I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
D
Notes:
1.1 Aggregate expenditure outturn
D
Notes:
Aggregate expenditure outturn was below 85% of the approved budget in two out of three of the last three fiscal years under this assessment (FY18/19=79% and FY19/20=84.1%).
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
D
Notes:
Varience in composition by administrative classification was more than 15% in each of the last three years (25.3%, 33.1% and 48.8% in 2018/19, 2019/20 and 2020/21, respectively).
2.2 Expenditure composition outturn by economic type
C
Notes:
Variance in expenditure composition by economic classification was more than 10% but less than 15% in two of the three most recent fiscal years - FY18/19 (13.6%) and FY20/21 (12.4%).
2.3 Expenditure from contingency reserves
A
Notes:
Contingency allocations were transferred and spent within the budget line items in need. As a result, there were nodirect expenditures against the contingency fund itself.
Notes:
3.1 Aggregate revenue outturn
D
Notes:
Actual revenue was less than 92% of budgeted revenue in not only two, but all of the last three years (85.2%, 83.5% and 90% in FY18/19, FY 19/20 and FY 20/21, respectively).
3.2 Revenue composition outturn
C
Notes:
Variance in revenue composition in two of the last three years under review was less than 15%. (7.6%, and 11.6% and 53.3% in FY18/19, and FY 19/20, respectively)
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
D
Notes:
4.1 Budget classification
D
Notes:
An economic classificationconsistent with GFSM 2014 isapplied to all revenues andrecurrent expenditures but not todevelopment projects, due to thedifficulties of its application o externally funded projects
Notes:
5.1 Budget documentation
D
Notes:
Budget documentation is presented in the Budget Speech, the four Volumes of the Budget and the Plan & Budget Guidelines submitted in advance of the Budget.
6. Central government operations outside financial reports
A
Notes:
6.1 Expenditure outside financial reports
A
Notes:
The historical sources of under-reporting of expenditures have been largely addressed. Although some under-reporting of expenditures from grantfinanced projects may have continued, there is no audit or other evidence of its value.
6.2 Revenue outside financial reports
A
Notes:
Most revenue collection functions are centralised within TRA (see PI-19) and the non-tax revenues of MDAs are now controlled by being paid through the GePG.
6.3 Financial reports of extrabudgetary units
B
Notes:
All extra budgetary units submit annual financial reports to Government; not all of these submit within three months of the end of the fiscal year but most of them do submit within 6 months.
7. Transfers to subnational governments
C+
Notes:
7.1 System for allocating transfers
D
Notes:
Horizontal allocations have been transparent in the sense of being preannounced and publicly discussed with the relevant stakeholders.
7.2 Timeliness of information on transfers
A
Notes:
The process by which LGAs receive information on their annual transfers is managed through the regular budget calendar, which is generally adhered to and provides sufficiently detailed information to allow at least 6 weeks for the budget formulation process at LGA level.
8. Performance information for service delivery
C
Notes:
8.1 Performance plans for service delivery
B
Notes:
All ministries publish annually, within the MTEF, information on the activities to be performed through their projects and recurrent spending, the anticipated outputs and the objectives.
8.2 Performance achieved for service delivery
C
Notes:
Information is published annually within the MTEF by all ministries on the outputs produced through the Development budget but, for the Recurrent Budget, reporting is at the level of activities.
8.3 Resources received by service delivery units
D
Notes:
Information on resources received by front-line service delivery units is not systematically collected and reported on an annual basis by any sector ministry.
8.4 Performance evaluation for service delivery
C
Notes:
Through the 39 performance audits of NAOT and the Health Sector PER conducted with the World Bank in 2020,
9. Public access to fiscal information
D
Notes:
9.1 Public access to fiscal information
D
Notes:
Only 3 of the 5 basic elements are made available to the public on a timely basis. Key budget documents and Quarterly Budget Execution reports are not published regularly and were not available for the year under review.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
B
Notes:
10.1 Monitoring of public corporations
C
Notes:
For 2019/20, most of the Public Corporations (76 out of 82) submitted audited annual financial reports within 9 months of fiscal year end.
10.2 Monitoring of subnational governments
A
Notes:
Audited financial statements are published for all LGAs within nine months of the end of the fiscal year.
10.3 Contingent liabilities and other fiscal risks
B
Notes:
Most significant contingent liabilities of Central Government are identified and quantified in the annual consolidated financial statements of the MoFP.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Economic analyses are conducted for some major investment projects (more than 25% of the total number). Some of these analyses were published but they were not reviewed on a systematic basis by any central entity other than the sponsoring MDA.
