This presentation was made by Naida CARSIMAMOVIC, World Bank, at the 15th Annual Meeting of OECD-CESEE Senior Budget Officials held in Minsk, Belarus, on 4-5 July 2019

1. Spending Reviews in PEMPAL
Countries
Public Expenditure Management Peer Assisted Learning (PEMPAL) Network
Budget Community of Practice (BCOP)
Program and Performance Budgeting Working Group (PPBWG)
OECD CBO CESEE meeting, July 2019
Naida Carsimamovic Vukotic, BCOP Resource Team, World Bank
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2. PRESENTATION OVERVIEW
1. ABOUT PEMPAL, BCOP, AND PPBWG
2. PPBWG FOCUS ON SPENDING REVIEWS AND
BACKGROUND INFORMATION
3. DATA COLLECTED IN 2016 OECD PERFORMANCE
BUDGETING SURVEY FOR PEMPAL COUNTRIES
4. DATA COLLECTED IN 2018 OECD PERFORMANCE
BUDGETING SURVEY AND IN INTERNAL PEMPAL SURVEY
IN 2019
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3. About PEMPAL
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Aims to promote and facilitate
efficient and effective use of
public funds resulting from
applying good PFM practices
through supporting a peer
learning and knowledge exchange
platform for practitioners to
connect within three
‘Communities of Practice’ -
budget, treasury, and internal
audit.

4. PEMPAL’S Budget Community of Practice (BCOP)
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Aims to strengthen budget methodology,
planning, and transparency in member
countries. 2017-2021 priorities:
1. sharpening tools for effective fiscal
management with primary focus on
performance and program budgeting
2. strengthening fiscal transparency and
accountability with focus on budget
literacy, transparency, and public
participation initiatives
3. expanding internationally available
data on PEMPAL countries through
identification and sharing of budget-
related good practices and
benchmarking within and outside of
the PEMPAL region

5. BCOP’s Collaboration with OECD
• A long-standing valuable relationship, primarily through BCOP’s participation
in the meetings of the OECD Senior Budget Officials’ Network for Central,
Eastern, and South-Eastern European countries (CESEE)
• Moreover, work of the OECD Performance and Results Network is an
important content source for the work of PPBWG
• PPBWG facilitated PEMPAL’s participation in the OECD Performance
Budgeting (PB) Survey in 2016 and 2018
• Participation in the Survey contributes to the WG’s objectives by:
 providing data on status of program and performance budgeting reforms
in PEMPAL countries
 providing opportunity for PEMPAL countries to benchmark their
progress against the OECD countries
 providing information on newest trends and best practices
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6. BCOP’s Program and Performance
Budgeting Working Group (PPBWG)
Goal: To identify main trends observed in program budgeting and spending
reviews in developed and PEMPAL countries so that efficient approaches to
such practices can be subsequently developed and spending effectiveness
improved. BCOP members continuously identify program and performance
budgeting as a priority area in their budgeting reforms, including in 2019.
PPWBG Objectives:
 to identify key trends in program and performance budgeting
implementation and spending reviews
 to learn from specific PEMPAL and international country examples in
these areas.
Working Group members (16 countries): Albania, Armenia, Belarus, Bosnia
and Herzegovina, Bulgaria, Croatia, Georgia, Kosovo, Kyrgyz Republic,
Moldova, Republic of North Macedonia, Russian Federation, Serbia, Turkey,
Ukraine, and Uzbekistan.

