Workbook 1

Planning and Budgeting

PFM Concepts of S/L

PFM Concepts
Planning and budgeting S/L
Planning and budgeting
The MTBF typically has a
Medium Term Budget
timescale of 3 or 4 years (in
Framework (MTBF)
Somaliland 3 years).
 Planning and Budgeting

The Annual Budget Somaliland National Annual

Budget
Output and performance
budgeting Somaliland Budget 2015 was
$180 Millions
Investment planning and capital
budgets
 Public Financial Management Cycle

Planning and
Budget
Preparations

External
Budget
Scrutiny &
Execution
Audit

Accounting
& Reporting
 Somaliland P F M Cycle

1) STRATEGIC PLANNING
Vision 2030 and NDP
Macroeconomic and Fiscal
Framework (MFF)
Medium Term Budget
Framework (MTBF) 2) ANNUAL BUDGET
6. POLICY REVIEW PREPARATION
Outcome Evaluation Revenue Forecast
Annual Review Expenditure
Policy Update Allocation
Budget (Finance Bill)
Passed

3) BUDGET EXECUTION
5. REPORTING AND AUDIT
4. ACCOUNTING AND Release of Funds
External Audit
MONITORING Payments
House of Representatives
Financial Reports Procurement
Public Accounts
Performance Reports Commitment Controls
Committee (PAC)
Annual Accounts
Somaliland Budget Allocation 2016
GoSL Expenditures 2016
 Terminology and Documents

Term Explanation Somaliland equivalent

Policy A political/social vision or aspiratio Vision 2030
n

Plan How to implement the vision National Development Plan (NDP)

Strategy What to do to get there Medium Term Budget Framework (MTBF)

Forecast An estimate of items in a plan that Revenue Forecast incorporated in the Macro and
cannot be fully controlled Fiscal Framework (MFF)

Budget Annual forecast of revenues, financiThe budget which becomes law as the
ng and expenditure allocation enac Appropriation Act
ted as budget law
 Budget and planning documents Somaliland and International
Document Typical timescal Organisational covera Type of document Somaliland document
e ge
National Policy 5 to 20 Whole of Visions and goals National
and National years government Development Plan
Development
Plan
Medium Term Fiscal Fra 3 years Whole of government Forecast of available finan Macro and Fiscal Framewor
mework (MTFF) cial resources k (MFF)
Medium Term 3 years A group of Detailed sectoral Policy statement
Sector Strategies ministries in the strategies
and Plans (MTSS) same
government
sector
Medium Term 3 years Whole of Integrates MTSS Medium Term
Expenditure government and MTFF Budget framework
Framework (MTBF)
(MTEF)
Programme One year Sectors and Physical plans, Not implemented
budgets ministries with performance in Somaliland
targets and
detailed costed
expenditure
budgets
Call circular One year Sectors and Budget Budget circular
ministries instructions and resource Budget guidelines
ceilings
as basis for
budget estimates
 Budget and planning documents
Somaliland and International

Document Typical timescale Organisational coverag Type of document Somaliland DOC

e

Ministry, One year MDAs and Revenue targets Budget

Department and spending units and expenditure submissions

Agency (MDA) within them budgets showing
annual financial legal expenditure
budgets limits

Annual budget One year Whole of Revenue forecast, The Budget

(Appropriation) government financing and expend Finance Bill becomes the Appr
iture appropriations t opriation Act
o Ministries,

departments and
Agencies
The Somaliland Vision 2030 has the Following Five Pillars:

1- Economic Development
2- Infra-Structure Development
3- Good governance
4- Social Development
5- Environmental Protection
 Somalilands vision 2030

Vision
Stable, democratic, and prosperous
Somaliland where citizens enjoy a High
quality of life

Governance Pillar
Economic Pillar

Environmental
Infra-structure

Social Pillar
Pillar

Pillar
 Somaliland Budget Calendar 2017

Document Description 2017 PFMA Act

Deadline Deadline

Estimate of total government revenue and expenditure for the coming t

Macroeconomic and Fiscal hree years, macroeconomic policy and forecast of macroeconomic vari 31st July 30th June
Framework (MFF) ables (Sections 1.1, 1.2, 2.1 & 4.2)

Medium Term Budget Indicative expenditure and revenue estimates for public bodies over the
Framework (MTBF) coming three years (Sections 1.1, 1.2, 3.3 & 6.1) 31st July 30th June

Budget Circular & Statement of government priorities, economic situation and new budget
Guidelines process circulated by the Minister of Finance (Section 4.6) 31st July 31st July

Each public body must state the amount of funding they request within
Budget Submission sectoral limits & details of the policies they plan to implement with publi 31st August 31st August
c funds (Sections 5.1 & 5.2).

