Report No. 44429-CI Côte d'Ivoire Public Expenditure Management and Financial Accountability Review (In Three Volumes) Volume II: Public Financial Management Performance Report November 2008 PREM 4 Africa Region Document of the World Bank, co-produced with the Government of Côte d'Ivoire, the International Monetary Fund, the African Development Bank and the European Union CFAF CFA Franc FUR Central Personnel Database (Fichier Uniquede Rdfdrence) GDP Gross Domestic Product HDI Human Development Index HDS Health and Demographic Survey HIPC Highly-Indebted Poor Countries IDA InternationalDevelopment Association IGE General Public Inspectorate IGF General Inspectorate o f Finance IGT General Inspectorate o f the Treasury IMF InternationalMonetary Fund MDG MillenniumDevelopment Goals MEF MinistryofEconomic andFinance MTEF Medium-Term ExpenditureFramework OECD Organizationof Economic Cooperation and Development PEFA Public Expenditureand FinancialAccountability PEMFAR Public ExpenditureManagement and Financial Accountability Review PGT Paymaster-General of the Treasury (Payeur Gdneral du Trdsor) PIP Public InvestmentProgram PPA Purchasing-Power Parity PRSP Poverty Reduction Strategy Paper SAC0 Central Payment Order Service (ServiceAutonome de Centralisation de 1'Ordonnancement) SIGFAE Integrated System for the Management o f the Civil Servants' Records (Systdme Intdgrd de Gestion des Fonctionnaires et Agents de I'Etat) SIGFIP IntegratedPublic Finance Management System SIGMAP IntegratedPublic Procurement Management System SIR Ivorian Refining Company (Socidtd Ivoirienne de Rafinage) SNDI National Company o f Sofwtare Development (Socidtd Nationale de Software Informatique) SOE State-Owned Enterprise SYGADE Integrated Debt Management System SYSCOA West African Accounts System TOFE Government Fiscal Operations Table UNO UnitedNations Organization VAT Value Added Tax WAEMU West African Economic and Monetary Union Vice-president: Obiageli K.Ezekwesili Country Director: Madani M.Tall Sector Manager: Sudhir Shetty Sector Official: Antonella Bassani Team Leaders: Marcel0 R.Andrade Richard A. Doffonsou *. 11 TABLE OF CONTENTS SUMMARY OF THE ASSESSMENT ..................................................................................................... iv 1 INTRODUCTION 1 2.. ................................................................................................................................ COUNTRYBACKGROUNDINFORMATION ............................................................................... 3 A Description ofthe Country Economic Situation.............................................................................. 3 3 ASSESSEMNT OF PFMSYSTEMS. PROCESSESAND INSTITUTIONS . B Descriptionofbudgetary outcomes.................................................................................................. 4 .. ................................. 7 A Credibility ofthe Budget.................................................................................................................. 7 B Comprehensivenessandtransparency............................................................................................ .. 11 C. Policy-BasedBudgeting.. ............................................................................................................... 20 D. PredictabilityandControl inBudgetexecution ............................................................................. 22 E. Accounting. RecordingandReporting........................................................................................... 34 F. External Scrutiny andAudit ........................................................................................................... 38 4. G Donor Practices .............................................................................................................................. 41 . GOVERNMENTREFORMPROCESS ........................................................................................... 42 A Descriptionof Recent and On-goingreforms ................................................................................ . 42 B. InstitutionalFactors Supporting ReformPlanning andImplementation ........................................ 43 Table 2.1: Revenueand Expenditure Outturns. 2004-2006 ........................................................................ Table 2.2: Estimatedand Actual Expenditures bymajor Functional Categories. 2004-2006 .................... 5 6 Table 3.1: Comparison between Expenditures estimated by the Budget Laws and Actual Expenditures for the Fiscal Years 2004 to 2006 ........................................................................ 8 Table 3.2: Differencesbetween InitialBudgets and Actual Expenditures for the 20 most important Budget Lines duringthe 2004, 2006 and 2006 Fiscal Years ..................................... 8 Table 3.3: Comparisonbetween Estimates and Actual Domestic Revenues for the 2004, 2005 and 2006 FiscalYears ................................................................................................................ 8 ANNEXES Annex 1: Summary Table ofPEFA Scores............................................................................................. 45 Annex 2: Summary Justification of Scores assignedto Indicators .......................................................... 46 Annex 3: Listofpersons Met .................................................................................................................. 57 Annex 4: List of Documents Consulted .................................................................................................. 61 Annex 5: Calculations of Ratios for PI-1 and PI-2 .................................................................................. Annex 6: Synthesis o f the Observations and Proposals of the IvorianPart on the PEFA Rep0rt ...........67 70 ... 111 SUMMARYOF THE ASSESSMENT IntegratedAssessment of PublicFinancialManagementPerformance 1. The legal and regulatory framework o f C6te d'Ivoire's public financial management system comprises: the Constitution; the organic law on the Budget Act o f December 31, 1959; Law No. 62-53 o f February 12, 1962, defining the public finance management system organization; andthe decree on public sector accountingprinciples o f January 3, 1980. This legal framework fixes the rules on preparationo fthe budget laws, their implementation as well as their control. 2. C6te d'Ivoire had initiated the reform o f the public finance management system, in order to bring it closer to international standards and in line with the regional framework o f the West African Economic and Monetary Union (WAEMU), which has not been incorporated into the national law. Progress has been slow because o f the crisis the country has been facing since the beginning o f 2000, which had a direct impact on the performance o f the system. Hence, the procedure o f paying expenditures on the basis o f treasury advances was widely used until 2007. For some fiscal years (2006,2007 and 2008), the budget was approved by presidential ordinance. Despite this particular situation, the periods and dates specified in the guidelines on the use o f the Public Expenditure and Financial Accountability (PEFA) methodology were carefully respected, inorder to analyze the situation as it is andnot as it should be. 3. Annex 1o f the report presents the summary o f scores assigned to the 31indicators o f the PEFA review system. This review o f the public finance system i s incomplete since it was not possible to assign scores to four indicators (PI-1, PI-2, PI-7 and D-1) for which the data was not available. For five other indicators, the data provided was only partial and some components were assigned a D score (PI-13 - 3`d dimension, PI-15 - lSt dimension, PI-16 - 3`d dimension, andD2 - 1'` dimension). 4. The review notes that, globally, the public financial system is below average.' Indeed, the review observed that if, on the whole, C6te d'Ivoire has made significant progress in recent years, there are still a large number o f weaknesses in its public finance system. However, for some aspects, the scores assigned to the indicators are good, while those assigned to other indicators could evolve positively through actions such as the return to the orthodoxy inbudget formulation and approval, execution and reporting as well as external control, all o f which are appropriately defined inthe country's legal andregulatory framework. 5. Credibility of the budget. The credibility o f the budget is low. The performance of domestic revenues i s adequate, taking into account the crisis situation. It should be noted that the outturn for 2006 was well above the initial estimates. Concerning expenditures at the aggregated level, there were differences over the past three fiscal years (2004, 2005 and 2006) which are probably significant, taking into account the level o f advances not regularized. These differences weakened the transparency and accountability in the use o f public funds, including the non *Considering C as the average performance, 10 out o f the 31 indicators o f the PEFA system are at this level and above. iv respect o f the procurement procedures. Globally, the breakdown o f expenditures shows that, for the main ministries, the differences from plans are considerable. It should be specified that the data used for the analysis should be corrected by taking into account the expenditures to be regularized and which feature inthe general balance o fthe Treasury accounts. 6. Comprehensiveness and transparency. Despite the improvements observed during these past years, there are still efforts to be made in order to improve the presentation o f the budget document. The budget classification was reviewed at the beginning o f the years 2000, but still shows some limitations: lack of clarity between the various components and inadequate alignment with the functional classification o f the GFS 2001, which to be prepared requires a bridge table. Although abundant, the budget documentation is not in conformity with the requirements neither o f the organic law, nor o f the PEFA standards (for example, it does not identify financing o f the deficit or analysis the impact o f the tax measures). The budget i s not comprehensive in terms o f resources and expenditures. Indeed, despite the efforts made by the Government duringthe implementationo fbudgetreforms, a number o f operations do not feature inthe budget. They include first o f all revenues collected directly by some ministries, generally against services rendered, and which are either not paid to the Treasury or are partially paid. The same applies to dividends paid by some state-owned companies or parastatals that are not systematically added to the budget (case o f PETROCI, which manages government shares inthe energy sector). Moreover, to ensure comprehensiveness o f the budget, it i s necessary to budget the quasi-fiscal levies on some key sectors like oil and particularly the cocodcoffee sector. Besides, transfers from the State to the local communities are not based on clear and well- defined rules and the information on the amount is provided late, which delays the adoption o f their budgets. Concerning the oversight o f the aggregate fiscal risk from other public sector entities, the lack o f consolidation o f the data limits monitoring o f these fiscal risks. Finally, public access to key budgetary information is gradually improving with the establishment o f Internet sites for key agencies (DGD, DGTCP, and DGI). An Internet site o f the DGBF is being developed. However, the dissemination o f information to the public concerning budget vote and budget execution is still limited. 7. Policy-basedbudgeting. The presentation o f the budget is still marked by the logic o f resources and the predominant role o f the MEF in the process. Also, its perspective i s annual. Since the last three years were characterized by the non-compliance o f the deadlines for the preparation and adoption o f the budget, the Government pledged to ensure better supervision o f the 2008 budget preparation in order to adopt it before the end o f the year. The very short deadlines given to the ministries for preparation o f their budgets limit the quality o f their proposals. However, a timetable for preparing the 2008 budget was adopted. The budget i s prepared purely on an annual basis and the ministries do not have quantified sector strategies. The resumption o fthe process to finalize the poverty reduction strategy will offer the opportunity to engage in the development o f medium-term scenarios for the priority sectors o f the strategy andtherebyhelp to move beyond the annual budget perspective. 8. Predictability and control in budget execution. The obligations o f taxpayers are fixed bya regulation, which is widely disseminated. There are opportunities for appeal but they require greater transparency and efficiency. The system for registration o f taxpayers is relatively efficient and the tax audits are planned, but the verification programs are not based on clear risk assessment criteria. The rate o f recovery o f tax and customs arrears could not be assessed due to V the lack o f data. Management of the public treasury is conducted on the basis o f an annual plan, which i s updated monthly both in forecasting and execution. This possibility of availability o f funds over several months is, however, not exploited since the ceilings are provided to the ministers on a monthly basis. The controls carried out on the personnel database o f the payroll are inadequate and updated late. The level o f control o f non-salary expenditures i s affected by lack o f assessment ofrisks. Finally, the internal audit system i s inefficient. 9. Accounting, recordingandreporting.Public accountants carry out bank reconciliations on regular basis but the suspense accounts are not adequately monitored. This situation largely reflects the use o f the procedure o f payments on the basis of advances. The SIGFIP system i s under-utilized since the publication o f budget execution reports is not systematic. The reliability o f the data cannot be totally ensured during the fiscal year, as the reconciliation between the SIGFIP and ASTER records i s only done at the end o f the fiscal year. 10. External scrutiny and audit. The Chamber o f Accounts is not yet really operational. Although the DGTCP transmitted the Treasurer-General's management accounts until the 2002 fiscal year, none has, so far, been verified or judged. The last report prepared by the Chamber o f Accounts on the budget execution review law concerns the 2002 fiscal year. The examination of the draft budget execution review laws (Lois de Riglement) is done with much delay. The last voted budget execution review law i s that o f the 2001 fiscal year. The National Assembly does not receive any external audit report and since the budgets for the 2006, 2007 and 2008 fiscal years were adopted by presidential ordinance, it did not consider the draft budget law (Loi de Finances). The score adopted for the corresponding indicators is, therefore, the lowest. Assessment of the impactofweaknesses inpublicfinancialmanagement 11. The weaknesses in public management have an impact on the objective o f a sound management o f public finances (fiscal discipline, strategic allocation, and efficiency). The following table reviews some o f the impacts of the weaknesses on the three objectives o f a sound public financial management. vi Fiscal discipline Strategic allocation of -resources Efficient service delivery Credibility of It is not possible to assess the The importance o f the Requests for reallocation the budget level o f credibility o fbudget amount o f arrears payment o f funds fromthe finds' estimates inrelationto budget leads to added costs, as administrators are outturns. Indeed, a government suppliers frequent and may prevent considerable amount o f integrate a risk premium in the efficient use o f expenditures to be regularized their prices. The presence o f resources. However, cannot be charged to the important arrears may also these changes may also budget. Domestic revenues are result inmodifications inthe be due to the excessive quite close to the estimates. real structure o f expenditures. detail o f allocated funds. However, the credibility can be affected by the modalities o fbudget execution (system o f advances), by the delay in adoption o f the budget and, therefore, late disbursement o f budget resources. Comprehensive Despite some weaknesses, the The incomplete budget The lack o f transfer to ness and budget structure, ifused inall documentation may have an the treasury by some transparency its components, would allow adverse effect on ministries o f revenues for a clear presentationo f the Parliamentary control and collected for services budget. prevent efficient allocation o f rendered and the fact that resources. they probably use these The budget documentation, amounts to meet their which includes detailed The lack o f consolidation o f operating expenditures annexes, notably on transfers, the data on the EPNs and does not allow the central does not conform with the local governments may government to make an requirements o f the organic prevent the State from equitable distribution o f law or o f the PEFA standards. anticipating a situation o f such resources. deficit o f these entities, which A number o f operations are not would affect its own financial The late provision o f covered by the budget. They situation. information o n transfers are revenues collected directly from the State to the by some ministries and finds The lack o f budgeting o fpart local governments has a allocated, the amount o f which o f the government resources direct impact on the is not known. has a direct impact on the quality o f their budget total amount o f resources to estimates. The rules to allocate transfers be allocated to the different from the central to the local sectors. governments are either not updated or clear. The amounts The absence o fpre- o f the transfers are establishedrules governing communicated late, at the the method o f distribution o f stage o f budget preparation by transfers from the State to the the local governments, and are local governments leaves the also paid late. door open for arbitrary distribution o f these resources. The public has access to limited information o n the The lack o f information budget. prevents the public from verifying how the resources are utilized. vii Fiscal discipline Strategic allocation of Efficientservice resources delivery Policy-based The impact o f the medium- The lack of MTEFmay affect The lack of importance budgeting term operations i s not taken the strategic allocationo f attached to the medium- into account, since the budget resources and leadto major termprevents ministries preparationprocess i s not changes inthe composition o f from optimizing their based on an overall medium- expenditures. interventions. term framework. The lack o f dialogue between Moreover, no ministry has the MEF and the sector sector strategies based on ministries as well as the short quantified estimates. deadline given to them for the preparationo f their budget may have an adverseeffect on the quality o f their budget proposals and, therefore, globally, on the allocation o f the resource envelope. Predictability There is a formal framework The coordination between The lack oftimely and control in for cashmanagement. A budget execution and the informationon budget treasury plan is established at treasury estimates is not availability of budget execution the beginning o f the fiscal obvious because o f delays in funds may favor the year, for the duration o f the the adoption o fthe budget emergence o f irregular year andupdated monthly. andrecourse to advances. practices among the managers for fear o f risks The efficiency o fthe apriori The treasury cashflow o fblocking funds. internal control o f forecast i s not exploited, expenditures is weak. since the funds for current The weakness ofthe Expenditures are largely expenditures are made internal control system executed according to the available to the ministries on and the practice o f simplified procedure and a a monthlybasis. This practice payments on the basis o f considerable amount i s prevents them from advances may result in executed inthe form o f efficiently managing their the emergence of treasury advances. budget, as a great number o f unorthodox practices. expenditures extend over a periodlonger than one month. The practice o fmaking payments on the basis o f advances and the presence o f considerable amounts o f expenditures to be regularized preventsthe evaluation o fthe budget execution. Accounting, The general balance o fthe The fact that the execution The lack o finformation recording and treasury accounts i s produced reports are not usedas tools on the execution o f reporting monthly. The reconciliations to assist decision-making and budgets, both the general betweenthe accounts and piloting o f budget budget andbudgets o f statements o f account are done implementation, may prevent other public every ten days. But, the quality an efficient allocation o f administrations, limits o f the informationon the resources the capacity to monitor budgetexecution is limited by the achievement o f the lack o f automatic transfer The lack o f information on objectives and, therefore, o f data between the SIGFIP the monitoringo fbudget take the necessary and ASTER computer systems executionmav also result in corrective measures as ... Vlll Fiscal discipline Strategic allocation of Efficient service resources delivery and the fact that the unjustified changes inthe early as possible. reconciliationbetween these composition o f expenditures. two systems is only done at the The lack o f control o f the end o f the fiscal year. disbursement o f funds to the recipient Apart from a monthly TOFE, administrative entities the in-year budget execution mayprevent the reports, which could be effectiveness o f this obtained from the SIGFIP disbursement, system, are not established. Even with the delay, the administrative entities are well informed about the amount o f resources allocated to them. Butthe low level o f financial resources o f the ministries and the very highnumber o f administrative units only allow them to carry out a few field surveys o n the effectiveness o f the expenditure. Surveillance The aposteriori examination The lack o f aposteriori The lack o f aposteriori and external o f the execution o f the budget examination o f the public examination o fpublic verification law by the Chamber o f accounts may reduce the accounts may, inthe Accounts is not operational. Government incentives to absence o f sanctions, allocate resources inan result inlack o f The examination o f the draft efficient manner and accountability on the part budget execution review law executing the budget in o f the administrations. by Parliament is done with accordance with the policies The quality of the muchdelay. The last draft and budget circular that administrative and budget execution review law served as basis for budget financial services may be voted was that o f fiscal year preparation and execution. reduced as a result. 2001. Prospectsfor ReformPlanningandImplementation 12. The Ministry o f Finance developed in 2006 and 2007 a strategic action plan whose objectives were aimed at enhancing the public financial management system. It should also be noted that, in 2006, the status o f implementation of the priority action matrix showed a good execution rate. This practice should be consolidated and further improved and, in this context, the Government could, in the short term, build on the findings of the PEFA review to develop a strategy for strengthening public finances in the areas o f budget preparation, execution and control. ix 1. INTRODUCTION 1.1 The Government o f C8te d'Ivoire initiated, duringthese recent years, major reforms o f its public financial management system (PFM), but the crisis facing the country since 2002 has had a negative impact on its performance. However, given the recent progress accomplished under the auspices o f the Ouagadougou Political Accord for reunification, significant improvement o f the PFM system can be achieved inthe short term. It i s in this context that the Government has decided to conduct an assessment o f its PFM system performance on the basis o f the indicators o f the PEFA Secretariat. This performance assessmentwill assist to review and deepen its reform program. 1.2 Objective of the report: The objective o f the public financial management performance report (PFM-PR) is to establish, on the basis o f the 31 high-level PEFA indicators, a baseline from which the future progress in the PFM area will be assessed. The Government and its technical and financial partners (TFPs) will thus have a baseline as well as indicators to monitor and assess over time the impact o f implemented reforms. 1.3 The review focused on the systems and practices in place during the reference periods fixed by the PEFA methodology.2 The rules for assigning scores were applied in accordance with the instructions contained inthe June 2005 publicationo fthe PEFA Secretariats3It is useful to stress that the purpose o f the exercise was not to assess or assign scores to the different public institutions or their officials but rather to situate the public finance management system in relation to good international practices. 1.4 The assessment was conducted with the support o f several TFPs, including the World Bank,the lead agency, the African Development Bank, the International Monetary Fundandthe European Union. 1.5 An ad hoc Committee has been put inplace, chaired by the Director-General o f Budget and Finance. This Committee ensured the preparation and implementation o f the review. The Director o f Forecasting and Budget Syntheses ensured the coordination (focal point) o f the PEMFAR review for the national part. Throughout the process, the representatives o f the national part (senior managers and high officials o f the structures) devoted a lot o f time and efforts to ensure ownership o f the review's findings and facilitate the search for documents and justifications o f the scores o f the indicators. The World Bank, the lead agency o f this assessment, ensured the coordination and acted as a focal point for the TFPs. 1.6 This report is Volume I1 o f the "Public Expenditure Management and Financial Accountability Review" (PEMFAR), and informed the preparation o f the PEMFARmain report, particularly Chapter 11, which presents a review o f the public financial system. Document entitled "Guidance on evidence and sources o f informationto supportthe scoring o f the indicators." 3Document entitled "Public Financial Management -Performance Measurement Framework." PEFA Secretariat, World Bank, Washington D.C., June 2005. 