[Federal Register Volume 80, Number 13 (Wednesday, January 21, 2015)]
[Notices]
[Pages 2997-3004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00792]
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DEPARTMENT OF STATE
[Public Notice 9006]
2014 Fiscal Transparency Report
AGENCY: Department of State.
ACTION: Notice.
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SUMMARY: The Department of State hereby presents the findings from the
FY 2014 fiscal transparency review process in its Fiscal Transparency
Report. This report describes the minimum requirements of fiscal
transparency developed by the Department of State in consultation with
other relevant federal agencies, identifies governments that are
potential beneficiaries of FY 2014 foreign assistance funds, assesses
those that did not meet the minimum fiscal transparency requirements,
and indicates whether those governments made significant progress
towards meeting the requirements.
Fiscal Transparency
Fiscal transparency is a critical element of effective public
financial management, helps in building market confidence, and sets the
stage for economic sustainability. Transparency also provides a window
into government budgets for citizens of any country, helping them to
hold their leadership accountable. The Department of State's fiscal
transparency review process assesses whether governments meet minimum
requirements of fiscal transparency. The review includes an assessment
of the transparency of processes for administering government contracts
and licenses for natural resource extraction.
Annual reviews of the fiscal transparency of governments that
receive U.S. assistance help ensure U.S. taxpayer money is used
appropriately and to sustain a dialogue with governments to improve
their fiscal performance, leading to greater macroeconomic stability
and better development outcomes.
Section 7031(b) of the Department of State, Foreign Operations, and
Related Programs Appropriations Act, 2014 (Div. K, Pub. L. 113-76)
(``the Act'') requires the Secretary to develop, for each government
receiving assistance appropriated by the Act, minimum requirements of
fiscal transparency, in consultation with heads of other relevant
federal agencies, and to make a determination of ``significant'' or
``no significant progress'' in meeting the minimum requirements of
fiscal transparency for each government that did not meet the minimum
requirements. Through authority delegated from the Secretary, the
Deputy Secretary of State for Management and Resources made those
determinations for FY 2014.
This report describes the minimum requirements of fiscal
transparency developed by the Department, identifies whether
governments met the requirements, and indicates whether those
governments that did not meet the minimum requirements made significant
progress toward meeting them. The report includes a description as to
how those governments fell short of the minimum requirements, outlines
any significant progress being made toward meeting the minimum
requirements, and provides specific recommendations of short and long-
term steps such governments should take to improve fiscal transparency.
The report also outlines the process followed by the Department in
completing the assessments and describes how funds appropriated by the
FY 2014 and earlier appropriations acts are being used to support
fiscal transparency.
Fiscal Transparency Review Process and Criteria
The Department reviewed its minimum requirements of fiscal
transparency in consultation with other relevant federal agencies, and
updated and strengthened its review criteria. In determining which
governments were subject to fiscal transparency assessments and
inclusion in the report, the Department identified those governments it
anticipated would receive bilateral allocations of assistance
appropriated by the Act based upon a review of the Congressional Budget
Justification for FY 2014, and in consultation with the Department's
Office of U.S. Foreign Assistance Resources, as well as the
Department's regional and functional bureaus.\1\
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\1\ This included governments that received government-to-
government assistance and or assistance to be provided through
implementing partners. Additional governments may receive assistance
through regional or global programs, but the governments identified
in the report represent the vast majority of foreign assistance
recipients.
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The Department then assessed the fiscal transparency of the 140
governments identified as potential recipients of bilateral allocations
of assistance from FY 2014 foreign assistance funds, determined whether
the minimum requirements were met, and identified any measures those
governments had implemented to make significant progress towards
meeting the requirements.
In conducting the FY 2014 review, the Department assessed the
fiscal transparency of governments as of January 17, 2014, the date the
Act, which mandated this review, became law. In reaching a
determination, the Department considered information from U.S.
embassies and consulates, other U.S. government agencies, international
organizations such as the IMF and multilateral development banks, and
civil society organizations. U.S. diplomatic missions consulted with
foreign government officials, NGOs, international organizations, and
civil society to obtain information for these assessments.
Minimum Requirements of Fiscal Transparency
Subsection 7031(b)(2) of the Act provides that the minimum
requirements of fiscal transparency developed by the Department are
[[Page 2998]]
requirements ``consistent with those in subsection [7031](a)(1)'' and
the public disclosure of:
National budget documentation (to include receipts and
expenditures by ministry), and
government contracts and licenses for natural resource
extraction (to include bidding and concession allocation practices).
