Question 34

Does the Executive’s Budget Proposal or any supporting budget documentation present central government finances (both budgetary and extra-budgetary) on a consolidated basis for at least the budget year?
 * a. Yes, central government finances are presented on a consolidated basis.
 * b. No, central government finances are not presented on a consolidated basis.
 * c. Not applicable/other (please comment).

Guidelines
Question 34 asks whether the Executive’s Budget Proposal or supporting documents present the finances of the central government on a consolidated basis, showing both its budgetary and extra-budgetary activities. Virtually all of the questions in the OBS questionnaire focus on budgetary central government — the activities of the ministries, departments, or agencies of central government. In addition, Question 33 asks about extra-budgetary funds, such as social security funds that are not included in the budget.

Coverage is an important aspect of fiscal reporting. Budget documents should cover the full scope of government’s financial activity. In many countries, extra-budgetary activities are substantial, and can represent a sizable share of the central government’s activities. To get a full picture of the central government’s finances, therefore, it is necessary to examine both activities that are included in the budget and those that are extra-budgetary. This question asks whether such a consolidated presentation of central government finances, including both revenues and expenditures, is provided.

The central government is only one component of the overall public sector. The public sector also includes other levels of government, such as state and local government, and public corporations. (See Box 2.1 under Principle 1.1.1 of the IMF’s Fiscal Transparency Handbook (2018). For the purpose of answering this question, please consider only the central government level. In order to answer “a,” the Executive’s Budget Proposal or supporting documentation must present central government finances (both budgetary and extra-budgetary) on a consolidated basis for at least the budget year.

1) What specific information is needed beyond covering both central government and extra-budgetary finances?
In the Philippines in OBS 2019, there is a table presenting consolidated information (including public corporations) about the central government borrowing requirements (deficit), but it doesn’t show revenues or expenditures. In OBS 2019, we did not accept this as a consolidated statement because, at a minimum, consolidated statements should cover both revenues and expenditures.

2) How to score Q34 when a country does not have extra-budgetary funds
In cases where a country scores "e" on Q33 because it is clear that there are no EBFs, then Q34 should also be scored as "c" or not applicable. In OBS 2017, this was the case in four countries: Bosnia, Costa Rica, Paraguay, and Peru.

External References

 * IMF’s Fiscal Transparency Handbook (2018), Principle 2.1