I. Credibility of the Budget
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure out-turn compared to original approved budget
A
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)
A
Notes:
Performance improved, partly due to more realistic revenue and expenditure planning. The variance between the 2010-2012 RA State budget primary expenditure out-turns and primary expenditure of the approved original budget was 1.4%, -1.9% and -1.7% respectively. (p. 48)
2. Composition of expenditure out-turn compared to original approved budget
B+
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)
B
Notes:
In two of the last three years the variance of the composition of actual primary expenditures was above 5% but below 10%. (p. 50)
2.2 The average amount of expenditure actually charged to the contingency vote over the last three years
A
Notes:
Not allocated expenditure categories, including the Contingency Fund in the approved budget were completely reallocated to ministries/agencies during 2010-2012. (p. 50)
3. Aggregate revenue out-turn compared to original approved budget
A
Notes:
3.1 Actual domestic revenue collection compared to domestic revenue in the originally approved budget
A
Notes:
In 2010-2012 actual domestic revenues represented 104.6%, 100.7% and 100.8% respectively of the originally budgeted amounts. (p. 51)
4. Stock and monitoring of expenditure payment arrears
A
Notes:
Performance unchanged. Expenditure arrears have been virtually zero for the last 10 years due to good revenue performance and the unchanged legislation-based expenditure control system. Report 254 – generated by the Treasury IT system – monitors expenditure commitments, advance payments, invoices and payments, arrears being the net of these 3 amounts. Arrears of SNCOs were covered in the 2008 assessment for un-explained reasons, but are not covered in the 2013 assessments as they are counted as extra-budgetary operations, assessed under PIs 7 & 9. The rating for (ii) in the 2008 assessment has been revised to A. (p. 45)
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
A
Notes:
Performance unchanged. Expenditure arrears have been virtually zero for the last 10 years due to good revenue performance and the unchanged legislation-based expenditure control system. All invoices submitted prior to 20th December are paid/cleared. End-year accounts payables are not possible under the cash-based accounting system. Invoices submitted after 20th December therefore have to be paid out of next year’s budget. (p. 54)
4.2 Availability of data for monitoring the stock of expenditure payment arrears
A
Notes:
Performance unchanged. Report 254 – generated by the Treasury IT system – monitors expenditure commitments, advance payments, invoices and payments, arrears being the net of these 3 amounts. In principle an age profile of arrears is possible, but in practice it lacks meaning as invoices are paid within 3 days of submission. This system has not changed. This dimension was assigned a lower rating in the 2008 assessment due to the absence of a unified government system for monitoring arrears incurred by SNCOs. The scope of the 2013 assessment excludes the PFM systems of SNCOs, as they are extra-budgetary operations, which are assessed under PIs 7 & 9. (p. 54)
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:
Performance unchanged. Budgets are prepared, executed and reported according to the GFS-2001 functional, economic and administrative classifications.Since the 2008 PEFA assessment, budget expenditures have also been presented in the draft State budget in the programme format. (p. 58)
6. Comprehensiveness of information included in budget documentation
A
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)
A
Notes:
Performance unchanged. 7 out of the 9 information benchmarks are met. Since the 2008 PEFA assessment, the main changes to the structure, volume and content of information presented to the National Assembly include improvements in analytical quality and the presentation of programme classification and performance indicators. (p. 60)
7. Extent of unreported government operations
B+
Notes:
7.1 The level of extra-budgetary expenditure (other than donor funded projects) which is unreported i.e. not included in fiscal reports.
B
Notes:
Performance unchanged. Un-reported domestic EBOs amounted to 4.5% of total GoA expenditure in 2012. The A rating in the 2008 assessment has been revised to B. as SNCOs were considered not to beEBOs, when in fact they are. (p. 62)
7.2 Income/expenditure information on donor-funded projects which is included in fiscal reports.
A
Notes:
Performance unchanged. Individual DP projects are mostly presented in the state budget with some insignificant exceptions. (p. 62)
8. Transparency of inter-governmental fiscal relations
A
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);
A
Notes:
Performance unchanged. The horizontal allocation of virtually all central government transfers to community budgets (at least 90% in terms of their value) is performed through rules-based and transparent systems. (p. 65)
8.2 Timeliness of reliable information to SN governments on their allocations from central government for the coming year;
A
Notes:
Performance unchanged. Before the start of the budget process community governments are provided with reliable information on appropriations to be transferred to them from the State budget. (p. 65)
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.
