I. Credibility of the Budget
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure out-turn compared to original approved budget
D
Notes:
1.1 The difference between actual primary expenditure and the originally budgeted primary expenditure (i.e. excluding debt service charges, but also excluding externally financed project expenditure)
D
Notes:
Actual primary expenditure fell more than 15 per cent short of original budget in two of the three years 2011-13. Percentages were 87.3%, 80.4%, 80.0% respectively. (p. 32)
2. Composition of expenditure out-turn compared to original approved budget
C+
Notes:
2.1 Extent of the variance in expenditure composition during the last three years, excluding contingency items (the methodolodgy to rate this dimension is set out in the footnote of the PFM PMF booklet)
C
Notes:
The variance in the composition of primary expenditure exceeded the global deviation in primary expenditure by more than 15 per cent of actual expenditure in only one of the three years. (p. 35)
2.2 The average amount of expenditure actually charged to the contingency vote over the last three years
A
Notes:
No expenditure was charged to a Contingency Reserve during 2011-13. (p. 35)
3. Aggregate revenue out-turn compared to original approved budget
D
Notes:
3.1 Actual domestic revenue collection compared to domestic revenue in the originally approved budget
D
Notes:
Actual revenue was 91.7%, 105.1% and 72.4% for the three years 2011-13. Thus in two of the three years revenue was below the 92% required for C. (p. 36)
4. Stock and monitoring of expenditure payment arrears
C+
Notes:
4.1 Stock of expenditure payment arrears (as a percentage of actual total expenditure for the corresponding fiscal year) and any recent change in the stock
C
Notes:
Stock of arrears was 2.29% of expenditure in 2013. (p. 37)
4.2 Availability of data for monitoring the stock of expenditure payment arrears
A
Notes:
The existing system allows having complete and reliable data on arrears in real time (any time during the year) with an age profile. (p. 37)
II. Comprehensiveness and Transparency
Scores by Dimension
Overall Indicator Score
5. Classification of the budget
A
Notes:
5.1 The classification system used for formulation, execution and reporting of the central government's budget
A
Notes:
The budget formulation, execution and reporting is based on administrative, economic, sub-functional and program classifications. (p. 39)
6. Comprehensiveness of information included in budget documentation
B
Notes:
6.1 Share of the listed information under PI-6 in the PFM PMF booklet in the budget documentation most recently issued by the central government (in order to count in the assessment, the full specification of the information benchmark must be met)
B
Notes:
Recent budget documentation fulfils 6 of the 9 information benchmarks. (p. 40)
7. Extent of unreported government operations
A
Notes:
7.1 The level of extra-budgetary expenditure (other than donor funded projects) which is unreported i.e. not included in fiscal reports.
A
Notes:
The level of unreported extra-budgetary expenditure (other than donor funded projects) is nil. (p. 41)
7.2 Income/expenditure information on donor-funded projects which is included in fiscal reports.
A
Notes:
The grants received in 2011 and 2013 were included in the budget and fiscal reports of the city of Crikvenica. (p. 41)
8. Transparency of inter-governmental fiscal relations
NA
Notes:
8.1 Transparent and rules based systems in the horizontal allocation among SN governments of unconditional and conditional transfers from central government (both budgeted and actual allocations);
NA
Notes:
8.2 Timeliness of reliable information to SN governments on their allocations from central government for the coming year;
NA
Notes:
8.3 Extent to which consolidated fiscal data (at least on revenue and expenditure) is collected and reported for general government according to sectoral categories.
NA
Notes:
9. Oversight of aggregate fiscal risk from other public sector entities.
C
Notes:
