Manual on Fiscal Transparency (2007)

Back Matter

Back Matter

Author(s):
Dawn Rehm, and Taryn Parry
Published Date:
October 2007
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    Website References

    Australia:

    Basel Committee on Banking Supervision:http://www.bis.org/publ/bcbs30a.htm

    Canada:

    Customs Cooperation Council:

    European System of Accounts (ESA95):http://www.europa.eu.int/comm/eurostat

    European Union:

    Extractive Industry Transparency Initiative (EITI):http://www.eitransparency.org/

    Hong Kong SAR: Budget: http://www.budget.gov.hk/

    Hungary: Government: http://www.meh.hu/default.htm

    IFAC:http://www.ifac.org

    IMF:

    International Budget Project:http://www.internationalbudget.org/

    INTOSAI:http://www.intosai.org/

    New Zealand: Treasury: http://www.treasury.govt.nz/publications/

    OECD:

    South Africa:

    United Kingdom: HM Treasury: http://www.hm-treasury.gov.uk/

    United Nations:

    United States:

    World Trade Organization:

    World Bank:

    Index

    The locations of each reference are indicated as follows: by a paragraph number (for text in the “overview” chapter); by a three-digit “good practice” number (for text in the four main chapters); by a footnote number (designated by a suffix “n”); or by a box number.

    A

    • Accounting systems. See also specific systems

      • aid in kind records, 2.2.1

      • fiscal transparency and international public sector accounting standards for financial and fiscal reporting, Box 14

      • reconciliation of debt transactions with operating accounts, 3.2.3

      • use of generally accepted accounting principles for annual budgets and final accounts, 4.1.2

    • Accrual basis accounting

    • Advance release calendars

      • timing of publication, 3.3.2

    • Advanced countries. See also specific countries

      • delegation of powers related to employment conditions, 4.2.2

      • fiscal sustainability, 3.1.7

      • payment arrears and, 2.2.1

      • public-private partnerships, 46n

      • results- (or performance-) oriented budgeting and accounting, 2.1.4, Box 12

    • Aid in kind, 2.2.1

    • Albania

      • fiscal financing data reconciliation with financial sector claims on and liabilities to the government, 138n

      • time allocation for consideration of the budget by the legislature, 56n

    • Analytical Perspectives, 3.1.7, 117n

    • Annual budgets. See also Open budget processes

    • Arrears assessment, 2.2.1, 3.1.5, Box 15

    • Arusha Declaration. See Declaration of the World Customs Organization (Customs Cooperation Council), Arusha

    • Asset management

      • inventories of physical assets, 1.2.5

      • strategy for, 1.2.5

    • Assurances of integrity

      • accessibility of procurement regulations, 4.2.3

      • basic requirements, 4.1, 4.2, 4.3

      • budget forecasts’ and time of presentation, 4.1.1

      • Data Quality Assessment Framework, 4.1.3

      • data quality standards, 4.1

      • data verification, 4.3.4

      • description and changes to core practices, 19

      • documentation of public sector employment procedures and conditions, 4.2.2

      • ethical standards of behavior for public servants, 4.2.1

      • external scrutiny of fiscal information, 4.3

      • historical consistency, 4.1.3

      • independence of national revenue administrations, 4.2.6

      • independent assessments of fiscal forecasts and assumptions, 4.3.3

      • internal audits of government activities and finances, 4.2.5

      • internal consistency of data, 4.1.3

      • internal oversight and safeguards, 4.2

      • purchases and sales of public assets, 4.2.4

      • reconciliation of data in fiscal reports with other data, 4.1.3

      • submission and publication of audit reports, 4.3.2

      • summary table of principles and basic requirements, Appendix

      • use of generally accepted accounting standards for annual budgets and final accounts, 4.1.2

    • Audits

      • audit reports, 2.2.4

      • external audit standards, 4.3.1, 4.3.2

      • final accounts, 2.2.4, 3.1.1

      • “internal audit” definition, 154n

      • internal audit for financial accountability of tax collection staff and systems, 1.2.2

      • internal audits of government activities and finances, 4.2.5, Box 28

      • legislative oversight of the national audit body, 4.3.2

      • military spending, 4.3.2

      • national audit bodies, 4.3, 4.3.2

      • purchases and sales of public assets, 4.2.4

      • regulatory audits, 4.3.1

      • remedial actions, 4.3.2

      • submission and publication of reports, 4.3.2

      • supreme audit institutions, 4.3, 4.3.2

    • Australia

      • Charter of Budget Honesty, 3.1.7, Box 23

      • “compliance cost statements,” 38n

      • ethics codes and codes of conduct for public officials, 145n

      • fiscal responsibility laws, Box 9

      • function of financial reports, 83n

      • modified accrual accounting, 129n

      • public-private partnerships, 46n

      • publication of reliable information on the general government, 115n

      • Treasury Macroeconomic Model, 168n

    • Azerbaijan

      • fuel subsidies provided by SOCAR, 27n

    B

    • Bank account reconciliation, 2.2.1

    • Bank of Norway

      • publication of macroeconomic forecasts, 165n

    • Banking sector. See also Central banks

      • government involvement in, 1.1.5

    • Basel Committee on Banking Supervision

      • Financial Sector Assessment Program, 39n

    • Basel Core Principles for Effective Banking Supervision

      • framework for bank regulation, 1.1.5

    • Belarus

      • monthly compilation of economic classification data, 124n

    • Brazil

      • central bank activities, 31n

      • ethics codes and codes of conduct for public officials, 145n

      • fiscal responsibility laws, 58n, Box 9

      • medium-term budget framework, 59n

      • quasi-fiscal activities of public corporations, 35n

      • tax expenditure reporting, Box 16

    • Budget calendars, 2.1.1

    • Budget documentation

      • background paper analyzing the differences between forecasts and relevant outturn information, 4.1.3

      • categories of, 3.1.1

      • coverage of, 3.1.1

      • medium-term macroeconomic and fiscal policy framework for, 2.1.2, 2.1.5

      • summary of, Table 1

    • Budget execution, monitoring, and reporting procedures, 2.2

    • Budget program objectives

      • annual reporting of, 3.2.4

    • Budget supporting documents, 3.1.1, Table 1

    • Budget system law

    • Budgetary performance incentives, Box 12

    • Budgets. See Open budget processes; Public availability of information

    • Build-operate-transfer forms of public-private partnerships, 1.2.4

    • Bulgaria

      • stand-alone fiscal rules, Box 9

      • time allocation for consideration of the budget by the legislature, 56n

      • timeliness of presentation of final accounts to the legislature, 79n

    C

    • Canada

      • basis for fiscal projections, 169n

      • coverage of budget documentation, 81n

      • ethics codes and codes of conduct for public officials, 145n

      • pre-budget consultation phase, 55n

      • public-private partnerships, 46n

    • Cash basis accounting

    • Central banks

      • contingent liabilities, 3.1.3

      • fiscal data production and dissemination, 171n

      • foreign exchange reserves, 3.1.5

      • losses in developing countries, 100n

      • publication of macroeconomic forecasts, 4.3.3

      • quasi-fiscal activities, 1.1.4, 3.1.3

      • responsibilities of, 1.1.4

    • Central government. See also General government sector

      • fiscal transparency and data dissemination standards, Box 25

      • reporting of debt, 3.1.5

    • Charter of Budget Honesty, 3.1.7, Box 23

    • Chile

      • Budget Directorate publication of comprehensive information and databases related to the public sector, 84n

      • budget documentation, 85n

      • macroeconomic forecasts, 168n

      • medium-term budget framework, 59n

      • public-private partnerships, 46n, Box 5

      • quasi-fiscal activities of public corporations, 35n

      • “The Report on the Public Finances” inclusion in chapters on contingent liabilities, 105n

      • stand-alone fiscal rules, Box 9

    • Citizens’ guide to budgets,

    • Clarity of roles and responsibilities

      • basic requirements, 1.1, 1.2

      • contractual arrangements, 1.2.4

      • description and changes to core practices, 16

      • direct equity investment, 1.1.5

      • fiscal management framework, 1.2

      • government involvement in the private sector, 1.1.5

      • government liability and asset management, 1.2.5

      • national resource companies, 1.1.4

      • public comment on legislative or regulatory changes, 1.2.3

      • relationships between the government and public corporations, 1.1.4

      • responsibilities of different levels of government, 1.1.3

      • roles of the executive, legislative, and judicial branches of government, 1.1.2

      • structure and functions of government, 1.1.1

      • summary table of principles and basic requirements, Appendix

    • Classification of the Functions of Government, 3.2.2

    • The Code. SeeCode of Good Practices on Fiscal Transparency

    • Code for Fiscal Stability, 3.1.7, Box 23

    • Code of Good Practices on Fiscal Transparency

      • addition of new good practices, 20–21

      • background, 1–5, Box 1

      • central government focus, 24

      • changes in, 15–21

      • introduction of, 1

      • member country compliance with, 3

      • pillars of, 15–19

      • relevance of, 3

      • revised Code, 12–14

    • Code of Good Practices on Transparency in Monetary and Financial Policies

      • banking sector, 1.1.5

      • central bank activities, 1.1.4

    • Codes of conduct, 4.2.1

    • COFOG. See Classification of the Functions of Government

    • Colombia

      • resource distribution, 24n

      • time allocation for consideration of the budget by the legislature, 56n

    • Commonwealth of Independent States

      • fiscal ROSCs and, 11

    • Conflicts of interest

      • general government sector provision of commercial services, 1.1.4

    • Consistency of data, 4.1.3

    • Contingency funds

    • Contingent liabilities

    • Contracts. See Procurement regulations

    • Contraloría General. See Supreme audit institutions

    • Countries in transition. See also specific countries

      • budget system law, 1.2.1

      • medium-term budget frameworks and, 2.1.2

    • Cour des Comptes. See Supreme audit institutions

    • Croatia

      • time allocation for consideration of the budget by the legislature, 56n

    • Customs revenues

      • administrative application of laws, 1.2.2

      • Declaration of the World Customs Organization (Customs Cooperation Council) Arusha, 1.2.2, Box 1

