countries, governments have entered into PPPs in order to finance services to communities. While not explicitly guaranteed, such arrangements almost always generate a contingent liability for the government, should the commercial terms in the contract not be satisfied. For example, the forecast level of tolls generated from a road constructed and operated by the private sector may not be realized. Such contingencies may result in a significant and quantifiable financial risk for government and should be included in the assessment of this indicator.

10.3:2. Significant contingent liabilities are defined as those with a potential cost in excess of 0.5 percent of total BCG expenditure and for which an additional appropriation by the legislature would be required. Dimension 10.3 does not assess explicit contingent liabilities arising from public corporations or

subnational governments as they are assessed under dimensions 10.1 and 10.2 respectively. To list the significant contingent liabilities, assessors should first identify the legal framework covering contingent liabilities arising from government programs and any entity responsible, if any, for monitoring and reporting such liabilities. Then, they should select the significant ones (see above for definition).

10.3:3. Implicit contingent liabilities such as bailouts, the failure of nonguaranteed pension funds, natural disasters, armed conflicts, and other possible events pose significant risks as well. They are not legally binding and are difficult to quantify. Nevertheless, the extent of any qualitative assessment of such risks should be reported as part of the narrative for this dimension.

Dimension 10.3. Scoring

Score Minimum requirements for scores
A A report is published by central government annually that quantifies and consolidates information on all significant contingent liabilities and other fiscal risks of central government.
B Central government entities and agencies quantify most significant contingent liabilities in their financial reports.
C Central government entities and agencies quantify some significant contingent liabilities in their financial reports.
D Performance is less than required for a C score.


Dimension 10.3. Timing, coverage and data requirements

Time period Coverage Data requirements/calculation Data sources
Last completed fiscal year. CG.
  • Reports on contingent liabilities by CG and by individual CG entities.
  • Consolidated report on contingent liabilities and information on the frequency of publication.
  • Annual financial statements.
  • Financial or other reports of budgetary units.
  • MoF.


Pillar Three: Management of Assets and Liabilities