THE ROLE OF THE PASSPORT INDICATORS IN MONITORING

THE ROLE OF THE PASSPORT INDICATORS IN MONITORING PFM STRATEGY PEMPAL-TCOP Plenary meeting: “Aspects of KPIs in the government liquid position” Mrs. Vanina JAKUPI 15 -17 th May, 2018 Director Managing the Reforms in the Public Finance Management 1

Introduction on PFM Reform The Albanian Ministry of Finance adopted a comprehensive public finance management reform strategy for 2014 -2020, by the Council of Ministers Decision in October 2014. The vision of the PFM reform strategy is to ensure a public finance system that promotes transparency, accountability, fiscal discipline and efficiency in the management and use of public resources for improved service delivery and economic development. This document has a double significance, not only sets the path for maintenance the public finances in the trajectory of long-term stability, creating the prerequisites for economic growth, but also constitutes an obligation under agreements with international partners, in particular with World Bank, International Monetary Fund and European Union. The importance of reforms in Public Financial Management lies in creating an enabling environment for achieving various objectives such as poverty reduction, economic growth, accession to the European Union. 2

PFM Strategy 2014 -2020 Well integrated and efficient planning of public expenditure Sustainable and prudent fiscal framework Efficient execution of the Budget Strengthening internal control in the public sector PILLARS Improvement and increase in transparency of Government Financial Reporting Effective oversight of public finances 3

PFM Monitoring Process (1/2) q To provide a clear monitoring and reporting process it was adopted Concept Monitoring Note (CMN), in March 2017. This tool aims to inform the participants of their responsibilities and to allow them to get ready for respective commitments according: the procedures to complete monitoring and reporting (WHAT), the responsible institutions (units) for completion of procedures (WHO) and the time to complete these procedures (WHEN). CMN consists in: I. The Instruction for monitoring and reporting (including reporting templates and guidelines); II. The structure of the annual reports. 4

PFM Monitoring Process (2/2) q The tools through PFM implementation is monitored, are: Ø Monitoring reports: I. Annual monitoring report, which covers the period from January to December for each year (external use) II. Semi-annual monitoring report, covers the period from January to June (only for internal use). III. PFM Action Plan (AP), adopted in December 2014 and updated AP 2016 -2020 (march 2016) and Updated AP 2017 -2020 (march 2017) Ø Passport Indicators (PI): § PI, important tool prepared by SIGMA and approved in October 2016, used for the first time in ‘PFM Annual Report of 2016’, based on performance indicator and objectives achievements. § Updated Passport Indicators, approved in 5 th SC, (in March 2017), to reflect some methodological changes. 5

PFM Monitoring Arrangements 6

PFM Monitoring Arrangements 7

Passport Indicators • The purpose of Passport Indicators is to provide the detailed methodological description of measurement for all Output-level indicators that are included into the Public Finance Management Strategy 2014 -2012 of Albania. It provides transparency regarding how the Government provides information on achievements within the objectives. • PIs includes only the results of indicators (results measured against objectives) related to annual monitoring / reporting: o Basic data (when available) as well as expected intentions o The accurate measurement method of the indicator o Institutions responsible for collecting data (and in some cases for determining the indicator value) o Time of reporting, frequency of data collection 8

PFM Strategy 2014 -2020 Indicators Two levels of indicators General PFM indicators 14 indicators Each objective Indicators 36 indicators 9

The drafting process • It was ensured that a Accurate Methodology was developed for each indicator: data validity is the most important point. • All stakeholders agreed on what needs to be done to ensure a systematic process of data collection, including: Ø Time limits Ø Possible needs for additional resources / funding Ø Understand determine how often data on indicators will be provided / reported (semiannually or annually) 10

The drafting process Until 27 May 2016 • The final list of indicators was agreed. • The format for each indicator was developed. Until 30 June 2016 • With each structure was worked individually for determining the exact methodology of measuring indicators, the definition of basic data, End of July 2016 • Review all passports indicators (comments, clarifications, improvements in methodology) Until 20 October 2016 • All passports of indicators were revised • from SIGMA and EC Structures PI was approved on October 2016, by the PFM Steering Committee 11

Passport Indicators 2. 2. 3 Title of Indicator Annual publication of actual disbursements for major investment projects compared to planned disbursements, along with explanation of variations The corresponding general or specific objective Strengthened processes and institutional capacity for initiating, appraising, prioritizing and approving capital investment projects Source of data for monitoring of performance indicator Annual Budget Law , Annual Budget Executive Report Institution responsible for gathering data GD Budget Planning-Mo. F Frequency of data publication Annual This indicator will measure the spending performance of the public investment projects. The Ratio of annual disbursement of budget for public investment projects ( RIPD) will be measured as the ratio between the total amount planned in the Annual Budget for investment projects above the 7 million ALL, ( or 5 mln EUR), versus the total amount of budget allocated in a given year for implementation of respective projects. A brief description of the methodology RIPD = Information on baseline values Information on target values Year Baseline value Year Indicator value 2015 95% 2017 97% 2020 98% 12

The importance of reporting indicators The importance of reporting Indicators Indicator 1 Indicator 2 Objective 1 Objective 2 The aim of the strategy Indicator N Indicators Levels Achieving Objectives All Indicatos Achieving the Politics Purpose in a Specific Field Final Purpose of PFM Reform 13

The first PFM Annual Report based on PIs • Focus on achieving the objectives: The level of achievement of each indicator in 2016 makes it possible to assess the progress made towards achieving the final goal - 2020. • Information on the main achievements during 2016. Not what has been done in terms of performing the activities - but what has been the effect and impact it has brought in implementing the reform undertaken in each particular area, and the positive results that PFM implementation has produced in good governance of public finances. 14

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THANK YOU FOR YOUR ATTENTION! Mrs. Vanina JAKUPI e-mail: vanina. jakupi@financa. gov. al www: financa. gov. al 19