I. Credibility of the Budget
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure out-turn compared to original approved budget
B
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)
B
Notes:
In 2 out of the 3 years under analysis, the executed expenditure out-turn was less than 10% as compared to the original approved, but exceeded 5% in two years. (P. 19)
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 overall deviation by over 5 percentage points in the three years under analysis (P. 20)
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:
Actual domestic revenue collection was above revenue forecasts in the approved budget in the three years under analysis (2006-2008). (P. 21)
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:
The available information does not meet the PEFA requirements to score this dimension. (P. 24)
4.2 Availability of data for monitoring the stock of expenditure payment arrears
D
Notes:
Data on stock of payment arrears are generated on an annual basis, using the record of floating debt, but this monitoring can only be effected as from the time when a liability is formally recorded as accrued; however, there is no information to monitor payment arrears as from the effective generation of a payment liability; there could be invoices that are not recorded, or not captured by the system. However, based on the information provided on the basis of the record of floating debt, it may be noted that payments are made promptly and arrears are not significant. (P. 24)
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:
Both the budget formulation and execution use classification systems that allow for the generation of consistent documentation based on various classifiers, including administrative, economic and functional, which in turn is divided into the respective sub-functions (P. 26)
6. Comprehensiveness of information included in budget documentation
C
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)
C
Notes:
The documentation of the budget bill most recently submitted to Congress complies with 3 out of the 9 required criteria (P. 28)
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 budget coverage and information on execution are broad, and the amount of extra-budgetary expenditure is not significant (P. 31)
7.2 Income/expenditure information on donor-funded projects which is included in fiscal reports.
A
Notes:
Fiscal reports include complete information on income and expenditure corresponding to 90% (by value) of donor-funded projects (loans and grants), except for in-kind contributions (P. 31)
8. Transparency of inter-governmental fiscal relations
C+
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 horizontal allocation of almost all transfers (at least 90%) is determined by transparent and rules -based systems (P. 36)
8.2 Timeliness of reliable information to SN governments on their allocations from central government for the coming year;
C
Notes:
Reliable information is provided to the subnational governments, only when it is no longer possible to introduce significant budget changes (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.
D
Notes:
Fiscal information (ex-ante and ex-post) that is consistent with central government fiscal reporting is collected for at least 90% (by value) of subnational government expenditure and consolidated annually within 10 months of the end of the fiscal year. The ex-post information, however, is not broken down into sectoral categories. (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:
Although there is a requirement to present monthly fiscal reports and annual financial statements (with reliability or audit reports), this requirement is met partially, affecting the availability of complete information (P. 40)
9.2 Extent of central government monitoring of SN government's fiscal position
C
Notes:
There is monitoring of the net fiscal position corresponding to the major subnational government level, but the records are not complete to allow for the preparation of consolidated reports of the municipalities fiscal position (P. 40)
10. Public access to key fiscal information
B
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)
B
Notes:
The government makes available to the public three of the six required types of information (P. 42)
III. Policy-Based Budgeting
Scores by Dimension
Overall Indicator Score
11. Orderliness and participation in the annual budget process
D+
Notes:
11.1 Existence of and adherence to a fixed budget calendar;
C
Notes:
There is a clear annual budget calendar, but it is rudimentary since it does not include dates/deadlines for the intermediate stages, and it is usually complied to with delays. The time given to the ministries, departments, and organizations to make detailed estimates is short, at least in the case of the 2009 budget. (P. 45)
11.2 Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions (budget circular or equivalent);
C
Notes:
The ministries, departments, and organizations are sent a note explaining their expenditure ceilings less than one month in advance and the Cabinet becomes aware of the draft budget after the deadline for submittal of the preliminary drafts by each institution, and only days before the submittal to Congress. (P. 45)
11.3 Timely budget approval by the legislature or similarly mandated body (within the last three years);
D
Notes:
Congress did not approve the budget within 60 days of its submittal, and the bill sent by the Executive become effective as mandated by the Constitution, without the express approval by Congress (P. 45)
12. Multi-year perspective in fiscal planning, expenditure policy and budgeting
C
Notes:
12.1 Preparation of multi -year fiscal forecasts and functional allocations
D
Notes:
No estimates of fiscal aggregates are made, going beyond the respective fiscal year (P. 48)
12.2 Scope and frequency of debt sustainability analysis
A
Notes:
An annual public debt sustainability analysis is made, including both domestic and external debt (P. 48)
12.3 Existence of sector strategies with multi-year costing of recurrent and investment expenditure;
D
Notes:
Although progress is being made in preparing sectoral strategies for some sector or institutions, work has not yet been carried out to determine costing of investment expenditure and its recurrent costs, or for other current expenditure (P. 48)
