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:
Actual primary expenditure deviated from primary budget estimates by more than 5% in only one of the years considered: - 2004/2005: 5% - 2005/2006: 10% - 2006/2007: 2% (p. 30)
2. Composition of expenditure out-turn compared to original approved budget
D
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)
D
Notes:
Variance in expenditure composition exceeded overall deviation by more than 10% in two of the three years considered: - 2004/2005: 14% - 2005/2006: 6% - 2006/2007: 15% (p. 30)
2.2 The average amount of expenditure actually charged to the contingency vote over the last three years
NU
Notes:
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:
"Domestic revenue collection exceeded 97% in all three of the last three budget years: - 2004/2005: 178% - 2005/2006: 131% - 2006/2007: 185%. It would appear that the non-tax expenditure data includes expenditure emanating out of direct budget support while the revenue estimates are exclusive of direct budget support. If such an interpretation is given to the data, the results still exceed 97% for all three years considered. (p. 30)"
4. Stock and monitoring of expenditure payment arrears
D*
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
D*
Notes:
At the present time even though there are identified areas where arrears continue to accrue, there are no mechanisms in place to monitor arrears. The Government has paid off (with the assistance of the securitization of some of the arrears) the 10.3 Billion MK established through a comprehensive audit in 2005, however since that time the continuing accrual of arrears has not been monitored. (p. 30)
4.2 Availability of data for monitoring the stock of expenditure payment arrears
D
Notes:
At the present time even though there are identified areas where arrears continue to accrue, there are no mechanisms in place to monitor arrears. (p. 30)
II. Comprehensiveness and Transparency
Scores by Dimension
Overall Indicator Score
5. Classification of the budget
B
Notes:
5.1 The classification system used for formulation, execution and reporting of the central government's budget
B
Notes:
The budget formulation and execution is based upon a functional, sub-functional, programme, sub-programme, economic and administrative classifications that are used both for budget formulation and execution. However, comparison with the COFOG standard indicates that the current use of programmes and sub-programmes ( which would be an equivalent of sub-functional classification in COFOG) will not allow mapping to produce consistent documentation with COFOG functions. (i.e. The mis-assignment of administrative heads to programmes and sub-programmes in a number of instances makes it unlikely that the programmes and sub-programmes can be mapped to COFOF sub- functions in a consistent way). (p. 31)
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:
"Budget documentation fulfils 6 benchmarks. Benchmarks fulfilled: - Macro-economic assumptions; - Fiscal deficit; - Deficit financing; - Debt stock; - Current year’s budget; - Summarised budget data for both revenue and expenditure. Benchmarks not fulfilled: - Financial Assets; - Prior year’s budget out-turn; - Explanation of budget implications of new policy initiatives. (p. 32)"
7. Extent of unreported government operations
D*
Notes:
7.1 The level of extra-budgetary expenditure (other than donor funded projects) which is unreported i.e. not included in fiscal reports.
D*
Notes:
"All revenues generated directly by the MDAs are transferred to the Consolidated Revenue Fund held with the Reserve Bank of Malawi (RBM). In 2006/2007 the RBM posted a loss of 1 Billion MK which was automatically funded by the Government through a promissory note mechanism that sits outside the budgetary process. As a ratio of total expenditure though this amount was less than 1%. However additional documentation provided by IMF (March 2007 Report) indicated that there is scarcity of information on the operation of the Treasury Funds, therefore there appear to be insufficient information to score. (p. 34)"
7.2 Income/expenditure information on donor-funded projects which is included in fiscal reports.
A
Notes:
Income/expenditure data of donor funded projects (loan funded) are submitted to the Ministry of Finance, the Ministry of Economic Planning and Development (Public Sector Investment Programme) as well as the corresponding Line Ministry to be included in fiscal reports. The Government of Malawi seek to exclude all projects that are managed outside Government systems from the budget, however other projects are included in other fiscal reports that are submitted to parliament. (p. 34)
8. Transparency of inter-governmental fiscal relations
B+
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:
The central government transfers for recurrent expenditure of the Local Authorities are based upon the same budget procedures as for the Line Ministries and are transparent and subject to set procedures and rules. While the Sector Specific Grants, under the current transition arrangements, have their rule basis restricted by historical factors, the very high component (approximately 90%) of personnel emolument expenditure results in an overall effect of making over 90 % of the horizontal allocations transparent and rules based. (p. 36)
8.2 Timeliness of reliable information to SN governments on their allocations from central government for the coming year;
B
Notes:
Local Authorities are provided the budget ceilings along with the Line Ministries about three weeks before the completion of the budget process but not at the start of their detailed budget process. (p. 36)
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.
