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

Budget Execution 293
cases, these special payment orders are controlled against the appropriations,
and their issuance could be explained by the slowness of the normal procedure.
In other cases, however, they are not controlled against the appropriations, but
they may be issued at the request of the highest political levels. Special payment
orders are paid by the treasury department, which centralizes all cash payments.
They are registered in the treasury accounts, but in a credit or in a suspense
account—not in the budgetary expenditure accounts. They are supposed to be
“regularized”later as budgetary expenditures, but the regularization procedure
is not systematically undertaken. In some countries, special payment orders,
not accounted for in the appropriation accounts, can amount to a significant
share of goods and services expenditure. As a result, budget execution
is not monitored, and priorities stated in the budget are distorted in favor of
sectors managed by powerful politicians and well-connected suppliers.
Although numerous and redundant, the ex ante ministry of finance
controls do not prevent arrears generation not only because, as discussed
earlier, expenditures are committed in different ways, but also because the
control procedures are not systematically enforced. In addition, integration
of in-year cash management systems with budget execution controls
procedures is weak.
commonwealth systems. In anglophone countries, financial
control before the payment stage is largely assigned to line ministries. The
accounting officer, who is generally the head of the line-ministry administration
(the permanent secretary), has the authority to set up the arrangements
for making expenditure commitments and issuing the payment
order. He or she is accountable for budget management in his or her area
of responsibilities.
Budget execution is often regulated through warrants issued by the
ministry of finance or through cash releases to imprest accounts (imprest
systems are discussed later). For example, annual warrants can be provided for
salaries, and quarterly or monthly warrants can be provided for other current
expenditures. In principle, expenditure commitments are recorded against the
appropriations in the ministry or department books and should be reported
to the ministry of finance. As previously noted, however, in several countries
the ministries’ reports on expenditure commitments are incomplete and
received late by the ministry of finance; as a consequence, the ministry of
finance is unable to exercise control over expenditure commitments.
With weak accounting and poor coordination between budget and
accounting divisions of line ministries, expenditure commitments can
be made without reference to cash availability and may even exceed voted