12.4 Linkages between investment budgets and forward expenditure estimates.
C
Notes:
Investment decisions have weak linkages with plans and, although information and commitment regarding the operating cost of investment works is required, these are not incorporated into forward budget estimates. (P. 48)
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 tax legislation in Bolivia is comprehensive and strictly limits National Tax Service and National Customs of Bolivia discretionary powers. There is ambiguity regarding the statute of limitation on tax events. The new Constitution has declared tax crimes and debts under a firm decision of the jurisdictional court have no limitation period, which is a good measure. However, by leaving the tax events in the same category, the taxpayer liabilities would be uncertain and could remain at the discretion of the Tax Administration (P. 50)
13.2 Taxpayer access to information on tax liabilities and administrative procedures.
A
Notes:
There are Taxpayer Service units and large taxpayers have access to enquiries. There are tax education programs and the National Tax Service website provides information to the rest of the taxpayers. There is also printed material available for taxpayers with limited Internet access. This information is available in Spanish and in the Quechua and Aymara languages. (P. 50)
13.3 Existence and functioning of a tax appeals mechanism.
B
Notes:
Appeals are filed before agencies that independent from National Tax Service and National Customs of Bolivia, although the taxpayer may choose to file before the Complaints Authority or the administrative judicial courts (P. 51)
14. Effectiveness of measures for taxpayer registration and tax assessment
B+
Notes:
14.1 Controls in the taxpayer registration system.
B
Notes:
Taxpayers are registered in the Taxpayer Registry under a unique and permanent taxpayer identification number and with linkages with other public registry systems, such as the civil and electoral registry (P. 52)
14.3 Planning and monitoring of tax audit and fraud investigation programs.
B
Notes:
There is an audit strategy with clear and detailed risk evaluation criteria that comprises the major taxes and compliance with the formal requirements. The coordination between the National Tax Service and the National Customs of Bolivia for compliance assessment purposes is limited to data exchanges. Improving the coordination across both entities, for example, with a joint foreign trade compliance assessment force would reduce the risks of evasion, particularly of value added tax (P. 53)
14.2 Effectiveness of penalties for non-compliance with registration and declaration obligations
A
Notes:
The penalties cover all the most important areas of non-compliance (evasion, missing inventories, lack of payment, or payment in arrears.) (P. 52)
15. Effectiveness in collection of tax payments
B+
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).
A
Notes:
The average tax debt collection ratio was 93% (2007-2008). (P. 55)
15.2 Effectiveness of transfer of tax collections to the Treasury by the revenue administration.
B
Notes:
Tax revenue collections by National Tax Service and National Customs (internal and customs taxes) to the National General Treasury are transferred daily even though each agency has separate agreements (P. 55)
15.3 Frequency of complete accounts reconciliation between tax assessments, collections, arrears records and receipts by the Treasury.
B
Notes:
Complete and regular reconciliation takes place on a regular (monthly) basis, although on occasion there are delays. (P. 55)
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:
In 2008 the ministries, departments, and organizations had reliable information available for investment expenditure on a monthly basis and every quarter for current expenditure (P. 58)
16.3 Frequency and transparency of adjustments to budget allocations, which are decided above the level of management of MDAs.
C
Notes:
Although budget adjustments are legally transparent and the budget increase requests to Congress are assembled into a single request per year, there are strong and frequent adjustments across institutions (P. 58)
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 monthly on the basis of actual cash inflows and outflows (P. 58)
17. Recording and management of cash balances, debt and guarantees
A
Notes:
17.1 Quality of debt data recording and reporting
B
Notes:
Domestic and foreign debt records are complete, and they are updated and reconciled on a monthly basis with data considered of high integrity. Comprehensive management and statistical reports (covering debt service, stock and operations) are produced at least annually. (P. 60)
17.2 Extent of consolidation of the government’s cash balances
A
Notes:
The calculation and consolidation of cash balances take place daily (P. 60)
17.3 Systems for contracting loans and issuance of guarantees.
A
Notes:
Central government’s 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. 60)
18. Effectiveness of payroll controls
B+
Notes:
18.1 Degree of integration and reconciliation between personnel records and payroll data.
B
Notes:
The personnel database and the payroll are not always directly linked at the level of each entity. Although the entities surveyed reported that at the time of preparing the payroll they made reviews of the individual records, no specific procedure was identified in each entity to reconcile the data liquidated in the payroll and the data in each employee’s individual record. On the other hand, using the specialized application Century, the General Directorate of Treasury Operations and Programming (Vice Ministry of Public Treasury and Credit) controls that the information required for payroll payments does correspond to the authorized levels and that duplicate payments are not made. This is a filter for the quality and integrity of the data since it identifies inconsistencies and results in reprocessing for correction by each requesting entity. (P. 64)
18.2 Timeliness of changes to personnel records and the payroll
A
Notes:
Required changes to the personnel records and payroll are updated monthly, generally in time for the following month’s payments. Retroactive adjustments are not common. No substantial delays in the processing of the payroll are reported. (P. 64)
18.3 Internal controls of changes to personnel records and the payroll.
A
Notes:
There exist review and authorization controls of the changes to the payroll in each entity, based on functions and responsibilities assigned to appropriate levels within the Personnel Management System. Furthermore, a documentary record of the control and authorization of such changes is maintained (P. 64)
18.4 Existence of payroll audits to identify control weaknesses and/or ghost workers.
D
Notes:
No external audits of payroll liquidation processes are conducted, or of the information systems used in their processing (P. 64)
19. Transparency, competition and complaints mechanisms in procurement
B
Notes:
19.1 Transparency, comprehensiveness and competition in the legal and regulatory framework
B
Notes:
Over 90% of the procurement takes place through public calls for bids. Procurement processes starting from Bs20,000 (US$3,000) are made through a public call in SICOES and are open to the participation of bidders. Although the law sets minimum terms of 15 business days for domestic competitive bids and 20 for international competitive bids, these are short for the amounts involved and could limit the competitive quantity and quality. (P. 71)
19.2 Use of competitive procurement methods
B
Notes:
The use of less competitive or very restrictive competition methods is not generalized (3% of the total procurement). They are carried out within existing legal framework; however, the entities have authority to make this type of procurement using a public call. Although the process follows procurement regulations, it is possible to introduce improvements in these methods to obtain better outcomes. (P. 71)
19.3 Public access to complete, reliable and timely procurement information
C
Notes:
A process exists for submitting and addressing procurement complaints, but it is designed poorly and does not operate in a manner that provides for a timely resolution of complaints (P. 71)
19.4 Existence of an independent administrative procurement complaints system
NU
Notes:
20. Effectiveness of internal controls for non-salary expenditure
D+
Notes:
20.1 Effectiveness of expenditure commitment controls.
A
Notes:
Expenditure commitment controls are in place and effectively limit commitments to actual cash availability and approved budget allocations. These controls are included in SIGMA and prevent or highlight in real time the inexistence or mistaken allocation of a process request in budget execution (P. 74)
20.2 Comprehensiveness, relevance and understanding of other internal control rules/ procedures
D
Notes:
The internal control rules of the entities are not clear or comprehensive since they are not based on risk evaluations but rather are limited to transactional control activities (P. 74)
20.3 Degree of compliance with rules for processing and recording transactions
C
Notes:
The Comptroller’s Report for 2006,a 2007,b and 2008 reveal notable lack of compliance with the internal control standard for entities where their interventions were practiced. Likewise, the Internal Audit Unit Reports of the General State Comptrollership reveal a partial lack of compliance with the controls. (P. 74)
21. Effectiveness of internal audit
C
Notes:
21.1 Coverage and quality of the internal audit function.
C
Notes:
Most of the entities representing the central government have an internal audit function, although the scope of their work is eminently transactional. These Internal Audit Units partially comply with the accepted international standards for professional audit practice. (P. 77)
21.2 Frequency and distribution of reports
C
Notes:
In most central government entities, reports are periodically issued and sent to the head of the audited unit, the entity’s chief executive authority and the General State Comptrollership. The MEFP does not get a copy of these reports (P. 77)
21.3 Extent of management response to internal audit findings.
C
Notes:
Although the internal auditors have no statistics available on the degree of adoption of the findings reported in the Internal Audit Unit reports, Internal Control Deputy Comptrollership data show that in the annual periods 2006 to 2008, approximately 44% of the Internal Audit Unit recommendations were implemented (P. 77)
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 reconciliation of the central government bank accounts is done on a daily basis. (P. 79)
22.2 Regularity of reconciliation and clearance of suspense accounts and advances.
C
Notes:
The reconciliation and clearance of these items is the responsibility of each entity, and although they can do it periodically and it is carried out at least on an annual basis, the non-cleared balances in a considerable quantity of accounts are carried over (P. 79)
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:
Although some level of information might exist—for example at the municipal level—in the last three years there has been no comprehensive data gathering on the resources allocated to the service delivery units with reference to any of the major sectors. (P. 81)
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:
Although data classification makes it possible to compare with the effective budget, expenditure is only captured at the executed stage and not at the commitment stage. (P. 83)
24.2 Timeliness of the issue of reports
A
Notes:
Reports are prepared on a monthly basis and submitted to the MEFP Minister within four weeks after the close of the period. (P. 83)
24.3 Quality of information
B
Notes:
There is some concern regarding the accuracy of the data; however the General Directorate of Fiscal Accounting maintains the registration and control of the entities that have failed to submit their information on a timely basis and which therefore is not included in the budget reports; this allows them to conclude that such omissions do not fundamentally undermine the basic usefulness of the reports since the information that may not be reported is not material. (P. 83)
25. Quality and timeliness of annual financial statements
D+
Notes:
25.1 Completeness of the financial statements
B
Notes:
Consolidated central administration’s financial statements are prepared annually and include information on revenue, expenditure, and financial assets and liabilities. However, the consolidation does not respond to a technical method but rather merely constitutes an aggregation. For purposes of the central government, this does not imply a significant effect (P. 85)
25.2 Timeliness of submission of the financial statements
D
Notes:
The financial statements, including the budget execution statement, are submitted in a timely manner according to the legal requirements and no material lack of compliance was identified. Said financial statements however are not independently audited on an annual basis. (P. 85)
25.3 Accounting standards used
C
Notes:
The corresponding annual standards are applied. Although an updated study demonstrating their consistency with the IPSAS is not available, the fact of not having a consolidation but merely an aggregation is a lack of compliance with the accepted standards. (P. 85)
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:
The General State Comptrollership does not audit financial statements of the central administration, or the consolidated budget execution, either at the general level of the financial statement reported by the Executive or at the level of individual entities (P. 90)
26.2 Timeliness of submission of audit reports to legislature.
A
Notes:
All the reports issued by the General State Comptrollership, regardless of the type of audit or review, such as follow-up ones, are submitted to the Legislature within four months of the end of the study period (P. 90)
26.3 Evidence of follow up on audit recommendations
B
Notes:
There is a formal commitment by the chief executive authority of the audited entity to implement the recommendations issued by the General State Comptrollership. Based on that document, the General State Comptrollership plans and conducts the respective follow-up. However, the time allocated to this activity has been reduced to 20%. (P. 90)
27. Legislative scrutiny of the annual budget law
D+
Notes:
27.1 Scope of the legislature’s scrutiny.
D
Notes:
The examination made separately by each Chamber comprised fiscal aggregates as well as some breakdown of income and expenditure, but the analysis by the Legislature was not completed within the legally required time frame. (P. 94)
27.2 Extent to which the legislature’s procedures are well-established and respected.
D
Notes:
Although some procedures exist for budget review and approval by the Legislature, they are not comprehensive, are not respected, and have not guaranteed the completion of the review in the last years. (P. 94)
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:
The Legislature has exactly 2 months (60 days) to examine and approve the annual budget. (P. 94)
27.4 Rules for in-year amendments to the budget without ex-ante approval by the legislature.
C
Notes:
There are clear rules that are respected, but they may provide for broad administrative reallocations and the expansion of the total expenditure. (P. 94)
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 Legislature does not make an examination of the external audit reports received from the General State Comptrollership. (P. 95)
28.2 Extent of hearings on key findings undertaken by the legislature.
D
Notes:
No in-depth hearings are conducted by the Legislature (P. 95)
28.3 Issuance of recommended actions by the legislature and implementation by the executive.
D
Notes:
No recommendations are issued by the Legislature (P. 95)
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
C
Notes:
D-2.1 Completeness and timeliness of budget estimates by donors for project support.
C
Notes:
Most donors (bilateral and multilateral) agree disbursement forecasts with the implementing agencies before the start of the fiscal year although they do not follow the Government’s budget classification (P. 99)
D-2.2 Frequency and coverage of reporting by donors on actual donor flows for project support.
C
Notes:
The main donors covering over 50% of the forecasted estimates provide quarterly information (and in some cases monthly information) within the month following the end of the period. The information does not always provide a breakdown consistent with the government classification (P. 99)
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:
50% or more of donor-disbursed funds are managed through national procedures. (P. 100)
