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Author : The European Commission

Year : 2010

1. Integrated Assessment of PFM performance
This section summarizes the detailed indicator led-assessment along the six core
dimensions identified in the performance measurement framework. Table 1 summarizes
the scoring.
(a) Credibility of the budget (PIs 1- 4)
As revealed by performance indicators 1-3, the budget was by and large implemented as
planned except performance indicator 2. The significant deviation indicated by the
composition of expenditure outturn compared to the original approved budget has highly
contributed to weaken budget credibility. On the other hand due to tight internal control
system, strict rules and regulations and strong culture of compliance, the stock of arrears
was significantly low, below 2% for the EFY 2000 and 2001 while no arrears were
reported in EFY 1999.
(b) Comprehensiveness and Transparency
The scores of performance indicators under the comprehensiveness and transparency
reveal mixed results. The fairly good classification of the budget that allows tracking of
expenditures and the insignificant level of unreported extra budgetary expenditures (with
the exception of Global Fund expenditures) reveal very good comprehensiveness and
transparency. On the other hand, the lack of comprehensiveness of information included
in the budget documentation and the lack of access to key fiscal information signifies
poor comprehensiveness and transparency.
(c) Policy based budgeting
The annual budget process is by and large conducted in an orderly way. There is a fixed
budget calendar which allows sector bureaus/offices sufficient time to process their
budget proposals in accordance with guidelines issued by BoFED. However, there are
problems with the timely approval of the budget by the legislature. In addition, no multiyear
fiscal forecast on a rolling annual basis has been introduced even though fixed
multi-year sectoral development programs and strategic plans are operational.
(d) Predictability and control in budget execution
Taxes raised by the regional government have legal basis. The income tax is
comprehensive and clear with tax payers having easy access to information on tax
liabilities. A tax appeal system was setup. A cash flow system has been operational.
Bureaus are able to commit expenditure within the year based on approved budget.
Procurements are governed by proclamation and directives. However, there are no
compiled data on the methods used to award public contracts. Internal audit is
operational in the majority of the bureaus/offices but focus on transaction audits than
systemic audit.
There is lack of complete accounts reconciliation between tax assessment, collections,
arrears records and receipts by treasury. Tax arrears are not recorded and no compiled
information is available in this

Contibutor: Meftuh Shash