      • legal basis for collection of, 1.2.1

    • Cyprus

      • time allocation for consideration of the budget by the legislature, 56n

    • Czech Republic

      • contingent liabilities in the form of guarantees, 92n

      • public-private partnerships, 46n

    D

    • Data integrity

      • institutional independence for verification of data, 4.3.4

    • Data Quality Assessment Framework

    • Debt

      • breakdowns of, 3.1.5

      • government balance sheets, 3.1.5, Box 22

      • indexed debt, 3.1.5, 109n

      • public availability of information on, 3.1.5

      • reconciliation of debt transactions with operating accounts, 3.2.3

    • Debt management

      • authority for, 1.2.5

      • legislation on public debt, 1.2.5

      • responsibilities of the debt management unit, 1.2.5

      • secondary regulations, 1.2.5

    • Debt service

      • Special Data Dissemination Standard reporting of, 3.1.5

    • Debt-to-GDP ratio

      • fiscal sustainability and, 2.1.4

    • Declaration of the World Customs Organization (Customs Cooperation Council), Arusha

      • description, Box 1

      • guidelines on integrity in customs administration, 1.2.2

    • Defined-benefit pension plans

    • Defined-contribution pension plans

    • Developing countries. See also specific countries

      • budget system law, 1.2.1

      • central bank losses, 100n

      • delegation of powers related to employment conditions, 4.2.2

      • externally financed transactions, 2.2.1

      • medium-term budget frameworks and, 2.1.2

      • relationship between the domestic budget and externally financed expenditure, 2.1.5

    • Direct equity investment

      • natural resource projects, 1.1.5

    • DQAF. See Data Quality Assessment Framework

    E

    • Earmarked revenues, 2.1.5

    • Earmarked taxes, 1.2.2, 73n

    • Effective rate approach to revenue forecasting, Box 7

    • Egypt

      • transparency of natural resource contracts, 51n

    • EITI. See Extractive Industries Transparency Initiative

    • El Salvador

      • general government and public sector distinctions, 20n

    • Elasticity approach to revenue forecasting, Box 7

    • Emerging market countries. See also specific countries

      • fiscal ROSCs and, 11

    • Employee pension funds

    • Employment

      • delegation of powers related to employment conditions, 4.2.2

      • merit principles in public sector employment, 4.2.2

    • Environmental clean-up operations, 3.1.5

    • ESA. See European System of Accounts, 1995

    • Ethical standards of behavior for public servants, 4.2.1

    • European System of Accounts, 1995

      • general government sector boundaries definition, 1.1.1

    • European Union

      • Code and Manual development and, 26

      • fiscal ROSCs and, 11

      • “Long-Term Sustainability of Public Finances in the European Union,” 3.1.7

      • Maastricht Treaty, 2.1.2, Box 9

      • Stability and Growth Pact, 2.1.2

    • Eurostat

      • population projections, 3.1.7

      • public-private partnerships decision, 1.2.4

    • Executive branch of government

    • Explicit liabilities, 2.1.4, Box 11

    • External audits

    • Extrabudgetary activities

    • Extrabudgetary funds

      • channeling of earmarked taxes to, 73n

      • description, 1.1.1

      • incorporation of former extrabudgetary funds as special funds in the annual budget, 75n

    • Extractive Industries Transparency Initiative

    F

    • Final accounts

      • auditing of, 2.2.4, 3.1.1, Table 1

      • reconciliation with budget appropriations, 4.1.3

      • use of generally accepted accounting principles for, 4.1.2

    • Financial assets

      • description, 3.1.5

      • public availability of information on, 3.1.5

    • Financial Reporting Under the Cash Basis of Accounting, Box 14

    • Financial reports

    • Financial Sector Assessment Program, 39n

    • Finland

      • public-private partnerships, 46n

    • Fiscal management framework

      • basic requirements, 1.2

      • comprehensive laws, regulations, and administrative procedures, 1.2.1

      • explicit legal basis for revenue collection, 1.2.1

      • fiscal regime for resource sectors, 1.2.1

      • judicial appeal for tax and regulatory impositions, 1.2.2

      • revenue administration, 1.2.2

      • revenue collection, 1.2.2

      • use of public funds and resources, 1.2.1

    • Fiscal Responsibility Act, 3.1.7, Box 23

    • Fiscal responsibility laws, 2.1.2, Box 9

    • Fiscal risks

      • budget documentation, 3.1.3

      • budgets and, 2.1.4

      • public availability of information on, 3.1, 3.1.3

      • statement of, Box 21

    • Fiscal ROSCs

      • format of, 8

      • publication of on the IMF website, 9

      • purpose of, 6

      • reassessments of, 9

      • region and level of economic development and, 11

      • revised Code and, 12–14

      • voluntary nature of, 7

    • Fiscal rules

      • medium-term macroeconomic and fiscal policy framework for budgets and, 2.1.2, Box 9

    • Fiscal sustainability assessment

      • advanced countries, 3.1.7

      • long-term reporting, 3.1.7

      • primary balance and, 2.1.4

    • Fiscal transparency. See also Manual on Fiscal Transparency

      • “basic requirements” of, 25

      • external scrutiny of fiscal information, 4.3

      • extrabudgetary activities, Box 13

      • importance of, 24

      • independent assessments of fiscal forecasts and assumptions, 4.3.3

      • original objectives, 2

      • resource revenues, 5

      • SDDS and GDDS dimensions relevant to, Box 25

      • strengths and weaknesses of, 10–11

      • transparency initiatives, 4, Box 1

    • Fiscal transparency modules of Reports on the Observance of Standards and Codes.

      • See Fiscal ROSCs

    • FOIAs. See Freedom of information acts

    • Formula funding, Box 12

    • France

      • coverage of budget documentation, 81n

      • distinction between existing policy expenditure and “items of expenditure reflecting new policies,” 63n

      • function of financial reports, 83n

      • quasi-fiscal activities of public corporations, 35n

    • Freedom of information acts, 3.3.1, Box 24

    • FRLs. See Fiscal responsibility laws

    • FSAP. See Financial Sector Assessment Program

    • Fundamental Principles of Official Statistics

      • data integrity standards, 4.3.4, Box 30

      • Data Quality Assessment Framework and, 4.1.3

    G

    • GAAP. See Generally Accepted Accounting Principles

    • Gas industry

      • production sharing agreements, 1.2.4

    • GDDS. See General Data Dissemination System

    • General Data Dissemination System

      • advance release calendars, 3.3.2

      • data integrity standards, 4.3.4

      • Data Quality Assessment Framework and, 4.1.3

      • dimensions relevant to fiscal transparency, Box 25

      • periodicity and timeliness of fiscal reports to the public, 2.2.2

      • purpose of, 4.1.3

      • timeliness of data guidelines, 3.3.1

    • General government sector. See also Central government

      • banking sector involvement, 1.1.5

      • central bank responsibilities, 1.1.4

      • contractual arrangements with public or private entities, 1.2.4

      • debt management, 1.2.5

      • decentralization, 1.1.3

      • defined boundaries of, 1.1.1

      • definitions of, 1.1.1

      • direct equity investment, 1.1.5

      • distribution of resource revenues, 1.1.3

      • extrabudgetary funds, 1.1.1

      • fiscal activities of lower levels of government, 1.1.3

      • fiscal regime for resource sectors, 1.2.1

      • fiscal transparency and data dissemination standards, Box 25

      • formulas for revenue sharing, 1.1.3

      • “function” definition, 1.1.1

      • intergovernmental transfers, 1.1.3

      • internal audits of government activities and finances, 4.2.5, Box 28

      • legal obligation for the timely publication of fiscal information, 3.3.1

      • liabilities, 3.1.5

      • liability and asset management, 1.2.5

      • long-term public finance reporting, 3.1.7

      • national resource companies, 1.1.4

      • nonmarket nonprofit institutions, 1.1.1

      • nonmarket services, 1.1.1, 17n

      • open budget processes, 2.1

      • overall balance of, 3.2.3

      • private sector involvement, 1.1.5

      • provision of commercial services, 1.1.4

      • public financial corporations, 1.1.4

      • public-private partnerships, 1.2.4

      • publication of fiscal information on, 3.1.6

      • quarterly or midyear budget reports, 3.1.6

      • quasi-fiscal activities and, 1.1.4

      • relationships between the government and public corporations, 1.1.4

      • responsibilities of different levels of, 1.1.3

      • roles of the executive, legislative, and judicial branches, 1.1.2

      • scope of, 1.1

      • separation of functions from commercial and monetary activities, 1.1.1

      • structure and functions of, 1.1.1

    • Generally accepted accounting principles

      • use for annual budgets and final accounts, 4.1.2

    • Generational accounting

      • long-term public finances, 3.1.7

      • 30-year horizon for, 118n

    • Germany

      • Law on Budgetary Principles, 58n

      • public-private partnerships, 46n

      • tax expenditure reporting, Box 16

    • GFSM 2001. See Government Finance Statistics Manual, 2001

    • Government balance sheets

    • Government Finance Statistics Manual, 2001

      • accounting standards, Box 14

      • accrual basis for recording fiscal reports, 3.2.3

      • budget documentation, Table 1

      • compatibility of data classification systems with, 3.2.2

      • economic classification of revenue and expenditure, 3.2.2

      • “government” definition, 1.1.1

      • grants guidelines, 3.2.3

      • overall balance guidelines, 3.2.3

      • public-private partnership guidelines, 1.2.4

      • reporting of debt, 3.1.5

      • reporting of grants as revenue, 3.1.4, Table 2

      • revenue classification, Table 2

      • unfunded government pension plan treatment, 3.1.5

    • Government sector. See Central government; General government sector

    • Grants

    • Greece

      • estimate of pensions and health care establishment as a percentage of general

      • government expenditure, 82n

      • ethics codes and codes of conduct for public officials, 145n

      • public-private partnerships, 46n

    • Guarantees

      • as contingent liabilities, 3.1.5

      • public availability of information on, 3.1.5

      • reporting of, Box 17

      • support for private and other government levels, 112n

    • The Guide. See Guide on Resource Revenue Transparency

    • Guide on Resource Revenue Transparency

      • contracts for resource development, 1.2.4

      • description, 5

      • fiscal transparency, 1.2.1

      • recommendations on natural resource reporting, 3.1.5

    • Guidelines on Best Practice for the Audit of Privatizations, 4.2.4

    H

    • Historical fiscal data, 4.1.3

    • Honduras

      • general government and public sector distinctions, 20n

      • quasi-fiscal activities of public corporations, 35n

    • Hong Kong SAR

      • annual budget documentation, 57n

      • medium-term budget framework, 59n

    • Hungary

      • “Glass Pockets” initiative, 149n

      • public-private partnerships, 46n

    I

    • Implicit liabilities, 2.1.4, Box 11

    • Indexed debt, 3.1.5, 109n

    • India

      • audit reports to the parliament, 161n

      • Comptroller and Auditor General’s

    • Indonesia

      • time allocation for consideration of the budget by the legislature, 56n

    • Information technology

      • computer systems for exchange information among revenue departments, 1.2.2

      • role in eliminating opportunities for discretionary action, 1.2.2

    • Institute of Internal Auditors

      • internal audit standards, 4.2.5

    • Integrity. See Assurances of integrity

    • Internal audits

      • definition of, 154n

      • for financial accountability of tax collection staff and systems, 1.2.2

      • of government activities and finances, 4.2.5, Box 28

    • International Accounting Standards Board

      • Code and Manual development and, 26

    • International Code of Conduct for Public Officials, 4.2.1

    • International Federation of Accountants

      • Code and Manual development and, 26

      • International Public Sector Accounting Standards Board, 4.1.2, Box 14

    • International Financial Accounting Standards, 2.2.1

    • International Organization of Supreme Audit Institutions

      • Code and Manual development and, 26

      • external audit standards, 4.3.1

      • guidelines for internal control standards, 31

      • Guidelines on Best Practice for the Audit of Privatizations, 4.2.4

      • INTOSAI Code of Ethics for Auditors in the Public Sector, 4.2.1

      • Lima Declaration of Guidelines on Auditing Pillars, 4.3.1, 4.3.2, 31, Box 29

      • objectives of internal control systems, 4.2.5, Box 28

    • International Public Sector Accounting Standards Board, Box 14

    • Internet

      • public availability of information and, 3.3.1

    • INTOSAI. See International Organization of Supreme Audit Institutions

    • INTOSAI Code of Ethics for Auditors in the Public Sector, 4.2.1

    • IPSASB. See International Public Sector Accounting Standards Board

    • Iran

      • Supreme Audit Court, 160n

    • Ireland

      • public-private partnerships, 46n

    • Italy

      • ethics codes and codes of conduct for public officials, 145n

      • public-private partnerships, 46n

    J

    • Japan

      • public-private partnerships, 46n

    • Judicial branch of government

    L

    • Latvia

      • incorporation of former extrabudgetary funds as special funds in the annual budget, 75n

    • Legislative branch of government

    • Liabilities

    • Lima Declaration of Guidelines on Auditing Pillars, 4.3.1, 4.3.2, 31, Box 29

    • Line-item budgeting, 2.1.4

    • “Long-Term Sustainability of Public Finances in the European Union,” 3.1.7

    M

    • Maastricht Treaty, 2.1.2, Box 9

    • Macroeconomic forecasts and assumptions. See also Medium-term macroeconomic and fiscal policy framework for budgets

    • The Manual. See Manual on Fiscal Transparency

    • Manual on Fiscal Transparency

      • audience for, 23

      • “basic requirements” of fiscal transparency, 25

      • chapter focuses, 28–31

      • complementary best practices, 25

      • issuance of the first version, 1

      • revisions to, 26–31

      • role of, 22–25

    • Marginal analysis, Box 12

    • Medium-term budget frameworks

    • Medium-term fiscal frameworks, 2.1.2

    • Medium-term macroeconomic and fiscal policy framework for budgets. See also Macroeconomic forecasts and assumptions

      • budget documentation, 2.1.2, 2.1.5

      • fiscal rules, fiscal responsibility laws, and fiscal transparency laws, 2.1.2, Box 9

      • medium-term budget frameworks, 2.1.2, Box 8

      • medium-term fiscal frameworks, 2.1.2

      • optimistic “targets,” 2.1.2

      • realistic budgets, 2.1.2

    • Merit principles in public sector employment, 4.2.2, 147n

    • Mexico

      • public-private partnerships, 46n

    • Military spending

    • Model-based approach to revenue forecasting, Box 7

    • Model Law on Procurement of Goods, Construction, and Services, 4.2.3

    • Modified accrual accounting, 2.2.1, Box 22

    • Modified cash accounting, 2.2.1

    • Moldova

      • central bank activities, 31n

      • incorporation of former extrabudgetary funds as special funds in the annual budget, 75n

      • medium-term budget framework, 59n

      • stand-alone fiscal rules, Box 9

      • statement of fiscal policy objectives, 57n

      • timeliness of presentation of final accounts to the legislature, 79n

    • Mongolia

      • central bank activities, 31n

    • Mozambique

      • institutional framework for intergovernmental relationships, 24n

    • MTBFs. See Medium-term budget frameworks

    • MTFFs. See Medium-term fiscal frameworks

    N

    • National audit bodies, 4.3, 4.3.2

    • National resource companies

      • commercial and noncommercial activities, 1.1.4

      • corporate governance standards, 1.1.4, Box 4

    • Natural resources. See also Resource revenues; specific natural resources

      • authority over natural resource assets and resource-related borrowing, Box 6

      • contracts for resource development, 1.2.4

      • direct equity investment in projects, 1.1.5

      • estimating the value of, 3.1.5

      • legal title to, 1.2.1

      • licensing procedure clarity, 1.2.4

      • medium-term frameworks for resource-rich countries, 2.1.2

      • public availability of information on, 3.1.5

      • separate identification of in budgets, 3.1.4

    • The Netherlands

      • identification of fiscal cost of new policy initiatives, 63n

      • medium-term budget framework, 59n

      • program budgeting, 70n

      • public-private partnerships, 46n

      • reliability of budget data, 134n

      • timeliness of presentation of final accounts to the legislature, 79n

    • New Zealand

      • ethics codes and codes of conduct for public officials, 145n

      • Fiscal Responsibility Act, 3.1.7, 137n, Box 23

      • function of financial reports, 83n

      • use of generally accepted accounting principles, 136n

    • Nigeria

      • revenue-sharing formulas, 25n

    • 1993 SNA. See System of National Accounts

    • Non-tax revenues

      • legal basis for collection of, 1.2.1

    • Nondebt liabilities

    • Nonmarket nonprofit institutions

      • activities of, 1.1.1

      • as general government entities, Box 2

    • Nonmarket services

    • Nonprofit institutions. See Nonmarket nonprofit institutions

    • Norway

      • asset management, 53n

      • Bank of Norway publication of macroeconomic forecasts, 165n

      • Government Pension Fund–Global, 2.1.5

    • NPIs. See Nonmarket nonprofit institutions

    • NRCs. See National resource companies

    • Numerical fiscal rules, 2.1.2, Box 9

    O

    • Observatory on Ethics Codes and Codes of Conduct in OECD Countries, 4.2.1

    • OECD. See Organization for Economic Cooperation and Development

    • OECD Policy Recommendations on Regulatory Reform

      • regulation of the nonbank private sector, 1.1.5

    • OECD Principles of Corporate Governance

      • Principle V on disclosure and transparency, 1.1.4, Box 3

    • Oil industry

      • cost oil, 1.2.4

      • fuel subsidies provided by SOCAR in Azerbaijan, 27n

      • production-sharing agreements, 1.2.1, 1.2.4

      • profit oil, 1.2.4

    • Open Budget Initiative

    • Open budget processes

      • accounting systems, 2.2.1, Box 14

      • annual budget contents, 2.1

      • arrears assessment, 2.2.1, Box 15

      • assessment of the impact of new policies, 2.1.3

      • audited final accounts and audit reports, 2.2.4

      • bank account reconciliation, 2.2.1

      • basic requirements, 2.1, 2.2

      • budget calendar, 2.1.1

      • budget presentation to the legislature, 2.1.1, 2.2.2, 3.1.1

      • budget programs and performance objectives, 2.1.4

      • changes to the budget, 2.2.3

      • coordination of budgetary and extrabudgetary activities, 2.1.5, Box 13

      • costing of new revenue and spending programs, 2.1.3

      • description and changes to core practices, 17

      • description of major expenditure and revenue measures and their contribution to policy objectives, 2.1.3

