1. Austrian Budget Reform - Performance Budgeting
PEMPAL Workshop – March 13th 2018

2. Outline Overview budget reform Performance budgeting framework
Gender budgeting
Example: Education

3. Austrian federal budget reform
Primary motivation: Improved budgetary decision-making
Addresses the following weaknesses of the former system:
No binding medium-term perspective
Prevailing focus on inputs
Control monopoly of classic cameralistics
The budget as a comprehensive steering instrument for resources & outputs & outcomes
Implementation in two stages: 2009 and 2013

4. Overview 1st and 2nd stage of the budget reform
 Budgetary discipline and planning: binding Medium-Term Expenditure Framework (MTEF) & strategy report
2009
2013
4 key elements
 Flexibility for line ministries through full carry-forward possibilities without earmarking
Result-oriented management of administrative units
Performance Budgeting incl. gender budgeting
Accrual budgeting and accounting
New budget structure: „lump-sum budgets“
new budget principles: outcome-orientation; efficiency; transparency; true and fair view

5. Budget planning process
forecasts on a quarterly basis
by an independent research institute
top-down MoF targets
budget negotiations
passed by Parliament in May*
budget controlling
in-year reporting
new laws/projects
shifting of funds
reserves
annual budget implementing MTEF
budget speech in October
passed by Parliament before end of year
* Amendment in 2017: alignment of the planning processes in autumn (MTEF and annual budget)

6. New budget structure Total Budget Headings Budget Chapters
MTEF: 5 Headings
Budget Chapters
~ 30
~70 global resource frameworks instead of more than 1000 appropriation line items
Global Budgets
enacted by Parliament
binding within public administration
Detail Budgets
~ 250; shown in the budget
flexible steering tool, easily adaptable to specific requirements
Cost Accounting
Transparent budget structure as a prerequisite for other reform elements

7. Budget 2017
33 budget chapters
5 budget headings

8. Integration of 3 perspectives: organisation, budget, performance
Organisational Structure
Budget Structure
Performance Information
Budget Chapter
Mission Statement;
Outcome Objectives
Line ministry
headed by the minister
Global-
budget 1
GB 2
Primary Activities*
Primary Activities
GB 3
GB 4
Primary Activities
Primary Activities
* to achieve outcome objectives
xxx
Budget managing bodies
Explanatory budget documents based on performance contracts
Detail Budgets

9. Performance budgeting framework
Budget Chapter
Annual Budget
Statement
Max. 5 outcome objectives at least 1 gender
Mission statement
Global Budget 1 – 5 primary activities at least 1 gender
Global Budget 1 – 5 primary activities at least 1 gender
Global Budget 1 – 5 primary activities at least 1 gender
Detail
budget
Detail
budget
Detail
budget
Detail
budget
Detail
budget
Detail
budget
Detail
budget
Detail
budget
Detail
budget
Explanatory budget
documents
Objectives and
Objectives and Activities
Objectives and Activities
Objectives and Activities
Objectives and Activities
Objectives and Activities
Objectives and Activities
Objectives and Activities
Objectives and Activities
Activities
gender included
P e r f o r m a n c e C o n t r a c t s

10. Gender budgeting
Definition by the Council of Europe*
Gender budgeting is an application of gender mainstreaming in the budgetary process. It means a gender-based assessment of budgets, incorporating a gender perspective at all levels of the budgetary process and restructuring revenues and expenditures in order to promote gender equality.

11. Why gender budgeting?
To foster gender equality: Focus on the most important levers.
Budgetary decisions are KEY decisions: Government policy is put into numbers.
Therefore: Using the budget as a lever for gender equality!

12. Application of gender budgeting
Constitutional budgetary principle: outcome orientation including gender equality
Integrated approach: gender equality is to be considered in policy making and management ( strategy report, annual outcome and output statements, performance contracts)
Goes beyond simply allocating separate budgets for women and men
Integrated gender mainstreaming and budgeting requires
gender analysis
identification of challenges
definition of objectives (i.e. outcome statements)
action to be taken (i.e. output statements)
evaluation and reporting (i.e. Annual Federal Performance Report)

13. Examples of gender-related outcome objectives
Education
Promoting equality in the educational system (reducing gender, ethnic and socioeconomic inequality)
Family and Youth
Facilitating the reconciliation of work and familiy life
Labour market
Reintegration of women into the labour market, especially after parental leave
Interior
Better protection against violence, especially violence against women, children and elderly people
Finance
Increasing the percentage of women on the supervisory boards of state-owned companies

14. Budget structure - example
Heading
Education, Research, Arts and Culture
Budget chapter
Education
Global budget
Schools incl. teaching staff
Detail budgets
Primary schools, general secondary schools
Grammar schools (lower level)
Grammar schools (upper level)
Pre-vocational schools
Vocational schools
Austrian schools abroad ….
in total 10 detail budgets

15. Strategy report (budget chapter)
Budget chapter xx
Mio. €
Actual
Budget
Ceiling MTEF
2015
2016
2017
2018
2019
2020
Expenditures
Changes compared to previous MTEF
Total expenditures
fix
variabel
Challenges
Key spending areas
...
Outcome objectives (at least 1 gender)
Planned activities and reforms
Risks, corrective measures

16. Annual budget statement (budget chapter)
Budget chapter: Education
Cash Flow Statement
Ceiling MTEF
Budget 2017
Budget 2016
Actual 2015
Receipts
Expenditures – fix ceiling
Total expenditures
Net cash balance
Operating Statement
Revenues
Expenses
Net balance
Legally binding
MTEF = medium term expenditure framework

17. Annual outcome statement (budget chapter)
Budget chapter 30 – Education
Mission statement
The ministry is responsible for shaping the framework of education policy. Improving the level of education and the equality of opportunities and gender.
Outcome objective 1
Improving the education level of pupils
Outcome objective 2
Improving the equality of opportunities and gender in the education system

18. Annual outcome statement (budget chapter)
Outcome objective 1
Improving the education level of pupils
Indicator 1
% of year olds who have finished upper secondary education
Last available value
2013:
87,8%
Target value 2017
89,0%
Indicator 2
% of pupils who still attend any form of education 1 year after mandatory schooling ends
Last available value
2014
93,8%
Target value 2017
94,2%
Indicator 3
% of 5th graders who are eligible to advance to the next grade
Last available value
2014:
94,6%
Target value 2017
94,7%

19. Budget chapter at a glance
Budget chapter: Education
= financial information
= performance information (outcome statement)

20. Annual budget statement (global budget)
Operating Statement
Budget 2017
Budget 2016
Actual 2015
Revenues from operating activities and transfers
Revenues
Personnel expenses
Operating expenses
Transfer expenses
Expenses on financial activities
Expenses
Net balance
Cash Flow Statement
Receipts from operating activities and transfers
Receipts from investment activities
Receipts
Personnel and operating expenditures
Expenditures from transfers
Expenditures from investment activities
Expenditures
Net cash balance
Legally binding

21. Schools incl. teaching staff
Annual output statement (global budget)
Outcome objective 1
Improving the education level of pupils
Global budget 30.01
Governance & Services
Global budget 30.02
Schools incl. teaching staff
Indicator
Number of school places at upper and lower secondary school
Primary activity 1
Quantitative and qualitative extension of full time schooling…
Current value
Target value 2017 ≥
Current value
All classes from 5th grade upwards (9.003)
Target value 2017
all classes until generation 6
Primary activity 2
Implementation of the „new secondary school“ with a teaching and learning culture …
Indicator 1
number of classes using this model
Current value
Learn designers (generation 8) take part in advanced training
Target value 2017
Certified learn designers (generation 8)
Indicator 2
Number of new learning designers in schools ….

22. Global budget at a glance
Global budget: Schools incl. teaching staff
= financial information = performance information (output statement) = recommendations by the Court of Audit

23. Explanatory budget documents (detail budget)
Objective
Ensuring a high quality, European and internationally competitive Education, that opens up private and occupational development opportunities
Detail budget
Pre-vocational schools
Activity 1
Implementing the Goals of the QIBB-Initiative in the context of school development plans
Indicator/Milestone 1
Finalization of School Development Plans (EUP) 2013/2014
Budget 2017
Personnel expenses: 2.2 Mio. €
Operating expenses: 0.2 Mio. €
Transfer expenses (to “Laender”) : Mio. €

24. Detail budget at a glance
Detail budget: Pre-vocational schools
= financial information = performance information

25. Performance budeting process
WHAT?
WHO?
Drafting outcome and output statements
Line ministries
Quality check  uniform quality of objectives and indicators
FPMO
„Comply or explain“
amendment of the outcome and output statements or
explanation why a recommendation has not been implemented
Plausibility check
Ministry of Finance
Preparation of the budget documents (draft Annual Budget, Explanatory Supplements etc.)
Submission of the draft Annual Budget to Parliament
Federal Government
Discussion and adoption of the Annual Budget
Parliament

26. Annual Federal Performance Report
Kopfzeile
Annual Federal Performance Report
Ministries
Performance Management Office
Parliament & interested public
evaluation
statement on achievement of objectives
reporting
standardisation
quality assurance
coordination
reporting
discussion of results
political accountability
31 May
31 October
Fußzeile

27. Conclusions Challenges Requires relating budget to results
Exceeds the scope of mere budget management
Entails cultural change on the federal administrative and political level (setting priorities, transparent decision-making, etc.)
Improvement of quality of performance information (ongoing process)
Opportunities
Facilitates targeted policy-making on political level
Enables the administrative level to present its results & achievements
Citizens are provided a better insight into where tax money is put

28. Thank you for your attention
Contact:
Monika Geppl
Advisor
Directorate General for Budget and Public Finances
Department for Spending Reviews and Administrative Reform
phone: