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Index

Page 1. Introduction 2. Why should civil society be involved in the budget process? 2.1 Looking at policies 2.2 What is the role of civil society? 2.3 What can civil society do? 2.4 What is your focus? 2.5 Why the budget? 3. The budget Process 3.1 Introduction 3.2 What is a budget and why it matters 3.3 Budget principles 3.4 Stages of the budget process/ cycle 3.5 Ethiopia’s budget process 4. Budget Tracking and the Rights Based Approach 4.1 Budget tracking 4.2 Using the human rights based approach 5. Budget Analysis 5.1 Introduction 5.2 Techniques of budget analysis 5.3 What do we learn by looking at different methods of budget analysis? 5.4 Thinking about the budget document 6. Budget Monitoring and Evaluation 6.1 General overview on budget monitoring and evaluation 6.1.1 Why and what is budget monitoring and evaluation? 6.1.2 How to carry out budget monitoring and evaluation 6.1.3 What are the indicators for budget monitoring and evaluation? 6.2 Community based budget monitoring and evaluation 6.3 Country experiences 6.3.1 Uganda 6.3.2 Tanzania 6.4 Why civil society in budget monitoring and evaluation? References Annex 1 – Financial calendar Annex 2 – Glossary of terms 3 3 3 4 4 5 5 7 7 7 9 12 13 17 17 18 21 21 21 26 27 28 28 29 31 32 32 35 35 38 40 42 43 44 1

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1. Introduction
Welcome to this guide to government budgets for civil society produced by the Poverty Action Network Ethiopia (PANE). This guide aims to give the basic understanding on the budget process, budget tracking and monitoring budgets at a community level. Government budgets, at all levels of government, are the key document to understanding priorities and tracking implementation of pro-poor programmes. This is why PANE has chosen to focus on budgets. Hopefully this guide will provide the information and key skills to enable civil society to engage in this process. PANE is a network of over 70 civil society organizations in Ethiopia who have come together to influence the PASDEP and other poverty related policy issues. The mission of PANE is to ‘ empower citizens to enable their active participation in policy design, implementation and monitoring and evaluation in order to bring the voice of the poor to decision makers and make civil society, government and donors more accountable to the poor’. PANE sees giving civil society and citizens the ability to understand and engage with budgets as a key part of this mission.

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2. Why should civil society be involved in the policy process?
2.1 Looking at policies
Looking around in your community you can see there are problems that need to be addressed. Children do not go to school People may be hungry Members of the community are sick There may be no roads to take products to markets Prices may be increasing due to inflation

NGOs, CBOs and communities are all trying to address these problems through their own work. However one major actor who can have significant impacts on all these problems is the government. Government policies affect everyday life. Policies on education affect children’s schooling, policies on health affect people’s well-being and policies on trade and taxes can affect the price of goods. Therefore if citizens want to change their situation they need to engage with the policies that affect their lives. Policies can have a big impact on poverty. The government of Ethiopia has also signed up to the Millennium Development Goals (MDGs)– a set of 8 goals which the international community has decided it will try to reach in order to reduce poverty. It also has a commitment to produce a poverty reduction strategy to gain access to debt relief. The Plan for Accelerated and Sustained Development to End Poverty (PASDEP) is the government’s 5 year policy that sets out its poverty reduction strategy and how it will reach the MDGs. Through the PASDEP the government has signaled its clear commitment to ending poverty through various initiatives in different sectors.

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However policies do not always manage to achieve their goals around reducing poverty. This could be for a number of reasons – perhaps funds were not allocated for the policy’s activities, perhaps the activities were not carried out well enough (i.e. clinics were built too slowly or roads were not of a good enough quality) or perhaps the activities outlined in the policy were not enough to address the whole problem (i.e. more schools were built and fees reduced to increase education for girls but more girls did not attend as their parents were worried about abuse from teachers).

2.2 What is the role of civil society?
No government can predict exactly how their policies will turn out, nor can they have perfect information systems. Governments are also not the only ones working to reduce poverty in a country. Therefore the work can be more effective if everyone works together – citizens, community based organizations, civil society organizations, the private sector as well as government. Civil society has a particular role as they are often focused on poverty reduction and have close links to the communities in which they work. Therefore they can help communities to understand and monitor policies and bring the perspectives and voice of those communities to the process.

2.3 What can civil society do?
Civil society can therefore be engaged in various ways. Finding out about what policies exist and what they cover is a first step. Informing people about the policies that concern them and engaging them in the process is also a useful role for civil society. Then civil society can monitor the policy to see if it is being implemented properly and helping to address the issues it should. The basic steps for this include gathering evidence analyzing the evidence influencing the policy process based on the evidence

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PANE’s Focus PANE’s main focus is around the PASDEP and the Millennium Development Goals. 6 . They might want to monitor the impacts of policies on the rights of children on the ground i. Therefore having a clear focus will help you to decide where to look and what evidence to gather.e. All organizations are coming from a particular perspective or hoping to see a particular change. Organizations working for children’s rights might analyze policies to ensure child rights are addressed. do they ensure children can access health care? Gender Organizations working on gender might want to analyze the impacts on women of different policies. It highlights the priorities for the government as these are the areas where scarce resources are being spent. 2. PANE therefore focuses on the PASDEP policies and assess how these will help deliver the MDGs. Organizations working to support communities livelihoods might want to consider how a range of government polices – from infrastructure development to the development of marketing systems – will support the livelihoods of community members. For example do agricultural extension services reach and benefit women headed households? Livelihoods focus.5 Why the budget? So why are we focusing on the budget? The budget is the basic way in which policies are turned into action.4 What is your focus? If civil society wants to engage in the policy process it is useful to think about the focus you will have. The budget sets out the plan for government spending and therefore shows what will be delivered. 2.2. What are the key issues for you and what are the changes you want to see? Deciding on your focus can help design your work. For the promises written down on paper to be translated into schools or hospitals or roads they need resources. However the government only has a limited number of resources and has to decide where to spend them. Examples of particular focuses could be Child rights.5 Why the budget?monitoring the implementation of the PASDEP policies and the actions This mean’s PANE’s needed to reach the MDGs. The government has a huge number of policies and many impacts on the ground and it is impossible to track all of them.

The budget therefore provides a useful tool for civil society to monitor government’s commitments to pro-poor spending and to implementing policy commitments. This can help civil society reveal the problems and give evidence to back up their arguments. 7 . Understanding budgets and following their implementation gives civil society a unique opportunity to comment on the system.

From an administrative perspective. At the national level a budget refers to a state’s allocation of resources in terms of various perspectives such as economic. manpower. To monitor or track a budget and to assess its impacts on policy implementation it is important to understand the budget process. For our workshop purpose we only focus 1 The word budget is derived from the French bougette. a bag or purse. and human and a budget may include all these types of resources. natural. Therefore budget is key to the implementation of all policies. cited in Diokno. From an economic perspective budget is a representation in money terms of state’s activity or preferences in national policy. 8 .3.2 What is Budget and why does it matter? What is budget?1 We have all used budgets in various forms – from planning how to spend the bills at home to developing project budgets at work. 3. Budget Process 3. material. There are various types of resources such as financial. A budget is. 2 For details see Wildavsky. outlined as the ‘most important economic and political instrument’. 1999. a budget can also be defined as a process through which financial resources are allocated in compliance with state obligations to respect.2 A budget from political perspective is a reflection of a country’s policy priorities and political commitments into expenditures.1 Introduction It is difficult to conceive of any public policy that can be carried out without money and the way money is allocated to policies is through budgets. for the fiscal year. and human right. therefore. material. and is applied in modern times to the statement of revenues and expenditures (including the balance between the two) of governments. and other resources. political. administrative. Before we go to a discussion into budget process it is appropriate to introduce readers with what is budget and why it is important. protect and fulfil human rights as prescribed by human rights conventions and associated laws. a budget is understood as a resource plan that serves for the utilisation of financial. From a human rights standpoint.

equity. To put it simply budget decisions influence where we work. and rights may determine how the envelope is going to be spent (sectoral allocation). These are baseline figures from previous year. cost effectiveness research. therefore. whether we have clean water and sanitation. constitutional obligations (legal framework). It is the most important economic policy instrument of government. In this workshop we will mainly be focusing on the expenditure side. 9 . how it spends the money is a large determinant of economic development with redistributive impact. The Budget is also a fundamental tool in implementation of public policy. These allocations guide the expenditures which are made in order to reach various targets.on the financial and use the term ‘budget’ as a process by which state’s financial resources are planned and controlled. and as such can be a powerful tool in transforming the economy to meet the needs of the poorest. education our children have. What determines a budget: There are various factors that determine the total budget envelope – that is how much money is available to spend. regional or woreda) is also a powerful actor in the economy. This gives it the power to influence the level and direction of economic activity. For our purpose we. It is the major indicator of the priority accorded to fighting poverty or other issues than policy or legislation. define the term ‘budget’ as a process through which state resources are allocated. The Government (be it federal. what health care is available to use. a financial statement which includes revenue. therefore. It determines what services the government provides and what taxes we have to pay. expenditure and the balance between the two. what transport we use. need (as reported by offices). cost of programs. and capacity to spend. Thus. The budget is. Policy priorities (political). electricity. Why do government budgets matter? Government budget decisions affect everyday lives and the future of every citizen. It is therefore a key area to consider when looking at how a government is implementing policies or legislation. and many others.

