INNOVATIVE BUDGETING EXPENSES OF DEFENSE
Picture 2: Converting strategic objectives into financial plans
However, operational planning, mechanisms for the preparation of financial plans and rules for the enforcement of them, within the line budgeting, which was represented by 2008. in the defense system, did not provide enough information about whether the defined objectives are being successfully implemented in practice. It was therefore important to improve the links between financial plans and strategies in order to provide appropriate mechanisms for monitoring the success of their implementation and consideration of future needs.
Therefore, the program budget is a comprehensive system of defense resource management - a system of monitoring results (performance management system). Key feature of the program budget is in a change of budget focus from budgetary commitments on short-and long-term results and reached objectives of the defense system.
However, limited resources imposes, in fact, wanted it or not, accepting different, basically an economic standpoint, which is characterized by:
1. the need for the best utilization of resources available for the specific purpose
2. the influence by the consequences of decisions in the present to a quality of development in the future 3. the necessity to be efficient, which correspond to a care that the set objectives achieve with adequate
real available resources and
4. the obligation to legally dispose and permanently control the expenditure of resources for implementation of planned needs.
To increase the efficiency of the management structures of the defense system, changes in the sphere of budget expenditures were necessary, just because of limitation and scarcity of available funding. Otherwise the time and attention of management structures would be focused on securing funding for a reconciliation of the regular needs of defense and would be lost to the efficiency of doing the basic tasks.
4. SECTOR PROGRAMS AS AN INOVATIVE WAY TO BUDGETS EXPENDITURES OF DONATIONS OF DEFENSE
Defense expenses are financed by funds from the budget and donations from the European Union through Sector Approaches (also known as Sector Wide Approaches – SWAps). Sector Approaches are usually seen as programme-based approaches (PBA) operating at the level of a sector. PBA is defined as follows, (European Commission, 2007):
„A programme-based approach (PBA) is a way of engaging funds EU in development sectors programme, such as a National defence strategy, a sector programme, a thematic programme or a programme of a specific organisation (defence).PBAs have the following features:
leadership by the host country;
a single comprehensive programme and budget framework;
a formalised process of donor coordination and harmonisation of donor procedures for reporting, budgeting, financial management and procurement end
efforts to increase the use of this systems for programme design and implementation, financial management, monitoring and evaluation.“ (p.24)
The European Commission (EC) is committed to delivering "more and better aid" for "legitimate strategies". One of the legitimate strategies is National defence strategy.
Sector approaches or sector-wide approaches (SWAps) are processes aimed at the development of coherent sector policies and strategies. They involve governments, donors and other sector stakeholders in a unified process and framework.
As mentioned above, EC decisions about whether and how to support a sector programme are based on assessments in seven key areas, (European Commission, 2007):
„The five elements of a sector programme 1. The sector policy and overall strategic framework 2. The budget and it medium-term perspectives 3. Sector and donor coordination systems 4. The institutional setting and existing capacities 5. Performance monitoring
And the two additional elements influencing the sector programme's performance
6. The macroeconomic framework
7. Public financial management (PFM) systems“ (p.27-35)
Limitations EC provide an insight into the basic concepts that are relevant to each assessment, identify key issues to be addressed and point to additional sources for more detailed guidance. The aim is to assist programme managers throughout the cycle of operations of EC support in reviewing the quality of sector programmes and deciding on appropriate support modalities.
Assessment of these areas would start during the programming and identification phases of the sector politics cycle, with the analysis then being completed during formulation. During implementation, these assessments would also need to be updated regularly in order to keep abreast of developments in the sector politics and each of the areas.
There are many overlaps between these assessments (for example, there are obvious connections between sector expenditure strategy, the macroeconomic assessment and the review of public finance management; all the other assessments may feed into the institutional and capacity assessment, and so forth).
Also, many of the assessments are also required for other aspects of EC work (e.g. a macroeconomic assessment will have been undertaken as part of limits preparation and to support any sector politics and so on. Those working on analyses should first of all draw on given limits, and if necessary update, existing assessments. Wherever there are relevant preexisting studies and materials, these should be drawn upon. When it is possible, the EC works jointly with other donors, as well as with the partner government, on such assessments, and does so in ways that support the development of partner country capacity. The assessment required at the design stage of an politics sector is part of a continual process of monitoring and review of key issues. There are few, if any, absolute criteria involved in the assessments. Balanced judgements are required, which identify opportunities as well as risks, and which assess the direction of change as well as current levels of performance.
5. CONCLUSION:
The introduction of the new model of program budgeting, situation in the field of management of defense resource is changing drastically. Namely, there is a process that takes place continuously. All plans and programs are integrated into one unit. The financial plan of the defense, as a function of plan holders, serve to establish a connection between the proposed appropriation of resources and results achieved. Mechanisms for monitoring the implementation of goals achieved are being introduced, which is advantage compared to the state so far.
The system of financial management of defense resources is becoming a complex, dynamic, interoperable, and integrated process. The main purpose of this process is management of maintenance and capacity building of the Ministry of Defense and the Serbian Army to achieve the defense objectives of Serbia. Finally, the purpose of defense resource management process is the provision of conditions for achieving the mission and tasks of the defense system.
However, the process of resource management is not just a technical procedure, but also an important political process. In the event that there is no political will and consistency in terms of sustainability of the planned and predicted values, there is a risk that the budgeting process could turn back into the allocation of available financial resources, as it has been the case until the year of 2010.
REFERENCES