Capital Investment Diagnostic

An interesting new paper from World Bank- A diagnostic framework for assessing public investment management;

Summary: This paper provides a pragmatic and objective diagnostic approach to the assessment of public investment management systems for governments. Since weaknesses in public investment management can negate the core argument that additional fiscal space allocated to public investments could enhance future economic prospects, attention to the processes that govern public investment selection and management is critical. The paper begins with a description of eight key "must-have" features of a well-functioning public investment system: (1) investment guidance, project development, and preliminary screening; (2) formal project appraisal; (3) independent review of appraisal; (4) project selection and budgeting; (5) project implementation; (6) project adjustment; (7) facility operation; and (8) project evaluation. The emphasis is placed on the basic processes and controls (linked at appropriate stages to broader budget processes) that are likely to yield the greatest assurance of efficiency in public investment decisions. The approach does not seek to identify best practice, but rather to identify the "must have" institutional features that would address major risks and provide an effective systemic process for managing public investments. The authors also develop a diagnostic framework to assess the main stages of the public investment management cycle. In principle, the identification of core weaknesses will allow reforms to focus scarce managerial and technical resources where they will yield the greatest impact. In addition, the framework is intended to motivate governments to undertake periodic self-assessments of their public investment systems and design reforms to enhance the productivity of public investment.

Dept. of Parliament of Whores

But what caught my eye is a provision that would create a “Commission on Cross-Sector Solutions.” This commission would explore “ways in which the Federal Government interacts with nonprofit organizations, philanthropic organizations, and business to address national and local challenges.”

The legislation states that “The Commission shall conduct a thorough study of all matters relating to ways in which the Federal Government can work more efficiently and effectively with non-profit organizations and philanthropic organizations to assist the organizations described in this subparagraph, and the Federal Government, in achieving better outcomes with regard to addressing pressing national and local challenges, and improving accountability and utilization of resources, and relating to assisting the Federal Government, such organizations, and business in improving their collaboration to achieve such outcomes.” The commission would have 18 months to report its findings and recommendations.

-Reorganizing Goverment — A Commission?

Efficiency of Public Investments

From a workshop at KDI- Efficiency Enhancement in Public Investment Management
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Public Investment in Chile - Building the Future

Measuring the Efficiency of Public Expenditure - Evaluation on the Government Program in Korea

Thailand Monitoring and Evaluation System

Planning, Programming and Public Investment Experience in Turkey

In all presentations were made concerning 10 countries: Australia, Belarus*, Chile*, China*, Ireland*, Japan, Korea*, Thailand, Turkey and Vietnam . These presentations and the accompanying papers provided insights into aspects of public investment management in these countries. Some participants drew particular attention to one case which was able to consolidate a great deal of data concerning the operation of public investment management, including the operation of PPPs, which have become increasingly important.

Other highlighted themes

A number of common themes emerged during the discussions:

* The role of central guidelines: Guidelines, which are then rigorously applied, were seen as a particularly critical aspect of a well functioning PIM system. Examples of such guidelines include: Guidelines for Total Project Cost Management System, Korea, 2007, and Guidelines for the Appraisal and Management of Capital and Expenditure Proposals in the Public Sector, Ireland, 2005. It was noted that the actual use of Guidelines was not always assured, thereby highlighting the need to see how systems actually work, rather than how they are designed to work. This was particularly the case for some developing countries, where there remains a need to develop guidelines.
* Evidence based research: Availability of good data was seen as a critical component in the evaluation of the efficiency of specific public investment projects, as well as for reviewing the performance of PIM systems as a whole. Some countries, most notably Chile and Korea, were able to assemble and publish a great deal of investment related data, which assisted the conference in understanding the mechanics of their PIM systems. Yet participants remained somewhat cautious of the ability to estimate efficiency of public projects, given data issues. Notwithstanding, there was general support to attempting to measure efficiency both ex ante and ex post.
* Increasing interest in and role of PPPs: There was general acceptance that PPPs can, for a number of reasons, accelerate the delivery of highly valued social services and infrastructure. Participants also agreed that the availability of PPP-related financing and use may need to be considered in the context of the availability of relevant expertise to assess PPP arrangements, the potential for optimal risk transfer, and value for money considerations. The Australian case usefully highlighted a number of the technical issues associated with managing a PPP portfolio.

Budget Circular Beauty Contest

The Winner is Kosova.

Budget Circular

MTEF

Law on Public Finance

Law on SOEs

Affordable Computing for Schools in Developing Countries

Total Cost of Ownership (TCO): A Study of Models of Affordable Computing for Schools in Developing Countries

"Total cost of ownership" (TCO) is often underestimated, sometimes grossly, when calculating costs of ICT in education initiatives in developing countries. Estimates of initial costs to purchase equipment to overall costs over time vary widely; typically they lie between 10-25% of total cost. That said, there is a dearth of reliable data, and useful tools, to help guide education decisionmakers in their assessments of the true costs of educational technology initiatives.

A recent whitepaper from Vital Wave Consulting, "Affordable Computing for Schools in Developing Countries: A Total Cost of Ownership (TCO) Model for Education Officials", and accompanying case study of ICT in education initiatives in India , provide further insight and perspective on this important and often controversial issue. The white paper discusses key issues related to technology use in education and presents several major findings, including:

* Academic research and private-sector investment decisions indicate that computers in schools contribute to improved academic outcomes, boost a nation’s economic competitiveness, and attract job-creating economic investments.
* Governments need to consider the entire cost of school computing solutions, rather than merely the initial expenses. A total cost of ownership model takes into account recurrent and hidden costs such as teacher training, support and maintenance, and the cost of replacing hardware over a five-year period.
* Support and training are recurrent costs that constitute two of the three largest costs in the total cost of ownership model. They are greater than hardware costs and much higher than software fees.
* Ultra-low cost computers and Linux-based solutions are relatively equal in cost to traditional hardware and proprietary software solutions because they require higher labor and replacement costs over a five-year period.
* The total cost of ownership for different computer types and software platforms is relatively consistent.

