Report on Pilot Questionnaire Results Budget Frameworks Budget Comprehensiveness Off-budget expenditure Revenue and Expenditure Classification Alta Fölscher and Mickie Schoch

CABRI questionnaire on budgeting practices Why questionnaire? Database of budget practices in African countries for reference and research New information: identification of aggregate trends New presentation format for annual seminar: variation in type of session Pilot questionnaire Is it useful? What can be done differently? What other themes can be explored?

Report 5 sections 10 countries completed, 8 analysed General information on budgeting institutions Budget framework for central government Comprehensiveness Classification Budget documentation 10 countries completed, 8 analysed Still time to complete for post-seminar documentation

General information on budgeting institutions Most countries have legal framework, but not always comprehensive or followed Clear and comprehensive timetable for budget, but it is not necessarily followed Central budget office mostly in the Ministry of Finance and has senior civil servant at helm. One country central budget office split Some have political appointees as head Different countries different relationship between centre and line Majority line ministry budget offices report directly to finance ministry (devolution of responsibility and accountability?)

Do budget frameworks assist in coordination? Most countries report using relatively sophisticated central government budget frameworks to coordinate macro-economic, fiscal and budget policy Most countries follow good practice rules concerning sequencing of decisions for budget frameworks and have arrangements to ensure the coordination and quality of information going into the central government frameworks. However, in most countries less attention is paid to ensuring the comprehensiveness of information considered during the fiscal and budget policy processes. Most countries have less than 20% of donor resources included in fiscal frameworks, and do not include extra-budgetary funds, fiscal operations in the wider public sector or contingent liabilities.

Role of central government frameworks Central government budget frameworks commonly used to coordinate macro-economic, fiscal and budget policy Most countries have explicit fiscal policy process, resulting in medium term fiscal policy… …and have a consistent framework stating targets or ceilings for main aggregates…

Most countries subject to external fiscal interventions Half of the responding countries are subject to fiscal limitations and most are subject to fiscal interventions by regional or international institutions. Three quarters reported IMF and/or World Bank involved, half as a condition for loans.

Managing uncertainty and change Most countries have an explicit fiscal prudence factor built into the economic assumptions which reduces the final economic estimates… Most countries reported including reserve funds in the budget framework to cushion against macro-economic uncertainty and unforeseen expenditure But contingent liabilities mostly not considered Some countries update fiscal framework during spending year, but most stick to targets for revenue and borrowing and adjust expenditure upwards or downwards

Central government budget framework: who is involved? Fiscal policy process involve diverse sources of information On average 4, in some cases 7 institutions involved But mechanisms exist to coordinate information Cabinet approves fiscal framework in only two countries Mostly done at level of finance ministry

Central Government Budget Framework: accuracy Most countries use models to forecast main macro-economic variables But more than half reported that method to estimate current GDP not always transparent and that future revenues given current tax policy are not modeled Only two countries allow independent review of main assumptions before publication Most countries reported only small variations between estimated and actual fiscal aggregates

Budget comprehensiveness (i) Donor funds Most countries reported that less than 20% of donor funds are considered in the fiscal policy process Donor funds that do not flow through government accounts not included Most countries do not consider long-term effect of donor spending But most publish information on donor conditionalities

Budget comprehensiveness (ii) Extra-budgetary funds and the wider public sector Half of countries occasionally include projected impact of fiscal operations in wider public sector, but only quarter do so systematically Most countries do not include information on extra-budgetary funds Most countries have only limited frameworks for general government Transfers shown but not broken down Subnational government own revenue not included

Classification (i) Most use consistent classification, allowing for a single ‘version of truth’ and consolidation Most countries have undergone substantial classification reforms in past decade Government accounts are not comprehensive Only half the countries receipts and payments included general government sector appear in government account Majority only include domestically-financed transactions Majority of countries have well-defined rules to distinguish between current and capital expenditures How capital expenditures are financed differs from country to country

Classification (ii) Half the countries appropriate financing for investment incrementally; recurrent cost implications usually incorporated in budget documents Significant percentage of public investment is donor financed In most countries, appropriations are divided in development and recurrent budgets, but are commonly by a single ministry The development budget against recurrent budget defined differently across countries (largely on account of external resources) Classification not always used consistently across

Budget documentation Most countries report that budget documentation forms effective demand for information in budget process Scope of budget documentation Few countries publish comprehensive fiscal frameworks that include fund flows outside of main appropriations Significant contextual information now included, particularly regarding macro-economic and fiscal outlook and policies and tax policy Most countries reflect multiple classification dimensions in documentation