I. Credibility of the Budget
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure out-turn compared to original approved budget
C
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)
C
Notes:
In this assessment, the rating is based only on the operating budget, as Core development expenditures was a concept introduced during 2004. Based on operating expenditures only, the rating is “2” because operating expenditures have deviated from budget by a percentage higher than 10% but lower than 15%, in more than one year: - 2002/03: 0.9% - 2003/04: 10.5% - 2004/05: 12.3% (p. 15-16)
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:
Where the composition of expenditure regularly varies considerably from the original budget, that budget will not be a useful exante statement of intent. The rating criteria calls for a “2” where the variance between budgets and outturn by function does not exceed 10 percentage points above the variance of total expenditures in more than one year over the last three years: - 2002/03: N/A - 2003/04: 13.9% - 2004/05: 0.6% (p. 16)
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:
Although there is significant variance between projections and actuals, the rating is “4” because actual revenues were below 97% of budgeted revenue in only one year (83% in 2004/05), and this indicator is not measured symmetrically. (p. 15-16)
4. Stock and monitoring of expenditure payment arrears
C
Notes:
The rating on this indicator is “2” because there may be a stock of expenditure arrears but it is likely to be below 10% of total expenditure; the accumulation of new arrears is low and the net stock level declined in the last year. However, there is no track record yet of an annual process to gather data on all arrears. (p. 17)
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
NU
Notes:
4.2 Availability of data for monitoring the stock of expenditure payment arrears
NU
Notes:
II. Comprehensiveness and Transparency
Scores by Dimension
Overall Indicator Score
5. Classification of the budget
C
Notes:
5.1 The classification system used for formulation, execution and reporting of the central government's budget
C
Notes:
The rating is “2+” because the existing operating budget classification is based on major administrative and economic classifications, i.e. using GFS standards or a standard that can produce consistent documentation according to these standards. The new Chart of Accounts (initiated for 2005/06) should result in a higher rating as it will allow consistent administrative, economic, and sub- functional classifications for the entire Core Budget. (p. 17-18)
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:
Among other things, the annual budget documentation for 2005/06 included: (i) A clear definition of the fiscal deficit (compatible with international standards); (ii) Deficit financing and its composition (even though there are doubts as to whether the budget is based on expected cash or commitments); (iii) Estimates of the current year’s (2004/05) budget outturn; (iv) Summarized data for both revenue and expenditure according to the main heads of the classification. However, the budget documentation includes: - Very little about Macroeconomic assumptions, - Nothing about the debt stock; - No information about financial assets, - [No information about] the previous year’s (2003/04) budget out-turn, - And little explanation of major revenue policy changes and major changes in expenditure program. The rating is “2” since the 2005/06 budget documentation includes some but not all the elements listed above. (p. 18)
7. Extent of unreported government operations
B
Notes:
The rating is “3” because, while the level of extra-budgetary activities of central government is most likely insignificant, complete income/expenditure information on donors’ grant-financed projects is not included in the fiscal accounts. Moreover, for some operations in the External Budget executed by donors, the data made available are not considered highly reliable, are limited to disbursement information, and are very aggregate (in particular for the security sector). (p. 19)
7.1 The level of extra-budgetary expenditure (other than donor funded projects) which is unreported i.e. not included in fiscal reports.
NU
Notes:
7.2 Income/expenditure information on donor-funded projects which is included in fiscal reports.
NU
Notes:
8. Transparency of inter-governmental fiscal relations
D
Notes:
Keeping in mind that Afghanistan is a unitary state and hence that this rating applies only to municipalities and does not have a wide scope, the rating is“1” on the three dimensions of the indicators: (i) transparency and objectivity in the horizontal allocation among subnational governments; (ii) timeliness of reliable information to subnational governments on their allocation; and (iii) extent of consolidation of fiscal data for general Government according to sectoral categories. Revenues and expenditures of municipalities are outside the national budget. Municipalities manage their own tax and fee base (although rates are agreed with the national Government) and must fund all of their expenditures from this base. The Ministry of Interior (MoI) approves the budgets and staffing complements of all municipalities. Oversight is provided by MoI through the provincial governors; the Ministry of Finance (MoF) approves the budget of the municipality of Kabul. However, there is very little reporting from municipalities to MoF and no overall assessment of their fiscal situation by MoF. There is very little information on financial flows and fiscal positions of the municipalities, but this should change with the implementation of the new Public Finance and Expenditure Management Law which requires municipalities to comply with the financial reporting requirements established by MoF. Even the existence of transfers from the central Government (through MoI) to municipalities is unclear, and if such transfers exist they would not appear to be very transparent. (p. 19)
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);
D
Notes:
8.2 Timeliness of reliable information to SN governments on their allocations from central government for the coming year;
D
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.
