Environmental protection | Water management » Ministry of Environment, Forestry and Water Management, Sector Guide

Source: http://www.doksinet ALBANIA Medium Term Budget Programme SECTOR GUIDE Ministry of Environment, Forestry and Water Management December 2009 Source: http://www.doksinet This Sector Guide has been prepared by REPIM and Europartners under the project ‘Supporting the Ministry of Finance, Line Ministries and the Department for Strategy and Donor Coordination for Strategic Plans Development, the Implementation of Medium Term Budget Program, Public Investment and Monitoring’ (Ref. 0208 of PP) which has been funded under a multi-donor trust fund grant ‘Capacity Building and Support to Implement the Integrated Planning System in Albania (IPS)’ Grant No MDTF 90843 Source: http://www.doksinet Table of contents Table of contents 1 Acronyms 4 Introduction 6 1 The elements of submissions 1.1 What is a Programme? 1.2 Checklist for Programmes 1.3 What is a Programme Tree? 1.4 What is a Policy Goal? 1.5 Checklist for Policy Goals 1.6 What is a Policy Objective? 1.7

Checklist for Policy Objectives 1.8 What is a Policy Standard? 1.9 Checklist for Standards 1.10 What is a Project? 1.11 Checklist for Projects 1.12 What is an Output? 1.13 Checklist for individual Outputs 1.14 Checklist for the Outputs of a Programme taken together 1.15 What is an Activity? 1.16 Checklist for Activities 8 8 9 10 13 14 16 18 20 21 21 25 28 30 35 37 39 2 Some issues that commonly arise 2.1 Recruitment, salaries and people-related expenditures 2.2 The treatment of investment expenditure 2.3 The content of Programme 111 42 42 42 43 3 Some technical issues that might be helpful 3.1 Apportionment 3.2 De minimis 46 46 49 4 Evaluation: performance measures and performance indicators 50 Annex A – A worked example of one Programme 53 Annex B – Potential Options for Planning the Delivery of Services under Programme 1110 57 1 Source: http://www.doksinet Preface 2 Error! Bookmark not defined. Table of contents 3 Acronyms 5 Introduction 7 1 The elements

of submissions 1.1 What is a Programme? 1.2 Checklist for Programmes 1.3 What is a Programme Tree? 1.4 What is a Policy Goal? 1.5 Checklist for Policy Goals 1.6 What is a Policy Objective? 1.7 Checklist for Policy Objectives 1.8 What is a Policy Standard? 1.9 Checklist for Standards 1.10 What is a Project? 1.11 Checklist for Projects 1.12 What is an Output? 1.13 Checklist for individual Outputs 1.14 Checklist for the Outputs of a Programme taken together 1.15 What is an Activity? 1.16 Checklist for Activities 9 9 10 11 14 15 17 19 21 22 22 25 27 29 34 36 38 2 Some issues that commonly arise 2.1 Recruitment, salaries and people-related expenditures 2.2 The treatment of investment expenditure 2.3 The content of Programme 111 41 41 41 42 3 Some technical issues that might be helpful 3.1 Apportionment 3.2 De minimis 45 45 48 4 Evaluation: performance measures and performance indicators 49 Annex – A worked example of one Programme 53 Source: http://www.doksinet 3 Source:

http://www.doksinet Acronyms GSBI MIP MTBP PEIP PMT PPR SAA SMART SMARTER 4 Group for Strategy, Budget and Integration Ministry Integration Plan Medium Term Budget Plan Public Expenditure and Investment Planning Programme Management Team Programme Policy Review Stabilisation and Assocation Agreement Specific, Measurable, Achievable, .Realistic, Time-bound, Specific, Measurable, Achievable, Realistic, Time-bound, Evaluated, Rewarded Source: http://www.doksinet 5 Source: http://www.doksinet Introduction This Guide contains advice on how to produce a good budget plan that can: • Provide a comprehensive statement of how the Ministry of Environment, Forestry and Water Management intends to turn policy into action that will inform Government, the Assembly and the public. • Provide a work programme for everyone who works in the Ministry of Environment, Forestry and Water Management. • Be evaluated so that achievement can be compared to plan. The Guide complements the

existing Medium Term Budget Programme Operational Manual. The Operational Manual is a detailed guide to the process of preparing a medium-term budget plan and of producing monitoring reports. The processes of planning and monitoring are assisted by the PSHIP software. This guide deals with the work that must be done before the PSHIP software can be used. It is a practical tool for the Ministry to use in defining the content of the plan – the way in which Programme Policies, Goals, Objectives, Standards, Projects, Outputs and Activities are defined and linked together so that they provide a clear narrative. The translation of policy Goals into practical action should be transparent. The Guide provides definitions, illustrative examples of good and weak practice – all of which are taken from real life in Albania – and a checklist of points to review before you approach the computer. Where they are relevant, examples of good practice from other countries are included. The examples

provided here are not absolute rules that must be copied. They should be used as a reference point in starting a discussion about how the Ministry might best do justice to the nature, scale and volume of its work as it presents its budget plan. The examples presented are not comprehensive. Remember that the people who read your plan are not experts in your Ministry’s work. They will not know about it unless you tell them a story that they can easily follow. 6 Source: http://www.doksinet Who should use this guidebook? This guidebook is for anyone who is involved in the Medium Term Budget Programme (MTBP) in a budget institution. It will be useful at all stages in the process, but in particular in the following circumstances: • • • • • General Secretary/Director General – for monitoring implementation of the plan for the current year; for quality control of the plan for years 1-3. Group for Strategy Budget and Integration (GSBI) - for monitoring the plan for the

current year and approving any changes that might be necessary; for review of the draft plan for years 1-3 and considering any changes that might be necessary. Heads of Programme Management Teams (PMTs) - for monitoring the plan for the current year and deciding whether changes are necessary; for production of plan for years 1-3. Members of PMTs – in producing detailed MTBP plans for years 1-3; for reviewing progress on the plan for the current year; and reviewing the effectiveness of definitions, measures and indicators being used. Newcomers to the MTBP and anyone involved in training people about the MTBP. 7 Source: http://www.doksinet 1 The elements of submissions 1.1 What is a Programme? A Programme contains all the work associated with one coherent policy area. It includes both policy development and execution. (See Operational Manual A2114) And each Programme should be distinct from all other Programmes. All budget institutions have a Programme 111: Planning, Management

and Administration. This Programme is defined in terms of functions and it includes all the general services that are provided in support of the budget institution as a whole (See chapter 2.3 for a more detailed description of what should be included in Programme 111). As a general rule, other Programmes should be defined in terms of the policy that they design and implement and not functions. This is because all the remainder of the budget work is organised around policy Goals, Objectives and Outputs. It will be very difficult to do this work if the policy itself is not clear. The Programme Description should simply state the competencies of the Programme. The Programme Policy Statement should identify the policy for which the Programme is responsible. There should be a recognisable link between the Programme Policy Statement and the public documents that set the policy agenda. That might be the Government Programme, the National Plan for Development and Integration, a Sector

Strategy, the Implementation Plan for the Stabilisation and Association Agreement or some similar document. Programmes often match exactly with Directorates but this will not always be the case. Sometimes two or more Directorates are included in the same Programme because they all have different responsibilities but for the same policy field. In other cases the same Directorate is responsible for two programmes. In both cases, it makes no difference to the normal managerial and hierarchical relationships within the budget institution, provided that the Heads of the Programme Management Teams have sufficient authority to carry out their tasks. 8 Source: http://www.doksinet 1.2 1 Checklist for Programmes Is what is included in the Programme clear? Is it obviously different from other Programmes in the budget institution? Example: ‘Forest sector policy aims at developing sustainable and multifunctional forest resources and pastures, which ensures and protects biodiversity,

productivity, renewable ability, vitality and their potential to fulfil, for today and the future, ecological functions, economic and social locally, nationally and globally, without causing damage to other ecosystems.’ What is included in the above Forest Administration Programme is not clear. The Programme Description should not be a description of policies but of its competences. The phrase ‘Forest sector policy aims at.’ should be changed in ‘The Forest Administration Programme covers.’ A possible re-formulation of the Programme Description is: ‘The Forest Administration Programme covers the sustainable management of the national forests, including agricultural pastures, both at national and communal level.’ A definition of competences at national and communal level could follow. 2 Are there any Sectors in the budget institution whose work is included in more than one Programme? If yes, then re-arrange the scope of the Programmes so that the Sector appears in one

Programme only or re-arrange the management arrangements. Example: In the 2009 MTBP submissions of the Ministry of Environment, the opposite occurs: there are several environment sub-sectors that are included in the Programme ‘Environment Protection’. That results in the majority of the Ministry expenditure being lumped in this single programme. The option of dividing the programme into two or more programmes could be considered. That would result in: (i) a more transparent description of the environmental competences; and (ii) a better alignment to the classification of the sectors presented in the SAA implementation plan 1. Besides the general policies on environment, the SAA implementation plan includes, among others, specific policies on: • air and noise pollution, • waste management, • water pollution prevention and drinking water management, • nature protection 1 ‘The National Plan for the Implementation of the Stabilisation and Association Agreement 2007-2012’,

September 2007 9 Source: http://www.doksinet • • 3 pollution and industrial risks, including chemicals climate change Are all the resources that are appropriate to the development and implementation of this Programme included within the budget ceiling for the Programme? The ceiling should include: • • • expenditures on all the personnel associated with the Programme all the expenditures of any subordinate institution that implements the policy of the Programme all Projects that are concerned with this Programme only Chapter 2.3 discusses other expenditures that may be allocated to the Programme 1.3 What is a Programme Tree? A Programme Tree is a diagrammatic way of describing the planned work of a Programme. It shows how resources allocated to individual tasks (Activities) will eventually lead to the achievement of long-term policy ambitions (Goals). The sum total of the resources allocated to Activities will equal the total budgeted expenditure of the Programme.

Or, to put it the other way round, it shows how a statement of a long-term policy ambition (Goal) is converted into a concrete set of tasks (Activities) that will be carried out yearby-year and which can be measured and monitored to ensure that the intended policy is implemented. A Programme Tree incorporates every level of budget planning and analysis and covers every item of Programme expenditure. It is the most comprehensive representation of a Programme’s link between policy and expenditures. The relationship of all Activities to the policy Goal can be traced through Outputs and Programme Objectives. The diagram below shows the generic model that is in use in Albania. 10 Source: http://www.doksinet The following table shows how a similar (but not identical) approach has been used to display clearly the work of the Department of Environment and Heritage in Australia. This table does not extend to quantified Outputs and Activities. But it is a good example of how a very broad

policy can be translated into a clearly defined area of work: 11 Source: http://www.doksinet 12 Source: http://www.doksinet 1.4 What is a Policy Goal? In the MTBP Operational Manual (B.3338), a Policy Goal is defined as The desired, measurable result to be achieved from government actions that should be achieved in the medium to long term (beyond the MTBP period) A Goal is a long-term target for a Programme. It will be reached at some point beyond the medium term – that is in year 4 or later. Some policies have very long time horizons and these should be reflected in the description of the Goal. For example, reaching EU standards for CO2 gas emissions may require a time horizon longer than one MTBP period. Goals should be measurable in some way or it will not be possible to know when, or whether, they are achieved. Example: ‘Improving quality of water resources, strengthening local control structures of river water quality, restricting human activity for limited periods of

the year, increasing crossborder cooperation with countries to make use of water resources’. This is a series of statements that are not goals. They are framed as general aspirations and not clear targets. They should indicate specific and measurable targets and should be time-bound A possible reformulation of the statement would be: • ‘By 2020 reducing the nitrate content at river mouths by <<X>>% as compared to a baseline of <<Y>> mg/litre recorded in 2010, • ‘By 2020 Cross-board cooperation for river and lakes cover <<X>>% of total river banks and <<Y>>% of lake shorelines. Restricting human activities is rather a means for achieving the reformulated goals above and could go in the Output section as ‘number of controls/inspections of key commercial and industrial activities along rivers and lakes’. Three examples of international practice: • Air pollution – by 2015 reduction of <<%>> of occasions where

concentrations of key air pollutants exceeds the standard limits for ambient air quality in major urban areas; baseline occasions was <X>> in 2010. The national standard limits are specified in SO2 (sulphur oxide) and NO2 (nitrogen oxide) concentration in the air (<<X>> Kg/capita). • Renewable Energy – By 2015 investment on renewable energy increases to <<%>> and <<%>> of total investment in energy, from 13 Source: http://www.doksinet • public and private projects respectively. In 2010 these percentages were <<%>> for public investment and <<%>> for private investment. Forestry – by 2020 the strategy for forestry protection and management is fully implemented, increasing the areas of forest protected and managed through the National Reserve System Programme, from <<X>> has in 2010 to <<Y>> has in 2020. A source of reference for environmental indicators, from which the above have

been taken, is the OECD publication ‘Environment at a Glance’ obtainable at http://www.oecdbookshoporg/oecd/displayasp?CID=&LANG=EN&SF1=DI&ST1=5L GR0Q4DQH5G or http://books.googlecom/books?id=g1hGsKs1REC&printsec=frontcover&source=gbs v2 summary r&cad=0#v=onepage& q=&f=false The relationship between Goals and Objectives Work towards the Goal may already have started. Or it may begin in the medium term In either case, there should be Objectives that will make progress towards the achievement of the Goal in one of more years in the medium-term. The medium term is the current year (year 0) and the next three years (years 1 to 3). If a Goal has no Objectives that are linked to it then this means that work towards achieving the Goal will not begin until after the end of the mid-term plan – that is in year 4 at the earliest. 1.5 Checklist for Policy Goals 1. Does the definition clearly describe a desired policy achievement that will be reached in year

4 or beyond? Example: The Goal ‘to develop and ensure the enforceability of all legal disciplines in environmental protection and to achieve high indicators of environmental quality’ as presented in the 2009 MTBP submission for the programme, is not supported by SMART targets and also lacks a clear year reference for its achievement. Improving quality of air and water indicators may require significant investments and in particular a cultural change in the population. Without a clear time horizon, the Goal risks to remain a simple statement of good intentions. 14 Source: http://www.doksinet A possible re-formulation of the Goal description is: ‘Environment protection is to provide the population with adequate initiatives against air and water pollution by, • by 2015 reduction of <<%>> of SO2 (sulphur oxide) and <<%) NO2 (nitrogen oxide) concentration in the air as compared to <<X>> and <<Y>> Kg/capita recorded in 2009, respectively.

• reducing the nitrate content in rivers by <<X>>% by 2020, as compared to a baseline of <<Y>> mg/litre recorded in 2010.’ 2. Is the time horizon included in this definition appropriate to the nature of the policy? Examples: Most of the Goals stated in the 2009 Ministry MTBP submission lack measurable and time-bound indicators. For example the statement ‘Improving functional structure for a more effective management of human resources, increase skills through a process of open competition, motivation and reward according to the performance, increasing the fight against corruption’ appears a timeless promise if it does not concretely state WHAT will be achieved and WHEN. Policy Goals and Objectives need to be reassessed every year during the annual MTBP preparation process, based on feedback from a consolidated and reliable monitoring system capable of capturing the quantitative, qualitative and time-bound progress of the reform agenda. The above

statement on ‘motivation and reward according to performance’ could, for example, be reformulated as follows: ‘In 2015 70% of staff in the ministry achieve all the targets contained in their performance contract agreed with their respective director, compared to <<X>> proportion in 2010, year of the introduction of the performance evaluation scheme’. 3. Does the definition include details of how the Goal is to be achieved instead of, or in addition to, the description of the policy achievement? If so, there may be some confusion between ends – which are described in Goals and Objectives – and means that are described in Outputs. Example: ‘Management of marine resources through the careful creation of a licensing system, control of fishing vessels, protection of species at risk through joint coordination of cross-border transactions, improvement of legal basis in accordance with EU standards’. All the above are neither Goals nor Objectives but the means to

achieve these through the delivery of Outputs. The goals should be limited to the description of the intended 15 Source: http://www.doksinet policy achievement such as ‘Ensuring the long-term conservation and sustainable use of fish stocks in the next ten years, by maintaining stocks at the 2010 level of total catch <<x>> tonnes by species as measured by the national statistic bulletin.’ 4. Are there Objectives that will take forward work towards the achievement of the Goal in one or more of the mid-term years? If not, do you intend to start work only in year 4 or beyond? Example: ‘Rehabilitation of degraded forests through planting of forest seedlings. Management and cultivation of mussels as a national treasure. Ensure the alignment of national environmental standards to those of the EU. Reduce water pollution in rivers’ Aside from the non-SMART nature of the above, presented as goals in the Ministry’s MTBP submission in 2009, none of them are supported in

the submission by intermediate targets (Objectives) during the MTBP period. For example the rehabilitation of degraded forests could have a long term goal: • ‘by 2015 15,000 hectares of degraded mountain areas will be reforestated’; and medium term Objectives for each year of the MTBP: • ‘3,000 hectares will be reforestated in 2010’; . ‘3,000 hectares will be reforestated in 2011’; ‘3,500 hectares will be reforestated in 2012’ 1.6 What is a Policy Objective? Policy Objectives are defined (Operational Manual B.3338) as Specific policy achievements, precisely measured in terms of time, number and cost, that can be accomplished during the MTBP period and that are intermediate steps in achieving a policy Goal. All ministerial expenditures should contribute to the stated policy Objectives The Objectives define the planned achievements in each year of the medium-term. The medium-term always keeps four years in view – the current year (year 0) and the next three years

(years 1 to 3). An Objective may contribute progress towards the achievement of a Goal which, as we have seen, will not be completed until the longer term. An Objective may describe the completion of action that was started some years previously. An Objective may describe work that is continued from year to year An Objective must state clearly what you plan to achieve by the end of the year in question. It must be measurable so that you (and others) can subsequently evaluate whether the Objective has been achieved. It is not a description of the means by which you plan to achieve the Objective. The means will appear as Outputs and Activities 16 Source: http://www.doksinet Objectives should be independent of each other so that they can be measured separately without overlap or double counting. You will find it very difficult to define Outputs and allocate resources if the Objectives are not independent. Two examples from international practice: • Targets for gas emission intensity

are typically established for each year of an MTBP period (as measured by Kg/ capita), and are typically compared (e.g not higher, average etc) to levels for accession countries and/or new Member States 2. For example, ‘10% reduction of emission intensity from 46 SO2 Kg/capita (sulphur oxide) in 2010 to 40 in 2011’; or S02 Kg/capita in 2011 to be equal to the 2004 average of EU Member States equal to <<X>> Kg/capita; • In 2012 Waste recycling rates for glass to increase to 45% from a 40% recycling rate recorded in 2011 ( a separate indicator to be used for paper recycling). A source of reference for environmental indicators, from which the above have been taken, is the OECD publication ‘Environment at a Glance’ obtainable at http://www.oecdbookshoporg/oecd/displayasp?CID=&LANG=EN&SF1=DI&ST1=5L GR0Q4DQH5G or http://books.googlecom/books?id=g1hGsKs1REC&printsec=frontcover&source=gbs v2 summary r&cad=0#v=onepage& q=&f=false The

relationship between Objectives and Outputs Each Objective will have one or more Outputs. One Output is unusual A common mistake is to confuse Objectives and Outputs. Staff with better qualifications, new buildings, introduction of new chemical tests, improved technology such as purchase of new science labs, the production of reports and surveys may all be very desirable. They may all be absolutely necessary But achieving them is not an Objective They are secondary to the policy Objective which might be to improve standards of service, or provide new services. If you find that you have more Objectives than Outputs, then something has gone wrong. It is probably a case of this confusion In the Annex, there is an example on how to link Objectives and Outputs for the programme ‘Support to Fisheries’. 2 This a target used in most OECD countries. 17 Source: http://www.doksinet 1.7 Checklist for Policy Objectives 1. Does each Objective describe the planned achievement of the

policy at the end of (or during) the year in question? Are you sure that the Objectives describe ends and not means? Example: ‘Reduce emissions of greenhouse gases and increase the use of renewable energy sources’. Two generic objectives appear in this statement without a SMART indicator of achievement at the end of each MTBP year for either 3. How ambitious is the objective of emission reduction in terms of concrete results? If the objective is reformulated using an approach from international practice (as noted above), i.e ‘10% reduction of emission intensity from 46 SO2 Kg/per capita in 2010 to 40 in 2011’, the policy makers could judge at the end of 2011 if the policies adopted have been successful or not in achieving the planned (intermediate) target. Example: ‘Improved management of water resources, increasing and strengthening cooperation with local government and control over the licensing of activities to reduce river pollution’ is an objective that describes means

(to be placed in the Output section) and not ends. An appropriate end of improved water resources management would be ‘a 5% reduction in ground leakage of mains drinking water in 2012 from the 50% dispersion level of the existing drinking water network as recorded in 2011’. 2. Can the Objective be measured? Example: ‘Improve environmental indicators by 10%, licensing of subjects with environmental permits and prohibition of illegal activities by 20%.’ This statement presents quantified targets but it would be difficult to measure them as they are not specific. For example, which environmental indicators is the statement referring to? Which is the baseline from which to calculate the 10% increase? Please refer to the two examples (above) from international practice for an illustration of specific and measurable objectives. 3 18 This example uses information as presented in the 2009 Ministry MTBP submission. Source: http://www.doksinet 3. Are the Objectives clearly

different from each other? A common shortcoming in preparing MTBP submissions is that Objectives are repeated verbatim in each year of the MTBP period. For example repeating the following objective statement for two separate MTBP years, ‘Complete audit on use of funds in 10 subsidiary institutions’, suggests two shortcomings. First, this looks more like an output rather than an objective. Second, the statement does not provide a clear differentiation of the staged achievement of the objective in each year. It is not clear if the 10 audits will take two years to complete or there will be 10 new institutions audited each year. The above objective statement, in fact, attempts to capture improvement in financial management capacity. An appropriate performance indicator for this could be the ratio of actual versus planned capital expenditures at the end of the year, the Objective for which could be stated as follows: ‘As a result of the strengthening of the financial management

capacity, including the auditing function, the ratio of actual versus planned capital expenditures at the end of the year will increase from 60% in 2009 to 80% 2010.’ 4. Can you identify Outputs that relate to each Objective? In the Water Administration programme the stated objective of ‘Drafting necessary legal provisions to prevent illegal activities’ as presented in the 2009 MTBP submission is linked with a similarly-titled Output, ‘Legal Acts and regulations proposed to control the sustainable use of water resources’. The problem in this case is that the Output (as presented) is effectively a repetition of the Objective (as presented). The Objective would need to be rewritten in terms of a desired end, for example ‘the reinforcement of legislation together with adequate monitoring, reduces the illegal dumping sites recorded in the country from <<X>> number in 2011 to <<Y>> number in 2012’. Outputs would then need to be formulated to ensure the

