I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Aggregate expenditure out-turn was between 90% and 110% of the approved aggregate budget expenditure in at least two of the last three years.
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
C
Notes:
Variance in expenditure composition by administrative classification was less than 15% in two of the last three years.
2.2 Expenditure composition outturn by economic type
D
Notes:
Variance on economic classification was more than 15% in all of the last three years.
2.3 Expenditure from contingency reserves
A
Notes:
Actual expenditure charged to contingency vote was nil in each year.
Notes:
3.1 Aggregate revenue outturn
B
Notes:
Actual revenue was between 94% and 112% of budgeted revenue in each of the last three years.
3.2 Revenue composition outturn
D
Notes:
Variance was more than 15% in each of the last three years.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
A
Notes:
4.1 Budget classification
A
Notes:
Budget formulation, execution and reporting are based on every level of administrative, economic and functional classification us GFS/COFOG compliant classifications.
Notes:
5.1 Budget documentation
C
Notes:
Budget documentation includes all four basic elements, and two out of eight of the additional elements.
6. Central government operations outside financial reports
B
Notes:
6.1 Expenditure outside financial reports
B
Notes:
Expenditure outside government financial reports was 1.5% of total Budgetary Central Government (BCG) expenditure for FY22.
6.2 Revenue outside financial reports
B
Notes:
Revenue outside government financialreports was 2.5% of total BCG revenue for FY22.
6.3 Financial reports of extrabudgetary units
B
Notes:
Detailed financial reports of all extrabudgetary units are submitted to the government within six months of the end of fiscal year.
7. Transfers to subnational governments
A
Notes:
7.1 System for allocating transfers
A
Notes:
The horizontal allocation of all transfers from the central government to local governments(LGs) is determined by transparent and rules-based systems.
7.2 Timeliness of information on transfers
A
Notes:
The LGs receive information on their annual transfers through the Budget Call Circular with clear guidelines on how to prepare their budget. The guidelines provide clear and sufficiently detailed information to allow at least six weeks for the LGs to complete their budget planning on time.
8. Performance information for service delivery
C+
Notes:
8.1 Performance plans for service delivery
B
Notes:
Information is published annually on program objectives, key performance indicators (KPIs), and planned outputs and outcomes for mostministries, and are determined in accordancewith a defined performance management system.
8.2 Performance achieved for service delivery
D
Notes:
The quantity of output produced, outcomes achieved, and activity performed is evaluated in accordance with the defined framework, but information on achievement is not published.
8.3 Resources received by service delivery units
A
Notes:
Information on resources received by frontline service delivery units (SDUs) is recorded for all ministries in the MYRB/e-PEMS, identified by source of funds. A reportcompiling the information is available on areal-time basis.
8.4 Performance evaluation for service delivery
C
Notes:
The RAA has conducted independent evaluations in the form of performance audits on the efficiency and effectiveness of service delivery for some (four) ministries during the last three years.
9. Public access to fiscal information
B
Notes:
9.1 Public access to fiscal information
B
Notes:
Five basic elements and two additional elements are made available to the public.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
C
Notes:
10.1 Monitoring of public corporations
D
Notes:
Public corporations (PCs) produce audited financial statements and some publish them. Delays have been observed in publishing audited financial statements. While the RGoB receives financial reports from PCs, some are received late.
10.2 Monitoring of subnational governments
D
Notes:
A consolidated report on the financial position of all local governments (LGs) is published annually as part of the RAA’s annual report.
10.3 Contingent liabilities and other fiscal risks
A
Notes:
All significant contingent liabilities and other fiscal risks are reported in the National Budget Report and the AFS of the RGoB.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
D
Notes:
Implementing agencies prepare Detailed Project Reports (DPRs) or Initial Project Documents (IPDs), and also detailed feasibility studies. Although some socio-economic impacts are discussed in DPRs/IPDs, economic-analysis (i.e., cost-benefit analysis)is not done systematically. While economic analysis is done for development partner-funded projects, this does not concern most major investment projects.
