GEORGIIAN SECURIITY ANALYSSIISS CENTER INTERVIEW June, 2007 MOD Planning, Programming and Budgeting System and Human Resource Management To help fulfill its goals under the NATO Individual Partnership Action Plan (IPAP), Georgia has asked the Netherlands to provide support in the area of planning, programming and budgeting (PPBS) and human resource management (HRM). The first phase of the project took place February 2006 - June 2007, focusing on PPBS. On June 21, the two countries signed a new Memorandum of Understanding that focuses on an HRM that will run through early 2008. The Georgian Security Analysis Center interviewed the leaders of a Dutch delegation that visited Tbilisi June 20-21 Professor Jan Geert Siccama, Deputy Director of General Policy Affairs, MoD; Mr. Henk Swarttouw, Deputy Director of Security Policy, MFA; Mr. Ray Thuis, Director of Financial Departrment, MoD. In a separate interview, GSAC talked to the Georgian side of the project Mr. Nodar Kharshiladze, Director of the Defense Policy Planning Department, MoD; and Ms. Maka Petriashvili. Also of the Defense Policy Planning Department. GSAC: I think it will be useful for our readers to start with kind of overview which goals of Planning, Programming and Budgeting System have been achieved and which tasks are still to be accomplished? Siccama: Perhaps it is also good to say something about the purpose of the project. PPBS is a bilateral project, aside from the multilateral efforts which are being made for Georgia s NATO integration. The Georgians should be, and are in the driver s seat. Our main purpose was to give Georgians a tool, an opportunity to build transparency in the relationship between the policy goals of Georgian defense policy and defense planning, which is more a military activity; and transparency in the budgetary allocation, which of course, is a parliamentary matter. So you have to bring all these into a relationship and the project has developed in this respect. I think now the project has to reach deeper into the organization. This requires some more time, some years perhaps, to get sustainable results, which will be also be useful for Parliament and for the general accounting office. These are the institutions that also should have their own view into the Georgian defense policy-making process and allocation process. GSAC: Have the major goals of the project been achieved? Siccama: Well, I think the tool has been transmitted and that is the success of the project. Swarttouw: Now Georgia has the tools to continue the process itself. With regard to this project, it is amazing what so few people have achieved in such a short time. There is perhaps one concern, that within the Georgian defense organizations, the base is still quite small, and the number of people who have been involved in reforms is still very limited. This has to sink into the whole organization to be able to keep the results achieved sustainable for a long term. One
area in which I think reforms still need to improve, in which achievements have not been made to the desirable extent, is perhaps transparency in the budgeting process, and particularly in procurement. There still could be more transparency in the way procurement decisions are made, are founded in a coherent framework and also in the way they are funded. GSAC: What are some of the recommendations that could help Georgia accomplish the tasks that have not been accomplished to the desired extent? Siccama: As a NATO official said, now you can walk, but you have to walk. How you do this is a question of the internal defense organization of Georgia, and a question of parliamentary involvement. Parliaments in democratic societies require transparent decision-making and budget allocation; you want to know where the money goes. Swarttouw: And where it comes from. We are not without sins in that regard as well. Recently we had problems in our financial defense planning. Siccama: Sure. Everything I say here may be translated to our own country. But no doubt, there is a difference. You have had a great increase in revenues and in the defense budget. [In the Netherlands,] Parliament would immediately ask how you spend that money. Major debate would arise. Opposition parties have defense committees and they would start major investigations; hundreds of questions would be asked. GSAC: Strengthening parliamentary oversight was one of the project recommendations. Is the Dutch team giving any specific recommendations to the Defense Committee other than that, generally, there needs to be more oversight? Swarttouw: That is beyond the mission of the project. We advise the Georgian defense organizations, not the Georgian Parliament. We may have remarks about the general involvement of Parliament in government decision-making, but this is outside the scope of this project. Thuis: As my colleagues have rightly mentioned, all instruments are in place, so that is not an issue. It is now to make them work, and I worry about three things, if I may. First, one of the pillars of this project is a pilot program with the brigade that is going to be sent abroad. That might create a problem. At the end of the day, you might end up with instruments and some people at the staff level being able to understand them, but the vertical part of the story might not be completely understood, felt and executed. So at the end of the day, you might end up with the instruments which work only at the staff level and not throughout the entire organization. One of my suggestions would be to start a new pilot project as soon as possible, preferably with a brigade that stays in Georgia. Because it is not just staff exercise, it has got to be something that is felt by the whole organization. You have to go through a full cycle planning and budgeting is not too difficult to do, but you have to do it. You have to run through the full cycle to be able to execute it completely. Second, and a very important issue, is involvement of the Ministry of Finance; otherwise it might run risks for the entire projects. You may involve the Ministry of Finance either in the final stage budgeting, or, preferably, in the start of the cycle, in which you define policy. If you don t get them involved, and instruments remain only in the hands of the Ministry of Defense, they will not work. So, a proper finance cycle is crucial for the instruments that are already in place, but need to be executed. When you look at the PPBS pyramid, there are three building blocks that link policy, programming, planning and budgeting. They have to be inter-linked, otherwise you run a risk of having a policy being just for policy makers, as in case of not involving Ministry of Finance. It is not about policy making, it is about policy being able to
transition to an executive phase in operations, in people doing what you actually thought they would need to do. So you have to devise a system that inter-links the information and the management control system. Life cycle cost is another big issue. When it comes into play, lifecycle cost is not an instrument that should be kept to itself or left alone. It should link the three building blocks of policy, planning, and budgeting. So three rather concrete suggestions that if executed, with instruments already in place, could work. GSAC: On June 21, the new Memorandum of Understanding will be signed. What do you plan to achieve in the new phase of the project? Thuis: The new phase of the project will be human resource management. The financial management system is finished in the sense that all the instruments are there. It is now up to Nodar Kharshiladze and others to actually make it work. Having followed the process very closely in the last year and a half, I know that they have already done a remarkable job. seated Prof. Siccama, Mr. Nikoleishvili ; standing Mr. Swarttouw, Mr. Thuis, Amb. Elderenbosch, Mr. Kharshiladze
GSAC: Mr. Kharshiladze, let us start with the overview of the first phase of the project. Kharshiladze: This bilateral project with the Dutch Ministry of Defense was a very good example of a successful project. First of all, the approach introduced by our Dutch colleagues was very effective and efficient because they did not provide us with ready solutions. They facilitated processes, which led to solutions and that was very good. They helped us with staff training, both domestic training, as well as training in Holland. They have provided us with a different kind of problem-solving experience and, of course, the experience needed for building team work with the joint staff and the MOD. We consider that all those processes together resulted in a quite good and impressive conclusion. We do think that the first stage accomplished various goals. We have now better qualified and well-trained people, better relationships and good team work among the joint staff and MOD at certain levels. Of course, I do not want to say that everything is perfect, but regarding this very project, everything is good. Other than that, a number of institutional tasks were also accomplished. We have created structures like the board of directors, management team or decision-making body, as well as program managers. Of course having only structures is not enough to have a successful process, but to manage a process in the first place you need good structures. So the first step was made. As you have rightly mentioned, the first stage of this program resulted in well-considered and well-established institutions inside MOD. Now the second and very important stage of this project will be to implement all these decisions step-by-step. We have already been engaged with this stage but, of course, we cannot finish it overnight. For the first year we think to have 25-30 % of the processes fulfilled in accordance with this project and its framework. Next year we will almost double our achievement, and in three years we think to have introduced 90 % of the overall efficiency. This is our priority at the moment. GSAC: While working on the project, which were the most difficult goals to accomplish? Kharshiladze: The hardest and the most challenging goal was to implement everything, to have in reality what looked nice on paper. This was because, of course, the processes are going well, but there are always number of obstacles that are presented. For example, some aspects of the legal base need improving. We need additional training for personnel because we don t have a large group of people who can deal with the system. Then, of course, we have to settle down and start the system, which is in the process of building, and still based mostly on the goodwill of the leadership and political level of the leadership. We have been successful so far, but there is not a system established yet and that is the problem. I would like to mention that the Dutch team also contributed to the process of the Strategic Defense Review. This was based on a number of different recommendations, of which one of the biggest contributors was ISAB. We received most of the recommendations from them in trying to establish the joint staff, civilian control on the staff and so on. We have already been engaged in this process for years and I think now we are up to the end of the process. This is a unique case in which a state agency in Georgia was able to provide the plan for SDR itself. Of course, in this regard, we should mention NATO involvement and, though the Dutch side well contributed to the establishment of the SDR plans, they also worked with the Ministry of Finance. The Dutch also provided four-year budgeting proposals. So it was also a very good contribution from their side to the SDR. That process, which is almost done, is also one of the successful projects.
