Relationship between Strategic Performance Based Budgeting Systemand law on the Budgetary Procedures

Abstract

Since the reform of national budgeting system to strategic performance based budgeting system in 2002, the improvement of law on the budgetary procedures has not yet been made in accordance with the major principles of such budgeting system which leads to inability of the executive branch of government to use budget as an administrative tool in an efficient manner.  Moreover, it is a loophole leading to corruption and destruction of fiscal discipline as follows: 1) budget planning and budget formulation puts more accents on budget allocation made by political party policy than allocation for country and sustainable development 2) budget adoption by the parliament emphasizes on budget increase or decrease rather than the final budget outcomes 3) budget execution still puts more emphasis on control than devolution as provided by public service agreement (PSA) and 4) law on the budgetary procedures still does not put accent on outcomes assessment. The researcher proposes the improvement of law on the budgetary procedures in order to ensure budget execution which aims to strategic outcomes and harmonizes with any laws. The approach also provides the Budget Policy Committee plays a vital role in planning and formulating budget.  Besides, the modification of annual budget bill as well as other necessary budget documents is offered by this research in order that the budget could be taken into account by the legislative branch of parliament in a more careful manner.