Objective is achieved (including those specifying the legal provisions that should be drafted). In the same programme there is an Objective in the 2009 MTBP submission that states generically the fight against corruption, which appears not to have any related Outputs. The Objective could be restated as: ‘<<X>> number of court cases against corruption successfully completed in 2013, compared to <<Y>> number in 2012’ with the related outputs including ’number of investigations on corruption leading to a court case in 2013’. 5. Have you defined the Standards that provide the quality measures? Standards in the area of Environment, especially on minimum levels of gas emissions and water pollutants, and protection of forest land and fishing stocks are clearly stated in EU legislation but have generally not been used to provide quality measures for the Objectives as presented in the Ministry’s MTBP submission in 2009. 19 Source: http://www.doksinet For

instance the Objective ‘Develop and improve legal basis in environmental protection to introduce EU standards in the national legislation’ is too generic, particularly with regard to the EU standards that are to be applied. The relevant EU standards should be specified or, where they are complex, they should be summarised in the ‘Standards’ section of the submission and a reference should be provided for further detail. For example a reference might be made to ‘Directive 75/442/EEC on Waste’ which can be found in the Official Journal 194 25.071975 P0039-0041 The interested reader can then go to the reference and understand the policy standards that are to apply for the years in question. This Objective could be re-specified as follow: ‘Develop and improve the legal basis for environmental protection to introduce EU standards in the national legislation (as per Directive 75/442/EEC on Waste’ Official Journal 194 25.071975 P0039-0041) so that by end of 2012: • the waste

produced in Albania is properly accounted for and classified according to Annex 1 of Directive; and • 50% of waste is recovered or disposed of ‘without endangering human health and without using processes or methods which could harm the environment’ as per article 4 1.8 What is a Policy Standard? Policy Standards are defined (Operational Manual B.3338) as The quantity and quality parameters that give the policy meaning. Objectives should be delivered to a certain Standard, which may be international, European, Albanian, or other. Objectives and Outputs must be described in ways that enable the achievement to be measured against the plan. So Standards describe measures that can be used in that process. Every Objective will need Standards to be defined, unless the statement of the Objective (or Output) already contains a full definition of the Standards which apply to it. The definition of Standards should set out the Standard in full or be summarised such that a non-specialist

can understand them and otherwise be referred to in a public and accessible source where the full definition can be found. Public and accessible means a readily available document and/or a website. Users and potential users of services will want to know what to expect and they must be able to obtain the information. In the SAA implementation plan (available at http://www.miegoval/?fq=brenda&d=3&gj=gj2&kid=112) there is a long list of EC Directives related to the Environment that include quantitative, qualitative and timerelated standards and limits (see chapter 3.22 from page 285 onwards) These standards 20 Source: http://www.doksinet should be used selectively by PMTs to help readers understand those that are to apply to the programme objectives as presented 4. 1.9 Checklist for Standards 1. Do you have a quality measure for each Objective? This might be contained in the definition of the Objective 5 itself, or in the Standards or in a combination of both. 2. Do you

have data that will measure achievement of these Standards? If not, what steps must you take to obtain appropriate data? And what proxy measures or performance indicators can you use meanwhile? 3. Are the Standards quoted in full in the MTBP documentation? If not: are they summarised in the MTBP documentation so that a non-specialist can understand them; and are they publicly and easily available? Does the MTBP documentation identify this source? 1.10 What is a Project? A Project is defined (Operational Manual B.35C) as A related group of tasks that together produce one or more Outputs that will increase public assets A Project has a clear beginning and a clear end and usually involves some transformation. Constructing and bringing into use a new building would be a Project; so would a major improvement in existing buildings. Projects often involve large sums of investment resources, though they usually include a mixture of investment and running costs expenditures. Projects usually

need more than one year for their completion. 4 Note, in some cases the EU standards will be policy goals. This will be the case when those standards are not currently achieved and where the aim is to achieve them at some point in the future. In other cases, they will be used as ‘MTBP standards’. This will be the case when the EU standard in a particular area has already been achieved and when that standard is to be maintained whilst implementing some other aspect of environmental policy. 5 If referred to in the objective, it should be repeated and/or elaborated in the standards section of the submission as appropriate. 21 Source: http://www.doksinet The fact that investment expenditure is involved does not automatically define a Project. The work in question may be a Project; but it may be part of a Project and it may not be a Project at all. Nor does one contract equal one Project. A Project may include many tasks that need many separate contracts for its successful

completion. Example: Project 1: replace lifts in office block to be used by Directorate A. Project 2: complete refurbishment of office block to a standard that is fit for use by Directorate A Project 3: purchase equipment for office block to be used by Directorate A Project 4: purchase vehicles for use by Directorate A These are not independent Projects. On their own, Projects 3 and 4 are not Projects at all. They are buying things They may be four different contracts But they can be seen as Outputs of a single Project: Project X: Bring office block into use to a standard fit for use by Directorate A Output A: replace (number of) lifts Output B: refurbish (number of) offices or refurbish (number of) square metres of office space Output C: purchase (number of) items of office equipment Output D: purchase (number of) vehicles This gives a clearer picture of all the work involved in bringing the offices into use. It is easier to ensure that all the necessary work is included. (Is no work

required on electricity, water, IT network connections to workstations?) And it is easier to see how delay in one part of the Project can affect later tasks. For example, if the refurbishment of the offices is delayed, then the purchase of the equipment to go into the offices must also be delayed and the completion of the whole Project will be delayed. The same principle applies to small Projects of a similar character – for example, replacing window frames in all the buildings occupied by the budget institution. These can be grouped together in one Project and each separate building can appear as an Output. It is tempting to define Projects so that they last only one year. It makes it easy to define when a Project is regarded as complete. And it fits in with an annual schedule of contracting. But a Project should be defined in terms that match its own natural life from start to finish. This will probably mean two or more years When a Project lasts, say, three years, the question

arises of how to define the position to be reached at the end of years 1 and 2. The Project will contribute to the 22 Source: http://www.doksinet achievement of an Objective, which will be specific to each year. The Project will deliver Outputs that must be defined in SMART terms each year. 23 Source: http://www.doksinet There are several possible approaches to this: • It may be possible to quantify the amount of work to be completed in each year. If 2000 square metres of office space are to be refurbished over three years, then that might be 500 square metres by the end of year 1, a further 1200 square metres by the end of year 2 and the final 300 square metres at some point during year 3. You will also be able to produce a profile of the work to be completed at the end of each quarter. • It will usually be possible to identify key points in the Project that must be completed by a certain date if the whole Project is to be completed on time. These might be important

parts of the process such as signing a contract or completing a formal review of progress that can be signed off as satisfactory. These key points will occur at specific dates so you will be able to assign them to a particular quarter in your profile. • It might be necessary to say something like “complete 20% of the Project by end year 1”. This is obviously less precise and it must be possible to make a reasonable estimate of what ‘20%’ actually looks like. If you have good project management arrangements in place, it will be possible to do this. Producing a quarterly profile may be more problematic, but you should be able to make broad estimates that will enable you to evaluate whether the Project is running to timetable or not. A Project has a clear end point when its work has been completed. But the end of the Project is not the end of expenditure. All Projects have consequences for the nature and cost of normal business and this must be reflected in the planned

expenditure. Resources must be allocated to the Project and to the Outputs and/or Activities that will be needed if the Outputs of the Project are to be used effectively. An example: A Project is designed to build and bring into use a warehouse as part of the fishing port of Durres. The Project will arrange for the supply of services (water, electricity, roads etc) to the site, for the erection of the building to the appropriate standard (which will depend on what is to be stored there), the fitting out of the building (floors, equipment etc), the recruitment of people who will work in the warehouse and some project management. When the warehouse is ready for use, the Project is over Then there will be continuing costs. The people who work there must be paid; the maintenance of an environment that keeps the fish catches in good condition will need temperature and humidity control which will consume electricity; if the supply of electricity is uncertain, a generator will be needed; the

property must be kept safe so 24 Source: http://www.doksinet some security arrangements will be necessary; from time to time, equipment must be replaced and the building maintained and repaired. These are the running costs consequences of a Project. They should always be evaluated and included in plans. As, in our example, the warehouse is intended to store fish catches for export, and no plan is made for the employment of security guards, two possible consequences will arise. Either the fish will be stored there but it is probable that some of it will be stolen. Or, fish will not be stored there because of the risk of theft. In either case expenditure on the Project has not produced the desired result and it will not deliver value for money. So, if the work on bringing the warehouse into use is to be completed by the end of year 2, the running costs must appear in year 3. It is not sufficient to estimate the running costs when the Project is nearing its completion. The running

costs must be part of the planning right from the start. Example from international practice: • 1.11 Restoration of brown-field areas – This UK project, which lasted three years, established 1,000 hectares of community woodland with 40 km of footpaths. The costs included land acquisition, tree planting and maintenance and the development of access facilities. The funding for this project came in equal parts from public and private partners. Checklist for Projects 1. Are you absolutely sure that your Project really is a Project? Could it be described more accurately as one Output of a larger Project? Or is it just buying things, which is probably not a Project at all. Example: Under each programme in the 2009 Ministry MTBP submission, a project named ‘Expenses outside projects‘ is presented. This ‘project’ appears to be just a vehicle for making miscellaneous Ministry purchases. It is not, therefore, a project and the related Ministry expenditures should be properly

detailed under the relevant Outputs to which they will be applied (whether these are project outputs elsewhere or non-project outputs). Only projects that satisfy the checklist of this section should be presented in the Project section of the submission for the programme. In the case of the Water programme, as presented in the 2009 MTBP submission, for example, the entire programme consists of one project ‘Expenses outside projects’ with two outputs: • Legal Acts and regulations for water resources management • Entities monitored in 6 water basins 25 Source: http://www.doksinet The programme as structured is not transparent and does not appear to satisfy the requirements for presentation as a project. It also does not appear to have meaningful outputs (whether presented as project outputs or not). For example, in a programme dealing with water quality (as is the case here) the following output (among others) could be added: ‘Chemical on-site kits purchased to measure and

report content of nitrates in water basins according to ‘Directive 75/442/EEC on Waste’’ 2. Have you identified all the components that must be delivered if your Project is to be completed successfully? 3. Can you define these components in your Outputs? In the (fictional) environmental project ‘technical facilities to monitor gas emissions in major city centres’ a series of outputs of different economic nature may be required: a new building may be required if no empty space is available in existing premises (capital expenditure); chemical laboratories and chemical on-site kits need to be purchased and/or established (capital and recurrent expenditures); new personnel to man the laboratories will be employed (salary and social security recurrent costs). The absence of one of these outputs (and the related expenditure allocations) may hamper the successful delivery of laboratory tests or significantly reduce the quality of these tests (for example if there is a lack of

