“Liberia is a unitary sovereign state divided into counties for administrative purposes. The form of government is Republican with three separate coordinate branches: the Legislative, the Executive and the Judiciary. Consistent with the principles of separation of powers and checks and balances, no person holding office in one of these branches shall hold office in or exercise any of the powers assigned to either of the other two branches except as otherwise provided in this Constitution; and no person holding office in one of the said branches shall serve on any autonomous public agency”.
1. Separation of Powers and Checks and Balances
The Liberian people are masters of their own country and destiny. All political power stems from the people. The most important power is to make decision and set up rules. These rules and decisions need to be executed. The execution needs to be controlled. In order to avoid concentration and abuse of power the people’s power is separated into three parts (= separation of powers): Legislature ―Representation; law-making; and Oversight; (The stabilization of people’s behavior, The steering of social development, Giving legal effects to a State’s policies, Creating legal structures and Thus controlling public affairs); Executive ―implements or executes; Judiciary ―interprets the laws.
The Liberian people exercise their power through the Legislature (The House of Representatives and the Senate), the President as the Executive and the Judiciary (courts). Through the Constitution, the people delegate their powers to their representatives in the bodies that comprise the government structure. The doctrine of separation of powers within a state has its roots in the 18th century and served the purpose to avoid absolutism. A separation of state powers has been first realized in England. The doctrine of separation of powers was described by Montesquieu in his book “De l’Esprit des Lois” (1748). Each power comes from sovereignty.
The three state powers are meant to avoid abuse of power. Reciprocal control shall create a balance of power, which finally secures the protection and freedom of the individual. The separation of government powers is thought to establish a system of “checks and balances”. By “check” we mean to limit or stop, by “balance” we mean keeping equality. This system is meant to ensure that no branch oversteps its powers. In order for the separation of powers to serve its purposed, no branch of government may encroach on the function of another branch. For instance, the President may not decide or influence the outcome of a court case. Deciding court cases is a function of the judicial branch, not the executive branch. Similarly, adopting laws is neither the function of the executive nor the judiciary-it is the function of the legislature.
“d) To levy taxes, duties, imposts, excise and other revenues, to borrow money, issue currency, mint coins, and to make appropriations for the fiscal governance of the Republic, subject to the following qualifications”:
Let it be noted that the budget must first be framed or formulated by the Executive before appropriation can take place. Therefore, in the framing of the national budget, there are priorities issues that are looked at”.
(ii) “No monies shall be drawn from the treasury except in consequence of appropriations made by legislative enactment and upon warrant of the President; and no coin shall be minted or national currency issued except by the expressed authority of the Legislature. An annual statement and account of the receipt and expenditure of all public monies shall be submitted by the office of the President to the Legislature and published once a year;
“The President shall, on the fourth working Monday in January of each year, present the administration’s legislative program for the ensuing session, and shall once a year report to the Legislature on the state of the Republic. In presenting the economic condition of the Republic, the report of the President shall cover expenditure as well as income”.
This year, the Administration’s legislative program for the ensuing Session revealed by President Ellen Johnson Sirleaf captured issues of priorities in the Legislative Agenda, amongst which are the followings:
1. Infrastructure and Basic services.
2. Health and Agriculture.
3. Social Development Services (youth development and empowerment).
4. Budget for the people’s benefit.
5. Creating middle-class.
6. Promoting Equality (creating balances in our governance process)
The Public Financial Management Act of 2009
In 2009, the Legislature enacted into law a “Public Financial Management Act” which states in section 8. Context and structure of the Budget;
1. The Minister shall oversee the preparation of the National Budget in the context of a medium-term fiscal framework for purposes of achieving national objectives over a multi-year period. The fiscal framework for the National Budget should be based on estimates for the fiscal year and for the two subsequent years, which take into account the economic and development policies that are consistent with the Government’s declared medium-term economic and fiscal objectives.
Section 17. Temporary Financing of the Budget and Adoption of the Budget;
2. In the case where the legislature is unable to adopt the National Budget before the start of the fiscal year, the Minster is authorized to collect revenues and approved expenditures, in line with the proposed budget, up to one twelfth (1/12) of the Budget of the previous fiscal year.
