I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
A
Notes:
1.1 Aggregate expenditure outturn
A
Notes:
Aggregate expenditure outturn has been just marginally lower than the budget plan for each of the last three years: 99.2% (2020), 99.0% (2019), and 98.4% in 2018.
2. Expenditure composition outturn
A
Notes:
2.1 Expenditure composition outturn by function
A
Notes:
The variance in expenditure composition by administrative classification was 9.6% (2020), 2.1% (2019) and 2.3% in 2018.
2.2 Expenditure composition outturn by economic type
A
Notes:
The variance in expenditure composition by economic classification was 4.1% (2020), 1.2% (2019) and 0.8% in 2018.
2.3 Expenditure from contingency reserves
A
Notes:
An insignificant contingency amount (Reserve) is allocated within the MoF budget. However, no expenditures are recorded against the contingency, and funds are transferred to the ministries and expenditures recorded against relevant account codes.
Notes:
3.1 Aggregate revenue outturn
A
Notes:
Actual revenue was 103.6%, 109.5% and 102.1% in 2020, 2019 and 2018 respectively.
3.2 Revenue composition outturn
A
Notes:
The variance in revenue composition by category was 3.9%, 14.8% and 4.0% in 2020, 2019 and 2018 respectively.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
D
Notes:
4.1 Budget classification
D
Notes:
The 2016 Greenland Budget and Accounting Act regulating both Naalakkersuisut and the municipalities requires that the Finance Act, the Supplementary Act and the annual Accounts are structured in a similar way13.
Notes:
5.1 Budget documentation
A
Notes:
The 2021 budget documentation (Budget proposal, Finance Act, Political-Economical Statement (pre-budget statement), fiscal oversight documents and reports from the Greenland Economic Council) Satisfies the 4 basic elements and 7 of the 8 additional elements.
6. Central government operations outside financial reports
A
Notes:
6.1 Expenditure outside financial reports
A
Notes:
There are no extrabudgetary units in Greenland’s central government. There are no extrabudgetary expenditure in any ministry areas.
6.2 Revenue outside financial reports
A
Notes:
There are no Extrabudgetary Units in Greenland’s central government. There are no extrabudgetary revenue in any ministry areas.
6.3 Financial reports of extrabudgetary units
NA
Notes:
There are no extrabudgetary units in Greenland Central Government.
7. Transfers to subnational governments
B
Notes:
7.1 System for allocating transfers
A
Notes:
The horizontal allocation of all transfers from the GoG to the municipalities is determined by a fully transparent and rules-based system.
7.2 Timeliness of information on transfers
C
Notes:
The Naalakkersuisut budget proposal under § 20.05.20 for fiscal year 2020 was presented on a press conference on August 9, 2019, including the size of transfers to each municipality, thus providing municipalities less than 4 weeks to complete their budget planning.
8. Performance information for service delivery
C+
Notes:
8.1 Performance plans for service delivery
D
Notes:
A number of initiatives are well under way to strengthen the programmatic approach in Greenland. However, the majority of Departments (ministries) do not publish either comprehensive plans nor a systematic set of indicators linked to outputs or outcomes.
8.2 Performance achieved for service delivery
B
Notes:
Most Departments publish an annual report on the quantity of outputs produced.
8.3 Resources received by service delivery units
B
Notes:
Resources made available to frontline service delivery (SD) units are recorded and published in the annual audited financial statement. The information is compiled in several departments and published.
8.4 Performance evaluation for service delivery
C
Notes:
A number of evaluations have been produced for the period 2018-2020 however they do not systematically cover broader departmental areas and rarely include both assessment of efficiency and effectiveness.
9. Public access to fiscal information
B
Notes:
9.1 Public access to fiscal information
B
Notes:
Budget documentation fulfills 4 basic elements and 3 of 4 additional elements (where the 4th is NA). In all, 7 elements are made available to the public within the respective timeframes.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
B
Notes:
10.1 Monitoring of public corporations
A
Notes:
The 14 non-financial public corporations (PC) are incorporated as public limited companies operating according to the Danish law on limited companies.
