This indicator measures the extent to which government revenue and expenditure are reported outside central government financial reports. It contains the following three dimensions and uses the M2 (AV) method for aggregating dimension scores:

  • Dimension 6.1. Expenditure outside financial reports
  • Dimension 6.2. Revenue outside financial reports
  • Dimension 6.3. Financial reports of extrabudgetary units


Ex-post financial reports available to the government should cover all budgetary and extrabudgetary activities of central government to allow a complete picture of revenue and expenditures across every category. This will be the case if expenditure and revenue of extrabudgetary units and expenditure and revenue related to extrabudgetary activities of budgetary units are insignificant or if such revenues and expenditures are included in central government ex post financial reports.

A complete picture of revenues and expenditure is essential for aggregate fiscal discipline. A complete picture also helps ensure that resources not covered in financial reports are adequately managed in a manner consistent with government policies and procedures. It is also relevant to service delivery, where operations outside financial reports may affect the quality and quantity of services provided on behalf of government.


6:1. Entities with individual budgets not fully covered by the main budget are considered extrabudgetary in accordance with the IMF’s GFS Manual 2014.

These entities are separate units that operate under the authority or control of a central government (or in the case of a subnational government assessment, the state or local government). They may have their own revenue sources, which may be supplemented by grants (transfers) from the general budget or from other sources. Even though their budgets may be subject to approval by the legislature, extrabudgetary units have discretion over the volume and composition of their spending. Such entities may be established to carry out specific government functions, such as road construction, or the nonmarket production of health or education services. Budgetary arrangements vary widely across countries, and various terms are used to describe these entities, but they are often referred to as ‘extrabudgetary funds’ or ‘decentralized agencies’ (GFS Manual 2014, chapter 2, section 2.82).

6:2. Extrabudgetary units may also include certain public enterprises that have been legally established as public corporations but that do not meet the statistical requirement of a ‘public corporation’ because they do not charge economically significant prices (see PI-10.1). Government-owned enterprises, such as a central bank, post office, or railroad—which are often referred to as public corporations, stateowned enterprises, or parastatals in a legal sense— may be part of the general government or public sector, depending on the nature of their business and ownership (GFS Manual 2014, chapter 2, sections 2.1, 2.64, 2.65, 2.88). Sometimes such entities exist as unincorporated enterprises within government ministries. When these unincorporated enterprises produce goods and services for the market at economically significant prices and have separate sets of accounts, they are quasi-corporations and classified as public corporations (GFS Manual 2014, section 2.33). However, unincorporated enterprises owned by government units that are not quasicorporations remain integral parts of the ministries under which they are organized and, therefore, must be included in the general government sector (GFS Manual 2014, section 2.59).

6:3. Whether an entity is classified as budgetary, extrabudgetary, or a public corporation depends on


Pillar Two: Transparency of Public Finances