Programme Budgeting was first tried in several US Federal agencies but it probably was most full brought on its governmental scene in the 1960s through the federal government’s, or Planning-Programme Budgeting System. This budgeting system was intended to help managers make wise, long-range, and effective decisions on how to deploy their budgetary resources.
The Programme Budgeting differs from other forms of budgeting by virtue of being effectiveness-centred. Efficiency which is promoted by other forms of budgeting like performance Budgeting, is not considered enough. The supporters of the Planning-Programme Budgeting System argue that government is supposed to be effective first and efficient second. Effectiveness, or the actual delivery of goods, is more important. An efficient army is useless unless it is a victorious army. A.A. Lerner and John Wanat point out that the critical question associated with programme budgets is: What is the best way to spend our money to achieve the agency’s goals? The steps in the formulation of a programme budget are: the organization must first decide on its goals. Then for each goal, its personnel identify alternative ways of attaining the goal. Each alternative’s specific benefits and cost are compared in a quantitative way, and the one alternative that yields the greatest benefit (or effectiveness) for the lowest cost is included in the budget.
The programme is the basic accounting unit in the budget document. For example, an environmental protection agency would break its budget down into categories like pollution research, law enforcement, public education, and general administration. The broad programme of pollution research might be sub-divided into research on noise pollution, water-pollution and air pollution. Each of these may then divide them into specific programmes and their alternatives for spending money. Each alternative would be subjected to determine which should be included in the budget. Sometime explanations may also be given why a particular alternative has been chosen. The quantitative comparison of programme alternatives is a very important characteristic of Planning Programme Budgeting System. Such techniques as cost-benefit analysis and systems analysis are central to programme budgeting.
The systems concept underlines the programme budgeting. It assumes that all the elements of government are closely intertwined so that a change in one aspect of one policy may affect all others.
Characteristics of the Programme Budgeting
1. The major goals and objectives of government must be identified. Programme budgeting begins with the central goals and priorities of the government rather than the initiatives taken by the agencies or departments as in the traditional budget.
2. Programmes must be developed according to the specified goals, and how will these be attained? Programmes should be analytically defined and should not necessarily fall within existing organisations.
3. Resources must be allocated among the programmes. The budget has to state overall costs for the achievement of certain objectives. These costs would be justified as efficient and effective means of attaining goals.
4. Organisations are not so important in programme budgeting. It does not envisage that each programme must be located within a single agency or that each agency should be involved with only a single programme.
5. Programme budgeting extends the time frame beyond the single year which is common in the traditional budget. The medium-term and long-term consequences of the programmes may be considered while preparing the budget.
6. Budget makers systematically analyze alternative programmes. They scrutinize alternatives to existing programme structures for more effective and efficient-configurations. They are expected to justify their programmes to show that these are superior to alternatives.
Constraints of the Programme Budgeting
Despite its cost effectiveness and goal of delivering the programme, there exist constraint associated with programme budgeting;
1. Programme budgeting is very expensive.
2. The time and energy required to prepare a programme budget is not small, and is much greater than required for preparing other types of budgets.
3. It is sometimes almost impossible to develop quantitative measures of benefits that result from a programme.
4. Since this budgeting forces decisions to be taken at higher levels of hierarchy of government, most departments & agencies do not like this centralizing tendency.
5. The quest to analyse all alternative strategies forces a department or agency to expose existing programmes to attack.
6. The discussion of alternative policies reduces the maneuverability of the department or agency concerned. It has to justify its policy choices in writing which limits its strategies use of ambiguity in dealing with different groups.
But some of the techniques of Programme Budgeting have still survived in some organizations. Its techniques are especially valuable for the evaluation of new budget proposals and initiatives if the organization has the appropriately skilled employees.
Preparation of the Budget
The method of the preparation of budget estimates is much the same in all countries. The responsibility for the preparation of the budget estimates rests on the executive. The executive is responsible for running the administration and it is, therefore, in the best position to say what funds are required for it.