The Minister of Finance submits expenditure votes for approval by the 15th October
The Budget (Finance Bill) House of Representatives and presents an update on the Somaliland e 1st October
conomy (Sections 7.1, 7.2 & 7.4).
 1. STRATEGIC PLANNING

1) Budget Policy Committee reviews Budget Framework Paper and

chooses: -
I. Macroeconomic and Fiscal policy goals
II. Expenditure priorities (using development goals identified in Vision 2030, National
Development Plan)
2) MoF prepares Macroeconomic and Fiscal Framework (MFF) and Medium
Term Budget Framework (MTBF) after direction from the Budget Policy Commit
tee (Sections 1.1, 4.2 & 4.3)
a) Total level of government financial resources in the medium
term (MFF)
b) First year estimates hard constraint for opening budget ne
gotiations (MTBF)
c) Indicative expenditure limits for each public body for years
2 and 3 (MTBF)
 2.BUDGET PREPARATION

1) Public bodies prepare Budget Submission to the Ministry of Fina

nce (Sections 4.4 & 4.5).
a) Policy Statement should contains statement of their priorities in the coming
year
b) Should contain Year 1 expenditure estimates within year 1 expenditure limit i
n MTBF (unless compelling case for extra funding is made)

2) House of Representatives submit Budget recommendations based upo

n Medium Term Budget Framework (MTBF) (Section 6.3).
3) Minster of Finance presents the Budget (Finance Bill) to the House of Rep
resentatives after approval from the Council of Ministers (Section 7.1).
a) Set of expenditure votes with accounting officers for each MDA
 3. BUDGET EXECUTION

1) Public funds disbursed where it has been legally approved by the Hous
e of Representatives in the Budget and expenditure approved by the Minst
er of Finance, the Accountant General and the Auditor General (Sections 28.1 & 28.
2).
Expenditure goes through SLFMIS system

Somaliland Financial Management Information System (SLFMIS) is `

to provide a system with adequate audit trails to improve
administrative accountability in processing transactions.
Improved timeliness and accuracy of financial information will also
improve timeliness and comprehensiveness of financial reports for
decision making.
 Following mapping was defined
between the PFM Strategic Pillars and
the Main components of SLFMIS:
Workbook 2 Budget Execution
 Workbook 3
Accounting System in S/L
Established in 1993, the Somaliland Accountant General Office
( AGO )

(AGO) is entrusted with various functions including

Accounting and entitlement functions of the government,

compiling of accounts reports from various government departments,
prepares financial Statement & appropriation accounts annually.
Using from Single Entry Accounting System to double Entry Accounting
 Accounting and reporting

MAIN OBJECTIVE

To strengthen financial management and reporting

by Line Ministries and local governments, and

Increase Transparency and Accountability in the use

of public resources.
 GoSL Set to Improve following
Area

(1) The development of comprehensive Treasury Accounting Instructions

(2) The development of a Chart of Accounts (CoA) which is compliant

with the International Monetary Fund Government Financial Statistics
Guidelines (IMF & GFS).
(3) CoA to ensure it supports International Public Sector Accounting Sta
ndards IPSAS double-entry cash accounting and GFS 2001 Functio
nal Classification.
(4) It will also ensure that the CoA provides the necessary information
on all Government Sectors and projects in support of the operation
alisation of the NDP. (National Development Planning )
 Workbook 4 Financial Reporting

1) Review of existing accounting procedures, and reporting require

ments and financial Statements
2) Review of existing records management procedures , systems
3) Review of processes for receiving funds
4) Develop appropriate reporting frameworks and guidelines in
Financial reporting

5) Whole of Government fiscal reports are prepared annual using

the Standard Chart of Accounts
 Workbook 5 Audit and Control

The Auditor-General is the Supreme National auditing Institution and is co

nstitutionally an independent authority under Articles 55, 90, and 113 of
the constitution of Somaliland, established under law No. 05/98

Somaliland Auditor General Law No. 76/2016 consisting of 70 Articles w

as signed by the President on 31 January 2017 and, according to the Law (A
rt. 70) comes into force on its signature by the President.

The role of the Auditor-General is to provide an independent oversight of

government operations through financial and other management audits.
 The Objective of the audits conducted
by the Auditor General

1) Determine whether public funds are spent efficiently, effectively, and in

accordance with applicable laws;
2) Evaluate internal controls and help improve governance in Governme
nt and in public sector agencies;
3) Undertake investigations to assess whether illegal or improper activitie
s are occurring;
4) Determine whether public sector agencies are in compliance with app
licable laws and regulations, rules and procedures
5) Provide assistance to the Parliament and the Public Accounts Com
mittee in support of their oversight and decision-making responsibiliti
es.