I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Aggregate expenditure outturn was 93, 91 and 88 percent of the approved original budget in the years 2015-16, 2016-17 and 2017-18.
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
D
Notes:
Variance in expenditure composition by functional classification was 20, 25 and 8 percent in the FY 2015-16, 2016-17 and 2017-18.
2.2 Expenditure composition outturn by economic type
C
Notes:
Variance in expenditure composition was 13, 11 and 9% in 2015-16, 2016-17 and 2017-18.
2.3 Expenditure from contingency reserves
A
Notes:
GoPb does not use contingency as budget code.
Notes:
3.1 Aggregate revenue outturn
D
Notes:
Actual revenue outturn was 82, 90 and 93 percent of the original budget in the years 2015-16, 2016-17, and 2017-18.
3.2 Revenue composition outturn
D
Notes:
Variance in revenue composition was 16, 11 and 16 percent in the years 2015-16, 2016-17 and 2017-18.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
A
Notes:
4.1 Budget classification
A
Notes:
Budget formulation, execution, and reporting use a classification system that can produce consistent documentation comparable with GFS/COFOG 1986, however with certain modifications.
Notes:
5.1 Budget documentation
C
Notes:
GoPb provides 3 basic elements and 1 additional element (Table 3.8) in its budget documents. While, elements 5 and 6 are not applicable to Punjab being a SNG.
6. Central government operations outside financial reports
D
Notes:
6.1 Expenditure outside financial reports
D*
Notes:
FD lacks a central mechanism to determine the exact size of expenditure and revenue data outside government financial reports.
6.2 Revenue outside financial reports
D*
Notes:
FD lacks a central mechanism to determine the exact size of expenditure and revenue data outside government financial reports.
6.3 Financial reports of extrabudgetary units
D*
Notes:
The attendance of the government representative in the Board meeting and submission of the financial accounts to the Board is the mechanism of provision of the financial reports.
7. Transfers to subnational governments
B
Notes:
7.1 System for allocating transfers
A
Notes:
The horizontal allocation of all transfers to local governments from province is determined by transparent and rule-based systems.
7.2 Timeliness of information on transfers
C
Notes:
The SNGs receive the budget ceilings after the passage of the provincial budget.
8. Performance information for service delivery
D
Notes:
8.1 Performance plans for service delivery
D
Notes:
GoPb has not adopted output-based budgeting nor is separate Information published on policy or program objectives, key performance indicators, outputs to be produced, and the outcomes planned.
8.2 Performance achieved for service delivery
D
Notes:
GFMIS does not capture the service delivery unit level information owing to the lack of budget codes for a large size of primary health and education service delivery units.
8.3 Resources received by service delivery units
D
Notes:
GFMIS does not capture the service delivery unit level information owing to the lack of budget codes for a large size of primary health and education service delivery units.
8.4 Performance evaluation for service delivery
C
Notes:
External evaluations have been carried out by the Directorate of M&E and under externally funded program at Education and Health Departments.
9. Public access to fiscal information
A
Notes:
9.1 Public access to fiscal information
A
Notes:
Government makes available to public all basic and one additional element. (Macroeconomic forecasts not applicable to SNG).
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
D+
Notes:
10.1 Monitoring of public corporations
C
Notes:
Government receives financial reports from public corporations/PSEs within 9 months of the end of financial year (FY).
10.2 Monitoring of subnational governments
D
Notes:
Audited or unaudited financial reports of the sub-national governments are not published within 9 months of the close of FY.
10.3 Contingent liabilities and other fiscal risks
D
Notes:
Budget White paper and debt bulletin provides the guarantees issued against the limit allowed by the Council of Common interest (CCI).
11. Public investment management
C+
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Economic analysis is conducted for major investment projects, reviewed by P&D Department but results are not published.
11.2 Investment project selection
B
Notes:
Provincial screening forums have a clear mandate for project proposals. The criteria for project selection are provided in the P&D guidelines on ADP formulation and the Provincial Development Working Party prioritize the projects.
11.3 Investment project costing
C
Notes:
The budget documents only provide project-wise details of total capital and recurrent cost for the budget year but in the two outer years in the MTDF these costs are provided at aggregate level and not segregated by capital and recurrent cost estimates.
11.4 Investment project monitoring
B
Notes:
Investment project monitoring is conducted by implementing unit as well as the P&D department. ‘Punjab Works code’ serves as the rules for implementation.
