UNIVERSITY OF MAKENI
(UNIMAK)
MBA-FINANCE – 4 TH COHORT
PUBLIC FINANCE
GROUP 2 - MEMBERS
No
NAME
ID
No
NAME
ID
1
Dennis Bangura - Leader
620
13
Ibrahim P. Mansaray
6968
2
Brima Yirah Konteh
6257
14
Sulaiman Kamara
6438
3
Abdul Rahman Bangura
1052
15
Edward Phillip Kamara
2865
4
Huldah Rhoda Bangura
2201
16
Christiana F. Kamara
2829
5
Willie K. Caulker
859
17
Albert Konerr Kamara
6340
6
Ibrahim M. Kamara
289
18
Ibrahim Sheku Kanu
2839
7
Woma Berewa
6924
19
Chernor Kamara
2090
8
Alie Dabor
2843
20
Jamil M. Kamara
2721
9
Samuel Abu Conteh
1910
21
Isatu Isha Holland-Cole
6821
10
Aminata Fofanah
1947
22
Albert Kamara
2907
11
Kelfala J. Lahai
6910
23
Ibrahim Michael Conteh
3943
12
Yusifu Janneh
6886
24
Vandi MS Kanu
6911
•
Table of Content
i. Introduction – Monitoring Government Allocations
ii. Introduction – Monitoring Government Expenditure
iii. Why Government Do Allocations
iv. Government of Sierra Leone 2021 Budgetary Allocations
v. Government of Sierra Leone 2021 Recurrent and Capital Expenditure
vi. The Executive Control
vii. The Legislative Control
viii.Ministry of Finance Control
ix. The Treasury Control
x. Control by Warrants
xi. Departmental Control Over Budgeted Expenditure
xii. Control by the Auditor General
GOVERNMENT ALLOCATION &
EXPENDITURE
Introduction
• Before the start of every fiscal year, MDAs and
other government functionaries prepare annual
budget for their planned activities for the coming
year.
• When these budgets are prepared, resources
would be allocated to them based on their
expenditure level or priority areas.
MONITORING GOVERNMENT ALLOCATIONS
Introduction Cont..
• Budget/Allocation Monitoring is centered on the idea of ensuring that
government is setting the right priorities and doing it in a manner that
is fiscally responsible and responsive to citizen needs.
• Key players control (Executive, Legislative, MoF, Treasury,
Departmental and control by the Auditor General) and monitor
government budgets by observing budget hearings and obtaining
budget documents during the budget formulation and approval stages.
If the political space allows, monitoring from the executive, audit
department and legislative hearings because budget are generally
determined by all branches of government.
MONITORING GOVERNMENT ALLOCATIONS
CONT…..
• The key documents that monitoring groups should request are
the executive budget proposal, supporting budget reports,
documentation of any budget laws and reports developed by
legislative budget committee.
• When planning government monitoring initiatives related to
the government budget cycle, citizen groups should first do an
analysis of the political context to determine whether there is
enough space available to carry out monitoring activities. In
order for citizen engagement in the budget cycle to be
successful, central government must be willing to allow
citizens access to budget meetings and publicly share budget
documents.
MONITORING GOVERNMENT EXPENDITURE
• Introduction
• Public Expenditure monitoring and control helps governments,
citizens and CSOs ensure that allocated public resources effectively
reach their intended beneficiaries. It can help identify and address
problems and weaknesses in systems of public expenditure, transfer
and service delivery. It is also effective in revealing corruption and
detecting the exact location of leakages.
• Public expenditure tracking usually involves some form of both
quantitative research such as for e.g. verifying financial accounts to
monitor the actual flow of funds and qualitative research such as for
e.g. interviewing users of public services about their experiences and
assessments of the quality, accessibility and cost of public services.
Expenditure control and monitoring can be undertaken at the local,
district or national level.
MONITORING GOVERNMENT EXPENDITURE
• Introduction
• In some cases, the flow of resources is tracked from the highest level
of government like for e.g. the National Treasury through its various
layers to the final beneficiaries viz. the end users of public services or
programmes like school, transportation, energy or health centre etc.
Such an undertaking requires substantial expertise, resources and
coordination between actors from the national to the grassroots levels.
• For e.g., the Public Expenditure Tracking Surveys (PETS) supported
and implemented by the World Bank, engage researchers at both the
national and grassroots level and use both interviews and technical
reviews of financial records to trace the flow of funds from source to
final destination
WHY GOVERNMENT DO ALLOCATIONS
• The very reasons why government allocate resources to different
MDAs or undertake capital expenditure projects or recurrent
expenditure is to boost economic growth, stability and equal
distribution of scare resources. Implicitly, government allocate
resources to mitigate/avoid market failure.
