Process & Timeframe for Health Sector Budget and Programme Formulation in Nepal

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Formulation of Budget and Programme

Each level of government and its subordinate offices must formulate a budget and programme for the next year in order to obtain resources.

The budget should be divided under economic expenditure heads, based on the approved “Integrated code for revenue and expenditure for all three tiers of governments”, 2074. The budget and programme proposals shall be based on the objectives and targets of the periodic plan, Medium-term Expenditure Framework (MTEF) and the international commitments and annual plans and policies of the GoN.

Budget proposals shall be based on the long-term vision, mission, target and objectives and expected outputs. The budget proposal for the following year should track the progress of current year budget implementation. In formulating the health budget, intensity of disease, priority-based programmes, Basic Health Services, previous-year budget progress, demand from the field office, and local context must be included. Business Plans (BPs) are a helpful tool to ensure realistic budget formulation.

Budget and programme formulation at federal level

The MoHP receives the budget ceiling and budget formulation guidelines from the Ministry of Finance (MoF) and National Planning Commission; the Policy, Planning and Monitoring Division (PPMD) of MoHP sends budget ceilings and budget formulation guidelines to the subordinate departments, central-level offices, national and specialised hospitals and other health entities. The MoHP finalises the budget proposals from subordinate offices through discussion of the rationale of activities with departments. The PPMD enters the activities with their proposed budgets into the Electronic Annual Work Plan and Budget (e-AWPB) and Line Ministries Budget Information System (LMBIS).

The budget proposal of the MoHP is submitted to the MoF and NPC for discussion and finalisation of the ministerial budget. The budget formulation process begins from the third week of Magh each year and is completed in the fourth week of Baisakh.

By constitutional provision, the federal-level budget shall be presented in the joint session of federal parliament on the 15th of Jestha each year. Before presenting the budget estimation to parliament, the Minister of Finance submits next year’s budget policy to the Finance Committee and seeks suggestions. The Finance Minister presents progress on the current year’s budget and the status report of public enterprises along with the budget estimation.

Budget and programme formulation in provinces

At the provincial level, health budget proposals are formulated in accordance with the guidelines by the Health Division of the MoSD and the Budget Ceiling from Policy and Planning Commission and the Ministry of Economic Affairs and Planning (MoEAP).

The budget is drawn up taking into account the province periodic plan, project bank, MTEF and the rationale of the new programme. The MoSD shall provide finalised budget proposals for the next FY and forwards, with three-year expenditure projections, to the Province Policy and Planning Commission (PPC) and MoEA. The MoEA finalises the budget of the MoSD, including other ministries, and submits the budget estimation to the province assembly on Asar 1 each year.

Budget and programme formulation at local level:

At the local level, the programme and budget shall be formulated in compliance with the steps and limitations as laid out in the Local-level Programme Formulation Directives, 2075. The local executives shall deliver the budget proposal to the local assembly before Asar 10.

Role of the MoHP in conditional grants to local- and provincial-level budgeting:

At present, the MoHP identifies the activities and budget for the programmes implemented at provincial and local level and makes them available to the Federal MoF. The MoF allocates the budget as discussed with the MoHP as conditional grants to provinces and the local level.

Medium-term Expenditure Framework (MTEF): The MTEF for the health sector for all three tiers of government is prepared in accordance with Clause 17(2) (ka to chha) of the Inter-Governmental Financial Management Transfer Act, 2074, and Schedule 6 of the Local-level Budget Formulation Directives, 2076. The MTEF is prepared with the expected outputs/targets of the programme and the estimated budget for the same. The MTEF includes health sector programmes with detailed activity indicators, targets, and estimated budget for three years, including funding sources and short programme descriptions.

Approval of budget and programme

The federal parliament, provincial assembly and local assembly shall approve the budget. After approval of the budget, a budget authorisation letter shall be issued with detailed activities.

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Timeframe for Federal Budget and Programme Formulation

S.N	Details of process	Responsibility	Timeframe
1.	Preparation of annual programme and budget formulation	Ministry	Magh 2nd–3rd week
2.	Receipt of budget ceiling from NPC and distribution of guidelines on budget formulation along with budget ceiling	Ministry	Magh 3rd week
3.	Review of budget formulation preparations and revision of budget ceiling as needed	Ministry	Falgun 1st week
4.	Entry of proposed budget and programme details in e-AWPB	Departments and centres	Falgun 2nd week
5.	Discussion of proposed divisional budget in the ministry	Ministry	Falgun 2nd–3rd week
6.	Entry of proposed programme and budget in e-AWPB	Departments and centres	Falgun 4th week
7.	Verification that the whole budget and programme under the ministry is in line with the budget formulation guidelines, budget ceiling and procurement plan	Ministry	Chaitra 1st week
8.	Entry of finalised proposed budget and programmes of MoHP in e-AWPB and LMBIS	Departments and centres	Chaitra 2nd–3rd week
9.	Migration of proposed budget and programme of LMBIS to NPC and MoF	Ministry	Chaitra 4th week
10.	Policy-focused discussion on proposed annual programmes and federal- and local-level budgets in NPC	NPC	Chaitra 4th week
11.	Revision of LMBIS in line with the agreed discussion held in NPC	Departments and centres	Baisakh 1st week
12.	Policy-focused discussion on programmes and budget with MoF	MoF	Baisakh 2nd–4th week
13.	Forwarding of statements of transfer through conditional grants with detailed programmes and activities to MoF	Ministry	Baisakh 3rd week
14.	Entry of agreed proposed programmes and budget with MoF in LMBIS and e-AWPB	Ministry	Baisakh 4th week
15.	Submission of budget estimates to the joint session of federal parliament	MoF	Jesth 15
16.	Revision of LMBIS and e-AWPB in accordance with the approved budget from parliament	Ministry	Ashad 2nd week
17.	Approval of the office-wise allocation in LMBIS from MoF	Ministry	Shrawan 1st week
18.	Issue of budget implanting authorisation with details of programmes for each office	Ministry	Shrawan 1st–2nd week

