The georgian budget system
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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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The georgian budget system

The Georgian Budget System

Presented by:

Goga Gugava, Deputy Director of Budget Department

Ministry of Finance, Georgia


Presentation will cover

Presentation will cover:

  • History of budget reform

  • Current Georgian Budget System

  • Recent improvements

  • Future improvements


History of budget reforms

History of Budget Reforms

  • 2003 Rose Revolution

  • 2004 Law on Revenues

  • Passage of Organic Law

  • Law on Local Government

  • New State Budget Circular


Roles and responsibilities

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


Ministers

Ministers

  • Preparation of multi-year strategic plans

  • Preparation of annual budgets

  • Execution of budget


Cabinet

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


Parliament

Parliament

  • Approves:

    • Basic Data and Directions Document

    • Annual Budget Law

    • Laws pertaining to the State and Local government budgets and financial management

    • Budget execution


Current georgia state budget system

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


Budget process continued

Budget Process (Continued)

  • Issuance of State Budget Circular (Mid-June)

    • Spending Ceilings

    • Instructions

    • Forms

    • Schedule


Budget process continued1

Budget Process (Continued)

  • Preparation and Review of budget requests (June – August)

  • Budget Law Submitted to President (September)

    • Unresolved issues

    • Cabinet discussion

    • Amendments


Budget process continued2

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)


Budget execution

Budget Execution

  • Quarterly budget distribution

  • Quarterly execution reports

  • Annual report on prior year budget (March)

  • Periodic budget adjustments


Territorial budget process

Territorial Budget Process

  • Municipalities prepare and approve own budget

  • State transfers

    • Equalization

    • Conditional

    • Special


Territorial process

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)


Territorial process continued

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


Highlights of improvements

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


Improvements continued

Improvements (Continued)

  • Improved content

    • BDD

    • Ministry Strategic Plans

    • Budget request

    • Budget law

  • Improved Transparency

    • Documents posted on web

    • Citizen’s Guide to the Budget


Improvements continued1

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


Future improvements

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


Questions

Questions?

? ? ? ? ? ?


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