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The Georgian Budget System

The Georgian Budget System. Presented by: Goga Gugava, Deputy Director of Budget Department Ministry of Finance, Georgia. Presentation will cover:. History of budget reform Current Georgian Budget System Recent improvements Future improvements. History of Budget Reforms.

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The Georgian Budget System

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  1. The Georgian Budget System Presented by: Goga Gugava, Deputy Director of Budget Department Ministry of Finance, Georgia

  2. Presentation will cover: • History of budget reform • Current Georgian Budget System • Recent improvements • Future improvements

  3. History of Budget Reforms • 2003 Rose Revolution • 2004 Law on Revenues • Passage of Organic Law • Law on Local Government • New State Budget Circular

  4. Roles and Responsibilities • Minister of Finance • Budget circulars • State • Territorial • Basic Data and Directions Document • Review and negotiation of budget Requests • Preparation of proposed and adopted budget laws • Presentation of budget to Parliament • Budget execution, monitoring, and adjustment

  5. Ministers • Preparation of multi-year strategic plans • Preparation of annual budgets • Execution of budget

  6. Cabinet • Address unresolved issues between MOF and individual ministries. • Review and amend proposed budget laws • Approve budget law sent to Parliament • Respond to Parliament questions • Review budget execution reports

  7. Parliament • Approves: • Basic Data and Directions Document • Annual Budget Law • Laws pertaining to the State and Local government budgets and financial management • Budget execution

  8. Current Georgia State Budget System • Medium Term Strategic Action Plan (January – February) • Each ministry • All spending agencies • Basic Data and Directions (March-May) • Macro-economic directions • Multi-year forecast • Government priorities • Ministry medium term strategic plans • Initial budget ceilings

  9. Budget Process (Continued) • Issuance of State Budget Circular (Mid-June) • Spending Ceilings • Instructions • Forms • Schedule

  10. Budget Process (Continued) • Preparation and Review of budget requests (June – August) • Budget Law Submitted to President (September) • Unresolved issues • Cabinet discussion • Amendments

  11. Budget Process (Continued) • Submission of Budget Law to Parliament (October –December) • Must be submitted by October 1 • Committee review • Preparation and response to committee comments • Amendments to draft budget law • Budget Law Approved (by January 1)

  12. Budget Execution • Quarterly budget distribution • Quarterly execution reports • Annual report on prior year budget (March) • Periodic budget adjustments

  13. Territorial Budget Process • Municipalities prepare and approve own budget • State transfers • Equalization • Conditional • Special

  14. Territorial Process • Issue guidelines and forms for estimating State assistance • Local governments submit equalization transfer data • MOF Review of financial assistance requests from local governments • MOF issues preliminary transfer amounts • Distribute approved transfer amounts and budget preparation guidelines to local governments (Mid-January)

  15. Territorial Process Continued • State and local agreements on transfers approved (within 30 days of publication of the State budget) • Adoption of Local Government Budget (within two months after the adoption of the State budget • Quarterly execution reports sent to MOF

  16. Highlights of Improvements • Improved interconnection between BDD, Ministry Budgets, and the annual budge law. • National priorities • Ministry priorities • Expenditure ceilings • Multi-year approach to forecast and budget • Clear direction on the use of surpluses and limitations on deficits

  17. Improvements (Continued) • Improved content • BDD • Ministry Strategic Plans • Budget request • Budget law • Improved Transparency • Documents posted on web • Citizen’s Guide to the Budget

  18. Improvements (Continued) • Clearer instructions for preparation of the budget. • Increased Parliament involvement, e.g., review and approval of BDD. • Improved working relationship between MOF and line-ministries. • Increased compliance with PEFA indicators

  19. Future Improvements • Conversion of budget classification to GFS 2001 for 2008 budget • Installation of PFMIS/Budget Automation • Comprehensive PEFA Assessment • Improved capital expenditure budget • Improved territorial budget process • Equalization formula • Budget circular • Re-write and integration of budget laws. • Program budgeting

  20. Questions? ? ? ? ? ? ?

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