector budget and grant information papers 14
Thank You Any Questions? 15
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