This presentation was made by Jungmin PARK, OECD, at the 15th Annual Meeting of OECD-CESEE Senior Budget Officials held in Minsk, Belarus, on 4-5 July 2019

1. OECD Budget Review of Bulgaria
- Preliminary assessment -
Jungmin Park
Senior policy analyst, Budgeting & Public Expenditures
OECD
CESEE SBO, Minsk, Belarus, 5 July 2019

2. Context (1) : Steady economic growth
2
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
2000 2003 2006 2009 2012 2015 2018
Real GDP growth rate
European Union (28 countries) Bulgaria
(%)
Source: Eurostat database of June 2019.

3. Context (2) : Robust public finance
3
0
10
20
30
40
50
60
70
80
90
100
200720082009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General government debt
EU (28 countries) Bulgaria
(% of GDP)
Source: Eurostat database of June 2019.
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
EU 28 Bulgaria Threshold
General government budget balance
(% of GDP)

4. • Explain reforms undertaken since the previous OECD
budget review (2009)
• Assess alignment with the OECD 10 recommendations on
Budgetary governance
• Identify priority areas for further reforms
Objectives of the OECD budget review
4

5. PRELIMINARY ASSESSMENT
5

6. Public Finance Act (2013)
6
Significance
• Primary budget law for the general structure of public finances*
* amended in 2015, 2016, 2017
• Prudent fiscal policies consistent with the European Union
Main contents
• Strengthening medium-term budget framework and budget forecasting
according to ESA(European System of Accounts) 2010
• Strict fiscal rules (Debt, budget balance and spending)
• Social insurance, health insurance and municipal budget consistent with
state budget
• Sustainable implementation of a programme budget format
• Increasing the budget transparency and accountability through monitoring
and reporting

7. Budgeting
within fiscal
objectives
OECD Principles of Budgetary Governance
Quality,
integrity &
independent
audit
Performance,
Evaluation &
VFM
Comprehensive
budget
accounting
Effective
budget
execution
Alignment with
medium-term
strategic plans
and priorities
Performance,
evaluation &
VFM
Transparency,
openness &
accessibility
Participative,
Inclusive
& Realistic
Debate
Fiscal Risks &
Sustainability
Capital
budgeting
framework
Alignment with
medium-term
strategic plans
and priorities

8. Performance,
Evaluation &
VFM
Preliminary assessment
Main changes/progress
- Fiscal rules underpin Government commitment to
counter-cyclical, sustainable fiscal policy
- Budget targets are strongly respected by Council of
Ministers
- Medium-term forecasts are realistic and prudent
Recommendations
- Improve the alignment between medium-term
strategic plans and the budget to make the expenditure
ceilings less indicative
- Closer cooperation between MoF and other centre of
government bodies on strategic planning
- Enact the draft Law on Strategic Planning to ensure
that progress to date is built upon
Alignment with
medium-term
strategic plans
and priorities
Budgeting
within fiscal
objectives

9. Performance,
Evaluation &
VFM
Main changes/progress
- Performance-based budgeting is used widely*
* policy area, programs, performance indicators, etc.
- MoF launched an initiative to review and prioritise
performance indicators in the key sectors
- MoF started joint spending review projects with the World
Bank
- MoF carried on the process of preparing spending reviews,
based on the World Bank public spending manual
Recommendations
- Improve the linkage between performance information and
budget process (i.e. using the reprioritisation of resources)
- Introduce an agenda for implementation of spending
reviews
Preliminary assessment
Transparency,
openness &
accessibility
Performance,
evaluation &
VFM

10. Performance,
Evaluation &
VFM
Main changes/progress
- Independent Fiscal Council was established in
2016
- Fiscal Council serves as a reference point for fiscal
policy and enhances the quality of budget process
- National Audit Office is well designed to deal
authoritatively with financial accountability
Recommendations
- Strengthen an involvement of Parliament in the
budget process
- Requires adequate resources and timely access to
information and fiscal plan for the Fiscal Council
- Value-for-money audit by NAO for enhancing the
effectiveness in managing public funds
Preliminary assessment
Quality, integrity
& independent
audit
Participative,
Inclusive
& Realistic
Debate

11. Performance,
Evaluation &
VFM
Preliminary assessment
Capital budgeting
framework
Main changes/progress
- Capital budgeting integrated within overall
fiscal policy of the Government
- Ordinance adopted by CoM in 2015 establishes
a framework for approving capital investments
Recommendations
- Adopt a standard methodology for public
investment management to enable CBA and
comparison across sectors
- Develop institutional capacity to appraise,
procure and manage large projects
- Place more emphasis on monitoring and
reporting and ex-post evaluation

12. 12
Preliminary assessment
Comprehensive
budget
accounting
Main changes/progress
- Administrative, economic and functional
classifications in the budget nomenclature
- Monthly reporting in-year and modified accruals
for year-end reporting
Recommendations
- Establish consolidated modified-accruals financial
statements for the State and consider a move to full
accrual accounting
- Establish a quality insurance mechanism for
accounting standards (independent standards
setter or advisory council)
- Provide more detailed and legible on transfers in
monthly budget execution reports
- Consider formal approval from the Parliament for
major changes in budget execution (between policy
areas)
Effective budget
execution

13. http://www.oecd.org/gov/budgeting/
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