Public Sector Governance and Accountability Series: Budgeting and ...

84 Salvatore Schiavo-Campo
Division of powers in budgeting
The specific arrangements for division of responsibilities between the executive
and the legislature depend on the nature of the country’s political
system—whether parliamentary or presidential, unitary or federal, the legal
tradition and role of the judiciary, and the historical and cultural context.
In general, the executive and the legislature are jointly responsible for
defining the broad directions of economic and fiscal policy. The executive is
responsible for formulating the expenditure program consistent with the
broad directions, within the limits of affordability; the legislature is responsible
for approving the expenditure program and monitoring its execution.
The key principles
The organic budget law should have as its first section a clear statement of
the fundamental principles of good governance and of public finance. These
principles also recapitulate the major points made in this chapter:
No moneys to be collected from natural or legal persons, nor any moneys
expended, nor services provided, nor exemptions granted, except as
duly authorized by the law and other legal instruments
Transparency of fiscal and service information, requiring not only openness
but an affirmative effort to provide to the public in usable form the
basic budgetary information and government plans and programs, in
accordance with international standards on fiscal transparency
Conformity of fiscal policy with macroeconomic and social objectives,
requiring, among other things, the placement of the annual budget
process in a multiyear perspective
Individual responsibility of ministers, heads of agencies, and other senior
managers for the acquisition, use, accounting, and reporting of public
resources and for the taking of necessary measures to prevent abuses of
such resources
Equal obligation of all government employees to comply with the rules
and regulations of public financial management, and equal application
of sanctions to violators of said rules
Maximum feasible participation by government employees, members of
the legislature, and other concerned persons, in the budget preparation
and budget execution process, as may be appropriate and realistic
Public financial management conducted to ensure expenditure control,
efficient resource use, effective service provision, and high integrity
Unity of the budget and the treasury, among other reasons to make
possible comparisons of the relative effectiveness of different types of
proposed expenditures