1.7 Processof preparing the report: The review was conducted intwo stages: e An inter-agency mission to the field: during which working sessions were organized with representatives o f the Government and the private sector and documentary evidence was collected. At the end o f the field mission, an aide-memoire containing the main conclusions was presented to the Government. e The second phase concerned the preparation of this report. A provisional report was initially transmitted to the Government and all the donor agencies in January 2008. This provisional report was then finalized to take into account the comments o f the Ivorian Government, the PEFA Secretariat and donor agencies. This report was presented for validation by all stakeholders during a workshop held inAbidjan on June 16-17,2008. 1.8 The methodologyfor thepreparation of the report: The review requiredmany technical interviews with the senior managers o f the structures involved and persons with responsibilities inthe public financial management system. The field mission, therefore, met with senior officials o f the MEF, the National Coordination and Monitoring Committee o f the public procurement reform (CNCS), the Economic and Financial Affairs Commission o f the National Assembly, the General Public Inspectorate (IGE), the Chamber of Accounts, the Administrative and Financial Directors (DAAFs) o f the Ministries in charge o f Education, Health, Economic Infrastructure, the Department o f Decentralization and Local Communities o fthe Ministry o f Interior, as well as officials o f the General Confederation o f Enterprisesof C6te d'Ivoire (CGECI). 1.9 The review relied on the analysis o f the documents that were provided as well as on the additional documentary evidence requested. Information on different sources was cross-checked whenever possible. 1.10 Some o f the working sessions o f the field mission were devoted specifically to the scoring of the indicators. The mission objectives were not only to explain the scores assigned to the indicators with a view to their approval but also to attain the objective o f ownership of the exercise by the national part. 1.11 Annex 6 of this report informs whether the observations transmitted by the Government were totally or partially taken into account or not taken into account. 1.12 The scope of the assessment as provided by the PFM-PR: The public financial management performance report inC6te d'Ivoire concerned all the revenues and expenditures o f ~ ~ From 14 to 28 November 2007. Participants in this inter-agencymission included Mr.Robert Cauneauand Mrs. Giskle Suire, international consultants financed by the African Development Bank and the World Bank, respectively, who drafted this report. The mission team, which was led by Messrs. Marcel0 Andrade (TTL, PrincipalEconomist) andRichardDoffonsou(Co-TTL, Economist), bothWorldBank experts, and includedMessrs. EricYoboue, (Principal ProcurementSpecialist), BellaLeloumaDiallo (PrincipalFinancialManagementSpecialist) and Mrs. Assiata Houkdanou(Disbursement Assistant), all fiom the World Bank, Mr. BacariKone, Adviser to the Technical Assistance o f the IMF Fiscal Affairs Department, Messrs. Racine Kane, Lead Economist, Samba Ba (Principal Macro-Economist), and Serge Nguessan(Principal Procurement Officer) from the AfDB as well as Mr. Zoltan Agai from the EuropeanCommissionDelegation. Mr.FrangoisSerre, Consultant financed by the AfDB and Procurement Specialist, also took part in the mission. Mmes Zainab Mambo-CissB, Tina Aboah Ndow, and Judite Fernandes (Operations Assistants) and Mrs. Marie-France Anet-Oyourou (Procurement Assistant), all from the WorldBank, facilitated the preparationandwork of the missionteam. 2 the central government. The study, therefore, covered: the central administrations o f ministries and their deconcentrated services. However, the National Public Agencies (EPNs) and public enterprises, as well as the territorial communities were only integrated from the point o f view o f financial transfers from the State, o fwhich they are beneficiaries. 1.13 Content of the report: The rest o f the report comprises a brief presentation o f the economic situation o f CGte d'Ivoire and the legal and institutional framework o f public financial management (Chapter 2); a description o f the context and explanation o f the scores assigned to each PEFA performance indicator (Chapter 3); a brief description o f the Government's reform program and the institutional factors supporting reform planning and implementation (Chapter 4). Several annexes comprise: a summary o f scores o f the performance indicators (Annex l), justifications o f the specific scores for each indicator (Annex 2), a list o f the persons met (Annex 3) and a list o f the documents consulted (Annex 4). Annex 5 presents the details o f the calculations that were used for scoring the PI-1 and PI-2 indicators. Finally, Annex 6 provides information on the follow-up o f the observations transmitted by the Government on the provisional PEFA report. 2. COUNTRY BACKGROUND INFORMATION A. DESCRIPTIONOFTHE COUNTRYECONOMIC SITUATION Country Context 2.1 Considered as one o f the countries with the most advanced economy inWest Africa, CGte d'Ivoire experienced a crisis, which resulted in a civil war in September 2002. Over the period 2000 to 2006, the average economic growth rate became negative and remained below rates observed inthe rest o f the WAEMU and sub-Saharan Africa. Despite a per capita GDP o f $ 920 for a population of a little over 18 million inhabitants, the living conditions o f the population and public services have deteriorated and it is estimated that per capita income declined by 15% duringthe crisis. 2.2 Since the Ouagadougou Accord was signed, on March 7, 2007, which has received the support o f the international community, the new Government has embarked on an economic recovery process and the prospect o f holding presidential elections in 2008. The economic situation improved recently and the economic activity slightly improved to attain the rate o f 1.5% in2004, 1.8% in2005 and 1%in2006. 2.3 Despite a difficult context, in mid 2007, the Government implemented most o f the measures envisaged in the context o f the program supported by the Emergency Post-Conflict Assistance (EPCA) o f the IMF. This program focuses on general measures inthe areas o fbudget policy, debt management, monetary and financial issues and structural reforms aimed at restoring the viability o f public finances and reconstructing the economy by launching key actions to strengthen the economy and improve transparency. 3 The Government Reform Program 2.4 The Government has made considerable progress in restoring normal budget execution procedures and, at the beginning o f 2008, a credible budget was adopted by ordinance, thus limitingthe recourse to cash advances which was widespread during the previous fiscal years, partially due to the late adoption o f the budget. In 2008, the Government plans to implement measures to lay the basis, inthe longer term, for deeper andwide-ranging structural reforms. The Government will particularly focus on: (i) strengthening o f the capacities and increasing the accountability o f managers o f the financial and fiscal administrations and o f the parastatal sector; (ii)intensification o f controls; and (iii) improvement o f communication on budget execution and, more broadly, on the results o f govement policies. The Government has pledged, through the PEMFAR review and implementation o f the Governance and Institutional Development Grant, funded by the World Bank, to adopt measures inthe areas o f public finance, the energy sector and the cocodcoffee sector. Rationalefor PFMReforms 2.5 As mentioned in its letter o f development policy o f April 2008, the Government i s determined to place good governance o f public resources management at the centre o f its economic program. Inorder to improve budget transparency and enhance the efficiency o f public expenditures, the authorities intend to develop a comprehensive plan for improving public financial management, with the support o f the World Bank and other donor agencies. The PEMFAR review, conducted by the World Bank, jointly with the IMF, ADB and the European Commission should help identify the major orientations o f a priority reform program in the area o f public finance. B. DESCRIPTION OFBUDGETARYOUTCOMES Fiscal Performance 2.6 In2006, the budget situationwas not as good as envisaged and the basic primary surplus represented 0.3% o f GDP (as against 0.4% o f GDP achieved in2005 and 1.4% o f GDP planned for 2006). This was due to weaker than plannedrevenues due to the lower levels o f oil and gas production than initially programmed. During the same year, expenditures were higher than estimated, which i s explained by overspending observed in non-salary current expenditures (excluding crisis-related expenditures), in particular the unforeseen sovereignty expenditures (toxic wastes and subsidies in the energy sector). The latter took place despite the fact that the level o f crisis-related expenditures was lower than estimated. 2.7 The table below was prepared on the basis o f the data contained intables 4a and 4b o f the report issuedby the IMF for the 2007 Article IV consultations and the request presented for the emergency post-conflict assistance. 4 Table 2.1: RevenueandExpenditureOutturns,2004-2006 (Amounts inCFAF billion) external resources, except net compensation proceeds from toxic waste damage. Allocation of Resources 2.8 In 2002, C8te d'Ivoire prepared a draft Poverty Reduction Strategy Paper entitled "Growth, Development, Wealth Creation and Poverty Reduction 2003-2007", but this paper was not adopted. There i s also no national long-term policy document or medium-term budget framework. Moreover, the objectives defined by the convergence policies decided in the framework o f the WAEMU seem not to have been taken into account, since the budget documents do not make reference to them. Hence, the allocation o f resources at the time o f budget preparation does not obey to any clear logic and the budget funds are allocated to the spending structures, taking more into account the level o f the allocations at their disposal during the previous fiscal year than a real strategic vision. 2.9 Table 2.2 below presents the estimated and actual expenditures during the fiscal years 2004, 2005 and 2006, classified by major functional categories. The data that appear inthis table are those that were used for the review o f the PI-1 and PI-2 indicators. They should be considered as incomplete, since they do not reflect expenditures to be regularized, hence paidbut not recorded in a specific budget account, showing in the cash balances o f some suspense accounts o f the treasury balances. The totals o f actual expenditures from 2004 to 2006 inTable 2.2 below, should in principle, be close to domestic primary expenditures and net loans in the previous Table. 5 Table 2.2: EstimatedandActualExpendituresby Major FunctionalCategories,2004-2006 (Amounts inCFAF billion) I I 2004 I 2005 I 2006 I c. DESCRIPTIONOF THE LEGALAND INSTITUTIONALFRAMEWORK FOR PFM The LegalFramework 2.10 The legal framework o f the public financial management system of C8te d'Ivoire comprises the Constitution, the Organic Law on the Budget Law o f December 31, 1959, which sets the rules on the preparation o f the Budget Laws, their execution as well as their control, and Law No. 62-53 o f February 12, 1962, organizing public finance management. TheInstitutional Framework 2.11 The Ministryo f Economy and Finance ensures the coordination o f the different stages o f the budget preparation. It conducts budget conferences and ensures arbitrations. Where necessary, it resorts to the arbitration o f the Prime Minister. It approves the budget documents and consolidates them inthe draft budget, which is then submitted to the Cabinet. Following the adoption o f the draft Budget Law by the Government, it edits and finalizes the different documents to be submittedto the National Assembly. 2.12 The budget management system is based on the principle o f segregation o f duties between credit managers (ordonnateurs) and accountants (comptables), The Minister o f Finance i s the sole credit manager of the budget. H e delegates his power to sub-credit managers who are the Administrative and Financial Directors (DAAFs) o f the ministries. The ministers are the administrators o f credits. 2.13 According to the regulation, the expenditures are incurred through the normal procedure (commitment-validation-order to pay-payment) or by a simplified procedure whereby the commitment and order to pay phases take place concomitantly. The public accountants are in charge o f collection o f revenues and payment o f expenditures, as well as keeping the accounting records o fthe State. 2.14 The texts establish that: (i) ex ante control o f public expenditure is exercised by the the Directorate o f Financial Control (Direction du Contrdle Financier) for expenditures on the 6 budget, the Directorate o f Budget Control (Direction du ContrGle Budgbtaire) for expenditures by National Public Agencies (EPNs), as well as by the public accountants; and (ii) financial the and budget operations o f the State are controlled ex post by the internal bodies, the General Inspectorate o f Finance (Inspection Gknbrale des Finances), the General Public Inspectorate (Inspection Gbnbrale de l'&tat),control structures o f the ministries, and by an external body, the Chamber o f Accounts o f the Supreme Court. An ex ante control o f compliance with public procurement rules and procedures i s also exercised bythe Directorate o fPublic Procurement. 2.15 The National Assembly exercises its control through the examination and vote o f the draft Budget Law (Loi des Finances) and the draft Budget Execution Review Law (Loi de Riglement). A budget timetable has been formalized for the preparation o f the 2008 budget. The 1959 Organic law on the Budget Law defines the provisions on the presentation o f the Budget Law andBudget Execution Review Law, as well as modalities for voting the draft budget. 3. ASSESSEMNT OFPFMSYSTEMS,PROCESSES AND INSTITUTIONS A. CREDIBILITY OFTHE BUDGET 3.1 Credibility, inthe sense o f good practices o fpublic financial management, i s reviewed on the basis o f the difference between the initial estimates and actuals in terms o f revenues and expenditures5. Concerning estimates, the data used for assessing these criteria were those o f the initial budget o f the 2004, 2005 and 2006 fiscal years. In terms o f actual, the data used were extracted from the General Accounts o f the Financial Administration (CGAF). Considered as such, the figures o f budget execution o f the CGAF would allow to conclude that the budget is credible, as it appears in Table 3.1 below. Indeed, this table shows that the actual total domestic primary expenditures (Le. excluding debt service and externally financed project expenditures) were above 5% o f the estimated amounts for only one year. 3.2 However, given the practices o f the expenditure chain actors intervening upstream o f the DGTCP, the data i s incomplete as it does not include the considerable amount o f expenditures to be regularized, therefore paid but not recorded in a specific budget account, which are reported inthe treasury cash balance of each of the above mentioned fiscal years under accounts 470.1 "Expenditures paid without payment order" and under certain sub-divisions o f account 472 "Provisional charge o f expenditures to the DGTCP", which are not possible to analyse for lack o f details. The field mission could not obtain details o f the amounts concerned, classified by fiscal year andby ministry. For this reason, the review could not assign a score to this indicator. The amounts o f budget realizations used inthis report are all based on payment authorizations. 7 2004 2005 2006 Primary expenditures approved' (initial budget law) 1,037.8 1,104.5 1,232.2 Actual primary expenditures (CGAFs) 1,034.1 1,083.6 1,155.2 Difference between amount approved and actual 3.7 20.9 76.9 Difference between amounts approved and actual (in%) 0.4% 1.9% 6.2% 3.3 The analysis, by ministry or institution, o f the differences between estimated and actual expenditures as they appear in the CGAFs allows to conclude that budget credibility i s average. Table 3.2 below shows the average o f these differences calculated according to the PEFA method. It indicates that the differences never exceeded 10%. However, as in the case o f the evaluation o f the credibility o f the budget at the aggregate level, data on budget execution should be completed by adding the important amount o f expenditures paid without payment order and expenditures provisionally charged to the DGTCP and not yet regularized. Hence, here too, the review considers that it cannot assign scores to this indicator. Table 3.2: DifferencesBetweenInitialBudgets andActual Expendituresfor the 20 Most ImportantBudgetLinesDuringthe 2004,2006 and2006 FiscalYears* Difference in total Variation of total Variation exceeding the expenditures (PI-1) expenditures total difference (PI-2) 2004 0.4% 8.0% 7.6% 2005 1.9% 9.9% 8.0% 2006 , 6.2% 6.7% 0.4% 3.4 The difference between the estimates o f domestic revenues (budget revenues excluding grants and borrowing) and those effectively realized only exceeded 5% during fiscal year 2004. The performance o f domestic revenues should, therefore, be considered as adequate if the crisis situation i s taken into account. It should be noted that the actual for 2006 was higher than the estimate. Finance Act CGAF Actual (Rate) 2004 1,466.05 1,347.66 91.9% 2005 1,368.96 1,299.83 95% 2006 1,364.96 1,425.22 104.4% 8 3.5 The regulation applied for the definition o f payment in arrears i s that o f the WAEMU, that is to say all expenditures received by the Treasury and not paid 90 days after the date o f the order to pay has been issued by the credit manager, i.e. from the date o f transmission o f the order to pay to the public accountant, whether it i s payment for goods and services or salaries. Subject to some arrangements concerning specific creditors like the World Bank, the public debt service i s considered as arrears from the moment the payment is not made by the due date. 3.6 The arrears are monitored by the Directorate o f Public Debt (DDP) and the Statistics Coordination Department o f the DGTCP. The DDP uses the SYGADE computer system, which helps among others to know the age o f the arrears, both in terms o f the original fiscal year and precise date they were incurred, particularly concerningthe Treasury pending payments managed by the IT system ASTER. The data available to the DDP are transmitted every month to the financial partners as part o f the monitoring o f the economic and financial program and to the Directorate o f Conjuncture and Economic Forecasting (DCPE) for the monthlypreparationo f the TOFE. The DDP prepares a quarterly report on the debt. This document contains the arrears on both the external and domestic debts. It should be noted that since an inventory o f salary arrears i s being undertaken by the IGF, the total amount o f arrears could still be higher. 3.7 As a consequence o f the crisis situation that has been prevailing for several years, the stock o f arrears as o f December 31, 2006, i s very important, totalling CFAF 1,162 billion, representing 100.6% o f the total primaryexpenditures for the fiscal year. This stock increased in 2006 inrelative value, since the stock as o f December 31,2005, represented 93.65% o f the total primaryexpenditures for fiscal year 2005. 3.8 The accounting o f the Treasury allows monitoring the pending payments both in the general and subsidiary accounting (monitoring o f the budget execution and individualized management o f the payment orders). The ASTER computer system allows making partial payments on the payment orders to facilitate dealing with temporary cash difficulties. It also allows publishing reports containing either all the pending payment orders or those that were issued after more than 90 days which are, therefore, considered as domestic arrears. 3.9 The project under implementation, to establish the interface between the SIGFIP and ASTER applications, will facilitate a more efficient monitoring o fpayment orders and remaining amounts yet to be paid. Besides, the Government has pledged to pay o f f the arrears owed to the World Bank and the African Development Bank in agreement with these two institutions. It has put in place a mechanism intended to secure the necessary funds for covering the servicing o f debts owed to these institutions.6 It has also pledgedto adopt a domestic arrears clearance plan over the period 2007/2009. 3.10 A summary o f the indicators covering the credibility o f the budget is presented in the following matrix: ~~~ ~~ 6 At the beginningof 2008, the Governmentpaidhalf of its arrears owed to the World Bank and on April 1, 2008, it benefited from an Economic Governance and Recovery Grant (EGRG) of US$308 million (including a budget support of about US$35 million), whichmade it possibleto payoff the other half. 9 Indicator Score SummaryExplanation A. CREDIBILITY OF THE BUDGET PI-1. Aggregate NS' Differencesbetweenthe budget initially approved and actual expenditureout-turn expenditures were: comparedto original 2004: 0.4% approved budget 2005: 1.9% 2006: 6.2% Considered as such, these figures would allow concluding that budget is credible and propose the A score. However, the evaluationo f this indicator should be qualified, since a considerable amount o f expenditures to be regularized, i.e. paid and not charged to a specific budget account, feature inthe balance o f each o f the fiscal years on accounts 470.1 and some sub-divisions o f account 472. Since the details of operations charged to these suspense accounts is not known, this indicator was not scored. PI-2. Compositionof NS The variations o f the actual composition of the budget expenditureout-turn (according to the administrative classification) compared to comparedto original what was initially approved are as follows: approved budget 2004: 7.6% 2005: 8% 2006: 0.4% Considered as such, these figures would allow a C score to this indicator. However, as inthe case o f indicator PI-1, given the considerable amounts o f expenditurescharged to accounts 470.1 and some sub-divisions o f account 472, these values are likely to change. Therefore, this indicator cannot be scored. PI-3. Aggregate revenue B Total actualrevenuescomparedto revenues o fthebudget initially out-turncomparedto approvedwere: originalapproved budget 2004: 91.9% 2005: 95% 2006: 104.4% Since the revenues o f the past 3 years were only inone year below 94%, the score i s B. PI-4. Stockand monitoring of expenditurepayment D+ arrears (i)Stockofexpenditure D The regulation applied for the definition of arrears is that o fthe payment arrears and any WAEMU, that is to say any expenditurenotpaidwithinaperiod recent change inthe stock of90 days fiomtheir issue by the credit manager, i.e. fiom the date oftransmission ofthe payment order to thepublic accountant, whether it ispayment for goods andservicesor salaries. The stocko farrears as at 31December2006 amounts to CFAF 1,162 billionandrepresents 100.6% o fthe totalprimary expendituresfor the fiscal year. It increasedin2006 inrelative value, since the stock as at December 31,2005, represented 93.65% o ftotal primaryexpenditureso f fiscal year 2005. Sincethe stock o farrears exceeds 10% o fthe total primary emenditures. the scoreis D. 'NS:NOScore. 10 Indicator Score SummaryExplanation (ii)Availability o f data for B The arrears are monitoredby the DGTCP (Directorate of Public monitoring the stock of Debt and Statistics Coordination Department). The data expenditure payment arrears concerning the stock o f arrears are transmitted monthly to the financialpartners. The Directorate o f Public Debtprepares a quarterly report. These documents comprise the total o fexternal anddomestic arrears, havingbeenspecified that the IGFis currently carryingout an audit o fthe salary arrears. The score is B since the data onthe stock o farrears are regularly made available butmay be incomplete for a small number of categories o f expenditures identified, notably salaries. B. COMPREHENSIVENESSAND TRANSPARENCY Classificationof the Budget 3.11 The budget nomenclature was adopted by Decree No. 98-259 o f June 3, 1998 which establishes the detailed codification o f the Government's budget classification. It was implemented on January 1, 1999 by Order No. 1572/MEF/CAE3 o f December 31, 1998. Compared to the WAEMU project, which i s mainly based on double classification by services and by nature, the Ivorian budget nomenclature also comprises a classification o f expenditures by destination. The classification o f expenditures is based on four elements: title, ministry or section, destination, and nature. 3.12 Giventhe potential offered by the nomenclature, the presentation o f the budget document could be improved. The expenditures are not presented in a summary form using the functional classification and a synthesis by ministry. The reading o f the document i s made difficult because of the regrouping within the classification by destination (chapter and sub-chapter): (i)f a o classification by sectors o f activities, similar to the functional classification at the level o f the chapter; and (ii) o f an administrative classification at the level of the sub-chapter. The budget i s presented by title, representing a diverse type o f expenditures, and within each title by ministry. Some expenditure classified under title 3 "Investment Spending" i s in fact operating expenditures o f the services. In the same way, some expenditures featuring under title 2 "Operating Expenditures", are in reality investment expenditures. Moreover, the budget execution review laws do not present expenditures classified by ministry. The last budget execution review laws adopted in 2000 and 2001 present the execution o f expenditures only by nature. 3.13 A presentation o f expenditures by functions according to the classification of the functions of public administrations (COFOG) o f the Government Finance Statistics (GFS) Manual of 2001 i s made possible thanks to a bridge table. It should be noted that the Government undertook to integrate in the budget nomenclature the 2001 GFS functional classification. 