1. Royal Government of Cambodia
Ministry of Economy and Finance
General Department of Finance for Sub-national Administration
State Budget Allocation to
Sub-national Administrations
Presented by : Mr. Hoy Vicheth
Asian Public Governance Forum on Local Finance Management.
Lombok, Indonesia.
May 7-8, 2015.

2. Contents Cambodia at a Glance Administration System
Sub National Administrations (SNA) Budgeting
Summary of SNA’s Annual Budget
Challenges

3. Cambodia at a Glance Kingdom of Cambodia Capital: Phnom Penh
Area: KM2
Border: Thailand, Lao, Vietnam.
Population: >15M
Language: Khmer
Currency: Riel
Religion: Buddhist

4. Administration System

5. Sub National Administration (SNA) Budgeting.
Capital/ Province Budget (CP Budget)
District/ Municipality Funds (DM Fund)
Commune/ Sangkat Funds (CS Fund)

6. 3.1. Capital/ Province (C/P) Budget
The central government transfers state budget in a rate of 0.96% of current national revenue to C/P.
The CP also have their own source(tax) revenues.
Increment rate of CP budget 2015 is 17.65% compared to CP budget 2014.

7. 3.1. Capital/ Province (C/P) Budget (Cont.)
The C/P budget allocates based on the following indicators and formula as below:
Admin Operation was allocated;
Equal shares: 40%
Number of councilors: 20%
Number of Board of Governor: 20%
Number of staff: 20%
Local development component was allocated;
Number of population: 20%
Poverty scores: 20%
Number of Districts/Municipalities: 20%

8. 3.1. Capital/ Province Budget (Cont.)
CP Budget Allocation ( )
Year
Amount (in million $)
2010
80.59
2011
88.30
2012
105.64
2013
124.23
2014
158.23
2015
186.16
TOTAL
743.15

9. 3.2. District /Municipality Funds
Royal Government of Cambodia has been transferred state budget to DM fund in the following rate;
0.80% of current revenues ( )
0.90% of current revenues (2016)
1% of current revenues ( )

10. 3.2. District/ Municipality Funds (Cont.)
The DM fund allocates based on the following indicators and formula as below:
Admin Operation was allocated;
Equal shares: 40%
Number of councilors: 20%
Number of Board of Governor: 20%
Number of staff: 20%
Local development component was allocated;
Number of population: 20%
Poverty scores: 20%
Number of Commune/Sangkat: 20%

11. 3.2. District/ Municipality Funds (Cont.)
The DM fund in 2015 had allocated for two component as the following:
75.57% for administrative component
24.43% for development component
Annual increment rate of DM funds 2015 is 14.64% compared to DM funds in 2014.

12. 3.2. District/ Municipality Funds (Cont.)
DM Fund allocation ( )
Year
Amount
(in million $)
2013
14.42
2014
16.74
2015
19.19
TOTAL
50.35

13. 3.3. Commune/ Sangkat Funds (CS)
Royal Government of Cambodia (RGC) has allocated CS funds firstly in 2002.
Royal Government of Cambodia (RGC) has to transfer the State budget into CS funds account ( ) in a rate from2% % of the approved annual national budget in the previous year.
Transferring of CS Fund to CS Account will be made in 4 installments as below:
- 1st Installment : 25% of total CS fund in earlier 1st quarter
- 2nd Installment : 25% of total CS fund in earlier 2nd quarter
- 3rd Installment : 25% of total CS fund in earlier 3rd quarter
- 4th Installment : 25% of total CS fund in earlier 4th quarter

14. 3.3. Commune/Sangkat Funds (Cont.)
CS fund is allocated in two different components;
Admin component (not exceed 1/3 of total fund)
Development component (not less than 2/3 of total fund)

15. 3.3. Commune/Sangkat Funds (Cont.)
The Administrative Operation component allocates based on the following indicators and formula;
- Equal share 30%
- Number of CS councilors 60%
- Poverty score 10%

16. 3.3. Communes/Sangkat Funds (Cont.)
The Local development component allocates based on the following indicators and formula;
- Equal share = 30%
- Number of population in CS = 30%
- Poverty score = 30%
- Number of villages in CS = 10%

17. 3.3. Commune/ Sangkat Funds (Cont.)
Total CS funds in 2015 is US$ million (in average, each CS has received US$ 21,138 for general admin operations component and US$ 19,983 for local development component)
Average annual increment rate of CS fund 2015 is 14.62% compared to CS fund in 2014

18. Summary of CS Funds Allocation in 14 years (2002-2015)
Amount
Increment rate
(%)
(in million Riel)
(in million US$)
2002
30,688
7.87
2003
51,420
13.18
67.56%
2004
58,000
14.5
12.80%
2005
66,100
16.32
13.97%
2006
77,814
18.98
17.72%
2007
89,550
21.84
15.08%
2008
93,025
22.97
3.88%
2009
113,340
27.64
21.84%
2010
148,649
35.82
31.15%
2011
159,400
38.41
7.23%
2012
181,990
44.94
14.17%
2013
204,141
50.41
12.17%
2014
237,266
58.58
16.23%
2015
271,954
67.15
14.62%
TOTAL
1,783,337
438.61

19. 4. Summary Budget Allocation to SNA 2015
CS budget : 271,954 million Riels (US$ 67m)
DM budget : 81,302 million Riels (US$ 20m)
CP budget : 753,940 million Riels (US$ 186m)
GRAND TOTAL SNA BUDGET 2015: 1,107,196 million Riels EQUIVALENT: US$ 273million

20. 5. Challenges for Sub National Administrations
The budget for SNAs’ is low.
Most of annual budget (over 70%) is to cover staff salary and operation costs and the budget for local development is very tight.
Lack of human resources at SNAs
Lack of equipment at SNAs
The financial management system is new to SNAs.

21. THANK YOU