Effectiveness and Efficiency in Implementation of Program-Based Budgeting and Budget Credibility

Abstract

Full implementation of program-based budgeting has financial advantages over line-item budgeting. However, in the Timor-Leste Ministry of Finance this is not implemented effectively and efficiently and does not maintain the level of budgetary credibility. The main objective of the study was to assess the level of effectiveness, efficiency and credibility of the budget at the Ministry of Finance. For the purpose of achieving this objective, a quantitative descriptive analysis method was used. The result shows that the average budget absorption for 2018-2022 is not effective and the result was 78.12%, which means Less Effectiveness. The average level of efficiency rated 78.12%, which means Efficient. However, this does not mean that most programs or activities were successfully achieved, but rather because several situations faced at that time did not allow them to be well implemented. Meanwhile, budgetary credibility in the context of budget implementation was Less Credible, with average percentages of 78.12%. On the other hand, budget credibility in the context of budget ratification (addition or reduction), the average ratio was 5.99%, which means Less Credible over the five-year period. It is recommended that Ministry of Finance Timor-Leste should provide sufficient and timely training for the staffs, regular supervision and prepare performance report, staffs of the ministries should be committed in planning process of their respective budget.