personnel, on-site testing may not be performed with the required frequency and or accuracy). 4. If you have a multi-year Project, can you define the position you plan to reach at the end of each year? The projects financed by donors tend to have project planning documents (e.g the World Bank PAD, Project Appraisal Document) that review the project design in detail. In these documents the work done during the identification and preparation phases is summarised and the project implementation schedule and its expected results are normally presented, together with annual costs. This information can be helpul in defining the planned annual achievement of multi-year projects in the MTBP submission. Domestic projects should follow the national public investment management procedures which have been designed according to international good practice. They give a clear picture of the annual costing and achievement of multi-year projects. As for project monitoring, the MTBP formats should be

used not only to report to the Government’s central agencies but, as far as possible, also to donors, creating a single reporting system. 26 Source: http://www.doksinet From an analysis of unit costs, it is possible to verify whether some programmes plan outputs whose actual financing requirements are larger than the planned expenditure allocations under the MTBP three-year period. This practice of ‘stretching resources thin’ introduces significant management risks, in that the output may not be completed, face completion delays associated to costs overruns or force a reduction of service quality standards to economise on costs. Example: The unit costs for the improved management of existing forest described as ‘cleaning forest surface and creating fire-prevention corridors between parcels’ has a unit costs of 37,000 Lek per hectares, or about 400 USD. Whether this cost is adequate or not depends on prevailing labour market conditions in Albania and the expected work

specifications. The issue here is to ensure that the analysis of unit costs prevent the underestimation of the actual expenditures necessary to ensure adequate fire prevention. 5. Have you identified the running costs that will be incurred after the Project is over? Staying with our example of chemical laboratories, the initial purchase of on-site chemical kits as part of the project start-up may provide a stock of kits sufficient for the first year. In the following years, an output for the regular purchase of those kits must be envisaged as part of the project running costs. Otherwise, the laboratories would not be able to operate once the start-up stock has been utilised. 27 Source: http://www.doksinet 1.12 What is an Output? The Operational Manual (B.3536) defines Outputs as The goods and services to be produced to contribute to the achievement of medium term Objectives and the longer-term Goals Outputs should describe the concrete actions that will deliver the Objectives. The

ideal Output is SMARTER (Operational Manual B.3542 as further developed in later work): • • • • • • • Specific Measurable Achievable Realistic Time-bound Evaluated Rewarded A distinction should be made between Output Name and Output Description. The Output Name should be short and summarise what the Output is intending to achieve. The Output Description should be longer and should explain more precisely what the Output seeks to achieve. ‘Loans provided’ would be a good example of an Output Name in the Support to Fisheries Programme. ‘<Y> number of soft loans for new fish production directed towards exports’ would be a good example of an Output Description. Outputs should describe, as far as possible, the situation that will exist when the Output has been implemented – at the end of the year in question or at some specified date during the year. Avoid describing an intermediate stage Example Programmes often include some kind of training. This might be a

short course of a few days or a major degree programme that takes years to complete; training might be provided in-house or commissioned from an external provider. In all cases, the aim is the same – the trainees/students should emerge with skills and/or knowledge that they did not have previously. And the successful trainees/students receive a qualification or certificate that provides evidence of their success. Training needs teachers, training rooms and training materials. But these are inputs not Outputs. 28 Source: http://www.doksinet The teachers, rooms and materials create training capacity. A measure of training capacity is useful in identifying the maximum numbers of training days that can be provided with this combination of resources but it gives no information on how many days are actually used. This is an intermediate stage A measure of the number of trainees/students who apply for or enrol on a course gives a more accurate measure of the original demand for

training. But it provides no information on how many people completed the course successfully. People may fail to complete a course for a variety of reasons – illness, family reasons, financial reasons, they are recalled to work urgently or their work for the course is not of a satisfactory standard. This is a further intermediate stage The best definition is the number of people who complete a specified course well enough to be awarded a qualification/certificate of attainment. This is a good indication of what the investment in training has produced. Because training courses can differ so much, each training course should probably be described in a separate Output. Some final results are difficult to define in concrete Outputs. Examples from international practice: Quantity • <<X>> hectares of protected forest areas that have been gazetted in 2011 • Hazardous substances – <<X>> number of environmental risk assessments of: (i) industrial chemicals; and

(ii) agricultural pesticides completed in 2012. (They could be two separate outputs if the expenditure allocations are not too small.) • Recovery of threatened wildlife – <<X>> number of recovery plans being prepared or already in operation in 2011; <<Y>> number of threatened species listed and with recovery plans in operation • Participatory Environment Grants – <<X>> number of community projects funded in 2011 Quality • Percentage of environmental recommendations successfully implemented in 2011 under the strategic assessments of fisheries management • Greenhouse Gas Abatement reports – <<X>> number of completed reports appropriately targeted in 2012; • Participatory Environment Grants – 80% of individual grants paid that are consistent with the terms and conditions of funding (based on monitoring reports) 29 Source: http://www.doksinet 1.13 Checklist for individual Outputs 1. Does the Output describe (more or

less) identical entities? If the Output definition includes two or more different things, it cannot be measured or evaluated. Example1: ‘Specialists and trainers trained on new chemical testing’. This (fictional) output would need to be split into two different outputs, i.e ‘<<X>> number of trainers trained on chemical testing’ and ‘‘<<Y>> number of specialists trained on new curricula on chemical testing’’, as the training for trainers is likely to be more complex, longer in duration and more expensive. So, any outputs that are superficially similar but vary in unit cost by, say, +/- 10% are probably different Outputs. Example2 from the Fishing Programme: The works for fishing facilities in the two different seaports of Durres and Vlora have been correctly kept distinct in the outputs as specified in the 2009 MTBP submission as the activities and the planned expenditure allocations will differ sufficiently to make the outputs distinct. Moreover,

each of these outputs could be further divided into several outputs in line with the expected milestones of the works to be carried out. (See the example on the next page for more details). 2. Are the units in which the Output is measured described precisely? ‘Number’ is not sufficient. Number of what? - people? documents? clients? families? So, ‘Number of loans’ would be an appropriate unit of measurement for the Output ‘<Y> number of soft loans for new fish production directed towards exports’ and ‘Refrigerated storage facilities’ would be an appropriate unit of measurement for the Output ‘<Y> number of refrigerated storage facilities created in proximity of fishing ports’. In the 2009 MTBP submission for the Environment Protection programme all Outputs except one have a unit of measurement expressed as ‘number of progress reports’ and the target specified for each is ‘one report per month’. In the submissions each output is linked to a project

of the same name. For example in 2009 the project ‘Identification and implementation of adaptation measures for climate changes in the delta of rivers Drin and Mat’ has one single output named ‘Monitoring system for climate changes and their impact the on ecosystem of rivers Drini and Mati’. The unit of measurement is ‘number of progress reports The unit of measurement is weak because it does not provide the reader with a reliable measure of the achievement of the programme policy. A progress report that is extremely negative on the project results, would count as an output achieved and would suggest (by extension) that the related objective is also on course to being achieved (even if the progress report suggests that it isn’t!). 30 Source: http://www.doksinet Let’s take an example. The Project ‘Integrated Management of the Eco-system in the Prespa lake basin’ has ‘Integrated management of cross-border Lake Prespa’ as the only Output . The unit of measurement

is ‘progress reports’ and the target is 12 A better representation of the project results would be to break down the only output into a number of different components (presented as outputs) along the expected project milestones, for example: • Specialised unit created to monitor activities along the lake; • Purchase of on-site chemical laboratory to regularly monitor toxic elements in the lake basin; • Seminar organised to present a 10-year plan for the sustainable management of water resources of the basin; • Awareness campaign to sensitize the population on the sustainable use of water resources of the basin; • Number of cross-border agreements signed on different environmental areas, water management, fishing, industry discharge limits, tourism standards; • and so on. 3. Does the name of the Output, the description or the unit of measurement include abbreviations or acronyms that mean something to you but are incomprehensible to anyone else? The content of the MTBP

documents will be discussed by many people outside the budget institution itself. And the plans will become public documents because they are included in documents sent to the Assembly and they are published in Ministry Integrated Plans. Explain all abbreviations and acronyms when they first appear. In the 2009 MTBP submission three acronyms have been used: ‘Dshp’, ‘ECAT Tirana’ and DCM, which may not be known by an average reader. 4. If you used an Output definition last year, is it still appropriate? Some Outputs will be valid for several years because they describe accurately work that is continued in every year. Regular production of reports or statistics would be an example Other definitions must change as other circumstances change. If you found that you could not monitor the Output, then you should look again at the definition so that you will be able to monitor progress. Example: ‘Local staff trained on decentralised services’ may be an accurate name for an Output

when the process of decentralisation is in progress and the Output number relates to number of local staff trained on services that had been transferred to local government management at the end of the year. Now, once the process is completed, the Output is obviously concerned with something else. The name of the Output should reflect the new circumstances and be changed. In our case of Prespa lake basin, for example, after 31 Source: http://www.doksinet the training the staff would be expected to produce regular reports on the water quality. The number of these reports would make a good output for the following years (subject to an appropriate quality standard for each of these reports). 5. Does the Output definition include a quality Standard – either directly in the definition itself or indirectly by reference to a Standard? Example : ‘Better administration of the forest and pasture resources’ is an output that has an implicit standard in the word ‘better’ (leaving

aside for the moment the fact that the output as specified here is not SMART). The problem is that this standard is open to interpretation: how to define ‘better administration’? An appropriate standard could be, for example, an unchanged ratio of pasture hectares to forest hectares over the years (although it would need to be specified in conjunction with an improved SMART presentation of the Output itself). 6. When the Output definition includes a change – a percentage, or a reduction or increase in numbers – is the baseline that will be used for comparison clearly described? Example: ‘Reduce absenteeism of full-time employees by 3 percentage points compared to the figure of <<X>>% in 2010’ but not ‘Reduce absenteeism by 3%’. 7. Can the performance measure be interpreted unambiguously? If there is possible ambiguity, what other sources of information are available to help make a reliable interpretation? Example 1: If an Output deals with the handling of

complaints, and the number of complaints falls below the expected number, is this good news or bad news? It would be good news if the reason for the shortfall were greatly improved service; it would be bad news if the reason were inadequate publicity about the complaints mechanism or service so bad that clients did not believe that complaints will not be investigated seriously. Example 2 under the programme ‘Support for Fisheries’: Output “New fishing regulations (three regulation books)” appears in the 2009 MTBP submission. The targets for the units of measurement, which over the years are 2, 17 and 250 appear to contradict the specification of the output itself (which requires the production of 3 regulation books). The title of the output, its description and the unit of 32 Source: http://www.doksinet measurement should be consistent and comprehensible to the reader. This output could, for example, be divided in two: • Regulations introduced (3 sets in Year 1) •