9.1 Extent of central government monitoring of AGAs and PEs.
C
Notes:
Companies controlled (partially or fully) by the city submit fiscal reports to the city annually but there is no consolidation of the data. (p. 43)
9.2 Extent of central government monitoring of SN government's fiscal position
NA
Notes:
10. Public access to key fiscal information
A
Notes:
10.1 Number of the above listed elements of public access to information that is fulfilled (in order to count in the assessment, the full specification of the information benchmark must be met)
A
Notes:
The city makes available to the public 5 of the 6 listed types of information. (p. 45)
III. Policy-Based Budgeting
Scores by Dimension
Overall Indicator Score
11. Orderliness and participation in the annual budget process
B
Notes:
11.1 Existence of and adherence to a fixed budget calendar;
C
Notes:
The earlier stages of the calendar have been subject to considerable delays which were outside the control of LGUs. (p. 47)
11.2 Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions (budget circular or equivalent);
B
Notes:
Ongoing consultations between the Finance Department, the Mayor, the City Departments and the main budget users ensure that Budget proposals can readily be produced once the final instructions, which include expenditure ceilings, have been given. (p. 47)
11.3 Timely budget approval by the legislature or similarly mandated body (within the last three years);
A
Notes:
The City Council has approved the next year's Budget before 25 December in each of the last three years. (p. 48)
12. Multi-year perspective in fiscal planning, expenditure policy and budgeting
D+
Notes:
12.1 Preparation of multi -year fiscal forecasts and functional allocations
C
Notes:
Although detailed projections of budgeted activities are prepared each year for a three year period, firm links between multi-year estimates and subsequent budget ceilings for particular activities have not yet been established in many cases. (p. 49)
12.2 Scope and frequency of debt sustainability analysis
NA
Notes:
Crikvenica's total debt service costs are only about 6 per cent of revenue. Since there is no question of the city's debt becoming unsustainable, this dimension is Not Applicable. (p. 49)
12.3 Existence of sector strategies with multi-year costing of recurrent and investment expenditure;
D
Notes:
Plans for the development of programmes where activities have a steady pattern allow fully for both capital and current costs. But there is as yet no overall strategy, or strategies for the development of particular services. (p. 49)
12.4 Linkages between investment budgets and forward expenditure estimates.
C
Notes:
Investment planning is rather uncertain because of the unpredictability of the revenue streams required to finance it, although the projections produced each year are consistent as between current and capital expenditure. (p. 49)
IV. Predictability and Control in Budget Execution
Scores by Dimension
Overall Indicator Score
13. Transparency of taxpayer obligations and liabilities
B
Notes:
13.1 Clarity and comprehensiveness of tax liabilities
B
Notes:
The legislation governing the taxes and utility fees for which LGUs are responsible is clear, and the administrative procedures straightforward, although there may be scope for error in the measurement of chargeable areas. In the case of the community fees payable in respect of new developments, there is inevitably some element of negotiation. (p. 52)
13.2 Taxpayer access to information on tax liabilities and administrative procedures.
B
Notes:
Information is readily available at local offices, although there are no particular efforts directed towards education of those liable to pay. (p. 52)
13.3 Existence and functioning of a tax appeals mechanism.
C
Notes:
A special section of the Ministry of Finance deals with tax appeals. There is provision for appeals against city utility and community fees to be made to a body appointed by the county concerned, but such appeals were stated to be extremely rare. (p. 52)
14. Effectiveness of measures for taxpayer registration and tax assessment
D+
Notes:
14.1 Controls in the taxpayer registration system.
C
Notes:
Crikvenica devotes much effort to its property database. But there are no links with TA databases. (p. 54)
14.3 Planning and monitoring of tax audit and fraud investigation programs.
NA
Notes:
The taxes and fees for which Crikvenica is responsible do not involve any element of self-assessment. This dimension is therefore Not Applicable. (p. 54)
14.2 Effectiveness of penalties for non-compliance with registration and declaration obligations
D
Notes:
Sanctions have little importance in the enforcement of LGU taxes and fees. (p. 54)
15. Effectiveness in collection of tax payments
D+
Notes:
15.1 Collection ratio for gross tax arrears, being the percentage of tax arrears at the beginning of a fiscal year, which was collected during that fiscal year (average of the last two fiscal years).
D
Notes:
Arrears of the taxes and which Crikvenica is responsible amount to more than a third of total annual receipts. The debt collection ratio is below 60%. (p. 56)
15.2 Effectiveness of transfer of tax collections to the Treasury by the revenue administration.
B
Notes:
The majority of the revenue dependent on Crikvenica's own decisions is paid immediately into the City's Single Treasury Account, with only the minor revenue from the small taxes received monthly from TA. (p. 56)
15.3 Frequency of complete accounts reconciliation between tax assessments, collections, arrears records and receipts by the Treasury.
C
Notes:
Complete reconciliation of the position of individual fee payers with the City's Treasury records is carried out every six months. (p. 56)
16. Predictability in the availability of funds for commitment of expenditures
C+
Notes:
16.2 Reliability and horizon of periodic in-year information to MDAs on ceilings for expenditure commitments
C
Notes:
Departments are provided reliable information for one or two months in advance. (p. 57)
16.3 Frequency and transparency of adjustments to budget allocations, which are decided above the level of management of MDAs.
