LEGAL AUTHORITY

PROCESS

The Government's Financial Year runs from April 1 to March 31 of the following year. The main steps in the process of preparing the annual budget are outlined below:

• Between August and September the Ministry of Finance prepares a submission for Cabinet's approval outlining the profile of the Budget based on the macro-economic targets developed and the priority polices for the next budget year.

• Between September and October the Ministry of Finance issues the "Budget Call" to all ministries and departments requesting them to send in to the Ministry of Finance draft proposals of their requirements for the next year's budget. The Budget Call informs ministries/departments of the programmes to which Government intends to provide priority funding in the next financial year as well as expenditure ceilings within which ministries and departments are expected to operate. Ministries and departments are allowed two to three months to submit draft budgets.

• Associated with the Budget Call is a request for Ministries to submit their Corporate Plans outlining their programmes for the next financial year.

• Ministries submit draft budgets and Corporate plans to the Ministry of Finance by December.

• The Ministry of Finance examines the draft budgets. The examination process takes place between December and February

• Cabinet's approval is sought for the proposed budget in March.

• After receiving Cabinet's approval, the Budget is then submitted to Parliament in March or April.

• The draft Estimates are referred to the Standing Finance Committee of the House of Representatives for examination.

• The Minister of Finance submits the Appropriation Bill setting out the allocations for each ministry and department of Government for the financial year to the House of Representatives at the opening of the Budget debate in April.

• On the same day that the Budget debate opens, the Revenue Estimates, that deals with the financing of the Budget, is tabled in the House of Representatives.

• The Budget Debate closes with the approval by Parliament of the Appropriation Bill by early May.

The Budget process does not end with the approval of the budget by Parliament. There are four important phases in the overall cycle, which follow the passage of budget, namely:

• Ministry of Finance releases funds;

• Departments record expenditure;

• The Auditor General audits these records; and

• Parliamentary Review.

Regarding (i) release of funds by Ministry of Finance, the Constitution and the FAA Act provide that nothing can be spent until the Minister of Finance gives approval by issuing a warrant. The warrant is a document signed by the Minister of Finance and Financial Secretary authorizing withdrawals of specified sums from the Consolidated Fund to fund the accounts of ministries and departments. The warrant thus has a control function - to ensure that there is a relationship between the inflow of revenue and outflow of expenditure.

By virtue of the Financial Administration and Audit Act, all revenues are paid into the Consolidated Fund. Regarding the processes (ii) and (iii) above, the Permanent Secretary, as head of a Ministry is held responsible for the operation of his/her ministry as well as accounting for its expenditure. He/she is required by law to submit his/her final (Appropriation) Accounts to the Ministry of Finance and the Auditor General by July of the year after the expenditure takes place.

Regarding item (iv), Parliamentary Review, the Auditor General's Department is concerned with auditing the accounts of all government departments, that is, External Audit. The Auditor General is answerable to Parliament. The Auditor General under the Financial Administration and Audit Act is required to submit to Parliament each year a report on the Appropriation Accounts of ministries and departments. The Public Accounts Committee (P.A.C.) is a select committee of Parliament consisting of all members of Parliament from both sides of the House and chaired by the Shadow Minister of Finance. It is the function of this committee to examine the Appropriation Accounts and the Auditor General's report and based on the Auditor General's comments questions accounting officers on how they have discharged their responsibilities during the year under review.

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