SNG PILLAR: INTERGOVERNMENTAL FISCAL RELATIONS
Scores by Dimension
Overall Indicator Score
HLG-1 Transfers from Higher Levels of Government
C
Notes:
HLG-1.1 Outturn from higher-levels of government
D
Notes:
Actual transfers were more than 116% of the original budget estimate in two of the last three years. In
HLG-1.2 Transfers composition outturn
D
Notes:
Difference between the original budget estimate and actual earmarked grants was greater than 15 percent in two of the last three years.
HLG-1.3 Timeliness of transfers from higher-levels of government
A
Notes:
There are established procedures for the municipality to receive transfers from high-level governments on time.
HLG-1.4 Predictability of transfers
C
Notes:
Batumi municipality receives information on the amount of distribution of VAT transfers for the budget year and the two years following.
HLG-2 Fiscal rules of monitoring of fiscal position
NU
Notes:
NU
HLG-2.1 Fiscal rules for subnational governments
NU
Notes:
NU
HLG-2.2 Debt rules for subnational governments
NU
Notes:
NU
HLG-2.3 Monitoring of subnational governments
NU
Notes:
NU
I. BUDGET RELIABILITY
Scores by Dimension
Overall Indicator Score
PI-1 Aggregate expenditure out-turn
C
Notes:
NU
PI-1.1 Aggregate expenditure out-turn
C
Notes:
Actual aggregate expenditure deviates from the original budget were between 85% and 115% in two of the last three years. In 2019 – 110.6%, in 2020 – 91.6%, and in 2021 – 118.7%.
PI-2 Expenditure composition outturn
D+
Notes:
PI-2.1 Expenditure composition outturn by function
C
Notes:
The deviation of actual and budgeted expenditures by function in 2 out of the 3 years was less than 15%.
PI-2.2 Expenditure composition outturn by economic type
D
Notes:
The deviation actual and budgeted expenditures by economic classification for in 2 out of the 3 years were more than 15%.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
According to the average of the three considered years, the actual expenditures of the reserve fund amounted to 1.1% of the total budget expenditures.
Notes:
PI-3.1 Agregate revenue outturn
D
Notes:
Deviation between budgeted revenue and actual revenues collected in all three assessment years was outside of the range of 92% and 116%.
PI-3.2 Revenue composition outturn
D
Notes:
Variance in revenue collection was more than 15% in two of the three years: 10.8% in 2019, 63.0% in 2020, and 36.2% in 2021.
II. TRANSPARENCY OF PUBLIC FINANCES
Scores by Dimension
Overall Indicator Score
PI-4 Budget Classification
A
Notes:
PI-4.1 Budget Classification
A
Notes:
Budget formulation, execution, and reporting are based on every level of economic and functional classification (10 functions) using GFS/COFOG standards.
PI-5 Budget Documentation
A
Notes:
PI-5.1 Budget Documentation
A
Notes:
Budget documentation fulfils seven out of the nine applicable elements, including the four basic elements and three additional elements.
PI-6 Subnational government operations outside financial reports
A
Notes:
PI-6.1 Expenditure outside financial reports
A
Notes:
All expenditures are included in financial reports.
PI-6.2 Revenue outside financial reports
A
Notes:
All revenues are included in financial reports.
PI-6.3 Financial reports of extrabudgetary units
NA
Notes:
There are no extrabudgetary units.
PI-7 Transfers to subnational governments
NA
Notes:
PI-7.1 System for allocating transfers
NA
Notes:
There are no subnational entities under Batumi in 2022, which has not changed since the 2018 PEFA.
PI-7.2 Timeliness of information on transfers
NA
Notes:
There are no subnational entities under Batumi in 2022, which has not changed since the 2018 PEFA.
PI-8 Performance information for service delivery
B
Notes:
PI-8.1 Performance plans for service delivery
B
Notes:
Information is annually prepared and published according to program objectives of the municipality in the budget documentation.
PI-8.2 Performance achieved for service delivery
B
Notes:
Information is provided on results of the priority programs /subprograms implemented by municipality spending units.
PI-8.3 Resources received by service delivery units
A
Notes:
Information on the resources received by the service providers at spending units is available at least annually.
PI-8.4 Performance evaluation for service delivery
D
Notes:
The municipality’s Internal Audit Unit and the Supreme Audit Office compliance audits cover services delivered by the municipality in the previous three years.
PI-9 Public access to fiscal information
C
Notes:
PI-9.1 Public access to fiscal information
C
Notes:
Out of 6 applicable elements, 4 of basic elements are available to the public.
9bis Public consultation
D+
Notes:
9bis.1 Public consultation in budget preparation
B
Notes:
Public consultation in budget preparation was conducted prior to the approval of the 2022 budget of Batumi.
9bis.2 Public consultation in the design of service delivery programs
D
Notes:
Public consultation for service delivery programs was not conducted.
9bis.3 Public consultation in investment planning
D
Notes:
Public consultation for major investment projects was not conducted.
III. MANAGEMENT OF ASSETS AND LIABILITIES
Scores by Dimension
Overall Indicator Score
PI-10 Fiscal risk reporting
C
Notes:
PI-10.1 Monitoring of public corporations
C
Notes:
The MOEs relating to the municipality of Batumi submitted audited financial statements for 2020 within nine months of the end of 2020.
PI-10.2 Monitoring of subnational governments
NA
Notes:
PI-10.3 Contingent liabilities and other fiscal risks
NA
Notes:
PI-11 Public investment management
B
Notes:
PI-11.1 Economic analysis of investment proposals
C
Notes:
Economic analyses are conducted to assess some investment projects.
PI-11.2 Investment project selection
C
Notes:
Prior to their inclusion in the budget, the major investment projects are prioritized but not on the basis of standard criteria.
PI-11.3 Investment project costing
B
Notes:
Projections of the total capital cost of investment projects for the implementing timeframe.
PI-11.4 Investment project monitoring
A
Notes:
The monitoring of cost and physical progress of investment projects are outsourced and monitored by the Supervisory Unit.
PI-12 Public asset management
B
Notes:
PI-12.1 Financial asset monitoring
B
Notes:
The municipality maintains a record of its holdings in all categories of financial assets, which are recognized at their acquisition cost and in rare cases at real (market) value.
PI-12.2 Nonfinancial asset monitoring
C
Notes:
The municipality maintains a register of its holdings of fixed assets and collects partial information on their usage and age.
PI-12.3 Transparency of asset disposal
A
Notes:
Procedures and rules for the transfer or disposal of financial and nonfinancial assets are established.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
B
Notes:
Debt records are complete, accurate, and updated when payments have been made or loans undertaken.
PI-13.2 Approval of debt and guarantees
NA
Notes:
Primary legislation grants authorization to borrow, issue new debt, and issue loan guarantees on behalf of the subnational government to a single responsible debt management entity.
PI-13.3 Debt management strategy
D
Notes:
The assessment of the municipality’s capacity to undertake and service debt is carried out by the lending agencies.
IV. POLICY-BASED FISCAL STRATEGY AND BUDGETING
Scores by Dimension
Overall Indicator Score
PI-14new Medium term budget strategy
C+
Notes:
PI-14new.1 Underlying forecasts for medium-term budget
B
Notes:
Estimates of revenue and expenditure for the budget year are based on information on transfers, revenue, and expenditure assignments and on key demographic and macroeconomic indicators.
PI-14new.2 Fiscal impact of policy proposals
NA
Notes:
In 2021, no proposals in Batumi have impacted budget revenues or expenditures.
PI-14new.3 Medium-term expenditure and revenue estimates
B
Notes:
Medium-term estimates include information on expenditures by economic, administrative, and program classification.
PI-14new.4 Consistency of budgets with previous year's estimates
D
Notes:
The budget documents do not explain any changes to expenditure estimates between the second year of the last medium-term budget.
