What is The Value of Program Budgeting in Government COVID-19 Response?

Empower Reallocating, Tracking, Auditing through Good Public Finance Practices

The good news: many governments already use program budgeting in Financial Management Information Systems (FMIS).

  • Program structures in Charts of Accounts tie government objectives to projects across government Ministries, Departments, and Agencies 
  • Performance structures (outputs & outcomes) in Charts of Goals integrate with COA structure track results 
  • Valid Code Combinations in COA structures ensures that program and project spending ties to proper MDAs 


How can governments leverage Program Budgeting for pandemic responses? 

  1. Create a COVID-19 program and sub-programs (or projects) in the COA 
  2. Link to fund type and fund source to track spending based on aid and on-budget sources 
  3. Develop Valid Code Combinations tying programs to MDAs 
  4. Reallocate funds based on programs rather than by MDAs for an equitable response 
  5. Track commitments, obligations, goods received, and payments to track spending progress

Example: a Covid-19 program or subprogram shared by 3 ministries
The good news for public finance is the program budgeting supports fiscal shock planning and response.

  • Planning through program scenarios in budget formulation 
  • Response by spending reallocation, controls and tracking 
  • Compliance and performance audit during and after spending adjustments 

What if your government does not use program budgeting?

  • That’s complicated….

Reality check: adding segments to the COA easily requires a Multiple Year COA.

  • Supported in the FreeBalance Accountability Suite design because governments frequently update the COA and budget classifications a part of PFM reform 
  • Yet many ERP and custom-developed systems require significant effort to make changes to the COA 

Challenges for governments not using program budgeting, and without a multiple year COA could be temporarily overcome through:

  1. Adapting workflow rules if the FMIS has low-code/no-code business process management (like the FreeBalance Accountability Suite) 
  2. Add identical projects within the COA for each MDA because all FMIS systems should enable adding new account numbers without changing COA structures (but will be difficult to maintain post-crisis because of the need to replicate the same numbering scheme) 
  3. Reallocate budgets using the new account numbers (although will have the problem of assigning program percentages across MDAs, so will have an added burden on budget transfers and virements) 
  4. Develop new reports specifically for the new account numbers to track spending and support approvals 
  5. Publish spending on the web (although it may be difficult to track the entire commitment cycle, or to explain the outputs and outcomes achieved) 

Takeaway: program budgeting is a powerful Public Financial Management (PFM) tool to develop contingency plans, manage emergency spending, and provide fiscal transparency
How can FreeBalance help?

  • FreeBalance provides remote diagnostics for any government to address this spending challenge

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