10.2 Monitoring of subnational governments
D
Notes:
The fiscal operations of the municipalities are strictly monitored by the MoF and regulated and by the Law on the municipalities and the Governments accounts and budgets, 201617. Municipal budgets must not be in deficit over a 4-year period and the total expenditure must be maximum 93% of the expected revenue over a 4-year period § 2.
10.3 Contingent liabilities and other fiscal risks
B
Notes:
Debts and guarantees can only be assumed if included in the Finance Act. Although the GoG and the three UPC financial statements disclose all contingent liabilities including guarantees.
11. Public investment management
B+
Notes:
11.1 Economic analysis of investment proposals
B
Notes:
The “Instruction for Making Social-Economic Impact Assessments” 18 is used to appraise major investment project applying best practice cost-benefit and environmental analysis of major investment projects.
11.2 Investment project selection
B
Notes:
The political process to decide the prioritisation of investment projects involves the Inatsisartut and the MoF.
11.3 Investment project costing
B
Notes:
Following an open tender, a new Research Vessel was contracted in 2019 and delivered in 2021 with annual amounts allocated in the Finance Acts 2018-20 totalling 220m.
11.4 Investment project monitoring
A
Notes:
The investment has been judiciously monitored in terms of regular physical and financial progress reports by supervising engineer and bi-monthly virtual meetings between owner and contractor. Construction completed within budget.
12. Public asset management
B+
Notes:
12.1 Financial asset monitoring
A
Notes:
Cash: The Treasury holds accounts in three commercial banks. The main accounts of the 118 bank accounts combine to a Treasury Single Account (TSA) system (Landskassen) that integrates the largest accounts (Tax Board and External subsidies, etc.)
12.2 Nonfinancial asset monitoring
C
Notes:
Land is not per se an asset as landownership does not exist, but user rights are transferable at a nominal fee.
12.3 Transparency of asset disposal
A
Notes:
Asset disposal is done according to section 9.3 of the Budget Decree that regulates asset disposal. and mentions it must be done at market value.
Notes:
13.1 Recording and reporting of debt and guarantees
A
Notes:
The GoG has no domestic debt and the foreign debt is immaterial with loan balance end-2020 of just 119m or 0.6% of GDP. Debt and guarantees are recorded by the Treasury in the ERP and continuously updated.
13.2 Approval of debt and guarantees
A
Notes:
The 1993 Law on Borrowing Abroad26 authorises the GoG to obtain foreign loans up to 1.9bn. Loans and guarantees are regulated by § 6 of the 2016 Law on Budgets and Financial Management mentioned, setting stringent conditions for new financial obligations cf. PI-11.2.
13.3 Debt management strategy
A
Notes:
The 2016 Sustainability and Growth Plan (Holdbarheds- og Vækstplanen) evokes that new financial obligations should be appraised against four policy objectives and comply with the mentioned 2016 Law (The plan effectively constitutes a Debt Management Strategy).
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 Greenland Economic Council (GØR) prepares a forecast of key economic indicators for the coming years which is presented to legislators.
Notes:
Naalakkersuisut prepares forecasts of revenue, expenditure and the budget balance for the budget year and the two following fiscal years.
14.3 Macrofiscal sensitivity analysis
C
Notes:
During the forecast process Naalakkersuisut analyses the impact of a set of different scenarios. The assessment is qualitative in nature, for internal use and forecast sensitivities are not presented in the budget documentation.
Notes:
15.1 Fiscal impact of policy proposals
A
Notes:
The 2016 Budget and Accounts Act requires that all new or changed appropriations must be accompanied by a calculation of the impact on the fiscal year and the two outer years.
15.2 Fiscal strategy adoption
A
Notes:
The 2016 Budget and Accounts Act § 2-3 requires a balanced budget or a budget in balance over a 4-year period.
15.3 Reporting on fiscal outcomes
D
Notes:
The 2016 Budget and Accounts Act § 4 requires that the head of the Naalakkersuisut finance department must present a report on the status related to the requirements under § 2-3 before the end of April in the following fiscal year.
