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Title page

Contents

Acknowledgments 5

1. Introduction 6

2. Benefits and Conventional Operatonalization of Program Budgeting 8

2.1. Specification and Costing of Programs and Subprograms 9

2.2. Budget Execution 10

2.3. Budget Operational Management 12

3. Key Challenges 13

3.1. Avoidable Budget Execution Rigidities 13

3.2. Avoidable Proliferation of Transactions 14

3.3. Inadequate Recording and Reporting Practices 14

3.4. Avoidable Complexity 15

4. Pragmatic Policy Options 16

4.1. Releasing Funds by Program and Subprogram to Allow Flexibility below Subprograms 16

4.2. Recording to Allow For Appropriate Reporting 18

4.3. Harmonizing Budget Programs and Administrative Structures 19

Conclusions 24

References 27

Tables

TABLE 1. Budgeting Systems-Advantages and Disadvantages 25

Figures

FIGURE 1. Costing of Program Budgets 10

FIGURE 2. Allocation of Cash Resources in Program Budgets 11

FIGURE 3. Budget Program Structure That May Lead To a Proliferation of Transactions 14

FIGURE 4. Relinquishing Control for Greater Flexibility 17

FIGURE 5. Alignment of Program Structure with Administrative Structure - South Africa's Health Sector 20

FIGURE 6. Administrative Structure Is Adjusted to Align with Program Structure 21

FIGURE 7. Example of a Hybrid Structure 23