GSAC: You have been working on human resources management. The next phase of the project primarily focuses on HRM; what has the Georgian side gained, what do you hope to gain, and where are we now on the HR side? Petriashvili: The amendment made in the Memorandum of Understanding mainly covers support, establishment and development of an HR management system in the Georgian MOD. This MoU covers only civilian personnel management and it will define the strategy we are going to use with civilian personnel management. It covers the whole HR management cycle, from recruitment up to retirement. It includes the current management and training systems as well. We are going to start a pilot program on the assessment of personnel who work now in the MOD. The pilot program department, I think, will be the Defense Policy Planning Department. We will assess performance and personnel potential, competence, skills, and the directions employees should develop to fulfill their job functions more effectively. I mean, HR is not only appointment, selection or evaluation of somebody; it must also support professional development as well it is a part of the total defense system. All this process is based on the current public service law, as it will be when the new law comes in force. GSAC: Obviously, when you do a program like this, whether you are a Georgian civil servant or a Dutch adviser, you have to conform to the current law. That said, when people review western best practices they may find that to implement a western practice you need an amendment to the law. Have you encountered situations where you need amendments to the law? Petriashvili: For example, when we were working on military personnel management--it is not connected with the Dutch program but anyway, we found out that the length of service according to Georgian law was not proper for our army reformation process. We wanted to meet NATO requirements and so, we sent a proposal to Parliament to amend a current law, and this will be done in Autumn. So yes, we have had that kind of practice. GSAC: And in the terms of the Dutch program so far do you anticipate any such proposals that could be offered to the Parliament? Petriashvili: We do not know it yet, but currently everything is based on the law. Kharshiladze: Of the current HRM project we can say that there were already some good results achieved. They have set good cooperation between military and civilian human resources. They also trained and developed some personnel skills. Before, simply nobody knew what was HR. So, step-by-step, they started to get a little more professional, and then they got some individual training simply how to work with papers, how to develop different concepts, and how to deal with the overall issues. So, that is already achieved, and now they are starting the second and more advanced stage, in which they will go into details and start to fulfill this difficult process step-by-step. Their task is actually easier than was their military counterparts because MOD has only 300 people, not 28,000. I think anyway it will be complicated, but a successful task. Petriashvili: We are going to harmonize the military and civilian ranks as well, and establish a system in which we will be able to switch appoint a military person to a civilian position and opposite way. We don t have that practice now. We have a mostly civilian MOD like 95 % are civilian so we are going to increase military personnel in MOD positions. GSAC: When, having harmonized the ranks, will the pay by rank system be introduced? Petriashvili: Yes, and this will be additional amendment to the law.
GSAC: When you are finished, will there be something that a Georgian civil servant can look at that, essentially, is a career plan, showing when one enters service, things one should do to be promoted education, training, etc.? If successful, this will be path one takes? Do you anticipate that kind of framework? Petriashvili: Yes, our goal is to make everything for an employee and public servant very clear. When he/she enters the public service, he/she should have a picture of his/her career development up to retirement. And even in case of military personnel, we are currently working with NGOs on how to support their reintegration into the civilian work force. Maybe we will have some training on how to prepare CVs to find a job after military service. ###