I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
C
Notes:
1.1 Aggregate expenditure outturn
C
Notes:
Aggregate expenditure outturn was between 87.1% in 2015/16, 93.5% in 2016/17 and 88.3% in 2017/18 of the approved aggregate budgeted expenditure.
2. Expenditure composition outturn
C+
Notes:
2.1 Expenditure composition outturn by function
C
Notes:
Variance in expenditure composition by functional classification was 9.1% in 2015/16, 22.6% in 2016/17 and 10.2 % in 2017/18.
2.2 Expenditure composition outturn by economic type
C
Notes:
Variance in expenditure composition by economic classification was 14.4% in 2015/16, 12.1% in 2016/17 and 16.2% in 2017/18.
2.3 Expenditure from contingency reserves
A
Notes:
There is no expenditure charged to contingency vote as GoS does not use contingency as a budget code.
Notes:
3.1 Aggregate revenue outturn
C
Notes:
Actual revenue was 93.0% in 2015/16, 92.5% in 2016/17 and 95.6% in 2017/18 being more than 92% and less than 94% of the budgeted revenue during two of the last three financial years.
3.2 Revenue composition outturn
B
Notes:
Variance in revenue composition was less than 10% in two of the last three years being 11.4% in 2015/16, 8.5% in 2016/17 and 5.8% in 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. Development budget is presented as a single line item therefore does not include sub functional classification.
Notes:
5.1 Budget documentation
B
Notes:
Sindh Government provides three basic elements and two additional elements in its budget documents. Elements 5 and 6 are not applicable to Sindh being a SNG.
6. Central government operations outside financial reports
D
Notes:
6.1 Expenditure outside financial reports
D*
Notes:
Finance Department 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:
6.3 Financial reports of extrabudgetary units
D
Notes:
SOEs are requested by the Corporate Finance Wing to submit their annual reports. However, compliance remains an issue and often repeated follow ups are required by the CF wing.
7. Transfers to subnational governments
B
Notes:
7.1 System for allocating transfers
A
Notes:
The resource allocation for all transfers takes place based on the formula prescribed under the PFC Award of 2007-8.
7.2 Timeliness of information on transfers
C
Notes:
The Local Governments receive budget ceilings after passage of the provincial budget (end June). The local government budget calendar is also from July to June. Due to delay in issuance of ceilings, budget planning and timelines at Local level are also impacted.
8. Performance information for service delivery
D
Notes:
8.1 Performance plans for service delivery
D
Notes:
MTBF captures key performance indicators by cost center, and these are collated by line departments. However, there is no information on activities and related outcomes and outputs. Since the MTBF documents are not legally binding on the Government, the MTBF documents are not published or available on the Finance Department website.
8.2 Performance achieved for service delivery
D
Notes:
There is no mechanism of monitoring the output and outcomes achieved in line with the performance targets identified under the MTBF exercise. Neither is there any information published annually on the activities performed for the Departments.
8.3 Resources received by service delivery units
D
Notes:
Where service delivery units and cost centers align, reports can be easily generated and published. However, while tracking budgets and expenditure to service delivery level is possible but limited in coverage, the exercise is not carried out and the information is not published.
8.4 Performance evaluation for service delivery
D
Notes:
No performance evaluation especially for service delivery has been conducted in the last three fiscal years.
9. Public access to fiscal information
B
Notes:
9.1 Public access to fiscal information
B
Notes:
Government makes available to the public six elements, including all five basic elements and one additional element, within the timeframe specified.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
D
Notes:
10.1 Monitoring of public corporations
D
Notes:
There is no formal mechanism for monitoring public corporations, especially regarding submission of their annual accounts (audited/unaudited) within a given period.
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:
Systematic and methodical contingent liability and fiscal risk monitoring does not take place at the FD; as a result, contingent liabilities and other fiscal risks are not quantified and reported in financial reports.
11. Public investment management
B
Notes:
11.1 Economic analysis of investment proposals
C
Notes:
Economic analysis is conducted for some major investment projects, reviewed by P&D, however, the analysis is not published.
11.2 Investment project selection
A
Notes:
Guidelines/criteria for selection of the project in the budget are published on Finance Department website as Budget Call Circular. In addition, there are screening forums at the Provincial level who have a clear mandate regarding project proposals.
11.3 Investment project costing
C
Notes:
Volume V of the Budget documents provide budget estimate of the Current Financial Year as well as Financial Projection of next two Financial Years.
11.4 Investment project monitoring
B
Notes:
Total costs and physical progress are monitored, procedures for project implementation are in place, and information is published annually.
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 is not consolidated nor depreciated. Partial information on usage and age is available.
12.3 Transparency of asset disposal
D
Notes:
Information on sale of nonfinancial assets is not included in the budget documents or any other financial report.
Notes:
13.1 Recording and reporting of debt and guarantees
C
Notes:
Domestic and foreign debt and guaranteed debt records are updated annually, and reconciliations are performed annually as well as areas where reconciliation requires additional information to be complete are acknowledged in debt sensitivity analysis.
13.2 Approval of debt and guarantees
C
Notes:
Currently there are no concise guidelines, criteria or risk categories at the provincial level for approval of external debt.
13.3 Debt management strategy
D
Notes:
Debt Management Strategy is only now being prepared; therefore, this indicator could not be assessed/marked.
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 rests with the central government.
Notes:
Government prepared BSP (including MTFF report) with qualitative analysis. It is submitted to the Finance Committee of the legislature after approval by the Provincial Cabinet.
14.3 Macrofiscal sensitivity analysis
NA
Notes:
Not Applicable.
Notes:
15.1 Fiscal impact of policy proposals
D
Notes:
Fiscal impacts for revenue and expenditure proposals are calculated but are not explicitly published for the legislature. Revenue proposals are explicitly presented to the Finance Minister and Cabinet only.
15.2 Fiscal strategy adoption
C
Notes:
Government of Sindh prepares BSP which is presented to the Finance Committee of legislature after approval by Provincial Cabinet.
15.3 Reporting on fiscal outcomes
C
Notes:
While reporting on fiscal outcomes is often done through the next year’s budget documents (especially the Budget Speech and the Budget in Brief document), as well as through the Supplementary Demands document, and the Performance Monitoring Report (internal Finance Division document) with brief explanations, reporting against fiscal strategy is not done.
16. Medium-term perspective in expenditure budgeting
D+
Notes:
16.1 Medium-term expenditure estimates
D
Notes:
Only Budget Strategy Paper has a medium-term perspective. All documents, which are part of the Budget proposal, do not have a medium-term perspective.
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 some of the sectors - Agriculture, Education, Health and some of the expenditure policy proposals align with the strategic plans.
16.4 Consistency of budgets with previous year’s estimates
NA
Notes:
Medium term budget has not been adopted in all the budget documents. The Budget Strategy Paper cannot provide the variance analysis with a medium-term perspective.
17. Budget preparation process
C
Notes:
Notes:
A clear BCC exists and is generally adhered to. FD issued BCC in Nov 2016 (for budget year 2017-18) and were allowed at least 6 weeks to prepare the budget estimates.
17.2 Guidance on budget preparation
D
Notes:
The BCC for the budget year 2017-18 included detailed guidelines and forms but indicative budget ceilings were not included for administrative or functional areas.
17.3 Budget submission to the legislature
D
Notes:
Government of Sindh submitted budget proposals to the legislature less than one month before the start of fiscal year.
18. Legislative scrutiny of budgets
C+
Notes:
18.1 Scope of budget scrutiny
C
Notes:
Parliament discusses the revenue and expenditure for the next fiscal year. There is extensive discussion on budget priorities but no discussion on medium term fiscal projections or underlying assumptions.
18.2 Legislative procedures for budget scrutiny
C
Notes:
Legislative procedures are well defined in the Rules of Procedures for the Sindh Assembly, including internal organizations of the Assembly. The legislature’s procedures to review budget proposals are approved by the legislature in advance of budget hearings and are adhered to.