Inspections conducted to ensure compliance with regulations (17 and 250 in Years 2 and 3 respectively). 8. When you tried to produce a profile of your Outputs, did you find that you could not do it? (See Appendix B.3A of the Operational Manual for examples of profiling) Some Outputs are produced only once in the year and so only have to appear once in the profile. Most Outputs are produced in the majority, or all, of the months If progress is to be monitored, then there must be a plan for how many Outputs will be produced in each quarter. If you find you cannot do this, it is probably because the Output is not expressed in the appropriate units. Example: ‘Improve working conditions’ is a badly expressed Output. It cannot be measured at all And because it cannot be measured, it cannot be profiled, monitored or evaluated. It is not SMART or SMARTER. An Output such as ‘bring 4 offices in (name of) building to a standard suitable for the safe use of IT equipment’ can be measured

and evaluated. There may be other Standards that define the work – such as the amount of floor space for each work station. The Output can then be expressed in terms of offices brought to that Standard or, better still, the number of works stations brought up that Standard. And the plan for achieving this Standard can be profiled. Example: Going back to our example of number of progress reports produced in a year, this Output can be easily profiled, for example 3 reports every quarter. Yet, in this case as explained above it provides weak information in terms of signalling whether an objective is on course. This example shows that good common sense must be applied when choosing a unit of measurement that can: (i) be profiled; and (ii) provide useful information on results achieved by the planned policy. 9. Are data available that will measure this Output in the terms in which the Output is best expressed? For monitoring purposes, data will be needed at various points through the

year. If implementation of the Output continues through the year, then quarterly data are needed. In other cases, data must match the profile of implementation (See Appendix B.3A of the Operational Manual for examples of profiling) If data are not available, what measures must be taken to create a regular supply of appropriate data? And what approximate measures can be used meanwhile? In the longer run, the definition of Outputs should not be distorted by the availability (or non-availability) of data. Statistics should be the servant of the policy, not the master, and should be adapted if necessary. This may take a while and pragmatism is needed in the meantime 33 Source: http://www.doksinet Example: An Output may relate to the provision of information about a public service intended to reach some specified target audience – say, industries on newly introduced environmental standards. The only certain way of establishing whether people have received a certain item of information

is to ask a statistically valid sample of them whether they know about it and where they obtained the information. But surveys of this kind are complex and expensive and it may not be possible to conduct one frequently. It is desirable to plan to conduct one at feasible intervals Meanwhile, a proxy Output will have to suffice. An Output that describes the production of a given number of leaflets about a specified subject will give be broad indicator of the effort taken, but nothing more than that. An Output that describes the distribution of a given number of leaflets to a specified number of locations nationwide (say, municipalities and communes or Prefectures) will be a better indicator of whether a leaflet was available locally. Neither will reveal whether the intended audience saw the leaflet or, if they did see it, they understood the contents. 10. Look at the trend over the 4 years of the MTBP Does the pattern of units to be implemented, of total expenditure and of unit costs

look plausible? Investment expenditure comes in big chunks in some years only and so the pattern of investment expenditure can be very variable. But variability is not expected in other expenditure A trend should reflect expected levels of inflation, or planned changes in salaries or the running costs consequences of new work or other known changes that will influence the volume of work and/or the combination of resources needed to complete the work. The calculations on the report ‘expenditure by Output’ show the percentage changes from one year to the next. If you detect variability, can you explain it? Example: The Output ‘environmental hot spots eliminated’ as presented in the 2009 MTBP submission shows an implausible trend. The unit cost in 2010 is 333,000 Lek, while in 2011 it increases by almost 5 times, to 1.5 million Lek It doubles again in 2012 If there is a difference in the type of intervention in different hot spots from one year to another, there are two options:

i) the difference is explained in the description of the output; ii) a different output is presented for the years 2011 and 2012 where the variation in expenditures is the most significant. 34 Source: http://www.doksinet Produkti A Eleminimi i ndotjes ne pikat e Nxehta mjedisore Shpenzimet e Planifikuara 2010 – 2012 Njësia Viti Aktual 2009 Sasia Nr 2010 2011 2012 12 12 12 12 Totali i Shpenzimeve mijëra lekë 30.420,0 4.000,0 17.400,0 33.700,0 Shpenzime për njësi mijëra lekë 2.535,0 333,33 1.450,0 2.808,33 1.14 Checklist for the Outputs of a Programme taken together 1. Do the Outputs cover the full range of the work to be delivered by the Programme? Can all the resources available to the Programme be assigned plausibly to one or more of the Outputs? In particular, is the routine day-to-day work (which can take up so much of the time) adequately covered? Most of the programmes as presented in the 2009 MTBP submission do cover the routine day-to-day

work, like paying salaries and basic recurrent operating expenditures. Yet, the way expenditures are linked to Outputs is often problematic. For example the Environment Programme links expenditures to the Output: ‘Private companies inspected to enforce environment legislation’ which has three activities specified in the submission o Activity 1. ‘Accomplishment of the ministry matrix and SAA plan’ o Activity 2. ‘Inspections to monitor licensed private companies’ o Activity 3. ‘Support for ECAT Tirana in support to the respective DCM’ Besides the use of acronyms (that should be avoided or spelt out), the above Activities are more in the nature of Outputs rather than Activities. For example: • the ECAT Agency is responsible for a set of services aiming at assisting local governmental and non-governmental organizations, as well as industries and educational institutions, in the development and implementation of projects, programmes of action, and policy instruments to

improve the environment. All these could be Outputs themselves. • Accomplishing the ministry matrix would be expected to entail a series of deliverables, like number of acts introduced in line with the Acquis Communautaire and master plans for different environmental subsectors, which could be presented as outputs. In this case, therefore, the Outputs as presented in the 2009 MTBP submission do not cover the full range of work to be delivered by the programme. 2. Do the Outputs include all the relevant work in the: • Government Programme • National Strategy for Development and Integration • Sector strategy 35 Source: http://www.doksinet • • Implementation Plan for the Stabilisation and Association Agreement, NATO agreement and so on for any other published document that describes policy that is relevant to this Programme. A review of the Environment Strategy as reported in the 2009 MIP was made as part of the preparation of this Sector Guide which showed that some of

the priorities articulated in the Strategy were not reflected in the 2009 MTBP submission. In the programme Environment Protection, the 7 outputs included in the 2009 MTBP submission and do not cover the whole range of policy priorities set by the Government. For example, there are no outputs that relate to: (i) the air quality and its improvement; (ii) the frequency of measuring the environment indicators throughout the country; or (iii) inventory of all activities and equipment that use LHO, ozone depleting gas. Each of the above statements as presented in the Strategy would be expected to have related outputs in the MTBP submission. For example two (fictional) outputs that could potentially be used to represent the Strategy in the MTBP submission could be: (i) ‘<<X>> number of inspections completed to control economic activities using ozone depleting gas’ (this would be a different, more specific output from the one related to the general inspection of industrial

activities); (ii) ‘<<X>> number of mobile laboratories purchased for the detection of toxic gases in the atmosphere of the major city centres’. 3. Can each Output be linked directly to an Objective? Does each Objective have Outputs that together will be sufficient to fulfil the Objective in each of the MTBP years? Example: It appears that the following objectives in the 2009 MTBP submission for the programme Environment Protection do not have corresponding outputs: • ‘Maintain biodiversity through the establishment of protected areas’. In the case of this objective, an output (among others) on the number of new natural parks established could be introduced; • ‘Informing the general public on the results of environmental monitoring. In the case of this objective, an output, among others, to finance <<X>> number of awareness campaigns could be introduced. 4. If you have made an Additional Request (Operational Manual B35132), does the unit cost of

the additional Outputs you will deliver bear a plausible relationship to the unit cost of the Outputs that are already included in your budget plan? The unit costs may not be identical. There may be some economies of scale But there should be some similarity. Example: 36 Source: http://www.doksinet Output: Number of chemical tests carried out at river mouths to identify toxic content in water. (cost expressed in ‘000) Year 0 Year 1 Year 2 Year 3 Number of planned outputs 110 115 120 125 Unit cost (cost expressed in ‘000) 0.28 0.29 0.62 0.28 Additional number of outputs 115 120 125 Unit cost of additional outputs 0.12 0.05 0.02 There is an obvious anomaly in year 2 of the plan. The unit cost of 620 Lek breaks an otherwise plausible sequence. But there is a bigger problem with the additional request The unit costs of the additional Outputs bear no clear relation to each other or to the unit costs of the Outputs in the original plan. It is not possible to believe the story being

told here. The number of Additional Outputs proposed is the same in all years as the number of Outputs in the original plan. This is probably where the root of the problem lies The number has not been amended to show the additional Outputs to be delivered. 1.15 What is an Activity? The Operational Manual (paragraph B.561) defines Activities as The things that will be carried out to produce an Output. There may be and usually are several Activities to an Output. Activities are the basic building blocks in the plan for carrying out policy intentions. Resources must be attached to Activities by article. So, Activities define the resources that must be assembled to carry out one task that will contribute to the delivery of the specified Outputs in the specified numbers to the specified Standard. A distinction should be made between Activity Name and Activity Description. The Activity Name should be short and summarise what the Activity intends to carry out. The Activity Description should

be longer and should explain more precisely what the Activity intends to carry out. ‘Purchase of land’ would be a good example of an Activity Name in the Support to Fisheries Programme. ‘Purchase of land to be used for the creation of refrigerated storage facilities’ would be a good example of an Activity Description. There is no need to go into minute detail in defining Activities. At some point, your budget plan will be translated into individual work plans that show what must be done every month or, even, every week. But this degree of detail is needed only for your own 37 Source: http://www.doksinet internal management purposes. Small tasks of a similar nature can all be grouped together in one Activity Example: A common omission in defining Activities (and sometimes Outputs) relates to the time (and, therefore, resource) consumed by tasks relating to dealing with correspondence, preparing policy advice, attending meetings, consulting with stakeholders, and similar

things. Because these tasks are so common, and so familiar, they tend to be taken for granted. But they take time and so cost money They can all be put together in one Activity. The relationship between Outputs and Activities Every Output must have at least one Activity directly linked to it. An Output with no Activities can have no resources attached to it. The Activities should be sufficient to achieve the Output in the specified numbers and to the specified quality. When you take action to close financing gaps (Operational Manual B.3596) you will make changes to one or more Activities. They may have more resources allocated to them or fewer resources or they may be deleted altogether because they are not affordable. Any such changes will have an impact on the Output They will probably have an impact also on the other Activities linked to the same Output because these will be proportionate to each other. These impacts must be reflected by making appropriate adjustments to the Output.

