I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Total budget outturns within 100.8% and 106.3%
2. Expenditure composition outturn
C+
Notes:
2.1 Expenditure composition outturn by function
C
Notes:
Expenditures under estimated by 13%
2.2 Expenditure composition outturn by economic type
B
Notes:
The variance in expenditure composition by economic classification was 2.5% in 2019, 13.4% in 2020 and 7.3% in 2021.
2.3 Expenditure from contingency reserves
A
Notes:
Actual expenditure charged to a contingency vote was very low from the original budget, average 0.36%, for all three years.
Notes:
3.1 Aggregate revenue outturn
B
Notes:
The aggregate revenue deviated from the original approved budget to the actual budget mostly in 2020 and 2021 due to COVID-19 crisis. Certainly, the pandemic had an impact on revenue outturn.
3.2 Revenue composition outturn
B
Notes:
The variance in revenue composition shows how COVID-19 crisis had an impact on revenue oututurn especially in the social contribution and VAT tax.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
B
Notes:
4.1 Budget classification
B
Notes:
Budget preparation, execution and reporting are in accordance with IPSAS international standards. It is based on Periodical Statement about Transaction, and Harmonized Reporting Template in accordance with GFS and functional classification by COFOG.
Notes:
5.1 Budget documentation
A
Notes:
The budget documentation is comprehensive since it included each of the basic elements and the 6 additional elements.
6. Central government operations outside financial reports
C
Notes:
6.1 Expenditure outside financial reports
D
Notes:
Expenditure outside government financial reports comprises 37% of total BCG expenditure.
6.2 Revenue outside financial reports
D
Notes:
Revenue outside government financial reports is 39% of total BCG revenue. The revenue of extra budgetary units mostly consists of transfers from the central government and social security contributions.
6.3 Financial reports of extrabudgetary units
A
Notes:
Detailed financial reports of extrabudgetary units are submitted timely.
7. Transfers to subnational governments
A
Notes:
7.1 System for allocating transfers
A
Notes:
The allocation of public revenues is clearly regulated by the Law on Budget System and other laws. There are clear formulas that LSUs can use when planning their revenue.
7.2 Timeliness of information on transfers
A
Notes:
The MoF delivers the MTEF to the LSUs by the 1st of July. LSUs have enough time to prepare and adopt their budgets (more than six weeks), considering that the deadline for adopting budgets is 15th of December.
8. Performance information for service delivery
D+
Notes:
8.1 Performance plans for service delivery
D
Notes:
The RS Budget is still not prepared and adopted in program format.
8.2 Performance achieved for service delivery
D
Notes:
RS Budget is not prepared in program format, so budget users are not publishing information on provided services and achieved outcomes.
8.3 Resources received by service delivery units
A
Notes:
The MoF was in regular possession of up-to-date information on funds received by all budget users through the BPMIS information system in the last three completed fiscal years.
8.4 Performance evaluation for service delivery
D
Notes:
The RS Budget is still not prepared and adopted in program format.
9. Public access to fiscal information
B
Notes:
9.1 Public access to fiscal information
B
Notes:
The Government makes available to the public six elements: four basic and two additional.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
D+
Notes:
10.1 Monitoring of public corporations
D
Notes:
The line ministries monitor the operations of the public corporations. The audited annual financial statement of the public corporations is not captured in the annual budget report of the Government, nor were they found published for FY 2021.
10.2 Monitoring of subnational governments
C
Notes:
Reports on the financial performance of municipalities are collected every month. Only 34% of the audited annual financial statements of all subnational governments are published.
10.3 Contingent liabilities and other fiscal risks
D
Notes:
Contingent liabilities are not included in the annual budget execution report of the Government of RS.
11. Public investment management
D
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Economic analysis is conducted as part of feasibility studies for at least 25% of major investments. However, there are no national guidelines in place and analyses are not centrally reviewed.
11.2 Investment project selection
D
Notes:
PIM Order is silent on the criteria for prioritization of projects. The process of preparing Public Investment Program is detached from the budgetary process.
11.3 Investment project costing
D
Notes:
Budget does not contain information on total and recurring cost of major investment projects.
