improved and monitored. These can be augmented as proposed above with indicators of numbers or proportions of staff on duty and available to carry out their responsibilities. Subsequently, simple indicators of output/performance could be compiled and used in monitoring. It is more important to collect and effectively utilize simple information than to devise highly sophisticated data and monitoring systems which are difficult to implement and become a burden on scarce Government capacity. Finally, the institutions concerned need to take on the role of monitoring and evaluation and treat it as a serious part of their work, and to make meaningful use of performance indicators in decision making.

To illustrate how straightforward monitoring of basic financial data can provide meaningful insights and feedback for resource allocation and other budgetary decision-making, Table 5 compares estimated actual expenditures with budget targets for various categories of security sector expenditures in 2003/04 and 2004/05. Key points that emerge include the following:

- There were sizable deviations between budgeted and estimated actual spending for most categories of security expenditures and also major fluctuations over time, suggesting that there is still a long way to go before the budget becomes a reasonably good predictor of actual expenditures.

- Within the security sector, External Budget expenditures are substantially higher in relation to budget targets than are Core Budget expenditures.

- Defense expenditures tended to perform better in relation to budget targets than other parts of the security sector, especially in 2004/05.

- Comparing the security sector with the budget as a whole (see World Bank, 2005b, Volume II, Part 1, Table 1.1), it is clear that the security sector achieved considerably higher expenditures in relation to budget targets than did the overall budget.

**Table 5: Deviation Analysis of Security Sector Budget**

||**Budget**<br>**target**<br>**(US $**|**Estimated**<br>**actual**<br>**2003/04**<br>**million)**|**(Percent)**<br>**Estimate /**<br>**Budget**|**Budget**<br>**target**<br>**(US $**|**Estimated**<br>**Actual**<br>**2004/05**<br>**million)**|**(Percent)**<br>**Estimate /**<br>**Budget**|
|---|---|---|---|---|---|---|
|**Total**|**812**|**1,105**|**136**|**1,510**|**1,328**|**88**|
|**Core**|**193**|**235**|**122**|**355**|**292**|**82**|
|Operating|193|233|121|255|275|108|
|Development|-|2|-|99|17|17|
|**External**|**619**|**870**|**140**|**1,155**|**1,036**|**90**|
|Defense|563|797|141|790|788|100|
|Interior|143|209|146|498|340|68|
|Justice|13|16|125|61|45|74|
|Other|93|84|91|161|155|96|

_Source: Ministry of Finance budget documents and fiscal reports, staff estimates._ These observations suggest that the security sector as a whole (in relation to the rest of the budget), and within the security sector the External Budget and Defense, were better “protected” in terms of expenditures in relation to budget targets.

# **6.5. Summary of Recommendations**

The most important message emerging from this analysis of expenditures and public financial management in Afghanistan’s security sector is that the security sector needs to be 33