Managing Public Expenditure - CMI

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14 Managing Public Expenditure - A Reference Book for Transition Countries IMF INTOSAI IRR ISPA MTBF MTEF MTFF NPV OBL OECD OLAF PEM Phare PIFCS PIP PPBS PPO PUMA R&D SAI SAPARD SIGMA SNA TACIS TSA UCLAF UN UNCITRAL UNDP USAID VAT WTO ZBB International Monetary Fund International Organisation of Supreme Audit Institutions internal rate of return Instrument for Structural Policies for Pre-Accession medium-term budget framework medium-term expenditure framework medium-term fiscal/financial framework net present value organic budget law Organisation for Economic Co-operation and Development European Anti-Fraud Office public expenditure management Poland and Hungary Assistance to the Reconstruction of the Economy (European Commission) Public Internal Financial Control Systems Public Investment Programme planning, programming, budgeting system public procurement office/organisation OECD Public Management Service research and development supreme audit institution Special Accession Programme for Agriculture and Rural Development Support for Improvement in Governance and Management in Central and Eastern European Countries (European Union and OECD) Systems of National Accounts Technical Assistance to the Commonwealth of Independent States (European Commission) treasury single account European Commission’s Co-ordination of Fraud Prevention Task Force United Nations United Nations Commission on International Trade Law United Nations Development Programme United States Agency for International Development value added tax World Trade Organization zero-based budgeting
EXECUTIVE SUMMARY The national budget is the single most important policy vehicle for giving effect to a country’s economic and social priorities within the scarce resources that are available to government for public expenditure. It is through the budget process that competing policy objectives are reconciled and implemented in concrete terms. This book provides a comprehensive and in-depth analysis of all aspects of public expenditure management from the preparation of the budget to the execution, control and audit stages. It is intended to be a practical, operational guide that will assist countries in designing and implementing new laws and procedures in this field, and in improving the transparency of budgetary procedures and information. The book will be of general interest but is focused particularly on the requirements of countries in transition, especially those in Central and Eastern Europe that have the objective of being members of the European Union. These countries, like many others around the world, are modernising their budget systems and procedures in line with international standards. This book is organised into four parts; at the end of each part is a summary containing key points and directions for reform. The opening chapter is an Introduction. It summarises the three core objectives of PEM systems: fiscal sustainability, efficient resource allocation and operational efficiency. Transparency is another key objective, pushed into recent prominence by the IMF’s Code of Good Practices on Fiscal Transparency. The chapter emphasises the importance of the historic legacy of the former communist regimes in central and eastern European countries which still acts as a constraint on reforming PEM procedures and strengthening the institutional role of the ministry of finance. This chapter then sets out a “baseline” of criteria against which countries can assess the extent to which their PEM systems meet international standards, including (where appropriate) the specific requirements of EU membership. The opening chapter ends with a section that describes the methods that transition countries might consider using in order to manage the change process effectively. Effective communications, co-operation and co-ordination of activities are essential to successful reform of PEM systems, as they are in other areas of public administration. Building commitment to reform within the ministry of finance and other ministries and organisations directly affected by change is of key importance. Part I covers the budget and the institutional context. Chapter 1 reviews the basic concepts and definitions of the budget, the need to have the broadest possible coverage in order to achieve the three core objectives, and the use of special arrangements such as extrabudgetary funds and off-budget expenditures. The chapter also analyses other forms of government activity with a fiscal impact such as quasi-fiscal activities, government liabilities and contingent liabilities, loan guarantees and tax expenditures.
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CHAPTER 3 THE EUROPEAN BUDGET AND T
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Table 3.1. FINANCIAL PERSPECTIVE 20
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The European Budget and the Impact
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CHAPTER 4 BUDGET CLASSIFICATION, PR
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Budget Classification, Presentation
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CHAPTER 5 POLICY FORMULATION AND BU
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Policy Formulation and Budget Prepa
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PART III MANAGING BUDGET EXECUTION
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CHAPTER 9 THE TREASURY FUNCTION AND
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The Treasury Function and Cash Mana
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SUMMARY — PART III A. KEY POINTS
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Summary — Part III — Managing B
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CHAPTER 11 ACCOUNTING Accounting an
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Accounting 293 paid and, more gener
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Accounting 295 Figure 11.1. CASH AN
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Accounting 297 eventually a commitm
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Accounting 299 3. Expenses a. Main
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Accounting 301 Such an assessment c
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Accounting 303 • Implementation o
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Accounting 305 information on commi
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Accounting 307 The consolidation mo
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Accounting 309 Table 11.2. PLANS TO
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Accounting 311 Box 11.2. COMPARISON
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Accounting 313 4. Capital charges T
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Accounting 315 15. A generation is
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CHAPTER 14 EXTERNAL AUDIT Auditing,
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External Audit 343 Box 14.1. RECOMM
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External Audit 345 Independence of
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External Audit 347 (but not always)
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External Audit 349 2. Ex post audit
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External Audit 351 Such audits can
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External Audit 353 Box 14.4. FRANCE
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External Audit 355 Box 14.6. UNITED
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External Audit 357 government offic
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CHAPTER 15 PERFORMANCE MEASUREMENT
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Performance Measurement and Evaluat
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SUMMARY — PART IV A. KEY POINTS 1
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Summary — Part IV — Accounting,
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Summary — Part IV — Accounting,
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ANNEX I QUESTIONNAIRE ON PUBLIC EXP
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Questionnaire on Public Expenditure
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ANNEX II ESTABLISHMENT OF A NATIONA
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Establishment of a National Fund Sy
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ANNEX IV IMF CODE OF GOOD PRACTICES
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IMF Code of Good Practices on Fisca
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IMF Code of Good Practices on Fisca
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BIBLIOGRAPHY Abed, George T. (1998)
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Bibliography 477 Canada, Ministry o
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Bibliography 479 Goode, Richard (19
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Bibliography 481 Kopits, George and
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Bibliography 483 OECD (1996c). Perf
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Bibliography 485 Rajcoomar, S., Mic
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Bibliography 487 Squire, Lyn. (1995
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Bibliography 489 United States, Gen
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SELECTED WORLDWIDE WEB SITES 1 http
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INDEX Note: For terms listed in the
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Index 495 ex post control: 124, 262
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Index 497 GAAP: 13, 384, 456 genera
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Index 499 Pre-Accession Economic Pr
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OECD PUBLICATIONS, 2, rue André-Pa
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