11.4 Investment project monitoring
D
Notes:
Monitoring of investments implementation does not include collection of physical progress related information, except in the case of implementing institutions which do not publish such information.
12. Public asset management
D+
Notes:
12.1 Financial asset monitoring
C
Notes:
The budget central government maintains a record of its holdings in all categories of financial assets, which are recognized at fair or market value, in line with international accounting standards.
12.2 Nonfinancial asset monitoring
C
Notes:
The government maintains a register of its holdings of fixed assets and collects information on their usage and age which is updated and published annually.
12.3 Transparency of asset disposal
D
Notes:
Procedures and rules for the transfer or disposal of nonfinancial assets are established, however information on transfers and disposals is NOT included in budget documents, financial reports, or other reports.
Notes:
13.1 Recording and reporting of debt and guarantees
A
Notes:
Domestic and foreign debt and guaranteed debt records are complete, accurate, updated, and reconciled monthly. Comprehensive management and statistical reports covering debt service.
13.2 Approval of debt and guarantees
A
Notes:
Primary legislation grants authorization to borrow, issue new debt, and issue loan guarantees on behalf of the central government to a single responsible debt management entity.
13.3 Debt management strategy
A
Notes:
The medium-term debt management strategy covering existing and projected government debt, with a horizon of at least three years, is publicly available.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
B+
Notes:
14.1 Macroeconomic forecasts
A
Notes:
MoF prepares macroeconomic forecasts for the current fiscal year and the next three years for ERP that are adopted by National Assembly.
Notes:
MoF prepares fiscal forecasts for the current fiscal year and the next three years for ERP that are adopted by National Assembly
14.3 Macrofiscal sensitivity analysis
C
Notes:
There are only qualitative assessment of the impact of alternative macroeconomic assumptions.
Notes:
15.1 Fiscal impact of policy proposals
C
Notes:
There is a description of fiscal impact of new policy proposals on the budget’s expenditure side and an explanation of the changes in policies regarding public revenue.
15.2 Fiscal strategy adoption
A
Notes:
Government adopts the MTEF by the end of June, but does not send it to the RSNA (it is not prescribed by the Budget System Law of RS), while the ERP is adopted by the RSNA typically at the end of December.
15.3 Reporting on fiscal outcomes
D
Notes:
There is no prescribed obligation to draft separate report on progress made during the implementation of fiscal outcomes included in the MTEF and ERP. The government has not submitted to the legislature and published that report.
16. Medium-term perspective in expenditure budgeting
C
Notes:
16.1 Medium-term expenditure estimates
C
Notes:
The ERP, adopted by National Assembly, defines medium-term expenditure framework with the addition of expenditure assessment for the next and following two fiscal years, but only sorted by economic and functional classification.
16.2 Medium-term expenditure ceilings
A
Notes:
Government adopts the MTEF after which budgetary instruction number 2 is forwarded to budget users and approves budget ceilings to expenditures for individual budget users for the next budget year and following two years.
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
There is no link between strategic plans and projections of expenditures included in the MTEF and ERP.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
MTEF and ERP do not explain any changes to expenditure estimates between the last.
17. Budget preparation process
B
Notes:
Notes:
There is prescribed and clear annual budget calendar, which is generally adhered by the budget users.
17.2 Guidance on budget preparation
A
Notes:
There is a comprehensive and clear budget circular (Budget Instructions No. 2), which is issued to budgetary units and covering total budget expenditure for the full fiscal year
17.3 Budget submission to the legislature
D
Notes:
In the last tree completed fiscal years were submitted to the National Assembly only two and three weeks before the start of the fiscal year
18. Legislative scrutiny of budgets
B+
Notes:
18.1 Scope of budget scrutiny
A
Notes:
The National Assembly adopts ERP which covers fiscal policies, medium-term fiscal forecasts and medium-term priorities as well as details of expenditure and revenue.
18.2 Legislative procedures for budget scrutiny
B
Notes:
Prior to the discussion on the Proposal of the Budget in the parliament, the Proposal is review by the Assembly Committees. In the last three years budget is adopted by urgent procedure, with no public discussions held.
18.3 Timing of budget approval
A
Notes:
In the last three completed fiscal years the National Assembly approved the annual budget before the start of the respective fiscal year.
18.4 Rules for budget adjustment by the executive
A
Notes:
There are clear legal and administrative rules that prescribe in-year amendments to the budget by the executive power without prior approval by the legislative body.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
B
Notes:
19.1 Rights and obligations for revenue measures
A
Notes:
RSTA provide to taxpayers all legal documents, tax return formats, tax forms, instructions on the RSTA website and it helps taxpayers in exercising their rights and fulfilling obligations regarding payments that are considered public revenue.
19.2 Revenue risk management
C
Notes:
The Risk Management Department has been established and made independent from 2020, but still there is no comprehensive, structural and systematic approach in determining and prioritizing risks in public revenue collection.
19.3 Revenue audit and investigation
A
Notes:
The RSTA in 2021 completed all planned comprehensive audits and investigations.
19.4 Revenue arrears monitoring
D
Notes:
There is a low level of efficiency in collection of public revenue by the RSTA. The stock of revenue arrears at the end of 2021 is 45,9% of the total revenue collection for the year and the revenue arrears older than 12 months.
20. Accounting for revenue
B+
Notes:
20.1 Information on revenue collections
A
Notes:
Data on collected public revenue is available daily to both the Ministry of Finance and Tax Administration.
20.2 Transfer of revenue collections
A
Notes:
All tax revenue is collected into bank accounts controlled by RSTA and transferred daily to Treasury.
20.3 Revenue accounts reconciliation
B
Notes:
Reconciliation of assessments, collections, arrears, and transfers to Treasury is done semi annually.
21. Predictability of in-year resource allocation
A
Notes:
21.1 Consolidation of cash balances
A
Notes:
All cash balances are consolidated on a daily basis.
21.2 Cash forecasting and monitoring
A
Notes:
A cash flow plan is prepared by each budget user for the fiscal year and is updated monthly considering all actual inflows and outflows.
21.3 Information on commitment ceilings
B
Notes:
Information on commitment ceilings is provided for the preparation of the operational financial plans, which are adopted quarterly in RS. The budget users can spend as much as the limits approved in the adopted financial plans.
21.4 Significance of in-year budget adjustments
A
Notes:
There were no significant in-year adjustments in FY 2021.
22. Expenditure arrears
C+
Notes:
22.1 Stock of expenditure arrears
A
Notes:
The stock of expenditure arrears is less than 2% of total expenditure in the last three completed fiscal years.
22.2 Expenditure arrears monitoring
C
Notes:
The data on the stock and composition of expenditure arrears is generated annually at the end of each fiscal year.
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
There is full documentation supporting all changes made in the payroll and the personnel records each month. Data is updated monthly and checked against the previous month’s payroll data.
23.2 Management of payroll changes
A
Notes:
Both payroll and personnel databases are integrated in the Treasury software. Retroactive adjustments are insignificant in the volume of 0.04% for the first half year of 2022.
23.3 Internal control of payroll
B
Notes:
Authority and basis for changes to personnel records and the payroll are clear and adequate to ensure high integrity of data.
Notes:
Payroll is conducted regularly every fiscal year based on documentary checks, weaknesses identified are consistently addressed by the Treasury Department to implement the audit recommendations.
Notes:
24.1 Procurement monitoring
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
24.2 Procurement methods
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
24.3 Public access to procurement information
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
24.4 Procurement complaints management
NA
Notes:
Please refer to the explanation on IBIH PI-24 assessment.
25. Internal controls on nonsalary expenditure
B
Notes:
25.1 Segregation of duties
A
Notes:
There is appropriate segregation of duties prescribed in the rules and procedures for expenditure payment, there are clear responsibilities.
25.2 Effectiveness of expenditure commitment controls
B
Notes:
The rules and procedures of payment enforce level of controls that limit the expenditure commitments to the approved budget allocations.
25.3 Compliance with payment rules and procedures
D
Notes:
All payments are reported to be in accordance with regular payment procedures. The rejected payments which represent the exception to the payment rules and procedures, however, are not monitored and evidence on their volume cannot be provided.
Notes:
26.1 Coverage of internal audit
A
Notes:
The internal audit is operational in 91% of the total budget expenditures of the central government of RS.
26.2 Nature of audits and standards applied
B
Notes:
International internal audit standards are applied. The internal audit checks the effectiveness of the internal control system and the practice of quasi quality assurance exists for all internal audit units.
26.3 Implementation of internal audits and reporting
B
Notes:
Annual audit plans exist for most internal audit units. Most of the plans are completed, as evidenced by data provided by the CHU.
26.4 Response to internal audits
C
Notes:
There is documentary evidence of management response to internal audit recommendations for all audits performed with two weeks timing of the response.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
A
Notes:
27.1 Bank account reconciliation
A
Notes:
Due to the STA system, reconciliation of all active bank accounts takes place daily at aggregate and detailed level. Reconciliation of all bank accounts is daily based on statements delivered from the bank for the previous day.
Notes:
There are no suspense accounts.
Notes:
Advance accounts are reconciled monthly within a month. All advance accounts are cleared in a timely way.
27.4 Financial data integrity processes
B
Notes:
Access and changes to records is restricted by passwords, they are recorded and they result in audit trail (enabling individual accountability), there is no operational unit in charge of verifying financial data integrity.
28. In-year budget reports
A
Notes:
28.1 Coverage and comparability of reports
A
Notes:
In-year reports cover data that allows comparison to the original budget, and it includes all items of budget estimate.
28.2 Timing of in-year budget reports
B
Notes:
Budget execution reports are prepared monthly quarterly, six-months and annually and are issued within four weeks , from the end of the period.
28.3 Accuracy of in-year budget reports
A
Notes:
There are no issues regarding data accuracy, issues are highlighted in the report and the data is useful for analysis of budget execution, which is provided in the six-month report. Expenditures are captured at both commitment and payment stages.
29. Annual financial reports
B+
Notes:
29.1 Completeness of annual financial reports
A
Notes:
Financial reports are prepared and are comparable with the classification used in the approved budget. They contain information on revenue, expenditure, financial and tangible assets, liabilities and guarantees, and a reconciled cash flow statement.
29.2 Submission of reports for external audit
B
Notes:
The annual financial reports are submitted for external audit within 4 months of the end of the fiscal year.
29.3 Accounting standards
A
Notes:
International IPSAS accrual-basis accounting standards is applied in all financial reports. The standards used are disclosed in notes.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
A
Notes:
The Supreme Audit Office has analyzed financial reports including revenues, expenditures, assets, and liabilities of all central government entities for fiscal years 2019, 2020 and 2021. ISSAIs were applied consistently.
30.2 Submission of audit reports to the legislature
B
Notes:
All Annual Audit Reports were submitted to the legislature within six months of their receipt by the Supreme Audit Office for the last three completed fiscal years.
30.3 External audit follow-up
B
Notes:
There is clear evidence of a formal and comprehensive, and to some extent also timely response made by the executive or the audited entity on audits for which follow-up was expected, during the last three completed fiscal years.
30.4 Supreme Audit Institution independence
A
Notes:
SAO is independent from the executive in all aspects including appointment and removal of the Auditor-General, publishing of its report, unrestricted and timely access to records, financial and managerial autonomy.
31. Legislative scrutiny of audit reports
D+
Notes:
31.1 Timing of audit report scrutiny
B
Notes:
The audit reports have been scrutinised by the National Assembly within four months of receipt from SAO.
31.2 Hearings on audit findings
D
Notes:
There is no evidence of hearings of audit findings.
31.3 Recommendations on audit by the legislature
D
Notes:
The National Assembly does not issue recommendations with regard to the audit findings.
31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
The Audit Committee does not issue reports on legislative scrutiny. Due to pandemic restrictions, there were no public hearings of the audit report in the years of assessment.
NO PILLAR
Scores by Dimension
Overall Indicator Score
HLG-1 Predictability of transfers from higher level of Government
Notes:
HLG-1.1 Annual deviation of actual total HLG transfers from the original total estimated amount provided by HLG to the SN entity for inclusion in the latter’s budget
Notes:
HLG-1.2 Annual variance between actual and estimated transfers of earmarked grants
Notes:
HLG-1.3 In-year timeliness of transfers from HLG (compliance with timetables for in-year distribution of disbursements agreed within of month of the start of the SN fiscal year)
Notes: