Budget support training

Module 5

Transparency and oversight of the budget(Third eligibility criterion)

Version October 2013

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Outline of module 8

1. Why this new eligibility criterion?

2. How to assess initial eligibility: preparing the document for programme approval (supplement to the Action Fiche)

3. How to assess ongoing eligibility: preparing the payment file for the programme

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Transparency and oversight of the budget

New eligibility criterion

Definition: Budget transparency is the full disclosure of all relevant fiscal information in a timely and systematic manner.

Why is it important for BS? Key element of good governance: domestic accountability

requires public availability of comprehensive, timely and reliable budgetary information

Allows control bodies (Parliament, auditors, media, civil society) to hold policy makers accountable for the collection and use of public resources

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Assessment methodology

Definition of an entry point for provision of BS operations Assessment of progress based on a dynamic approach

The dynamic approach consists of

Identifying a baseline and setting realistic medium-term reform objectives during the formulation phase

Monitoring progress against the objectives

NB: Relevance & role of oversight bodies is examined under the FM eligibility criteria assessment (to avoid duplication)

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To keep in mind

Budget transparency is necessary but not sufficient for oversight and scrutiny; support is also needed for: Strengthening national legislative and oversight bodies Strengthening internal control mechanisms Encouraging a participative BS approach (e.g.. association of

national control bodies to BS annual reviews, use of national audit reports to feed in policy dialogue)

Publication does not necessarily mean availability to the public. Effective accessibility must be assessed.

Reforms of transparency and oversight of the budget take time. Therefore it is important to set realistic objectives.

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Outline of module 8

1. Why this new eligibility criterion?

2. How to assess initial eligibility: preparing the document for programme approval (supplement to the Action Fiche)

3. How to assess ongoing eligibility: preparing the payment file for the programme

1. Assessing the entry point

The government must have published its budget proposal or its enacted budget within the past or current budget cycle. Information must be available in print or on the web.

Under certain circumstances a programme can be approved if the partner government commits to meet the entry point before the first disbursement (to be specified in the Financing Agreement) for SBC in general and for BS contracts in SIDS/OCTs in exceptional and justified cases

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2. Identification of key weaknesses on transparency and oversight of the budget

Provide: A short summary of OBI, PEFA (cf Guidelines Annex 6, table

Template A, 2.page 117 on the relevant 6 PEFA indicators) to inform on indicators and trends

An analysis of the main weaknesses assessed by focusing on: Key budget documents to be produced Key budget documents to be made available and accessible to

the public Timeliness of release of budgetary information Comprehensiveness of budgetary information (content) Quality, integrity and accuracy of budgetary information

Cf. Template table to present the key weaknesses page pp 118-119 (structure presented in the next slide).

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Availability: Documents should be available to any person wishing

to access them

Comprehensiveness: Budget documents should allow a complete picture of central government’s fiscal forecasts, budget proposals and out-turn of the previous year.

Quality, integrity, accuracy: Realism and reliability of budget

data, accounting standards, data consistency, reconciliation with

other data.

Recommendation on comprehensiveness and quality complex issues (narrative) should rely on existing diagnostics (IMF ROSC,PEFA...).

Key Budget Document

Description Produced (Y/N)

Published (date, website)

Timeliness of Publication (Y/N)

Comprehensiveness & Quality (narrative on key issues)

Budget documents Availability due

1. Executive’s budget proposal

When presented to the legislature (at least before legislature approves it)

2. Enacted budget < 3 months after legislature approved it

3.In-year report (also monthly and quarterly reports)

< 3 months after reporting period

4. Mid-year report < 3 months after reporting period

5. Year-end report < 1 year after end of fiscal year (reporting period)

6. Audit report < 2 years after end of fiscal year

Running Head 12-Point Plain, Title Case

Key budget documents (cf. Appendix A of annex 6 page 123 of the Guidelines)

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Budget cycle and key documents• Ensuring transparency and

accountability• Providing managerial information

Parliament

Annual Report

Budget document Supreme Audit

Institution

Audit report

Minister

Managementhas internal

control

Audit Committee

Audit report

Internal auditorService

providers

Info

rmatiio

n

Measu

res

Audit

Audit

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3) Identification of the baseline and medium term objectives

Based on the analysis of weaknesses (chapter 2) Should identify the key weaknesses that can be addressed by the

BS programme Should be used to identify accompanying capacity development . Should identify realist reform objectives against which progress

will be measured during implementation.

Use table (page 120 of Annex 6):

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Key budgetary document

Specific weaknesses/baseline

Medium term reform expectation (including

timing)

Means

Points to keep in mind

If Executive’s Budget Proposal and Year End Report or Audit Report are not published, medium term reform expectations must take them into account

More flexibility for short term programmes (< 3 years) SBCs and SIDS/OCTs

Mention how objectives will be supported and by which means: policy dialogue, conditions for variable tranche disbursement, participatory budget approach, capacity development measures.

Adapt reform expectations to country circumstances

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Outline of module 8

1. Why this new eligibility criterion?

2. How to assess initial eligibility: preparing the document for programme approval (supplement to the Action Fiche)

3. How to assess ongoing eligibility : preparing the payment file for the programme

Assessing the entry point:

Same as for programme approval.

Assessing progress: Provide short updated summary of available international data

(PEFA, OBI, ..) using the template/table of Page 121 of annex 6. Use the table made at programme approval stage with

weaknesses and reform expectations and describe evolutions

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Key budgetary document

Specific weaknesses/baseline

Medium term reform expectations (incl. timing)

Means Evolution since last assessment

Provide conclusion on ongoing eligibility: narrative to reflect confirmation of entry point situation and (satisfactory) progress with respect to reform expectations.

Points to keep in mind: As reforms in this area take time, it is not required to show

annual progress but rather demonstrate progress against baseline and medium-term reform expectations.

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