Market Failure occurs when the competitive market system
1) produces the “wrong” amounts of certain goods and services or
2) fails to allocate any resources whatsoever to the production of
certain goods and services whose output is economically
justified.
WHY GOVERNMENT DO ALLOCATIONS CONT..
• The first type of failure results from what economists call externalities
or spillovers and the second type involves public goods. Government
can take actions to try to address both kinds of market failure.
1. Externalities - An externality is a cost or benefit from production
or consumption, accruing without compensation to someone other
than the buyers and sellers of the product. It have Positive and
Negative Externalities.
2.
Public Goods & Services - A good or service that is characterized
by nonrivalry and non-excludability; a good or service with these
characteristics provided by government. Everyone can
simultaneously obtain the benefit from a public good such as a
global positioning system, national defense, street lighting, and
environmental protection.
WHY GOVERNMENT DO ALLOCATIONS CONT..
3. One person's benefit does not reduce the benefit available
to others. More important, there is no effective way of
excluding individuals from the benefit of the good once it
comes into existence. The inability to exclude creates a
free-rider problem The inability of potential providers of an
economically desirable good or service to obtain payment
from those who benefit, because of non-excludability.
4. In which people can receive benefits from a public good
without having to pay for it. As a result, goods and services
subject to free riding will typically be unprofitable for any
private firm that decides to produce and sell them.
GOSL 2021 BUDGETARY ALLOCATIONS
NON SALARY, NON INTEREST RECURRENT
(SUBSIDIES AND TRANSFERS) BUDGETARY
ALLOCATIONS FOR FY 2021
No
DETAILS
FY 2021 Budget % of Goods
& Services
(Le’m)
1
General Services
399,479.4
36.6%
2
Security Services
299,907.4
27.5%
3
Social Services
278,813.4
25.6%
4
Economic Services
185.992.0
16.8%
5
Contingency Expenditure
19,930.5
1.8%
GOSL 2021 RECURRENT & CAPITAL
EXPENDITURE
No
A
B
DETAILS
In Trillion Leones
%
Recurrent Expenditure:
7.2 Trillion
Wages and Salaries
3.5 trillion
48%
Goods and Services
1.2 trillion
16%
Interest Payment
1.3 trillion
18%
Subsidies and Transfer
1.3 trillion
18%
Capital Expenditure
3 trillion
THE EXECUTIVE CONTROL
• The executive is the branch of government that is
responsible for the day-to-day management of the state.
Under the doctrine of the separation of powers, the
executive is not supposed to make laws (role of
the legislature), nor to interpret them (role of
the judiciary). The executive is supposed to put the
laws into action and it is headed by the President and
assisted by a number of ministers, who usually have
responsibilities for particular areas.
The Executive controls the budgetary allocations and
expenditure in diverse ways among which are:
THE EXECUTIVE CONTROL CONT…
1. Establishment of National Monitoring and Evaluation
Directorate (NaMED) – Sierra Leone Government places
importance on the monitoring and evaluation of development results.
To this end, a National Monitoring and Evaluation Directorate
(NaMED) has been established in the Office of the President with
direct oversight of the President. NaMED will monitor and evaluate
all Government and donor funded projects, programmes and policies
articulated in the National Development Plan.
2. Strategic exploration of the budget
3. Strategic control and monitoring of the budget
4. Budget outturn and accountability
5. Analysis and assessment of result
THE LEGISLATIVE CONTROL
The legislative branch of government is responsible for
enacting the laws of the state and appropriating the money
necessary to operate the government. In Sierra Leone, the
Public Accounts Committee (PAC) considers the Auditor
General’s report and makes recommendations to the plenary of
the entire house, the outcomes of which are then communicated
to the state president for follow-up actions and sanctions
where necessary. The legislative control processes are:
1. Establishment of a Budget Office. Strong, independent
legislatures may create a non-partisan budget office, where
alternative budget analyses and scenarios may be
proposed.
THE LEGISLATIVE CONTROL CONT..
2.
Proper scrutiny of the budget
3. Provides oversight functions
4. Frequent consultations between the administration and the
legislative committees on budget policies and their
implementation
5. Passing into law sound financial, management and
procurement laws.
MINISTRY OF FINANCE CONTROL
• Ministry of Finance of Sierra Leone is a government body tasked with
designing and implementing sound economic policies and public
financial management, ensure efficient allocation of public resources
to promote stable economic growth and development in the context of
a stable macroeconomic environment.
The control mechanism put in place among other things are:
1. It sanctions expenditure, subject to powers delegated to spending
ministries.
2. It gives acceptance of provision in budget estimates.
3. It prescribes a financial code for internal audit system of the
ministries.
