SNG PILLAR: INTERGOVERNMENTAL FISCAL RELATIONS
Scores by Dimension
Overall Indicator Score
HLG-1 Transfers from Higher Levels of Government
A
Notes:
HLG-1.1 Outturn from higher-levels of government
A
Notes:
Actual transfers were between 97% and 106% of budget in 2 of the 3 years 2017-19.
HLG-1.2 Transfers composition outturn
A
Notes:
Variance of earmarked transfers was less than 5% in all 3 years 2017-19.
HLG-1.3 Timeliness of transfers from higher-levels of government
A
Notes:
Transfers are received on a predictable path through the year as income taxes are paid.
HLG-1.4 Predictability of transfers
A
Notes:
The amounts of transfers for the budget year and the 2 subsequent years are forecast by reference to the predictions of the INS, which have generally proved very accurate.
HLG-2 Fiscal rules of monitoring of fiscal position
NA
Notes:
HLG-2.1 Fiscal rules for subnational governments
NA
Notes:
BCR Government is sovereign.
HLG-2.2 Debt rules for subnational governments
NA
Notes:
Federal Government does not control debt amounts.
HLG-2.3 Monitoring of subnational governments
NA
Notes:
There is no formal monitoring by Federal Government.
I. BUDGET RELIABILITY
Scores by Dimension
Overall Indicator Score
PI-1 Aggregate expenditure out-turn
A
Notes:
PI-1.1 Aggregate expenditure out-turn
A
Notes:
Expenditure was between 95% and 105% of original budget in 2 of the 3 years 2017-19.
PI-2 Expenditure composition outturn
B+
Notes:
PI-2.1 Expenditure composition outturn by function
A
Notes:
Variance of expenditure by function was less than 5% in all 3 years 2017-19.
PI-2.2 Expenditure composition outturn by economic type
B
Notes:
Variance of expenditure by economic type was less than 10% in all 3 years.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
No expenditure was charged to contingency during the period 2017-19.
Notes:
PI-3.1 Agregate revenue outturn
B
Notes:
Total actual revenue was between 94% and 112% of budget in 2 of the 3 years 2017-19.
PI-3.2 Revenue composition outturn
B
Notes:
Variance of revenue was less than 10% in 2 of the 3 years 2017-19.
II. TRANSPARENCY OF PUBLIC FINANCES
Scores by Dimension
Overall Indicator Score
PI-4 Budget Classification
A
Notes:
PI-4.1 Budget Classification
A
Notes:
Budget formulation, execution and reporting are based on consistent and detailed administrative, programme and economic classifications.
PI-5 Budget Documentation
A
Notes:
PI-5.1 Budget Documentation
A
Notes:
All 4 basic elements are fulfilled, and 7 of the 8 others.
PI-6 Subnational government operations outside financial reports
A
Notes:
PI-6.1 Expenditure outside financial reports
A
Notes:
The consolidated annual accounts of the Regional Entity include all of expenditure of extra-budgetary units and public corporations.
PI-6.2 Revenue outside financial reports
A
Notes:
The consolidated annual accounts of the Regional Entity include all of revenue of extra-budgetary units and public corporations.
PI-6.3 Financial reports of extrabudgetary units
B
Notes:
The 2019 statement covering more than 90 per cent of EBU expenditure was submitted within 6 months of year-end. emends to the Regional Accountant by 31 May each year.
PI-7 Transfers to subnational governments
A
Notes:
PI-7.1 System for allocating transfers
A
Notes:
General transfers are allocated by formulae set out in a 2017 law and are fixed for 3-year periods increasing by 2% a year.
PI-7.2 Timeliness of information on transfers
A
Notes:
Municipalities are notified in September and October of the previous year of the amounts they can expect to receive as general transfers.
PI-8 Performance information for service delivery
B
Notes:
PI-8.1 Performance plans for service delivery
B
Notes:
The ‘orientation notes’ provide a framework of performance indicators relating to outputs and outcomes covering five years that applies to the entire Brussels regional administration.
PI-8.2 Performance achieved for service delivery
B
Notes:
Annually, the Annual Report on Management Control (‘Globaal Jaarverslag Beheerscontrole’) presents performance information related to the operational objectives included in the orientation notes.
PI-8.3 Resources received by service delivery units
A
Notes:
The finance and budget department of the Brussels Capital Government has full information about all the resources received by the ‘service delivery units’ as the separate annual financial reports (including full balance sheets) of these units are completely consolidated in the budgetary and reporting system in line with the ESA classification.
PI-8.4 Performance evaluation for service delivery
D
Notes:
Based on the analysis of three actors that have a mandate to carry out performance evaluation on service delivery (the national SAI, the internal audit department and the Brussels Institute for Statistics and Analysis), only one performance evaluation was observed, namely the evaluation of the Brussels policies to support homeless citizens.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
Publication has hitherto been subject to extensive delays.
9bis Public consultation
B
Notes:
9bis.1 Public consultation in budget preparation
D
Notes:
There is no consultation other than through the budgetary process in Parliament.
9bis.2 Public consultation in the design of service delivery programs
B
Notes:
A consultative panel was set up in 2017 to make recommendations concerning public transport and the public infrastructure, which are the most important services provided by BCR.
9bis.3 Public consultation in investment planning
A
Notes:
There has been extensive public consultation on the Government’s Good Move mobility programme of investment, and a summary of the public’s responses was published in January 2020.
III. MANAGEMENT OF ASSETS AND LIABILITIES
Scores by Dimension
Overall Indicator Score
PI-10 Fiscal risk reporting
C+
Notes:
PI-10.1 Monitoring of public corporations
B
Notes:
Audited financial statements are published by most PCs within 6 months of year-end, and subsequently included in the consolidated report of the Regional Entity.
PI-10.2 Monitoring of subnational governments
C
Notes:
Unaudited reports on the financial position and performance of the majority of municipalities are published annually within 6 months of year- end.
PI-10.3 Contingent liabilities and other fiscal risks
C
Notes:
Budget documents include full details of contingent liabilities arising from guarantees, but Public-Private Partnership obligations have not yet been included.
PI-11 Public investment management
C
Notes:
PI-11.1 Economic analysis of investment proposals
B
Notes:
Economic analyses are carried out for major mobility projects that require an environmental impact assessment based on legal guidelines.
PI-11.2 Investment project selection
C
Notes:
The allocation of investment funds between thematic areas is a political decision constrained by the fiscal space. Investments projects with common characteristics are structured in multi-annual investment plans for specific thematic areas such as tunnels, bridges, public transport, and housing.
PI-11.3 Investment project costing
D
Notes:
The projections of the total capital cost of major investment projects are included in the multi-annual investment plans. The budget documents focus on the next year allocations and do not include the multi-annual costs of the major investment projects.
PI-11.4 Investment project monitoring
C
Notes:
The total cost and physical progress of each multi-annual investment plan (including the major investment projects) are monitored annually and for some MIP twice or three times a year.
PI-12 Public asset management
B+
Notes:
PI-12.1 Financial asset monitoring
A
Notes:
The consolidated annual accounts of the Regional Entity include summaries of the financial assets held by the Regional government and its subsidiary bodies at market value.
PI-12.2 Nonfinancial asset monitoring
C
Notes:
The Regional Government and its subsidiary bodies each maintain records of all their non-financial assets.
PI-12.3 Transparency of asset disposal
A
Notes:
Details of the disposals of all non-financial assets are reported in Annexes to the annual consolidated accounts of the Regional Entity, including balance sheet values, sale proceeds, and identity of purchasers.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
A
Notes:
Reconciled reports of both direct and guaranteed debt are produced monthly by the Middle Office of the BFB Debt Agency.
PI-13.2 Approval of debt and guarantees
A
Notes:
Debt is managed by the Debt Agency in accordance with the provisions of the 2006 Budget law and policies approved by the Minister of Finance.
PI-13.3 Debt management strategy
A
Notes:
Debt is managed according to a strategy approved by the Minister of Finance which aims to ensure that BCR retains its international AA rating for its debt instruments.
IV. POLICY-BASED FISCAL STRATEGY AND BUDGETING
Scores by Dimension
Overall Indicator Score
PI-14new Medium term budget strategy
C+
Notes:
PI-14new.1 Underlying forecasts for medium-term budget
B
Notes:
Estimates of revenue and expenditure for the budget year are based on full information about transfers, other revenue, and expenditure, taking into account demographic and macroeconomic indicators.
