Half transparent and half opaque budget

M S Siddiqui

http://observerbd.com/details.php?id=23361

Publish Date : 2014-06-03, Publish Time : 00:00, View Count: 10 yesterday


Budget transparency ensures right to know about taxes, borrow, and spend public money. It is important but
relatively neglected aspect of fiscal transparency is the need for the government to explain its budget proposals in a
plain language, by simple way, so that it becomes citizen guide to budget. The transparent budgeting is critically
important to bring about fairer and more prosperous societies. Conversely, keeping the process closed allows
governments to borrow and spend irresponsibly, and breeds suspicion about misuse of revenue. Annual budget is the
key instrument by which a government translates its policies into action, presenting the budget in a way that makes
sense to the general public is central to government accountability.

The Finance Ministry and National Board of Revenue (NBR) prepare the budget having "consultation" all
stakeholders like business community, civil society, experts and other ministries. The Finance Minister and
Chairman of National NBR some time give press briefing or statement about the proposed budget but those are not
formal pre-budget statements. The bureaucrats prepare the budget and print it and placed it before Cabinet Meeting
held at Parliament building, a few hours before budget session "approve" the finally prepared and printed budget
speech of Finance Minister and Finance Bill and the President use to give his consent to place the Finance bill in the
Parliament. The Parliamentary Standing Committee and the Ministers have virtually no option to change budget
prepared by officials. Bangladesh has Right to Information Act without effective implementation to dissemination of
desired information to the citizen. Access to information is a precondition for citizens to understand how a
government is using its entrusted powers to tax, borrow, and spend public resources. A Washington based civil
society, The International Budget Partnership's Open Budget Initiative (IBP)'s Open Budget Survey is the only
independent, comparative, regular measure of budget transparency and accountability around the world. The Survey
uses internationally accepted criteria to assess each country's budget transparency developed by multilateral
organizations, such as the International Monetary Fund (IMF), the Organization for Economic Cooperation and
Development (OECD), and the International Organization of Supreme Audit Institutions.

An average Bangladeshi citizen fails to get adequate information and opportunities to participate in the government's
budget process, as described by IBP, the survey attempts to give an independent, comparative, regular measure of
budget transparency and accountability around the world and study budget of many counties by every alternate year.
Bangladesh scored 58 out of 100 on the Open Budget Index (OBI) 2012, higher than the average score of 43 for all
the 100 countries surveyed. Insufficient information makes it challenging for Bangladeshi citizens to hold the
government accountable for its management of public money, the Open Budget Survey (OBS) 2012, The country
scored 42 on the OBI 2008 and 48 on OBI 2010. The transparency is improving every year. Bangladesh now
publishes only four documents- Executive's Budget Proposal, Enacted Budget, Mid-Year Review and In-Year
Reports. Bangladesh does not prepare other four more documents- Pre-Budget Statement although consult with
business associations, economists and civil society, Citizens' Budget, Year-End Report and Audit Report but not
timely produced and published. Bangladesh poorly performed due to lack of these four documents. The adequacy
and availability of eight key budget documents are preconditions of transparency of budget.

Pre-Budget Statement: The Pre-Budget Statement reflects the culmination of the strategic planning phase of the
budget process, in which the officials broadly aligns its policy goals with the resources available under the budget's
fiscal framework. This process establishes the parameters of the budget proposal before detailed programme funding
decisions are made. The statement also creates appropriate expectations for the budget itself, which is particularly
important when the budget submission occurs close to the start of the fiscal year and the time for debate, therefore,
is limited in our country.
The OECD states that best practice in this area requires the officials to release its Pre Budget Statement to the public
at least one month prior to submitting its budget proposal to the Parliament. Good practice also requires the Finance
Minister to present the budget proposal to the legislature at least three months prior to the beginning of the fiscal
year. The Pre-Budget Statement must be released at least one month prior to the release of the Ministry's Budget
Proposal and ideally at least four months prior to the beginning of the fiscal year. Citizens' Budget: Government
budgets are filled with so many numbers and so much technical jargon that the ordinary readers cannot easily
understand what they mean. People need information in an accessible, understandable form to enable them to
understand what government is doing with their money and allow them to participate in governmental affairs.
The International Monetary Fund in its Manual on Fiscal Transparency states that "A clear and simple summary
guide to the budget should be widely distributed at the time of the annual budget." Such a 'Citizens' Budget' serves
the public, but can also serve the government by enhancing public knowledge about the budget and the reasoning
behind the choices made in putting it together. Citizens' Budgets tend to present an accessible version of either the
Budget Proposal or the Enacted Budget. Citizens should have access to information in a language and through
formats that ordinary people can understand and appreciate. The report provides an overview of the structure, timing
and size of the State budget. But producing a Citizens' Budget can help a government to develop its capacity to
make technical information more accessible, more broadly.

A citizens budget is a summary of the national budget designed to reach and be understood by as large a segment of
the population as possible. By reporting and explaining budget decisions and the state of the public finances with
simplicity and clarity, the government can help to demystify the budget beyond the often necessarily technically
complex detail in the budget documentation. Otherwise, the job is left to civil society or the media, who are not
always adequately equipped. It is also a good discipline for policy makers to explain themselves in simple, everyday
language.

Publication of a citizens' budget allows a government to explain in plain language the objectives of its budget and to
supplement and complement other supporting material such as the budget speech, press releases, web pages, media
appearances, etc. It also helps citizens to assess the impact on their own circumstances and on specific groups in
society including the effects on the burden of taxation, service provision and employment prospects etc.
End Year Report: The year-end report is the government's key accountability document. It should be audited by the
Controller and Auditor General (CAG) and be released within six months of the end of the fiscal year. The year-end
report shows compliance with the level of revenue and expenditures authorized by Parliament in the budget. Any in-
year adjustments to the original budget should be shown separately. The presentation format of the year-end report
should mirror the presentation format of the budget. The year-end report, or related documents, should include non-
financial performance information, including a comparison of performance targets and actual results achieved where
practicable.

Audit Report: Audit Reports should produce and publish within 24 months after end of the financial year. But Office
of CAG needs few years to complete the audit. They have many limitations. The office of CAG is placed as an
attached department of the Ministry of Finance (MoF), which controls the audit and accounts cadre and the budget
of the CAG. The Ministry of Establishment (MoE), on the other hand, has control over the recruitment,
reorganisation and other personnel issues of the CAG. Conflict of interests might arise when the CAG takes MoF
and MoE to audit as it has to depend on them. Though the CAG prepares its own budget, it needs to get the budget
approved by the Finance Division. The CAG is the appointing authority of non-cadre class I, class II, III and IV
officials, but this requires clearance from MoF and Ministry of Public Administration, which is an excessively time
consuming process. Class I cadre officers are recruited through the BCS exam, which is again lengthy and
cumbersome. The CAG officers and staff are under the administrative control of the Finance Division of the
Ministry of Finance, which controls the appointment, promotion, and disciplinary action for the CAG employees.
Independence of the CAG as upheld in the Constitution has been jeopardised by this practice.
The audit report is never discussed with the media, unlike the practice in other countries. The legislature's Public
Accounts Committee (PAC) discusses the report but the press or media are not invited. Some public sector rules
have been cited as restricting civil servants from making comments to the press. The model legislation of democratic
countries allows CAG or his authorised staff to provide comments and interviews to the press or other media on the
subject of any published audit reports.

The Parliamentary Standing Committee should have a formal pre-budget policy debate prior to the tabling of the
Executive's Budget Proposal; the executive should present its budget proposal to the legislature at least six weeks,
but ideally three months, before the start of the new budget year; the legislature should scrutinize all audit reports
and to improve the budget transparency and accountability.
Bangladesh can improve accountability of government and rating of transparency by introducing Pre-budget
statement, Citizens Budget, yearend report and publishing audit reports on time.

The writer is a Legal Economist
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