11.2 Investment project selection
C
Notes:
Through the process of budget scrutiny, some, indeed a majority, of the major investment projects were prioritised by the NDP and BMD prior to inclusion in the Budget. The criteria for this process were stated in the Plan and Budget Guidelines, which were publicly available.
11.3 Investment project costing
D
Notes:
The Budget documentation does not include a presentation of the total cost of major investment projects nor of their anticipated recurrent costs, in addition to the presentation ofcapital costs for the coming budget year.
11.4 Investment project monitoring
D
Notes:
Major projects are monitored by the implementing MDA; some of this information is reported in the sector MTEF.
12. Public asset management
B+
Notes:
12.1 Financial asset monitoring
A
Notes:
Government maintains a record of its holdings in all categories of financial assets, recognised at fair or market value in line with international accounting standards.
12.2 Nonfinancial asset monitoring
C
Notes:
Within GAMIS, the Government maintains a register of its holdings of non-financial assets, including information on their usage, and remaining economic life.
12.3 Transparency of asset disposal
A
Notes:
Clear procedures & rules for the transfer/ disposal of non-financial and financial assets are established in legislation and regulations. Comprehensive information on transfers/ disposals of non-financial assets is presented in the GAMD annual report, and for financial assets in the ORT Annual Report.
Notes:
13.1 Recording and reporting of debt and guarantees
B
Notes:
Records on domestic and foreign debt and guaranteed debt are complete, accurate and updated quarterly. Most information is reconciled quarterly.
13.2 Approval of debt and guarantees
B
Notes:
The GLGGA grants the Minister ofFinance exclusive responsibility toborrow, issue new debt and issueloan guarantees on behalf of the CG.GLGGA regulations provideguidance for undertaking borrowing, issuance of loan guarantees and for other debt-related transactions.
13.3 Debt management strategy
C
Notes:
The MTDS is publicly available and comprises a 5-year strategy forexisting and projected Government debt.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
C+
Notes:
14.1 Macroeconomic forecasts
A
Notes:
Macroeconomic forecasts are prepared annually for the budget year and the subsequent 4 years.
Notes:
The Government prepares forecasts of revenue, expenditure and the budget balance for the budget year and the two following fiscal years.
14.3 Macrofiscal sensitivity analysis
D
Notes:
The macro-fiscal forecasts prepared by the Government do not include a qualitative assessment of the impact of alternative macroeconomic assumptions.
Notes:
15.1 Fiscal impact of policy proposals
C
Notes:
Government prepares and presents in the Budget Speech and Budget Documents estimates of the fiscal impact in the budget year of all proposed changes in revenue and expenditure policies.
15.2 Fiscal strategy adoption
A
Notes:
Within the PBG, the Government has adopted, submitted to the Legislature and published a current fiscal strategy that includes explicit, time based quantitative fiscal targets, together with qualitative fiscal objectives for the budget year and the following two years.
15.3 Reporting on fiscal outcomes
B
Notes:
The Budget Speech and the PBG, both of which are submitted to the Legislature each year, include reviews of performance against the fiscal targets for the previous FY.
16. Medium-term perspective in expenditure budgeting
D
Notes:
16.1 Medium-term expenditure estimates
D
Notes:
Each MDA produces a detailed 3- year MTEF as part of the budgetformulation process but the MTEFis not included in the annual budgetdocumentation, which is limited to estimates of the budget year itself.
16.2 Medium-term expenditure ceilings
D
Notes:
The aggregate “budget frame” included in the Plan & Budget Guidelines, includes indicativethree-year targets for the overall fiscal strategy.
16.3 Alignment of strategic plans and medium-term budgets
C
Notes:
Medium-term strategic plans are prepared for the major sectormministries, which together comprise more than 25% by value of CG expenditure.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
Budget documents do not provide an explanation of the changes to aggregate expenditure estimates between the second year of the most recent MTEF and the first year of the new MTEF.
17. Budget preparation process
A
Notes:
Notes:
A clear budget calendar exists, supported by the Budget Act (2015) and Regulations.
17.2 Guidance on budget preparation
A
Notes:
A comprehensive budget circular – the PBG - has been issued annually to MDAs covering total budget expenditure for the full fiscal year.
17.3 Budget submission to the legislature
A
Notes:
The Executive’s Budget Proposal (EBP) has been submitted to Parliament in April in each of the last three fiscal years, in slightly more than two months before the end of the fiscal year on 30th, June.
18. Legislative scrutiny of budgets
A
Notes:
18.1 Scope of budget scrutiny
A
Notes:
Parliament reviews fiscal policies as contained in the PBG, as well as the details of planned revenue and expenditures presented in the Budget Documents.
