Appendix I. Bosnia and Herzegovina: Institutional Arrangements

1. The collection of relevant data, the processing of these data, and the compilation of GFS for Bosnia and Herzegovina for the consolidated general government is diffused across a number of institutions within Bosnia and Herzegovina. The informal and formal arrangements in place are insufficiently robust to support comprehensive and adequate fiscal data reporting.

2. In part, the formal arrangements are supported to a certain extent by budget laws and statistical laws. This is, however, complicated by the fact that neither a single unified nor a multiple (but consistent) legal framework exists for the country, the entities, and the cantons. Individual budget laws and statistical laws cover Bosnia and Herzegovina, the Federation of Bosnia and Herzegovina (and its underlying cantons), and Republika Srpska (RS). Significantly, the underlying accounting standards, the reporting requirements—concerning periodicity, format, timeliness, the coding structure, level of detail, supporting information, and reporting obligations (whom to report to) differ. As compilers of the Bosnian general government, the CBBH and the BHAS (in the context of national accounts compilation) therefore do not have at their disposal source data compiled and submitted according to consistent standards.

3. The Bosnia and Herzegovina Statistical Law does not have sufficient provisions, or cannot be enforced sufficiently, to ensure that all public sector units report data to the CBBH and the BHAS in a timely and consistent manner.

Recommendation:

  • The mission recommends the BHAS and CBBH review the Budget Laws and the Statistical Laws and propose amendments to the legislation to better support the collection of public sector units’ data where needed. Consideration needs to be given to align the underlying accounting standards, and the reporting requirements—concerning periodicity, format, and timeliness on a consistent manner and according to international standards and best practices.

4. Not all of the institutions that provide source data compile official GFS data, and compile national accounts data have a joint memorandum of understanding in place.1 From an operational point of view this means that the compiler of GFS and related macroeconomic statistics, generally speaking, need to rely on longstanding practices in the sharing of data. However, these informal arrangements are accompanied with a large number of uncertainties regarding the compilation process. Long-standing practices can come to a halt due to changes in personnel, changed policy within institutions, or even misunderstandings between institutions. Further, important issues with regard to reporting standards are not secured without these memoranda of understanding. These include provisions on the periodicity, the timeliness, the format, the coding structure, the coverage of data, and supporting information. Over-and-above, often supplementary in-depth data on specific economic events is required on an incidental basis.

5. The CBBH has been compiling GFS data for Bosnia and Herzegovina since 2003 on an annual and quarterly basis according to the Government Finance Statistics Manual 2001. Step-by-step, the CBBH has expanded GFS compilation that now are on an annual level, that includes data on revenue, expenditure, and flows and stocks of the financial balance sheet for 2011–14. However, currently, no classifications of the functions of government data are compiled.

6. The CBBH compiles Bosnian general government (S.13) GFS on the basis of raw data prepared by the MOF RS, MOF of the Federation of Bosnia and Herzegovina, Bosnian institutions, Brcko District, and extrabudgetary funds. The MOF RS prepares data (main ledger data) for the entity RS. The budgetary and extrabudgetary units of RS are compiled by CBBH as central government (S.1311), while the local municipalities are compiled as local government (S.1313) and social security funds as S.1314. The MOF of the Federation of Bosnia and Herzegovina prepares data (main ledger data) for the Federation of Bosnia and Herzegovina entity. The budgetary and extrabudgetary units, together with the cantons of the Federation of Bosnia and Herzegovina are compiled by the CBBH as central government (S.1311), while the municipalities are compiled as local government (S.1313), and social security funds as S.1314. The Bosnian institutions and Brcko District governments are also compiled as central government (S.1311), while social security funds in Brcko District are compiled as S.1314. The CBBH consolidates all the underlying data from the country level budgetary and extrabudgetary units, all the social security funds, and municipal data, in order to compile consolidated general government of Bosnia and Herzegovina.

Appendix Figure 1.
Appendix Figure 1.

Bosnia and Herzegovina: Government Sectors According to GFS Classification1 and Compiling Responsibilities

Citation: IMF Staff Country Reports 2018, 026; 10.5089/9781484339978.002.A999

1 Current practice is to classify the budgetary and the extrabudgetary units of country and the entities, plus the cantons of the Federation of Bosnia and Herzegovina as the central government of Bosnia and Herzegovina.

7. Due to the lack of formal or strong informal arrangements, the CBBH lack comprehensive data to compile Bosnia and Herzegovina general government and its underlying sectors adequately according to international standards. The entity level data generally lack sufficient detailed data to consolidate to the country level. Further, often supplementary data or information are required concerning specific fiscal or economic events. Under current circumstances, the exchange of these data or information are often deficient.

Recommendation:

  • The mission recommends that the BHAS, CBBH, the MOFs, and relevant GFS data reporters and compilers establish memoranda of understanding to formalize exchanges of data and information, establish roles and responsibilities, assign tasks, and determine timelines.

8. The CBBH uses an in-house GFS data repository IT system to record and manipulate data to some extent. The system bridges several charts of accounts of different fiscal reporting units to the GFSM 2014 on a one-by-one basis. The system is not equipped to take account of differing treatments of accrual recording across fiscal reporting units and as well as adjusting the time of recording to a consistent standard. The GFS compilers of the CBBH use Excel files for each individual unit to reconcile, adjust, and amend GFS data where needed. Documentation of these modifications, including the supporting metadata, are consequently disperse and hamper the quality assurance of the compilation process. The current system will thus be lacking in fulfilling the EU reporting requirements, as these significantly increase the data compilation demands to fulfil consistency and level of detail demands. Each unit prepares a full complement of GFS tables per reporting unit. These units are consolidated to general government with the use of Excel.

9. The CBBH is envisaging an upgrade of the in-house GFS data repository IT system. During the coming months, the CBBH envisages inviting tenders to develop this upgrade. The CBBH will also start to develop a functional specification for this upgrade. The goal is to improve documentation of data amendments, align with more detailed data compilation requirements associated with excessive deficit procedure reporting, allowing for a single base to generate the required data submissions to Eurostat, the IMF, and the World Bank.

Annex I. Bosnia and Herzegovina: Tentative Object List for Developing Work Program for Expanding GFS Reporting

The Bosnia-specific object list shown below provides a tentative overview of the various ‘building blocks’ needed to cover the above-mentioned reporting requirements, aligned with other macroeconomic statistics compilation. The list of objects is comprehensive, whereby Bosnia and Herzegovina can in time successfully compile GFS, on an organized and comprehensive basis. Determining realistic timelines associated with these objects will be an ongoing process, and may extend beyond the duration of the three-year project. The goal is to coordinate this object list with a wider object list for Bosnia and Herzegovina—that is, including RS and the Federation of Bosnia and Herzegovina.

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Annex II. Bosnia and Herzegovina: List of Officials Met During the Mission

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1

The GFS advisor for South East Europe is hosted by the Center for Excellence in Finance, Ljubljana, Slovenia.

1

The CBBH and BHAS have a memorandum of understanding in place; however, it requires updating inter alia to address coordination on EU reporting requirements.

Bosnia and Herzegovina: Technical Assistance Report-Government Finance Statistics Mission
Author: International Monetary Fund. Statistics Dept.
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    Bosnia and Herzegovina: Government Sectors According to GFS Classification1 and Compiling Responsibilities