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2008 Assessment

Ethiopia: Integrity Indicators Scorecard

Ethiopia : Integrity Scorecard Report > Sub-Category: Budget Processes
Indicators		Score
40	Can the legislature provide input to the national budget?	50
41	Can citizens access the national budgetary process?	58
42	Is there a separate legislative committee which provides oversight of public funds?	100
43	Is the legislative committee overseeing the expenditure of public funds effective?	50

Indicator and sub-Indicator Details

Can the legislature provide input to the national budget?

40a: In law, the legislature can amend the budget.

Score:

YES

Comments: The article states the Legislature shall levy taxes and duties on revenue sources reserved for the Federal government and shall ratify the federal budget.

References: The Constitution of the Federal Democratic Republic of Ethiopia, Proclamation No. 1/1995, Article 55, Sub-Article 11.

40b: In practice, significant public expenditures require legislative approval.

Score:

100

$Scoring Criteria :: 100 Score Criteria: All significant government expenditures (defined as any project costing more than 1% of the total national budget), must be approved by the legislature. This includes defense and secret programs, which may be debated in closed hearings. <p>50 Score Criteria: Most significant government expenditures (as defined) are approved by the legislature, but some exceptions to this rule exist. This may include defense programs, an executive\'s personal budget, or other expenses. <p>0 Score Criteria: The legislature does not have the power to approve or disapprove large portions of the government budget, or the legislature does not exercise this power in a meaningful way.$

Comments: The Legislature in most cases is very ineffective.

Per the PEFA report, "The Budget and Finance Standing Committee carries out a review of the recommended budget. There is no evidence of existing written procedures for the review. Overall the legislature has about one month to review the recommended budget. Supplementary budgets (or in-year budget amendment) can be authorized by the House of Peoples Representatives on the recommendation of the Council of Ministers. The rules that allow such amendments are rudimentary."

References: Awramba Times, October 21, 2008, "About the Legislature," by Dawit Kebede.

Adiss Neger newspaper, October 18, 2008, The Activity of the Parliament" by Zerihun Tesfaye.

The Federal Republic of Ethiopia Public Financial Management Report [PEFA Assessment], October 23, 2007 (DFC Group, Barcelona, Spain).

Peer Review Comments: All significant government expenditures must be approved by the legislature, including defense and security programs.

40c: In practice, the legislature has sufficient capacity to monitor the budget process and provide input or changes.

Score:

100

Comments: One-party dominance, along with lack of qualified staff, is the main problems that crippled the performance of the Legislature. Although the executive reports to the legislature, the latter lacks the capacity to follow up.

The PEFA report notes. "The Budget and Finance Standing Committee carries out a review [of the government's draft budget]. There is no evidence of existing written procedures for the review."

References: Awramba Times, October 21, 2008, "The Role of the Legislators," by Dawit Kebede.

Adiss Neger newspaper, October 18, 2008, The Activity of the Parliament" by Zerihun Tesfaye.

The Federal Republic of Ethiopia Public Financial Management Report [PEFA Assessment], October 23, 2007 (DFC Group, Barcelona, Spain).

Peer Review Comments: The executive must report to parliament on the performance of budgets, and the auditor general also presents annual reports on budget performance to parliament.

Can citizens access the national budgetary process?

41a: In practice, the national budgetary process is conducted in a transparent manner in the debating stage (i.e. before final approval).

Score:

100

Comments: Budget debates are transmitted through government media.

References: Adiss Neger, November 8, 2008, by Masresha Mamo, Page 7.

Peer Review Comments: While the budget debates are broadcast, real discussions and debates happen in other, less public settings.

Peer Review Comments: Probably some parts of the national budget are not included in the (public) version presented to the Parliament (HPR -- House of Peoples Representatives).

41b: In practice, citizens provide input at budget hearings.

Score:

100

Comments: Though parliamentary budget debates are open to the public, very little budget information is accessible to the public during the budget drafting phase for scrutiny ahead of time. In parliament, civil society participation during budget hearings is limited to giving feedback or raising questions which may or may not be incorporated.

References: Adiss Neger, November 8, 2008, by Zerihun Tesfaye, Page 6, and by Maseresha Mamo, Page 7.

Interview with a Member of the Ethiopian Parliament who wished to remain anonymous.

Elizabeth Mekonnen, "Does the Ethiopian Budget encourage participation? A Preliminary Assessment." The African Child Policy Forum (2005). Website: www.africanchildforum.org

41c: In practice, citizens can access itemized budget allocations.

Score:

100

Comments: Citizens, journalists and CSOs can theoretically access itemized lists of budget allocations; the information could be transmitted through the state-owned television and radio stations during the parliamentary meeting on the budget. In addition to publications by the Ministry of Finance and Economy and the National Bank of Ethiopia, newspapers could also publish the itemized budgets.