It is through participation of people that one can bring people’s perspectives to the policy makers. It also allows different layers of government to know the most and unmet demands of the community. Through active participation in the budget process. Thus. Each budget system should be considered in terms of these standards. implementation. and review stages needs participation of various stakeholders. It also allows citizens to hold the government accountable. Participation in a budget process is not a luxury.3. By doing so the government and the community can mobilise resources. to build consensus3. accountability. The process in a budget preparation. it is rather a basic right of all citizens. Different budget systems have different levels of participation. and vulnerable groups) and effectively spend the resources. and equity and inclusiveness. people could stop money or resources being allocated to activities that would threaten their economic rights or ensure they receive compensation for rights they have been denied. to identify weaknesses in a budget. “city dwellers have been able to decide about virtually anything related to public 3 Consensus is a broad understanding of the common good and the modalities of working to that end. These are the ideals but not all budgets follow them.3 Budget Principles A budget process needs to be governed by principles like participation. transparency. provide more equitable distribution of budgetary allocations (without discrimination based on gender. One of the best examples in participatory budgeting is the case in Porto Alegre city in Brazil. and to mobilise the community effectively to meet a budget target. hence. region. approval. Participation: This is the level of involvement of all stakeholders/actors in the budget process directly or through legitimate intermediaries. It allows members of the community to raise what is important for them and. 10 . rural/urban. influence budget allocations. ethnicity. participation is an essential ingredient in the budget process to ensure efficient provision and more equitable distribution of budgetary allocations. Here forums made up of citizens regularly meet to discuss the budget and its formulation. Through this it is stated.

procedures. in its “Code of Good Practices on Fiscal Transparency – Declaration of Principles. practices. In addition. motivate citizens and civil society to participate. 1996 [Revised June 1996]. and can contribute to consensus building and commitment. and forums on the basis of which budget decisions are made. February 21 to 25. etc. The principle of transparency is crucial to the budget process. Transparency enables citizens and civil society to hold the government accountable. if budget information is not available.) should be accurate. It is also related with the existence of clearly spelt out rules.5 4 Zander Navarro. timely and frequent information in useful formats on a country's economic conditions and its budget policies.org/external/np/fad/trans/. Paper presented to the Regional Workshop: Decentralization in Latin America—Innovations and Policy Implications. French. 5 The principle of transparency is recognised by the IMF.resources under the municipal domain from streets to be paved to reform of the city’s public market. and helps to mobilise the community effectively to meet budget targets. Participatory Budgeting—The Case of Porto Alegre (Brazil). are available at the IMF transparency web site at http://www. accurate. Paper submitted to the Second International Budget Conference entitled “Transparency and Participation in the Budget Process. Transparency is a prerequisite for public debate. Chinese.” Cape Town. information on development thrusts and programs. this information should be made available and accessible to the general public. Transparency can increase faith in the state. 1999. May 23-24.” Published in 1998See Barry H. and outcomes allows the public to hold the government accountable. 11 . Portuguese. which are now available in Arabic. Caracas. from sanitation systems to pay policies regarding municipal civil servants. Transparency allows the analysis of state policies and facilitates the identification of weaknesses leading to the adoption of needed reforms. Potter. expenditures and outcomes. it is difficult to discuss. expenditures. which they can only do if they have information on budget policies. Copies of the IMF transparency documents. South Africa. true and portray the genuine state of the economy. Fiscal Transparency: The IMF Code. Russian and Spanish. open to public scrutiny. Venezuela. Availability of information on budget policies.”4 Transparency: This refers to the provision of comprehensive. mandating that information affecting budget decisions (budgetary and fiscal information. from supporting cultural initiatives in peripheral areas to the publication of a book telling the history of a specified community. and written clearly and be readily understood by the public. The principle of transparency is important in the budget process.imf.

etc. Resources mobilised for expenditure comes basically from three sources: taxes. approval. Loans are raised in the name of the population and the whole population will be responsible for repaying them. active civil society. Budget allocations should be fair and just. strong media. independent auditor general and strong parliament. external aid and external borrowing.Accountability: This refers to answerability of decision makers and implementers with regard to budgetary processes at the formulation. Budgets should also be governed by the principles of equity and inclusiveness with out discrimination. 12 . In general accountability requires robust financial management system. without discrimination based on gender. and should redound to all citizens equally. robust financial management legislation. implementation and performance review stages to those whose interests are affected by their actions or inactions. This means the government should be accountable not only for how it spends these resources but also for budget outputs and outcomes. the money the government is spending is not its own but belonging to everyone. age. state performance and results (achieving results or meeting objectives for which public funds are spent). and aware electorate. In particular. Thus. social class. Equity and inclusiveness: This refers to ensuring opportunities that will maintain and improve the well being of diverse groups in any given social or political setting in terms of budgetary allocations. This makes accountability an important ingredient in a budget process. ethnicity. vulnerable sectors of society should not be discriminated against in a budget. quality and service for public money. Taxes come directly from the people and aid is given to the government on behalf of the people of Ethiopia. geography. Accountability in the state budget has several dimensions: accountability for objects of expenditure (what the state spends on). and budget processes that result in best value.

Budget approval and appropriation In the second stage. it is then presented to the parliament for debate and approval. These are budget preparation (drafting/design process). The complete picture of the cycle is presented by Figure 1. The central agency is responsible to summarise and consolidate the national budget and finally to present this before the council of ministers and/or parliament.audit and evaluation process). budget execution (implementation process). Budget Preparation The central agency (usually ministry of finance) circulates a budget call letter and guide line to all public bodies. Annual appropriation of the approved budget will then follow 13 . Figure 1 Budget Cycle Budget Preparation Budget Control Budget approval and appropriation Budget implementation 1. budget approval and appropriation (legislative process). and budget control (performance monitoring . once the recommended budget is reviewed and adjusted by the councils of ministers. 2.4 Stages of Budget Process/Cycle There are 4 stages in the budget process/Cycle at any level of jurisdiction. Every public body is required to prepare their budget requirement and submit to the central agency.3.

