II.COMPARISONS OF OECD COUNTRY LEGAL FRAMEWORKS FOR BUDGET SYSTEMS

the “rules” (e.g. for preparing public sector and service delivery agreements in the United Kingdom). At the other extreme, the Government Performance and Results Act 1993 in the United States elaborates extensively on the contents of annual performance reports, required for each government programme in each federal agency. France and New Zealand are perhaps in an intermediate position – their respective laws specify some details on the content of the annual department performance reports, including an assessment of why actual performance was higher/lower than that anticipated one year earlier in statements of intention and projections of performance.

Although constitutions in several countries require the submission of annual accounts and/or reports to the legislature, they seldom specify the time delay. Two exceptions are Denmark and Norway (the two countries without a budget system law), whose Constitutions require unaudited annual accounts to be submitted to parliamentary auditors within six months after the end of the fiscal year. Most countries specify the reporting lag in statute law. Lags vary, from just over three months in New Zealand to 10 months in Japan and the United Kingdom (Table II.5). In practice, annual accounts and reports are submitted within the statutory time delays, or even faster (e.g. in Sweden, the 1996 State Budget Act requires the annual report to be submitted within nine months, whereas in practice it is submitted within four to five months after the end of the fiscal year).

Table II.5. Legal requirements for submission of annual report to the legislature: Selected countries

1.In the United Kingdom, the requirement is not for whole-of-government accounts, but for accounts of individual government departments, which are submitted directly to the Auditor General.

2.In Japan, the law requires their submission during the “ordinary parliamentary session in the subsequent fiscal year” which must be convoked in January of each year. This means that the legal delay is a minimum of 10 months.

II. COMPARISONS OF OECD COUNTRY LEGAL FRAMEWORKS FOR BUDGET SYSTEMS

With increased computerisation of accounting and computer-assisted auditing techniques, statutory lags for the submission of audited annual accounts and reports to Parliaments could be shortened. Partly reflecting this, when France revised its Organic Budget Law in 2001, it advanced the legal date of submission by seven months (the 1959 law allowed a 12-month delay). There was also a strong desire by Parliament in France to receive the draft budget execution law and annual performance reports prior to (instead of after) the submission of the budget for the upcoming budget year.

4.4.3. In-year reporting to the legislature on budget execution

Only a few countries’ laws require monthly financial statements on budget execution. Reporting delays (e.g. four to six weeks after the end of the month) are generally not written into the law. New Zealand’s Public Finance Act is one exception; this law contains relatively extensive legal provisions relating to the timing, accounting basis, and coverage of monthly financial statements. France’s 1922 Law on Controlling Expenditure Commitments requires expenditure commitments to be reported each month, but not complete monthly financial statements. Many countries (including Germany, Japan, the Nordic countries and the United Kingdom) publish monthly budget execution data as a matter of course, although this is not a legal requirement. The reporting delay of such data in most OECD countries is one month or less (OECD, 2003, Q.5.2.f).

Some OECD countries’ laws require a formal mid-year (or “mid-term”) report to be prepared by the Ministry of Finance (or equivalent) and submitted to Parliament. In the 1990s, this was written into the laws of several Westminster countries (fiscal responsibility acts or similar). It provides an opportunity to review budget execution and, if necessary, adopt a supplementary budget. The 1989 New Zealand Public Finance Act required submission of a report and financial statements to both the Parliament and the Audit Office, “as soon as practicable” after the end of the six-monthly period. The US Code contains dense legal provisions for the mid-term review (see the country case study), for which the president must submit a detailed report to Congress by 16 July, i.e. mid-way through the ninth month of the fiscal year. Besides the report of the Office of Management and Budget, the Congressional Budget Office is also required to submit a mid-term update report to congressional committees. France’s 2001 Organic Budget Law (and laws in several other countries) requires a report analysing recent economic and budgetary developments to coincide with the timing of the budget proposal for the next fiscal year (see Box II.3). Laws in some countries (e.g. France, New Zealand) require pre-budget reports. Following New Zealand’s example of adopting legislation to improve fiscal responsibility – requiring not only pre-budget, mid-year, annual, long-term