PI-14new.2 Fiscal impact of policy proposals
B
Notes:
In line with section 1.9 of the budget circular and the specific form in Annex 4, the fiscal impact of all new policy proposals needs to be estimated for six fiscal years ahead.
PI-14new.3 Medium-term expenditure and revenue estimates
D
Notes:
The annual budget does not present estimates of expenditure and revenue by type for the two fiscal years following the budget year. Only aggregated projections are presented
PI-14new.4 Consistency of budgets with previous year's estimates
C
Notes:
The section on the medium-term framework starts from the base level reflecting the second year of the medium-term budget presented the previous year.
PI-14 Macroeconomic and fiscal forecasting
NU
Notes:
PI-14.1 Macroeconomic forecasts
NU
Notes:
PI-14.2 Fiscal forecasts
NU
Notes:
PI-14.3 Macro-fiscal sensitivity analysis
NU
Notes:
Notes:
PI-15.1 Fiscal impact of policy proposals
NU
Notes:
PI-15.2 Fiscal strategy adoption
NU
Notes:
PI-15.3 Reporting on fiscal outcomes
NU
Notes:
PI-16 Medium term perspective in expenditure budgeting
NU
Notes:
PI-16.1 Medium-term expenditure estimates
NU
Notes:
PI-16.2 Medium-term expenditure ceilings
NU
Notes:
PI-16.3 Alignment of strategic plans and medium-term budgets
NU
Notes:
PI-16.4 Consistency of budgets with previous year estimates
NU
Notes:
PI-17 Budget preparation process
A
Notes:
Notes:
A clear budget calendar exists which allows spending units at least 5 weeks to complete their submissions. Submissions are made in accordance with the timetable.
PI-17.2 Guidance on budget preparation
A
Notes:
A comprehensive budget circular is issued each year. It sets our expenditure ceilings within which all spending units must work. Government approval is given before the issue of the circular.
PI-17.3 Budget submission to the subnational council
A
Notes:
All recent budgets have been submitted to the Parliament before the end of October of the previous year.
PI-18 Legislative scrutiny of budgets
B+
Notes:
PI-18.1 Scope of budget scrutiny
A
Notes:
Parliament’s review covers medium-term prospects as well as details of revenue and expenditure.
PI-18.2 Legislative procedures for budget scrutiny
B
Notes:
Ministers are questioned in detail by the Finance Committee before the budget is considered in plenary session. But there are no arrangements for public consultation.
PI-18.3 Timing of budget approval
A
Notes:
The last 3 budgets have all been approved before the beginning of the year to which they relate.
PI-18.4 Rules for budget adjustments by the executive
A
Notes:
The government is only able to reallocate provision within programmes without the approval of Parliament.
V. PREDICTABILITY AND CONTROL IN BUDGET EXECUTION
Scores by Dimension
Overall Indicator Score
PI-19 Tax administration
B
Notes:
PI-19.1 Rights and obligations for tax measures
A
Notes:
The website of BF is comprehensive and provides user-friendly information on tax liabilities and redress procedures.
PI-19.2 Property tax register and value assessment
NA
Notes:
The mandate for property valuation is at the federal level. The last comprehensive valuation of property values was done more than 30 years ago. Since it is outside the control of BCR, score is NA.
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
Not applicable as most of the core taxes (93%) are based on registers kept by the Federal Government and for these taxes, BF is not expected to conduct tax audits and compliance risk assessment.
PI-19.4 Tax arrears monitoring
C
Notes:
Tax arrears as a share of the total tax collection amount to 12.3 %. The share of arrears older than 12 months is 51.7 %.
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
The tax and non-tax data are obtained monthly and consolidated into a report.
PI-20.2 Transfer of revenue collections
A
Notes:
Tax and non-tax revenues are transferred to the Treasury daily.
PI-20.3 Tax accounts reconciliation
A
Notes:
Frequency of reconciling tax revenues is monthly.
PI-21 Predictability of in-year resource allocation
A
Notes:
PI-21.1 Consolidation of cash balances
A
Notes:
Consolidation is daily.
PI-21.2 Cash forecasting and monitoring
A
Notes:
The cash flow forecasting and monitoring is weekly.
PI-21.3 Information on commitment ceilings
A
Notes:
Sufficient cash available during the year, there is no need for commitment ceilings.
PI-21.4 Significance of in-year budget adjustments
A
Notes:
Only once a year a significant adjustment of the BCR budget.
