As a member of the European Union, Ireland is required to participate in the Stability and Growth Pact and is thus subject to intense budget scrutiny. In 2004, the Economic and Financial Committee (EFC) of the EU conducted an assessment of Ireland's compliance with European Monetary Union standards and found some problem areas. In particular, the EFC cited coverage gaps in both the national accounts and quarterly public finance data. However, a 2006 European Commission (EC) report found that the 2005-2008 Stability Program was broadly compliant in both structure and the provision of data. The EC report noted with approval the likelihood that ongoing reforms should continue to improve the efficiency of public spending and enhance transparency.

General Overview

Ireland is a member of the European Union (EU) and has adopted the euro. It is therefore subject to the Stability and Growth Pact, which entails intense budget scrutiny. In a 2004 report by the Economic and Financial Committee of the EU, Ireland's compliance with European Monetary Union's (EMU) requirements was assessed and a number of areas of noncompliance were noted, including gaps in the coverage of national accounts and quarterly public finance data. According to a 2006 assessment by the European Commission (EC), the current Irish stability program (2005-2008) "broadly follows the model structure and data provision requirements for stability convergence programs specified in the new code of conduct" (p. 2). The report adds that Ireland's ongoing structural reform program "should contribute towards enhancing the quality of public services, increasing the efficiency of public spending, and addressing the infrastructural needs of the Irish economy" (p. 4). Ireland's reform program prioritizes the application of public investment in growth-expanding areas of the economy and society and includes innovations in the budget process. The report concludes that Ireland's fiscal position is sound and that "the budgetary strategy provides a good example of fiscal policies conducted in compliance with the [Stability and Growth] Pact" (p. 5).

According to the "How We Work" page of the Department of Finance (DoF) website, the DoF receives its authority under the Ministers and Secretaries Act of 1924 to handle "the administration and business generally of the public finance of Ireland and all powers, duties and functions connected with the same, including in particular, the collection and expenditure of the revenues of Ireland from whatever source arising." Further functions were added to the DoF by the 1980 passage of the Economic Planning and Development (Transfer of Departmental Administration and Ministerial Functions) Order. With this order, the DoF was allocated the responsibility "to promote and coordinate economic and social planning, including sectoral and regional planning, to identify development policies, to review the methods adopted by departments of state to implement such policies and generally to advise the government on economic and social planning matters." Again by government order, in 1987 the DoF assumed the responsibilities formerly allocated to the Department of Public Service.

The DoF is comprised of six divisions: Taxation and Financial Services; Budget, Economics, and Pensions (BEPD); Sectoral Policy; Personnel and Remuneration; Organization, Management, and Training Division; and Corporate Services. According to the DoF website, the BEPD establishes the parameters for the medium-term budgetary policy and for the annual budget. To do this, it conducts reviews of prior economic performance, carries out ongoing assessments of policy, monitors international policies, and creates short- and medium-term macroeconomic forecasts and analyses. The BEPD also prepares the DoF's annual financial statement, the finance bill, and tax-related legislation. At the start of each year, the Finance Minister presents the annual budget speech to the legislature, in which current strategies, priorities, and goals are elaborated.

According to the DoF's 2006 Progress Report on the Department's Statement of Strategy, initiatives were taken that materially affect the DoFs conduct of fiscal policy and the transparency thereof. One such initiative is the creation of an annual "Pre-Budget Economic and Fiscal Outlook" that covers the three years ahead. As of early 2007, all government departments were to begin publishing detailed statements of their output. The recruitment system employed by the Irish civil service was made more open, and progress was made on the decentralization and coordination of the DoF. The National Development Plan, covering the years 2007-2013, was published in January 2007. New standards and contracts for construction and construction-related services were introduced. Finally, a new Central Expenditure Evaluation Unit was created "to promote best practice in the public service," (p. 3). The report added that the DoF's commitment to service extended to "recent enhancements in such areas as computer network support, financial management reporting, services provided by the Paymaster General, and risk management" (p. 21).

The International Monetary Fund's (IMF) 2007 Article IV Consultation report addressed current Irish fiscal policy issues and strategies. At the most general level, the IMF recommended that a medium-term goal should be "to further improve the quality of spending and review the tax base" (p. 1), adding that the aging population will continue to lead to fiscal pressures over the long-term. Ireland's current medium-term fiscal objective is to maintain a close balance-to-surplus ratio. The IMF staff found Irish fiscal policy to be prudent, that Ireland has saved windfall revenues from the construction sector, and that it has avoided assuming a pro-cyclical stance, contrary to previous practices that had been criticized in the IMF's 2005 Article IV report. The 2007 IMF report states that a housing boom has driven recent economic growth in Ireland, but that has begun to cool in recent months. Inflationary pressures increased during the 2006 fiscal year, and unemployment was low, which led IMF staff to conclude that Ireland was performing at or even a little above potential. However, inflation has affected Ireland's international trade competitiveness, leading to a widening of the current account deficit (to 4.5% of GDP). Nonetheless, Ireland's overall position in the external sector remains stable, and "Ireland's real effective exchange rate is close to, but perhaps slightly above, its equilibrium value" (p. 6). The IMF added that the effects of the cool-down in housing from 2006 levels should be mitigated by a combination of fiscal stimuli and rising public consumption. However, the 2007 IMF report cautions that, looking ahead, a steeper fall in the housing market could lead to a reduction in economic growth and government revenue, and increased stress on the financial sector.

In a 2006 "Economic Survey of Ireland" by the Organization for Economic Cooperation and Development (OECD), it was recommended that Ireland enhance its fiscal framework in anticipation of potential upcoming fiscal shocks. The OECD suggested that Ireland adopt a more top-down budget process to gain greater stability and control over policy and planning. Ireland's progress towards the modernization of the civil service was applauded, but the OECD suggested greater progress could be made in hiring and promotion practices. Few improvements have been seen in Ireland's expenditure review program to date, but the report noted that the processes have recently been changed, with potential positive effect.

Ireland has been a subscriber to the IMF's Special Data Dissemination Standard (SDDS) since July 26 1996, and the SDDS website discloses that Ireland meets all requirements for coverage, timeliness, and periodicity, although it does avail itself of the flexibility option for timeliness in reporting national accounts and central government debt data. Ireland provides summary methodologies posts advance-release dates for all datasets reported to the SDDS. The IMF's 2007 Article IV Consultations report deems data provision to be adequate for surveillance.

The Principles

Clarity of roles and responsibilities.

CP

According to the "How We Work" page of the DoF's website, the DoF receives its authority from the Ministers and Secretaries Act of 1924 to handle "the administration and business generally of the public finance of Ireland and all powers, duties and functions connected with the same, including in particular, the collection and expenditure of the revenues of Ireland from whatever source arising." Further functions were added to the DoF by the passage in 1980 of the Economic Planning and Development (Transfer of Departmental Administration and Ministerial Functions) Order. With this order, the DoF was allocated the responsibility "to promote and coordinate economic and social planning, including sectoral and regional planning, to identify development policies, to review the methods adopted by departments of state to implement such policies and generally to advise the government on economic and social planning matters." Again by government order, in 1987 the DoF assumed the responsibilities formerly allocated to the Department of Public Service.

The DoF is comprised of six divisions: Taxation and Financial Services; Budget, Economics, and Pensions (BEPD); Sectoral Policy; Personnel and Remuneration; Organization, Management, and Training Division; and Corporate Services. The BEPD. According to the DoF website, the BEPD establishes the parameters for the medium-term budgetary policy and for the annual budget. To do this, it conducts reviews of prior economic performance, carries out ongoing assessments of policy, and monitors international policies, and creates short- and medium-term macroeconomic forecasts and analyses. The BEPD also prepares the DoF's annual financial statement, the finance bill, and tax-related legislation. At the start of each year, the Finance Minister presents the annual budget speech to the legislature, in which current strategies, priorities, and goals are elaborated.

The Budget sets out the government's budgetary targets for the upcoming three years. The Budget contains several components. As evidenced on the DoF website, these include the Financial Statement; the Minister's Budget Speech (presented to the parliament); and the Budget Measures document, which offers details of changes and initiatives in the budget, along with cost or revenue estimates. There is also a document of Budget Statistics and Tables, in which the data supporting the 3-year budget projection are detailed. The Financial Resolutions document provides information on the legislative support attached to budget changes taking immediate effect. Also included is the Stability Program Update, which reviews the context of the budget and elaborates on the economic strategy going forward. This document is required by the EU Stability and Growth Pact. Finally, the White Paper on Receipts and Expenditure sets forth the current situation, upon which the budget proposal is based.

In 2006, the OECD report suggested improvements to the budget process, specifically calling for of a more top-down budget process, along with the establishment of routine and systematic evaluation and value-for-money audits and the inclusion of output indicators during both the planning and drafting of the budget. Specifically, the report asserted that "it will be important to strengthen the role of the Parliament and the Comptroller and Auditor General in results-oriented auditing and reviewing control mechanisms" (p. 8).

Open budget processes

FC

The Irish Budget, available on the DoF website, consists of several elements. The main text is provided in the Minister's Budget Speech, Financial Statement, Financial Resolutions, Summary of Budget Measures, and a Stability Program Update. These are supplemented by wide range of annexed, tables, estimated tables, and case-study examples. According to the IMF SDDS website, the data provided by Ireland in all datasets, including fiscal, are adequate for surveillance.

According to the "How We Work" page of the DoF website, the DoF receives its authority under the Ministers and Secretaries Act of 1924 to handle "the administration and business generally of the public finance of Ireland and all powers, duties and functions connected with the same, including in particular, the collection and expenditure of the revenues of Ireland from whatever source arising." Further functions were added to the DoF by the 1980 passage of the Economic Planning and Development (Transfer of Departmental Administration and Ministerial Functions) Order. With this order, the DoF was allocated the responsibility "to promote and coordinate economic and social planning, including sectoral and regional planning, to identify development policies, to review the methods adopted by departments of state to implement such policies and generally to advise the government on economic and social planning matters." Again by government order, in 1987 the DoF assumed the responsibilities formerly allocated to the Department of Public Service.

The DoF is comprised of six divisions: Taxation and Financial Services; Budget, Economic and Pensions (BEPD); Sectoral Policy; Personnel and Remuneration; Organization, Management, and Training Division; and Corporate Services. The BEPD. According to the DoF website, the BEPD establishesthe parameters for the medium-term budgetary policy and for annual budget. To do this, it conducts reviews of prior economic performance, carries out ongoing assessments of policy, and monitors international policies, and creates short- and medium-term macroeconomic forecasts and analyses. The BEPD also prepares the DoF's annual financial statement, the finance bill, and tax-related legislation. At the start of each year, the Finance Minister presents the annual budget speech to the legislature, in which current strategies, priorities, and goals are elaborated.

Public availability of information.

FC

The DoF annual budget contains detailed budgetary projections for three years. Ireland is a member of the EU and, as such, participates in the Stability and Growth Pact, which entails intense budget scrutiny. In a 2004 report by the Economic and Financial Committee of the EU, Ireland's compliance with EMU requirements was assessed and a number of areas of noncompliance were noted, including gaps in the coverage of national accounts and quarterly public finance data. In a 2006 assessment by the EC, the current Irish stability program (2005-2008) "broadly follows the model structure and data provision requirements for stability convergence programs specified in the new code of conduct" (p. 2). The report adds that Ireland's ongoing structural reform program "should contribute towards enhancing the quality of public services, increasing the efficiency of public spending, and addressing the infrastructural needs of the Irish Economy" (p. 4). Ireland's reform program prioritizes the application of public investments in growth-expanding areas of the economy and society, and includes innovations in the budget process. The report concludes that Ireland's fiscal position is sound and that "the budgetary strategy provides a good example of fiscal policies conducted in compliance with the Pact" (p. 5). The European Central Bank suggested that fiscal reporting could be enhanced by closing gaps in coverage and improving timeliness, particularly in the areas of quarterly reporting of national accounts and non-financial public finance data.

Ireland has been a subscriber to the IMF's SDDS since July 26 1996, and the SDDS website discloses that Ireland meets all requirements for coverage, timeliness, and periodicity, although it does avail itself of the flexibility option for timeliness in reporting national accounts and central government debt data. Ireland provides summary methodologies posts advance-release dates for all datasets reported to the SDDS. The IMF's 2007 Article IV Consultations report deems data provision to be adequate for surveillance.

Independent assurances of integrity.

FC

The IMF SDDS website discloses that Ireland meets the specifications of timeliness, coverage, and periodicity for all datasets, although it avails itself of the timeliness flexibility option in the area of national accounts and government debt data. Ireland is a member of the EU and, as such, participates in the Stability and Growth Pact, which entails intense budget scrutiny. In a 2004 report by the Economic and Financial Committee of the EU, Ireland's compliance with EMU requirements was assessed and a number of areas of noncompliance were noted, including gaps in the coverage of national accounts and quarterly public finance data. In a 2006 assessment by the EC, the current Irish stability program (2005-2008) "broadly follows the model structure and data provision requirements for stability convergence programs specified in the new code of conduct" (p. 2).

In 2003, an OECD report suggested improvements to the budget process, specifically calling for of a more fully top-down budget process, along with the establishment of routine and systematic evaluation and value-for-money audits and the inclusion of output indicators during both the planning and drafting of the budget. Specifically, the report asserted that "it will be important to strengthen the role of the Parliament and the Comptroller and Auditor General in results-oriented auditing and reviewing control mechanisms" (p. 8). In 2006, these concerns were once again raised by the OECD.

In its 2004 Stability Program Update, which forms a part of the 2005 Budget, the Minister of Finance announced the Management Information Framework (MIF), which was designed to develop a modern financial management system to be used across all government departments and offices. According to the report, this will not only improve reporting and enhance decision-making. "it will also facilitate greater transparency in, and accountability for, the use of those resources (p. E-29). (DoF 2005)

In 2002, the DoF issued a report on the results of the Working Group on the Accountability of Secretaries General and Accounting Officers, created in 2000 by a Government Decision of May 2000. The Working Group examined procedures then in place for financial management as part of the ongoing Performance Management Initiative. According to the 2002 DoF report, the Working Group drew up a system of governance rules to enhance the long-established roles and functions of the Secretaries General, Accounting Officers, and Ministers. The roles of Secretary General and Accounting Officer are key to smooth public administration, but the Working Group noted the need for some changes, citing significant growth in the government's size and complexity. Ongoing reforms in the public service sector have been aimed at recalibrating responsibilities and instituting a new appreciation for the need of public accountability.