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Stefan Leiderer et al. Table 2: The allocation of FY 2002/03 budget by MPRSP Pillar (ORT Only) MK Total Voted ORT 15,078.50 as % total voted ORT as % allocation to MPRSP activities Total MPRSP Activities 9,569.44 63.5 % Pillar 1 3,141.94 20.8 % 32.8 % Pillar 2 5,081.76 33.7 % 53.1 % Pillar 3 119.97 0.8 % 1.3 % Pillar 4 1,116.93 7.4 % 11.7 % Cross-Cutting 66.57 0.4 % 0.7 % Implementation and Monitoring 42.26 0.3 % 0.4 % Statehood Activities 1,218.94 8.1 % Other (Outside MPRSP) Source: World Bank (2004a) 4,290.12 28.5 % From this point, the planning departments within the line ministries start preparing their budget bids, consolidating the inputs from all cost centres and statutory bodies, which submit their proposals (European Commission 2002, 12, 50). They should set priorities within planned activities based on the MPRS and costing. In a next step, line ministries and public agencies present their resource bids, policy objectives and planned activities to the MoF. These resource bids are discussed during the hearings between the MoF and the different line ministries. Based on the submitted bids, the MoF needs to allocate the resources to the different line ministries. Resources should be allocated in line with the overall resource envelope available, according to strategic policy priorities as stated in the MPRS and costing. The MoF needs 60 German Development Institute
Public Financial Management for PRSP Implementation in Malawi to establish binding sector ceilings so that line ministries avoid overspending (Rakner et al. 2004, 10). When all available resources are allocated to MDAs, the MoF prepares and submits a statement of anticipated revenues and budgetary appropriations to the Cabinet. This has to be done at least fourteen days before introducing the budgetary estimates to Parliament for approval. The submitted statement is then discussed in the Cabinet. When the Cabinet approves the proposed budget, the MoF is authorised to prepare the estimates to be presented to the National Assembly (PFM Act: Section 21). The final step in the budget formulation process is the submittal of a statement of the budget estimates to the National Assembly for approval. The budget estimates have to include all estimated receipts, grants, other revenues and expenditures for the forthcoming financial year. Although statutory expenditures do not have to be approved by the National Assembly, they are to be included in the budget estimates to deliver a complete picture of the total amount of expenditures proposed by the programmes and activities of the government.(PFM Act: Section 21–22). The Budget and Finance Committee of the National Assembly scrutinises the budget for adequacy and prioritisation of key expenditures. The findings are then discussed in the National Assembly before approval. Finally, the Appropriation Act (the budget bill as voted by Parliament), normally tabled for June, authorises the expenditure of public money. No public expenditure is to be incurred unless public funds have been authorised by an Appropriation Act (PFM Act: Section 23–24). In addition to the budget estimates, the MoF has to sub mits no later than April 1 of each year an economic and fiscal policy statement for the forthcoming financial year and two outer years to Parliament. This document aims at specifying the economic and fiscal policy, the fiscal objectives and strategic priorities of the government. In addition, the MoF is required to publish a report by June 30 each year updating the economic and fiscal policy statement. (PFM Act: Section 14–17). These statements are produced to enable Parliament to scrutinise if the estimated budget allocations really represent the economic and fiscal policy goals, as stated in the documents of the government. Budget execution In 1996, the Government of Malawi introduced a cash budget system on a monthly basis to improve fiscal discipline and attenuate persistent overspend- German Development Institute 61
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Public Financial Management for PRS
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Studies Deutsches Institut für Ent
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Preface The present study on ‘Pub
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4 The Case of Malawi 44 4.1 Why Mal
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Bibliography 151 Annexes 157 Tables
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Boxes and Tables in the Annexes Box
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DS EHP ESAF EU GBS GDP GoM GRF GTZ
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TOR UDF UNCDF UNDP UNV USAID VAP VD
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Discussion Paper 16/2007 Schirm, St
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