D
Notes:
9. Oversight of aggregate fiscal risk from other public sector entities.
D
Notes:
The rating is a “1” because, while there is oversight and monitoring by the national government of parastatals and municipalities, the financial information is too limited and unverified to serve to manage fiscal risks. (p. 20)
9.1 Extent of central government monitoring of AGAs and PEs.
NU
Notes:
9.2 Extent of central government monitoring of SN government's fiscal position
NU
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:
The rating is “2” because two elements are published without major delays and the format is understandable: - Annual budget documentation, - Within-year budget execution reports. Improvement is needed in: - Year-end financial statements, - External audit reports, - Public procurement information on major contracts, - Resources available to primary service units (such as schools). (p. 21)
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 rating is “2” along the first dimension, “existence of a fixed budget Calendar”, because there is a calendar, but delays occur and there is little time for ministries and the Cabinet to make adjustments (this was in particular the case in 2004, as the mid-year review was postponed into the tenth month of the year). (p. 23)
11.2 Clarity/comprehensiveness of and political involvement in the guidance on the preparation of budget submissions (budget circular or equivalent);
C
Notes:
The rating is also “2” along the second dimension, “guidance on the preparation of budget submissions”, as there is a budget circular with ceilings for each ministry (for the operating budget), but these have not been approved by the Cabinet in advance. (p. 23)
11.3 Timely budget approval by the legislature or similarly mandated body (within the last three years);
C
Notes:
The rating is “2” along the third dimension, “timely budget approval by the legislature”, because the operating budget consistently has been approved by the President - who so far has had legislative powers - in a timely manner but there have been delays in the approval of the development budget. (p. 23)
12. Multi-year perspective in fiscal planning, expenditure policy and budgeting
D+
Notes:
The rating is “1” along the fourth dimension, “linkages between investment budgets and forward expenditure estimates”, because no such linkage has been established yet (some progress has been made on road maintenance in the revised 2005/06 budget). (p. 24)
12.1 Preparation of multi -year fiscal forecasts and functional allocations
D
Notes:
The rating is “1” along the first dimension, “multi-year fiscal forecasts and functional allocations”, because there are no forward estimates in the budget (projections on the development budget mainly reflect multi-year commitments). (p. 24)
12.2 Scope and frequency of debt sustainability analysis
C
Notes:
The rating is “2” along the second dimension, “scope and frequency of debt sustainability analysis”, as one such analysis was conducted recently (by the IMF). (p. 24)
12.3 Existence of sector strategies with multi-year costing of recurrent and investment expenditure;
C
Notes:
The rating is also “2” along the third dimension, “existence of costed sector strategies” since such strategies exist for several sectors (often developed as part of the Securing Afghanistan's Future report) but they have not been reconciled with fiscal forecasts. (p. 24)
12.4 Linkages between investment budgets and forward expenditure estimates.
D
Notes:
IV. Predictability and Control in Budget Execution
Scores by Dimension
Overall Indicator Score
13. Transparency of taxpayer obligations and liabilities
D+
Notes:
13.1 Clarity and comprehensiveness of tax liabilities
C
Notes:
On the first dimension, “clarity and comprehensiveness of tax liabilities”, the rating is “2” since the recent amendments to the income tax law and the adoption of a new customs code have made the legislative framework relatively comprehensive and clear for some major taxes. However, not all aspects of the legislative framework are being implemented in practice, and the supporting administrative procedures, human capacity, and physical infrastructure need to be developed. The fairness of the tax system is also questioned by many taxpayers due to the reported existence of many illicit taxes, the lack of comprehensive coverage, and discretionary powers of the government entities involved. (p. 26)
