Guidelines for the Preparation of Plans and Budget for 2017/18
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GUIDELINES FOR THE PREPARATION OF PLANS AND BUDGET FOR 2017/18 MINISTRY OF FINANCE AND PLANNING NOVEMBER, 2016 ISBN 978 - 9987 - 829 - 03 - 3 TABLE OF CONTENTS 1.0 INTRODUCTION ....................................................................... 1 2.0 CURRENT BUDGETARY REFORMS ............................................. 2 2.1 Budget Act No. 11 of 2015 .............................................................. 2 2.2 Programme Based Budget ............................................................... 2 2.3 Public Investment Management – Operational Manual .............................. 3 3.0 PREPARATION OF INSTITUTIONS’ PLANS AND BUDGETS ............. 3 3.1 Budget Committees ....................................................................... 3 3.2 Roadmap for Plans and Budgets Preparation .......................................... 3 3.3 Shifting Operations of the Government Headquarters to Dodoma .................. 4 3.4 Budget Dialogue and Scrutinization Process .......................................... 4 3.5 Data Entry into the Integrated Financial Management System ...................... 5 4.0 INSTRUCTIONS FOR PREPARATION OF PLANS AND BUDGET........................................................................................... 6 4.1 Medium Term Expenditure Framework and Resource Envelope ................... 6 4.2 The Medium Term Indicative Budget Ceilings........................................ 6 4.3 Strategies to Enhance Revenue Collection ............................................. 6 4.4 Criteria for Resource Allocation ........................................................ 8 4.4.1 Recurrent Expenditure.................................................................... 8 4.4.2 Development Budget ....................................................................10 5.0 OTHER ISSUES TO BE CONSIDERED DURING PLAN AND BUDGET PREPARATION .................................................................. 12 5.1 Controlling Accumulation of Arrears..................................................12 5.2 Contingent Liabilities....................................................................12 5.3 Cost Reduction Measures ...............................................................13 5.4 Exchange Rate............................................................................14 5.5 Mainstreaming Cross-cutting Issues into Plans and Budgets .......................14 5.6 Good Governance ........................................................................14 5.7 Employment and Economic Empowerment ..........................................15 5.8 Regional Integration and International Cooperation .................................15 5.9 Management of Public Properties ......................................................17 5.10 Public Private Partnerships .............................................................17 5.11 Risk Management ........................................................................18 6.0 SPECIFIC INSTRUCTIONS TO RSs AND LGAs ............................. 19 7.0 MONITORING, EVALUATION AND REPORTING ......................... 21 7.1 Performance Reporting ..................................................................22 8.0 CONCLUSION ........................................................................ 22 GUIDELINES FOR THE PREPARATION OF PLAN AND BUDGET FOR 2017/18 1.0 INTRODUCTION 1. The Plan and Budget Guidelines (PBG) is a Government instrument for the preparation and implementation of Government Budget, Public Entities‟ budget and National Development Plan for 2017/18. The PBG for 2017/18 guides mobilization and allocation of financial resources for the implementation of Annual Development Plan which is the second in the series of five annual plans for the implementation of the second Five Year Development Plan (2016/17 - 2020/21). The PBG has been prepared pursuant to Section 21 of the Budget Act No. 11 of 2015 and its Regulations. 2. The preparation of this PBG takes into account: the 2015 Ruling Party Election Manifesto; President‟s Inauguration Speech of the 11th Parliament on 20th November, 2015; the Fifth Phase Government decision of shifting the operations of Government headquarters to Dodoma; the FYDP II; and the Sustainable Development Goals (SDGs) consistent with other agreements at regional, bilateral and international levels ratified by the United Republic of Tanzania. 3. The core objective of PBG for 2017/18 is to guide Accounting Officers of Ministries, Independent Departments and Executive Agencies (MDAs); Regional Secretariats (RSs); Local Government Authorities (LGAs); and Public Entities on preparation and implementation of their plans and budgets for 2017/18. 