- The survey summarizes results from the 2011/2012 OECD survey on performance budgeting practices in 31 OECD countries and Russia. - It finds that while performance information is widely used, there is significant variation between countries and performance information has a looser link to funding decisions than in the past. It is used more for management than budgeting. - Spending reviews are becoming more common, used by about half of OECD countries. Line ministries are primarily responsible for setting targets. Poor performance faces increased monitoring but light consequences.

1. PERFORMANCE BUDGETING IN THE OECD:
HIGHLIGHTS FROM THE OECD
2011/2012 PB SURVEY RESULTS
Lisa von Trapp
10th Annual Meeting of OECD - Asian Senior Budget Officials
Bangkok, December 18-19, 2014

2. 1. Survey methodology and structure.
2.Highlights of survey results and discussions
in the SBO Performance and Results
Network.
4. Conclusions?
5. Draft OECD Principles of Budgetary
Governance.
Overview
2

3. • Survey objective: to obtain updated data on
performance information and instruments
are used in the budget process and how PI is
used in budgetary decision-making.
• Third iteration of the OECD PB Survey.
• 42 questions and new section on spending
reviews.
OECD 2011/2012 PB Survey
3

4. • Built-in consultation process:
(1)Piloted with 4 countries (Austria, Italy, Spain,
UK) before roll out to full sample;
(2)Presented for feedback and approval at 2011
Performance and Results Network Meeting.
(3) Data cleaning and quality control in fall 2012
• Targeted to respondents from central budget
authorities units responsible for PB practices.
• Response rate: 31 OECD member countries and
the Russian Federation
Survey process and response rate
4

5. 1. Institutional context and recent trends in
performance budgeting.
2. Types of performance information used in
budgeting and implementation of performance
budgeting practices.
3. Use of performance targets in budgeting.
4. Use of performance evaluations and spending
reviews in budgeting.
5. Common challenges to performance budgeting.
Survey themes
5

6. Survey used broad definition of “performance
budgeting”: use of performance information to
inform budget decisions and to instil greater
transparency and accountability throughout the
budget process.
Approaches
• Presentational
• Performance-informed
• Direct (or formula)
• Managerial approach – a fourth approach?
PB definition and approaches
6

7. • Established Performance Improvement Roles and Responsibilities
– Established roles for OMB Director, COO (usually Deputy), Performance Improvement
Officer (PIO), Goal Leaders, Performance Improvement Council (PIC)
• Established Goal Framework and Performance Reviews
• Modernized Performance Reporting
– Established Performance.gov as the central source for performance reporting
– Required government-wide list of programs, updated annually
Goals Timing Performance Reviews
1. Federal Cross-Agency
Priority (CAP) Goals
Every 4 years
(next in Feb 2018)
Quarterly reviews
by OMB Director/PIC
2. Agency Priority Goals
(APGs)
Every 2 years
(next in Feb 2016)
Quarterly reviews
by agency COO/PIO
3. Strategic Goals and
Objectives
Every 4 years
(next in Feb 2018)
Annual strategic
reviews
by agencies and OMB
Example of Managerial Approach:
US (GPRA Modernization Act)

8. • Quality
• Who decides?
• Proper response to poor performance?
• Gaming
• Engagement of different stakeholders with
different needs:
- Public administration
- Parliament
- Citizens
Can be difficult to capture with survey tool.
Some perennial problems…
8

9. • PB practices widely used but considerable variation between countries.
• Moving from using extensive indicator sets to a few but clear objectives.
• Only loose/indirect link between performance information and funding
decisions.
• Appears to be less reliance on performance information in the budget
negotiations between CBA and line ministries than in the past; in some cases PI
not used at all.
• PB generally decentralised. Some exceptions, e.g. spending reviews – about half
of OECD member countries now report using spending reviews.
• Line ministries and agencies have become the main institutions responsible for
setting performance objectives and targets.
• PI used more in internal line ministry and agency management than in
budgeting.
Survey results – some key messages
9

