DEVELOPMENT AND BUDGET DIVISION
The Development and Budget Division (DBD) comprises two Sub Divisions, that is, the Development Programmes Sub Division and the Budget Administration Sub Division. Until April 2022, both Sub Divisions had a number of officers placed at each line Ministry in Planning/Finance Units headed at Chief level, at D1. However, the rationalisation of ministerial portfolios of 2022 resulted in the establishment of the National Planning Commission, a part of which was staffed with a major part of the planning function from the Ministry of Finance. Therefore the Division has a small pool of officers at Headquarters to drive the mandate of the Division.
The Division is headed by the Secretary for Budget Mr Boniface G. Mphetlhe assisted by two Deputies being Ms Boineelo M. Peter as Deputy Secretary for Development Programmes and Ms Seabo M. Keorapetse as Deputy Secretary Budget Administration.
The Development and Budget Division is responsible for:
Coordinating the formulation of the Government recurrent and development budgets.
Control of the use of budgetary resources.
Public debt management.
Cash Flow analysis and reporting.
Financial administration of loss of cash and stores.
Government motor vehicle accident and other surcharges.
Assisting Ministries to identify cost recovery areas.
Coordination of Botswana’s Public Finance Management (PFM) Reform Programme
DBD’s operating processes, structures; management systems and culture are shaped by its values. In pursuit of its objective, the Division commits itself to the following values:
- Customer focus
- Team Work
- Open Mindedness
DEVELOPMENT PROGRAMMES SUB-DIVISION
The Sub Division is responsible for:
· assisting Line Ministries and departments in preparing the Annual Development Budget;
· reporting and analyse the implementation and progress of the development programmes and projects;
· ensuring that the Annual Development Budget Estimates are consistent with the National Priorities. Recommend, if required, any policy and other measures to align the Annual Development Budgets to targets before they are approved;
· monitoring through appropriate reporting mechanism whether public monies are being used for their intended purposes and are producing the intended economic benefits (as per National Development Plans and Annual Development Budget);
· ensuring that actual expenditure is in line with the fiscal forecasts, and to advise the Minister on requisite corrective actions if there are unplanned and/or significant variances;
· Appraising project memoranda and prepare Domestic Development Fund Tranches for consideration by senior staff and approval by the Honourable Minister.
· developing and continuously evolve the reporting mechanism and relationship protocols for Monitoring and Evaluation reports, Annual Development Budget, budget document package etc;
· mobilising external finance (formulate guidelines and policies for economic cooperation and sourcing of funds);
· Operating and manage EU programmes in Botswana on behalf of the National Authorising Officer (who is the Permanent Secretary) of the European Development Fund as well as being the National Designation Authority of the Green Climate Fund.
BUDGET ADMINISTRATION SUB-DIVISION
The Budget Administration Sub-Division is responsible for ensuring effective coordination of budgetary processes, mainly: control of use of budgetary resources; public debt management; cash flow analysis and reporting and coordination of PFM Reforms Programme. The Recurrent Budget Section under this Sub-Division has seconded over 90 percent of staff to the respective line ministries in order to provide advisory role to the rest of government on the overall public finance management matters. The overall objective is to ensure visibility and presence of the Ministry of Finance across the Line Ministries to facilitate effective coordination of the budget, monitoring of the budget execution as well as to ensure technical support to the Ministries.
It comprises of the following Sections and Units:
A) Recurrent Budget Section
The Section is responsible for:
- Formulation and preparation of the recurrent budget as well as coordination of the preparation of the Government’s annual budget throughout the various stages until approval.
- Ensures efficient and effective utilization of resources by producing financial statements during budget implementation as well as assessment of additional funding requirements by Ministries, Departments and Agencies (MDAs).
- Assessment and recommendation of payments for tuition fees, Subventions for Local Authorities and State-Owned Entities.
- Responsible for National Budgeting reforms (two major reform areas, i.e is Zero Based Budgeting and Budget Options).
- Ensures the publication of three (3) key budget documents (Revenue book, Estimates book and In-year report) in order to improve budget transparency.
- Overall management of the Budget Administration Sub Division’s human resources including staff allocation, promotions, consolidation of the training plan as well as training coordination.
- Review of relevant policies to improve the quality of the service
- Through seconded staff to the line Ministries, the section is responsible for:
· Advisory role to the Accounting Officers and Ministerial Heads of Departments
· Coordination of the budget preparation for the Line Ministries
· Monitoring of ministerial expenditure and revenue collection
· Ensures compliance to financial standards, rules and regulations.
· Ensures that audit queries are responded to timeously.
