Question 5

Does the Executive’s Budget Proposal or any supporting budget documentation presents expenditures for the budget year by economic classification, is the economic classification compatible with international standards?
 * a. Yes, the economic classification is compatible with international standards.
 * b. No, the economic classification is not compatible with international standards, or expenditures are not presented by economic classification.
 * c. Not applicable/other (please comment).

Note on expenditure classifications
There are three different types of expenditure classification. Each classification system has different advantages and answers a different question:
 * Administrative unit ==> who spends the money
 * Functional classification ==> for what purpose is the money spent
 * Economic classification ==> what is the money 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.

Questions about expenditure classification are repeated throughout the questionnaire, for each of the various budget documents. It is important that budget data are presented in a consistent format throughout the different stages of the budget process to facilitate transparency and accountability.

Guidelines
Question 5 asks whether a country’s economic classification meets international standards. To answer “a,” a country’s economic classification must be consistent with the International Monetary Fund’s (IMF) 2001 Government Finance Statistics (GFS). The GFS economic classification is presented here. To learn more about Government Finance Statistics also refer to the entire IMF 2001 GFS manual.

1) How closely must a country’s economic classification align with the international classification in order to be considered an “a” response?
In OBS 2021 in Turkey, the researcher asked: If a country has an economic classification that is close to the international one (i.e. most categories match up with compensation of employees, use of goods and services, consumption of fixed capital, interest, subsidies, grants, other expenses but perhaps 2 are missing), would that be considered an “a” response? Resolution: When two categories were missing in the case of Turkey, we scored this question “b”. See also the case of Senegal in OBS 2021 and in previous rounds.

External references

 * IMF Government Finance Statistics Manual, Appendix 4
 * IMF 2001 Government Finance Statistics Manual