Transformation of Government through the Integrated Results Based Management System
1.0 Introduction & Background
“People First, Performance Now!” – this is the slogan that is being used by the Malaysian government to rally a major initiative to reinvent government to improve public sector performance and service delivery. The slogan is also an important transformation change management tool that is intended to rally all key development partners in the country towards further improving the national development results. An assessment carried out in 2008 of the then ongoing 9th Malaysian Plan 2006-2010 showed that the progress and success with the national development plan was still not satisfactory1. Though the development planning approach and process were robust enough, the assessment showed that the real underlying challenge was with the implementation system and especially with the monitoring and evaluation aspects.
2.0 Government Transformation & Reinvention
Based on the assessment, the government decided to review and revamp all aspects of the national development planning and implementation system commencing with the national development planning system, and all other aspects of public sector performance. In this respect, the government reviewed the latest approaches to development planning and results management for public sector. Technical advice from outside was brought in to help support its effort. Among the key new initiatives that the government adopted to help it improve public sector performance was the Integrated Results Based Management (IRBM2) system. In early 2009, the government brought in a team of public sector performance management experts3, which helped to design and introduce the IRBM system into government, in time for the 10th Malaysia Plan which was supposed to commence in 2011. The government decided to break up the implementation of the IRBM system into strategic parts commencing with the integrated development planning component. The various components of the IRBM system were assigned to key implementing entities in government as follows:
a. Integrated Development Planning Component – Economic Planning Unit of the Prime Minister’s Department
b. Integrated Results-Based Budgeting (IRBB) Component, Integrated Monitoring & Evaluation (IME) Component and the Integrated Management Information and Decision-Support System (IMIDSS) Component under the Ministry of Finance. The last component of the IRBM system, the Integrated Results-based Personnel Performance System (IPSS) was placed under the Public Services Department (PSD), of the Prime Minister’s Department.
Implementation of the IRBM system in time for the 10th Malaysia Plan was started in earnest in early 2009 and the IDP component was completed towards the end of 2009. The RBB, M&E and DSS components were then commenced by the Ministry of Finance towards the end of 2009 with an expected completion of the entire IRBM system by December, 2011. Similarly, the personnel component (PPS) was commenced by the PSD with an expected completion date of December, 2011 as well. The entire IRBM initiative is coordinated through a national steering committee chaired by the Secretary General of the Ministry of Finance4.
It should also be mentioned that the above initiative to make the 10th Malaysia Plan fully IRBM compliant is also complemented with a number of other initiatives by the government, some of which are meant as Quick Wins while others are meant to be strategic initiatives5.
The sections below highlight the main features of the transformation that is being carried out by the government on a whole-of government basis.
The schema below illustrates the main features of the transformation initiatives, the focus, and the expected results. Details of these are provided in the sections below.
3.0 Main Features of the IRBM System to Transform Public Sector Performance
The schema above shows ten key points of transformation for the 10th Malaysia Plan that are expected to push public sector performance to new heights during the 10th Malaysia Plan 2011-2015. Details of these key points are presented below.
3.1 Results Based National Development Plan Focused on Outcomes
Under this key point, the government will ensure that all national development plan programs and projects will focus on outcomes rather than on outputs. This is a major change as the focus in the past has mostly been on outputs, activities, and expenditures (inputs). The 10th Malaysia Plan has now incorporated a significant macro results framework that clearly spells out the key outcomes that must be achieved for the national level under the 10th Plan. This is crucial to ensure that the targeted achievements are focused on grounded and evidenced- based outcomes. The outcome determination is done through a process of logical analysis using the ProLL Model approach6.
3.2 Multi-Level Programs & Outcomes
The 10th Malaysia Plan will adopt a multi-program and multi-outcome approach under the IRBM system. Under this approach, all initiatives will be seen as interventions and will adopt a programs-of- intervention approach for all 10th Plan initiatives. Each program will be linked to a set of outcomes at each level i.e. National, Ministry, Program, Activity with each level of outcome linked to the higher level. This is based on the HoVeR Principle7 which requires an integrated approach to policy implementation.
3.3 Integrated Budget Submissions
Under this requirement, all budget submissions by Ministries will adopt an integrated results based budgeting approach using a outcome-based program approach. All Ministries are currently required to prepare and submit their budgets based on this approach that is also a requirement under 3.2 above. The integrated budget submission covers both development as well as operating budget but is based on programs of interventions with specific outcomes identified and used as accountability mechanisms.
3.4 Adoption of Two-Year Rolling Budgets
Development programs/projects are often planned over the medium term of up to five years. Though typically Parliament approves the programs/projects for the five year period, the budget is difficult to be approved for five year blocks. This is due to financial and fiscal constraints and uncertainties. As such, medium term plans are now approved for five year blocks of time but their appropriation still follows a two-year rolling budget approach. Under this approach, approved programs/projects are funded on a two-year rolling basis. The use of the two-year rolling budget also helps to ensure that all scheduled projects are completed on time during the 24 month turn around period.
3.5 Continuous Engagement & Role of All Development Partners
Malaysia has a long history of engagement with the private sector and all other development partners. However, this has been mostly confined to the planning stages when there is extensive consultation with the various stakeholders. The study done in 2008 showed that many of the planned programs/projects showed shortfalls. This was due in part to the poor delivery by other development partners. Under the IRBM system, the concept of holistic engagement is highly prescribed to ensure the success of development initiatives. This calls for the continuous and total engagement of all development partners, not only in the planning stages but through the complete life cycle. This requirement, besides applying the HoVeR Principle, also ensures that all developments are continuously engaged including the monitoring, evaluation, and accountability for results aspects. This has been recognized as a key success factor under the IRBM system.
3.6 Program Plans and M&E Plans
Under the integrated planning and management approach prescribed by the IRBM system, systematic planning and structuring of development initiatives is a requisite. As mentioned earlier, the IRBM system strongly prescribes the adoption of a program-based approach to development and budgeting. Among others, this calls for the design and preparation of structured development program plans and M&E plans for every program of intervention. The Program Plans spell out the logical details of an intervention program while the M&E plan requires every program to prepare a structured and detailed M&E plan that will ensure the systematic implementation of each program of intervention. This is an integrated requirements under the IDP, RBB, and M&E components of the IRBM System. Under the 10th Malaysia Plan, the above will be mandatory for all Ministry programs.
3.7 Systematic Program Performance Monitoring
A major flaw of the previous results based budgeting system was its adoption of the reporting by exception approach. This exceptions performance reporting will no longer be adopted for the 10th Malaysia Plan. Instead, mandatory performance monitoring based on the outcome-based program approach will be utilized. This reporting will be supported by a detailed and structured program performance management approach under the M&E component of the IRBM System. This approach helps differentiate between monitoring and evaluation but also prescribes a synergistic integration between monitoring, evaluation, and the prescription for policy and strategic adjustments. This also complies closely with the evidence-based policy management requirement under the IRBM system.
3.8 Integrated Program Evaluation
Evaluation has been a requirement under the results-based budgeting system since 1990. Sector-based evaluations have also been a requirement under the PPBS8 system implemented by Malaysia since 1969. Under the IRBM system, every Ministry will be required to carry out evaluation of its programs on an annual basis. This program-based evaluation is to complement the program approach undertaken and ensures that all programs undertaken in government undergo evaluation on an annual basis. However, to address capacity issues, this annual requirement will be confined to formative evaluation only while the once-in-five-years summative evaluation requirement under the current system will be maintained. To further ensure the practicality and usefulness of the evaluation effort, the government will adopt the Internalized Self-Evaluation (ISE) Approach9 that was successfully experimented since 1999. This is expected to substantially strengthen the evaluation and results management process. This requirement will also help do away with the traditional approach of mid-term review process on the Malaysia Plan programs/projects.
3.9 Annual Program Performance Reporting
To further strengthen the program performance management process, the government will further strengthen the program performance reporting system. This will be done through the introduction of a structured program-based performance reporting system that is also supported by a fully e-enabled integrated performance monitoring and reporting system. The use of e-enabled integrated systems is a requisite under the IRBM system as it requires substantive performance data management for key types of decision-making at all levels. The structured performance reporting will be closely supported through a range of systematic and structured program performance management setups and mechanisms at the implementation levels.
