99911 Government of Libya Ministry of Finance Budget Classification Structure For Ministry of Finance Budget Allotment (BA) And Management Information System (MIS) FY 2014 Version 1.0 Dated: December 2013 Table of Contents Contents 1. BACKGROUND ...................................................................................................................................... 3 2. DEVELOPMENT OF THE BUDGET CLASSIFICATION STRUCTURE ....................................... 3 3. PROCESSING OF FINANCIAL TRANSACTIONS ........................................................................... 3 4. DESCRIPTION OF BCS CODES FOR TRANSACTIONS............................................................... 3 4.1 FUND SEGMENT ................................................................................................................................ 4 4.2 ORGANIZATION SEGMENT ................................................................................................................ 4 4.3 LOCATION SEGMENT ........................................................................................................................ 5 4.4 PROJECT SEGMENT .......................................................................................................................... 6 4.5 ACCOUNT SEGMENT ......................................................................................................................... 6 5. DESCRIPTION OF BCS CODES FOR CROSS CLASSIFICATION PURPOSES ...................... 7 5.1 GFSM 2001 ECONOMIC CLASSIFICATION SEGMENT ..................................................................... 7 GOVERNMENT OF LIBYA BUDGET CLASSIFICATION STRUCTURE -- FY 2014 COMPLETE ... 9 GOVERNMENT OF LIBYA BUDGET CLASSIFICATION STRUCTURE -- FY 2014 BUDGET AND ALLOTMENT (ALL CHAPTERS) ................................................................................................................. 9 GOVERNMENT OF LIBYA BUDGET CLASSIFICATION STRUCTURE -- FY 2014 EXPENDITURE (CHAPTERS 1 AND 2) ................................................................................................................................. 10 GOVERNMENT OF LIBYA BUDGET CLASSIFICATION STRUCTURE -- FY 2014 EXPENDITURE (CHAPTER 3) ................................................................................................................................................. 11 Budget Classification Structure for Ministry of Finance Budget Allotment (BA) and Management Information System (MIS) – FY 2014 1. Background The Government of Libya is now embarking on a series of reforms in Public Financial Management, including the introduction of information systems for Treasury management and financial reporting. The system is based on the Bisan Enterprise Government Edition (Bisan) accounting application. This Code Book provides a description of the Budget Classification Structure (BCS) that has been configured in Bisan for the Financial Year 2014 Budget Execution. The procedures for financial management in Bisan are set out in a series of User Specific Procedures Manuals which should be read in conjunction with this publication. 2. Development of the Budget Classification Structure A budget classification structure, often referred to as a Chart of Accounts is a means of classifying an entity’s accounting data in a way that leads to better management and accountability, through clarity and transparency of operations. Major classifications of accounting data for government are revenue, expenditure, assets, liabilities and capital. Within each major classification further sub-classification occurs, e.g. expenditure may be sub-divided into accounts for salaries and wages, goods and services, other operating expenses etc. The necessary level of sub-classification depends on the nature of the accounting entity and the needs of users of the accounting information. The BCS for government financial operations has been designed to capture sources and uses of funds in sufficient detail to satisfy the reporting requirements of the Government and eventually the legislature and the public. The categories provide a structure within which the individual financial transactions are recorded in a consistent manner with a logical means of aggregating each set of related transactions. The structure determines the limit of reporting financial information because data cannot be easily reported unless the relevant category has been created in the BCS. Further discussion on the principles for developing a budget classification structure can be found in an IMF 1 Technical Guidance paper on the subject . The BCS for Budget Preparation and the Bisan MIS that reflects these and other information gathering and reporting considerations is shown in Attachment 1. A description of each Segment is in the following sections. Attachment 2 shows only the Segments that will be used in data entry for either the Budget and Allotment purposes or expenditure recording purposes in the Bisan MIS. 3. Processing of Financial Transactions In line with sound financial procedures, all financial transactions will have to conform to the BCS coding structure (see below), and the Chart of Accounts developed by the Ministry of Finance. Transactions will be identified by the source of Funds, the Organization and sub-unit involved (Spending Units), Location, and Account detailing Expenditure and Revenue by the Chapter/Item structure. The BCS also provides for inclusion of Project identification, which will be used in the future for recording Ministry of Planning Project actual expenditure. A supplementary table, outside the BCS coding structure used for transaction processing, will allow reporting of expenditures in an alternative presentations to reflect GFSM 2001 economic classifications (GFS). Sectors, Spending Units and the Budget, Treasury, and Follow-up Departments will be required to utilize the relevant codes when processing any financial transaction manually or in the Bisan MIS. 4. Description of BCS Codes for transactions Each Segment within the structure shows the “Belongs To�, or roll-up structure developed mainly for reporting purposes. There are two specific levels in the structure identified for (1) transaction processing and (2) for budget ceiling and control purposes. These are displayed in Red (Budget Control) and Blue (Transaction level) which will be used on all transactions. A Code Book contains 1 PFM TECHNICAL GUIDANCE NOTE NO. 41 BUDGET CLASSIFICATION Prepared by Davina Jacobs, Jean-Luc Hélis, and Dominique Bouley February 2008 the coding of all the BCS segment tables will be progressively developed now that the Code Structure is agreed and implemented as Segments in the Bisan application. 4.1 Fund Segment The Fund Segment indicates the source of funding for the relevant expenditure and revenue transactions. This will allow identification of Treasury Single Account funding and external funding. The first level of one digit indicates the Total funds spent by or for the benefit of the Government. The second digit defines whether the expenditure is processed through the Treasury Single Account, or is provided directly by External funding (1 is TSA; 2 is External). Where the Fund is the Treasury Single Account, lower level details would not normally apply, so the full code would be 1100000. Where a specific external funding applies, two additional levels are added to the code structure. The first of these is a Fund Source code of a further three digits, to identify the funding country or multilateral funding source. The specific codes to be inserted here would be the standard global DAC codes, compiled by the OECD (details available in a separate document). The final level would add a two digit Subsidiary Fund code, in which the last two digits identify the specific agency – again drawn from the DAC code schedule. Where a funding country is not identified in the DAC codes a new code can be created taking care to insert the code into the list in alphabetical order. For example, funding by the Department for International Development from the UK, would be coded 1201201, with the first two digits (12) signifying an external fund source; the next three digits (012) identify the UK, and the final two digits (01) identifying DFID as the specific UK agency providing the funds. The full format of this segment is set out below: SEGMENT SEGMENT SEGMENT FUND FUND FUND Total Total Total Total Total X 1 1 (1) (1) (1) Fund TSA External XX 11 Treasury Single 12 External (2) Account (2) (2) UK External Fund TSA Treasury Single Funding UK External Source 11000 12012 Account Funding XXXXX (5) (5) (5) UK DFID Treasury Single External UK DFID Expenditure TSA Fund Detail 1100000 Account Funding External Recording Level XXXXXXX (7) 1201201 Funding (7) (7) 4.2 Organization Segment The Organization Segment contains a two-digit code which identifies the highest level administrative description of the Sector (Ministry). The next two digits specify the Branch and the last three digits the Department. The lowest level is referred to as the Spending Unit for Budget and Treasury financial management purposes. Where it is not necessary to further classify the Organization structure below the Sector level this can be identified by adding zeros to the Sector code. This procedure can be adopted in any of the Segment tables, whereby the higher level structure simply carries down to the transaction level. SEGMENT SEGMENT ORGANIZATION ORGANIZATION Sector Ministry of (Ministry) Finance XX 06 (2) (2) Branch XXXX Control of (4) Regional Financial Services 0603 (4) Budget Expenditure Department Control Recording XXXXXXX Level Level (7) Control of Financial Services -- Budget Expenditure Tripoli 0603002 Control Recording (7) Level Level 4.3 Location Segment The Location Segment code allows the expenditure made or revenue collection to be identified by geographic location which benefits from the transaction. For this purpose the Location segment first identifies Libya (one digit). The next two digits identify the Payment Centres and the final three digits the Municipalities that are serviced by the Payment Centre. Thus the top level code indicates that the transaction is applicable to Libya as a whole, and would be coded as 100000. SEGMENT SEGMENT LOCATION LOCATION Libya Libya X 1 (1) (1) Payment Financial Centre Services -- XXX Misrata (3) 104 (3) Municipality Expenditure XXXXXX Unknown Recording (6) 104000 (6) Level 4.4 Project Segment The Project Segment provides the option to track development or capital projects. This segment is included now for completeness as it will later be required for recording of Ministry of Planning Chapter 3 Actual expenditures by Project. The Code structure will be determined by Ministry of Finance and Ministry of Planning jointly and entered in 2014 before expenditure recording takes place. SEGMENT SEGMENT PROJECT PROJECT Project Project XXXX XXXX (4) (4) SubProject SubProject Expenditure XXXXXX XXXXXX Recording (6) (6) Level 4.5 Account Segment The Account Segment codes are used to identify expenditure or revenue transactions according to the type of expenditure undertaken or revenue received. The detailed account codes adopted are consistent with the coding structure used for preparation of the FY 2014 budget. This coding segment classification be used for either manual processing or computerized in the MIS. SEGMENT SEGMENT ACCOUNT ACCOUNT 1 Revenue 2 Expense 2 Expense X 2 (1) (1) Chapter Goods and XX Services (2) 22 (2) Section XXXX Training (4) 2202 (4) Budget Expenditure Item Control Recording XXXXXX Local Level Level (6) Training 220201 (6) 5. Description of BCS Codes for cross classification purposes The following segment is included in the BCS to allow for reporting of financial information on an alternative basis, related to international obligations for reporting and possible differing National needs. 5.1 GFSM 2001 Economic Classification Segment In addition to reporting by Economic classification as used by the Government of Libya the GFSM 2001 provides for an alternative classification of expenditure in a structure that is used for economic analysis (as opposed to administrative control of expenditure) and for international country comparison. The Segment structure and reporting format is therefore fully prescribed and no additional data entry is required. The already entered Account Segment data is cross-classified at the transaction level and the standard format report created automatically by Bisan. SEGMENT SEGMENT ACCOUNT ACCOUNT 1 Revenue 1 Revenue 2 Expense 2 Expense X X (1) (1) GFS L2 XX Chapter (2) XX (2) GFS L3 XXX (3) Section GFS L4 XXXX XXXX (4) (4) GFS L5 XXXXX Budget Expenditure Item (5) Control Recording XXXXXX Level Level (6) Libya PFM and Governance Project BCS Development and ICT Modernization Attachment 1 Government of Libya Budget Classification Structure -- FY 2014 Complete SEGMENT SEGMENT SEGMENT SEGMENT SEGMENT SEGMENT FUND ORGANIZATION LOCATION PROJECT ACCOUNT GFS Total Libya 1 Revenue 1 Revenue Sector X X (Ministry) Project 2 Expense 2 Expense (1) XX (1) XXXX X X (2) (4) (1) (1) Payment GFS L2 Fund Centre XX Branch XXX (2) XX (3) SubProject Chapter XXXX Budget (2) (4) XXXXXX XX (6) (2) GFS L3 Control Level XXX Municipality (3) XXXXXX Fund (6) Source Department Section GFS L4 XXXXX XXXXXXX XXXX XXXX (7) (5) (4) (4) GFS L5 XXXXX Fund Detail Item (5) Expenditure XXXXXXX XXXXXX Recording (7) (6) Libya PFM and Governance Project BCS Development and ICT Modernization Attachment 2-1 Government of Libya Budget Classification Structure -- FY 2014 Budget and Allotment (All Chapters) SEGMENT SEGMENT SEGMENT FUND ORGANIZATION ACCOUNT Total Sector 1 Revenue X (Ministry) 2 Expense (1) XX X (2) (1) Fund XX Branch XXXX Chapter Budget (2) (4) XX Control Level (2) Fund Expenditure Source Department Section Recording XXXXX XXXXXXX XXXX (7) (5) (4) Fund Detail Item XXXXXXX XXXXXX (7) (6) Libya PFM and Governance Project BCS Development and ICT Modernization Attachment 2-2 Government of Libya Budget Classification Structure -- FY 2014 Expenditure (Chapters 1 and 2) SEGMENT SEGMENT SEGMENT SEGMENT FUND ORGANIZATION LOCATION ACCOUNT Total Libya 1 Revenue Sector X X (Ministry) 2 Expense (1) XX (1) X (2) (1) Payment Fund Centre Branch XXX XX (3) Chapter XXXX Budget (2) (4) XX Control Level (2) Municipality XXXXXX Fund (6) Expenditure Source Department Section Recording XXXXX XXXXXXX XXXX (7) (5) (4) Fund Detail Item XXXXXXX XXXXXX (7) (6) Libya PFM and Governance Project BCS Development and ICT Modernization Attachment 2-3 Government of Libya Budget Classification Structure -- FY 2014 Expenditure (Chapter 3) SEGMENT SEGMENT SEGMENT SEGMENT SEGMENT FUND ORGANIZATION LOCATION PROJECT ACCOUNT Total Libya 1 Revenue Sector X X (Ministry) Project 2 Expense (1) XX (1) XXXX X (2) (4) (1) Payment Fund Centre Branch XXX XX (3) SubProject Chapter XXXX Budget (2) (4) XXXXXX XX (6) (2) Control Level Municipality XXXXXX Fund (6) Source Department Section XXXXX XXXXXXX XXXX (7) (5) (4) Fund Detail Item Expenditure XXXXXXX XXXXXX Recording (7) (6)