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PROVINCIAL BUDGET AND PROGRAMME FORMULATION TIMEFRAME

S.N	Steps/phases	Timeframe
1.	Submission of revenue and expenditure projection for next FY to GoN	By end of Paush
2.	Delivery of budget ceilings and guidelines on fiscal transfer from GoN to Provinces	By end of Falgun
3.	Determination of the size of estimation on resources and budget ceiling	By Chaitra 15
4.	Delivery of budget ceiling to line ministries/entity I province	By Chaitra 20
5.	Submission of proposed programmes and budget to PPC and MoEA	By Baisakh 10
6.	Finalisation of proposed programmes and budget	By Jestha 15
7.	Obtaining approval from PPC on the proposed development programmes/activities	By Jestha 25
8.	Submission of Province budget to Province assembly	By Ashad 1
9.	Obtaining approval from Province assembly on programmes and budget	By end of Ashad
10.	Publication of the budget and programmes of the following FY	Ashad 1

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BUDGET AND PROGRAMME FORMULATION TIMEFRAME AT LOCAL LEVEL

SN	Steps/phases	Timeframe
1.	Submission of revenue projection by Revenue Consultative Committee to local executives	Paush 15
	Submission of revenue and expenditure projection for following FY with data to GoN	By end of Paush
2.	Obtaining  budget  ceilings  and  guidelines  on  fiscal  transfer  from GoN/Province	By end of Falgun
3.	Allocation to different thematic sectors	by end of Chaitra
4.	Determination/estimation of resources and budget ceiling by the Budget Ceiling Determining Committee	By Baisakh 10
5.	Providing budget ceiling to committees and thematic divisions	By Baisakh 15
6.	Prioritising ward-level programme formulation	By Jestha 15
7.	Formulation of the integrated proposed budget for the local level for the following FY	By end of Jestha
8.	Approval of programmes and budget from the local executive	By Ashad 5
9.	Submission of budget estimation with mid-term expenditure framework	By Ashad 10
10.	Obtaining  approval  from  local-level  assembly  on  the  budget  and programmes, including MTEF	By end of Ashad
11.	Publication of the budget and programmes for the following FY	By Shrawan 15

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Source of information: Public Financial Management (PFM) Strategic Framework

Related readings

Ministry of Health & Population

Divisions:

1. Policy, Planning & Monitoring Division
2. Health Coordination Division 
3. Quality Assurance & Regulation Division
4. Population Management Division
5. Administration Division

Unit

• Health Emergency and Disaster Management Unit (Health Emergency Operation Center -HEOC)

Councils

1. Nepal Medical Council
2. Nepal Nursing Council
3. Nepal Ayurvedic Medical Council
4. Nepal Health Professional Council
5. Nepal Pharmacy Council and
6. Nepal Health Research Council

Central Hospitals

Departments

• Department of Health Services (DoHS)
• Department of Drug Administration (DDA)
• Department of Ayurveda and Alternative Medicine (DoAA)

Vector Borne Disease Research and Training Center (VBDRTC)

Department of Health Services (DoHS)
Centres

• National Health Education, Information and Communication Centre (NHEICC)
• National Health Training Centre (NHTC)
• National Centre for AIDS and STD Control (NCASC)
• National Tuberculosis Control Centre (NTC)
• National Public Health Laboratory (NPHL)

Divisions

• Management Division
• Family Welfare Division
• Curative Service Division
• Nursing and Social Security Division
• Epidemiology and Diseases Control Division (EDCD)

Sections

• Administration Section
• Finance Administration Section

Department of Drug Administration (DDA)

1. Drug Evaluation and Registration Division
2. Planning, Coordination and Management Division
3. Inspection, Evaluation and Law Enforcement DivisionNational Medicines Laboratory (NML)

Department of Ayurveda and Alternative Medicine (DoAA)

1. Herbs, Medicine and Research Division
2. Ayurveda Medicine Division
3. Alternative Medicine Division
4. Administration Section

Provincial Government

Provincial Health System

Ministry of Social Development (MoSD)

• Hospital Development and Medical Service Division
• Policy, Law, Standard, Planning and Public Health Division

Offices 

• Health Directorate
• PHEOC
• Health Offices
• Provincial Health Logistic Management Center
• Health Training Center
• Provincial Reference Laboratory

Local Government

Local Health System

• Metropolitan Health System (Division/ Section)
• Sub-Metropolitan Health Section
• Rural Municipality Health Section
• Municipality Health Section
• Primary Hospitals
• Primary Health Care Center
• Health Post
• Urban Health Promotion Center
• Urban Health Center
• Community Health Unit
• Female Community Health Volunteers
• Expanded Program on Immunization Clinics
• Primary Health Care Outreach Clinics

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Related readings: Health Insurance Board (HIB)

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