PI-5. BUDGET DOCUMENTATION
ABOUT THE INDICATOR
This indicator assesses the comprehensiveness of the information provided in the annual budget documentation, as measured against a specified list of basic and additional elements. There is one dimension for this indicator – dimension 5.1. Budget documentation
IMPACT ON BUDGET OUTCOMES
Annual budget documentation refers to the executive’s budget proposals for the next fiscal year with supporting documents, as submitted to the legislature for scrutiny and approval. The set of documents provided by the executive should allow a complete picture of central government fiscal forecasts, budget proposals, and outturn of the current and previous fiscal years.3
Dimension 5.1. Budget documentation
DIMENSION MEASUREMENT GUIDANCE
5.1:1. Comprehensive data on expenditure and revenue estimates and outturns, as well as other fiscal aggregates (such as the level of deficit and debt), are essential for well-informed decisions on fiscal sustainability and resource allocation. Information on the budgetary implications of new policy initiatives and capital investments supports the government in prioritizing budget allocations.
5.1:2. The dimension scoring requirements refer to the number of elements that are included in the last annual budget proposals submitted to the legislature by the central government. The full specification of the information benchmark must be met to be counted in the score. The indicator relates to documentation provided to the legislature as part of the annual budget information, or in advance of the executive’s budget submission.
5.1:3. The assessment includes four basic elements of fiscal information that are considered the most important to enable the legislature and other budget decision makers to understand the government’s fiscal position. Eight additional elements of budget documentation are considered to be good practice.
The elements captured by this indicator are as follows:
- Forecast of the fiscal deficit or surplus or accrual operating result.
- Previous year’s budget outturn, presented in the same format as the budget proposal. In this element, ‘same format as the budget proposal’ means that figures should be presented and comparable at the same aggregate level or the same level of relevant detail as in the budget proposal.
- Current fiscal year’s budget presented in the same format as the budget proposal. This can be either the revised budget or the estimated outturn.
- Aggregated budget data for both revenue and expenditure according to the main heads of the classifications used, including data for the current and previous year with a detailed breakdown of revenue and expenditure estimates. (Budget classification is covered in PI-4.)
- Deficit financing, describing its anticipated composition.
- Macroeconomic assumptions, including at least estimates of GDP growth, inflation, interest rates, and the exchange rate.
- Debt stock, including details at least for the beginning of the current fiscal year presented in accordance with GFS or other comparable standard.
3 The following terminology is used: Current fiscal year (T) is the fiscal year in which the budget proposals are being prepared and usually presented. Next year (T+1) is the budget year or fiscal year for which the annual budget proposals are made. Previous year (T-1) is the last fiscal year completed. Outer years (T+2, T+3, and so on) are the fiscal years beyond the year for which the annual budget proposals are made. Outer years are relevant for the medium-term budget perspective in PI-14, PI-15, and PI-16.
PEFA Handbook Volume 1: The PEFA Assessment Process – Planning, Managing and Using PEFA