“Performance-based budgeting – a tool for streamlining the LPA activity”

The Joint Integrated Local Development Programme, implemented by the Government of the Republic of Moldova with the assistance of UNDP, UNIFEM and Swedish Government, organized a round table where the implementation of the initiative "Performance-based budgeting - a tool for streamlining the LPA activity" has been analysed.

The initiative was launched by the Joint Integrated Local Development Programme (JILDP) in 2009 and the beneficiary cities are: Balti, Ungheni, Floresti, Comrat and Stefan-Voda. "Over this period (2009-2010) we achieved an increase of these LPAs capacities with a view to plan more efficiently their resources, attract citizens in decision-making process and make LPAs accountable", JILDP project manager, Valeria Ieseanu said.

JILDP offered consultancy to these LPAs, organized trainings, provided technical assistance as sets of equipment for the financial departments of the mayoralties, as well UNDP granted 200 thousand lei to each LPA to put into practice some drafts of their local development strategies. Within the initiative, these five LPAs have also carried out projects for improvement of local public services, thermal efficiency, creation of green spaces and recreation areas for the citizens of these cities.

"The performance-based budgeting has the advantage not only to quantify the expenditures, but also to assess the outcome of funded activities. This provides the opportunity to keep a check on the exploitation of budget allocations and on the benefits brought by these to the community", the consultant of Business Consulting Institute, Angela Secrieru said.

Grigore Cojocaru, the Mayor of Floresti, referred to the experience in performance-based budgeting of a primary school reconstruction project that will be extended henceforth and will also include a kindergarten. "Our problems are well known: we do not have enough money. By this method of developing and executing the budget, we can see how every "leu" from the budget is spent. And this thing is clear for all citizens", Grigore Cojocaru mentioned.

Alexandr Tarnavski, Deputy Mayor of Comrat, communicated that the mayoralty, which he was representing, has been developing the local budget based on priorities for many years. But a performance-based budgeting is a different issue. "We made certain of this thing implementing a project for modernising the heating system in a local kindergarten. All resources were analyzed and the optimal project option has been selected. The costs to purchase the materials and equipment were estimated in detail. Everything was done to streamline these expenses. On the other hand, the purchased materials and equipment were chosen to be sustainable", Deputy Mayor of Comrat said.

Veaceslav Bulat, Director of the Institute for Urban Development, who was involved in providing consulting services to implement projects in pilot-cities, said that the detailed analysis of available resources, transparency of their use, and the fact that there is kept a check on the projects result, represent an attractive moment for potential investors. "The experience of Poland, Slovakia and other countries that advanced significantly in implementing the performance-based budgeting made us certain of this fact", the expert said.

Maria Caraus, Deputy Minister of Finance, said that the state budget of the Republic of Moldova has some experience in planning the performance-based expenditures. "Currently, 30% of the state budget expenditures cover certain programmes. Not accidentally, during this round table there was said that performance-based budgeting is nothing else but project or programme management. We are ready to transmit this experience of the state budget and, jointly with the development partners, to help the LPAs implement this method of development and execution of the local budgets on performance basis", Deputy Minister said.

The transition of LPAs to the development of performance-based budgets across the country is an ambitious purpose. According to Maria Caraus, the objective is not simple, but it is possible to achieve it in about 5 years, if the gained experience is successfully turned to advantage.