B
Notes:
Significant adjustments take place twice a year. They are carried out in a transparent (predictable) way. (p. 57)
16.1 Extent to which cash flows are forecast and monitored
A
Notes:
A cash flow forecast is prepared for the fiscal year, and is updated daily on the basis of actual cash inflows and outflows. (p. 57)
17. Recording and management of cash balances, debt and guarantees
A
Notes:
17.1 Quality of debt data recording and reporting
B
Notes:
Domestic debt records (there is no foreign debt) are complete, updated and reconciled quarterly. Data are considered of high standard. Comprehensive management and statistical reports (cover debt service, stock and operations) are produced quarterly. (p. 58)
17.2 Extent of consolidation of the government’s cash balances
A
Notes:
All cash balances are calculated daily. (p. 58)
17.3 Systems for contracting loans and issuance of guarantees.
A
Notes:
Crikvenica contracting of loans and issuance of guarantees are made against transparent criteria and fiscal targets, and always approved by a single responsible government entity. (p. 58)
18. Effectiveness of payroll controls
B+
Notes:
18.1 Degree of integration and reconciliation between personnel records and payroll data.
B
Notes:
Although there are no direct links between personnel records and the payroll, there is full documentation of the way changes in personnel records are reflected in the payroll. (p. 60)
18.2 Timeliness of changes to personnel records and the payroll
A
Notes:
Changes in personnel records are notified immediately to the Finance Department. There is no record of any need for retrospective adjustments to the pay of individuals. (p. 60)
18.3 Internal controls of changes to personnel records and the payroll.
A
Notes:
There are firm controls over both personnel records and the payroll, and changes always leave a clear audit trail. (p. 60)
18.4 Existence of payroll audits to identify control weaknesses and/or ghost workers.
B
Notes:
The operation of the payroll was the subject of an internal audit in 2013. (p. 60)
19. Transparency, competition and complaints mechanisms in procurement
A
Notes:
19.1 Transparency, comprehensiveness and competition in the legal and regulatory framework
Notes:
The legal and regulatory framework meets the requirements of the EU Directive on Public Procurement. It provides for transparency, comprehensiveness and competition covering all procurement by general government and government-owned companies. (p. 63)
19.2 Use of competitive procurement methods
Notes:
Where contracts above Croatian thresholds have been let other than by open competition, this has been justified in accordance with the Procurement Law. Contracts above the thresholds not let by open competition have accounted for only a small proportion of Crikvenica's procurement expenditure. (p. 63)
19.3 Public access to complete, reliable and timely procurement information
Notes:
There is full public access on the City website to Crikvenica's Procurement Plans, tender opportunities and contract awards. If there had been any recent complaints, the results would have been published on the State Commission's website. (p. 63)
19.4 Existence of an independent administrative procurement complaints system
A
Notes:
The State Commission serves as an effective independent body charged with resolving complaints. It has authority to cancel a tender or a contract award where complaints are found to be justified. (p. 63)
20. Effectiveness of internal controls for non-salary expenditure
B+
Notes:
20.1 Effectiveness of expenditure commitment controls.
B
Notes:
Although there is not a separate commitment control in place across the whole budget, controls are effective in preventing new commitments from being undertaken before the availability of finance has been assured. (p. 65)
20.2 Comprehensiveness, relevance and understanding of other internal control rules/ procedures
A
Notes:
Internal control rules and procedures are generally understood and observed. Separation of duties is correctly practised,[ and ex post facto checks are made of a sample of payments]. (p. 65)
20.3 Degree of compliance with rules for processing and recording transactions
A
Notes:
Rules and procedures for registering transactions are generally observed. (p. 65)
21. Effectiveness of internal audit
D+
Notes:
21.1 Coverage and quality of the internal audit function.
D
Notes:
A wide range of work was undertaken in accordance with professional standards, and focused on the performance of systems But the Internal Audit function has recently been discontinued. (p. 67)
21.2 Frequency and distribution of reports
A
Notes:
Up to four reports were made each year, which were sent to the heads of the Departments concerned and taken into account by SAO in the course of its annual audit work. (p. 67)
21.3 Extent of management response to internal audit findings.
C
Notes:
Most findings and recommendations were accepted. The auditor should also contribute to the documentation supporting the annual Statement of Fiscal Responsibility, but this will no longer be possible. (p. 67)
V. Accounting, Recording and Reporting
Scores by Dimension
Overall Indicator Score
22. Timeliness and regularity of accounts reconciliation
A
Notes:
22.1 Regularity of bank reconciliations
A
Notes:
Reconciliation of the only bank account of the city takes place daily. (p. 68)
22.2 Regularity of reconciliation and clearance of suspense accounts and advances.
A
Notes:
Reconciliation and clearance of suspense accounts and advances take place monthly, within a month from end of period and with no balances brought forward. (p. 68)
23. Availability of information on resources received by service delivery units
A
Notes:
23.1 Collection and processing of information to demonstrate the resources that were actually received (in cash and kind) by the most common front-line service delivery units (focus on primary schools and primary health clinics) in relation to the overall
A
Notes:
Routine data collection or accounting systems provide reliable information on resources received in cash by primary schools across the city’s boundaries. The information is compiled into reports at least annually. (p. 69)
24. Quality and timeliness of in-year budget reports
C+
Notes:
24.1 Scope of reports in terms of coverage and compatibility with budget estimates
C
Notes:
Comparison to the adjusted budget is possible only for main functional and economic headings. Expenditure is captured only at the accrual stage, and not at the stage of the original commitment. (p. 70)
24.2 Timeliness of the issue of reports
A
Notes:
In-year execution reports are finalized within a maximum of 20 days after the period covered. (p. 70)
24.3 Quality of information
A
Notes:
There are no material concerns regarding data accuracy. (p. 70)
25. Quality and timeliness of annual financial statements
C+
Notes:
25.1 Completeness of the financial statements
A
Notes:
Annual Financial statements include full information on revenue, expenditure, financial assets and liabilities. (p. 71)
25.2 Timeliness of submission of the financial statements
A
Notes:
The last annual financial statements (2013) were submitted for external audit on February 26th, 2014, less than 2 months after the period covered. (p. 71)
25.3 Accounting standards used
C
Notes:
National standards not corresponding to IPSAS were used for the last 3 years. (p. 71)
VI. External Scrutiny and Audit
Scores by Dimension
Overall Indicator Score
26. Scope, nature and follow-up of external audit
D+
Notes:
26.1 Scope/nature of audit performed (incl. adherence to auditing standards).
D
Notes:
Audits cover aspects of performance in addition to financial and compliance audits. International standards are respected. But the absence of an audit every year of the Financial Statements prevents a higher score from being recorded. (p. 73)
26.2 Timeliness of submission of audit reports to legislature.
B
Notes:
Audit reports are presented to the City Council within a few weeks of their receipt by the Administration. In 2013 this was about 6 months after the Financial Statements were submitted to the SAO. (p. 73)
26.3 Evidence of follow up on audit recommendations
A
Notes:
The Administration addresses the recommendations, and normally implements them to the extent possible, given the resources and time required. (p. 73)
27. Legislative scrutiny of the annual budget law
B+
Notes:
27.1 Scope of the legislature’s scrutiny.
B
Notes:
The Council's examination mainly focuses on the next year's revenue and expenditure. There is no scope at sub-national government level for any discussion of the appropriateness of the Government's fiscal stance, and not much attention is paid to fiscal planning in the medium term. (p. 75)
27.2 Extent to which the legislature’s procedures are well-established and respected.
A
Notes:
The arrangements for the Council's discussion of the Budget proposals are well established and regularly followed. (p. 75)
27.3 Adequacy of time for the legislature to provide a response to budget proposals both the detailed estimates and, where applicable, for proposals on macro-fiscal aggregates earlier in the budget preparation cycyle (time allowed in practice for all stag
B
Notes:
The Council has at least a month to consider the Mayor's proposals, although for 2014 it chose to take decisions more quickly. (p. 75)
27.4 Rules for in-year amendments to the budget without ex-ante approval by the legislature.
A
Notes:
Crikvenica does not use the flexibility the Administration has to make limited reallocations without reference to the Council. Instead revised Budgets are put forward whenever changes need to be made. (p. 75)
28. Legislative scrutiny of external audit reports
A
Notes:
28.1 Timeliness of examination of audit reports by the legislature (for reports received within the last three years).
A
Notes:
Audit reports are submitted to the Council within a few weeks of their receipt by the Administration, and discussion by the Council is then normally completed within a short timescale. (p. 76)
28.2 Extent of hearings on key findings undertaken by the legislature.
A
Notes:
The Council discusses the responses to audit recommendations with the City officials concerned. (p. 76)
28.3 Issuance of recommended actions by the legislature and implementation by the executive.
A
Notes:
The Administration seeks the Council's approval for the action taken in response to audit recommendations. (p. 76)
Donor Practices
Scores by Dimension
Overall Indicator Score
D-1 Predictability of Direct Budget Support
NA
Notes:
D-1.1 Annual deviation of actual budget support from the forecast provided by the donor agencies at least six weeks prior to the government submitting its budget proposals to the legislature (or equivalent approving body).
NA
Notes:
D-1.2 In-year timeliness of donor disbursements (compliance with aggregate quarterly estimates)
NA
Notes:
D-2 Financial information provided by donors for budgeting and reporting on project and program aid
D
Notes:
D-2.1 Completeness and timeliness of budget estimates by donors for project support.
D
Notes:
Decisions hitherto have been taken without regard to the budget cycle. (p. 77)
D-2.2 Frequency and coverage of reporting by donors on actual donor flows for project support.
NA
Notes:
Flow of information is from City to donors rather than the reverse. (p. 77)
D-3 Proportion of aid that is managed by use of national procedures
C
Notes:
D-3.1 Overall proportation of aid funds to central government that are managed through national procedures
C
Notes:
National procedures are used in 50 per cent of cases. (p. 78)
