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:
Deviation of actual expenditure from the approved budget greater than 5% in only one of the three fiscal years (P. 21)
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 the overall deviation in primary expenditure by more than 10 percentage in at least two of the three years (P. 23)
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 rev. collection was below 97% in one of the reported years (P. 24)
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:
4.2 Availability of data for monitoring the stock of expenditure payment arrears
D*
Notes:
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:
Budgets for all seven regions covered include administrative, economic, and functional classification of expenditures. (P. 25)
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:
The FY1999 budget documentation satisfies 5 of the 7 requirements relevant for regional review listed by PEFA (P. 26)
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:
The comprehensiveness of fiscal information has improved in recent years for all regions although it needs to improve further in Benishengal and Gambella. The extent of unreported government operations is estimated to be in less than 5% of total expenditure. Unable to score due to lack of overall information. (P. 27)
7.2 Income/expenditure information on donor-funded projects which is included in fiscal reports.
B
Notes:
8. Transparency of inter-governmental fiscal relations
B+
Notes:
The distribution of expenditure responsibilities between regions and weredas is transparent. Timeliness of information from regions to weredas is good and SN reporting of local government expenditure is comprehensive. (P. 28)
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);
B
Notes:
8.2 Timeliness of reliable information to SN governments on their allocations from central government for the coming year;
B
Notes:
8.3 Extent to which consolidated fiscal data (at least on revenue and expenditure) is collected and reported for general government according to sectoral categories.
A
Notes:
9. Oversight of aggregate fiscal risk from other public sector entities.
NA
Notes:
Fiscal risk from other public sector entities is non-existent at SN levels for the 6 regions. (P. 29)
9.1 Extent of central government monitoring of AGAs and PEs.
NA
Notes:
9.2 Extent of central government monitoring of SN government's fiscal position
NA
Notes:
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:
Public information is available for 2 of the 6 yardsticks for all regions. (P. 30)
III. Policy-Based Budgeting
Scores by Dimension
Overall Indicator Score
11. Orderliness and participation in the annual budget process
C+
Notes:
A clear budget calendar exists and there is good ownership at wereda and regional levels. Approval by legislature timely in most – Gambella and Afar exceptions. (P. 31)
11.1 Existence of and adherence to a fixed budget calendar;
A
Notes:
11.2 Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions (budget circular or equivalent);
A
Notes:
11.3 Timely budget approval by the legislature or similarly mandated body (within the last three years);
A
Notes:
12. Multi-year perspective in fiscal planning, expenditure policy and budgeting
D+
Notes:
Some basic elements of a MTBF process have been introduced at the six regions. Further developments are required to improve the quality of the MTBF and enhance its linkage with the annual budget. (P. 32)
12.1 Preparation of multi -year fiscal forecasts and functional allocations
C
Notes:
12.2 Scope and frequency of debt sustainability analysis
NA
Notes:
12.3 Existence of sector strategies with multi-year costing of recurrent and investment expenditure;
D
Notes:
12.4 Linkages between investment budgets and forward expenditure estimates.
C
Notes:
IV. Predictability and Control in Budget Execution
Scores by Dimension
Overall Indicator Score
13. Transparency of taxpayer obligations and liabilities
B
Notes:
Legislation and procedures are clear but discretionary power of tax authorities still exist. The flow and access of taxpayer information needs further work. Appeals mechanisms have been rolled out but too early to judge how effective and fair they are (P. 32)
13.1 Clarity and comprehensiveness of tax liabilities
A
Notes:
13.2 Taxpayer access to information on tax liabilities and administrative procedures.
C
Notes:
13.3 Existence and functioning of a tax appeals mechanism.
B
Notes:
14. Effectiveness of measures for taxpayer registration and tax assessment
C
Notes:
Registration of taxpayers exists but limited in scope and interoperability with other databases, effectiveness of penalties for non-compliance with registration and tax registration is weak and planning and monitoring for tax audits is limited. (P. 33)
14.1 Controls in the taxpayer registration system.
C
Notes:
14.3 Planning and monitoring of tax audit and fraud investigation programs.
D
Notes:
14.2 Effectiveness of penalties for non-compliance with registration and declaration obligations
C
Notes:
15. Effectiveness in collection of tax payments
C
Notes:
Average debt collection ration has been high in recent years and total amounts of tax arrears are insignificant. Tax revenues are paid directly into treasury or transferred to daily. Complete accounts reconciliation is an annual exercise, often delayed. (P. 34)
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).
B
Notes:
15.2 Effectiveness of transfer of tax collections to the Treasury by the revenue administration.
A
Notes:
15.3 Frequency of complete accounts reconciliation between tax assessments, collections, arrears records and receipts by the Treasury.
C
Notes:
16. Predictability in the availability of funds for commitment of expenditures
A
Notes:
Fund availability highly predictable. Variations in ceilings set as part of budget cycle are exceptional and justifiable. (P. 35)
16.2 Reliability and horizon of periodic in-year information to MDAs on ceilings for expenditure commitments
A
Notes:
16.3 Frequency and transparency of adjustments to budget allocations, which are decided above the level of management of MDAs.
A
Notes:
16.1 Extent to which cash flows are forecast and monitored
A
Notes:
17. Recording and management of cash balances, debt and guarantees
NA
Notes:
17.1 Quality of debt data recording and reporting
NA
Notes:
17.2 Extent of consolidation of the government’s cash balances
NA
Notes:
17.3 Systems for contracting loans and issuance of guarantees.
NA
Notes:
18. Effectiveness of payroll controls
A
Notes:
18.1 Degree of integration and reconciliation between personnel records and payroll data.
A
Notes:
Controls around nominal rolls, reconciliation with payroll data, alterations to payroll/establishment data and independent scrutiny of payroll transactions all in evidence and effective across all jurisdictions. (P. 36)
18.2 Timeliness of changes to personnel records and the payroll
A
Notes:
18.3 Internal controls of changes to personnel records and the payroll.
A
Notes:
18.4 Existence of payroll audits to identify control weaknesses and/or ghost workers.
A
Notes:
19. Transparency, competition and complaints mechanisms in procurement
C+
Notes:
The legislative framework is satisfactory but still has to become fully effective in practice. There are weaknesses in the setting up of apples mechanisms – particularly at wereda level - across all regions. (P. 37)
19.1 Transparency, comprehensiveness and competition in the legal and regulatory framework
Notes:
19.2 Use of competitive procurement methods
Notes:
19.3 Public access to complete, reliable and timely procurement information
Notes:
19.4 Existence of an independent administrative procurement complaints system
NU
Notes:
20. Effectiveness of internal controls for non-salary expenditure
A
Notes:
Robust systems of commitment, recording and processing, widely understood and applied across all regions. (P. 37)
20.1 Effectiveness of expenditure commitment controls.
A
Notes:
20.2 Comprehensiveness, relevance and understanding of other internal control rules/ procedures
A
Notes:
20.3 Degree of compliance with rules for processing and recording transactions
A
Notes:
21. Effectiveness of internal audit
B+
Notes:
Internal audit in the middle of nationwide reform process yielding some results, reporting mechanisms and follow-up appropriate, but until reforms bed down there is not an appropriately systemic focus in most regions. (P. 38)
21.1 Coverage and quality of the internal audit function.
C
Notes:
21.2 Frequency and distribution of reports
B
Notes:
21.3 Extent of management response to internal audit findings.
A
Notes:
V. Accounting, Recording and Reporting
Scores by Dimension
Overall Indicator Score
22. Timeliness and regularity of accounts reconciliation
B
Notes:
Bank reconciliations are performed across all regions on a timely and regular basis, despite logistical challenges. Clearance of suspenses and advances is not always achieved. (P. 39)
22.1 Regularity of bank reconciliations
A
Notes:
22.2 Regularity of reconciliation and clearance of suspense accounts and advances.
C
Notes:
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:
Disaggregated data in budget and accounting systems available showing resources down to point of delivery. (P. 40)
24. Quality and timeliness of in-year budget reports
C+
Notes:
System allows for monitoring of performance against budget across all jurisdictions examined, but there were some fluctuations in timeliness of in-year report completion. There are no material concerns about data accuracy. (P. 40)
24.1 Scope of reports in terms of coverage and compatibility with budget estimates
A
Notes:
24.2 Timeliness of the issue of reports
C
Notes:
24.3 Quality of information
A
Notes:
25. Quality and timeliness of annual financial statements
C+
Notes:
Year-end information of appropriate quality (and in accordance with accounting standards) is produced, but there are some delays in some regions. (P. 41)
25.1 Completeness of the financial statements
A
Notes:
25.2 Timeliness of submission of the financial statements
C
Notes:
25.3 Accounting standards used
A
Notes:
VI. External Scrutiny and Audit
Scores by Dimension
Overall Indicator Score
26. Scope, nature and follow-up of external audit
D+
Notes:
Regional audit is severely hampered by its limited scope, although annual audit reports are made and submitted to the legislatures, which are followed up to varying degrees. (P. 42)
26.1 Scope/nature of audit performed (incl. adherence to auditing standards).
D
Notes:
26.2 Timeliness of submission of audit reports to legislature.
B
Notes:
26.3 Evidence of follow up on audit recommendations
C
Notes:
27. Legislative scrutiny of the annual budget law
D+
Notes:
Scrutiny occurs but is perhaps limited by capacity. Nevertheless, oversight and scrutiny are established in budget cycles and clear rules exist relating to budget amendments, although the amount of time elected members have to scrutinise the budget is severely limited. (P. 43)
27.1 Scope of the legislature’s scrutiny.
A
Notes:
27.2 Extent to which the legislature’s procedures are well-established and respected.
A
Notes:
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
D
Notes:
27.4 Rules for in-year amendments to the budget without ex-ante approval by the legislature.
A
Notes:
28. Legislative scrutiny of external audit reports
C+
Notes:
Reports are issued in all regions, but the extent and institutionalisation of parliamentary review and follow-up is mixed. (P. 44)
28.1 Timeliness of examination of audit reports by the legislature (for reports received within the last three years).
A
Notes:
28.2 Extent of hearings on key findings undertaken by the legislature.
C
Notes:
28.3 Issuance of recommended actions by the legislature and implementation by the executive.
C
Notes:
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
NA
Notes:
D-2.1 Completeness and timeliness of budget estimates by donors for project support.
NA
Notes:
D-2.2 Frequency and coverage of reporting by donors on actual donor flows for project support.
NA
Notes:
D-3 Proportion of aid that is managed by use of national procedures
NA
Notes:
D-3.1 Overall proportation of aid funds to central government that are managed through national procedures
NA
Notes:
