I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Since the variations in two of the three years covered by the assessment are between 90 and 110 percent.
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
B
Notes:
Since the variations in expenditure composition were less than 10 percent in two of the past three years. 2020 outturns deviated strongly in response to the pandemic.
2.2 Expenditure composition outturn by economic type
D
Notes:
As the variations in expenditure composition by economic classification in two of the past three years exceeded 15 percent.
2.3 Expenditure from contingency reserves
A
Notes:
Since the level of actual expenditure charged to a contingency was less than 5 percent in the past three years.
Notes:
3.1 Aggregate revenue outturn
C
Notes:
Since the actual revenue deviation in two out of the three past financial years was under 8 percent of total revenue.
3.2 Revenue composition outturn
C
Notes:
Since the variance in revenue composition in two of the past three years was lower than 15 percent.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
B
Notes:
4.1 Budget classification
B
Notes:
The budget is classified by administrative, economic, program, and the functional classification is derived from the program and organizational classifications by bridge table.
Notes:
5.1 Budget documentation
D
Notes:
Budget documentation fulfils two of four basic elements and three of the eight additional elements.
6. Central government operations outside financial reports
D+
Notes:
6.1 Expenditure outside financial reports
C
Notes:
Extra-budgetary expenditure not included in exante and ex post financial reports amounted to less than 10 percent of budgetary central government expenditure in 2020.
6.2 Revenue outside financial reports
D
Notes:
Extra-budgetary revenue not included in ex-ante and ex-post financial reports amounted to more than 10 percent of budgetary central government revenue in 2020.
6.3 Financial reports of extrabudgetary units
C
Notes:
The majority of extrabudgetary units submit financial reports within 9 months of the end of the fiscal year.
7. Transfers to subnational governments
A
Notes:
7.1 System for allocating transfers
A
Notes:
The allocation of over 90 percent on average of central government grants to LGUs is based on transparent and rules based systems.
7.2 Timeliness of information on transfers
A
Notes:
Local governments receive guidance on prospective allocations and other factors to be taken into account in preparing their budgets by 30 September each year.
8. Performance information for service delivery
D+
Notes:
8.1 Performance plans for service delivery
C
Notes:
Since information is produced annually on activities to be performed and is published for the majority of ministries.
8.2 Performance achieved for service delivery
C
Notes:
Since the information is not presented in a format that would allow for comparing results achieved against the performance indicators of planned programs and allocated funding.
8.3 Resources received by service delivery units
C
Notes:
A survey carried out in one of the last three years provides estimates of the resources received by service delivery units for at least one large ministry.
8.4 Performance evaluation for service delivery
D
Notes:
The number, institutional coverage and amount of expenditure covered by performance audits is less than required for a B score, the rating for this dimension is therefore C.
9. Public access to fiscal information
A
Notes:
9.1 Public access to fiscal information
A
Notes:
All elements assessed are published within the required timeframe.
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:
Most public corporations submit audited financial reports within 9 months of the end of the fiscal year which qualifies for score C.
10.2 Monitoring of subnational governments
C
Notes:
All subnational governments submit unaudited financial reports annually within 9 months of the close of the fiscal year, published on the individual municipality webpages.
10.3 Contingent liabilities and other fiscal risks
B
Notes:
Two of three significant contingent liabilities are reported, but there is no consolidated report including all significant contingent liabilities.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Since there are no national guidelines, and appraisals based on economic analysis are conducted for some major projects (funded from external sources).
11.2 Investment project selection
D
Notes:
Major projects are prioritized by a central entity but not on the basis of measurable criteria for selection that are rigorous and focus on economic efficiency and productivity.
11.3 Investment project costing
C
Notes:
Capital costs of major investment projects are included in each year of the medium-term budget, but recurrent costs of the project are not included in the budget documents.
11.4 Investment project monitoring
C
Notes:
The total costs and physical progress of major investment projects are monitored by the implementing government unit, but there are no standard procedures for project implementation and published annual reports address financial implementation only.
12. Public asset management
D+
Notes:
12.1 Financial asset monitoring
C
Notes:
While records of the major categories of financial assets are maintained, information on their performance is too fragmented to be considered useful for the analysis.
12.2 Nonfinancial asset monitoring
D
Notes:
There are issues reported with timeliness of information in cadaster, the only comprehensive centralized registry of immovable property, while other comprehensive asset registries are yet to be established.
12.3 Transparency of asset disposal
D
Notes:
Considering that the required information on asset disposal is highly decentralized and the information in the budget execution report limited to aggregate values.
Notes:
13.1 Recording and reporting of debt and guarantees
B
Notes:
Even though the central records are updated regularly and comprehensive statistical and management reports are publicly available, there is only formal annual reconciliation with creditors.
13.2 Approval of debt and guarantees
A
Notes:
The MoF is, de facto, the single responsible debt management entity which undertakes borrowing operations.
