Budget implementation and legislative oversight

By Abubakar Jimoh

While budget or Appropriation Act is expected to be implemented within the context of a legal framework in terms of purpose, policy and penalties, it is uncommon that the legislature has raised alarm over non-compliance by the executive to the budget implementation process as appropriated and approved.

As the goal of budget implementation is to assure citizens that funds are legally and efficiently utilised for the purpose which they are meant, as directed by the legislature to provide effective public services for Nigerians, legislative oversight through constant review, scrutiny and monitoring of budget is paramount to ensure compliance and avert unnecessary changes to the implementation as appropriated.

It is in support of this backdrop that a study by UK’s Department for International Development (DFID) in collaboration with London School of Economics and Political Science reports that effective financial scrutiny enhances accountability, participation and transparency, and deepens democracy.

The study recommends that legislative financial scrutiny and oversight should be continuous and should cover all stages of the budget process such as: drafting, approval, implementation and audit. “It should be underpinned by the provision of comprehensive, accurate, appropriate and timely information.

Legislatures can become more involved in the formulation stage by debating medium-term priorities, and they should closely monitor in-year information on budget execution,” it recommended.

The executive arm has the mandate for execution of the budget, as funds are apportioned to spending departments in line with the approved budget. However, it is not uncommon that funds are diverted to purposes other than those for which they were approved.

A study by the International Budget Project (IBP) has revealed that frequent ad hoc adjustments to budgets can reflect uncertainties in the macroeconomic and fiscal environments, but the need for continuous revisions is also a symptom of a weak and ill-disciplined budgeting system. “For this reason, legislatures might closely monitor implementation of the budget by scrutinizing information on actual spending. Under normal circumstances, any significant changes in spending should be approved in adjustment appropriations,” it explained.

To effectively perform its oversight functions, legislature must enhance its capacity to play a more active role in the policymaking process, assert its independence from the executives, assumed a greater responsibility in policy transformation into legislation, and more actively oversee the operations of the executive branch.

Constitution provisions

Oversight function of the National legislature is provided under Section 88 of the 1999 Constitution (as amended in 2010), which empowers the legislature to carry out investigations within its competence to prevent and expose corruption, inefficiency or waste in the execution or administration of laws.

The Section provides as follows: “(1) Subject to the provisions of this Constitution, each House of the National Assembly shall have power by resolution published in its journal or in the Official Gazette of the Government of the Federation to direct or cause to be directed an investigation into – (a) any matter or thing with respect to which it has power to make laws; and (b) the conduct of affairs of any person, authority, ministry, or government department charged, or intended to be charged, with the duty [of] or responsibility for executing or administering (i) laws enacted by the National Assembly; (ii) disbursing or administering moneys appropriated or to be appropriated by the National Assembly. (2) The powers conferred on the National Assembly under the provisions of this section are exercisable only for the purpose of enabling it to: (a) make laws with respect to any matter within its legislative competence and correct any defect in existing laws; and (b) expose corruption, inefficiency or waste in the execution or administration of laws within its legislative competence and in the disbursement or administration of funds appropriated by it.”

As related to the State House of Assembly, Section 128 provides: “(1) Subject to the provisions of this Constitution, a House of Assembly shall have power by resolution published in its journal or in the Office Gazette of the Government of the State to direct or cause to be directed an inquiry or investigation into: (a) any matter or thing with respect to which it has power to make laws; and; (b) the conduct of affairs of any person, authority, ministry or government department charged, or intended to be charged, with the duty of or responsibility for – (i) executing or administering laws enacted by that House of Assembly, and (ii) disbursing or administering moneys appropriated or to be appropriated by such House. (2) The powers conferred on a House of Assembly under the provisions of this section are exercisable only for the purpose of enabling the House to – (a) make laws with respect to any matter within its legislative competence and correct any defects in existing laws; and (b) expose corruption, inefficiency of waste in the execution or administration of laws within its legislative competence and in the disbursement or administration of funds appropriated by it.”

In attempt to clarify the essence of oversight function of legislature, in a Paper titled Legislative Oversight and Public accountability, Sen. Victor Ndoma-Egba explained that legislative oversight refers to the power to review, monitor and supervise agencies, programmes, activities and policy implementation of the executive arm of government by the legislature.

“Legislative oversight is a constitutional right of the legislature, which empowered it to expose corruption and waste of public funds in government, agencies and ministries. Oversight is a loosely defined term that covers a wide variety of obligations and responsibilities of a legislative nature and the extent of which is defined by each country’s constitution and municipal laws. Part of this power is also inherent in the nature of parliament or the legislature,” he added.

In the analysis of Jeremy Borbon, oversight responsibilities are carried out in two broad ways: “the police patrol” method and the “fire alarm” method.

The “police patrol” method implies a continuous watchfulness or constant supervision of the Ministries, Departments, and Agencies of Government and bureaucracy; the same way that the police constantly patrols the streets to provide security. This type of oversight is usually costly in terms of funds and capacity.

