By Peter Oloo Aringo

Budget is undoubtedly the government’s most important policy tool. It reflects the fundamental values underlying national policy within which framework the budget must operate and be consistent with. It is further a declaration of the government’s fiscal, financial and economic objective and highlights its social and economic priorities.

In a nutshell therefore, the basic functions of the national budget entail: Collection and allocation of scarce resources to priority sectors; Provision of public goods and services by Government; and Redistribution of incomes.

Further, the budget provides a regulating and disciplining framework within which government departments must be managed and subsequently perform their functions. It is indeed the most important government document aimed at insuring transparency, accountability, comprehensiveness and good governance.

The national budget is perhaps the most fundamental of the various aspects prompting parliamentary oversight over the Executive. Hence, strengthening legislative involvement in the budget process would help to create greater checks and balances in systems that have been dominated by the Executive.

Nonetheless, given the predominance of the Executive powers in most countries, Parliament tends to do little more than endorse budgetary decisions made by the Executive. In most cases, Members must contend with the lack of timely, accurate information, and still lack the necessary budgetary skills for optimal engagement of the budget proposals on the floor of the House.

The underlying bottlenecks facing the budgetary process in most countries are manifested in, among others: Institutional weaknesses; lack of transparency; and weak participation.

In a democratic environment, Parliament should be able to influence the drafting of the budget. MPs’ participation informs the process and helps the government to correct and adjust the budget to within realistic estimates.

The budget itself is an end product of a lengthy process involving the treasury and other agencies. The budget cycle is commonly separated into four stages, namely: drafting; legislating; execution/implementation and evaluation and audit.

Across countries, and depending on the political system of which the budget is but an expression, parliament’s role varies across these four stages.

One effective way of perfecting members’ active engagement in the budgetary process is through presentation to Parliament by the Executive of a medium-term policy statement providing an opportunity for MPs to understand the overall policy framework within which the next budget will be developed.

Drafting entails negotiation within the Executive at the various levels -administrative and political - as well as consulting with parliament. Unchecked secrecy at the drafting stage often hides poor budgeting practices and provides a dangerous breeding ground for corruption and inefficiency. The ensuing weak participation is further a recipe for subsequent supplementary budgets to suit Executive indulgences.

MPs actively get engaged in the process at the legislation stage, when the budget proposals are first read in Parliament. Here, Parliament reviews, possibly amends and adopts or rejects the draft budget. In certain cases, Kenya included, the powers to amend are quite restrictive and the permissible amendments in form of spending quite insignificant.

Parliament’s oversight role is critical to the execution in terms of scrutinizing the audit reports to ensure compliance, and the efficiency and effectiveness of spending comes in at the execution, evaluation and audit stage.

In particular, weak budget execution undermines the principles behind national budgets and further distorts spending priorities to the detriment of the economy and policy.

Ideally, MPs must participate in all these stages. Where the legal framework does not cater for this, they need to push for the necessary legislation to allow them do so.

Across the world, Members’ engagement in the budgetary process has been varied and mechanisms that enable them to become more effective.

Such include: Constitutional mandate that entrench their roles in the process; Involvement of parliamentary committees; and Creation of independent budget research units.

In broad terms, however, legislative powers of amendment are more restrictive in parliamentary system of government, unlike in presidential systems. The underlying variable is the separation of powers in pure presidential systems, which gives rise to deliberate checks and balances.

For instance, in the Westminster tradition of parliamentary government, ‘reducing only’ restrictions apply, where parliament may only reduce existing items in the budget proposed by the Executive, but may not include new ones. To the contrary, the constitution of the United States, dating back to 1787, establishes no legal limits on parliament’s budgetary powers. Nevertheless, the highest interest of the nation should transcend political affiliations to the extent that affiliation to the majority party should not prevent members from looking at the budget critically in the interest of the electorate.

An active and purposeful engagement of the budgetary process by Members not only ensures equitable allocations and prioritization among competing expenditure areas but also empowers them to make decisions they are required to in the most wise and prudent manner. It also pre-empts parliamentary tug-of-war between the Executive and the backbenchers over budgetary proposals, and creates opportunities for greater consensus resulting in very modest level of amendments. In addition, difficult trade-offs are addressed upfront.