3.10 Role of Mid-Term Review & Policy Adjustments
This is perhaps the true test of the IRBM system’s effectiveness and usefulness. Under this requirement, all programs under the 10th Malaysia Plan will have to carry out mandatory formative evaluations on an annual basis. This annual evaluations will be used to carry out any adjustments to the prevailing program strategies, including policy adjustments where critical to ensure the success of the programs. Given this, there will be no necessity for the traditional mid-term reviews. However, the end-of-Plan evaluations of the programs will still be carried out to guide the formulation of policies and strategic directions for the next Plan. However, it should be noted that the doing away of the mid-term reviews will be the end result of a combination of the restructured monitoring system, the annual performance reporting, institutional arrangements, and the annualized formative evaluations. Strategies and mechanisms are also put into place to ensure the practical application of the formative evaluation requirement.
4.0 Summary and Way Forward
The government’s dynamic leadership under the current administration and its rallying call for a “People First, Performance Now!” approach has already produce some good results. The leadership’s dedicated move to transform government and move public sector performance to new heights has proved to be a strong foundation. The introduction of the IRBM system has also helped to provide government with the necessary system, structures, institutional and functional setups, and performance management tools that are crucial to the success of development initiatives. It is now left to be seen how the government’s transformation initiative and the new strategies under the IRBM system help improve the performance under the 10th Malaysia Plan and onwards towards systematically achieving the nation’s Vision 2020.
Footnotes
- This assessment was part of the regular mid-term review of the 9th Malaysia
- The IRBM system is an adaptation of the original RBM system. The system covers the key components of development planning, budgeting, personnel performance, monitoring and evaluation, as well as management information and decision-support systems. The IRBM approach was originally pioneered by Arunaselam Rasappan in 1999 through his public sector performance research work. See also Rasappan. A. (1999), “Integrated Development Planning”, ARTD Malaysia; Special paper for CTA Conference, UNDP, Hanoi: March.
- The Center for Development & Research in Evaluation (CeDRE) International (Malaysia) was commissioned to help adapt and implement the IRBM system for Malaysia and to ensure that the 10th Malaysia Plan was fully compliant with the principles of the IRBM system. CeDRE International has been policy and technical advisors to several governments in Asia, Africa, and Middle East on the IRBM system adaptation and implementation.
- The IRBM system implementation is referred to by different labels for each The IDP component is referred to as the Outcome-based Approach (OBA), while the RBB portion is referred to as the Outcome-Based Budgeting Component. However, these labels are likely to be changed soon to reflect the strong results orientation as recommended under the IRBM system.
- This includes the Government Transformation Programme focused on five key priority areas and the Economic Transformation Program, focused on twelve economic drivers of change for the government’s performance agenda under the 10th Malaysia Plan.
- ProLLTM is a special logical analytical tool used for both program planning as well as program monitoring and evaluation. The model was first developed by Dr. Arunaselam Rasappan in 1992 for use in the Malaysian public sector under the Modified Budgeting System (MBS). The Model has since been adopted in several countries and is now the main performance planning and evaluation tool adopted for programming and performance management by all Ministries and agencies in Malaysia. See also Rasappan, Arunaselam 1994, “How To Measure Success”, Khidmat, pp. 27-29
- HoVeR Principle refers to the need to adopt an integrated program approach for turning policies into actions and results at the grassroot level. It coves all aspects of both vertical and horizontal integration needed to ensure effective and efficient development results at all levels. See also Rasappan.A. 1999, “Integrated Development Planning in a Developing Country”, ARTD Malaysia, Special Paper CTA Conference, Hanoi; March.
- PPBS is the Program Performance Budgeting System implemented in 1969 across government. This budgeting system introduced the concept of evaluation based on a Program- Activity structure but was not implemented to its full extent due to several challenges.
- The ISE approach was first developed in 1999 by Arunaselam Rasappan with the close cooperation and collaboration of the Ministry of Finance, Malaysia. It involves building the internal evaluation capacity of key officials within a Program to design and carry out structured evaluation of their own programs. This is both for internal performance management purposes as well as supporting external summative evaluations. The ISE approach has now been adopted by the World Bank as a strategic approach to strengthen evaluation within government.