General accounts are accounts that record financial transactions that are not specifically restricted to a particular set of accounts or are not necessary to account for in another fund. The general fund is the only one kept and run by governments all over the world. The Special fund accounts records general government transactions that are normally restricted by law or contractual agreements for particular predetermined purpose other than huge capital projects. This accounts will always exists as long as government has resources dedicated to some special programs and projects.
In addition, budget preparation is an important process done every year for effective planning and running of government. The different departments develop their budgets annually by calculating the amount of resources they will need to implement authorized and projected activities for the year. However, the process has challenges and several issues are prone to emerge most of the times since the budget process is long and tiring.
Institutional mechanisms for policy formation are one of the key issues in budget preparation. In particular, this is essential to underpin formulation of policies for the various sectors, act as guide to the ministries in evaluating their budgets according to their mandates and visions and their very own strategic plans, and calculate a broad cost estimate. The strategic planning is a dynamic process and mostly inclusive as it provides the basis or the department’s daily activities. There is no blue print for departmental policy formulation but generally, the law that ensures coherence and coordination for the various actors heading them defines the relationship between different departments. Formal communication lines are very essential to eradicate problems in coordination and implementation of government programs.
Distribution of duties and responsibilities for the macroeconomic framework is another key issue when it comes to budget preparation. This are normally the different forecasts projections gathered from different departments of the state. The agencies responsible for putting all the gathered forecasts together is normally very reluctant and therefore presenting lack of consistency and poor dialogue in government departments on implementation of policies. The unintended consequence of this laxity is more influence on the financial situation of a country by external financial institutions weakening the government programs budgets.
In addition, the distribution of responsibilities in annual budget preparation is another key factor that arises in the process of preparing budget since many actors from the various ministries take part in the preparation. The quality of the budget prepared every year mainly depends on the coordination among the various actors from the different departments assigned this important task. Therefore, clear guidelines and budgetary rules should be established for compliance and ensure accountability in the budget execution process. Ministries and agencies should prepare their budgets within their immediate authority and guided by their mandate. Afterwards, it is necessary to submit the budget estimates and forecasts to one of the departments tasked with the leading role in budget preparation to ensure fiscal targets and the objectives intended by the various policies be taken into account at every step of the process.
Budget timetable is the final key issue that arises for every budget preparation process. Firstly, it involves sending the first budget circular to all the departments that introduce the budget preparation process stating clearly the fiscal policy targets and the policies proposed to reach the target. The issuance of a budget preparation calendar to all departments and taking the special role of Congress for example, the process normally takes around 18 months for it to be complete effectively. The optimal calendar for budget preparation is difficult to estimate and depends on the country in context.
The process is normally difficult because it is long and tiring, involving complex government bureaucracies along the way and having financial deficits almost all the time, the actors must cut down their ambitious budgets leading to discontentment of the budgetary in various departments.
Finally, the budgetary process can be made more reflective of the work being completed by ensuring that the financial allocations of resources reflect the governments priorities and policies brought forward assuming the uncertainties involved.
References
Jones, Rowan, Evelyne Lande, Klaus Lüder, and Marine Portal. "A comparison of budgeting and accounting reforms in the national governments of France, Germany, the UK and the US." Financial Accountability & Management 29, no. 4 (2013): 419-441.
