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108 Public Administration in Southeast Asia

In this SPBB framework, all ministries and agencies are required to present the budget on an output basis, which means that all spending agencies must develop appropriate performance measures attached to all programs and activities outlined in the budget documents. Another major change in Thailand’s budgetary system following the SPBB framework is that budgeting is intended to be used as a tool to translate government policies or strategies into tangible results.

Thailand has a long history of central development planning. The 5-year National Economic and Social Development Plan is normally developed by government officials from the National Economic and Social Development Board. These 5-year plans are more than indicative plans; they actually set agenda and budget priorities for the governments to follow.

From the SPBB framework, instead of responding to the 5-year National Economic and Social Development Plan, the government decided to adopt a system of the 4-year Government Administrative Plan. This plan is used as a means to translate the political will of the elected government into administrative actions. The 4-year timeframe coincides with the electoral term of the government. In this sense, it means that instead of government responding to a 5-year plan drawn by technocrats, the government agencies now have to respond to the will of the elected government.

In the SPBB framework, the first 4-year Government Administrative Plan was implemented in 2005. The plan was divided into nine strategies (Bureau of the Budget, 2006a: 6–18):

(1)Poverty alleviation

(2)Development of human resources and a quality society

(3)Adjusting the economic structure for balance and competitiveness

(4)Management of natural resources and the environment

(5)Foreign affairs and international economy

(6)Development of laws and promotion of good governance

(7)Promotion of democracy and civil society

(8)Upholding national security

(9)Accommodation of changes and world dynamism

All government ministries and agencies had to prepare annual budget plans that demonstrated their alignment with these strategies or priorities proposed by the Government Administrative Plan.

5.4.4 Outcome of Budgeting Reform: The Budget Process in Thailand

The budget process begins with budget preparation. During the annual budget preparation process, the first step is to determine the economic assumptions applicable for the budget. This calculation is carried out by four key central economic agencies: the Bank of Thailand, the Ministry of Finance, the National Economic and Social Development Board, and the Bureau of the Budget. Based on their calculation, the total resources available for the following year’s budget will be known. From this information, the Bureau of the Budget will propose expenditure ceilings for each ministry, and the spending ministries must submit their budget requests consistent with these ceilings.

All budget requests must also demonstrate their alignment with the Government Administrative Plan. At the same time, the ministries and spending agencies must also develop appropriate performance measures attached to all the strategies and activities outlined in the budget documents. The Bureau of the Budget therefore evaluates budget plans not only whether they are in line with government priorities, but also whether they contain appropriate outputs and performance measures (Bureau of the Budget, 2006b: 13–14).

© 2011 by Taylor and Francis Group, LLC

Performance Management Reforms in Thailand 109

In order to assist the ministries and spending agencies in developing appropriate performance measures, a special performance office has been established within the Bureau of the Budget. It acts as a consultant to ministries and agencies in terms of how they can best define their outputs and develop appropriate performance measures.

During the budget approval process, however, the role of Parliament in the budget process has been very limited in Thailand. This is mainly due to the primacy of the executive in the budget approval process in Thailand and the limited information on budget policies and impacts available to Parliament. The Thai constitution imposes several restrictions on Parliament’s budgetary role, which serve to ensure the executive’s pre-eminence. Key constitutional restrictions can be specified as follows:

(1)Members of the House of Representatives may only consider reductions in expenditure. They cannot propose additional expenditures.

(2)The Senate cannot make any changes in the budget. It can only make an up-or-down vote on the budget in total.

(3)If the House and the Senate have not finished their deliberations on the budget within fi xed time limits (105 days), the proposed budget is deemed to have been approved by them.

These constitutional restrictions are aimed at ensuring the primacy of the executive over the legislature in budget approval.

