I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
D
Notes:
1.1 Aggregate expenditure outturn
D
Notes:
Actual expenditure was between 64% and 82% of budget in all three years.
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
D
Notes:
The variance was less than 15% in only one of the three years.
2.2 Expenditure composition outturn by economic type
D
Notes:
The variances were more than 15% in all three years.
2.3 Expenditure from contingency reserves
A
Notes:
The average amount charged to contingency was 0.67% of total expenditure in 2013-15.
Notes:
3.1 Aggregate revenue outturn
D
Notes:
Own source revenue was less than 92% of budget in all three years 2013-15. Despite the facts that data for 2013 - 2014 represent the pre-TAR municipality and that 2015 data is not completely comparable due to TAR, the differences are so significant that a score can be assigned with confidence.
3.2 Revenue composition outturn
D
Notes:
Variance in revenue composition exceeded 15% in all three years 2013-15.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
C
Notes:
4.1 Budget classification
C
Notes:
Scoring Method M1. The 2015 budget classifications and Chart of Accounts are based on economic and administrative classification at the GFS standard 3- digit level, although consistent comparisons between budget and out-turn require additional efforts.
Notes:
5.1 Budget documentation
B
Notes:
Budget documentation fulfils 9 elements, including all four basic elements
6. Central government operations outside financial reports
A
Notes:
6.1 Expenditure outside financial reports
A
Notes:
There is no expenditure controlled by the municipality which is not fully covered in financial repo
6.2 Revenue outside financial reports
A
Notes:
There is no revenue accruing to Fier which is not fully covered in financial reports.
6.3 Financial reports of extrabudgetary units
NA
Notes:
There are no extra-budgetary units
7. Transfers to subnational governments
NA
Notes:
Since there are no government units subordinate to the city of Fier, this Indicator is Not Applicable
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:
No plans are published at any frequency about the levels of service to be provided.
8.2 Performance achieved for service delivery
D
Notes:
Reporting of service levels achieved against targets is not yet established
8.3 Resources received by service delivery units
B
Notes:
Reports have been produced about the resources received by individual SDUs.
8.4 Performance evaluation for service delivery
D
Notes:
No evaluations have been produced by internal or external auditors, or by other independent bodies
9. Public access to fiscal information
D
Notes:
9.1 Public access to fiscal information
D
Notes:
Only one out of the five applicable basic elements are satisfied.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
A
Notes:
10.1 Monitoring of public corporations
A
Notes:
The water utility has submitted audited annual financial reports within 6 months of year-end.
10.2 Monitoring of subnational governments
NA
Notes:
Not applicable at municipal level.
10.3 Contingent liabilities and other fiscal risks
NA
Notes:
Fier has not guaranteed any borrowing by subordinate institutions, or participated in any PPP operations.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Projects are put forward to central government taking into account some analysis of the costs and the likely beneficiaries.
11.2 Investment project selection
C
Notes:
Prior to their inclusion in the budget, some of the major investment projects are prioritized by a central entity. Most projects are selected by central government through the RDF.
11.3 Investment project costing
D
Notes:
Decisions on project implementation are generally taken after municipal budgets have been set, with no information in budget documentation about the total capital costs of projects.
11.4 Investment project monitoring
C
Notes:
Project implementation is regularly monitored by the Public Works Directorate, but the reports are not published.
12. Public asset management
C
Notes:
12.1 Financial asset monitoring
D
Notes:
Data in the unpublished financial statements about revenue arrears is very uncertain.
12.2 Nonfinancial asset monitoring
C
Notes:
There is a register of fixed assets, but it is not published.
12.3 Transparency of asset disposal
B
Notes:
There are procedures regulating asset disposals, and reports to the council contain information on disposals.
Notes:
13.1 Recording and reporting of debt and guarantees
NA
Notes:
Fier has not contracted any loans.
13.2 Approval of debt and guarantees
A
Notes:
All municipal borrowing is fully controlled by MoF.
13.3 Debt management strategy
NU
Notes:
Excluded by terms of reference
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
B
Notes:
14.1 Macroeconomic forecasts
NU
Notes:
Excluded by the terms of reference for the assessment.
Notes:
The city administration prepares forecasts of fiscal indicators, including underlying assumptions, revenues (by type), aggregate expenditure, and the budget balance, for the budget year and two following fiscal years. These projections have been submitted to the Council in each of the last three years and published.
14.3 Macrofiscal sensitivity analysis
NU
Notes:
As 14.1
Notes:
15.1 Fiscal impact of policy proposals
A
Notes:
MTBF includes estimates of revenue and expenditure, taking account of any changes in policy. But the coverage is incomple
15.2 Fiscal strategy adoption
B
Notes:
Balanced budgets represent a kind of fiscal strategy. But there are no qualitative objectives associated with it.
15.3 Reporting on fiscal outcomes
D
Notes:
No explanations have been given for differences between one year’s MTBF and that for the following year.
16. Medium-term perspective in expenditure budgeting
B
Notes:
16.1 Medium-term expenditure estimates
B
Notes:
Revenue and expenditure projections for the following three years based on administrative and economic classifications are submitted to the Council.
16.2 Medium-term expenditure ceilings
A
Notes:
Ceilings for each of the three next years are issued to each administrative unit at the start of the MTBF process.
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
The unpredictability of investment financing precludes the preparation of strategic plans which can be executed over a specified time period.
16.4 Consistency of budgets with previous year’s estimates
NA
Notes:
There has as yet been no opportunity to explain changes from a previous year’s MTBF since the 2015 municipal reorganisation.
17. Budget preparation process
C+
Notes:
Notes:
There is a clear budget calendar, but administrative units have less than four weeks to prepare their final submiss
17.2 Guidance on budget preparation
A
Notes:
Expenditure ceilings are issued to administrative units at each stage of the MTBF and budget preparation process
17.3 Budget submission to the legislature
D
Notes:
For each of the 2014-16 budgets proposals have been sent to the Council one week before the plenary session which approved them.
18. Legislative scrutiny of budgets
C+
Notes:
18.1 Scope of budget scrutiny
A
Notes:
The Council considers the MTBF before the budget is submitted.
18.2 Legislative procedures for budget scrutiny
A
Notes:
Procedures are well-established, including public consultation and review by a specialist committee.
18.3 Timing of budget approval
B
Notes:
Budget has been approved before the beginning of the new fiscal in two of the last three budgets.
18.4 Rules for budget adjustment by the executive
C
Notes:
Although budgets have been adjusted in response to the provision of conditional grants for investment, RDF grants have not been included in these arrangements.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
D+
Notes:
19.1 Rights and obligations for revenue measures
B
Notes:
Tax and fee payers have ready access to information on obligations, and procedures exist for appeal
19.2 Revenue risk management
C
Notes:
The main focus of collection effort is on business taxpayers who contribute the largest share of revenue.
19.3 Revenue audit and investigation
D
Notes:
There is no systematic approach to the investigation of non-payment of households.
19.4 Revenue arrears monitoring
NR
Notes:
No data are available about the nature, amounts and ages of revenue arrears.
20. Accounting for revenue
D+
Notes:
20.1 Information on revenue collections
A
Notes:
Information is available daily about the nature and amounts of receipts, and reports are made
20.2 Transfer of revenue collections
D
Notes:
All revenue received by municipal departments is paid immediately into the city’s accounts in the Treasury system, but amounts collected by the water company, which now collects the majority of municipal revenues are paid into the Treasury account monthly.
20.3 Revenue accounts reconciliation
D
Notes:
Reconciliations do not establish total amounts outstanding or the amounts owed by individual tax and fee payers.
21. Predictability of in-year resource allocation
C+
Notes:
21.1 Consolidation of cash balances
A
Notes:
All balances are held in the city’s Treasury account.
21.2 Cash forecasting and monitoring
C
Notes:
A cash flow forecast is prepared at the beginning of the year, and may be updated to take account of the prospective availability of conditional grants but not revenue trends.
21.3 Information on commitment ceilings
D
Notes:
Administrative units have little assurance that funds will be available to meet planned expenditures.
21.4 Significance of in-year budget adjustments
C
Notes:
Budgets are adjusted to take into account the prospective availability of conditional grants.
22. Expenditure arrears
D+
Notes:
22.1 Stock of expenditure arrears
D
Notes:
The stock of expenditure arrears was more than 10% of total expenditure in two of the three years 2013-15.
22.2 Expenditure arrears monitoring
A
Notes:
Data on the stock, age, and composition of expenditure arrears is generated quarterly within four weeks of the end of each quarter.
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
Changes in the payroll are initiated by HRD on the basis of changes in personnel records, but there are no automatic links between them.
23.2 Management of payroll changes
A
Notes:
The payroll is updated monthly on instructions from HRD. There have been no retroactive adjustments.
23.3 Internal control of payroll
B
Notes:
Procedures in HRD and the Finance Directorate provide sufficient assurance of the integrity of personnel records and payroll data.
Notes:
Recent audit work by HSC and the city’s Internal Audit Department constitute partial payroll audits
Notes:
24.1 Procurement monitoring
A
Notes:
Full records are kept of all procurement contracts, including what is procured, the value, and the name of the successful contractor.
24.2 Procurement methods
A
Notes:
Nearly 88 per cent by value of 2015 contracts were placed through the use of competitive procedures.
24.3 Public access to procurement information
B
Notes:
Five of six elements of information are published.
24.4 Procurement complaints management
B
Notes:
PPC satisfies the requirement for independence and three of the other five criteria.
25. Internal controls on nonsalary expenditure
B
Notes:
25.1 Segregation of duties
B
Notes:
Appropriately provided for in accordance with the law on Financial Management and Control, although some local instructions may need review following the municipal reorganisation
25.2 Effectiveness of expenditure commitment controls
C
Notes:
Controls are in place and limit commitments to projected cash availability and approved budget provision, but the latter are not updated to reflect actual revenue performance.
25.3 Compliance with payment rules and procedures
A
Notes:
The Treasury system ensures that all payments are in accordance with established rules and procedures
Notes:
26.1 Coverage of internal audit
C
Notes:
IA is operational in all the city’s departments, but coverage in 2015 was limited. Resources need to be increased to take account of the enlarged field following the municipal reorganisation
26.2 Nature of audits and standards applied
B
Notes:
Audit meets professional standards and is focused on the operation of systems in high risk areas.
26.3 Implementation of internal audits and reporting
B
Notes:
Most planned audits are completed, with reports sent to audited units before submission to the Mayor.
26.4 Response to internal audits
B
Notes:
Most recommendations are appropriately addressed by responsible managers
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
B
Notes:
27.1 Bank account reconciliation
B
Notes:
There are monthly reconciliations between city and Treasury records.
Notes:
There are monthly reconciliations between Treasury and revenue Directorate records of individual payments.
Notes:
No use is made of advance accounts
27.4 Financial data integrity processes
D
Notes:
Many operations are carried out through unlinked IT systems to which access is not restricted, and which do not ensure adequate audit trails.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
A
Notes:
Reports are produced with the same breakdown by administrative unit and economic nature as the original budget
28.2 Timing of in-year budget reports
A
Notes:
Reports are produced within 5 working days of the end of each month.
28.3 Accuracy of in-year budget reports
C
Notes:
Payments only are covered, not commitments. There are serious concerns about data accuracy.
29. Annual financial reports
D+
Notes:
29.1 Completeness of annual financial reports
D
Notes:
Financial reports are prepared annually, and include a cash flow statement. But they do not provide for a comparison between the actual outturn and the originally approved budget. Information about financial assets and liabilities is incomplete.
29.2 Submission of reports for external audit
D
Notes:
Reports are not submitted for external audit.
29.3 Accounting standards
C
Notes:
Standards are disclosed, and applied consistently from year to year. But they are not consistent with IPSAS, and differences are not explained.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
C
Notes:
Audit coverage exceeds 50%, and international standards are observed
30.2 Submission of audit reports to the legislature
D
Notes:
HSC’s audit reports of the Municipality of Fier are not submitted to the Municipal Council.
30.3 External audit follow-up
C
Notes:
A formal response was 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
C
Notes:
The HSC has its functional and operational independence, and its Head is appointed for a 7-year term by the National Assembly on the proposal of the President of the Republic. It has unrestricted and timely access to records, documentation and information, but its budget is constrained within expenditure ceilings set by the Government.
31. Legislative scrutiny of audit reports
D
Notes:
31.1 Timing of audit report scrutiny
D
Notes:
The Council has not discussed any audit reports.
31.2 Hearings on audit findings
NA
Notes:
No hearings have taken place.
31.3 Recommendations on audit by the legislature
NA
Notes:
The Council has not discussed any audit reports.
31.4 Transparency of legislative scrutiny of audit reports
NA
Notes:
The Council has not discussed any audit reports.
NO PILLAR
Scores by Dimension
Overall Indicator Score
HLG-1 Predictability of transfers from higher level of Government
C+
Notes:
HLG-1.1 Annual deviation of actual total HLG transfers from the original total estimated amount provided by HLG to the SN entity for inclusion in the latter’s budget
B
Notes:
Total receipts were at least 90 percent of the original budget estimate in two of the last three years
HLG-1.2 Annual variance between actual and estimated transfers of earmarked grants
C
Notes:
The difference between the original budget estimate and actual earmarked grants was 10 percent or less in two of the last three year
HLG-1.3 In-year timeliness of transfers from HLG (compliance with timetables for in-year distribution of disbursements agreed within of month of the start of the SN fiscal year)
A
Notes:
A quarterly disbursement plan for unconditional grants is prepared by MoF, and implemented as scheduled. Delays in the payment of shared taxes and conditional grants were of minor significance