      • domestic and externally financed transaction coverage, 2.2.1

      • fiscal risks, 2.1.4, Box 11

      • fiscal sustainability assessment, 2.1.4

      • in-year reports, 2.2.2

      • line-item budgeting, 2.1.4

      • medium-term macroeconomic and fiscal policy framework, 2.1.2

      • midyear reports, 2.2.2

      • organization of responsibilities among central and spending ministries, 2.1.5

      • Poverty and Social Impact Analysis, 2.1.3, Box 10

      • procedures for budget execution, monitoring, and reporting, 2.2

      • revenue forecasting, Box 7

      • summary table of principles and basic requirements, Appendix

      • supplementary budgets, 2.2.3

      • timetable for budget preparation, 2.1

      • user charges, 2.1.5

    • Organization for Economic Cooperation and Development

      • Best Practices for Budget Transparency, 2.1, 2.2.2, 3.1.5, 4, Box 1

      • characteristics of transparent regulations, Box 4

      • Code and Manual development and, 26

      • employee pension obligations, 3.1.5

      • financial asset reporting guidelines, 3.1.5

      • long-term reporting of public finances, 3.1.7

    • Observatory on Ethics Codes of Conduct in OECD Countries, 4.2.1

      • Principles for Managing Ethics in the Public Sector, 4.2.1

      • statements of responsibility for fiscal reports, 164n

      • tax expenditure guidelines, 3.1.3

    • Overall balance

      • general government sector, 3.2.3

      • reconciling with financing data, 4.1.3

    P

    • Pakistan, 162n

    • Payment arrears, 2.2.1, Box 15. 2.2.3

    • PEFA. See Public Expenditure and Financial Accountability

    • Pension funds

    • Performance-based budgeting

    • Peru

      • Fiscal Responsibility and Transparency Act, 26n

    • Poland

      • ethics codes and codes of conduct for public officials, 145n

      • public-private partnerships, 46n

    • Poverty and Social Impact Analysis

    • PPPs. See Public-private partnerships

    • Private sector. See also Public sector

      • contractual arrangements between the government and, 1.2.4

      • government involvement in, 1.1.5

      • quasi-fiscal activities, 3.1.3

      • regulation of the nonbank private sector, 1.1.5

      • risks incurred in relation to public-private partnerships, 1.2.4

      • tax issues, 1.1.5

    • Procedural fiscal rules, Box 9

    • Procurement regulations

    • Production-sharing agreements

    • Program budgeting, Box 12

    • PSIA. See Poverty and Social Impact Analysis

    • Public assets, purchases and sales of, 4.2.4

    • Public availability of information

      • administrative accountability, 3.2.2

      • advance release calendars, 3.3.2

      • basic requirements, 3.1, 3.2, 3.3

      • budget program objectives reports, 3.2.4

      • citizens’ guide for, 3.2.1

      • contingent liabilities, 3.1.3

      • description and changes to core practices, 18

      • financial asset reporting, 3.1.5

      • fiscal indicators, 3.2.3

      • fiscal performance information, 3.1.2

      • fiscal position of subnational governments and public corporations, 3.1.6

      • freedom of information acts, 3.3.1, Box 24

      • GFSM 2001 compatibility, 3.2.2

      • government guarantees, 3.1.5

      • legal obligations, 3.3.1

      • legislative or regulatory changes and, 1.2.3

      • long-term public finances, 3.1.7

      • military spending, 3.2.2

      • natural resource assets, 3.1.5

      • nondebt liabilities, 3.1.5

      • overall balance of the general government sector, 3.2.3

      • posting on the Internet, 3.1, 3.3.1

      • presentation of information, 3.2

      • provision of comprehensive information on fiscal activity and major fiscal risks, 3.1

      • quasi-fiscal activities, 3.1.3, 3.1.6, Box 20

      • reporting criteria, 3.2.2

      • reporting of debt, 3.1.5

      • reporting of guarantees, Box 17

      • summary table of principles and basic requirements, Appendix

      • tax expenditures, 3.1.3, Box 16

      • timely publication of fiscal information, 3.3

      • unfunded public pension funds, 3.1.5

    • Public corporations

      • annual reports, 1.1.4

      • application of internationally recognized accounting standards, 1.1.4

      • noncommercial activities on behalf of governments, 1.1.4

      • noncommercial services, 1.1.4

      • quasi-fiscal activities, 1.1.4, 3.1.6

      • relationships between the government and, 1.1.4

      • reporting of fiscal information on, 3.1.6

      • risks in debts of, 2.1.4

      • transparency requirements, 1.1.4, 3.1.6

      • types of, 1.1.1

    • Public Expenditure and Financial Accountability

      • description, 4

    • Public financial corporations

      • general government sector use of, 1.1.4

    • Public-private partnerships

      • accounting for, 1.2.4

      • build-operate-transfer forms, 1.2.4

      • in Chile, Box 5

      • description, 1.2.4

      • GFSM 2001 guidelines, 1.2.4

      • guarantees and, 3.1.5

      • risks incurred by the private sector and, 1.2.4

    • Public sector. See also Private sector

      • contractual arrangements between the government and, 1.2.4

      • description, 1.1.1

      • diagram, Figure 1

      • fiscal transparency and data dissemination standards, Box 25

    • Purchaser-provider model for performance-based budgeting, Box 12

    Q

    R

    • Regularity audits, 4.3.1

    • Reports on the Observance of Standards and Codes. See Fiscal ROSCs

    • Republic of Korea

      • ethics codes and codes of conduct for public officials, 145n

      • legal basis for taxes, 41n

    • Resource revenues

      • budgeting and, 2.2.1

      • distribution of, 1.1.3

      • fiscal regime for resource sectors, 1.2.1

    • Results-based budgeting

    • Revenue forecasting

    • Revenue sources. See also specific revenue sources

      • annual budget presentation of, 3.1.4

      • classification of, 3.1.4

      • production-sharing agreements, 1.2.1

      • revenue classification (GFSM 2001), Table 2

    • Roles and responsibilities. See Clarity of roles and responsibilities

    • ROSCs. See Fiscal ROSCs

    S

    • SAI. See Supreme audit institutions

    • SDDS. See Special Data Dissemination Standard

    • Sensitivity analysis

      • fiscal sustainability, 2.1.4

    • Slovenia

      • medium-term budget framework, 59n

    • SNA. SeeSystem of National Accounts

    • Social insurance programs

    • South Africa

      • macroeconomic assumption inclusion in the medium-term budget framework, 166n

      • Medium-Term Budget Policy Statement, 55n

    • Spain

      • ethics codes and codes of conduct for public officials, 145n

      • public-private partnerships, 46n

    • Special Data Dissemination Standard

      • advance release calendars, 3.3.2

      • data integrity standards, 4.3.4

      • Data Quality Assessment Framework and, 4.1.3

      • dimensions relevant to fiscal transparency, Box 25

      • reporting of debt, 3.1.5

      • timeliness of data guidelines, 3.3.1

    • Stability and Growth Pact, 2.1.2

    • Stand-alone fiscal rules, Box 9

    • Standards and Codes Initiative

      • revised Code and, 12

    • Statement of Contingent Liabilities, Box 17

    • Subnational governments

      • extrabudgetary activities, 3.1.6

      • national accounts-based reports, 114n

      • reporting the fiscal position of, 3.1.6

      • resource requirements and expenditure responsibilities, 2.1.3

    • Supplementary budgets

      • presentation to the legislature, 2.2.3

    • Supreme audit institutions, 4.3, 4.3.2

    • Sweden

      • freedom of information legislation, 130n

      • quasi-fiscal activities of the central bank, 30n

      • Swedish Riksbank publication of macroeconomic forecasts, 165n

    • Swedish Riksbank

      • publication of macroeconomic forecasts, 165n

    • System of National Accounts

      • “government” definition, 1.1.1

    T

    • Tax expenditures

      • public availability of information on, 3.1.3

      • reporting of, Box 16

    • Tax issues

      • accessibility and understandability of tax laws, 1.2.2

      • appeals of tax or non-tax obligations, 1.2.2

      • collection of tax and non-tax revenues, 1.2.2

      • collection of taxes on private businesses and individuals, 1.1.5

      • computer systems for exchange information among revenue departments, 1.2.2

      • criteria for administrative application of tax laws, 1.2.2

      • customs and non-tax revenue collection, 1.2.1

      • earmarked taxes, 1.2.2

      • explicit legal basis for revenue collection, 1.2.1

      • information technology and, 1.2.2

      • internal audit for financial accountability of tax collection staff and systems, 1.2.2

