Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
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<strong>Public</strong> <strong>Financial</strong> <strong>Management</strong> <strong>for</strong> <strong>PRSP</strong> Implementation in Malawi<br />
to establish binding sector ceilings so that line ministries avoid overspending<br />
(Rakner et al. 2004, 10).<br />
When all available resources are allocated to MDAs, the MoF prepares and<br />
submits a statement of anticipated revenues and budgetary appropriations to<br />
the Cabinet. This has to be done at least fourteen days be<strong>for</strong>e introducing the<br />
budgetary estimates to Parliament <strong>for</strong> approval. The submitted statement is<br />
then discussed in the Cabinet. When the Cabinet approves the proposed<br />
budget, the MoF is authorised to prepare the estimates to be presented to the<br />
National Assembly (PFM Act: Section 21). The final step in the budget <strong>for</strong>mulation<br />
process is the submittal of a statement of the budget estimates to the<br />
National Assembly <strong>for</strong> approval. The budget estimates have to include all<br />
estimated receipts, grants, other revenues and expenditures <strong>for</strong> the <strong>for</strong>thcoming<br />
financial year.<br />
Although statutory expenditures do not have to be approved by the National<br />
Assembly, they are to be included in the budget estimates to deliver a complete<br />
picture of the total amount of expenditures proposed by the programmes<br />
and activities of the government.(PFM Act: Section 21–22). The Budget and<br />
Finance Committee of the National Assembly scrutinises the budget <strong>for</strong> adequacy<br />
and prioritisation of key expenditures. The findings are then discussed<br />
in the National Assembly be<strong>for</strong>e approval. Finally, the Appropriation Act (the<br />
budget bill as voted by Parliament), normally tabled <strong>for</strong> June, authorises the<br />
expenditure of public money. No public expenditure is to be incurred unless<br />
public funds have been authorised by an Appropriation Act (PFM Act: Section<br />
23–24). In addition to the budget estimates, the MoF has to sub mits no<br />
later than April 1 of each year an economic and fiscal policy statement <strong>for</strong> the<br />
<strong>for</strong>thcoming financial year and two outer years to Parliament. This document<br />
aims at specifying the economic and fiscal policy, the fiscal objectives and<br />
strategic priorities of the government. In addition, the MoF is required to<br />
publish a report by June 30 each year updating the economic and fiscal policy<br />
statement. (PFM Act: Section 14–17). These statements are produced to enable<br />
Parliament to scrutinise if the estimated budget allocations really represent<br />
the economic and fiscal policy goals, as stated in the documents of the<br />
government.<br />
Budget execution<br />
In 1996, the Government of Malawi introduced a cash budget system on a<br />
monthly basis to improve fiscal discipline and attenuate persistent overspend-<br />
German Development <strong>Institut</strong>e 61