Survey of the Budget Process in Slovenia

Dirk-Jan Kraan

Budgeting and Public Expenditures Division Public Governance and Territorial Development Directorate OECD

General government expenditures and revenues as % of GDP -- 1996-2005

Revenues Expenditures 45 43 41 39 37 35 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Real gross domestic growth as % of GDP in the previous year 2000-2005 EU 15 Slovenia 2000 2001 2002 2003 2004 2005

3.4

4.1

1.5

2.7

1.1

3.4

0.8

2.3

2.0

3.6

2.4

3.7

Sources: EU 15: Economic Commission, Economic Forecasts, April 2004; Slovenia: Spring Report 2004, Institute of Macro-economic Analysis and Development (IMAD).

General Government deficits 2000-2004 2000 2001 2002 2003 2004 EU 15 Slovenia 1.0

-3.0

-1.0

-2.7

-2.0

-1.9

-2.6

-1.8

-2.3

-1.7

Source: Bulletin of Government Finance Year V, no.6 June 2004

General government gross financial liabilities as % of GDP -- 1996-2003

Debt RS in % of GDP 30 25 20 15 10 5 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Special features of Slovenian budget process

1. Budgets for two consecutive years 2. Law on budget execution

Executive Budget Process Time Table April April-May May May-June June June August September September

Spring economic forecast of IMAD Preliminary discussions MoF / line ministries First budget session of government Negotiations MoF / line ministries Second budget session of government Submission of financial plans Final decision making in cabinet Submission of budget to Parliament

Conclusions executive budget process

• Effective top-down control based on two stage decision-making process • Anti-cyclical stance in expenditure policy does not provide automatic stabilisation • Detailed account structure provides firm grip on expenditures but requires reallocation • Multi-year estimates only at higher levels of aggregation • Excellent role of forecasting institute IMAD • No explicit prudence factor in revenu forecasts • Many off-budget funds • Many long term planning documents

• Submission of executive budget in two stages complicates the process • Short timeframe for parliamentary scrutiny • Introduction of pre-budget statement may contribute to parliamentary oversight

• • • • •

Conclusions Budget execution and service delivery

Detailed account structure necessitates reallocation Effective system of cash management through Single Treasury Account Scope for further reform in the structure of service delivery Transparancy of procurement regulation may be improved Reform of civil service has been succesful but further steps are important Transparancy of personnel information system may be improved.

Conclusions Accounting and Audit Procedures

• Substantial improvements in quality and timeliness of accounting; a next step may be the submission of financial statements to Parliament within six months after conclusion of the budget year • Impressive evolution of the Court of Accounts towards an Auditor-General type of Supreme Audit Institution based on a modern legal framework and sound procedures • The use of audit findings for parliamentary scrutiny has thus far been suboptimal

Legislative Budget Process Time Table September

Submission of draft budget to Parliament

October October November November

Consideration in sectoral committees and subsequently in Committee on finance and monetary policy Submission of second budget proposal to Parliament Parliament proposes amendments under qualified rules Parliament votes on amendments