B. Public Finance Management And Control Section
The PFMC Section’s mandate is to coordinate, control as well as to ensure through constant monitoring, that the provisions of the Public Finance Management Act as it relates to losses of public funds and financial management thereto, are adhered to and observed. The Section has over the years been responsible for the surcharge function, the power which has now been devolved to line Ministries. The power to surcharge was delegated to Accounting Officers effecting April 2014; pursuant to section 43 (1) of the Public Finance Management Act, 2011. The Section is also mandated to drive revenue maximization/cost recovery issues for Government. This involves driving revenue maximization initiatives by undertaking desktop research on potential revenue streams and revision of existing revenue sources. With passage of time, the Unit shall also serve as a Secretariat for the proposed Revenue Management Committee.
The Section has the following Units:
i) Motor Vehicle Accidents Unit:
The Unit deals with issues relating to Government Motor vehicle accidents. When such cases arise, investigations are done by the Department of Central Transport Organization and the outcome is submitted to concerned Ministries/Departments for surcharge action or otherwise, and copies of the cases are submitted to Ministry of Finance, in the PFMC Section for monitoring purposes. Since the devolution of the surcharge function, the main responsibility of the Unit is now to monitor the implementation of the devolved powers at line Ministries and to ensure optimal recovery, through surcharge, of losses incurred by Government due to damage of Government motor vehicles.
ii) Loss of Cash Unit:
The Unit processes requests received from Ministries, Departments and Agencies (MDA’s) for write offs and abandonments of irrecoverable public monies in accordance with Financial Instructions and Procedures (FIPs). Although the power of surcharge has been devolved to Accounting Officers; the authority to write off losses of public funds and or abandon arrears of revenue has also been partially devolved to MDAs. Accounting Officers have been empowered to authorize write-offs of public monies and abandonment of arrears of revenue up to P10 000 and P50 000 respectively. Abandonments and write-offs of sums above these thresholds are still the responsibility of this Ministry. However, write-offs in excess of P1 000 000 are referred to Cabinet for consideration.
iii) Revenue Maximization Unit (Cost Recovery)
The Unit is responsible for the coordination and implementation of the national cost recovery policy, by assisting Ministries in identifying sources of revenue, setting targets as well as monitoring progress. It also coordinates Ministries’ activities relating to loss of public monies and administers surcharges in accordance with the relevant provisions of the Public Finance Management Act.
The responsibilities of the Unit include:
- Compilation of an inventory of cost recovery areas in Government by ministry/department.
- Examination of procedures /systems in place for the collection of revenue with a view to proposing improvements if deemed necessary.
- Monitoring the collection of revenues against clear established targets and establishment of possible explanations for any deviations.
- Working closely with ministries/departments in identifying potential cost recovery areas.
- Assisting ministries/departments to establish effective systems for the collection of revenues in the newly identified areas.
- Reviewing specific ministries’ programmes with a view to determining the need for cost sharing/cost recovery measures for these programmes to be sustainable.
- Reviewing the methodology used for determining the level of fees/charges.
- Monitoring implementation of revised user fees and service charges.
- Advising the Permanent Secretary, MoF on the effectiveness of the cost recovery measures undertaken by various ministries on a continuous basis.
The Ministry’s Strategic Plan has an objective towards increasing revenue base. In that regard, this Section is partly driving the objective under the notion of cost recovery. So far, review of existing cost recovery budget lines and identification of new cost recovery budget lines has been undertaken in nine Ministries and the review of revised fees and service charges for the remaining Ministries is in process. The draft Cab Memo shall be circulated by end of May 2023.
C. Public Finance Management Reform Program Unit
The Public Finance Management Reform Programme (PFMRP) for Botswana introduced in July, 2010, is a response to the socio-economic challenges the country continues to face and that require prudent management of public finances. The programe is housed under the Ministry of Finance and is part of the wider Public Sector Reforms.
The major focus is on addressing issues of budget credibility, comprehensiveness and transparency; policy based budgeting; predictability and control in budget execution; accountability and reporting as well as external scrutiny and auditing. The PFM Reform agenda is expected to transform Botswana’s public finance management systems in order to attain long-term sustainable development. The 2009 and 2013 Public Expenditure and Financial Accountability (PEFA) assessments, assisted in identifying key areas for reform such as Legal and Institutional Framework, Budget Planning and Formulation, Budget Execution, Budget Control and Oversight, and Revenue Management.
The Government of Botswana has committed to a well-coordinated and sequenced PFM reform programme. However, with the evolving nature of PFM, the Government will continually review and align the reforms with new conditions. At inception the PFMRP consisted of Five (5) main components and 17 sub-components but in 2014, it was refocused and compressed into thirteen (13) main components, each led by a Component Manager. International Monetary Fund (IMF).
D. PUBLIC DEBT SERVICE UNIT
This Unit processes external debt and domestic lending payments transactions. It monitors, administers and manages all debts incurred by Government from bilateral and multilateral foreign donors, including other financial lending institutions. Domestic lending by Government to Parastatals and other institutions from special funds is also the responsibility of this Unit.
E. BUDGET ANALYSIS AND DEBT MANAGEMENT SECTION
The Budget Analysis and Debt Management Section monitors and analyses the Central Government cash flow operations on a monthly basis. This involves reporting on revenues and expenditures and the financing aspects of the Central Government budget. The Section also administers and manages public and Government guaranteed debt and domestic lending using a computerized system called the Commonwealth Secretariat – Debt Recording and Management System (CS-DRMS).
The Central Government cash flow analysis and monitoring is done on a monthly basis and a management report is written on a quarterly basis showing the performance of the budget during the period. One of the important tables produced is the cash flow series showing the budget outturn for each month.
On an annual basis, the Budget Analysis and Debt Management Section consolidates the Central Government budget in order to produce the Consolidated Cash Flow Presentation of the Budget table published in the Financial Statements, Tables, and Estimates of the Consolidated, and Development Funds Revenues book. Another table published in the same publication is the Functional Classification of Expenditure and the Net Landing. This table is prepared using the Classification of Functions of Government (COFOG) approach as outlined in the IMF 2001 GFS manual.
Botswana participates in the IMF Enhanced-General Data Dissemination System framework and the metadata is published on the IMF Dissemination Standards Bulletin Board at http://dsbb.imf.org.
Botswana acquired the Commonwealth Secretariat-Debt Recording and Management System. In 1986 and it has assisted in creating comprehensive external debt and domestic lending (loans advanced to Parastatals and Local Authorities by government) portfolios. More details on the system can be obtained at www.csdrms.org
The Budget Analysis and Debt Management Section has 2 Units namely
· Debt Management Unit
· Cash Flow Unit
i) Cash flow Unit responsibilities cover:
- Economic classification of central Government budget
- Functional classification of central Government budget
- Monthly classification of new unclassified budget items
- Monthly compilation and dissemination of Sources and Uses of Cash Table for central Government
- Compilation of monthly Functional Table and dissemination of same
- Compilation of Government Finance Statistics balance sheet
- Production and dissemination of quarterly budget monitoring report
- Compilation of the annual Government Finance Statistics data for international reporting of same
- Consolidation of central government budget and generation of Sources and Uses of Cash and Classification of Functional Outlays of Government Tables for publication in the annual Financial Statements, Tables and Estimates of the Consolidated and Development Funds Revenues
- Compilation of Uses of Cash and Classification of Functional Outlays of Government Tables for publication in Annual Statements of Accounts
- Annual contribution into budget speech (budget outturn, revised budget and estimated budget)
- Compilation and consolidation of annual general government accounts. This comprises of:-
i) Revenues and expenses for 17 Land Boards
ii) Revenues and expenses for 26 District and City Councils
iii) Balance sheet data of same
iv) Identification of Extra Budgetary Entities
-Revenues and expenses
-Balance sheet data
- Consolidation of Central Government, Land Boards, Councils and Extra Budgetary Entities accounts for publication in the annual GFS Year Book
- Compilation and dissemination (unique to each specific questionnaire, for example FAO, SADC,OECD Revenue Publication Statistic for Africa)
ii) Debt Management Unit responsibilities cover:
- Implementing the government borrowing plan based on an approved Medium Term Management Strategy, it seeks to secure funds in a manner consistent with the government debt management cost and risk objectives;
- Developing a funding plan to mobilise resources from foreign governments, international financial institutions, capital markets and retail investors;
- Preparing loan proposals and prospectuses;
- Negotiating loans, guarantee arrangements and on-lending agreements;
- Issuing of Government Securities;
- Hedging and undertaking derivative transactions;
- Managing relationships with creditors and investors;
- Ensuring fulfilling all conditions/precedent required for the drawdown of a loan
- Developing a Medium and long-term borrowing policy and Medium Term Debt Management Strategy aimed at minimizing cost and risk;
- Undertaking portfolio and Debt Sustainability Analysis;
- Undertaking risk analysis and managing risk coordination
- Formulating guarantee and on-lending policies;
- Producing analytical and annual debt reports; and
- Monitoring the performance of the funding managers against strategic benchmarks set in the Debt Sustainability Analysis and Medium Term Debt Management Strategy.
- Facilitate drawdowns;
- Debt service payments;
- Forecasting debt service payments and cash requirements;
- Recording and monitoring all debt transactions;
- Generating monthly, quarterly and annual debt reports required by the government, lenders, credit rating agencies and World Bank, amongst others;
- Maintaining a comprehensive, accurate and up-to-date debt databases;
- Disseminate debt data through Ministry website and Open Data Platform.