I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
A
Notes:
1.1 Aggregate expenditure outturn
A
Notes:
The aggregate expenditure outturn is reliable in which the outturn deviated less than 5% in FY 2017 and FY 2018. However, this was not maintained in FY 2019, in which the outrun was more that the budget by 10%.
2. Expenditure composition outturn
C+
Notes:
2.1 Expenditure composition outturn by function
C
Notes:
The expenditure composition outturn by function was 11.9%, 11.2% and 10.8% in 2017, 2018 and 2019.
2.2 Expenditure composition outturn by economic type
C
Notes:
The expenditure composition outturn by economic type was 21%, 13% and 3% in 2017, 2018 and 2019.
2.3 Expenditure from contingency reserves
A
Notes:
There was no expenditure charged to contingency reserve in the last three completed fiscal years.
Notes:
3.1 Aggregate revenue outturn
A
Notes:
Actual revenue outturn was in excess of budget between 97% and 106% of budgeted revenue in at least two of the last three years.
3.2 Revenue composition outturn
D
Notes:
The composition variance in all the three years was more than 15% in the last three completed fiscal years.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
B
Notes:
4.1 Budget classification
B
Notes:
The budget preparation, its execution, accounting and reporting of the local budget is undertaken by classification corresponding to the GFS/COFOG standards.
Notes:
5.1 Budget documentation
D
Notes:
The last budget submitted to the legislature was for FY 2020 and the requirements are met for 2 basic elements out of 4 and 1 additional element out of 8.
6. Central government operations outside financial reports
A
Notes:
6.1 Expenditure outside financial reports
A
Notes:
There are no expenditures outside financial report.
6.2 Revenue outside financial reports
A
Notes:
There are no revenues outside financial reports.
6.3 Financial reports of extrabudgetary units
NA
Notes:
There are no extrabudgetary units in LSG Saz.
7. Transfers to subnational governments
NA
Notes:
7.1 System for allocating transfers
NA
Notes:
There are no subnational governments in LSG Saz.
7.2 Timeliness of information on transfers
NA
Notes:
There are no subnational governments in LSG Saz.
8. Performance information for service delivery
D+
Notes:
8.1 Performance plans for service delivery
D
Notes:
Information is not published annually on the activities to be performed under the policies or programs of ministries or a framework of performance indicators relating to the outputs or outcomes of ministries is not in place.
8.2 Performance achieved for service delivery
D
Notes:
Budgetary institutions prepare annual reports on their activities and performances achieved, but they are not published.
8.3 Resources received by service delivery units
A
Notes:
Information on resources received by frontline service delivery units is collected and recorded for all budgetary institutions, disaggregated by source of funds. A report compiling the information is prepared annually.
8.4 Performance evaluation for service delivery
D
Notes:
LSG Saz does not have the practice of assessing the effectiveness or efficiency of the provision of services.
9. Public access to fiscal information
D
Notes:
9.1 Public access to fiscal information
D
Notes:
The government makes available to the public one basic element only, and none of the additional elements in accordance with the specified timeframe.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
D
Notes:
10.1 Monitoring of public corporations
NA
Notes:
There are no public corporations in LSG Saz.
10.2 Monitoring of subnational governments
NA
Notes:
There is no lower level of government
10.3 Contingent liabilities and other fiscal risks
D
Notes:
There is no information on contingent liabilities and other fiscal risks in the financial reports of SNG Saz.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
D
Notes:
There are no established economic analysis and selection criteria for capital investment projects in LSG Saz.
11.2 Investment project selection
C
Notes:
There are no approved economic selection criteria for capital investment projects.
11.3 Investment project costing
C
Notes:
Costing information is partially included in the budget documentation – for the next year, only.
11.4 Investment project monitoring
C
Notes:
Public investment projects are monitored in terms of cost and physical progress. The achieved progress and output are not published.
12. Public asset management
C
Notes:
12.1 Financial asset monitoring
C
Notes:
There is no information if financial assets are published annually.
12.2 Nonfinancial asset monitoring
C
Notes:
Information on assets is not officially published and available to the public.
12.3 Transparency of asset disposal
C
Notes:
The assets disposal information is covered in budget documentation.
Notes:
13.1 Recording and reporting of debt and guarantees
NA
Notes:
LSG Saz have not borrowed, issued debt obligations or loan guarantees in the period 2017-2019.
13.2 Approval of debt and guarantees
NA
Notes:
LSG Saz have not borrowed, issued debt obligations or loan guarantees in the period 2017-2019.
13.3 Debt management strategy
NA
Notes:
LSG Saz have not borrowed, issued debt obligations or loan guarantees in the period 2017-2019.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
D
Notes:
14.1 Macroeconomic forecasts
NA
Notes:
Macroeconomic forecast is not prepared at the level of LSG.
