COVID Module Question 13

Do published documents or information on the emergency fiscal policy package under consideration include information on extra-budgetary funds and other off-budget arrangements to be used for implementing policies and programs included in the emergency fiscal policy package?

Guidelines
As part of their emergency response to the COVID-19 pandemic, many countries have created dedicated COVID-19 extrabudgetary funds (EBFs). Some of these countries routinely use EBFs during normal times, while others rarely use them. While there can be good reasons for relying on EBFs, they also raise the risk of weakening accountability, in the absence of strong governing rules and oversight.

The IMF defines an EBF as a set of accounts or a government entity engaged in “government transactions, often with separate banking and institutional arrangements, that are not included in the annual state budget law.“ (Allen and Radev 2010) Financing for EBFs can come from a variety of sources, such as transfers from existing budget allocations, including contingency reserves, or from governmental revenue. It can also come from private donations. Examples of EBFs include special purpose funds, development funds, savings funds, trading funds, and investment funds. (See IMF Special Series on COVID-19, “COVID-19 Funds in Response to the Pandemic,” August 26, 2020).

IMF finds that there are several reasons that countries would create an EBF, which can include centralizing control and management of funds, being able to more easily combine public funds with private donations, and streamlining certain steps in the budgeting and procurement processes. EBFs may facilitate the ability of governments to move quickly to address the pandemic and associated economic fallout. But relaxing processes that regulate government action during more normal times also come with certain risks, particularly if these EBFs operate outside of the regular financial management systems, are managed by officials who are unfamiliar with sound financial management practices, or are not subject to strong transparency and reporting requirements.

To foster transparency and accountability, governments should disclose the existence of EBFs on their website and describe the key characteristics of the funds, including their legal mandate, statement of purpose or policy rationale, governance arrangements, and rules and procedures for managing the EBF.

Data on EBFs should be published with a similar level of detail as other budgetary information. Governments should disclose revenue and expenditures on a gross basis, including sources of financing and details about the amount of expenditures, including a presentation of expenditures by program or activity.

Tick boxes: ''Please check the boxes of the items that appear in the relevant documentation. If none of the items are presented, please check ‘None of the Above’. In the comment box, please provide a detailed citation for each item selected below as described in the assessment directions as well as any additional details.''


 * ☐  Legal mandate
 * ☐  Policy rationale
 * ☐  Institutional arrangements
 * ☐  Reporting and auditing requirements
 * ☐  Estimates of total financing
 * ☐  Estimates of income from revenue or budget transfers (public resources)
 * ☐  Estimate of income from private donations and international donors
 * ☐  Estimates of other sources of financing
 * ☐  Estimates of total expenditure
 * ☐  Estimates of expenditure by program or activity
 * ☐  Sunset clause
 * ☐  Explanatory narrative
 * ☐  None of the above
 * ☐  Not applicable (the country did not create or use an existing extra-budgetary fund to implement the EFPP)