Improved Budget Execution
29 Oct 2008
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The trend toward improved budget execution should continue as ministries improve their ability to conduct feasibility studies. Seven ministries are prepared to utilize the United Nations Industrial Development Organization (UNIDO) Computer Model for Feasibility Analysis and Reporting (COMFAR III) software within their ministries. This is an off-the-shelf package available in Arabic. Seventeen participants from the Ministries of Agriculture, Planning, Oil, Electricity, Health, Municipalities and Public Works and Water Resources completed USAID-facilitated specialized training in Amman, Jordan. These trainees are currently qualified to be trainers a plan to utilize them to train 400 government employees are in place. USAID/Tatweer is currently supporting and encouraging the participants to install and begin to use the software in their ministries. This should result in improved definition of procurements which in turn should further improve budget execution in the future.
Capital investment projects constitute a major component of the Government of Iraq’s annual budget. For the year 2006, this budget was $10 billion, but the execution rate did not exceed 21 percent. Low rates of budget execution continued through 2007, and remain a concern. One critical factor in the low budget execution rate is the inadequate design of capital investment projects. Badly designed projects invariably run into difficulties that slow down and even halt their progress. Projects get delayed due to inaccurate costs estimates, unforeseen blockages, and key missing elements in the original proposals and project budgets. Many of these problems can be avoided or reduced through better project design and improved feasibility studies.
In August 2008, seventeen Government of Iraq project planners from the Ministries of Planning, Oil, Electricity Health, Water Resources, Municipalities and Public works, and Agriculture went for training in Jordan on an off-the-shelf computer software program that would help the Ministries design feasibility studies. Each of these trainees is committed (and committed by his or her ministry) to train another twenty colleagues upon returning from the workshop in Jordan. USAID/Iraq set up this program for the Planning Ministry.
The Ministry of Planning and Development Cooperation plays an enabling (or restricting) role in Capital Project design, approval, implementation, and monitoring. Therefore this training not only helps the ministry itself, but will improve key processes that affect project execution of all ministries. To improve project design, the Ministry of Planning is increasingly demanding that all proposals include acceptable feasibility studies. One roadblock to this is that neither the ministry personnel preparing feasibility studies nor the Ministry of Planning officials reviewing the proposals are adequately skilled and knowledgeable in the process and requirements. The Ministry of Planning is taking steps to strengthen the project design and review process to count for all projects elements from the beginning which will speed up the implementation process.
The Ministry of Planning is introducing an automated system for preparing and submitting the feasibility study part of project proposals using software originally developed by UNIDO in 1983: Computer Model for Feasibility Analysis and Reporting (COMFAR). The current software (COMFAR III Expert for Windows) is based on the experience and recommendations for more than 3,000 users in 140 countries. This program includes tools such as sensitivity and parametric analysis, break even point analysis and calculation of the internal rate of return. The entry interface, in Arabic, guides the practitioner in the completion of the feasibility study, requiring that all required elements be filled in, providing definitions, guidelines, explanations for each element, and so forth. The software is one of many products currently available on the market.
This software will expedite the effective implementation of capital investment projects and will provide much needed raw data for other initiatives that the USG developed for the Government of Iraq such as the IFMIS, GAPTIS and CBRP.
COMFAR III will provide a standardized and automated system of feasibility studies preparation, more completely planned and better quality submissions by line ministries, and will support quicker review and decision by the Planning Ministry. This will have a direct impact on the budget execution rate, which will result in better services to the Iraqis.
Capital investment projects constitute a major component of the Government of Iraq’s annual budget. For the year 2006, this budget was $10 billion, but the execution rate did not exceed 21 percent. Low rates of budget execution continued through 2007, and remain a concern. One critical factor in the low budget execution rate is the inadequate design of capital investment projects. Badly designed projects invariably run into difficulties that slow down and even halt their progress. Projects get delayed due to inaccurate costs estimates, unforeseen blockages, and key missing elements in the original proposals and project budgets. Many of these problems can be avoided or reduced through better project design and improved feasibility studies.
In August 2008, seventeen Government of Iraq project planners from the Ministries of Planning, Oil, Electricity Health, Water Resources, Municipalities and Public works, and Agriculture went for training in Jordan on an off-the-shelf computer software program that would help the Ministries design feasibility studies. Each of these trainees is committed (and committed by his or her ministry) to train another twenty colleagues upon returning from the workshop in Jordan. USAID/Iraq set up this program for the Planning Ministry.
The Ministry of Planning and Development Cooperation plays an enabling (or restricting) role in Capital Project design, approval, implementation, and monitoring. Therefore this training not only helps the ministry itself, but will improve key processes that affect project execution of all ministries. To improve project design, the Ministry of Planning is increasingly demanding that all proposals include acceptable feasibility studies. One roadblock to this is that neither the ministry personnel preparing feasibility studies nor the Ministry of Planning officials reviewing the proposals are adequately skilled and knowledgeable in the process and requirements. The Ministry of Planning is taking steps to strengthen the project design and review process to count for all projects elements from the beginning which will speed up the implementation process.
The Ministry of Planning is introducing an automated system for preparing and submitting the feasibility study part of project proposals using software originally developed by UNIDO in 1983: Computer Model for Feasibility Analysis and Reporting (COMFAR). The current software (COMFAR III Expert for Windows) is based on the experience and recommendations for more than 3,000 users in 140 countries. This program includes tools such as sensitivity and parametric analysis, break even point analysis and calculation of the internal rate of return. The entry interface, in Arabic, guides the practitioner in the completion of the feasibility study, requiring that all required elements be filled in, providing definitions, guidelines, explanations for each element, and so forth. The software is one of many products currently available on the market.
This software will expedite the effective implementation of capital investment projects and will provide much needed raw data for other initiatives that the USG developed for the Government of Iraq such as the IFMIS, GAPTIS and CBRP.
COMFAR III will provide a standardized and automated system of feasibility studies preparation, more completely planned and better quality submissions by line ministries, and will support quicker review and decision by the Planning Ministry. This will have a direct impact on the budget execution rate, which will result in better services to the Iraqis.
Categorization
Topic
- Financial Management
- Information Technology
News Type
- Press Release