13.2 Taxpayer access to information on tax liabilities and administrative procedures.
C
Notes:
On the second dimension, “information on tax liabilities and administrative procedures”, the rating is “2” since taxpayers have access to some information on tax liabilities and administrative procedures, but the usefulness of the information is limited mainly due to the coverage of selected taxes only and limited geographical coverage, and the ongoing development of the administrative procedures and tax rulings. (p. 26)
13.3 Existence and functioning of a tax appeals mechanism.
D
Notes:
On the third dimension, “existence and functioning of a tax appeals mechanism”, the rating is “1” as there is no such system. (p. 26)
14. Effectiveness of measures for taxpayer registration and tax assessment
D+
Notes:
On the second dimension, on penalties, the rating is “1” since penalties for non-compliance are generally ineffective and rarely imposed due to the lack of enforcement powers and the need to develop capacity and processes for both the tax and customs administrations. (p. 27)
14.1 Controls in the taxpayer registration system.
C
Notes:
On the first dimension, “controls in the taxpayer registration system”, the rating is “2” because, while taxpayers are registered with a unique Taxpayer Identification Network in a database system, the coverage is currently partial (in addition, the linkages to other registration/licensing functions - Afghan Investment Support Agency, Central bank of Afghanistan, Brokers - are being strengthened and may be supplemented by occasional surveys of potential taxpayers). (p. 27)
14.3 Planning and monitoring of tax audit and fraud investigation programs.
D
Notes:
On the third dimension, audit programs, the rating is “1” as tax audits and fraud investigations are undertaken on an ad-hoc basis if at all. The new revenue systems being introduced will increasingly rely on self-assessment and the use of risk targeted auditing of taxpayers as a key activity to improve compliance and deter tax evasion. However, the Government is at a very early stage of developing the capacity and processes that will enable the collection and analysis of information on non-compliance and other risks that are necessary for focusing tax audit activities and resources toward specific sectors, and types of taxpayers with the highest risk of revenue leakage. It is hoped that the establishment of a dedicated Large Taxpayer Office (LTO), which began in 2004, will help to pilot many of the reforms associated with monitoring, auditing, and enforcing collection for taxpayers. However, in the short-term capacity constraints and the absence of a well-functioning legal system will severely limit the ability of either the Afghanistan Customs Department or the General Presidency of Revenue to investigate and successfully prosecute major evasion and fraud cases on a regular basis to ensure that taxpayers comply with their obligations. (p. 27)
14.2 Effectiveness of penalties for non-compliance with registration and declaration obligations
D
Notes:
15. Effectiveness in collection of tax payments
D+
Notes:
The effectiveness of tax payments is very low, with very little reconciliations and a low level of collection. However, considerable progress has been made over the last few months in consolidating the Treasury Single Account arrangements and ensuring periodic transfers of funds to the Treasury. The rating is therefore “1+”. (p. 28)
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).
NU
Notes:
15.2 Effectiveness of transfer of tax collections to the Treasury by the revenue administration.
NU
Notes:
15.3 Frequency of complete accounts reconciliation between tax assessments, collections, arrears records and receipts by the Treasury.
NU
Notes:
16. Predictability in the availability of funds for commitment of expenditures
D+
Notes:
The rating is “1+” because some progress has been made with regard to cash flow forecasts (now prepared by the Treasury, but at an aggregate level and with limited analysis on actual cash inflows and outflows), but more progress is required with regard to the allotment process and within- year adjustments. The current allotment procedure in Afghanistan does not support effective budget execution because of the difference between the executing unit’s records and the controlling unit’s records of authorized amounts. Also, rationing of cash in line with transparent rules has yet to be achieved. Similarly, the use of a year-end decree to regularize expenditures over appropriations indicates that there are uncontrolled within-year deviations from allotments. (p. 29)
16.2 Reliability and horizon of periodic in-year information to MDAs on ceilings for expenditure commitments
NU
Notes:
16.3 Frequency and transparency of adjustments to budget allocations, which are decided above the level of management of MDAs.
