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Budget execution

In order to remain within approved budgets, it is crucial that spending is controlled and budgets revised according to changed resources and priorities. In many countries the fragility of revenue management systems means that cash management systems play a key role in determining which approved budgets actually get funded. If government spending is to help reduce poverty, sound policies must be followed up by good budget execution processes.

This page, which forms part of the Governance Theme section on 'public financial management and accountability', includes a series of key texts that explore this concept.

Key texts

Schiavo-Campo, S and Tommasi, D. 1999, 'Assuring compliance in budget execution', in Managing Government Expenditure, Asian Development Bank.
In Chapter 6 of their book, 'Managing Government Expenditure', S Schiavo-Campo and D Tommasi outline the budget execution system, highlighting areas where implementation problems can happen. Traditionally, detailed controls are used to ensure that there will be no overspending and that the composition of the budget remains unaltered. However, even these rigid and time-consuming controls are insufficient to assure fiscal discipline.
Full document available online

Schiavo-Campo, S.and Tommasi, D. 1999, 'Cash management and the treasury function", Chapter 8 in Managing Government Expenditure, Asian Development Bank.
In Chapter Eight of their book Managing Government Expenditure, Salvatore Schiavo-Campo and Daniel Tommasi examine the most suitable role for government and the Treasury to adopt in controlling their cash flows and financial assets. Control of cash is a fundamental aspect of macroeconomic and budget management, whilst the increasing separation of the Central Bank and government increases the significance of cash management.
Full document available online

Potter, B. and Diamond, J. 1999, 'Budget execution', Section 4 in Guidelines for Public Expenditure Management, IMF.
This section in the IMF's Guidelines for Public Expenditure Management looks at the budget execution process. It highlights issues and weaknesses throughout the process that need to be addressed and rectified. Budget execution processes differ depending on the type of government (francophone, Latin American, Commonwealth or transition systems), especially in their information flows.
Full document available online

Potter, B. and Diamond, J. 1999, 'Cash planning and management,' Section 5 in Guidelines for Public Expenditure, IMF.
Effective cash planning and management is crucial to developing countries public expenditure management. Good management of both the timing and the amounts of expenditure ensure smooth financing, preventing variations from budgeted expenditure. These variations can lead to over-borrowing and hence failure to meet fiscal policy objectives. This chapter from the IMF book Guidelines for Public Expenditure Management outlines the main cash planning requirements for well managed annual budgets.
Full document available online

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