7 key takeaways from Burundi’s new public finance law
RegionWeek Newsletter Vol VI, Issue #217 | Tuesday, June 29, 2022
On June 20th President Evariste Ndayishimiye promulgated a law relating to public finances amending the current one Law No. 1/35 of December 4, 2008. This organic law lays down the budgetary principles as well as the rules relating to the determination of the charges and resources of the public authorities. It defines the legal regime and the content of finance laws as well as their conditions of adoption and execution.
In his explanatory memorandum, the minister in charge of finance, Mr. Domitien Ndihokubwayo, indicated that the revision of this law followed the objective of adapting it to reforms and projects carried out by the government in order to ensure the performance of public administrations in the collection of revenue and the effective and efficient management of public expenditure.
The architecture of the new public finance law comprises 80 articles, including 26 new and 25 modified, spread over 5 chapters. The law provides that its application begins with the 2022-2023 budget year. (art 78) But pending the establishment of a new nomenclature, the current one will continue to be applied (art 76).
1. Communes has now the possibility to collect revenue
Chapters I, II, and III are general in scope. They deal with general provisions, resources, and public charges as well as the budget and fiscal policy. They cover all public bodies.
The novelties introduced by this bill at this level relate to:
- the attribution by law to commune of the possibility of collecting revenue (art 4);
- the creation of a virtual account and a single Treasury account for monitoring the funds of public bodies (art 5);
- the clarification of what are the annexed budgets (art 10), the special allocation budgets (art 11), the loan budgets (art 12-13), the guarantee and endorsement accounts (art 14), and their operation within the framework of the program budget;
2. Program-oriented budgeting
The 5th chapter is about finance laws. It talks about the content and structure of finance laws, the presentation of credits, the documents to be appended to finance laws, the preparation of finance laws as well as the discussion and vote on finance laws.
Section 2 in relation to the presentation and scope of appropriations deserves particular attention because it introduces the notion of a “program-oriented budget”.
Indeed, with this law, the credits will now be the credits of the ministries and will be presented in one or more programs grouping together the means of financing a coherent set of actions contributing to a public policy pursuing specific objectives.
As for the budgetary appropriations allocated to constitutional institutions, they will be grouped together as an allocation when they are directly intended for their constitutional mission. However, they are divided into programs when they contribute to the implementation of a public policy. (art 21)
3. The obligation to report on achievements
In chapter 5, the 21st Article describes the content of the appropriations allocated to ministries. The novelty of this law at this level is to include the obligation to report on the achievements and on the objectively verifiable results associated with the means made available to finance actions contributing to public policy.
The monitoring and evaluation of achievements in the field will be based on four (4) financial categories: works, goods and equipment, services, and operation.
Article 22 describes the mode of appointment of program managers. They are appointed by order of the Minister or decision of the head of the constitutional institution to which they belong. The act of appointment specifies, where applicable, the conditions under which authorizing officer powers are delegated to them, as well as the procedures for managing the program.
Article 23 specifies the appropriations which must be the subject of allocations.
Are subject to endowments:
- the appropriations intended for the constitutional institutions which cover the expenditure of personnel, goods, and services, subsidies, and transfers as well as the investment expenditure directly necessary for the exercise of their constitutional functions;
- global credits for accidental and unforeseeable expenses;
- credits intended for common expenses;
- credits intended to cover repayment defaults or collateral calls made on loan or advance, guarantee, and endorsement accounts;
- the financial charges of the State debt
4. The Minister in charge of Finance is the sole principal authorizing officer for general budget receipts
Chapter V is a chapter that deals with the implementation of the budget. It has 5 sections. The first section announces the basic rules governing the implementation of the budget.
Article 43 insists on the incompatibility of the functions of authorizing officer and public accountant.
Article 47 recognizes Ministers and heads of constitutional institutions as principal authorizing officers of program credits, allocations, supplementary budgets, and special allocation budgets, of their ministry or their institution.
However, under Articles 45 and 46, the Minister of Finance retains significant powers in the implementation of the finance law.
In fact, the Minister in charge of Finance is the sole principal authorizing officer for general budget receipts, supplementary budgets, special allocation budgets, loan budgets, guarantee and endorsement accounts, and all treasury operations ( art 45)
The Minister in charge of Finance is then responsible for the execution of the finance law and the respect of the budgetary and financial balances defined by it.
And as such, he has the power of budgetary regulation which allows him, during the execution of the budget:
- to cancel a loan that became irrelevant during the financial year;
- to cancel a credit to prevent a deterioration of the budgetary and financial balances of the budget law. (art 46)
6. Limitation of benefits
In addition, the Minister in charge of Finance may make the use of appropriations by the authorizing officers subject to the availability of State cash. (art 46)
Article 49 announces the statute of limitations for the benefit of the State or any other public body with a public accountant, all debts whose payment has not been claimed within a period of four years from the first day of the year following that in which the rights were acquired.
Section 2 relating to the execution of the budget has not been updated. The same applies to sections 3 and 4 in relation respectively to accounting and cash.
At the level of section 5 in relation to control, the novelties brought by the law are about the powers of control of Parliament and the reports that the Minister of Finance must submit to Parliament within the framework of this control.
Indeed, by virtue of article 61, the Commission in charge of finance oversees, during the annual management, the proper execution of the finance laws without prejudice to the general powers of control of Parliament. (art. 61)
In addition, the Minister of Finance is required to submit to Parliament, within the framework of the exercise of this power of control, a report on the execution of the finance law.
7. The Mission of the Court of Auditors
Article 64 specifies the other new features related to the missions of the Court of Auditors. This is the mission to judge the accounts of public accountants, a mission affirmed by article 183 of the Constitution
It is also a matter of carrying out, on its own initiative, audits of the management capacity of ministries and constitutional institutions in order to certify that the conditions of management and internal control meet standards of efficiency, efficiency, and safety. (art 63)
The novelties brought to the 6th section which deals with responsibilities and sanctions are about the debiting of accountants (art 73) and the sanctions for mismanagement (art 74) which fall to the Court of Auditors by virtue of the jurisdictional mission affirmed by article 183 of the Constitution. The other provisions of the law have not undergone substantive changes.
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Fabrice Iranzi, Editor in Chief | RegionWeek.com