Notes:
The fiscal forecast prepared by Saz Ayil Aimak forecasts revenue for three years while expenditures for one year only.
14.3 Macrofiscal sensitivity analysis
D
Notes:
According to the existing practice of LSGs, macroeconomic scenarios are not developed at the local level, including for the Saz Ayil Aimak.
Notes:
15.1 Fiscal impact of policy proposals
D
Notes:
The LSG does not prepare an estimate of fiscal implications and revenue and expenditure policies for three years or one fiscal year.
15.2 Fiscal strategy adoption
D
Notes:
The fiscal strategy adopted by LSG Saz does include quantitative fiscal objectives but not qualitative objectives.
15.3 Reporting on fiscal outcomes
D
Notes:
A report on the implementation of the Strategic Plan for the Development has not been prepared together with the Annual Budget.
16. Medium-term perspective in expenditure budgeting
D
Notes:
16.1 Medium-term expenditure estimates
D
Notes:
The Annual Budget of the Saz Ayil Okmotu is generated for the period of three years on revenues, and for the period of one year on expenditures with a break down to economic and functional classifications.
16.2 Medium-term expenditure ceilings
D
Notes:
Aggregate expenditure ceilings for the budget year and the two following fiscal years are not prepared.
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
Institutions of LSG Saz do not develop Medium-term strategies for budget expenditures.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
The budget on revenues of the LSG Saz is developed for the period of three years, while for expenditures - for one year. Therefore, the budget document does not provide explanation on changes to expenditure estimates.
17. Budget preparation process
D
Notes:
Notes:
No Budget Calendar was developed by the Ayil Okmotu.
17.2 Guidance on budget preparation
D
Notes:
Budget guidance or circular for budgetary units were not prepared.
17.3 Budget submission to the legislature
D
Notes:
Budget was submitted to the legislature after the start of the year.
18. Legislative scrutiny of budgets
D+
Notes:
18.1 Scope of budget scrutiny
C
Notes:
The legislature’s review covers details of expenditure and revenue. However, it does not cover fiscal policies and aggregates for the coming year.
18.2 Legislative procedures for budget scrutiny
D
Notes:
Legislature approves procedures to be used for reviewing draft budget are approved before budget hearings and are followed. However, the procedures include internal organizational arrangements such as specialized review committees, technical support, and negotiation procedures.
18.3 Timing of budget approval
C
Notes:
The legislature has approved the annual budget within one month of the start of the year in two of the last three fiscal years.
18.4 Rules for budget adjustment by the executive
A
Notes:
Clear rules exist for in-year budget adjustments by the executive. The rules set strict limits on the extent and nature of amendments and are adhered to in all instances.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
NA
Notes:
19.1 Rights and obligations for revenue measures
NA
Notes:
There is no territorial office of the State Tax Service in LSG Saz.
19.2 Revenue risk management
NA
Notes:
There is no territorial office of the State Tax Service in LSG Saz.
19.3 Revenue audit and investigation
NA
Notes:
There is no territorial office of the State Tax Service in LSG Saz.
19.4 Revenue arrears monitoring
NA
Notes:
There is no territorial office of the State Tax Service in LSG Saz.
20. Accounting for revenue
B+
Notes:
20.1 Information on revenue collections
B
Notes:
Information on revenue collection is disaggregated by type and consolidated in a report.
20.2 Transfer of revenue collections
A
Notes:
Revenue collections are transferred directly into the Treasury Single Account controlled by the Treasury and their regional offices.
20.3 Revenue accounts reconciliation
A
Notes:
There are monthly reconciliations between Treasury records and those of the regional office of the State Tax Services.
21. Predictability of in-year resource allocation
A
Notes:
21.1 Consolidation of cash balances
NA
Notes:
Cash plans are prepared only in the Republican Budget and the budgets of cities of republican and regional significance.
21.2 Cash forecasting and monitoring
NA
Notes:
Cash plans are prepared only in the Republican Budget and the budgets of cities of republican and regional significance.
21.3 Information on commitment ceilings
NA
Notes:
Cash plans are prepared only in the Republican Budget and the budgets of cities of republican and regional significance.
21.4 Significance of in-year budget adjustments
A
Notes:
No budget adjustments were made during the last financial year of assessment 2019.
Notes:
22.1 Stock of expenditure arrears
A
Notes:
Stock of expenditure arrears is negligible less than 1 % in all last three years.
22.2 Expenditure arrears monitoring
C
Notes:
LSG Saz control expenditure arrears by monitoring data on stock and composition generated annually at the end of each fiscal year.
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
The personnel database and payroll system are manually controlled and monthly reconciled but there are not automatically linked.
23.2 Management of payroll changes
A
Notes:
There were no changes to the payroll in FY 2019.
23.3 Internal control of payroll
C
Notes:
There is sufficient control ensuring integrity of payroll data.
Notes:
All budget organisations with audit function regularly conduct payroll audits.
Notes:
24.1 Procurement monitoring
D
Notes:
There is no information on contract awards.
24.2 Procurement methods
B
Notes:
The total value of contracts awarded through competitive methods is more than 70%.
24.3 Public access to procurement information
A
Notes:
All public access criteria are met.
24.4 Procurement complaints management
A
Notes:
All procurement complaints management criteria are met.
25. Internal controls on nonsalary expenditure
A
Notes:
25.1 Segregation of duties
A
Notes:
Almost all budget operations take place through the Single Treasury Account that is managed by the Ministry of Finance.
25.2 Effectiveness of expenditure commitment controls
A
Notes:
Payment obligations remain within the limits of the annual budget allocations.
25.3 Compliance with payment rules and procedures
B
Notes:
There were no financial violations. Payments are made in accordance with standard payment procedures.
Notes:
26.1 Coverage of internal audit
NA
Notes:
There is no internal audit function in LSG Saz.
26.2 Nature of audits and standards applied
NA
Notes:
There is no internal audit function in LSG Saz.
26.3 Implementation of internal audits and reporting
NA
Notes:
There is no internal audit function in LSG Saz.
26.4 Response to internal audits
NA
Notes:
There is no internal audit function in LSG Saz.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
B
Notes:
27.1 Bank account reconciliation
C
Notes:
Reconciliation, between the National Bank and the Central Treasury, takes place quarterly.
Notes:
All suspense accounts are cleared in a timely way.
Notes:
Reconciliation of advance accounts takes place at least monthly, within a month from the end of each month.
27.4 Financial data integrity processes
NA
Notes:
The data integrity control process is carried out by the Central Treasury at national level.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
A
Notes:
The database in the automated treasury system allows full coverage of budget execution data and comparison with the originally approved budget.
28.2 Timing of in-year budget reports
A
Notes:
The automated treasury system allows receipt of data in real time regardless of the timing of the budget execution report.
28.3 Accuracy of in-year budget reports
C
Notes:
Expenditure is presented only at payment stage.
29. Annual financial reports
D+
Notes:
29.1 Completeness of annual financial reports
D
Notes:
The annual budget execution report for FY 2019 contains information on revenue, expenditure and tangible assets.
29.2 Submission of reports for external audit
B
Notes:
The Account Chamber received the LSG Saz within six months from the year end.
29.3 Accounting standards
C
Notes:
Work is underway on the implementation of International Public Sector Accounting Standards (IPSAS) on an accrual basis.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
C
Notes:
All revenue and expenditure are audited using national audit standards with an increasing amount of compliance with international audit standards with audit findings focused on relevant significant weaknesses.
30.2 Submission of audit reports to the legislature
B
Notes:
The audit report was submitted to the local parliament within six months from receipt of the financial report.
30.3 External audit follow-up
A
Notes:
There is evidence of external audit follow-up and implementation of audit recommendations.
30.4 Supreme Audit Institution independence
B
Notes:
The Chamber of Accounts operates independently from the executive, they plan audits and enjoy unrestricted access to data and information. The CA has substantial independence over its operations and its financing.
31. Legislative scrutiny of audit reports
D
Notes:
31.1 Timing of audit report scrutiny
D
Notes:
No evidence was provided to show audit hearings were conducted by the Ayil Kenesh.
31.2 Hearings on audit findings
NA
Notes:
Since no audit hearings were conducted by the Ayil Kenesh, the legislature did not provide recommendations on the audit reports.
31.3 Recommendations on audit by the legislature
NA
Notes:
Since no audit hearings were conducted by the Ayil Kenesh, the legislature did not provide recommendations on the audit reports.
31.4 Transparency of legislative scrutiny of audit reports
NA
Notes:
No evidence was provided to show that audit scrutiny was conducted by the Ayi lKenesh.
NO PILLAR
Scores by Dimension
Overall Indicator Score
HLG-1 Predictability of transfers from higher level of Government
B+
Notes:
HLG-1.1 Annual deviation of actual total HLG transfers from the original total estimated amount provided by HLG to the SN entity for inclusion in the latter’s budget
A
Notes:
There was no difference between the originally planned and the actual total (and targeted) transfers in each of the last three years 2017-2019.
HLG-1.2 Annual variance between actual and estimated transfers of earmarked grants
B
Notes:
Only in two FY 2017 and 2019 the original budget estimate and the actual earmarked transfers were 100%.
HLG-1.3 In-year timeliness of transfers from HLG (compliance with timetables for in-year distribution of disbursements agreed within of month of the start of the SN fiscal year)
A
Notes:
All transfers are actually disbursed each month being evenly distributed across the year.