NU
Notes:
16.1 Extent to which cash flows are forecast and monitored
NU
Notes:
17. Recording and management of cash balances, debt and guarantees
C+
Notes:
17.1 Quality of debt data recording and reporting
D
Notes:
The rating is “1” on the first dimension, “quality of debt data and reporting”, since the unreconciled amount of debt remains substantial (even though spreadsheet records are now maintained on reconciled debt, and reports on debt stock and service are prepared periodically). (p. 31)
17.2 Extent of consolidation of the government’s cash balances
C
Notes:
The rating is “2” on the second dimension, “extent of consolidation of the Government’s cash balances”, because, although there is daily calculation and consolidation of government cash balances, a number of provincial accounts are reconciled and consolidated only monthly and development funds for the most part remain outside the cash planning and consolidation arrangements since they are not fungible. (p. 31)
17.3 Systems for contracting loans and issuance of guarantees.
A
Notes:
The rating is “4” on “systems of contracting loans and issuance of guarantees”, since the system for loans is transparent and effective (with authority given to the Ministry of Finance and policies set in the Budget Decree). This rating assumes that no guarantee has been issued recently in the Government. (p. 31)
18. Effectiveness of payroll controls
C
Notes:
There is evidence that controls on establishment are effective, as the observed headcount in the Monitoring Agent database has remained flat over the last three years (with the exception of teachers). Although controls are manual and decentralized, this is compensated for by the centralized controls on positions, paper documentation of payroll expenditures, and the concurrent review by the Afghanistan Reconstruction Trust Fund (ARTF) Monitoring Agent. The accuracy of the provincial data on head count, however, is affected by difficulties in reporting head count where payroll delays or back pay occur, so the payroll for a month may not coincide with the head count. Significant risks in payroll remain, related to:(i) weak oversight of payroll support in areas not covered by the Monitoring Agent (most notably in the security sector); (ii) decentralized personnel records; and (iii) limited reviews by internal audit and central authorities in terms of matching payroll to personnel records and evidencing of final settlement with the employees. Controls exist over payroll expenses in aggregate through the tashkeel and the allotments (takhsis). In addition, audits have been undertaken, including by the ARTF Monitoring Agent, showing good results. The link between the payroll and the nominal roll is a key control which is decentralized to the operating units and is not closely supervised, but as explained above, payroll integrity is not undermined due to the existence of other controls. Hence although manual personnel records may be incomplete, and there may be delays in processing of payroll changes, the rating is “2”. (p. 33)
18.1 Degree of integration and reconciliation between personnel records and payroll data.
NU
Notes:
18.2 Timeliness of changes to personnel records and the payroll
NU
Notes:
18.3 Internal controls of changes to personnel records and the payroll.
NU
Notes:
18.4 Existence of payroll audits to identify control weaknesses and/or ghost workers.
NU
Notes:
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 rating along the first dimension, “use of open competition for award of contracts that exceed the nationally established monetary threshold for small purchases”, is is “4” for procurement done by Afghanistan Reconstruction and Development Services as there is accurate data showing that more than 75% of contracts above the threshold are awarded on the basis of open competition. (p. 34)
19.2 Use of competitive procurement methods
B
Notes:
The rating along the second dimension, “justification for use of less competitive procurement methods”, is “3” for national systems (both justify the use of less competitive methods in accordance with regulatory requirements, but these requirements are not fully clear for national systems). (p. 34)
19.3 Public access to complete, reliable and timely procurement information
D
Notes:
The rating along the third dimension, “existence and operation of a procurement complaints mechanism”, is “1” as no such mechanism exists. (p. 34)
19.4 Existence of an independent administrative procurement complaints system
NU
Notes:
20. Effectiveness of internal controls for non-salary expenditure
C
Notes:
The problems with the control environment in Afghanistan can be inferred from the problems with revenue remission to the center by the provinces, confusion with and access to authorized allotments, and general variance from formal rules and regulations. The rating for internal control is “2” because the system consists of a basic set of rules for the processing and recording of transactions which are rather well understood by those directly involved in their application, and which audits indicate are observed in a significant majority of transactions. In particular, effective controls are in place in Treasury with the computerized financial management system. Commitment controls are ad-hoc, manual, and not integrated in the budget, but there is evidence of improving and most recently adequate effectiveness of controls. However, capacity in line ministries remains weak. Finally, the work of the Monitoring Agent forms a key element of the internal controls today, but it should be rendered redundant over time with advances in systems, training, and clarification of the regulatory framework. (p.36)
20.1 Effectiveness of expenditure commitment controls.
NU
Notes:
20.2 Comprehensiveness, relevance and understanding of other internal control rules/ procedures
NU
Notes:
20.3 Degree of compliance with rules for processing and recording transactions
NU
Notes:
21. Effectiveness of internal audit
C
Notes:
Monitoring of the internal control system is in place through the extraordinary arrangements relying on the FM Advisor, Procurement Advisor, and Monitoring Agent (even though these operations examine only transactions which are reported through Afghanistan Financial Information System and do not formally examine compliance or evaluate the internal control system in the central government). The rating is therefore “2” as some monitoring of the internal control framework is provided by these arrangements. (p. 37)
21.1 Coverage and quality of the internal audit function.
NU
Notes:
21.2 Frequency and distribution of reports
NU
Notes:
21.3 Extent of management response to internal audit findings.
NU
Notes:
V. Accounting, Recording and Reporting
Scores by Dimension
Overall Indicator Score
22. Timeliness and regularity of accounts reconciliation
C+
Notes:
22.1 Regularity of bank reconciliations
C
Notes:
Along the first dimension, “regularity of bank reconciliations”, the rating is “2” because bank reconciliation takes place at least quarterly, usually within eight weeks after the end of each quarter. (p. 38)
22.2 Regularity of reconciliation and clearance of suspense accounts and advances.
B
Notes:
Along the second dimension, “regularity of reconciliation and clearance of suspense accounts and advances”, the rating is “3” as the Treasury has established and implemented new procedures by which these accounts are cleared at least annually. (p. 38)
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:
Overall, despite good information on Core Budget execution, the rating is “1” because there is no data collection on resources to service delivery units (except the pilot expenditure traclung survey in education). (p. 39)
24. Quality and timeliness of in-year budget reports
C
Notes:
The rating is “2” because budget reports, with classification that allows comparison to the budget at some levels and which incorporate expenditure and revenue data, are disseminated in the Government within four weeks after the end of each quarter. Although there are some problems of accuracy (e.g. when data from a large province is missing), these do not fundamentally undermine the usefulness of the reports, since the sources of inaccuracies (e.g. omissions) are known and can be taken into account. (p. 39-40)
24.1 Scope of reports in terms of coverage and compatibility with budget estimates
NU
Notes:
24.2 Timeliness of the issue of reports
NU
Notes:
24.3 Quality of information
NU
Notes:
25. Quality and timeliness of annual financial statements
C
Notes:
A complete set of financial statements (but without information on financial assets and liabilities) was presented to the fiscal authorities within 12 months of year-end. However, given the significance of donor in-kind contributions which are not reflected in the cash statements, the financial statements are not presented fully in accordance with international accounting standards. With the delay in reporting on 2003/04, the quality of the financial statements presented to the highest fiscal authority must be rated “2”. (p. 40)
25.1 Completeness of the financial statements
NU
Notes:
25.2 Timeliness of submission of the financial statements
NU
Notes:
25.3 Accounting standards used
NU
Notes:
VI. External Scrutiny and Audit
Scores by Dimension
Overall Indicator Score
26. Scope, nature and follow-up of external audit
C
Notes:
The rating is “2” because over 50% of government expenditures are audited annually, reports are issued within 12 months of year-end, and significant issues are identified. All the financial statement audits include an assessment of internal control systems and reports on systemic issues as well as irregular transactions. The response by the Ministry of Finance to the observations on internal control made in the annual audit of financial statements is thorough and supported by an action plan, whereas responses in other areas on compliance audits are practically non- existent. (p. 41)
