The Program Expenditure Classification (PREXC) ApproachThe Next Phase of the Performance Informed Budgeting

What is PREXC?1. Re-classification of the budget items

into outcome areas2. Improvement of the performance

measurements of government agencies

3. A better budget system for M&E 4. A basis for organizing units in an

agency for better accountability

Reclassification: From MFOs to Programs

- A program is an integrated grouping of activities and projects that contributes to a particular outcome of an agency.

- As long as the Activities & Projects contribute to the same outcome, they’re part of the same Program

STO

MFO1 MFO2

MFO3

LFP FAP

OO1 OO2 OO3

AGENCY

Activities (Level 1) & Projects / PAP Activities (Level 2) & Projects / Sub-PAP

OPERATIONS

Current MFO- based Budget Structure

Line Items of the Budget

STO

MFO1

MFO2 MFO3

LFP FAP

OO1 OO2 OO3

AGENCY

OPERATIONS

AGENCY

GAS STO Operations

OO1 OO2

AGENCY

GAS STO Operations

OO1 OO2

ProgramSub-ProgramActivity / Projects

Program Expenditure Classification

Line Items of the Budget

Example ProgramPS MOOE CO TOTAL

Coastal & Marine Resource Management Program

301,333,000 53,700,000 355,033,0001. Management of Coastal & Marine Resources 198,533,000 6,500,000 205,033,000

National Capital Region 54,843,000 54,843,000Central Office 46,949,000 46,949,000Protected Areas & Wildlife Bureau 7,680,000 7,680,000NCR - Proper 214,000 214,000

insert the various regional offices and PENROs here

2. Development, updating & implementation of the Manila Bay Coastal Management Strategy 102,800,000 47,200,000 150,000,000

National Capital Region 102,800,000 47,200,000 150,000,000Central Office 102,800,000 47,200,000 150,000,000

Program Name

Activity

Project

Why put Activities & Projects together?

1. Projects are part of a bigger Program that a department / agency is delivering.

2. A complete analysis of a Program can only be done by including Projects in the accomplishments.

3. The main difference between the two is that Projects are time-bound.

Societal Goal

Sectoral Outcomes

Organizational Outcomes

Program Outcome

Sub-Program Outcome

Hierarchy of Outcomes

PDP

GAA

Measuring Performance: Program Profiles

The Program Objective Statement

1. The Program Objective Statement captures, in a few words, the RESULTS or OUTCOMES of the Program.

2. Avoid using words such as: PROVIDE, FORMULATE, CONDUCT, DRAFT, ISSUE

3. Instead use words that describe what will happen to the intended beneficiaries / clients / sectors: IMPROVE, ENHANCE, PROTECT, DECREASE

Refinement of Output Indicators

1. Preference for Quantity Indicators that are programmable before budget execution

2. Focus on output levels that agencies have more control over.

3. Application of Timeliness Indicators for critical frontline services.

4. Consideration for the “audit-ability” of reports on Output

Specifying Program Outcome Indicators

- Outcome Indicators measure the effectiveness of the program to deliver its objective/s

- They are usually subsets of the larger Organizational Outcome

- These should measure the effect of the program on external clients

On-Going Roll-Out- April: Final review of agency

submissions for approval- June: Encoding of all Programs, Sub-

Programs, Activities, and Projects to a Reference Library

- August / September: User testing of modified, PREXC-compliant OSBP

Lessons & Observations1. The level of detail of the Program Profiles

varies across and within agencies. 2. Some confuse Objective with Activity3. Many agencies do not measure program

outcomes.4. Ownership over outcomes is weak.5. Coordination between Budgeting /

Finance, Planning, and Operations in some agencies remain weak.

PREXC: Linking Budgeting & Planning

1. How to align Programs to the PDP and the RM?

2. How to help agencies plan their Programs along a medium-term timeframe?

3. How to relate Agency Programs to cross-cutting Convergence Programs?

4. How to ensure “results-orientedness” extends beyond planning offices?