11 Indicator Score SummaryExplanation B. COMPREHENSIVENESS AND TRANSPARENCY PI-5. Classification ofthe B The nomenclature classifies the expenditures by nature and budget according to their administrative destination. The classification by destination comprises a classification by sectors o factivity similar to the functional classification at the level o f the chapter, which is identical to that o f WAEMU Guideline No. 4/98 on budget nomenclature. The budget execution review law adopted in2001presents the execution bynature. The hctional classification used i s a specific classification, but it may be made similar to the COFOG by usinga bridge table. Score is B, becausethe establishment and execution of the budget are based on an administrative, economic and infra-functional classification inspired by at least the ten main functions of COFOG. Comprehensiveness of the Budget 3.14 The annual budget documentationpresented to the National Assembly comprises a set o f annexes and reports, containing pertinent macro-economic and budget information on the fiscal policy and the main macro-economic problems. In this regard, the production o f the documentation required by Article 35 o f the Order o f 1959 is observed. This Order establishes that the draft law presented to Parliament should be accompanied by: e A report on the economic and financial situation, recent main outcomes and future prospects. e Support documents indicating the cost o f services previously voted as well as the cost o f the new measures associated with proposed modifications, notably the credits for the creation, abolition, and transformation o f employment. e Annexes providing the list o f special Treasury accounts, their revenues, expenditures and overdrafts as well as the full list o f quasi-fiscal taxes; e Concerning the budget annex on investment and equipment, a report on the execution o f the operations during the past year and a statement indicating the scheduling over the future years o fthe voted programs authorized. 0 Concerning other budget annexes, a report on the activity o f the interested service during the past year and on the operational and investment program planned for the following fiscal year. 3.15 The budget annexes contain detailed information on the financial operations of national public agencies (EPNs) as well as amounts o f votes allocated in the budget for the local communities. It should be noted that WAEMU GuidelineNo. 5 I 9 7 I C W A E M U on the budget law contains additional requirements in this field with regard to the current practice in CBte d'Ivoire. Indeed, the documentation to be presented to the National Assembly should include a statement on pendingpayments by the State established on the most recent date at the time of 12 tabling the draft budget law, a statement on the balances and deadlines for public debt servicing and a statement on credits pendingto be collected. 3.16 Inthe sense ofthe PEFAreview, the criteria on the presentation ofthe budget document are presented as follows: 0 The macro-economic assumptions for 2007 feature in the financial and economic report (page 54). These are also featured in the analysis o f compliance with the WAEMU criteria which include indications such as the inflation rate, the growth rate and the exchange rate. This benchmark is, therefore, met. e The economic and financial report makes reference to the ratio o f the basic budget balance as a ratio to .GDP (page 51). But there i s no presentation o f budget balances as defined in the Government Finance Statistics (GFS). This benchmark is, therefore, not met. e Fundingo f the deficit, including the breakdown, does not feature explicitly inthe budget document. The balance o f the budget is presented but details o f financing needs are not specifically stated. This benchmark i s therefore not met. e The debt stock features in an aggregated manner in the 2007 budget document. This benchmark, therefore, i s met. e There i s no detailed information on the financial assets, i.e. the cash amounts or credits held by the State. This benchmark is, therefore, not met. 0 There i s no detailed statement o f execution for the previous year presentedin the same format as the draft budget. For example, in the 2007 budget, there i s no detailed information, using the same format as the proposed budget, on the execution o f the 2005 budget and revised estimates for 2006. The indications on the execution are global. This benchmark is, therefore, not met. e The 2007 budget was prepared usingthe details and format o f the initial estimates o f the 2006 budget. This benchmark is, therefore, met. e The report on presentation o f the 2005 budget law, which is the last budget adopted by the National Assembly, contains summary tables on revenues and expenditures. The data on expenditures are presented by title and by ministry. The draft 2007 Budget presented to Cabinet contains the same tables. This benchmark is, therefore, met. e Annex 2, entitled "Catalogue o f new measures", presents the financial impact o f these measures. The fiscal annex contains a note which presents, in a general manner, the main fiscal measures adopted over the past few years concerning the rationalization and modernization o f the fiscal system. But the impact o f these measures i s not analyzed in the document. This benchmark is, therefore, not met. 3.17 Since 1999, with the establishment o f the Integrated Public Finance Management System (SIGFIP), efforts have been made to improve the readability o f the budget document i d the financial information. The SIGFP IT application helped to improve the monitoring o f the execution o f the budget, at both the central and deconcentrated levels. It i s now possible to obtain, in real time, information on the execution o f expenditures that are registered in the system and the authorities are committed to exploiting its possibilities, notably by producing, at least quarterly, a report on the budget execution. 13 Indicator Score Summary Explanation PI-6. Comprehensivenessof C The assessment is based on a specific list o f 9 benchmarks, which informationincludedinthe should be communicated in the budget document for the fiscal year budgetdocumentation 2007 addressedto the Parliament or the National Assembly. The benchmarks that are met are as follows: i)Macro-economicassumptions; iv) Debt stock; vii) Presentationin the same format as the initial estimates o fthe previous budget; viii) Summary tables on revenues and expenditures. The unmet benchmarks are as follows: ii)Presentationofbudgetbalances; iii)Financingofthedeficit; v) Detailedinformation on financial assets; vi) Detailed statement o fexecution for the previous year presented inthe same format as the draftbudget; ix) Analysis o f the impact of the fiscal measures. Overall, 4 out o f the 9 information benchmarks are met and the score i s C. Extentof unreportedOperationsof the CentralAdministration 3.18 According to the provisions o f Article 3 o f the Organic Law, the budget comprises the totality o f the expenses and resources o f the State in a single account entitled general budget. However, a number o f operations do not feature init: e First o f all, revenues collected directly by some ministries, in general for services rendered and, which are either not paid to the Treasury or are partially paid (examination fees, fines, mining revenues, etc.). Some o f these revenues, called service revenues (counterpart o f a service rendered), are regulated by specific texts. The administration plans to clean up these texts. By definition, the level o f these operations is not known, having been specified that there i s a regulation for some o f them. The DGTCP and the IGF have started identifylng these revenues in order to make them follow the revenue regimes inaccordance with the regulation. e Moreover, concerning the comprehensiveness o f the budget, it is necessary to budget the quasi-fiscal levies o f certain key sectors, such as the petroleum and coffee/cocoa sectors. e Also, some allocated,funds should be managed according to the regulation on earmarked accounts, a regulation that exists but i s not yet utilized. The Government intends to review this practice and, therefore, use this specific regulation for earmarked accounts. The list o fthese hnds is knownbutnot the amounts managed. 3.19 Concerning externally-financed expenditures, most o f them are included in the budget, having been specified that they have declined considerably during the past three years. Title I11 o f the budget contains the details o f expenditures funded by the Treasury with its own resources 14 and those funded with grants and loans. But the expenditures financed by grants are not presented in an exhaustive manner. Externally-financed expenditures are monitored by a Committee on Mobilization o f External Financing and Monitoring o f Public Investments (COMFESIP), which i s responsible for producing a quarterly and annual report on the mobilization o fbudget support and execution o fpublic investments. As o f the date o f the review, the report for fiscal year 2004, the report as o f September 30, 2005 and the report as o f October 31,2006 hadbeen produced. But the final report as o fDecember 31,2006, was not available. Indicator Scofe Summary Explanation PI-7. Extentof unreportedgovernment NS operations (i)Levelofextra- A number of operations, whose amounthasnot yet beenassessedbythe budgetary expenditures NS administration, are not coveredinthe budget.They are revenuescollected directly by some ministries,in general for services renderedandwhich are either not paid back to the Treasury or are partially paid. Moreover, concerning the comprehensiveness o f the budget, it is necessaryto budget the quasi-fiscal levies ofcertain key sectors, such as the petroleumand coffee/cocoa sectors. Similarly, some of the earmarkedfunds, the list of which is known, but not the correspondingamounts, are not managed according to the regulation, which stipulatehowever that they should obey the rules on earmarkedaccounts. Since the information on amounts collected directlyby some ministriesas well as those concerning finds that shouldbemanagedaccordingto the regulation establishedfor earmarkedaccountsare not known, this component i s not scored. (ii) Income/expenditure NS Fromthe point of view of forecasting, the majority o f externally-financed information on donor- expenditures are included inthe budget. These expendituresare monitored funded projects by COMFESIP which, for the fiscal year 2006, only provided information on the level of these expendituresuntil October 31. A score cannot be assignedto this component without the production of the final reuort of COMFESIP for fiscal vear 2006. Transparency of Intergovernmental Fiscal Relations 3.20 The territorial administrative organization distinguishes 5 levels o f decentralization: 718 communes, 183 sub-prefectures, 68 departments, 19 regions and 2 districts. It i s useful at this stage to clarify the decentralization and deconcentration concepts. Decentralization involves assigning to the elected local authorities the management responsibility, while deconcentration refers to the action of giving more powers to the local representatives o f the Central Government. 3.21 Law 2003-489 o f December 26, 2003 on the financial, fiscal and territorial regime o f the local communities devotes its title I1 to resources o f the territorial communities. Chapter 3 (Articles 86 - 96) deals with the State's assistance, which results in the establishment o f an allocation for operational expenditures, another allocation for general decentralization and grants for equipment. The rules on distribution o f these allocations are incomplete. For example, the law does not indicate the per capita amount o f the fixed part o f the overall operational allocation andrefers to a decree on modalities for calculating the additionalpart o fthe allocation. 15 3.22 The rules on distribution o f the allocations should, therefore, be the subject of implementation texts. Following the holding o f the Decentralization General Assemblies of January 2007, instructions were given to accelerate the adoption o f the implementingorders o f the 2003 laws. Hence, concerning the decentralization allocation, a draft text was proposed in January 2007. It i s on this basis that the actual distributions o f this allocation would be made. 3.23 The resources o f the State do not facilitate the transfer to the territorial communities o f the amounts to which they are entitled, given the competences transferred. Inorder to distribute the amounts available, the DGBF communicates them the resource envelopes. Then, on the basis o f the proposals o f the communities, it issues a proposed distribution. The representatives o f the DGBF feel that this approach may create disparities among the communities, since the amount that served as basis for the initial distributions could have been poorly determined. Inthis case, the initial error o f evaluation i s carried forward from one year to the other. 3.24 The territorial communities also have tax resources for which the distribution rules are known. Proceeds from state taxes are paid back to the territorial communities according to the quotas provided for by the provisions o f Article 36 o f the fiscal annex to the 2004 Budget Law. Concerning the effective pay out o f these sums, the books o f the Central Accounting Agency of Deposits (Agence Comptable Centrale des Dkp6ts-ACCD) contain a special bank account under the name of the General Treasury identifiedas "Tax revenues to be paid out to the territorial communities"*. This account i s intended to receive transfers o f tax quotas made by the Central Accounting Agency o f the Treasury (Agent Comptable Central du Trksor-ACCT) for the benefit o f the territorial communities attached to the General Treasury. The funds that are paid into this special account are automatically transferred to the respective accounts of the beneficiary communities. 3.25 For the preparation of the 2006 budget, the circular was dated October 17, 2005. The deadline givento the Presidents o f the General Councils and Mayors to submit their draft budget was October 29. Generally, the information on transfers from the State do not arrive at the financial departments o f the territorial communities before the end o f November, too late to enable the local councils to effectively adopt their budget before the beginningo f the fiscal year concerned. The local communities very rarely succeed inadopting their budgetbefore January 1. If the budget is voted earlier, the Mayors are obliged to amend it to take into account the information on the amount o f transfers. As regards the effective payment o f transfers, it i s generally made with much delay. 3.26 The Directorate o f Parastatal Accounting o f the DGTCP receives every month the financial situation and the aggregated budget situation o f all the territorial communities. The budget and accounts nomenclature o f these communities facilitate a presentation o f their expenditures on the basis o f an economic and functional classification identical to that o f the national budget.However, this last presentation has never been used. 3.27 Inorder to rapidly make available to the territorial communities their share o f local taxes, provisions were recently adopted. They concern, notably Order No. 2006-234 o f August 2nd, Procedure envisaged by instruction No. 0103 DGTCPDCE of January 5, 2007, on the modalities o f transferring the quota o fproceeds ofcertain taxes to the territorial communities. 16 2006 in the 2006 budget, which establishes new rules on transfer o f proceeds of taxes to the communities. This text, indeed, provides for "the opening o f an account in the name o f each territorial community in the books o f the Treasury Department. This account is immediately credited with the quota for each community as soon as the tax i s collected." I Indicator IScore Summary Explanation PI-8. Transparencyofinter- D+ governmentalfiscalrelations (i)Transparencyandobjectivity D There are four types o f transfers from the State to the territorial inthe horizontal allocation communities: decentralization allocation, general operations allocation, among the decentralized equipment grant and share o f local taxes to which they are entitled. The administrations rules on distribution o f these transfers are either not updated or unclear. Score is D. (ii)Timelinessofreliable c For the preparation of the 2006 Budget, the circular dated October 17, information to the decentralized 2005 andthe deadline given to the Presidents o f General Councils and administrations on their Mayors to submit their draft budget was October 29. The information, allocations therefore, arrives too late to allow for major amendment o f the budgets. (iii) ofconsolidationof Extent D Although their budgetand accountingnomenclature allows it, the budget fiscal data for the general information o f the territorial communities, which i s centralized and government according to sectoral aggregated monthly at the Directorate o f Parastatal Accounting o f the categories DGTCP, is not presentedaccording to the functional or sectoral I I categories. Score is D. Oversightof the aggregatefiscal risk from other publicsector entities 3.28 In CGte d'Ivoire, public sector entities other than the central administration are constitutedbyNational Public Agencies (EPNs) and State-owned companies. 3.29 The budget o f the'70 EPNs i s prepared in an autonomous manner within each establishment, eventually with the support o f the Directorate of Parastatal Accounting o f the DGTCP. It i s then adopted by its Management Board and annexed to the budget. All the management accounts o f the EPNs for fiscal 2004 were produced by accounting officers and only one o f them didnot produce its management accounts for fiscal 2005 and fiscal 2006. These documents contain reliable information on their accounting andbudget execution. 3.30 The Directorate o f Parastatal Accounting receives every month a financial and budget situation for most of the establishments. These situations are prepared by accounting officers o f the establishments who are staff o fthe DGTCP. The MEFis, therefore, ina position to anticipate the eventual risk of slippages due to the build up o f arrears or creation of operational deficits, which could adversely affect the financial situation o f the State. However, since it has no financial and budget information from all the EPNs, it cannot establish a consolidated situation. 3.31 It is necessary to specify that the EPNs do not resort to borrowing, but they are sometimes compelled to solicit grants directly from the donors. Inorder to anticipate on eventual cash problems and, thereby, avoid the constitution o f arrears, the State generally recommends to them to spend on the basis o f their cash situation. Ifit happens that, despite the recommendation, pending payments accumulate, the latter are at the charge o f the EPN concerned, unless it is dissolved. 17 3.32 The data on the financial operations o f public enterprises and companies with public financial participation are available for those concerning State owned companies and companies with majority public participation, except for the Civil Servants National Retirement Fund (Caisse Ge'nkrale de Retraites des Agents de I'Etat-CGRAE), for which an audit is envisaged. It is, therefore, not possible to consolidate the financial andbudgetinformation o f all these entities. 3.33 The management accounts o f the territorial communities (districts, departments and communes) are established by the accountant o f the community, then approved by its deliberating body and forwarded to the MEF latest on June 30 o f the year following the closure o f the fiscal year. After the analysis o f these documents, the Directorate o f Parastatal Accounting o f DGTCP deposits them with the Chamber o f Accounts, latest on 31 August o f the year following the closure o f the fiscal year. At the time o f the assessment, the management accounts o f the territorial communities for the past 3 fiscal years (2004, 2005 and 2006) had been produced at 80% (439 out o f 549). The documents contain detailed information, which helps the DGTCP to carry out an initial control o f their accounts andtheir budget execution and then make these elements available to the Chamber o f Accounts. Hence, the net budget situation o f the territorial communities is controlled at least every year, but does not make it possible to present a consolidated situation. I Indicator IScore I Summary Explanation I PI-9. Oversight of the overall fiscal riskfrom other public C sector entities (i) ofcentralgovernment Extent monitoring of autonomous public Most of the main autonomous public agencies (EPN) and public agencies and public enterprises enterprises submit, at least every year, budget reports to the central administrations. However, since some of them do not comply with this directive, it i s not possible to present a consolidated situation. The score i s C. (ii) ofcentralgovernment Extent C The net budget situation of the territorial communities i s I monitoring of the decentralized controlled at least every year, but does not make it possible to administrations fiscal position present a consolidated situation. The score is C. Publicaccessto key fiscalinformation 3.34 The access o f the public to the main budget information is improving gradually with the establishment o f Internet sites for the main financial administrations. One can, for example, consult the 2004 and 2005 fiscal annexes o fthe 2004 and 2005 Budgets on the Internet site o f the DGTCP, which, like that o f the DGI, i s one o f the best documented sites. These documents may be communicated, at their request, to interested persons or organizations. However, the dissemination o f the information to the public concerning budget allocations and budget execution i s still limited and, generally, the public has access to this information only after the adoption o f the budget. 3.35 On the Internet site o f the DGTCP, it is also possible to consult the monthly information review o f the Ministry o f Economy and Finance Eco Actualitb, which provides economic and administrative information. However, there are no publications presenting the results o f the budget execution inan analytical form accessible to the public. This information is, nevertheless, available and should be published inthe fkamework o f the communication policy o f the Ministry. 18 3.36 Inthe sense o f the PEFA indicators, elements o f the main budget information accessible to the public are presented as follows: The enterprises are consulted by the MEF at the stage o f establishment o f the macro- economic framework. The budget documents are accessible to the public after the voting of the budget law. The main elements are published in the Gazette and in the written press, which carries out analyses. However, the budget documents are not accessible at the time of the presentation o f the budget in Parliament. This criterion is, therefore, not met. 0 The in-year annual budget execution reports are not available to the public. This criterion is, therefore, not met. 0 The end-of-year financial statements, notably the draft budget execution review laws, are not approved since fiscal year 2002. The last budget execution review law approved is that o f 2001. The draft budget execution review law o f 2003 was forwarded to the Chamber o f Accounts in July 2006. Inthe context o f the budget support granted by the World Bank, the authorities are committed to examining the draft budget execution review law o f 2003 and2004 before the end o f 2007. This criterion is, therefore, not met. 0 The external audit reports, notably the report o f the Chamber o f Accounts on execution o f the budget law, are not accessible to the public within the 6 months following the audit o f the accounts. This criterion is, therefore, not met. The award o f contracts estimated to cost more than $100,000, or about CFAF 50 million, i s advertised in the public procurement journal, which is published every 10 days. This criterion is, therefore, met. The information on resources made available to primary service units at the local level i s detailed inthe budget document for the administrative entities with a credit administrator. For the others, the information i s available to the beneficiaries upon request to the administrative department o f their constituency. This criterion is, therefore, met. Indicator Score Summary Explanation PI-10. Public access to key CA This indicator i s basedon a list o f six elements of information about fiscal information budget operations, to which the public should have access. The criteria that are met are as follows: v) The award o f contracts estimated at over $100,000; vi) The information on resources made available to the administrative units. The criteria that are not met are as follows: i)Thebudgetdocumentatthetimeoftheirpresentationin Parliament; ii)Thein-yearreportsontheexecutionofthebudget; iii)Theyear-endfinancialstatements; iv) The external audit reports. The score i s C, since the administration makes available to the public two o fthe elements mentioned inthe PEFA performance framework. An arrow has been added to the score to indicate that the process is improving, notably with the establishment of Internet sites for the main financial administrations. 19 C. POLICY-BASEDBUDGETING Orderlinessandparticipationinthe annualbudgetprocess 3.37 The instruction o f the MEF dated July 16, 2007, sets the timetable for preparation o f the 2008 Budget, which defines the main stages as well as their deadlines up to the promulgation o f the budget law, which should take place before December 31, 2007. The budget conferences should take place between September 3 and October 14. But delays are observed inthe respect o f this timetable. Concerning fiscal year 2007, which serves as reference for assigning scoresto this component, it could not be demonstrated that a budget timetable had been established or instructions formally given for preparationo fthe budget. 3.38 The deadline for presentation o f the budget to the National Assembly is fixed by Article 80 o f the Constitution, which stipulates that "the budget law is tabled before the National Assembly at the opening o f the October session." Given the crisis situation prevailing in Cbte d'Ivoire these past years, the budget was approved and adopted by Ordinance. The 2005 Budget was adopted by the National Assembly on April 27, 2005; the 2006 Budget was approved on June 14,2006 and adopted by Ordinance on August 2,2006; and the 2007 budget was approved May 31,2007 and adopted by Ordinance on May 31,2007. Indicator Score Summary Explanation PI-11. Orderliness and participation in the annual D A budget process (i) Existence o f and adherenceto DA The referenceperiod for this component concerns the last budget a fixed budget calendar adopted (2007). Since the information on the timetable for the preparation o f the 2007 Budget is inadequateto determine the number o fweeks between reception of the budget circular and budget submissions bythe ministries, the score i s D. The time-table for the preparation of the 2008 Budget has been defined. It establishes the main stages and their deadlines up to the promulgation of the draft budget law. This progress justifies an arrow. (ii)Guidance on the preparation D Concerning fiscal 2007, it couldnot be demonstratedthat a circular o f budget submissions had formally been issued for the preparation of the budget.The MEF'scircular o f July 16`h, 2007 sets the timetable for the preparation of the 2008 Budget. The score is, therefore, D. (iii)Timelybudgetapprovalby D The reference period for this component concerns the last three the legislature budget years. During the past 2 years (2006 and 2007), the budget was adoptedby Ordinance with more than 5 months delay. The score is, therefore, D. Multi-yearperspectivein fiscal planning,expenditurepolicyandbudgeting 3.39 The MTEF is an integrating factor o f the PRSP in the public expenditure programs, but the crisis situation did not make it possible to finalize this strategy and, consequently, Cbte d'Ivoire i s preparing neither the general MTEFnor sectoral MTEFs. However, in the framework o f the strategy o f the post-crisis re-engagement, the process has beenre-launched. Inthis regard, a workshop should be organized from 28 to 30 November 2007. Moreover, although the PRSP 20 was not adopted, a national development strategy focused on the MDGs is being finalized and could help to place the budgetina multiyear perspective. 3.40 The Debt Department has installed the DebtPro software for conducting debt sustainability analyses. It seems that this department i s trying to carry out such analyses but its work i s not validated by the authorities. The department intends to master this tool, initially with the support o f the development partners. The estimated expenses o f the debt, calculated on the basis o f the debt outstanding as o f the end o f the year, are communicated to the DGBF for preparationo f the annual budget. 3.41 Issues relating to the crisis recovery, as those relating to the staffing and office rehabilitation, are dealt with as a priority, with the development o f strategies relegated to a second plan. There are no quantified sectoral strategies, notably in the health, education or infrastructure sectors. However, the development o f a new National Health Sector Program (PNDS) for 2008-2012 is one o fthe priorityactivities o fthe action plan o fthis sector. 3.42 A Public Investment Program (PIP) is established on the basis o f the major budget orientations. This document, which constitutes an attempt to monitor and assess investments, is a triennial programming o f investments updated every year on the basis o f the actual realizations and orientations and priorities o f the Government. A few projects are based on strategies in the Ministries o f Health and Education. There i s also a medium-term national strategy, which integrates some sectoral strategies. But these strategies are neither detailed into action plans nor assessed. 3.43 The Directorate o f Planning has expressed the wish that the project sheets should be established by the ministries on the basis o f their objectives and that the costs should be quantified. It shouldbe noted that there is no national inventory o f projects. This type o f database would, however, be very useful in order to provide information on the life o f projects, notably taking into account the various stages o f preparation and execution (projects studied but not yet accepted, projects about to be financed, etc.). 3.44 Expenditures under Title I11o f the budget are those that were previously retained in the PIP. It is not shown whether the recurrent costs induced by investments are taken into account, as the ministries have no sector strategies. 3.45 The resumption o f the preparation o f a poverty reduction strategy, which started with the seminar heldat the end o fNovember 2007, should be completed duringthe third quarter o f 2008. This document will be prepared under the control o f the PRSP Steering Committee and the preparatory process will comprise, notably, the development o f a medium-tern expenditure framework and a system for monitoring results. Indicator . Score Summary Explanation PI-12.Multi-year perspectivein D fiscal planning, expenditure policy and budgeting (i)Multi-yearfiscalforecastsand D Cate d'Ivoire does not prepare a global MTEFor sector MTEFs. functional allocations However, in the framework o f the post-crisis re-engagement strategy, the process hasbeenre-launched. Moreover, anational development 21 Indicator Score SummaryExplanation strategy focused on the MDGs is being finalized. Since no medium-termbudget framework has been established, the score i s D. (ii)Scopeandfrequencyofdebt D The Debt Department i s trying to carry out studies on debt sustainability analysis sustainability, but they have not been validated. The score is, therefore, D. (iii)Existence o f costed sector D There is a national medium-termstrategy, which integrates certain strategies sectoral strategies. Butthese strategies have not been detailed into an action plannor assessed. Since no sectoral strategy has been sufficiently quantified for the cost associated with investments and operational expenditures, the score is n U. (iv) Linkages between investment C Ithas not beendemonstratedthat the recurrent costs induced by budgets and forward expenditure investments are taken into account since the ministries have no sectoral estimates strategies. The score is, therefore, C. D. PREDICTABILITYANDCONTROLINBUDGETEXECUTION Transparency of taxpayer obligations and liabilities 3.46 The texts and procedures on all the main categories o f taxes feature in the General Tax Code (CGI) and in the Customs Code (CD). These exhaustive texts are clear and limit intheory the discretionarypowers o fthe entities o f the administration that exercise a function inthat area. The private sector pointed out that some enterprises are subjected to in-depth tax controls every two months, whereas the procedures manual provides that the same taxpayer should not be subjected to a new control withintwo months. 3.47 Concerning the Internal Revenue Service (DGI), which collects 90% o f tax revenues, a numberofdocuments were prepared duringthe past four years to facilitate access o ftaxpayers to information: the tax procedures book and the taxpayer's guide. The media are also used to disseminate tax regulations. For example, the television presents a program every Monday and the radio presents a program twice a week which cover the entire country. Toll free numbers are also available to the public. The DGI has a department that monitors the quality o f its services and, which recently conducted out a satisfaction survey. The General Directorate of Customs (DGD) uses its own Internet site andthat o fthe WAEMU to present its texts to the public. It also organizes information meetings for economic operators. Inthis regard, a seminar was organized inGrandBassam inOctober 2007. This seminar helpedrationalize some tax procedures. 3.48 Within the DGI, the regulation on disputes is clearly defined in the tax code. The procedure is contradictory and seems to satisfy taxpayers. The statistics provided show that a major part o f submitted applications had been treated and that 12% are referred to the courts. The DGD has established an observatory in charge o f receiving complaints from taxpayers. This observatory intervenes as an arbitration court. However, ifthis administration has duly provided the list o f cases formulated by economic operators in 2006, no information on the statistics concerning the follow-up actions to these requests was provided to the mission. The lowest score is, therefore, retained for this component. 22 Indicator Score SummaryExplanation PI-13. Transparencyofthe C+ taxpayer obligationsand liabilities (i)Clarityand C The texts and procedures on all major categories o f taxes are exhaustive and clear, which limit intheory, the discretionarypowers o f the entities o fthe administration that exercise a function inthat area. But,contrary to what the regulation stipulates, some enterprises are subjectedto in-depth fiscal controls every 2 months. The score is, therefore, C. (ii)Taxpayers'accessto A Inrecent years, the DGIandthe DGDhave developed anumber of information on tax and liabilities tools to facilitate access o f taxpayers to information. and administrative procedures Since taxpayers now have easy access to exhaustive, friendly and up-to- date information on tax obligations and administrative procedures, the score is A. (iii)Existenceandfunctioningof D A taxpayer's appeal mechanismprovides for transparent administrative a tax appeals mechanism procedures, but the information on statistics concerning the appeals to the financial administrations were only provided bythe DGI, since no information on the follow-up o f the appeals was obtained from the DGD.The score ofthis component is, therefore, D. Effectiveness of measures for taxpayer registration and tax assessment 3.49 A system o f registration o f taxpayers was established in 2005. It is based on a single identification number that captures the information on each taxpayer: surname, first name, address and activity. The census conducted during the establishment o f the system helped to identify a number o f taxpayers inthe informal sector. This identification number i s managed by the DGIwhich, however, acknowledges that not all taxpayers have been identified and that some o f them are registered under several numbers. The identification number i s also used by the DGD. However, the conclusions o f the seminar held in June 2007 on the fight against fraud helped to confirm that the "DGD has no adequate information on the account number o f taxpayers." This number is also usedby the SIGFIP system, which helps to make a reconciliation o f the credits and debts owed to the State by the same individual or moral entity. 3.50 Concerning the DGI, the lack o f tax declaration leads to the payment o f a fine equal to the amount o f the tax itself. Discussions may be initiated. A schedule for payment i s proposed. Concerning the DGD, the goods imported serve as guarantee for payment o f duties and can therefore, as a last resort, be auctioned. If it is not declared or not adequately declared, the due duties shall be paid together with the fines according to the Customs Code. Concerning fines, discussions may be initiated. The duties are guaranteed by a bank guarantee mandatory for the exercise o f the function o f customs' clearing agent. 3.5 1 The DGD establishes an annual program o f activities. This very brief document does not present objectives based on a rankingand assessment o f risks. The DGIpresented some elements o f programming and execution o f the tax control that it actually carries out, but this activity i s not based on a ranking o f risks. A continuous program on tax audits and surveys on fraud, therefore, exists but the audit programs are not based on clear risk assessment criteria. 23 Indicator Score Summary Explanation PI-14. Effectivenessof C+ measuresfor taxpayer registrationandtax assessment (i)Controlinthetaxpayer C A system ofregistration of taxpayers was put inplace in 2005. The registration system identification number i s used bythe fiscal administrations as well as inthe SIGFIP information system. The score is C, becausethe database i s not exhaustive and contains taxpayers with several numbers. (ii)Effectivenessofpenalties B for non-compliance with Concerning the DGI, the lack o ftax declaration results in the registration and tax declaration payment of a fine equal to the amount o f the tax itself. Discussions may be initiated. A repayment schedule i s proposed. Concerning the DGI, the goods imported serve as guarantee for the payment o f duties and can therefore, as a last resort, be auctioned. If it is not declaredor not appropriately declared, the duties due shall be paidtogether with the fines according to the Customs Code. Concerning the penalties, discussions maybe initiated. The duties are guaranteed by a bank guarantee mandatory for the exercise of the function o f customs' agent. Hence, the fines for all cases o f contravention are sufficiently high to have a dissuasive effect, but it was not possible to verify whether they are administered in a coherent manner. The score i s B. (iii)Planningandmonitoring C The DGIand DGDhave a continuous program o f tax audits and oftax audit programs surveys on fraud, but the audit programs are not basedon clear criteria for risk assessment. The score i s C. Effectiveness in collection of tax payments 3.52 The necessary elements for assigning a score to the first component, which would help to assess the collection ratio o f tax arrears, are inadequate both for the DGD and the DGI. The lowest score is, therefore, retained for this component. 3.53 The transfer o f the DGI and the DGD to the Treasury i s done every evening. All the accounts are then set at zero. The transfer o f collected taxes to the account o f the Treasury by the tax authorities should, therefore, be considered as very efficient. 3.54 A weekly meetingbetween the BCEAO, the DGI, the DGD and the Treasury helps to verify the compliance o f payments by the revenue administrations to the Treasury account. This work is done in preparation o f the treasury committee and conducted by the Statistics Coordination Department o f the DGTCP during the technical reconciliation meetings chaired,by the BCEAO. All the bank accounts o f the EPNs are centralized and monitored by the Central Accounting Agency o f Deposits (ACCD), which is gradually being deployed in the interior o f the country inorder to make up for the withdrawal o f certain commercial banks. Concerning the amounts to be recovered, the Treasury carries out regular reconciliations between its general accounting held on the ASTER software and the REC application, which is used for monitoring the collections insubsidiaryaccounting. 24 Indicator Score Summary Explanation PI-15. Effectiveness in D+ collection of tax payments (i)Collectionratioforgross D The elements providedby the DGD and the DGIare not sufficient to tax arrears calculated in assess this component. Score is, therefore, D. percentage o f tax arrears 7 during the fiscal year concerned (ii)Effectivenessoftransfer A ~~ ~~~~ ~~ o f tax collections to the The transfer from the DGIand the DGDto the Treasury Department i s Treasury by the revenue done every evening. All the accounts are then set at zero. administration The score is A. (iii)Frequencyofcomplete A The compliance o f the payments from the revenue administrations into accounts reconciliation the Treasury account is verified each week. Concerning the remaining between tax assessments, amounts to berecovered, the Treasury carries out regular collections, arrears records and reconciliations between its general accounting heldon the ASTER receipts by the Treasury software andthe REC application (subsidiary accounting o f collections). The score i s A. Predictabilityin the availabilityof funds for commitmentof expenditures 3.55 The Statistics Coordination Department o f the DGTCP establishes, on the basis o f cash flows of the previous fiscal years, an annual cash plan for the coming budget year. This cash plan is updated monthly on the basis o f actual inflows and outflows o f funds. The directorate o f forecasting calculates, on a monthly basis, the revenues and the DGBF assesses future expenditures, both help to inform the preparation o f the annual cash plan. The arrears to be cleared are also integrated into the plan. The monthly update i s the opportunity to verify the achievement o f the revenue objectives assigned to the revenue administrations inthe framework o fmonitoring the quantitative benchmarks o f the economic and financial program. 3.56 The MEF, the sole credit manager of expenditures, oversees the rate o f consumption o f credits by the DAAFs, delegated credit managers. The latter are appointed on the basis o f a proposal o f the responsible minister after the MEF has given its view. They, therefore, intervene in a dual capacity. The allocations for current expenditures are made available to the ministries every month. When a particular expenditure, by its nature, has to be made over a period o f time exceeding one month, the DAAFs o f the ministries may request for an exception from the DGBF.The investmentcredits are made available on a casebycasebasis. 3.57 No corrective budget law was voted during the past three years. The last was before the outbreak o f the crisis. However, many modifications o f budget credit lines were made through decrees, thus indicating either poor estimation o f expenditures or an excessive detail o f budget credits. The review team wanted to have a list o f these budget modification acts. The list extracted from the SIGFIP system, which was provided, shows that these modifications are quite numerous. However, the list does not contain all the necessary information to carry out a review. Infact, a good number of operations are not balanced. It is, therefore, not possible to determine whether these modifications are credit virements (modification o f budget allocation within the same ministry), or credit transfers (modification between two or several ministries). Moreover, 25 the total amount o f operations i s not indicated. It is, therefore, not possible to verify whether the budget balance is changed or not through these modifications. Finally, the purpose o f these modifications is not indicated. For lack o f adequate information, the lowest score i s retained for this component. Indicator ScoreI Summary Explanation PI-16. Predictability in the availability D+ of funds for commitmentof expenditures (i)Extenttowhichcashflowsare A forecast and monitored Estimations o f cash flows are preparedby the Statistics Coordination Department o f the DGTCP for the subsequent budget year and updated every month. Since the cash flow estimates are prepared for the budget year and are updated every month on the basis o f the actual inflows and outflows of funds, the score is A. (ii)Reliability and horizon o f periodic Concerning operational expenditures, the credits are made in-year information to spending agencies available to the ministries every month. When expenditure, on ceilings for expenditure byits nature should be made over a period oftime exceeding one month, the DAAFso f the ministries may solicit for an exception from the DGBF.The credits for investment expenditures are made available in a piecemeal fashion. (iii)Frequencyandtransparencyof A list o fbudget acts modifyingthe initial estimates was adjustments to budget allocations which produced. Butthe information provided in this document for are decided above the level o f assessingthis component i s inadequate: unbalanced management o f spending agencies operations, lack o f a total amount, lack o fpurpose. For this reason, score i s D. Recordingand managementof cash balances,debt and guarantees 3.58 The Directorate o f Public Debt (DDP) is operational since 1997, when debt management was removed from the Amortization Autonomous Fund (Caisse Autonome d 'Amortissement). In 2002, the Sygade application was installed, as the RCIwas designated as a pilot country for the use o f this application. The database concerning the debt was transferred from the database o f the CAA into that o f Sygade. This database contains the records o f all debt movements since 1998. The loans are codified and the grants are also registered. The operations are entered on a daily basis. The database i s updated in real time o f the variations o f the exchange rate, thanks to an Internet connection. 3.59 As for the other financial flows, the management o f the debt is subjected to the principle o f segregation o f duties between credit manager (the Director o f Debt) and the accountant (the Debt Accounting Officer). The two actors should, therefore, be in a position to exercise mutual control as a result o f this type o f organization. But this control i s not possible. Indeed, the debt accounting officer i s certainly informed o f the movements on the debt, in terms o f mobilization and reimbursement, but it has no database that would allow him to assess the debt stock. He verifies and accounts for the files on the debt flows, but has not access to agreements or amortization schedules. 26 3.60 The DDP prepares a quarterly report on the debt situation. All debt flows are subjected to accounting transactions and the balance presents the stock situation (ASTER application). The stock and flows of the debt are monitored in the SYGADE application (DDP). The SIGFIP application only allows the monitoring o f the flows. The reconciliations between these different sources o f information only show differences due to exchange rate variations. The database o f the DDP is exhaustive, both for the domestic and external debt. All flow operations are presently registered in the SYGADE application. The data on domestic and external debt are subjected to monthly reconciliations betweenthe different operational sub-divisions o fthe DDP. 3.61 A central account opened at the BCEAO is managed by the Central Accounting Officer of the Treasury. The flows from all other accounts are aggregated on this central account through regular action taken by the BCEAO. Generally, no account i s opened in the name o f the Government incommercialbanks. 3.62 Parliament does not fix the annual ceiling o f indebtedness in order to allow the Government to deal with emergency situations. The procedure for public indebtedness starts by establishing a drafl agreement at the level o f the MEF. The DDP carries out a financial and legal analysis o f the dossier. It then makes suggestions on the conditions o f the loan. The sector Minister responsible for the expenditures for which funding is solicited is then authorized to initiate the technical discussions with the financial partner. At the end o f the procedure, it i s the Minister o f Economy and Finance who signs the loan agreements and, thereby, commits the State for all agreements. 3.63 The granting o f loan guarantees and approvals i s codified by the Decree No. 83-501 o f June 2, 1983, which stipulates, notably in its Article 25, that the decision solely belongs to the Minister o fFinance. Indicator Score Summary Explanation PI-17 Recording and B managementof cash balances, debt and guarantees (i) ofdebtdatarecording Quality B The debt stock features in an exhaustive manner in the SYGADE and reporting (Directorate o f Public Debt) and SIGFIP databases and in the public accounting system (ASTER). The reconciliations only show differences due to exchange rate variations. The Directorate o f Public Debt establishes a quarterly report on the debt situation. Since the debt accounts officer has no information on the debt stock, the score i s B. (ii)Extentofconsolidationofthe government's cash balances A central account opened at the BCEAO is managed by the central accounting officer o f the Treasury. Flows from all other accounts are aggregated on the central account through regular action taken by the BCEAO. Generally, no account i s opened in the name o f the Government in commercial banks. (iii)Systems for contracting loans After the study by the Directorate o f Public Debt, the Minister o f and issuance o f guarantees Economy and Finance signs all loan agreements. The granting o f loan guarantees and approvals is also decided by the Minister o f Finance. However, since there is no clear ceiling for indebtedness, the score is C. 27 Effectiveness of Payroll Controls 3.64 The R C Ihas no integrated management tool for salaries o f civil servants and government employees. There are two separate files: that o f the Civil Service Directorate (DFP), which manages all civil servants as well as contractual staff and that o f the Payroll Directorate, which only manages civil servants (government employees and EPN) who have to be paid. A project to develop a central personnel database (Fichier Unique de Rkfkrence - FUR) called Integrated System for the Management o f Civil Servant's Records (SIGFAE), which will be used by the Civil Service Directorate, the Payroll Directorate, the PGT and the CGRAE is being prepared by the Sociktk nationale de development informatique (SNDI). This i s one o f the actions contained inthe 2007 strategic actionplanofthe MEF. 3.65 Presently, the Payroll Directorate o f the DGBF uses the Year 2000 Payroll application. The payroll database i s updated on the basis o f administrative documents and computer records transmitted by the Civil Service Directorate, the DAAFs o f ministries, EPNs and institutions. Since May 2007, unexpected sectoral controls are carried out in the ministries to ensure that all the agents paid are effectively working inthe administration. Onthis basis, the file is updated. 3.66 At the stage o f the preparation o f the draft budget, the wage bill estimation is done through a conference for the programming o f staff attended by representatives o f the Payroll and Civil Service Directorates. An assessment o f future recruitments is conducted but it i s not based on a list o fpre-defined budget positions. 3.67 Salary expenditures are incurred on the basis o f capped appropriations. The payment i s made according to the expenditures without prior payment order (DSOP) procedure, which are regularized 2 or 3 months later. The procedure o f monthly payment o f salaries i s initiated by the Payroll Directorate, which first o f all registers the commitments in the SIGFIP system. The draft monthly payroll i s sent to the Civil Service Directorate which, on the basis o f global and sectoral statements, carries out some controls. At the payment stage, the PGT controls the variable elements o f the payroll. To do that, he has a direct link with the database o f the Payroll Directorate. A major part o f the salaries is paid to bank accounts. Some are still paid by cash notes. 3.68 Newly-recruited staff members are not registered inthe system before an average period o f more than 3 months from the time o f their assumption o f duty. This delay in taking into account the new civil servants, concerning especially teachers, is due to delays in the transmission o f files. The changes in the situation o f civil servants are taken into account from the date o f transmission of the files to the Payroll Directorate, i.e. with a minimum delay o f 3 months. 3.69 Concerning new recruitments, the orders are submitted to the prior approval o f the Financial Controller before signature by the Minister o f Civil Service and Employment. The same applies to changes in' the administrative situation o f civil servants. The modalities for approval o f acts in connection with recruitments and change o f situation are clearly spelt out. These elements are also verified by the Payroll Directorate. All pay movements associated with changes inthe administrative and financial situation o f civil servants and government employees are subjected to systematic control by the PGT, before being accounted for. Particularly, the PGT 28 systematically verifies the pay orders exceeding CFAF 600,000. Summary statements are prepared to review movements made in the month (registration o f new agents, changes in appointment, service or change inmarital status, reclassification after promotion, etc.). When the civil servant goes on retirement, the Payroll Directorate prepares a certificate on suspension o f payment, which enables the service incharge o fretirements to pay the pensionbenefits. 3.70 A staff census was conducted in 2002 with financing from the World Bank. On this occasion, only civil servants who physically presented themselves were paid. This operation helped to remove a number o f ghost workers from the database. Since then, there has not been any exhaustive control o f the payroll statements or staffing position. However, since May 2007, sector control operations on staff are carried out in the ministries. The Regional Payroll directorates and the Salary Control Branch o f the Payroll Directorate carry out monthly checks on all elements o f remunerations. To complete these regular checks, targeted controls are conducted on some elements of salaries or fringe benefits, for example transport allowances, special work allowance. To date, these controls have been carried out in all sectors, except education and health. 3.71 The project on development o f a new IT application to be shared by the administrative and financial management o f the pay system should lead to the automatic feeding o f pay information into the SIGFIP application. A group o f projects chaired by the Director-General of the Civil Service has been put inplace for conducting the SIGFAE project. The new application will be based on a decentralized management o f salaries by the DAAFs o f ministries. It should be implemented latest in2008. ~~ Indicator Score SummaryExplanation PI-18. Effectiveness of D+ payroll controls (i) ofintegrationand Degree The updates o f the payroll database are done on the basis o f computer reconciliation betweenpersonnel systems under the control o f all the administrations concerned. records and payroll data. However, the reconciliation o fpayroll and personnel records is carried with a periodicity o f more than six months. Unexpected controls are carried out inthe ministriesto ensure the physical presence o f the agents. However, it is not certain that the coherence is regularly ensured between the file o f the Payroll Directorate and that o f the Civil Service Department. That's why the score is C. (ii)Timelinessofchangesto Newly-recruited staff members are not registered in the system personnel records and the before an average period o f more than 3 months from the date o f their payroll assumption of duty. Changes inthe situation o f civil servants are taken into account with a minimumdelay o f 3 months. (iii)Internalcontrolsof The visa modalities o f recruitments and changes in situation are changes to personnel records clearly established. These changes are made under the prior control and the payroll. o f the Financial Controller and the PGT. A list i s prepared to recap movements made in the month, registration o f agents, changes in appointments or services. (iv) Existence o f payroll audits Since the 2002 census, there has not been any exhaustive control o f to identify control weaknesses the payroll statements or staffing position. However, since May 2007, andlor ghost workers. monthly operations to control staff are launched inthe ministries by the Pay Control Division o fthe Payroll Directorate. Moreover, selected controls are carried out on certain remuneration elements, for example transport allowances. 29 Competition,value for money and controlsin procurement 3.72 A data collection system has beenput inplace (Sigmap), managed by the Directorate o f Public procurement (DMP), and i s producing quite reliable annual statistical data for much o f the budget i s approved within acceptable deadlines to facilitate taking into account contracts since the beginning o f the fiscal year. The data provided show the total amount o f budget lines submitted for procurement, beyond the threshold, by type o f contract and function o f the contracting authorities and in relation to the total volume of contracts for the given year (from June 2006 to the date o f the review, since the budget was approved late). In fact, the choice o f procurement methods depends on the ceilings, which are different according to the nature o f the contracting authorities (notably, state-owned companies, and especially, the cocodcoffee fund). Presently, the data collected for the second half o f 2006 shows that the amount o f sole sourcing contracts (CFAF 49.7 billion) -without specifying whether they are sole sourcing contracts ina value exceeding the ceiling - and limitedcompetitive bidding (CFAF 14.8 billion) i s higher than the amount ofthe opencompetitive bidding(CFAF 57.6 billion). This shows that about 47.5% o f contracts were awarded on an open competitive basis. This percentage is below 50%, mainly due to the following combined factors: (i) procurement thresholds for competitive bidding that are highandnotjustified for part ofthepublic entities (SODEKFAF 120million, CommunesCFAF 60 million, ARCC CFAF 500 million, etc.) whereas that o f the ministries i s CFAF 30 million; (ii)criteria for utilisation of sole sourcing still too broad and favouring its use; and (iii) procurement o f direct contracts between public law entities, which restricts the scope o f use o f competitive biddingmethods. 3.73 The procurement code provides for the principle that open competition is the preferred method o f procurement. Several criteria justifying the use o f sole sourcing do not appear really justified: (a) no bids or unacceptable bids; (b) supplies unable to come from more than one production or storage venue because o f their particular nature (terms subject to very wide interpretation); (c) transportation o f public funds; (d) additional procurement beyond ceilings in the contracts (the cases mentioned show the risks o f slippage, notably in case o f poor needs assessment), where the circumstances justifying unforeseen technical or economic constraints are not justifiable; and (e) cases o f major technical or investment needs. These cases are not in conformity with the WAEMU Guidelines. It has moreover been noted that, since the adoption o f the new code, there has been a worrying increase in the number o f sole sourcing (over 30%), cases o f regularization of sole sourcing signed without resorting to normal procurement procedures; the importance o f specifying the accounting o f sole source contracts in the Sigmap system according to the presented justification was underlined. Furthermore, the lack o f independent audit does not facilitate the verification o f compliance with procedures for procurement awarded using less competitive modalities and guaranteeing the control o f detected slippages. 3.74 There i s a regulatory and institutional mechanism (commission for settlement o f disputes- CRD) to appeal against decisions taken inthe area o f complaints and resolutions to facilitate the implementation o f the code (a pamphlet on appeals) were adopted to describing the functioning o f the CRD and appeal procedures. However, as the mechanism i s not yet functional, it cannot ensure effective registration o f complaints and treatment o f claims in accordance with the provisions o f the code implemented in 2005 and, as a result, it i s not possible to assess its efficiency. Moreover, the information provided by SIGMAP on complaints (number, author, 30 etc.) and the treatment (justification, processing timelines, ...etc.) data, have yet to be developed. Furthermore, the existing mechanism for appeals and for the amicable settlement o f disputes i s not independent, since the Settlement Commissions that will be instituted and to which cases can be referred only provide recommendations subject to approval by the Minister in charge o f Public Procurement (at the same time, the control authority and authority for approval o f appeals). Indicator Score Summary Explanation PI-19. Competition, value for C money and controlsin procurement i)Useofopencompetitionfor C The percentage o f contracts awarded on the basis of open award o f contracts that exceed competitionprocedures is 47.5%. This is mainly the consequence o f the nationally established several combined factors: (i)procurement thresholds for monetary threshold for small competitive bidding that are high and notjustified for part o f the purchases public entities (SODEKFAF 120 million, Communes/CFAF 60 million, ARCC/ CFAF 500 million, etc.) whereas that of the ministries i s CFAF 30 million; (ii) for utilisation o f sole criteria sourcing still too broad and favouring its use; and (iii)procurement o f direct contracts between public law entities, which restricts the scope o f use of competitive biddingmethods. (ii)Justification for use o f less C The procurement code provides for the principle that open competitive procurement competitioni s the preferred method of procurement. Several criteria methods justifying the use o f sole sourcing do not appear reallyjustified and are not in conformity with WAEMU Guidelines. Ithas also been noted that since the adoption o f the new code, there has been a worrying rate o f increase insole sourcing. Besides, the lack of an independent audit does not facilitate the verification o f compliance with proceduresfor procurement awarded usingless competitive modalities and guaranteeingthe control of detected slippages. (iii) Existence and operation of a, C There is a regulatory and institutional mechanism for appealing procurement complaints against decisions rendered in the area o f complaints and resolutions mechanism to facilitate the implementation o f the code were taken to that end to describe the appealsprocedures. However, this mechanism i s not yet functional. Besides, the information providedby SIGMAP on complaints and treatment given has yet to be developed. Finally, the existing appeals mechanism and amicable settlement o f disputes is not independent. Effectiveness of internal controls for non-salary expenditures 3.75 The a priori control o f public expenditures i s exercised by the Financial Control Directorate, which is placed under the authority o f MEF. The attributions and functioning o f this Directorate were fixed by a decree adopted in 1995. Its main function consists in controlling commitments o f expenditures under the general budget, having been specified that the expenditures o f the EPNare controlled by the Budget Control Directorate. This control concerns availability o fbudget funds, the quality and legality o f the expenditure (conformity with the texts inforce). Concerning salary expenditures, the Financial Control Directorate carries out controls on the management decisions on staffing: recruitment, promotion, end o f career. 31 3.76 The financial controller also intervenes at a stage o f the validation o f the expenditure before the order to pay phase to verify: (i) that the order concerns a commitment already authorized by him; (ii)that the invoice has been correctly prepared and that the support documents are attached to the file; and (iii) that the service has beenrendered, i.e. the provision o f service or delivery has been effectively made. This control should be made within 8 days o f service or supply. The financial controllers are supported in this task by verification officers. At the central level, each financial controller i s in charge o f the expenditures o f several ministries. At the deconcentrated level, each financial controller is in charge o f the expenditures o f all ministries that have a local representation. 3.77 The financial control has no market price listing reference (an ongoing project at the DMP should result inthe establishment o f a reference price database). It does not make a ranked control. It does not use the risk assessmentmethod and controls all files presented to it according to the same rules, irrespective o f their amount. The effectiveness o f the financial control may also be assessed by comparing the budget estimates to outturns. Inthis regard, the CGAF under Article 62 "Purchase o f goods and services" reports an execution rate o f 142% in 2004 and 110.1% in 2005, thus reflecting overspending. Hence, the measures for control o f expenditure commitment exist but, since they are not based on an assessment o f risks, they lack effectiveness. They do not cover all the expenditures and are not always respected. 3.78 The normal expenditure procedure i s used for a low percentage o f expenditures. The use o f the simplified expenditure procedure has virtually become the rule because, out o f a total authorized mandates o f CFAF 1326 billion, CFAF 1,178 billion followed this procedure. The rules (Article 68 o f the 1998 Decree) establish a limited list o f expenditures that can be made according to this procedure, which i s characterized by the simultaneous issue o f commitment and the order to pay. A major part o f these expenditures concerns transfers to the EPN, public enterprises and territorial communities (29% o f actual revenues o f fiscal year 2006) whose expenditures were controlled not by the financial controller but the budget controller. Consequently, the control carried out by the financial controllers is exercised especially at the stage o f the validation o f the expenditure. Hence, during fiscal 2006, the financial controllers cleared a total amount o f payment orders o f CFAF 1,344 billion (central level plus local level) while they only controlled CFAF 68 billion o f commitments. It would be necessary to review this type o f practice by limiting the simplified procedure to expenditures o f an exceptional or emergency nature, in order to give back to the financial controller, for the majority o f budget expenditures, hisreal role as the upstream controller o fpublic expenditure. 3.79 The public accountant (PGT at the central level) also exercises, before taking charge, the control o f non-salary expenditures. This control focuses on all support documents attached to the expenditure file and may result in rejections. It i s based, among others, on the evaluation at the time o f the order to pay o f availability o f adequate budget credits. Since this type o f control has already been done at the commitment stage by the financial controller, the question i s whether thisnew control is relevant. Somerules andprocedures therefore appear excessive. 3.80 The rules concerning the treatment o f expenditures are clear but incomplete. In this regard, Decree 98-716 o f December 16, 1998 and its draft application instruction do not define deadlines for the different actors o f the chain except the 8 days deadline for the financial controller at the stage o f commitment and order to pay approval. The reliance on payment o f 32 expenditures through treasury cash advances is quite frequent and represents important amounts. Account 470.1 "Expenditures paid before prior authorization" shows a balance of CFAF 309 billion on the cash balance as o f October 31, 2007. These expenditures, even if they are later regularized are not subjected to prior control. Indeed the financial controllers are not informed of their issue, which confirms the particularly non transparent nature of this type o f practices. Moreover, this procedure presents the risk o f not being able to regularize these expenditures, i.e. o fnot being able to charge them to the budget, because o f an eventual lack o fbudget credits. The results o f the budget execution may, therefore, be distorted. Indicator Score Summary Explanation PI-20. Effectivenessofinternal D+ controlsfor non-salary expenditures (i)Effectiveness o f C A considerable amount o f expenditures is made through the expenditure commitment simplified procedure (89% of payment authorizations approved by controls the financial controllers in 2006), which limits considerably the area o f intervention o f the financial controller. The control of expenditures made on the basis o f transfers from the State through the EPNand public enterprises escape the financial controller, since it i s entrusted to the budget controller. The financial control does not carry out ranked control. Hence, there i s no methodfor risk assessment. Some budget accounts register over expenditures. Hence, measures for controlling commitments o f expenditures exist but, sincethey arenotbased on risk assessment, they lack effectiveness. They do not cover all the expenditures and are not always respected. The score i s C. (ii)Comprehensiveness, The financial control has no market price listing reference. relevance and understanding o f' The public accountant (PGT) exercises, before accounting booking, other internal control rules/ the control o fnon-salary expenditures. This control is done, among procedures others, on the evaluation at the stage o f the order to pay o f the respect o fthe budget ceilings, being noted that this type o f control has already been done bythe financial controller at the stage o f commitment. Some rules and procedures, therefore, seem excessive and the score is C. (iii) Degree o f compliance The regulation does not set deadlines for the different actors for the with rules for processing and various phases o f the expenditure. recording transactions The rules guiding expenditure procedures are clear, both for the noma1 and the simplified procedure. But the use o f the simplified procedure, other than for salary expenditures and debt, i s very important and it has become the rule. The reliance o f payment o f expenditures on the basis o f treasury cash advances i s still very frequent and represents important amounts. These expenditures, therefore, escape the priori control and distort (I the results o f the budget execution. For this reason, the score i s D. Effectiveness of internal audit 3.81 The internal verification is ensured by the General Finance Inspectorate (IGF), whose vocation i s to control all the administrative entities using public funds. This entity has about twenty inspectors, who consider themselves as inadequately trained, and sometimes resorts to private firms that it supervises. Its audit method is contained in a manual o f procedures. It i s 33 based on the ranking of risks and i s in conformity with international standards. But the IGF basically conducts financial audits and only exceptionally intervenes in the organizational and structural aspects (monitoring o f systems) o f the controlled administrations. 3.82 IGF's reports are transmitted to the entity audited and to the Minister o f Economy and Finance. But they are prepared in a highly irregular manner. The IGF attributes this situation to the fact that their audits are conducted at the request of the top hierarchy, which does not allow them to respect their program o f activities. It also expressed that the texts do not compel them to systematically transmit their audit reports to the Supreme Audit Institution (Chamber o f Accounts). 3.83 The IGF prepares an annual program of activities as well as a strategic action plan. The realization i s generally below the estimations. Concerning the other control structures, the Inspectors consider that there i s no redundancy between their interventions and those o f the IGE, an organization with which they do not coordinate their activities. The follow up of conclusions and recommendations o f the internal audit is not ensured. This lack o f follow up constitutes one o f the major concerns o f IGF, which indicated that the follow-up o f its recommendations are left to the discretion o fthe top hierarchy. 3.84 The IGF became interested in the monitoring/evaluation system only a few months ago. According to its representatives, its activities are now oriented inthis sense. Consequently, it will benecessary to enhance the skills o fthis entityto enable it to accomplish its mission. Indicator Score Summary Explanation PI-21. Effectiveness of internal audit (i) Coverage and quality o fthe The internal verification is ensured by the General Finance internal audit function Inspectorate (IGF). Its methodo f audit is basedon the ranking o f risks and it i s in conformity with international standards. But the IGF basically conducts financial audits and only exceptionallyintervenes on the structural aspects (monitoring o fthe systems) o fthe controlled administrations. The reports o f the IGFare transmitted to the entity audited and to the o f reports MEF.It is difficult for themto establish aplan o ftheir audits, which are decided on case by case basis by their hierarchy. Besides, the text does not oblige them to systematically transmit their audit reports to the Supreme Audit Institution (Chamber o f Accounts). (iii) ofmanagement Extent D The follow-up o f the conclusions and recommendations of the internal audits is not ensured. This lack o f follow-up constitutes one o f the major concerns o f the IGF, which indicates that the follow-up o f its recommendations are left to the discretion o f the hierarchy. E. ACCOUNTING,RECORDINGAND REPORTING Timelinessand regularityof accounts reconciliation 3.85 The public accountants establish each day their banking situation on the basis o f checks received and checks issued. The reconciliation between their accounting entries and bank statements i s conducted at the time o fthe daily, fortnightly andmonthly closing o f accounts. 34 3.86 Some suspense and advance accounts present very important balances, whose amount increases from year to year. This i s notably the case o f account 472, which presented a balance o f CFAF 335 billion as o f October 3lS', 2007. This means that the reconciliation and adjustment o f these accounts are not done within the 2 months deadline afier the end o f the fiscal year. I Indicator IScore I Summary Explanation ~~~ ~~~ ~~~~~~ ~~ _ _ _ _ _ _ ~ ~~ ~ ~ PI-22. Timeliness and C+ regularity of accounts reconciliation (i)Regularityofbank A The public accountants establish each day their bank situation on the reconciliations basis o f checks received and checks issued.The reconciliation between their account entries and bank statements i s conducted at the time o f the daily, fortnightly and monthly settlement o f accounts. (ii)Regularity o f reconciliation and clearance o f suspense Some suspense and advance accounts (notably the sub-divisions of accounts and advances account 472) present very important balances whose amount increases from year to year. This means that the reconciliation and adjustment o f these accounts are not done within the 2 months deadline after the end o f the fiscal year. Availability of informationon resources receivedby service delivery units 3.87 The administrative entities whose manager operates as credit manager are informed, by simple consultation of the annual budget, o f the amount o f credits granted to them. This i s the case, for example, o f secondary schools or health centres. For the others, the credits are managed by the head o f the deconcentrated service to which they are attached. When the credit administrators are not connected to the SIGFIP system, the credits are granted to them in the form o f credit delegation. The Ministries o f Infrastructure, Health and Education conduct a management control, which i s materialized by field surveys. But the low level o f their resources does not allow them to conduct more than three or four missions each year. The highnumber o f administrative units (for example, about 1,400 health centres) makes it impossible to conduct a systematic countrywide control. 3.88 Although no real public expenditure tracking surveys were conducted during the past three years, the ministries that the mission met (Education, which prepares a quarterly report through the regional office, Health and Infrastructure) carry out some controls on the effectiveness o f the expenditures. These actions are sometimes completed by the interventions o f the Public Expenditure Review Unit (CRDP), which was established in 2002. This unit i s placed under the authority o f the DGBF and is in charge o f conducting every evaluation on the execution o f public expenditures. Its reports are sent to the Director-General o f Budget and Finance. It carried out in 2006 an audit o f grants and schooling fees granted to private educational institutions, notably inorder to verify the effectiveness o f the services. Indicator Score Summary Explanation PI-23. Availability of DA The administrative entities are well informed o f the amount o f credits information on resources granted to them. Butthe low level o f financial resources o f the received by service delivery ministriesand the very high number o f administrative units allow units them to carry out only a few field surveys on the effectiveness o f the exuenditure. 35 Quality and timeliness of in-year budgetreports 3.89 Reports on budget execution may be prepared upon request by generating them from the SIGFIP system which allows the preparation o f reports both aggregated and detailed. These documents present the amount o f (i)budget estimates; (ii)commitments issued; (iii) commitments approved by the financial controllers; and (iv) payment orders registered in the accounting books o f the Treasury. However, the amount o fpayments i s not indicated. 3.90 Analytical reports on budget execution are prepared duringthe year with the objective o f monitoring the policies decided in the framework o f WAEMU, in order to follow up on the convergence criteria. The DGTCP publishes a monthly balance o f accounts within the 10 days following the end o f the month, from the ASTER system. Concerning the administrative accounts, although the SIGFIP system allows it, the publication i s not systematic, but upon request. A monthly TOFE is'preparedas part o fthe monitoring o f the crisis recovery program. 3.91 The information from the DGBF (SIGFIP system), notably payment orders, i s transferred to the Treasury (ASTER system) in digital form. But the procedure is not completely electronic. The reconciliation o f registrations made inthe two systems is only done at the end o f the fiscal year. This work generally takes only one or two days. A committee was put inplace recently to ensure this reconciliation on quarterly basis. The reliability o f data can, therefore, not be totally ensured during the fiscal year. Hence, the reconciliation between amounts o f expenditures reported in the 2006 CGAF and amounts reported in the execution reports drawn from the SIGFIP show relatively significant differences (about 10%). 