12. Public asset management
D+
Notes:
12.1 Financial asset monitoring
C
Notes:
The government maintains a record of its holdings in major categories of financial assets but is not published.
12.2 Nonfinancial asset monitoring
C
Notes:
The Government maintains a record of its non-financial assets; however, it is neither consolidated nor is the information published. Partial information on usage and age is available.
12.3 Transparency of asset disposal
D
Notes:
The transfer and sale of financial assets is governed by the Punjab Financial Rules while the sale of non-financial assets is governed under the auction rules.
Notes:
13.1 Recording and reporting of debt and guarantees
B
Notes:
Domestic and foreign debt records are complete, reconciled and produced bi-annually in the debt bulletin available on FD website.
13.2 Approval of debt and guarantees
A
Notes:
Constitution provides for borrowing by the provinces, subject to conditions. In addition, the GFR, Securities Manual, and the Accounting Policies and Procedures Manual (APPM) provide for the operational. framework.
13.3 Debt management strategy
D
Notes:
A current medium-term debt management strategy does not exist.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
C
Notes:
14.1 Macroeconomic forecasts
NA
Notes:
Not Applicable. Macroeconomic functions rest with the central government.
Notes:
Government prepared BSP and MTFF report with qualitative analysis, however, was not submitted to the legislature.
14.3 Macrofiscal sensitivity analysis
NA
Notes:
Not Applicable.
Notes:
15.1 Fiscal impact of policy proposals
D
Notes:
Government does not prepare the estimates of the fiscal impact of revenue and expenditure policy proposals.
15.2 Fiscal strategy adoption
C
Notes:
GoPb prepares for internal use BSP and MTFF supported with analytical report.
15.3 Reporting on fiscal outcomes
C
Notes:
The government prepares presentation on the progress made against its revenue mobilization proposals.
16. Medium-term perspective in expenditure budgeting
D
Notes:
16.1 Medium-term expenditure estimates
D
Notes:
Only the annual ‘development’ budget includes a medium-term perspective (budget year and two following years).
16.2 Medium-term expenditure ceilings
D
Notes:
Aggregate and or department level medium term expenditure ceilings were not provided to the Line departments prior to the issuance of budget call circular.
16.3 Alignment of strategic plans and medium-term budgets
C
Notes:
Medium-term sector strategies are prepared for majority of the sectors - agriculture, education, industries, urban development, health, WASH.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
Medium term budget has not been adopted government wide therefore the budget document does not provide the variance analysis with a medium-term perspective.
17. Budget preparation process
C
Notes:
Notes:
A clear BCC exists and is adhered to by the LDs. FD issued BCC in Oct 2017 (for budget year 2018-19) and allowed the line departments at least 6 weeks to prepare the budget estimates.
17.2 Guidance on budget preparation
D
Notes:
BCC for the budget year 2018-19 included detailed guidelines and forms but indicative budget ceilings were not included.
17.3 Budget submission to the legislature
D
Notes:
GoPb submitted budget proposals to the legislature less than one month before the start of the fiscal year.
18. Legislative scrutiny of budgets
C+
Notes:
18.1 Scope of budget scrutiny
C
Notes:
Legislative review covers details of expenditure and revenue (demand for grants) but does not include review of the fiscal policies. The MTFF is not submitted to the legislature.
18.2 Legislative procedures for budget scrutiny
C
Notes:
Rules of Procedure (1997) provide for the budget scrutiny procedure and are adhered to. The rules do not provide for technical support and review committee.
18.3 Timing of budget approval
A
Notes:
Budget has been approved prior to the start of fiscal year in the last three years.
18.4 Rules for budget adjustment by the executive
B
Notes:
The rules for adjustments are set out clearly and are adhered to in most cases. Rules are silent on the amounts of expenditure that can be re-appropriated.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
D+
Notes:
19.1 Rights and obligations for revenue measures
B
Notes:
Entities collecting majority of revenue provide on its website the information on main revenue obligations and rights and conduct media campaigns to educate taxpayers on taxes and incentives offered.
19.2 Revenue risk management
D
Notes:
A partly structured risk management is conducted for a few of the taxes.
19.3 Revenue audit and investigation
D
Notes:
Revenue audit and investigations are not based on a systematic plan nor does a methodical compliance improvement plan exist in most of the revenue authorities.
19.4 Revenue arrears monitoring
D*
Notes:
The stock of revenue arrears particularly the historical data could not be determined.
20. Accounting for revenue
C+
Notes:
20.1 Information on revenue collections
A
Notes:
FD website provides monthly information on revenue collection.
20.2 Transfer of revenue collections
A
Notes:
Entities collecting most of the provincial government revenues use the Treasury account for the revenue collection. The amount of collection outside the treasury as identified by the Revenue receipts audit was less than 1 % of the total revenue collection.
20.3 Revenue accounts reconciliation
C
Notes:
Monthly reconciliation of tax and non-tax collection and transfer takes place but not of the assessments and the arrears.
21. Predictability of in-year resource allocation
C+
Notes:
21.1 Consolidation of cash balances
A
Notes:
SBP provides daily cash position to FD that is based on bank balance position of main accounts and sub accounts. The cash position does not capture deposits in the schedule banks24.
21.2 Cash forecasting and monitoring
D
Notes:
Cash forecasting and monitoring takes place daily relying on the cash position provided by the SBP. However, the forecasts do not reflect the commitments of the line departments or liabilities created.
21.3 Information on commitment ceilings
B
Notes:
FD does not notify a cash release policy but provide information on cash availability 3-6 months in advance for current and development budget respectively.
21.4 Significance of in-year budget adjustments
C
Notes:
In-year budget estimates are rules based and transparent, but significant number of adjustments takes place.
Notes:
22.1 Stock of expenditure arrears
D*
Notes:
Owing to the lack of functional commitment accounting practices, GoPb does not have a mechanism to record expenditure arrears.
22.2 Expenditure arrears monitoring
D
Notes:
Information on expenditure arrears is not available therefore monitoring of expenditure arrears does not take place.
Notes:
23.1 Integration of payroll and personnel records
B
Notes:
Payroll is supported with full documentation and checked against previous month’s data. Staff hiring is controlled by budget availability and sanctioned strength.
23.2 Management of payroll changes
A
Notes:
The retroactive adjustments were 2.4 percent of the total salary payments in the year 2017-18.
23.3 Internal control of payroll
A
Notes:
Authorization and basis of changes in personnel record and payroll are comprehensively defined in the control framework- Punjab Financial Rules and APPM.
Notes:
Partial payroll audit/physical survey has been conducted however not across the province.
Notes:
24.1 Procurement monitoring
D*
Notes:
Spending units are obligated to maintain all procurement related records. Database to monitor the record at PPRA is available. However, the value of procurements by non-competitive methods was not available.
24.2 Procurement methods
D*
Notes:
Data segregated by competitive and non-competitive procurement method was not available.
24.3 Public access to procurement information
C
Notes:
Complete and reliable Information is available on PPRA website for legal framework, bidding opportunities and bid evaluation reports.
24.4 Procurement complaints management
C
Notes:
Complaint management system complies with requirement 1, 2 and 6. PPRA Rules (2014) briefly provides for grievance redress, but separate procedures have not been notified.
25. Internal controls on nonsalary expenditure
B+
Notes:
25.1 Segregation of duties
A
Notes:
All accounts offices have adopted three-level segregation of duties notified by the CGA. The General Financial Rules and the APPM stipulates the segregation for authorization, recording, custody of assets, and reconciliation functions.
25.2 Effectiveness of expenditure commitment controls
C
Notes:
Practice of commitment accounting is patchy. Alternative methods like the budget availability and cash releases are adopted which are not effective for expenditure commitments evident from the expenditure arrears reported in the FM budget speech (2018-19).
25.3 Compliance with payment rules and procedures
A
Notes:
All payments (over 90 percent) comply with payment procedures and exceptions are noted. Audit findings include approximately 3 percent of the audited expenditure incurred in violation of rules.
Notes:
26.1 Coverage of internal audit
D
Notes:
Internal audit function exists in most of the departments however is not supported with audit programs and functioning in line with IIA standards.
26.2 Nature of audits and standards applied
C
Notes:
Internal auditors do not conduct evaluation of the internal controls effectiveness but primarily focus on financial audit'.
26.3 Implementation of internal audits and reporting
D
Notes:
Only the internal audit wing of the Excise and taxation department provided data of audit programs with 40 percent compliance.
26.4 Response to internal audits
D
Notes:
Internal audit reports are not prepared by most of the entities as a result there is no response by the Management.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
D+
Notes:
27.1 Bank account reconciliation
D
Notes:
Book and Bank reconciliation as a process takes place on monthly basis, however the bank reconciliation statements included sizeable ‘unidentified’ amounts in each month during the FYs reviewed.
Notes:
Reconciliation of suspense account as a process takes place monthly, however the ‘DO Suspense accounts’ record showed un-reconciled balances more than two months after the close of FY 2017-18.
Notes:
DG Works Audit report included findings on non-recovery of supplier's and works related advances. While TA advances data included unsettled TA advances of 223.8 Million more than three months after the end of the FY.
27.4 Financial data integrity processes
A
Notes:
Since the introduction of integrated FMIS the access and changes to records is restricted and recorded. Any change results in an audit trail. The DG audit conducts periodic inspections to verify financial data integrity.
28. In-year budget reports
C+
Notes:
28.1 Coverage and comparability of reports
C
Notes:
Coverage and classification of expenditure data allows direct comparison to all items of the current budget, but in case of development budget the comparison is at the aggregate level only as development budget is presented as single line.
28.2 Timing of in-year budget reports
B
Notes:
Monthly Civil accounts and C&W monthly progress reports are issued within 4 weeks from the end of each month. The former includes outturns data and the latter includes summary physical progress in percentage numbers.
28.3 Accuracy of in-year budget reports
C
Notes:
Monthly civil accounts and the progress reports capture the budget execution for payments only and not commitments. Moreover, the data is not supported with qualitative analysis.
29. Annual financial reports
C+
Notes:
29.1 Completeness of annual financial reports
C
Notes:
Financial reports are prepared annually and provide budget and actual data, but do not include information on financial assets, liabilities, guarantees and obligations.
29.2 Submission of reports for external audit
B
Notes:
Submission of error free financial reports takes place within 6 months after the end of fiscal year.
29.3 Accounting standards
B
Notes:
Annual financial statements are prepared according to IPSAS cash basis financial reporting format. Majority of the IPSAS cash basis financial reporting standards (mandatory requirements) have been adopted.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
C
Notes:
Financial reports of Government of Punjab and PSEs representing the ‘majority’ of total expenditure and revenue have been audited, using national auditing standards incorporating ISSAI’s. Significant issues have been highlighted.
30.2 Submission of audit reports to the legislature
C
Notes:
Audited financial reports were submitted to the legislature within 9 months of the receipt of financial reports from the provincial AG.
30.3 External audit follow-up
C
Notes:
A comprehensive response is provided by the Executive to audit findings however not timely, as delays in holding DACs were noted and MFDAC (2016-17) included findings from the year 2013.
30.4 Supreme Audit Institution independence
C
Notes:
Provincial directorates of the Auditor General Pakistan (AGP) enjoy full independence from the Executive, being the administrative arm of the AGP. It conducts its operational matters independently and has no restriction in access to government’s finance related record nor has any limitations on audit reports publication once reviewed by PAC.
31. Legislative scrutiny of audit reports
B
Notes:
31.1 Timing of audit report scrutiny
D
Notes:
Scrutiny of audit reports takes place more than 12 months after the submission of the audit reports.
31.2 Hearings on audit findings
A
Notes:
In-depth hearings on audit reports take place with participation of the senior audit staff and relevant line department staff is ensured.
31.3 Recommendations on audit by the legislature
A
Notes:
PAC issues directives for compliance and follows up; however, instead of a robust system-based monitoring and reporting of directives, it is carried out manually by the PAC secretariat.
31.4 Transparency of legislative scrutiny of audit reports
C
Notes:
Committee reports are published on the Provincial Assembly website after the review is completed and the report is endorsed by the House.
NO PILLAR
Scores by Dimension
Overall Indicator Score
HLG-1 Predictability of transfers from higher level of Government
D+
Notes:
HLG-1.1 Annual deviation of actual total HLG transfers from the original total estimated amount provided by HLG to the SN entity for inclusion in the latter’s budget
C
Notes:
Transfers were 102, 88 and 85% of the original budget in the FY 2015-16, 2016-17 and 2017-18.
HLG-1.2 Annual variance between actual and estimated transfers of earmarked grants
C
Notes:
The difference between the original budget estimate and actual earmarked grants did not exceed 10 percent in two of the three FYs: 8% in2015-16, 11% in 2016-17 and 8% in 2017-18.
HLG-1.3 In-year timeliness of transfers from HLG (compliance with timetables for in-year distribution of disbursements agreed within of month of the start of the SN fiscal year)
D
Notes:
Federal Government in the month of May communicates a disbursement schedule for revised estimates of the ongoing year and the budget estimates for the next year.