Understanding and Analysing the Government's Budget

This course aims at providing participants with an understanding of the central government budget and provides a framework to analyse it.  The central government´s budget is placed within the fuller public sector framework to permit a basis for examining the degree of comprehensiveness achieved and the opportunities presented for obscuring the application of government funds through extra-budgetary arrangements.   The course covers the integration of national development plans into the budget; the multi-year fiscal framework within the budget constraints is set; the policy objectives and the corresponding sector allocation of resources.  It examines the budget classification and how that can support policy based budgeting, but also explores the consequences of budget classification options on budget execution, predictability, control and financial reporting.   The budget preparation and execution cycle is presented with an emphasis on the identification for opportunities for civil society engagement as well as for corruption and abuse in the execution of the budget.  The budget cycle presented looks also at the policy input dimensions provided at both the beginning and end by the cabinet and parliament.   An important element is the budget reconciliation process between demands for sector resources and the fiscal discipline constraint.  Also addressed is the sustainability of budget based upon considerations of monitoring of fiscal risk posed by public enterprises and sub national government entities as well as the revenue achievements based upon an analysis of recurrent and capital revenues, as well as the role of grants and the impact on the policy space.

The budget documents are described identifying the full scope of best practice requirements.  Specifically the participant is guided through an interpretation of key summary tables; comparison of aggregate estimate to outturn, the economic classification estimates and outturns, as well as sector estimates and outturns.   The debt service and debt stock and tests for adherence to guidelines, performance criteria and overall ceilings is reviewed and the source of funds.   Further the sources of funds for meeting the fiscal deficit.

The course concludes with a presentation of methods for monitoring of budget implementation through the interpretation of monthly expenditure returns and audited financial statements. 

By the end of the course participants will:

• Understand the public sector space in which the central government budget sits so as to have a basis for assessing the comprehensiveness of the budget and identifying unreported extra-budgetary fiscal activity.

• Understand the budget formulation, implementation and reporting cycle and identify opportunities for meaningful civil society engagement as well as opportunities for corruption and abuse;

• Be equipped with some basic methods for analysing budget documentation to assess whether the scope of information provides meets international  best practice; to what degree is there adherence to fiscal discipline, whether sector resource allocations are consistent with stated policy objectives and whether economic classification allocations are concistent wit economic growth objectives.

• To be able to assess the credibility of the budget

• Be able to identify threats to debt sustainability

• Understand the basic elements of Budget Formulation; Budget Classification; Budget Preparation; Budget Execution, Financial Management and Reporting; External Audit and Parliamentary Oversight.

The learning methods will include the following

• Introduction to key concepts through the “teaching and discussion” methods

• The use of original source material of key writers/thinkers in this area  

• The use of extensive examples from many different countries with different experiences to illustrate the points put across

• The use of exercises (in particular short "buzz-group" sessions) to provoke and consolidate certain points raises

• The use of major case studies –to illustrate in more detail some of the key points of the course.