Moreover, the pre-eminence of the executive over the legislature in budget approval can be seen from the structure of the Scrutiny Committee itself. During the parliamentary budget approval process, a Scrutiny Committee is selected to examine the government’s budget proposals. It is an ad hoc committee that is formally selected anew each year. However, in comparison with parliamentary committees in other countries, the Scrutiny Committee in Thailand is mainly dominated by the Executive branch (Blondal & Kim, 2006: 24). It is a joint legislative-executive committee with the government nominating approximately one-fourth of the total membership. In addition, the Minister of Finance serves as the chair of the Scrutiny Committee. The committee normally divides into several sub-committees to address the different sectors of the budget, and most of the scrutiny meetings take place in the sub-committees.

The Bureau of the Budget also serves as the secretariat of the committee. The deputy directorgeneral of the Bureau of the Budget serves as official secretary of the committee (Niphaphen Smerasuta, 2009: 25). This also reflects the executive’s primacy in the budget process.

During the budget approval period, many scholars have observed that the members of the committee normally do not have adequate information on budget policies and their impacts. Due to the ad hoc nature of the committee, it has to rely on information supplied by the executive and the bureaucracies. In order to reduce this problem, many studies in Thailand have proposed that Thailand should set up a permanent budget office directly under Parliament. This parliamentary budget office will be responsible for providing information on budget policies and impacts to the members of Parliament so that they can more effectively evaluate and examine the government’s budget proposals (Kraiyuth Teeratayakeenan, 1996; Ponlapat Buracom, 2007: 79).

During the budget implementation process, the budget is divided into five types of appropriation modes:

Personnel expenses

Operating expenses

Subsidies

© 2011 by Taylor and Francis Group, LLC

110Public Administration in Southeast Asia

Investment

Other expenses

The Bureau of the Budget has also made it possible for the spending agencies to transfer funds between and within the above categories so that the flexibility of the spending agencies in the implementation of their budgets can be increased. But there are also some guiding principles for such transfers (Bureau of the Budget, 2006: 13):

The transfer should not be for new personnel

The transfer should not change the output targets or change the core objective of the budget

The transfer should not tie up funds in a future budget

The transfer should not be for unplanned overseas trips

During this budget implementation period, the spending agencies are also required to submit a budget implementation plan to the Bureau of the Budget. This plan is a detailed action plan for how the budget will be implemented. Previously, the Bureau of the Budget would approve individual aspects of the plan on a rolling basis throughout the year. But following the reforms, it is now common practice for the Bureau of the Budget to authorize expenditure for the entire year at the beginning of the year.

After the approval, the budget implementation plan is forwarded to the Comptroller-General’s Department of the Ministry of Finance for cash management function. A payment request would be sent by a spending agency to the Comptroller-General’s Department, which verifies that the money for this item is authorized in the agency’s budget implementation plan for the month requested. The Comptroller-General’s Department then pays directly from its account in the Bank of Thailand into the recipient’s bank account electronically.

The Comptroller-General’s Department also prepares the annual financial statements that will be submitted to the auditor-general for certification. Following performance management reform, the Office of the Auditor-General also places greater emphasis on performance audits, with financial audits increasingly being outsourced to private sector audit firms. With Thailand’s emphasis on performance budgeting, the Office of the Auditor-General has assumed an important role in evaluating the performance information provided by ministries and agencies.

5.4.5 Conclusion

Thailand has been making significant reforms in its budgetary system. The objective of these reforms has been to increase flexibility and reinforce a performance and results orientation. But it should be noted that these reforms are still a relatively new phenomenon for Thailand. The sophistication of the internal budget procedures still varies from ministry to ministry. In some cases, they are based on elaborate internal strategic planning exercises; however, this may not be the case in others. At the same time, the role of Parliament in performance budget approval is still very limited due to the pre-eminence of the executive in this approval. To ensure that the budget priorities, outputs, and outcome are responsive to the needs of the people, the role of Parliament in performance budget evaluation must be strengthened.

Moreover, Thailand’s budget reform mainly covers the central government budget. Budget reform at local government level has still not been incorporated. Over the past decade, various means of fiscal decentralization have been implemented in Thailand. It is widely recognized that local government capacity needs to be strengthened considerably if central government is to lessen

© 2011 by Taylor and Francis Group, LLC

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