3.92 According to the representatives o f the DGBF, efforts have been made since September 2007 to ensure that the in-year reports on the budget execution are published and made available on a monthly basis. A bilateral committee comprising representatives from the DGBF and the DGTCP has been established, with the objective o f monitoring progress inthe budget execution. To enable it to accomplish its task, a monthly execution report must be prepared showing the amount o f expenditures according to the different types o f classifications. This report will be Indicator , Score Summary Explanation PI-24. Quality and timeliness of D+ Iin-year budget reports (i)Scopeofreportsintermsof I D The SIGFIP systemallows the publicationof both aggregated and coverage and compatibility with detailedbudget executionreports andreports may also be published budget estimates on request.However,these reports do not containthe information on paymentsof expenditures. Analytical reportson budgetexecution are preparedduringthe fiscal year with the objectiveofmonitoringthe policies decidedinthe frameworkof WAEMU, in order to follow upthe convergence I criteria. (ii) Timelinessofthe issueof ID A reports The monthly balancesheets are producedregularlywithin the 10 days following the end ofthe month.However, althoughthe SIGFIP systemfacilitates it, the publicationofbudget executionreports i s not systematic, but uponrequest.A monthly TOFE i s prepared. Since the quarterlyreports are not prepared,the score i s D. However, 36 Indicator Score Summary Explanation an arrow is attached to the score in order to formalize the intention o f the DGBFto proceed, in the near future, to the monthly publication o f the budget execution statement. (iii)Qualityofinformation The information from the DGBF (SIGFIP system) i s transferred to the Treasury (ASTER system)indigital form. But, the procedureis not fully electronic. The reconciliationo f the registrations made in these two systems is done at the end o fthe fiscal year. The amount o f expenditures appearinginthe 2006 CGAF i s different from that of the budget execution reports produced by SIGFIP. Sincethere are concerns about the accuracy o f the data, the score i s C. Qualityandtimelinessof annualfinancialstatements 3.93 The budget execution review law, which i s produced with much delay, i s a very brief document which contains no analysis on the budget execution data. However, the General Accounts o f the Financial Administration (CGAF) i s a highly complete document. It contains: (i) the detailed balance o f accounts o f the State; (ii) breakdown of budget expenditures by title, the ministry and economic nature; (iii) breakdown o f budget revenues; (iv) the development o f the result accounts; as well as (v) the financial documents. 3.94 The CGAF is prepared each year on aregular basis. That o f2006 exists ina draft version. However, the budget execution review law i s voted with much delay. The most recent one i s that o f 2001. The 2002 draft budget execution review law has been examined by the Chamber o f Accounts and presented to Parliament. The draft budget execution review law o f 2003 i s being examined by the Chamber of Accounts. The delay o f submission for external scrutiny is, therefore, above 15 months following the endo f the fiscal year. 3.95 The accounting system is based on the accounting standards contained in the WAEMU guideline regarding the government accounting plan, which is based on the SYSCOA system. The statements are presented in a format that is based on these norms since the establishment o f this new system in 2002. However, the analysis o f the balances at the end o f the 2004, 2005 and 2006 fiscal years has allowed observing that some suspense accounts present unusual balances and that others are not systematically paid off. The existence o f unusual balances i s also pointed out in a report o f the mission on control of the 2007 balances carried out by the DGTCP services from 17 to 30 September 2007. This shows that ifthe accounting standards really exist, they are not hlly respected. 37 - Indicator Score Summary Explanation fiscal 2003 is beingexamined by the Chamber o f Accounts. The delay insubmission for external scrutiny, therefore, exceeds 15 months following the end of the fiscal year. (iii) Accounting standards used C The accounting system i s based on the accounting standards contained inthe WAEMU directive on the government accounting plan, which i s based on the SYSCOA system. However, the analysis o fthe balances of the 2004,2005 and 2006 fiscal years made it possible to observe that some suspense accounts present unusual balances while others are not systematically paid off. This shows I I that ifthe accounting standardsreally exist, they are not totally respected. F. EXTERNAL SCRUTINY AND AUDIT Scope, nature and follow-up of externalaudit 3.96 The Chamber o f Accounts, a Supreme Audit Institution was created in 1961. The 2000 Constitution upgraded it to an Auditor General's Office but because o f the crisis, the operation could not be concretized and the organization remained a Chamber o f Accounts subordinated to the Supreme Court. Ithas a triple mission: jurisdictional, by judging the accounts o f public accountants, according to a written and contradictory procedure. However, the management accounts o f the State have not been judged since 1978. Those o f National Public Agencies (EPNs) have never beenjudged and those o f territorial communities were only partially judged (about one hundred for each o f the 2002 and 2003 fiscal years). According to the declarations o f an official o f this organization, the management accounts o f the State have not been produced since 1978. However, the DGTCP affirms that this production has been formalized, but that, since the Chamber o f Accounts has not enough place to stock the huge volumes of support documents, the latter have been kept inthe offices of the MEF. management control, by conducting audits: the Chamber conducted three EPN audits during the year 2006, including a control o f the operations of the Caisse Nationale de Prkvoyance Sociale (CNPS). Hence, the audits carried out by the Chamber of Accounts infiscal 2006 largely concern less than50% ofthetotal expenditures. analysis o f the draft budget execution review law. This analysis i s conducted with much delay since the project presently being examined i s that o f 2003, having been specified that the document was sent by the DGBF only in July 2006. A report on the execution o f the budget law was presented at the same time as the examination o f the draft budget execution review law. The most recent exercise was that o f 2002. After reconciling the administrative accounts o f the credit manager and the balance o f the Treasury, the Chamber issues a certificate o f conformity o f the entries o f the DGBF and those o f the Treasury. 3.97 The Chamber o f Accounts prepares an annual activity report, which i s published in the Gazette. It also prepares a bi-annual report on the entities audited, which contains notably the status of follow-up o f the recommendations made, a follow-up which i s generally difficult to 38 ensure. This document i s intended for the President o f the Republic as well as for the National Assembly. However, the Chairman o f the Economic and Financial Affairs Commission o f the National Assembly declared that he never received it. The last report on the budget execution dates back to fiscal year 2002. It was developed andproduced inApril 2004. Hence, with a delay of well over 12months after the end o fthe periodunder review. Indicator Score Summary Explanation PI-26 Scope, nature and D follow-up of externalaudit ~~~~~ ~ (i)Scopehatureofaudit D The Chamber of Accounts has notjudged the managementaccounts performed o f the State since 1978.Those of NationalPublic Agencies (EPNs) haveneverbeenjudged andthose ofthe territorial communities were only partiallyjudged. It carries out, on average, 3 auditsper year. Hence, the audits carriedout by the Chamber ofAccounts during fiscal 2006 largelyconcern less than 50% oftotal expenditures. The examination ofthe draft budget executionreview law is conducted with much delay. The projectcurrentlybeingexaminedi s that of 2003. (ii)Timelinessofsubmission The Chamber ofAccounts prepares abi-annualreportonthe entities of auditreports to legislature audited. This document i s intendedfor the Presidentof the Republic as well as the NationalAssembly. However, the Chairman of the Economicand FinancialAffairs Commission ofthe National Assembly declaredthat he neverreceived it. The lastreport on the budget execution datesbackto fiscal 2002. It was developed andproducedinApril 2004, thus with a delay well over 12months after the end ofthe periodunder review. (iii)Evidenceoffollow-upon Accordingto the informationcollected, the recommendations audit recommendations formulatedbythe auditors are not followed-up, neither bythe Chamber of Accounts itselfnor bythe NationalAssembly. Legislative scrutiny of the annual budget law 3.98 The parliamentary control could not be exercised because o f the crisis. During the preparation o f the 2005 Budget Law, the Economic and Financial Affairs Commission o f the National Assembly carried out the examination of: (i)the budget policies; (ii)the major aggregates; as well as (iii) details o f expenditures and revenues. However, since the draft budget i s prepared on the basis o f an annual framework, the Commission could examine neither the medium-term financial framework nor the medium-term priorities, which were not yet defined. 3.99 The procedure for examining the draft budget law by Parliament features in the National Assembly's Standing Orders. The Commission organizes sessions for questions posed to the MEF and its collaborators. Non-member MPs o f the Commission may participate in these sessions, but they have no voting rights. The Commission carries out controls on the allocation of resources (bearing in mind the concerns o f the populations), the sources o f funding o f expenditures, and the fiscal provisions (new taxes, exonerations, etc.). It also examines the budgetpolicy elements presented by the MEFinsupport o fthe fiscal annexes. Discussions often take place on the level of the external and domestic debt. Amendments may be proposed in writing, but they cannot result in an increase in expenditures, unless they contain proposals on corresponding new revenues. The presentation made by the Chairman o f the Commission and his 39 main collaborators helped the review to consider that the procedures were well respected during the examination o fthe 2005 draft BudgetLaw. 3.100 Since the beginning o f the crisis, except for fiscal years 2006 and fiscal 2007 during which the Government intervened through ordinances, the Draft Budget Law was presented to the National Assembly with a delay o f three or four months, which gave the MPs only one month to examine it. The budget has never been voted before the month o f May o f the fiscal year concerned. 3.101 The rules governing the amendments made to the budget during the fiscal year, without prior approval by Parliament, are clearly set by the organic law on the 1959 Budget Act. However, these amendments do not appear in the budget execution review laws o f 2000 and 2001,or inthe 2006 General Accounts o f the Financial Administration. Besides, the existence o f over-expenditures in the 2006 CGAF shows that even if they are not formalized, many budget and credit transfers are made. Indicator Score Summary Explanation PI-27 Legislativescrutiny of D+ the annual budget law (i) ofthelegislature's Scope D Parliamentary control was not possible because o f the crisis. scrutiny The referenceperiod for this component concerns the last budget executed. Since the budget for fiscal 2006 was approved by Ordinance and the National Assemblydidnot examine the Draft BudgetLaw, the score is D. (ii)Extenttowhichthe D The reference period for this component concerns the last budget year legislature's procedures are executed. Since the budget for fiscal 2006 was adoptedby Ordinance well-established andrespected and, therefore, the National Assembly did not examine the Draft Budget Law, the score is D. (iii)Adequacy o ftime for the D Since the beginning o fthe crisis, except for fiscal 2006 and fiscal legislature to provide a 2007, duringwhich the Government intervened with ordinances, the response to budget proposals draft Budget Law was submittedto the National Assembly with a both the detailed estimates delay o f three or four months, which gave the MPs only one month to and, where applicable, for examine it. proposals on macro-fiscal aggregates earlier in the budget Since the budget for fiscal 2006 was adoptedby Ordinance and, preparation cycle (time therefore, the National Assembly did not examine the Draft Budget allowed in practice for all Law, the score i s D. stages combined) (iv) Rules for in-year C These rules are clearly set by the organic law on the 1959 Finance amendments to the budget Act. However, these amendments do not appear neither in the budget without ex-ante approval by review acts o f 2000 and 2001 nor inthe General Accounts o f the the legislature Finance Administration o f 2006. Besides, the existence o f over- expenditures inthe 2006 CGAF shows that even if they are not formalized, many budget or credit transfers are made. Since the rules on amendment o f credits are not always respected, score is C. Legislative scrutiny of external audit reports 3.102 Duringthe past three years, the National Assembly received no external audit report from other external control organizations or institutions except the bi-annual report o f the Chamber o f 40 Accounts, which i s sent to the President but which i s not communicated to members o f the Economic and Financial Affairs Commission. The examination o f the draft budget execution review laws i s conducted with much delay. The most recent budget execution review law voted i s that o f fiscal 2001. The Chamber o f Accounts transmitted in October 2006 to the National Assembly, the 2002 draft budget executionreview law. 3.103 During the past three years, no hearing was organized by the Economic and Financial Affairs Commission o f the National Assembly. 3.104 During the past three years, the National Assembly made no recommendation on measures associated with the findings identified in the reports from the external control institutions. Indicator IScore I Summary Explanation PI-28 Legislativescrutiny of external audit reports D (i)Timeliness o f examination o f D The National Assemblyreceived, during the past three years, no audit reports by the legislature (for external audit report from other external control organizations or reports received within the last three institutions. The examination o fthe draft budget execution years) review law was conducted with much delay. The most recent draft budget execution review law voted i s that of fiscal 2001, The Chamber o f Accounts transmitted in October 2006, to the (ii)Extentofhearingsonkey D IThe Economic and Financial Affairs Commission has the right findings undertaken by the to establish commissions o f enquiry. But it never used it. During 1egislature the past three years, no hearing was organizedby Parliament on the main conclusions o f the external audit reports. (iii)Issuance o frecommended D Duringthe past three years, the National Assembly made no actions bythe legislature and recommendation on measures in connection with the findings implementation bythe executive identified inthe reports from the external control institutions. G. DONOR PRACTICES Predictabilityof DirectBudget Support 3.105 Since the Republic o f C8te d'Ivoire was not eligible for direct budget support during the past three fiscal years, this type o f intervention was neither envisaged nor realized. It is, therefore, suggested not to assign any score to this indicator. Indicator Score Summary Explanation D-1Predictability of Direct Budget NS Since the Republic o f CGte d'Ivoire was not eligible for direct support budget support duringthe past three years, this type of intervention was neither envisagednor realized. Hence, this indicator cannot be scored. (i)Annualdeviationofactualbudget NS support from the forecast provided by the donor agencies at least six weeks prior to the government submittingits budget proposals to the legislature (ii)In-yeartimelinessofdonor NS disbursements 41 Financialinformationprovidedby donors for budgetingandreporting 3.106 The documents provided contain the amount o f program aid and project aid mobilized in 2006 (67.6%), but it i s not specified in which period o f the budget calendar they are provided. Because o f this lack o f information, the lowest score i s retained. 3.107 The total information on aid disbursementswas provided to the country within a period o f one month from the end o fthe quarter o fthe last year. These data are obtained from the Public DebtDirectorateand from COMFESIP. Indicator Score Summary Explanation D-2 Financial information D+ providedby donors for budgetingand reporting (i)Completeness and timeliness o f D The documents provided contain the amount o f program aid and budget estimates by donors for project aid mobilized in 2006 (67.6%), but it i s not specified in project support which period o f the budget calendar they were provided. Because o f lack o f information, score i s D. (ii)Frequencyandcoverageof A The total information on disbursements o f aid was provided to the reporting by donors on actual countrywithin one month from the end of the quarter o f the last donor flows for project support year. These data are obtained from the Public DebtDirectorate and from COMFESIP. Proportionof aidthat is managedby use of nationalprocedures 3.108 The period o f crisis that the RCI faced recently made it impossible to develop the use o f national procedures in the implementation o f external aid. In2006, 32% o f the amount o f loans and project grants were managed according to the national public procurement procedures. The payments made according to the national payment and accounting procedures represented 1.62% o f total aid. Indicator Score Summary Explanation D-3 Proportionof aidthat is D In2006,32% ofthe amount of loans andproject grants were managedby use of national managed according to the national public procurement procedures. procedures The payments made according to the national payment and accounting procedures represented 1.62% o f total aid. Score is D. 4. GOVERNMENTREFORMPROCESS A. DESCRIPTIONRECENT AND ON-GOING REFORMS OF 4.1 The management o f public finance has undergone major reforms initiated towards the end o f the 1990s. First o f all, they concern the implementation o f a new budget nomenclature, which i s based on reformed procedures for execution o f expenditures and the SIGFIP application, introduced in 1999 for monitoring budget execution. This reform accompanied the deconcentration o f the Service Autonome Central d 'Ordonnancement (SACO) and appointment o f DAAFs in the ministries. It was followed by the adoption o f a new public accounting plan, 42 close to SYSCOA, and through the computerization o f operations o f the Treasury and the general public accounting through the establishment of the ASTER software package developed inpartnership with France and the General Directorate of Public Accounting. The new public accounting system has been operational since 2003. 4.2 As part o f the program to support the implementation o f the corrective measures in CBte d'Ivoire, these reforms were completed from 2002, with the assistance o f the European Union, through the establishment in October 2002 o f the Public Expenditure Review Unit and through the strengthening o f the control structures. The entities benefiting from this support were the Financial Control Directorate, the Public Procurement Directorate and the General Inspectorate o f Finance. The reform o f the public procurement system initiated since 1999 resulted in the adoption o f the new Public Procurement Code, by Decree No. 2005-110 o f February 24, 2005 and applicable since April 2006. These reforms were completed by a capacity buildingprogram supported by UNDP. 4.3 All these reforms helped to improve the comprehensiveness and transparency of the data on the execution o f the financial operations o f the Government. They were expected to facilitate the monitoring o f the execution o f the budget. Indeed, it i s now possible to obtain in real time, information on budget execution. The modernization o f the operations o f the Treasury helped to establish, since 2003, the General Accounts o f the Finance Administration, which presents, for a given fiscal year, all the budget expenditures and revenues o f the State and which contains elements concerning the balance sheet and income statement. 4.4 Beyond these important reforms, at the end o f fiscal 2006, the major improvements concerned: Implementation o fpilotingtools such as TOFE and development o ftreasury plan; 0 Formalization o f a budget execution timetable; 0 Deconcentrationo f the SIGFIP; 0 Drafting o fmanuals o fprocedures for most o f the services; Adoption o f the financial system o f the territorial communities. B. INSTITUTIONALFACTORS SUPPORTINGREFORM PLANNINGAND IMPLEMENTATION 4.5 Given the crisis situation facing the RCI, the Government could not benefit like some countries inthe sub-region from reform programs supported by the financial partners. Moreover, the internalization o fthe WAEMU directives has not been formalized. 4.6 The MEF prepares every year, a plan o f action for strengthening the management of public finance. This document focuses on finalizing the reforms initiated towards the end o f the 1990s, which instituted a real reform o f budget management, and would require the development o f a strategic vision based on clearly-defined objectives and results. The 2007 action plan comprises ten objectives aimed notably at: (i) conducting a performance-based budgetpolicy; (ii) optimizing the management o f the public portfolio and treasury; and (iii)safeguarding the economic and financial information system. Besides, the DGCPT develops an annual action plan, which serves as basis for the consolidation o f the major reforms that it conductedinrecent years with a view to improving the hnctioning and productivity of its services. 43 Politicalwill of GovernmentandSupportfor the Reforms 4.7 The R C I i s committed to develop a PRSP by September 2008. As part o f the revitalization o f this process, it i s envisaged to implement a MTEF. This programming framework, which aims at achieving greater effectiveness o f public actions, should help to clarify the inter and intra-sectoral strategic choices through a multiyear budgetary framework. The finalization o f the PRSP and the implementation o f the MTEF could be the startingpoint o f the redefinition o f a public finance reform strategy. CoordinationandImplementationofReforms 4.8 On the basis o f the PEFA assessment, a reform strategy could be developed to accompany the PRSP process. Taking inspiration from the strong points and weaknesses identified for each o f the six basic dimensions o f the assessment, it would involve reflecting on the reform objectives and anchor them on a medium and long-term strategic vision o f development. The action plans o f the ministries and other institutions could be developed in a concerted manner in order to ensure complementarity o f the actions between, on the one hand, the central level and the deconcentrated level, and on the other, between the State, the EPNs and the territorial communities. Involvementof Social Partners 4.9 The Public Finance Strengthening Strategy (SRFP) envisages in its institutional mechanism, the representation o f members o f the civil society on the Steering Committee. It i s important that this representation o f the civil society becomes effective to enable it to hlly play its role and meet good international practices. Participationof the TechnicalandFinancialPartners(TFPs) 4.10 Beyond the representation o f the TFPs on the Steering Committee o f the SRFP, it i s basically through the general framework o f budget support for implementation o f the poverty reduction strategic framework (CGAB-PRSF) that the partnership to support the reform should be formalized in order to contribute to the identification o f the priorities, the coordination o f the reforms o fthe TFPs practices and o f their support for public finance reforms. 44 Annex 1: Summary Table of PEFA Scores Indicatorson the Performanceof Public FinancialManagement Har$lg fja)=bYcomponent ovorail scarp A. PFM OUT-TURNS: Credibility of the Budget PI-12 I Multi-year perspectivein fiscal planning, expenditure policy andbudgeting I M2 ID I D I D 1 CI D I PI-14 Effectiveness of measuresfor taxpayerregistrationandtax assessment M 2 C B C C+ PI-15 Effectiveness incollectionof tax payments M I D A A D+ PI-16 Predictabilityin the availability of funds for commitmentof expenditures M 1 A C D D+ PI-17 Recordingandmanagement of cash balances, debt andguarantees M 2 B A C B PI-18 Effectivenessof~avrollcontrols M 1 C D B C D+ PI-19 Competition, value for moneyand controlsinprocurement I M 2 l C I C I C PI-20 Effectiveness of internalcontrolsfor non-salaryexpenditure I M 1 I C I C I D PI-21 I1IEffectiveness of internalaudit IM1 I D I C I D III III cD+ III D+ PI-23 1 Availability of informationon resourcesreceivedby servicedeliveryunits I M 1 I I I D A I PI-24 Quality andtimeliness of in-yearbudget reports IM1 I D I D A l C II D+ PI-25 1I Quality andtimeliness of annual financial statements /I M I /1 A II D II C III I D+ I1 (`(it) ExternalScrutiny and Audit I I III I PI-26 I Scope, natureand follow-up of external audit IM1 I D I D I D D II PI-28 II Legislativescrutiny PI-27 Legislativescrutiny of the annualbudget law lM1 I D I D I D I C 1 D+ of external audit reports / M I I D I D I D I 1 D D-1 PredictabilityofDirect BudgetSupport M1 NS N S NS D-2 Financialinformation providedby donors for budgeting and reporting on project andprogramaid M1 D A D+ 1 D-3 1 Proportionofaidthat is managedby use of nationalprocedures I M l I I I / I D 1 45 Annex 2: SummaryJustificationof Scores assignedto Indicators Indicator Score SummaryExplanation A. CREDIBILITY OF THE BUDGET PI-1. Aggregate expenditure NS Differences between the budget initially approved and actual out-turncomparedto expenditures were: original approved budget 2004: 0.4% 2005: 1.9% 2006: 6.2% Considered as such, these figures help to conclude that budget i s credible andpropose the A score. However, the evaluation o f this indicator should be qualified, since a considerable amount o f expenditures to be regularized, i.e. paid and not charged to a specific budget account, feature inthe balance o f each o f the fiscal years on accounts 470.1 and some sub-divisions o f account 472. Since the details o f operations charged to these suspense accounts i s not known, this indicator i s not scored. PI-2. Compositionof NS The variations of the actual composition o fthe budget (according expenditureout-turn to the administrative classification) compared to what was comparedto original initially approved are as follows: approved budget 2004: 7.6% 2005: 8% 2006: 0.4% Considered as such, these figures would allow a C score to this indicator. However, as inthe case o f indicator PI-1, given the considerable amounts o f expenditures charged to accounts 470.1 and some sub-divisions of account 472, these values are likely to change. Therefore, this indicator cannot be scored. PI-3. Aggregaterevenueout- B Total actualrevenuescomparedto revenuesofthe budget initially turn comparedto original approvedwere: approved budget 2004: 91.9% 2005: 95% 2006: 104.4% Since the revenues o fthe past 3 years were only inone year below 94%, the score is B. PI-4. Stockand monitoring of expenditurepayment D+ arrears (i) ofexpenditure Stock D The regulation applied for the definition o farrears i s that o fthe payment arrears and any recent WAEMU,that is to say any expenditure notpaidwithmaperiodof change inthe stock 90 days fromtheir issue bythe credit manager, i.e. from the dateo f transmission ofthe payment order to thepublic accountant, whether it is payment for goods andservicesor salaries. The stock o farrears as at 31December 2006 amounts to CFAF 1,162 billionandrepresents 100.6% o fthe totalprimaryexpenditures for the fiscal year. It increasedin2006 inrelative value, since the stock as at December 312005 represented93.65% oftotalprimary expendituresoffiscal year 2005. Sincethe stock o farrears exceeds 10%o fthe total primary expenditures,the scoreis D. (ii)Availability o f data for B The arrears are monitoredby the DGTCP (Directorate ofpublic Debt monitoringthe stock o f and Statistics Coordination Departmeni. The data cokerning the 9NS: No Score. 