1. Main players in budget execution
Allister Moon
Budget execution course, Jan 16

2. Perspectives on the roles in budget execution
Positive / normative
Law,regulations/ practice
‘normal’budget implementation/ fiscal crisis

3. Legal Framework for Public Expenditure Management
Constitution
Fiscal
Responsibility Acts
Budget System Laws
Local Government Laws
Public Debt Laws
Annual Budget Law
Regulations

4. Central agencies functions in budget execution (1)
Administering release of funds
Monitoring expenditure flows
Reporting
Cash management
Managing central payments

5. Central agencies functions (2)
Monitoring macro/fiscal performance
Review progress in sector programs
Coordinating budget revisions as required

6. Varying configurations of central agencies
Separate Treasury ministry
Role of Office of President/Prime Minister /State Chancellry
Ministry of Economy/Planning – monitoring macro, sector programs
Public Service ministry – wagebill

7. Spending agencies functions
Allocating funds to spending units
Procurement ; commitment, purchase, verification
Payments/prepare request for payments
Progress reports, performance monitoring
Review program implementation
Reallocation within approved ceilings

8. Rules of the game in budget execution
What kind of flexibility do spending agencies have : budget classification, appropriations, virement provisions
Aggregate fiscal discipline, predictability and frequency of releases
Quality of control systems: treasury function, commitment controls

9. Other players Central bank, banking system Legislature
Revenue agencies
External audit

10. Formal/informal practices
Budget deviation : a useful indicator of informal allocations through budget execution
Stable patterns of excess allocations to ‘power ministries’
Unrealistic budgets creating discretionary powers
Evading aggregate discipline : exploiting weaknesses in commitment control

12. Out turn as % Budget for selected Ministries Recurrent expenditures, 1987/8-1994/95, Uganda

13. Case study : developing the Russian Treasury
Background : esw on overall budgetary system, review of draft budget legislation,
Treasury established, but major gaps in coverage, classification system, commitment control, inadequate information systems
High budget deviation, low credibility
Strong commitment to Treasury reform, little interest in broader budget management reform
Problem : establishing an appropriate role for the Treasury through defining the interface with other players

14. Defining the role of Treasury with other players
Central bank, the banking system: transferring to the Treasury single account
Revenue agencies
Line ministries
Sub national government
Chamber of Accounts
Treasury staff

15. Case study : Uganda cash management
Background : early 1990s macro crisis, inflation 100%, major fiscal imbalance
Facing persistent revenue instability, external shocks
High priority for stabilisation objectives, but need to maximise predictability for spending agencies
Adapting budgetary institutions to context

16. Frequency Distribution of One Year Errors as a Percentage of GDP, 1980-2000

17. Revenue instability
Index = standard deviation of year to year changes in tax revenue
and grants as percentage trend GDP

18. Design issues in cash management
timetable : long planning horizon, short review & intervention horizon
scope of analysis : review all stabilisation instruments
institutional issues: broad inclusion, joint commitment, accountability for forecasting, close coordination with central bank
decision rules : feedback from macro outturn, protected expenditure

19. Dimensions of a cash management system