10. Survey results – highlights
18
5
1
8
Yes for both line ministries
and agencies
Yes, but only for line
ministries
Yes, but optional for line
ministries and agencies
No, line
ministries/agencies have
their own
Does the CBA have in place a standard performance budgeting
framework which is applied uniformly across central government
organisations?
10

11. Survey results - highlights
0 5 10 15 20 25 30
SAI
Internal Audit Institution
Private consultants
NA
CSO
other
Legislature or Legislative body
CBA
Chief Execute or governing body
Agencies
Line Ministries
Who is responsible for setting performance targets
No of responding countries
2011
No of responding countries
2007
11

12. Survey results – highlights
1 1.5 2 2.5 3 3.5 4 4.5 5
Independent performance information
Statistical information
Line Ministries’/Agencies’ performance
evaluations
Spending Reviews
Line Ministries’/ Agencies’ operational data and
performance reports
Line Ministries’/ Agencies’ financial data
How often do the Central Budget Authority (CBA) and Line
Ministries use the following kinds of performance
information in their budget negotiations?
Never Occasionally Always
12

13. Survey results – highlights
How is performance information generally used by line
ministries in their negotiations with the CBAs?
0% 10% 20% 30% 40% 50% 60%
Other
For eliminating programmes
For developing mngt reform proposals
Not used
To increase spending
To reduce spending
For setting allocations for Line
Ministries/Agencies
For proposing new areas of spending
For strategic planning/prioritisation
For setting allocations for programmes
2007 2011
13

14. Survey results - highlights
1 1.5 2 2.5 3 3.5 4 4.5 5
Pay cut for head of programme/organisation
Programme transferred to other…
Negative consequences for leaders'…
Programme eliminated
More staff assigned to…
New leadership brought in
Budget freezes
Budget increases
More training provided to staff assigned
Budget decreases
More intense monitoring in the future
Poor performance made public
No consequences
2007 2011
Never Always
What happens when performance targets are not met?
14

15. Performance Budgeting Index
15
Notes: 1) This index examines the degree to which OECD countries have
put a performance budgeting system in place. However, it does not
measure how successfully these systems operate in practice.
2) The OECD average is based on 31 member countries. Iceland, Israel,
and the USA did not respond.

16. • Performance information has been useful for
accountability and results orientation; less so for
resource allocation.
• Allocation of resources remains a political
process.
• Increased importance of “performance
budgeting extenders” (evaluation, spending
review)
• Need better links to ex ante evaluation for
performance informed policymaking
• Need clearer links with multi-year strategic plans
and objectives.
Conclusions (and ongoing debate)?
16

17. • Still a work in progress. Appears to be emerging
consensus towards “performance-informed” approaches
with few but clear objectives, but one size does not fit all.
• Challenging to provide the right information (and the
right amount of information) to different stakeholders
using it for different purposes.
• Role of accountability institutions (parliament, SAIs still
evolving)
• Expectations arguably too high in the past.
“We all like budgeting, we all like performance, but
the marriage…”
• Performance budgeting is here to stay.
Conclusions (and ongoing debate)?
17

18. Budgeting
within
fiscal
objectives
Performance: part of overall Budget
picture (Principle 8)
Quality,
integrity &
independent
audit
Performance,
Evaluation &
VFM
Comprehens-
ive budget
accounting
Effective
budget
execution
Alignment
with medium-
term strategic
plans and
priorities
Performance,
evaluation &
VFM
Transparency,
openness &
accessibility
Participative,
Inclusive
& Realistic
Debate
Fiscal Risks &
Sustainability
Capital
budgeting
framework

19. • On the Performance and Results Network
please visit:
www.oecd.org/gov/budgeting/seniorbudgeto
fficialsnetworkonperformanceandresults
• On the composite indicator please visit:
www.oecd.org/gov/govataglance
Thank you!
For more information
19