4. The PBG for 2017/18 is organized into eight sections, namely: Introduction; Current Budgetary Reforms; Preparation of Institutions‟ Plans and Budgets; Instructions for Preparation of Plans and Budgets; Other Issues to be Considered during Budget Preparations; Specific Instructions to RSs and LGAs; Monitoring, Evaluation and Reporting; and Conclusion. These Guidelines should be read together with its Annex. 1 2.0 BUDGETARY REFORMS 5. The Government has undertaken various reforms in order to make the budget management more efficient, accountable and transparent. These include preparation and endorsement of the Budget Act No. 11 of 2015 and its Regulations of 2015; preparation of Programme Based Budgeting; implementation of the Public Finance Management Reforms Programme (PFMRP) Phase IV; and adoption of the Public Investment Management – Operational Manual (PIM-OM) 2015. 2.1 Budget Act No. 11 of 2015 6. The main objective of the Budget Act is to ensure effective budget management and accountability, whereby all Accounting Officers are obliged to adhere to the Act and its Regulations during the preparation and implementation of their plans and budgets. 2.2 Programme Based Budgeting 7. The Government intends to prepare its budget using Programme Based Budgeting (PBB) approach to enhance budget coherence and prioritization of expenditure to improve efficiency and effectiveness in service delivery to the public. This change is a result of various reforms adopted by international institutions responsible for managing budgets and public funds. This program will start as a pilot in eight selected ministries which have been trained, namely: Ministry of Health Community Development, Gender, Elderly and Children; Ministry of Water and Irrigation; Ministry of Works, Transport and Communication; Ministry of Agriculture, Livestock and Fisheries; Ministry of Education, Science and Technology; Ministry of Finance and Planning; Ministry of Energy and Minerals; and Ministry of Industry, Trade and Investment. 8. The PBB requires Accounting Officers of the pilot ministries to prepare their budget based on programmes by considering guidelines and international standards. They are also required to prepare shadow budgets reflecting their objectives which indicate key outcome(s) and performance indicators that will be used to measure progress on the implementation of programme. 2 2.3 Public Investment Management – Operational Manual of 2015 9. The Government has introduced the Public Investment Management - Operational Manual (PIM – OM) which provide guidance on the project identification and analysis, financing, implementation, management, monitoring and evaluation, and management of database for public investment projects. Therefore, Accounting Officers are instructed to comply with the Manual and to build professional capacity in their respective votes as may be needed. 3.0 PREPARATION OF PLANS AND BUDGETS 3.1 Budget Committees 10. Section 18(2) of the Budget Act No. 11 of 2015, provides for the establishment of Budget Committees in Government and Public Entities to facilitate planning and budgeting processes. The Committees are required to carry out their responsibilities in the preparation of institutional plans and budget as provided for under Regulation 17(3) of the Budget Act No. 11 of 2015. Furthermore, Accounting Officers for Public Entities should abide to the Treasury Registrar Circulars. 3.2 Roadmap for Plans and Budgets Preparation 11. MDAs, RSs, LGAs and Public Entities are directed to prepare plans and budget estimates using Medium Term Expenditure Framework (MTEF) and submit to MoFP for scrutinization in the first week of February, 2017. RSs and LGAs are directed to prepare and submit their estimates to President‟s Office – Regional Administration and Local Government (PO-RALG) after approval by their respective Legislative Authorities by the third week of January, 2017. 12. The MoFP will consolidate budgets of all votes and submit the same for Government approval. In addition, MDAs will prepare their MTEF and submit to their respective Parliamentary Sectoral Standing Committee from the third week of March, 2017 to the first week of April, 2017 for scrutiny 3 and preparations of recommendations to be submitted to the Parliament. Thereafter, the consolidated estimates shall be submitted to the Parliament for deliberation and approval from second week of April to fourth week of June, 2017. Budget implementations will commence from 1st July, 2017 to 30th June, 2018. 3.3 Shifting Operations of the Government Headquarters to Dodoma 13. Shifting of headquarter‟s operations from Dar es Salaam to Dodoma will be implemented in phases during the medium term. In 2017/18, Accounting Officers are required to accommodate their budgetary needs in the plans and budgets in line with the roadmap issued by the