SNG PILLAR: INTERGOVERNMENTAL FISCAL RELATIONS
Scores by Dimension
Overall Indicator Score
HLG-1 Transfers from Higher Levels of Government
D
Notes:
HLG-1.1 Outturn from higher-levels of government
D
Notes:
The variances of the last three years are 161.8% in 2018, 135.5% in 2019 and 79.4% in 2020.
HLG-1.2 Transfers composition outturn
D
Notes:
The transfers composition outturn was 52.3% (2018), 20.2% (2019) and 13.7% (2020).
HLG-1.3 Timeliness of transfers from higher-levels of government
D
Notes:
There is no a disbursement timetable that is agreed at the beginning of the fiscal year and actual transfers have not been distributed evenly across the year in last three fiscal years.
HLG-1.4 Predictability of transfers
C
Notes:
The central government provides information on the fiscal year and next following year by providing partial explanations of all changes between 2020 and 2021; however, it is not broken down by head administration of SNA level 1.
HLG-2 Fiscal rules of monitoring of fiscal position
C+
Notes:
HLG-2.1 Fiscal rules for subnational governments
A
Notes:
The provincial administrations respect fiscal rules by following a zero-budget balance approach.
HLG-2.2 Debt rules for subnational governments
NA
Notes:
HLG-2.3 Monitoring of subnational governments
C
Notes:
A consolidated budget report of PPCA is summitted to MEF late more than 6 months.
I. BUDGET RELIABILITY
Scores by Dimension
Overall Indicator Score
PI-1 Aggregate expenditure out-turn
D
Notes:
PI-1.1 Aggregate expenditure out-turn
D
Notes:
Aggregate expenditure outturns were 139.8%, 160.1%, and 67.1% in 2018, 2019, and 2020 respectively.
PI-2 Expenditure composition outturn
D+
Notes:
PI-2.1 Expenditure composition outturn by function
NA
Notes:
The PPCA follows the line-item budgeting system and uses only economic classification.
PI-2.2 Expenditure composition outturn by economic type
D
Notes:
The variance in expenditure composition exceeded 15% in two (2019 and 2020) of the last three financial years.
PI-2.3 Expenditure from contingency reserves.
B
Notes:
The average amount of expenditure actually charged to the contingency vote over the last three years is 3.6%.
Notes:
PI-3.1 Agregate revenue outturn
D
Notes:
Aggregate revenue outturn is 114.3%, 132.4 %, and 163.9% in 2018, 2019, and 2020 respectively.
PI-3.2 Revenue composition outturn
D
Notes:
Revenue composition outturn is 145.4%, 76.4% and 36.4% in 2018, 2019, and 2020 respectively.
II. TRANSPARENCY OF PUBLIC FINANCES
Scores by Dimension
Overall Indicator Score
PI-4 Budget Classification
D
Notes:
PI-4.1 Budget Classification
D
Notes:
The PPCA prepares and monitors its budget based on only economic classifications.
PI-5 Budget Documentation
D
Notes:
PI-5.1 Budget Documentation
D
Notes:
There is only one requirement for basic that is fulfilled.
PI-6 Subnational government operations outside financial reports
A
Notes:
PI-6.1 Expenditure outside financial reports
A
Notes:
All PPCA ’s expenditure is reported in monthly and annual expenditure reports.
PI-6.2 Revenue outside financial reports
A
Notes:
All PPCA ’s revenue is reported in monthly and annual revenue reports.
PI-6.3 Financial reports of extrabudgetary units
NA
Notes:
There are no extra-budgetary units under PPCA.
PI-7 Transfers to subnational governments
C
Notes:
PI-7.1 System for allocating transfers
C
Notes:
Khan s’ budget are a part of the PPCA’s budget and are not determined by a rule-based system but sangkats received between 33-47 percent compared total transfer to both lower tiers (khans and sangkats) with the rule-based system.
PI-7.2 Timeliness of information on transfers
C
Notes:
Khan administrations are able to execute the budget without delay and received information for budget planning before fiscal year but there is no calendar for budget disbursement.
PI-8 Performance information for service delivery
D
Notes:
PI-8.1 Performance plans for service delivery
D
Notes:
There is no information published annually. In current practice, outputs are set only in the BSP but not in the annual budget since the PPCA will not implement the program budget until FY2021.