B
Notes:
All Local Authorities provide monthly financial statements to the Ministry of Local Authorities. On an annual basis the Local Authorities submit final accounts that are included in the national appropriations accounts when they are presented to the National Audit Office (NAO). Further the National Local Government Finance Committee prepares and submits Local Authorities Budget Estimates to parliament within 11 to 12 months of the close of the fiscal year. The actual expenditure figures are not audited and given the current backlog of local authority audits this raises some question as to the accuracy of these reports. (p. 36)
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:
The 10 Key Commercial Statutory Bodies overseen by the Public Enterprise Reform Monitoring Unit (PERMU) submit fiscal reports to central government on a quarterly basis, as well as audited financial accounts annually which the PERMU consolidates the fiscal risk issues into a report and integrates into the Annual Economic Report for submission to parliament. However, it has not been established that these 10 public enterprises are the ‘all major AGAs/PEs’ which would warrant a higher score. (p. 38)
9.2 Extent of central government monitoring of SN government's fiscal position
A
Notes:
Under the terms of the Local Government Act 1998 and the Public Finance Management Act 2003 Local Authorities cannot generate fiscal liabilities for the central government. It should be noted though that at this time no regular monitoring of the consolidated position of Local Authorities is carried. (p. 38)
10. Public access to key fiscal information
C
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)
C
Notes:
"Information elements publicly available: - Annual budget documentation; - In-year budget execution reports. Information elements that are not publicly available: - Year-end financial statements; - External audit reports; - Contract awards; - Resources available to primary service units. (p. 39)"
III. Policy-Based Budgeting
Scores by Dimension
Overall Indicator Score
11. Orderliness and participation in the annual budget process
C+
Notes:
11.1 Existence of and adherence to a fixed budget calendar;
C
Notes:
The budget process is clearly set out in a draft budget calendar introduced in the 2007/2008 budget year. In the years covered by the PEFA Assessment such a calendar was not pre-announced even though by tradition the key steps occurred around the same time of the year. On the basis of the ceilings provided by the Ministry of Finance and approved by a Cabinet, the Line Ministries have about 2 to 3 weeks to prepare their submissions. (p. 40)
11.2 Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions (budget circular or equivalent);
B
Notes:
The Ministry of Finance issues comprehensive and clear budget circulars. The Budget ceilings have been approved by cabinet and issued to the line ministries after the budget circulars but prior to the completion of the line ministries budgets. (p. 40)
11.3 Timely budget approval by the legislature or similarly mandated body (within the last three years);
C
Notes:
While the government has submitted the budget just prior to the close of the fiscal year, the legislature has in the past three years always approved the budget within two months of the start of the new fiscal year. (p. 40)
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:
Three years functional forecasts are prepared which serve as sector ceilings for the integration of the Public Sector Investment Programme (PSIP) into the budget. Forecasts of fiscal aggregates are prepared for three years and agreed with the IMF and published and submitted as part of the documentation to Parliament. The forecasts are directly linked to subsequent budget ceilings. (p. 42)
12.2 Scope and frequency of debt sustainability analysis
A
Notes:
DSA for external and domestic debt is carried out annually by the Debt and Aid Division of the Ministry of Finance. They began in 2005/2006 and the team received DSA reports for both years. Under the Poverty Reduction and Growth Facility (PRGF), the IMF also carries out a debt sustainability analysis. (p. 42)
12.3 Existence of sector strategies with multi-year costing of recurrent and investment expenditure;
C
Notes:
Statements of sector strategies exist for several major sectors including the health, finance and education sectors. There are 5 thematic areas representing several sectors exceeding 25% of primary expenditure. (p. 42)