A
Notes:
Performance improved. The MTA consolidates all community budget revenues and expenditures (GFS-consistent functional and economic classification) into quarterly and annual reports. Aggregated versions of the annual reports are included in the annual state budget execution reports, which are prepared by MoF within 4 months of the end of the financial year and posted on the MoF’s website. The improvement since the 2008 PEFA is mainly due to the MTA linking the financial management systems of community governments to the central government treasury systems in 2012, enabled by the adoption by all communities of the central government’s GFS 2001-compliant budget classification system in 2009. (p. 65)
9. Oversight of aggregate fiscal risk from other public sector entities.
D+
Notes:
9.1 Extent of central government monitoring of AGAs and PEs.
C
Notes:
Performance unchanged. Monitoring and oversight of SNCOs and CJSCs have improved, but external audit of SNCO and CJSC financial statements (required for a higher rating) is still absent. (p. 68)
9.2 Extent of central government monitoring of SN government's fiscal position
D
Notes:
Performance unchanged. Despite certain improvements, the rating has remained at the same level because the monitoring of the financial state of communities (with the exception of Yerevan) remains incomplete. (p. 68)
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:
Performance unchanged. 5 out of the 6 specified information elements are accessible to the public, the volume of information increasing for some of the elements. (p. 72)
III. Policy-Based Budgeting
Scores by Dimension
Overall Indicator Score
11. Orderliness and participation in the annual budget process
A
Notes:
11.1 Existence of and adherence to a fixed budget calendar;
A
Notes:
A clear annual budget calendar is in place which, in general, is adhered to and provides adequate time to MDAs (at least six months after the receipt of the circular for preparation of MTEF submissions) for timely finalizing of meaningful and detailed expenditure estimates. (p. 72)
11.2 Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions (budget circular or equivalent);
A
Notes:
MDAs are issued a comprehensive and clear circular for preparation of budget submissions which reflects the expenditure ceilings approved during the strategic phase of the budget preparation process prior to the dissemination of the circular to MDAs. (p. 72)
11.3 Timely budget approval by the legislature or similarly mandated body (within the last three years);
A
Notes:
Over the last three years the legislature has approved the next year’s draft State budget before the start of the coming fiscal year. (p. 72)
12. Multi-year perspective in fiscal planning, expenditure policy and budgeting
B
Notes:
12.1 Preparation of multi -year fiscal forecasts and functional allocations
A
Notes:
Performance unchanged according to the scoring criterion. The quality of MTEF submissions, and therefore the MTEF document, has improved over time. (p. 78)
12.2 Scope and frequency of debt sustainability analysis
A
Notes:
Performance unchanged. (p. 78)
12.3 Existence of sector strategies with multi-year costing of recurrent and investment expenditure;
C
Notes:
Performance has improved, due to the fully established long-term strategic planning system and the high degree of its interrelation with the annual MTEF and budget planning processes. Long term plans are rigorous, but are not fully costed, as costing takes place through the MTEF process. (p. 78)
12.4 Linkages between investment budgets and forward expenditure estimates.
C
Notes:
Performance unchanged. (p. 78)
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:
Performance unchanged. (p. 86)
13.2 Taxpayer access to information on tax liabilities and administrative procedures.
A
Notes:
Performance improved. due to significant improvement in SRC websites enabling easier and quicker taxpayer access to information. The Hot Line for providing clarifications on tax issues has strengthened in terms of functionality. The SRC commenced a weekly ‘TaxInfo’ TV programme in early 2013. SRC has stepped up its regular training programmes and its conduct of large-scale awareness campaigns. (p. 86)