The work in connection with the preparation of the budget begins 5 to 8 months before the commencement of the next financial year. Since the financial year commences on July 1, budget preparation begins in our country in the month of September. The ball is set rolling by a circular of the Finance Ministry to the various administrative ministers or departments asking them to start the preparation of the estimates. These pass on the directive to their local offices. Printed forms are supplied wherein the estimates and the other requisite information have to be filled in. The estimates of revenue and expenditure have to be prepared separately. Five sets of figures have to be supplied to each estimate. If the estimates are being prepared for 2012-2013 these figures would be the following.
1. The actuals of the previous year (i.e. for 2010-2011)
2. Revised estimates for the current year (2011-2012)
3. Budget estimates for the next year (2012-2013)
4. The sanctioned estimates for the current year (2011-2012)
5. Actuals of the current year (at the time of the preparation) and
6. Actuals of the corresponding period of the previous year.
These estimates for the coming year are made on the basis of these figures, allowing for any special circumstances causing variations. Small increases over the previous year’s figures occur in the usual course of things on account of salaries, etc. but if there are any sharp variations they have to be explained in the remark column of the forms. Explanatory memoranda are appended to explain new items of receipt or expenditure. The estimates are prepared in two parts. Part I; relates to the existing revenues and charges, and Part II; to new schemes or expenditure and to the proposals for the abandonment of any existing sources of revenue.
The local offices send the estimates to the head of the departments, who consolidates them for the whole department, after such review and Head has to judge the relative importance of the proposals from the various branches and sections of the department for new expenditure in the light of the possible grant for the department as a whole, and accept some of them and reject others. The estimates from the various departments are sent to the appropriate Secretariat Department to be scrutinized there once again in the light of it general policy, and finally, the secretariat departments send the estimates to the Finance Ministry or Department.
Criticism of Finance Ministry’s Control over Estimates or Proposals (Projections)
The Finance Ministry’s control over the estimates has been subjected to a good deal of criticism in recent years. In the first place, it is said that such control is change-over from the past when under the influence of the laissez-faire theory of the functions of the State economy in expenditure was the ruling consideration in budgetary policy. In the changed circumstances of today what is needed it into fruitful channels. The natural instinct of the Finance Ministry, however, still is to say ‘no’ to a new proposal. It thus acts as a brake on progressive policies. In the second place, the competence of the Finance Ministry to exercise judicious control over departmental estimates is questioned. It is said that the officials of this ministry too are after all, fallible human beings, and it is hardly possible for them to apply any but the rule of the thumb sort of scrutiny to the departmental proposals involving expenditure to the tune of cores of rupees within the short time available to them for the purpose.
The result is that proposals are arbitrarily accepted or rejected. Not unoften, the Finance Ministry is cents-wise and dollar foolish. It is prone to reject small proposals, while accepting the big ones without much ado. A wag has said that if you approach the Ministry for a few hundreds of thousands, and you will get it. Thirdly, the propriety of vesting into one ministry the control over the estimates of other ministries is doubted. It is said that if there must be such control, it should be in the hands of some super-departmental agency.
These criticisms are not without their substance, but control over estimates by some control agency like the Finance Ministry is a valuable instrument of balancing the budget and securing co-ordination for the activities of the Government. Without it there would be confusion and chaos.
Finally, it has become customary in our country to frame, introduce and pass the draft national budget. The national budget as our constitution calls it is introduced to the House of Representative by the Minister of Finance and with a speech call the “Budget Speech”. The budget goes through five stages in the course of its passages in the Legislature of Liberia. Namely; i.) introduction in the legislature. ii.) the general discussion, iii.) the voting of the demands. iv.) the consideration and passage of the appropriation bill., and v.) the consideration and passing of the total budget (inclusive amendments and/or adjustments).
Sen. Isaac W. Nyenabo, II – MA, MBA, MPA
Resource Senator and Senior Senator/Grand Gedeh Co.
Email – firstname.lastname@example.org