Bolivia—Evaluación de las finanzas públicas (EFIP)
Report No. 58674
Plurinational State of Bolivia
Bolivia—Public Financial Management Review
Public Financial Management Review, based on the PEFA Methodology
October 2, 2009
World Bank
Operations and Services Office
Management Unit for Bolivia, Ecuador, Peru and Venezuela
Latin America & The Caribbean Region
[pic]
Inter-American Development Bank
Procurement, Financial Management
& Portfolio Monitoring Division
Document of the World Bank and the Inter-American Development Bank
|This document is for restricted distribution and can only be used by its recipients in the performance of their official duties. Its contents |
|may not be otherwise disseminated without the authorization of the World Bank |
Fiscal Year of the Republic of Bolivia
January 1 to December 31
Currency Equivalence
(AS OF AUGUST 19, 2009)
1 US Dollar equals 7.07 Bolivianos (Bs)
Weights and Measures
METRIC SYSTEM
|World Bank |Inter-American Development Bank |
|Vice President, LCR: |Pamela Cox |Vice President, LCR: |Roberto Vellutini |
|Country Director: |Carlos Felipe Jaramillo |Manager: |Alicia Ritchie |
|Sectorial OS Director: |Elizabeth O. Adu |Division Chief: |Katharina Falkner-Olmedo |
|Sector Manager: |Roberto Tarallo |Task Team Leader: |Héctor Rabade |
|Task Team Leader: |Lourdes Linares | | |
Contents
Acronyms and Abbreviations vi
Acknowledgments viii
Acknowledgments viii
Executive Summary i
Section 1. Introduction 1
1.1 Objective of the PFM Performance Report 1
1.2 PFM Performance Indicator Preparation Process 1
1.3 Methodology for the Preparation of the Report 4
1.4 Scope of the Assessment as Provided by the PFM Performance Indicators 5
Section 2. General Country Information 7
2.1 Bolivia’s Economic Situation 7
2.1.1 Country Context 7
2.1.2 Global Public Sector Reform Program 8
2.1.3 Rationale for PFM reforms 8
2.2 Description of Budgetary Outcomes 9
2.2.1 Fiscal Performance 9
2.2.2 Allocation of Resources 10
2.3 Description of the Legal and Institutional Framework for PFM 11
2.3.1 PFM Legal Framework 11
2.3.2 PFM Institutional Framework 13
2.3.3 Essential Attributes of PFM 15
Section 3. Assessment of PFM Systems, Processes, and Institutions 17
3.1 Budget Credibility 17
PI-1 Aggregate expenditure out-turn compared to original approved budget 17
PI-2 Composition of expenditure out-turn compared to original approved budget 19
PI-3 Aggregate revenue out-turn compared to original approved budget 20
PI-4 Stock and monitoring of expenditure payment arrears 22
3.2 Comprehensiveness and Transparency 24
PI-5 Classification of the budget 24
PI-6 Comprehensiveness of information included in budget documentation 26
PI-7 Extent of unreported government operations 28
PI-8 Transparency of inter-governmental fiscal relations 31
PI-9 Oversight of aggregate fiscal risk from other public sector entities 36
PI-10 Public access to key fiscal information 40
3.3 Policy-based Budgeting 42
PI-11 Orderliness and participation in the annual budget process 42
PI-12 - Multi-year perspective in fiscal planning, expenditure policy, and budgeting 45
3.4 Predictability and Control in Budget Execution 48
PI-13 Transparency of taxpayer obligations and liabilities 48
PI-14 Effectiveness of measures for taxpayer registration and tax assessment 51
PI-15 Effectiveness in collection of tax payments 53
PI-16 Predictability in the availability of funds for commitment of expenditures 54
PI-17 Recording and management of cash balances, debt, and guarantees 57
PI-18 Effectiveness of payroll controls 59
PI-19 Competition, value for money, and controls in procurement 63
PI-20 Effectiveness of internal controls for non-salary expenditure 71
PI-21 - Effectiveness of internal audit 73
3.5 Accounting, Recording, and Reporting 76
PI-22 Timeliness and regularity of accounts reconciliation 76
PI-23 Availability of information on resources received by service delivery units 78
PI-24 Quality and timeliness of in-year budget reports 80
PI-25 Quality and timeliness of annual financial statements 82
3.6 External Scrutiny and Audit 85
PI-26 Scope, nature, and follow-up of external audit 85
PI-27 Legislative scrutiny of the annual budget law 90
PI-28 Legislative scrutiny of external audit reports 93
3.7 Donor Practices 94
D-1 Predictability of Direct Budget Support 95
D-2 Financial information provided by donors for budgeting and reporting on project and program aid 96
D-3 Proportion of aid that is managed by use of national procedures 99
Section 4.4. Public Sector Reform Process 101
4.1 General Description of Recent and On-Going Reforms 101
4.2 Institutional Factors Supporting Reform Planning and Implementation 102
Annex 1. Spreadsheet for PI-1 and PI-2 105
Annex 2. CGE Coverage f 2008 Budget 108
Annex 3. PI-13 Transparency of Taxpayer Obligations and Liabilities 111
Annex 4. PI-14 Effectiveness of Measures for Taxpayer Registration and Tax Assessment 112
Annex 5. PI-19 Procurement 113
Annex 6. Scoring Methodology 115
Annex 7. Participants in the Field Mission 132
Documents Related to PFM Review 135
Boxes, Figures, and Tables
Box 2.1 PFM Legal Framework 12
Box 3.1 Rules Used for Horizontal Allocation to Municipalities and Prefectures 34
Box 3.2 Procurement Bidding Procedures 65
Figure 3.1 Timeline of Approval of the 2008 National General Budget 90
Table ES1. Performance Indicators for Bolivia’s Public Financing vi
Table 1.1 Number of Entities and Share of Public Expenditure, according to 2009 Budget 6
Table 2.1 General Government Operations and Public Sector Outcome, 2005-2008 10
Table 2.2 General Government Expenditures per Economic Classification, 2005-2008 11
Table 2.3 Central Administration Expenditure Structure per Main Functions 11
Table 3.1 Original Approved Primary Expenditure, Amended and Executed Budget 18
Table 3.2 Deviations in Budget Execution of Central Government’s Overall Expenditure and Composition 19
Table 3.3 Central Government Tax and Non-Tax Revenues 21
Table 3.4 Payment Arrears 23
Table 3.5 Information on the Contents of Budget Documentation 27
Table 3.6 Central Government Transfers to Subnational Governments, 2008 33
Table 3.7 Items of Public Access to Fiscal Information 41
Table 3.8 Important Dates in the Budget Formulation and Approval Process 43
Table 3.9 Debt Recovery Ratio 53
Table 3.10 Inter-institutional Expenditure Budget Amendments 56
Table 3.11 Modalities of Open Competition 64
Table 3.12 Procurement Records With and Without Open Calls 65
Table 3.13 Procurement With and Without Public Calls for Bids, FY2008 67
Table 3.14 Detail of the Reports Issued by General State Comptrollership in 2006-2008 86
Table 3.15 Comparison of Major Aspects of General State Comptrollership’s Mandate and Operation 87
Table 3.16 Follow-up on Implementation of Recommendations of General State Comptrollership 89
Table 3.17 Information Supplied by Donors on Flow of Funds to Projects and Programs 90
Acronyms and Abbreviations
|ABC |Bolivian Highway Administration (Administración Boliviana de Carreteras) |
|ANPE |National Support to Production and Employment (Apoyo Nacional a la Producción y Empleo) |
|CAF |Andean Development Corporation (Corporación Andina de Fomento) |
|CGE |Comptroller’s General Office (Contraloría General del Estado) |
|CGR |Comptrolle’s General Office (Contraloría General de la República) |
|COFOG |Classifications of Functions of Government |
|EFIP |Evaluation of Public Finance (Evaluación de las Finanzas Públicas) |
|EU |European Union |
|FPS |National Productive and Social Investment Fund (Fondo Nacional de Inversión Productiva y Social) |
|GDP |Gross Domestic Product |
|HIPC |{0>Heavily Indebted Poor Countries.Heavily Indebted Poor Countries.Bs20,000) * |Production and | | | |
|Without amount limit Supreme |Employment (from 20.000 | | | |
|Decree No. 29190 |– up to Bs. 200.000) | | | |
| |National Support to |9,246 |7,276 |78.70% |
| |Production and | | | |
| |Employment (from Bs. | | | |
| |200.001 to Bs. 500.000) | | | |
|WITH PUBLIC BIDDING |Public bidding (from Bs.|5,748 |4,295 |74.70% |
|Higher amounts |500.001 onwards) | | | |
|TOTAL |61,466 |47,026 |76.51% |
• Of the total of processes initiated in the above mentioned modalities, 76.51% was contracted in 2008.
|As of June 2009 |
|AMOUNT |MODALITY |INITIATED |CONTRACTED |PERCENTAGE |
|WITH PUBLIC BIDDING |National Support to |16,597 |12,163 |73.20% |
|Lower amount (>Bs20,000) * |Production and | | | |
|Without amount limit Supreme |Employment (from 20.000 | | | |
|Decree No. 29190 |– up to Bs. 200.000) | | | |
| |National Support to |3,404 |2,316 |68% |
| |Production and | | | |
| |Employment (from Bs. | | | |
| |200.001 to Bs. 500.000) | | | |
|WITH PUBLIC BIDDING |Public bidding (from Bs.|2,407 |2,005 |83.30% |
|Higher amount |500.001 onwards) | | | |
|TOTAL |22,408 |16,484 |73.56% |
• Of the total of processes initiated in the above mentioned modalities, 73.56% was contracted as at June 2009.
Source: Information provided by SICOES and own calculations.
