Jamaica 2024 (PEFA Agile Report)

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Aggregate expenditure outturn has been above the budget plan at 105.9%, 107.7%, and 103.3% for FY 2021/22, 2022/23 and 2023/24, respectively.

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Variance in expenditure outturn by administrative classification was 7.3%, 10.3% and 8.8% for 2021/22, 2022/23 and 2023/24, respectively. Major sources of the variation were mid-year reorganizations of departments and supplementary estimates to allocate new resources.

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Variation in expenditure outturn by economic type were 6.0%, 8.5% and 6.2% for 2021/22, 2022/23 and 2023/24, respectively. Major sources of this variance were mid-year increases in funding for employee compensation, adjustments to funding for debt service, and reduction in funding for capital projects.

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The GoJ maintains contingency reserves for natural disasters and for costs that will arise during the course of the year. Average contingency fund expenditure was 0.01% of total expenditures during the three-year period.

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Actual revenue was 107.9%, 106.4%, and 101.3% or the approved budget for FY 2021/22, FY 2022/23, and FY 2023/24, respectively.

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The variance in revenue composition by category was 8.8%, 10.7%, and 8.3% for FY 2021/22, FY 2022/23, and FY 2023/24, respectively.

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The chart of accounts, budget and budget execution reporting present administrative, economic, function and program classification of receipts and payments at GFS 5-digit level.

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The Budget documents fulfil nine elements, including at least three basic elements between 1-4.

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Both the use of the untied grants (under object 27) made available to budget-funded public bodies, and the use of any funds collected and retained by these bodies, are not covered by financial reports. The amount of such expenditure is at least 16% of total budget expenditure, being the value of grants and appropriation-in-aid which is included in budget estimates (but not reported) but the full extent of such expenditure cannot be estimated from the evidence available.

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The collection of revenues by some budgetary and all extrabudgetary unit, except for those recorded as appropriation-in-aid, is not included within financial reports. The amount of such expenditure cannot be estimated from the information provided.

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There is no evidence available of the ex-post financial reports of extrabudgetary units.

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Local Government (Financing and Financial Administration) Act specifies that 90% of all property taxes fees collected in each parish each month are paid to the relevant municipality. The remaining 10% of the property taxes are paid into and equalization and distributed to each Municipality based on the ‘…needs of the relevant parish upon application made to the Minister by the Municipal Corporation and after consultation by the Minister with the Municipal Corporation’.In addition, the Act specifies that 75% of license duties are distributed to each municipal corporation ‘…on the basis of the number of parochial roads in the relevant parish expressed as a percentage of the number of parochial roads in Jamaica.’ The remaining 25% is allocated on the basis of the amount paid in the respective parish.

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There is no formal budget calendar issued by the Ministry of Local Government and Community Development (MLGCD), which manages the municipal corporations budget process. For 2023-24, formal advice on transfers was provided to the municipal corporations by MLGCD on April 13, 2023, for submission of budgets by April 17, 2023. Notification of final approved allocations occurred after the commencement of the new fiscal year.

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on for service delivery (M2) D+ 8.1. Performance plans for service delivery All ministries and departments present information on objectives in the published Jamaica Annual Estimates of Expenditure and their planned activities for the budget year. While the format of the annual estimates requires ministries to present performance indicators, this is being rolled out progressively and currently only 30% of ministries (as a percentage of service delivery expenditure) presented output and outcome indicators and then only for a few of their service delivery programs in the 2024/25 Estimates of Expenditure.

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Information on the quantity of outputs produced and outcomes achieved in 2022/23 - the most recent completed financial year for which data was available at the time of the 2024/25 budget - is presented for only few programs of 30% of ministries (as percentage of total service delivery expenditure) in the 2024/25 Estimates of Expenditure. No information is provided on the activities performed in the most recently completed financial year.

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Reports on resources received by frontline service delivery units are not received centrally by the Ministries of Education and Health. Reports compiling information on resources received by service delivery units of the largest two ministries are also not prepared.

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The main source of independent evaluation of efficiency and effectiveness is the performance audits of the Auditor-General. Performance Audits have been undertaken for some ministries at least once in the last three fiscal years (i.e. Ministry of Health and Wellness, Ministry of Economic Growth and Job Creation; Ministry of Tourism; and Ministry of Local Government and Community Development). The audits are publicly available on the Auditor-General website.

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The government makes available online to the public two basic elements and three additional elements within the specified timeline

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All self-financing corporations publish audited financial statements more than 6 months after the end of the fiscal year. However, all such corporations provide unaudited financial reports to the government within 9 months.

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All subnational governments are delayed in preparing, submitting for audit and publishing their annual financial statements. All SNGs provide financial reports to the Ministry of local government but these are not consolidated or published.

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The government prepares and publishes detailed quantitative analysis of loan guarantees. Other fiscal risks are elaborated twice a year in fiscal policy papers. This includes PPPs, which represent a significant contingent liability, but these are not quantified in public reports.

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An economic analysis was conducted for the Southern Coastal Highway Project prior to funding. It was reviewed only by the implementing agency and was not published.

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None of the major projects listed were prioritized by a central agency prior to their inclusion in the budget.

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Projections of the total capital cost of major investment projects, together with a year-by-year breakdown of the capital costs for the next three years are included in the budget documents. No estimates of recurrent costs are included for the major projects, nor are life cycle costs incorporated.

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Information on implementation of major investment projects is prepared annually and incorporated in the estimates documentation submitted to the legislature. There are no standard procedures and rules for project monitoring in place.

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The Accountant General maintains a list of securities held by the government including purchase price and current value. This list is updated annually. A list of bank accounts is also available. Neither list is published.

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The National Land Agency maintains a listing of all public lands. There is no complete register of nonfinancial assets, only a partial register of assets retained by individual MDAs.

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Procedures and rules for the disposal and transfer of nonfinancial assets are established and an internal report is prepared but not provided to the legislature or public. Budget reports include information on land sales and mineral revenues. Minor revenue from sales of unserviceable stores without original cost are also reported in the estimates document.

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Domestic and foreign debt and guaranteed debt records are complete, accurate, and updated annually. Reconciliations with creditors are performed annually and areas where reconciliation requires additional information to be complete are acknowledged as part of documentation of records. Comprehensive management and statistical reports covering debt service, stock, and operations are produced monthly and publicly available.

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The Public Debt Management Act gives sole authority to issue debt to the Minister of Finance and specifies how debt is to be issued, recorded, and reported, providing guidance on undertaking debt-related transactions, loan guarantees, and monitoring transactions to a single debt management entity, the Debt Management Branch of the MoF. A debt management information system is in place that records, analyzes and reports public sector debt. There is an agreement between the MoFPS and the Bank of Jamaica for the latter to act as fiscal agent for the MoFPS in the issuance and management of domestic securities. Annual borrowing is approved by the legislature.

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The DMB of MOFPS prepares a MTDMS. The last was issued 14th February 2024 and covers the fiscal years FY2024/25 to FY2027/28. The document is publicly available on the MOFPS/DMB website. The current strategy contains a report on outcomes against the prior year strategy. Some information is provided for the evolution of the debt portfolio over the prior three years.

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Macroeconomic projections for GDP, inflation, exchange rates and interest rates for the budget and two following fiscal years are prepared by the Planning Institute of Jamaica (PIOJ) and Bank of Jamaica (BoJ). The estimates for GDP and inflation are presented in the annual FPP along with underlying assumptions.The FPP is prepared by the MoFPS (Fiscal Policy Management Branch) and presented to parliament with the budget and published on the government’s MoFPS website. The macroeconomic forecasts are updated once a year and presented in the Interim Fiscal Policy Paper that is also tabled in parliament and published each year. The PIOJ also publishes a Review of Economic Performance quarterly. The Fiscal Policy Paper is reviewed annually by the Auditor-General who produces a report entitled ‘Examination of the Components of Fiscal Policy for the relevant fiscal year. For the three most recent completed fiscal years report was submitted to the House of Parliament on March 4, 2021, February 24, 2022 and February 27, 2023.

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Fiscal forecasts including revenues (by type), aggregate expenditure and budget balance for the budget and two following fiscal years together with underlying assumptions are presented in the annual FPP submitted to parliament. Updated fiscal forecasts, again with underlying assumptions are included in the interim FPP. Both the annual and interim FPPs include an explanation of the main differences from the forecasts in the previous FPP.

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The annual Fiscal Policy Paper submitted to the legislature includes a Fiscal Risk Statement. This examines risks and implications from deviations from macroeconomic projections including economic growth, inflation, exchange rate, interest rates, natural disasters, commodity prices and wages growth as well as contingent liabilities. The fiscal risk statement also includes a fan chart and explanation of the level of uncertainty surrounding the medium-term projections for real GDP growth. However, specific fiscal scenarios based on alternative macroeconomic projections with detailed assumptions and analysis of the impact on fiscal targets are not prepared.

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The Tax Policy Division of the MoFPS is responsible for developing revenue policy proposals. It prepares a Revenue Measures document that forms part of the budget submission that includes all proposed revenue measures in the budget. This includes the fiscal impact of the proposal for the budget and two following fiscal years. For expenditure, the MoFPS sets out budget ceilings for each ministry through the Budget Call Circular. Any resources required above the ceiling are included in the budget submissions as ‘unbudgeted expenditures. There is no formal new spending request process in which ministries submit policy proposals setting out the objectives, planned results and fiscal impacts.

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The Annual FPP, submitted to the parliament and published with the budget, incorporates a Fiscal Management Strategy that includes explicit time-based quantitative goals and indicators based on legislative targets included in the Financial Administration Act for the budget year and medium term. The key target – specified in the FAA and FPP – is the attainment of a debt-to-GDP ratio of 60.0%, or lower, by the end of FY 2027/28 and a fiscal balance that supports the achievement of the debt-to GDP ratio. For 2023/24 and the medium term the FPP specifies a target for the primary fiscal balance of 5.5% of GDP. The 2023/24 FPP also references several qualitative objectives including improvements in simplicity, equity and efficiency of the revenue systems to support economic growth, commitment to fiscal discipline (in respect of declining expenditure ratio) and reduction in public debt interest.

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The FPP presents a report that describes progress against the fiscal strategy presented in the previous budget. It includes explanation of deviations from the objectives and targets set and sets out planned actions to address any deviations consistent with the requirements of the FAA.

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The Estimates of Expenditure 2024/25 present budget and two forward year estimates by administrative, economic and program classification.

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Aggregate and ministry budget ceilings for the budget year and two following fiscal years are distributed with the budget circular.

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All ministries prepare strategic plans setting out their mission, vision, results framework, goals and outcomes, national and sector objectives, and ministry objectives. This information is incorporated within the medium term program based Estimates of Expenditure 2024/25 which also presents expenditures for the budget and forward years by program and function, including recurrent and capital, for the budget and two following fiscal years.

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There is no reconciliation of the previous budget forward estimates and following budget year estimates

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A clear budget calendar exists, it is adhered to, and it allows budgetary units approximately eight weeks (about two months) to complete the detailed estimates.

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The budget circular provides clear instructions to the budgetary units on preparing the estimates, including information on their total expenditure. There is no available data on whether the Cabinet approved the budget ceiling before the call circular was issued or before the completion of the estimates by the MDAs. There is evidence that the Cabinet approved the estimates before tabling in the House of Representatives.

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Estimates presented to the legislature at least six weeks (about one and a half months) before the start of the fiscal year for all years 2023/2024, 2022/2023 and 2021/2023

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The Estimates of Revenue and Expenditure, the Fiscal Policy Paper and the Medium-Term Debt Strategy form part of the Budget documentation tabled in both houses of the Parliament annually for legislative scrutiny at least six weeks (about one and a half months) before the start of the FY.

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The Standing Order of the House of Representatives requires that the estimates presented to the House be deliberated publicly by a Standing Finance Committee on the macroeconomic issues, examine the debt management strategy, the fiscal policy paper and the Auditor General’s report on the Fiscal Policy Paper. However, there is no provision in the Standing Order or the legislative framework to support public consultation.

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Estimates were approved five weeks after being tabled in the Parliament for all three fiscal years and before the start of each fiscal year

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The rules for in-year budget adjustments by the executives are clear and are adhered to in most instances. However, the parameters set out allow for extensive administrative reallocations. Information provided by the MoFPS to quantify the value of the executive adjustments excluded the Ministries of Education and Youth and Health and Wellness, thus prohibiting a true analysis of the information. Both Ministries reported that they complete frequent virements.

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Tax Administration of Jamacia (TAJ) and Jamaica Customs Agency (JCA) publish significant material on taxpayer rights and obligations – including redress processes - and support this with extensive outreach activities.

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TAJ and JCA have a comprehensive, structured and systematic approach for assessing and prioritizing compliance risks. For TAJ, this includes an emphasis on large and medium taxpayers’ customs, while Custom focuses on specific risk areas for taxpayers of all sizes.

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Both TAJ and CJA have compliance plans which set out audit and investigation strategies and plans. Across the two entities, 88% of planned audits were completed.

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The stock of revenue arrears for TAJ and CJA combined was equivalent to 44.8%, with 36.4% being arrears aged more than 12 months.

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The Accountant General receives data, and the MoFPS prepares a detailed report, on all central government revenue (excluding some own-source revenues, which are estimated at less than 10% of total collections.

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TAJ and JCA or their agents transfer collections directly into revenue accounts controlled by the Treasury (at least daily), which are then swept into the CF accounts at least daily.

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TAJ and JCA complete reconciliations monthly within 4 weeks but for TAJ these cover only the collections and transfers to the Account-General.

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A TSA arrangement is in place which provides the Account-General’s Department with access to the balances of all funds within the structure of the TSA.

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The cash management unit within the Accountant-General’s Department prepares a cash flow forecast for the remainder of the year, which is updated daily with actual outflows.

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MDAs are able to plan and commit expenditures for the full year in advance according to the budget and monthly commitment releases.

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Significant in-year budget adjustments are frequent and partially transparent.

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The stock of expenditure arrears is not available due to poor internal reporting practices.

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The MoFPS receives and collates data on the stock, age and composition of expenditure arrears but such data is considered incomplete as some large Ministries report their arrears only sporadically.

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Payroll and HR are linked in the MyHR+, approved staff list linked to budget control, data consistent and monthly reconciliation. Information for non budgetary units not on the MYHR+ was not available for assessment.

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Required records are updated monthly, in time for the next payroll; retroactive payments are rare

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For Budgetary Central Government, the authority to change records and payroll is restricted, results in an audit trail and is adequate to ensure full integrity of data. However, there wasn’t enough evidence on extra budgetary units.

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Partial payroll audits have been undertaken within the last three completed fiscal year

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The Public Procurement Commission oversees the online GoJ Electronic Procurement Portal (GOJEP). The portal includes a contract award report that presents a live online database that records data on what has been procured, value of procurement and who has been awarded contracts. The PPS confirmed that 59% of value of contracts are managed and awarded through the system. The remaining contract awards are processed manually which are subsequently uploaded to the GOJEP portal. The database is therefore accurate and complete for all procurement methods for goods, services, and services.

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67% of contracts are awarded through competitive methods.

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The public have access to three key procurement information elements (legal and regulatory framework for procurement; bidding opportunities; contract awards) for the majority of procurement operations.

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The Public Procurement Act established a Review Board. Based on the legislation and regulations, the role of Review Board meets criterion (1) and four of the other criteria. However, at the time of the assessment the Review Board is not yet functional.

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Segregation of duties is adequately prescribed in the procedures’ manual, and responsibilities are clearly laid out.

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Expenditure commitment control procedures exist to limit commitment to projected cash availability and approved budget allocations for most types of expenditure.

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Financial irregularities across the five largest ministries reported by the Internal Auditors are less than 1 percent of estimates over the last three years

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The Internal Audit Directorate (IAD) is based in The Ministry of Finance and the Public Service (MoFPS) and has responsibility for the effectiveness and efficiency of the Internal Audit Units (IAU) across the Government of Jamaica (GOJ). Internal audit is operational for all central Government entities. Coverage is 100% of budgeted expenditure and revenue and includes all Government Ministries and departments, 34 MDAs are covered in total by 31 IAU with 31 functional Audit Committees in place. All audit plans are discussed and agreed with Audit Committees. The TAJ and the JCA are the main revenue agencies and are part of the Ministry of Finance, which is covered. The Internal audit function has its own regulations and procedures, audit documentation, and reporting. Risk based audit plans are being used, up to date and signed off and follow the IA Manual. They are actively using TeamMate+ and carry out quality reviews. They are using and following the Institute of Internal Audit (IIA) Standards. Auditors take IIA basic level exams to become an auditor – IIA and CIA professional status is encouraged.

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Internal audit activities are focused on evaluations of the adequacy and effectiveness of internal controls.The IAD establishes methodologies, provides training on risk assessment planning, and reviews all central government annual plans. The IAD internal audit manual provides guidance and format for all government internal audit departments. 31 internal audit units cover all central government activities. The IAD establishes methodology, provides training on risk assessment planning, and reviews all central government annual plans. Active quality assurance process is in place. Quality Assurance (QA) activities occur on a three-year rolling basis, further QAs can occur if requested. Adherence to IIA standards is assured through peer reviews and other quality assurance activities. Quarterly and annual reports provided for management detail audit work planned and executed in addition to compliance evaluation activities. Reports on the quality assurance activities are maintained on file by the IAD and a copy submitted to the respective entities. Surveys are used as well to judge performance and compliance, standard approach and manual, plus the introduction of TeamMate+ further supports the standard approach in line with standards. Active training is provided based on QA reviews to tackle any noncompliance issues.

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All internal audit units have an annual audit program, which is based upon a risk assessment, and details the audits to be completed within the financial year. The IAU monitors delivery against the plans and reviews reports which are issued for all completed audits, quarterly activity reports are prepared with details on all activities of the units, including status of audits and final reports with findings and management responses. Audit reports are also reviewed by the Audit Committee for each MDA on a regular basis. Most programmed audits are completed.

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Management responds to most recommendations and implementation is included in follow-up audits. Management provides partial comments on the auditors' recommendations in most cases within 12 months. Internal audit reports and findings are included in the audit report and in quarterly activity reports of each internal audit unit. In most cases appropriate action to implement them where necessary is carried out. For recommendations where responses are not provided, partially provided and/or implementation is unsatisfactory, the Audit Committee will follow up the recommendations and call in relevant officers. The Audit Committees are active and add to the follow-up process and implementation of recommendations. Each IAU has a detailed spreadsheet of all recommendations, which are ranked and monitored, recommendations are tracked, reports are shared with Audit Committees and with IAD. All recommendations are now included in TeamMate+ and allocated status, these are all followed up annually (not all IAU have fully implemented TeamMate+ at this time).

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Treasury accounts are largely reconciled within six weeks; the Auditor General cited backlogged audits across line ministries in the 2023 report and MOHW and MoEY have reported back-logged reconciliations.

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N/A

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Advance accounts are reconciled monthly and advanced cleared in a timely

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Access and changes to records are generally restricted and result in an audit trail, but there are no available dedicated operational bodies, units, or teams in charge of verifying the integrity of financial data.

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In-year budget reports are prepared with a comparison to the original budget. The document covers all classification levels.

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Budget execution reports are prepared monthly within four weeks from the end of the month.

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In-year budget execution reports include expenditures captured at the payment stage, there are no material concerns they include commitments. No supporting budget analysis.

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Annual financial reports for budgetary central government include information on revenue, expenditure and cash balances and are comparable with the Estimates. They do not include financial assets or liabilities, and no statements of guarantee and long-term obligations exist.

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The most recent available statement presented for audit under the FAA Act 24(H) was statement “C’ for FY 2021-2022. It was presented for audit more than six months after the close of the FY. The other elements have not been submitted for audit. Performance is less than required for a C score.

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The accounting standards applied to the Annual Financial Statements comply with the country’s legal framework, and the standard is disclosed in the annual financial reports for the budgetary central government.

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External audit applies the International Standards of Supreme Audit Institutions (ISSAI) – the INTOSAI standards on auditing and has adopted and complies with the INTOSAI Code of Ethics. The Auditor General is ACCA and ICA certified (FCCA, FCA, CISA). Audit reports of central government entities represent most expenditure and revenue and have been audited using ISSAIs during the last three completed fiscal years. The audits have highlighted relevant material issues and systemic and control risks. It must be noted that the AuGD have complied with the requirements under the GoJs legislative and constitutional frameworks.

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The annual reports for past three completed years (2021.2022 & 2023) submitted to Legislature within 6-9 months. Dates confirmed with Parliament, Annual Report covering all audit work submitted in December of each year.

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Formal responses to audit reports and management letters are provided by Ministers and to the MoF. During these exit meetings, the audit findings are discussed, discussions held whether or not they accept the findings and the recommendations, what will be done to address the findings, by whom and by what date. This is then followed up with a letter requesting a response. Responses are provided. This process has been in place for some time and covers past three years. PAC is very active, and recommendations and actions taken are discussed and documented. Minutes provided showing discussion and action on recommendations.

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The AuGD operates independently from the executive, ensured through the procedures for appointment and removal of the Head of the SAI as well as the execution of the SAI’s budget. The SAI has unrestricted and timely access to the majority of the requested records, documentation and information. They are not subject to direction In the exercise of his/her functions under the provisions of Section 122 (subsections 1 and 2) of the 2, the Auditor General shall not be subject to the direction or control of any other person or authority. The rights and powers of the Auditor General are as stated in the Financial Administration and Audit Act Section 25 (subsection 3). The budget is approved by the Legislative Assembly as part of the normal budget process.

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Annual audit reports submitted as one document to Parliament, document is then laid on table, and automatically referred to the PAC. The report is then discussed at the next PAC session, full debate and hearing held. Minutes of the PAC and Report are then sent to Parliament and a further debate is then held on the findings of the PAC. Past three years the Annual Reports laid on the table in December. The PAC has convened when the House sits and the first of its meeting has been 2 – 3 months after the receipt of the AuGD’s report.

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PAC hearings are held on regular basis and timely, officers are called to account and requested to attend, all qualified accounts require officers to be in attendance and questions are asked by the PAC Members. This is then documented in the report submitted to Parliament. The scrutiny of the PAC is centered on issues raised in the AuGD’s report. The AuGD prepares a briefing paper for the PAC on the issues so the concentration of questioning is on areas that the AuGD has identified in the annual report.

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There is clear evidence of effective and timely follow up by the executive, or the audited entity on audits for which follow-up was expected, during the last three completed fiscal years. Audit recommendations are made in two stages. The first stage is during the audit process when the audited entity reviews the draft report and has the ability to respond before the report is finalized. Once the report is finalized further follow up is conducted by the AuGD in producing the briefing papers to the PAC (see Indicator 31.2) which provide details of follow up. There are further recommendations by the PAC which the AuGD follows up on. Discussions with the AuGD indicated that it is content with the level of response and follow up

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The reports of the PAC are forwarded to the Parliament and are tabled in the House and debated. They thus become a public document through the official channels such a Hansard and laying on the table. The Press can attend meetings and report on them. The meetings are on TV and radio.