13.3 Existence and functioning of a tax appeals mechanism.
B
Notes:
Performance improved largely through a measure of independence being established in the tax appeals structure as a result of the establishment of the inter-agency appeals council. (p. 86)
14. Effectiveness of measures for taxpayer registration and tax assessment
B
Notes:
14.1 Controls in the taxpayer registration system.
B
Notes:
Performance unchanged. TINs are not linked to other databases operated in other government agencies, except, starting in April 2011, for business registration under the one-stop shop system. The process of issuing TINs is centralized and automated. The taxpayer database is also linked to some extent with the banking system, as TINs are required for opening bank accounts in Armenia. (p. 89)
14.3 Planning and monitoring of tax audit and fraud investigation programs.
B
Notes:
Performance improved. Since the 2008 PEFA assessment, a risk-based audit selection system has been established and is being successfully implemented. (p. 89)
14.2 Effectiveness of penalties for non-compliance with registration and declaration obligations
B
Notes:
Performance unchanged. The penalties for not complying with the tax legislation are fairly explicit. The application of penalties is adequately effective in that it is impossible to avoid responsibility once an irregularity is detected. (p. 89)
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:
Performance unchanged. The stock of year-end tax arrears ranged between 13%-17% of annual tax collections during 2010-2012 (Table 13) 70% of the arrears is owed by only 30 entities and the collection rate is very low for reasons beyond SRC’s control. The other 30% is owed by 600 insolvent companies, which SRC has taken to court, with some measure of success. SRC is able to track tax arrears electronically through its Taxpayer 3 e-management system established in 2012. The SRC has re-assssed the 2008 PEFA rating as D, the Taxpayer 3 e-management system not yet being in place. (p. 92)
15.2 Effectiveness of transfer of tax collections to the Treasury by the revenue administration.
A
Notes:
Performance unchanged. (p. 92)
15.3 Frequency of complete accounts reconciliation between tax assessments, collections, arrears records and receipts by the Treasury.
A
Notes:
Performance improved as a result of the establishment of the Taxpayer 3 e-management system, which abled much improved tracking of tax arrears. The SRC has re-assssed the 2008 PEFA rating as D, the Taxpayer 3 e-management system not yet being in place. (p. 92)
16. Predictability in the availability of funds for commitment of expenditures
A
Notes:
16.2 Reliability and horizon of periodic in-year information to MDAs on ceilings for expenditure commitments
A
Notes:
No change in performance. (p. 95)
16.3 Frequency and transparency of adjustments to budget allocations, which are decided above the level of management of MDAs.
A
Notes:
No change in performance. (p. 95)
16.1 Extent to which cash flows are forecast and monitored
A
Notes:
No change in performance. (p. 95)
17. Recording and management of cash balances, debt and guarantees
A
Notes:
17.1 Quality of debt data recording and reporting
A
Notes:
Performance unchanged: There should be no data quality issues. The evidence suggests this continues to be the case, and that strengthening in terms of timeliness of updating debt records, issuing reports and reconciling debtor and creditor records has improved through the use of DMFAS and the improvement in the structure of the debt management unit in MoF (e.g. reports are now prepared within a week after the end of the month, compared to quarterly based reports prepared in 25 days many years ago). (p. 99)
17.2 Extent of consolidation of the government’s cash balances
A
Notes:
Performance improved through development partner project/programme bank accounts being brought under the Treasury Single Account (dimension ii).. The ‘A’ rating in the 2008 assessment seems too high as some DP accounts opened for funding programmeme/project expenditures, were outside TSA. They have since been brought under TSA. The rating has been revised to B. (p. 99)
17.3 Systems for contracting loans and issuance of guarantees.
A
Notes:
Performance unchanged. (p. 99)
18. Effectiveness of payroll controls
D+
Notes:
18.1 Degree of integration and reconciliation between personnel records and payroll data.
D
Notes:
Performance unchanged: Linkages between the staff list/ other personnel records and payroll and between the positions list of non-civil service staff and the staff list are manual and reconciliations are not carried out. The monthly payroll prepared by PMDs in public bodies based on the staff list and other personnel records is transmitted to Accounts Departments in those bodies. These Departments then manually input the information into the ‘Armenian Software’ payroll calculation system, which then automatically makes the salary calculations. In some public bodies the internal control systems in place do not guarantee the integrity of these transmission and manual inputting processes, thus under-scoring the need for a separate reconciliation process. This does not routinely take place, as, in the absence of electronic links, it would be time-consuming. The 2008 PEFA assessment justified an A rating on the basis of (for each MDA) the PMD’s list provided to the Accounting Department being the same list that is used for the calculations by the Accounting Department”. It may not have been the same list, however, as indicated in the narrative above. The A rating was therefore incorrect and has been revised to D. (p. 106)
18.2 Timeliness of changes to personnel records and the payroll
B
Notes:
Performance unchanged. A comprehensive system for routinely generating information on the timeliness of payroll changes is not in place. However, interviews with internal auditors and financial officers of a number of public bodies indicated that retroactive adjustments to payrolls are made only occasionally and that the overall sum is small. An ‘A’ rating would require precise quantification of the timeliness of updating and the extent of retroactive adjustments. A ‘B’ rating is therefore provided. The 2008 PEFA assessment seems to have overestimated the situation. It stated what the situation should be, according to the law, but did not provide evidence of the actual situation. The situation appears not have changed, so the 2008 rating has been revised to B. (p. 107)
18.3 Internal controls of changes to personnel records and the payroll.
C
Notes:
Performance unchanged. The powers to make changes in the personnel records and payrolls are clear and reserved to specific units and persons. All the information about those changes is recorded in the respective software and ensures the necessary audit trail. The systems, however, have bottlenecks such that the complete accuracy of the data is not guaranteed. The 2008 PEFA assessment did not say anything about controls. The basis of the B rating is not substantiated. The performance appears not to have been any different from the current performance, so the rating has been revised to C. (p. 108)
18.4 Existence of payroll audits to identify control weaknesses and/or ghost workers.
C
Notes:
Performance unchanged. The internal audit legislation in principle provides for the audit of personnel management and payroll systems, but the internal audit function is still at an early stage of development. No comprehensive payroll audit has been conducted during the last 3 years. Audits that have been conducted have been fragmented between PMDs and Accounts Departments, the focus being mainly on transactions rather than systems. The Financial Inspectorate Department performs regular ex post transactions checks and thus provides a partial audit function. The 2008 PEFA overestimated the extent of payroll audit, so the score has been revised to C. (p. 108)
19. Transparency, competition and complaints mechanisms in procurement
B
Notes:
19.1 Transparency, comprehensiveness and competition in the legal and regulatory framework
A
Notes:
The legal system regulating the state needs’ procurement process meets all 6 benchmarks. (p. 120)
19.2 Use of competitive procurement methods
D
Notes:
Insufficient data are available to assess the extent that use of non-competitive methods for state needs’ procurement is justified in terms of the procurement legislation. This is of concern, given the high incidence of non-competitive procurement on the basis of special or exclusive rights (66% in 2011, 72% in 1972, by value, as shown in Table 18). The significant checking/auditing conducted by various agencies (e.g. MoF, PSC, Financial Inspectorate) on the justifications for using non-competitive methods suggests that evidence is available for scoring this dimension. (p. 120)
19.3 Public access to complete, reliable and timely procurement information
B
Notes:
Although the information about contracts concluded is published in procurement e-bulletin, there is no comprehensive information about their actual publication date. Three out of four main information elements of the procurement process are comprehensive and reliable. Information (with regard to all public bodies) is accessible to the public by relevant means – within the established deadlines and in full. (p. 120)
19.4 Existence of an independent administrative procurement complaints system
A
Notes:
Procurement appeal system meets all the criteria. (p. 120)
20. Effectiveness of internal controls for non-salary expenditure
C+
Notes:
