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Managing the Performance Framework in MTEF–

Options for the Ministry of Education and Science in Albania

Mr Genc Pollo, Albania Minister of Education and Science

Tirana, April 2008

Supported by the REPIM Team, Mauro Napodano and Jorida Tabaku

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Performance framework in Albania

Managing the performance framework – country case studies

Managing the performance framework – options for the Albanian Ministry of Education and Science

LegendMoECS = Ministry of Education and ScienceMTEF = Medium Term Expenditure Framework (MTBP in Albania)NSDI = Albanian Nation Strategy for development and IntegrationMIP = Ministry Integration PlanSPC = Strategic Planning Committee (chaired by Prime Minister)GSBI = Group for Strategy, Budget and Integration (chaired by Portfolio Minister)PMT = Programme Management Team (e.g. Primary Education PMT)

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The performance framework focuses on the delivery of public goods and services (the ‘outputs’) to the population*

Programme Area 1

Objective one Objective <N> Objective one

Output 1 Output 1 Output 1Output ‘N’ Output ‘N’ Output ‘N’

Activity ‘N’

Activity 1

Activity ‘N’

Activity 1

Activity 1

Activity ‘N’

Activity 1

Activity ‘N’

Activity 1

Activity ‘N’

Activity 1

Activity ‘N’

Objective <N>

Output ‘N’Output 1

Activity 1

Activity ‘N’

Activity 1

Activity ‘N’

(*)In the case of MoES, the population target consists of students (education) and the Albanian people’s well being (science)

Expenditure Ceilings

Programme Area <N>

Expenditure Ceilings

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In the performance framework, budget resources are linked to policies through a three-year rolling programme review process

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Linking Budget to Policies

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3Monitoring the implementation process

Programme Policy Review Programme Expenditures and Investment Planning

• Assessing past achievements and future directions of policy priorities;

• Linking outputs and activities to policy objectives

Monitor expenditures and activities instrumental to attain objectives’ and outputs’ targets

Allocation of resources to programmes over a three-year expenditure framework

The above sequence is a simplification of a multi-faceted and iterative process for public expenditure management

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3-Year Framework – It is a shift from one-year to three-year budgetR

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Medium term budget

2008 2009 2010 2011

Why 3-year framework?

• Sector strategies have a medium term perspective as they will not be completed in one year. It is important to provide an estimation of resources over the medium term to guarantee that the initiated sector policies will be completed

• Fund predictability

Medium term budget

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A full performance framework has been developed in Albania built upon a comprehensive system, but management problems persist

Institutional and regulatory framework is in place

Mid term expenditure framework links budget to policies

Management of performance framework is WEAK at ministry level

• The integrated planning system provides a robust foundation

• NSDI and EU Integration Plan prepared

• SPC at cabinet level and GSBI at ministry level functioning

• MTBP is being prepared annually (three-year horizon)

• From input to output budgeting

• New draft Organic Budget Law to be soon approved by Parliament

• IT system includes MTBP software, embedded in GovNet

• Procedures and software manual available

• Budget submissions and MoF negotiations based on electronic reporting

• Performance indicators are not monitored

• Weak management information system to make decisions

• Significant deviations from plan due to absence of proactive management

• Comprehensive Annual Report is not prepared to inform next year Ministry Integration Plan (MIP)

Planning and budget are integrated in IT system

Management problems differ among ministries, though MoES is well placed to address them

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Management of performance framework – MoES response to situations of weakness

MoES response

•Political leadership involved in planning process

•Good management practice is enforced in daily operations

•Advanced dialogue with donors on policy priorities leading to SWAp agreement

Situations of weakness

•Political leadership driven by short-term agenda

•Performance principle not yet accepted/understood

•Management practice is weak, driven by urgency

•Dialogue with donors still at project level

Minister in past UK Government : ‘Political leaders need show competence and continuous support on performance framework to ensure that the practice is accepted by the civil service’

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MoES has increased transparency in its budget, whose structure now consists of six programme areas compared to only three in the past

Before MTBP After MTBP

Pre- University

University

Science

Planning and Management

Primary education

Secondary Education

Vocational Education

University

Science

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MoES has successfully negotiated a Sector Wide Approach with key donors, committing to accountability

At the time of approval the Education SWAP in Albania was the first of its kind in the ECA region. In the Albanian Government circle SWAP has become a synonymous of successful donor coordination

The SWAp has a total value of USD 70 million, of which 30 million are provided by the Government

One intermediate goal is that ‘leadership, management and governance of the education system are improved’

As implementation covenant the ministry is required to prepare a an annual report on the SWAp performance

At the end, the financial management capacity of MoES should be strengthened in accordance with the Fiduciary Capacity Building Plan

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MoES works within a predictable, expanding financial envelop for both domestic and external sources

This significant financial support needs to deliver results if it is to be sustained, calling for a strengthened delivery plan and its monitoring

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Next steps to strenghten management of the perfomance framework in the ministry

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Management of Performance Framework

Prepare a credible delivery plan with a comprehensive lists of expected outputs

and activities (ongoing)

Set up a monitoring system, based on a strengthened EMIS, to report on implementation progress and attainment of results (process, part of MTBP, to be launched

this year for the first time)

Regular review of achieved vs. planned results to be reflected in Annual Report and fed back into the next year planning process

(planned as part of SWAP)

In the following section of the document examples are presentedon how other countries are managing the performance framework

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Performance framework in Albania

Managing the perfomance framework – country case studies

Managing the performance framework – options for the Albanian Ministry of Education and Science

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New Zealand system – Strategic Business Plan and management contracts ensure that the performance framework is effectively managed at all level of the public administration

Service delivery

It may be comparable to an extendedversion of the Albanian MIP. It contains: (i)missions and values; (ii) SWOT; (iii)strategic objectives; (iv) outputs and theirperformance indicators (quantity, quality,timeliness, costs); (v) delivery plan; (vi)organisational structure and controlmechanisms; (vii) financial statementsbased on accrual system; (viii) risk analysis.

The State Secretary acts as CEO and thestrategic business plan is her managementcontract with the Minister. Directors andspecialists have their own managementcontracts, based on a written performanceagreement with their superior. Theagreement includes targets that, if met,trigger salary bonus at the end of the year.

Management Contracts

Management contracts are part of the public administration reform adopted by Korea and Mongolia

Strategic Business Plan

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UK – three-year Public Service Agreements (PSAs) complemented with technical notes and delivery agreements

More info at http://www.hm-treasury.gov.uk/pbr_csr/psa/pbr_csr07_psaindex.cfm

Public Service

Agreements

1 Introduced in 1998 PSAs present measurable targets for a wide range of the government’s objectives in key sectors Ministries prepare PSAs, which are linked to three-year spending plans called Spending Reviews

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3 2007 Delivery Agreements explain how the targets would be operationalised, i.e. which initiatives will be taken to reach the target and who will be responsible forThe delivery plan aims at involving more closely front-line service providers in the target identification and management

Technical Notes were introduced in 2000 to explain how the PSA targets are defined, which data sources are used to measure progress towards the target, and a description of how targets can be judged as satisfactorily metThe number of targets were significantly reduced to be more manageable

Delivery Agreements

Technical Notes

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UK example of PSA delivery plan in education –http://www.hm-treasury.gov.uk/media/E/E/pbr_csr07_psa10-11.pdf

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USA – The Federal Government has introduced a comprehensive assessment process with the Program Assessment Rating Tool (PART)

Assess performance with PART

Publish a scorecard to hold agencies accountable for their implementation of PART recommendations

Publish PART results on the website www.ExpectMore.gov

Promote discussions among managers to implement interagency programme improvement

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USA example of a programme proposed for termination despite being rated adequate, due to overlapping with another initiative –

http://www.whitehouse.gov/omb/expectmore/summary/10000184.2002.html

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Performance framework in Albania

Managing the perfomance framework – country case studies

Managing the performance framework – options for the Albanian Ministry of Education and Science

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MoES – initiatives to strengthen management of the performance framework

Management of performance framework is WEAK

• Performance indicators are not monitored

• Weak management information system to make decisions

• Significant deviations from plan due to absence of proactive management

• Comprehensive Annual Report is not prepared to inform next year Ministry Integration Plan (MIP)

Set up a monitor system for performance targets

• Already foreseen in this year MTBP instruction

• Requested by donors as part of the SWAP agreement

Expand the MIP to become a more strategic document

• Ministry Integrated Plan already part of the ministry’s outputs

In the next pages the above initiatives are presented with implementing options, currently being discussed by managers within the Ministry

Preparation of Annual Performance Reports

Note: the above initiatives do not imply any additional work that is not already planned and/or implemented in the ministry. A sophistication of existing practice is requested.

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Option 2

Option 1

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3PMTs are currently identifying a list of outputs and activities for MTBP 2009-2011

Part of the delivery plan of the ministry

In January PMTs prepare Programme Performance Annual Reports

To become part of the SWAP Annual Report

MTBP monitoring formats are used by PMTs

As per MTBP instructions (annex 9)

In addition the Minister nominates 20 officials to specifically support PMTs in the monitoring process

Senior officials in the education and science sectors are each assigned key priority targets to monitor. Their monitoring reports feed into the SWAP Annual Report

All steps of option 1 are completed

Set up a monitoring system for performance targets

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Option 2Option 1

SWAP Annual Report to be prepared in the first quarter

Heads of PMTs will contribute chapters to the report

Each of the six programme teams also prepares a Performance Annual Report

The six reports will inform the preparation of the SWAP Annual Report and be included in annex

Preparation of Annual Performance Reports

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Option 2Option 1

Maintain the existing format of the MIP

Enrich the information by using the evidence from the monitoring process

MIP is to become the Ministry’s Portfolio Budget Statement

This would be a first for Albania. The MTBP and budget would have a stand-alone volume on Education and Science policies and budget analysis. To be used in Parliamentary hearings.

Expand the MIP document to become a more strategic document

In the end, a more effective management of the performance framework as part of MTEF becomes a powerful management tool for the Ministry rather than a control mechanism for MoF