The FY 2014 fiscal transparency review process evaluated whether
governments receiving U.S. foreign assistance publicly disclosed budget
documents including receipts and expenditures by ministry. The review
process also evaluated whether the government has an independent
supreme audit institution or similar institution that carries out a
yearly verification of financial statements to ensure they meet
internationally accepted accounting principles. The review further
assessed the existence and public disclosure of criteria and procedures
for awarding government contracts and licenses for natural resource
extraction, including bidding and concession allocation practices. The
Department applied the following criteria in assessing whether
governments met the minimum requirements of fiscal transparency.
Budget information should be:
Substantially Complete: Budget documents should provide a
substantially full picture of a government's revenue streams, including
natural resource revenues, and planned expenditures. Budget documents
should include allocations to and earnings from significant state-owned
enterprises. A published budget that does not include significant cash
or non-cash resources, including foreign aid or the balances of special
accounts or off-budget accounts, would not be considered substantially
complete. Budget documents should also include expenditures to support
royal families or offices where such expenditures represent a
significant budgetary outlay. The review process recognizes that
military and/or intelligence budgets are often not publicly available
for national security reasons.
Reliable: Budget documents and related data are considered
reliable if they are accurate and disseminated on time. Actual receipts
and expenditures should be reasonably correlated to the budget plan,
and significant departures from planned receipts and expenditures
should be explained in supplementary budget documents and publicly
disclosed in a timely manner. Financial statements should meet
internationally accepted accounting principles. The executed budget
should be audited on a regular and timely basis by an independent
supreme audit institution, and the results of such audits should be
made public.
Publicly Available: Budget documents should be broadly
available online, at government offices or libraries, on request from
the ministry, or for purchase at a nominal fee at a government office.
Publicly available budgets should include receipts and expenditures
broken down by ministry. Information on government debt obligations
should be publicly available.
Natural resource extraction contracting and licensing procedures
should be:
Transparent: The criteria and procedures for the
contracting and licensing of natural resource exploitation should be
publicly available and codified in law or regulation. Procedures used
to award contracts and licenses in practice should be consistent with
the country's legal requirements. The basic parameters of concessions
and contracts should be made publicly available after the decision.
Such information should include the geographic area covered by the
contract or license, the resource being developed, the duration of the
contract, and the company to which the contract or license is awarded.
The Department recognizes the specific circumstances and practices
of fiscal transparency differ among governments. The review process
takes a tailored approach in evaluating governments while ensuring
minimum fiscal transparency requirements are met in order to enable
meaningful participation of the public in the budgeting process.
Fiscal Transparency Innovation Fund
Section 7031(b)(4) of the Act recommended that not less than $10
million appropriated under title III of the Act be made available for
programs and activities to improve budget transparency and to support
civil society organizations that promote fiscal transparency. With this
recommendation in mind, the Department and USAID have created the
Fiscal Transparency Innovation Fund (FTIF). FTIF supports programs and
activities that assist countries improve their public financial
management and fiscal transparency standards, and NGOs that promote
budget transparency. The Bureau of Economic and Business Affairs and
USAID's Bureau for Economic Growth, Education, and the Environment (E3)
solicit and award funds in accordance with established guidelines. FY
2014 funding to be used for FTIF was notified in November, but has not
been obligated or expended.
The Department utilized $5 million in FY 2013 authorized funds to
support 11 projects in the following countries: Chad, Democratic
Republic of the Congo, Gabon, Guinea, Haiti, Malawi, Nicaragua, Niger,
and Somalia, as well as one regional project in North Africa and one
global project to benchmark public procurement systems. The projects
furthered efforts by government and civil society to improve the state
of fiscal transparency and public financial management practices, and
improve public awareness and involvement in the expenditure of public
resources. Examples of projects included $542,000 to the Department of
Treasury's Office of Technical Assistance to support improved budgetary
practices in Gabon and $200,000 to the Institute of Strategic Studies
and Public Policy in Nicaragua to support civil society participation
in the budget process.
The Department intends to use FY 2014 FTIF funds to support
projects to enhance: (1) Governments' capacity to develop and execute
comprehensive, reliable, and transparent budgets; (2) citizens'
visibility into state expenditure and revenue programs; and (3)
citizens' ability to advocate for specific issues related to government
budgets and budget processes.
Conclusions of Review Process
The Department concluded that, of the 140 governments that were
potential beneficiaries of foreign assistance and were evaluated
pursuant to the Act, 50 did not meet the minimum requirements of fiscal
transparency. Of these, eleven governments made significant progress
toward meeting the minimum requirements of fiscal transparency.
The Department assessed the following governments as meeting the
minimum requirements of fiscal transparency for FY 2014: Albania,
Angola, Armenia, Argentina, The Bahamas, Belize, Benin, Bosnia and
Herzegovina, Botswana, Brazil, Bulgaria, Cabo Verde, Chile, Colombia,
Costa Rica, Cote d'Ivoire, Croatia, Czech Republic, Djibouti, Ecuador,
El Salvador, Estonia, Georgia, Ghana, Greece, Guatemala, Guyana,
Honduras, Hungary, India, Indonesia, Iraq, Israel, Jamaica, Jordan,
Kenya, Kosovo, Kyrgyzstan, Latvia, Lesotho, Liberia, Lithuania,
Macedonia, Malaysia, Mali, Malta, Marshall Islands, Mauritania,
Mauritius, Mexico, Micronesia, Moldova, Mongolia, Montenegro, Morocco,
Mozambique, Namibia, Nepal, Pakistan, Palestinian Authority, Panama,
Papua New Guinea, Paraguay,
[[Page 2999]]
Peru, Philippines, Poland, Portugal, Romania, Rwanda, Samoa, Senegal,
Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, South
Africa, Sri Lanka, Thailand, Timor-Leste, Togo, Tonga, Trinidad and
Tobago, Tunisia, Turkey, Uganda, Uruguay, Vietnam, and Zambia.
The following table lists those governments that were found not to
meet the minimum requirements of fiscal transparency and identifies
whether the governments made significant progress toward meeting those
requirements:
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Governments assessed pursuant to
the act as not meeting minimum Significant No significant
requirements of fiscal progress progress
transparency for FY 2014
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Afghanistan..................... .................. X
Algeria......................... .................. X
Azerbaijan...................... .................. X
Bahrain......................... .................. X
Bangladesh...................... .................. X
Burkina Faso.................... .................. X
Burma........................... X ..................
Burundi......................... .................. X
Cambodia........................ X ..................
Cameroon........................ X ..................
Central African Republic........ .................. X
Chad............................ X ..................
China........................... .................. X
Comoros......................... X ..................
Congo, Democratic Republic of X ..................
the............................
Congo, Republic of the.......... .................. X
Dominican Republic.............. .................. X
Egypt........................... .................. X
Ethiopia........................ X ..................
Fiji............................ .................. X
Gabon........................... .................. X
Gambia, The..................... .................. X
Guinea.......................... X ..................
Guinea-Bissau................... .................. X
Haiti........................... .................. X
Kazakhstan...................... .................. X
Laos............................ X ..................
Lebanon......................... .................. X
Libya........................... .................. X
Madagascar...................... .................. X
Malawi.......................... .................. X
Maldives........................ .................. X
Nicaragua....................... .................. X
Niger........................... X ..................
Nigeria......................... .................. X
Oman............................ .................. X
Sao Tome and Principe........... X ..................
Saudi Arabia.................... .................. X
Somalia......................... .................. X
South Sudan..................... .................. X
Sudan........................... .................. X
Suriname........................ .................. X
Swaziland....................... .................. X
Tajikistan...................... .................. X
Tanzania........................ .................. X
Turkmenistan.................... .................. X
Ukraine......................... .................. X
Uzbekistan...................... .................. X
Yemen........................... .................. X
Zimbabwe........................ .................. X
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Government by Government Assessments
This section describes areas where such governments fell short of
the Department's minimum requirements of fiscal transparency, and
includes specific recommendations of short and long-term steps such
governments should take to improve fiscal transparency. For those
countries found to have made significant progress toward meeting the
minimum requirements, the section also includes a brief description of
such progress. Note that correcting previously identified deficiencies
was a necessary but not sufficient condition for meeting the minimum
requirements of fiscal transparency.
Afghanistan: Despite significant improvements in recent years,
revenue data is still considered unreliable. Financial allocations to,
and earnings from, significant state-owned enterprises need to be
clearly accounted for in public documents. While laws governing the
award of contracts and licenses for natural resource extraction are
publicly available, improvement is needed in how well they are
followed. Afghanistan's fiscal transparency would be enhanced if the
supreme audit institution were to audit the budget, including all line
ministries.
Algeria: Algeria's published budget does not include information on
[[Page 3000]]
receipts, expenditures, and balances of special treasury accounts, a
persistent weakness for fiscal transparency in Algeria. Algeria's
fiscal transparency would be enhanced by disclosing such financial
flows as part of the published budget. In addition, budget reliability
would be improved with an annual verification of revenues and
expenditures by an independent supreme audit institution that can
certify such financial statements meet internationally accepted
accounting principles.
Azerbaijan: While Azerbaijan has taken steps to ensure revenues
from resource extraction are generally transparent, the government's
criteria for awarding licenses for natural resources extraction are not
made public. Outside the area of natural resource extraction, there is
little publicly available information about the financial relationships
between significant state-owned enterprises and the government.
Azerbaijan's fiscal transparency would be enhanced by making public the
criteria for awarding licenses for natural resource extraction, and
publishing information on the relationships between state-owned
enterprises and the government.
Bahrain: Bahrain does not disclose the expenditures of the royal
family in its publicly available budget. Bahrain's fiscal transparency
would be enhanced by publicly disclosing royal family expenditures in
its budget.
Bangladesh: While the independence of Bangladesh's supreme audit
institution is enshrined in the constitution, the supreme audit
institution has not produced and made publicly available timely and
comprehensive year-end evaluations of the government's accounts. This
deficiency diminishes the reliability of the budget and accountability
to the public. Bangladesh's fiscal transparency would be enhanced by
working to ensure the supreme audit institution annually audits the
central government budget and makes its findings publicly available.
Burkina Faso: While budget documents are available to the public
and summaries are published online, financial allocations to
significant state-owned enterprises are not reflected in budget
documents. Burkina Faso's fiscal transparency would be enhanced by
using the opportunity provided by the formation of a new government to
make further progress and improve budget documents to more fully
include allocations to and earnings from state-owned enterprises.
Burma: Burma does not yet have comprehensive and institutionalized
procedures for budget execution, monitoring, and reporting, which has
caused official fiscal data to be incomplete. Also, the supreme audit
institution did not publish annual audits to verify revenues and
expenditures. Nonetheless, Burma has made significant progress in
improving fiscal transparency in recent years. This progress includes
increasingly robust participation by parliament in the budget drafting
process and several high-profile tenders that have been lauded for
their fairness and transparency. These tenders follow the issuance by
the president's office of a directive in April 2013 providing
government ministries with standardized guidelines on conducting and
awarding public tenders. Burma's fiscal transparency would be enhanced
by putting in place clear and comprehensive procedures for budget
management, monitoring and reporting, and conducting and making public
annual audits of budget execution.
Burundi: While expenditures are broken down by ministry and are
included in the publicly available budget, budget documents do not
provide reliable information about revenues. Basic data regarding
contracts for natural resource extraction is legally available to any
interested party, however, the Ministry of Mines and Energy does not
consistently honor requests for information, and it is not clear
whether Burundi follows its law and regulations for natural resource
contracts. Burundi's fiscal transparency would be enhanced by providing
a full and reliable accounting of all of its revenues and expenditures
in its budgetary documents, making public basic data regarding
contracts for natural resource extraction, and improving transparency
regarding procedures in granting licenses for natural resource
extraction.
Cambodia: While Cambodia publishes a reasonably detailed budget,
shortcomings in fiscal transparency constrain public participation in
the budget process. Furthermore, the supreme audit institution has
failed to publish timely annual audit reports. Cambodia has made
significant progress in fiscal transparency during the past few years,
in part by making the budget more comprehensive and accessible. The
Ministry of Economy and Finance produced a Budget in Brief and made it
available online. Cambodia's fiscal transparency would be further
enhanced by continuing to ensure all government revenues are reflected
in the budget and conducting and making public timely annual audits of
the government's budget execution.
Cameroon: Cameroon's budget does not provide data on all
significant government expenditures, most notably state subsidies and
allocations to significant state-owned enterprises. In addition, the
country's supreme audit institution is not sufficiently independent.
Cameroon made significant progress in 2013 on budget execution by
establishing budget execution follow-up committees at national,
regional, divisional, and local council levels, with participation by
civil society groups. Cameroon's fiscal transparency would be enhanced
if the central government budget provided transparency regarding all
major government expenditures and the head of the supreme audit
institution were not subject to executive authority or influence.
Central African Republic: Following the seizure of power by the
Seleka rebel alliance on March 24, 2013, and continuing through the
review period, the government was unable to carry out normal functions
because of the security situation and political crisis. When made
possible by circumstances, the Central African Republic's fiscal
transparency would be enhanced by drafting a budget and following
normal budgeting procedures.
Chad: While budget information is publicly available, the high
degree of extra-budgetary spending indicates the budget is not
substantially complete. Chad made significant progress in developing
transparency regulations and governance standards, moving forward on
conducting a post-execution review of the budget, and strengthening
public financial management by working on limiting extra-budgetary
expenditures. The government also created a Web site publishing budget
and public financial information. Chad's fiscal transparency would be
enhanced by improving its budgetary process and reducing extra-
budgetary spending by implementing the 2014 Organic Finance Law reforms
and ensuring ministry-level budget staff are appointed and trained to
increase public financial management capacity across the government.
China: While China publishes annual budget documents, the
government does not disclose all financial allocations to and earnings
from numerous significant state-owned enterprises. Also, although the
supreme audit institution audits all national government entities,
including ministries and state-owned enterprises, it cannot be
considered an independent agency, as it directly reports to China's
State Council and is one of 25 ministries and commissions under the
State Council's direct supervision. China's
[[Page 3001]]
fiscal transparency would be enhanced by explicitly detailing financial
allocations to and earnings from state-owned enterprises and taking
steps to increase the independence of the supreme audit institution.
Comoros: Comoros' budget includes relevant revenues and
expenditures, including allocations to and earnings from significant
state-owned enterprises and natural resource extraction; however,
budgets are not always followed, and may be changed with little to no
legislative oversight. Budget documents are not readily available to
the public. Technical assistance on budget execution from the IMF is
ongoing, and Comoros has made significant progress in improving budget
execution. Comoros' fiscal transparency would be enhanced by improving
budget execution and oversight and making provisions for budget
documents to be publicly available.
Congo, Democratic Republic of the (DRC): Despite a public and open
process for preparation, dissemination, and parliamentary debate of the
budget, receipts and expenditures, broken down by ministry, are not
substantially complete and reliable. The budget does not accurately
reflect revenues from extractive industries. The criteria for awarding
extractive contracts have not been codified. The country's supreme
audit institution is not sufficiently independent, is insufficiently
funded and trained, and does not conduct yearly comprehensive audits of
spending. Significant progress has been made to improve the process by
which salaries are paid to increase transparency and effectiveness in
this area of budget execution. The DRC made significant progress in
natural resource transparency with the publishing of information on
existing natural resource contracts. The DRC's fiscal transparency
would be enhanced by increasing the capacity and independence of the
supreme audit institution, increasing transparency regarding the
process and outcomes for awarding natural resource concessions,
contracts, and licenses, and providing complete and reliable accounting
of receipts and expenditures.
Congo, Republic of the: The Republic of the Congo's budget includes
significant gaps, relating both to petroleum revenues and to government
expenditures. Debt obligations are not fully disclosed, and audits are
not conducted in a timely manner. The Republic of the Congo's fiscal
transparency would be enhanced by improving the completeness and
reliability of its budget reporting, including disclosing sovereign
debt obligations, and conducting audits in a timely manner.
Dominican Republic: The Dominican Republic's budget lacks detail
for large portions of spending by the Office of the Presidency, which
accounts for nine percent of central government expenditure. Autonomous
and decentralized institutions, and even some ministries, do not fully
report revenue and expenditures during budget implementation, but only
at the end of the accounting year. The Dominican Republic's fiscal
transparency would be enhanced by taking additional steps to improve
the completeness and timeliness of its budget, particularly for the
Office of the Presidency.
Egypt: Egypt's published budget does not disclose income and
expenditures information for significant state-owned enterprises or
presidential expenses. The process for awarding natural resource
revenue contracts and the basic terms of natural resource concessions
are also not publicly disclosed. Egypt's fiscal transparency would be
enhanced by implementing reporting of state-owned enterprise finances
and making public the process for awarding natural resource contracts
and licenses and the basic terms of those contracts, such as to whom
licenses have been awarded, covering which resources, and for what
length of time.
Ethiopia: While Ethiopia's budget documents are publicly available,
they are not yet substantially complete due to the lack of information
on the fiscal impact of significant state-owned enterprises.
Additionally, the government's general processes for awarding natural
resource concessions, contracts, and licenses are opaque. Ethiopia made
significant progress in improving state-owned enterprise financial
reporting during the review period by increasing in practice the
oversight role played by the legislature in state-owned enterprise
management and standardizing its contract award process. Ethiopia's
fiscal transparency would be enhanced by including allocations to and
earnings from state-owned enterprises in its budget and financial
statements in both consolidated and stand-alone forms, providing
disclosures of natural resource information in its budget, and
providing more information to the public about the process and outcomes
for awarding governmental contracts, licenses, and natural resource
concessions.
Fiji: During the review period, Fiji's publicly available budget
documents did not provide a substantially full picture of the country's
revenues and expenditures because of the lack of explanatory
narratives. In addition, Fiji's failure to release the Auditor
General's Report since 2008 undermined the public's ability to
effectively monitor the budgetary process and negatively impacted the
budget's reliability. Fiji's fiscal transparency would be enhanced by
making public annual audit reports, along with comprehensive budgetary
documents, including budget narratives.
Gabon: Gabon's budget reliability is lacking. The supreme audit
institution has been unable to complete verification of annual revenues
and expenditures on a timely basis because of a lack of information
from the government. The public does not have sufficient information
about the budget. As of the close of the review period, Gabon has yet
to make a complete 2014 budget publicly available. In addition, Gabon
lacks transparency and reliability in government contracting and
project financing. Gabon's fiscal transparency would be enhanced by
ensuring timely publication of the supreme audit institution's yearly
verification of the annual financial statement.
Gambia, The: The Gambia does not include earnings from and
allocations to significant state-owned enterprises in the general
budget documents, although this information is available to the
National Assembly after the fact. Additionally, the requirements for
awarding natural resource exploration rights are not publicly
available, and information on contracts or awards, including the
identity of the party holding the rights, is not made available to the
public. The Gambia's fiscal transparency would be enhanced by
increasing transparency on how natural resources contracts are reviewed
and what has been awarded, as well as increasing transparency regarding
revenues from and allocations to state-owned enterprises.
Guinea: Guinea does not make the budget accessible to the general
public. The government also lacks a supreme audit institution. Guinea
has not made the criteria for natural resource licensing tenders public
and the budget does not provide information on revenues from
significant state-owned enterprises, including those from natural
resources. However, the government has made significant progress in
making natural resource revenues transparent by making basic
information on all current mining concessions public. Guinea's fiscal
transparency would be enhanced by creating an independent supreme audit
institution, making the budget publicly accessible, making public the
criteria for natural resource licensing tenders, and
[[Page 3002]]
providing a comprehensive and reliable accounting of all revenues.
Guinea-Bissau: Guinea-Bissau's budget process was not reliable
during the review period, as a large amount of unbudgeted expenditure
occurred, and fiscal controls were insufficient. The new government of
Guinea-Bissau's fiscal transparency would be enhanced by using this
window of opportunity to implement comprehensive public financial
management reforms.
Haiti: Although Haiti's budget is publicly available, the country's
process for granting natural resource contracts lacks transparency and
information on natural resources contracts is not published. Haiti's
budget process does not consistently follow the country's established
timetable and does not include earnings from significant state-owned
enterprises. Haiti's fiscal transparency would be enhanced by improving
the transparency of its system governing natural resource contracts,
more closely following its budget timetable, and improving reporting
for state-owned enterprises.
Kazakhstan: While the budget is publicly available, information on
allocations to and revenues from significant state-owned enterprises is
not included. Estimated to produce approximately 40 percent of GDP,
state-owned enterprises are believed to account for a sizeable portion
of the government's allocations and revenues. Kazakhstan's fiscal
transparency would be enhanced by including allocations to and revenue
from state-owned enterprises in its budget.
Laos: While Laos' budget is publicly available, some key budget
documents were not published in a timely fashion. One quarter of
government spending occurred outside of the National Assembly's
authorized budget. Limited budgetary information was publicly available
on state-owned enterprise finances and the process used to award
natural resource contracts is generally not transparent or accessible
by the public. The government made significant progress in
strengthening the role of the supreme audit institution. Laos' fiscal
transparency would be enhanced by publishing key budget documents in a
timely manner, ensuring government spending is subject to parliamentary
oversight, capturing allocations to and earnings from state-owned
enterprises in the budget, and improving transparency and legal
frameworks regarding the process for awarding natural resource
concessions.
Lebanon: Lebanon does not disclose financing or assistance in-kind
received from foreign sources in its budget. Lebanon's budget also does
not include transfers to or earnings from significant state-owned
enterprises. Lebanon's budget data remain unreliable and its budgets
are not subject to annual comprehensive audits. Lebanon's fiscal
transparency would be enhanced by reporting all foreign financing and
assistance and including detailed information for state-owned
enterprises, public institutions, and all ministries in its budget.
Lebanon's fiscal transparency would further be enhanced by establishing
annual audits of its budget execution by an independent supreme audit
institution.
Libya: Libya's national budget does not include expenditures
managed by the Ministry of Planning, and there is no verification by an
independent supreme audit institution that annual receipts and
expenditures meet internationally accepted accounting principles.
Libya's fiscal transparency would be enhanced by including all
expenditures in the annual budget approved by Libya's parliament and
ensuring financial statements are verified by an independent supreme
audit institution.
Madagascar: The former government of Madagascar did not follow
procedures outlined under domestic law for making awards of extractive
industry contracts, nor did the former government publish results in a
consistent manner. Additionally, budget documents under the former
government did not match actual spending, and follow-up reporting of
actual receipts and expenditures was inconsistent and inadequate.
Madagascar's supreme audit institution has not published a report since
2006. Madagascar's fiscal transparency would be enhanced by improving
its extractives contracting procedures and providing information on
outcomes to the public. Madagascar's fiscal transparency would be
further enhanced by improving budgeting processes.
Malawi: While Malawi's budget documents are substantially complete,
the supreme audit institution lacks full independence and a clear
reporting structure. Revenue from state-owned enterprises and natural
resources is included in the budget. However, the government's
procedures for awarding contracts and licenses for natural resource
extraction are not regularly publicly available, and, once awarded, the
basic information of such contracts and licenses is not routinely made
available to the public. As Malawi develops its emerging extractive
industry sector, it needs to improve transparency with regard to
contracts and licenses. Malawi's fiscal transparency would be enhanced
by addressing potential inconsistencies between its Constitution and
the relevant statutory law regarding the supreme audit institution's
reporting structure.
Maldives: While Maldives' budget is publicly available and provides
a substantially complete picture of the country's revenue and
expenditures, the figures are not always reliable. The independent
supreme audit institution does not conduct and make public year-end
audits of the central government budget. Maldives' fiscal transparency
would be enhanced by continuing to improve its public financial
management. Maldives' fiscal transparency would be further enhanced if
the supreme audit institution were to conduct and make publicly
available year-end audits of the central government budget.
Nicaragua: Nicaragua's budget does not provide information on
substantial financial support provided to the government by Venezuela.
The reporting on allocations to and earnings from significant state-
owned enterprises also lacks detail. Nicaragua's fiscal transparency
would be enhanced by fully reporting off-budget support provided to the
government and improving reporting on allocations to and earnings from
state-owned enterprises.
Niger: Niger's central budget is not substantially complete because
it does not reflect earnings of significant state-owned enterprises or
revenues and debt associated with oil production. The government made
significant progress in 2013 with the first release of oil revenue
numbers and the first audit of the oil industry. Niger's fiscal
transparency would be enhanced by ensuring the budget includes all
revenue and expenditures, including natural resources.
Nigeria: While Nigeria's budgetary process meets and in many ways
exceeds many elements of the Department's minimum requirements in
budgetary areas, Nigeria does not meet the Department's overall minimum
requirements due to concerns in the natural resources sector. While the
criteria for awarding natural resource extraction concessions is made
public, actual practices are opaque and do not appear to always conform
to the criteria. Significant off-budget spending on fuel subsidies is
also of concern. Additionally, while the Finance Ministry publishes
aggregate revenues, lack of transparency in the revenues and
expenditures of Nigeria's flagship oil and gas sector state-owned
enterprise, the Nigerian National Petroleum Corporation (NNPC), impedes
Nigeria's overall fiscal transparency. Nigeria's
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fiscal transparency would be enhanced by conducting a full audit, to
international standards, of NNPC. The Petroleum Industry Bill, once
implemented, could partially address the transparency concerns in the
oil and gas sector. Nigeria's fiscal transparency would be further
enhanced by moving off-budget spending on budget.
Oman: Oman does not disclose the expenditures of the royal family
in its publicly available budget. Oman's fiscal transparency would be
enhanced by publicly disclosing royal family expenditures in its
budget.
Sao Tome and Principe: While Sao Tome and Principe's budget can be
considered substantially complete, its budget documents do not
currently comply with internationally accepted accounting principles.
Sao Tome and Principe publishes periodic reports throughout the year
evaluating the budget execution, though it does not publish an end-of-
year report. While Sao Tome and Principe was not assessed in previous
reports, the government has made significant progress on fiscal
transparency, including passing legislation in recent years requiring
all payments to government agencies over five dollars to be made
directly at the Central Bank and all salary payments to civil servants
be paid directly to employees' bank accounts. Sao Tome and Principe's
fiscal transparency would be enhanced by adopting internationally
accepted accounting principles for public financial documents and
producing and making public an annual report on overall budget
execution.
Saudi Arabia: Saudi Arabia does not publish a detailed annual
budget that discloses revenues and expenditures broken down by
ministry. While Saudi Arabia discloses the contribution of natural
resource revenues to the budget in an annual IMF report, it does not
publish such data in its publicly available budget, nor does it
disclose the expenditures of the royal family in the publicly available
budget. Saudi Arabia's fiscal transparency would be enhanced by
publishing such a budget. Saudi Arabia's fiscal transparency would be
further enhanced if the supreme audit institution were to publish an
annual verification that revenues and expenditures were carried out in
accordance with internationally accepted accounting principles.
Somalia: Partly due to a severe lack of institutional capacity and
funds, Somalia does not have an effective public financial management
system. Ministries do not follow budget procedures. Somalia does not
have an effective, functioning, independent supreme audit institution.
The government does not make basic information about the results of
concessions or natural resource contracts available. Somalia's fiscal
transparency would be enhanced by implementing comprehensive public
financial management reforms.
South Sudan: South Sudan's budget execution is unreliable, with
some ministries overspending while others spend less than allocated.
Fiscal activities are not subject to effective internal oversight and
safeguards, and the supreme audit institution has not published a
report on the budget in several years. Additionally, while the 2012
Petroleum Act requires the government to make information on tenders,
licensing, and petroleum agreements publicly available, it is not clear
those requirements have been carried out in practice. South Sudan's
fiscal transparency would be enhanced by implementing comprehensive
public financial management reforms and making available information on
tenders, licensing, and petroleum agreements.
Sudan: Publicly available budget documents do not provide a full
picture of Sudan's revenues and expenditures, including natural
resource revenues. There are no procedures in place allowing for
parliamentary review of the allocations to and earnings from
significant state-owned enterprises, particularly those operated by the
security services. Sudan's fiscal transparency would be enhanced by
providing a full accounting of the allocations to and earnings from
state-owned enterprises and allowing for legislative oversight of
expenditures of the security services.
Suriname: Suriname does not fully report on the financial
performance of some significant state-owned enterprise and related
government transfers. The executive branch often fails to provide
Suriname's supreme audit institution with sufficient information to
conduct thorough oversight. The government does not disclose
information about how it awards natural resource contracts and
licenses, nor does it disclose basic information on awards granted.
Suriname's fiscal transparency would be enhanced by improving the
transparency and reporting of natural resource contracts, providing
more robust reporting for state-owned enterprises, and strengthening
its auditing function.
Swaziland: Swaziland's budget lacks transparency with regard to
allocations to and earnings from significant state-owned enterprises
and with regard to natural resource revenues. Additionally, Swaziland
does not have a functioning, independent supreme audit institution, and
there are concerns about off-budget spending. Swaziland's fiscal
transparency would be enhanced by ensuring that all revenues and
expenditures are reflected in the budget, including natural resource
revenues and allocations to, or earnings from, state-owned enterprises.
Tajikistan: Tajikistan's budget is not substantially complete, and
revenues and expenditures are not broken down by ministry. Tajikistan's
fiscal transparency would be enhanced by publishing a detailed budget,
carrying out audits of yearly expenditures by an independent supreme
audit institution, and engaging the public in the budget process.
Tanzania: Tanzania has used pension funds to support off-budget
projects through loans that have at times not been included in the
country's debt obligations. In addition, Tanzania's procedures for
awarding contracts and licenses for natural resource extraction are not
clear. Tanzania's fiscal transparency would be enhanced by clearly
publicizing and following procedures for awarding contracts and
licenses for natural resource extraction and by including all
governmental expenditures and debt obligations in the budget.
Turkmenistan: The budget is not substantially complete, nor does it
provide a breakdown of revenue and expenditures by individual ministry.
No information on allocations from the budget to significant state-
owned enterprises is disclosed. Turkmenistan's fiscal transparency
would be enhanced by making this information publicly available.
Turkmenistan's fiscal transparency would be further enhanced by
disclosing proceeds from the sale of oil and natural gas, which
constitute the majority of the government's revenues, and making public
the process for awarding government contracts and licenses for natural
resources.
Ukraine: While Ukraine's national budget and budget execution
reports are readily available to the public, the former government of
Ukraine did not include quasi-fiscal activities in the energy sector in
the state budget. The audit agency was not permitted to review
government revenues or the financials of significant state-owned
enterprises. Criteria for natural resource tenders, aside from
production sharing agreements for oil and gas, were not made public.
Ukraine's fiscal transparency would be enhanced by including quasi-
fiscal energy sector activities in the budget, allowing the audit
agency to review revenues of the
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government and the financials of state-owned enterprises, and making
public the criteria for all natural resource tenders.
Uzbekistan: The budget process is not transparent, as budget
discussions in the legislative branch are not open to the public. Only
a general overview of the budget is publicly available; a breakdown of
revenues and expenditures by ministry is not disclosed. Information on
revenue from the extraction and sale of natural resources is not
available to the public. While criteria for awarding natural resource
contracts are publicly available, the process of awarding contracts in
practice is not transparent. Uzbekistan's fiscal transparency would be
enhanced by making the budget publicly available. Uzbekistan's fiscal
transparency would be further enhanced by providing information on
revenue from the extraction and sale of natural resources and ensuring
the process of awarding contracts is transparent.
Yemen: Yemen's annual budget lacks sufficient information regarding
allocations to and revenue from significant state-owned enterprises.
The supreme audit institution does not publish its annual verifications
that statements of revenues and expenditures meet internationally
accepted accounting principles. Yemen's fiscal transparency would be
enhanced by providing sufficient detail in the section of the budget
devoted to state-owned enterprises. Yemen's fiscal transparency would
be further enhanced if the supreme audit institution were to make such
audits public each year.
Zimbabwe: Zimbabwe's budget lacks transparency with regard to
financial flows to and from significant state-owned enterprises and
with regard to natural resource revenues, including mining contracts.
Zimbabwe's fiscal transparency would be enhanced by improving
transparency in its budget management, including greater transparency
on the country's debts, and including a substantially complete picture
of natural resource revenues in the budget. Zimbabwe's fiscal
transparency would be further enhanced by making public the criteria
and process for awarding natural resource contracts and licenses and
the basic terms of those contracts, such as to whom licenses have been
awarded, which resources are covered, and the length of the contract or
license.
Dated: December 31, 2014.
Heather Higginbottom,
Deputy Secretary of State for Management and Resources, Department of
State.
[FR Doc. 2015-00792 Filed 1-20-15; 8:45 am]
BILLING CODE 4710-07-P