11.2 Investment project selection
C
Notes:
The RGoB’s Flagship Program Guidelines include selection criteria. Likewise certain new major investment projects have guidelines that are also issued to relevant sectors. Prior to inclusion in the budget, some major investment projects are prioritized by a central entity, the GNHC, on the basis of published standard criteria (plan targets, annual targets, budget write-up format, and other aspects specified in the Budget Call Notification).
11.3 Investment project costing
D
Notes:
While projections of the total capital cost of major investment projects, together with a year-by-year breakdown of capital costs and estimates of recurrent costs for the next three years, are available at the aggregate level, project-wise are not available. Budget documents only contain capital cost projections for the forthcoming year.
11.4 Investment project monitoring
B
Notes:
The three-level monitoring is done by:site engineers; implementing agencies; and, central coordinating agencies (the erstwhile GNHC and the MoF).Monthly and quarterly progress reports are prepared and shared with stakeholders, including development partners where agreed. There is a vast corpus of rules, regulations and guidelines defining standard procedures and rules for project implementation. Implementing agencies on a regular basis monitor total costs and physical progress of projects. Information on major investment projects is published on an annual basis.
12. Public asset management
C+
Notes:
12.1 Financial asset monitoring
B
Notes:
The RGoB maintains a record of its holdings in major categories of financial assets. These are recognized at their acquisition cost or fair value. Information on the performance of major categories of financial assets is published annually in the RMA’s annual report.
12.2 Nonfinancial asset monitoring
C
Notes:
The Department of Procurement and Properties (DPP) is in the process of implementing the web-based Government Inventory Management System (GIMS) non-financial assets, including information on office equipment and inventories. The GIMS includes information on usage and age of holdings and fixed assets.
12.3 Transparency of asset disposal
C
Notes:
Procedures and rules for the transfer and disposal of all assets are established. This includes rules on the transfer and disposal of financial and non- financial assets. Information on transfers and disposals is included in the AFS presented to Parliament.
Notes:
13.1 Recording and reporting of debt and guarantees
A
Notes:
Domestic, external debt, and guaranteed debt records are complete, accurate, updated, and reconciled monthly. A comprehensive debt portfolio analysis covering debt stock, debt service, and operations are produced and published quarterly on the MoF’s website.
13.2 Approval of debt and guarantees
A
Notes:
The PFA is the primary legislation that grants authorization to borrow and issue new debt and loan guarantees to the Finance Minister, subject to approval by the Cabinet, and are made against documented transparent criteria and fiscal targets.
13.3 Debt management strategy
A
Notes:
A current Medium-Term Debt Management Strategy (MTDS) covers existing and projected government debt, with a horizon of three years, and is publicly reported. The strategy includes clear targets for domestic and external borrowing. The MTDS also includes a description of key costs and risks associated with borrowing, and a review of the previous debt strategy. Annual reporting against debt management objectives is provided to the legislature. The government’s annual plan for borrowing is consistent with the approved 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
C
Notes:
The MFCTC prepares three-year forecasts for selected macroeconomic indicators which, together with the underlying assumptions, are included in the National Budget Reports and submitted to the legislature.
Notes:
The forecast for fiscal indicators – including revenue, grants, expenditure, and financing – is prepared by the MFCTC. However, the forecast for the next two years is not included in the National Budget Report for FY 2022/23.It also does not include an explanation of the main differences from the forecasts made in the previous year budget.
14.3 Macrofiscal sensitivity analysis
C
Notes:
The government prepares for its internal use a range of fiscal forecast scenarios based on alternative macroeconomic assumptions. The National Budget Report includes a qualitative discussion of macroeconomic risks, but no discussion of forecast sensitivities.
Notes:
15.1 Fiscal impact of policy proposals
D
Notes:
The fiscal impact of any policy passed by Parliament is captured in the revenue and expenditure projections of the current fiscal year.
15.2 Fiscal strategy adoption
D
Notes:
The government has adopted and submitted to Parliament a current fiscal strategy that includes quantitative fiscal targets for the budget year. However, the proposed fiscal deficit target was not taken into consideration when drafting the FY23 budget.
15.3 Reporting on fiscal outcomes
B
Notes:
The government has submitted to Parliament, along with the annual budget, a report that describes progress made against its fiscal strategy and provides an explanation of the reasons for any deviation from the objectives and targets set.
16. Medium-term perspective in expenditure budgeting
D
Notes:
16.1 Medium-term expenditure estimates
D
Notes:
The National Budget Report for FY23 presents expenditure estimates for the budget year by administrative, economic, and functional classification, but no estimates are provided for the two following fiscal years. This was due to non-availability of 13th FYP estimates (in the past, the two outer fiscal year projections were provided).
16.2 Medium-term expenditure ceilings
D
Notes:
The government approves aggregate expenditure ceilings for the budget year and for the two following years before the Budget Call Circular is issued, but ministry ceilings are approved for the budget year only. This was not captured in FY23 due to nonavailability of 13thFYP estimates (although, in the past, the ceilings were projected).
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
Entity-level strategic plans are prepared as part of the FYPs. While medium-term budgets diverge from fixed strategic plans due to changing policies and priorities, a few expenditure policy proposals align with strategic plans.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
The budget documents provide an explanation of a few changes to expenditure estimates between the first year following the budget year of the previous medium-term budget and the estimate for the budget year of the new medium-term budget at the aggregate level.
17. Budget preparation process
C
Notes:
Notes:
A clear budget calendar exists and is substantially adhered to. It allows budget units around 10 weeks to meaningfully complete their detailed estimates.
17.2 Guidance on budget preparation
D
Notes:
The Budget Call Circular for FY23 does not specify agency-wise or functional ceilings.
17.3 Budget submission to the legislature
D
Notes:
Article 47 of the PFA, as per the Public Finance (Amendment), that states “The Minister of Finance shall present to the Parliament the Government’s Budget Appropriation Bill no later than five days preceding the budget year”. For the past three fiscal years, the budget was submitted to Parliament within one month for one year and within three weeks for two years.
18. Legislative scrutiny of budgets
B+
Notes:
18.1 Scope of budget scrutiny
B
Notes:
The legislative review of the FY22 budget included fiscal policies and aggregates for the coming years as well as details of expenditure and revenue except for medium term priorities.
18.2 Legislative procedures for budget scrutiny
B
Notes:
Parliament’s procedures for annual budget review established through the Constitution, acts and rules, and are adhered to. The procedures include internal organizational arrangements.
18.3 Timing of budget approval
A
Notes:
Parliament approved the annual budget before the start of the fiscal year for the last three years.
18.4 Rules for budget adjustment by the executive
A
Notes:
The FRR 2016 provides clear and strict rules for in-year budget adjustments by the executive, which 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 DRC, which collects most of the revenue, provides taxpayers with comprehensive information on the main revenue obligations and on their rights, including rights of redress.
19.2 Revenue risk management
B
Notes:
The DRC uses a structured and systematic approach for assessing and prioritizing compliance risks for some categories of revenue, including for large revenue payers.
19.3 Revenue audit and investigation
A
Notes:
The DRC, which collects the most revenue, undertakes audits and fraud investigations, managed and reported according to a documented compliance, and completes all planned audits and investigations.
19.4 Revenue arrears monitoring
B
Notes:
The stock of revenue arrears at the end of FY22 is calculated at 15.2% of total revenue collected for the year. All arrears are less than one year old.
20. Accounting for revenue
A
Notes:
20.1 Information on revenue collections
A
Notes:
Information on revenue collection is reported monthly to the MoF and is consolidated into a report.
20.2 Transfer of revenue collections
A
Notes:
Transfers to the Treasury are made daily.
20.3 Revenue accounts reconciliation
A
Notes:
Complete reconciliation of assessments, collections, arrears, and transfers to the Treasury is made daily, monthly and quarterly within a week of end of period.
21. Predictability of in-year resource allocation
B
Notes:
21.1 Consolidation of cash balances
D
Notes:
The balances in the Treasury Single Account (TSA) are consolidated daily. There are balances outside the TSA that are not consolidated.
21.2 Cash forecasting and monitoring
C
Notes:
A cash flow forecast is prepared for the fiscal year and updated monthly, but not based on actual cash inflows and outflows.
21.3 Information on commitment ceilings
A
Notes:
The budgetary bodies are able to plan and commit expenditure for at least six months in advance in accordance with the budgeted appropriations and cash/commitment releases.
21.4 Significance of in-year budget adjustments
A
Notes:
In-year adjustments to budget allocations are not significant (i.e., less than 5% of original budget), take place only once a year above the level of the budgetary bodies and are done in a transparent and predictable way.
Notes:
22.1 Stock of expenditure arrears
D*
Notes:
There have not been any arrears on debt servicing and salaries. In respect of works, goods and services, there is no central system of reporting of stock of arrears and hence status is not known by the MoF.
22.2 Expenditure arrears monitoring
D
Notes:
Debt is monitored centrally while salary is monitored through the Government Payroll System (GPS).A system has been prescribed for recording arrears in respect of works, goods and services at an individual unit level. However, there is no system for collation, consolidation and reporting of stock, composition or age of expenditure arrears, if any.
Notes:
23.1 Integration of payroll and personnel records
D
Notes:
The payroll and personnel records are not integrated, and periodic reconciliation between the two records is not undertaken.
23.2 Management of payroll changes
A
Notes:
The required changes to the personnel records and payroll are updated monthly. Retroactive adjustments are less than 1% of the salary expense.
23.3 Internal control of payroll
C
Notes:
Sufficient controls exist to ensure integrity of the payroll data of greatest importance.
Notes:
There is no system of annual payroll audits in the RGoB, but partial payroll audits and reviews have been undertaken within the last three fiscal years.
Notes:
24.1 Procurement monitoring
C
Notes:
About one-third of procurement is carried out through the electronic government procurement (e-GP) system. For the balance, procurement records are maintained at the agency-level. Records are accurate and complete for a majority of transactions with data on what has been procured, value of procurement, and who has been awarded contracts.
24.2 Procurement methods
B
Notes:
As per the PRR 2019, the basic method of procurement is open tender. It comprises more than 76% of total value of all contracts (e-GP and manually) awarded during FY 2021/22.
24.3 Public access to procurement information
B
Notes:
All key procurement information for national procurement is publicly available on www.egp.gov.bt, except for annual procurement statistics. Information on bidding opportunities and contract awards for tenders outside the e-GP is made available through national media and on the websites of the respective procuring entities.
24.4 Procurement complaints management
A
Notes:
The complaint resolution system meets six out of six criteria. Grievances are processed through the e-GP system and all decisions are accessible to the public.
25. Internal controls on nonsalary expenditure
A
Notes:
25.1 Segregation of duties
B
Notes:
Segregation of duties is prescribed throughout the expenditure process. Responsibilities are clearly laid down for most key steps, while further details may be needed in a few areas.
25.2 Effectiveness of expenditure commitment controls
A
Notes:
Comprehensive expenditure commitment controls are in place and effectively limit commitments to projected cash availability and approved budget allocations.
25.3 Compliance with payment rules and procedures
A
Notes:
All payments are compliant with regular payment procedures. All exceptions are properly authorized in advance and justified.
Notes:
26.1 Coverage of internal audit
B
Notes:
Internal audit is operational for central government entities representing 82% of total budgeted expenditures, and for central government entities collecting all budgeted government revenue.
26.2 Nature of audits and standards applied
B
Notes:
Internal audit activities are focused on evaluations of the adequacy and effectiveness of internal controls.A quality assurance process is in place within the internal audit function.
26.3 Implementation of internal audits and reporting
A
Notes:
Annual audit programs exist. During FY22, 92% of programmed audits were completed, as evidenced by the distribution of their reports to the appropriate parties.
26.4 Response to internal audits
B
Notes:
Management provides a partial response to audit recommendations for most entities audited, within twelve months of the report being produced.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
B+
Notes:
27.1 Bank account reconciliation
B
Notes:
Bank reconciliation for all active central government bank accounts takes place at least monthly, usually within one week from the end of each month.
Notes:
Reconciliation of suspense accounts takes place annually, within two months from the end of the year. Suspense accounts are cleared in a timely way, no later than the end of the fiscal year unless duly justified.
Notes:
Reconciliation of advance accounts takes place at least monthly, within a month from the end of each month. All advance accounts are cleared in a timely way.
27.4 Financial data integrity processes
A
Notes:
Access and changes to records is restricted and recorded, and results in an audit trail.There is an operational body, unit or team in charge of verifying financial data integrity.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
A
Notes:
The quarterly budget performance reports cover revenues, grants, loans and expenditures with comparisons between the budget and actual, including for transfers to local governments.
28.2 Timing of in-year budget reports
C
Notes:
The time for completing and issuing the quarterly budget performance reports varied during FY/22 from about three weeks to almost five week.
28.3 Accuracy of in-year budget reports
B
Notes:
The data reported are extracted from the systems (MYRB and e-PEMS) which function on real time basis. The data is reliable, useful for analysis which is done on a quarterly basis. Expenditure is captured at least at payment stage.
29. Annual financial reports
C+
Notes:
29.1 Completeness of annual financial reports
C
Notes:
The AFS cover all budgetary bodies and are prepared annually. They include a comparison with the budget and information on revenue, expenditure and cash balances, but not financial assets and liabilities.
29.2 Submission of reports for external audit
A
Notes:
The AFS are submitted for external audit within three months of the end of the fiscal year.
29.3 Accounting standards
C
Notes:
The accounting standards applied to the AFS are based on the legal framework and are disclosed in the AFS. The standards have been applied consistently over time.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
A
Notes:
Financial reports including revenue, expenditure, assets and liabilities of all central government entities have been audited using the International Standards of Supreme Audit Institutions (ISSAIs) during the last three completed fiscal years. The audits have highlighted relevant material issues and systemic and control risks.
30.2 Submission of audit reports to the legislature
C
Notes:
The AARs were submitted by the RAA to Parliament 7.8 months, 2.5 months and 2.5 months, respectively, after receipt from the MoF of the AFS for the last three fiscal years.
30.3 External audit follow-up
A
Notes:
There is clear evidence of effective and timely follow-up by the executive on audit findings and recommendations during the last three fiscal years.
30.4 Supreme Audit Institution independence
C
Notes:
The RAA operates independently from the executive, ensured through the Constitution and the Audit Act, with respect to procedures for appointment and removal of the Auditor General, planning of audit engagements, arrangements for publicizing reports, and execution of the RAA budget. The RAA also has unrestricted and timely access to records, documentation and information.
31. Legislative scrutiny of audit reports
B+
Notes:
31.1 Timing of audit report scrutiny
B
Notes:
Parliament scrutiny of the AARs was for the last three fiscal years completed within six months from receipt of the AARs from the RAA.
31.2 Hearings on audit findings
C
Notes:
Parliament PAC has undertaken in-depth hearings on key findings of audit reports, which have covered a few audited RGoB entities.
31.3 Recommendations on audit by the legislature
A
Notes:
In its review reports on the AARs, which are tabled in and deliberated on in Parliament, the PAC issues recommendations on actions to be implemented by the executive. Follow up on implementation of the recommendations is undertaken systematically.
31.4 Transparency of legislative scrutiny of audit reports
A
Notes:
All hearings are held in public, and additional field visits are also carried out. The PAC reports are tabled in joint sittings of Parliament for deliberation and consideration. The reports are published on the official website of Parliament.