12.4 Linkages between investment budgets and forward expenditure estimates.
D
Notes:
Most of the important investment decisions are selected after analysis from the Ministry of Economic Planning and Development however the investment decisions still have some links to sector strategies. The recurrent cost implications are not directly taken into account. (p. 42)
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
C
Notes:
Existing legislation is clear for VAT, but others are not comprehensive and clear leading to uncertain tax liabilities in some cases. Some of the laws are obsolete and not in harmony with each other. Work is on-going to revise these laws to produce a tax procedure code. (p. 44)
13.2 Taxpayer access to information on tax liabilities and administrative procedures.
B
Notes:
Comprehensive, user friendly and up-to date information is available for tax liabilities. Assessments based on tax audit and are always communicated clearly to tax payers. (p. 44)
13.3 Existence and functioning of a tax appeals mechanism.
B
Notes:
There are both internal and external processes for tax appeals. The Commissioner General has made recent changes and refers all cases of appeal to a technical committee for advice. It is too early to assess its effectiveness since only few cases come up and tax payers are still unsure about the fairness of the system. (p. 44)
14. Effectiveness of measures for taxpayer registration and tax assessment
C+
Notes:
14.1 Controls in the taxpayer registration system.
C
Notes:
Domestic tax administration is supported by 3 systems run independently with no interface to exchange information electronically. There is a common taxpayer identification number (Tax Personal Identification Number or TPIN) but in built controls appear inadequate. (p. 45)
14.3 Planning and monitoring of tax audit and fraud investigation programs.
C
Notes:
The Malawi Revenue Authority (MRA) undertakes tax audit and fraud investigations. There was no evidence of a documented audit plan for tax audits. Risk assessment is used, but there was no evidence of clear risk criteria. (p. 45)
14.2 Effectiveness of penalties for non-compliance with registration and declaration obligations
B
Notes:
Penalties exist, but taxpayers can get around them as they considered by the business community to be inconsistently applied and not effective. (p. 45)
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).
C
Notes:
The average tax ration for the two most recent fiscal years was 70%. (p. 46)
15.2 Effectiveness of transfer of tax collections to the Treasury by the revenue administration.
A
Notes:
All tax receipts are paid to 3 commercial banks and transfers are made from their headquarters on daily basis to government accounts held at the Reserve Bank. (p. 46)
15.3 Frequency of complete accounts reconciliation between tax assessments, collections, arrears records and receipts by the Treasury.
D
Notes:
Monthly reconciliations are carried out for revenue deposits made into the National and Standard banks by the Malawi Revenue Authority (MRA) and the amounts received by into the Consolidated Fund held at the Reserve Bank of Malawi (RBM) by the Ministry of Finance (Revenue Division). MRA have indicated that there is no complete reconciliation of tax assessments, collections and arrears. (p. 46)
16. Predictability in the availability of funds for commitment of expenditures
B
Notes:
16.2 Reliability and horizon of periodic in-year information to MDAs on ceilings for expenditure commitments
B
Notes:
MDAs are provided with three-monthly expenditure forecasts (funding proposals) to serve as commitment ceilings. Actual funding releases are done on a monthly basis. (p. 47)
16.3 Frequency and transparency of adjustments to budget allocations, which are decided above the level of management of MDAs.
B
Notes:
All significant virements must be made subject to the approval of the Ministry of Finance Integrated Financial Management Information System (IFMIS) ensures a strict application of virement control. Most significant in-year adjustments are done through a supplementary budgetary budget process after a mid-year review even though emergency drought and subsidies stay outside of this arrangement. (p. 47)
16.1 Extent to which cash flows are forecast and monitored
B
Notes:
Annual cash flows are prepared by the Line Ministries and updated each quarter. (p. 47)
17. Recording and management of cash balances, debt and guarantees
A
Notes:
17.1 Quality of debt data recording and reporting
A
Notes:
Comprehensive records on domestic and external debt are compiled and are updated and reconciled on a monthly basis. Comprehensive statistical reports providing information on debt stocks, debt service and debt management operations are prepared by the Debt and Aid Management quarterly and the Reserve Bank of Malawi (RBM) on a monthly basis. (p. 49)
17.2 Extent of consolidation of the government’s cash balances
A
Notes:
The payments system utilizes the Consolidated Fund for all payments on Government expenditure (except for grant and loan funded project accounts). This facilitates a monitoring mechanism that reports and reconciles the account on a daily basis. All active project accounts are held in the Reserve Bank of Malawi (RBM) and withdrawals disbursed through the Credit Ceiling Authorization scheme. Balances are reconciled on a daily basis. (p. 49)
17.3 Systems for contracting loans and issuance of guarantees.
B
Notes:
The systems for contracting loans and issuing guarantees are bound by transparent procedures set within the legal and regulatory framework. Loan level ceilings may be inferred from the Guidelines on External Debt Management but limits on total guarantees are not articulated. (p. 49)
18. Effectiveness of payroll controls
C+
Notes:
18.1 Degree of integration and reconciliation between personnel records and payroll data.
A
Notes:
The personnel and payroll databases are directly integrated ensuring data consistency and providing for real time reconciliation. (p. 50)
18.2 Timeliness of changes to personnel records and the payroll
B
Notes:
While the changes with respect to new hires and postings are performed on a monthly basis with only occasional requirements for retroactive adjustments, it is not clear that all terminations are updated monthly. In the cases of voluntary terminations officials report such adjustments occur within 3 months. (p. 50)
18.3 Internal controls of changes to personnel records and the payroll.
A
Notes:
The authority to change records in payroll and personnel records is highly restricted directly by software controls and distributed between the Department of Human Resource Management and Development (DHRMD), the Accountant General and the Line Ministry and results in an audit trail. (p. 50)
18.4 Existence of payroll audits to identify control weaknesses and/or ghost workers.
C
Notes:
Only partial pay roll audits have been taken by the Internal Audit and the National Audit Office (NAO) in the past three years. In addition the Department of Human Resource Management and Development (DHRMD) undertake personnel inspections. (p. 50)
19. Transparency, competition and complaints mechanisms in procurement
D*
Notes:
19.1 Transparency, comprehensiveness and competition in the legal and regulatory framework
D*
Notes:
Data on public procurement shows that approximately 88% of contracts above the requisite threshold are awarded on the basis of open competition. However, the data sample does not distinguish between procurement under national procurement systems versus others, and so may not be representative of the awards made using national procurement systems. (p. 52)
19.2 Use of competitive procurement methods
C
Notes:
The justification for the use of procurement methods other than the open tender method remains weak due to ambiguity arising from emergencies due to dilatory behaviour. There are instances where the Director of Public Procurement may wave the requirement for Open Tender in the case of a national security threat without providing clear guidelines on what constitutes a national security threat. (p. 52)
19.3 Public access to complete, reliable and timely procurement information
C
Notes:
A process exits for submitting and addressing complaints, but appears to not yet be fully operational. (p. 52)
19.4 Existence of an independent administrative procurement complaints system
NU
Notes:
20. Effectiveness of internal controls for non-salary expenditure
C+
Notes:
20.1 Effectiveness of expenditure commitment controls.
B
Notes:
The recently introduced Integrated Financial Management Information System (IFMIS) system has substantially increased the quality of transaction processing, commitment control and security of payments. For all entities integrated in IFMIS it is virtually impossible to make an unwarranted commitment or an unauthorised payment. (p. 53)
20.2 Comprehensiveness, relevance and understanding of other internal control rules/ procedures
C
Notes:
The concept of management responsibility for internal control is firmly established and comprehensively outlined in the Public Financial Management Act. The controlling officers responsibilities are detailed in Section 10 in a way that leaves no doubt about where the responsibilities lies and the section also underlines all officer’s responsibility for internal control. However, there are doubts how much those rules have permeated the ministries at different levels. (p. 53)
20.3 Degree of compliance with rules for processing and recording transactions
C
Notes:
Evidence from Internal Audit and Auditor General shows that several errors or mistakes are made, indicating either ignorance or lack of applied rules on the operational level. The new follow-up system for internal and external audit, i.e. Audit Committees, might be able to raise the awareness once they are fully operational. (p. 53)
21. Effectiveness of internal audit
C+
Notes:
21.1 Coverage and quality of the internal audit function.
C
Notes:
Internal audit units have been created in nearly all ministries and professional international standards (Institute of Internal Auditors or IIA) are being implemented. Systemic issues are being increasingly observed. (p. 55)
21.2 Frequency and distribution of reports
B
Notes:
Reports are made as the audits are finished. They are distributed to the Controlling Officer in the Ministry, Treasury, the Central Internal Audit Unit, the Audit Committee, and to the Auditor General. The Director of the Central Internal Audit issues consolidated reports twice a year, of which one is the annual report. (p. 55)
21.3 Extent of management response to internal audit findings.
C
Notes:
The Audit committee is the body that should move matters arising from the report further. As most of the Audit committees are not yet operational, actions and responses are still delayed. (p. 55)
V. Accounting, Recording and Reporting
Scores by Dimension
Overall Indicator Score
22. Timeliness and regularity of accounts reconciliation
B+
Notes:
22.1 Regularity of bank reconciliations
A
Notes:
The Reserve Bank of Malawi (RBM) monitors and reconciles the Consolidated Fund account on a daily basis and so is in a position to determine the current status of bank balances for the entire Government on a next-day basis. The RBM submits bank statements to the Ministry of Finance within 15 days of the close of the month. While the signatories for grant and loan funded project accounts may not be Government officials, these accounts are managed under a similar scheme using Credit Ceiling Authorities. The placement of all project accounts (reported within the budget) with the RBM facilitates the reconciliation for all central government bank accounts on a monthly basis and within 15 days of the close of the month. (p. 56)
22.2 Regularity of reconciliation and clearance of suspense accounts and advances.
B
Notes:
Suspense accounts are monitored through the Integrated Financial Management Information System (IFMIS) and reconciled on an on-going basis. The accounts are cleared at the end of each year. (p. 56)
23. Availability of information on resources received by service delivery units
D
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
D
Notes:
There has been no comprehensive data collection on resources disbursed to service delivery units in the past three years. The current financial reporting systems do not indicate fund flows to the primary schools and primary health care clinics. (p. 56)
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:
The Monthly Expenditure Returns allow a direct comparison of budget implementation to the original budget at the budget head level and by economic classification. Only expenditures are covered, not commitments. Information included covers all of the budget estimates items, including Part1 (donor financed projects). (p. 57)
24.2 Timeliness of the issue of reports
A
Notes:
Reports are prepared through the Integrated Financial Management Information System (IFMIS) by the Accountant General on a monthly and quarterly basis and submitted within 10 days of the close of the month. (p. 57)
24.3 Quality of information
B
Notes:
There are no material concerns regarding that accuracy. However, given that double entry book keeping is not adopted neither are bank balances reported to ensure reconciliation data accuracy cannot be assured. (p. 57)
25. Quality and timeliness of annual financial statements
C+
Notes:
25.1 Completeness of the financial statements
C
Notes:
The Ministry of Finance prepares consolidated final accounts annually. Consolidated government accounts are prepared with revenue and expenditure information as well as a table of financial assets and liabilities. However, the financial statements do not include any expenditure arrears or tax arrears. (p. 58)
25.2 Timeliness of submission of the financial statements
A
Notes:
The last Annual Financial Statement was submitted was submitted 4 months after the fiscal year. (p. 58)
25.3 Accounting standards used
C
Notes:
The Generally Accepted Accounting Principles (GAAP) standard is applied for preparing financial statements on consistent basis from one year to the next. The GAAP not adapted to national accounting standards, so there are disclosure of some accounting policies. (p. 58)
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).
C
Notes:
From available information, it seems that the external financial audit of Central Government has a coverage of about 50%. Performance Audit is not yet implemented and International Auditing Standards have just started to be implemented. The Auditor General’s full independence when it comes to control over own resources is still missing. (p. 60)
26.2 Timeliness of submission of audit reports to legislature.
D
Notes:
The last Annual Audit Report submitted to the National Assembly was for the fiscal year 2003/2004. Thereafter no report has been submitted since the sudden death of the Auditor General in 2006 left the post vacant. No new Auditor General, who can sign the reports, had yet been appointed at the time for the evaluation. The report for 2004/2005 is already drafted and 2005/2006 report is almost finalised and once a new Auditor General is appointed, this problem will be solved and the reporting will be resumed. However, even earlier the National Audit Office (NAO) has been late with is statutory reporting depending partly on late submission of the annual accounts to NAO. (p. 60)
26.3 Evidence of follow up on audit recommendations
C
Notes:
Until now the National Audit Office (NAO)'s reporting does not seem to trigger much response before the issues turns up in the Public Accounts Committee (PAC) hearings. The NAO is doing some follow up of its audits when it returns to the same audit subject again A new organisation for audit follow-up in the Government has been decided (2006) and started to be implemented by the Government. Audit Committees will be implemented in all ministries, tasked with analysing and acting on all audit reports, both from external audit and internal audit, and also on PAC reports. This new organisation has so far been implemented only in 12 ministries but will probably add much structure and substance to the audit follow-up once the Audit Committees are fully functioning. So far the feedback from the Audit Committees has been limited. (p. 60)
27. Legislative scrutiny of the annual budget law
B
Notes:
27.1 Scope of the legislature’s scrutiny.
B
Notes:
The scope of the Parliaments assessment covers the whole budget as it is laid before them. (p. 61)
27.2 Extent to which the legislature’s procedures are well-established and respected.
B
Notes:
In Malawi, the rules dealing with the parliament’s approval of the annual budget are set out in the Constitution, The Public Finance Management Act and in the Standing Orders of the National Assembly. The Budget and Finance Committee, which is established by the constitution, is the committee in the Assembly that is especially tasked with the examination of the annual budget. Also, there are some backroom discussions and negotiations, whereby the Parliament wields influence to facilitate the budget process and bring it to conclusion. (p. 61)
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 Budget Documents has to be submitted to the Parliament not later than 1st of April of each year. After the budget is laid before the Parliament it has, according to the Chair of Budget and Finance committee, about 40 days to work with the budget. The Standing Orders says that the budget debate shall last for a period of not less than 21 calendar days. (p. 61)
27.4 Rules for in-year amendments to the budget without ex-ante approval by the legislature.
B
Notes:
There are clear rules for in-year amendments, spelled out in the Constitution (Section 177), and these rules are normally respected. (p. 61)
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).
D
Notes:
The Public Accounts Committee (PAC) is currently working on the Annual Audit report from 2003/2004. The breakdown in reporting from the NAO, due to the fact that there is no Auditor General, will stall this accountability process in the parliament for an indefinite time. The very long time lapse from the already delayed audit reports until the recommendations are issued seriously undermines the value and usefulness of its work. (p. 62)
28.2 Extent of hearings on key findings undertaken by the legislature.
A
Notes:
According to evidence, hearings take place, and involve all Ministries. However, judging on the aging of the information being discussed, its overall usefulness becomes questionable. (p. 62)
28.3 Issuance of recommended actions by the legislature and implementation by the executive.
C
Notes:
The Public Accounts Committee (PAC) is issuing reports with observations and recommendations after its scrutinizing of the Annual Audit reports. In the Government the Secretary to Treasury is tasked with the responsibility to follow up on the PAC report by issuing a Treasury minute to all Ministries, which has only happened once. With a time span of several years from the National Audit Office (NAO) observations until scrutinizing in PAC and the following Treasury measures, the follow-up has not been effective. (p. 62)
Donor Practices
Scores by Dimension
Overall Indicator Score
D-1 Predictability of Direct Budget Support
D*
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).
D*
Notes:
The scoring is based only on the two years, 2005/2006 and 2006/2007 where reliable data was available. For 2006/2007 the predictability of budget support has actually been stronger and predictability has improved considerably. No scoring is done on this dimension. (p. 64)
D-1.2 In-year timeliness of donor disbursements (compliance with aggregate quarterly estimates)
D*
Notes:
Information is lacking or is incomplete for 2004/2005 and 2005/2006. For 2006/2007 information is complete and delays are insignificant. (p. 64)
D-2 Financial information provided by donors for budgeting and reporting on project and program aid
C
Notes:
D-2.1 Completeness and timeliness of budget estimates by donors for project support.
C
Notes:
For 2006/2007 eight out of fifteen development partners met all of Government of Malawi requirements for provision of data. However the remainder failed to meet at least one of the requirements. These requirements are not only submission of data but also completeness of data and consistency with Government budget classification. (p. 64)
D-2.2 Frequency and coverage of reporting by donors on actual donor flows for project support.
C
Notes:
Donors has provided quarterly reports but is now required to report monthly, as a consequence of IMF ?s requirement on Government reporting. (p. 64)
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:
The development partners administer about 66% of their support through Government systems according to figures compiled by Debt and Aid Department. The figure is likely to be too high depending on inconsistent criteria. (p. 64)