16. Medium-term perspective in expenditure budgeting
C
Notes:
16.1 Medium-term expenditure estimates
C
Notes:
The budget classification includes all three classifiers. While the administrative classifier is consistently used the economic classifier is only used with regards to some appropriations.
16.2 Medium-term expenditure ceilings
A
Notes:
During the budget preparation process aggregate ceilings are presented to each ministerial area for the budget year and two outer years.
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
No ministries prepare medium-term strategic plans and expenditure policy areas in the annual budget are not aligned with strategic plans.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
The budget documentation does not provide an explanation of (some) the changes to expenditure estimates between the second year of the last medium-term budget and the first year of the current medium-term budget at the aggregate level.
17. Budget preparation process
A
Notes:
Notes:
A clear budget calendar is issued by the Naalakkersuisut MoF and for the fiscal year 2022 the budget calendar provided 4 weeks of preparation to all budgetary units (although any budgetary unit needing additional time was granted this).
17.2 Guidance on budget preparation
A
Notes:
The budget circular and instructions to budgetary units is clear and comprehensive. Ministry ceilings approved by the Naalakkersuisut are coded into the budget preparation system.
17.3 Budget submission to the legislature
A
Notes:
Budget submissions to the legislature covering the budget years 2018-2020 have provided at least 2 months for treatment prior to the start of the fiscal year.
18. Legislative scrutiny of budgets
A
Notes:
18.1 Scope of budget scrutiny
A
Notes:
All new legislation (including the Budget Proposal) must be tabled in 3 successive session in the Parliament. The Finance and Tax Committee scrutinizes the budget proposal prior to the 2nd and 3rd tabling an presents analysis and recommendations to the Parliament.
18.2 Legislative procedures for budget scrutiny
A
Notes:
Procedures of the process of scrutiny are well described in the legislation.
18.3 Timing of budget approval
A
Notes:
All budget proposals for the period 2018-2020 have been approved prior to the start of the fiscal year.
18.4 Rules for budget adjustment by the executive
A
Notes:
The 2016 Budget and Accounts Act clearly defines rules for in-year budget adjustments by the executive. Legislation sets strict limits on the extent and nature of amendments and these are adhered to in all instances.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
B+
Notes:
19.1 Rights and obligations for revenue measures
A
Notes:
The Tax Agency makes available several channels to provide payers with easy access to comprehensive and up-to-date information on the main revenue obligation areas and on rights including, as a minimum, redress processes and procedures.
19.2 Revenue risk management
A
Notes:
The Division for ”Taxes and Control” in Tax Agency is constituted by two offices covering respectively audit and control.
19.3 Revenue audit and investigation
A
Notes:
The Tax Agency executes its annual ”Ligningsplan” and execution of the plan is generally on track with notable execeptions in 2020 due to the COVID 19 epidemic.
19.4 Revenue arrears monitoring
C
Notes:
The Tax Agency has reported an accumulation in tax arrears leading to the corresponding score. Accumulated total arrears correspond to 24.9 % of total annual revenue
20. Accounting for revenue
A
Notes:
20.1 Information on revenue collections
A
Notes:
The Tax Agency and other departments collecting minor fees are using the PRISME GoG ERP system for all revenue administration and collection. Thus, the MoF has immediate and real-time access to revenue accounting information by revenue type.
20.2 Transfer of revenue collections
A
Notes:
Revenue (with information on revenue type) is collected directly into accounts under the consolidated control of the Landskassen (Treasury).
20.3 Revenue accounts reconciliation
A
Notes:
The Tax Agency accounts for taxes in the PRISME accounting system. All non-tax revenue is also managed and accounted for in the PRISME accounting system by, including revenue collected by other GoG entities.
21. Predictability of in-year resource allocation
A
Notes:
21.1 Consolidation of cash balances
B
Notes:
The finance department consolidates all bank and cash balances on a weekly basis.
21.2 Cash forecasting and monitoring
A
Notes:
The cash flow forecast is prepared on a yearly basis and is updated every month running into the coming fiscal year.
21.3 Information on commitment ceilings
A
Notes:
All budgetary units can plan and commit expenditure for at least six months in advance and the respective cash is available. The PRISME system does not impose ceilings on commitments and is open to registration of transactions all year.
21.4 Significance of in-year budget adjustments
A
Notes:
Significant in-year budget year. adjustments are clustered around the preparation of supplementary appropriations which take place twice a year.
Notes:
22.1 Stock of expenditure arrears
A
Notes:
The GoG has no expenditure arrears. According to section 3 of the Accounting Manual27 the “Treasury pays the amounts approved by the budgetary units”. Approved invoices are settled by the Treasury four times a week using PRISME interfaced with IRIS, the electronic invoice management system.
22.2 Expenditure arrears monitoring
NA
Notes:
NA (no arrears)
Notes:
23.1 Integration of payroll and personnel records
A
Notes:
The HR database with personnel files (stamoplysninger) is directly linked to the integrated payroll system KMD-Perspektiv administered by Payroll Services that is also linked to the IT time registration system Webtas.
23.2 Management of payroll changes
A
Notes:
The personnel records and payroll are updated continuously and monthly payroll lists are communicated to budget units for verification and comparison with the payroll list of the previous month, so discrepancies can be detected and corrected retroactively.
23.3 Internal control of payroll
A
Notes:
Access to make changes to the KMD database and the payroll system is restricted and at two levels: Access to read-only and access to change data.
Notes:
There is strong system of annual payroll audits comprising payroll documentation (monthly payroll lists) and controls as part of the during-the-year-audit by the external auditor and reported in the annual audit report of the GoG financial statements covering 100% of the payroll spend.
Notes:
24.1 Procurement monitoring
D
Notes:
Tenders above the respective ceilings are published on the tender portal with information on contract awards.
24.2 Procurement methods
D*
Notes:
Insufficient data to calculate open procurement as percentage of total procurement by value.
24.3 Public access to procurement information
B
Notes:
Four of the six procurement elements fulfilled. 1. The 2019 law on procurement of goods and services is a distinct improvement to legal and regulatory framework for procurement. 2. Bidding opportunities are now available on (the Tender Portal) https://udbudsportalen.gl and published in the media. 3. Contract awards with value, name of contractor and purpose are also published on the same website. 4. Data on resolution of procurement complaints are published by the Complaints Board https://aua.gl/udbud/.
24.4 Procurement complaints management
A
Notes:
The new law on the Procurement Complaints Board32 provides legally defined rules and procedure for complaints, which till then was not the case. The Complaints Board functions since mid-2019 evidenced by the activities on its website. The law covers 5 of the 6 PEFA criteria.
25. Internal controls on nonsalary expenditure
A
Notes:
25.1 Segregation of duties
A
Notes:
The key functions in the control framework: recording/inspection, authorization, custody of assets and reconciliation are functionally segregated.
25.2 Effectiveness of expenditure commitment controls
A
Notes:
Expenditure commitment controls in the traditional sense are not applied by the GoG as each budgetary unit, is expected to execute its budget within the overall ceiling.
25.3 Compliance with payment rules and procedures
A
Notes:
The ERP with integrated and separate payment approval, captures the prescribed processes and provides trails of individual payments. There is no evidence the payment rules and procedure described is not adhered to.
Notes:
26.1 Coverage of internal audit
D
Notes:
The responsibilities and functions of the Internal Audit Office are based on the 1990 Instruction on Intern Audit37 and the Regulation Public Accounting38.
26.2 Nature of audits and standards applied
C
Notes:
The Instruction on Internal audit focuses on financial audit and compliance rather than general internal audit. All the internal audit reports are submitted to the external auditor.
26.3 Implementation of internal audits and reporting
D
Notes:
In 2020 16 internal audits were planned and 9 carried out due to Covid-19 restrictions. The Audit Instruction does not mandate internal audit to ask auditees or the relevant ministries for comments. Hence, follow-up on findings is neither systematic or monitored.