PI-8.2 Performance achieved for service delivery
D
Notes:
Information is not published with the activities performed with reference to output and outcome indicators for major public service programs.
PI-8.3 Resources received by service delivery units
D
Notes:
There is no information available for individual spending units under the control of PPCA, with reporting being consolidated across the whole PPCA and reporting using only economic classification.
PI-8.4 Performance evaluation for service delivery
D
Notes:
Evaluations of the efficiency or effectiveness of public service delivery have not been carried out by programs within the last three fiscal years.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
There is limitation of fiscal information available to the public.
9bis Public consultation
D+
Notes:
9bis.1 Public consultation in budget preparation
D
Notes:
The PPCA usually prepares the public consultation to listen to the needs of local citizens as inputs for annual budget preparation. However, the PPCA does not present the annual budget plan and estimates in public consultation/forum.
9bis.2 Public consultation in the design of service delivery programs
C
Notes:
The PPCA conducted the public consultation once per year and received feedback on the service provided.
9bis.3 Public consultation in investment planning
D
Notes:
There is no public consultation on the preparation of major investment projects.
III. MANAGEMENT OF ASSETS AND LIABILITIES
Scores by Dimension
Overall Indicator Score
PI-10 Fiscal risk reporting
D
Notes:
PI-10.1 Monitoring of public corporations
NA
Notes:
The PPCA does not hold equity shares or in any way control any public enterprises.
PI-10.2 Monitoring of subnational governments
D
Notes:
Khan and sangkat administrations submit the budget execution reports to the PPCA, which is available on the I-SAF database of NCDDS; however, the audit or unaudited financial positions are not published.
PI-10.3 Contingent liabilities and other fiscal risks
NA
Notes:
The PPCA does not identify the contingent liabilities in a report.
PI-11 Public investment management
D+
Notes:
PI-11.1 Economic analysis of investment proposals
D
Notes:
Economic analyses are not carried out to assess the feasibility of major investment projects proposed for the next year’s budget.
PI-11.2 Investment project selection
D
Notes:
The Project Formulation Committee of PPCA selected investment projects proposal based on PIP 3-year rolling as well as political interests. There is still a lack of specific criteria for project selections.
PI-11.3 Investment project costing
C
Notes:
Technical line departments in the PPCA are responsible for project costings. Medium-term major project costing included in the PIP does not reflect full capital and recurrent costs for the forthcoming budget year as well as included in the annual budget.
PI-11.4 Investment project monitoring
C
Notes:
The existence of the working group monitors major projects implementation and report annually; however, these reports were not published.
PI-12 Public asset management
C+
Notes:
PI-12.1 Financial asset monitoring
C
Notes:
The PPCT consolidates its cash balances each month.
PI-12.2 Nonfinancial asset monitoring
C
Notes:
The PPCA registers state property annually but lacks asset information on immovable assets and the value of asset. However, the information is not made available to the public and some immovable assets have not had hard titles.
PI-12.3 Transparency of asset disposal
B
Notes:
The State Property Commission of PPCA has authority to monitor and dispose and follows the Prakas no.002 MEF.PrK (2020) on Detailed Rules and Procedures on Disposal Asset from Inventory List.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
NA
Notes:
PI-13.2 Approval of debt and guarantees
NA
Notes:
PI-13.3 Debt management strategy
NA
Notes:
IV. POLICY-BASED FISCAL STRATEGY AND BUDGETING
Scores by Dimension
Overall Indicator Score
PI-14new Medium term budget strategy
D
Notes:
PI-14new.1 Underlying forecasts for medium-term budget
C
Notes:
The PPCA estimates of the revenue and expenditure based on information on transfers, revenue and expenditure assignment.
PI-14new.2 Fiscal impact of policy proposals
D
Notes:
The PPCA does not prepares estimates of the fiscal impact in the BSP and annual budget.
PI-14new.3 Medium-term expenditure and revenue estimates
D
Notes:
The annual budget proposal presents only current budget and one following year.
PI-14new.4 Consistency of budgets with previous year's estimates
D
Notes:
The gap between the BSP estimates for the forthcoming budget year and the subsequent annual budget is a quite substantial 20%-30% as well as the gap is not explained in the budget proposal.
