CAPACITY BUILDING :
LITHUANIA’S EXPERIENCES
FROM 10 YEARS OF REFORM
Vilnius, Lithuania
20-21 March, 2007
PRESENTATION OUTLINE
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PREREQUISITES OF THE REFORM
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GOALS AND IMPLEMENTATION STAGES
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REFORM SWOT ANALYSIS
SITUATION BEFORE
•POOR STATE FINANCIAL SITUATION IN 1998-1999
• CURRENT ACCOUNT DEFICIT – 12 %
• FISCAL DEFICIT – 8 % in 1999
• GOVERNMENT BORROWING INTEREST RATE - 12–14 %
• LARGE AMOUNT OF EXTRABUDGETARY FUNDS
•NO LINKS BETWEEN POLICY FORMATION AND BUDGETING
•POOR DECISION MAKING PROCESS
•NO FISCAL RELATIONS ACROSS LEVELS OF GOVERNMENT
FACTORS STIMULATED REFORMS
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STRONG POLITICAL WILL
ASPIRATION FOR EUROPEAN-ATLANTIC
INTEGRATION
ATTITUDE OF SOCIETY TOWARDS PUBLIC
ADMINISTRATION
POOR FINANCIAL SITUATION
GOALS OF THE BUDGET REFORM
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CONSOLIDATION OF PUBLIC FINANCIAL
RESOURCES
PRIORITY BASED PLANNING
RESULT ORIENTED ACTIVITIES
RESPONSIBILITY AND ACCOUNTABILITY
TRANSPARENCY
IMPLEMENTATION STAGES:
1998 →REFORM INITIATIVE
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THE SEIMAS RESOLUTION ON THE BUDGET STRUCTURE
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REFORM CONCEPTION:
- THREE-YEAR PLANNING;
- PROGRAMME BUDGET;
- CONSOLIDATION OF RESOURCES;
- TRANSPARENCY
IMPLEMENTATION STAGES:
1998→REFORM OF MUNICIPAL BUDGET
FORMATION PRINCIPLES – STAGE I
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THE LAW ON THE METHODOLOGY FOR DETERMINATION OF
MUNICIPAL BUDGETARY REVENUE
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MUNICIPAL BUDGETS FORMATION PRINCIPLE – TO OBSERVE
THE REVENUE EQUALISATION PRINCIPLE TO CARRY OUT ALL
FUNCTIONS OF MUNICIPALITIES
IMPLEMENTATION STAGES:
1999→PROGRAMME BUDGET
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THE DRAFT OF STATE BUDGET WAS PREPARED BY
PROGRAMMES AND SUBMITED TO THE SEIMAS
FOR IT’S CONSIDERATION AND APPROVAL
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PROGRAMMING BUDGETING IS OBLIGATORY TO
ALL APPROPRIATION MANAGERS
IMPLEMENTATION STAGES:
2000→GOVERNMENT STRATEGIC PLANNING
SYSTEM
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STRATEGIC PLANNING METHODOLOGY IS OBLIGATORY TO
ALL STATE BUDGET APPROPRIATION MANAGERS
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RECOMENDED TO MUNICIPALITIES
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THE INTEGRATED PLANNING MODEL AND THE LONG-TERM
DEVELOPMENT STRATEGY WAS ESTABLISHED
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THE LAW ON THE GOVERNMENT AND THE LAW ON THE
BUDGET STRUCTURE EMBED THE STRATEGIC PLANNING AS
A MEASURE FOR ORGANISATION OF ACTIVITIES AND
FINANCING PLANNING
IMPLEMENTATION STAGES:
2001→ REFORM OF MUNICIPAL BUDGET
FORMATION PRINCIPLES – STAGE II
THE ESSENCE OF THE REFORM:
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TO USE THE REVENUE EQUALISATION PRINCIPLE ONLY FOR
CARRYING OUT INDEPENDENT FUNCTIONS OF
MUNICIPALITIES
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TO ALLOCATE GRANTS FROM THE STATE BUDGET FOR
