Egypt: Finance Minister, Amr El-Garhy, Announces Regulations of the New State General Budget 2017/18

Intensifying control over public money and rationalizing expenditure. Allocated reserves of the State budget for encountering national necessities and emergencies.

Banning purchases of new automobiles or exceeding limits of financial allocations under whatsoever reasons.

Giving priority to paying off loan interests and installments, & introducing techniques for solving financial entanglements.

Disallowing the use of allocations of the State general budget in financing private insurance funds and end of service bonuses.

Finance Minister, Mr. Amr Al-Garhy, announced that the general regulations of the new State general budget law 2017/18, ratified recently by President Al-Sisi, grant finance minister the right to use general reserves allocated in the State budget in encountering national necessities, emergencies or other obligations and expenses which were not considered in the preparation of the new budget draft, all as per criteria set by the Cabinet of Ministers.

The new budget's regulations also allow finance minister to increase allocations of entities factored in the budget if there are parallel increases in their revenues.

Such revenues may be received from any aids, grants, local or foreign donations, revenues designated for special purposes, special private funds or accounts, or local or external loans, he noted

. Under the new budget's regulations, finance minister shall have the right to settle financial entanglements and debts among different entities, such as the Tax Authority, the State Public Treasury, Customs Authority and National Investment Bank, through funds allocated by the State Public Treasury for these said entities.

Resulting revenues from such settlements can be used consequently to increase capitals of public authorities and state-owned companies, provided that entanglements of Customs and Tax authorities be settled first and that the State budget is not burdened as a result.

No allocations for financing private insurance funds are allowed except within the allowable limits specified in their budgets, added Mr. Al-Garhy, noting that end of service bonuses are not to be paid to employees from budgets of public entities.

In attempt to rationalize expenditure, no public entities are allowed to issue financial decisions decreeing an increase in the systems of incentives or financial privileges beyond applicable laws, however, otherwise subject to a prime ministerial decision, a request from the minister of planning and the approval of the finance minister.

Budget savings of constitutional allocations designated to the health, education, higher education and scientific research sectors shall not be used in non-relevant purposes except after the approval of the finance minister. Similarly, allocations for maintenance, taxes, fees shall be dealt with in the same manner, noted Mr. Al-Garhy.

Total sum of indemnity amounts allocated for exceptional services and incentive bonuses shall not exceed allowable limits, except subject to a presidential decree or to the approval of a president-authorized official and also to the availability of funds in salary and indemnity allocations in the general budget. Finance ministers, notwithstanding, shall have the right to surpass the said incentive limits by not more than 3% of either the actual increase of any above-expected revenues of any entity, or otherwise of budget savings resulting from cutting down public expenses.

Budget allocations for transportation means in the budgets of the administrative body, units of local administration and public service authorities shall not be used in purchasing automobiles under whatsoever reason except after the approval of the minister of planning for less than 4 cylinder engine cars and the approval of the minister of planning for vehicles of greater motor power.

In all cases, priority shall be given for locally produced vehicles. Public entities are not allowed to add automotive purchases in project procurement contracts subject to rules set by a decision issued by the Prime Minister, said Mr. Al- Garhy.

Budget regulations also set rules for aids disbursed by the State to women and children related centers, to social justice related NGOs and to special schools.

Financial disbursements shall be first approved by the relevant minister and monitored continuously by the Central Auditing Organization.

Commenting on new appointments and promotions, Mr. Al Gahry illustrated that the Prime minister is the only authority that shall have the right to approve new appointments among the lowest recruitment job grades, and the right to ratify the financing of senior management job grades.

He added that relevant authorities shall ensure first the availability of job grades and their conformity with the authorized job grade organization structure in the same fiscal year of the appointment or promotion requests.

With respect to national projects, Mr. Al-Garhy noted that in order to accelerate their implementation process, the minister of planning shall have the right to increase investments allocated to quick implemented projects from budget savings of the same entity, other entities or public reserves.

Public entities shall unify technical specs required in the establishment of the different public premises across the nation in order to maintain a common architectural pattern for buildings for each ministry, separately, so as to adjust expenses and achieve the best effective investment results.

Minister of planning shall also have the right to transfer financial allocations among different elements of a given project if there is a price change, or otherwise to speed up the implementation process or to pay custom duties, VAT or interests due on the project before its kickoff.

Moreover, minister of planning is allowed to resort to the same procedure to raise local currency for financing other projects which are scheduled to be carried out under authorized loans, additional facilitations or grants allocated thereto in the current FY budget.

Such funds should be supplied basically out of the savings of the same given project or otherwise out of investment savings of its relevant entity or from the undisbursed general reserves.

Mr. Al-Garhy finally reiterated that under the regulations of the new budget FY 2017/18, public entities are not allowed to surpass their annual financial allocations for whatsoever reasons.

Allocations for tax & custom duties along with loan interests and installments shall not be exploited in non-relevant purposes and shall receive payment priority.