PALOP and Timor-Leste have a similar system of governance (in terms of public administration, justice, public finance management, labor markets and interconnected social services) and share strong linguistic and cultural ties, as well as a long tradition of collaboration. This also applies to social, economic, political and cultural relations with Brazil and Portugal.
In the last decade, most of these countries have made significant progress in terms of economic governance, largely due to a number of reforms introduced in Public Financial Management (PFM) systems.
However, public administration generally continues to face institutional challenges, including weak human resources and organizational structures, resulting in serious shortcomings that have proved to be an obstacle to adequate and effective external control of public expenditure. Civil society remains neglected in development assistance programs in most beneficiary countries.
In general terms, the limitations in the PALOP and Timor-Leste context can be summarized as follows:
- Parliamentary and Court of Auditors staff have insufficient technical knowledge;
- Integrated Management Systems on public finance have gaps or are nonexistent in Parliaments and Court of Auditors;
- There are few technical interactions between the country's Parliament and the Court of Auditors;
- Insufficient technical exchanges between the Parliaments of PALOP and Timor-Leste on these matters, as well as the lack of technical exchanges between the Court of Auditors of PALOP and Timor-Leste;
- Outdated websites and/or low interactivity;
- Insufficient mechanisms to ensure public transparency of the budget and limited involvement of Civil Society Organizations in Public Financial Management and budget policies.
In all countries, the media reports on budgetary issues. However, media access to relevant information is limited and there are some restrictions in terms of the technical capacity of journalists when it comes to analyzing these issues in detail. Public hearings in the legislature on the macroeconomic framework of the budget and individual budgets (administrative units) remain very limited, despite the encouraging examples in Angola and Mozambique.
Transparency, participation and accountability are three fundamental pillars of good governance and the management of public resources. The promotion of these three pillars depends on a group of public and non-governmental institutions with separate yet complementary roles, including the Government, Parliament, Supreme Audit Institutions and civil society, among others. Good governance of public resources depends on effective interaction between these various actors.
Assessing budgetary transparency provides a better understanding of the actual state of transparency and accountability, i.e. it makes it possible to measure the accessibility, dissemination, regularity and comprehensiveness of budget documents.
According to the terminology used by the International Budget Partnership (IBP), eight budget documents are of particular importance:
- Pre-Budget Statement
- Executive’s Budget Proposal and supporting documents for the Executive’s Budget Proposal
- Enacted Budget
- Citizens Budget
- In-Year Reports
- Mid-Year Review
- Year-End Report
- Audit Report
Measuring the capacity for external control, whether legislative (exercised by legislatures - parliaments) or judicial (exercised by the Supreme Audit Institutions or Supreme Audit Institutions - Courts of Accounts), allows, on the one hand, the role of legislative bodies during the budget process as well as the effectiveness of their control over government policies and, on the other hand, to measure the autonomy, means and capacity to conduct annual financial audits by SAIs to implementation of the budget in line with legislative directives.
Measuring the participation and involvement of the public in the budget process, including the audit phase, enables the real opportunities for civil society and citizens to participate actively in budgetary and independent, institutionalized and strong fiscal and accountability decisions and budget transparency and accountability.
Therefore, it enables civil society and citizens to interact with the Executive, SAI and parliaments in the implementation of their mandates.
Irrespective of the performance of SAIs, Parliament and Civil Society, limited budgetary transparency indicates a weak impact of the achievements of these institutions on citizens in terms of external control of public finances.
Most countries currently provide few opportunities for public engagement in the budget process. Since 2012, the Open Budget Survey have consistently noted that opportunities for public participation in the budget process, including budget legislative oversight and external technical and jurisdictional control, in the PALOP and Timor-Leste are limited and should be expanded considerably.
The following are some of the weaknesses noted:
- Legislative public hearings on the macroeconomic framework of the budget and individual budgets (administrative units) remain very limited, notwithstanding the encouraging examples in Angola and Mozambique;
- There are no practical and accessible mechanisms for identifying and including the public's perspective during budget formulation;
- Other than the publication of audit reports by SAI, there is no communication mechanism on audits, as a rule prohibited by law (management accounts oversight);
- There is no adequate explanation or dissemination that precedes public involvement in budget formulation;
- There is no formal requirement for the executive to involve the public in the budget process;
- Opportunities in the Legislative for public testimony during public hearings of the budget;
- Mechanisms developed by the Executive for public participation during budget execution;
- Mechanisms developed by ISC to participate in the audit agenda;
- Executive Feedback on the use of inputs and contributions from the public;
- Publication by the Legislative of the reports on the public hearings of the budget;
- SAI feedback on the use of inputs and contributions from the public.
Budget transparency and external control are not enough to lead to accountability. It must be accompanied by significant opportunities for society and citizens to participate actively in budgetary decision-making, and by institutionalized and strong independent oversight through interactions with SAIs, parliaments and governments.
Public participation in the budgetary process should:
- occur throughout the budgetary process, in all four phases of the budget cycle;
- take place in all parts of government, complementing and supporting the roles of legislative and CSOs in budgetary control as well as the executive in budget formulation and execution;
- have a legal basis, and the government should be obliged by law or public policy to involve the public in making budgetary decisions without discrimination;
- be preceded by a wide dissemination of its purpose, and the government / SAI / Parliament should clearly specify the scope of the consultation;
- be made through multiple mechanisms of participation, and the government / SAI / Parliament should use appropriate forums at different times to obtain public input;
- be followed by feedback to the public on their opinions, and the government / SAI / Parliament should publish reports that present the opinions received and explain how they were used;
Although good practices exist, most countries offer very limited opportunities for civil society and citizens to participate in budgetary processes. In the current context of international economic crisis and strong democratic competition, the involvement of civil society in the budget process is an opportunity for executives and political actors.
The comparatively low public participation result indicates that although there is a consensus on transparency and independent monitoring institutions are important components of effective and accountable budgetary systems, the idea that citizens have the right to participate in the budget process, should be the case, is still far from consensual.
There are still very few countries where opportunities are offered to the public to testify during legislative hearings on the macroeconomic and fiscal framework presented in the budget. CSOs have created mechanisms for engaging the public in the formulation of their audit programs (identifying agencies, programs or projects to be audited) or carrying out audit investigations (while interviewed, witnesses, etc.) or communication with the public about reports.