18.3 Timing of budget approval
A
Notes:
Budget for the last three completed fiscal years have been approved prior to the start of the fiscal year.
18.4 Rules for budget adjustment by the executive
B
Notes:
Clear rules exist for in-year budget adjustments. However, the rules do not account for ex-ante approval for the adjustments by the parliament and there are excessive adjustments by the executive during the year.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
C+
Notes:
19.1 Rights and obligations for revenue measures
B
Notes:
The entity collecting majority of the revenues provides payers with access to information on the main revenue obligation areas and on rights including redress processes and procedures.
19.2 Revenue risk management
B
Notes:
The entity collecting the majority of revenues uses structured and systematic approaches for assessing and prioritizing compliance risks.
19.3 Revenue audit and investigation
C
Notes:
The entity that collecting the majority of revenues undertakes audits following the guidance of a 2016 compliance program and is working on cases selected by the risk parameters.
19.4 Revenue arrears monitoring
D*
Notes:
Sufficient information is not available. Information available on the stock of revenue arrears at the end of the last completed fiscal and on revenue arrears older than 12 months is not sufficient to calculate this indicator/dimension.
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.
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
C
Notes:
Account reconciliations are only done once a month, and some funds may remain outside the Government Account and are not reconciled.
21.2 Cash forecasting and monitoring
C
Notes:
The cash forecast is provided for the full year but only 25% of total revenue is updated monthly.
21.3 Information on commitment ceilings
B
Notes:
Budgetary units are provided information on commitment ceilings at least quarterly in advance.
21.4 Significance of in-year budget adjustments
C
Notes:
There are significant in-year budget adjustments to budget allocations which are frequent as well as partially transparent.
Notes:
22.1 Stock of expenditure arrears
D*
Notes:
The Government currently does not have a practice of commitment accounting.
22.2 Expenditure arrears monitoring
D
Notes:
Government does not have a mechanism to centrally record and monitor expenditure arrears.
Notes:
23.1 Integration of payroll and personnel records
A
Notes:
The system of payroll and personnel records is integrated and reconciled monthly.
23.2 Management of payroll changes
A
Notes:
Robust internal processes guide the management of internal payroll changes.
23.3 Internal control of payroll
A
Notes:
There are several internal control mechanisms on the payroll, including pre-audit of any changes, and limited access to the system.
Notes:
Payroll is audited annually as part of certification audit but in-depth audits on the payroll are conducted through compliance audits, which are conducted for only a few departments annually.
Notes:
24.1 Procurement monitoring
A
Notes:
Spending units have all relevant procurement records available. These records were independently verified by assessors.
24.2 Procurement methods
B
Notes:
Majority (70%) of the procurements followed competitive process.
24.3 Public access to procurement information
B
Notes:
Five of the six listed requirements are met for majority of the procurements.
24.4 Procurement complaints management
B
Notes:
Complaints mechanism meets five out of six requirements including criterion 1.
25. Internal controls on nonsalary expenditure
B
Notes:
25.1 Segregation of duties
A
Notes:
Appropriate segregation of duties is prescribed throughout the expenditure process. Responsibilities are clearly laid down albeit slightly outdated.
25.2 Effectiveness of expenditure commitment controls
C
Notes:
Budgetary checks and releases are the primary tools of commitments controls. Releases help with cash management, but at times are used at the discretion of the Finance Department without any adequate communication to the line departments.
25.3 Compliance with payment rules and procedures
B
Notes:
Payment rules and procedures are clearly outlined, and the AG office has its own SOPs and checklist to follow the rules.
Notes:
26.1 Coverage of internal audit
B
Notes:
Within Sindh Government, Internal audit function has been established. The internal audit coverage has been extended to entities representing majority of the expenditure and revenue in Sindh Government.
26.2 Nature of audits and standards applied
B
Notes:
Internal Audit function is following International Internal Audit Standards Board (IIASB) as well as the provisions of Internal Audit Charter.