PI-14 Macroeconomic and fiscal forecasting
NU
Notes:
PI-14.1 Macroeconomic forecasts
NU
Notes:
PI-14.2 Fiscal forecasts
NU
Notes:
PI-14.3 Macro-fiscal sensitivity analysis
NU
Notes:
Notes:
PI-15.1 Fiscal impact of policy proposals
NU
Notes:
PI-15.2 Fiscal strategy adoption
NU
Notes:
PI-15.3 Reporting on fiscal outcomes
NU
Notes:
PI-16 Medium term perspective in expenditure budgeting
NU
Notes:
PI-16.1 Medium-term expenditure estimates
NU
Notes:
PI-16.2 Medium-term expenditure ceilings
NU
Notes:
PI-16.3 Alignment of strategic plans and medium-term budgets
NU
Notes:
PI-16.4 Consistency of budgets with previous year estimates
NU
Notes:
PI-17 Budget preparation process
C
Notes:
Notes:
There is a clear budget calendar that is set out in the Law on Financial Regime and State Property Management for SNAs (2011).
PI-17.2 Guidance on budget preparation
D
Notes:
There is a clear guidance for budget formulation based central government guidance; however, it does not include budget ceiling for PPCA.
PI-17.3 Budget submission to the subnational council
D
Notes:
The governor submitted the budget proposal to PPCC less than one month.
PI-18 Legislative scrutiny of budgets
D+
Notes:
PI-18.1 Scope of budget scrutiny
C
Notes:
The PPCC reviews cover only revenue and expenditure but lake of review completed on policies, and medium-term expenditure.
PI-18.2 Legislative procedures for budget scrutiny
D
Notes:
The PPCC lacks of its own procedure for budget review, resulting in a lack of effective budget scrutiny.
PI-18.3 Timing of budget approval
A
Notes:
Approval of the 2020 budget was in accordance with the budget calendar set out in Law on Financial Regime and State Property Management (2011). There were no significant delays.
PI-18.4 Rules for budget adjustments by the executive
A
Notes:
There is a clear rule for in-year budget adjustment. When there is a budget adjustment, the PPCA must request for approval from the MEF. The rules for adjustments to the annual budget appropriations are strictly respected.
V. PREDICTABILITY AND CONTROL IN BUDGET EXECUTION
Scores by Dimension
Overall Indicator Score
PI-19 Tax administration
NA
Notes:
PI-19.1 Rights and obligations for tax measures
NA
Notes:
PI-19.2 Property tax register and value assessment
NA
Notes:
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
PI-19.4 Tax arrears monitoring
NA
Notes:
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
The PPCA receives monthly revenue collections data from the Phnom Penh Capital Treasury and from the Phnom Penh Municipality of Tax Division.
PI-20.2 Transfer of revenue collections
A
Notes:
All revenue is directly transferred to the national TSA on a daily basis. These accounts are ‘zero balance’ accounts.
PI-20.3 Tax accounts reconciliation
NA
Notes:
The central government is responsible for collecting taxes.
PI-21 Predictability of in-year resource allocation
B
Notes:
PI-21.1 Consolidation of cash balances
A
Notes:
The PPCT consolidates the cash balance daily.
PI-21.2 Cash forecasting and monitoring
B
Notes:
A cash flow forecast is prepared for the fiscal year and is updated at least quarterly by the PPCT on the basis of actual cash inflows and outflows.
PI-21.3 Information on commitment ceilings
D
Notes:
There is no commitment ceiling provided at least one month in advance and based on revenue collection.
PI-21.4 Significance of in-year budget adjustments
A
Notes:
The budget adjustment happens only one time in 2020 in a transparent and predictable way.
PI-22 Expenditure arrears
D*
Notes:
PI-22.1 Stock of expenditure arrears
D*
Notes:
Stock expenditure arrears are not able to assess due insufficient data based on definition of PEFA.
PI-22.2 Expenditure arrears monitoring
D*
Notes:
Data maintained on the FMIS can be extracted to generate Excel reports and data on stock and composition of arrears is monitored by the PPCT on a regular basis and reported annually based on current practice.
Notes:
PI-23.1 Integration of payroll and personnel records
B
Notes:
The payroll is supported by full documentation for all changes made to personnel records each month and checked against the previous month’s payroll data. Staff hiring and promotion is controlled by a list of approved staff positions. The PPCA control only staffs in the jurisdiction and has the authorization to promote only up to deputy heads of departments.
