1. Building the institutional and HR capacities to deliver PFM reform.
PPT ENG 22-Jun
Drpbx 22.06
Veikko Kapsta
Head of State Budget Department
Estonia
28 May 2016

2. The Structure History of public finance reforms in Estonia.
The institutional framework.
The HR management.
The suggestions.
The conclusions.

3. History of public finance reforms (1)
2002
4 years State Budget
Strategy
2004
Accrual Accounting (IPSAS)
2005
Framework for Strategic Planning
2008
Big plans – Activity and Accrual based Budgeting

4. History of public finance reforms (2)
2009
2010
- pilots in accrual budgeting
- Standardizing financial data
- Regular networks
- Centralizing support services
2011
- Harmonization of budgeting and accounting
- need for new IT systems for strategic planning and budgeting
2012/2013
- Preparing new standard SAP system for all central government agencies
- trainings for accrual basis budgeting (300)
- Mapping shortages in current system, simplifications
Start of Centralizing support services
Building capacity to work out and implement changes (networks, pilot projects, methodology)

5. History of public finance reforms (3)
2014
2015
- New IT system for budgeting
Centralizing support services
Trainings for accrual basis budgeting (200)
2016
Preparations to accrual basis budgeting
Centralizing support services (100%)
Start of performance based budgeting step by step (1 line ministry)
Project with PwC
2017
Accrual basis state budget
Ideas for changing State Budget Act
- New State Budget Act
Centralizing support services

6. Public finance reforms on the way
2020
Performance based state budget
Other possible changes in budgeting
Performance based budgeting step by step
methodology and implementation of new ideas of State Budget Act

7. The institutional framework
Ministry of Finance is the leading institution.
Cooperation with Government Office.
2 frameworks in Estonia:
- financial managers;
- strategic managers.
Cooperation of strategic and financial management.
Cooperation with universities (training, synergy from theoretical and practical approaches).
Cooperation with private sector.

8. The HR management There is a need for a clearly formulated goal.
All parts of the system should be informed and involved.
Training activities.
Work with HR has to be continuous.

9. The constrains Human resources.
Work load in the Ministry of Finance (and other ministries) will increase.
Positive effects will not reveal soon enough
Motivation question (if reforms stop or develop slowly).

10. The Suggestions Formulate the goals of reform
Brief the decision makers
Build up the networks
Communication in all levels

11. The Conclusions
Need of extra resources at the beginning gives output in the future.
Coordination.
Monitoring.
Communication, communication, communication!

12. Veikko Kapsta veikko.kapsta@fin.ee
Thank You
Veikko Kapsta

13. “The single biggest problem in communication is the illusion that it has taken place.” ― George Bernard Shaw