Economic Growth & Governance Initiative Quarterly Report Q2 2013

The project's focus on budgeting, tax administration, and revenue generation led to notable areas of progress. Program budgeting was a key area of focus, with the project conducting debriefing sessions on the approved FY 1392 budget for 645 participants from 25 budgetary units. The project also supported line ministries to better align their budgets with government priorities, with the updated program budgeting workplan approved in early March. Provincial budgeting coordination activities continued, with the project conducting meetings with provincial counterparts, donor projects, and regional USAID representatives. However, provincial budgeting workplan activities were cancelled per USAID guidance in March. Tax administration was another area of progress, with the project delivering tax enforcement training to 72 tax officials from the Kabul and Jalalabad Large Taxpayer Offices (LTOs), Medium Taxpayer Offices (MTOs), and Small Taxpayer Offices (STOs). The project also delivered accounting training to 42 tax officials from the Herat, Mazar, Jalalabad, Kandahar LTOs and MTOs, and Kabul STO. The Women in Government team celebrated three years of success for the internship program and officially launched the Women in Development Association. The program hired 120 additional interns in Kabul and the provinces, and 138 interns graduated from the internship program during the quarter. An additional 38 interns found full-time employment, bringing the overall full-time employment rate for program graduates to 62%. The Revenue Reconciliation Database (RRD) team supported the Afghanistan Revenue Department (ARD) to successfully remediate RRD application issues and fiscal year reporting issues in five of the six priority provinces—Herat, Kandahar, Kunduz, Mazar, and Nimroz. The project's quarterly objectives and results are broken down by associated workstream. The project continued to support 38 line ministries in all key aspects of budget formulation, budget execution, and performance reporting. The project's support focused on program budget structures and aligning line ministry budgets to government priorities. Following the approval of the FY 1392 budget by Parliament, the program budget team worked with the line ministries to complete necessary program budget activities and organized debriefing sessions to review the budget in detail and help budgetary units understand the approved budget. In response to requests from the Ministry of Finance (MoF), the team finalized a new workplan, which was approved by the MoF in early March. The new workplan includes implementation of Operations and Maintenance (O&M), gender-sensitive budgeting, pro-poor spending, and State Budget Planning System (SBPS) rollout in selected line ministries. The Parliament approved the FY 1392 national budget on January 20, following a two-month budget review and discussion both at the committee level and in plenary meetings. The overall budget scrutiny and review process by Parliament has improved significantly for the FY 1392 budget from earlier years. Many of the suggestions from Parliament were incorporated in the final budget. The total budget approved by the Parliament was $6,809.2 million, including an operating budget of $3,775.5 million and a development budget of $3,033.7 million.