IMPLEMENTATION OF THE FUNCTIONS DELEGATED BY THE
GOVERNMENT
IMPLEMENTATION STAGES:
2003→EVALUATION OF BUDGET IMPLEMENTATION
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THE INTERNAL AUDIT’S FUNCTIONS:
TO EVALUATE THE ECONOMY, EFFECTIVENESS AND
EFFICIENCY OF THE PROGRAMS, WAS IMPLEMENTED IN
PUBLIC INSTITUTIONS
THE EXTERNAL AUDIT INTITUTION’S FUNCTIONS:
TO EVALUATE WHETHER APPROPRIATIONS ALLOCATED
HAVE BEEN USED FOR THE GOALS SET IN THE
PROGRAMMES;
TO EVALUATE WHETHER APPROPRIATIONS HAVE BEEN USED
AT THE HIGHEST POSSIBLE EXTENT OF ECONOMY AND IN
THE MOST EFFECTIVE MANNER
IMPLEMENTATION STAGES:
2003-2004→DECISION IMPACT ASSESSMENT
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ADOPTION OF THE DECISION IMPACT ASSESSMENT
METHODOLOGY ON:
- AN ADEQUATE AREA
- ECONOMICS
- PUBLIC FINANCES
- SOCIAL ENVIRONMENT
- CORRUPTION EXTENT
- ENVIRONMENT
IMPLEMENTATION STAGES:
2005→PERFORMANCE ASSESSMENT CRITERIA
SYSTEM
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OUTCOME / IMPACT CRITERION – AN ASSESSMENT
CRITERION FOR ACHIEVEMENT OF THE INSTITUTION’S
STRATEGIC GOAL
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RESULT CRITERION – AN ASSESSMENT CRITERION FOR THE
FULFILMENT OF THE PROGRAMME OBJECTIVE
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OUTPUT CRITERION – AN ACTIVITY IMPLEMENTATION
ASSESSMENT CRITERION
REFORM SWOT ANALYSIS:STRENGTHS
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A UNIFORM STRATEGIC PLANNING METHODOLOGY
INSTITUTION’S ACTIVITIES BASED ON SYSTEMATICAL
PLANNING AND LINKING WITH FINANCING
COMPREHENSIVELY REGULATED PLANNING PROCESS
A POSSIBILITY TO ANALYSE AND TO ASSESS AN INSTITUTION
AS A SYSTEM IN PURSUIT OF THE GOALS SET
INSTITUTIONS ARE ENCOURAGED TO ORIENT THEIR
ACTIVITIES TOWARDS THE RESULTS
MORE RATIONAL DISTRIBUTION OF FINANCIAL, MATERIAL
AND HUMAN RESOURCES
PUBLICITY OF PROVIDING INFORMATION AND ITS
COMPREHENSIVENESS TO THE PUBLIC
REFORM SWOT ANALYSIS:WEAKNESSES
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INADEQUATE INSTITUTIONAL HUMAN RESOURCES AND
CAPACITIES
FORMULATION OF STRATEGIC GOALS OF AN INSTITUTION
RESTS WITH THE INSTITUTION ITSELF
STRATEGIC PLANNING IS APPLIED NOT IN ALL
ADMINISTRATION LEVELS
STRATEGIC PLANNING IS HIGHLY FORMALISED
REFORM SWOT ANALYSIS:OPPORTUNITIES
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DEVELOPMENT OF THE PLANNING SYSTEM IN
CONNECTION WITH ACCOUNTABILITY
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FURTHER CAPACITY BUILDING OF PUBLIC
SERVANTS IN THE FIELD OF STRATEGIC PLANNING
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LESS FORMALISED STRATEGIC PLANS WOULD BE
MORE COMPREHENSIBLE AND USEFUL TO THE
PUBLIC AND POLITICIANS
REFORM SWOT ANALYSIS:THREATS
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STRATEGIC PLANNING SYSTEM MAY BECOME DECLARATORY
AND FORMAL
SEGREGATION OF STRATEGIC PLANNING AND BUDGETING
PROCESSES
NON-PERCEPTION OF THE IMPORTANCE OF STRATEGIC
PLANNING MAY POSE THREATS TO ITS REDUNDANCY IN THE
FUTURE
FINDINGS
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CAPACITY BUILDING IN ALL LEVELS OF PUBLIC
ADMINISTRATION
SYSTEM SHALL BE UNIQUE IN DECISION MAKING AND
BUDGETING PROCESS
“HUMANISATION” OF THE SYSTEM
LEARNING “STRATEGIC THINKING”