WIPO magazine issue -1 - 2024 World Intellectual Property organization.
Report on the Public Financial Accounts and Coding System in Malawi and Agriculture Expenditures within the System by Chance mwabutwa
1. Report on the Public Financial Accounts and Coding System
in Malawi and Agriculture Expenditures within the System
Dr Chance Mwabutwa
IFPRI Collaborator
Malawi
8th October 2014
2. Outline
• Objective of the study
• Background
• Malawi coding system, budget classification and identification
public agriculture data
• Access to Budget and Expenditure Information
• Conclusion and recommendations
• Acknowledgement
3. Objective of the study
• Analyses how public expenditures in agriculture are
captured in the Malawi’s public finances
Specifically examine how agricultural budgets and
expenditures are identified and aggregated using the
existing public accounts classification and coding structure.
4. Background
• Reforms in public financial system started in 1980s under WB structural adjustment
arrangement.
• Reforms such as MTEF (1995), IFMIS (2005), Review of chart of accounts (2011),
etc.
• Improving budget classification and coding system compliant with GFS and linking
expenditures items to MGDS activities
• Presentation of budgets and expenditure information has changed from narrative
style to IFMIS compatible way that employs codes
• Migration was not tasking because the budget and expenditure information had
already been using a combination of codes and narratives.
• 2011/12 codes of CoAs aligned with prevailing classification and these codes are
used in budget preparation and reporting.
• There are 32 digits divided into 4 segments and fall along the 4 budget classification
system
5. Budget and Expenditure
Classification
CoAs Segments Category Description Length
Administrative Classification Administrative with 14 digits Vote
Budget type
Cost centre
Division
Donor
project
3
1
3
2
2
3
Program Classification Program with 5 digits Program
Sub-program
Sub-sub-program
2
2
1
Functional (MGDS Output) MGDS Output with 6 digits Objective (sub-sub-theme)
Outputs
Activities
2
2
2
Economic (GFS) Economic (GFS) with 7 digits Chapter
Sub-chapter
Item
Sub-item
1
2
2
2
6. E.g. Ministry of Agriculture:
19010010000000010120000002011001..PresentationVote 190
Agriculture Expenditure 2012-13.xls
Budget and Exp. Classification Category Description Length
Administrative Classification Vote (Ministry of Agriculture and Food Security)
Budget type (Recurrent Budget)
Cost centre (Headquarters)
Division (not in use)
Donor (non in this case)
Project (non in this case)
190
1
001
00
00
000
Program Classification Program (Agriculture and food security)
Sub-program (Irrigation services)
Sub-sub-program (Irrigation Engineering)
01
01
2
Functional (MGDS Output) Objective (sub-sub-theme) (not in this case)
Outputs (not in this case)
Activities (not in this case)
00
00
00
Economic (GFS) Chapter (General Expense)
Sub-chapter (Wages and Salaries)
Item (Salaries)
Sub-item (Established staff)
2
01
10
01
7. Malawi Coding System and Budget Classification
• Collection of data started with the administrative classification at
the vote and sub-vote level, comprising recurrent and development
Vote Ministries/Departments
090 Office of the President and Cabinet
120 Local Government Finance Committee
121 National Local Government Finance Committee
190 Agriculture and Food Security
210 Irrigation and Water Development
275 Subvention
470
Natural Resources, Energy and Environment
Various
District Councils
vote
8. Malawi Coding System and Budget Classification
Using the cost centers – administrative
and geographical
1,345 cost centers in the CoAs.
In Ministry, 8 ADDs, 28 DADOs/RDPs,
other cost centers include HQ,
10 research stations,
3 livestock farms,
5 technical departmental head offices
Observation: using
three digit numbers
do not assign unique
numbers.
Though cost centres codes are not unique across votes, once
combined with vote code we can extract agriculture budget and
expenditure data at a specific centre.
