OPEN BUDGET QUESTIONNAIRE BRAZIL

Transcription

1 Interntionl Budget Project OPEN BUDGET QUESTIONNAIRE BRAZIL October 2005 Interntionl Budget Project Center on Budget nd Policy Priorities 820 First Street, NE Suite 510 Wshington, DC

2 This questionnire ws completed by: Nme: Orgniztion: FERNANDA CARVALHO INSTITUTO BRASILEIRO DE ANÁLISES SOCIAIS E ECONÓMICAS (IBASE) Address: Av. Rio Brnco, 124, 8 ndr, Rio de Jneiro, RJ Brzil Telephone: (+55 21) E-mil: Internet Website: fernnd@ibse.br 2

3 Interntionl Budget Project OPEN BUDGET QUESTIONNAIRE BRAZIL Section One: The Avilbility of Budget Documents...4 Tble 1. Budget Yer of Documents Used in Completing the Questionnire... 5 Tble 2. Internet Links for Key Budget Documents... 6 Tble 3. Distribution of Documents Relted to the Executive s Budget Proposl... 8 Tble 4. Distribution of the Encted Budget nd Other Reports Section Two: The Executive s Budget Proposl...11 Estimtes for the Budget Yer nd Beyond Estimtes for Yers Prior to the Budget Yer Comprehensiveness The Budget Nrrtive & Performnce Monitoring Additionl Key Informtion for Budget Anlysis & Monitoring Section Three: The Budget Process...51 Executive s Formultion of the Budget Legisltive Approvl of the Budget Executive s Implementtion of the Budget Executive's Yer-end Report nd the Supreme Audit Institution

4 Section One: The Avilbility of Budget Documents 4

5 Tble 1. Budget Yer of Documents Used in Completing the Questionnire Plese indicte the budget yer of the document used to complete the questionnire. If the document is not vilble to the public, plese stte, Not Avilble. Budget Documents Used in Completing the Questionnire As explined in the guide to the questionnire, documents from vriety of fiscl yers re referred to throughout the questionnire. Plese indicte below for which fiscl yer responses to questions relting to ech report or experience were bsed on. Budget Yer Used Pre-Budget Sttement 2005(*) Budget Summry 2005 Executive s Budget Proposl 2005 Supporting Budget Documents 2005 Citizens Budget Not Avilble Encted Budget 2005 In-Yer Reports 2005 Mid-Yer Report Not Avilble Yer-End Report 2003 Audit Report

6 Tble 2. Internet Links for Key Budget Documents Plese provide the Internet link for the document, or indicte one of these three nswers: Not Produced, Produced, But Not Avilble to the Public, Publicly Avilble, But Not on the Internet. Budget Document Website Pre-Budget Sttement eudo/legislco/legislco_sof.htm sof/999_mensgem2005.pdf Budget Summry Executive s Budget Proposl Supporting Budget Documents sof/presministronelson_orc2005.ppt eudo/orcmento_2005/orcmento_2005.htm eudo/orcmento_2005/orcmento_2005.htm Citizens Budget Not Produced Encted Budget In-Yer Reports eudo/orcmento_2005/orcmento_2005.htm sof/orcmento_2005/reltorio_congresso2005 Mid-Yer Review Not Produced Yer-End Report x.html Obs: until June 22, 2005 only the 2003 report vilble Audit Report &_dd=portl&_schem=PORTAL 6

7 Other Documents Technicl budget mnul 04/mnul.htm Relevnt Ministries & Deprtments ncipl/ 7

8 Tble 3. Distribution of Documents Relted to the Executive s Budget Proposl DISTRIBUTION OF BUDGET DOCUMENTS For the following reports, plce Yes in the pproprite row below to indicte if the report is: A. Not produced, even for internl purposes B. Produced for internl purposes, but not vilble to the public C. Produced nd vilble to the public, but only on request D. Produced nd distributed to the public (for exmple, in librries, posted on the Internet.) 1. The relese dte is known t lest one month in dvnce 2. Advnce notifiction of relese is sent to users, medi 3. Relesed to public sme dy s officil relese to medi 4. Avilble on the Internet free of chrge 5. Free print copies vilble, limited distribution 6. Free print copies vilble, mss distribution Min document Executive s Budget Proposl Budget summry* Supporting Document 1 Additionl Document Yes Yes Yes Yes Yes For budget reports tht re produced nd distributed to the public, wht steps does the executive tke to distribute these reports nd to promote interest in them? For ech chrcteristic, mrk Yes if yes, No if no, or NA if Not Avilble. Executive s Budget (*) Prebudget Prebudget Min document Budget summry* Supporting Document 1 Additionl Document Citizens budget Yes Citizens budget Yes Yes Yes Yes Yes NA Yes Yes Yes Yes Yes NA No No* No No No NA Yes Yes Yes Yes Yes NA No No* No No No NA No No No No No NA 8

9 7. Redily vilble outside cpitl nd/or Yes Yes Yes Yes Yes NA big cities + 8. Written in more thn one lnguge No No No No No NA 9. News conference is held to discuss relese Yes Yes Yes Yes Yes NA *A budget summry should be stnd-lone document, which could include budget speech or seprtely published executive summry. + Mrk Yes if ccess by mil order or by Internet, if Internet service is redily vilble outside the cpitl nd/or big cities. (*) The timefrmes re set in the Federl Constitution. This question includes reference to steps the executive tkes to promote interest in budget reports. Although ll documents re publicly vilble in the Internet, promoting interest would cll for much more thn is ctully the cse. 1 Sme dy is quite strict. Certinly the budget is mde vilble when finished, even if few dys fter news of its completion re published in the medi. 2 Just to remin t the sfe side, it might be the cse tht such free copies re mde vilble somewhere even if very limited. The sme pplies to the next three boxes. Even then, it would be irrelevnt, so tht the No mrkings correctly describe the sitution. 9

