Rwanda Aid on Budget Working Session CABRI Annual Seminar April 2009

CABRI AoB Working Sessions Follow-up on CABRI/SPA Aid on Budget study Applies study approach at country level Identify which phase / which issue most important, urgent to address Research to investigate issues Working session(s) to identify strategies On request from CABRI member states Input from other countries 3 phases: scoping, research, working session Benefits are transfer of network expertise African/developing country perspective

AoB focus in Rwanda CABRI/GOR scoping exercise identified two obstacles to bringing more aid on budget Lack of clarify on how to treat different sources, types and uses of aid Process weaknesses in the management of aid information Aim not only reflection of aid on budget, but integration Focus on non-budget support aid in ‘on plan’ and ‘on budget’ phases, with implications for ‘on account’ Objective was to resolve What the rules will be in Rwanda for integrating aid on budget / on parliament / neither on parliament nor on budget? How quality integration of aid on budget can be achieved? Joint CABRI / MINECOFIN research team Multi-stakeholder working session, including input from other SBOs

Research Key research questions Phase 1 Phase 2 Phase 3 When and why are aid flows on budget? When not and why not? What are inconsistencies? When and why should aid flows be on budget? Phase 1 Compare 2007 comprehensive reports with 2007 budget and aid flow data (DAD) Identify gaps and overlaps Investigate reasons for gaps Phase 2 Choose a number of projects/programmes and track information flows Identify what helps and what hinders quality information for budget management purposes Phase 3 Write up and consultation

Research Results 2 levels Key quantitative results Quantitative results on comprehensiveness and quality of aid coverage on budget No of projects / quality of information Qualitative results on processes to manage aid information for budgeting purposes Key quantitative results Only 46 projects in all 3, 175 in only one document Only 32% of projects on budget and on account Even for the projects that are on all three the bases, there is a difference in the amounts reported Under and over budgeting

Comparison of aid coverage Note that Only 46 or 16% of projects are shared That only 90 or 32% of total appear on both the budget and the accounts 175 projects in only one document 177 not on budget

Why discrepancies? Rules and definitions No commonly understood clear rules for when aid should be on budget / on parliament / not on either No clear definition of a project / programme for budgeting purposes Reflecting recurrent and capital/investment expenditure, internally/externally financed on budget How should aid for sub-national governments and public entities be reflected? Timing of programme start-up Cutting of projections in MINECOFIN

Why discrepancies? Process Lack of MINECOFIN involvement / poor flow of information in MINECOFIN Multiplicity of data collection exercises, databases and definitions Lack of unique project identification number Lack of validation of donor data Small projects left off too easily These within control of GoR, but poor donor processes and constraints due to rules and regulations

Rwanda Working Session Rwanda-specific and appropriate criteria for putting aid on budget The purpose for which the aid is used The recipient of the aid The timeliness of the information / its integration in the planning/budgeting process The degree of government control in planning, using and accounting for aid funds Criteria sequenced

Criteria to decide on treatment of aid projects/programmes IF PROJECTS AND PROGRAMMES ARE: ODA to the government sector (excludes funds to CSOs where they are not third party Signed by GoR (refine GoR) Are in plans/budget submissions of Line Ministries (therefore in time) AND Under control of Government BUT Not under control of Government AND used by central government BUT used by districts, autonomous entities NOT ON PARLIAMENT BUT ON BUDGET ON PARLIAMENT

Rwanda Working Session Criteria continued Project / programme under government control if all of the following criteria satisfied: Responsible budget agency active in allocation Chief Budget Manager approves disbursements Project accounts submitted to budget agency Supporting documents kept by budget agency If third party implementing, contract signed between budget agency, implementing partner and MINECOFIN.

Rwanda Working Session Process resolutions Unique entry point in MINECOFIN for all aid information Coordinating / streamlining databases and assigning unique project identification numbers MINECOFIN involved in signing off on all aid projects MINECOFIN triangulate aid information in the budget Unrealistic ‘cutting’ of aid projects and amounts to be resolved Donor aid information in chart of accounts formats

Follow up MINECOFIN Senior Management approved recommendations Budget Unit tasked to prepare reform roadmap Four step process Upgrade budgeting database, pilot reform (done) Agree implementation of recommendations with budget managers (done) Discuss with JBS donors (forthcoming) Process review of internal MINECOFIN process

Reflection Value for CABRI as network But some lessons CABRI/GOR work demonstrated Aid on plan and on budget important first concern – determine quality of management of aid through fiduciary systems Risk for developing country important factor Importance of country-driven definitions, criteria and rules for treating aid in budget process Importance of coordinated, functional interface between management of aid and management of budget Adds to network expertise But some lessons Mechanisms for input by other SBOs Research ownership Working session format