by ALBERT BRANDFORD

FOR THE FIRST TIME in Barbados' history, Government will be required by the Constitution to table an annual budget in Parliament.

This will result from an amendment to the Constitution passed by the House of Assembly yesterday – which will be debated in the Senate today – accompanied by a new Financial Management and Audit Act to repeal the 1964 statute.

The two measures were piloted by Minister of State in the Ministry of Finance, Clyde Mascoll, who said they were part of an ongoing reform of the financial system by Government which has embarked on a reform of the commercial banking system and recently introduced the Financial Services Commission to look at the non-banking institutions.

"These bills are an attempt to bring Government in line with the current level of thinking in the financial system," Mascoll said.

"Government is a major player in the financial system and therefore to the extent that the current accounting system that is cash-based is out of synch, there is now an attempt to move towards an accrual system of accounting."

Under current law, the Minister of Finance is only required to present the annual Estimates of Expenditure and Revenue, which form the Schedule of the Appropriation Bill.

A component

The new Financial Management and Audit Bill, which takes effect from April 1, 2007, includes the expression "annual budget" of which, Mascoll said, the Estimates would only be a "component".

"Budget" also includes projected balance sheets and cash flow.

It will bring closer to reality the Owen Arthur Administration's stated intention of "integrating" the Budget, Estimates and annual Appropriation Bill instead of having three separate debates in Parliament.

In addition to the transition from cash-based to accrual-based accounting, the proposed legislation was aimed, Mascoll said, at significantly improved data on which to undertake economic planning and decision-making; strengthening budget development and management, particularly through its recognition and control of Government's liabilities and assets; greater accountability and transparency; fuller disclosure of Government's financial activities; and a greater degree of financial independence for the Office of the Auditor-General.