Dimension 17.1. Timing, coverage and data requirements
|Time period||Coverage||Data requirements/calculation||Data sources|
|Last budget submitted to the legislature||BCG.||
Dimension 17.2 Guidance on budget preparation
DIMENSION MEASUREMENT GUIDANCE
17.2:1. This dimension assesses the clarity and comprehensiveness of top-down guidance on the preparation of budget submissions. It examines the budget circular(s), or equivalent, to determine whether clear guidance on the budget process is provided, including whether expenditure ceilings or other allocation limits are set for ministries or other budgetary units or functional areas. The budget for the entire upcoming fiscal year (and relevant subsequent years for medium-term budget systems) should be covered in the guidance provided by the circular(s).
17.2:2. In order to avoid last-minute changes to budget proposals, it is important that political leadership is actively involved in setting aggregate allocations on expenditure priorities from an early stage of the budget preparation process. This should be initiated through review and approval of the ceilings in the budget circular, either by approving the budget circular or by approving a preceding proposal for aggregate ceilings—for example, in a budget outlook paper or approved medium-term fiscal outlook or framework. This dimension differs from PI
16.2, which considers only whether medium-term expenditure ceilings are set by the government. This dimension does not require medium-term expenditure ceilings for medium-term budgets, but assesses only whether annual or medium-term expenditure ceilings have been set.
17.2:4. Ceilings refers to the indicative maximum budget allocations issued to budgetary units early in the budget preparation process as the basis for preparing detailed budget proposals. The final budget allocations to individual budgetary units may subsequently be adjusted on the basis of the quality and justification of their detailed proposals. Ceilings constitute an essential element in a disciplined budget preparation process. Assessors need to determine whether the budget circular includes ceilings pre-approved by cabinet. If not, it is important to determine whether the ceilings are notified in time to budgetary units to amend their budget estimates.
17.2:5. The ceilings refer to total ministry budgets, including both capital and recurrent. It is not unusual for amounts under ceilings to move during the budget process, but the important feature examined by this indicator is the application of approved ceilings before the budget circular is issued.
PEFA Handbook Volume 1: The PEFA Assessment Process – Planning, Managing and Using PEFA