THE UNITED REPUBLIC OF TANZANIA - Ministry of …

1 THE UNITED REPUBLIC OF TANZANIA Ministry OF FINANCE AND PLANNING TRAINING MANUAL ON THE BUDGET ACT NO. 11 OF 2015 GOVERNMENT BUDGET DIVISION SEPTEMBER 2016 THE UNITED REPUBLIC OF TANZANIA Ministry OF FINANCE AND PLANNING TRAINING MANUAL ON THE BUDGET ACT NO. 11 OF 2015 Ministry of Finance and Planning 9111 DAR ES SALAAM, TANZANIA Office Tel: 022 2111174-6 Fax: 022 2110326 Website- Ministry of Finance and Planning Box 9111, Dar es Salaam TANZANIA Ministry of Finance and Planning, 2016 ISBN 978-9987-829-01-6 First Edition, 2016 All rights reserved. No part of this publication may be reproduced, stored in any retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of The Ministry of Finance and Planning.

2 Iii TABLE OF CONTENTS LIST OF APPENDICES .. viii GUIDANCE ON EFFECTIVE USE OF THE MANUAL .. ix ACRONYMS .. x FOREWORD .. xi ACKNOWLEDGEMENT .. xii KEY CONCEPTS AND TERMINOLOGIES .. xiii CHAPTER ONE .. 1 INTRODUCTION AND BACKGROUND INFORMATION TO THE MANUAL. 1 BRIEF OVERVIEW OF THE BUDGET ACT .. 1 Need for the Training Manual .. 2 Target Beneficiaries .. 2 Objectives of the Manual .. 2 Coverage of the Manual .. 3 The Need for Budget Act .. 3 CHAPTER TWO .. 8 MACRO ECONOMIC AND FISCAL FRAMEWORK .. 8 INTRODUCTION .. 8 Principles of Fiscal Responsibility .. 9 Fiscal policy objective .. 10 Macroeconomic and Fiscal forecast.

3 10 Coordination with National Development Plan .. 12 iv CHAPTER THREE .. 14 MANAGEMENT OF THE BUDGET PROCESS .. 14 INTRODUCTION .. 14 Responsibilities of the National Assembly .. 14 Parliamentary Budget Committee .. 15 Powers and Functions of the Minister .. 15 Responsibilities of the Minister Responsible for Planning .. 16 Powers and Functions of the Permanent Secretary and Pay Master General .. 17 Powers and Functions of the Planning Commission .. 17 Responsibility of the Commissioner for Budget .. 19 Powers, Functions and Responsibilities of the National Plan and Budget Guidelines Committee.

4 20 Responsibilities of the Commissioner for Policy Analysis .. 21 Powers and Functions of Treasury Registrar .. 21 Powers and Functions of Accounting Officers .. 22 CHAPTER FOUR .. 24 BUDGET PREPARATION AND APPROVAL PROCESS .. 24 INTRODUCTION .. 24 Stages in the Budget Process .. 25 The National Development Plan .. 27 The Plan and Budget Guideline .. 27 Budget of Public Entities .. 29 v Submission of Budget Estimates and Related Document for Approval .. 30 Approval of National Budget by National Assembly .. 31 Expenditure Appropriation .. 32 Where Appropriation Act is not yet in Force.

5 32 Appropriation to Lapse at the end of Financial Year .. 33 Duration of Appropriations and Warrants .. 33 Submission of Budget Policy Highlights .. 33 Submission of the Finance Bill .. 34 Withholding of Approval .. 34 Government Deviation from Financial Objectives .. 35 Sources of Contingency Fund .. 36 Administration of Contingency Fund .. 36 Advances from Contingency Fund .. 37 Parliamentary Approval for Payments Made from Contingency Fund .. 38 Financial Statements in Respect of Contingency Fund .. 38 Accruals and Investments .. 39 Reallocation of Funds .. 39 Excess Revenue .. 41 Submission of Supplementary Budget.

6 41 CHAPTER FIVE .. 42 BUDGET EXECUTION, MONITORING, EVALUATION AND REPORTING . 42 vi INTRODUCTION .. 42 Commitment of Approved Budget .. 42 Authorities for 43 Grants of 43 Withdrawal from the Consolidated Fund .. 43 Disbursement of Funds to the National Assembly and Judiciary Fund .. 43 ACGEN s Warrants .. 44 Assumption of Commitments .. 44 Multi Annual Commitments .. 44 Commitment Control System .. 45 Report on Expenditure Commitments .. 46 Development Project Contracts .. 46 In Year Reporting .. 46 Compliance Report .. 47 Quarterly Statements of the Government .. 49 CHAPTER SIX.

7 50 MANAGEMENT OF REVENUES .. 50 INTRODUCTION .. 50 Principles for Management of Revenues .. 50 Responsibility in Revenue Collection and Management .. 51 CHAPTER SEVEN .. 53 vii OVERSIGHT OF PUBLIC ENTITIES AND EXTRA- BUDGETARY AGENCIES .. 53 INTRODUCTION .. 53 Budgetary and Financial Management of Local Government Authority .. 53 Financial Management of Extra Budgetary Agencies .. 54 CHAPTER EIGHT .. 55 GENERAL PROVISIONS .. 55 INTRODUCTION .. 55 Extension of Time .. 55 Liability on Failure to Meet Requirements of the Act .. 55 Corrective Measures against Entities included in the Government and Public Entities.

8 56 Indemnity of Public Officers .. 57 Overriding Effect of the 57 Transitional Provisions .. 57 APPENDICES .. 59 BIBLIOGRAPHY .. 69 viii LIST OF APPENDICES Appendix I: Arrangement of Sections in the Budget Act .. 59 Appendix II: Arrangement of Sections in the Regulations of the Budget Act .. 63 Appendix III: Recommended Training Exercise .. 66 ix GUIDANCE ON EFFECTIVE USE OF THE MANUAL This Manual is mainly intended for all relevant stakeholders involved in the National Budget Management Process. The General Public is strongly encouraged to read and understand, as the national budget is an important tool towards attaining National Development.

9 X ACRONYMS ACGEN Accountant General AO Accounting Officer BA Budget Act CAG Controller and Auditor General CB Commissioner of Budget CF Contingency Fund CFS Consolidated Fund Services CPAD Commissioner of Policy Analysis Department FPWG Financial Programming Working Group FY Financial Year GDP Gross Domestic Product LGAs Local Government Authorities MAC Multi Annual Commitment NAO National Audit Office NDP National Development Plan PBC Parliamentary Budget Committee PBG Plan and Budget Guidelines PE Personal Emolument PER Public Expenditure Review PIM-OM Public Investment and Management - Operation Manual PMG Paymaster General PS Permanent Secretary PST Permanent Secretary Treasury TR Treasury Registrar VAT Value Added Tax xi FOREWORD It has always been the concern of the Ministry Of Finance and Planning to ensure that Government Budget is prepared to the levels that are acceptable nationally and internationally.

10 In order to achieve this objective the Ministry has been undertaking capacing buildingprogrammes to Government Offices to ensure that prepared budgets are able give results towards attaining National Development. It is gratifying to note that the National Team of Facilitators on Planning and Budgeting has been able to come up with this manual to assist in such training particularly on the Budget Act. This document provides useful information for training on the Budget Act and it is my hope that it will significantly contribute towards better understanding of this important law in the whole aspects of budget management.