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GUIDELINES for PREPARATION of 2015-2017 BUDGET Prepared and Issued by Ministry of Finance

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GUIDELINES for PREPARATION of 2015-2017 BUDGET Prepared and Issued by Ministry of Finance GUIDELINES FOR PREPARATION OF 2015-2017 BUDGET REPUBLIC OF GHANA Prepared and Issued by Ministry of Finance th 27 June, 2014 ACRONYMS AND ABBREVIATIONS AAP Annual Action Plan CoA Chart of Accounts DACF District Assemblies Common Fund DDF District Development Facility EPVS E-Payment Voucher System G&S Goods and services GFS Government Finance Statistics GIFMIS Ghana Integrated Financial Management Information System GoG Government of Ghana GSGDA Ghana Shared Growth and Development Agenda II L.I. Legislative Instrument MDAs Ministries, Departments and Agencies MMDAs Metropolitan, Municipal and District Assemblies MMDCEs Metropolitan, Municipal and District Chief Executives MOF Ministry of Finance MTEF Medium Term Expenditure Framework NTR/IGFs Non-Tax Revenue/ Internally Generated Funds PBB Programme Based Budgeting PBWGs Programme Budget Working Groups S/DMTDP Sector/District Medium Term Development Plan UDG Urban Development Grant ii TABLE OF CONTENTS ACRONYMS AND ABBREVIATIONS .................................................................................................. ii LIST OF TABLES ..................................................................................................................................... iv 1. INTRODUCTION............................................................................................................................ 1 2. GHANA SHARED GROWTH AND DEVELOPMENT AGENDA (GSGDA II), 2014-2017 ...... 3 3. MEDIUM TERM FISCAL FRAMEWORK ................................................................................... 4 4. THE REVENUE BUDGET ............................................................................................................. 6 5. MEDIUM TERM EXPENDITURE FRAMEWORK ...................................................................... 7 6. MDA INDICATIVE CEILINGS FOR THE MEDIUM TERM ...................................................... 8 7. BUDGET CLASSIFICATION AND CHART OF ACCOUNTS ................................................... 8 8. PROCESS FOR PREPARING THE 2015-2017 BUDGET ESTIMATES BY MDAs ................... 9 9. OTHER BUDGET PREPATION ISSUES .................................................................................... 14 10. PREPARATION OF 2015-2017 BUDGET ESTIMATES BY MMDAs ...................................... 17 11. CONCLUSION .............................................................................................................................. 19 APPENDIX 1: MDA INDICATIVE CEILINGS 2015-2017 .................................................................. 20 APPENDIX 2: CHART OF ACCOUNTS ............................................................................................... 23 APPENDIX 3: STANDARDIZED OPERATIONS AND PROJECTS ................................................ 100 APPENDIX 4: TIME-TABLE FOR 2015-2017 BUDGET PREPARATION PRODUCTION WORKSHOP ............................................................................................................................... 114 APPENDIX 5: TIME-TABLE FOR 2015-2017 BUDGET HEARING ................................................ 115 APPENDIX 6: TEMPLATE FOR BUDGET PROPOSAL ................................................................... 116 APPENDIX 7: TEMPLATE FOR OUTSTANDING COMMITMENTS /ARREARS ........................ 119 APPENDIX 8: PAYROLL DATA FOR COMPENSATION OF EMPLOYEES ................................. 121 APPENDIX 9: COUNTERPART FUND REQUIREMENT FOR PROJECT LOANS AND GRANTS ...................................................................................................................................................... 122 APPENDIX 10: DEVELOPMENT PARTNER PROJECTS ................................................................ 123 APPENDIX 11: MMDA INDICATIVE CEILINGS ............................................................................. 124 APPENDIX 12: NON-TAX REVENUE COLLECTION ..................................................................... 145 iii LIST OF TABLES Table 1: Resource Envelope for the Medium Term .............................................................................. 4 Table 2: Resource Allocation for the Medium Term ............................................................................ 5 Table 3: MDAs Allocation for the Medium Term................................................................................. 7 Table 4: Projecting Revenue to Be Collected on a Monthly Basis ................................................... 145 Table 5: Revenue Projections Classified into Lodgement and Retention by month for 2015 ....... 