26.4 Response to internal audits
D
Notes:
The draft audit reports are sent to the auditee and the final reports are submitted to the relevant ministry, the auditee and the external auditor. As the Audit Instruction does not require the parties to comment on the reports, the Internal Audit office informs, it rarely receives response from auditees and ministries.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
B+
Notes:
27.1 Bank account reconciliation
B
Notes:
The number of bank accounts held by GoG entities has been reduced from 18940 to 108 eliminating minor accounts and centralising bookkeeping and payment functions as to improve the overall quality of accounting, including reconciliations, and further minimise the risk of errors.
Notes:
Reconciliation of the suspense account (mellemregningskonto) is done monthly by the Treasury and involving the budget units. By end-year the suspense account is cleared.
Notes:
Advances are given to staff for business travel expenses only according to the rules of the Accounting Manual section 5.2, and the travel expense module of XAL or IRIS are used to calculate, register and pay the advances to staff’s personal bank accounts. All advances are cleared monthly.
27.4 Financial data integrity processes
B
Notes:
Access to records and changes to data in the IT systems is restricted, recorded and results in an audit trail. There is no designated body to verify financial data integrity and no periodic lists of users are produced for management review.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
A
Notes:
According to § 25 of the Budget and Accounting Act, the GoG must carry out expenditure control on an ongoing basis during the fiscal year. On this basis the Treasury prepares quarterly budget monitoring reports on expenditure and revenue in consultation with the line ministries drawn from PRISME41.
28.2 Timing of in-year budget reports
C
Notes:
Monthly summary expenditure and revenue reports44 of all budget units are generated by the IT system five days after close of the months and used internally by the ministries as management information (Ledelsesinfo).
28.3 Accuracy of in-year budget reports
A
Notes:
The quarterly budget monitoring reports are comprehensive with text annotations and detail budget spending and revenue by administrative classification. There are no material concerns regarding the data accuracy according to the external auditor.
29. Annual financial reports
C+
Notes:
29.1 Completeness of annual financial reports
B
Notes:
The Treasury prepares the annual financial statements consistent with the approved budget and a summary of the expenditures for the past three fiscal years. The accounts are presented in three dimensions: administrative, functional (Formål), and economic (Art).
29.2 Submission of reports for external audit
B
Notes:
Financial reports are submitted for audit within 6 months of the end of the financial year for the last three completed fiscal years.
29.3 Accounting standards
C
Notes:
The financial statements are prepared in accordance with IPSAS modified cash basis and with the requirements of the of the Accounting Law.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
A
Notes:
For cost-effectiveness reasons the GoG has no Supreme Audit Institution (SAI) and in lieu the Inatsisartut appoints a private chartered accounting firm as external auditor each year during the autumn session.
30.2 Submission of audit reports to the legislature
A
Notes:
The audit reports were sent to the Inatsisartut within 3 months of receipt by the external auditor of the annual accounts for the last three completed fiscal years.
30.3 External audit follow-up
B
Notes:
Folllow-up is monitored by the external auditor evidenced in the Audit Protocols that include reviews on the implementation of recommendations made in the previous year’s Audit Protocols.
30.4 Supreme Audit Institution independence
NA
Notes:
Greenland has no Supreme Audit Institution.
31. Legislative scrutiny of audit reports
B+
Notes:
31.1 Timing of audit report scrutiny
C
Notes:
Audit reports for the last three years have been tabled at the Inatsisartut’s autumn sessions beginning September going through two hearings in November.
31.2 Hearings on audit findings
NA
Notes:
The audit reports for the past three years contains no qualified or adverse audit opinions or disclaimers.
31.3 Recommendations on audit by the legislature
A
Notes:
The Report prepared by the Audit Committee presents selected audit findings and GoG’s comments together with the Committee’s observations.
31.4 Transparency of legislative scrutiny of audit reports
A
Notes:
The dates of the Inatsisartut hearings are made public three weeks before the two hearings are tabled, and the Audit Committee’s report is published on Inatsisartut’s homepage48 3-4 days before.