20.1 Effectiveness of expenditure commitment controls.
A
Notes:
Performance improved. The introduction of the Client Treasury system and periodic upgrades to the TOD system has led to efficiency gains in terms of commitment control, while the scope of the system has expanded to include PIUs. Since 2012 all public bodies have been directly connected to the TOD system through Client-Treasury system (established in 2010) and are now able to execute complete electronic control over the expenditure commitment process, including control over PIU commitment processes. Previously, public bodies had to go through the local treasury system, which linked up with the central treasury system. The situation has definitely improved, the main change in terms of the score being the inclusion of PIUs in the system. Their previous exclusion indicates that the rating should have been B the 2008 assessment and the score has been revised accordingly. (p. 124)
20.2 Comprehensiveness, relevance and understanding of other internal control rules/ procedures
C
Notes:
Performance unchanged: The integrity, availability and timeliness of circulars and methodological instructions establishing internal controls are inadequate. No special induction courses on internal controls are provided for new employees. (p. 125)
20.3 Degree of compliance with rules for processing and recording transactions
C
Notes:
Performance unchanged.Financial inspections (through the Finance Inspectorate in MoF), audits conducted by internal audit units in public bodies and audits conducted by the CoC identify regular violations of internal control processes and the unjustified use of simplified procedures. This dimension was clearly mis-understood in the 2008 PEFA assessment. The supporting narrative was only 1 line long and referred only to transactions recording. The rating has bee revised to C. (p. 125)
21. Effectiveness of internal audit
C
Notes:
21.1 Coverage and quality of the internal audit function.
C
Notes:
Performance improved The IA function exists in almost all public bodies. IA standards, rules of conduct and manuals have been adopted, based on IA international standards. IA independence has improved, through the direct subordination of the IA function to the head of a specified organization. Around 30% of IA working hours are allocated to systems’ audit. Audit standards are not fully observed, however. Capacity constraints limit the pace of establishment of the IA function. (p. 128)
21.2 Frequency and distribution of reports
C
Notes:
Performance unchanged: The IA information system is only partially working, so there is no reliable way for MoF to know the extent to which public bodies observe the rules stipulated for the submission and distribution of audit reports. Although the IA function was less developed at the time of the 2008 PEFA assessment, it was a mandatory requirement for line ministries to submit IA audit reports to MoF. IA reports are provided to the CoC and other controlling bodies upon request. (p. 129)
21.3 Extent of management response to internal audit findings.
C
Notes:
Performance improved and is continuing to do so. The introduction of the IA system has considerably improved the attention of the organization’s management and the quality of response to the recommendations of IA reports. The imperfect functioning of the IA Committees indicate, however, that recommendations are not always implemented or even prepared. The only partial operation of the IA information system used by RA public bodies hinders the the assessment of the timeliness and comprehensiveness of the measures undertaken by management, Nevertheless, the extent of follow-up continues to improve. The 2008 PEFA assessment seems to have over-estimated the situation at that time, as a systems focused IA function was not yet in place. The rating has been revised to D. (p. 129)
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:
Performance has improved due to the TSA including all transactions of foreign-financed projects/programmes starting in 2012. The 2008 assessment rating has been revised to B as the TSA did not cover PIU bank accounts at that time. (p. 132)
