PUIC Bulletin No.8 Winter 2011
Mr. Habib Makki Hashim, member of the Shura Council, Kingdom of Bahrain, participated in a symposium titled ”Changing Role of Parliaments in Budget Process” , jointly organized by the Grand National Assembly of Turkey and the PUIC General Secretariat. The proceedings were held in the Turkish city of Afyon Karahisar, on 23-25 September 2010. He has penned this article specially for the “PUIC” about the various phases of the budget as it passes through the Parliamentary process.
Every public or private institution must have its own budget. Parliaments are legislative institutions and have budgets. The budget is a document by the General Secretariat in each assembly (Parliament) as a draft that includes revenues estimated to be received (remitted) and the expenditure estimated to be spent over a certain period (fiscal year). The researcher of reader may perceive, through the given figures, the general policy of the parliament.
In the National Council of Bahrain (whether the Council of Representatives of the Shura Council ), for example, the budget is composed of the following components:
1- Estimated revenues requested and allocated within the general budget of the state.
2- Estimated expenditure according to the chapters of the general state budget (recurrent expenses, projects, if any).
3- Amounts allocated as revenues as well as adopted expenses for the ended fiscal year.
4- Actual amounts of incomes and expenditure for the pre-ended fiscal year.
5- Objectives, programmes and events together with an explanatory Note.
The budget is, therefore, a guide to the General Secretariat to specify the programmes and events in which the National Council participates, taking into consideration utilization of allocated revenues and spending them most effectively and efficiently.
Preparation, discussion and approval as well as controlling implementation of parliament budget are governed by constitutional provisions and the law of the general budget, the internal regulations of the Council, in addition to the law of the Chamber of Financial and Administrative Control (control is independent in the Kingdom of Bahrain).
The budget passes through different phases, commencing with the preparation phase and ending with the approval of the final accounts phase by the parliament.
a- Preparation Phase:
The General Secretariat, through the competent department, prepares the draft budget. It lays out expenditure estimates together with the necessary statement in order to justify every approbation. According to the total estimated funds required as expenditure, the amount of funds to revenues are determined. These are normally allocated in the general budget of the state under one number and are remitted to the parliament in installments throughout the fiscal year in question.
b- Approval Phase:
The budget approval phase is important because it precedes the implementation phase. After preparation, the budget is referred to a special committee in parliament, namely the Committee on Financial and Economic Affairs. This committee examines and discusses the budget, and reviews the basis on which the draft budget is established. It also makes its observations and proposals. Then the draft budget is submitted to parliament for discussion and the budget enters a new phase which is the implementation phase.
c- Implementation Phase:
Following the approval of the budget by the parliament, the General Secretariat begins to implement it by requesting the government to remit the amounts allocated as revenues. The General Secretariat then starts to spend funds within the limits stipulated in the budget.
d- Implementation Control Phase:
Financial control is a comprehensive scientific methodology that requires the integration and merging of legal, economic, accountancy and administrative concepts, aimed at preserving the funds, raising the efficiency of their utilization and achieving the largest measure of effectiveness from the achieved results.
There are several types of financial control:
Internal Control:
This is usually carried out by the General Secretariat of the parliament by recruiting an internal auditor responsible to the Secretary General or the Speaker of the Parliament. This auditor follows up and monitors the implementation of the budget as allocated and approved without exceeding the approved amounts. He must be certain that the funds spent conform with the financial regulations. He also supervises the preparation of monthly, quarterly and yearly accounts for follow up.
External control: (Independent Control)
This is carried either by the Financial Control Chamber or a recognized professional audit firm in countries where there are no financial control chambers. The task is limited to control implementation of the budget and to make sure that expenditures are made according to the way approved by the parliament as well as in conformity with the financial rules and regulations in force. The chamber or the firm should submit an annual report about the final accounts of the General Secretariat stating its observations - if any.
Parliamentary Control:
The final accounts of the Council as well as the report of the Financial Control Chamber (External auditor) are submitted to the special committee in the parliament for examination, discussion and submission-with its observation and proposals- to the Council which, in turn, reviews, discusses and expresses its views thereon.
From the above we may be certain of the importance of the budget to the parliament enabling it to draw up its plans, programmes and events in financial forms, and be sure that those plans, programmes and events have been executed as adopted effectively and efficiently.