7. PPBWG Activities
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Spring-Summer‘16
Fall‘16
Fall‘17
Spring2018
Spring-Summer‘17
Winter‘17
Fall-Winter2018
Launch and 1st
meeting in
Ljubljana
Participation
2016 OECD
PB
Survey
Launch and
Taking Stock
Country Cases
& Knowledge
Product
Decision
Report for
Knowledge
Product on Indicators
Examining 5
PEMPAL countries
Presentation of
2016 survey results
to OECD CESEE SBO
Decision to work
on KP on indicators
International
Practices
Review
Attending OECD
P&R meeting
Workshop to
review latest
WB research,
French, Irish and
Dutch experience
Work on KP on
Indicators
Collecting indicators
from 9 countries
Workshop to define
10 criteria for
analyzing indicators
for KP and collecting
data
Attending OECD
P&R meeting and
presenting
preliminary
findings from KP
and country case of
Russia
Collecting further data
on health and
education indicators
Prepared the report
on Performance
Indicators in
PEMPAL Countries:
Trends and
Challenges
Participation
in OECD PB
Survey
Examining PB
in Austria and
OECD Best PB
Practices
Workshop with
Austrian MF and
Performance
Management Office
Examining Draft
OECD Best PB
Practices
Examining 2
PEMPAL country
cases
Participation in
2016 OECD PB
Survey
Attending OECD
P&R meeting
and presentation
of preliminary 2018
survey results
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NEXTSTEPS
Spring2019
Review of survey results
Examination of spending
reviews in PEMPAL and
OECD countries
Presentation on spending
reviews in PEMPAL
countries and PB in
Russia to OECD CESEE
SBO
Analysis of
Results of 2018
OECD PB Survey,
and Examining
Spending Reviews
Workshop on
spending reviews
in advanced
countries,
hopefully back-to-
back with OECD
P&R meeting
Knowledge
product on
spending reviews
In-depth
Focus on
Spending
Reviews

8. Subtopic of Spending Reviews Within
PPBWG
• This subtopic chosen to be in focus of PPBWG over the next period
• Monitoring and evaluation of expenditure effectiveness including spending
reviews are again the most common subtopic identified as a priority by
PPBWG member countries in pre-event survey for this event
• Spending reviews generally rare in PEMPAL countries, with some conducted
over the recent years in the context of urgent fiscal consolidation needs, i.e.
savings needed to be identified quickly (e.g. in Croatia)
• As PEMPAL countries progress and increase quality of program and
performance budgeting, more information becomes available to conduct
performance-informed spending reviews
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9. Data on Spending Reviews in PEMPAL
Countries from 2016
• First attempt to collect data on spending reviews in PEMPAL countries was
within the 2016 OECD Performance Budgeting (PB) Survey – PPBWG
facilitated participation of PEMPAL countries in this survey
• Based on the survey responses, it was evident that there were different
interpretations of what a spending review is, with some PEMPAL countries
using much less rigorous definitions than those used by OECD/World Bank
• In 2016, Croatia, Uzbekistan, Armenia reported having conducted spending
reviews, but only Croatia answered all subsequent questions on the details
of spending
• PEMPAL countries that answered the question on spending review obstacles
(Croatia, Armenia, and Uzbekistan) ranked poor quality of performance
information as the top challenge, followed by lack of time, and lack of
capacity
• All PEMPAL countries that answered the 2016 survey noted that spending
reviews are under consideration
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10. • The results from the 2018 OECD PB Survey for PEMPAL
countries indicate that different interpretations of spending
reviews remain for some countries. To double check the
data and collect additional data, BCOP Resource Team
included a section on spending reviews in pre-event survey
for this event.
• We stressed the definition and general characteristics of
spending review:
i. the process of identifying scope to make savings to reduce
overall government expenditure or to identify fiscal space to
be reallocated in line with the government’s policy priorities
ii. reviews baseline expenditures and may include specific
targets for spending reductions
iii. can be broad based, covering all government expenditures
(in rare cases) or limited to certain spending
programs/projects, processes (e.g. IT systems and process,
procurement processes, or human resources management
processes), or ministries
2018/2019 Data: Spending Review Definitions and Criteria
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11. • We stressed the definition and general characteristics of
spending review (continued):
iv. differ from regular or more detailed analyses
conducted by the Ministry of Finance in the process of
drafting budget - much more in-depth, take longer time
to be conducted, and they are conducted by a
designated team/body that in addition to Ministry of
Finance staff also includes other experts – typically from
the line ministries/agencies responsible/relevant for
spending that is being reviewed, as well as external
experts
v. typically requested and in the end decided on by the
Executive (the Government or the Chief Executive),
rather than the Ministry of Finance
vi. integral part of spending reviews in most cases is
examination of performance of the programs that are
being reviewed, including performance information
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2018/2019 Data: Spending Review Definitions and Criteria