18.2 Legislative procedures for budget scrutiny
A
Notes:
The Legislature’s procedures for scrutiny of budget proposals include specialised committees, public consultations and agreed negotiation processes. Procedures are approved in advance by theLegislature and respected.
18.3 Timing of budget approval
A
Notes:
The Legislature approved the annual budget in advance of the fiscal year in 2018, 2019 and 2020.
18.4 Rules for budget adjustment by the executive
A
Notes:
Clear rules exist in the Budget Act (2015) and Regulations for in-year budget amendments by the Executive. These are always adhered to.
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:
TRA, which is responsiblefor most Government revenue collection (88%), uses multiple channels to provide tax-payers with easy access to comprehensive information on main revenue obligations and rights, including redress procedures.
19.2 Revenue risk management
A
Notes:
TRA uses approaches that are well structured and systematic for assessing and prioritising compliance risks for all revenue streams, including large, medium and small taxpayers.
19.3 Revenue audit and investigation
C
Notes:
TRA, which is responsible for collecting most revenues, undertakes audits and fraud investigations as part of a compliance improvement plan and completes a majority (but not all) of its planned audit and fraud investigations.
19.4 Revenue arrears monitoring
C
Notes:
Based on data received from TRA the stock of arrears at end 2020/21 is 37.4% of the total revenue collections for the year, with the revenue arrears older than 12 months comprising less than 75% of total arrears.
20. Accounting for revenue
A
Notes:
20.1 Information on revenue collections
A
Notes:
PAD obtains revenue data monthly from entities collecting all central Government revenue. The information is broken down by revenue type and consolidated into a monthly report.
20.2 Transfer of revenue collections
A
Notes:
Through the GePG system, transfers to the BoT revenue account are made daily for most Government revenue.
20.3 Revenue accounts reconciliation
A
Notes:
TRA, representing most central Government revenue, undertakes a complete reconciliation of its assessments, collections, arrears and transfers to BoT as frequently as needed, including daily, using the GePG.
21. Predictability of in-year resource allocation
C
Notes:
21.1 Consolidation of cash balances
C
Notes:
GoT operates a single treasury account (STA). Most bank accounts are connected to the STA. Cash balances are consolidated on a monthly basis.
21.2 Cash forecasting and monitoring
C
Notes:
Annual cash forecasts are prepared; monthly forecasts are produced based upon updated projections of cash outflows and inflows, but do not successively update the forecast for the remaining part of the year.
21.3 Information on commitment ceilings
D
Notes:
For salaries and recurring payments predictable monthly releases take place in accordance with the budget.
21.4 Significance of in-year budget adjustments
C
Notes:
Significant in-year budget adjustments took place and were partially transparent.
Notes:
22.1 Stock of expenditure arrears
D
Notes:
The stock of expenditure arrears has exceeded 10 % in at least two of the last three completed fiscal years
22.2 Expenditure arrears monitoring
D
Notes:
Given that there is no regular in-year reporting of expenditure arrears and that they are not reconciled with accounts payable and accruals in MUSE, nor with theconsolidated annual financial statements, systematic reporting of arrears cannot be said to take place currently in Government’s consolidated financial reporting. Dimension (ii) is therefore rated a “D”.
Notes:
23.1 Integration of payroll and personnel records
A
Notes:
The approved staff list, personnel database and payroll for CG and LGAs are all integrated in the new HCMIS system and have an electronic interface with the MUSE system for processing of salary payments to ensure budget control, data consistency, and monthly reconciliation.
23.2 Management of payroll changes
B
Notes:
Changes to the personnel and payroll system are updated monthly through the new HCMIS system, generally in time for the following month’s payments.
23.3 Internal control of payroll
B
Notes:
Authority to change personnel and payroll records is restricted and results in an audit trail. Although it has not yet been possible to ensure full integrity of data, evidence suggests that data integrity is high.
Notes:
Payroll audits are undertaken byInternal audit and CAG. Also POPSMchecks on integrity of data and carries out site visits.
Notes:
24.1 Procurement monitoring
C
Notes:
Records are maintained in TANePS for the whole public sector on what has been procured, the value of procurement and who has been awarded contracts.
24.2 Procurement methods
A
Notes:
Proposed procurement methods must be stated in General Procurement Notices (GPNs) and methods cannot later be changed without a valid justification and formal approval by PPRA.
24.3 Public access to procurement information
C
Notes:
Four of the six key procurement information elements (1,2,3 & 5) are complete and accurate for BCG entities representing a majority of BCG procurement operations, and are made available to the public on a timely basis.