146 Table 6: Programmed expenditure to be incurred from Retained IGF .......................................... 147 iv 1. INTRODUCTION Regulation 152 (2) of the Financial Administration Regulation, 2004 (L.I. 1802) states that “the Minister shall not later than six months before the end of each financial year issue a budget circular detailing out the timetable for the preparation and submission of government’s macroeconomic policy statement and budget for such period as shall be determined by the President in accordance with article 179 of the Constitution and which shall be followed by all departments’’. Regulation 152 (3) also states that ‘’the Budget Circular shall specify the Sectoral and Ministerial constraints within which heads of departments will prepare their budget submissions’’. The 2015-2017 Budget Guidelines seeks to meet the legal mandate given to the Minister for Finance as well as provide the broad framework together with the required directives to ensure the preparation of a transparent, credible and predictable budget for the ensuing year as well as the medium term. The 2015-2017 Budget preparation will be guided by the following: i) All Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MMDAs) will be required to prepare their 2015-2017 budget based on their 2014-2017 Sector/District Medium Term Development Plan (S/DMTDP). The S/DMTDP in themselves should have been prepared based on the Ghana Shared Growth and Development Agenda (GSGDA II), 2014-2017 document. ii) There should be a link between the Budget Statement and Economic Policy as well as the detailed Estimates. iii) The budgets of MDAs will continue to be in Programme Based format whilst that of MMDAs will be Activity Based in 2015 and Programme Based in 2016. 1 iv) The budgets of MDAs will be prepared using the new Ghana Integrated Financial Management Information System (GIFMIS) Budget Preparation Module (HYPERION) whilst the budgets of MMDAs will be prepared using the ACTIVATE software. v) Due to the continuous increase in the wage bill as well as interest payments, and amortization among others, MDAs are entreated to budget within the given ceilings. vi) MDAs are reminded to budget adequately for all donor funded projects to ensure that aid is on budget. 2 2. GHANA SHARED GROWTH AND DEVELOPMENT AGENDA (GSGDA II), 2014-2017 The 2015-2017 Budget will be prepared within the broad framework of the Ghana Shared Growth and Development Agenda (GSGDA II), 2014-2017 document. The Medium Term Vision as enshrined in the GSGDA II document is; “A stable, united, inclusive and prosperous country with opportunities for all”. The GSGDA II, 2014-2017 hinges strategically on four pillars namely; i. Putting People First ii. A Strong and Resilient Economy iii. Expanding Infrastructure and iv. Transparent and Accountable Governance Also, the GSGDA II, 2014-2017 clearly identifies seven (7) Thematic Areas. These are: • Ensuring and Sustaining Macroeconomic Stability • Enhancing Competitiveness of Ghana's Private Sector • Accelerated Agriculture Transformation and Sustainable Natural Resource Management • Oil and Gas Development • Infrastructure and Human Settlements Development • Human Development, Productivity and Employment and • Transparent and Accountable Governance The GSGDA II (Volume I) provides detailed information on the focus areas, policy objectives and strategies for the respective thematic areas. Based on the NDPC Guidelines for the preparation of the Sector and District Medium-Term Development Plans (MTDPs), MDAs and MMDAs are expected to have prepared their plans to implement GSGDA II. The Budget is therefore meant to finance the implementation of the MTDPs and consequently GSGDA II. For the MDAs, the Programme Based Budgeting (PBB) provides the framework for ensuring that the budget is based on the MTDPs. 3 3. MEDIUM TERM FISCAL FRAMEWORK The fiscal position of the Government of Ghana has been challenged in recent years with an increasing expenditure and a lower than expected revenue inflow. Most of these expenses were identified as shocks in the quantum of single spine arrears, interest payment overruns and a higher than expected arrears clearance. The 2015-17 resource envelope framework is anchored on a number of measures aimed at expenditure rationalisation and efficiency to achieve Governments fiscal consolidation goals. The Resource Envelope for the Medium Term (2015-17) has been prepared based on the indicative projections in the 2014 Budget Statement and Economic Policy, fiscal policy recommendations from the Senchi Consensus; the fiscal consolidation stance from the Home Grown Economic and Financial Policies to Parliament and the provisions in the Ghana Shared Growth and Development Agenda II. Arising from the above, the total resource envelope for the medium term is provisionally estimated at GH¢153,775.7 million. This is made up of GH¢43,544.7 million for 2015,
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