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  • effective budgeting and forecasting enable the resources to be allocated and planned to achieve programmatic and financial objectives
  • facilitates tracking of expenditures against a forecast, providing a feedback mechanism

Budgeting is a process usually undertaken before the beginning of the financial year, to create a plan or estimate of the expected incomes and expenditures in the upcoming financial year. The budgeting process is usually collaborative, enabling budget assumptions to be agreed and stated.

Forecasting can assist in preparing cashflow forecasts and asset purchases as well as a “sensitivity analysis”, understanding the areas where a small percentage change can have significant overall impact.

UNDP’s Support

UNDP has worked with several ministries of health to develop detailed finance manuals and standard operating procedures, which detailed the budgeting process.

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In several countries, UNDP has developed an Operations Manual for the Ministry of Health which details the steps in the budgeting process. It also includes the processes for approval and subsequent monitoring and modification.

UNDP’s offer

UNDP has assisted health programmes to improve budgeting and forecasting systems in Africa, Asia and the Caribbean.

  • UNDP works with ministries of health to
    • use existing national budget systems and procedures
    • prepare budgets for health programmes
  • UNDP provides technical support to budget and cost national strategic plans, including identifying available resources as well as critical gaps
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  • Demonstrates a clear linkage between
    • national health strategies
    • disease programmes and
    • financial budgets and forecasts
  • UNDP has worked with CSOs and governments to
    • design and implement robust budgeting systems supported by a systematic approach for cost allocation and cost recoveries
    • develop manuals, guidelines and standard operating procedures (SOPs) to conduct a meaningful variance analysis as well as, where appropriate, feed into remedial actions
    • establish clear policies for project-specific costs for the following
      • salary scales suitable for attracting and retaining critical project staff
      • travel and subsistence
      • standardized training costs
      • vehicle usage and costings
      • consulting fees and scale rates
  • UNDP has used innovative approaches to tailor existing IT systems and technologies which interface with existing systems to provide easy to use budget input and forecasting
  • UNDP has developed a capacity assessment tool which helps to identify areas for strengthening in budgeting and forecasting for health systems
  • UNDP works with government health systems and projects, as well as CSOs, to establish development milestones and indicators, including training needs to measure improvements in effective budgeting and forecasting
The Global Fund requires each grant to have detailed budget in a prescribed format. UNDP has a core team with strong familiarity with the templates, as well as being fully conversant with the Global Fund Budgeting Guidelines. UNDP is able to mobilize a team of strong finance professionals to support budget development

Suggested capacity development indicators

UNDP uses clear indicators to monitor improvements in budgeting and forecasting

  • an approved budget is in place
  • integration of planning and budgeting processes
  • budgets are integrated with programmatic and financial results
  • budgeting guidelines and procedures are available, in all Head Offices and % Regional Finance Departments
  • % Budgets are developed on an activity basis and adopt a bottom-up approach
  • the budgeting cycle for the health system is aligned with wider government or institutional timelines
  • disbursement requests supported by cash forecasts completed correctly and submitted punctually

Key resources

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