1.1 This 2019 Financial Soundness Indicators Compilation Guide (Guide) provides guidance on the concepts and definitions, data sources and methods for the compilation and dissemination of financial soundness indicators (FSIs). (Table 1.1 contains the set of core and additional FSIs.)
1.1 The government sector should be distinguished from the rest of the public sector and from the rest of the economy, and policy and management roles within the public sector should be clear and publicly disclosed.
72. Similar principles of transparency to those recommended for other parts of the government budget should apply to the processes for planning, allocating, spending, and reporting resource revenues. The special features of resource revenue, however, require that governments give particular emphasis to policy clarity with regard to explicit treatment of risks arising from the resource base, transparency of accounting, and control of receipts and spending. In particular, the government should clearly explain to the public its policies toward smoothing the impact of volatile revenue flows and ensuring long-term fiscal sustainability. If savings or stabilization funds have been established, they should be fully integrated into the overall fiscal policy framework. All resource-related asset holdings should be fully disclosed and asset management policies open. This section covers these and other good transparency practices that will lead toward an effective application of fiscal policy in resource-rich countries.
120. The need for effective mechanisms to provide assurances of integrity is especially important in the case of resource revenue flows. The magnitude of these transactions and their technical complexity provide a high exposure to risks of malpractice. In developing countries, this situation is often combined with a lack of technical capacity and political failure to address risks adequately. The inherent risks107 associated with resource sectors require that governments place special emphasis on data quality, internal controls, and independent external audit. This chapter of the Guide examines some key requirements for establishing good practice in this area of the Code. The role of the EITI validation process is highlighted again in this context.
11.1 This chapter provides practical guidance on strategic and management considerations about the compilation of FSIs and dissemination practices, which can be adapted to meet specific country circumstances.