      • monitoring of local offices, 1.2.2

      • netting operations, 1.2.2

      • openness of tax collection processes, 4.2.6

      • powers and limitations of tax administration, 1.2.1

      • production-sharing agreements, 1.2.4

      • revenue administration, 1.2.2

      • revenue source, 3.1.4, Table 2

      • rights and safeguards of taxpayers, 1.2.1

      • tax avoidance behavior, 1.2.3

      • “tax” definition, 40n

    • Taxpayer rights, 4.2.6

    • Thailand

      • freedom of information legislation, 130n

    • Trend and autocorrelation approach to revenue forecasting, Box 7

    U

    • UNCITRAL. See United Nations Commission on International Trade Law

    • United Kingdom

      • Code for Fiscal Stability, 3.1.7, Box 23

      • ethics codes and codes of conduct for public officials, 145n

      • fiscal responsibility laws, Box 9

      • generational accounts, 118n

      • modified accrual accounting, 129n

      • nonfinancial public corporation operation, 35n

      • public availability of the macroeconomic model, 168n

      • public-private partnerships, 46n

      • reporting of budget measures, 63n

      • use of generally accepted accounting principles, 136n

    • United Nations. See also System of National Accounts

      • Classification of the Functions of Government, 3.2.2

      • Code and Manual development and, 26

      • Fundamental Principles of Official Statistics, 4.1.3, 4.3.4, Box 30

      • International Code of Conduct for Public Officials, 4.2.1

    • United Nations Commission on International Trade Law

    • Model Law on Procurement of Goods, Construction, and Services, 4.2.3

    • United States

      • accrual reporting as separate from budgeting, 83n

      • Analytical Perspectives, 3.1.7, 117n, Box 23

      • disclosure of all major macroeconomic assumptions, 170n

      • estimated cost that proposed federal legislation would impose on state and local governments, 64n

      • ethics codes and codes of conduct for public officials, 145n

      • Federal Financial Accounting Standards, 136n, 137n

      • freedom of information legislation, 130n

      • government balance sheets, Box 22

      • Planning, Programming, and Budgeting System, 68n

      • reliance on market forces to discipline the finances of lower levels of government, 115n

      • tax expenditure reporting, Box 16

    W

    • WCO. See World Customs Organization

    • Within-year budget reports

    • World Bank

      • Code and Manual development and, 26

      • revised Code and, 12

    • World Customs Organization

      • Declaration of the World Customs Organization (Customs Cooperation Council) Arusha, 1.2.2, Box 1

    • World Trade Organization

      • Code and Manual development and, 26

    Z

    This version of the Manual (May 2007) replaces earlier versions posted on the IMF website in November 1998, April 1999, and March 2001.

    See Petrie (2003). One example of private sector use of the Code is Oxford Analytica’s series of assessments for the California Public Employees’ Retirement System, of monetary transparency and fiscal transparency against IMF standards, for 27 emerging market countries. http://www.oxan.com/cr/projects/calpers.asp.

    See Allan and Parry (2003) for a description of fiscal transparency in the EU accession countries.

    Public Information Notice (PIN) No. 05/106.

    The pillars were called “general principles” in the first edition of the Manual.

    The Manual’s discussion of how the good practices in the Code might be implemented is drafted to apply to most countries. It is recognized, however, that institutional, constitutional, and legal differences among countries will mean that the specific desirable implementation of good practices in a particular country may differ from what is described in the Manual.

    Some examples include OECD, the International Organization of Supreme Audit Institutions (INTOSAI), and the United Nations.

    The terms and concepts defined in this section are based on the definitions provided in Chapter II of the IMF’s Government Finance Statistics Manual 2001 (GFSM 2001). Readers are encouraged to refer to this manual and companion material (http://www.imf.org/external/pubs/ft/gfs/manual/index.htm) for a more in-depth understanding.

    The GFSM 2001 uses the term “public corporation” uniformly to replace the terms “public enterprise” and “public financial institution,” and this practice is followed throughout this document.

    Examples of institutional tables for selected countries can be found in the annual Government Finance Statistics Yearbook.

    Output is defined as nonmarket if it is supplied free or at prices that are not considered economically significant to influence its demand or supply. The GFSM 2001 (p. 10) notes that it can be difficult to determine whether an entity should be classified as government or a public corporation when it sells its output. Although the main criterion for classifying a public corporation is that it sells most or all of its output at market prices, the market price can be difficult to determine for many public sector goods and services.

    This includes ad hoc or regular expenditure of public money not appropriated by the legislature. For example, the expenditure of oil bonus revenue should be included in general government revenue and expenditure, even if it is not appropriated or included in the budget of any government entity.

    An example of good practice is Honduras, where the new budget system law passed in 2004 defines general government and public sector in accordance with the GFSM 2001. This entailed budgeting and reporting for noncommercial decentralized agencies that were previously excluded (see Honduras, Fiscal ROSC-Update, 2005, paragraph 4). El Salvador is another country where there is a fairly clear distinction between decentralized public institutions performing noncommercial functions, which are included in the budget and government finance statistics, and those performing commercial functions, which are included only in statistics on the public sector. However, some extrabudgetary expenditures remain (see El Salvador, Fiscal ROSC, 2005, paragraph 2).

    See, for instance, Alesina and Perotti (1995 and 1999) and Stein, Talvi, and Grisanti (1998). These studies suggest that fiscal performance in Europe and Latin America is strengthened by budget procedures that concentrate power in the executive (and, within the executive, in the finance ministry) and are more transparent.

    The Code is silent, however, on whether the legislature should have the power to amend the budget presented by the executive. This goes beyond transparency. See Alesina and Perotti (1999) for a discussion of the effects of different legislative budget amendment powers.

    Mozambique has recently set up a new institutional framework for intergovernmental relationships, with relatively clear and simple rules (see Mozambique, Fiscal ROSC, 2001, paragraph 5). In Colombia, legislation clearly and transparently establishes the amount of resources to be transferred, the rules of growth of the transferred resources, and criteria applicable for distributing resources among departments, districts, and municipalities (see Colombia, Fiscal ROSC, 2003, Box 1).

    Nigeria has reached agreement on revenue sharing formulas for oil- and gas-related revenues among federal, state, and local governments. Disbursements to all territorial entities are published every month at http://www.fmf.gov.ng. To manage the macroeconomic impact of the oil resources, consensus was reached to limit release of oil revenues to the budgets by saving revenues in excess of a budgetary reference oil price.

    In Peru, the 2003 Fiscal Responsibility and Transparency Act requires that the central government guarantee external debt contracted by subnational administrations; such external debt is to be used only to finance public investment; the debt–to–current revenue ratio and annual debt service–to–current revenue ratio must be below 100 and 25 percent, respectively, for each subnational government; and the three-year average primary balance of subnational governments must be positive.

    In Azerbaijan, fuel subsidies provided by the national oil company, SOCAR, were eventually put on budget by recognizing the amount of the subsidy in the budget, while SOCAR received credit for taxes owed for the same amount (see Azerbaijan, Fiscal ROSC-Update, 2005, Section II).

    In the Code, and hereafter in the Manual, references to public financial corporations do not include the central bank. Given the particular significance of the central bank for fiscal analysis, it is important to distinguish it clearly from other public financial corporations.

    The relationship between the central bank and government should be consistent with the principles of the International Monetary Fund’s Code of Good Practices on Transparency in Monetary and Financial Policies.

    In Sweden, the central bank undertakes no quasi-fiscal activities, and its independence is assured under amendments to the 1997 Sveriges Riksbank Act (see Sweden, Fiscal ROSC, 2000, paragraph 5).

    Some examples include Moldova, Mongolia, and Brazil. Even if direct financing is prohibited, it is still possible for the central bank to buy government securities on the open market, or to influence the demand for such securities in other ways (e.g., by requiring their use in meeting reserve requirements).

    See the International Financial Reporting Standards (IFRS) (http://www.iasb.org/Home.htm) or the U.S. generally accepted accounting principles (http://cpaclass.com/gaap/gaap-us–01a.htm) as the primary examples. The Public Sector Committee of the International Federation of Accountants (PSC) has issued a Guideline stating that IFRS are applicable to government business entities.

    In the United Kingdom, nonfinancial public corporations operate on a commercial basis, with the costs of noncommercial activities being compensated for and reflected in the budget. In some countries, such as France, Chile, Honduras, and Brazil, QFAs have been reduced considerably by making explicit budget transfers for certain noncommercial activities conducted by public corporations (see France, Fiscal ROSC, 2000, paragraph 2; Chile, Fiscal ROSC-Update, 2003, paragraph 5; Honduras, Fiscal ROSC-Update, 2005, paragraph 4; and Brazil, Fiscal ROSC, 2001, paragraph 11).

    See the Guide for further discussion of these issues and additional examples of QFAs provided by national resource companies.

    In Australia, these are referred to as “compliance cost impact statements.”

    See Basel Committee on Banking Supervision (1997). This is one of the core standards promoted through the Financial Sector Assessment Program (FSAP). In the FSAP, staff of the World Bank and IMF consider observance of relevant financial sector standards as an input into a broader examination of financial sector stability.

    The term “tax” in this section is used to refer to any compulsory payment under law, including customs duties.

    For example, in the Republic of Korea taxes are levied under strict legal authority, tax laws are accessible, and they contain details of taxpayers’ rights, tax dispute procedures, and the application of tax laws. Taxpayers can contest rulings through internal dispute resolution procedures, recourse to the National Tax Tribunal, and finally by appealing to the judiciary (see Republic of Korea, Fiscal ROSC, 2001, paragraph 8).

    For more discussion on the legal traditions for budget systems, see OECD (2004a).

    Many developing countries inherit their legal systems either from continental Europe, where the legislation for public financial management relies on budget principles and procedures that are codified in detail in the law, or from Britain, where the legislative model tends to legislate broad requirements, with the detailed budget procedures reflected in regulatory and administrative instructions.

    A number of advanced economies have well-established PPP programs. The United Kingdom started its Private Finance Initiative in 1992 and it now accounts for about 14 percent of public investment. Australia, Canada, Finland, Germany, Greece, Ireland, Italy, Japan, the Netherlands, and Spain also have PPP programs, but their share in total public investment is modest. Countries in Eastern Europe, including the Czech Republic, Hungary, and Poland, are also launching PPP programs. Among other emerging market economies, Chile and Mexico have well-developed PPPs.

    For example, Engel, Fischer, and Galetovic (2003) note that Mexican taxpayers spent more than US$8 billion to bail out both franchise owners and the banks that financed their projects. Other countries, such as Chile (see Box 5), have had successful and transparent PPP programs.

    Under generally accepted accounting principles (GAAP), the acquisition of an asset is not included in the operating statement, but treated as strictly a balance sheet transaction. However, under the GFSM 2001 presentation, the operating balance is arrived at in accordance with GAAP, and then the acquisition of nonfinancial assets is deducted from the operating balance to arrive at net lending/borrowing.

    In some cases a national oil company may have a production-sharing agreement with a private investor. This is just as much a granting of rights to a public resource, and hence, these contracts should be subject to the same transparency requirements.

    An example of good practice is Egypt, where all contracts are made public, whether awarded through negotiated deals or bid rounds.

    It is recommended that debt management practices follow the IMF (2003b)Guidelines for Public Debt Management.

    Norway’s Government Pension Fund–Global is considered a best practice in transparent asset management. Box 6 in the Guide on Resource Revenue Transparency provides more details on the asset management guidance, reporting, and auditing of these assets.

    Readers may also wish to refer to Guidelines on Public Expenditure Management at http://www.imf.org/external/pubs/ft/expend/index.htm as well as the World Bank Public Expenditure Management Handbook at http://www-wds. worldbank.org/external/default/WDSContentServer/IW3P/IB/1998/06/01/000009265_3980728144519/Rendered/PDF/multi_page.pdf.

    In South Africa, a Medium-Term Budget Policy Statement is presented to parliament up to four months before budget day. It contains the macroeconomic assumptions, proposed interprovincial allocations, the expected functional classification of expenditure, and the expected split between capital and current spending. For a discussion of the pre-budget consultation phase in Canada, see OECD (1999).

    Current practice in terms of the amount of time allocated for consideration of the budget by the legislature varies across countries. Albania allocates one month, which legislators consider to be too short, but new legislation is under preparation to extend it to at least two months. Bulgaria, Croatia, and Indonesia allow six to eight weeks, whereas Colombia and Cyprus allocate three months. Most developed countries allow at least three months. The time for consideration by the legislature is protected in many countries by provisions that allow for continued financing in the event that the budget is not adopted prior to the beginning of the fiscal year.

    In Hong Kong SAR, the annual budget documentation provides a clear statement of fiscal policy objectives and medium-term sustainability (see Hong Kong SAR, Fiscal ROSC, 1999, paragraph 32). In Moldova, a statement of fiscal policy objectives is reflected in both the medium-term expenditure framework and the annual state budget (see Moldova, Fiscal ROSC, 2004, paragraph 36).

    In Germany, the Law on Budgetary Principles, for instance, explicitly requires multiyear financial planning by all levels of government (see Germany, Fiscal ROSC, 2003, paragraph 50). In Brazil, the Fiscal Responsibility Law requires a multiyear framework for all levels of government for a three-year period (see Brazil, Fiscal ROSC, 2001, Box 1).

    A number of countries, including Brazil, Chile, Hong Kong SAR, the Netherlands, and Slovenia, have integrated a medium-term framework into both the budget process and budget documentation (see Brazil, Fiscal ROSC, 2001, paragraph 22; Chile, Fiscal ROSC, 2003, paragraph 37; Hong Kong SAR, Fiscal ROSC, 2001, paragraph 32; Netherlands, Fiscal ROSC, 2006, paragraph 30;Slovenia, Fiscal ROSC, 2002, paragraph 19). In Moldova, the medium-term framework provides a comprehensive analysis of government finances that covers social insurance funds as well as the central and local governments (see Moldova, Fiscal ROSC, 2004, paragraph 33).

    See the Guide to Resource Revenue Transparency.

    Indeed, fiscal rules that are poorly designed or inconsistently implemented can undermine fiscal transparency, in part because of the perverse incentives they may provide for one-off measures or creative accounting.

    Kopits and Symansky (1998) discuss fiscal rules in detail.

    A good example of this is the reporting of budget measures in the United Kingdom, where a summary table of new budget measures and their estimated fiscal effects is provided in the budget document, and an annex expands upon each new measure in more detail. In France, existing policy expenditure (“appropriations for current services”) is clearly distinguished from “items of expenditure reflecting new policies.” This distinction is required by the organic budget law and, under that law, current services appropriations are subject to only one vote in parliament, whereas new policy items are subject to detailed voting processes (see France, Fiscal ROSC, 2000, paragraph 13). In the Netherlands, the fiscal costs of new policy initiatives are separately identified in the budget process and budget documents (see Netherlands, Fiscal ROSC, 2006, paragraph 34).

    In the United States, the Congressional Budget Office (CBO) is required by law to advise the legislature of the estimated costs (and the basis of the estimate) that proposed federal legislation would impose on state and local governments (and on the private sector). See http://www.cbo.gov.

    IMF and World Bank (2005 and 2006).

    The emergence of new debt-creating obligations that may be excluded from routine fiscal projections—such as contingent liabilities that may have to be honored—should also be taken into account.

    For further discussion of approaches to assessing fiscal sustainability, including for countries where the assessments are affected by special circumstances such as the availability of an exhaustible mineral resource, see Chalk and Hemming (2000).

    The United States, through its Planning, Programming, and Budgeting System, represented the leading example in the mid-1960s.

    It should be noted that a program classification is conceptually distinct from the GFSM 2001/Classification of the Functions of Government (COFOG) functional classification, because government program objectives may be served by activities in several functional areas (an anti-malaria subprogram, for instance, could have an educational component, an agricultural drainage component, and a health component). Nonetheless, in practice, some program classifications have been based on COFOG at higher levels of categorization.

    The Netherlands introduced program budgeting in 2001 to provide parliament with a more policy-oriented and transparent budget document. The methodology has structured line ministry budgets around strategic objectives and policy areas, and then connected these to performance targets (see Netherlands, Fiscal ROSC, 2006, paragraph 48).

    Access to detailed work on these issues in the OECD and to individual country sites is provided through the OECD website, http://www.oecd.org/topic/0,2686,en_2649_37405_1_1_1_1_37405,00.html.

    In some cases, extrabudgetary funds are established using earmarked tax or non-tax revenues.

    The channeling of earmarked taxes to extrabudgetary funds is common when there is a strong link between taxes and benefits, emphasis on which may result in earmarked taxes being more easily accepted than regular taxes. Also, activities undertaken through extrabudgetary funds should often be less influenced by the short-term considerations that affect the budget, and may even be governed by separate legislation. Social security has these characteristics.

    Or through more extended reviews linked to medium-term budget targets or longer-term sustainability.

    The new budget system laws in Moldova and Latvia go as far as to incorporate former extrabudgetary funds as special funds in the annual budget.

    See more detailed discussion of these issues in Potter and Diamond (1998) and IFAC (2000b).

    Because tax revenue is compulsory and unrequited, there are more difficulties in establishing recognition points to establish tax liability than on the expenditure side. IFAC (2000b) notes a number of possible recognition points that could apply under an accrual system and gives examples of recognition points for different taxes (paragraphs 517–28), but notes that “because of the differences in legislation and administrative systems across countries, it is possible that different countries will have different recognition points for similar taxes” (paragraph 524).

    Although offsetting arrangements are generally not recommended in government transactions, it is important that a unified approach be taken to assessment of tax liabilities. A single taxpayer identification number and tax file for each taxpayer would permit such an assessment; if a taxpayer is in arrears for one tax and entitled to a refund from another tax, the refund could be used to offset the tax arrears.

    As examples, audited final accounts are available within four months of the end of the fiscal year in Moldova, five months in the Netherlands, and nine months in Bulgaria.

    For countries with a language that is not in widespread international usage, and particularly for such countries seeking access to international capital markets, it is useful if fiscal and other economic information is translated, if possible simultaneously, into an international language.

    For example, Canada covers (at the federal level) all budgetary and extrabudgetary funds in the budget, and France has incorporated many funds previously treated as extrabudgetary in the budget (see Canada, Fiscal ROSC, 2002, paragraph 18; and France, Fiscal ROSC, 2000, paragraph 9).