10 Tble 4. Distribution of the Encted Budget nd Other Reports DISTRIBUTION OF ENACTED BUDGET AND OTHER REPORTS For the following reports, plce Yes in the pproprite row below to indicte if the report is: A. Not produced, even for internl purposes Encted budget In-yer reports Mid-yer review Yes Yer-end report Audit report B. Produced for internl purposes, but not vilble to the public C. Produced nd vilble to the public, but only on request D. Produced nd distributed to the public (for exmple, in librries, posted on the Internet.) Yes Yes Yes Yes For budget reports tht re produced nd distributed to the public, wht steps does the executive tke to distribute these reports nd to promote interest in them? 1. The relese dte is known t lest one month in dvnce For ech chrcteristic, mrk Yes if yes, No if no, or NA if Not Avilble. Encted budget In-yer reports Mid-yer review Yer-end report 2. Advnce notifiction of relese sent to users, medi 3. Relesed to public sme dy s officil relese to medi 4. Avilble on the Internet free of chrge 5. Free print copies vilble, limited distribution 6. Free print copies vilble, mss distribution Audit report Yes Yes NA Yes Yes Yes Yes NA Yes Yes No No NA No No Yes Yes NA Yes Yes No No NA No No No No NA No No 7. Redily vilble outside cpitl/big Yes Yes NA Yes Yes cities + 8. Written in more thn one lnguge NA 9. News conference is held to discuss relese Yes Yes NA Yes Yes + Mrk Yes if ccess is vilble by mil order or by Internet, if Internet service is redily vilble outside the cpitl nd/or big cities. 10

11 Section Two: The Executive s Budget Proposl Notes on bbrevitions: BY = budget yer (yer for which the budget proposls re being mde) BY+1 = one yer beyond the budget yer BY-1 = one yer before the budget yer 11

12 Plese mrk your nswer by plcing the pproprite letter in the box to the right of the question. For ll nswers mrked not pplicble/other, plese provide brief explntion indicting either why the nswer choices provided re not pplicble or why nother response would be more pproprite. The Executive s Budget Proposl Estimtes for the Budget Yer nd Beyond 1. Does the executive s budget or ny supporting budget documenttion present expenditures for the budget yer tht re clssified by dministrtive unit (tht is, by ministry, deprtment, or gency)?. All expenditures re clssified by dministrtive unit. b. Expenditures re clssified by dministrtive unit, but some smll units re not shown seprtely. c. Expenditures re clssified by dministrtive unit, but significnt number of units re not shown seprtely. d. No expenditures clssified by dministrtive unit re presented. Cittion nd/or comment: The Technicl Budget Mnul (Mnul Técnico Orçmentário, MTO) estblishes n Institutionl Clssifiction which ctegorizes ll expenditures into two levels of Budget Agencies nd Units (Órgãos e Uniddes Orçmentáris). Brzil hs Budget Guidelines Lw, the Lei de Diretrizes Orçmentáris (LDO) provided for in Article 165 of the Federl Constitution. The drft lw is submitted to Congress for discussion nd pprovl during the first hlf of the yer prior to the budget. Under Article 35 of the trnsitory constitutionl provisions (Ato ds Disposições Constitucionis Trnsitóris), Congress cnnot djourn without voting on the LDO. The bill must be submitted to the Ntionl Congress eight months prior to the close of the finncil yer, tht is, round April 15, ccording to Article 35, prgrph 2, Cluse II, of the Ato ds Disposições Constitucionis Trnsitóris. The bill must comprise the gols nd priorities of the federl public dministrtion, including finncil expenses for the following fiscl yer; [it must] guide drfting of the nnul budget lw; specify ltertions in tx lw; nd set out ppliction policy for officil investment funding gencies (rt , Federl Constitution). This is for the purpose of giving direction to preprtion of the budget lw. But the LDO is before Congress, nd while the vrious deprtments re going to flt out to prepre their plns, the Technicl Budget Mnul (Mnul Técnico Orçmentário), which is prepred by the Federl Budget Secretrit/Ministry of Plnning, Budget nd Mngement (Secretri de Orçmento Federl/Ministério do Plnejmento, Orçmento e Gestão), circultes round ll the deprtments of the three powers of the Union.The Mnul ddresses the sme topics nd competences s the lw, nd in effect reduces the ltter s bility to ctully set guidelines for the budget. The Integrted Budget Informtion System (Sistem Integrdo de Ddos Orçmentários, SIDOR) is mde vilble for deprtments to post their projected expenditures, t the sme time s the LDO is before Congress. The LDO is pproved in the finl dys of June, when not in July, nd snctioned in July/August (the LDO for 2005, Lw No , ws snctioned on 11 August 2004, 20 dys before the dedline for submission of the Drft Budget [Projeto de Lei Orçmentári] to Congress). 12

13 2. Does the executive s budget or ny supporting budget documenttion present expenditures for the budget yer tht re clssified by functionl clssifiction?. All expenditures re clssified by functionl clssifiction, nd the ctegoriztion is comptible with interntionl stndrds. b. All expenditures re clssified by functionl clssifiction, but the ctegoriztion is not comptible with interntionl stndrds. c. Some, but not ll, expenditures re clssified by function. d. No expenditures clssified by function re presented. Cittion nd/or comment: Ministeril Order (Portri) No. 42, of April 14, 1999, by the Ministry of Plnning, Budget nd Mngement (Ministério do Plnejmento, Orçmento e Gestão), updtes the concept of function nd sub-function, nd clssifies these. There re 28 functions nd 106 sub-functions. 3. Does the executive s budget or ny supporting budget documenttion present expenditures for the budget yer tht re clssified by economic clssifiction?. All expenditures re clssified by economic clssifiction, nd the ctegoriztion is comptible with interntionl stndrds. b. All expenditures re clssified by economic clssifiction, but the ctegoriztion is not comptible with interntionl stndrds. c. Some, but not ll, expenditures re clssified by economic clssifiction. d. No expenditures clssified by economic clssifiction re presented. Cittion nd/or comment: Annex I to Inter-ministeril Order (Portri Interministeril) No. 163, of My 4, 2001, from the Federl Budget Secretrit nd Federl Tresury Secretrit (Secretri de Orçmento Federl, SOF nd Secretri do Tesouro Ncionl, STN), sets out the Clssifiction nd Economic Ctegories of Revenue - Expense nd Cpitl (Clssificção e Ctegoris Econômics d receit - Custeio e Cpitl), nd Annex II clssifies expenditure in the sme wy. 13

14 4. Does the executive s budget or ny supporting budget documenttion present expenditures for individul progrms for the budget yer?. Progrm-level dt re presented for ll expenditures. b. Progrm-level dt re presented for t lest two-thirds of, but not ll, expenditures. c. Progrm-level dt re presented, but for less thn two-thirds of expenditures. d. No progrm-level dt re presented. Cittion nd/or comment: The progrms re divided into projects (fixed timefrme), ctivities (ongoing timefrme) nd specil opertions (funds). 5. In the executive s budget or ny supporting budget documenttion, re estimtes of the ggregte level of expenditure presented for multi-yer period (t lest two yers beyond the budget yer)?. Yes, multi-yer estimtes of ggregte expenditure re presented. b. No, multi-yer estimtes of ggregte expenditure re not presented. c. Not pplicble/other (plese comment). Cittion nd/or comment: Article 165 of the Federl Constitution provides for preprtion of four-yer pln (Plno Plurinul, PPA); estimted expenditure reltes to the pln. The PPA is broken down into Progrms nd Actions, which re provided for in ech budget in terms of progrms nd projects, ctivities, nd specil opertions. These terms re defined in Chpter II of ech yer s LDO (On the Structure nd Orgniztion of the Budgets). 14

15 6. In the executive s budget or ny supporting budget documenttion, is more detil thn just the ggregte level presented for expenditure estimtes tht cover multi-yer period (for t lest two yers beyond the budget yer)?. Yes, multi-yer expenditure estimtes re presented for ll individul progrms, nd for one or more expenditure clssifiction (such s functionl, economic, or dministrtive). b. Yes, multi-yer estimtes re presented for one or more expenditure clssifiction (such s functionl, economic, or dministrtive), but only for some individul progrms. c. Yes, multi-yer estimtes re presented, but only for portion of one or more of the expenditure clssifictions (such s some functions, or some dministrtive units) nd/or for only some individul progrms. d. No, multi-yer estimtes re presented for ggregte expenditure only, or they re not presented t ll. Cittion nd/or comment: See comment to previous question. 7. Does the executive s budget or ny supporting budget documenttion identify the different sources of tx revenue (such s income tx or VAT) for the budget yer?. All sources of tx revenue re identified individully. b. Sources of tx revenue mounting to t lest two-thirds of, but not ll, tx revenues re identified individully. c. Sources of tx revenue mounting to less thn two-thirds of ll tx revenues re identified individully. d. No sources of tx revenue re identified individully. Cittion nd/or comment: Ministeril Order No. 9, of April 28, 2005, dels with budget clssifiction by type of revenue for ppliction by the federl government. The Ministeril Order identifies revenues by source, nd this differentition must be presented in the Annul Drft Budget (Projeto de Lei Orçmentári Annul, PLOA). The sources by type of levy (txes, contributions nd rtes) re relted to sources of funding in the budget. For exmple, revenues from federl levies (income tx, tx on industrilized goods [ipi], etc) tht remin with the federl government re considered s source relting to Ordinry Funds Source 100 (Recursos Ordinários - Fonte 100). The portion of income tx nd IPI tht is trnsferred to the sttes, municiplities nd the federl district is termed Income Tx nd IPI Trnsferred Source 101 (Trnsferênci d Imposto de Rend e do IPI Fonte 101), nd so on. 15

16 8. Does the executive s budget or ny supporting budget documenttion identify the different sources of non-tx revenue (such s grnts, property income, nd sles of goods nd services) for the budget yer?. All sources of non-tx revenue re identified individully. b. Sources of non-tx revenue mounting to t lest two-thirds of, but not ll, nontx revenues re identified individully. c. Sources of non-tx revenues mounting to less thn two-thirds of ll non-tx revenue re identified individully. d. No sources of non-tx revenues re identified individully. Cittion nd/or comment: Ministeril Order 09, of June 27, 2001, develops the clssifiction of revenues, enbling this kind of revenue to be identified. Tx revenues cn lso be distinguished from other revenues by the pyment source. 16

17 9. In the executive s budget or ny supporting budget documenttion, re estimtes of the ggregte level of revenue presented for multi-yer period (t lest two yers beyond the budget yer)?. Yes, multi-yer estimtes of ggregte revenue re presented. b. No, multi-yer estimtes of ggregte revenue re not presented. c. Not pplicble/other (plese comment). Cittion nd/or comment: The Drft Annul Budget (LOA executive s budget document) does not contin the multi-yer estimtes; they pper, in the LDO document tht guides the LOA (in Annex IV, which dels with the trgets for the Primry Surplus) but re not differentited. Note tht there is mjor problem with the revenue estimtes for the fiscl yer. The government sends the Drft Annul Budget Lw to Congress with the revenues underestimted; Congress revises, nd overestimtes them; nd the government, with the Contingency Decree (Decreto de Contingencimento), returns to proposl close to its originl drft. At yer-end, revenues re found to be higher thn forecst in the Contingency Decree, but there is no longer time to perform the relted mesures: then either the funds re recorded s pybles pending, which undermines the qulity of public spending, or they go to swell the primry surplus. The response is pproprite becuse in Brzil the LDO cn lso be considered supporting budget document. The LDO needs to be pproved by Congress nd it is lw closely linked to the LOA. The observtion mde by the resercher bout budget overestimtion, lthough not directly linked to the question, is crucil to understnding one of the most importnt sources of corruption in Brzil. After the Contingency Decree (ctully invlidted by unilterl decision of the executive prt of the recent pproved budget), there is sd politicl trdition, perpetuted yer fter yer, of exchnging votes in fvor of executive s projects for reviewing the contingency of proposls from the respective voter. It is not illegl, but immorl nd it is front door for extrlegl (like offering positions inside ntionl deprtments) nd even illegl mens of mking mjority in fvor of the executive in the Prliment. Around 20,000 positions in the ntionl government re the result of ppointments by the chief executive. 17

