Dimension 25.2. Effectiveness of expenditure commitment controls
DIMENSION MEASUREMENT GUIDANCE
25.2:1. This dimension assesses the effectiveness of expenditure commitment controls. This process is singled out as a separate dimension of this indicator due the importance of such controls for ensuring that the government’s payment obligations remain within the limits of annual budget allocations (as revised) and within projected cash availability, thereby avoiding creation of expenditure arrears (refer to PI-22). Governments with comprehensive fiscal rules and access to well-developed debt markets may face no constraints in financing cash flow fluctuations and so may limit commitments only in relation to annual budget appropriations, whereas governments operating in different environments may need to issue commitment limits to spending agencies for
much shorter periods, based on actual cash available and robust short term forecasts, ref. PI-21.2 and 21.3.
25.2:2. Assessors need to establish if government entities have different systems of commitment control (e.g., where government is extensively decentralized) and different types of expenditure (e.g., for one-off contracts, indefinite contracts such as rent and utilities, ad hoc staff compensation/ allowances, etc.). Assessors should determine the extent to which expenditure is covered by commitment controls that effectively limit commitments to projected cash availability and approved budget allocations.
25.2:3. Comprehensive commitment controls exist when all CG entities are prevented from incurring unauthorized commitments through system controls, regulations and procedures, additional pre-commitment checking arrangements, and audit orreview arrangements that ensure compliance.
Dimension 25.2.Scoring
| Score | Minimum requirements for scores |
|---|---|
|
A |
Comprehensive expenditure commitment controls are in place and effectively limit commitments to projected cash availability and approved budget allocations |
| B |
Expenditure commitment controls are in place and effectively limit commitments to projected cash availability and approved budget allocations for most types of expenditure |
| C |
Expenditure commitment control procedures exist which provide partial coverage and are partially effective |
| D | Performance is less than required for a C score. |
Dimension 25.2. Timing, coverage and data requirements
| Time period | Coverage | Data requirements/calculation | Data sources |
|---|---|---|---|
|
At time of assessment |
CG |
|
|
Pillar Five: Predictability and Control in Budget Execution