46 Score Summary Explanation stock o farrears are transmitted monthly to the financial partners.The Directorate o fPublic Debtprepares a quarterly report. These documents comprise the total o f external and domestic arrears, havingbeen specified that the IGF is currently canying out an audit o fthe salary arrears. The score is B since the data on the stock o farrears are regularly made available butmay be incomplete for a small number o f categories o f expenditures identified, notably salaries. B. COMPREHENSIVENESS AND TRANSPARENCY B The nomenclature classifies the expenditures by nature and Budget according to their administrative destination. The classification by destination comprises a classification by sectors o factivity similar to the hnctionalclassification at the level o f the chapter, which is identical to that o f WAEMU Guideline No. 4/98 on I budget nomenclature. The budget execution review law adopted in2001presents the executionbynature. The functional classification used i s a specific classification, but it may be made similar to the COFOG by usinga bridge table. Score is B, becausethe establishment and execution o f the budget are based on an administrative, economic and infra-functional classification inspiredby at least the ten main functions of COFOG. PI-6. Comprehensivenessof C The assessment is basedon a specific list o f 9 benchmarks, which informationincludedin should be communicated inthe budget document for the fiscal year budget documentation 2007 addressedto the Parliament or the National Assembly. The benchmarks that are met are as follows: i)Macro-economicassumptions; iv) Debt stock; vii) Presentationinthe same format as the initial estimates of the previous budget; viii) Summary tables on revenues and expenditures. The unmetbenchmarks are as follows: ii)Presentationofbudgetbalances; iii)Financingofthedeficit; v) Detailedinformation on financial assets; vi) Detailed statement o f execution for the previous year presentedin the same format as the draft budget; ix) Analysis o f the impact of the fiscal measures. Overall, 4 out o f the 9 information benchmarks are met and the score i s C. 1PI-7. Extentof unreported government operations NS (i) ofextra-budgetary Level A number of operations, whose amount has not yet been assessedby expenditures NS the administration, are not covered in the budget. They are revenues collected directly by some ministries, in general for services rendered and which are either not paidback to the Treasury or are partially paid. Moreover, concerning the comprehensiveness o f the budget, it is necessaryto budget the quasi-fiscal levies of certain key 47 Indicator Score Summary Explanation sectors, such as the petroleumand coffee/cocoa sectors. Similarly, some of the earmarked funds, the list o f which is known, but not the corresponding amounts, are not managed according to the regulation, which stipulate however that they should obey the rules on earmarked accounts. Since the information on amounts collected directly by some ministries as well as those concerning funds that should be managed according to the regulation established for earmarked accounts are not known. this comuonent is not scored. (ii)Income/expenditure NS Fromthe point of view of forecasting, the majority o f externally- information on donor-funded financed expenditures are included inthe budget. These projects expenditures are monitoredby COMFESIP which, for the fiscal year 2006, only provided information on the level o f these expenditures untilOctober 31. A score cannot be assigned to this component without the production o f the final report of COMFESIP for fiscal year 2006. PI-8. Transparencyof inter- D+ governmentalfiscalrelations (i)Transparency and objectivity There are four types o f transfers from the State to the temtorial inthe horizontalallocation communities: decentralization allocation, general operations among the decentralized allocation, equipment grant and share o f local taxes to which they are administrations entitled. The rules on distribution o f these transfers are either not updated or unclear. Score i s D. (ii)Timeliness o f reliable For the preparation o f the 2006 Budget, the circular dated October 17, information to the decentralized 2005 and the deadline given to the Presidentso f General Councils administrations on their and Mayors to submit their draft budget was October 29. The allocations information, therefore, arrives too late to allow for major amendment o f the budgets. (iii)Extentofconsolidationof Although their budget and accounting nomenclature allows it, the fiscal data for the general budget information o fthe territorial communities, which is government according to centralized and aggregated monthly at the Directorate o f Parastatal sectoral categories Accounting of the DGTCP, is not presented according to the functional or sectoral categories. Score is D. PI-9. Oversightof aggregate fiscal risk from other public C sector entities (i)Extentofcentralgovernment c Most o f the main autonomous public agencies (EPN) and public monitoring o f autonomous enterprises submit at least every year, budget reports to the central public agencies and public administrations. However, since some o f them do not comply with enterprises this directive, it isnotpossible to present a consolidated situation. The score i s C. (ii) ofcentralgovernment Extent c The net budget situation o f the territorial communities is controlled at monitoring o f the decentralized least every year, but does not make it possible to present a administrations fiscal position consolidated situation. The score is C. PI-10. Public accessto key CA This indicator i s basedon a list o f six elements o f information about fiscal information budget operations, to which the public shouldhave access. The criteria that are met are as follows: v) The award o f contracts estimated at over $100,000; vi) The information on resources made available to the administrative units. The criteria that are not met are as follows: i)Thebudgetdocumentatthetimeoftheirpresentationin 48 Summary Explanation Parliament; ii)Thein-yearreportsontheexecutionofthebudget; iii)Theyear-endfinancialstatements; iv) The external audit reports. The score i s C, since the administration makes available to the public two o f the elements mentioned inthe PEFA performance framework. An arrow has beenadded to the score to indicate that the process is improving, notably with the establishment o f Internet sites for the main financial administrations. PI-11. Orderliness and participation in the annual D A budget process (i)Existenceof,andadherence DA The reference period for this component concerns the last budget to, a fixed budget calendar adopted (2007). Since the information on the timetable for the preparation o f the 2007 Budget is inadequateto determine the number o f weeks between reception o f the budget circular and budget submissions bythe ministries, the score i s D. The time-table for the preparation o f the 2008 Budget has been defined. It establishes the main stages and their deadlines up to the promulgation o f the draft budget law. This progressjustifies an arrow. Concerning fiscal 2007, it could not be demonstratedthat a circular o fbudget submissions had formally been issued for the preparation o f the budget. The MEF's circular o f July 16,2007 sets the timetable for the preparation o f the 2008 Budget. The score is, therefore, D. The reference period for this component concerns the last three the legislature budget years. During the past 2 years (2006 and 2007), the budget was adopted by Ordinance with more than 5 months delay. The score is, therefore, D. PI-12. Multi-year perspective in fiscal planning,expenditure CBte d'Ivoire does not prepare a global MTEFor sector MTEFs. and functional allocations However, in the framework o f the post-crisis re-engagement strategy, the process has been re-launched. Moreover, a national development strategy focused on the MDGs i s being finalized. Since no medium-termbudget framework has been established, the score i s D. The Debt Department i s trying to carry out studies on debt sustainability analysis sustainability, but they have not been validated. The score is, therefore, D. There i s a national medium-term strategy, which integrates certain strategies sectoral strategies. But these strategies have not been detailed into an action plannor assessed. Since no sectoral strategy has been sufficiently quantified for the cost associated with investments and operational expenditures, the score is D. (iv) Linkagesbetweeninvestment C Ithasnotbeen demonstratedthat the recurrent costs inducedby budgets and forward expenditure. investments are taken into account since the ministrieshave no estimates sectoral strategies. The score is, therefore, C. 49 Indicator Score Summary Explanation PI-13. Transparencyof ct taxpayer obligationsand liabilities (i)Clarityand c The texts and procedures on all major categories o f taxes are comprehensiveness o f tax exhaustive and clear, which limit intheory, the discretionary powers liabilities o f the entities o f the administration that exercise a function inthat area. But,contrary to what the regulation stipulates, some enterprises are subjected to in-depth fiscal controls every 2 months. The score is, therefore, C. (ii)Taxpayeraccessto A Inrecent years, the DGIandthe DGDhave developed anumber of information on tax liabilities and tools to facilitate access o f taxpayers to information. administrative procedures Since taxpayers now have easy access to exhaustive, friendly and up- to- date information on tax obligations and administrative procedures, the score i s A. D A taxpayer's appeal mechanismprovides for transparent o f a tax appeals mechanism administrative procedures, but the information on statistics concerning the appeals to the financial administrations were only providedby the DGI, since no information on the follow-up o f the appeals was obtained from the DGD. The score o f this component is, therefore, D. PI-14. Effectivenessof c+ measuresfor taxpayer registration and tax assessment (i)Controlsintaxpayer c A system o fregistration o ftaxpayers was put inplace in 2005. The registration system identification number i s usedby the financial administrations as well as inthe SIGFIP information system. The score is C, becausethe database is not exhaustive and contains taxpayers with several numbers. (ii)Effectivenessofpenalties B Concerning the DGI, the lack o f tax declaration results inthe for non-compliance with payment o f a fine equal to the amount o f the tax itself. Discussions registration and tax declaration may be initiated. A repayment schedule is proposed. Concerning the DGI, the goods imported serve as guarantee for the payment o f duties and can therefore, as a last resort, be auctioned. If it is not declared or not appropriately declared, the duties due shall be paid together with the fines according to the Customs Code. Concerning the penalties, discussions may be initiated. The duties are guaranteed bya bank guarantee mandatory for the exercise o f the function o f customs' agent. Hence, the fines for all cases o f contravention are sufficiently high to have a dissuasive effect, but it was not possible to verify whether they are administered in a coherent manner. The score i s B. (iii)Planning and monitoring o f c The DGI and DGDhave a continuous program o f tax audits and tax audit programs surveys on fraud, but the audit programs are not basedon clear criteria for risk assessment. The score is C. PI-15. Effectivenessin D+ collection of tax payments (i)Collectionratioforgrosstax D The elements providedby the DGD and the DGI are sufficient to arrears calculated in percentage assess this component. Score is, therefore, D. o f tax arrears during the fiscal year concerned 50 Indicator Score Summary Explanation (ii)Effectivenessoftransferof A tax collections to the Treasury The transfer from the DGIand the DGDto the Treasury Department bythe revenue administration i s done every evening. All the accounts are then set at zero. The score i s A. (iii)Frequencyofcomplete A The compliance of the payments from the financial administrations accounts reconciliationbetween on the account o f the Treasury Department is verified each week. tax assessments, collections, Concerning the remaining amounts to be recovered, the Treasury arrears records and receipts by carries out regular reconciliations between its general accounting held the Treasury on the ASTER software and the REC application (subsidiary accounting of collections). The score i s A. PI-16. Predictabilityin the availability of funds for commitmentof expenditures (i)Extenttowhichcashflows Estimations o f cash flows are preparedby the Statistics Coordination are forecast and monitored Department o f the DGTCP for the subsequent budget year and updated every month. Since the cash flow estimates are prepared for the budget year and are updated every month on the basis o f the actual inflows and outflows - o f funds, the score i s A. (ii)Reliability and horizon of C Concerning operational expenditures, the credits are made available periodic in-year information to spendingagencies on ceilings for to the ministries every month. When an expenditure, by its nature expenditure should be made over aperiod of time exceeding one month, the DAAFsofthe ministries may solicit for an exception from the DGBF.The credits for investment expenditures are made available in a Diecemeal fashion. (iii)Frequencyand D A list ofbudget acts modifyingthe initial estimates was produced. transparency of adjustmentsto But the information provided inthis document for assessing this budget allocations which are component is inadequate: unbalanced operations, lack of a total decided above the level o f amount, lack o f purpose. For this reason, score i s D. management o f spending agencies PI-17. Recordingand B managementof cashbalances, debt and guarantees (i) ofdebtdata Quality B The debt stock features in an exhaustive manner in the SYGADE (Directorate o f Public Debt) and SIGFIP databases and in the public accounting system (ASTER). The reconciliations only show differences due to exchange rate variations. The Directorate of Public Debtestablishes a quarterly report on the debt situation. Since the debt accounts officer has no information on the debt stock, the score i s B. A central account opened at the BCEAO i s managed by the central the government's cash balances accounting officer o f the Treasury. Flows from all other accounts are aggregated on the central account through regular action taken by the BCEAO. Generally, no account i s opened in the name o f the Government in commercial banks. After the study by the Directorate o f Public Debt, the Minister o f loans and issuance o f guarantees Economy and Finance signs all loan agreements. The granting o f loan I guarantees and approvals is also decided by the Minister o f Finance. 51 Indicator Score Summary Explanation However, since there is no clear ceiling for indebtedness, the score is n PI-18. Effectivenessof payroll D+ controls (i) ofintegrationand Degree c The updates of the payroll databaseare done on the basis o f computer reconciliation betweenpersonnel systems under the control o f all the administrations concerned. records and payroll data However, the reconciliation o fpayroll andpersonnel records is carried with a periodicity o f more than six months. Unexpected controls are carried out inthe ministries to ensure the physical presence o f the agents. However, it i s not certain that the coherence is regularly ensured between the file o f the Payroll Directorate and that of the Civil Service Department. That's why the score i s C. (ii)Timelinessofchangesto D Newly-recruited staff members are not registered inthe system before personnelrecords and the payroll an averageperiod o f more than 3 months from the date o f their assumption o f duty. Changes in the situation o f civil servants are taken into account with a minimumdelay of 3 months. (iii)Internalcontrolsofchanges B The visa modalities o frecruitments and changes in situation are to personnelrecords and the clearly established. These changes are made under the prior control of payroll the Financial Controller and the PGT. A list is preparedto recap movements made in the month, registration o f agents, changes in appointments or services. (iv) Existence of payroll audits to c Since the 2002 census, there has not been any exhaustive control of identify control weaknessesand/or the payroll statements or staffing position. However, since May 2007, ghost workers monthly operations to control staff are launched inthe ministries by the Pay Control Division o f the Payroll Directorate. Moreover, selected controls are carried out on certain remuneration elements, for example transport allowances. PI-19. Competition, value for C money and controlsin procurement i)Useofopencompetitionfor c The percentage o f contracts awarded on the basis of open competition award of contractsthat exceed the procedures i s 47.5%. This i s mainlythe consequence o f several nationally established monetary combined factors (i) procurement thresholds for competitive bidding threshold for small purchases that are high andnotjustified for part of the public entities (SODEKFAF 120 million, Communes/CFAF 60 million, ARCC/ CFAF 500 million, etc.) whereas that of the ministries is CFAF 30 million; (ii)criteria for utilisation of sole sourcing still too broad and favouring its use; and (iii) procurement o f direct contracts between public law entities, which restricts the scope of use of competitive bidding methods. (ii)Justificationforuseofless C competitive procurement methods The procurement code provides for the principle that open competition i s the preferredmethod of procurement. Several criteria justifying the use o f sole sourcing do not appear reallyjustified and are not in conformity with WAEMU Guidelines. Ithas also been notedthat since the adoption of the new code, there has been a worrying rate o f increase in sole sourcing. Besides, the lack o f an independent audit does not facilitate the verification of compliance with procedures for procurement awarded usingless competitive modalities and guaranteeingthe control o f detected slippages. (iii) Existence and operation of a C procurement complaints There i s a regulatory and institutional mechanism for appealing mechanism against decisions rendered inthe area o f complaints and resolutions to 52 ~ _ _ _ _ _ _ ~ ~~ Indicator Score SummaryExplanation facilitate the implementation o f the code were taken to that endto describe the appealsprocedures. However, this mechanism i s not yet functional. Besides, the information providedby SIGMAP on complaints andtreatment given has yet to be developed. Finally, the existing appeals mechanism and amicable settlement o f disputes is not independent, PI-20. Effectivenessof internal D+ controlsfor non-salary expenditure (i)Effectivenessofexpenditure C A considerable amount o f expenditures i s made through the commitment controls simplified procedure (89% o f payment authorizations approved bythe financial controllers in 2006), which limits considerably the area o f interventiono f the financial controller. The control o f expenditures made on the basis o f transfers from the State through the EPN and public enterprises escape the financial controller, since it i s entrusted to the budget controller. The financial control does not carry out ranked control. Hence, there i s no method for risk assessment. Some budget accounts register over-expenditures. Hence, measures for controlling commitments o f expenditures exist but since they arenot based on riskassessment, they lack effectiveness. They do not cover all the expenditures and are not always respected. The score i s C. (ii)Comprehensiveness, relevance C The financial control has no market price listing reference. and understandingof other internal control rules/ procedures The public accountant (PGT) exercises, before accountingbooking, the control o f non-salary expenditures. This control is done, among others, on the evaluation, at the stage o f the order to pay o f the respect o f the budget ceilings beingnotedthat this type o f control has already been done by the financial controller at the stage o f commitment. Some rules and procedures, therefore, seem excessive and the score i s C. (iii)Degree of compliance with D The regulation does not set deadlines for the different actors for the rules for processingandrecording various phases o f the expenditure. transactions The rules guiding expenditure procedures are clear, both for the normal and the simplifiedprocedure. But the use of the simplified procedure, other than for salary expenditures and debt, i s very important and it has become the rule. The reliance o f payment o f expenditures on the basis o ftreasury cash advances i s still very frequent and represents important amounts. These expenditures, therefore, escape the apriori control and distort the results o f the budget execution. For this reason, the score i s D. PI-21. Effectivenessof internal D+ audit (i)Coverageand quality of the D The internal verification i s ensured by the General Finance internal audit function Inspectorate (IGF). Its method o f audit is basedon the ranking o f risks and it i s in conformity with international standards. But the IGF basically conducts financial audits and only exceptionallyintervenes on the structural aspects (monitoring o f the systems) o fthe controlled administrations . (ii))Frequencyanddistribution C The reports o f the IGFare transmitted to the entity audited and to the of reports MEF.Itis difficult for them to establish aplan oftheir audits, which are decided on case by case basis bytheir hierarchy. Besides, the text does not oblige them to systematically transmit their audit reports to the Supreme Audit Institution (Chamber o f Accounts). 53 Indicator Score Summary Explanation (iii) ofmanagement Extent D responseto internal audit findings The follow-up o f the conclusions and recommendations of the internal audits is not ensured. This lack o f follow-up constitutes one o f the major concerns o f the IGF, which indicates that the follow-up o f its recommendations are left to the discretion o f the hierarchy. PI-22. Timeliness and regularity C+ of accountsreconciliation (i) Regularity o fbank A The public accountants establish each day their bank situation on the reconciliations basis o f checks received and checks issued. The reconciliation between their account entries and bank statements i s conducted at the time ofthe daily, fortnightly andmonthly settlement of accounts. (ii)Regularity of reconciliation D and clearance of suspense Some suspense and advance accounts (notably the sub-divisions of accounts and advances account 472) present very importantbalances whose amount increases from year to year. This means that the reconciliation and adjustment o f these accounts are not done within the 2 months deadline after the end o f the fiscal year. PI-23. Availability of D A The administrative entities are well informed o f the amount o fcredits informationon resources granted to them. But the low level o f financial resources o f the receivedby service delivery ministries and the very high number o f administrative units allow units them to carry out only a few field surveys on the effectiveness o f the ewenditure. PI-24. Quality andtimelinessof D+ in-year budget reports (i) ofreportsintermsof Scope D The SIGFIP system allows the publication ofboth aggregated and coverage and compatibility with detailed budget execution reports and reports may also be published budget estimates on request. However, these reports do not contain the information on payments o f expenditures. Analytical reports on budget execution are prepared during the fiscal year with the objective o f monitoring the policies decided inthe framework o f WAEMU in order to follow up the convergence criteria. (ii)Timeliness of the issue of D A The monthly balance sheets are produced regularly within the 10 days reports following the endo f the month. However, although the SIGFIP system facilitates it, the publication o f budget execution reports i s not systematic, but upon request. A monthly TOFE i s prepared. Since the quarterly reports are not prepared, the score is D. However, an arrow is attached to the score in order to formalize the intention o f the DGBFto proceed, inthe near future, to the monthly publication o fthe budget execution statement. (iii)Quality o fthe information C The information from the DGBF(SIGFIP system) is transferred to the Treasury (ASTER system) in digital form. But, the procedure i s not fully electronic. The reconciliation o f the registrations made in these two systems i s done at the end o f the fiscal year. The amount of expenditures appearingin the 2006 CGAF is different from that o f the budget execution reports produced by SIGFIP. Since there are concerns about the accuracy o f the data, the score is C. PI-25. Quality and timelinessof annualfinancialstatements (i)Completeness of the financial A The budget execution review law is a very brief document. However, statements the General Accounts ofthe FinancialAdministration (CGAF) is a very complete document. 