18 10. In the executive s budget or ny supporting budget documenttion, is more detil thn just the ggregte level presented for revenue estimtes tht cover multi-yer period (for t lest two yers beyond the budget yer)?. Yes, multi-yer revenue estimtes re presented for individul sources of revenue, nd by revenue clssifiction (such s tx nd non-tx). b. Yes, multi-yer estimtes re presented by revenue clssifiction (such s tx nd non-tx), but only for some individul sources of revenue. c. Yes, multi-yer estimtes re presented, but only for some individul sources of revenue. d. No, multi-yer estimtes re presented for ggregte revenue only, or they re not presented t ll. b Cittion nd/or comment: See previous item. The response is pproprite becuse in Brzil the LDO cn be considered supporting budget document. 11. Does the executive s budget or ny supporting budget documenttion present dt on the totl government debt outstnding for the budget yer?. Yes, the dt reflect the outstnding debt both t the strt of the budget yer nd t the end of the budget yer (nd thereby reflect the net borrowing requirement of the budget). b. Yes, the dt reflect the outstnding debt t the end of the budget yer. c. Yes, the dt reflect the outstnding debt t the strt of the budget yer. d. No, dt on the outstnding debt re not presented. Cittion nd/or comment: There is chpter in the Drft Annul Budget Lw which dels with servicing contrctul nd bond debt by Agency nd Budget Unit (Órgão nd Unidde Orçmentári). The budget guidelines lw lso contins chpter on the subject. 18

19 12. Does the executive s budget or ny supporting budget documenttion present interest pyments on the debt for the budget yer?. Yes, interest pyments on the debt re presented. b. No, interest pyments on the debt re not presented. c. Not pplicble/other (plese comment). Cittion nd/or comment: In the clssifiction by expenditure type group, two of them relte to the debt: i) GND 02 debt interest nd chrges (Juros e Encrgos d Dívid), nd ii) GND-06 debt Amortiztion (Amortizção d Dívid). There re lso two progrms tht relte to domestic debt service (Serviços d Dívid Intern, 0905) nd externl debt service (Serviços d Dívid Extern, 0906). The Progrmmes re discriminted by projects/ctivities/specil opertions. 13. Does the executive s budget or ny supporting budget documenttion present informtion relted to the composition of government debt (such s interest rtes on the debt, mturity profile of the debt, currency denomintion of the debt, or whether it is domestic nd externl debt) for the budget yer?. Yes, extensive informtion relted to the composition of government debt is presented. b. Yes, key dditionl informtion is presented, but some detils re excluded. c. Yes, some dditionl informtion is presented, but it lcks importnt detils. d. No, dditionl informtion relted to the composition of government debt is not presented. Cittion nd/or comment: The informtion permits debt to be nlyzed in terms of contrctul nd bond debt, by gency, primry blnce etc. 19

20 14. Does the executive s budget or ny supporting budget documenttion present the mcroeconomic forecst upon which the budget projections re bsed?. Yes, n extensive discussion of the mcroeconomic forecst is presented, nd key ssumptions (such s infltion, rel GDP growth, unemployment rte, nd interest rtes) re stted explicitly. b. Yes, the mcroeconomic forecst is discussed nd most of the key ssumptions re stted explicitly, but some detils re excluded. c. Yes, there is some discussion of the mcroeconomic forecst (nd/or the presenttion of key ssumptions), but it lcks importnt detils. d. No, informtion relted to the mcroeconomic forecst is not presented. Cittion nd/or comment: The problem here lies not in the informtion tht is provided explicitly, but in its soundness. Mny figures re under- or over-estimted, nd in other cses the trgets re not met. For exmple, estimted revenues (see item 8), GDP growth, or infltion trgets re not met. The frgility of the economy, primrily due to high volume of debt, mkes ccurte estimtes difficult. 15. Does the executive s budget or ny supporting budget documenttion show the impct of different mcroeconomic ssumptions (i.e., sensitivity nlysis) on the budget (including expenditures, revenues, nd debt)?. Yes, extensive informtion on the impct of mcroeconomic ssumptions on the budget is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting the impct of the mjor mcroeconomic ssumptions, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on the impct of different mcroeconomic ssumptions on the budget is not presented. Cittion nd/or comment: Annex IV to the LDO ddresses this issue. The Messge from the President tht ccompnies the Drft Lw lso ddresses the subject. The problem is the qulity of the estimtes, s mentioned in the previous item. 20

21 16. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer tht shows how policy proposls in the budget, s distinct from existing policies, ffect expenditures?. Yes, extensive informtion on the impct of policy proposls on expenditures is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting the impct of key policy proposls on expenditures, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on the impct of policy proposls on expenditures is not presented. b Cittion nd/or comment: The resercher mrked the nswer s b. The President s Messge describes the impcts of the min policies, but s this is politicl document, it expresses the government s plns nd gols rther thn the relities of execution. A more pproprite response to this question would be c. Given the fct tht ctul budget execution significntly differs from the legislture-pproved budget, expressed intentions re not tken seriously. IBP Comment: IBP editors chose nswer b to mintin the consistency of the dt cross the countries. 21

22 17. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer tht shows how policy proposls in the budget, s distinct from existing policies, ffect revenues?. Yes, extensive informtion on the impct of policy proposls on revenues is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting the impct of key policy proposls on revenues, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on the impct of policy proposls on revenues is not presented. b Cittion nd/or comment: The resercher mrked the nswer s b. The executive s drft budget is directed minly to expenditure. There re revenue estimtes, which very often conflict with the legislture s estimtes (see item 8). The impct on revenue tht is shown in the documents reltes bsiclly to infltion, vrition in GDP nd chnges in legisltion. However, s previously mentioned, there re flws in the estimtes of these items. A more pproprite response to this question would be c. See the previous comment. A similr observtion pplies here. IBP Comment: IBP editors chose nswer b to mintin the consistency of the dt cross the countries. Estimtes for Yers Prior to the Budget Yer 18. Does the executive s budget or ny supporting budget documenttion present expenditures for the yer preceding the budget yer (BY-1) tht re clssified by dministrtive unit (tht is, by ministry, deprtment, or gency)?. All expenditures re clssified by dministrtive unit for BY-1. b. Expenditures re clssified by dministrtive unit for BY-1, but some smll units re not shown seprtely. c. Expenditures re clssified by dministrtive unit for BY-1, but significnt number of units re not shown seprtely. d. No expenditures clssified by dministrtive unit re presented for BY-1. Cittion nd/or comment: See question 1. 22

23 19. Does the executive s budget or ny supporting budget documenttion present expenditures for the yer preceding the budget yer (BY-1) tht re clssified by functionl clssifiction?. All expenditures re clssified by functionl clssifiction for BY-1, nd the ctegoriztion is comptible with interntionl stndrds. b. All expenditures re clssified by functionl clssifiction for BY-1, but the ctegoriztion is not comptible with interntionl stndrds. c. Some, but not ll, expenditures re clssified by function for BY-1. d. No expenditures clssified by function re presented for BY-1. Cittion nd/or comment: See question Does the executive s budget or ny supporting budget documenttion present expenditures for the yer preceding the budget yer (BY-1) tht re clssified by economic clssifiction?. All expenditures re clssified by economic clssifiction for BY-1, nd the ctegoriztion is comptible with interntionl stndrds. b. All expenditures re clssified by economic clssifiction for BY-1, but the ctegoriztion is not comptible with interntionl stndrds. c. Some, but not ll, expenditures re clssified by economic clssifiction for BY-1. d. No expenditures clssified by economic clssifiction re presented for BY-1. Cittion nd/or comment: See question 3. 23

24 21. Does the executive s budget or ny supporting budget documenttion present expenditures for individul progrms for the yer preceding the budget yer (BY-1)?. Progrm-level expenditure dt re presented for ll expenditures for BY-1. b. Progrm-level expenditure dt re presented for t lest two-thirds of, but not ll, expenditures for BY-1. c. Progrm-level expenditure dt re presented, but for less thn two-thirds of expenditures for BY-1. d. No progrm-level expenditure dt re presented for BY-1. Cittion nd/or comment: Chpter II of the LDO (On the Structure nd Orgniztion of the Budgets) stipultes tht clssifiction by progrms nd by projects/ctivities/specil opertions is obligtory. 24

25 22. In the executive s budget or ny supporting budget documenttion, how mny months of ctul dt re reflected in the expenditure estimtes of the yer prior to the budget yer (BY-1)?. All BY-1 estimtes hve been updted from the originl encted levels to reflect six or more months of ctul expenditure. b. All BY-1 estimtes hve been updted from the originl encted levels, but reflect less thn six months of ctul expenditure. c. Some BY-1 estimtes hve been updted from the originl encted levels to reflect ctul expenditure. d. The BY-1 estimtes hve not been updted from the originl encted levels, or no BY-1 estimtes re presented. c Cittion nd/or comment: The resercher s response to this question ws e. Budget vlues re generlly not corrected on the bsis of ctul expenditures in previous months. For mjor expenditures like socil security, cturil clcultions nd clcultions of finncil sitution re specified in nnexes to the LDO. The sme occurs with compulsory expenditures, for which there is n nnex stting the mrgin of expnsion for continuous compulsory expenditures. A number of prmeters re used, including expected infltion, growth in the minimum wge etc. This is difficult response, becuse s the resercher sys, budget vlues re generlly not corrected bsed on previous months expenditures. Notwithstnding, more pproprite response to this question I think would be c, tking into considertion tht the LDO should lso be considered prt of the supporting budget documenttion nd tht for some expenditures (s correctly mentioned by the resercher) BY- 1 updted estimtes re shown. A more pproprite response to this question would be. The resercher s nswer pprently ddresses revisions of BY, nd not BY-1 ctul dt, which re vilble. IBP Comment: IBP editors chose nswer c to mintin the consistency of the ssumptions used in selecting nswers cross the countries. 23. In the executive s budget or ny supporting budget documenttion, re estimtes of the ggregte level of expenditure presented for yers tht precede the budget yer by more thn one yer (tht is, BY-2 nd prior yers)?. Yes, such prior-yer estimtes of ggregte expenditure re presented. b. No, such prior-yer estimtes of ggregte expenditure re not presented. c. Not pplicble/other (plese comment). Cittion nd/or comment: A chrt is published showing the evolution of ntionl tresury expenditures (Evolução d Despes do Tesouro Ncionl), by economic ctegory nd group of expenditure type (Ctegoris Econômics e Grupos de Nturez de Despes), from 2002 to 2004 nd with n estimte for

26 24. In the executive s budget or ny supporting budget documenttion, is more detil thn just the ggregte level presented for expenditure estimtes tht cover yers preceding the budget yer by more thn one yer (tht is, BY-2 nd prior yers)?. Yes, such prior-yer expenditure estimtes re presented for ll individul progrms, nd for one or more expenditure clssifiction (such s functionl, economic, or dministrtive). b. Yes, such prior-yer estimtes re presented for one or more expenditure clssifiction (such s functionl, economic, or dministrtive), but only for some individul progrms. c. Yes, such prior-yer estimtes re presented, but only for portion of one or more of the expenditure clssifictions (such s some functions, or some dministrtive units) nd/or for only some individul progrms. d. No, such prior-yer estimtes re presented for ggregte expenditure only, or they re not presented t ll. b Cittion nd/or comment: The resercher mrked the nswer s b. As explined in the previous item, the evolution of expenditures by economic ctegory nd expense group is published. There is specific tble on socil security spending (socil insurnce, socil ssistnce nd helth/previdênci Socil, Assistênci Socil e Súde). There re Internet sites through which historicl series cn be built up of ll government ctions by ll clssifiction types. The nswer is (b), becuse these re presented for only some progrms. A more pproprite response to this question would be c for the sme resons s explined by the resercher, but considering tht only the helth nd socil security re is considered. IBP Comment: IBP editors chose nswer b to mintin the consistency of the ssumptions used in selecting nswers cross the countries. Prior-yer estimtes re provided for economic clssifiction nd for some individul progrms, which stisfies the conditions for b nswer. 26

27 25. In the executive s budget or ny supporting budget documenttion, wht is the most recent yer presented for which ll expenditures reflect ctul outcomes?. Two yers prior to the budget yer (BY-2). b. Three yers prior to the budget yer (BY-3). c. Before BY-3. d. No ctul dt for ll expenditures re presented in the budget or supporting budget documenttion. Cittion nd/or comment: BY-2 (AE-2) nd n estimte for the current yer-end re used. This kind of clcultion reltes more to the compulsory expenditures, but in Brzil those ccount for 93% of totl expenditures. Also, in estimting interest rtes, chrges nd mortiztion, mrgin is lwys left to llow for contingencies, nd therefore the vlue is normlly higher thn ctul expenditure. 26. Are the expenditure estimtes for the yers prior to the budget yer djusted, s needed, to be comprble with the budget-yer estimtes in terms of clssifiction nd presenttion?. Yes, prior-yer dt re lwys djusted to be comprble to the budget yer dt. b. Yes, in most cses, prior-yer dt re djusted to be comprble. c. Yes, in some cses, prior-yer dt re djusted to be comprble, but significnt devitions between prior-yer nd budget-yer clssifictions exist. d. No, prior-yer dt re not djusted to be comprble, or no prior-yer estimtes re presented. d Cittion nd/or comment: Government progrms, projects nd ctions hve chnged nmes very frequently, or they simply pper with fictitious nmes. One of the present government s min progrms bols fmíli (fmily grnt) will not be found under tht nme in the executive budget. 27

28 27. Does the executive s budget or ny supporting budget documenttion identify the different sources of tx revenue (such s income tx or VAT) for the yer preceding the budget yer (BY-1)?. All tx revenues re identified individully for BY-1. b. Tx revenues mounting to t lest two-thirds of, but not ll, tx revenue for BY-1 re identified individully. c. Tx revenues mounting to less thn two-thirds of ll tx revenues for BY-1 re identified individully. d. No tx revenues re identified individully for BY-1. Cittion nd/or comment: There is chrt showing the evolution of Ntionl Tresury revenues by economic ctegory nd source. 28. Does the executive s budget or ny supporting budget documenttion identify the different sources of non-tx revenue (such s grnts, property income, nd sles of goods nd services) for the yer preceding the budget yer (BY-1)?. All non-tx revenues re identified individully for BY-1. b. Non-tx revenues mounting to t lest two-thirds of, but not ll, non-tx revenue for BY-1 re identified individully. c. Non-tx revenues mounting to less thn two-thirds of ll non-tx revenues for BY-1 re identified individully. d. No non-tx revenues re identified individully for BY-1. Cittion nd/or comment: There is clssifiction by source tht permits such identifiction. For exmple, dontions by interntionl orgniztions re clssified s No. 195; dontions to the Zero Hunger progrm re clssified s No Cpitl revenues re lso identified. 28

29 29. In the executive s budget or ny supporting budget documenttion, how mny months of ctul dt re reflected in the revenues estimtes of the yer prior to the budget yer (BY-1)?. All BY-1 estimtes hve been updted from the originl estimtes to reflect six or more months of ctul revenue collections. b. All BY-1 estimtes hve been updted from the originl estimtes, but reflect less thn six months of ctul revenue collections. c. Some BY-1 estimtes hve not been updted from the originl estimtes to reflect ctul revenue collections. d. The BY-1 estimtes hve not been updted from the originl estimtes or no BY-1 estimtes re presented. Cittion nd/or comment: The federl inlnd revenue uthority (Secretri d Receit Federl, which works jointly with the federl budget office, Secretri de Orçmento Federl, to produce revenue dt) publishes revenues collected monthly. The limits for the gencies re normlly nnounced in June/July nd bsed on April/My. The response provided by the resercher is pproprite even though the comment is little bit confusing becuse it gives n nswer to question tht is not in the questionnire, but tht is relevnt for budget nlysis purposes to know when the gencies normlly hve their limits nnounced. Yer reports nd monthly reports re provided by the executive updting estimtes from previous yers nd on the budget under execution. 30. In the executive s budget or ny supporting budget documenttion, re estimtes of the ggregte level of revenues presented for yers tht precede the budget yer by more thn one yer (tht is, BY-2 nd prior yers)?. Yes, such prior-yer estimtes of ggregte revenue re presented. b. No, such prior-yer estimtes of ggregte revenue re not presented. c. Not pplicble/other (plese comment). Cittion nd/or comment: There is tble showing the on-going estimtes of Ntionl Tresury revenues by economic ctegory nd source. 29

