Programme and performance budgeting in Malaysia
| DOI | http://doi.org/10.1002/pad.4230060306 |
| Author | Peter N. Dean |
| Published date | 01 July 1986 |
| Date | 01 July 1986 |
PUBLIC ADMINISTRATION AND DEVELOPMENT, VO1.6,267-286 1986
Programme and performance budgeting in Malaysia
PETER
N.
DEAN
United
Nuiions
SUMMARY
This paper reviews the evolution of programme and performance budgeting (PPB) in
Malaysia from its beginning in
1969,
through the in-depth implementation phase which began
in
1972,
to the present day. It outlines the system in the Ministry of Health, where PPB has
been extensively developed and comments
on
the systems established in other in-depth
ministries, in several of which little appears to have been achieved.
In
1981
all other agencies
were asked to adopt PPB in their budget submissions. Compliance has been superficial. The
paper explores the constraints to the further development of PPB. These range from
difficulties of securing appropriate staff, lack of top-level commitment and information
problems, to the inherent difficulties of programming and performance measurement. In
seeking to evaluate the success of PPB the paper adopts two approaches. The first, involving
a small questionnaire survey amongst those involved in PPB, reveals rather guarded opinions
concerning its usefulness and progress. The second, which explores the use made of PPB,
reveals little use
by
legislators, budget officers
or
line managers, and no link between PPB and
the planning process. However the audit department expresses considerable interest in
relation to performance auditing. In summary the achievements of PPB have been modest.
ORIGINS OF BUDGET REFORM
The
purpose
of this
paper
is
to
evaluate the success of the
programme
and
performance budget (PPB) reform in Malaysia.’
PPB
is
an
improved system of
government budgeting which developed in the
USA
in
the
1950s
and
1960s
and
was
the subject of
a
United Nations manual
in
1965.
Many developing countries adopted
the
new
system,
and
many writers have described its principles. Far fewer writers
have attempted
to
evaluate
it in practice. This
paper
traces the evolution of
PPB
in
Malaysia,
attempts
to evaluate
its
contemporary usefulness to the various
information-users for whom it is designed,
and
reviews constraints
to
its further
development.
Peter Dean is Interregional Adviser with the Development Administration Division, DCTD, United
Nations, New
York
11017, U.S.A.
‘The field work for this study was carried out in February/March 1984. It comprised 23 interviews with
senior Malaysian civil servants and public officers with duties in the administrative and financial areas.
Interviews were carried out in 10 administrative ministries/departments, and in INTAN (the Institute
of
Public Administration), the Auditor-General’s Department, the Implementation and Coordination Unit
of
the Prime Minister’s Department, the Accountant-General’s Department, the Budget Division, and the
Financial Management Systems Unit, the latte, three being part
of
the Ministry
of
Finance. While this
article is based partly on commissioned research work carried out by Dr Doh
of
the Faculty
of
Economics
and Administration, University
of
Malaya, the views expressed are those
of
the author.
@
1986
by John Wiley
&
Sons, Ltd.
0271-2075/86/030267-20$10.00
268
P.
N.
Dean
Table
1.
Term Definition
Example
Activity
A collection of homogeneous
Training
of
school
types
of
work
in
a
programme,
the purpose
of
which
is
to
contribute to
the
accomplishment
of
the
objective
teachers
Project
Objective
An
activity
of
a
capital
nature
The goal to
which
all
the
activities
within
a
programme
are
directed:
the
end
product
or goal relates
to
the
basic
mission
of
the
agency
Building
a
school
Improving
education
The system of financial management inherited at Independence stressed control,
conformity with rules, and the legality of expenditure. Reflecting these
preoccupations, the traditional government budget was expressed in the form of line
itemization, listing the expenditures requiring to be funded but neglecting to clarify
the aims behind the money figures or the achievements to be accomplished. As Doh
(1981) has explained, the change of focus from custody to development, which
occurred in the post-colonial era, highlighted the need for appropriate
administrative reforms. Two influential reports prepared the way for budgetary
reform: that of Montgomery and Esman (1966), two Ford Foundation consultants,
which dealt generally with development administration; and that of Mudford
(1967), a member of the Harvard Advisory Group, which dealt specifically with the
system of government budgeting. The need was felt for an improved system of
managing and controlling the allocation and utilization of resources. The result was
Treasury Circular
No.
5,
1968, which announced the introduction of programme
and performance budgeting.2 It was hoped that this system would provide more
meaningful information for taxpayers, members of parliament and government
officials, in particular introducing managerial tools which would help with the
evaluation of performance; and that it would bring about a closer relationship
between budgeting and planning. For the purpose of the reform the Supply Division
of
the Treasury was redesignated the Budget Division, and its
staff
was
doubled; the
UN
Manual (1965) was adopted as a blueprint; and a former controller of the
US
General Services Administration was sponsored by the Ford Foundation
to
act
as
budget adviser.
In
addition an accounting adviser was sponsored by the Canadian
Government, and was assisted by
a
team of about
25
US
Peace Corps workers
serving as ‘systems accountants’.
The circular
of
1968 identified two components of
PPB:
programme budgeting
(programmes and their costs) and performance budgeting (measured performance
’At the outset the new system
of
government budgeting went under the initials PPBS. However these
initials are more commonly used to describe the analytically more ambitious Planning Programming
Budgeting System used in the
USA
in the
1960s.
The Malaysian system, which
follows
the
UN
Manual
(1965)
quite closely, goes under the acronym PPB,
for
Programme and Performance Budgeting.
Nevertheless manuals published by Ministry
of
Health still use the initials PPBS.
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