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Mid-term Budget review - July Dec 2011

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1.1 The 2011/12 budget was premised on the principle to "maintain macroeconomic stability without compromising service delivery" as an efficient allocative guiding principle. The 2011/12 total budget envelope preserved the same aggregate level as it was in 2010/11 at $170m, including $27.9m as budget support from bilateral and multilateral donor agencies.

1.2 The execution of the 2011/12 budget had been carefully and closely monitored to ensure expenditure does not exceed what had been allocated, while staying focused on delivery of the adopted theme. Ministries with emerging activities that were considered priority were advised to manage within their allocated resources through expenditure rationalization and repriotization. That is, ministries had to forgo or reallocate resources from activities in their Annual Management Plans.

1.3 Ensuring that the 2011/12 budget is implemented in a prudent, effective and efficient way, the mid‐term budget review is essential to provide an overview of progress in the budget execution and to project the likely budget position for the last six months of the financial year. The review provides the opportunity to assess the budget execution and to consider ways to improve budget management going forward. Specifically, to review whether implementation of programs is on schedule and will be completed within the allocated budgets.

1.4 The budget review focused on two areas:
a. budgetary (fiscal) performance which primarily aimed at achieving a fiscal balance; and
b. projection of the aggregate fiscal outturns with an objective to identify redeployable resources to ministries that are confirmed encountering significant cost over‐run due to unanticipated expenditures.

1.5 Over the period review, MOFNP adopted an internal financing strategy in response to fiscal pressure from line ministries requesting additional resources to meet the cost of low priority/ emerging activities or unanticipated expenditures that was not known at budget time. The internal financing strategy provided an opportunity to line ministries to consider expenditures repriotization and avoid any attempts to take a soft approach by resorting to Contingency Funds, early in the financial year, as the only funding options. A total of $6.2m unbudgeted requests have been received so far and $1.6m has been funded within the allocated resources of the requesting ministries.

1.6 Apart from the reallocation of resources between sub‐programs and ministries, there have not been major policy changes implemented to warrant a major modification to the approved estimate.

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Last Updated ( Monday, 16 July 2012 12:54 )  

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