54 Indicator Score Summary Explanation (ii)Timelinessof submissionof The CGAF i s preparedeach year but the budget executionreview law the financial statements is voted with much delay. The mostrecent one i s that of 2001. The 2002 draftbudget executionreviewlaw has beenexaminedbythe Chamber of Accounts and submittedto Parliament. That of fiscal 2003 i s beingexaminedby the Chamber of Accounts. The delayin submission for external scrutiny,therefore, exceeds 15 months following the end of the fiscal year. (iii)Accountingstandardsused The accountingsystemi s basedonthe accounting standards containedinthe WAEMU directive on the government accounting plan, which is itselfbasedon the SYSCOA system. However, the analysis ofthe balances of the 2004,2005 and2006 fiscal years made it possibleto observe that some suspenseaccounts present unusual balances while others arenot systematically paidoff. This shows that ifthe accountingstandardsreallyexist, theyarenottotallyrespected. PI-26 Scope, nature and follow- D up of externalaudit (i)Scopehature ofaudit D The Chamber of Accounts hasnotjudgedthe managementaccounts performed of the State since 1978.Those ofNationalPublicAgencies have neverbeenjudged andthose ofthe territorial communities were only partiallyjudged. It carries out, on the average, 3 auditsper year. Hence, the verifications carriedout bythe Chamber of Accounts duringfiscal 2006 largelyconcernless than 50% of total expenditures. The examinationofthe draftbudget executionreview law is conductedwith muchdelay. The project currentlybeing examinedis that of 2003. (ii)Timelinessofsubmissionof D The Chamber o f Accounts prepares a bi-annualreporton the entities audit reports to legislature audited. This document i s intendedfor the President of the Republic as well as the NationalAssembly. However, the Chairman of the Economic and FinancialAffairs Commission of the National Assemblydeclaredthat he never receivedit. The last report on the budget execution dates backto fiscal 2002. It was developed andproducedinApril 2004, thus with a delay well over 12months after the end of the periodunderreview. (iii)Evidenceof follow-up on D Accordingto the information collected, the recommendations audit recommendations formulatedby the auditors arenot followed-up, neither bythe Chamber ofAccounts itselfnor bythe NationalAssembly. PI-27 Legislativescrutiny of the D+ annualbudgetlaw (i)Scopeofthelegislature's D Parliamentarycontrolwas not possiblebecauseofthe crisis. scrutiny The reference periodfor this component concerns the lastbudget executed. Since the budget for fiscal 2006 was approvedby Ordinance and the National Assembly didnot examinethe Draft BudgetLaw, the score is D. (ii) towhichthe Extent D legislature's proceduresare well- The reference periodfor this component concernsthe lastbudget year establishedand respected. executed. Since the budget for fiscal 2006 was adoptedby Ordinance and, therefore, the NationalAssembly did not examinethe Draft Budget Law, the score i s D. (iii)Adequacyoftimeforthe D Since the beginningofthe crisis, except for fiscal 2006 and fiscal legislatureto provide a response 2007, duringwhich the Governmentintervenedwith orders, the draft to budgetproposalsboththe Budget Law was submitted to the NationalAssembly with a delay of detailedestimates and, where three or four months, which gave the MPs only one monthto examine applicable,for proposalson it. 55 Indicator Score Summary Explanation macro-fiscalaggregatesearlier in the budgetpreparationcycle (time Since the budget for fiscal 2006 was adoptedby Ordinance and, allowedinpracticefor all stages therefore, the National Assembly did not examinethe Draft Budget combined) Law, the score i s D. (iv) Rules for in-yearamendments C These rules are clearly set by the organic law on the 1959Finance to the budgetwithout ex-ante Act. However, these amendments do not appear neitherinthe budget approvalby the legislature review acts of 2000 and 2001 nor in the General Accounts of the FinanceAdministration of 2006. Besides, the existenceof over- expenditures inthe 2006 CGAF shows that even ifthey are not formalized, many budget or credit transfers of credits are made. Since the rules on amendmentof credits are not always respected, PI-28 Legislativescrutiny of externalaudit reports D (i)Timelinessof examinationof P The NationalAssembly received, during the past three years, no auditreportsby the legislature(for external audit report from other external control organizationsor reports receivedwithin the last institutions. The examination of the draft budget execution review three years) law was conductedwith much delay. The most recent draft budget executionreview law voted is that of fiscal 2001. The Chamber of Accounts transmitted in October 2006, to the National Assembly, the 2002 draft budget executionreview law. (ii) ofhearingsonkey Extent D The Economic and Financial Affairs Commission has the right to findings undertakenby the establish commissions of enquiry. But it never usedit. Duringthe legislature past three years, no hearing was organizedby Parliament on the main conclusions of the externalaudit reports. (iii)Issuance of recommended D During the past three years, the National Assembly madeno actions by the legislatureand recommendation on measuresin connectionwith the findings implementationby the executive identifiedinthe reports fromthe externalcontrol institutions D-1Predictabilityof Direct NS Since the Republic of CBte d'Ivoire was not eligible for direct budget Budget Support support during the past three years, this type of intervention was neither envisagednor realized. Hence, this indicator cannot be scored. (i)Annualdeviationofactual NS budget support from the forecast providedby the donor agencies at least six weeks prior to the government submittingits budget proposals to the legislature (ii)In-yeartimelinessofdonor NS disbursements D-2 Financialinformation D+ providedby donorsfor budgetingand reporting (i)Completenessandtimeliness o f D The documents provided contain the amount of program aid and budget estimatesby donors for project aid mobilizedin 2006 (67.6%), but it i s not specified in which project support period of the budget calendarthey are provided. Because of lack of information, score i s D. (ii) Frequency andcoverageof A The total information on disbursementsof aid was provided to the reportingby donors on actual country within one month fromthe endof the quarter of the last year. donor flows for project support These data are obtained fromthe Public Debt Directorate and from COMFESIP. D-3 Proportionof aidthat is D In2006,32% ofthe amount ofloansandproject grantswere managedby useof national managedaccording to the national public procurement procedures. procedures The paymentsmade according to the national payment and accounting proceduresrepresented 1.62%of total aid. Score i s D. 56 Annex 3: Listof PersonsMet No. Surname and FirstName I Function Structure Contacts (TelJernail) Ministry of Economy and Finance 1 Charles Koffi Diby Ministry of Economyand Finance 2 Koffi Ahoutou PrincipalSecretary 3 Kouassi Kouman TechnicalAdviser IOffice of the MEF Tel 20 250 08 41 EconomicandFinancial Accounts 13 Anoman Paulette Research Officer Chamber of Tel.: 20 21 21 94 Accounts 14 DoudouJonas Auditor Chamber of Tel.: 20 21 70 27 Accounts Mobile: 07 47 25 11 15 GobaDaniel Auditor Chamber of Tel.: 20 21 70 27 Accounts Mobile: 05 67 03 60 16 Adja Vincent Auditor Chamber of Tel.: 20 21 70 27 Accounts Mobile: 07 60 92 82 17 Bouadou E. Julien Adviser Chamber of Mobile: 07 07 22 80 Accounts 18 N'Guessan Djaha Adviser Chamber of Tel.: 20 21 32 09 Accounts 19 GueraudBtatrice Adviser Chamber of Chamber of Tel.: 20 21 98 01 Accounts Accounts Mobile: 02 02 1001 General Inspectorate ofFinance I Ingkraph@yahoo.fr 57 SurnameandMrstName I Fanction BudgetPolicies and amanykonan@hotmail.com - Syntheses 27 PatriceAhoussi CE Department of Tel.: 20 21 0769 BudgetPolicies and Mobile: 05 62 09 86 Syntheses Ahoussijatrice@yahoo.fr - 1 28 Soro Mandjima CE DGBF/DBE Mobile: 02 50 06 46 - 29 KonanK.Germain CE Department of Tel.: 20 21 03 88 Budget Policies and Ext. 2339 Syntheses Mobile: 05 74 31 31 - germain konan71@yahoo.fr 30 N'Dri Brou Administration Tel.: 20 21 16 25 Department of Mobile: 05 55 07 19 - SIGFIP 31 Administration Department of Mobile: 05 79 30 40 - SIGFIP 32 DGBF 33 KouakouN'Diaye ResearchOfficer DGBF 34 DoukoureLassink ResearchOfficer DGBF Tel.: 20 21 21 88 Mobile: 01 28 40 78 - douklass@,yahoo.fr 35 EbrotieYomanfo Director Directorateof Tel.: 20 21 15 19 - PublicProcurement 36 Coulibaly Yacouba P. DeputyDirectorfor Directorateof Tel.: 20 21 53 28 - Regulationand Control PublicProcurement py coulibaly@yahoo.fr 3 1 KossonouKoko Olivier Headof Studies and Directorateof Tel.: 20 305 252 - AssessmentDivision PublicProcurement Ext 2246 38 Yap0 Assamoi A. DeputyDirector for Directorateof Proceduresand PublicProcurement Ext. 2313 Operations Mobile: 08 39 66 60 - yapaug@hotmail.com 39 Brou Yao P. DeputyDirectorfor Directorateof Tel.: 20 305 252 AssistanceandTraining PublicProcurement Ext. 2387 - brouyaopaul@yahoo,fr 40 DiabateKaladji ResearchOfficer Directorateof Tel.: 20 30 52 52 Ext. 2393 II PublicProcurement Mobile: 02 50 29 91 - 41 N'DriNorbert TechnicalAdvisor Directorateof PublicProcurement Mobile: 07 83 32 15 - 42 Brou Yao Paul DeputyDirector Directorateof - PublicProcurement brouyaopaul@yahoo.fr 43 Gnagne Kanne DeputyDirector for Directorateof Tel.: 20 21 93 43 Computer Systems PublicProcurement Mobile: 05 27 41 59 44 FinancialControl -Timite Directorate 45 Youssouf FinancialController FinancialControl - Directorate 46 TraorC TiCde BudgetControlDirector BudgetControl Directorate - 47 TraorC Seydou Inspector Auditor Public Expenditure General Review Unit 58 No.II SurnameandFirstName II Function Structure Contacts(Tel.lEmai1) DirectorateGeneral of Treasury and 1 Public Accounting 48 IKonanK.Charles ISpecialAdviser I Statistics I Tel: 20 25 38 28 CoordinationUnit 20 25 38 12 49 GbanCAbou Director Public Accounts Tel.: 20 25 38 41 Department 50 Ali Coulibaly DeputyDirector PublicAccounts Mobile: 07 30 79 29 Department alikadercoul@,yahoo. fr 51 BeugrCK.Amos DeputyDirector ' PublicAccounts Tel.: 20 25 38 41 Department amosbeugre@yahoo.fr 52 GnonsiChouCMichel Trainer Public Accounts Tel.: 20 25 38 41 Department 53 Brika Sarapahi Director PublicDebt Tel.: 20 25 09 80 Department I s.brica@yahoo.fr 54I ZikC Celestin IHeadof Department PublicDebt Tel.: 20 25 09 58 Department celestinzikey@yahoo.fr 55I DohAndr6 1DeputyDirector II1ITreasury 1IITel.: 20 21 50 02 Department dohkohona@yahoo.fr 56 Adopo Fiacre Headof Department Treasury Tel.: 20 25 67 18 Department Mobile: 07 69 37 19 1 fiacreadouo(iiinetcourrier.com NationalAssistant I DPTE II Mobile: 07 71 70 56 64 Niepe PaulHubertM. ResearchOfficer DGTCP 65 KouassiK.Noel Attorney PGT Mobile: 09543296 66 Coulibaly Issa Headof Department PGT Mobile: 07 673946 67 AkCNina Conservator Tel.: 20 21 21 99 68 N'GuettaArskne I Inspector Auditor I Mobile: 05 71 15 47 69 Anguit Angme IGAF Tel.: 20 330072 Mobile: 05302749 70 Yoro Zahui Apollinaire DeputyDirector Legal Tel.: 20217094 Department 71 BouaouliKouassiAugustin DeputyDirector for PayDepartment Tel.: 20217586 p.2256 Control 72 Sanogo Bassirima Direction Grand Solde Tel.: 20 21 36 76 Abidjan 73 Dag0Komenan Computer Analyst DDP 74 ZikC Celestin HeadofDepartment DDP 75 GbessaneBouazo DeputyDirector DDP Tel.: 20250960 76 N'Guessan GnambaHenri ` SpecialAdvisor DDP Tel.: 20 25 09 57 59 CentralRevenueDepartment CustomsDepartment Other Ministries 77 NiamienKadjo Ag. Director I DGPLAN/DP kniamien@yahoo.fr Tel.: 20 25 88 61 78 Attoh Aristide DAAF MIE Tel.: 20 225759 79 KonanSimlice D A N MSHP 80 BambaCharles DAAF MEN Tel.: 20 213396 81 Abiyou Ourag OAF MEN Tel.: 20212216 82 Diaby Lancine Director for MEMPD Diaby-lancine@yahoo,fr Development Other Institutions I PEFATeam 83 DoffonssouRichard Economist World Bank Tel.: 22 400 418 Mobile: 05 41 63 58 rdoffonssou@worldbank.org 84IMarceloAndrade IEconomist I WorldBank IITel.: 22 400 400 s.ba@afdb.org 91IZoltAn Agai IEconomist I Delegation, IIZoItan.AGAI@ec.euroDa.eu European Commission 92 RobertCauneau IConsultant inPublic ADB 33241952932133675505867 Finance I rcauneaum,vahoo.fi I I IFinance I I 336 83 1245 40 I giselesuire@orange.fr 94IFranqoisSerres 1Consultant in IITel.:47 03 43 62 60 Annex 4: Listof Documents Consulted Indicator Department or Unit General Documents Law 60-356 of 3 November 1960 on the Constitution of the Republic of CBte d'Ivoire Law 2000-513 of 1" August 2000 on the Constitution of CBte d'Ivoire Organic Law 59-249 of 31December 1959on the Finance Act DGBFDPSB Law 62-53 of 12 February 1962organizing public finance management DGBFDPSB Decree 50-209 of 21 October 1959on creation of the Caisse Autonome des Emprunts DGBFDPSB subscribedby the Republic of CBte d'Ivoire Decree 64-116 of 6 March 1964on organization of economic control DGBFDPSB Order 447-FAEP of 30 May 1960 on organization of the CaisseAutonome DGBFDPSB d 'Amortissementdes Emprunts subscribedby the Republic of C6te d'Ivoire Decree 64-240 of 16 June 1964on regulation of the accountability and balance due to DGBFDPSB public accountants Decree 69-416 of 16 September 1969 on regulation inthe control of contracts and - DGBFDPSB agreements signed on national budgetsand supplementarybudgets Decree 73-436 of 1'' September 1973 fixing the rules on constitution of advance I DGBFDPSB systems Decree 77-209 o f 2 April 1977on additional regulation ofpayments made on public DGBFDPSB funds Articles 6, 7 and 8 of Law 70-214 of 24 March 1970 DGBFDPSB Decree 2006-118 of 7 June 2006 on organization of the Deputy Minister attachedto Statistics Coordination the Prime Minister incharge ofEconomy and Finance Department ofthe DGTCP_ ~ _ ~ ~ Decree 98-260 of 3 June 1998 on application of the GeneralPublic Accounting Plan DGTCPDCP Decree 69-304 of 4 July 1969fixing guarantees for public accountants DGTCPDCP Decree 71-167 of 25 March 1971, fixing guarantees for public accountants DGTCPDCP Decree 2005-48 of 3 February 2005 on appointmentof GeneralAccountants for the DGTCPDCP Treasury Department and Government Accounting Decree 2002-444 of 16 September 2002 on the attributions, organization and IGE functioning of the InspectorateGeneral(IGE) Synthesis of the 2002 recommendationsof the seminar on Optimization ofPublic IGF Expenditures, Yamoussoukro, 23 26 August 2006 - Supportfor training on budget reforms and proceduresfor execution of public DGBFDPSB expenditures,2007 edition, containing the budgetstructureand Decree 98-716 of 16 December 1998 on the reform o f the channelsand proceduresfor execution ofthe expendituresand revenues of national budgetunder the special accounts of the Treasury and implementation ofthe integratedpublic finance management system Procedures Guide of Public Treasury services DGTCP Procedures Manual ofthe Operations Department of Decentralized Communities DGBFDOCD DGBF pamphlet on the budget preparation process DGBFDPSB Extract from the ProceduresGuide of the DGBF on the structureof public DGBF 61 Indicator Departmentor Unit 2005 Finance Ict, presentationreport and annexes DGBFDPSB Order fixing the 2006 Budget, presentationreport and annexes DGBFDPSB Order fixing the 2007 Budget, presentationreport and annexes DGBFOPSB PIP 2003-2005 Planning Department PIP 2004-2006 Public Investmentand PIP 2005-2007 Programming Department PIP 2006-2008 PI-4: Stock and monitoringofexpenditure paymentarrears PI-16: Predictabilityin the availabilityof funds for commitmentof expenditures PI-17: Recordingand managementof cash balances, debt and guarantees Note on the debt structure Public Debt Department Responsesof the Public Debt Departmentto PEFA questionnaireon PI-4, PI-12, PI-I7 Public Debt Department and PI-22 indicators 2007 I1Department o f DGTCP Order 067 /DGTCP/CE of 21 May 2001 on establishmenta Treasury Committee Statistics Coordination 62 communities(communes) Summary statement o fmanagementaccounts ofthe territorial communitiesfor the DGTCP/Semi-publicDC years 2004-2005and2006 2004 ManagementAccount of Agbovillecommune DGTCP/ Semi-publicDC 2005 Management Account of Dimbokrocommune DGTCP/ Semi-publicDC PI-9: Oversightofthe overall fiscal riskfrom other publicsector entities Law 98-388of 2 July 1998, fixing the generalrules on nationalestablishmentsandon DGBFDPSB the creationof categoriesofpublic*establishmentsandrepealingLaw 80-1070of 13 September 1980 List of state-ownedcompanies andpublic companies DGE/JointVenture and Table presentingthe executionofproductsandoverheadsofthe mainstate-ownedand joint companiesfor the 2005 and 2006 managementandestimates for 2006 List o f audits and studies concerningstate-ownedenterprisesandpublicfunded enterprises PrivatizationDepartment Summary statement o f EPNfinancialaccountsproducedby accountingofficers for the DGTCP/ Semi-publicDC years 2004-2005 and2006 2006 FinancialAccount o fthe FIDEN(NationalEnterpriseDevelopmentFund) DGTCP/ Semi-publicDC PI-10: Publicaccessto keyfiscal information PI-11: Orderlinessand participationin the annual budget process Organic Law 59-249onthe Draft FinanceAct DGBFDPSB The PrimeMinister'sLetter of 20 September2007presentingthe 2008 Budget DGBFDPSB Letter 139/MEF/DGBF/DPSB02 of29 August 2007, presentingthe 2008 Draft DGBFDPSB s in2007 and2008, Synthesisof staff 63 t I I PI 16: Predictabilityin the availabilityof funds for commitment of expenditures List of movementsof funds for 2006 DGBFDPSB PI-17: Recordingand managementof cash balances, debt and guarantees See PI-4 PI-18: Effectivenessof payrollcontrols Organizationaland Functional Overview ofthe Debt Department DGBFPay Branch Reportof the Steering Committee on Staff Sector Control of 31May 2007 DGBFPay Branch Staffing position by category and by ministry from 2002 to 2006 DGBFPay Branclh Detailed estimates ofthe impact (confirmed or potential) pay demands by the different DGBF/ Pay BranchDPSB groups o f civil servants in2007 PI-19 Competition,value for moneyand controlsin procurement The GovernmentContracts Code, Decree 2005-110 of 24 February 2005 DMP GovernmentProcurementprocedureson the basis of the Decrees o f 16 September DMP 1969 and 3 January 1980 Order 250 MEFDGBFDMPo f 13 August 2002 amendingOrder 037NEFDMP o f IDMP 64 Indicator 1 Department or Unit materialsat the central level Order 23 PM of 6 November 1995 on the application of Decrees 95-121,95-122 and I DGBFDCF PI-23: Availability of information on resourcesreceived by service delivery units II PI-24: Quality and timeliness of in-year budget reports Accounts Instruction 0609 DGTCP ASTEWCRCP proiect of 14April 2006 on the breakdownof provisional allocation accountsinthe deconcentratedaccountsheadings . I Letter 2604 of MEMEFIDGTCPIACCT of 26 June 2006 fixing the time frame for production ofthe general monthly balanceofthe 2005 management 65 Government 1CGAF 2003,2004 DGTCPDCP GeneralAccount ofthe FinanceAdministration,PresentationReport and Operating DGTCPDCP Report of the Treasury, 2005 Management - 1 GeneralTrial Balanceas at 31October 2007 DGTCPDCP Developmentof Budgetary Revenues as at 31October 2007 DGTCPDCP Developmentof Budgetary Expenditures as at 31October 2007 DGTCPDCP PI-25: Qualityandtimelinessof annualfinancialstatements 2000 BudgetReviewAct DGBF Presentationof the reportof the 2001BudgetReviewAct DGBF 2001BudgetReviewAct DGBF IPI-26: Scope, nature and follow-up of externalaudit 66 Annex 5: Calculationsof Ratiosfor PI-1 and PI-2 Sources of data: Situations extracted from SIGFIP and General Accounts o f the Financial Administration. The amounts are inCFAF million. Indications on the method: For the PI-1 indicator, the ratio to be calculated i s the ratio o f the difference (in absolute value and inpercentage of the estimate) between the total o f budgeted and actual expenditures. It does not take into account expenditures on debt and projects funded with external resources. For the PI-2 indicator, the ratio to be calculated i s equal to the sum o f differences between the budgeted and actual for each institution, in relation to the total o f budgeted expenditures and corrected with the relative difference between total budget and total actual. Data Year: 2004 I BudgetHead I Budget I Actual I DifferenceI Absolute 1Percent I Education 282,879 269,183 -13,697 13,697 4.8% Economy and Finance 186,53 1 224,788 38,257 38,257 20.5% Defence 131.717 130.454 -1.263 1.263 1.O% Health and Public Hygiene 71,897 67,567 -4,330 4,330 6.0% Higher Education and Research 62,360 62,247 -113 113 0.2% Interior 59,493 49,923 -9,570 9,570 16.1% Foreign Affairs 35,824 35,925 102 102 0.3% Economic Infrastructure 35,212 1 31,620 I -3,592I 3,592 I 10.2% Presidency of the Republic 35,158 I 35,567 I 409I 409 I 1.2% Other Ministries 32,290 I 31,696 I -595I 595 I 1.8% TotalExpenditures 1,037,874 I 1,034,128 I -3,746I 3,146 I 0.4% 67 Data Year: 2005 Budget Head Budget Actual Difference Absolute Percent National Education 277,560 272,736 -4,824 4,824 1.7% Economy and Finance 157,469 198,647 41,178 41,178 26.1% Defence 128,704 122,671 -6,033 6,033 4.7% Services 15,613 13,345 -2,268 2,268 14.5% Justice and HumanRights 13,480 12,386 -1,093 1,093 8.1% NationalRepresentation 10,378I 10,291I -86 I 86I 0.8% Civil Service and Employment 8,358I 8,461I 103 I 103I 1.2% Youth, Sports and Leisure 5,795I 7,407I 1,612 1 1,612I 27.8% Solidarity and War Victims 4,035 I 4,011I -24I 24I 0.6% Other Ministries 402,41 I 34,511I -5,729 I 5,729 I 14.2% Total Expenditures 1,104,535 1 1,083,607 1 -20,927 I 20,927I 1.9% 68 DataYear: 2006 BudgetHead Budget Actual difference absolute Relative difference Education 291,056 27,67 1 -17 384 17 384 6,0% Economy and Finance 227,756 I 216,837 I -10 919 I 10919 I 4,8% Defence 132,359 I 119,796 I -12,563 1 12 563 I 9,5% Higher Education and Research 78,276 1 76,924 -1,352 1352 1,7% Health and Public Hygiene 76,721I 73,679 -3,041 3 041 4,0% Attached Services Results ForPI-1 For PI-2 Total Expenditure Year Deviation Total expenditure Variance in excess (1\ variance of total deviation 2004 0.4% 8.0% 7.6% 2005 1.9% 9.9% 8.0% 20056 6.2% 6.7% 0.4% 69 Annex 6: Synthesis of the ObservationsandProposalsof the 'IvorianParton the PEFA Report ObservationsandProposalsof the DirectorateGeneralof Budget andFinance FINAL REPORT-STATUS PAGE PARA- PEFA Fullytaken Partially Nottaken GRAPH REPORT OBSERVATIONS PROPOSALS into takeninto consideration "Though The budget V §-6 abundant, the documentationis in Comprehensi budget conformitywith the X veness and documentation organic requirements. transparency is not in We will producethe conformity datainaccordance with the with PEFA standards. organic requirements, nor PEFA standards" What operationsare This part could "The level of beingreferredto be cancelledfor extra- here?How can one lack of specific budgetary assess the level of elements on X operations operationsthat are these serious would not known?The andunfounded representa . extra-budgetary assertions. high amount expendituresare giventhat, by limited to advances definition, they not regularizedat the are difficult to endof the assess as they management, there are not are no others. knOWn" "It is not One shouldrather The credibility Vii (ii)0-11 possible to indicate"credibility of the budget X Table: line assessthe level ofthe estimatesin estimatesor credibility of of credibility relationto the authorizationsis the budget; ofthe actuals" andnot in appreciatedin column estimates relationto the budget relationto the budget comparedto authorizations, which actual discipline the budget are also estimates. expendituresin authorizations" the budget execution review laws. (ii) 0-11 Vii Table: line: "The lack of This is avery vague All the budget X comprehensiv budget assertion.There is a documentation eness and documentation needto indicatethe requiredfor transparency, may affect precisedocuments parliamentary column: parliamentary that are necessary control are strategic control and ' andwould not be producedand allocationof prevent available. available. resources efficient allocationof resources" (ii) 0-1 1 Viii Table: line "But the There i s aPECMER Accounting, quality of interfacewhich registrationof information ensuresthe link of financial ... i only s the transfersinreal information assessedat the timebetweenSIGFIP andreports end ofthe andASTER. Studies 70 FINAL REPORT STATUS - PAGE PARA- PEFA Fullytaken Partially Nottaken GRAPH REPORT OBSERVATIONS PROPOSALS into takeninto into consideration consideration consideration column: fiscal year" are ongoingfor the budget creationof another discipline interface which will ensurefeed-back from ASTER and SIGFIP. 12 3.13 "The budget The budget structure X (Table) structure .............,the is in conformitywith the WAEMU destinationand nomenclature, which nature." i s adirectivedefining the minimum framework concerning classificationby fimctions andby nature, which the member States should completein case of need. The differentparts are linked among themselvesthrough well-definedtypes of administrativeunity: it is thereforenot true to say that they lack clarity. The expenditureson povertyreductionare clearlyidentifiablein the budget. They may be well monitored. ObservationsandProposalsof the Chamberof Accounts FIT LLREPORT- TATUS PAGE PARA- PEFA Fullytaken Partially Nottakeninto GRAPH REPORT OBSERVATIONS PROPOSALS into takeninto consideration IThe consideration consideration The following vi 10 (( Chamber statistics of Accounts...... Contraryto this view, indicatethe pace the Chamber of o f activities: X .....,nonehas Accounts has a so far been regularactivity Years and I verified nor despite its highly TotalAccounts judged" reducedpersonnel judged (07 Magistrates and 02 auditors in2000) 2005 - 95 andthe very poor 2006 101 - state of the offices, 2007 - 115 which makesthe 40 I archivingof documentsdifficult. 3.95 "...However the accounts 71 Partially Nottaken into into taken taken into consideration I ,PAGE I I FINALREPORT-STATUS PARA- PEFA GRAPH REPORT OBSERVATIONS PROPOSALS consideration consideration ...of fiscal 2002 and fiscal Controls made X 2003" 2006: Abidjan Instituteof Cardiology, I Road Safety Bureau, National Institute o f Public Hygiene 2005: Sociktk des Transports Abidjanais, - Control o f the efficiency o f the grants granted to private state establishments. Observations and Proposals of the General Directorate of Customs FINALREPORT-STATUS 1 PAGE PARA- PEMFAR Fullytaken Partially Nottaken GRAPHE REPORT. OBSERVATIONS PROPOSALS into takeninto into consideration consideration consideration 25 Table PI-14 "The taxpayers The Customs has (0 are registered in no other use to X ,,,,,,. a relatively make o f the tax reliable system .......the account than identifying number is also correctly the used by the importer or the Customs but in exporter. an inadequate manner." The inadequate use that is mentioned i s not specified. Observations and Proposals of the General Directorate of Economy I FINAL REPORT STATUS - PEMFAR Fullytaken Partially Nottaken REPORT OBSERVATIONS PROPOSALS into takeninto into consideration consideration consideration "(...)The The expenditures to X expenditures be regularized are comprise operations regularized, estimated in the therefore, budget but executed paid but not via advances, before budgeted their execution in (. .)." . SIGFIP and some operations not provided for in the 72