Recently from GAO

Wildland Fire Management: Interagency Budget Tool Needs Further Development to Fully Meet Key Objectives

Approaches to Mitigate Freight Congestion

Contract Management: DOD Developed Draft Guidance for Operational Contract Support but Has Not Met All Legislative Requirements

State and Local Fiscal Challenges: Rising Health Care Costs Drive Long-term and Immediate Pressures

Federal Real Property: Government's Fiscal Exposure from Repair and Maintenance Backlogs Is Unclear

In 2003, GAO designated federal real property as a high-risk area. In 2007, GAO reported that real-property-holding agencies and the administration had made progress toward managing their real property, but underlying problems, such as backlogs in repair and maintenance, still existed and six agencies reported having over $1 billion in repair and maintenance backlogs. Owning real property creates a fiscal exposure for the government from the expectation that agencies will incur future maintenance and operations costs. GAO was asked to (1) describe how six agencies estimate their repair and maintenance backlogs, (2) determine how these agencies manage their backlogs and the expected future changes in these backlogs, and (3) identify how backlogs have affected operations at some sites. GAO reviewed agency documents, interviewed officials, and visited two sites at each of the six agencies.

Have you heard about the CoST Initiative?

The Construction Sector Transparency Initiative (CoST) Criteria represent seven core requirements that will form the Pilot Phase. These criteria will be reviewed during the Pilot Phase, and will be amended, if necessary, before the design of CoST is finalised. The Criteria are:

1. For public-sector construction projects above an agreed threshold, there is regular disclosure of material project information to a wide audience in a publicly accessible, comprehensive and comprehensible manner.
2. Procuring bodies are subject to a credible audit process and, as far as possible, projects are subject to credible, independent financial and technical audits.
3. The adequacy of material project disclosures and audits are assessed by an independent, objective and technically competent Assurance Team, and reports published. The membership, terms of reference and activities of this team must be publicly disclosed.
4. The application of this approach is extended to the main procuring bodies responsible for public-sector procurement, and related contractors.
5. A Multi-Stakeholder Group (MSG) representing the interests of stakeholders has oversight of the implementation of CoST. The membership, terms of reference and activities of the MSG must be publicly disclosed.
6. Civil society is actively engaged as a participant in the design, monitoring and evaluation of this process.
7. A public, financially sustainable work plan for all the above is developed by the host government, including measurable targets, a timetable for implementation, and an assessment of potential capacity constraints.

Solomon Islands- Domestic Maritime Project

Solomon Islands- Domestic Maritime Project, ADB

Kyrgyz - Investment Climate

Kyrgyz Republic: Preparing the Investment Climate Improvement Program

Fiscal Space and Infrastructure

Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania

Summary: A common dilemma facing governments around the world is how to meet the sizeable fiscal costs of providing and maintaining infrastructure networks. Over the past decade, developed and developing countries have looked to fiscal rules, budgetary reforms, tax policy and administration measures, public-private partnerships and other innovative financial instruments to raise additional finance for infrastructure investment. This paper looks at the range of options for raising the financing to meet Tanzania's infrastructure needs. It begins with a brief survey of the evidence on the relationship between infrastructure, public investment, and economic growth, and then goes on to consider the case for additional infrastructure investment in Tanzania. The second part of the paper looks at five broad options for mobilizing additional resources to meet Tanzania's infrastructure needs: (i) direct private investment and PPPs, (ii) expenditure reprioritization and efficiency, (iii) domestic revenue mobilization, (iv) external grants and concessional financing, and (v) sovereign borrowing on domestic or international credit markets. The paper concludes with some general recommendations on what combination of the above approaches might be suitable for Tanzania.

GFS data quality in Dominica

Statistical capacity problems affect the timely production of quality government finance statistics. In particular, the data are subject to frequent revisions stemming in part from omissions and misclassifications. Data on central government operations are incomplete and must be supplemented with additional information from external sources. For instance, some operations are undertaken outside the consolidated fund. These include certain investment spending, loan and grant receipts, and on-lending and transfers to public enterprises. As a result, capital expenditure data, recorded by the Treasury, must be supplemented with additional donor financing information, particularly because the public sector investment program (PSIP) data are not timely. Delays in the reporting of the PSIP data reportedly stem from reporting delays from the line ministries.

Several ongoing initiatives to strengthen expenditure management, should help minimize the extent of this problem. There is an ongoing effort to automate the expenditure execution process. A new automation technology installed in all line ministries in 2005 should allow all local purchase orders (LPOs) to be electronically generated and tracked. Commitments are charged against a specific budget allocation once the LPOs are generated. All ministries and suppliers of goods and services are compelled to use the new system. Only limited financing data are available. Although progress has been made in improving the measurement of the government's debt, there are concerns that there is still some under-recording of government commitments.

The authorities do not provide consolidated nonfinancial public sector data. Data for the rest of the public sector—Dominica Social Security and the public enterprises—must be obtained directly from each entity during Fund Article IV consultation missions.

No government finance data are reported to STA for publication in the International Financial Statistics (IFS) or the Government Finance Statistics (GFS) Yearbook.

via Dominica: 2008 Article IV Consultation - Staff Report

US learns Privatizations

As many as six bidders are expected to ante up more than $2 billion for Chicago's Midway Airport. In contrast to public facilities in the United States much of the infrastructure in Great Britain, including its airports and railways, has been privatized.