The “fire alarm” method on the other hand is conducted as a result of concerns by constituents; the public, or the media. It can also happen through whistle blowing. Unlike the police patrol method which is preventive and designed to pre-empt or prevent issues the “fire alarm” method is ex-post facto oversight as it deals with issues after they have caused a fire. It is usually cheaper in terms of funds and maybe costlier in terms of the damage that may have already occurred.

Oversight Committees

In order to effectively discharge its oversight functions, there are no fewer than 90 committees in the House of Representatives while the Senate has at least 65 committees carrying on these investigations. Each committee in either House consists of many members with each Senator or Member of the House of Representatives belonging to several committees at the same time.

In support of the above, Civil Society Legislative Advocacy Centre (CISLAC) argues that the Legislature organizes itself as a mirror to the executive with committees established to mirror and oversight corresponding executive agencies. The constitution allows each legislative house to decide the number of committees it would have as well as their compositions. Usually, each Committee consists of the Chair, appointed by the Presiding officer and a secretary nominated by the Clerk (who is staff of the Legislature) and other members. In addition to these committees, there are other standing Committees.

These include: Appropriation Committee (responsible for leading the scrutinizing of the Appropriation Bills), Public Accounts Committee, Public Complaints Committee (to allow citizens to file in complaints on issues affecting them or their communities), Ethics and Privileges Committee (for regulating the conduct and ethical behavior of the members of the legislature including matters of discipline), Committee on Fund Management & Self-Accounting Law (this is mainly for the management of the funds of the Legislature), and Committee on Selection (mostly responsible for advising the presiding officer on the compositions of legislative committees).

In 2010, a report by the World Bank observed that legislative oversight is nowhere more important than over the budget, when it noted: “The role of the legislature in most countries is to scrutinize and authorize revenues and expenditures, and to ensure that the national budget is properly implemented. How governance affects the wellbeing of the populace depends on tax levels, spending patterns, the impact of policies on investment and on interest rates, as well as on the ways that domestic priorities and choices interact with international economic and financial trends.”

Another study titled “Legislative Oversight and Budgeting: A World Perspective” by the World Bank Group explained that legislative oversight function with a view to increasing public financial accountability, curbing corruption, and contributing to poverty reduction would vary based on constitutionally defined powers of the legislature, institutional arrangements between the branches of government, divisions of authority between national, regional, and local governments, the degree of legitimacy conferred on the legislature, and the resources available to it.

What Legislators must understand

Exercising oversight function, legislatures are frequently faced with several obstacles including weak formal authority and capacity for budget review, persistent deviations from approved budget during implementation, poor audit processes that undermine legislative authority, poor fiscal transparency, and political dynamic not conducive to independent legislative scrutiny.

The Global Organisations of Parliamentarian Against Corruption (GOPAC) has argued that it is the duty of legislators to require the executive to follow the rules related to financial operations, and openly report to legislature on its exercise of the executive’s powers and public resources granted.

According to GOPAC, the oversight of financial integrity comprises: the review of all sources of revenue and expenditures, including tax expenditures; legislation and other legislative rules related to government budgeting, debt management, expenditure operations (including for example as related to procurement and provision of grants), and financial reporting; and legislation and other rules which guide and enable legislature to effectively oversee the implementation of the government’s obligations related to the UN Convention Against Corruption (UNCAC).

Efforts to carry out oversight, legislators are advised to consider putting in place some internal and external measures. As part of the internal measures the legislature must: exercise the powers to authorize all revenues (tax rates, royalties, fee structures) and expenditures; have the authority to set its own budget and the budgets of legislative support agencies, but do so only for core parliamentary functions; establish, as required, procedures for the approval of budgets and reports on actual expenditures and results; provide in its budget the services of professional staff to assist it in its plenary and committee duties; have the authority to call witnesses, including ministers and officials, in a way which requires their attendance and response to hearings related to legislative oversight; review the provisions of the executive’s proposal to ensure it has the powers and resources to oversee such expenditure in a manner equivalent to its oversight of annually approved expenditures.

Also, in external measures, legislators are advised to set out: core standards for the executive utilization of all financial instruments, including procurement (such as Procurement Act), contracts, grants, and loans; standards for reporting to legislature (and legislative access to) actual revenues, expenditures and results; standards for the public service, including appointment, compensation, and accountability; and establish, as a legislative agency, an independent audit Office with the power to audit departmental reports and operations, and report to parliament promptly and openly on its findings.

Civil Society and Legislative Oversight

Similarly, to strengthen legislative capacity for effective budgetary oversight, DFID has advised civil society groups and professionals on that holistic effort to: avoid simplistic institutional replication of the Westminster model, which limits legislative involvement in setting budget priorities which may not be suitable in other contexts; consider the wider political context and build on indigenous demand and broad-based support for greater parliamentary oversight of the budget; develop an approach that considers the requirements for legislative scrutiny throughout the budget process; develop a long-term approach that allows for temporary setbacks and learns from experience; enhance coordination on the overall approach to the work and share experiences with other main actors at regular intervals.

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