These may be adjustments to the quantity that will be produced, or the quality or both. There may be circumstances when reducing the resources available for an Output will make the Output non-viable – there will not be enough resources to function properly at all. If this is the case, delete the Output and allocate the remaining resources to an Activity and Output where the resources will be productive. Example: An office has to be open to the public for 8 hours a day for 5 days a week, and 4 hours on Saturdays, for 50 weeks a year (this allows for public holidays). This needs an absolute minimum of 1.3 people (and a lot of extremely careful scheduling) This will provide just one person in the office at all times. If the resource to the Activity is reduced so that only one salary is available, then the office cannot be open for the intended hours and will be closed completely whenever the one person is unavailable because of holidays or sickness. So, the Output has to be redefined so

that the service to be provided can be delivered with the resources actually available. If a minimum of two people are always needed in the office to cope with the expected workload, then 2.6 people are needed to cover all the intended opening hours If the 38 Source: http://www.doksinet resources available will provide only 1.5, then the Output is not viable The service cannot be delivered with that level of resource. 1.16 Checklist for Activities 1. Can you plausibly allocate all the available resources to the Activities that you have identified? If you find that you have some money ‘left over’ then you have probably failed to include an Activity for which you need resources. Look back through your Activities and, if necessary, your Outputs to identify what you have omitted. Do not load any ‘left over’ resource onto one Activity or one Output. It will distort the unit costs and will produce variable patterns of cost that readers will not understand and which you will be

unable to explain. 2. Is every task you need to carry out included in an Activity somewhere? All the available resources are allocated to Activities. Anything that does not appear in an Activity does not exist in any practical sense. It may be mentioned scores of times in Strategies, policy documents, Decisions of the Council of Ministers, speeches or similar. But if it has no money it will not happen. Example: In the programme Support to Fisheries, as presented in the 2009 MTBP submission, there are no Activities or Outputs that link to the strategic priority of increasing the commercialisation of Koran fish, crabs and other imported species (this priority is stated in the MIP). Activities could include (among others), for example, the introduction of tax rebates for new commercial operations, the provision of promotional support services to favour fish exports and the provision of free technical expertise to enterprises to comply with EU food safety regulations (all of which would

also require one or more relevant outputs 6). 6 In practice, of course, the outputs associated with the priorities as stated here would be specified first and then the relevant activities for delivery of those outputs would be specified and costed. 39 Source: http://www.doksinet 3. Is your Activity and/or its linked Output still viable with the resources you finally allocate to it (after all funding gaps have been closed)? Example: The Output ‘<<X>> number of grants provided to new energy saving projects in the private sector’ 7 shows an anomaly in unit costs in year 2011. A significant reduction of expenditure allocations from the previous year level and the limited amount of funds available per single grant, may indicate that the activity ‘launching calls of proposal for grant applications’ linked to this output would no longer be viable in 2011. If this is the case, the number of grants to be financed in 2011 should be reduced proportionally to make the

average level of individual grant financing appealing to potential applicants. 4. Look at Chapter 31 on apportionment It may help 5. If you really cannot describe the Activities that deliver an Output in any other way, use one Activity for people-related costs (Articles 600 and 601), one Activity for running costs (purchase of goods and services Article 602) and one Article for investment (Articles 231 and 232). This is not perfect, but it is a good place to start Example1: Following the above suggestion, the Activity ‘Implementation of the project of use solar panels for water heating’ (as presented in the 2009 MTBP submission under the Output ‘National programme for the use of solar panels’), could be re-elaborated in the following set of (fictional) activities: • Preparation of the National Programme (salaries of staff) • Mapping areas for the introduction of the first batch of solar panels (purchase of consultancy services) • Monitoring the results of the first batch

of solar panels in terms of energy savings (salaries of staffs) • Grant scheme for financing local projects (transfers and/or investment) Example2: An output that refers to capital expenditures such as ‘<<X>> number of new offices built’ may have a standard set of activities linked to the project cycle management: • Prepare Feasibility study and site drawings • Procurement procedures • Construction works • Work supervision 7 40 This is a fictional example; it is not part of the Ministry MTBP submissions. Source: http://www.doksinet 41 Source: http://www.doksinet 2 Some issues that commonly arise 2.1 Recruitment, salaries and people-related expenditures People are the most valuable resource that a budget institution has. In some budget institutions, salaries and related costs such as social insurance form a very high percentage of total expenditures. But the fact that they are precious and expensive resources does not make paying people an Output.

People are a necessary contribution to the achievement of an Output, not an Output in their own right. So, mostly, salaries and other people-related expenditures are included within Activities where they are clearly identifiable in Articles 600 and 601. It is possible that the recruitment of new personnel might be an Output within a Project – that is, recruitment is one component necessary to the successful completion of a Project. After the end of the Project, paying salaries becomes a normal part of everyday business and is treated as described above. 2.2 The treatment of investment expenditure Major capital works, such as new building or large-scale refurbishment, are Projects. They meet our definition of a Project as a set of actions with a clear beginning and a clear end that together bring about some transformation. Other investment expenditure is not a Project. Buying things – furniture, equipment, vehicles – is part of normal business and continues in every year, or in

most years. It is just like buying other goods and services. The purchase is a necessary contribution to the achievement of an Output and is therefore an Activity. If there is a centralised department that provides some services for the whole Ministry – fleet maintenance or IT – then the purchase of categories of equipment may be an Output. In our example here, that would be purchase of vehicles and purchase of IT equipment. Any further details (types of vehicles or types of IT equipment) can be shown in Activities. 42 Source: http://www.doksinet 2.3 The content of Programme 111 The general principle is that all the work that relates to a specific area of work should be located within in the programme related to that work. This includes the salaries of all the staff that work on the subject, linked subordinate institutions, training specific to the subject of the programme and Projects including Project supervision. Programme 111 should include only the work that supports the

Ministry as a whole. That work includes various professional Activities and various support Activities. Generally, the numbered items on the following list will Outputs and the bullet points will correspond to Activities. This may vary, depending on the precise nature of the organisation in each budget institution. The standard list is: 1. Senior management: • Ministers, Deputy Ministers and General Secretary and their Cabinet, secretaries, drivers and cars. 2. Financial services: • Production of reports for the whole Ministry on expenditure and outputs for monitoring and accounting purposes • Collate MTBP plan for consideration by GSBI and Ministry of Finance • End of year accounts • Payroll • Procurement 3. Human resource management • Recruitment in accordance with Civil Service Law • Production of appraisal reports • Training on subjects relevant to the whole Ministry (e.g induction training, public administration, language skills) 4. Legal services • Production

of law and other legal instruments • Legal implications of EU accession 5. Planning and research • Production and dissemination of statistics • Special studies 6. Internal audit This should be included in Programme 11 for planning purposes Audit should always report directly to the Minister/Head of the budget institution 43 Source: http://www.doksinet • • • • Audit investigations Audit reports Professional training of auditors so as to meet European standards Travel for auditors 7. Public relations (unless this has already been explicitly included in senior management) 8. International relations • Membership of international bodies • Arranging official visits abroad by Ministry staff and official visits to Albania by representatives of foreign governments and institutions • International travel 9. Provision of general services, physical environment and infrastructure for staff of the Ministry • Building construction, adaptation and maintenance • IT and

communications • Furniture and equipment • Utilities (water, electricity, generators) • Office consumables (e.g stationery) • Protocol • Travel (excluding international travel and internal audit) • Security To assist the Programme Management Team in presenting the above standard items in programme tree format and to assist in planning service delivery and presenting this plan as an MTBP submission, Annex B presents a model of a tree diagram for Programme 1110 and a corresponding table which explains in more detail each component of the tree. This model will need to be adapted to the specific service delivery and planning requirements of Programme 1110 for the Ministry of Environment, Forestry and Water Management 44 Source: http://www.doksinet 45 Source: http://www.doksinet 3 Some technical issues that might be helpful 3.1 Apportionment Expenditures must be allocated to Activities and thus to Outputs. A unit cost of an Output is then calculated and forms a key part

of the MTBP reports. Much of the time, this allocation of expenditures is straightforward. When a clearly identifiable Sector, or agency, is wholly responsible for the delivery of one Output (or Activity), and one Output (or Activity) only, then the resources needed to deliver the Output (or Activity) will be easily identifiable. It is less straightforward when the same group of resources (people, equipment etc) is used to deliver two or more Outputs or Activities. In this case, the resources must be divided among the Outputs (or Activities) as accurately as possible. This is apportionment. It is the process of estimating what proportion of the total expenditures should be allocated to each Output (or Activity). Example A unit is responsible for issuing licences, for renewing licences and for recording changes of circumstances. All the people in the unit may work on any of these Activities The first step in the process is to identify the volume of resources needed to complete one task

- to issue one licence, to issue one renewal and to record one change of circumstance. If this is not already known, then a simple observational exercise will produce an average figure. Observe the work being done for a period of time, note how long it takes to complete each task and then calculate an average time for each task. Let us assume that the results of these observations are: Issue a new licence: 120 minutes Issue a renewal: 80 minutes Record change of circumstances: 25 minutes The second step is to estimate the number of licences, renewals and changes of circumstance that will arise. Looking at the pattern of applications in the past should reveal a trend and will enable a calculation of the ratio of renewals and changes to the number of licences. 46 Source: http://www.doksinet Let us assume that these estimates are: New licences: 2000 in year 1 Renewals: 900 in year 1 Changes of circumstance: 460 in year 1 The hours needed through the year can be calculated. No-one can

work for every second of the day, so add 25% to allow for slack time. This produces the total number of hours needed. Divide by 40 to calculate the total number of weeks of work that will be needed. Divide by 43 to calculate the total number of people. The figure of 43 working weeks per person takes account of public holidays, holiday entitlements, average sickness absence and non-availability because of training. The actual numbers will come from your own records. In this example, the assumptions are: Public holidays: Holiday entitlement: Sickness absence: Training: 2 weeks 4 weeks 2 weeks 1 week This gives the number of full-time workers needed to do this work and this work alone. In our example, this is 4 workers. (39 rounded up) Other costs, such as running costs, can be allocated pro rata. So, issuing new licences would receive 74% of the total running costs. But see the note below on de minimis before you do a lot of work. 47 Source: http://www.doksinet Worked example of

how to calculate staff requirements Type new licence renewal change of circs Number per year Minutes per item Total minutes per year 2,000 900 460 120 80 25 240,000 72,000 11,500 Total minutes +25% 300,000 90,000 14,375 total minutes 404,375 total hours total weeks (40 hours per week) number of full-time workers needed if they do nothing else 48 Total Total Full hours weeks Time per per year Workers years needed 5,000.0 125.0 2.9 1,500.0 37.5 0.9 239.6 6.0 0.1 % of total 74.2 22.3 3.6 6,739.6 168.5 3.9 100.0 Source: http://www.doksinet Example: A policy Sector with 5 people works on three Outputs. Nobody works on only one Output. One person works on all three Outputs; the others work on two Outputs In a policy Sector, people-related costs will be a high percentage of the total costs, so it is very important to allocate them accurately among the Outputs. If you do not already have some estimates of how much time each person spends on each Output, then collect some data

by asking everybody to keep a diary for a period. This does not have to be complicated. Produce a form that divides the working day into hours and has one column for each Output. At the end of every hour, make a note of how you spent the previous hour. This will take only a very few seconds At the end of the sample period, calculate an average for each person for each Output and use that average to apportion expenditures. 3.2 De minimis It is possible to allocate all expenditures among Activities and Outputs. But sometimes the sums involved are so small that it is not efficient to spend a lot of time making the calculations. Example: cars Where a person, or a Directorate, has the exclusive use of a vehicle, then the cost of that vehicle, including fuel and the cost of the driver, can easily be allocated to a specific programme. It might be possible to apportion the costs among the Outputs An inspectorate needs to travel to do its work. So the cars it uses should be included in the

expenditures allocated to the Outputs of the inspectorate. Where a fleet of cars is maintained for used, as required, by everyone in the budget institution, then it is probably not worthwhile to separate out the expenditures into all Programmes and Outputs. The expenditures relevant to the fleet can be shown as a general service in Programme 111. Example: electricity If a building is occupied by a single Directorate, or by a single subordinate institution, then the expenditure on maintaining the building, including the expenditure on electricity, can easily be allocated to a Programme. It may be straightforward to apportion the costs to Outputs using the percentage of total workers employed on the Output. (see the second example in section 41 on apportionment above) If a building is occupied by many Directorates and sectors, working on lots of different Outputs, then this procedure is too time-consuming to be worthwhile. Building maintenance can be shown as a general service in

