Taking account: New budget law introduces accounting mechanisms to optimise mission-oriented public spending


In order to improve the allocation of public funds the new budget law – Law No. 15 of 2019 – introduces the concept of medium-term budget forecasts. This legislative reform entails the establishment of a new accounting system to be used for the state funding of programmes to meet policy objectives.

The previous system, which was established in January 1959, followed a public accounting system based on that of France. This system was built on a cash basis and used a single-entry book keeping system rather than accrual or double-entry accounting methods. Under this regime, there was no balance sheet by which the government could value its financial situation in a manner that took into account all assets. Instead additional documents were used to account for metrics such as public debt.

France chose to reform this system in August 2001 and to adopt a new general accounting system for government expenditure in 2006. This new system applied the principles of corporate accounting to public expenditure. The 2019 budget law introduces similar reforms to Tunisia, in order to bring public accounting into line with international best practice.

Major Reforms

The 2019 budget law has a broad scope covering issues beyond that of public accounting. The major reforms adopted by the law are:

• Article 18 emphasises that authorised funds are allocated to missions and programmes where each mission is defined by a set of sub-programmes aimed at achieving a public policy objective.

• Article 25 states that the government must keep three accounts: budgetary accounts (currently in force), general accounts and analytical accounts covering the cost of programmes.

• Article 27 introduces general accounting – as used in the corporate business world – with the application of accrual and double-entry accounting.

• Article 28 introduces analytical or cost accounting to gauge the achievements of objectives.

• Article 39 introduces the three-year budget forecast. However, the budget law authorises the collection of resources and sets charges for the first year only. Budget forecasts are prepared within the framework of the national medium-term development plan and are updated on an annual basis.

• Article 45 requires the presentation of detailed tables on revenue and expenditure for each mission and programme.

• Article 46 requires additional documents, namely a report on the link between the budget and the macroeconomic situation and prospects, the medium-term budget forecast, a report on public debt, a report on state-owned firms, among others, including regional impact assessments.

• Article 54 authorises the transfer of allocated funds between programmes within a specified mission of up to 2% of the programme budget.

Meeting Challenges

Conscious of the challenge that adopting business-type accounting would represent for the government, a three-year period was granted for the implementation the legislation. Specifically, the 2019 budget law outlines the mandatory use of general accounts and analytical accounts by 2022. However, improvements in human resources are needed to implement these reforms, considering the transition to double-entry accounting in France required the mobilisation of 8000 agents. In addition, government agents will be required to meet International Public Sector Accounting Standards, while private firms are training their employees to move towards the Conceptual Framework for Financial Reporting. Nevertheless, given the openness of the Tunisian economy, the pace of this process will need to be stepped up.

OBG would like to thank KPMG for its contribution to THE REPORT Tunisia 2019