4. It approves policies and programmes in principle.
5. It offers financial advice through integrated financial advisor.
6. It permits re-appropriation of grants.
THE TREASURY CONTROL
• Treasury is responsible for the formulation of fiscal policy; budget
preparation; budget execution; management of financial operations;
accounting; and auditing and evaluation. Management of government
bank accounts; part of its control mechanisms are:
1. Controls liquidity in public financial administration
2. Controls the day-to-day cash management of the consolidated fund
and other funds
3. Co-ordinates the receipts, custody, disbursement and transfer of public
and trust monies as required by law,
4. Controls the commitments and contingent liabilities of Government,
5. Controls public debt management;
CONTROL BY WARRANTS
• In legal term, a warrant control is a legal document that is given by the
court if you have any debt and it is the type of document that allows
the agents of warrant control to have a check at your place, and they
are allowed to get control over the things you own. Whatever they
seize will typically be sold at auction to collect the debt that is required
from you.
• In financial transactions, a warrant is a written order by one person
that instructs or authorises another person to pay a specified recipient a
specific amount of money or supply goods at a specific date. Awarrant
may or may not be negotiable and may be a bearer instrument that
authorises payment to the warrant holder on demand or after a specific
date.
• Governments may pay wages and other accounts by issuing warrants
instead of cheques.
CONTROL BY WARRANTS
Control by warrants are conveyed through one of the following
warrants:
1. Annual General Warrant – this authorises the accountantgeneral to issue funds for the payment of personal emoluments
and other services provided for in the approved
estimate/budget/allocation.
2. Provisional General Warrant – this is issued before the
appropriation act comes into operation at the beginning of the
financial year. It provide for continuation of government activities
at a level not exceeding the level of those services prevailing in
the previous financial year.
3. Supplementary General Warrant – this is issued for additional
personal emoluments and other services provided for in the
approved Supplementary Estimates.
CONTROL BY WARRANTS CONT..
4. Reserved Expenditure warrant – this authorised the release of funds
included in the approved annual and supplementary estimates but excluded from
the annual general or supplementary general warrants, i.e, the release of fund
which the minister of finance initially withheld in order to exercise special
control.
5. Virement Warrant – this is issued when, as a result of unforeseen circumstances
during the time the annual estimates being approved, an additional provision is
required under a particular sub-head, and an equivalent amount can be saved
under another sub-head.
6. Development Fund General Warrant – this authorised the A.G to issue funds
for expenditure on capital projects, as contained in the annual estimate and
authorises the officer controlling expenditure to incur expenditure on these
projects.
7. Departmental Warrant– this is issued where there is need for an accounting officer of one
ministry or department to authorise an accounting officer to another ministry to incur
expenditure.
DEPARTMENTAL CONTROL OVER BUDGETED EXPENDITURE
• Department is a sector of a state government that deals with a
particular area of interest. For Sierra Leone, the various types
of parastatals/departments are NASSI, National Tourism
Board, Office of the Administrator and Registrar General,
Office of Diaspora Affairs, NRA, Statistics Sierra Leone etc.
• Therefore, their control functions over budgeted expenditure are:
1. Controls on liabilities or guarantees- This control is applied on the
incurrence of a liability or guarantee and again at the payment stage
when the liability is extinguished or guarantee is paid. It seeks to
verify: (i) the existence of budget cover or space within the authorized
limits; and (ii) that the payment is being made to extinguish the
liability to a real supplier and for a claim that was not paid earlier
DEPARTMENTAL CONTROL OVER BUDGETED EXPENDITURE
CONT..
1. Payroll controls -The objective of payroll controls is to control personnel
expenditures and staffing numbers.
2. Pension controls - The liability and associated expense for pensions and other
retirement benefits should be recognized at the time the civil servants’ services
are rendered. Any part of that cost unpaid at the end of the period is a liability.
3. Verification of goods and services- That is, verification of the goods and/or
services delivered by a supplier to ensure that these conform to the specified
quality and quantity; and a calculation of the liability incurred by the
government to the supplier.
4. Manual Processing Controls - Key manual processing controls for
purchasing, payment, and confirmation of receipt of goods and services are
performed outside the typical information systems
5. Control of Procurement
CONTROL BY AUDITOR GENERAL
• The Auditor General is mandated to carry out audits on the
economy, efficiency and effectiveness with which the audited
government entities use their resources in carrying out their
responsibilities. The Auditor General is the independent
auditor reporting to Parliament.
• Section 119 of the 1991 Constitution of Sierra Leone
empowers the Auditor General to audit the public accounts of
Sierra Leone and of all public offices including the courts, the
central and local government administrations, the Universities
and public institutions, together with statutory corporations,
companies, bodies or organisations set up partly or wholly out
of public funds.
CONTROL BY AUDITOR GENERAL CONT..
• Some its control systems are:
1. Being a ‘watch dog’
2. Physical controls
3. Accounting controls
4. Process controls
5. Procurement controls
6. Making recommendations