PILLAR TWO: TRANSPARENCY OF PUBLIC FINANCES
Pillar II assesses whether information on PFM is comprehensive, consistent, and accessible to users. This is achieved through comprehensive budget classification, the transparency of all government revenue and expenditure including intergovernmental transfers, published information on service delivery performance, and ready access to fiscal and budget documentation.
Transparency of information on public finances is necessary to ensure that government activities and operations are taking place within the government fiscal policy framework and are subject to adequate budget management and reporting arrangements. Transparency is an important feature that enables the external scrutiny of government policies and programs and their implementation.
Improved transparency supports the achievement of desirable budget outcomes by giving the legislature and civil society the information they need to hold the executive accountable for budget policy decisions and for the management of public funds more generally. Greater transparency enables stakeholders to examine fiscal strategy and to consider whether public resources are being allocated to the country’s important social and development priorities, and whether they are being used efficiently.
Comprehensive information is necessary to provide a complete and accurate picture of public finances, enabling decision makers and other stakeholders to make balanced and well-informed judgments. If some important information is not made available, it could lead to biased and not well-informed decisions.
Pillar II has six indicators:
- PI-4. Budget classification
- PI-5. Budget documentation
- PI-6. Central government operations outside financial reports
- PI-7. Transfers to subnational government
- PI-8. Performance information for service delivery
- PI-9. Public access to fiscal information
Pillar Two: Transparency of Public Finances