Albania 2024

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The aggregate expenditure outturn was between 95% and 105% of budget in allthe assessed three years.

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Variance in expenditure composition by, functionalclassification was less han 10% in all of the last three years.

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Variance in expenditure composition by economic classification was less than 10 per cent in all the threeassessed years

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The actual expenditure charged to contingency vote was nil in all three years.

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Actual revenue outturn was between 97% and 106% of budget in two of the three years 2021-23.

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Variance in revenue composition was less than 10% in FY2021 and FY2022 only

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The budget classification and Chart of Accounts are based on every level of economic, administrative, and functional (and subfunctional) classification using GFS/COFOG standards and should produce information compatible with the GFS 2011 standards.

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The Budget Central Government of Albania fulfils 11 of the 12 elements

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Expenditure of active EBUs not reported cannot beconfirmed.

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Revenues of active EBUs not reported cannot beconfirmed.

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Active extrabudgetary units do not provide regularfinancial reports to GoA.

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70% of CG transfers included in municipal budgets are distributed by reference to an objective formula.

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Municipalities know the amounts they will receive for the following year at the end of October each year.

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The MTBP document produced each year for the following three years sets out the objectives of each Ministry’s programmes.

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Each line Ministry prepares an annual monitoring report on expenditure on each of its programmes.

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Responsibility for financing schools and health centres is shared between central government (CG) and municipalities, with CG meeting the costs of professional salaries and municipalities those of building maintenance and supporting staff. But information is not brought together in respect of each school or health centre.

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The Supreme Audit Institution carries out each year a range of performance audits which assess different aspects of the delivery of public services.

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The Government makes available to the public only three out of five basics although all four additional elements of the budget documentation are covered

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There are quarterly financial reports from SOEs, but few audited financial reports are published.

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Most municipalities published audited financial reports for 2023 before end-September 2024.

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Some explicit contingent liabilities are quantified and published, but coverage of fiscal risks is inadequate.

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Most major projects in course of implementation in 2023 were subject to detailed economic analysis, but none of the results have been published.

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From FY2023 major projects can only be included in the annual budget if they have satisfied all the criteria for inclusion in the National Strategic Project Pipeline (NSPP) approved each year by the Council of Ministers.

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Projections of the total capital costs of each major investment project, with the amounts allocated for the budget year and the two subsequent years, are included in each year’s budget documentation.

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Cost and physical progress of projects are monitored by the implementing agencies, and regular reports are made to MoF. Information on the implementation of major projects is published annually.

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The central government maintains and monitors major categories of financial assets

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Partial information on usage and age of tangible assets is maintained at each budget central government organisation.

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There are procedures and rules for transfer and disposal of non-financial assets and they are partially captured in the government consolidated balance sheet

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Domestic and foreign debt and guaranteed debt records are complete, accurate, updated and reconciled monthly.

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The law specifies clearly the responsible management unit for approval of debt and guarantees.

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The current Debt Management Strategy 2022-26 covers all aspects of debt management.

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The Government prepares forecasts of key macroeconomic indicators which, together with the underlying assumptions, are included in budget documentation, but forecasts are no longer reviewed independently by IMF..

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The Government prepares forecasts of the main fiscal indicators, including revenue by type, expenditure by programme, and the budget balance for the budget year and the two following years. .

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The Government prepares a range of fiscal forecast scenarios based on alternative macroeconomic assumptions.

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Expenditure programmes are projected in detail for 3 years ahead together with key performance indicators for the development of each service. The fiscal impact of revenue policy changes is shown only for the first year.

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The government has adopted, submitted to the legislature, and published time-based and quantified fiscal goals and targets.

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As part of the budget supplement documentation, there is assessment with explanation of factors leading to deviations from the approved objectives but lacks an indication of corrective actions.

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The MTBP for 2023-2025 and the annual budget 2023 include expenditure estimates for 2023, 2024, and 2025 broken down by institution, programme and function.

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The government approved detailed expenditure ceilings for MTBP 2024-2026 in April, after the first budget circular was issued in February.

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Medium-term strategic plans are prepared covering the majority of CG expenditure.

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Changes to expenditure estimates are not explained.

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The calendar was fully respected in preparing the 2024 Budget

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Both the preliminary and revised ceilings issued to spending units were approved by the Council of Ministers before being sent out by the Ministry of Finance.

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The Budgets for 2021, 2022 and 2023 were all submitted to the National Assembly before the end of October of the previous year.

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The budget for the year immediately ahead remains the main focus of discussions.

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There is a detailed examination of expenditure plans for the following year, with hearings conducted by the Economy and Finance Committee.

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The budgets for the years 2021-24 were all approved before the end of the previous year.

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The provision in the Constitution allowing the Government to impose urgent measures subject only to subsequent Parliamentary ratification through “Normative Acts” has repeatedly been used instead of presenting a revised budget in circumstances where there is no apparent emergency.

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GDT and GDC use multiple channels to provide taxpayers with easy access to comprehensive and up-to-date information. There is redress mechanism

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GDT and GDC use a structured and systematic approach for assessing compliance risks for most categories of revenue.

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GDT and GDC undertake audits and fraud investigations using a documented compliance improvement plan.

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Revenue arrears at the end of 2023 amounted to 35 per cent of 2023 collections, but arrears over 12 months old were more than 90 per cent of total arrears.

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MoF obtains revenue data at least monthly from both GDTand GDC who collect more than 90 percent of centralgovernment revenues. MoF compiles a consolidated Fiscal Report covering revenue by type and the collection period

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GDT and GDC, who are responsible for more than 90 percent of domestic revenue collection, transfer the collection daily directly to the Treasury Department.

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Both GDC and GDT, who are responsible for more than 90 percent of domestic revenue collection, undertake complete reconciliation of assessment, collection, arrears, and transfers to the Treasury Department daily.

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Cash balances on accounts in TSA exceed the cash in accounts not in TSA. They are consolidated daily and they 71% at the end of 2023. Reports on the status of accounts outside TSA are collected monthly, however most of balances outside TSA are not consolidated

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Treasury Department -prepares a cash flow forecast for the whole year and updates it based on actual cash inflows and outflows upon receipt of complete quarterly update of information.

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Budgetary units receive reliable information on monthly commitment ceilings for the whole year in January.

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Two significant (the materiality is less than 1%) budget adjustments took place in 2023 through budget rectifications approved after the event by the Parliament, with limited transparency.

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The stock of expenditure arrears at the end of each of the last three years was one per cent or less of total budget expenditure

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The annual monitoring report for FY2023, including the stock and composition of expenditures arrears, and period of origin.

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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. There is manual control of payroll system and the approved budget personnel allocations.

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The changes to the personnel records and payroll are updated at least monthly, in time for the following month’s payments. Retroactive adjustments are rare, and usually done within the next month payroll.

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Authority and basis for changes to personnel records and the payroll are clear and adequate to ensure high integrity of data.

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An element of Payroll audit is included in the annual audits of all central government bodies, but there have been no audits specifically directed at payroll issues..

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Databases or records are maintained for all contracts.

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Open competitive method is the default option by law. The tenders of noncompetitive method represent only 2 percent of the total value of all public contracts FY2023 according to annual PPA report.

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The key procurement information is made available to the public on the website of PPA and it covers legal framework, procurement plans, bidding opportunities, contract awards, resolution of complaints and annual procurement statistics

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The PPC provides clear route for complaints. The mechanism in place is electronic, transparent and user friendly. The complaints mechanism meets all six criteria

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There is appropriate segregation of duties prescribed in the rules and procedures for expenditure payment. Responsibilities are not clear for each level of authority.

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The commitments of bodies which are fully integrated in the AGFIS system are controlled automatically.

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All payments are compliant with regular payment procedures. All exceptions are properly authorized in advance and justified.

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Internal audit is operational for all Central Government entities.

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Internal audit activities are focused on evaluations of the adequacy and effectiveness of internal controls.

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Over 90 per cent of planned audits were completed in 2023, and only 15 of 7385 recommendations were not accepted.

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Management provides a partial response to audit recommendations for all entities audited.

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Daily real-time reconciliation at aggregate level.

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The suspense account is used only for revenue (transitore), Reconciliation takes place monthly, within a month from the end of each month.

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Clearance compliant with contractual agreement (IFI/donor projects). In general, this is performed on monthly basis.

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Access and changes to records is restricted and recorded, and results in audit trail.

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The mid-year review of progress in budget execution allows comparison with the original budget. But the monthly and quarterly reports are not consolidated, and so do not provide any overview of budget execution.

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Monthly reports are issuedby each Ministry within four weeks of the end of the period , but there is no consolidation

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No significant concerns over data accuracy but payments reporting not taking account of budget commitments. Analysis of performance is provided in the mid-year report.

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The Annual financial reports for budgetary central government of Albania are prepared annually and are mostly comparable with the approved budget. They contain information on revenue and expenditure

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The financial reports are submitted for external audit within 6 months as of year-end.

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The national accounting standards are in process of being approximated to IPSAS

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Audits fully meet international audit standards, but coverage is limited to revenue and expenditure in the absence of consolidated financial statements for central government

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Audit reports have been submitted to the legislature within 6 months of receipt of financial reports for the last three years.

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Formal responses are made by audited entities, but the implementation of recommendations is subject to considerable delays.

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The SAI has full in dependence from the Executive in the setting of its budget and in planning, executing and reporting its audits. and full access to information.

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The National Assembly usually concluded its work within three months of receipt of the audit reports for in all 3 years 2020-22.

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Hearings are held with representatives of MoF and SAI.

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Recommendations are addressed to Government by the National Assembly.

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Hearings about the audit report and the budget execution report are open to the public. There are no Committee reports exclusively based on the audit report on budget execution.