Economic Governance and Management Chapter 4 Chapter 4 policies that are used to guide budget preparation; (ii) the quality of the public resource management and control tools; (iii) the organisational efficiency of the institutions responsible for implementing and monitoring the government budget (which should reflect efficient coordination of the resources available); and (iv) the mechanisms developed to involve civil society in developing budget priorities and in evaluating their results. 509. The preparation of the annual budget and its analysis by Parliament are privileged exercises in Mauritius. They help to demonstrate the relevance of the budget. 510. The CRM noted that the reforms and rigorous policy strategies were launched within the framework of the NEA. Their objectives are to improve the productivity of public finance, to help to reconcile the objectives of sustained economic growth and to establish the pillars of social justice. 511. The PEFA 2007 EU-led study analysed the reforms. The study highlighted the strong points and weaknesses of the programming and budgeting tools, budget development, management and control processes, as well as the institutions involved in implementing government policies. 512. With regard to the reforms of the legal and institutional framework, the CRM noted that the most important reform was to reorganise the public finance planning and management structures, particularly by centralising the two functions under the MOFEE. This reform aimed at ensuring the efficient coordination of the whole programming and budgeting process – from developing short-, medium- and longterm macroeconomic projections to preparing the budget itself. The reform laid the basis for an organised implementation of the process of developing the MTEF and the PBA. However, the instruments still exist in isolation and do not take into account the essential links between subordination and coherence. The government should strive to consolidate these reforms to ensure that the links between these tools are forged. 513. 200 There were other measures to ensure that the legal and institutional framework was modernised. They include the review of the 2005 law on the Central Tender Board and the Public Financial Management and Control Manual. Another important measure was granting autonomy to two key institutions involved in public financial management: the Economic Governance and Management MRA, instituted in 2004, and the PPO, established in 2007, assisted by a tender board. The CRM appreciates these measures. They confirm that the government wants to improve bureaucratic sluggishness in order to promote the culture of output. They also aim at achieving greater discipline and accountability on the part of managers, who will be evaluated on results and who are obliged to report to the responsible authority and to Parliament and the director of audit. The reform is too new to evaluate its effect. 514. With regard to planning and budgeting tools, the CRM noted that the MTEF and the PBA had been adopted in 2003 and 2006 respectively. Both are intended to improve government’s capacity for programming, managing and monitoring financial management. The government only made the MTEF effective in 2006. As the PEFA Report emphasised, the sector strategies did not exist at the time. Consequently, the 2005/2006 and 2006/2007 budgets did not reflect the PBA. During discussions with the MOFEE, the CRM learnt that the MTEF would in future cover all the sectors. It therefore commended the government for the effort made to base the development of the 2008/2009 budget on all sector MTEFs. However, effective implementation is still confronted by considerable challenges, including differences in the levels of mastery of these tools and the absence of monitoring mechanisms in the sector ministries. Moreover, to be efficient and functional, the MTEF and its resulting budget should be based on economic policies conceived to convert government’s objectives at the macroeconomic and sector levels. The CRM observed that only a few sectors developed strategies that were inspired by the government’s political priorities or used the manual that guides the development of the MTEF. Besides, the preparation of the PB is still isolated from the sector strategies and it does not reflect their costs. The absence of modelling methods to link the budget to macroeconomic projections also affects the quality of the MTEF and the PBA. 515. The CSAR presents the process of preparing the budget. The CRM noted the mechanism established to encourage significant participation by civil society. However, this participation is limited to civil service management staff (whose main objective is to defend their budget envelopes) and to private sector umbrella organisations, which represent large enterprises. Employee organisations, small enterprises and grass-roots population groups are rarely consulted. As long as this instrument does not reflect coherent policies developed with the active involvement of all stakeholders, including grass-roots population groups, it will be difficult for them to accept 201