24.4 Procurement complaints management
A
Notes:
In 2020/21, the procurement complaints system met all six PEFA criteria for the effectiveness of an independent procurement complaint resolution mechanism.
25. Internal controls on nonsalary expenditure
C+
Notes:
25.1 Segregation of duties
B
Notes:
Segregation of duties is prescribed throughout the expenditure process and responsibilities are clearly laid down for all key steps.
25.2 Effectiveness of expenditure commitment controls
C
Notes:
Commitment control procedures do exist, which are partially effective. The existence of extensive expenditure arrears in several types of expenditure (PI-22) demonstrates that the system of commitment control cannot be considered comprehensive, nor to effectively limit commitments to projected cashavailability and approved budget allocations for most types of expenditure.
25.3 Compliance with payment rules and procedures
C
Notes:
Most payments are compliant with regular payment procedures and themajority of exceptions are properly authorized and verified.
Notes:
26.1 Coverage of internal audit
B
Notes:
The internal audit function is in place for central government entities representing most of total budgeted expenditure and for central government entities collecting all of government revenue.
26.2 Nature of audits and standards applied
C
Notes:
Internal audit activities have a primary focus on financial compliance.
26.3 Implementation of internal audits and reporting
C
Notes:
Annual audit programmes and plans exist and are submitted to IAGD. However only 77 % submitted annual reports in 2020/21.
26.4 Response to internal audits
C
Notes:
Management provides a full response for the majority of CG entities audited. However, the implementation pace is slow for some entities and many recommendations are not implemented.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
C+
Notes:
27.1 Bank account reconciliation
B
Notes:
Bank reconciliation of all active central Government accounts takes place monthly, usually before 4 weeks from the end of each month
Notes:
The absence of a suspense account facility or of any alternative organised procedure to keep track of pending postings (receipts or expenditure) is a deviation from best practice.
Notes:
A complete reconciliation of advances and imprest accounts only takes place annually within the deadline for submission of the annual financial statements from MDAs, namely three months after year’s end.
27.4 Financial data integrity processes
B
Notes:
Access to records is restricted and all changes recorded, resulting in an audit trail. There is no specific unit in charge of verifying and checking data integrity.
28. In-year budget reports
C
Notes:
28.1 Coverage and comparability of reports
C
Notes:
The coverage and classification of the published quarterly Budget Execution Reports allow direct comparison to the original budget only for the main administrative headings.
28.2 Timing of in-year budget reports
C
Notes:
Apart from the report for the first quarter, the published reports are available quarterly and issued within 8 weeks from the end of the quarter.
28.3 Accuracy of in-year budget reports
C
Notes:
There are some concerns regarding data accuracy. Data is however useful for analysis of budget execution, but on a highly aggregate level.
29. Annual financial reports
C+
Notes:
29.1 Completeness of annual financial reports
C
Notes:
Most of the desired information is contained in the annual report. However, the level of aggregation is high, details of budgets compared to outturn for votes/ ministries do not feature, and arrears are not consistently reported.
29.2 Submission of reports for external audit
B
Notes:
The consolidated financial statement for budgetary Central Government has in the past three years been received by CAG within 6 months of fiscal year end.
29.3 Accounting standards
B
Notes:
Accounting standards are applied to all financial reports and are consistent with the country’s legal framework.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
B
Notes:
CAG’s annual audit reports include results from audit of CG entities representing most total expenditures and revenues.
30.2 Submission of audit reports to the legislature
B
Notes:
Audited reports have been submitted to the National Assembly within six months from receipt of the financial statements by CAG for the last three completed fiscal years.
30.3 External audit follow-up
B
Notes:
A formal, comprehensive, and timely response was made by the Executive or the audited entities on which follow-up was expected, during the last three completed fiscal years.
30.4 Supreme Audit Institution independence
B
Notes:
The CAG has a 5-year renewable period of tenure and enjoys significant constitutional protection from removal from office.
31. Legislative scrutiny of audit reports
C+
Notes:
31.1 Timing of audit report scrutiny
C
Notes:
In the last three fiscal years, scrutiny of audit reports on annual financial reports has been completed by the legislature within 12 months from receipt of the reports.
31.2 Hearings on audit findings
A
Notes:
Over the last three completed fiscal years, in-depth hearings on the key findings in the CAG’s reports have been undertaken with all entities receiving disclaimer of opinion or adverse or qualified opinions.
31.3 Recommendations on audit by the legislature
B
Notes:
The Legislature – through the PAC – issues directives on actions to be implemented by the Executive and follows up on the implementation of these directives.
31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
The reports of the PAC are provided to the full chamber of Parliament, committee hearings are open to the public and press, and announced on the official website of the Parliament.