Programme 111. 49 Source: http://www.doksinet 4 Evaluation: performance measures and performance indicators Throughout this Guide you have been encouraged to define Goals, Objectives and Outputs in terms that can be measured. This is essential if plans are to be effectively monitored and evaluated. Monitoring requires data that can tell if the intended progress is being made. Evaluation means making judgements about the relationship between the planned progress and the achieved progress. Is progress satisfactory? Do plans have to be changed because actual achievement is different from planned? Are the expenditures affordable? Can any differences between planned and actual performance be explained? These judgements can only be made if there are data about the expected quantity AND expenditures that can be compared to the actual quantity AND expenditures. One item of data without the other is meaningless. Example: Output: install IT equipment at 200 workstations by end of year 0 The

profile for this is: Quarter 1 Number of workstations Expenditure 000s leke Quarter 2 Quarter 3 Quarter 4 20 70 80 30 200 700 800 300 Total for year 0 200 2000 At the end of quarter 2, the equipment has been installed at 100 workstations. This is more than expected. On its own, this looks good At the end of quarter 2, 1,200,000 leke have been spent. This is more than expected but the increase in expenditure is not proportionate to the increase in the number of workstations. The unit cost is 12,000 leke and not 10,000 leke as planned This is not good. If this unit cost is maintained, the 200 workstations cannot be completed within the budget. 50 Source: http://www.doksinet Several choices are now available – reduce the number of workstations; take action to reduce costs; divert resources from other Outputs. (The procedure for making, approving and documenting the choice is described in detail in Chapter 7 of the Operation Manual). For evaluation of this kind,

performance measures are needed. Measures can produce precise data. This road is exactly 172 kilometres long (and not 171or 173); exactly 13 draft Decisions of the Council of Ministers were submitted to the Council of Ministers in the first 6 months of the year; there were exactly 317 places in residential care homes for elderly people at the end of September and so on. Measures describe precisely what happened in the past. They can be used to define precise targets for what should happen in the future. There are circumstances when performance indicators are useful. Performance indicators do not necessarily measure precisely. But they can provide an additional dimension to the information provided by measure; or give an indication or suggestion about a general direction of progress; or about what needs further investigation. Performance indicators describe the past. They are rarely useful for setting targets for the future. Example: The purpose of providing technical services to fish

companies to achieve food safety standards is to enhance the possibility that they can penetrate the European market with their product. The actual job of the technical services is to develop and deliver seminars and workshops that a specified number of private operators each year successfully complete. Outputs that define this are appropriate to the programme ‘Support to Fisheries’ in the MTBP submission. But this says nothing about succeeding in the EU export markets. Technical services are only one part of a complex picture that determines whether producers will find access to the EU market for their fish produce – the quality of the product, the importers’ attitudes to Albanian products, the availability of export credit line from Albanian private banks and Government fiscal incentives. Responsibility for influencing these lies outside the Ministry’s service delivery responsibilities (with the exclusion of Government’s incentives) and cannot therefore be included among

their Outputs. Whether producers have consistently succeeded in finding the right export market for their products after applying the necessary food safety standards can only be known at some point in the mid - to long-term future. It is not a short-term measure So, it is not a suitable topic for setting annual Objectives. But if the number of producers which have obtained an export contract within six months from the application of food safety standards is recorded, this will provide a measure of whether the fish exporting trend for Albanian manufacturers is moving in the desired direction. It is useful because it takes us further towards evaluating whether the technical services have achieved their ultimate aim of increasing fish exports. It does not, by itself, identify which of the many contributory factors have influenced the trend. 51 Source: http://www.doksinet But it gives an indication of which factors merit further investigation if it is examined alongside other data.

Some performance indicators are measures that do not really measure the correct object. But they are used because the correct object is difficult to measure or is measured only at long intervals. We have already seen the example of publishing leaflets. Measures of production and distribution are used as proxies for the real object which is the receipt of information by the target group. So, although these measures are precise – the exact number of copies produced or distributed – they are only indicators of success because they do not tell us about what we really wanted to achieve. Such measures should therefore be treated with caution. And surveys that actually discover whether the target audience received the information should be conducted when possible. Surveys provide the essential additional dimension Any action intended to improve customer service falls into this category too. Action to train staff, to make offices more accessible, to advertise the services, to increase

opening hours and so on can be measured. But the measures tell us about the scale of the efforts to improve service. They do not measure whether the clients thought the service had improved. We can only discover that by asking them These measures are indicators. Alternatively, complaints can be a proxy measure of customer dissatisfaction. But though complaints will reveal how many people were dissatisfied, it is not safe to assume that all other clients were satisfied. They may have been dissatisfied but deterred from complaining for a variety of reasons. And what about rewards? We have covered the SMARTE part of SMARTER. The R is for Reward Rewards are beyond the scope of this Guide, because they are beyond the scope of the Medium Term Budget Programme. But a well-executed budget plan lays solid foundations for a rational system of rewards within Directorates, within budget institutions and in dialogue between budget institutions and the Ministry of Finance and the Council of

Ministers. Because a well-executed plan provides a work-plan at all these different levels . So, it is up to you to take advantage of the possibilities. Good luck! 52 Source: http://www.doksinet Annex A – A worked example of one Programme Example: Support to Fisheries Programme The programme as a whole, as presented in the 2009 MTBP submission, is not properly developed. There are a number of weaknesses: • The single Goal as presented appears more in the nature of a Program Policy Description • There are three Objectives – none of which is SMART • There are four outputs – one for each project/non-project The programme as it is formulated does not provide a clear indication of what the program sets out to achieve in terms of goal, objectives and outputs, how it intends to achieve them (through its activities) and how efficiently and effectively the programme expenditures have been allocated. Goal (as presented in the 2009 MTBP submission) ‘Management of marine

resources through the careful creation of a licensing system, control of fishing activities under the legislation in force, protection of species at risk through joint coordination of cross-border transactions, improvement of legal basis in accordance with EU standards’. This could be reformulated as follows: ‘Improve the management of marine resources so that: • in 2015 the exploitation of fish stock in national water remains sustainable as measured by a maximum annual increase by 5% of commercial landings per year as compared to the <<X>> tonnes of fish catches registered in 2010; • fish exports by Albanian producers increase from <X> million Lek in 2010 to <<Y>> million Lek in 2015’. Otherwise, the statements as presented in the Goal (in the 2009 MTBP submission) are more in the nature of Outputs and Activities and should be presented in the related sections. The Objectives are not SMART and they also appear to be more in the nature of Outputs

and Activities. For example, the Objective (as presented in the 2009 MTBP submission): • ‘Licensing and control of private entities in cooperation with other structures’ 53 Source: http://www.doksinet could be reformulated as o ‘A more effective licensing and control of private fishing operators to reduce the recorded cases of overfishing from <<X>> number in 2012 to <<Y>> number in 2013 and ensure that the annual increase in 2013 of commercial landing stays within the stated Goal of 5% compared to the <<X>> tonnes of fish catches registered in 2012’ Please note that the above proposed targets are feasible if in 2011 a proper structure for monitoring fish activities is established and the inspections of fish operators take place, are effective and are systematically recorded. When referring to fish stocks and volume of commercial landing, it should be noted that an extensive reference to EU standards exists in the National Plan for the

Implementation of the Stabilisation and Association Agreement. It should be noted that the Standard section of the MTBP submission would need to be reformulated from: • ‘Continuous improvement of legal basis and improve it in accordance with existing EU legislation’ to become an Objective • ‘by 2012 Albania will implement all EU standards as referred in chapter 3.10 of the SAA implementation plan’, see http://www.miegoval/?fq=brenda&d=3&gj=gj2&kid=112 In particular interested readers should refer to the following community acts regarding the management of resources: community acts 2406/96 EEC, 493/87 EEC, 1381/87 EEC, 1382/87 EEC, 89/631 EEC, 1226/94 EEC, 3317/94 EEC, 2943/95 EEC, 96/286 EEC, 2205/97 EEC, 2635/97 EEC’ (to be found at http://eur-lex.europaeu)’ This list should be included in the Standard section From project/non-project level onward the programme tree becomes flat. Four projects (including a non-project) have one output each. Basically

there is no information on the results each project intends to bring about. For example, taking one of the three projects included in the 2009 MTBP submissions • Works in the port of Durres may produce a series of outputs such as o A dedicated berth is built for fish commercial landing o A new refrigerated warehouse is built to store fish o Five specialists are employed and stationed at the port to provide advice on food safety regulation o 15 controls on fishing vessels based in Durres are carried out to Monitor cases of overfishing and irregular fishing practice (this output could be centralised in a single output for all ports unless this function is decentralised) 54 Source: http://www.doksinet The output linked to the non-project is ‘New fishing regulations (three regulations)’. As the expenditures related to the wages of component of Ministry expenditure appears to be included here, it seems too simplistic to imagine that the ministry staff in charge of fisheries is

only devoted only to the development of regulations. Here different outputs could be developed based on the different services delivered by the ministerial units. From the above, it is clear that a much more detailed and informative presentation of the programme can be developed. The first stage for this would be the construction of a programme tree in the form as presented in Section 1.3 above This would be the first step in ensuring that the programme is properly planned and costed in accordance with sector priorities (as articulated, for example, in the MIP) and consistent with the advice on presentation of content as discussed in this Sector Guide 8. An example of how this might be achieved is presented below through the construction of one section of a programme tree for the Support to Fisheries Programme 9. As a starting point for this exercise, it is worth noting that there are no Outputs in the 2009 MTBP submission for the programme that comply with the Government’s strategic

priority of increasing the commercialisation of Koran fish, crabs and other imported species (this priority is stated in the MIP (the Ministry Integration Plan). The following diagram demonstrates one way this might be achieved through links to the Goal ‘fish exports by Albanian producers increase from <X> million Lek in 2010 to <<Y>> million Lek in 2015’. 8 9 As well as the process requirements of the MTBP Operational Manual. Please note, this example has been constructed for the purpose of illustration only to demonstrate how the programme tree tool might be applied in practice. It does not intend to state what the structure of this programme should be. That is a matter for the PMT to determine 55 Source: http://www.doksinet Possible Programme Tree Goal: Fish exports from Albanian producers increase from <X> million Leke in 2010 to <Y> million Leke in 2015 2011 Objective 1: Fish exports by Albanian producers increase from <X1> million

