In Jamaica, Section 115 of the Political Constitution sets out the need to prepare, before the end of each financial year, annual estimates of revenue and expenditure for public services during the succeeding financial year, which is laid before the House of Representatives. The estimates of expenditure have to show, separately, the sums required to meet Statutory Expenditure and the other expenditure proposed to be paid out of the Consolidated Fund. This Fund is the principal Government account to which all Government revenues must be deposited and from which expenditure, via warrants, is withdrawn.

The Statutory Expenditure refers to expenditures provided for the Budget, which receive their authority from the Political Constitution. These expenditure are regarded as statutory obligations and therefore do not require prior approval of Parliament (i.e. debt servicing, pension payments, and the salaries of certain public officers such as Auditor General and Judges of the Court of Appeals).

According to Section 116 of the Political Constitution, the Ministry of Finance and Planning (MOF), through its Financial Secretariat (FS) is the governmental institution that prepares and presents Government's expenditure and revenue estimates for parliamentary approval. These estimates are organized by public service into what is called Heads of Estimates, and reflect government's development policies and priorities.

In the country, there are two national accounts, the recurrent and the capital account. The recurrent account represents the cost of maintaining the permanent administrative structure of government. The capital account addresses the expenses of the national infrastructure, projects that enhance the country's ability to pursue growth and development. Each ministry's estimate is based on a corporate plan whose goals must be in harmony with the overall objectives of the Government.

In Jamaica, the governmental institution responsible for the preparation of the public budget is the Ministry of Finance and Planning (MOF) through its Financial Secretariat (FS).

The MOF is currently administered through five (5) Departments: Customs Department, Inland Revenue Department, Tax Administration Services Department, Taxpayer Appeals Department, Taxpayer Audit and Assessment Department; ten (10) Divisions: Corporate Services Division, Economic Management Division, Finance and Accounts Division, Financial Investigations Division, Public Enterprise Division, Public Expenditure Division, Public Expenditure and Policy Coordination Division, Public Service Establishment Division, Revenue Protection Division, Tax Policy Division; one (1) Unit: Internal Audit Unit; and two (2) Executive Managements: The Offices of the Minister and the Financial Secretary.

The MOF has overall responsibility for developing the Government's fiscal and economic policy framework; collecting and allocating public revenues and playing an important role in the socio-economic development of the country in creating a society in which each citizen has every prospect of a better quality of life.

The MOF objectives are as follows:

a) Create the environment that will promote sustainable economic growth,
b) Effectively manage the national budget and administer policies for the sound financial management of public funds,
c) Effectively regulate financial institutions and entities in order to protect the interest of all investors,
d) Develop tax policies and administer same to provide revenue needed to finance the socio-economic development, and
e) Provide conditions of service that enable public sector employees to provide improved service to our valued stakeholders.

Also, MOF Operational Responsibilities are as follows:

a) The Preparation and Management of the Budget,
b) Financial Regulation and Anti-Corruption,
c) Public Service Establishment Oversight,
d) Management of the Public Debt,
e) Financial Management of Public Sector,
f) The Collection of Revenues, and
g) Public Bodies Oversight.

On the other hand, the FS, apart from dealing with the management and functioning of the Ministry, has other responsibilities including recommending policy options in financial, monetary, economic, trade and employment matters to the MOF and the Public Service. Also, the FS ensures the preparation and the management of the country's budget and the implementation of fiscal and economic policies approved by the Cabinet.

Public Sector Master Rationalization Plan (MRP)

In accordance with the Public Sector Master Rationalization Plan (MRP)'s recommendations, MOF's activities are going to focus on macro-economic policy and financial management. Its activities must be directed at managing the fiscal resources in an effective and efficient manner with the proper accountability framework in place.

Regarding its structure, the recommendation is to reflect MOF's activities on four (4) functional areas, with an appropriately size corporate service/administrative unit: 1. Public Sector Financial Policy; 2. Enforcement Regulation and Compliance; 3. Debt Management; and 4. Financial Management.

This recommendation includes establishment of a Central Treasury Management System to bring responsibility for treasury management functions across all of Government under on agency. The objective of this proposal is to improve cash management, promote efficient financial management of government financial resources and facilitate the smooth execution of the government's budget.

Likewise, another recommendation made was to relocate Public Service Establishment Division to the Cabinet Office where the strategic Human Resource Management functions will be managed (Public Sector Master Rationalization Plan, page 23).

Planning for the Budget begins with the development of the medium term framework and the policy targets. This is responsibility of the Ministry of Finance and Planning (MOF) (Section 115 of the Political Constitution) in coordination with the Bank of Jamaica and the Planning Institute of Jamaica.

In accordance to Section 116 of the Political Constitution, the elaboration process of the public budget in Jamaica is as follows:

The Ministry of Finance and Planning (MOF) through its Financial Secretariat (FS) sends, in respect of each financial year, an Appropriation Bill to the House of Representatives containing the estimated aggregate sums which are proposed to be expended (otherwise than by way of statutory expenditure) during that financial year.

Afterwards, the moment for sending it depends if:

• Any monies are expended or are likely to be expended in any financial year on any services which are in excess of the sum provided for that service by the Appropriation law relating to that year; or
• Any monies are expended or are likely to be expended (otherwise than by way of statutory expenditure) in any financial year upon any new service not provided for by the Appropriation law relating to that year.

When there are sums which have not yet included them in any Appropriation Bill, the Minister of Finance and Planning may, at any time before the end of the financial year, introduce into the House of Representatives a Supplementary Appropriation Bill containing, under appropriate heads, the estimated aggregate sums, and shall, as soon as possible after the end of each financial year, introduce them in a final Appropriation Bill for their voting and approval.

The Appropriation Bill is rigorously debated by the Standing Finance Committee of the House of Representatives, which comprises all members of Parliament. After the Bill is passed by the House of Representatives, it is submitted to the Senate. After passage thorough the Senate the Bill is passed into law and becomes the Appropriation Act which gives the government legal authority for the collection of revenues, the raising of loans and the expenditure of funds for the purposes approved by Parliament.