Oecd Journal on Budgeting, Volume 2012 Supplement 1: Budgeting in Luxembourg: Analysis and recommendations

Foreword
Table of contents
Budgeting in Luxembourg: Analysis and recommendations
	Executive summary
		Aim and content of the report
		Fiscal planning
		Financial reporting, internal audit, and evaluation
		Consistency with the new European requirements
		Steering of executive agencies
	1. Introduction
		1.1. Aim and contents of the report
		1.2. Basic statistics
		1.3. Budget institutions
			1.3.1. Parliament, government and Court of Accounts
				Table 1. Basic economic and political statistics of Luxembourg, 2009
			1.3.2. Components of public finance
			1.3.3. Supervision of budget preparation and execution
			1.3.4. Financial reporting and audit
		1.4. Fiscal policy
			1.4.1. Fiscal policy in the recent past
				Table 2. GDP and government balance
				Figure 1. Gross debt
			1.4.2. Budget 2011
				Figure 2. General government expenditures, revenues and balance
	2. Fiscal planning
		2.1. Baseline estimates
		2.2. Expenditure framework
		2.3. Fiscal rules
		2.4. Spending reviews
			Box 1. Spending reviews in the United Kingdom
			Box 2. Spending reviews in the Netherlands
		2.5. Budgetary discipline
		2.6. Budget classification (programme budgeting)
		2.7. Budget documentation (horizontal and vertical explanation)
		2.8. Special funds
		2.9. Conclusions
	3. Financial reporting, internal audit and evaluation
		3.1. Financial reporting
		3.2. Internal control
		3.3. Internal audit
			Table 3. Visas refused and passer outre in 2001-10
			Table 4. Visas and returned dossiers in 2001-10
			Table 5. Reasons for refusal of visas, 2001-10
			Table 6. Internal audit units within ministries
			Box 3. The European Union and public international financial control (PIFC)
		3.4. Evaluation as a tool of policy development
			Box 4. United Kingdom Treasury: The Green Book – Appraisal and Evaluation in Central Government
		3.5. Conclusions
	4. Consistency with new European requirements
		4.1. Outline of the European Commission package
			Table 7. European Commission legislative package of 29 September 2010
			Figure 3. The European semester
		4.2. Reinforced EU requirements for national fiscal frameworks
			4.2.1. Accounting and statistics issues (Chapter II of the draft Directive)
				Box 5. Arguments for monthly cash-based data
			4.2.2. Macroeconomic and budgetary forecasting (Chapter III of the draft Directive)
			4.2.3. Numerical fiscal rules (Chapter IV of the draft Directive)
				Box 6. EU deficit, debt and expenditure requirements
			4.2.4. Medium-term budgetary framework (Chapter V of the draft Directive)
			4.2.5. Transparency of general government finances and comprehensive scope of budgetary frameworks (Chapter VI of the draft Directive)
		4.3. Budgetary practices in Luxembourg versus the new EU requirements for national fiscal frameworks
			4.3.1. Accounting and statistics issues
			4.3.2. Forecasting practices
			4.3.3. Fiscal rules
			4.3.4. Medium-term budgetary framework (MTBF)
			4.3.5. Transparency of general government finances and comprehensive scope of fiscal frameworks
		4.4. Conclusions
	5. Steering of executive agencies
		5.1. Organisation of government
			5.1.1. The traditional pattern of organisation
			5.1.2. Arm’s-length and independent agencies
		5.2. Separation of budgeting and performance steering
			5.2.1. Problems with output budgeting in agencies
			5.2.2. Recent developments in vanguard countries
			5.2.3. Standards of operational management
		5.3. Steering of agencies in Luxembourg
			5.3.1. The organisation of policy execution in Luxembourg
			5.3.2. Observations and recommendations
		5.4. Productivity cuts
		5.5. Conclusions
	Notes
	References
	Annex A1. Six proposals for reinforced economic governance in the EU
	Annex A2. EU data on the fiscal rules of Luxembourg and the medium-term budgetary framework (MTBF)
		Table A2.1. Fiscal rules in Luxembourg (central government, 2008)
		Figure A2.1. Standardised fiscal rules index (2008)
		Figure A2.2. Medium-term budgetary framework index (median 2008)
		Table A2.2. MTBF index construction for Luxembourg (central government, 2008)