But overall, as the PEFA report notes, "The public has no access to key fiscal information although a culture of information sharing and downward accountability is currently under-developed in Ethiopia...The public cannot [also] not obtain a set of the annual budget document when it is submitted to the Legislature. The public has no access to the In-year budget execution reports. However the MOFED website (www.mofed.org) provides quarterly information on the executed budget. Although this information is useful, it is NOT made routinely available within one month of its completion."

With regard to ongoing budgetary reporting, the PEFA report also notes that, "At the Federal level [ministries] report monthly on their executed budgets to the appropriate department at MOFED. Once every three months, the monthly reports are consolidated in a report covering the previous quarter. These reports are not available in English."

References: National Bank bulletin and report, 2008, of the Ministry of Finance and Economy.

Adiss Neger, Nov 8, 2008, by Zerihun Tesfaye, Page 6, and by Maseresha Mamo, Page 7

The Federal Republic of Ethiopia Public Financial Management Report [PEFA Assessment], October 23, 2007 (DFC Group, Barcelona, Spain)..

Is there a separate legislative committee which provides oversight of public funds?

42: In law, is there a separate legislative committee which provides oversight of public funds?

Score:

YES

Comments: Article 5, Standing Committees of the House include: a) the Legal Affairs Committee, b) the Budgetary Affairs Committee, c) the Economic Affairs Committee, d) the Defense and Security Committee, e) the Foreign Affairs Committee, f) the Social Affairs Committee, g) the Committee for the Administrative Affairs of the House, h) the Mass Media and Cultural Affairs Committee and i) the Women's Affairs Committee.

The Budgetary Affairs Committee is responsible for initial budget review, while the Public Accounts Committee (PAC) is charged with reviewing budget execution and auditor reports. The Budget Committee is further divided into three sub-committees under its mandate: Public Accounts, Revenue, and Recurrent and Capital Budget sub-committees. It was established and began working in 1998 to authorize the collection of federal public funds (taxes and duties) and the expenditure of public funds, after due debate, consideration, and ratification of the federal budget, Article 55.

References: Proclamation 14/1995, House of Peoples' Representatives Legislative Procedure, Article No. 5.

Is the legislative committee overseeing the expenditure of public funds effective?

43a: In practice, department heads regularly submit reports to this committee.

Score:

100

Comments: Departments submit reports to this committee; however, since the committee has limited qualified staff and capacity, the reports are not well received or acted upon.

References: Interview with Ato Solomon, member of the Ethiopian parliament, November 25, 2008.

Peer Review Comments: Ministries and departments routinely present reports to parliament.

43b: In practice, the committee acts in a non-partisan manner with members of opposition parties serving on the committee in an equitable fashion.

Score:

100

$Scoring Criteria :: 100 Score Criteria: The committee is comprised of legislators from both the ruling party (or parties) and opposition parties in a roughly equitable distribution. All members of the committee -- including opposition party members -- are able to fully participate in the activities of the committee and influence the committee\'s work to roughly the same extent as any other member of the committee. <p>50 Score Criteria: The committee is comprised of legislators from both the ruling party (or parties) and opposition parties although the ruling party has a disproportionate share of committee seats. The chairperson of the committee may be overly influential and curb other members\' ability to shape the committee's activities. <p>0 Score Criteria: The committee is dominated by legislators of the ruling party and/or the committee chairperson. Opposition legislators serving on the committee have in practice no way to influence the work of the committee.$

Comments: A member of the opposition has chaired the Public Accounts Committee (PAC). The Budget Committee is controlled by the ruling party.

References: Adiss Neger, November 08, 2008, by Zerihun Tesfaye, Page 6, and by Maseresha Mamo, Page 7.

Awramba Times, October 21, 2008, "The Role of the Legislators," by Dawit Kebede.

Adiss Neger, October 18, 2008, "The Activity of the Parliament," by Zerihun Tesfaye.

The Federal Republic of Ethiopia Public Financial Management Report [PEFA Assessment], October 23, 2007 (DFC Group, Barcelona, Spain).

43c: In practice, when necessary, this committee initiates independent investigations into financial irregularities.

Score:

100

Comments: The investigation on the General Auditor's report of excessive borrowing by the government has reported the case as a misinterpretation of the law, which, according to the newspapers, shows the ineffectiveness of the committee.

As the PEFA report notes, "The Public Accounts Committee (PAC) of the House of Peoples' Representatives reviews [audit] report[s] in open session. Such sessions are widely reported in the media. The PAC, working through the OFAG, to a limited degree, sometimes follows up recommendations at a later date...[Such sessions] are not systematic due to limited capacity...the PAC looks at recommendations but in practice they are not acted upon by the executive."

References: Adiss Neger, November 08, 2008, by Zerihun Tesfaye, Page 6, and by Maseresha Mamo, Page 7. Awramba Times, Oct 21, 2008, "The Role of the Legislators," by Dawit Kebede. Adiss Neger, October 18, 2008, "The activity of the Parliament," by Zerihun Tesfaye.

The Federal Republic of Ethiopia Public Financial Management Report [PEFA Assessment], October 23, 2007 (DFC Group, Barcelona, Spain).