Budget preparation means drawing up a detailed plan that sets out all the activities of a project and allocates an amount of money, the forecast expenditure, against each item. A budget is an essential part of planning for the implementation of projects and programmes so that future costs are fully understood. As noted in Section 12.1, budget preparation is an important component of good financial management.
For the OWNP, each implementing agency starting at woreda level is required to prepare a work plan with a related budget for each budget year and send it to the next higher level for review, approval and consolidation. The Regional WASH Coordination Office (RWCO) is responsible for consolidating the regional budget from all regional implementers and for getting it approved by the Regional WASH Steering Committee (RWSC) before submission to the National WASH Coordination Office (NWCO). The NWCO prepares a consolidated budget for all regional and federal implementing ministries and submits this to the National WASH Steering Committee (NWSC) for approval.
Think back to Study Session 7 where the organisational relationships of the OWNP were described. What types of relationship are demonstrated by these budget approval processes?
The RWCO has a horizontal relationship with the RWSC and a vertical relationship with the NWCO, to which it submits the budget for approval. The NWCO and NWSC are both at national level and so have a horizontal relationship, but the NWSC has overall responsibility for the OWNP so there is also an element of vertical relationship between them.
Budgeting takes place based on forms and procedures designed by MoFED. Sector offices at all levels from federal ministries to woreda offices are responsible for requesting WASH budgets from the level above them. This is based on a comprehensive resource mapping of all resources available to WASH at the given level, i.e. federal, regional, zonal or woreda/town.