30 31. In the executive s budget or ny supporting budget documenttion, is more detil thn just the ggregte level presented for revenue estimtes tht cover yers preceding the budget yer by more thn one yer (tht is, BY-2 nd prior yers)?. Yes, such prior-yer revenue estimtes re presented for individul sources of revenue, nd by revenue clssifiction (such s tx nd non-tx). b. Yes, such prior-yer estimtes re presented by revenue clssifiction (such s tx nd non-tx), but only for some individul sources of revenue. c. Yes, such prior-yer estimtes re presented, but only for some individul sources of revenue. d. No, such prior-yer estimtes re presented for ggregte revenue only, or they re not presented t ll. Cittion nd/or comment: There is tble showing on-going estimtes of Ntionl Tresury revenues by economic ctegory nd source. 32. In the executive s budget or ny supporting budget documenttion, wht is the most recent yer presented for which ll revenues reflect ctul outcomes?. Two yers prior to the budget yer (BY-2). b. Three yers prior to the budget yer (BY-3). c. Before BY-3. d. No ctul dt for ll revenues re presented in the budget or supporting budget documenttion. Cittion nd/or comment: See questions 28 nd

31 33. Does the executive s budget or ny supporting budget documenttion present informtion relted to the government debt for the yer preceding the budget yer?. Yes, extensive informtion is presented on the level nd composition of government debt for the yer preceding the budget yer. b. Yes, informtion on the level of debt is presented, but some importnt detils bout the composition of the debt re excluded. c. Yes, but only informtion on the level of debt is presented. d. No, informtion relted to the government debt for BY-1 is not presented. Cittion nd/or comment: There is tble showing contrctul nd bond debt serviced by government gency. 34. In the executive s budget or ny supporting budget documenttion, wht is the most recent yer presented for which the debt figures reflect ctul outcomes?. Two yers prior to the budget yer (BY-2). b. Three yers prior to the budget yer (BY-3). c. Before BY-3. d. No ctul dt for government debt re presented in the budget or supporting budget documenttion. Cittion nd/or comment: There is chpter in the drft LOA deling with servicing non-convertible debt by gency nd by budget unit. There is lso chpter in the LDO on this subject. The federl tresury secretrit (STN) nd the centrl bnk publish the sttus of the public debt. In the 2005 budget documents, ctul debt dt for BY-2 is presented. Consolidted dt on the public debt of one yer is vilble during the subsequent yer s first qurter. See for exmple: 31

32 Comprehensiveness 35. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer on extr-budgetry funds?. Yes, extensive informtion on extr-budgetry funds is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting key extr-budgetry funds, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on extr-budgetry funds is not presented. d Cittion nd/or comment: The Length of Service Retirement Fund (Fundo de Grnti por Tempo de Serviço, FGTS), mngement of which is completely divorced from the budget, is submitted to Congress. There re lso the pension funds of stte enterprises, which hve ssets worth billions of reis; the lrgest, for employees of the Bnco do Brsil, hs ssets worth R$ 70.3 billion. Though the Interntionl Monetry Fund s (IMF) ltest ROSC for Brzil nd the CFAA stte tht Brzil s budget is comprehensive nd tht there re no extr-budgetry funds. This is not ccurte, nd the nswer provided by the resercher is correct. 36. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer on intergovernmentl trnsfers?. Yes, extensive informtion on intergovernmentl trnsfers is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting key intergovernmentl trnsfers, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on intergovernmentl trnsfers is not presented. b Cittion nd/or comment: Though comprehensive dt is provided on intergovernmentl trnsfers there is no nrrtive text. There re two progrms connected with trnsfers, which re discriminted by ction. For exmple: the funds for trnsfer to sttes (Fundo de Prticipção dos Estdos), nd municiplities (Fundo de Prticipção dos Municípios), etc. 32

33 37. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer on trnsfers to public corportions?. Yes, extensive informtion on trnsfers to public corportions is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting key trnsfers to public corportions, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on trnsfers to public corportions is not presented. b Cittion nd/or comment: The resercher mrked the nswer s b. There re quntittive dt on expenditures by public enterprises, like the griculturl reserch enterprise (Empres Brsileir de Pesquis Agropecuári, Embrp). In certin cses, the informtion is not cler; for exmple, regrding government pyments to the federl dt processing service (Serviço Federl de Processmento de Ddos, Serpro). Resercher Response to Peer Reviewer: The government s ccountncy system provides for the mintennce of comprehensive informtion on trnsfers to public corportions, though in the pst such informtion ws lcking during recovery progrms instituted by Stte bnks. A more pproprite response to this question would be c. For some yers now, the executive cesed to bil out public compnies by mens of trnsfers. However, since there is no consolidted dt on the ggregte of the 130 or so Brzilin public compnies, perhps it would be hzrdous to fltly stte tht such opertions do not hppen t ll. This would justify mrking this question s c rther thn b. Observe tht pyments s in the exmple of Serpro re not unjustified trnsfers, but correspond to services rendered to the vrious ministries. IBP Comment: IBP editors chose nswer b to mintin the consistency of the ssumptions used in selecting nswers cross the countries. 33