22.2 Regularity of reconciliation and clearance of suspense accounts and advances.
A
Notes:
Performance unchanged. Advances from LTBs for financing expenditures and travel advances are regularly cleared. (p. 132)
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:
Performance improved due to reports on resources received and spent by schools with SNCO status now being prepared and publicized: Public institutions (regional governors’ offices (marzpetarans), State Health Agency (SHA), Ministry of Education, Ministry of Finance) regularly (quarterly or annual) receive reports on the resources received by SNCOs and CJSCs from the state budget and other sources (e.g. own revenues). The information is also published in summary by MoF and SHA. Advancements in IT since the 2008 assessment have helped to improve transparency in the allocation of resources to service delivery entities. (p. 133)
24. Quality and timeliness of in-year budget reports
B+
Notes:
24.1 Scope of reports in terms of coverage and compatibility with budget estimates
A
Notes:
Performance unchanged: Budget performance reports are prepared for management using the same budget classification codes as those used in the approved budget, enabling direct comparison of actual expenditures and revenues with the originally budgeted amounts. The reports also include information on expenditure commitments to date. (p. 135)
24.2 Timeliness of the issue of reports
B
Notes:
Performance unchanged: The reports are prepared quarterly and published within 6 weeks upon completion of the period. The monthly reports are published within 4-5 weeks. In both cases, the reports are available earlier for senior management to use in terms of analyzing budget performance. (p. 135)
24.3 Quality of information
B
Notes:
Performance is strengthening. The quality of the information provided in quarterly budget performance reports has improved, due to the advent of the Client-Treasury system and the use by PIUs of the treasury system. The rating in the 2008 assessment has been revised to B, as the coverage of this indicator should have excluded the reporting of financial flows in relation to SNCOs (assessed separately under PI-7). (p. 135)
25. Quality and timeliness of annual financial statements
D+
Notes:
25.1 Completeness of the financial statements
C
Notes:
Performance unchanged: The annual report prepared by MoF consolidates the budget execution statements prepared by budget agencies. The statements are comprehensive in terms of revenues, grants and expenditures and include the balances (and movements thereof) on most GoA bank accounts, the coverage having increased since the 2008 assessment due to the inclusion of PIU account balances in the TSA. The statements exclude, however, most of the accounting information that typically appears in financial statements: e.g. balance sheet and cash flow statements that formally link up to the revenue, grants and expenditure statements. The CoC reports indicate that it is not possible to issue an opinion on the annual budget execution statements; they do not contain the accounting information required for an opinion to be formed on whether the statements accurately represent the financial position of the government. (p. 137)
25.2 Timeliness of submission of the financial statements
A
Notes:
Performance unchanged: The consolidated government report is submitted to the CoC for audit within 5 months following the end of the fiscal year. (p. 137)
25.3 Accounting standards used
D
Notes:
Performance unchanged. The annual budget execution reports are prepared according to a consistent format, but the accounting standards that form the basis of report preparation are not disclosed. The absence of modern accounting standards hinders the preparation of meaningful auditable annual financial statements. (p. 137)
VI. External Scrutiny and Audit
Scores by Dimension
Overall Indicator Score
26. Scope, nature and follow-up of external audit
C+
Notes:
26.1 Scope/nature of audit performed (incl. adherence to auditing standards).
C
Notes:
Performance improved due to increased independence and is continuing to strengthen through CoC’s on-going reform activities. Following the amendments to the Constitution in 2005 and the adoption of the RA “Law on the Control Chamber” in late 2006 (effective June, 2007, the independence of the CoC has increased, but not yet by enough to fully meet the INTOSAI standards for independence. The other INTOSAI standards are not yet fully met during the auditing process, but more attention is gradually being paid to the systemic issues, as evidenced by the annual reports that CoC has conducted in recent years. The scoring is therefore mainly based on the audit of the annual State budget execution report, in this case the report for 2012. (p. 144)
26.2 Timeliness of submission of audit reports to legislature.
A
Notes:
Performance unchanged. This dimension is assessed on the timeliness of the submission of the opinion on the budget execution report. The annual reports prepared by CoC only partly count in terms of scoring, as they cover issues from earlier years and are not budget entity- specific. The CoC’s opinion on the annual report of the “RA State budget execution” for 2012 was provided to the National Assembly within the maximum allowed 38 days after the CoC received it.On this basis the rating for the 2008 PEFA has been revised to A from D. (p. 145)
26.3 Evidence of follow up on audit recommendations
B
Notes:
Performance is improving with regard to the follow-up by auditees on audit recommendations, though not yet by enough to increase the rating. The RA Government has been publishing on its official webpage (www.e-gov.am) information about CoC oversight/audit results and measures undertaken, feedback and official responses from the controlled entities. The effectiveness of the measures taken by the RA Government to resolve issues identified by the CoC is not clear. (p. 145)
27. Legislative scrutiny of the annual budget law
C+
Notes:
27.1 Scope of the legislature’s scrutiny.
A
Notes:
Performance unchanged. Nevertheless, the quality of legislative scrutiny of state budget expenditures has improved as a result of the on-going introduction of programmeme budgeting. (p. 149)
27.2 Extent to which the legislature’s procedures are well-established and respected.
A
Notes:
Performance unchanged. (p. 149)
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
A
Notes:
Performance unchanged. (p. 149)
27.4 Rules for in-year amendments to the budget without ex-ante approval by the legislature.
C
Notes:
Performance unchanged. Starting with the 2002 state budget law, additional flexibility was provided to the Executive branch of Government to increase spending after the budget is approved up to the excess of actual budget receipts over the budgeted amounts, without first applying to NA for approval. Moreover, the Government can spend the excess in any way it wants, thereby providing it with the potential to change the composition of the budget. (p. 149)
28. Legislative scrutiny of external audit reports
D+
Notes:
28.1 Timeliness of examination of audit reports by the legislature (for reports received within the last three years).
A
Notes:
Performance unchanged. In two out of the last 3 years audit reports have been reviewed within the defined dates, and the time taken did not exceed the three-month period after the receipt of the report. (p. 153)
28.2 Extent of hearings on key findings undertaken by the legislature.
A
Notes:
Performance unchanged. The CoC reports are first discussed by the Standing Committee of NA Standing Committtee on Financial and Budgetary Affairs, then in the NA itself. Representatives from the CoC, as well as from the government where significant findings have been recorded attend.are present. (p. 153)
28.3 Issuance of recommended actions by the legislature and implementation by the executive.
D
Notes:
Performance unchanged. Proposals are made by MPs during the review process, but these have no mandatory force. (p. 153)
Donor Practices
Scores by Dimension
Overall Indicator Score
D-1 Predictability of Direct Budget Support
C+
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).
C
Notes:
Performance unchanged: Actual budget support disbursements were 53.0%, 85.1% and 180.4% of budgeted amounts during 2010-2012 respectively. Actual budget support fell short of budgeted amounts by more than 15% in one (2010) out of the three years. (p. 155)
D-1.2 In-year timeliness of donor disbursements (compliance with aggregate quarterly estimates)
B
Notes:
Performance improved: Actual quarterly disbursements differed from agreed amounts in weighted terms (the weights reflecting the extent of delays) by 20.6%, 11.7% and 0.0% in 2010, 2011 and 2012 respectively. (p. 155)
D-2 Financial information provided by donors for budgeting and reporting on project and program aid
A
Notes:
D-2.1 Completeness and timeliness of budget estimates by donors for project support.
A
Notes:
Performance unchanged. All major DPs (EU, GIZ, ADB, World Bank) providing support to the central government do so through the central government budget. PIUs prepare budget estimates for their projects under the auspices of their parent ministries in stages which are consistent with the budget calendar.The PIUs use templates to convert DP classification expenditure codes into the Government’s budget classification codes. (p. 157)
D-2.2 Frequency and coverage of reporting by donors on actual donor flows for project support.
A
Notes:
Performance unchanged. Upon the approval of the majority of disbursement requests by DPs, the appropriate information (in paper format or electronically) is provided monthly to MoF. In the case of some DPs who provide low volumes of assistance the appropriate information (in paper format or electronically) is provided quarterly to MoF. (p. 157)
D-3 Proportion of aid that is managed by use of national procedures
B
Notes:
D-3.1 Overall proportation of aid funds to central government that are managed through national procedures
B
Notes:
The rating has improved significantly partly due to the increased proportion of aid being provided as budget support (use of country systems is close to 80%.), and partly due to a significant increase in the proportion of aid that is managed by use of national procedures. (p. 159)
