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7/29/2019 Working Group Meeting on Governance of Public Finance.pdf
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Recent major experiences in financial governance reforms
Budget laws in Slovenia
Working Group Meeting on Governance of Public Finance
October 1-3, 2005
Cairo, Egypt
Bojan Pogaar
Ministry of Finance, Slovenia
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Agenda
Introduction
Initial position (pre-reform position)
Reforms
Implementation of reforms some features
Budget laws
Conclusion
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Introduction (1)
1991 disintegration of SFR Yugoslavia
Republic of Slovenia
Population: 2 million
2004 member of European Union
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Introduction (2)
Inflation
GDP per capita
1989 3,116 %
1992 139 %
2004 3 %
1989 6,058
1992 6,275
2004 16,269
A p p r o x i m a t io n o f i n f l a ti o n r a te
0 , 0 0
5 0 0 , 0 0
1 . 0 0 0 , 0 0
1 . 5 0 0 , 0 0
2 . 0 0 0 , 0 0
2 . 5 0 0 , 0 0
3 . 0 0 0 , 0 0
3 . 5 0 0 , 0 0
1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4
GDP per capita
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
1 98 7 1 98 8 1 98 9 1 99 0 1 99 1 1 99 2 1 99 3 1 99 4 1 99 5 1 99 6 1 99 7 1 99 8 1 99 9 2 00 0 2 00 1 2 00 2 2 00 3 2 00 4
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Initial position (pre-reform position)
extremely decentralized budgetary systems
(self-management interest associations in just 60 local communities existed more than600 budgets with individual revenue programs)
no medium-term orientation
no link between priorities and budget
bottom-up approach lead to higher and higher
expenditures each year, pressure on revenue side
(difficult to negotiate with line ministries, accros the
board cuts at the end of the year, non-payed bills and
carry overs to next year, )
no transparency (many budget lines with names that
had no meaning, the structure of the budget was
inappropriate, )
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Reforms
centralizing public expenditure management
all the rest major public reforms started in 1999
reforms regarding classifications
reforms regarding budget preparation procedure
some solutions regarding information system
reforms regarding implementation of performance
budgeting
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Reforms - classifications
WHO ? WHAT ? HOW ?
ORGANIZATIONAL/
INSTITUTIONAL
CLASSIFICATION
FUNCTIONAL
AND PROGRAM
CLASSIFICATION
ECONOMIC
CLASSIFICATION
Introduced in 2000 covers all institutions and
agencies of Central
Government and Local
Government (3000)
defines direct and indirect
budget users
Both introduced in 2000 Functional classification: it is used
for reporting (statistical purposes) to
international organizations (fully in line
with the COFOG)
Program classification: programs
are developed according to the
operational priorities and objectives of
the government. Major link between
government policy and budget.
Introduced in 1999 Inputs required to carry out
the tasks determined for
each program activity or
project
Object classification of
revenues
Used for both budgeting and
accounting,
fully in line with GFS
Users: Budget, Accounting, Treasury, Auditing, Decision makers,
Fiscal reporting and statistics
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Reforms budget preparation procedure
First phase:defining of the Overall Budget Ceiling for 24
Expenditures Areas and 96 Main Programs
Second phase:
detailed preparation of line ministries
Subprograms, projects and activities
MACROECONOMIC
INDICATORS
1st Government budget session
CEILINGS
LINE MINISTRIES
Proposals
according to priorities
FINAL NEGOTIATIONS
Budget send to Parliament
2nd Government budget session Budget adopted by the Government
BudgetCir
cula
r
Estimation
of expenditures
Estimation
of revenues
Reconciliation of budget
expenditures
DEFICIT/SURPLUS, + PRIORITIES
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Reforms information system
System MFERAC
ACCOUNTING
EXECUTION
System APPrA
BUDGETPREPARATION
MONITORING
MODULES:
Macro-fiscal scenarios
Borrowing and amortization of debt
Web collection of data budget preparation
Amendments (Parliament)
Outturn - monitoring
Web collection of data final accounts
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Inplementation of reforms some features
centralizing accounting services
developing of unified information
system for accounting and executing
of budget for all budget users
all reforms were started and lead by MoF (mostly byBudget Department)
using help of advisers of international
organizations
comparing systems and solutions of other
countries
solutions were never copied
qualitydatabase
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Budget laws
Constitution
BUDGET
Act on
Implementation of
the Budget
Law on Public
ProcurementAccounting
Act
The Court of
Audit Act
E X E C U T I V E R E G U L A T I O N S
Public Finance
Act
Law on Financing
Local Communities
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Budget laws Public Finance Act
came into effect on January 1, 2000
clarifies responsibilities and duties in:
preparing,
implementing and
controlling the state budget
other permanent provisions and references to
general and specific rules that are to be observedby - central government,
- local authorities,
- special funds, and
- other public institutions
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Budget laws Act on Implementation of the Budget
annual provisions
specific authorizations (for example, limits on state
borrowing and guarantees)
budget structure
recognition of specific revenues (earmarked
revenues)
reallocation of budgetary commitments
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WG III Good Governance for Development in Arab Countries Initiative
Governance of Public Finance, Cairo, 1-3 October 2005
Conclusion
quality database
compare systems and solutions of other countries
listen and learn from advisors of international
organizations
BUT
DO IT YOUR WAY