World Bank2012-06-142012-06-142008-06https://hdl.handle.net/10986/8062Afghanistan's public financial management (PFM) system achieved significant improvements between June 2005 and December 2007. Among 28 performance indicators, 18 indicators improved, two indicators deteriorated, and eight indicators remained unchanged. Among three indicators of donor practices, two deteriorated and one remained unchanged. In relation to other countries for which Public Expenditure and Financial Accountability (PEFA) assessments have been conducted, Afghanistan's ratings are better than the average for other low-income countries and in some areas better than the average for middle-income countries. The operating budget is credible as funding from domestic revenues and donors has been stable. However, the gap between the budget and realization remains significant in the development budget expenditures. The comprehensiveness of the budget is generally good, although reporting and especially transparency should be improved. However, fiscal risk oversight of state-owned enterprises and municipalities is practically non-existent and thus problematic. The budget process is based on multi-year fiscal planning and comparatively detailed budgeting at the level of ministries and agencies, but so far has lacked the necessary strategic prioritizations of resources by the cabinet early in the process. Payroll processing is highly decentralized which contributes to timely updates of payroll and reconciliation of personnel and payroll records. Access to a number of provinces by the external auditor and the Afghanistan Reconstruction Trust Fund (ARTF) monitoring agent is hampered by security concerns. External audit of donor funding is conducted according to acceptable standards, but the quality of review of the annual budget statement and of regulatory audits needs to be improved. Arrangements are in place for the effective internal audit of treasury and revenue operations of government, but capacity for internal audit in the line ministries is still very weak.CC BY 3.0 IGOACCOUNTINGACCOUNTING POLICIESACCOUNTING STANDARDSADBAPPROPRIATIONSASSETSAUDIT CASE SELECTION SYSTEMAUDIT STRATEGYAUDITINGAUTHORITYBANK OF THAILANDBANKRUPTCYBUDGET DEFICITSBUDGET MANAGEMENTBUDGET PROCESSBUDGETARY ALLOCATIONSCASH FLOWSCASH MANAGEMENTCENTRAL AGENCIESCENTRAL GOVERNMENTCENTRAL GOVERNMENT REVENUE COLLECTIONCENTRAL TRANSFERSCONSERVATISMCONSTITUTIONCORPORATE INCOME TAXCORRUPTIONDEBT SERVICEDECENTRALIZATIONDECENTRALIZATION FRAMEWORKDECENTRALIZATION REFORMSDECISION MAKINGDEVOLUTIONDISTRICTSECONOMIC ACTIVITYECONOMIC GROWTHECONOMIC STABILITYEQUALIZATIONEVASIONEXECUTIVE AGENCIESEXPENDITUREEXPENDITURE ASSIGNMENTEXPENDITURE MANAGEMENTFINANCIAL INSTITUTIONSFINANCIAL MANAGEMENTFINANCIAL REPORTINGFINANCIAL SYSTEMFISCALFISCAL BALANCEFISCAL DECENTRALIZATIONFISCAL DEFICITSFISCAL DISCIPLINEFISCAL EXPANSIONFISCAL MANAGEMENTFISCAL PERFORMANCEFISCAL POLICIESFISCAL POLICYFISCAL REFORMSFISCAL RESPONSIBILITYFISCAL SUSTAINABILITYFISCAL TRANSPARENCYFISCAL YEARFOREIGN BORROWINGFOREIGN DIRECT INVESTMENTGAAPGOVERNMENT AGENCIESGOVERNMENT BORROWINGGOVERNMENT DEBTGOVERNMENT EXPENDITURESGOVERNMENT POLICIESGOVERNMENT PROGRAMSGOVERNMENT REVENUEGOVERNMENT REVENUESGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTHEALTH SERVICESHUMAN RESOURCEHUMAN RESOURCE MANAGEMENTINCOMEINCOME DISTRIBUTIONINCOME INEQUALITYINFLATIONINSTITUTIONAL CONSTRAINTSINSTITUTIONAL REFORMSINSTITUTIONAL WEAKNESSESINTERGOVERNMENTAL TRANSFERINTERGOVERNMENTAL TRANSFERSINVESTMENT SPENDINGLACK OF TRANSPARENCYLEGAL FRAMEWORKLOCAL ACCOUNTABILITYLOCAL ADMINISTRATIONLOCAL ADMINISTRATIONSLOCAL AUTONOMYLOCAL DECISION MAKINGLOCAL GOVERNMENTLOCAL GOVERNMENT BORROWINGLOCAL GOVERNMENT EXPENDITURESLOCAL GOVERNMENT REVENUELOCAL GOVERNMENT REVENUESLOCAL GOVERNMENTSLOCAL REVENUEMINISTRY OF FINANCEMUNICIPAL REVENUESMUNICIPALITIESNATIONAL DECENTRALIZATION ACTNATIONAL DECENTRALIZATION COMMITTEENATIONAL GOVERNMENTSPOLICY MAKERSPOLITICIANSPOVERTY ALLEVIATIONPRIVATE SECTORPRODUCTIVITYPROJECT FINANCEPROJECT GRANTSPROPERTY TAXESPUBLIC DEBTPUBLIC DEBT MANAGEMENTPUBLIC EXPENDITUREPUBLIC EXPENDITURE MANAGEMENTPUBLIC EXPENDITURESPUBLIC FINANCEPUBLIC FINANCESPUBLIC INSTITUTIONSPUBLIC INVESTMENTPUBLIC RESOURCESPUBLIC SECTORPUBLIC SECTOR MANAGEMENTPUBLIC SECTOR REFORMPUBLIC SERVICESPUBLIC WORKSREAL ECONOMIC GROWTHREHABILITATIONRESOURCE MOBILIZATIONREVENUE ADMINISTRATIONREVENUE COLLECTIONREVENUE GROWTHREVENUE MOBILIZATIONREVENUE SOURCESRISK MANAGEMENTSALES TAXESSAVINGSSOCIAL SECTORSSOCIAL SECURITYSTATE ENTERPRISESSTATE OWNED ENTERPRISESSTATE-OWNED ENTERPRISESTAX ADMINISTRATIONTAX ARREARSTAX BURDENTAX COLLECTIONTAX COLLECTIONSTAX POLICYTAX RATESTAX REFORMSTAX REVENUESTAX SYSTEMTAXPAYER COMPLIANCETRADEOFFSTRANSPORTURBAN DEVELOPMENTWAGESPUBLIC FINANCEFINANCIAL MANAGEMENTFISCAL ADJUSTMENTSFISCAL POLICYFISCAL REFORMSFISCAL MANAGEMENTECONOMIC CRISISCONSTITUTIONAL LAWPUBLIC SECTOR MANAGEMENTECONOMIC STABILIZATIONTAX REVENUESPUBLIC EXPENDITURESDEVELOPMENT CONSTRAINTSBUDGETARY PROCESSSOCIAL ACTIONRISK MANAGEMENTDECENTRALIZATIONREFORM POLICYHUMAN RESOURCES DEVELOPMENTWorld Bank10.1596/8062