THE NEXUS OF BUDGET AND PUBLIC ACCOUNTS COMMITTEES IN LEGISLATIVE INSTITUTION
The performance of most legislatures, according to empirical studies, varies directly as the performance of their standing committees. This, of course, underlines the importance of standing committees in legislative institutions as they act as surrogates for the legislative chambers by which they are formed and of which they are a part.
In evaluating the performance of any legislature, we look at the policies and programs resulting from its activities and the impact these have on the citizens. The number of laws passed by a particular legislature in a given period can be regarded as its nominal output while the real output is the effect or impact that the enacted laws have on the people.
Usually, the process leading to the enactment of the said laws determines how impactful the laws will be on the citizenry, and this process is carried out through Standing Committee systems of many legislatures. Thoroughness, representativeness, responsibility, and rationality are all assumed to be indicative of the performance of legislative bodies. Thoroughness is said to exist when a legislature explores critical aspects of a problem, which may be in form of a bill or report, and major alternatives are considered.
Representativeness is said to exist when the values of contending interests and the public are reflected in the process by which legislative decisions are reached.
Responsibility is said to exist when members of a legislature are visible, accessible and can be held accountable for the decisions they make. Rationality is said to exist when solutions devised by a legislature are logically related to the problems or needs they are supposed to meet.
As mentioned above, a standing committee system becomes veritable tool when employing process values to assess legislative performance. By definition, standing committees are those committees to parliament that exist on a permanent basis. The committees operate from legislative session to session, as they consider and refine legislative bills that fall under their jurisdiction. Unlike Special or Select Committees that aге often established by a parliaments to perform particular study or investigation, Standing Committees are permanent committees established under the standing rules of the parliament and specialize in the consideration of particular subject areas.
Given the above description of Standing Committees and the critical roles they play in determining the legislative performance of democratic legislatures, this legislative discourse seeks to examine two Standing Committees that play very important roles in legislative institutions. The first is the Budget or Appropriation Committee, Government’s annual budget estimates and makes recommendations leading to provision of legislative framework for revenue and expenditure benchmarks for a particular fiscal year. Performance review of the past and current budget is crucial for the consideration/approval of new budgets. In this regard, the Committee examines Government’s projected surplus or deficit budget vis a vis its public debt profile. It determines government’s fiscal sustainability through its financial standing by comparing its debt management and revenue profiles. It critically looks at the absorptive capability of the government to effectively utilize funds being sought, ensuring that government borrowings are tied to financing critical infrastructure before recommending such for approval.
The Committee also thoroughly looks at the government’s performance indicators by assessing how Ministries, Departments and Agencies (MDAs) justify monies received with service delivered. For procurement, the Committee employs cost minimization models to assess MDAs’ procurement procedures to determine whether or not best options have been considered before contracts are awarded _in line with international standards. It must be clearly stated that since a budget is government’s estimates of future revenue and expenditure, as well as quantitative analysis of government’s policy statement, it is the duty of parliaments to ensure that the budget mirrors current economic realities of the government. In this line, many parliaments world over now ensure that budgets are not only targeted at critical infrastructure but also ascertained to address micro economic stability. Micro economic stability entails planning for sustainability of Micro Small Medium Enterprises (MSMES) through appropriation of needed funds and provision of enabling business environment, which include but not limited to tax holiday/moratorium /reduction and other measures that guarantee or facilitate ease of doing business.
The Commonwealth Parliamentary Association (CPA) recommends benchmarks for democratic legislatures, which provide a minimum standard and guide on how a parliament should be constituted and how it should function. In the recommended benchmarks, in addition to the draft annual budget, the Legislature shall receive and assess medium-term and annual budget strategies and be informed of the main assumptions that underlie the annual budget’s revenue and expenditure projections. This presupposes that government must include Medium Term Expenditure Framework (MTEF) and Medium Term Sector Strategy (MTSS) in the budget to enable the Budget Committee do thorough evaluations of government’s sectoral needs with a view to appropriating annual budgets that are strategic, realistic and forward looking.
For best practices and towards achieving inclusive, robust and promising budgets, it has been suggested that the government should engage its parliament at the pre-budget stage when MTSS and MTEF are determined. We need to emphasize that members of parliaments are closer to the people and are in a better position to aggregate articulated needs of the people for inclusion in policy statement of the government.
When government leaves out the parliament during the pre-budget stage, the time when sectoral needs are determined, the result is always the presentation of budget estimates that run contrary to people’s aspirations.
The second Standing Committee, as this discourse has lined up, that plays critical roles in legislative institutions is the Public Account Committee (PAC); it is a very important parliamentary committee that ensures government’s financial probity, rectitude and accountability through post-mortem analysis of appropriated funds. The Committee makes use of Auditor-General’s reports and other related financial documents to hold government institutions accountable for their use of public funds and resources. It examines the accounts showing the appropriation of the sums granted appropriation by the parliament to meet public expenditure in comparison with the Auditor-General’s reports on same.
It is the duty of the Committee to ensure that monies shown in the accounts as having been disbursed legally available applicable to the service for which they have been applied or were charged. It is also the duty of the Committee to be satisfied that the expenditure authority that governs it and that no extra budgetary spending has been incurred.
It must be stated that though democratic legislatures differ in size and age, which informs their dynamism, approaches and attitudes, there still exists unanimity of practice among Commonwealth parliaments as regards the conduct of Public Accounts Committee and Budget Committee. For instance, the recommended benchmarks for parliamentary institutions in Commonwealth countries also stipulates that the legislature shall receive regular in-year budget reports and an audited annual financial statement from the government within 12 months after the end of the fiscal year. This point probably accounts for why many legislative institutions in Commonwealth countries clearly make provisions for Public Accounts Committees in their constitutions. In Nigeria, for instance, Section 85(5) of the constitution states that: “The Auditor-General shall within ninety days of receipt of the Accountant-General’s financial statement, submit his reports under this section to each House of the National Assembly and each House shall cause the reports to be considered by a committee of the National Assembly responsible for public accounts.” In the same vein, Section 125(4) of the constitution also states that “The Auditor-General for the State shall have power to conduct periodic checks of all government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by a law of the House of Assembly of the State.” Section 125(5) states that “The Auditor-General for a State shall, within ninety days of receipt of the Accountant-General’s financial statement and annual accounts of the State, submit his reports to the House of Assembly of the State and House shall cause the report to be considered by a committee of the House responsible for public accounts.” The functions and responsibilities of Public Accounts and Budget Committees, like other standing committees, are also contained in the Business, Rules and Standing Orders of respective legislative institutions at national and sub-national levels across Commonwealth countries. For Nigeria’s Senate and House of Representatives, the rules say that public Accounts Committee shall have power to request the report of the Auditor-General of the Federation with respect to any prepayment audit query, which had been overruled by the Chief
Executive of the Ministry, Extra Ministerial Departments or Agency of the Federal Government and Courts of the Federation and to report same to the National Assembly.
Similarly, in the Business, Rules and Standing Orders of the Lagos State House of Assembly (as amended), the rules provide for Public Accounts Committee (State) and Public Accounts Committee (Local) respectively. While the Public Accounts Committee (State) is empowered to act on the reports of the State Auditor-General and request for persons/records and documents for its consideration, the Public Accounts Committee (Local) is to examine reports of the Auditor-General for Local Government on pre-payment audit queries raised by the Internal Auditors of Departments or Committees on
Local Government/Local Council Development Areas but overruled by the Chief Executive.
From the foregoing, we can infer that the Public Accounts Committee’s primary function is to assess fiscal performance of executive agencies that are saddled with the responsibility for implementing annual budgets, with a view to eradicating corruption and promoting efficiency and effectiveness of public spending.
Experience and studies have confirmed that Public Accounts Committees play these critical roles in promoting good governance and development in the countries that allow them to function and their reports to be implemented. Sadly, some parliaments do not have either the political will or the institutional capacity or both to consider Auditor General’s Reports, make own Reports therefrom and exert pressure on the executive for the implementation. These are either rubber-stamp or quasi-independent legislatures. In Nigeria, Reports of the Public Accounts Committees are often bordered on Auditor-General’s queries such as: frivolous or dubious expenditure, unretired payment vouchers, unauthorized expenditure or extra budgetary spending, nugatory expenditures or wasteful spending, improper book keeping and accounting records, unexecuted projects, and unremitted revenue, etcetera.
In summary, the importance of Budget and Public Accounts Committees in any legislative institutions cannot be overemphasized. As standing committees, their roles and functions are guaranteed in the constitutions and Business, Rules and Standing Orders of their respective parliaments.
The performance of legislative bodies, especially with regards to oversight, can be measured to a large extent by looking at how Budget and Public Accounts committees of such parliaments conduct their oversight functions and ensure fiscal responsibility of government. The process values of parliaments can only be examined through its committee system.
Budget and Public Accounts Committees provide us opportunities to examine legislative performance through process values such as thoroughness, rationality, representativeness and responsibility. This point does not vitiate the importance of other standing committees. All committees are important in their own functionality and they all contribute in no ordinal scale to the systemic development of the parliaments that establish them.
What this study recommends is the need for increased process values especially as it concerns representativeness of legislative institutions during budget consideration. It is important that the budget process is more open to the people, especially members of the Civil Society Organisations and other critical stakeholders for input.