Notwithstanding the above, several reasons render substance as to why MPs need to actively participate in the budget process. Key among these are: Legislative approval of the budget as a constitutional requirement; as the representatives of the people, parliament must ensure that the budget reflects the priorities of the nation; checks and balances tend to support transparency, accountability and good governance; participation can build consensus over difficult choices and trade-offs, and improve policy, if well designed and structured.

Even when parliament has the legal and political space to shape budgets, analytical capacity is necessary to make full use of this opportunity. Some key variables that combine to determine this ability to analyze are:

Research and analytical capacity: Independent, dedicated and specialized research service for Members to access independent information and analysis on the budget. Political goodwill coupled with the establishment of parliamentary budget offices and research departments add impetus to this variable. The Congressional Budget Office (CBO) of the United States, and the Congressional Planning and Budget Office (CPBO) of the Philippines would perhaps serve as good examples on this particular front.

Then there has to be an availability of factual, comprehensive, accurate, appropriate and timely information supplied by the Executive, as well as the supporting documentation.

Parliamentary committees must also be strengthened to allow for in-depth and more technical debate, away from the political grandstanding that characterize proceedings on the floor of the House.

The budget should be brought before Parliament for approval after meaningful analysis and scrutiny. More often, members have limited time periods allocated to review and interrogate the document.

Another important aspect is budget documentation, which makes it possible for Parliament and the public to monitor budget performance through time, and to provide timely feedback to allow for corrective and remedial measures.

There has to also be effective committee structure to, among other things: Monitor, review and assess the budget and can make suggestions.

Question and hold special meetings with senior treasury and line ministry officials responsible for the budget.

Organize public input into the budget process by inviting public submissions, as well as holding public hearings and meetings.

Reach out to civil society and other organizations to benefit from their views and analysis.

Committee involvement in the budget process appears to be gaining momentum albeit with varying degrees of success thus rendering strength to oversight capacity. The Australian Senate, for instance introduced a departmental committee stage for the budget process in 1970, India in 1994, and in Africa the parliaments of Uganda and Zambia have in recent years created new committees to consider budget issues. In Kenya, the Fiscal Management Bill, 2006 has been initiated and seeks to establish a Fiscal Analysis and Appropriations Committee (now in place), as well as the Parliamentary Office of Fiscal Analysis.

The information the committees draw from this participation and interactions can be fed back into the budget process and help shape future budgets.

To sum up, in all its aspects, the national budget is the benchmark against which the government can be held to account and its performance evaluated.

It is increasingly emerging that the requirement for secrecy in budget matters is fast declining in importance. The inherent secrecy too often has led to cases of unauthorized expenditures and budget variance for most developing nations. To wean itself from this scenario, and further strengthen parliamentary oversight, parliament needs to be capacitated with adequate fiscal staff or capacity to analyze the budget adequately.

Transparency in the entire budgetary process is at the very heart of democracy. It enhances Government accountability regarding conformity to the legal framework and initial fiscal objective of the budget, and helps in management of public resources. Moreover, transparency also allows for predictability which is essential for a well functioning market economy and is greatly welcomed by the private sector. However, transparency is of very little value, unless it is followed by active participation.

On a positive note, more encouraging recent trends are the intense budgetary debates between Parliament and the Executive and the attention budgetary issues are given within sub-regional economic organizations, for instance, the East African Community.

While in most cases, limited Members’ engagement of the budget process is a direct maneuver of the Executive, sometimes a country’s high level of foreign debt leaves little room for extensive interrogation of the budget proposals. In such scenarios, Members’ role might be severely diminished to mere rubberstamping that reflect prior agreements between lenders and the Executive which severely constrain the range of possible budget choices.

The writer is a nominated MP and the Vice chairman of the Parliamentary Service Commission, Kenya. This speech was delivered during an orientating workshop for MPs of the National Assembly of Somaliland.

Source: Kenya times