Question 85

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

OBS Guidelines
Question 85 asks if expenditure estimates in the Year-End Report 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 Year-End Report must present expenditure estimates by all three of the expenditure classifications for at least two years beyond the budget year. Answer “b” if expenditure estimates are presented by two of these three classifications. Answer “c” if expenditure estimates are presented by one of the three classifications. Answer “d” if expenditure estimates are not presented by any of the three classifications in the Year-End Report.

1) 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.

2) 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.