I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Actual expenditure outturns deviated from the originally approved budget in the range between 89,9% and 91,6%. This indicates overestimated expenditures.
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
C
Notes:
The expenditure by function was underestimated, deviation from originally approved budget to actual revenues varied up to23.%.
2.2 Expenditure composition outturn by economic type
D
Notes:
The variance was over 20% during all three years of the assessed period.
2.3 Expenditure from contingency reserves
A
Notes:
Actual expenditure charged to a contingency vote was very low from the original budget (under 1%) for all three years of assessed period.
Notes:
3.1 Aggregate revenue outturn
A
Notes:
The aggregate revenue was close from original approved budget to the actual budget in 2019 and 2021, but in the year 2020 was overestimated. COVID-19 crisis had an impact.
3.2 Revenue composition outturn
C
Notes:
The variance in revenue composition shows moderate to high increase.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
B
Notes:
4.1 Budget classification
B
Notes:
Economic and functional classification is in accordance with GFS/COGOF standards whilst administrative/organizational classification is not.
Notes:
5.1 Budget documentation
B
Notes:
The budget documentation requirements meet each of the basic elements, and only 3 of 8 additional elements.
6. Central government operations outside financial reports
D+
Notes:
6.1 Expenditure outside financial reports
D
Notes:
Expenditure outside government financial report is 23.6% of total BCG expenditure.
6.2 Revenue outside financial reports
D
Notes:
Revenue outside government financial report is 28.1% of total BCG revenue. The revenue of EBUs is mostly transfers from central government and social security contributions.
6.3 Financial reports of extrabudgetary units
C
Notes:
Financial reports of all extrabudgetary units are submitted to the government in a timely manner, but not all financial reports are as detailed as required.
7. Transfers to subnational governments
NA
Notes:
7.1 System for allocating transfers
NA
Notes:
7.2 Timeliness of information on transfers
NA
Notes:
8. Performance information for service delivery
D+
Notes:
8.1 Performance plans for service delivery
D
Notes:
The BD Budget is still not prepared and adopted in program format and there are no other published information on measurable performance indicators of outputs and outcomes for service delivery.
8.2 Performance achieved for service delivery
D
Notes:
Individual budget users do not prepare and publish information on measurable performance indicators of outputs and outcomes for service delivery.
8.3 Resources received by service delivery units
A
Notes:
The FDBD was in regular possession of up-to-date information on funds received by all budget users in the last three completed fiscal years. At least two large departments have information on all resources received by its service delivery units.
8.4 Performance evaluation for service delivery
D
Notes:
Even if Office for the Audit of Public Administration and Institutions in the BD of BiH conducts performance audits, completed performance audit reports indicates that they are focused on specific functions or policies rather than institutions as such.
9. Public access to fiscal information
D
Notes:
9.1 Public access to fiscal information
D
Notes:
The Government makes available to the public four elements: three basic and one additional.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
D+
Notes:
10.1 Monitoring of public corporations
C
Notes:
The public corporation of BD submit their financial statements to the SAI and the Assembly.
10.2 Monitoring of subnational governments
NA
Notes:
There are no lower level governments in BD.
10.3 Contingent liabilities and other fiscal risks
D
Notes:
The contingent liabilities are not included in the annual budget execution report of the Government.
11. Public investment management
D
Notes:
11.1 Economic analysis of investment proposals
D
Notes:
There are no guidelines for the economic analysis. Feasibility studies for major projects are not made publicly available.
11.2 Investment project selection
D
Notes:
Project selection is not done by criteria which is transparent and embedded in legislature. Centralized review is not performed.
11.3 Investment project costing
C
Notes:
Project costing includes submission of total cost and expenditure to be incurred in the forthcoming period.
11.4 Investment project monitoring
D
Notes:
Implementation monitoring is not centralized. It is done at the level of the implementing unit and information is not made public.
12. Public asset management
D+
Notes:
12.1 Financial asset monitoring
C
Notes:
The government maintains a record of its holdings in all categories of financial assets, which are recognized at acquision cost. Information on the financial assets is published annually in the budget execution report but their performance (interest, dividents, loss) is not captured.
12.2 Nonfinancial asset monitoring
C
Notes:
The government maintains a register of its holdings of fixed assets and collects information on their usage.
12.3 Transparency of asset disposal
D
Notes:
Procedures and rules for the transfer or disposal of nonfinancial assets are established and clear, however information on transfers and disposals is not included in budget documents, financial reports, or other reports.
Notes:
13.1 Recording and reporting of debt and guarantees
A
Notes:
Domestic and foreign debt and guaranteed debt records are complete, accurate, updated, and reconciled monthly. Comprehensive management and statistical reports covering debt service, stock, and operations are produced at least quarterly.
13.2 Approval of debt and guarantees
A
Notes:
Primary legislation grants authorization to borrow, issue new debt, and issue loan guarantees on behalf of the central government to the BD FD. Documented policies and procedures provide guidance to borrow, issue new debt and undertake debt-related transactions.
13.3 Debt management strategy
B
Notes:
A current medium-term debt management strategy covering existing and projected government debt, with a horizon of at least three years, is publicly reported.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
D+
Notes:
14.1 Macroeconomic forecasts
C
Notes:
FDBD prepares macroeconomic forecasts for the current fiscal year and the next three years for MTEF, but that are not adopted by BD Assembly. Macroeconomic forecasts are not part of budget documentation.
Notes:
FDBD prepares fiscal forecasts for the current fiscal year and the next three years for MTEF, but that are not adopted by the Assembly. Fiscal forecasts are not part of budget documentation. The MTEF does not include an explanation of general deviations of fiscal projections between periods.
14.3 Macrofiscal sensitivity analysis
D
Notes:
There are no macro fiscal sensitivities analysis and alternative fiscal forecasts.
Notes:
15.1 Fiscal impact of policy proposals
C
Notes:
There is a description of fiscal impact of new policy proposals on the budget’s expenditure side and an explanation of the changes in policies regarding public revenue. Budget does not contain information on total and recurring cost of major investment projects.
15.2 Fiscal strategy adoption
C
Notes:
Government adopts the MTEF by the end of June for the next and following two fiscal years and sent it to Assembly. MTEF is not adopted by the Assembly.
15.3 Reporting on fiscal outcomes
D
Notes:
There is no prescribed obligation to draft separate report on progress made during the implementation of fiscal outcomes included in the MTEF. The government has not submitted to the legislature and published that report.
16. Medium-term perspective in expenditure budgeting
D+
Notes:
16.1 Medium-term expenditure estimates
D
Notes:
MTEF it is not part of the budget documentation.
16.2 Medium-term expenditure ceilings
A
Notes:
Government adopts the MTEF after which budgetary instruction number 2 is forwarded to budget users and approves budget ceilings to expenditures for individual budget users for the next budget year and following two years.
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
Only some of strategic plans have a link with projections of expenditures included in the MTEF, but the amount of expenditure linked with this strategic plans is not materially compared with total budget expenditure.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
MTEF do not explain any changes to expenditure estimates between the last.
17. Budget preparation process
C+
Notes:
Notes:
There is prescribed and clear annual budget calendar, but it is adhered to by only some of budget users.
17.2 Guidance on budget preparation
A
Notes:
There is a comprehensive and clear budget circular (Budget Instructions No. 2), which is issued to budgetary units and covering total budget expenditure for the full fiscal year.
17.3 Budget submission to the legislature
D
Notes:
In the last tree completed fiscal years were submitted to the National Assembly at the beginning of the fiscal year to which it applies.
18. Legislative scrutiny of budgets
D+
Notes:
18.1 Scope of budget scrutiny
B
Notes:
The Assembly adopts Budget which covers details of expenditure and revenue and fiscal policies.
18.2 Legislative procedures for budget scrutiny
A
Notes:
Prior to the discussion on the Proposal of the Budget in the Assembly, the Proposal is reviewed by the Budget Committee. After the Budget Proposal is submitted to the Assembly, it holds at least one public discussion on the Budget Proposal.
18.3 Timing of budget approval
D
Notes:
In the last three completed fiscal years the BD Assembly approved the annual budget after the start of the respective fiscal year.
18.4 Rules for budget adjustment by the executive
A
Notes:
There are clear legal and administrative rules that prescribe in-year amendments to the budget by the executive power without prior approval by the legislative body.
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:
TABD provide to taxpayers all legal documents, tax return formats, tax forms, instructions on the TABD website and it helps taxpayers in exercising their rights and fulfilling obligations regarding payments that are considered public revenue.
19.2 Revenue risk management
C
Notes:
The Taxation Risk Management Office has been established, but still there is no comprehensive, structural and systematic approach in determining and prioritizing risks in public revenue collection.
19.3 Revenue audit and investigation
A
Notes:
The TABD in 2021 completed all planned comprehensive audits and investigations. A basic compliance improvement plan is a part of the annual Report on the work and work program of the TABD for 2021.
19.4 Revenue arrears monitoring
D
Notes:
There is a low level of efficiency in collection of public revenue by the TABD. The stock of revenue arrears at the end of 2021 is 64,2% of the total revenue collection for the year and the revenue arrears older than 12 months are 77,7% of total revenue arrears for the year
20. Accounting for revenue
C+
Notes:
20.1 Information on revenue collections
A
Notes:
Data on collected public revenue is available daily to both the FDBD and Tax Administration.
20.2 Transfer of revenue collections
A
Notes:
The most of tax revenue is collected into bank accounts controlled by TABD and transferred daily to Treasury.
20.3 Revenue accounts reconciliation
C
Notes:
There is no reconciliation of assessments and arrears. There is reconciliation of collections and transfers to Treasury on a monthly basis.
21. Predictability of in-year resource allocation
C+
Notes:
21.1 Consolidation of cash balances
D
Notes:
Only 38% of cash balances are consolidated on a daily basis, the remaining part are consolidated monthly.
21.2 Cash forecasting and monitoring
A
Notes:
A cash flow plan is prepared by each budget user for the fiscal year and is updated monthly considering all actual inflows and outflows.
21.3 Information on commitment ceilings
C
Notes:
Information on commitment ceilings is provided for the preparation of the operational financial plans, which are adopted quarterly in BD. The budget users can spend as much as the limits approved in the adopted financial plans.
21.4 Significance of in-year budget adjustments
C
Notes:
There were three significant (17%) in-year adjustments in FY 2021. The legal framework does not impose a limit on budget adjustments.
22. Expenditure arrears
C+
Notes:
22.1 Stock of expenditure arrears
A
Notes:
There are no expenditure arrears recorded in the annual financial statement of BD in the last three years of assessment. There is no legally defined period after which an unpaid invoiced obligation is considered to be in arrears.
22.2 Expenditure arrears monitoring
C
Notes:
Due date of invoice payment is monitored by the Financial Department of BD and this information is generated at the end of the fiscal year
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
There is full documentation supporting all changes made in the payroll and the personnel records each month. Data is updated monthly and checked against the previous month’s payroll data.
23.2 Management of payroll changes
D
Notes:
Both personnel records and payroll are updated at least monthly, in time for the following month’s payments. Payment corrections data is not maintained.
23.3 Internal control of payroll
C
Notes:
The internal controls restrict the authority to change records and payroll, however it cannot be ascertained how effective these controls are with the lack of financial integrity function.
Notes:
Payroll is conducted regularly every fiscal year, weaknesses identified are consistently addressed by the Treasury to implement the audit recommendations.
Notes:
24.1 Procurement monitoring
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
24.2 Procurement methods
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
24.3 Public access to procurement information
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
24.4 Procurement complaints management
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
25. Internal controls on nonsalary expenditure
C
Notes:
25.1 Segregation of duties
C
Notes:
Segregation of duties is prescribed throughout the expenditure process.
25.2 Effectiveness of expenditure commitment controls
B
Notes:
The rules and procedures of payment enforce level of controls that limit the expenditure commitments to the approved budget allocations. The controls are manual and immaterial technical errors may occur
25.3 Compliance with payment rules and procedures
D
Notes:
All payments are reported to be compliant with regular payment procedures. The rejected payments which represent the exception to the payment rules and procedures.
Notes:
26.1 Coverage of internal audit
D
Notes:
The internal audit function is not established yet.
26.2 Nature of audits and standards applied
NA
Notes:
The internal audit function is not established yet.
26.3 Implementation of internal audits and reporting
NA
Notes:
The internal audit function is not established yet.
26.4 Response to internal audits
NA
Notes:
The internal audit function is not established yet.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
C
Notes:
27.1 Bank account reconciliation
D
Notes:
Reconciliation of all bank accounts is daily based on statements delivered from the bank for the previous day. This does not cover the extrabudgetary units that constitute 22% of the total budget expenditure of BD for FY2021.
Notes:
There are no suspense accounts.
Notes:
Advance accounts are reconciled monthly within a month.
27.4 Financial data integrity processes
D
Notes:
Access and changes to records is restricted by passwords, there is no operational unit in charge of verifying financial data integrity.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
A
Notes:
In-year reports cover data that allows comparison to the original budget, and it includes all items of budget estimate.
28.2 Timing of in-year budget reports
B
Notes:
Budget execution reports are prepared quarterly, and are issued within four weeks from the end of the period.
28.3 Accuracy of in-year budget reports
C
Notes:
Data is useful for analysis of budget execution. Expenditures are captured only at payment stages.
29. Annual financial reports
D+
Notes:
29.1 Completeness of annual financial reports
B
Notes:
Financial reports are prepared and are comparable with the classification used in the approved budget. They contain information on revenue, expenditure, financial and tangible assets, liabilities and guarantees.
29.2 Submission of reports for external audit
B
Notes:
The annual financial reports are submitted for external audit within 6 months of the end of the fiscal year.
29.3 Accounting standards
D
Notes:
National standards that are approximated to international IPSAS modified cash and accruel basis accounting standards as applied in all financial reports. The standards are not disclosed in notes.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
A
Notes:
The Audit Office has analyzed financial reports including revenues, expenditures, assets, and liabilities of Brcko Government, the extrabudgetary funds and the public enterprises for fiscal years 2017, 2018 and 2019. ISSAIs were applied consistently.
30.2 Submission of audit reports to the legislature
B
Notes:
All Annual Audit Reports were submitted to the legislature within six months from their receipt by the Supreme Audit Office for the last three completed fiscal years.
30.3 External audit follow-up
B
Notes:
There is clear evidence of a formal and comprehensive, and to some extent also timely response made by the executive or the audited entity on audits for which follow-up was expected, during the last three completed fiscal years.
30.4 Supreme Audit Institution independence
A
Notes:
The Audit Office is independent from the executive in all aspects including appointment and removal of the Chief Auditor, publishing of its report, unrestricted and timely access to records, financial and managerial autonomy. The independence in assured by law.
31. Legislative scrutiny of audit reports
C+
Notes:
31.1 Timing of audit report scrutiny
B
Notes:
The parliamentary Committee for Public Finances scrutinizes the audit reports within six months and debates them in plenary sessions (full chamber).
31.2 Hearings on audit findings
A
Notes:
In-depth interviews were held with all budget organizations that received a qualified opinion.
31.3 Recommendations on audit by the legislature
D
Notes:
The Assembly do not issue recommendations on audit to be considered by the executive. They can only endorse the recommendations issued by the Audit Office.
31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
All hearings are conducted in public. The audit reports are debated in the full chamber of the legislature. The plenary sessions are broadcasted in the media but the Committee reports are not published on the Assembly’s website.