Survey of the Budget Process in Slovenia Dirk-Jan Kraan Budgeting and Public Expenditures Division Public Governance and Territorial Development Directorate OECD

General government expenditures and revenues as % of GDP -- 1996-2005

Real gross domestic growth as % of GDP in the previous year 2000-2005 2001 2002 2003 2004 2005 EU 15 3.4 1.5 1.1 0.8 2.0 2.4 Slovenia 4.1 2.7 2.3 3.6 3.7 Sources: EU 15: Economic Commission, Economic Forecasts, April 2004; Slovenia: Spring Report 2004, Institute of Macro-economic Analysis and Development (IMAD).

General Government deficits 2000-2004 2001 2002 2003 2004 EU 15 1.0 -1.0 -2.0 -2.6 -2.3 Slovenia -3.0 -2.7 -1.9 -1.8 -1.7 Source: Bulletin of Government Finance Year V, no.6 June 2004

General government gross financial liabilities as % of GDP -- 1996-2003

Special features of Slovenian budget process 1. Budgets for two consecutive years 2. Law on budget execution

Executive Budget Process Time Table April Spring economic forecast of IMAD April-May Preliminary discussions MoF / line ministries May First budget session of government May-June Negotiations MoF / line ministries June Second budget session of government June-August Submission of financial plans September Final decision making in cabinet Submission of budget to Parliament

Conclusions executive budget process Effective top-down control based on two stage decision-making process Anti-cyclical stance in expenditure policy does not provide automatic stabilisation Detailed account structure provides firm grip on expenditures but requires reallocation Multi-year estimates only at higher levels of aggregation Excellent role of forecasting institute IMAD No explicit prudence factor in revenu forecasts Many off-budget funds Many long term planning documents

Conclusions legislative budget process Submission of executive budget in two stages complicates the process Short timeframe for parliamentary scrutiny Introduction of pre-budget statement may contribute to parliamentary oversight

Conclusions Budget execution and service delivery Detailed account structure necessitates reallocation Effective system of cash management through Single Treasury Account Scope for further reform in the structure of service delivery Transparancy of procurement regulation may be improved Reform of civil service has been succesful but further steps are important Transparancy of personnel information system may be improved.

Conclusions Accounting and Audit Procedures Substantial improvements in quality and timeliness of accounting; a next step may be the submission of financial statements to Parliament within six months after conclusion of the budget year Impressive evolution of the Court of Accounts towards an Auditor-General type of Supreme Audit Institution based on a modern legal framework and sound procedures The use of audit findings for parliamentary scrutiny has thus far been suboptimal

Legislative Budget Process Time Table September Submission of draft budget to Parliament October Consideration in sectoral committees and subsequently in Committee on finance and monetary policy Submission of second budget proposal to Parliament November Parliament proposes amendments under qualified rules Parliament votes on amendments