9. Program budget and expenditure classification based on
the COFOG framework
• Government has come up with a number of programs
and sub-program from which ministries and
departments can choose from
• After review of the CoAs, codes have changed and the
program structure has also changed
10. Program Codes & Description 08/09 09/10 10/11 11/12 12/13
01-Administration & Support Services √
01-Agriculture & Food Security √ √ √ √
02-Natural Resources & Environment Mgt √ √ √ √
04-Water Resources Development Management & Supply √
05-Industry & Investment Promotion √ √
07-Health Services √ √
08-Education √
09-Community, Youth & Sports Development √ √
10-Transport, Building & Housing √ √
11-Information, Communication & Technology (IC&T) √ √
12-Research & Development √ √
14-Extension Services √
14-Economic & Financial Management √ √
16-Fisheries & Aquaculture Development √
17-Public Administration √ √ √ √
18-Employment and Labour Affairs √
27-Manpower Dev. & Institutional Dev. √
30-Nutrition & Food Security √
31-Planning Services √
35-Research, Technology Generation & Development √
Total Number of Program for the Year 7 12 11 3 3
Remove these
programs from
agriculture
expenditures
removed
11. Functional based on MGDS goals, objectives and activities
• Extraction of information is difficult because there are unresolved challenges
in terms of codes.
• Agriculture budget and expenditure data captured from an array of classifiers
Sub-Sector or
Sub-Function
Vote How data is captured Remarks
Agriculture
Extension
Ministry of
Agriculture & Food
Security plus about
28 District Councils
Captured under the
Agriculture & Food Security
program as a separate sub-program
Sub- programs includes: i)
Extension Services; ii)
Agriculture Business
Management
Crops
Ministry of
Agriculture & Food
Security plus about
28 District Councils
Captured under the
Agriculture & Food Security
program as a separate sub-programs
– includes
allocation for subsidies
(FISP)
Separate sub-programs: i)
Field crops, ii) Input
Subsidy; iii) Horticulture
crops; iv) Farm
mechanization; v) crop
protection
12. Economic (GFS) Budget and Expenditure Classification
• Although adopted GFS 2001 coding system, 2011/12 CoAs uses 7
digits compared to 4-5 digit presentation of the GFS.
• Agriculture budget and expenditure data has also been captured at
economic level (item level) over the period under review.
GFS Economic Classification-5 digits Malawi CoA Economic Classification-7 digits
Category Title Digits Category Title Digits
Account Class 1 Chapter 1
Item 1 Sub-Chapter 2
Sub Item 1 Item 2
Sub-sub item 1 Sub-item 2
Sub-sub-sub item 1
Total 5 7
13. Composition of agriculture expenditures
• UN – COFOG agriculture include crops, livestock, fishing, forestry,
water for production, and agriculture land related.
• Fishing and water either outside the Ministry or part of the Ministry
over the period under review
• Forestry nether under the Ministry and expenditure data difficult to
obtain
• Local councils and districts under local Government captured and
attempted to capture by programs
• Transfers to public entities such as ADMARC and National Food
Reserve agency
• Agriculture related projects implemented off-budget, actual
expenditures not reliable
14. Identification of public agriculture budget and expenditures
Codes Ministries/Department 2013/14
Approved
2014/15
Estimate
190 MoAIWD 118,674 140,666
090 OPC – Green Belt Initiative 1,000 2,000
210 MoWDI 15,678 572
Councils: 002 Agriculture 1,038 1,142
Councils: 011 Fisheries 81 100
Councils: Irrigation 84 94
Total 136,555 144,574
In local council, Serenic Navigator is used and have different coding system
Prior to 2011/12, programme on agriculture and food security appeared under Ministry
of Local Government and Rural Development (Vote 120)
Forest under Ministry of Natural Resources, energy and environment?????
15. Access to Budget and Expenditure Data
• Access to these electronic system remains limited
• Used Consolidate Annual Appropriation Accounts (CAAAs) produced
by the Accountant General and internal generated accounts for the
past three years.
• Records on foreign financed projects are still manually processed.
• Off budget data on projects can be collected using Aid Management
Platform (issue of commitments, Disbursement and Actuals).
16. Conclusion and Few Recommendations
• The introduction of IFMIS has enhance Government use of improved
coding structure in its budget and expenditure reporting processes.
• Although classification has improved the stability of the budget structure
remains limited as most programs tend to change as the administrative
structure of government change overtime.
• Recommendations
• Government need to adopt a single and clear definition of Agriculture to
enable proper trucking of expenditures
• Modernize and strengthen data capturing and management through of
enhancement of IFMIS
• Improve the segment of CoAs relating to Functional (MGDS output)
• Budget program and sub-program aligned to functional area of priority e.g.
ASWAp
• Expenditure on off-budget development projects properly recorded and
consolidated for each fiscal year in every sector.
17. Acknowledgement
• Karl Pauw
• Tewodaj Mogues, Bingxin Yu, Athur Mabiso, for their
comments on the draft
• The ministry, DAPS, Thokozani Sentala and friends
played bigger role in collecting data
• Treasury and DAG for the data.