Dominican Budget System

System Features

MULTI-YEAR RESULTS-ORIENTED BUDGET PROJECT WITH A DYNAMIC MODALITY

Dominican Budget System

The Dominican Budgetary System contains three fundamental components: Revenues, Expenditures, and Financing. The first refers to the estimates of the resources that the State expects to receive or collect; the second, to the use of these Revenues to cover various items; and the last, to the resources that, in net terms, have been necessary to meet the requirements of financial availability, consisting of disbursements of the Public Debt, both domestic and external (loans, bonds, treasury bills, credit facilities, and other liabilities) and Financial Applications (principal amortizations, redemption of bonds, treasury bills, and other liabilities).

The statistics of these Income, Expenses and Financing, corresponding to the Government's Fiscal Period, which begins on January 1 and ends on December 31 of each year, are recorded, classified and ordered within an Integrated Financial Management System of the State (SIAFE), which uses as a fundamental tool, the Financial Management Information System (SIGEF), compatible with the accounting records that are carried out in parallel within it.

These systems provide the necessary data for analysis, evaluation, and decision-making by the authorities in budgetary matters, using various classifications for this statistical information.

Firstly, it has been working with the technique of program budgets since 1966 and there is no doubt about the progress made in the formulation, programming and control of state resources.

Revenue Budget:

The Revenue Budget begins with the projection of revenues for the coming year, based on macroeconomic assumptions regarding key variables, primarily the growth targets and level of Gross Domestic Product (GDP) in both real and nominal terms, the expected inflation rate, and the exchange rate. Estimates made by the revenue-collecting entities (National Treasury, Directorate General of Internal Taxes, and the Directorate General of Customs) are also taken into consideration.

It is classified in multiple ways, taking into account several different points of view.

First, there is the criterion of the “periodicity (or permanence), predictability and economic nature” of the income itself as well as the type of expenditure it intends to finance.

Expenditure Budget:

Expenditure budgets comprise five basic classifications, and several additional ones, as a combination of these. The basic classifications are: 1) classification of expenditures by program; 2) classification of expenditures by function; 3) classification of expenditures by institution; 4) economic classification of expenditures; 5) classification by object of expenditure.

Budget Cycle

Budget Formulation

It is the first phase of the budget process in which public entities prepare the preliminary budget proposals under which the degree of compliance with the budget policy must be specified, the programs and projects previously prioritized by the Ministry of Economy, Planning and Development, the demand or population to be served, the results and physical goals to be achieved during the budget year, the means of verification of each production and its relationship with the planned resources, as well as the organizational chart and the structure and number of positions.

Discussion and Approval

It is the second stage of the budget cycle, carried out by the National Congress, after the submission by the Executive Branch of the Draft General State Budget Law, corresponding to the act by which the National Congress, after its analysis and consideration, legally establishes the total expenditure, the estimated revenues and the financing planned to be executed in the fiscal year.

The budgets of non-financial public companies are approved by their governing boards, with the prior consent of the Minister of State to which they are attached, and sent to the General Directorate of Budget.

The budgets of the municipalities and the National District must be approved by their respective councils and submitted no later than January 15 of each year to the General Directorate of Budget, the Ministry of Economy, Planning and Development, the Comptroller General of the Republic, as well as the Chamber of Accounts.

Budget Execution

Stage of the budgetary process in which income is received and expenditure obligations are met, in accordance with the budgetary credits (appropriations), authorized in the General State Budget Law, approved annually by the National Congress.

Follow-up

It is the monitoring carried out by the General Directorate of Budget, of the levels of execution of Expenditures (Expenses and Financing), with respect to the budget credits (appropriations), authorized by the Annual General Budget Law of the State and the modifications that occur during the budget execution process.

Assessment

Phase of the budget process in which the measurements of the results obtained are carried out and the analysis of the physical and financial variations observed, in relation to those approved in the General State Budget Law.

Glossary of Terms

GLOSSARY

TO

Budgetary action is a special type of input-output relationship to which resources can be formally allocated in the budget. Its resources and outputs are defined and clearly distinguishable from other resources and outputs belonging to other input-output relationships.

It is the lowest-level programmatic category, whose output is always intermediate and involves producing goods or providing services with existing installed capacity. Similarly, it is the set of specific and necessary public actions that enable the proper fulfillment of the established objectives.

It is the reduction of the budgetary availability of expenses, foreseen in the General State Budget Law for each institution, due to the registration of a credit, a purchase order for goods and services or any document that commits a budgetary allocation.

B

It is the financial statement of any economic unit at a given date, reflecting its assets, liabilities and equity.

C

Programmatic categories constitute the formalization and expression, within the budget, of budgetary actions. There are various programmatic categories depending on the type of output (final or intermediate) that results from these budgetary actions. In all cases, programmatic categories are formal centers for the allocation of real and financial resources.

The programmatic categories used are: program, subprogram, project, work and activity.

It is a center for planning, combining and formally allocating resources based on a predictable production.

It is the one that, for reasons of economies of scale of production, has under the same formally divided or minimum level organization, several differentiated production processes and, consequently, produces various types of goods or services.

It is the one where a homogeneous production process takes place, because economies of scale allow it.

It is the set of stages under which the budget is prepared, such as: formulation, discussion, approval, execution, and evaluation.

These constitute the budget programming elements that allow the identification and ordering of government transactions, which facilitate institutional, economic, functional, etc. analysis.

Its purpose is to analyze and present expenses in a way that facilitates their economic analysis. Initially, it should differentiate between current expenses and capital expenses.

It shows the general, economic and social purposes towards which public spending is directed, according to the various actions carried out by the State.

It allows, in accordance with the territorial distribution established by the National System of Planning and Public Investment, the classification of the expenses carried out by public institutions according to the territorial space where they are carried out.

It orders the transactions that generate income according to the institutional levels of the Public Sector, as well as its disaggregation according to its administrative structure, the latter if necessary.

It organizes expenditure transactions according to the different institutional levels of the Public Sector, as well as their disaggregation according to their administrative structure, the latter if necessary.

Express the different concepts that motivate the collection according to the nature of the act or fact that generates it.

It is part of the Executive Branch of the Government and is made up of the Ministers and the President and functions as a collegial body.

A bank account that centralizes the income and payments of the Central Government and of Decentralized and Autonomous Non-Financial Institutions, operated by the National Treasury in its capacity as the Governing Body of the Treasury System. There is a single account for each currency used by the National Treasury at each Agent Bank.

D

Governing body of the Public Credit System that assists the government in decision-making and in matters of financing expenditure through debt.

Governing body of the Budget System that reports to the Ministry of Finance.

AND