34 38. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer on qusi-fiscl ctivities?. Yes, extensive informtion on qusi-fiscl ctivities is presented, including both nrrtive discussion nd, where possible, quntittive estimtes. b. Yes, informtion is presented, highlighting key qusi-fiscl ctivities, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on qusi-fiscl ctivities is not presented. c Cittion nd/or comment: The issue here is the budget of the stte enterprises. The nnul drft budget lw (Projeto de Lei Orçmentári Anul, PLOA) declres the investments they mke, but other expenditures re not submitted. For exmple: the Ntionl Economic And Socil Development Bnk (Bnco Ncionl de Desenvolvimento Econômico e Socil, BNDES) finnces investments in the order of R$ 40 billion per yer. The PLOA declres only those investments the BNDES mkes internlly, tht is, purchsing or constructing buildings, computer equipment etc., which were set t R$ 108 million for The sme hppens with the other government funding gencies (Cix Econômic Federl, Bnco do Brsil, Bnco do Nordeste nd Bnco d Amzôni). The budget declres only the trnsfer to the BNDES from the Workers Sfegurd Fund (Fundo de Ampro o Trblhdor, FAT) of 40% of its collected revenue, totling R$ 7.2 billion in Another type of expenditure with these chrcteristics is government publicity performed by stte enterprises tht produce institutionl publicity. The ntionl oil enterprise, Petrobrás, nd Bnco do Brsil crry out number of these opertions which involve hundreds of millions of reis. Once more, diverging from ROSC nd CFAA sttements on this field, the resercher nswer is correct if we consider broder definition of qusi-fiscl ctivities (including politicl bis on stte bnks lons nd the politicl use of some gencies funds, such s for publicity) which is essentil in Brzil s cse, regrding the recent corruption scndls involving some stte owned compnies (mostly linked to the use of huge funds for publicity but not only; there is lso history of controversil lons mde by BNDES in the pst during the privtiztions in the 90 s). It is importnt to register tht lot of progress hs been mde to eliminte qusi-fiscl ctivities in Brzil, especilly fter the inclusion of monetry opertions by Centrl Bnk in the generl government. However, there is still considerble mrgin of mneuver for the government to operte outside budget constrints. 34

35 39. Does the executive's budget or ny supporting budget documenttion present informtion on finncil ssets held by the government?. Yes, extensive informtion on finncil ssets is presented, including listing of the ssets, discussion of their purpose, nd n estimte of their mrket vlue. b. Yes, informtion is presented, highlighting key informtion, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on finncil ssets is not presented. d Cittion nd/or comment: This is complex mtter: in order to clculte the net public sector debt, comprison is mde between ssets nd libilities. The figures from Brzil s Centrl Bnk indicte gross debt of R$1,383.1 billion nd net debt of R$ billion, nd thus should reflect ssets of R$ billion. It must be emphsized tht there re doubts s to the return on these ssets, prticulrly s regrding lons connected with the regionl funds for the Northest, Amzon nd Mid-West (Fundo do Nordeste nd Fundo d Amzôni nd Fundo do Centro Oeste), ginst which complints of embezzlement re routinely mde. The blnce of pplictions by these funds s of June 30, 2004 totled R$ 23.4 billion. The finncil ssets of the stte enterprises, prticulrly the government funding gencies (BNDES, Bnco do Brsil, Bnco do Nordeste, Bnco d Amzôni nd Cix Econômic Federl) re not given in the LOA. Some informtion is extensive (lthough not explicitly in the budget, but elsewhere), but its interprettion is subjected to debte, s pointed out by the resercher. 40. Does the executive's budget or ny supporting budget documenttion present informtion on non-finncil ssets held by the government?. Yes, extensive informtion on non-finncil ssets is presented, including listing of the ssets, discussion of their purpose, nd (where possible) n estimte of their mrket vlue. b. Yes, informtion is presented, highlighting key informtion, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on non-finncil ssets is not presented. d Cittion nd/or comment: Non-finncil ssets (the sum of mounts tht do not ffect finncil movement, comprising current ssets, short-term mounts outstnding, long-term ssets nd permnent ssets) re not declred, but their volume is lrge. The response provided by the resercher is correct. The stte hs lot of lnd properties tht re not declred. I concur with the resercher s nswer. 35

36 41. Does the executive s budget or ny supporting budget documenttion present informtion for t lest the budget yer on expenditure rrers?. Yes, extensive informtion on expenditure rrers is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting key expenditure rrers, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on expenditure rrers is not presented. Cittion nd/or comment: As provided for in lw No /64, rrers re recorded s pending pybles nd cn be monitored by the integrted finncil dministrtion system (Sistem Integrdo de Administrção Finnceir, SIAFI). All members of Congress hve ccess to the system. The LDO sets out the conditions for pyment of rrers, including the existence of monthly schedule. The posting of these pending pybles leds to series of problems for budget trnsprency nd execution. In the Ministry of Trnsporttion, for instnce, sizble mount of the execution of the current yer generlly begins t yer-end, nd ends up becoming pending pybles for the following yer. It is never-ending cycle. Governments hve lso used this instrument to post funds of interest to members of congress for politicl negotition (members of congress submit budget mendments in their own interest). 42. Does the executive s budget or ny supporting budget documenttion present informtion on contingent libilities (such s government lon gurntees)?. Yes, extensive informtion on contingent libilities is presented, including both nrrtive discussion nd quntittive estimtes. b. Yes, informtion is presented, highlighting key contingent libilities, but some detils re excluded. c. Yes, some informtion is presented, but it lcks importnt detils. d. No, informtion on contingent libilities is not presented. Cittion nd/or comment: There is n nnex to the LDO tht dels with contingent libilities (pssivos contingentes); these re potentil debts tht my derive from rnge of fctors nd which, becuse of their peculirities, hve not yet been recognized s debts by the federl government. These libilities re often difficult to mesure nd imprecise, nd therefore it should be noted tht the listing of libilities does not men, or infer the likelihood, tht they will ctully occur, especilly those tht involve judicil disputes. One of the budget nnexes lists expenditures with these chrcteristics. 36