PI-22 Expenditure arrears
A
Notes:
PI-22.1 Stock of expenditure arrears
A
Notes:
Stock of arrears during last two years below 2%.
PI-22.2 Expenditure arrears monitoring
A
Notes:
Monitoring is frequent and timely. Except for composition, relevant data are generated. However, nature of arrears is limited, and stock of arrears is low.
Notes:
PI-23.1 Integration of payroll and personnel records
B
Notes:
No direct links between personnel and payroll systems but monthly checks of all changes.
PI-23.2 Management of payroll changes
A
Notes:
Adjustments to the personnel and payroll are updated monthly; the total of retroactive adjustment is less than 3% of the salary payments.
PI-23.3 Internal control of payroll
A
Notes:
Changing payroll records is restricted and integrity of data is ensured.
Notes:
No explicit evidence that a strong system of pay roll audit exists.
Notes:
PI-24.1 Procurement monitoring
A
Notes:
Databases are maintained with complete and accurate data for all procurement methods.
PI-24.2 Procurement methods
A
Notes:
Value of contracts through competitive methods is more than 80%.
PI-24.3 Public access to procurement information
C
Notes:
Only 3 requirements out of the 6 key procurement elements are met.
PI-24.4 Procurement complaints management
NA
Notes:
All requirements regarding the review body are met by the so-called Appeal law, but no evidence is available to confirm that its implementation is satisfactory and the BCR Government has no responsibility or control.
PI-25 Internal controls on nonsalary expenditure
A
Notes:
PI-25.1 Segregation of duties
A
Notes:
Segregation of duties is clearly regulated.
PI-25.2 Effectiveness of expenditure commitment controls
A
Notes:
The system of commitment controls is effective.
PI-25.3 Compliance with payment rules and procedures
A
Notes:
Payment rules and procedures are defined and executed.
Notes:
PI-26.1 Coverage of internal audit
D
Notes:
Coverage of the internal audit activities was less than 50% of 2019 expenditures.
PI-26.2 Nature of audits and standards applied
A
Notes:
Internal audit is based on the international internal audit standards; audits deal with compliance and adequacy and effectiveness of internal control.
PI-26.3 Implementation of internal audits and reporting
A
Notes:
90% of the planned audits were completed and reported on.
PI-26.4 Response to internal audits
A
Notes:
Auditees respond positively on recommendations; IA organises follow up each 6 months.
VI. ACCOUNTING AND REPORTING
Scores by Dimension
Overall Indicator Score
PI-27 Financial data integrity
A
Notes:
PI-27.1 Bank account reconciliation
B
Notes:
Bank reconciliation occurs monthly.
PI-27.2 Suspense accounts
A
Notes:
Reconciliation and clearing of suspense accounts occurs monthly.
PI-27.3 Advance accounts
NA
Notes:
There are no advance accounts.
PI-27.4 Financial data integrity processes
A
Notes:
Restriction for access to records is ensured. A unit is responsible for verifying data integrity.
PI-28 In-year budget reports
C+
Notes:
PI-28.1 Coverage and comparability of reports
A
Notes:
Comparison of budget execution with original budget of all items is possible.
PI-28.2 Timing of in-year budget reports
B
Notes:
In-year reports are produced monthly after two weeks of from the end of each month.
PI-28.3 Accuracy of in-year budget reports
C
Notes:
The source of the monthly reports is reliable, but the reports lack analysis of presented data.
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
D
Notes:
In the annual Budget Execution Account the comparison is with revised not original budget flow statement.
PI-29.2 Submission of reports for external audit
B
Notes:
The annual report is submitted to the CoA within 9 months of year-end.
PI-29.3 Accounting standards
C
Notes:
Variations between International and National accounting standards are not inventoried and explained.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
PI-30.2 Submission of audit reports to the subnational council
NU
Notes:
PI-30.3 External audit follow-up
NU
Notes:
PI-30.4 Independence of the public audit institution in charge of subnational governments
NU
Notes:
PI-31 Legislative scrutiny of audit reports
NU
Notes:
PI-31.1 Timing of audit report scrutiny
NU
Notes:
PI-31.2 Hearings on audit findings
NU
Notes:
PI-31.3 Recommendations on audit by subnational council
NU
Notes:
PI-31.4 Transparency of legislative scrutiny of audit reports
NU
Notes: