The state budget for 2023 and the Medium-term Fiscal Framework (MFP) 2023-2025 are drawn up in a dual format, in the context of the transition of the state machine to the new integrated computerized Enterprise Resource Planning (ERP) system.
As stated in the Strategic Framework of Fiscal Policy, due to the dynamic nature of the upcoming implementation of the ERP and the need for a smooth transition to the new data, it was deemed appropriate that the budget be prepared on the basis of activities (BAB), but also in the traditional format, "so as to address any unforeseen technical situations".
Speaking to KYPE, the Director of the Budget Directorate of the Ministry of Finance, Melina Katsounotou said that the Ministry of Finance must make sure that the ERP system, which is necessary for the implementation of the PBD, is ready so that the budget on the basis of activities can be submitted to Parliament. "However, since we cannot risk a budget not being submitted to the House of Representatives, the traditional budget is being prepared at the same time," he added.
"In the coming weeks, it will be decided what will be done, what form will apply. Our pursuit is the budget based on activities, but if for any technical reason we have any doubt, we will be forced to submit the traditional budget", added Mrs. Katsounotou, clarifying that no final decisions have been made.
According to Ms. Katsunotou, the notable difference of the activity-based budget from the traditional form is that it supports accountability, efficiency, provides more flexibility to the agencies, i.e. the Ministries, to monitor their budget and there is a better use of money and human resources. "It is considered a mechanism that countries use to produce better results in governance."
"The big difference is that the use of resources is linked to the strategic planning of each Ministry and by extension the government", he stressed.
Accordingly, the SPDP states that the main difference in the form of the PBD in relation to the existing Budget, is the introduction of a third dimension, the programmatic (objectives, activities, projects, etc.), in addition to the existing dimensions of the organizational structure (Ministries , Deputy Ministries, Departments, subdivisions of Departments) and economic analysis (groups of articles, subgroups of articles, articles, etc.). It should be noted that, within the framework of the new budget format, a new Chart of Accounts has been prepared and the coding of the organizational structure is different. The basic philosophy of the PBD is that all expenses must be allocated under specific objectives, activities and by extension to specific projects/tasks.
The budget is expected to be submitted to the Council of Ministers around the end of September. According to the Fiscal Responsibility Law, the state budget is approved by the Council of Ministers and submitted to Parliament by September 30.