12. • Out of 12 PEMPAL countries that answered the question, 7
countries report that they have spending reviews in line with
international definitions and characteristics:
 Croatia,
 Bulgaria,
 Russia,
 Belarus,
 Serbia,
 Moldova, and
 Bosnia and Herzegovina (BiH)
• Montenegro, Kazakhstan and Georgia report that there are plans
to introduce spending reviews, while Kosovo and Armenia report
no plans
• Analyses conducted by international organizations in several
countries, such as World Bank, and IMF work in Belarus, BiH,
Serbia, Kazakhstan, and Georgia, as well some World Bank
assistance in spending reviews in Croatia
Spending Reviews in PEMPAL Countries as of 2018/2019
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13. • Where exist, spending review in PEMPAL countries have weaker regulatory
and methodological basis compared to OECD countries
• Out of 7 PEMPAL countries that report having spending reviews:
 Croatia and Moldova report having both executive order/decision and
guidelines/methodology (published in Croatia)
 Bulgaria reports having guidelines/methodology
 Serbia reports having executive order/decision
 Belarus report each review having its own ToR
 BiH reports only reviews done within IMF program
Regulatory and Methodological Basis
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2
7
19
10
11
0
0
3
3
3
A separate law on spending reviews
Basic/organic budget law
Guidelines/methodology for spending
reviews
An executive order
There are no established guidelines (each
spending review has its own ToR)
PEMPAL OECD

14. Topics/Objectives of Spending Reviews
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Belarus
2011 - Pension system sustainability; social assistance targeting; and energy and
agriculture subsidies
2013 - Intergovernmental fiscal relations; and education and health
BiH
2009 - Reduction of wage bill and material costs
2011 - Reduction of material costs
2012 - Reduction of wage bill
2015 - Reduction of material costs
Bulgaria
2018 - Improving efficiency and effectiveness of waste management
2018 - Policing and firefighting
2015 - Judicial performance, caseload and expenditure review
2015 - Agriculture and rural development
Croatia
2014 - Reducing spending: i) wage bill; ii) subsidies apart from agriculture; iii) healthcare;
iv) operation of agencies, institutes, funds and other legal persons with public authority;
and v) tax expenditures
Moldova
2018 - Education (higher education and vocational education), to identify savings for
other priorities
Russia
2018 - International obligations and events (relevance, appropriateness, and necessity)
2018 - Spending for acquisition of communication services by government agencies
(analysis of current practices and develop uniform cost standards)
Serbia 2014-2018 - Salaries and pensions, for fiscal consolidation

15. Roles are mixed among PEMPAL countries and differ than in OECD countries,
although in both MoF-centric spending review system mostly, with weaker role
of line ministries in PEMPAL countries generally
Spending Review Actors
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Determining
methodology
Determining the
scope
Providing
guidance/
steering
Conducting the
spending review
and preparing
reports
Supervision
and review
of reports
Final
decision
making
Monitoring and
follow up
BiH President/PM MoF MoF Committee/team MoF
President/
PM
President/PM,
MoF
Belarus
Committee/
team
MoF Line ministries
Bulgaria MoF
MoF, line
ministres
MoF
MoF, line
ministries,
committee/team
President/
PM
Croatia MoF
MoF, line
ministries
MoF
MoF, line
ministries.
committee/team
MoF
MoF, line
ministries,
committeee/team
Moldova President/PM MoF
MoF, line
ministries,
committee/team
President/
PM
President/PM,
committee/team
Russia
President/PM,
MoF
President/PM MoF
MoF,
committee/team
President/
PM
President/
PM
MoF, line
ministries,
committee/team
Serbia MoF
MoF, line
ministries
MoF
MoF, line
ministries
President/
PM
President/
PM
President/PM,
MoF

16. • Russia, Moldova, Bulgaria, and Belarus report that performance indicators
used in budgetary process are considered (sometimes, to some extent)
• Belarus, Croatia, Moldova, and Russia (upcoming) publish reports
• Teams mostly mixed, with MoFs having primary role, similarly to OECD
countries; however with somewhat weaker role of line ministries, and with
weaker role of external expertise (WB/IMF take that role in several cases)
Use of PIs, Publishing Reports, and Spending Review Teams
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Country Composition of teams/bodies/working groups/committees
Belarus
Wor l d Ban k t eam compr ising r epr esentat ives of t he Min ist r y of F in an ce, Min istr y of Taxat i on an d
Coll ect ion s, Min istr y of Econ omy, Min istr y of Educat ion , Min istr y of Healt h, Nat ion al St at ist ics
Committee, National Bank, executive authorities of the Minsk Region etc.
BiH
Wor king t eams for med asn ecessar y an ddepen ding on t he subj ect of t he spen ding r evi ew . The Min istr y
of Finance is usually in charge, while representatives of other institutions are called in if necessary.
Croatia
The Cr oat ian Government appoint ed a Centr al Committ ee for Govern ment Budg et Spen ding Revi ew s
for each of t he five expen dit ur e ar eas. The Govern ment appoint ed a pr esi dent an d six me mber s fr om
sen ior civil ser vice posit ion st ow or kin t he Centr al Committ ee. The me mber s come fr omt he Min istr y of
Public Admin istr at ion, Min istr y of Healt h, Min istr y of Econ omy, Min istr y of Mar it ime Affair s, Tr an sport
an d In fr astr uct ur e, Min istr y of Sci en ce an d Educat i on , an dtw o member s fr omt he Min istr y of F in ance
(one of them is also the president of the Central Committee).
Moldova
Spen ding r evi ew t eam chair ed byt he Min istr y of fin an ce an din cludes alsor epr esent at ives of ot her lin e
min istr iest hat have in st it ut ion s in educat ion sect or: Min istr y of Educat ion ; Min istr yof Healt h an d Soci al
Protection; and Ministry of Agriculture.
Serbia The Ministry of Finance, line ministries, and IMF.

17. • Belarus, BiH, Croatia, and Serbia report that most recommendations are
implemented; Bulgaria reports that some are implemented; while Moldova
reports that small part of recommendations are implemented
• All challenges greater in PEMPAL countries compared to OECD countries,
especially capacity, political support, and ICT challenges
Usage and Challenges
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1.4
1.4
1.5
1.2
1.6
1.9
2.0
1.3
1.7
1.7
1.3
1.5
1.4
1.5
1.6
1.9
1.9
1.9
1.9
2
2.2
2.3
2.5
2.5
Gaming behaviour
Senior civil service support
Political support (legislative)
ICT
Political support (executive)
Quality of performance information/data
Availability of performance information
Framework/methodology
Time constraints for implementation
Inattention to implementation
Capability (e.g. technical expertise)
Lack of capacity (e.g. available staff)
PEMPAL OECD
1 = Low 2 = Medium 3 = High

18. • Following specific plans reported:
 World Bank-led review in Belarus, focusing on social sector
spending
 Review of Ministry of Internal Affairs in Bulgaria
 Integrating spending reviews into budget calendar and
institutionalize it in Moldova
 Planning to involve line ministries in introducing spending
reviews in Montenegro
 In Russia, in April 2019, a list of topics of spending reviews
until 2024 will be defined (6 topics annualy, of which 2 at
institution level, 2 at program level, and 2 at cross-cutting
level); plans to work on methodology improvement and
integrating results of spending reviews in budget process on a
regular basis as well
Current Spending Review Plans
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19. Thank you for your attention!
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