PI-23.2 Management of payroll changes
B
Notes:
The personnel records and payroll are updated at least monthly, generally in time for the following month’s payments and retroactive adjustments to the payroll are between 5% and 11% from 2018-2020.
PI-23.3 Internal control of payroll
B
Notes:
Sufficient controls exist to ensure the integrity of the payroll data, but audit trails are generally missing.
Notes:
The NAA audited the PPCA in 2018 on PFM (expenditure, revenue, and asset management) and internal control. There is no findings/information on payroll.
Notes:
PI-24.1 Procurement monitoring
A
Notes:
The PPCA is a procuring unit recording all data in an excel spread sheet and the total value of 34 contracts could calculate against the total annual procurement value.
PI-24.2 Procurement methods
D
Notes:
The total value of contracts awarded through competitive methods in 2020 was only 10%.
PI-24.3 Public access to procurement information
D
Notes:
There is only 1 key procurement information made available to the public.
PI-24.4 Procurement complaints management
D
Notes:
Criteria (i) is not met and the other 5 are met.
PI-25 Internal controls on nonsalary expenditure
C
Notes:
PI-25.1 Segregation of duties
C
Notes:
Segregation of duties is clearly specified across administrative units throughout the expenditure process; however, it is partially effective.
PI-25.2 Effectiveness of expenditure commitment controls
C
Notes:
The PPCA executes the annual budget based on cash availability and commitment is under control of PPCEF and Payment is under control of PPCT. However, the PPCA has not prepared for quarterly revenue and expenditure programs and submission to PPCDEF.
PI-25.3 Compliance with payment rules and procedures
C
Notes:
The majority of payments are compliant with regular payments procedures and majority of exceptions are duly authorized or justified.
Notes:
PI-26.1 Coverage of internal audit
D
Notes:
No internal audit has taken place during the assessment period.
PI-26.2 Nature of audits and standards applied
NA
Notes:
PI-26.3 Implementation of internal audits and reporting
NA
Notes:
PI-26.4 Response to internal audits
NA
Notes:
VI. ACCOUNTING AND REPORTING
Scores by Dimension
Overall Indicator Score
PI-27 Financial data integrity
B
Notes:
PI-27.1 Bank account reconciliation
NA
Notes:
It is a function of the central government.
PI-27.2 Suspense accounts
NA
Notes:
It is a function of the central government.
PI-27.3 Advance accounts
NA
Notes:
It is a function of the central government.
PI-27.4 Financial data integrity processes
B
Notes:
There is a clear separation of responsibility from entry data to recording in the business process of FMIS which provides information on any access to records and changes to data entry and results in an audit trail. However, there is no operational unit in charge of the integrity of the system.
PI-28 In-year budget reports
C+
Notes:
PI-28.1 Coverage and comparability of reports
C
Notes:
The coverage and classification of data allow direct comparison to the original budget for the main administrative headings under the PPCA.
PI-28.2 Timing of in-year budget reports
A
Notes:
The PPCA produces monthly budget execution reports and issues them within two weeks from the end of each month. These reports are used for monthly PPCC meeting.
PI-28.3 Accuracy of in-year budget reports
C
Notes:
Expenditure is captured at the payment stage only (not including the commitment stage).
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
C
Notes:
The PPCA ’s annual financial reporting includes only revenues and expenditures and cash balance.
PI-29.2 Submission of reports for external audit
D
Notes:
Annual financial reports are prepared and submitted to the MEF for consolidation. The MEF will then prepare a draft budget settlement law and submit that for an external audit by NAA, typically in Q3. The draft of the consolidated budget settlement law is inclusive of both national and subnational administrations.
PI-29.3 Accounting standards
D
Notes:
Cash Basis of Accounting Standard is not applicable for the PPCA since it is used for central government.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
PI-30.2 Submission of audit reports to the subnational council
NU
Notes:
PI-30.3 External audit follow-up
NU
Notes:
PI-30.4 Independence of the public audit institution in charge of subnational governments
NU
Notes:
PI-31 Legislative scrutiny of audit reports
NA
Notes:
PI-31.1 Timing of audit report scrutiny
NA
Notes:
PI-31.2 Hearings on audit findings
NA
Notes:
PI-31.3 Recommendations on audit by subnational council
NA
Notes:
PI-31.4 Transparency of legislative scrutiny of audit reports
NA
Notes: