I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
C
Notes:
1.1 Aggregate expenditure outturn
C
Notes:
Aggregate expenditure outturn was 10% higher than the initial budget in two of the past three fiscal years considered.
2. Expenditure composition outturn
B+
Notes:
2.1 Expenditure composition outturn by function
B
Notes:
Variance in expenditure composition by administrative classification was below 10% in the three completed fiscal years considered.
2.2 Expenditure composition outturn by economic type
B
Notes:
Variance in expenditure composition by
economic classification was below 10% in
two of the three completed fiscal years
considered.
2.3 Expenditure from contingency reserves
A
Notes:
Central government budget does not include a contingency item or vote.
Notes:
3.1 Aggregate revenue outturn
C
Notes:
Actual revenue was higher than the initial budget value by more than 12% in two of the last three completed fiscal years.
3.2 Revenue composition outturn
C
Notes:
Revenue variance composition is higher than 10% in two of the fiscal years considered, but only in one exceeds the upper margin of 15%.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
B
Notes:
4.1 Budget classification
B
Notes:
The same budget and accounting structures are consistently applied throughout the budget formulation, execution, and reporting cycle according to organizational (administrative) units, function/sub-function, economic, and programmatic classifications.
Notes:
5.1 Budget documentation
A
Notes:
The budget proposal submitted to the Legislature includes 4 of the 4 the basic elements required for adequate scrutiny and 6 of the 8 additional elements.
6. Central government operations outside financial reports
A
Notes:
6.1 Expenditure outside financial reports
A
Notes:
Expenditure outside financial reports, if it exists, is insignificant (less than 1%) in relation to budgetary central government expenditure.
6.2 Revenue outside financial reports
A
Notes:
Revenue outside financial reports, if it exists, is insignificant (less than 1%) in relation to budgetary central government revenue collection.
6.3 Financial reports of extrabudgetary units
B
Notes:
At least 94% of all central government extrabudgetary institutions submitted detailed financial reports for 2018 within 6 months of the end of the fiscal year.
7. Transfers to subnational governments
A
Notes:
7.1 System for allocating transfers
A
Notes:
All transfers to provinces are based on a clear and transparent set of rules.
7.2 Timeliness of information on transfers
A
Notes:
In 2018, subnational governments (SNGs) received information on transfers through the budget cycle that allowed them at least 6 weeks to complete their budgets planning.
8. Performance information for service delivery
C+
Notes:
8.1 Performance plans for service delivery
B
Notes:
Information published annually for budget program allocations shows that most of the central government budget entities include performance indicators for outputs, but not yet for outcomes.
8.2 Performance achieved for service delivery
B
Notes:
Reports published quarterly and annually show performance in relation to most output indicators, but not yet outcome indicators.
8.3 Resources received by service delivery units
NA
Notes:
This dimension is not applicable for the evaluation.
8.4 Performance evaluation for service delivery
D
Notes:
No evaluations of performance of service delivery have been undertaken in the past three completed fiscal years.
9. Public access to fiscal information
B
Notes:
9.1 Public access to fiscal information
B
Notes:
The government makes available to the public 4 basic elements and 3 additional elements, in accordance with the specified timeframes.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
C
Notes:
10.1 Monitoring of public corporations
C
Notes:
Annual audit reports for most public corporations are issued and published within 9 months of the fiscal year-end.
10.2 Monitoring of subnational governments
D
Notes:
Less than 50% of unaudited financial reports are published annually within 9 months of the following fiscal year.
10.3 Contingent liabilities and other fiscal risks
B
Notes:
The central government and decentralized entities include significant contingent liabilities in notes to their financial statements.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Economic analyses are carried out, in accordance with national guidelines, to assess most major investment projects, by an entity other than the one that promotes the project. However, the results of these analysis are not published.
11.2 Investment project selection
D
Notes:
There is no entity that performs centralized prioritization of investment projects.
11.3 Investment project costing
D
Notes:
While certain projections are made, they are at the level of works and not of large investment projects. It is also not possible to link these projections with the project reference in BAPIN.
11.4 Investment project monitoring
C
Notes:
The total cost and physical progress of major investment projects are monitored by the executing agencies. Information on implementation of major investment projects is prepared on a quarterly basis.
12. Public asset management
C
Notes:
12.1 Financial asset monitoring
C
Notes:
Central government keeps records on the main categories of financial assets, but it does not recognize the total of those assets at fair or market value, and it does not publish information on the performance of the portfolio of all managed financial assets.
12.2 Nonfinancial asset monitoring
C
Notes:
Although central government maintains a information disclosing their use or status of preservation and aging.
12.3 Transparency of asset disposal
C
Notes:
Procedures and rules for the transfer or disposal are established by legislation, regulations, and/or approved procedures. Partial information on transfers and disposals is published.
Notes:
13.1 Recording and reporting of debt and guarantees
A
Notes:
Public debt management registering and reporting is undertaken according international standards.
13.2 Approval of debt and guarantees
A
Notes:
The Finance Secretary is the single entity authorized by Law to approve national public sector borrowing.
13.3 Debt management strategy
D
Notes:
There is only a two-year debt management document that is part of the two-year Financial Program.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
C+
Notes:
14.1 Macroeconomic forecasts
B
Notes:
The government prepares macroeconomic forecasts for a full set of key indicators, but these forecasts are not published. A mandated set of these estimates is presented to the Federal Council for Fiscal Responsibility and published, but the estimates are not formally reviewed. estimates are also included in the documents presented to the Legislature with a discussion of their underlying assumptions. These documents are also published.
Notes:
The government prepares fiscal forecasts for the budget year and two years into the future for internal use.
14.3 Macrofiscal sensitivity analysis
C
Notes:
Macrofiscal forecasts prepared include some qualitative assessments of the effects of alternative assumptions.
Notes:
15.1 Fiscal impact of policy proposals
C
Notes:
The government prepares estimates of the future fiscal impact of all proposed changes in revenue and expenditure, but these are not presented to the Legislature.
15.2 Fiscal strategy adoption
A
Notes:
The central government has explicit, published, time-based fiscal targets for three years, which have been submitted to the Legislature and are supported by fiscal rules embedded in legislation.
15.3 Reporting on fiscal outcomes
C
Notes:
The central government prepares reports on the progress made against its fiscal strategy, but these are yet to be formally submitted to the Legislature.
16. Medium-term perspective in expenditure budgeting
B
Notes:
16.1 Medium-term expenditure estimates
A
Notes:
The multi-annual budget for 2019-2021 presents expenditure estimates for three fiscal years disaggregated by all required
classifications: administrative, economic,
functional, and programmatic.
16.2 Medium-term expenditure ceilings
A
Notes:
Aggregate expenditure ceilings for the budget year and two more fiscal years are approved by the government and distributed among all central budgetary entities before the first budget circular is issued.
16.3 Alignment of strategic plans and medium-term budgets
C
Notes:
There are very few medium-term strategic plans prepared by ministries, but all prepare budget sector programs with cost estimates and production targets, which have recently been used to test their alignment with government policy objectives.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
There is no documentation that explains changes in expenditure estimates between different multi-annual budgets.
17. Budget preparation process
B
Notes:
Notes:
A budget calendar exists, it is strictly adhered to, and provides budgetary institutions with more than 4 weeks to complete their detailed institutional budget proposals.
17.2 Guidance on budget preparation
C
Notes:
A budget circular is issued to budgetary units, including ceilings for total expenditure for the full fiscal year. The budget estimates are reviewed and approved by Cabinet after they have been completed in every detail by budgetary
units.
17.3 Budget submission to the legislature
A
Notes:
The Executive submitted the annual budget proposal to the Legislature three-and-ahalf months before the start of the corresponding fiscal year in all three fiscal years considered.
18. Legislative scrutiny of budgets
B+
Notes:
18.1 Scope of budget scrutiny
B
Notes:
The Legislature’s scrutiny of the budget includes fiscal policies, medium-term fiscal forecasts, and details of expenditure and revenue. It did not review the mediumterm priorities embedded in the multiannual budget.
18.2 Legislative procedures for budget scrutiny
A
Notes:
Legislative procedures were approved before revision of the budget proposal and they are respected and adhered to. They include review by specialized committees, technical support, public consultations, and negotiation procedures.
18.3 Timing of budget approval
A
Notes:
The Legislature approved the budget, in all three fiscal years considered, before the start of the year for which it was intended.
18.4 Rules for budget adjustment by the executive
B
Notes:
Clear rules exist which are adhered to, but these may allow for extensive administrative reallocations, including the expansion of total expenditure.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
D+
Notes:
19.1 Rights and obligations for revenue measures
D
Notes:
Although FRCA collects most of the revenue of the country and disseminates comprehensive, easy to access, and updated information about main tax obligations, it does not provide information on the redress processes and procedures.
19.2 Revenue risk management
D
Notes:
There are no systematic and structured risk-management processes and procedures to assess/mitigate risk of tax non-compliance and promote voluntary compliance.
19.3 Revenue audit and investigation
D
Notes:
FRCA does not yet have a single compliance improvement plan.
19.4 Revenue arrears monitoring
B
Notes:
The stock of revenue arrears at the end of 2018 is 3.24% of the total revenue collection of the year and the revenue arrears older than 12 months are 49.8% of total revenue arrears for the year.
20. Accounting for revenue
D+
Notes:
20.1 Information on revenue collections
A
Notes:
SIP reports on a monthly consolidated basis all the tax revenues by type of tax. Tax revenues represent 97 percent of the total tax and non-tax revenues.
20.2 Transfer of revenue collections
A
Notes:
Daily, the National Treasury, provinces, and NSSA receive from the FRCA bank collecting accounts, the corresponding amounts established by law.
20.3 Revenue accounts reconciliation
D
Notes:
No assessment, charges, transfers, or arrears reconciliation process between NTO and the collecting agencies according to the PEFA methodology and guidelines is undertaken.
21. Predictability of in-year resource allocation
B+
Notes:
21.1 Consolidation of cash balances
A
Notes:
All balances are consolidated daily for both revenue and expenditure accounts.
21.2 Cash forecasting and monitoring
A
Notes:
An annual cash flow forecast is prepared for the fiscal year and is updated monthly, based on the monitoring of revenue and payments.
21.3 Information on commitment ceilings
B
Notes:
Public entities are aware of their cash availability beforehand and are able to plan and commit expenditures a quarter in advance.
21.4 Significance of in-year budget adjustments
C
Notes:
Frequent adjustments are made in the approved budget during the year, in accordance with a regulated review and approval process, and the affected parties are made aware of them in advance.
Notes:
22.1 Stock of expenditure arrears
D*
Notes:
Sufficient information is not available to establish the actual level of performance.
22.2 Expenditure arrears monitoring
D*
Notes:
Sufficient information is not available toestablish the actual level of performance.
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
The monthly payroll of each entity, including any additions, is supported by approved documentation that has been verified against the files reflecting the approved conditions for each employee.
23.2 Management of payroll changes
A
Notes:
Changes to be made to personnel and payroll records are updated at least monthly, generally before the next month’s payments are made. Retroactive adjustments and payments by the central government at the time of the evaluation amounted to 2.3 percent of the wage bill.
23.3 Internal control of payroll
A
Notes:
Independent internal controls are used throughout the payroll preparation and payment process. These controls include restricted authority for approvals and restrictions for the introduction of changes in records. The applications used provide for the entry of changes and other actions to ensure the quality and integrity of the payroll.
Notes:
Partial payroll audits have been conducted in each of the last three years
Notes:
24.1 Procurement monitoring
B
Notes:
Two e-procurement systems centralizing procurement data in NPO databases have been gradually implemented, and NPO has collected the information on public works not included in the systems, covering the major part of capital expenditures from the 5-largest procuring sectors in 2018, including bidding and awarded contracts. However, the level of implementation of the e procurement system for public works as of December 2018 indicates that a large part of public expenditure in procurement was not being recorded in a complete and precise database during that year.
24.2 Procurement methods
C
Notes:
Although the analysis of available information from NPO’s e-procurement systems and databases indicates at least 60% of the amount is executed using competitive methods, there is not comprehensive measurement for all categories of expenditure.
24.3 Public access to procurement information
B
Notes:
The information displayed publicly enables access to 5 of the 6 key elements.
24.4 Procurement complaints management
D
Notes:
The complaint system does not ensure access to an external and independent entity that does not participate in the procurement process. Complaints are addressed by the procuring entity.
25. Internal controls on nonsalary expenditure
B+
Notes:
25.1 Segregation of duties
A
Notes:
Current regulations provide for the separation of incompatible duties, and institutional responsibilities for the budget execution process have been formally established.
25.2 Effectiveness of expenditure commitment controls
A
Notes:
Manual and electronic internal controls prevent expenditure commitments from being made outside the approved budget and without the availability of funds.
25.3 Compliance with payment rules and procedures
C
Notes:
It was verified that the majority of payments are compliant with regular payment procedures.
Notes:
26.1 Coverage of internal audit
A
Notes:
Internal audit function operational within all central government entities.
26.2 Nature of audits and standards applied
C
Notes:
IAUs do not have annual reports on the structure and effectiveness of each entity’s internal control system, nor do their audit plans include an analysis of the coverage of their work with respect to the revenues and expenses executed by each entity. Their practice conforms to internal auditing standards that have yet to be updated to bring them into line with international standards.
26.3 Implementation of internal audits and reporting
A
Notes:
Annual internal audit plans and programs exist and are almost fully completed.
26.4 Response to internal audits
C
Notes:
The response by most entities to internal audit recommendations is partial.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
C
Notes:
27.1 Bank account reconciliation
D
Notes:
The bank accounts composing the Annual Financial Report are reconciled annually within 5 months of the close of the reference fiscal year.
Notes:
The chart of accounts does not provide for any suspense account. Information is disclosed in notes to the financial statements.
Notes:
The advance accounts are reconciled annually as part of the preparation of the annual financial reports, within 6 months of the close of the financial year.
27.4 Financial data integrity processes
A
Notes:
Access and changes to records are subject to strict security protocols and result in an audit trail. Data integrity is supervised on a continual basis by the Systems Audit Directorate of NAO.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
A
Notes:
Several in-year reports are prepared by NBO. Coverage and classification of these reports comprehensively account for expenditures and comparison with budget estimates. Expenditures made from transfers to decentralized units within the central government are included in the reports.
28.2 Timing of in-year budget reports
C
Notes:
Budget execution reports are prepared monthly/quarterly and issued within 8 weeks from the end of each period.
28.3 Accuracy of in-year budget reports
A
Notes:
There are no major concerns regarding data accuracy. Data on expenditure is provided at commitment, accrual, and payment stages in different reports. Analysis is made quarterly.
29. Annual financial reports
C+
Notes:
29.1 Completeness of annual financial reports
A
Notes:
Financial reports for the BCG are prepared annually and include complete information on revenue, expenditure, physical and financial assets, liabilities, guarantees, and long-term obligations; they are comparable with the original approved budget and the modifications thereto. Basic financial statements are included, including a cash flow statement.
29.2 Submission of reports for external audit
C
Notes:
The financial reports for the BCG were submitted for external audit within 7 months after the end of the fiscal year.
29.3 Accounting standards
C
Notes:
The accounting standards applied to all reports are consistent with the country’s legal framework and current local accounting standards, and the standards are applied consistently. Reference is made to the application of such standards in the notes to the financial statements.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
D
Notes:
There is insufficient information available to assess the performance level.
30.2 Submission of audit reports to the legislature
D*
Notes:
There is insufficient information available to establish the actual level of performance.
30.3 External audit follow-up
D
Notes:
No statistics are available on follow-up to the recommendations made in AGO reports.
30.4 Supreme Audit Institution independence
A
Notes:
In accordance with the Constitution and the law, AGO operates independently from the Executive with respect to the appointment and removal of its leadership, the formulation of its budget, the planning of its audits, the issuance of its reports, and access to the information required for its audits.
31. Legislative scrutiny of audit reports
D
Notes:
31.1 Timing of audit report scrutiny
D*
Notes:
There is no evidence of the timing of legislative scrutiny of external audit reports.
31.2 Hearings on audit findings
D*
Notes:
There is no evidence of hearings held on key findings of AGO (SAI).
31.3 Recommendations on audit by the legislature
D
Notes:
No evidence was found on recommendations to the Executive based on the legislative scrutiny of audit reports.
31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
Committee reports are published; however, there is no evidence of publication of minutes or reports on legislative scrutiny of audits