Auditors warned: BiH institutions plan budget solely based on previous year's spending

The Audit Office of BiH institutions conducted an audit of performance on the topic: "Planning of Budget Expenditures in BiH Institutions". The Office conducted the audit with the aim of assessing the extent to which the existing budget planning method contributes to increasing the efficiency and effectiveness of budget expenditures.

In the last decade, significant funds and projects have been engaged in implementing reform activities to strengthen public finances and increase the efficiency and effectiveness of budget management. The Law on Financing of BiH Institutions from 2009 established the obligation to submit information on the purpose and expected results of budget expenditures (program budget) along with the budget proposal.

Audit findings indicate that the budget preparation process of BiH institutions does not achieve the desired pressure on the efficiency and effectiveness of budget expenditures. The budget for the next year is based on the spending level from the previous year and has almost no connection with the institution's achieved results.

- Although most of the necessary procedures for preparing a program budget are incorporated into the budget preparation process of BiH institutions, they do not function successfully, so the achieved program results have almost no impact on the budget decision-making – the auditors state in their report. 

- Those responsible for preparing and adopting the budget (Ministry of Finance and Treasury of Bosnia and Herzegovina, Council of Ministers of Bosnia and Herzegovina, Presidency of Bosnia and Herzegovina, and Parliamentary Assembly of Bosnia and Herzegovina) do not have timely and clear information on the purpose and expected results of budget requests, nor do they have information on achieved results and the effectiveness of budget expenditures – the report of the Audit Office of BiH institutions further states.

The Office has made recommendations to the Council of Ministers of BiH, the Ministry of Finance and Treasury of BiH, and BiH institutions responsible for the budget proposal preparation process. These recommendations should contribute to the further development of the budget process so that it becomes an effective instrument for promoting the efficiency and effectiveness of BiH institutions, writes Patria.