8.3 Public sector planning and budgeting, budgetary process and budgetary expenditure control

8.3 PUBLIC SECTOR PLANNING AND BUDGETING, BUDGETARY PROCESS AND BUDGETARY EXPENDITURE CONTROL

Public sector planning and budgeting involves the process of formulating and implementing government plans and budgets to allocate resources and achieve desired outcomes. It encompasses various stages, including setting objectives, formulating plans, allocating funds, and monitoring expenditure. The budgetary process refers to the steps involved in preparing, approving, executing, and evaluating the budget. Budgetary expenditure control involves mechanisms to ensure that expenditures are in line with approved budgets and that public funds are used efficiently and effectively.

Planning process

1. Objective setting: The planning process begins with setting clear objectives, goals, and priorities that align with government policies and development strategies. Objectives should be specific, measurable, achievable, relevant, and time-bound (SMART).
2. Formulating plans: Government ministries and agencies develop plans and programs to achieve the set objectives.
3. Assessing resource availability: The availability of resources, including revenue projections, grants, loans, and donor support, is assessed to determine the fiscal envelope for planning purposes.

Budgetary Process

1. Budget preparation: Government entities prepare budget estimates by aligning their plans with available resources.
2. 1. Budget execution: After budget approval, government entities implement the budget by releasing funds, initiating spending activities, and monitoring the utilization of resources.
   2. Budget monitoring and evaluation: Monitoring and evaluating budget implementation help ensure that funds are utilized as planned and that objectives are being achieved. Budget approval: The budget is presented to the legislative body or parliament for approval.

   Expenditure control

   1. Authorization and commitment control: Government entities must adhere to financial regulations and procedures to ensure that expenditures are within authorized limits and align with approved plans and budgets.
   2. Budgetary control: Budgetary control mechanisms are put in place to monitor and control expenditure against approved budgets.
   3. Internal controls: Governments establish internal control systems to ensure compliance with financial regulations, prevent fraud and corruption, and safeguard public funds.
   4. Auditing and oversight: Independent audit agencies play a vital role in examining financial statements, assessing compliance, and providing assurance on the proper use of public funds.
   5. Performance-based budgeting: Performance-based budgeting focuses on outcomes and results rather than inputs.