13.3 Debt management strategy
A
Notes:
A current, comprehensive three-year DMS is in place and its execution against the debt management objectives publicly reported, including on target ranges for various indicators.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
C
Notes:
14.1 Macroeconomic forecasts
D
Notes:
The forecast of macroeconomic indicators is included in the fiscal strategy covering the budget year and two following years, but is not reviewed by any other independent entity.
Notes:
The MoF prepares the macroeconomic forecasts, but the differences from the projects provided in the previous year’s budget are not explained and published as part of the annual budget process.
14.3 Macrofiscal sensitivity analysis
B
Notes:
Fiscal forecast scenarios based on unexpected changes in macroeconomic conditions or other external risks are being published starting from the Fiscal Strategy 2019-2021.
Notes:
15.1 Fiscal impact of policy proposals
D
Notes:
There are brief explanations of the proposed changes in revenues and expenditures, but they are not covering the next two fiscal years, and are not quantified.
15.2 Fiscal strategy adoption
A
Notes:
The fiscal strategy that includes quantitative fiscal goals and targets for the budget year and the following two years is duly adopted.
15.3 Reporting on fiscal outcomes
D
Notes:
There is no published or internal report that describes the progress made against the fiscal strategy or an explanation of the deviations from the objectives and targets set.
16. Medium-term perspective in expenditure budgeting
C
Notes:
16.1 Medium-term expenditure estimates
B
Notes:
The annual budget presents estimates of expenditure for the budget year and the two following fiscal years allocated by administrative and economic classification.
16.2 Medium-term expenditure ceilings
D
Notes:
The aggregate expenditure ceilings for the budget year and the two following fiscal years were not approved by Government before the first budget circular was issued for the 2021-23 budget.
16.3 Alignment of strategic plans and medium-term budgets
B
Notes:
Medium-term strategic plans are prepared for the majority of ministries, and include cost information.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
The budget documents do not provide any explanation of changes to expenditure estimates between the second year of the last medium-term budget and the first year of the current mediumterm budget at the aggregate level.
17. Budget preparation process
C+
Notes:
Notes:
A clear annual budget calendar exists, is generally adhered to, and allows all budgetary units at least six weeks from receipt of the budget circular.
17.2 Guidance on budget preparation
D
Notes:
The budget circular does not provide expenditure ceilings for total funds.
17.3 Budget submission to the legislature
C
Notes:
The executive has submitted the annual budget proposal to the legislature at least one month before the start of the fiscal year in two of the last three years.
18. Legislative scrutiny of budgets
B+
Notes:
18.1 Scope of budget scrutiny
A
Notes:
The legislature’s review covers fiscal policies, medium-term fiscal forecasts, and medium-term priorities as well as details of expenditure and revenue.
18.2 Legislative procedures for budget scrutiny
B
Notes:
The legislature’s procedures to review budget proposals are approved by the legislature in advance of budget hearings and are adhered to.
18.3 Timing of budget approval
A
Notes:
The legislature has approved the annual budget before the start of the year in each 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.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
C
Notes:
19.1 Rights and obligations for revenue measures
A
Notes:
Revenue collecting agencies provide comprehensive and up-to-date information of revenue rights and obligations, including redress process.
19.2 Revenue risk management
C
Notes:
Partly structured and systematic approaches are used for assessing revenue compliance risks.
19.3 Revenue audit and investigation
D
Notes:
Neither of the revenue agencies has a compliance improvement plan (PRO has plans only for some sectors). the score for the present dimension is D.
19.4 Revenue arrears monitoring
D*
Notes:
Based on the analysis and supporting evidence and given that the PRO is not able to determine the age of tax arrears and accrued interest (except for VAT), the score for the present dimension is D* due to lack of reliable data.
20. Accounting for revenue
C+
Notes:
20.1 Information on revenue collections
A
Notes:
MoF Treasury Department has daily access to revenue data broken down by type which is reported on a monthly basis.
20.2 Transfer of revenue collections
A
Notes:
All revenue payments are collected in the STA controlled by the MoF Treasury Department.
20.3 Revenue accounts reconciliation
C
Notes:
Given that revenue agencies are not reconciling data related to assessments.
21. Predictability of in-year resource allocation
A
Notes:
21.1 Consolidation of cash balances
A
Notes:
Since all BCG bank and cash balances are calculated and consolidated daily.
21.2 Cash forecasting and monitoring
A
Notes:
On basis of the frequency of updates to the annual cash forecast and the scope of information used to update it.
21.3 Information on commitment ceilings
B
Notes:
Reliable information on commitment ceilings issued to spending units that are updated monthly on a rolling basis for the following quarter.
21.4 Significance of in-year budget adjustments
A
Notes:
Despite of the significant volume of in-year adjustments caused by the pandemic, these took place twice in 2020 and have remained transparent and systematic.
22. Expenditure arrears
B+
Notes:
22.1 Stock of expenditure arrears
A
Notes:
Ratio of reported arrears at the end of the last three fiscal years against the total expenditure of under 1 percent.
22.2 Expenditure arrears monitoring
B
Notes:
Information on stock and composition of public sector arrears (including BCG entities) is prepared and published quarterly within 2 weeks from the end of the quarter but does not include age.
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
There is an indirect link between personnel and payroll databases and staff hiring is controlled by approved staff positions and available funding.
23.2 Management of payroll changes
A
Notes:
As the changes between personnel records and payroll calculations are updated monthly and in time for the next month’s payment with low presumed retroactive adjustments.
23.3 Internal control of payroll
B
Notes:
While systemic issues highlighted in SAO findings indicate a number of internal control weaknesses none are related to integrity of data which is considered high.
Notes:
SAO progressively audits more central government institutions but without the complete annual coverage of all CG salary expenditures.
Notes:
24.1 Procurement monitoring
A
Notes:
The ESPP maintains data for contracts including data on what has been procured, value of procurement and who has been awarded contracts.
24.2 Procurement methods
A
Notes:
Based on the dominant share of open procurement methods in use, the score on this dimension is A.
24.3 Public access to procurement information
A
Notes:
Every key procurement information element is complete and reliable for government units representing all procurement operations.
24.4 Procurement complaints management
A
Notes:
The procurement complaint system meets every criterion.
25. Internal controls on nonsalary expenditure
B+
Notes:
25.1 Segregation of duties
B
Notes:
There is appropriate segregation of duties with clear responsibilities in payment processing, but a number of institutions have yet to operationalize segregation of duties throughout the other steps in the expenditure process.
25.2 Effectiveness of expenditure commitment controls
B
Notes:
Considering the comprehensiveness of annual commitment controls against projections of available cash and the annual appropriation, but gaps exist in controlling alignment of multi-annual commitments with medium-term ceilings.
25.3 Compliance with payment rules and procedures
A
Notes:
Budget inspection and external audit findings did not document non-compliance with regular payment procedures or unauthorized use of exceptions.
Notes:
26.1 Coverage of internal audit
A
Notes:
Based on the reported internal audit coverage of CG revenue and expenditure of just above 90 percent of revenues and expenditures, the score assigned to this dimension is A.
26.2 Nature of audits and standards applied
B
Notes:
Considering that the focus of the internal audit ison adequacy and effectiveness of internal control with limited gains in implementing full scale qualityassurance improvement programs in line with the applicable standards.
26.3 Implementation of internal audits and reporting
C
Notes:
Considering that less than 75 percent of planned internal audits in 2020 were executed, the score for the present dimension is C.
26.4 Response to internal audits
C
Notes:
Considering that management response came within 12 months of the report being produced for under 75 percent of issued recommendations, the dimension score is C.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
B+
Notes:
27.1 Bank account reconciliation
A
Notes:
Since all budgetary central government bank accounts (90 percent by materiality) are part of the STA and are reconciled with the NBRNM daily.
Notes:
Transitional accounts - operated by the MoF Treasury Department - are reconciled and cleared the day after.
Notes:
Available information suggests quarterly reconciliation on advance accounts.
27.4 Financial data integrity processes
B
Notes:
Integrity of financial data is assured through restricted and recorded access to the TrIS which results in audit trail but there is no dedicated unit or team in charge of verifying financial data integrity.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
C
Notes:
Since coverage and classification of data in the reports allows for direct comparison on administrative and highly aggregated level of economic classification with the budget.
28.2 Timing of in-year budget reports
B
Notes:
In-year budget execution reports are prepared and published monthly, within four weeks from the end of period.
28.3 Accuracy of in-year budget reports
B
Notes:
Despite no concerns with data accuracy and monthly narrative update on budget execution, the reported expenditure is captured at payment stage only.
29. Annual financial reports
D+
Notes:
29.1 Completeness of annual financial reports
C
Notes:
The information in the government’s Final Account is limited to revenue, expenditure and cash balance for the year.
29.2 Submission of reports for external audit
A
Notes:
Based on the date of the last submitted annual financial report for audit (FY 2019).
29.3 Accounting standards
D
Notes:
While the national framework ensures consistent reporting over time, the accounting standards are not formally disclosed.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
B
Notes:
Considering the reported coverage which excludes consolidated information on assets and liabilities.
30.2 Submission of audit reports to the legislature
C
Notes:
The submission of the report for FY 2019 was more than seven months, notwithstanding that the submission was in line with the state of emergency decision.
30.3 External audit follow-up
A
Notes:
Based on clear evidence of timely and effective follow-up by the executive.
30.4 Supreme Audit Institution independence
A
Notes:
Based on the requirements met to ensure that the SAI operates independently from the executive.
31. Legislative scrutiny of audit reports
C+
Notes:
31.1 Timing of audit report scrutiny
A
Notes:
Considering the Parliamentary review of the audit report of the Final Account was completed in under 3 months from its receipt.
31.2 Hearings on audit findings
D
Notes:
As the individual audit reports are not reviewed by the Parliament.
31.3 Recommendations on audit by the legislature
D
Notes:
Considering that the requirements have not been met for all three years in the sample.
31.4 Transparency of legislative scrutiny of audit reports
A
Notes:
All hearings are publicly available.