Box 2

Components of public expenditure management

Legal and organizational framework

Legal framework for expenditure management

Constitutional requirements

Legal framework for budget and fiscal policy

Fiscal management roles of the executive, legislative, and judicial branches

Intergovernmental fiscal relations

Allocation of responsibilities between different levels of government

Expenditure transfers to subnational governments

Revenue authority and borrowing rights of subnational governments

Relations between government and nongovernment entities

Scope of government fiscal targets and consistency with government finance statistics

Central bank independence

Clarity of distinction between government and public enterprises

Clarity of reporting of government equity holdings

Clarity and openness of formal regulation of private sector

Government structure

Type of government (presidential, parliamentary, and so on)

Cabinet arrangements (powers of prime minister, ministry of finance, and line ministries)

Organizational structure of ministries and agencies with financial responsibilities

Arrangements for civil service management

Second-tier organizations (directorates, agencies, autonomous bodies) Expenditure programming and budget preparation

Budget coverage

Budget classification and consistency with government finance statistics

Extrabudgetary funds and earmarked revenues

Quasi-fiscal activities

Contingent liabilities

Box 2 (continued)

Feedback from program review and evaluation

Approval of draft budget by the legislature

Budget execution

Treasury systems, cash management, and expenditure monitoring

Laws and regulations on treasury and cash management

Organization of the treasury function

Cash planning and forecasting

Banking and accounting arrangements

Rules and procedures for payments and cash allocations

Flexibility for budget managers (virement rules, carryovers, and so on)

Commitment control

Verification of receipt of goods and services

Monitoring and management of payables and arrears

Payroll monitoring and management

Reconciliation of fiscal and bank information

Public procurement and management of physical assets

Procurement laws and regulations

Organization of procurement functions within government

Openness of procurement processes and procedures

Tendering procedures

Documentation and information systems

Control and complaint review procedures

Management of physical assets

Internal control and audit

Internal control regulations, organization, and procedures

Internal audit regulations, organization, and procedures

Accounting, reporting, and external audit

Accounting, reporting, and records management

Accounting policies and standards

Accounting processes and responsibilities

Government financial management information systems

Internal reporting