26.3 Implementation of internal audits and reporting
D*
Notes:
Some audits have been undertaken by Internal Audit function through Chartered Accountancy firms, however, the reporting and implementation of internal audit recommendations were not available.
26.4 Response to internal audits
D*
Notes:
Management’s response and action on the internal audit recommendations could not be ascertained.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
D+
Notes:
27.1 Bank account reconciliation
D
Notes:
The reconciliation process takes place monthly, however, all reconciliation statements include sizeable unidentified amounts.
Notes:
The suspense account is reconciled monthly, however, there are un-reconciled balances in the DO Suspense Account for two months even after the close of Financial Year.
Notes:
Most advances are cleared in a month. The TA advances are cleared within a quarter after the close of the month (based on TA bill submission).
27.4 Financial data integrity processes
B
Notes:
Detailed processes for ensuring integrity of the financial data are well-defined and a thorough audit trail is maintained. There is however no dedicated unit that oversees financial data integrity.
28. In-year budget reports
C
Notes:
28.1 Coverage and comparability of reports
C
Notes:
BERs (in-year budget reports) can be compared to the budget documentation at some level of aggregation, usually by departmental/grant level.
28.2 Timing of in-year budget reports
C
Notes:
Budget execution reports are prepared quarterly and issued within 8 weeks from the end of each quarter. However, none of the above reports provide any quantitative analysis.
28.3 Accuracy of in-year budget reports
C
Notes:
Data inconsistencies persist between the BERs and the monthly accounts, especially comparisons are difficult given the different levels of aggregation of the reports.
29. Annual financial reports
C+
Notes:
29.1 Completeness of annual financial reports
C
Notes:
Detailed information on revenues, expenditures and cash flows are presented, however, information on long-term commitments is severely deficient.
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:
IPSAS cash basis accounting formats are used for compilation of financial statements and cover majority of the mandatory disclosures.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
C
Notes:
Financial reports of provincial government entities representing majority of total expenditures and revenues have been audited, using ISSAIs or national auditing standards during the last three completed fiscal years.
30.2 Submission of audit reports to the legislature
D
Notes:
Audit reports were submitted to the legislature after more than nine months from receipt of the financial reports by the audit office for the last three completed fiscal years.
30.3 External audit follow-up
C
Notes:
PAC follows up on the recommendations however a system to track formal responses by the Executive does not exist.
30.4 Supreme Audit Institution independence
C
Notes:
The AGP’s Directorates in Sindh operate independently from the executive with respect to procedures for appointment and removal of the AGP. They are also independent in terms of planning of audit engagements, and execution of the AGP’s budget but not its approval.
31. Legislative scrutiny of audit reports
D
Notes:
31.1 Timing of audit report scrutiny
D
Notes:
Scrutiny of audit reports takes 12 months or more.
31.2 Hearings on audit findings
NA
Notes:
In-depth hearings on key findings of audit reports take place regularly with responsible officers from all audited entities which received a qualified or adverse audit opinion or a disclaimer.
31.3 Recommendations on audit by the legislature
NA
Notes:
PAC issues directives for compliance and follows up, however a proper follow up system supported with a monitoring and reporting framework is not available.
31.4 Transparency of legislative scrutiny of audit reports
NA
Notes:
Legislative scrutiny is not open to public, but summary press releases are issued to the state media network. However, as none of the most recent audit reports have been securitized this is scored Not Applicable.
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 94.25%, 86.27% and 82.31% of the original budget in the FY 2015-16, 2016-17 and 2017-18, respectively, which is at least 85% of the original budget in two of the previous three years.
HLG-1.2 Annual variance between actual and estimated transfers of earmarked grants
D
Notes:
The difference between original budget estimate and actual earmarked grants was greater than10 percent in all the three years being 61.6% in 2015/16, 49.6% in 2016/17 and 40.1% 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)
C
Notes:
A disbursement timetable is part of the agreement between Federal government and Provincial government. The disbursement timetable is agreed on by all stakeholders at the beginning of the fiscal year. Fifty percent of actual disbursements have been on time in two of the last three years.