Annex 6. Scoring Methodology
|Scoring |Minimum Requirements (scoring method M1) |
|PFM system out-turns: |
|Credibility of the budget |
|PI-1 Aggregate expenditure out-turn compared to original approved budget |
|A |(i) In no more than one out of the last three years has the actual expenditure deviated from budgeted |
| |expenditure by an amount equivalent to more than 5% of budgeted expenditure. |
|B |(i) In no more than one out of the last three years has the actual expenditure deviated from budgeted |
| |expenditure by an amount equivalent to more than 10 % of budgeted expenditure. |
|C |(i) In no more than one of the last three years has the actual expenditure deviated from budgeted |
| |expenditure by more than an amount equivalent to 15% of budgeted expenditure. |
|D |(i) In two or all of the last three years did the actual expenditure deviate from budgeted expenditure by|
| |an amount equivalent to more than 15% of budgeted expenditure. |
|PI-2 Composition of expenditure out-turn compared to original approved budget |
|A |(i) Variance in expenditure composition exceeded overall deviation in primary expenditure by no more than|
| |5 percentage points in any of the last three years. |
|B |(i) Variance in expenditure composition exceeded overall deviation in primary expenditure by 5 percentage|
| |points in no more than one of the last three years. |
|C |(i) Variance in expenditure composition exceeded overall deviation in primary expenditure by 10 |
| |percentage points in no more than one of the last three years. |
|D |(i) Variance in expenditure composition exceeded overall deviation in primary expenditure by 10 |
| |percentage points in at least two out of the last three years. |
|PI-3 Aggregate revenue out-turn compared to original approved budget |
|A |(i) Actual domestic revenue collection was below 97% of budgeted domestic revenue estimates in no more |
| |than one of the last three years. |
|B |(i) Actual domestic revenue collection was below 94% of budgeted domestic revenue estimates in no more |
| |than one of the last three years. |
|C |(i) Actual domestic revenue collection was below 92% of budgeted domestic revenue estimates in no more |
| |than one of the last three years. |
|D |(i) Actual domestic revenue collection was below 92% of budgeted domestic revenue estimates in two or all|
| |of the last three years. |
| |15 |
|PI-4 Stock and monitoring of expenditure payment arrears |
|A |(i) The stock of arrears is low (i.e. is below 2% of total expenditure) |
| |(ii) Reliable and complete data on the stock of arrears is generated through routine procedures at least |
| |at the end of each fiscal year (and includes an age profile). |
|B |(i) The stock of arrears constitutes 2-10% of total expenditure; and there is evidence that it has been |
| |reduced significantly (i.e. more than 25%) in the last two years. |
| |(ii) Data on the stock of arrears is generated annually, but may not be complete for a few identified |
| |expenditure categories or specified budget institutions. |
|C |(i) The stock of arrears constitutes 2-10% of total expenditure; and there is no evidence that it has |
| |been reduced significantly in the last two years. |
| |(ii) Data on the stock of arrears has been generated by at least one comprehensive ad hoc exercise within|
| |the last two years. |
|D |(i) The stock of arrears exceeds 10% of total expenditure. |
| |(ii) There is no reliable data on the stock of arrears from the last two years. |
|KEY CROSS-CUTTING ISSUES: |
|Comprehensiveness and Transparency |
|PI-5 Classification of the budget |
|A |(i) The budget formulation and execution is based on administrative, economic and sub-functional |
| |classification, using GFS/COFOG standards or a standard that can produce consistent documentation |
| |according to those standards. (Program classification may substitute for sub-functional classification, |
| |if it is applied with a level of detail at least corresponding to sub-functional.) |
|B |(i) The budget formulation and execution is based on administrative, economic and functional |
| |classification (using at least the 10 main COFOG functions), using GFS/COFOG standards or a standard that|
| |can produce consistent documentation according to those standards. |
|C |(i) The budget formulation and execution is based on administrative and economic classification using GFS|
| |standards or a standard that can produce consistent documentation according to those standards. |
|D |(i) The budget formulation and execution is based on a different classification (e.g. not GFS compatible |
| |or with administrative break-down only). |
|PI-6 Comprehensiveness of information included in budget documentation |
|A |(i) recent budget documentation fulfils 7-9 of the 9 information benchmarks |
|B |(i) recent budget documentation fulfils 5-6 of the 9 information benchmarks |
|C |(i) recent budget documentation fulfils 3-4 of the 9 information benchmarks |
|D |(i) recent budget documentation fulfils 2 or less of the 9 information benchmarks |
|PI-7 Extent of unreported government operations |
|A |(i) The level of unreported extra-budgetary expenditure (other than donor funded projects) is |
| |insignificant (below 1% of total expenditure). |
| |(ii) Complete income/expenditure information for 90% (value) of donor-funded projects is included in |
| |fiscal reports, except inputs provided in-kind OR donor funded project expenditure is insignificant |
| |(below 1% of total expenditure). |
|B |(i) The level of unreported extra-budgetary expenditure (other than donor funded projects) constitutes |
| |1-5% of total expenditure. |
| |(ii) Complete income/expenditure information is included in fiscal reports for all loan financed projects|
| |and at least 50% (by value) of grant financed projects. |
|C |(i) The level of unreported extra-budgetary expenditure (other than donor funded projects) constitutes |
| |5-10% of total expenditure. |
| |(ii) Complete income/expenditure information for all loan financed projects is included in fiscal |
| |reports. |
|D |(i) The level of unreported extra-budgetary expenditure (other than donor funded projects) constitutes |
| |more than 10% of total expenditure. |
| |(ii) Information on donor financed projects included in fiscal reports is seriously deficient and does |
| |not even cover all loan financed operations. |
|PI-8 Transparency of inter-governmental fiscal relations |
|i) Transparency and objectivity in |Score = A: The horizontal allocation of almost all transfers (at least 90% by value) from central |
|the horizontal allocation among SN |government is determined by transparent and rules based systems |
|governments |Score = B: The horizontal allocation of most transfers from central government (at least 50% of |
| |transfers) is determined by transparent and rules based systems. |
| |Score = C: The horizontal allocation of only a small part of transfers from central government (10-50%) |
| |is determined by transparent and rules based systems. |
| |Score = D: No or hardly any part of the horizontal allocation of transfers from central government is |
| |determined by transparent and rules based systems. |
|(ii) Timeliness of reliable |Score = A: SN governments are provided reliable information on the allocations to be transferred to them |
|information to SN governments on |before the start of their detailed budgeting processes. |
|their allocations |Score = B: SN governments are provided reliable information on the allocations to be transferred to them |
| |ahead of completing their budget proposals, so that significant changes to the proposals are still |
| |possible. |
| |Score = C: Reliable information to SN governments is issued before the start of the SN fiscal year, but |
| |too late for significant budget changes to be made. |
| |Score = D: Reliable estimates on transfers are issued after SN government budgets have been finalized, or|
| |earlier issued estimates are not reliable. |
|iii) Extent of consolidation of |Score = A: Fiscal information (ex-ante and ex-post) that is consistent with central government fiscal |
|fiscal data for general government |reporting is collected for 90% (by value) of SN government expenditure and consolidated into annual |
|according to sectoral categories |reports within 10 months of the end of the fiscal year. |
| |Score = B: Fiscal information (ex-ante and ex-post) that is consistent with central government fiscal |
| |reporting is collected for at least 75% (by value) of SN government expenditure and consolidated into |
| |annual reports within 18 months of the end of the fiscal year. |
| |Score = C: Fiscal information (at least ex-post) that is consistent with central government fiscal |
| |reporting is collected for at least 60% (by value) of SN government expenditure and consolidated into |
| |annual reports within 24 months of the end of the fiscal year. |
| |Score = D: Fiscal information that is consistent with central government fiscal reporting is collected |
| |and consolidated for less than 60% (by value) of SN government expenditure OR if a higher proportion is |
| |covered, consolidation into annual reports takes place with more than 24 months delay, if at all. |
|PI-9 Oversight of aggregate fiscal risk from other public sector entities |
|A |(i) All major AGAs/PEs submit fiscal reports to central government at least six-monthly, as well as |
| |annual audited accounts, and central government consolidates fiscal risk issues into a report at least |
| |annually. |
| |(ii) SN government cannot generate fiscal liabilities for central government OR the net fiscal position |
| |is monitored at least annually for all levels of SN government and central government consolidates |
| |overall fiscal risk into annual (or more frequent) reports. |
|B |(i) All major AGAs/PEs submit fiscal reports including audited accounts to central governments at least |
| |annually, and central government consolidates overall fiscal risk issues into a report. |
| |(ii) The net fiscal position is monitored at least annually for the most important level of SN |
| |government, and central government consolidates overall fiscal risk into a report. |
|C |(i) Most major AGAs/PEs submit fiscal reports to central governments at least annually, but a |
| |consolidated overview is missing or significantly incomplete. |
| |(ii) The net fiscal position is monitored at least annually for the most important level of SN |
| |government, but a consolidated overview is missing or significantly incomplete. |
|D |(i) No annual monitoring of AGAs and PEs takes place, or it is significantly incomplete. |
| |(ii) No annual monitoring of SN governments’ fiscal position takes place or it is significantly |
| |incomplete. |
|PI-10 Public access to key fiscal information |
|A |(i) the government makes available to the public 5-6 of the 6 listed types of information |
|B |(i) the government makes available to the public 3-4 of the 6 listed types of information |
|C |(i) the government makes available to the public 1-2 of the 6 listed types of information |
|D |(i) the government makes available to the public none of the 6 listed types of information |
|BUDGET CYCLE |
|C i) Policy-Based Budgeting |
|PI-11 Orderliness and participation in the annual budget process |
|i) Existence of and adherence to a |Score = A: A clear annual budget calendar exists, is generally adhered to and allows MDAs enough time |
|fixed budget calendar |(and at least six weeks from receipt of the budget circular) to meaningfully complete their detailed |
| |estimates on time. |
| |Score = B: A clear annual budget calendar exists, but some delays are often experienced in its |
| |implementation. The calendar allows MDAs reasonable time (at least four weeks from receipt of the budget |
| |circular) so that most of them are able to meaningfully complete their detailed estimates on time, |
| |Score = C: An annual budget calendar exists, but is rudimentary and substantial delays may often be |
| |experienced in its implementation, and allows MDAs so little time to complete detailed estimates, that |
| |many fail to complete them timely. |
| |Score = D: A budget calendar is not prepared OR it is generally not adhered to OR the time allowed for |
| |MDAs’ budget preparation is clearly insufficient to make meaningful submissions.Calificación = D: No se |
| |prepara un calendario presupuestario; éste en general no se cumple, O BIEN el plazo concedido para la |
| |preparación del presupuesto de los MDO es claramente insuficiente para que éstos puedan presentar |
| |documentos útiles. |
|ii) Guidance on the preparation of |Score = A: A comprehensive and clear budget circular is issued to MDAs, which reflects ceilings approved |
|budget submissions |by Cabinet (or equivalent) prior to the circular’s distribution to MDAs. |
| |Score = B: A comprehensive and clear budget circular is issued to MDAs, which reflects ceilings approved |
| |by Cabinet (or equivalent). This approval takes place after the circular distribution to MDAs, but before|
| |MDAs have completed their submission. |
| |Score = C: A budget circular is issued to MDAs, including ceilings for individual administrative units or|
| |functional areas. The budget estimates are reviewed and approved by Cabinet only after they have been |
| |completed in all details by MDAs, thus seriously constraining Cabinet’s ability to make adjustments. |
| |Score = D: A budget circular is not issued to MDAs OR the quality of the circular is very poor OR Cabinet|
| |is involved in approving the allocations only immediately before submission of detailed estimates to the |
| |legislature, thus having no opportunities for adjustment. |
|iii) Timely budget approval by the |Score = A: The legislature has, during the last three years, approved the budget before the start of the |
|legislature |fiscal year. |
| |Score = B: The legislature approves the budget before the start of the fiscal year, but a delay of up to |
| |two months has happened in one of the last three years. |
| |Score = C: The legislature has, in two of the last three years, approved the budget within two months of |
| |the start of the fiscal year. |
| |Score = D: The budget has been approved with more than two months delay in two of the last three years. |
|PI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting |
|i) Multi-year fiscal forecasts and |Score = A: Forecasts of fiscal aggregates (on the basis of main categories of economic and |
|functional allocations |functional/sector classification) are prepared for at least three years on a rolling annual basis. Links |
| |between multi-year estimates and subsequent setting of annual budget ceilings are clear and differences |
| |explained |
| |Score = B: Forecasts of fiscal aggregates (on the basis of main categories of economic and |
| |functional/sector classification) are prepared for at least two years on a rolling annual basis. Links |
| |between multi-year estimates and subsequent setting of annual budget ceilings are clear and differences |
| |are explained. |
| |Score = C: Forecasts of fiscal aggregates (on the basis of the main categories of economic |
| |classification) are prepared for at least two years on a rolling annual basis. |
| |Score = D: No forward estimates of fiscal aggregates are undertaken |
|ii) Scope and frequency of debt |Score = A: DSA for external and domestic debt is undertaken annually. |
|sustainability analysis |Score = B: DSA for external and domestic debt is undertaken at least once during the last three years. |
| |Score = C: A DSA for at least for external debt undertaken once during last three years. |
| |Score = D: No DSA has been undertaken in the last three years |
|iii) Existence of costed sector |Score = A: Strategies for sectors representing at least 75% of primary expenditure exist with full |
|strategies |costing of recurrent and investment expenditure, broadly consistent with fiscal forecasts. |
| |Score = B: Statements of sector strategies exist and are fully costed, broadly consistent with fiscal |
| |forecasts, for sectors representing 25-75% of primary expenditure. |
| |Score = C: Statements of sector strategies exist for several major sectors but are only substantially |
| |costed for sectors representing up to 25% of primary expenditure OR costed strategies cover more sectors |
| |but are inconsistent with aggregate fiscal forecasts. |
| |Score = D: Sector strategies may have been prepared for some sectors, but none of them have substantially|
| |complete costing of investments and recurrent expenditure. |
|iv) Linkages between investment |Score = A: Investments are consistently selected on the basis of relevant sector strategies and recurrent|
|budgets and forward expenditure |cost implications in accordance with sector allocations and included in forward budget estimates for the |
|estimates |sector. |
| |Score = B: The majority of important investments are selected on the basis of relevant sector strategies |
| |and recurrent cost implications in accordance with sector allocations and included in forward budget |
| |estimates for the sector. |
| |Score = C: Many investment decisions have weak links to sector strategies and their recurrent cost |
| |implications are included in forward budget estimates only in a few (but major) cases. |
| |Score = D: Budgeting for investment and recurrent expenditure are separate processes with no recurrent |
| |cost estimates being shared. |
|C ii) Predictability and Control in Budget Execution |
|PI-13 Transparency of taxpayer obligations and liabilities |
|i) Clarity and comprehensiveness of|Score = A: Legislation and procedures for all major taxes are comprehensive and clear, with strictly |
|tax liabilities |limited discretionary powers of the government entities involved. |
| |Score = B: Legislation and procedures for most, but not necessarily all, major taxes are comprehensive |
| |and clear, with fairly limited discretionary powers of the government entities involved. |
| |Score = C: Legislation and procedures for some major taxes are comprehensive and clear, but the fairness |
| |of the system is questioned due to substantial discretionary powers of the government entities involved. |
| |Score = D: Legislation and procedures are not comprehensive and clear for large areas of taxation and/or |
| |involve important elements of administrative discretion in assessing tax liabilities. |
|ii) Taxpayers’ access to |Score A: Taxpayers have easy access to comprehensive, user friendly and up-to-date information tax |
|information on tax liabilities and |liabilities and administrative procedures for all major taxes, and the RA supplements this with active |
|administrative procedures |taxpayer education campaigns. |
| |Score = B: Taxpayers have easy access to comprehensive, user friendly and up-to-date information on tax |
| |liabilities and administrative procedures for some of the major taxes, while for other taxes the |
| |information is limited. |
| |Score = C: Taxpayers have access to some information on tax liabilities and administrative procedures, |
| |but the usefulness of the information is limited due coverage of selected taxes only, lack of |
| |comprehensiveness and/or not being up-to-date. |
| |Score = D: Taxpayer access to up-to-date legislation and procedural guidelines is seriously deficient. |
|iii) Existence and functioning of a|Score A: A tax appeals system of transparent administrative procedures with appropriate checks and |
|tax appeals mechanism |balances, and implemented through independent institutional structures, is completely set up and |
| |effectively operating with satisfactory access and fairness, and its decisions are promptly acted upon. |
| |Score = B: A tax appeals system of transparent administrative procedures is completely set up and |
| |functional, but it is either too early to assess its effectiveness or some issues relating to access, |
| |efficiency, fairness or effective follow up on its decisions need to be addressed.. |
| |Score = C: A tax appeals system of administrative procedures has been established, but needs substantial |
| |redesign to be fair, transparent and effective. |
| |Score = D: No functioning tax appeals system has been established |
|PI-14 Effectiveness of measures for taxpayer registration and tax assessment |
|i) Controls in the taxpayer |Score = A: Taxpayers are registered in a complete database system with comprehensive direct linkages to |
|registration system. |other relevant government registration systems and financial sector regulations. |
| |Score = B: Taxpayers are registered in a complete database system with some linkages to other relevant |
| |government registration systems and financial sector regulations. |
| |Score = C: Taxpayers are registered in database systems for individual taxes, which may not be fully and |
| |consistently linked. Linkages to other registration/licensing functions may be weak but are then |
| |supplemented by occasional surveys of potential taxpayers. |
| |Score = D: Taxpayer registration is not subject to any effective controls or enforcement systems |
|ii) Effectiveness of penalties for |Score = A: Penalties for all areas of non-compliance are set sufficiently high to act as deterrence and |
|non-compliance with registration |are consistently administered. |
|and tax declaration |Score = B: Penalties for non-compliance exist for most relevant areas, but are not always effective due |
| |to insufficient scale and/or inconsistent administration. |
| |Score = C: Penalties for non-compliance generally exist, but substantial changes to their structure, |
| |levels or administration are needed to give them a real impact on compliance. |
| |Score = D: Penalties for non-compliance are generally non-existent or ineffective (i.e. set far too low |
| |to have an impact or rarely imposed). |
|iii) Planning and monitoring of tax|Score A: Tax audits and fraud investigations are managed and reported on according to a comprehensive and|
|audit programs |documented audit plan, with clear risk assessment criteria for all major taxes that apply |
| |self-assessment. |
| |Score = B: Tax audits and fraud investigations are managed and reported on according to a documented |
| |audit plan, with clear risk assessment criteria for audits in at least one major tax area that applies |
| |self-assessment. |
| |Score = C: There is a continuous program of tax audits and fraud investigations, but audit programs are |
| |not based on clear risk assessment criteria. |
| |Score = D: Tax audits and fraud investigations are undertaken on an ad hoc basis if at all. |
|PI-15 Effectiveness in collection of tax payments |
|A |(i) The average debt collection ratio in the two most recent fiscal years was 90% or above OR the total |
| |amount of tax arrears is insignificant (i.e. less than 2% of total annual collections). |
| |(ii) All tax revenue is paid directly into accounts controlled by the Treasury or transfers to the |
| |Treasury are made daily. |
| |(iii) Complete reconciliation of tax assessments, collections, arrears and transfers to Treasury takes |
| |place at least monthly within one month of end of month. |
|B |(i) The average debt collection ratio in the two most recent fiscal years was 75-90% and the total amount|
| |of tax arrears is significant. |
| |(ii) Revenue collections are transferred to the Treasury at least weekly. |
| |(iii) Complete reconciliation of tax assessments, collections, arrears and transfers to Treasury takes |
| |place at least quarterly within six weeks of end of quarter. |
|C |(i) The average debt collection ratio in the two most recent fiscal years was 60-75% and the total amount|
| |of tax arrears is significant |
| |(ii) Revenue collections are transferred to the Treasury at least monthly. |
| |(iii) Complete reconciliation of tax assessments, collections, arrears and transfers to Treasury takes |
| |place at least annually within 3 months of end of the year. |
|D |(i) The debt collection ratio in the most recent year was below 60% and the total amount of tax arrears |
| |is significant (i.e. more than 2% of total annual collections). |
| |(ii) Revenue collections are transferred to the Treasury less regularly than monthly |
| |(iii) Complete reconciliation of tax assessments, collections, arrears and transfers to Treasury does not|
| |take place annually or is done with more than 3 months’ delay. |
|PI-16 Predictability in the availability of funds for commitment of expenditures |
|A |(i) A cash flow forecast is prepared for the fiscal year, and are updated monthly on the basis of actual |
| |cash inflows and outflows. |
| |(ii) MDAs’ are able to plan and commit expenditure for at least six month in advance in accordance with |
| |the budgeted appropriations. |
| |(iii) Significant in-year adjustments to budget allocations take place only once or twice in a year and |
| |are done in a transparent and predictable way. |
|B |(i) A cash flow forecast is prepared for the fiscal year and updated at least quarterly, on the basis of |
| |actual cash inflows and outflows. |
| |(ii) MDAs are provided reliable information on commitment ceilings at least quarterly in advance. |
| |(iii) Significant in-year adjustments to budget allocations take place only once or twice in a year and |
| |are done in a fairly transparent way. |
|C |(i) A cash flow forecast is prepared for the fiscal year, but is not (or only partially and infrequently)|
| |updated. |
| |(ii) MDAs are provided reliable information for one or two months in advance. |
| |(iii) Significant in-year budget adjustments are frequent, but undertaken with some transparency. |
|D |(i) Cash flow planning and monitoring are not undertaken or of very poor quality. |
| |(ii) MDAs are provided commitment ceilings for less than a month OR no reliable indication at all of |
| |actual resource availability for commitment. |
| |(iii) Significant in-year budget adjustments are frequent and not done in a transparent manner. |
|PI-17 Recording and management of cash balances, debt and guarantees |
|i) Quality of debt data recording |Score = A: Domestic and foreign debt records are complete, updated and reconciled on a monthly basis with|
|and reporting |data considered of high integrity. Comprehensive management and statistical reports (cover debt service, |
| |stock and operations) are produced at least quarterly |
| |Score = B: Domestic and foreign debt records are complete, updated and reconciled quarterly. Data |
| |considered of fairly high standard, but minor reconciliation problems occur. Comprehensive management and|
| |statistical reports (cover debt service, stock and operations) are produced at least annually. |
| |Score = C: Domestic and foreign debt records are complete, updated and reconciled at least annually. Data|
| |quality is considered fair, but some gaps and reconciliation problems are recognized. Reports on debt |
| |stocks and service are produced only occasionally or with limited content. |
| |Score = D: Debt data records are incomplete and inaccurate to a significant degree. |
|ii) Extent of consolidation of the |Score = A: All cash balances are calculated daily and consolidated. |
|government’s cash balances |Score = B: Most cash balances calculated and consolidated at least weekly, but some extra-budgetary funds|
| |remain outside the arrangement. |
| |Score = C: Calculation and consolidation of most government cash balances take place at least monthly, |
| |but the system used does not allow consolidation of bank balances |
| |Score = D: Calculation of balances takes place irregularly, if at all, and the system used does not allow|
| |consolidation of bank balances. |
|iii) Systems for contracting loans |Score = A: Central government’s contracting of loans and issuance of guarantees are made against |
|and issuance of guarantees |transparent criteria and fiscal targets, and always approved by a single responsible government entity. |
| |Score = B: Central government’s contracting of loans and issuance of guarantees are made within limits |
| |for total debt and total guarantees, and always approved by a single responsible government entity. |
| |Score = C: Central government’s contracting of loans and issuance of guarantees are always approved by a |
| |single responsible government entity, but are not decided on the basis of clear guidelines, criteria or |
| |overall ceilings. |
| |Score = D: Central government’s contracting of loans and issuance of guarantees are approved by different|
| |government entities, without a unified overview mechanism. |
|PI-18 Effectiveness of payroll controls |
|A |(i) Personnel database and payroll are directly linked to ensure data consistency and monthly |
| |reconciliation. |
| |(ii) Required changes to the personnel records and payroll are updated monthly, generally in time for the|
| |following month’s payments. Retroactive adjustments are rare (if reliable data exists, it shows |
| |corrections in max. 3% of salary payments). |
| |(iii) Authority to change records and payroll is restricted and results in an audit trail. |
| |(iv) A strong system of annual payroll audits exists to identify control weaknesses and/or ghost workers.|
|B |(i) Personnel data and payroll data are not directly linked but the payroll is supported by full |
| |documentation for all changes made to personnel records each month and checked against the previous |
| |month’s payroll data. |
| |(ii) Up to three months’ delay occurs in updating of changes to the personnel records and payroll, but |
| |affects only a minority of changes. Retroactive adjustments are made occasionally. |
| |(iii) Authority and basis for changes to personnel records and the payroll are clear. |
| |(iv) A payroll audit covering all central government entities has been conducted at least once in the |
| |last three years (whether in stages or as one single exercise). |
|C |(i) A personnel database may not be fully maintained but reconciliation of the payroll with personnel |
| |records takes place at least every six months. |
| |(ii) Up to three months delay occurs in processing changes to personnel records and payroll for a large |
| |part of changes, which leads to frequent retroactive adjustments. |
| |(iii) Controls exist, but are not adequate to ensure full integrity of data. |
| |(iv) Partial payroll audits or staff surveys have been undertaken within the last 3 years. |
|D |(i) Integrity of the payroll is significantly undermined by lack of complete personnel records and |
| |personnel database, or by lacking reconciliation between the three lists. |
| |(ii) Delays in processing changes to payroll and nominal roll are often significantly longer than three |
| |months and require widespread retroactive adjustments. |
| |(iii) Controls of changes to records are deficient and facilitate payment errors. |
| |(iv) No payroll audits have been undertaken within the last three years. |
|PI-19 Competition, value for money and controls in procurement |
|i) Use of open competition for |Score = A: Accurate data on the method used to award public contracts exists and shows that more than 75%|
|award of contracts that exceed the |of contracts above the threshold are awarded on the basis of open competition. |
|nationally established monetary |Score = B: Available data on public contract awards shows that more than 50% but less than 75% of |
|threshold for small purchases |contracts above the threshold are awarded on basis of open competition, but the data may not be accurate.|
| |Score = C: Available data shows that less than 50% of contracts above the threshold are awarded on an |
| |open competitive basis, but the data may not be accurate. |
| |Score = D: Insufficient data exists to assess the method used to award public contracts OR the available |
| |data indicates that use of open competition is limited. |
|ii) Justification for use of less |Score = A: Other less competitive methods when used are justified in accordance with clear regulatory |
|competitive procurement methods |requirements. |
| |Score = B: Other less competitive methods when used are justified in accordance with regulatory |
| |requirements. |
| |Score = C: Justification for use of less competitive methods is weak or missing. |
| |Score = D: Regulatory requirements do not clearly establish open competition as the preferred method of |
| |procurement. |
|iii) Existence and operation of a |Score = A: A process (defined by legislation) for submission and timely resolution of procurement process|
|procurement complaints mechanism |complaints is operative and subject to oversight of an external body with data on resolution of |
| |complaints accessible to public scrutiny. |
| |Score = B: A process (defined by legislation) for submitting and addressing procurement process |
| |complaints is operative, but lacks ability to refer resolution of the complaint to an external higher |
| |authority. |
| |Score = C: A process exists for submitting and addressing procurement complaints, but it is designed |
| |poorly and does not operate in a manner that provides for timely resolution of complaints. |
| |Score = D: No process is defined to enable submitting and addressing complaints regarding the |
| |implementation of the procurement process. |
|PI-20 Effectiveness of internal controls for non-salary expenditure |
|A |(i) Comprehensive expenditure commitment controls are in place and effectively limit commitments to |
| |actual cash availability and approved budget allocations (as revised). |
| |(ii) Other internal control rules and procedures are relevant, and incorporate a comprehensive and |
| |generally cost effective set of controls, which are widely understood. |
| |(iii) Compliance with rules is very high and any misuse of simplified and emergency procedures is |
| |insignificant. |
|B |(i) Expenditure commitment controls are in place and effectively limit commitments to actual cash |
| |availability and approved budget allocations for most types of expenditure, with minor areas of |
| |exception. |
| |(ii) Other internal control rules and procedures incorporate a comprehensive set of controls, which are |
| |widely understood, but may in some areas be excessive (e.g. through duplication in approvals) and lead to|
| |inefficiency in staff use and unnecessary delays. |
| |(iii) Compliance with rules is fairly high, but simplified/emergency procedures are used occasionally |
| |without adequate justification. |
|C |(i) Expenditure commitment control procedures exist and are partially effective, but they may not |
| |comprehensively cover all expenditures or they may occasionally be violated. |
| |(ii) Other internal control rules and procedures consist of a basic set of rules for processing and |
| |recording transactions, which are understood by those directly involved in their application. Some rules |
| |and procedures may be excessive, while controls may be deficient in areas of minor importance. |
| |(iii) Rules are complied with in a significant majority of transactions, but use of simplified/emergency |
| |procedures in unjustified situations is an important concern. |
|D |(i) Commitment control systems are generally lacking OR they are routinely violated. |
| |(ii) Clear, comprehensive control rules/procedures are lacking in other important areas. |
| |(iii) The core set of rules are not complied with on a routine and widespread basis due to direct breach |
| |of rules or unjustified routine use of simplified/emergency procedures. |
|PI-21 Effectiveness of internal audit |
|A |(i) Internal audit is operational for all central government entities, and generally meet professional |
| |standards. It is focused on systemic issues (at least 50% of staff time). |
| |(ii) Reports adhere to a fixed schedule and are distributed to the audited entity, ministry of finance |
| |and the SAI. |
| |(iii) Action by management on internal audit findings is prompt and comprehensive across central |
| |government entities. |
|B |(i) Internal audit is operational for the majority of central government entities (measured by value of |
| |revenue/expenditure), and substantially meet professional standards. It is focused on systemic issues (at|
| |least 50% of staff time). |
| |(ii) Reports are issued regularly for most audited entities and distributed to the audited entity, the |
| |ministry of finance and the SAI. |
| |(iii) Prompt and comprehensive action is taken by many (but not all) managers. |
|C |(i) The function is operational for at least the most important central government entities and |
| |undertakes some systems review (at least 20% of staff time), but may not meet recognized professional |
| |standards. |
| |(ii) Reports are issued regularly for most government entities, but may not be submitted to the ministry |
| |of finance and the SAI. |
| |(iii) A fair degree of action taken by many managers on major issues but often with delay |
|D |(i) There is little or no internal audit focused on systems monitoring. |
| |(ii) Reports are either non-existent or very irregular. |
| |(iii) Internal audit recommendations are usually ignored (with few exceptions). |
|C iii) Accounting, Recording and Reporting |
|PI-22 Timeliness and regularity of accounts reconciliation |
|i) Regularity of bank |Score = A: Bank reconciliation for all central government bank accounts take place at least monthly at |
|reconciliations |aggregate and detailed levels, usually within 4 weeks of end of period. |
| |Score = B: Bank reconciliation for all Treasury managed bank accounts take place at least monthly, |
| |usually within 4 weeks from end of month. |
| |Score = C: Bank reconciliation for all Treasury managed bank accounts take place quarterly, usually |