26.1 Scope/nature of audit performed (incl. adherence to auditing standards).
NU
Notes:
26.2 Timeliness of submission of audit reports to legislature.
NU
Notes:
26.3 Evidence of follow up on audit recommendations
NU
Notes:
27. Legislative scrutiny of the annual budget law
D
Notes:
The power to give the government authority to spend will rest with the legislature after this body is convened. If the legislature does not rigorously examine and debate the law, that power is not being effectively exercised and will undermine the accountability of the government to the electorate. A rating of “1” is given since so far legislative scrutiny has not occurred. This rating is obviously temporary as it reflects the absence of a Parliament as of June 2005. (p. 42)
27.1 Scope of the legislature’s scrutiny.
NU
Notes:
27.2 Extent to which the legislature’s procedures are well-established and respected.
NU
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
NU
Notes:
27.4 Rules for in-year amendments to the budget without ex-ante approval by the legislature.
NU
Notes:
28. Legislative scrutiny of external audit reports
D
Notes:
The legislature plays a key role in exercising scrutiny over the execution of the budget that it approves. A common way in which this is done is through a legislative committee/commission that examines external audit reports and questions responsible parties about the findings of such reports. The operation of the committee will depend on adequate financial and technical resources, and on adequate time being allocated to keep up to date on reviewing audit reports. The committee may also recommend actions and sanctions by the Executive. This indicator is rated “1” since the National Assembly has not yet reviewed the public accounts (as in the case of indicator 27, this rating is temporary). (p. 42)
28.1 Timeliness of examination of audit reports by the legislature (for reports received within the last three years).
NU
Notes:
28.2 Extent of hearings on key findings undertaken by the legislature.
NU
Notes:
28.3 Issuance of recommended actions by the legislature and implementation by the executive.
NU
Notes:
Donor Practices
Scores by Dimension
Overall Indicator Score
D-1 Predictability of Direct Budget Support
A
Notes:
The rating is “4” as the Government has been able to fully rely on these sources, Afghanistan Reconstruction Trust Fund in particular, to meet its recurrent budget financing requirements in a flexible and predictable manner. There have, however, been some delays in disbursements from Law and Order Trust Fund due to donor delays in replenishing that trust fund. Moreover, external budget support (from program loans/budget support operations) that the Government has designated for use in financing development projects in the Core Budget also has been predictable on a year-to-year basis. (p. 43)
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).
NU
Notes:
D-1.2 In-year timeliness of donor disbursements (compliance with aggregate quarterly estimates)
NU
Notes:
D-2 Financial information provided by donors for budgeting and reporting on project and program aid
D+
Notes:
The rating is “1+” because, while there is a good record of providing financial information, for the 2005/06 budget not all major donors provided budget estimates at least three months before the start of the fiscal year. (p. 43)
D-2.1 Completeness and timeliness of budget estimates by donors for project support.
NU
Notes:
D-2.2 Frequency and coverage of reporting by donors on actual donor flows for project support.
NU
Notes:
D-3 Proportion of aid that is managed by use of national procedures
D
Notes:
D-3.1 Overall proportation of aid funds to central government that are managed through national procedures
D
Notes:
Out of the total public spending of $3.4 billion in 2004/05, all but $269 million was donor financed. And of the $3.4 billion, only $0.9 billion was Government implemented (Core Budget). These resources flow through accounts controlled by the Ministry of Finance (MoF) and thus at least partially follow national procedures. The oversight by the Government of the operations implemented under donor responsibility is limited, which MoF recognized publicly (MoF Financial Report in June 2004). From the perspective of budget implementation, some recurrent spending and most public investment occurs outside national budgetary channels and procedures. The Government’s control over planning of total public spending, implementation of public spending, and reporting on its execution is rendered more difficult by the large portion which occurs outside of Government control. Donors are not subject, through their donor agreements, to plan, report, and operate in line with Government procedures. The rating is “1” because less than 50% of aid funds to central government are managed through national procedures. (p. 43)