PI-14 Macroeconomic and fiscal forecasting
NU
Notes:
NU
PI-14.1 Macroeconomic forecasts
NU
Notes:
NU
PI-14.2 Fiscal forecasts
NU
Notes:
NU
PI-14.3 Macro-fiscal sensitivity analysis
NU
Notes:
NU
Notes:
NU
PI-15.1 Fiscal impact of policy proposals
NU
Notes:
NU
PI-15.2 Fiscal strategy adoption
NU
Notes:
NU
PI-15.3 Reporting on fiscal outcomes
NU
Notes:
NU
PI-16 Medium term perspective in expenditure budgeting
NU
Notes:
NU
PI-16.1 Medium-term expenditure estimates
NU
Notes:
NU
PI-16.2 Medium-term expenditure ceilings
NU
Notes:
NU
PI-16.3 Alignment of strategic plans and medium-term budgets
NU
Notes:
NU
PI-16.4 Consistency of budgets with previous year estimates
NU
Notes:
NU
PI-17 Budget preparation process
B+
Notes:
NU
Notes:
The budget calendar is clear and adhered to. Budgetary units have more than 6 weeks from receipt of the budget circular.
PI-17.2 Guidance on budget preparation
A
Notes:
The budget circular is comprehensive and covers total expenditure for the fiscal year.
PI-17.3 Budget submission to the subnational council
C
Notes:
The municipality executive submitted the annual budget proposal six weeks before the end of the year in each of the last three fiscal years.
PI-18 Legislative scrutiny of budgets
A
Notes:
PI-18.1 Scope of budget scrutiny
A
Notes:
The Sakrebulo’s review covers fiscal policies, medium-term fiscal forecasts, and medium-term priorities as well as details of expenditure and revenue.
PI-18.2 Legislative procedures for budget scrutiny
A
Notes:
The Sakrebulo’s procedures are approved by the legislature in advance of budget hearings and are adhered to.
PI-18.3 Timing of budget approval
A
Notes:
During the last three fiscal years the Sakrebulo approved the annual budget law before the start of the fiscal year.
PI-18.4 Rules for budget adjustments 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
PI-19 Tax administration
NA
Notes:
PI-19.1 Rights and obligations for tax measures
NA
Notes:
GRS administers and collects all taxes.
PI-19.2 Property tax register and value assessment
NA
Notes:
GRS administers and collects all taxes.
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
GRS administers and collects all taxes.
PI-19.4 Tax arrears monitoring
NA
Notes:
GRS administers and collects all taxes.
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
The municipality obtains revenue data at least monthly from the data on revenues administered by Georgia Revenue Services and paid into the Treasury Single Account.
PI-20.2 Transfer of revenue collections
NA
Notes:
All revenues are transferred directly to the Treasury Single Account daily.
PI-20.3 Tax accounts reconciliation
NA
Notes:
Entities collecting most municipal revenue undertake complete reconciliation of assessments, collections, arrears and transfers to Treasury Single Account daily.
PI-21 Predictability of in-year resource allocation
B+
Notes:
PI-21.1 Consolidation of cash balances
A
Notes:
The consolidated information about all bank and cash balances is available at the municipality subaccount at the Treasury at the end of the day.
PI-21.2 Cash forecasting and monitoring
B
Notes:
A cash flow forecast is prepared annually for the fiscal year, broken down by quarter and updated quarterly on the basis of actual cash and outflows.
PI-21.3 Information on commitment ceilings
A
Notes:
Budgetary units are able to plan and commit expenditure for twelve months in advance in accordance with the budgeted appropriations.
PI-21.4 Significance of in-year budget adjustments
C
Notes:
Adjustments to budget allocations were made 4 times in 2021 and amounted to 38.6% of the original budget.
PI-22 Expenditure arrears
A
Notes:
PI-22.1 Stock of expenditure arrears
A
Notes:
The municipality reported that it did not have any expenditure arrears.
PI-22.2 Expenditure arrears monitoring
A
Notes:
The e- Treasury system allows for the recording and monitoring of arrears in real time.
Notes:
PI-23.1 Integration of payroll and personnel records
A
Notes:
The municipality maintains the personnel databases under the E-Treasury (payroll module) system that is managed by the Treasury.
PI-23.2 Management of payroll changes
A
Notes:
Records are updated monthly in time for the month’s payments.
PI-23.3 Internal control of payroll
A
Notes:
Changes to the payroll records, are retricted to only authorized persons in the municipality.
Notes:
SAO conducted an audit of the compliance of the 2019-2020 activities of the representative and executive bodies of the Batumi Municipality.
Notes:
PI-24.1 Procurement monitoring
NA
Notes:
Databases or records are maintained for all contracts including data on what has been procured, value of procurement, and who has been awarded contracts.
PI-24.2 Procurement methods
A
Notes:
As per public procurement legislation open competition above GEL 5,000 is the default method. 97% of contracts by value procured in 2021 were conducted through competitive selection.
PI-24.3 Public access to procurement information
A
Notes:
All the key procurement information is made available to the public.
PI-24.4 Procurement complaints management
A
Notes:
principles of publicity and the independence of the members of the Board.
PI-25 Internal controls on nonsalary expenditure
A
Notes:
PI-25.1 Segregation of duties
A
Notes:
Segregation of duties is prescribed throughout the expenditure process with responsibilities clearly laid out at at different levels in the PFMIS.
PI-25.2 Effectiveness of expenditure commitment controls
A
Notes:
Commitment control applies to all payments made from the Treasury Single Account.
PI-25.3 Compliance with payment rules and procedures
A
Notes:
Compliance with payment rules and procedures is very high.
Notes:
PI-26.1 Coverage of internal audit
A
Notes:
There is an Internal Audit Unit that covers the whole of the activities of Batumi.
PI-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, and they focus on high risk areas.
PI-26.3 Implementation of internal audits and reporting
A
Notes:
Annual audit programs exist, and they are monitored by the Center for Harmonization Unit at the Ministry of Finance.
PI-26.4 Response to internal audits
B
Notes:
Data supplied by management show that most of internal audit recommendations are implemented in a timely manner.
VI. ACCOUNTING AND REPORTING
Scores by Dimension
Overall Indicator Score
PI-27 Financial data integrity
A
Notes:
PI-27.1 Bank account reconciliation
A
Notes:
The Finance Department of the municipality reconciles daily all its balances with the TSA sub-accounts and other bank accounts in the National Bank of Georgia.
PI-27.2 Suspense accounts
NA
Notes:
There are no expenditure suspense accounts operated by the municipality.
PI-27.3 Advance accounts
A
Notes:
Reconciliation of advance accounts takes place monthly.
PI-27.4 Financial data integrity processes
A
Notes:
Access and changes to records is restricted and recorded, and results in an audit trail.
PI-28 In-year budget reports
B+
Notes:
PI-28.1 Coverage and comparability of reports
A
Notes:
Coverage and classification of data allows direct comparison to the original budget.
PI-28.2 Timing of in-year budget reports
A
Notes:
Consolidated budget execution reports are prepared monthly.
PI-28.3 Accuracy of in-year budget reports
B
Notes:
There are no material concerns regarding data accuracy Information on expenditure is covered at the payment stage in the e-Treasury system.
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
A
Notes:
The financial reports for the municipality are prepared annually and are comparable with the approved budget.
PI-29.2 Submission of reports for external audit
D
Notes:
Auditing by the State Audit Office is not mandatory on an annual basis.
PI-29.3 Accounting standards
B
Notes:
Municipalities are required to prepare financial statements that comply with the standards established by the Ministry of Finance which are based on international standards.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
There has not been a financial audit for the municipality during the assessment period.
PI-30.2 Submission of audit reports to the subnational council
NA
Notes:
No financial statements were submitted for audit. As such, no audit reports were submitted to the legislature.
PI-30.3 External audit follow-up
NA
Notes:
There were no external audit reports to follow up.
PI-30.4 Independence of the public audit institution in charge of subnational governments
A
Notes:
The State Audit Office is independent from the executive with respect to procedures for appointment and removal of the Auditor General.
PI-31 Legislative scrutiny of audit reports
D
Notes:
PI-31.1 Timing of audit report scrutiny
D
Notes:
The Batumi Sakrebulo did not scrutinize any audit reports during the assessment period.
PI-31.2 Hearings on audit findings
NA
Notes:
There were not any audit reports to have hearings of audit findings.
PI-31.3 Recommendations on audit by subnational council
NA
Notes:
There were not any audit reports to make related recommendations.
PI-31.4 Transparency of legislative scrutiny of audit reports
NA
Notes:
There were not any audit reports during the assessment period.