Parliament And The Budget
One of the main duties of Parliament is its oversight responsibility. This responsibility encompasses all activities pertaining to public expenditure by the Executive arm of government, MDAs, etc.
The presentation of a budget statement at least once a year is one of the Constitutional duties the Constitution places on spending officers in our country. Since Parliament is the only institution that approves public spending, it plays a major role in the planning, implementation and evaluation of the budget.
The role Parliament plays in the budget is one that is provided for in the 1992 constitution. Article 108 of the constitution talks about the settlement of financial matters and specifies Parliament's roles and limitations in the same.
Article 179 of the same Constitution deals with the authorization of expenditure and goes on to state that “the President shall cause to be prepared and laid before Parliament, at least one month before the end of the financial year, estimates of the revenues and expenditure of government of Ghana for the following financial year. ”
The budget also contains reviews of state of the national economy and informs Parliament of tax proposals in the relevant year.
In order to truly appreciate the role Parliament plays in the budget, it is important to take a critical look at the various stages of a budget.
The budget cycle has four main stages; planning and preparation, analysis and approval, implementation and monitoring, and lastly, audit and evaluation.
Planning and Preparation include the formulation of macroeconomic framework for the country which incorporates policy measures and initiatives aimed at attaining growth targets.
Typical macroeconomic objectives of the government's budget include attaining real GDP growth targets, decreasing the rate of inflation, fiscal deficits, and domestic debt/GDP, and boosting gross international reserves.
At the Analysis and Approval stage, draft estimates of MDAs are sent to parliamentary committees for examination.
This is done after many hours of consultation with Parliamentary Select Committees where issues are raised and needs are prioritized. Next, draft budget estimates are presented by Ministry of Finance and Economic Planning (MOFEP) to Parliament for discussion and debate.
The parliamentary debates are concluded with an approval by Parliament of the Appropriation Bill.
The 2006 budget was the first budget in our country's history to meet the constitutional requirement of presenting the budget to Parliament at least one month before the end of the year.
When it comes to the Implementation and Monitoring stage, the usual practice is that the Minister of Finance authorises the release of funds.
The Ministry of Finance and Economic Planning monitors and supervises the spending of the MDAs through the use of quarterly and monthly expenditure ceilings and the imposition of sanctions to MDAs which exceed their ceilings.
The Audit and Evaluation stage involves government assessing the fiscal performance for the year in order to identify appropriate corrective measures for the ensuing year.
In fiscal years in which the amount of funds appropriated is insufficient or that a need has arisen for expenditures for which no funds have been appropriated, the constitution provides that a supplementary budget estimate shall be presented to Parliament for its approval (2006, 2007 budgets).
Now that the budget statement has been presented to Parliament, work will begin during this weekend with the commencement of a post budget workshop that will analyze the various figures allocated to the various MDAs and to determine whether the projects mapped out to be executed are in line with decisions taken at earlier consultations and also to ensure equity and fair distribution of funds for the development of the country in its entirety.
This is done during what is referred to in Parliamentary parlance as the Supply Days.
As well, during this period, the Business Committee will allot a number of days for the consideration of the budget. On the final day, all the relevant figures are brought up for approval en bloc.
This is to give Members an opportunity to scrutinize the details of public spending and also to cause Ministers to defend the policies and spending of the MDAs under them.
It must be noted that Parliament has the mandate to reduce the expenditures of MDAs but cannot increase expenditure. Once this is done, an Appropriation Bill is introduced to grant the total amount of the budget for disbursement.
Once the Appropriation Bill is passed, the budget is said to be approved. It is expected that Parliament will conclude this exercise before or by the 18th of December when the Houses rises for the Christmas break.
After the passing of the Appropriation Bill, the financial watchdog role of Parliament is performed by the Public Accounts Committee by ensuring that all expenditures were incurred with the appropriate legislative authority.
The Committee also examines whether there has been wastage, extravagance of misapplication of public funds and then prescribes the requisite remedies. Of course, this work is dependent on reports from the auditor general.
It must be indicated though that the financial role of Parliament has its limitations. For instance, only the Executive arm of government can take financial initiative, meaning Parliament cannot appropriate any monies except the Executive requires same. And this is a Constitutional provision.
The role of Parliament, as a result, is limited to approving supplying, appropriating and criticizing government spending. For this situation to be rectified, changes will have to be made to Article 13 of the 1992 Constitution.
Having said that, it must be emphasized that Parliament still plays a vital role in the budget process. Indeed, most government policies encapsulated are as a result of inputs made by the people's representatives in the House.