    For example, in Greece, pensions and health care establish-ments—which are not covered by the budget—were estimated to account for about 36 percent of general government expenditure in 2004 (see Greece, Fiscal ROSC, 2006, Box 1).

    Where the government budgets on an accrual basis, as in Australia, New Zealand, and France, these financial reports also fulfill the function of reporting on compliance with budget appropriations. In other countries (e.g., the United States), accrual reporting is separate from budgeting, which is mainly on a cash basis.

    A good example is Chile, where the Budget Directorate publishes comprehensive information and databases related to the public sector at http://www.dipres.cl.

    In Chile, the budget documentation for 2006 shows information for the main fiscal aggregates for four years prior to the budget and projections for three years following the budget. The draft Budget Law includes final execution figures for the four previous years for ministries and programs, with as much disaggregation as in the budget. The government’s General Control Agency (Contraloría General de la Republica) annual statements include a comparison with the relevant budget. The Public Finance Statistics Yearbook includes consolidated figures for central government, general government, and the nonfinancial public sector for the previous nine years. Since 2000, as required by Chile’s fiscal responsibility law, the documents accompanying the budget have included a financial projection of the fiscal macro aggregates of budgetary central government for three years following the budget (see Chile, Fiscal ROSC-Update, 2003, paragraph 30).

    Medium-term fiscal forecasts are discussed in more detail in Chapter II.

    A special case that falls outside the usual definition of tax expenditure occurs where government or public corporations are exempt from taxes applied to similar transactions carried out by the private sector. Where such exemptions apply, these should be noted and quantified to the extent possible in the budget documentation.

    The quantification of tax expenditures is particularly complex, requiring the specification of a benchmark tax structure in the absence of tax expenditures and, in more sophisticated approaches to quantification, assumptions about the behavioral impact of tax expenditures (see OECD, 1984 and 1996; and Government of Canada, Tax Expenditures and Evaluations 2000, at http://www.fin.gc.ca/toce/2000/taxexp_e.html).

    More precisely, IFAC-IPSASB defines a contingent liability as either “(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the corporation; or (b) a present obligation that arises from past events but is not recognized as a liability because: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) the amount of the obligation cannot be measured with sufficient reliability.”

    Disclosure of contingent liabilities should be included in a broader statement of fiscal risks. Reporting on contingent liabilities will require development of an underlying information system for recording them.

    The Czech Republic is a good example of a country where there are significant contingent liabilities in the form of guarantees, and where steps have been taken to provide information on guarantees in budget documents (see Czech Republic, Fiscal ROSC, 2000, Box 2).

    Section 7.6 of the Code of Good Practice in Transparency in Monetary and Financial Policies requires that, where there are deposit insurance guarantees, information on the nature, operating procedures, financing, and performance of such arrangements be publicly disclosed.

    Where there is a portfolio of similar contingent liabilities, such as a large portfolio of loan guarantees with similar characteristics (e.g., in the housing or agriculture sectors), there may be sufficient reliable historical data on loan loss experience to allow a more reliable estimate of the expected cost of the guarantee program to be made. This estimate might then be appropriated as expenditure in the budget.

    Supplementary disclosure is also possible under cash accounting, as recommended in the IFAC Exposure Draft 9 (2000a).

    In some instances, revenue earned by a central bank from a quasi-fiscal activity may be transferred directly to the budget (e.g., revenue earned from the operation of a multiple exchange rate system).

    In addition, when sterilization is undertaken for monetary purposes (and hence is not a quasi-fiscal activity), it is important that its financial implications be reported separately in the central bank’s annual report.

    There is also typically a time lag between the time a quasi-fiscal activity occurs and affects the central bank’s profit and loss account, and when central bank profit is transferred to the central government.

    In some cases, the central bank law may provide that all profits are to be transferred to the central government once reserves reach a certain level. More generally, the marginal rate of transfer may vary over time.

    Significant central bank losses are not uncommon in developing countries; in some instances annual losses have exceeded 5 percent of GDP. See Robinson and Stella (1993).

    Such subsidized credit needs to be distinguished from rediscounting by central banks. The latter activity is monetary in character and should generally be regarded as involving an exchange of assets of equal value. Rediscounting is provided to solvent institutions on a fully collateralized basis, often at market or penal rates of interest. When rediscounting is provided at below-market interest rates, however, the interest rate subsidy should be regarded as a quasi-fiscal activity. Similarly, unremunerated (or under-remunerated) reserve requirements, which can impose a significant tax on financial corporations where interest rates are high, should be regarded as a quasi-fiscal activity.

    The Code of Good Practices on Transparency in Monetary and Financial Policies provides a basis for the provision of such information by the central bank.

    For example, reporting of a guaranteed loan might include the amount and duration of the loan; reporting of a subsidized loan might include the amount and duration of the loan and the rate of interest; and reporting of a consumer subsidy by a nonfinancial public corporation might include at least some indication of the divergence between the price charged and a price based on full cost recovery.

    See Mackenzie and Stella (1996) for a detailed discussion of issues in estimating the size of quasi-fiscal activities.

    Chile, Fiscal ROSC-Update, 2005, paragraph 7, notes that “The Report on the Public Finances (which accompanies the submission of the budget to congress) included chapters on contingent liabilities from 2003. The chapters on contingent liabilities include annual projections of the cost of minimum pension guarantees, and estimates of the present value of the expected fiscal costs of the future operation of all of the public-private partnerships (‘concessions’) which were in place as of the date of publication. The reports include a brief description of the methodology used for making this calculation.”

    To assist in the interpretation of overall revenue trends it is helpful to identify any revenue items that reflect specific onetime events, such as asset sales, granting of major resource concessions, or receipts of unusually large foreign grants.

    The OECD best practice guidelines suggest that debt should be reported with a lag of one month.

    The reporting standards for debt set out here are based on those in the GDDS and SDDS (http://dsbb.imf.org/Applications/web/gdds/gddshome). For a discussion of issues in the reporting of government debt and financial assets, see IFAC (2000b).

    Indexed debt is debt denominated in domestic currency but with its nominal value indexed to a foreign currency, inflation, or a commodity price (such as the price of oil or gold).

    Where remaining maturity is not available, original maturity may be reported.

    Cash and cash equivalents cover cash on hand, demand deposits, and short-term highly liquid investments readily convertible to cash.

    Guarantees are used to support private and other government levels to avoid risk; for example, loan guarantees for the private or public sector; other financial guarantees such as trade and exchange rate guarantees; income, profit, and rate of return guarantees; and minimum pension guarantees. Generally these risks have costs, if they materialize, for the government; therefore, it is recommended that they be carefully controlled.

    The methodologies and criteria used for the reserve estimation and other assumption should be clearly explained.

    In the case of subnational levels of government, the compilation need not be based on the actual outturns of all individual governments. It can be based instead on a sample survey that covers the actual budget outturns for a significant portion of total transactions undertaken by subnational governments.

    Australia provides a further example that broadly combines both of those approaches. States are independent sovereign agencies and present their budgets independently from the central government. However, states rely heavily on grants from the central government. Therefore, there has been a considerable effort to standardize statistical presentations in line with international standards for all jurisdictions, so that the focus of fiscal policy can be shifted to general government. The United States provides a good example of reliance on market forces (and voluntary self-regulation) to discipline the finances of lower levels of government. Because of the degree of independence of state governments, the focus of national fiscal policy is the federal budget. High standards of fiscal transparency are generally observed at all levels of government. The federal government compiles consolidated general government information ex post.

    Based on Ulla (2006).

    See Chand and Jaeger (1996). Also, the United States budget contains detailed information on the long-term implications of current fiscal policies. In an “Analytical Perspectives” publication provided as part of the budget documentation, projections are given for the budget to 50 years beyond the current year. The key assumptions are described and illustrations provided of the sensitivity of the projections to alternative assumptions and scenarios. Long-term (75-year) projections of the income and outlays of the Social Security, Medicare, and Medicaid trust funds are also provided, including the estimated 75-year actuarial balance of the trust funds as a summary measure of their financial status (see the Economic Assumptions and Analyses section in the Analytical Perspectives publication at http://www.whitehouse.gov/omb/budget).

    The United Kingdom budget regularly contains information on generational accounts (including comparative information for other countries), in the context of a detailed discussion of long-term fiscal sustainability (see http://www.hm-treasury.gov.uk/budget). To assess the sustainability and intergenerational impact of fiscal policy, the Code requires the government to publish illustrative long-term fiscal projections covering a period of at least 10 years. In practice, a 30-year horizon has been adopted.

    Treasury of the Commonwealth of Australia, Intergenerational Report 2002–03, Budget Paper No. 5.

    See Table 1 for a discussion of the relationship between GFSM 2001 classification and various types of fiscal reporting.

    Although the GFSM 2001 is not the only fiscal statistical reporting standard (the SNA and ESA provide alternatives that are close in concept), the current GFSM 2001 provides the most generally accepted international point of reference for purposes of classification of fiscal statistics.

    Belarus, Fiscal ROSC, 2004, paragraph 22, indicates that data on economic classification are compiled monthly for the republican government and quarterly for consolidated general government. The budget classification is broadly compatible with the GFSM 2001, with the exception of some parts of the functional classification. Privatization receipts were treated as revenue prior to 2003.

    In the GFSM 1986, the overall balance (or the overall deficit/surplus) is defined, on a cash basis, as total revenue and grants minus expenditure and lending minus repayments. An alternative definition of the GFSM 1986 overall balance may exclude some transactions in assets and liabilities (e.g., privatization proceeds) and classify them below the line. In the GFSM 2001, the “overall cash surplus/deficit” is defined as total revenue (including grants) minus expense minus transactions in nonfinancial assets; all transactions in financial assets (including “lending and repayments”) and liabilities are shown below the line. An alternative definition of the GFSM 2001 cash surplus/deficit and accrual net lending/borrowing is the “overall fiscal balance,” which allows for the reclassification of some transactions in assets and liabilities for public policy purposes (e.g., subsidies in the form of loans are shown as expenses, while proceeds from privatization—including fixed asset sales—are shown as financing).

    The various concepts of the fiscal balance are discussed in Bléjer and Cheasty (1993).

    See Mackenzie (1998) and the GFSM 2001.

    See Australia, Fiscal ROSC, 1999; and United Kingdom, Fiscal ROSC, 1999.

    The country with the longest tradition of such a commitment to open government is Sweden, where the principle has been enshrined in the constitution since 1776. Members of the public in Sweden (and in a number of other countries) have the right to appeal to the ombudsperson—an office independent of the executive that receives and investigates complaints of misadministration—any government agency’s decision to withhold information. Thailand has recently enacted freedom of information legislation. In other countries, such as the United States, there is a right of appeal to a court.

    Release calendars could include a statement that the dates are “expected” or “target,” but any subsequent delays due to unforeseen events should be announced as soon as they are evident.

    For discussion of advance release calendars, see IMF (1996 and 1998a).

    An in-depth treatment of this issue is found in the IMF’s July 2003 Data Quality Assessment Framework and Data Quality Program, at http://www.imf.org/external/np/sta/dsbb/2003/eng/dqaf.htm.

    Netherlands, Fiscal ROSC, 2006, paragraph 60, indicates that budget data are reliable and the variance between budgeted and actual outturn is disclosed to the public, giving reasons for variation.

    “Accounting policies are the specific principles, bases, conventions, rules, and practices adopted by an entity in preparing and presenting financial statements” (see IFAC’s 2003 glossary of defined terms at http://www.ifac.org/publicsector). The accounting basis may differ between budget documents and financial reports, as it does for example in the United States. Some countries have moved to accrual budgeting through a transitional period of reporting on an accrual basis, while still budgeting on a cash basis.

    For instance, international public sector acounting standards (IPSAS), GAAP as in the United Kingdom and New Zealand, or Federal Financial Accounting Standards applied by the United States federal government (see http://www.fasab.gov).

    For example, in the United States the Federal Accounting Standards Advisory Board is responsible for developing proposals to improve accounting and financial reporting in the federal government. In New Zealand, the Fiscal Responsibility Act requires the government to prepare and present all its fiscal reports in accordance with GAAP; that is, accrual accounting. GAAP is the responsibility of the New Zealand Accounting Standards Review Board (http://www.asrb.co.nz), a body independent of the government that establishes accounting standards for the private and public sectors.

    In Albania, fiscal financing data are reconciled with financial sector claims on and liabilities to the government, and government debt and official flows are reconciled with the balance of payments. See Annex IV, Sample C, in Carson (2001).

    Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated. Levels of detail are adapted to the needs of the intended audience.

    See detailed information by the IMF’s Statistics Department, at the Data Quality Reference Site.

    INTOSAI has published the INTOSAI Code of Ethics for Auditors in the Public Sector. See http://www.intosai.org.

    See http://www.oecd.org/document/12/0,2340,en_2649_201185_35532108_1_1_1_1,00.html. Countries included are Australia, Brazil, Canada, Greece, Italy, Korea, New Zealand, Poland, Spain, the United Kingdom, and the United States.

    Some countries have set up independent bodies or commissions that play a watchdog role for the observance of the code of conduct and some also report to the legislature.

    The merit principle is commonly understood to require that appointments be made in a non-partisan fashion with a selection process that is free from political party affiliation and bureaucratic relationships, and that they be based on competence and ability to do the job. See http://www.hrtoolkit.gov.bc.ca.

    An important resource is the methodology for measuring and monitoring procurement performance in the public sector set out by the OECD and World Bank (see http://www.oecd.org/document/29/0,2340,en_2649_19101395_34337309_1_1_1_1,00.html).

    Hungary, Fiscal ROSC, 2007, paragraph 29, provides a good example of meeting international procurement best practices through the “Glass Pockets” initiative, which was launched in mid-2003. Among its elements are increased State Audit Office powers of scrutiny and audit, a requirement that key players in public corporations declare their assets, and an increase in information on contracts available to the public.

    Guidelines on public procurement are available through the OECD website, which outlines relevant legislation under multilateral trade arrangements such as the World Trade Organization’s Government Procurement Agreement (http://www.jurisint.org/pub/06/en/doc/30.htm) and the European Union’s Procurement Directives (http://formby.wiganmbc.gov.uk/pub/bsu/eudirect.htm), which set legal obligations for national systems and practices.

    See practice 3.1.4 in regard to reporting requirements for major revenue items.

    Internal audit is defined as internal to the executive branch of government, and independent audit as external to the executive. Internal audit therefore covers both an audit of an agency by staff of the agency itself (ideally, reporting directly to senior management) and an audit of an agency by another agency (e.g., by an audit body under the control of the ministry of finance or the prime minister).

    Under this broad definition, internal audit covers administrative controls (procedures governing decision-making processes) and accounting controls (procedures governing the reliability of financial records).

    Canada, Fiscal ROSC 2002, paragraph 31, outlines internal audit policy, standards, and management.

    Lima Declaration, Section 5.1; see http://www.intosai.org.

    For Iran, the Supreme Audit Court (SAC) audits the accounts of spending agencies and reports to parliament on implementation of the government budget. The SAC derives its authority from the Supreme Audit Court Act, is independent of the executive, and reports to parliament. Its jurisdiction extends to “all the ministries, government institutions, and companies as well as other organizations that draw, in any way, on the general Budget” (Article 55 of the Constitution). The SAC enjoys independence in financial and administrative affairs (see Iran, Fiscal ROSC, 2002, paragraph 46).

    In India, an independent Comptroller and Auditor General (CAG) Reports only to the parliament. It should also be noted that state governments have their own accountants-general working under the comptroller, and auditors-general who provide audit reports directly to state legislatures (see India, Fiscal ROSC, 2001, paragraph 26).

    In Pakistan, for instance, defense appropriation accounts are provided to the Public Accounts Committee, but circulation of the documents is restricted for security reasons (see Pakistan, Fiscal ROSC, 2000, paragraph 30).

    In India (Fiscal ROSC 2001, paragraph 26), the CAG’s reports are tabled in the central and state legislatures and are reviewed by their respective Public Accounts Committees and Committees on Public Undertakings. Ministries are subsequently required to submit “Action Taken Notes” to the respective committee via the CAG.

    The OECD best practice guidelines go further by requiring that each fiscal report contain a statement of responsibility by the finance minister and the senior official responsible for producing the report.

    The Bank of Norway regularly publishes its internal staff macroeconomic forecasts. The Swedish Riksbank publishes macroeconomic forecasts sanctioned by its policymaking body.

    In South Africa, a set of macroeconomic assumptions are included in the medium term budget policy statement (MTBPS), and the budget submitted to parliament is based on a further update of the macroeconomic framework.

    See main conclusions of EU Survey on Independent Fiscal Institutions: Public Finances in EMU, No. 3, 2006 (http://ec.europa.eu/economy_finance/publications/european_economy/public_finances2006_en.htm).

    In Australia, for example, the Treasury Macroeconomic Model can be viewed at http://www.treasury.gov.au and purchased from the Australian Bureau of Statistics. In the United Kingdom, the treasury is required by law to make the macroeconomic model publicly available. In Chile, the government uses macroeconomic forecasts provided by a committee composed of independent experts.

    In Canada, the federal government prepares its fiscal projections on the basis of average private sector economic forecasts, a prudence factor for economic risks, and a contingency reserve to cover risks from forecasting inaccuracies and unpredictable events (see Canada, Fiscal ROSC, 2002, paragraph 34).

    In the United States, the budget documents clearly present budget forecasts and disclose all major macroeconomic assumptions (see United States, Fiscal ROSC, 2003, paragraph 49). External scrutiny of macroeconomic models and assumptions is encouraged, in particular because the executive and legislative branches of the government each develop their own independent forecasts. There is no formal external scrutiny of the models used. In addition, the United States has many private macroeconomic forecasters who provide a further check on government forecasting. The track record of the CBO in forecasting real economic growth has generally been superior to the average of the private forecasters over the almost 30 years since the creation of the CBO. The executive branch forecasts have been similarly accurate over this same period.

    In a number of countries, including several Latin American countries, fiscal data are produced and disseminated by the central bank rather than by the national statistics office.

    172

    The Fundamental Principles of Official Statistics were adopted by the United Nations in a special session in 1994. The principles are intended to guide producers of official statistics in fulfilling their obligations and to inform users of statistics of what they should expect.

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