3. implementation of planned activities. Budget execution/implementation The third stage is disbursement of the approved budget to the relevant agencies. This is the process of the transfer and spending of the money which ensures that activities can happen to reach the required goals. How budget is linked with policies and priorities: In some countries there is what they call the Medium Term Expenditure Framework (MTEF) which provides the linking framework among policy making. approved. and recording expenditure. This involves monitoring activities in terms of annual public bodies’ reports and audit reports to the parliament. appropriated and executed accordingly (for the schedule see Annex 1).3. 14 .. MTEF rests on three pillars: the top down multi year projections of resource envelope targets (what is available). evaluate and audit. the bottom up multi year cost estimates of sector programs (what has to be financed with a focus on performance). and budgeting.e.6 The MEFF provides. This process allows the budget to follow the priorities in the development strategy for growth and poverty reduction. accounts for expenditure.5 Ethiopia’s Budget Process The budget process is guided by a directive (known as Financial Calendar) issued by the Ministry of Finance and Economic Development (MoFED) to all entities listed as public bodies. and the institutional decision making process to integrate the above two pillars (making the necessary trade-offs). Budget preparation is guided by a document known as Macro-Economic and Fiscal Framework (MEFF) prepared by MoFED. the Council of Ministers. Budget control The fourth stage in the budget process/cycle is budget control/performance monitoring. planning. among others. i. This directive has a schedule to ensure that planning and budgeting are prepared. 4. This stage provides information that can be feed into future plans. forecast 6 MEFF shall be reviewed and approved by the executive body.

budget preparation . which includes identification of the amount of resources (foreign and domestic) . and budget control) at all level of jurisdiction (Federal. submission date of the budget request by public bodies to the respective finance and economic development institutions at all jurisdictions. the split of aggregate expenditures between federal and regional. and the split of federal expenditures between recurrent and capital for the next three years. and spilt the federal share between capital and recurrent budget. This phase facilitates the second phase. The first stage .of government revenue and expenditure. Firstly. budget implementation. submission of budget request in time. MoFED prepares annual fiscal plan by January 24. Based on this 3 year MEFF. preparation of unit costs and work plan for the upcoming fiscal year. and Woreda government). budget approval. Ethiopia’s budget process has the same four stages (budget preparation. Public bodies are required to respond to the budget call by preparing their budget according to the guidelines with their action plan.has four phases. MoFED/BoFED shall recommend a public body’s budget based on the information it has. expenditure financing. As discussed in the preceding section. Regional. If a public body fails to submit its budget request with the time specified in the budget call letter. 15 . This is the starting point of the budget preparation. the amount of money needed know as the expenditure requirement.known as the resource envelop. priority or focal areas to be considered in preparing the budget. Following this MoFED prepares the totals of the annual subsidy budgets and notifies the regional governments and administrative councils by February 8 at the latest. The second phase of budget preparation includes a budget call letter issued by MoFED/BoFED to all public bodies. The budget call letter includes recurrent and capital budget ceilings. setting the block grant amount for regional governments and administrative councils from all sources (domestic and foreign). all public bodies are required to perform all budget preparation activities including mid-year program review for the current fiscal year.

The last phase is summarization of the recommended budget by MoFED/BoFED/woreda to be presented to the executive body. regional house of people’s representatives. recurrent budget. health sector. amend. and Woreda Council. total expenditure ceiling. deals with performance review. and water sector indicators). Regional Council. ensuring whether disbursement is made according to budget. These legislative bodies review. The last stage. Subsidies to region are based on three indicators: population size 60%. Based on this discussion and government policies and priorities. education sector. 16 . and the recording and accounting procedures are up to the standard. MoFED/BoFED prepares the budget allocation guideline and the notification to public bodies and their budget institutions of the source of finance and line item of expenditures for the disbursement of the approved budget. After the recommended budget is reviewed and adjusted by the respective executive body at all levels. The institutions then use the budget to carry out their activities for the year. level of development 25 % (4 sub. The second stage of the budget process/cycle is budget approval and appropriation. ensuring whether public property is kept safe. budget control. 7 The appropriation at federal level specifies the total of the federal capital budget. adjusted and consolidated. and revenue collection effort 15%. Council of Ministers. The executive body shall review and recommend the budget. the requested budget will be reviewed. allocated ceilings for each public body.development indicators are considered here: agricultural sector. and regional subsidies and the total subsidy for each region. This includes activities such as ensuring whether the revenue utilization is according to laws and regulations. and woreda house of people’s representatives for approval of the budget and annual appropriation of the approved budget at all levels. The office of the general auditor is in charge of auditing public bodies and presents its findings before the House of Peoples Representative. Once the budget is approved and appropriated by the legislative bodies. it is then presented to legislative bodies the federal house of people’s representatives.7 The third stage is budget execution.The third phase is conducting a budget hearing (public bodies with MoFED/BoFED. and approve the budget.

What is your experience or observation with regard to the budget principles in the Ethiopian budget system? Do you think that civil society and citizens have access to influence what goes into the budget. influence the budget debate. Ideally. each stages of budget process/cycle should be subjected to all budget principles.Does Ethiopia observe budget principles in budget process/cycle? A budget process needs to be governed by principles like participation. and equity and inclusiveness. transparency. accountability. and monitor and evaluate the budget performance? Do civil society and citizens know whether the actual expenditure is according to budget and policy priorities and whether disbursement is made according to budget? Is there a room for civil society and citizen participation in most of the budget stages? How do you feel about the Ethiopian budget system with respect to budget transparency and budget accountability? 17 .

In what follows important points to be considered in budget tracking at each stages of budget process are identified. 2. the adequacy of the budget. funding flows and 18 . criteria/process for approving resources among regions. study and interpretation of budget data. “… involves the collection. It uses the information from budget proclamations and reports to analyze the actions of the government. Budget preparation: government commitment to stated policy priorities in allocations. and the establishment of findings and results. the correlation of budget data to other relevant information such as state policies and programs. Budget Tracking and the Rights-based Approach 4. Its aim is to provide analysis and information that is credible. as quoted by Diokno 1999). 1. accessible to a wide range of audiences. trends in budget. with the purpose of affecting the way budget issues are decided and the decisions that are made.4. Budget approval and appropriation: Is there transparency and inclusion of nonstate actors? Process conforms with laws and constitutions. equity issues (whether resources are allocated fairly among various sectors and regions/woredas?) along with criteria/process for allocating resources among regions. and makes a timely contribution to policy debates. 3. priority given to vulnerable groups.” Budget tracking is the assessment of whether or not a state’s allocations in the budget and their implementation are in compliance with its obligations or specific policy objectives. as pointed out by Lav (1999. progress in the budget (whether government’s response for specific purpose is improving?).1 Budget tracking A thorough and detailed review of the budget and actual expenditure is known as budget tracking. Budget tracking. Budget execution/implementation: operational efficiency (how much of the budget is spent? What happened to funds that are unspent?).

trends in actual expenditure and its adequacy. comparing expenditure on specific purpose (special interest) in relation to resources spent in other areas (for instance defence)? progress in actual expenditure (whether government’s response for specific purpose is improving?). The government is therefore obliged to undertake all actions and policies to enforce and protect the rights it has committed to. budget tracking from right-based approach specifically links the budget with state’s commitments and obligations to human rights. Budget control (performance monitoring . ensuring accountability and transparency (corruption? wastage?). a national budget can be defined as a process through which financial resources are allocated in compliance with state obligations to respect. protect and fulfill human rights. outcome (What impact has the budget had on the lives of the citizens and the economy?). In this approach the status of human rights and compliance with state obligations become the key determinants of the choices made relative to financial resource allocation. Is there transparency and inclusion of non-state actors in monitoring and evaluation of budget? 4. most cost effective programmes). Therefore the realisation and protection of rights should be taken into consideration in the national budget.audit and evaluation): Allocative efficiency (Are the right programmes being funded? (i.e. and 4. The Ethiopian government has ratified international conventions on human rights including child rights.2 Using the human rights based approach One focus for tracking budgets can be the human rights based approach. So. Where there are rights there are associated obligations which the government is duty bound to by the conventions.bottlenecks. while budget tracking can link various policies with the budget and its implementation. These rights are also included in the constitution. 19 . outputs of the budget (Is the budget meeting its target goals). From a human rights framework. Is actual expenditure in compliance with government’s policy priorities.

Public allocations may be scrutinized to find out whether the state has appropriated funds to protect rights. protect and fulfil rights. Public allocations may be compared against expenditures from a rights perspective. social and cultural rights and concomitant state obligations through a variety of ways: 1. 2. current expenditures and subsidies from the federal government. Public allocations may be probed to determine whether the expenditure mix.Budget tracking from a right-based approach tracks public allocations to determine their impact on economic. and 5. In general budget tracking from a right-based approach may use the following budget indicators: (a) Budgetary allocations: capital expenditures. Public allocations may be compared against international standards for rights expenditures and national standards related to the enjoyment and exercise of specific rights. 4. state programs. social. 3. Public allocations may be compared with the status and condition of economic. and (c) Changes in public allocations observed in time series data. and cultural rights to determine whether state allocations are geared towards the satisfaction and realization of these rights. geographical and spending level patterns. human rights. (b) Composition of expenditure among different state functions (for example priority may be given to national defence and security or debt service and less allocations for education and health). which result in breaches of 20 . imbalance in categories of current expenditures disproportionate or unequal spending on budgetary items. categories of current expenditures and compensatory measures comply with state obligations to respect.

however. therefore.Budget tracking. involves description and analysis of budget drafting. It should be noted. process. 21 . implementation and description of budget indicators that may be applied to a rights-based approach towards budget tracking. that monitoring the progressive realization of human rights through budget analysis entails a multi-year comparison of the state’s budget.

Budget Analysis 5.2 Techniques of budget analysis Preparatory work for budget analysis: Before getting into the budget analysis one has to be clear on the budget process and way the budget is presented. Quantitative techniques: One way to analyse budgets is to look at the allocations to different sectors or different regions. It also deals with per capita budgets. education) can be analyzed to measure The priority given to that sector compared to other sectors in the economy 22 Sectoral/specific budget area (for instance . One also needs to know how to read the figures in order to determine their implications.1 Introduction This section aims to give participants the specific skills to be able to analyze a budget. 5. comparing allocations to actual expenditure. and interpreting the results. Look at the government’s policies and plans to understand what the government is trying to achieve. both year-onyear and over the medium term. or calculating nominal and real growth rates.5. Familiarise oneself with various terms in the budget and to know how to read the budget. The purpose of this part of the budget work is to introduce participants to some of the key calculations that are frequently used in analysing budgets. These skills could be applied to different types of analysis for example budget tracking from a human rights based perspective. Organisations should Look at the budget law and corresponding guidelines and learn the process by which the government’s budget is prepared and approved (covered in the first section). One needs to know how the budget is classified and what each classification entails. These include looking at the size of a component of the budget relative to the budget total.

we divide 4 by 20 and multiply by 100 to change it into percentage. We express it in terms of a percent of the total. One sector’s as a share of the country’s (region’s) budget (example education) 2. For example. we say education’s share is 20%.- Changes in the amount allocated to that sector over time (also taking account of inflation) Amount allocated per person in that sector Whether the money allocated to that sector was spent. We use share to measure how much government prioritises a certain item in the budget. i. In what follows we shall discuss some specific techniques/tools which can give you the information on the above. 2003/04 and 2004/05 Method 1: Percentage share of the budget (indicates priority): The term share refers to the size of a slice of the pie in relation to the entire pie. Specific spending breakdowns as a share of the total sector budget (example: what share of the education budget goes to recurrent and capital budget and within recurrent budget what share goes to wages and salaries and teaching materials? What share of the health budget goes to primary health care or HIV/AIDS or …?) Looking at shares over time can tell us more about how government’s priorities are shifting. if the total national budget is Birr 20 billion and Birr 4 billion is spent on education. x 100 23 .. The formula is as follows Share of budget for sector Total budget We often use percent to express: 1.e. As well as considering specific sectors you could also look at regional or woreda budgets and compare them to national averages or other regions and woredas. Exercises are included to complete these tools for which you would need the regional budget for the following years: 2002/03.

divide the nominal amount by the deflator for that year. To take out the effects of inflation we use the ‘deflator’. Birr 20. In order to get the real amount for each year. The basic formula is: Growth rate in percentage in 2004/5 = (Amount in 2004/5 – Amount in 2003/4) x 100 Amount in 2003/4 Exercise 2: Calculate the growth rate for education in the recurrent budget. If we want to convert everything to 2002/3 purchasing power. The following example is derived from Table 5. Budgets from different years can give a distorted picture as inflation means that what money can buy across different years varies.000 million (nominal) divided by 1. 24 . Comparing one year’s budget with the next year’s allocations may indicate changes in the state’s policies and priorities. and from 2003/4 to 2004/5.44 (deflator) equals Birr 13889 million (real terms).1. Does the recurrent budget for education seem to be growing faster? Method 3 Converting from nominal values to real values (adjusting for inflation) Nominal: amount given Real: adjusted for inflation to reflect purchasing power of money at a particular time. we make 2002/3 the base year. from 2002/3 to 2003/4. As a result of this nominal and real values are equal at the base year. This is a figure set by the Ministry of Finance that is based on the rate of inflation. Therefore we need to remove the impact of inflation to determine the real figures. It is expressed as a percentage of the original allocation and is called the annual growth rate. For 2004/5. Would you say that the priority given to education is increasing or decreasing? Method 2: Calculating growth rates (indicates progress): The growth rate describes how much the size of an allocation changes from one year to the next.Exercise 1: Calculate the recurrent budget for education as a share of total recurrent expenditure for in 2003/04 and 2004/05. The deflator for the base year is 1 because we are using the base year as a benchmark and comparing everything to that year.

Birr 100 this year buys less than Birr 100 last year. inflation reduces purchasing power of Birr over time. i. 2003/04 2004/05 Average growth rate= Growth rate in year 1+ growth rate in year 2+ growth rate in year 3 3 25 . you add annual growth rates and divide for the number of annual growth rates. because prices are increasing.44 13889 As may be observed from the table.12 15179 2004/5 20000 1.Table 5. Is the budget for this program keeping up with inflation? 2002/03 Nominal figures for education Nominal Annual growth rate Real figures Real annual growth rate Method 4: Calculating annual average nominal /real growth rates (progress in nominal/real terms). Exercise 3: Calculate the real budget figures for the regional recurrent budget for education.1 Nominal and real values Nominal values Deflator Real values 2002/3 15000 1 15000 2003/4 17000 1. For the above given data annual average growth rate is the average growth rate of the three years. This gives a big-picture of what is happening over the medium term. We convert nominal amounts into real amounts to adjust for inflation. This makes straight comparison of amounts between different years inappropriate.e. i. Then calculate the annual growth rate for nominal and real budget and reflect on the two growth rates..e.

In 1998) * 100 26 . (i. This gives you the amount spent per person in your region on education.Exercise 4: Calculate the average growth rate for education for the real and nominal amounts over the three years. To do this divide the budget figure by the total population in the area the budget refers to. Calculate the per capita spending nationally 3.per capita budget for Eth. for the per captia spending in education in Amhara divide the education spending by the population in Amhara) Budgetfigu re population Per capita budget = Exercise 5: Find the population for your region. Express the difference between this amount and the average per capita budget figure for the countrywide as a percentage of the countrywide average. Is the spending on education keeping up with changes in the population? Method 6: Percentage difference from average (regional/woreda equity in per capita budgets) One thing you may want to analyse is if a fair amount is being spent per person in different regions. municipality) 2. district. Devide the education budget by the population figure. Calculate the difference between the sub-budget per capita spend and the national per capita spend 4. Take the per capita budget figure for a sub budget (region. Is this similar or different to the growth rate for each year? Method 5: Per capita budgets (equity and adequacy): To check that there is equity across the population it is necessary to work out the amount of spending per person. % difference for SNNP in 1998 = (per capita budget for SNNP in 1998.e. 1. Calculate this figure for the different years (remembering to check the different population figures). To do this you could compare the per capita spending for that particular region to the national average.

The spending rate for recurrent budget (recurrent expenditure to recurrent budget) is usually high because most of these expenditures are wages and salaries. The rate of utilisation can be found by dividing the actual expenditure by the approved budget. 1. the per capita figure (Method 5) (Methods 3 and 4) 27 . This can be also calculated for specific sector or sub sector. The spending rate for capital expenditure is usually low for Ethiopia.3 What do we learn by looking at different quantitative methods of budget analysis? The following can give an idea of how these methods can be used to inform our wider analysis. Adequacy: How much is budgeted? • • Nominal terms can tell us if the allocation is enough by looking a Real terms tell us if the allocation is keeping up with inflation. It is therefore necessary to look at actual expenditure as compared to approved budgets. To express this as a percentage of the approved budget divide the result by the approved budget and multiply by 100. To analyze the utilisation of the budgets you will need to compare budget reports to the budget proclamations.Average per capita budget for Ethiopia in 1998 Negative signs shows less per capita budget from countrywide average while positive signs shows more capita budget that the countrywide average. Rate of utilisation = (The actual amount spent on x in the approved budget) x100 The approved budget for x 5. Method 7: Comparing approved budget to actual expenditure (spending/utilisation rate  efficiency) What is in the budget may not be what is actually spent in reality.

4 Thinking about the budget document In your exercise and observation do you think that the budget book enables readers to establish the relationship between functions and allocations and thus to check the rationale behind the allocations? Is the budget structure okay for effective budget analysis or for effective assessment of policies and budget outcomes? Does the budget document have enough breakdowns for effective budget analysis? Looking at budget reports: Does the budget document give information on funds that are spent for purposes other than those that are authorized? Does the budget document give information on the source of funds for expenditures that are larger than the allocated funds? Does the budget document give information on the unutilized portions of the allocations for expenditures less than the allocated funds? 28 .2. Priority: To tell us if the stated policy priorities are reflected in the budget and to determine if the government is keeping its promises (policy commitments) • • Percentage share calculations shows if priority is being put in the Real and nominal growth can show how a government is placing right place (Method 1) more or less priority on a sector (Method 3) 3. Progress: Is government’s response on this issue improving? • The rate of growth of allocations to a sector tells us if the government is putting more into a sector (Methods 2 and 3) 4. Equity: Are resources being allocated fairly? • The per capita measure compared to the national shows if the regions allocations are more or less than the national (Method 6) 5.

1 General overview on budget monitoring and evaluation The main aim of budget monitoring and evaluation is to gather information on the budget implementation to provide an assessment of how the budget is being implemented compared to the plan. time frame and dissemination strategy. definition of essential variables of budget performance and indicators. budget monitoring is looking at what has actually happened to the budget. It is a continuous assessment of implementation of the budget in relation to originally agreed resource allocation. improve budget outputs and outcomes. Evaluation is concerned with budget outputs (direct results of budget implementation or what that money did) and budget outcomes (changes in the quality of life in society that result from budget outputs). Thus. It has to state what is going to be evaluated. drought … which takes the time of most institutions). formulating the broad aim of your budget monitoring work and core monitoring question are the key to get started for budget monitoring. ahead of time. It is an assessment of whether intended objectives of the budget have been met.6. Monitoring and evaluation is not something that we think about at the end of the fiscal year. what external influence should be taken into consideration (eg. authorised budget and actual expenditure. This can then be used to: ensure fair and appropriate allocation of budget among different sectors and people is taking place. methods. and reduce the gap between approved budget and budget disbursements. what process and activities are being used to spend the budget. what evidence is needed to answer key evaluation questions. This allows people engaged in monitoring and evaluation to know the purpose of the budget. Monitoring is a routine collection and analysis of information on implementation/progress vis a vis original plans and its follow-up. who has a stake in the budget. Budget Monitoring and Evaluation 6. what type of output and outcome is expected at what level. Monitoring and evaluation plan should be formulated during the designing and planning of the budget with the participation of the stakeholders. should consist the following: conceptual framework. war. Hence. etc. 29 .

It is therefore necessary to monitor and evaluate budget to assess what has actually happened. 6. To provide information whether the expenditure is aligned with policies/priorities. Did it fit with the plan and is what is spent achieving all it is supposed to? Specific reasons for monitoring and evaluating budgets are: 1.Monitoring the budget can help civil society to have an oversight over the actual implementation of the budget.priority sector get enough. It does not tell us what actually happened. 6. what improvements in sectoral allocation are required? Is sectoral allocation focused on the right elements?. To provide crucial information about budget performance (What is the total envelope and sectoral allocation . To identify and take action to correct weaknesses in budgetary allocation and implementation. To provide a view over time on the status of programs supported by public resources. What do we mean by budget monitoring and evaluation? 1. Tracking budget principles 30 . 3. To identify potentially promising programs or practices 7. To check the level of compliance by the government of its economic and social rights obligations.1 Why and what is budget monitoring and evaluation? What is budget monitoring? The budget that a government produces is only the plan for what they intend to implement over the coming year. To provide information whether the budget is aligned with expenditure. To provide timely and frequent information on budgetary performance. 4. etc.1. and 8.). 5. 2. Is the community owned the process and committed?. Civil society can also help engage citizens in these activities to give them the information and understanding of what is happening to the resources being spent in their name.

d) Comparing budgets/expenditures with changes in inequities. and 5. Carry out a baseline study to establish initial level of indicators to allow for comparison (trend analysis). and g) To suggest corrective actions if things are going wrong. 6.Looking into the level of participation. f) Identify reasons for the deviations/discrepancies. 31 . 3. develop a monitoring and evaluation plan that clearly defines what information you intend to collect. policies and priorities of the government. transparency. In order to develop this. indicating how to check whether these objectives have been achieved or not. b) Comparing budget with actual expenditure. plans for analysis and develop indicators that will be used to verify if the budget process have been aligned with budget principles. among others. Develop instruments for collecting required information. need to be addressed. 1. c) Comparing expenditures with policies and priorities. Tracking changes in the budget situation a) To evaluate accounting procedures. 2. 4. objectives. the following major issues. including documentation of expenses and incomes. develop the logframe8 which shows the logical relationship between the means and ends. There must be a clear understanding and systematic analysis of the budget process..1. accountability and equity issues in the budget process 2. e) Detecting deviations/discrepancies. It reflects the causal relationship between the different levels of objectives.2 How to carry out budget monitoring and evaluation First there is a need to put in place a monitoring and evaluation system. 8 Logframe which is also referred as Logical Framework is a kind of matrix structure that presents the budget inputs-outputs-outcomes in a logic and systematic way. if the budget objectives have been achieved and etc.

Process – to monitor the budget cycle .6. Community is a group of people living together. Outcomes – to monitor benefits from usage of outputs . availability of information. how much money has been allocated and disbursed for health care in a particular region or woreda. outputs. 1. and directly representative of the object being measures.e. information accessible. what clinics have been build or health services provided in that region or woreda. Inputs – to monitor financial inputs .. Let us be clear first what we mean by the community. number of children educated. inputs. i.2 Community Based Budget Monitoring and Evaluation In the preceding sections we have had a discussion on budget monitoring and evaluation in general terms. i. 32 . sharing common facilities and facing somehow similar problems. .financial indicators -checking disbursements – what was actually received and spent i. accountability (do public bodies subject to internal and external audit and accountable to the public) and equity (sectoral proportion.improvements indicators in standard of living. We now shall discuss the community based budget monitoring and evaluation.checking what the budget has done.e.e. time bound.participation (civil society). In selecting indicator one has to take into account whether the indicator is easily measurable.achievements/performance indicators checking what was produced – looking at number of schools and hospitals built. per capita budget. 3. and outcomes as outlined below. health. does spending translate into better services such as improved status of health and education and reduction of poverty. etc . transparency (was the process transparent.budget principles indicator. has the community in that region or woreda received better health care? Have their rates of illness decreased? 4. 2. education. Outputs – to monitor immediate achievements . clear. number of roads built etc.1.3 What are the indicators for budget monitoring and evaluation? Indicators are central and form a major part of budget monitoring and evaluation system. Budget monitoring and evaluation indicators can be tracked from budget process. working conditions. rural/urban…) 6.).

Step 2. This will determine the type of Inputs information to be collected as well as the source. Table 6. which sector or service will be the focus. If these activities are done by community members themselves it will give them a real opportunity to engage with the budget process. people. Thus. documents and information used to monitor and evaluate the intervention are defined. and whether there is a requirement to make changes to the budget plan in the subsequent years to ensure that outcomes are achieved. community based budget monitoring and evaluation needs in place a monitoring and evaluation system.e. information is collected on budgetary inputs in that specific sector – exact amount of resources that have been 33 .A community based budget monitoring and evaluation is. whether budget disbursement in the community is aligned with the budget approval. How to carry out community based budget monitoring and evaluation Like all general budget monitoring and evaluation work.1 Steps in carrying out community based budget monitoring and evaluation Indicator level Inputs/outputs/outco mes Activity Step 1: Analysis at community level to decide which areas of the budget will be monitored i. refer to tracking of public expenditure in the community. monitoring and evaluation of public expenditure in the community in all or specific project/intervention in the community is included in the logframe where the levels. The issues raised in the preceding section for developing monitoring and evaluation system and identifying indicators also applies here. processes. whether public expenditures are producing the anticipated outputs. whether actual expenditure is aligned with authorised budget. thus. Using the logframe format community based budget monitoring and evaluation can be applied as follows. whether public expenditures are contributing to the desired outcomes.

has the clinic being constructed? Has the expenditure been according to allocation and priority? Are there any long or short term benefits being accessed Outcomes from this output? Step 5: Get views from other stakeholders on the process that has been taken to produce the outcomes. do they now have access to better health services? Step 6: Compile the information collected in a report. What has been the participation of the beneficiaries in planning and implementation of the activity in the sector? What benefits are they deriving from the outputs of this activity? i.e. How much is allocated? Inputs Who are the target beneficiaries? Step 3: Preliminary quantitative analysis of the allocations themselves.made available for that sector. What is the efficiency in allocation of the resources? What is the prioritisation in allocation of resources? Has there been a nominal change over the years in the allocation for this specific sector? Has there been a real change in the allocation for the sector? Output/outcomes Has the allocated budget for the sector been disbursed? Step 4: Physical inspection of outputs Looking at what has actually happened on the ground – i.e. Step 7: Plan an advocacy/dissemination strategy Who does the information concern? Inputs/outcomes What is the change desired? Step 8: Produce a budget statement based on the analysis in 34 .

Flows of funds were tracked through different tiers of the government and at the community level. UDN recently launched the Budget Advocacy Initiative (BAI) for pro-poor budget policies. This is a summary of the report in step 6. Serena Beach Hotel.steps 3 & 4. civic groups and individuals. Kenya 35 . funds reaching schools has increased to 80-90% for the period 19992000.31. This allows the community to understand the budget 9 Arianna Legovini (2005) ‘International Experience in Impact Evaluation’ paper presented in Impact Evaluation Workshop.9 Part of this work was the community based budget monitoring exercise in Tororo District by Uganda Debt Network (UDN) in November-December 2002.3. 6.1 Uganda Monitoring evaluation of public expenditure on primary education in Uganda has significantly improved the utilisation rate of the education budget. UDN developed a participatory community based budget performance monitoring system through a pilot exercise based on participatory methodologies. Step 9: Review your dissemination strategy and then disseminate. making radio announcements. and requiring schools to post information on their walls. As a result of this. Both general budget monitoring and community based budget monitoring and evaluation brought this issue to the attention of the government and public at large. institutions. the government to began publishing monthly inter-governmental transfers in newspapers. From 199195 only 13% of earmarked funds reached schools. UDN was formed in 1996 as an advocacy and lobbying coalition of Uganda NGOs. It has been actively involved in budget monitoring. It has mobilised civil society and communities to participate in the formulation of budget policies by empowering them to monitor the use of public resources through process of participatory learning and action. above. 2005. Due to the work highlighting the issue. August 26. Mombassa.3 Country experiences 6.

and establishing monitoring and evaluation system and developing indicators.2 Budget monitoring score card Objectives Indicators Score (out of 5) 1. This was followed by a three-day workshop on participatory community based budget monitoring and evaluation. central and local government budget process. budget processes. It was reported that the community was aware of various funds spent and intended to be spent in their community and clearly informed the meeting of their concerns on what to monitor and their priority areas. budget performance monitoring. and capital and recurrent budget. Participants formed a budget monitoring committee and developed a general guideline for the participatory community based budget performance monitoring and evaluation and identified priority areas to be monitored. They then developed their own monitoring and evaluation tool with indicators in terms of monitoring score card. To ensure that released No of planned activities against the activities funds are properly utilised done No of pupils against released funds Extent of record keeping and accountability Evidence of purchase Value of purchase items against budgeted funds Knowledge of staff and committees about usage of funds 2. Table 6. To ensure transparency in No of accomplished activities Information flow of the money released utilisation of released funds within the staffs and the management 36 . Below is an example of the score card containing the designed objectives (priority area is universal primary education) and indicators developed by participants and used in monitoring budget performance. The pilot exercise was participatory in the sense that the team had a one-day community meeting to discuss about the budget monitoring and evaluation.policies.

kitchen No of desks learning environment Availability of learning materials 5. 2-poor. for instance has faced hostility from some local officials and reluctance to provide information. 1-very poor. Minutes. Despite these difficulties. Some of the findings for education included poor infrastructure and inadequate desks in schools Unpredictable release of funds to schools which meant one school had to borrow funds for the end of the school year Some schools had displayed the funds they received while some did not This helped the monitoring teams to debate these problems with the authorities. 3-fair. it was found out that participatory community 37 . receipts. and other records (contracts. These kinds of exercise can face some difficulties. and 0-nil By using this monitoring score card. To ensure that proper Funds clearly/publicly displayed Involvement of finance/management procedures are followed committee during the budget process Parents’ involvement Student involvement Availability of supporting. of uniforms or playing kits bought Music instruments in schools curricular activities are No inter school game and sports activities being promoted in school 6. Ensuring good/conducive Availability of a good latrine. To improve No of visits to the head office No of school purchases carried out administrative coordination Note: Grading (score): 5-very good. …) 4. findings on primary education and lower level health facilities were presented to a larger audience including the local government officials. 4-good. To make sure that extra No. The exercise in Tororo district.committee Level of transparency and accountability Availability of documents and reports Minutes of management committee 3.

We want greater community responsibility and this programme guarantees this. Although there is no empirical support to this particular exercise. health. the difficulty of getting officials to share information. let us remove all the wrong however small. 6. Hakikazi Catalyst have undertaken participatory community based budget monitoring in selected areas of Arusha Municipal and Arumeru districts in Arusha region. Its main aim is to advocate for social and economic rights that promote sustainable livelihood. a non-governmental social and economic justice organisation established in 2000. and water and sanitation) has increased from 32.3. the combined pro-poor budget (education.2% in 1994/95 to over 42. One government official said that ‘There is something wrong somewhere considering what has been reported.2 Tanzania Hakikazi Catalyst. and in general for improved local governance. outcomes for the PRSP priority sectors of education. agriculture. and activities by using a community score card. health. is involved in monitoring budget inputs.1% in 1999/00 and is projected to increase to 48% in 2003/04. indicators. water and roads. 38 . Generally there was a positive reaction from the authorities. So let us not be defensive.based budget monitoring and evaluation is an effective strategy for increased accountability. It begun by analysing the 2003/04 budget of Arusha Municipal and Arumeru districts to determine recurrent and capital expenditure for poverty reduction priority sectors. the monitoring team should inform the authorities of what it is doing first and build alliances with them.’ To avoid such kinds of problems. agriculture. It also collected information on poverty reduction targets. outputs. since the establishment of UDN. rural roads. transparency. They found it helpful to find out what was actually happening in the community.

Vulnerable members of the community like people living with HIV/AIDS. Challenges: Hakikazi found the budget format was not helpful for quick review and detailed analysis. community based organisations and community leaders. It made the analysis very difficult and time consuming and obstructed from effective monitoring and evaluation. After the intervention of Hakikazi Catalyst. and youth). single and widowed women. It held community based poverty reduction strategy debates in which the community selected a poverty reduction strategy monitoring committee for each community from all categories of people (old.The process involved mobilising support from local authorities. 39 . Education and health) Hakikazi also found a lack of transparency in terms of comparing what resources had been allocated versus actual expenditure. Output of the monitoring: Before the monitoring activity communities were not provided with information on funds allocation and expenditure. Data in the budget documents was not disaggregated and no breakdowns were given of expenditure for individual items. They also found out that resources allocated are not adequate to meet the demand of services required. and youths have difficulty accessing basic services (ex. orphans. women. who were then trained. other civil society working on poverty reduction. They also were not participating in development and budget process. communities are empowered to monitor and evaluate poverty reduction activities and demand accountability. Each monitoring community selected two poverty reduction strategy priority sectors to monitor and evaluate with the community score card. Findings: The monitoring grassroots communities have confirmed that the local government is making a difference in the priority sectors. Resources for poverty reduction are not also fairly allocated.

values. and main intervention entry point of civil societies. the role of civil society in policy formulation and budget process in general and budget monitoring and evaluation in particular has immense advantages to the community. To influence what goes into the budget or to influence decision-makers on key budget related policy issues or problems that concern the citizens and hence to ensure adequate public investments allocated to community concerns. To monitor the budget performance. To promote public awareness of government policy. It crates/raises community awareness about budget and its implication of economic and social rights. In general the role of civil society in budget monitoring and evaluation and the subsequent budget advocacy are outlined in what follows. 9. 6. This awareness provides communities with the opportunity not only to claim the budget. 8. norms and culture of a society and its people are fully recognized 4. 3. To determining targets and indicators for monitoring outputs and impact. To ensure priority needs of poor are addressed in policies and interventions and hence championing and protecting the interests of the poor and marginalised. 7.4 Why civil society in budget monitoring and evaluation? The role of civil society in budget monitoring and evaluation is critical. 5. Monitoring and evaluation is one of the strongest tools for advocacy. It should be noted that for effective engagement of civil society in budget monitoring and evaluation. To prepare detailed implementation plan. They can also influence the government to take positive actions to guarantee economic 40 . 1.6. and more importantly. To ensure that the beliefs. their participation in policy formulation and in various stages of budget process is critical as it opens the room for possible influence of budgetary allocations and priorities in budget allocations. they will have a great opportunity to influence the budget process and hence budget outputs and outcomes. For timely feedback to ensure government rectify situation in the next fiscal year. but also. When communities gain knowledge on the budget and budget process and identify exactly where and how tax contributions and other public money is spent. the To recap. 2. to claim their rights.

to hold the state accountable to them. The role of civil society is. 41 .and social rights or to desist from implementing any policy. program or measure that limits or obstructs their rights. This knowledge may also spur communities to effectively participate in the budget process. and to force the government to become transparent in its fiscal activities. immense in creating the awareness and empowers the community in the process. therefore.

particularly the poorest and excluded ones. as well as to bring more people into the debate. and the public – and must be available when needed to inform policy decisions. Some definitions of advocacy refer to policy change or the technical aspects of advocacy while others explicitly refer to power. 7. it should be undertaken with the explicit intention of achieving policy goals. In order to achieve these goals. medium and long term. 7. and to enact and implement laws and public policies so that visions of “what should be” in a just. The goals are to raise the level of budget literacy among those engaged in the budget policy debate in order to improve this debate. economic and social systems and institutions – that directly affect people’s lives. decent society become a reality.1 Definition of Advocacy The rapid growth of advocacy training in the last decade has generated a wide variety of definitions. Some focus on who does advocacy and who is meant to benefit from advocacy. Budget Advocacy CSOs’ budget work should essentially focus on bringing about improvements in the lives of people. economic and social – is an overarching framework for these 42 . Advocacy consists of organized efforts and actions based on the reality of “what is. the following commonly used definition may be enough: • It is usually defined as a process of social change and transformation directed at making power relations in society more democratic. For our purpose. assuring marginalised people a place in public decisions.” These organized actions seek to highlight critical issues that have been ignored and submerged. it also requires that its findings be presented in a way that maximizes its impact on the policy debate. to influence public attitudes. Human right – political. the media. CSOs have to engage in budget advocacy.7. approaches and strategies.2 What is advocacy? • • Advocacy is not an event. While applied budget work demands quality analysis. Value-neutral definition: Advocacy is the pursuit of influencing outcomes – including public policy and resource-allocation decisions within political. Accordingly CSO budget analysis/tracking or monitoring cannot be simply research for the sake of research. Different definitions reflect different assumptions about how politics and power operate. Instead. Applied budget work also encompasses efforts to advance the understanding of budget issues. The analysis must be accessible to a wide range of audiences – particularly policymakers. It is more of a process that an organization or an individual undertakes to achieve a series of objectives in the short. such as assisting the most disadvantaged in society. and how change happens.

6 Tools for advocacy • The media (Radio. destitution. How decisions are made: accessibility of citizens to information and decisionmaking processes. What is decided: laws. values. • Championing and protecting the interests of the poor and marginalised. institutions. ministers.5 Why Budget Advocacy • Because resources are scarce • Certain groups of people are either excluded or marginalised from benefiting from the available resource base.3 Focus of Advocacy • • • Who decides: legislators. influence the design of specific policies or enactment of relevant laws 7. heads of state. 7. accountability and responsiveness of decision makers to citizens and other stakeholders.4 Budget advocacy is about … • Influencing decision-makers on key budget related policy issues or problems that concern the citizens. judges.visions. constituents and/or members of affected groups. to ensure fair and just budgets and entitlements of poor people. implemented and evaluated: ensuring accountability so that decisions are put into action. appointed officials. managing directors. services. thereby changing the institutions themselves. • Existing social inequalities in society & the unequal power relations between various social groups. etc. to change the power relations between these institutions and the people affected by their decisions. Newspaper and Television) • Research – good quality research • Planning 43 . and to result in a clear improvement in people’s lives. budgets. exclusion. • Some members of society are benefiting more than others • To cause change in the STATUS QUO. etc. • Ensuring that the beliefs. laws are enforced equitably. boards of advisors. appointments. Advocacy organizations draw their strengths from and are accountable to people – their members. etc. etc. administrators. • 7. 7. and powerlessness. policies. How decisions are enforced. regulations. Advocacy has purposeful results: to enable social justice advocates to gain access and voice in the decision making of relevant institutions. priorities. policy-makers. norms and culture of a society and its people are fully recognized. • It is a struggle against injustice. marginalisation. programs. statements. extent of consultation with and direct say of citizens.

• • • Mobilising and Campaigning Information Dissemination Monitoring and evaluation 7. Success at the Policy level 2. and manage the power plays that go on under the decision making table. deal with opposition.helps to identify a) Primary targets b) Secondary targets b) Allies c) Opponents d) Constituents • Policy and Situational Research • Mobilising and campaigning Components of an advocacy activity • The Goal • Objectives • Strategies • Indicators • Outputs • Activities • Means of Verification (MOV) Types of advocacy • Lobbying • Campaigning  Letter writing  Media campaign  Demonstrations • Public Education • Litigation • Building Alliances and Coalition Evaluating Advocacy Impact 1. 44 . • Negotiating: Advancing your issue – How to present your position. • The Power Map .7 Planning an Advocacy Campaign: Critical steps to advocacy planning • Organisational Assessment (SWOT Analysis). Success at the democracy level Lobbying and Negotiating Lobbying: Getting to the table – What you will need to do to reach the table to voice your advocacy concerns. Success at the Society level 3.

money. how-reduces briefcase NGOs Weaknesses of advocating through networks 45 . • Familiarize yourself with the corridors of power • Classify the Players • Rank decision-makers • Inform and Build Relationships Advocacy network: A group of organizations that come together to ensure / bring about a social change in a democratic way. where.g.sign up to these • Common interests • Willingness /Value added-ness • Resources (take advantage of each others’ resources e.Who’s a lobbyist? Who’s a negotiator? • Good listeners • Not easily upset or distracted • Willing to let the other person talk and take the lead • Persistent but not dogged A good Lobbyist should be able to… • Think on their feet • Faithfully represent the views of others while still being flexible • Say I don’t know • Keep a sense of humour • Identify concealed agenda • Know when to retreat and try a new angle Lobbying: getting to the table 4 key steps. geographical experience) • Leadership • Clear work plan • Involvement Benefits of advocating through networks • Information sharing • Learning from each other • Having a strong/common voice in influencing change • Avoids/reduces duplication of work and competition • Able to know who is doing what. to help your lobbying lead on to serious negotiation.. Key factors for consideration in forming networks • Clear purpose and mission. human.

• • • • May lead to lack of ownership of responsibility Exploiting member organizations If there’s no transparency. database. can lead to suspicions on the coordinating NGO Not easy to disseminate information.making what is “invisible” visible • Information sharing Key factors in maintenance / growth stage • Creativity and innovativeness to keep the steam up • Organization in the network (communication systems. and chairperson doesn’t always have to share meetingrotate) 46 .keep members motivated • Setting realizable objectives • Foster trust and collaboration • Meetings and Documentation (meet only when necessary. decision making structure • Leadership. leading to high expenses Key factors in maintenance / growth stage • Openness and transparency at all stages • Good leadership with moral authority • Participatory decision making • Realization of tangible benefits • Equitable recognition and opportunities for all members. record minutes. send agenda before meeting.

g. promoting accountable and transparent governance. relevant legal and policy instruments of the government that prevail at present (e. the constitution. A few relevant examples are given below just to encourage further reading and understanding of the legal and policy environment. poverty eradication and development policies and strategies such as PASDEP. 8. 1/1995) Article 12: ‘Conduct and Accountability of Government’. Rural Development Strategy. states that the Government shall have the duty to formulate policies which ensure that all Ethiopians can benefit from the country's legacy of intellectual and material resources. affirms that citizens have the right to improved living standards and to sustainable development and the right to participate in national development and. 235/2001: The Establishment of the Federal Ethics and AntiCorruption Commission The Preamble of the proclamation states the reasons for establishing the Commission as: • the Government and the Peoples of Ethiopia recognize that corruption and impropriety are capable of hindering the Social. stipulates that the conduct of affairs of government shall be transparent. This right includes freedom to seek. in particular. opinion. receive and impart information and ideas of all kinds. and maintaining citizens’ active participation in matters that affect them. The Policy Environment In Ethiopia. Article 89: ‘Economic Objectives’.1 The Constitution of the Federal Democratic Republic of Ethiopia (Proclamation No. Economic and Political development of any country. and to ensure that all Ethiopians get equal opportunity to improve their economic conditions and to promote equitable distribution of wealth among them. • corruption and impropriety are to be checked in order to promote and sustain the development and the democratic process in Ethiopia. It also provides that Government shall at all times promote the participation of the People in the formulation of national development policies and programs. it shall also have the duty to support the initiatives of the People in their development endeavors. and access to information of public interest. to be consulted with respect to policies and projects affecting their community. guarantees freedom of thought.) emphasize on ensuring realization of human rights. Article 29: ‘Right of Thought. 47 . Opinion and Expression’. regardless of frontiers. and expression.2 Proclamation No.8. etc. It also guarantees freedom of the press and other media and specifically includes prohibition of any form of censorship. and that any public official or an elected representative is accountable for any failure in official duties. Article 43: ‘The Right to Development’. 8.

Human Rights. transparent and democratic governance that respects the rights of all of its citizens. and review will be established at the woreda and kebele level. Protecting Basic Services (PBS) Project The PBS Project is an initiative designed by the Government of Ethiopia (GoE) in cooperation with the donor community and other stakeholders in and outside the country. as enshrined in the Constitution. Participatory structures for planning. Minimum service standards will be developed and implemented at the woreda level. the government has shown its commitment to take the following practical measures that promote good governance: “During PASDEP. emphasis will be placed on steps to ensure accountability and transparency at the local government level. As part of the next stage of woreda-level decentralization.6.1 of the draft PASDEP. and then developed and adopted by the regional government institutions in the following two years. with a target of complete reporting by all federal institutions by the end of 2006.3 Plan for Accelerated and Sustained Development to End Poverty (PASDEP) Under section 5. In the same section of the PASDEP. there will be implementation of annual public audit reporting to Parliament. Manuals for grassroots participation will be developed and introduced in all regions at the woreda level during the next two years. including a series of M&E workshops. major efforts will be made to mobilize and capture local and community input into the decision-making process. It is also indicated that the M&E Action Plan formulated and adopted and a regular consultative process has been put in place with donors and civil society. especially women. 8. Openness and Consultation’ the government has reaffirmed that Ethiopia is committed to open. these minimum standards will be publicly displayed and publicized among citizens. ‘Governance.” “Citizens’ Charters will be developed and publicized by all federal institutions during 2006-07. and as part of the decentralization process. In addition.4. a system will be instituted of annual disclosure of accounting and performance information directly to the public. norms and standards. Local officials and stakeholders at the kebele level will be trained in grassroots participatory and consultative processes.• it has become necessary to create a society which shall not condone but rather prepared to effectively combat corruption and impropriety. defining indicators. 48 .” Besides. chapter 8 is entirely devoted to the Monitoring and Evaluation System of the PASDEP. and of the regions by 2007/08.” “Part of the rationale behind decentralization was to bring accountability and decisionmaking closer to the people. 8. monitoring. and systems developed for participation and consultation with civil society stakeholders. Actual performance against standards will be regularly publicized.

The existence of meaningful transparency. The PBS will provide the perquisite basis for locally initiated development with the efforts of grassroots groups. the Kebeles.” 49 . For this reason. The component has facilities to support citizens and CSOs to become “more familiar with budgets and to engage citizens and CSOs in pilot activities on social accountability. wanted and whether people believe that their livelihoods are improving as a result of PBS. The proposed PBS project is a package consisting of four main parts (or Components). and the woreda administration. ‘voice’ mechanisms and instruments of ‘bottom-up’ public accountability can help ascertain whether public services are needed. Component 4 of the PBS calls for Civil Society Organizations (CSOs) to participate actively and meaningfully in the implementation of pilot projects on Social Accountability (SA). backed by donor grants and matching government resources. The main aim of the PBS is to protect the delivery of basic services by the GoE while promoting and deepening transparency and accountability in the governance and management of the Protecting Basic Services project delivery. The management responsibility of the PBS is entrusted in the woreda administrations.It is designed to expand and sustain the basic human development programs that are almost exclusively provided by the GoE.

S.pdf. Ethiopia Streak. Mehrotra. New York. Legovini. Impact Evaluation Workshop.E. (1999) Rights-based Approach towards Budget Analysis. (2003) Monitoring Government Budgets to Advance Child Rights: A Guide for NGOS. Country Experiences in Assessing the Adequacy. 4..References Diokno M. Human Rights Quarterly. http://www. MD. October 1998. A (2005) International Experience in Impact Evaluation. (1998). Serena Beach Hotel. No. S. Vol. Social and Cultural Rights”. Robertson. paper prepared for the Meeting on 20/20 Initiative. (1994) “Measuring State Compliance with the Obligations to Devote the ‘Maximum Available Resources’ to Realising Economic. I. Cape Town. Mombasa. Baltimore.iie. Addis Ababa. Kenya. R. August 26-31. World Bank. 2005. Equity and Efficiency of Public Spending on Basic Social Services. IDASA. J. 16. South Africa. 50 .org/Website/CustomPages/ACFE8. Save the Children (2003) Children’s Budget: Are Children getting their Adequate Share of the Budget? Save the Children.

Notification of the approved budget 9. Notification of annual subsidy budget 3.mofed. Budget preparation 2. 26 – Feb 8. 8 Not later than March 22 March 23 .Annex 1: Financial calendar Cycle Planning Cycle 1.1 Public Investment Program call letter 2. 25-Nov 24-Jan Not later than Feb 8 Feb.3 Review and Finalize PIP 3. Executive Preparation and Recommendation of budget 1. Public Investment Program (PIP) Preparation 2.1 Preparation of MEFF 1. Budget Recommendation B. Prepare and finalize Annual fiscal plan Budget Cycle A. 8 Feb. Legislative Approval 7. Submit budget Request 5.July 7 51 .November 10 November 11 .2 Approval of MEFF 2. Notification of a 3-year subsidy estimates 4. 16 July 8. Approval and appropriation of the budget C. Executive Implementation 8.May 22 May 23. Issue budget call 4. Implementation of the approved budget Source: http://www. Preparation of the Recommended budget 6. Macro-Economic and Fiscal Framework 1.February 8 25-Nov Not later than December 25 Dec. Submission of Budget allocation and action plan 10.2 Submission of Public Investment 2.June 2 June 8 – July 7 July 8-15 July 16-Aug.org Calendar July 8 – November 10 Not later than October 26 October 27.

inputs used in service delivery. fiscal year. the addition of the term "fiscal" means a connection with government financial matters. appropriating spending.Capital expenditure: amount of money needed to spend on capital items or fixed assets such as land.Annual fiscal plan: preparation of annual estimates of the upcoming fiscal year revenue. expenditure. expenditure. . . .Annex 2: Glossary of budget terms .Appropriation: a legal authority granted to the executive by the House of Peoples Representative to spend public funds for the stated purpose. equipment. that are projected to generate income in the future.Budget deficit: an excess of budgetary expenditures over revenues. etc. or fiscal policy.Balanced budget: equality between the revenues and expenditures that constitute a budget. . such as fiscal budget. . .Fiscal year: government’s 12 months accounting period (Hamle 1– Sene 30) Recurrent expenditure: day-to-day operating expenses or those expenses usually incurred in the conduct of normal state operations. Fiscal year is then the standard 12-month period government uses for collecting taxes. etc. In each case. .Budget: a financial statement containing revenue. Fiscal policy. such as wages and salaries. and otherwise tabulating its budget. is policy that makes use of government spending and taxation. roads. which indicates how a government plans to use its expected resources to meet its goals for a given period. . or financial matters. buildings. The term is most often using in combination with other words. for example. administration. and financing. acquisition of furniture and equipment. and deficit/surplus estimates. spending.Revenue: income 52 .Fiscal: Relating to government taxation. .Budget surplus: an excess of budgetary revenues over expenditures. purchase of goods and services for current consumption.