| |within 8 weeks of end of quarter. |
| |Score = D: Bank reconciliation for all Treasury managed bank accounts take place less frequently than |
| |quarterly OR with backlogs of several months. |
|ii) Regularity of reconciliation |Score = A: Reconciliation and clearance of suspense accounts and advances take place at least quarterly, |
|and clearance of suspense accounts |within a month from end of period and with few balances brought forward. |
|and advances |Score = B: Reconciliation and clearance of suspense accounts and advances take place at least annually |
| |within two months of end of period. Some accounts have uncleared balances brought forward. |
| |Score = C: Reconciliation and clearance of suspense accounts and advances take place annually in general,|
| |within two months of end of year, but a significant number of accounts have uncleared balances brought |
| |forward. |
| |Score = D: Reconciliation and clearance of suspense accounts and advances take place either annually with|
| |more than two months’ delay, OR less frequently. |
|PI-23 Availability of information on resources received by service delivery units |
|A |(i) Routine data collection or accounting systems provide reliable information on all types of resources |
| |received in cash and in kind by both primary schools and primary health clinics across the country. The |
| |information is compiled into reports at least annually. |
|B |(i) Routine data collection or accounting systems provide reliable information on all types of resources |
| |received in cash and in kind by either primary schools or primary health clinics across most of the |
| |country with information compiled into reports at least annually; OR special surveys undertaken within |
| |the last 3 years have demonstrated the level of resources received in cash and in kind by both primary |
| |schools and primary health clinics across most of the country (including by representative sampling). |
|C |(i) Special surveys undertaken within the last 3 years have demonstrated the level of resources received |
| |in cash and in kind by either primary schools or primary health clinics covering a significant part of |
| |the country OR by primary service delivery units at local community level in several other sectors. |
|D |(i) No comprehensive data collection on resources to service delivery units in any major sector has been |
| |collected and processed within the last 3 years. |
|PI-24 Quality and timeliness of in-year budget reports |
|A |(i) Classification of data allows direct comparison to the original budget. Information includes all |
| |items of budget estimates. Expenditure is covered at both commitment and payment stages. |
| |(ii) Reports are prepared quarterly or more frequently, and issued within 4 weeks of end of period. |
| |(iii) There are no material concerns regarding data accuracy. |
|B |(i) Classification allows comparison to budget but only with some aggregation. Expenditure is covered at |
| |both commitment and payment stages. |
| |(ii) Reports are prepared quarterly, and issued within 6 weeks of end of quarter. |
| |(iii) There are some concerns about accuracy, but data issues are generally highlighted in the reports |
| |and do not compromise overall consistency/ usefulness. |
|C |(i) Comparison to budget is possible only for main administrative headings. Expenditure is captured |
| |either at commitment or at payment stage (not both). |
| |(ii) Reports are prepared quarterly (possibly excluding first quarter), and issued within 8 weeks of end |
| |of quarter. |
| |(iii) There are some concerns about the accuracy of information, which may not always be highlighted in |
| |the reports, but this does not fundamentally undermine their basic usefulness. |
|D |(i) Comparison to the budget may not be possible across all main administrative headings. |
| |(ii) Quarterly reports are either not prepared or often issued with more than 8 weeks delay. |
| |(iii) Data is too inaccurate to be of any real use. |
|PI-25 Quality and timeliness of annual financial statements |
|A |(i) A consolidated government statement is prepared annually and includes full information on revenue, |
| |expenditure and financial assets/liabilities. |
| |(ii) The statement is submitted for external audit within 6 months of the end of the fiscal year. |
| |(iii) IPSAS or corresponding national standards are applied for all statements. |
|B |(i) A consolidated government statement is prepared annually. They include, with few exceptions, full |
| |information on revenue, expenditure and financial assets/liabilities |
| |(ii) The consolidated government statement is submitted for external audit within 10 months of the end of|
| |the fiscal year. |
| |(iii) IPSAS or corresponding national standards are applied. |
|C |(i) A consolidated government statement is prepared annually. Information on revenue, expenditure and |
| |bank account balances may not always be complete, but the omissions are not significant. |
| |(ii) The statements are submitted for external audit within 15 months of the end of the fiscal year. |
| |(iii) Statements are presented in consistent format over time with some disclosure of accounting |
| |standards. |
|D |(i) A consolidated government statement is not prepared annually, OR essential information is missing |
| |from the financial statements OR the financial records are too poor to enable audit. |
| |(ii) If annual statements are prepared, they are generally not submitted for external audit within 15 |
| |months of the end of the fiscal year |
| |(iii) Statements are not presented in a consistent format over time or accounting standards are not |
| |disclosed. |
|C iv) External Scrutiny and Audit |
|PI-26 Scope, nature and follow-up of external audit |
|A |(i) All entities of central government are audited annually covering revenue, expenditure and |
| |assets/liabilities. A full range of financial audits and some aspects of performance audit are performed |
| |and generally adhere to auditing standards, focusing on significant and systemic issues. |
| |(ii) Audit reports are submitted to the legislature within 4 months of the end of the period covered and |
| |in the case of financial statements from their receipt by the audit office. |
| |(iii) There is clear evidence of effective and timely follow up. |
|B |(i) Central government entities representing at least 75% of total expenditures12 are audited annually, |
| |at least covering revenue and expenditure. A wide range of financial audits are performed and generally |
| |adheres to auditing standards, focusing on significant and systemic issues. |
| |(ii) Audit reports are submitted to the legislature within 8 months of the end of the period covered and |
| |in the case of financial statements from their receipt by the audit office. |
| |(iii) A formal response is made in a timely manner, but there is little evidence of systematic follow up.|
|C |(i) Central government entities representing at least 50% of total expenditures are audited annually. |
| |Audits predominantly comprise transaction level testing, but reports identify significant issues. Audit |
| |standards may be disclosed to a limited extent only. |
| |(ii) Audit reports are submitted to the legislature within 12 months of the end of the period covered |
| |(for audit of financial statements from their receipt by the auditors). |
| |(iii) A formal response is made, though delayed or not very thorough, but there is little evidence of any|
| |follow up. |
|D |(i) Audits cover central government entities representing less than 50% of total expenditures or audits |
| |have higher coverage but do not highlight the significant issues. |
| |(ii) Audit reports are submitted to the legislature more than 12 months from the end of the period |
| |covered (for audit of financial statements from their receipt by the auditors). |
| |(iii) There is little evidence of response or follow up. |
|PI-27 Legislative scrutiny of the annual budget law |
|A |(i) The legislature’s review covers fiscal policies, medium term fiscal framework and medium term |
| |priorities as well as details of expenditure and revenue. |
| |(ii) The legislature’s procedures for budget review are firmly established and respected. They include |
| |internal organizational arrangements, such as specialized review committees, and negotiation procedures. |
| |(iii) The legislature has at least two months to review the budget proposals. |
| |(iv) Clear rules exist for in-year budget amendments by the executive, set strict limits on extent and |
| |nature of amendments and are consistently respected. |
|B |(i) The legislature’s review covers fiscal policies and aggregates for the coming year as well as |
| |detailed estimates of expenditure and revenue. |
| |(ii) Simple procedures exist for the legislature’s budget review and are respected. |
| |(iii) The legislature has at least one month to review the budget proposals. |
| |(iv) Clear rules exist for in-year budget amendments by the executive, and are usually respected, but |
| |they allow extensive administrative reallocations. |
|C |(i) The legislature’s review covers details of expenditure and revenue, but only at a stage where |
| |detailed proposals have been finalized. |
| |(ii) Some procedures exist for the legislature’s budget review, but they are not comprehensive and only |
| |partially respected. |
| |(iii) The legislature has at least one month to review the budget proposals. |
| |(iv) Clear rules exist, but they may not always be respected OR they may allow extensive administrative |
| |reallocation as well as expansion of total expenditure. |
|D |(i) The legislature’s review is non-existent or extremely limited, OR there is no functioning |
| |legislature. |
| |(ii) Procedures for the legislature’s review are non-existent or not respected. |
| |(iii) The time allowed for the legislature’s review is clearly insufficient for a meaningful debate |
| |(significantly less than one month). |
| |(iv) Rules regarding in-year budget amendments may exist but are either very rudimentary and unclear OR |
| |they are usually not respected. |
|PI-28 Legislative scrutiny of external audit reports |
|A |(i) Scrutiny of audit reports is usually completed by the legislature within 3 months from receipt of the|
| |reports. |
| |(ii) In-depth hearings on key findings take place consistently with responsible officers from all or most|
| |audited entities, which receive a qualified or adverse audit opinion. |
| |(iii) The legislature usually issues recommendations on action to be implemented by the executive, and |
| |evidence exists that they are generally implemented. |
|B |(i) Scrutiny of audit reports is usually completed by the legislature within 6 months from receipt of the|
| |reports. |
| |(ii) In-depth hearings on key findings take place with responsible officers from the audited entities as |
| |a routine, but may cover only some of the entities, which received a qualified or adverse audit opinion. |
| |(iii) Actions are recommended to the executive, some of which are implemented, according to existing |
| |evidence. |
|C |(i) Scrutiny of audit reports is usually completed by the legislature within 12 months from receipt of |
| |the reports. |
| |(ii) In-depth hearings on key findings take place occasionally, cover only a few audited entities or may |
| |include with ministry of finance officials only. |
| |(iii) Actions are recommended, but are rarely acted upon by the executive. |
|D |(i) Examination of audit reports by the legislature does not take place or usually takes more than 12 |
| |months to complete. |
| |(ii) No in-depth hearings are conducted by the legislature. |
| |(iii) No recommendations are being issued by the legislature. |
|DONOR PRACTICES |
|D-1 Predictability of Direct Budget Support |
|A |(i) In no more than one out of the last three years has direct budget support outturn fallen short of the|
| |forecast by more than 5%. |
| |(ii) Quarterly disbursement estimates have been agreed with donors at or before the beginning of the |
| |fiscal year and actual disbursements delays (weighted) have not exceeded 25% in two of the last three |
| |years. |
|B |(i) In no more than one out of the last three years has direct budget support outturn fallen short of the|
| |forecast by more than 10%. |
| |(ii) Quarterly disbursement estimates have been agreed with donors at or before the beginning of the |
| |fiscal year and actual disbursements delays (weighted) have not exceeded 25% in two of the last three |
| |years. |
|C |(i) In no more than one out of the last three years has direct budget support outturn fallen short of the|
| |forecast by more than 15%. |
| |(ii) Quarterly disbursement estimates have been agreed with donors at or before the beginning of the |
| |fiscal year and actual disbursements delays (weighted) have not exceeded 50% in two of the last three |
| |years. |
|D |(i) In at least two of the last three years did direct budget support outturn fall short of the forecast |
| |by more than 15% OR no comprehensive and timely forecast for the year(s) was provided by the donor |
| |agencies. |
| |(ii) The requirements for score C (or higher) are not met. |
|D-2 Financial information provided by donors for budgeting and reporting on project and program aid |
|A |(i) All donors (with the possible exception of a few donors providing insignificant amounts) provide |
| |budget estimates for disbursement of project aid at stages consistent with the government’s budget |
| |calendar and with a breakdown consistent with the government’s budget classification. |
| |(ii) Donors provide quarterly reports within one month of end-of-quarter on the all disbursements made |
| |for at least 85% of the externally financed project estimates in the budget, with a break-down consistent|
| |with the government budget classification. |
|B |(i) At least half of donors (including the five largest) provide complete budget estimates for |
| |disbursement of project aid at stages consistent with the government’s budget calendar and with a |
| |breakdown consistent with the government’s budget classification. |
| |(ii) Donors provide quarterly reports within one month of end-of-quarter on the all disbursements made |
| |for at least 70% of the externally financed project estimates in the budget with a break-down consistent |
| |with the government budget classification. |
|C |(i) At least half of donors (including the five largest) provide complete budget estimates for |
| |disbursement of project aid for the government’s coming fiscal year, at least three months prior its |
| |start. Estimates may use donor classification and not be consistent with the government’s budget |
| |classification. |
| |(ii) Donors provide quarterly reports within two months of end-of-quarter on the all disbursements made |
| |for at least 50% of the externally financed project estimates in the budget. The information does not |
| |necessarily provide a break-down consistent with the government budget classification. |
|D |(i) Not all major donors provide budget estimates for disbursement of project aid at least for the |
| |government’s coming fiscal year and at least three months prior its start. |
| |(ii) Donors do not provide quarterly reports within two month of end-of-quarter on the disbursements made|
| |for at least 50% of the externally financed project estimates in the budget. |
|D-3 Proportion of aid that is managed by use of national procedures |
|A |(i) 90% or more of aid funds to central government are managed through national procedures. |
|B |(i) 75% or more of aid funds to central government are managed through national procedures. |
|C |(i) 50% or more of aid funds to central government are managed through national procedures. |
|D |(i) Less than 50% of aid funds to central government are managed through national procedures. |
Annex 7. Participants in the Field Mission
| Name |Institution |Title |
|Karin von Lundwust Morano |ABC |Budget Manager |
|David Augusto Solís Rubín de Celis |ABC |External Financing Officer |
|Gregorio Salazar |ABC |External Financing Manager |
|María Peñaranda |ABC |Administration and Finance Manager |
|Luis Fernando Escobar Patiño |Central Bank of Bolivia |Fiscal and Monetary Sector Manager |
|Teresa Vera |Central Bank of Bolivia |Fiscal and Monetary Sector Assistant Manager |
|Juan Carlos Escobar |Central Bank of Bolivia |Professional |
|Tatiana Quiroga Morales |Central Bank of Bolivia |Balance of Payments and External Sector Manager |
|Raúl Mendoza |Central Bank of Bolivia |Advisor |
|Freddy Gumiel |Central Bank of Bolivia |External Sector Assistant Manager |
|Oscar Ferrufino Morro |MEFP |National General Treasury Operation Unit Manager |
|Álvaro Orozco Salas |MEFP |Manager of Financial Programming Unit |
|Franz Crespo |MEFP |Salary and Administration Information Unit Manager |
|Moisés Blanco |MEFP |Salary and Administration Information Unit Manager |
|Andrés Ramos |MEFP |State-Owned Enterprises Unit Manager |
|Willy Chura |MEFP |Plurinational State and Decentralized Entities |
| | |Organization Unit |
|Magali Churruarrín |MEFP |General Director of Budget Programming and Management|
|Humberto Arandia |MEFP |Public Debt Sustainability Unit |
|Teresa Mariaca |MEFP |Public Debt Sustainability Unit |
|Humberto Fernández |MEFP |Public Debt Operation Unit |
|Juana Jiménez |MEFP |General Director of Public Credit |
|Gonzalo Callisaya |MEFP |General Director of Fiscal Accounting |
|Roberto Ugarte |MEFP |Deputy Minister of Tax Policy |
|Marcelo Eguino |MEFP |General Director of Tax Information Management |
| | |Systems |
|Karim Daza |MEFP |General Direction of Fiscal Information Management |
| | |Systems |
|Oswaldo Nina - |Ministry of Development Planning |General Director of Multiannual Planning |
|Fernando Ponce de León |Ministry of Development Planning |General Directorate of Investment and Financing |
| | |Monitoring |
|Mónica Loma |Ministry of Development Planning |External Financing, Programming and Pre-investment |
| | |Management Unit |
|Fernando Carrasco |Ministry of Development Planning |External Financing Analyst for the World Bank |
|Elizabeth Ascarrunz |Ministry of Development Planning |External Financing Analyst |
|Sandra Quiroga |CGE |Subcomptroller of Internal Control |
|Olga Suárez |CGE |Subcomptroller External Auditing |
|María Paz Andrade |CGE |National Manager of Internal Auditing |
|Franco Guzmán |National Tax Service |Planning and Management Control Staff |
|Fernando Arenas |National Tax Service |Planning and Management Control Staff Manager |
|Wilfredo Zapana |National Customs of Bolivia |National System Manager |
|José Luis Fernández |FPS |Administration and System Manager |
|Roxana Encinas |FPS |Agreement Management Manager |
|María del Carmen López |FPS |Treasury and Accounting Officer |
|Nelson Bellot |FPS |Agreements Management Officer |
|Jaime Zeballos |FPS |Internal Auditor |
|Ramiro Quiroga |Finance Committee– Chamber of |Technical Secretary |
| |Deputies | |
|Robny Clavijo Ponce |Ministry of Rural Development and |Legal Auditor |
| |Land | |
|Maritza Sandoval |Ministry of Rural Development and |Internal Audit Unit Manager |
| |Land | |
|Luis Cuentas |Ministry of Rural Development and |Budget Manager |
| |Land | |
|Julio Rojas |Ministry of Rural Development and |Accounting Manager |
| |Land | |
|Eileen Salamanca |Ministry of Rural Development and |Finance Unit Manager |
| |Land | |
|Carlos Pizarrozo |Ministry of Rural Development and |Consultant |
| |Land | |
|María Teresa Rojas |Ministry of Public Works, Services |General Director of Administrative Issues |
| |and Housing | |
|Elvia Villena Romero |Ministry of Public Works |Planning Director |
|Gualberto Reque Romero |Ministry of Public Works |General Director of Civil Aeronautics |
|Luis Freddy Pary |Ministry of Public Works | |
|José Lino Gemio |Ministry of Public Works | |
|Samuel Blanco Rivero |Ministry of Public Works |Director Internal Auditing |
|Mercedes Achá Arauco |Ministry of Public Works | |
|Norma Berno Tito |Ministry of Public Works |UECyD Project Coordinator |
|Frank Quintana |Ministry of Public Works |Finance Manager |
|Marcelino Callizaya |Municipal Government El Alto (GMEA) |Chief Administrative Office of Financial |
| | |Administration |
|Dionisio Velasco |Municipal Government of La Paz |Chief Administrative Office of Economic Promotion - |
| | |Director of Finance |
|Rafael Loayza |Prefecture of La Paz |Administrative Finance Secretary |
|Daniel Morales Baldivieso |Prefecture of La Paz |Director of Treasury and Public Credit |
|Ivonne Segales |Prefecture of La Paz |Director of Accounting |
|Lucy María Quisbert |Prefecture of La Paz |Analist |
|Wilbert Flores Ugarte |Prefecture of La Paz |Current Expenditure Manager |
|Javier Villarroel Romero |Prefecture of La Paz | |
|Roberto Ugarte |MEFP |Deputy Minister of Tax Policy |
|Gonzalo Mondaca |MEFP |Manager of Fiscal Accounting Unit |
|Fernando Mita |MEFP |General Director of Analiyis and Policies |
|Carlos Silva |MEFP |Area Chief |
|Monica Parada |MEFP |Area Chief |
|Patricia Alborta |Andean Development Corporation |Economist |
|Roberto Laguado |IDB |Procurement Specialist |
|Hugo Collareta |IDB |Consultant |
|Alejandra Velasco |World Bank |Country Officer |
|Franco Mendizabal |European Union |Economist |
|Roderick Mckenzie |European Union |Economist |
|Karmiña Antezana |KfW |Project Manager |
|Michael Dreyer |GTZ |Director |
|Pedro Sangueza |Ministry of Development Planning |External Financing Analist |
|Martha Fernandez |Ministry of Development Planning |External Financing Analist |
|Marcelino Aliaga |Ministry of Development Planning |External Financing Analist |
|Jose Luis Valencia |Chamber of Commerce | |
|Andrés Torres |Confederation of Private Businessmen | |
| |of Bolivia | |
Documents Related to PFM Review
Ahmad, E., G. Brosio, et al, Bolivia – Improving Budget and Descentralization Processes, Fiscal Affairs Department, International Monetary Fund, November, 2004
Artana, Daniel, Tópicos macro-fiscales y perspectivas de sostenibilidad fiscal en Bolivia, Serie de Estudios Económicos y Sociales, RE1-07-005, Inter-American Development Bank, May, 2007
Development Planning Ministry, Instructivo para el Registro de Convenios de Financiamiento Externo; Dirección General de Financiamiento Externo, VIPFE, Ministerio de Planificación del Desarrollo.
Supreme Decree Nº 23215, Reglamento para el Ejercicio de las Atribuciones de la Contraloría General de la República, July 22, 1992
Supreme Decree Nº 26115, Normas Básicas del Sistema de Administración de Personal, March 16, 2001
Supreme Decree Nº 27310, Reglamento al Código Tributario Boliviano, January 09, 2004
Supreme Decree Nº 27329, Transparencia y Acceso a la Información Gubernamental, January 31, 2004
Supreme Decree Nº 27849, Nuevo Reglamento de Modificaciones Presupuestarias, November 12, 2004
Supreme Decree Nº 29141, Programa de Desempeño Institucional y Financiero - PDIF, May 30, 2007
Supreme Decree Nº 29272, Plan Nacional de Desarrollo “Bolivia Digna, Soberana, Productiva y Democrática para Vivir Bien”, September 12, 2007
Supreme Decree Nº 29322, Modificatorio del Artículo 2 del Decreto Supremo Nº 28421 referido a la distribución del Impuesto Directo a los Hidrocarburos – IDH; October 24, 2007
Supreme Decree Nº 29365, Autorización al TGN a suscribir un Contrato de Fideicomiso con el Banco de Desarrollo Productivo S.A.M. - BDP S.A.M. - Banco de Segundo Piso en calidad de "Fiduciario", mediante la transferencia de $US 85.000.000, December 05, 2007
Supreme Decree Nº 29400, Reglamento a la Ley Nº 3791 de 28 noviembre de 2007, de la Renta Universal de Vejez (Renta Dignidad) y los Gastos Funerales, December 29, 2007
Supreme Decree Nº 29529, Incrementa el monto de transferencia a que hace referencia el Decreto Supremo Nº 29365 hasta US$155.000.000, amplia el plazo señalado en el Artículo 1 del Decreto Supremo Nº 29365 a dos (2) años, a partir de la firma del contrato de Fideicomiso, April 23, 2008
Supreme Decree Nº 29726, Pago indemnización correspondiente al valor de las inversiones de AEI Luxembourg Holdings S.ár.l. en Transredes y autorización al Ministerio de Hacienda, a través del Tesoro General de la Nación - TGN, a suscribir una adenda al contrato de Fideicomiso suscrito con el Banco de Desarrollo Productivo S.A.M. - BDP S.A.M., Banco de Segundo Piso, October 01, 2008
Supreme Decree Nº 29865, Modificatorio a los Decretos Supremos Nº 29529, Nº 29365, Nº 29706 y Nº 29726 para incrementar el monto del Fideicomiso hasta $US283.000.000, December 17, 2008
Supreme Decree Nº. 29308, Normas para la gestión y ejecución e recursos externos de donación, October 10, 2007
Supreme Decree Nº. 29881, Reglamento de Modificaciones Presupuestarias, January 07, 2009
Supreme Decree Nº. 29894, Estructura Organizativa del órgano Ejecutivo del Estado Plurinacional, February 07, 2009
General State Comptrollership, Informe del Contralor General del Estado por la gestión 2008, June, 2009
International Monetary Fund, Bolivia– External and Public Debt Sustainability Analysis, (attached to the corresponding Article IV Consultation report), June 27, 2007.
International Monetary Fund, Bolivia– External and Public Debt Sustainability Analysis, (attached to the Article IV Consultation report), December 2008.
International Monetary Fund, Bolivia– External and Public Debt Sustainability Analysis, December 11, 2008
International Monetary Fund, Bolivia– Report on the Observance of Standard and Codes (ROSC)—Data Module, IMF Country Report Nº. 07/283, Washington, D.C., August 2007.
International Monetary Fund, Bolivia– Staff Report for the 2006 Article IV Consultation, (Appendix 2: External and Public Debt Sustainability Analysis), June 26, 2006.
International Monetary Fund, Bolivia– Staff Report for the 2008 Article IV Consultation, IMF Country Report Nº. 09/27, Washington DC
International Monetary Fund, Government Finance Statistics DFS Manual, Washington, D.C., 2001
Law Nº 1654, Ley de Descentralización Administrativa, July 28, 1995
Law Nº 1990, Ley General de Aduanas, July 28, 1999
Law Nº 2137, Sustitutiva del texto del Artículo 28 de la Ley 2042 de Administración Presupuestaria, October 23, 2000
Law Nº 2492 , Código Tributario Boliviano, August 02, 2003
Law Nº 2650, Texto completo de la Constitución Política del Estado, April 13, 2004
Law Nº 3058, Ley de Hidrocarburos, May 17, 2005
Law Nº 3351, Ley de Organización del Poder Ejecutivo, February 21, 2006
Law Nº. 1178, Ley de Administración y control gubernamental (SAFCO), July 20, 1990
Law Nº. 1551, Ley de Participación Popular, April 20, 1994
Law Nº. 2028, Ley de Municipalidades, October 28, 1999
Law Nº. 2042, Ley de Administración Presupuestaria, December 21, 1999.
Ministerial Resolution Nº. 509 issued by the Ministry of Finance, Clasificadores Presupuestarios 2008, October 12, 2007
Ministerial Resolution Nº. 612 issued by the Ministry of Finance, Reglamento Básico de Operaciones del Sistema de Información sobre Inversiones, June 27, 1997
Ministry of Economy and Public Finance, Dossier Estadístico 1990- 2008, Viceministerio de Tesoro y Crédito Público, Dirección General de Análisis y Políticas Fiscales, September 2009.
Ministry of Economy and Public Finance, Informe Financiero de la Administración Central 2008; Dirección General de Contabilidad Fiscal, Viceministerio de Presupuesto y Contabilidad Fiscal, Ministerio de Economía y Finanzas Públicas; July 2009
Ministry of Economy and Public Finance, Presupuesto General de la Nación – Gestión 2009, January 2009
Ministry of Finance, Memoria Fiscal 2007 y 2008
Molina Díaz, Germán, “El sistema presupuestario boliviano 1960- 2003 y propuesta de presupuesto plurianual”, Observatorio de la Economía Latinoamericana, Nº. 83, August 2007.
Mollinedo, and J. Velasco, “La gestión y la sostenibilidad de la deuda en Bolivia”, working paper, World Bank, La Paz, 2005.
Political Constitution of the Republic of Bolivia, Enacted February 2, 1967
Political Constitution of the Republic of Bolivia, Enacted February 7, 2009
Regulatory Resolution from the Board of National Tax Service, Nº 10.0004.09, Procedimiento de Facilidades de Pago, December 14, 2007
Scartascini, Carlos and Ernesto Stein, “The Bolivian Budget (1990- 2002). A Year Long Budgeting Process”, preliminary draft, Inter-American Development Bank, March 2004.
Supreme Resolution Nº 0017 Ministerio de Economía y Finanzas Públicas, Designa a Edwin Rojas Ulo como Viceministro de Tesoro y Crédito Público, February 10, 2009
Supreme Resolution Nº 216768, Normas Básicas del Sistema Nacional de Inversión Pública, June 18, 1996
Supreme Resolution Nº 218041. Normas Básicas de Sistema de Crédito Público, July 29, 1997
Supreme Resolution Nº 218056, Normas Básicas del Sistema de Tesorería, July 30, 1997
Supreme Resolution Nº 227121, Modificación Art. 40 de las Normas Básicas del Sistema de Contabilidad Integrada, January 31, 2007
Supreme Resolution Nº. 225558, Normas Básicas del Sistema de Presupuesto, December 1, 2005
Supreme Resolution. Nº 222957, Normas Básicas del Sistema de Contabilidad Integrada, March 4, 2005
World Bank, Análisis de la Situación Institucional y de Gobernabilidad: Hacia una Descentralización Inclusiva (In two volumes) Report Nº. 36285-BO, May, 2006
World Bank, Cómo se gasta el dinero público, Pubic Expenditure Review, June, 2006 (update)
World Bank, Inter-American Development Bank, et al, Bolivia Country Financial Accountability Assesment, World Bank Report Nº. 34913-BO, Washington D.C., January, 2006
-----------------------
[1] The decision to base the 2007 EFIP primarily on data from the National General Treasury was due to a certain extent to technical and logistic limitations.
[2] In parallel with the PEFA exercise, an evaluation of the procurement systems is being carried out, using the OECD-DAC indicators, led by the IDB.
[3] Questionnaire for the field application of the PEFA framework to measure PFM performance.
[4] Annex 7 includes a detail of the entities visited and the officials interviewed.
[5] This section draws on the World Bank’s Interim Assistance Strategy for the Multinational State of Bolivia for the period 2010-2011.
[6] A detailed list of the legal regulations reviewed for this review is included in the References section.
[7] Section 3 of Law 1178 on Government Administration and Oversight.
[8] Previously, the report on the work of the Auditor’s General Office was submitted to the President.
[9] New Political Constitution of the State, Second Part, Title I, Chapter One.
[10] Although the subnational level is not comprised in the scope of this review, certain characteristics and limitations affecting the subnational levels were considered in the framework of performance indicators IP-7 and IP-9.
[11] Basic Standards of the Integrated Accounting System, Section 3, Public Sector Structure and Financing.
[12] Method 1 is used for all indicators with a single dimension and for the indicators with multiple dimensions when it is likely that unsatisfactory results in one dimension are detrimental to an adequate performance outcome in other dimensions of the same indicator. Consequently, the overall score will be based on the weakest link of the dimensions associated with the indicator and in that sense, the lowest score assigned to each dimension should be chosen, adding “+” when any of the remaining dimensions achieves a higher score.
[13] Method 2 is based on the average of the scores for the various indicator dimensions and is applied to multidimensional scores when a low score in one indicator dimension is not necessarily detrimental to the outcome of a higher score in another dimension. The conversion table available in the PEFA Guidelines is utilized to calculate the average.
[14] As described in connection with PI-16, for FY2008 the budget increase was approved by Congress in November, just little over a month away from the end of the fiscal year.
[15] For the general government (which besides the central government includes the subnational governments), these taxes linked to hydrocarbons represented close to one-third of the total tax revenues on these years).
[16] The tax on transactions represents a de facto minimum income tax, based on gross sales or income. See, for example, Simone (2007) for a review of Bolivia’s tax system and its recent development.
[17] It should be taken into account that the recording of fiscal revenues in Bolivia is gross and not net, as opposed to the usual standard [See IMF, Bolivia—Report on the Observance of Standards and Codes (ROSC), Data Module, Country Report No. 07/283, Washington, DC, August, 2007]. The most usual form of tax reimbursement is by means of Fiscal Credit Certificates. Table 5 in Annex A shows that these represent around 7 percent of total revenues, and if these certificates are excluded the fiscal revenues still exceed those originally budgeted, for an even slightly higher margin.
[18] According to data from the National Tax Service, the domestic taxes, excluding IEHD, IDH, ITF and the Transitory Program besides the royalties, increased at an annual rate of 6 percent above the actual GDP growth and inflation in the last 3 years, as compared to the 5 percent estimated in the budget assumptions for those years.
[19] World Bank, et al and Carlos Scartascini and Ernesto Stein, The Bolivian Budget (1990-2002), A Year Long Budgeting Process, Draft, IDB, March 2004.
[20] For the 2008 budget, the classifiers were approved under Ministerial Resolution No. 509 of October 12, 2007, just 13 (calendar) days before the Executive submitted the draft budget to Congress. In the two previous years, these resolutions on the classifiers were approved instead at the end of August and beginning of September, respectively, and for the 2009 budget the respective resolution was approved on September 30, 2008.
[21] Supreme Resolution No. 225558 (December 2005) on the Budget System Basic Standards, as well as other previous regulations, emphasize a program-based budget structure. There have always been difficulties to implement it, and through the years it has not been effectively used (see Germán Molina Díaz, El sistema presupuestario boliviano 1960-2003 y propuesta de presupuesto plurianual, Observatorio de la Economía Latinoamericana, No. 83, August 2007.
[22] Classifications of Functions of Government.
[23] 2001 Public Finance Statistics Manual (Manual de Estadísticas de Finanzas Públicas, 2001)
[24] The main actions to do so are indicated by E.G. Ahmad and others, Bolivia—Improving Budget and Decentralization Processes, Fiscal Affairs Department, IMF, November 2004.
