Question 78

Does the Mid-Year Review of the budget present expenditure estimates for the budget year underway by any of the three expenditure classifications (by administrative, economic, or functional classification)?
 * a. Yes, the Mid-Year Review presents expenditure estimates by all three expenditure classifications (by administrative, economic, and functional classification).
 * b. Yes, the Mid-Year Review presents expenditure estimates by two of the three expenditure classifications.
 * c. Yes, the Mid-Year Review presents expenditure estimates by only one of the three expenditure classifications.
 * d. No, the Mid-Year Review does not present expenditure estimates by any expenditure classification.
 * e. Not applicable/other (please comment).

OBS Guidelines
Question 78 asks if expenditure estimates in the Mid-Year Review are presented by any one of the three expenditure classifications — by administrative, economic, and functional classifications — which were addressed in Questions 1-5 above. Each of the classifications answers a different question: administrative unit indicates who spends the money; functional classification shows for what purpose is the money spent; and economic classification displays what the money is spent on. Unlike classification by administrative unit, which tends to be unique to each country, functional and economic classifications for government budgeting have been developed and standardized by international institutions. Cross-country comparisons are facilitated by adherence to these international classification standards.

To answer “a,” the Mid-Year Review must present expenditure estimates by all three of the expenditure classifications. To answer “b,” expenditure estimates must be presented by two of these three classifications. A “c” answer applies if expenditure estimates are presented by one of the three classifications. Answer “d” applies if expenditure estimates are not presented by any of the three classifications in the Mid-Year Review.

1) Should we only accept updated, revised figures (as opposed to budgeted or six-month implementation figures)?
Just six-month implementation figures are not acceptable. To accept full-year figures that are the same as the original enacted figures, there has to be some indication that the country is affirming that the original enacted figures are remaining the same for the rest of the budget year (this could be as simple as the title of the column heading). For example, if the column heading is “Approved 2019 Budget,” we would not accept this information.

2) Some, but not all, expenditure by economic, administrative, or functional classification
Some countries present some, but not all, of expenditure by economic classification (for example: Botswana, Trinidad and Tobago, and Zambia). In these cases, if more than 2/3 of expenditure is presented by economic classification, the answer should be “a.” If less than 2/3 of expenditure is presented, it should be a “b.”

Some countries also present partial administrative classifications (Indonesia IYR in Q68 and Philippines YER in Q85) or functional classifications (Papua New Guinea YER in Q85). These cases were also accepted in OBS 2019 as more than 2/3 of expenditure is presented in the classification.

3) What counts as an economic classification?
In OBS 2019, we agreed that current and capital disaggregation are not sufficient to qualify as an economic classification. For an economic classification to be counted, it should have some level of disaggregation below the level of recurrent expenditures (such as wages or interest payments), though capital expenditures presented as a single line item is acceptable. In the case of Vietnam, their use of an “economic classification” shows varying degrees of detail across their budget documents. Vietnam’s EBP and EB include some categories below current expenditure, including interest payments, even though wages and salaries are not shown. The classifications shown in these two documents were accepted as economic classifications in OBS 2019. However, in Vietnam’s YER, expenditures were only shown with expenditure categories for capital, current, and contingencies. Because there was no disaggregation of the current expenditure, this presentation was not accepted as a economic classification in OBS 2019.