1. Ministry of Economy and Finance Kosova
Public Expenditure Management Challenges in ECA/PRSP Countries Warsaw, Poland. February 2005
Ministry of Economy and Finance
Kosova

2. OVERVIEW OF THE MFE History Size and composition Staff size
Budget includes PISG/ Reserve
Organizational structure

3. 1. Achievement in PEM Implementation of the LPFMA
Creation of unique and transparent budget processes for all budget organizations of KCB.
Monitoring of budget spending electronically through Free Balance software.
Certification of Municipalities on financial management.

4. 2.Achievements in PEM
Financial Reporting Required by LPFMA (revenues and expenditures).
Implementation of the new Public Procurement law.
A move from multi year commitment to annualized cash based expenditure appropriations.

5. Need and purpose for an MTEF
Improve transparency and facilitate decision-making, especially in regards to subsidies to Public Owned Enterprises
Improve both the quality and amount of public spending on education, health and infrastructure
Implement a managed approach to fully utilizing the Government’s retained earnings by 2008
Contain government expenditure to respect the financing constraint
Facilitate fiscal stability

6. Medium Term Budget Framework 2004-2007
Summary of MTBF
utilizing the pool of retained earnings (ie the government cash bank balance) in order to finance planned differences between revenues and expenditures in each year.
A move from multi year commitment to annualized cash based expenditure appropriations to provide funds in the specific year that they will be spent. This will reduce the large carry forward of commitments and cash surpluses that have built up over the last few years.
A reduction in public expenditure on good and services as recommended by the International Monetary Fund (IMF).
Initial steps to integrate Public Owned Enterprises (POEs) and donor aid into the budget including introducing a dividend for the PTK in 2005 and other profit generating POEs from as is the practice in developed countries

7. BUDGET PROCESS Consistent with international standards
History
Calendar
Institutions (Budget Organizations, Budget Commission, Grants Commission)

8. Budget Cycle

9. Budget Process Challenges, Accomplishments, and Next Steps
To change from ad-hoc activities by new institutions, and establish a controlled process managed in a consistent way
To balance the divided power and varying spending priorities
To establish realistic expectations and conduct rational actions
Cashflow management

10. Next Steps
Control size of civil service and social subsidy programs
Determine maintenance level of G&S spending
Focus on results-oriented Capital spending
Require cost estimates for all proposed laws
Stress training for Budget Organizations and Assembly

11. Economic and Budget Policy Issues Facing The Government
How to develop the missing pieces
Methods to increase revenues and manage public spending
Budget consolidation
POE management
Relationship with SRSG and Reserved Powers

12. Medium Term Fiscal Strategy

13. MINISTRY OF ECONOMY AND FINANCE MINISTRIA PËR EKONOMI DHE FINANCA
Thank You