[25] However, in accordance with the Law on Municipalities (Law 2028, of October 1999), the municipalities have a deadline (up to December 31); so that after learning definitely about the forecasted transfers in the National General Budget, they complete the preparation and approval of their respective budgets by the Municipal Councils that then have to be sent to the MEFP.
[26] Once the transfers from the National General Budget have been estimated, the municipalities complete preparation of their respective budgets and have them approved by their respective Municipal Councils and report them to the MEFP, as explained in the description of PI-8.
[27] Agreement signed between the Development Planning Ministry, the Ministry of Economy and Public Finance and the entity that will be in charge of executing a project.
[28] Supreme Decree No. 29881 dated January 7, 2009.
[29] Supreme Decree No. 29308 dated October 10, 2007.
[30] Notes to the Financial Statements of the Central Administration for Fiscal Year 2008.
[31] US$5.041 million of credit and grant as of September 2008.
[32] For further details and analysis of said evolution, see World Bank, Análisis de la Situación Institucional y de Gobernabilidad: Hacia una Descentralización Inclusiva (In two volumes) Report Nº. 36285-BO, May, 2006.
[33] December 26 in the case of the 2008 budget.
[34] A webpage of the Vice Ministry of Budget and Fiscal Accounting presents the fiscal data of each of the municipalities and prefectures until 2007 but without aggregation or consolidation with other general government entities.
[35] The scope of this Section includes the municipalities (autonomous) and prefectures.
[36] The Institutional and Financial Performance Program was created taking into account the positive outcomes of the application of the Financial Adjustment Plan and the creation and administration of the Guarantee Funds.
[37] Section 3, Law 1178 of Government Administration and Control sets out that the Public Sector entities include the Office of the President and Vice President of the Republic, the ministries, the administrative units of the Comptroller’s General Office, and of the Electoral Courts; the Central Bank of Bolivia, the Offices of the Banking and Insurance Superintendents; the Development Corporations and the financial intermediation state entities; the Armed Forces and the National Police; the Departmental Governments, the universities and municipalities; the institutions, agencies and enterprises of the national, departmental and local governments, and any other legal person where the state holds a majority interest.
[38] In accordance with the notes to the Central Administration Financial Statements for FY 2008 that includes the net equity of decentralized entities and state-owned enterprises (without municipalities) reportedly only 47 entities submitted an external audit or reliability report.
[39] Neuman and Calland, 2007.
[40] See article 147 of the 1967 Constitution (as amended and unified by Law 2650, of April 13, 2004), as well as paragraph 11 in both Article 159 and Article 172 of the new National Political Constitution (enacted in January 2009).
[41] Ministry of Finance, “Memoria Fiscal 2008.
[42] Based on information prior to 2007, public debt sustainability estimates were made both in studies supported by the World Bank (Mollinedo and J. Velasco, “La gestión y la sostenibilidad de la deuda en Bolivia”, working paper, World Bank, La Paz, 2005) and summarized in World Bank, Cómo se gasta el dinero público, Pubic Expenditure Review, June, 2006, and Daniel Artana, Tópicos macro-fiscales y perspectivas de sostenibilidad fiscal en Bolivia, Serie de Estudios Económicos y Sociales, RE1-07-005, Inter-American Development Bank, May 2007.
[43] .bo and .bo.
[44] Some examples of the penalties applied include closures, which is exemplary (over 100 closures per month). On the other hand, the effectiveness seems to be quite high since only 1,027 cases were appealed in 2008, a minimum share of the penalties applied, which were close to 20,000.
[45] During the mission conducted in November 2008, the IMF commended efforts and results obtained in the area of treasury and cash management.
[46] An IMF mission reviewed the records in November 2008 and found they reflected appropriate information.
[47] Members of the Inter-Ministerial Public Debt Council include the Minister of Economy and Public Finance, the President of the Central Bank, the Development Planning Minister, the Minister of Foreign Relations, the then- Decentralization Deputy Minister (current Minister of Autonomies), and the Deputy Minister of Public Investment and External Financing.
[48] To that effect, in accordance with the Basic Standards of the Personnel Management System, each entity is required to: (a) record and control the information and actions related to the entity’s staff, as well as any changes in it; (b) have a database capable of providing information on the labor records of public officials, to facilitate decision-making; (c) develop a statistics and data-generation system on the main characteristics of the human resources of each public entity; and (d) provide the National Personnel Management Service with information to update the Personnel Management Information System.
[49] National General Budget – Fiscal Year 2009, Article 15, Maximum Compensation in the Public Sector.
[50] Sections 3 and 4 of Law 1178.
[51] Articles 48 and 49. Supreme Decree No. 29190.
[52] Articles 28 to 30 of Supreme Decree No. 29190
[53] Article 4 of Supreme Decree No. 29576
[54] Article 53, Supreme Decree No. 29190
[55] Articles. 70, 71 and 72 (12), Law 1178, and Articles 27 to 40 of its Regulations.
[56] With the reform of the procurement rules through Supreme Decree No. 0181, the possibility of filing a complaint under the ANPE modality was established as from Bs200,000.
[57] Article 71, Supreme Decree No. 29190
[58] Article 27, Regulations of Supreme Decree No. 29190
[59] Article 27, Regulations of Supreme Decree No. 29190
[60] Article 72 NB, Basic Norms Supreme Decree No. 29190
[61] Article 3 of Law No. 1178 of Government Administration and Control (SAFCO Law).
[62] Regulations for the Exercise of the Powers of the CGR in Bolivia.
[63] Resolution No. CGR-1/070/2000 of September 21, 2000.
[64] The commitment quota for investment expenditure is quarterly.
[65] Report of the General Comptroller of the Republic for Fiscal Year 2008.
[66] Of the cumulative balance (as of December 31, 2008) of Bs7.45 million, Bs1.5 million is pending since the close of FY2007.
[67] According to the classification of health facilities used in Bolivia, primary health care includes 1,360 health stations and 1,140 health centers.
[68] As described in the analysis of PI-7, the budgets of the line ministries and the prefectures are included in the General National Budget. While in the case of the municipalities, it is only included at the transfer level.
[69] According to the regulations in effect for budget execution, the entities are required to make a budget reserve (preventive) before initiating any selection or procurement process.
[70] Article 151. The general account of the revenues and expenditure of each financial year will be presented by the Minister of Finance to Congress at the first regular meeting.
[71] Article 27 (e): Within three months of the end of the fiscal year, each entity with its own equity and financial autonomy will be required to submit to the entity to which it reports, to the State General Comptrollership, and will make available to the General Comptrollership of the Republic the financial statements for the previous year, together with any notes and the internal auditor's report.
[72] Article 3. Public sector structure and means of financing.
[73] With central administration are 23 ministries with approximately 200 administrative directorates and 400 operating and executing units.
[74] According to the central administration financial statements, for FY2008, the net equity of 117 decentralized entities and state-owned enterprises is included (with the exception of municipalities and municipal enterprises), of which 6 failed to submit their financial information, although these only represent 5 percent of the item.
[75] The purpose of the special audit is expressing an independent opinion on the compliance with the administrative legal rules and other legally applicable regulations, and contractual obligations and, as may be the case, establish indications of responsibility of public officials (administrative, civil, criminal, and executive).
[76] According to the General Comptrollership of the Republic, the purpose of financial audits is to issue an independent opinion on whether the financial statements of the audited entity present reasonably, in all significant aspects, and in accordance with the Basic Standards of the Integrated Accounting System, the equity and financial position, the outcome of its operations, the cash flow, the changes in net equity, the budgetary execution of resources, the budgetary execution of expenditure, and the changes in the savings-investment-financing account.
[77] Transactional audit is that which focuses on individual transactions; hence it is not reasonable to issue opinions or conclusions on the systemic conduct of the budget execution, the financial statements or the internal control.
[78] Information obtained from the notes to the central administration financial statements for FY2008.
[79] Information provided by the External Audit Sub-Comptrollership during the interviews conducted for the review.
[80] The Finance Committee of the Chamber of Deputies only has a Technical Secretary who is responsible for conducting the review and preparing reports supplementing the information submitted by the Executive to facilitate the discussion by the members of the Committee.
[81] See Articles 139 and 127 of the General Regulations of the H. Senate and the H. Chamber of Deputies, respectively.
[82] Similarly, at the 2009 budget approval stage, on December 21, 2008, the Chamber of Deputies approved their budget proposal on the budget bill sent by the Executive on October 28, 2008, and in that case the Senate Committee was unable to conclude its report, that was sent on January 7, 2009.
[83] Article 97 of the old Constitution and Article172 of the new one.
[84] For the 2008 under review, Supreme Decree No. 27849 was applicable; it was then replaced by Supreme Decree No. 29881 of January 2009.
[85] Transfers were authorized by Supreme Decree No. 29365 of December 2007, Supreme Decrees Nos. 29529, 29726, and 209865 of 2008, and have continued in 2009 at least with Supreme Decree No. 17, of February 2009.
[86] Evaluación Cualitativa de algunos Mecanismos, Instrumentos, y Modalidades de financiamiento en la Ayuda Oficial al Desarrollo en Bolivia, Marcelo Barrón Arce, Royal Embassy of the Netherlands, Bolivia 2009.
[87] Memorandum of Understanding between the Government of Bolivia and the International Cooperation- Multidonor Multiannual Sector Budget Support for the Bolivian Poverty Reduction Policy, – Bolivia 2004.
[88] Point 1.2 of article 1 in the agreement between the KfW and the Government of Bolivia of March 16, 2006, makes the point that the borrower will use the loan exclusively for the Poverty Reduction Program. Within that framework, the loan will be granted to the borrower for cofinancing of the SSPC II and will essentially comprise budget assistance in support of the implementation of Bolivia's Poverty Reduction Strategy and the policy measures needed to improve basic services in the health, education, and drinking water and sanitation sectors.
[89] Many of these actions result from the analysis and review work carried out between 2004 and 2006 as the PER (Public Expenditure Review, 2006) or the 2004 CFAA, besides other specific reviews coordinated with other agencies. Until the year 2006, the Multidonor Budget Support Program was framed within a strategic plan for public finance strengthening, which gave rise to some actions that were completed.
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17 - Dec - 07
24 - Dec - 07
25 - Oct -07
6 - Nov - 07
Presentation of Budget Bill
Reception Chamber of Deputies
Reception Finance Committee, Chamber of Deputies
Approval of FC Report by Chamber of Deputies
Report Reception and Approval by Senate FC
Approval by Chamber of Deputies
Approval with changes by Senate
Reception Senate
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