Question 109

When does the legislature approve the Executive’s Budget Proposal?
 * a. The legislature approves the budget at least one month in advance of the start of the budget year.
 * b. The legislature approves the budget less than one month in advance of the start of the budget year, but at least by the start of the budget year.
 * c. The legislature approves the budget less than one month after the start of the budget year.
 * d. The legislature approves the budget more than one month after the start of the budget year, or does not approve the budget.
 * e. Not applicable/other (please comment).

OBS Guidelines
Question 109 examines when the legislature approves the Executive’s Budget Proposal. International good practice recommends that the Executive’s Budget Proposal should be approved by the legislature before the start of the fiscal year the budget proposal refers to. This gives the executive time to implement the budget in its entirety, particularly new programs and policies.

In some countries, the expenditure and revenue estimates of the Executive’s Budget Proposal are approved separately; for purposes of this question, at least the expenditure estimates must be approved. Further, approval of the budget implies approval of the full-year budget, not just a short-term continuation of spending and revenue authority.

To answer “a,” the legislature must approve the Executive’s Budget Proposal at least one month before the start of the budget year. Answer “b” applies if the legislature approves the Executive’s Budget Proposal less than one month in advance of the start of the budget year, but at least by the start of the budget year. Answer “c” applies if the legislature approves the Executive’s Budget Proposal less than one month after the start of the budget year. Answer “d” applies if the legislature approves the Executive’s Budget Proposal more than one month after the start of the budget year, or does not approve the budget.

1) Case of Slovakia in OBS 2017
Slovakia's 2017 budget had not been approved by December 31, 2016 (cutoff date) and so “b” or “c” would apply. 2016 budget was approved well in time, more than 1 month prior to the beginning of the year (so option “a” applies). This has been the practice for previous years as well ==> suggested response “a.”

Resolution : we can use BY 2016, also in line with the fact that we are using the 2016 EB in Section 3.

2) Case of Croatia in OBS 2017
Due to elections in November 2015, temporary financing was in place in the first 3 months of 2016 (the budget process was not normal). Due to elections (again!) in September 2016, the budget process was delayed again. Neither 2017 nor 2016 budget approval processes were “normal”.

Questions to ask: How many budget proposals have been submitted to parliament, including the “interim” ones? The 2016 budget was approved in March this year, right? And when was the 2015 budget approved?

If the 2014, 2013, and 2012 budgets were approved following the normal budget process, we can respond by using BY 2014. This is because we should really have some continuity in practice, if we want to respond “a”, “b”, or “c”. However, if 2014 was the only year where the normal process was followed, we should use BY 2016, and therefore respond “d” to this question. We can then wait to see whether by December 31, Parliament approves the 2017 budget on time.

Resolution : Given that the 2013, 2014 and 2015 budgets were approved according to the normal procedure (while the budget for 2012 was approved in March 2012 due to parliamentary elections), we agreed we can use 2015 as a reference year for answering questions about the budget process.

(3) What fiscal year should be assessed?
Unless there are identifiable exceptional circumstances, we should always answer this question considering the practice that happened in the latest fiscal year (or the year used for the Enacted Budget).