Leke in 2010 to <Y1> million Leke in 2011 Non-project Outputs Output 1.1: <Y> National acts passed in the area of commercial fishing that are harmonised with EU legislation 56 Project 1: . Output 1.2: Seminars for export promotion Project 2: . Output 1.3: Technical agreement with business association of fish producers to provide technical advice on food safety standards for fish products Output 1.4: <Y> number of soft loans for new fish production directed towards exports 2011 Objective 2: . 2011 Objective ‘n’: . Project ‘m’: Industrial Zones next to Main Fishing Ports Output P1.1: <Y> number of refrigerated storages in proximity of fishing ports Output P1.2: Trust fund to build shared infrastructure in the industrial zones Output P1.3: National market established for fish port in Durres Source: http://www.doksinet Annex B – Potential Options for Planning the Delivery of Services under Programme 1110 The following table illustrates

one set of planning options for Programme 1110. Whilst this table contains most of the standard planning components for Programme 1110, it will be important for the Programme Management Team to ensure that information in the table is appropriately adapted to the specific requirements of the Ministry of Environment, Forestry and Water Management. In practice, this will require some of the detail in the table to be edited before being applied to the Ministry of Environment, Forestry and Water Management. It may also require some of the detail to be dropped in some planning years and some entirely new components to be added also. Please note, because Programme 1110 delivers services to all other programmes in the Ministry and, therefore, has a much less clearly defined production function, the Programme Management Team will sometimes find that not all objectives and outputs for this programme can be made completely SMART. Where this is the case, Programme 1110 should be treated as an

exception. Outputs and Objectives for all other programmes should be SMART. Notwithstanding this, the following table demonstrates that most of the time, objectives and outputs for Programme 1110 can and should be made SMART. Programme 1110 Programme Description Management of the Ministry to ensure that the ministry mission statement is delivered efficiently and effectively Policy Description ‘A modernised administration system that operates with high efficiency by adopting good management practices and systems’ Goal ‘Improvement of the management and administration of the Ministry by carrying out its mandate with professionalism, integrity and honesty which creates trust to the citizens through implementation of ISO 9001:2008.’ Objectives 2010 (and repeated in 2010 & 2112) 1. Improve the effectiveness of ministry management and administration practices through implementation of (x, y and z aspects of ISO 9001:2008) 2. Effectiveness of internal controls for non salary

expenditure as measured by the:error rates or rejection rates in routine financial transaction as reported by internal audit not more than the benchmark established in 2009) 3. Effectiveness of systems as measured by the: • number of material weaknesses found per year not more than the benchmark Formázott: Felsorolás és számozás Formázott: Felsorolás és számozás Formázott: Felsorolás és számozás 57 Source: http://www.doksinet • established in 2009. the % of material weaknesses corrected within 12 months of notification not less than the benchmark for corrections established from 2009 material weaknesses. Policy Standards Relating to Objective 2 PEFA Indicator PI-20 An effective internal control system is one that (a) is relevant (i.e based on an assessment of risks and the controls required to manage the risks), (b) incorporates a comprehensive and cost effective set of controls (which address compliance with rules in procurement and other expenditure

processes, prevention and detection of mistakes and fraud, safeguard of information and assets, and quality and timeliness of accounting and reporting), (c) is widely understood and complied with, and (d) is circumvented only for genuine emergency reasons. Score A (i) Comprehensive expenditure commitment controls are in place and effectively limit commitments to actual cash availability and approved budget allocations (as revised). (ii) Other internal control rules and procedures are relevant, and incorporate a comprehensive and generally cost effective set of controls, which are widely understood. (iii) Compliance with rules is very high and any misuse of simplified and emergency procedures is insignificant. Score B (i) Expenditure commitment controls are in place and effectively limit commitments to actual cash availability and approved budget allocations for most types of expenditure, with minor areas of exception. (ii) Other internal control rules and procedures incorporate a

comprehensive set of controls, which are widely understood, but may in some areas be excessive (e.g through duplication in approvals) and lead to inefficiency in staff use and unnecessary delays. (iii) Compliance with rules is fairly high, but simplified/emergency procedures are used occasionally without adequate justification. Score C (i) Expenditure commitment control procedures exist and are partially effective, but they may not comprehensively cover all expenditures or they may occasionally be violated. (ii) Other internal control rules and procedures consist of a basic set of rules for processing and recording transactions, which are understood by those directly involved in their application. Some rules and procedures may be excessive, while controls may be deficient in areas of minor importance. (iii) Rules are complied with in a significant majority of transactions, but use of simplified/emergency procedures in unjustified situations is an important concern. Policy Standards

Relating to Objective 3 PEFA Indicator PI-21 Regular and adequate feedback to management is required on the performance of the internal control systems, through an internal audit function (or equivalent systems monitoring function). Such a function should meet 58 Source: http://www.doksinet international standards such as the ISPPIA, in terms of (a) appropriate structure particularly with regard to professional independence, (b) sufficient breadth of mandate, access to information and power to report, (c) use of professional audit methods, including risk assessment techniques. The function should be focused on reporting on significant systemic issues in relation to: reliability and integrity of financial and operational information; effectiveness and efficiency of operations; safeguarding of assets; and compliance with laws, regulations, and contracts. Specific evidence of an effective internal audit (or systems monitoring) function would also include a focus on high risk areas,

use by the SAI of the internal audit reports, and action by management on internal audit findings. The latter is of critical importance since lack of action on findings completely undermines the rationale for the internal audit function. Score A (i) Internal audit is operational for all central government entities, and generally meet professional standards. It is focused on systemic issues (at least 50% of staff time). (ii) Reports adhere to a fixed schedule and are distributed to the audited entity, ministry of finance and the SAI. (iii) Action by management on internal audit findings is prompt and comprehensive across central government entities. Score B (i) Internal audit is operational for the majority of central government entities (measured by value of revenue/expenditure), and substantially meet professional standards. It is focused on systemic issues (at least 50% of staff time) (ii) Reports are issued regularly for most audited entities and distributed to the audited entity,

the ministry of finance and the SAI. (iii) Prompt and comprehensive action is taken by many (but not all) managers. Score C (i) The function is operational for at least the most important central government entities and undertakes some systems review (at least 20% of staff time), but may not meet recognized professional standards. (ii) Reports are issued regularly for most government entities, but may not be submitted to the ministry of finance and the SAI. (iii) A fair degree of action taken by many managers on major issues but often with delay Score D (i) There is little or no internal audit focused on systems monitoring. (ii) Reports are either non-existent or very irregular. (iii) Internal audit recommendations are usually ignored (with few exceptions). Outputs Objective 1 • International relations outputs (e.g maintaining membership of ‘x’ international organisations by simple bank transfer; ‘y’ annual subscription payments accompanied by detailed compliance reports to

international organisations; ‘z’ official foreign visits by Minister)  Activities include: payment of international subscriptions; arranging official visits abroad by Ministry staff; arranging official visits to Albania by representatives of foreign governments and institutions; international travel of Ministry staff (not Formázott: Felsorolás és számozás 59 Source: http://www.doksinet exhaustive and would depend on specific needs of Ministry). • Senior management team service delivered  Activities include: payment of Ministers, Deputy Ministers and General Secretary and their Cabinet, secretaries, payment of drivers and maintenance of cars (not exhaustive and would depend on specific needs of Ministry). • Human resource management outputs (e.g ‘x’ recruitment processes completed; ‘y’ staff trained in particular skills; ‘z’ appraisal reports prepared)  Activities include: recruitment process, hire of training facilities, procurement of external

trainers, delivery of training, review of staff performance, report preparation (not exhaustive and would depend on specific needs of Ministry). • Planning and research outputs (e.g ‘x’ statistical reports produced; ‘y’ special studies produced)  Activities include: collection of data, review of data, report production (not exhaustive and would depend on specific needs of Ministry). • General services and infrastructure environment maintained  Activities include: Building construction, building maintenance, IT services, communications, furniture provision, equipment provision, utilities provision (water, electricity, generators), office consumables provision (e.g stationery), protocol services, travel (excluding international travel), security (not exhaustive and would depend on specific needs of Ministry). • Public relations outputs (e.g ‘x’ information leaflets produced; ‘y’ hours of help desk services provided)  Activities include: communications

with media, help desk maintained (not exhaustive and would depend on specific needs of Ministry). • Legal Services outputs (e.g ‘x’ pages of draft legislation prepared)  Activities include: review of existing legislation, review of EU approximation requirements, preparation of new draft legislation (not exhaustive and would depend on specific needs of Ministry). • Financial services outputs (e.g payroll process delivered; ‘x’ procurement processes successfully executed).  Activities include: review of payroll details, payroll preparation, bid documents prepared, review of bid documents (not exhaustive and would depend on specific needs of Ministry). Objective 2 • 60 One medium term Ministerial Strategy Updated including financial plan  Activities include: GSBI meetings. PMT meetings, preparation and action points for meetings, drafting and review of plan (not exhaustive and would depend on Formázott: Felsorolás és számozás Source:

http://www.doksinet specific needs of Ministry). • One Ministerial Integrated annual Plan  Activities include: GSBI meetings. PMT meetings, preparation and action points for meetings, drafting and review of plan (not exhaustive and would depend on specific needs of Ministry). • One and MTBP document prepared and submitted to MOF (incorporating annual budget submission)  Activities include: GSBI meetings. PMT meetings, preparation and action points for meetings, drafting and review of submission (not exhaustive and would depend on specific needs of Ministry). • One Ministerial Annual Report  Activities include: GSBI meetings. PMT meetings, preparation and action points for meetings, drafting and review of report (not exhaustive and would depend on specific needs of Ministry). • X number of staff trained in  Planning and budgeting  Financial systems  Activities include: preparation of training materials, procurement of external trainers, provision of

training facilities, training activities (not exhaustive and would depend on specific needs of Ministry). Objective 3 • One Ministerial Internal audit report on management systems  Activities include: management meetings, review of management systems drafting of report, review of report (not exhaustive and would depend on specific needs of Ministry). • One Ministerial report on response to internal audit recommendations  Activities include: management meetings, review of report, drafting of response (not exhaustive and would depend on specific needs of Ministry). • X number of staff trained in  Procurement  Computer systems  Management practises  Activities include: preparation of training materials, procurement of external trainers, provision of training facilities, training activities (not exhaustive and would depend on specific needs of Ministry). Formázott: Felsorolás és számozás 61 Source: http://www.doksinet Programme Tree Diagram for

Programme 1110 Adoption of effective, transparent and accountable modern management systems Ministry Management and Administration OBJECTIVES Nonproject Senior Management International Relations Minister, Dep Min, GS Cars Cabinet, secretaries, drivers Planning and Research Human Resource Management Recruitment Training Public Relations General Services, Infrastructure Effectiveness of systems Nonproject MTBP submission Financial Services Legal Services Effectiveness of internal controls Nonproject Projects Ministry Strategy Ministry integrated Plan Project outputs Ministry Annual Report Staff trained Ministry audit report Project outputs Projects Internal audit response Staff trained Project outputs OUTPUTS Statistics Special studies New laws NonProject activities Project activities IT, comms Payroll Furniture Procurement Protocol Project activities Project activities ACTIVITIES EU laws Appraisal Utilities 62 Projects Goal Security

NonProject activities Source: http://www.doksinet Notes to Accompany Programme Tree Diagram for Programme 1110: 1. For reasons of space, the above diagram provides shortened names for Objectives, Outputs and Activities rather than full names and descriptions. More detailed information for each of the components of the diagram can be found in the presentation of information in the preceding table. 2. For reasons of space, some of the Outputs as presented in the above diagram actually represent groups of similar Outputs. This is the case, for example, with ‘Human resource management’ which represents such Outputs as ‘recruitment processes completed’; ‘’staff trained in particular skills’; ‘appraisal reports prepared’. This additional detail can be found in the presentation of information in the preceding table. 3. For reasons of space and also because Projects will depend mainly on decisions on things such as construction of new ministry premises, specific examples

of Projects have not been presented in the diagram, although the possibility for projects to be planned under the programme is illustrated generically in the diagram. 4. When the Programme Management Team produces its programme tree diagram for Programme 1110, it should present all of the planning detail for the programme in the diagram. This means that a single sheet of A4 paper will be insufficient. 63 Formázott: Felsorolás és számozás