Budget amendment tipped to rev up disbursement

Budget amendment tipped to rev up disbursement

Suttirat: Unsigned contracts cancelled
Suttirat: Unsigned contracts cancelled

The amended Budgetary Procedure Act, which stipulates that the budget of any investment project for which contracts are not signed by the end of the fiscal year will be cancelled automatically, is meant to prompt state agencies to accelerate investment.

Investment project cancellation will affect state agencies' performance because it is an indicator in measuring working efficiency, said Suttirat Rattanachot, director-general of the Comptroller-General's Department.

The new law differs from the current rule by not allowing agencies to carry over their investment budget to the following fiscal year if projects' contracts have not been signed, she said.

The National Legislative Assembly recently passed a bill to amend the Budgetary Procedure Act, and it is now awaiting royal endorsement. The amendment will allow 7,851 local administrative organisations across the nation to become direct budget recipients, while the current act permits only state agencies and enterprises to receive budget allocations.

These organisations now seek budget disbursements through the Local Administration Department.

Ms Suttirat said that if the new law comes into force within this month, the final month of fiscal 2018, public investment projects worth 100 billion baht for which contracts have not been signed will be frozen.

As of Sept 14, investment contracts worth 457 billion baht, representing 69.3% of the annual investment budget, were signed.

State agencies took out 87.9% of the fiscal 2018 budget as of Sept 14. Some 98.5% of the regular budget was doled out, while 52% of the investment budget was drawn down.

The disbursed investment budget was 30% lower than targeted, Ms Suttirat said.

The government has a budget expenditure target for fiscal 2018 of 2.9 trillion baht, of which 577 billion is earmarked for investment. The aim is for 96% of the annual budget and 87% of the investment budget to be drawn down this fiscal year.

Ms Suttirat said the stricter Government Procurement and Supplies Management Act, effective from August last year, could be a contributor to the shortfall in reaching the investment disbursement target. State officials have tightened the disbursement process out of fear of the tougher law.

The act, which replaces the procurement rules of the Office of the Prime Minister Act of 1978, centres on preventing corruption and anti-competitive behaviour, with an increased level of transparency and monitoring. It covers more than 90% of government purchases and construction projects, adding criminal penalties for state officials.

Those criminal penalties have been extended to private-sector players who give bribes.

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