Finance Minister to Independent Entities: Reduce Expenditures, Press Spending, and Adhere to Appropriations

- The Ministry of Finance has updated the rules and instructions for quarterly follow-up reports by government entities

- The Ministry aims to monitor budget implementation and respond swiftly to any deviations or obstacles

- A 20-day deadline is set for submitting the final report for the fiscal year

- Detailed disclosure of vacant positions, resignations, and retirements

- External audit of accounts outside budget headings and reconciliation balances

- Clarification of reasons for delays in revenue collection and expenditure payments

- Monitoring of development plan projects and verifying their results within financial reports

- Statement of audit observations and measures taken to address them

Al-Rifai, in a circular regarding quarterly follow-up reports for institutions and entities with independent budgets, emphasized the necessity of settling payments for services exchanged with government entities, upholding the principle of annual budgeting, and working to enhance revenues and collect all due revenues, thereby achieving the intended objectives of independent entities’ activities.

Al-Rifai noted that the circular includes an update to the rules and instructions for preparing quarterly follow-up reports, stressing that public finance requires concerted efforts to achieve optimal use of funds and maximize benefits, while selecting the best available options amid continuous changes in domestic and global market needs and factors.

He clarified that the Ministry of Finance has established a precise monitoring system through quarterly financial reports that provide a complete presentation and disclosure of financial data, enabling periodic monitoring of budget implementation, keeping pace with developments, and enhancing financial and accounting control, in accordance with Article (47) of Decree-Law No. (31) of 1978 concerning the rules for preparing general budgets, monitoring their implementation, and the final account.

He pointed out that every general administration, authority, or public institution with independent legal personality must submit quarterly reports on operational progress and financial status to the Minister of Finance, including the data and information specified by the Ministry.

He highlighted that the Ministry of Finance has defined three main objectives for the monitoring system: assessing operational progress and financial status of each entity with an independent budget; monitoring and following up on budget implementation as an annual plan and responding swiftly to any deviations or obstacles hindering execution; and preparing accurate quarterly reports to facilitate the study of the final account and extract necessary indicators for planning future budget projects.

The circular specified the periods covered by the quarterly reports: the first report covers the first three months of the fiscal year up to June 30; the second covers six months up to September 30; the third covers nine months up to December 31; and the fourth report covers the full 12 months up to March 31.

Entities were required to implement the annual development plan as outlined in their budgets and provide the Ministry of Finance with a detailed statement of development plan projects implemented during the reporting period, along with explanations for any delays in execution.

He clarified the necessity of submitting five copies of the quarterly follow-up report to the Ministry of Finance, represented by the Independent Institutions Budgets Department, no later than the 15th day of the month following the reporting period. The final quarterly report must be submitted no later than the 20th day of the month following the end of the fiscal year.

He stressed the need for full cooperation from those responsible for preparing reports with researchers in the Independent Institutions Budgets Department, providing all required data and information, and held entities accountable for any delays or shortcomings in submitting the data.

The directive mandates that a detailed explanatory memorandum accompany each quarterly report, outlining the extent to which the entity has achieved its planned objectives for the period, identifying uncompleted tasks and their reasons, as well as highlighting the main challenges hindering budget implementation and proposing future solutions.

Regarding revenues, the amounts collected must be compared with those projected in the budget, with explanations provided for any increases or decreases at the level of each line item or category. The report must also clarify any new factors that emerged after the budget’s approval and their impact on revenues.

Concerning expenditures, a detailed presentation of each spending chapter is required, including the linkage between the budget, additional appropriations, and transfers. Actual expenditures must be compared with appropriations at the level of each line item or category, with explanations provided for any deviations from standard percentages.

The directive emphasized that reports must include a detailed presentation of all appropriations for development plan project expenditures, whether included within or outside the budget chapters. It must also explain reasons for non-spending or low spending rates and confirm that the actual results of the projects reported align with those held by the General Secretariat of the Supreme Council for Planning and Development.

Details of transfers made across budget line items and categories must be attached, including copies of relevant correspondence. Additionally, the report must state the progress made on recommendations from competent authorities and the corrective actions taken regarding reservations raised on the budget.

The directive pointed out the necessity of highlighting in the report any continuous observations recorded by the Court of Accounts and the Financial Supervision Authority against independent entities, along with the measures taken to address them in coordination with supervisory bodies, particularly those observations with direct financial implications.

The directive further stated that the report must include a detailed statement of occupied and vacant functional positions, the number of resignations, retirements, and terminations of service, categorized by Kuwaiti and non-Kuwaiti nationals, along with explanations for the failure to fill vacant positions. A general overview of accounts outside the budget chapters must also be provided, showing the opening balance, amounts settled during the quarter, and the closing balance, with explanations for any unsettled balances per account.

The directive called for an analysis of settlement account balances and the amounts cleared from them, particularly balances carried forward from previous fiscal years. It required clarifying the reasons for non-clearance, the measures taken, proposed solutions, and expected timelines for settlement.

The directive mandated the presentation of actual balances for current accounts and their comparison with book balances. This includes comparing the cash balance recorded in the general journal with the actual physical count, explaining any discrepancies, and comparing bank balances according to records with those stated in bank statements, clarifying the reasons for any differences. A detailed statement of the “Current” account with the Ministry of Finance must also be provided, accompanied by a reconciliation statement with the relevant department in the ministry.

Report requirements also include presenting the types of systematic accounts and comparing their balances at the beginning and end of the fiscal year, explaining reasons for non-collection or non-settlement. Furthermore, the report must clarify reasons for failing to collect due revenues on time or pay due expenditures, and outline the measures taken by the entity to address such cases.