IATI Consultations Archive

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Budgets and tentativeness


Background
The organisation budget element allows publishers to state the country that the budget applies to, but it’s not possible to add any other detail about the budget.
The organisation budget element also does not allow publishers to state how tentative their budget is - only the amount submitted to parliament.
In some countries the amount submitted to parliament and the amount agreed by parliament are sometimes radically different, particularly in the U.S.
It’s important to capture both the amount that is finally agreed as well as the amount that is being considered, and it helps other donors decide which countries or sectors they should allocate their aid to if they are aware of other donors’ plans.

Problems

  1. Organisation budget also does not have a way to state the tentativeness of the budget.

Proposal
    Add a new attribute, “type”, to organisation budget elements, with the following codelist (might need to think about this):

  • Agency submitted to budget office
  • Budget office submitted to parliament
  • Parliament approved budget
  • Agency firm budget
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23 Comments

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    Bill Anderson

    We need to run this past the secretariat for more consideration, but it does have merit. Approved to enter the first decimal upgrade process.

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    Bill Anderson

    Opinion of the TAG Secretariat is that further work needs to be done engaging with possible users of this modification (particularly USA) - and so it should NOT be included in this first upgrade.

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    Amy Lewis

    I agree that it would be useful to be able to describe the tentativeness of budget data according to an agreed upon standard.  Linking the level of certainty of a particular budget directly with the actual value is also a step towards ensuring the data are used in a way that makes sense.

    I've been associating this IATI data element with the reporting we already do for the OECD-DAC annual Forward Spending Survey (although the survey is limited to Country Programmable Aid and for IATI we would report on a broader set of operations). I think it is worth noting the vocabulary for this topic that was proposed at the DAC Working Party on Development Finance Statistics in June:

    • F1 - Provisional actual spending (provisional data for the previous year)
    • F2 - High certainty - implementation phase (future spending data on existing commitments)
    • F3 - Reduced certainty - design phase (future spending data of activities in preparatory phase (project design and financing commitments not yet finalized and approved))
    • F4 - Low certainty - spending envelope (remaining country envelopes (planned spending is based on remaining "spending envelopes" for a country/region and/or sector/purpose))
  • 0
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    David Carpenter

    This was considered in our first decimal upgrade, but rejected at that point. 

    However, this works well in the organisation file and should align with the forward spending data.

    Our ambition is that this should occur in the 1.04 upgrade.

  • 0
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    Mark Brough

    Re-propose for 1.04.

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    David Carpenter

    Unfortunately, although we continue to see the merit in this proposal, we feel we have other priorities to meet, especially around the location elements of the standard, so this is to be deferred to 1.05. 

    There is still work to be done on this however, so if you can help with that then please let us know.

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    Mark Brough

    Re-propose for both the 2.01 integer upgrade and for the 1.05 decimal upgrade (yes, happy to help).

    This is problematic for organisations that can provide a (very tentative) out-year budget prediction / indicative figure, but that only want to publish those figures if they can state it alongside significant caveats. For example, the United States, and several multilateral organisations.

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    David Carpenter

    The 1.05 upgrade is flagged as a 'codelist only' upgrade, so this may not be suitable. However I shall move it to that forum for consideration anyway.

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    Bill Anderson

    I think this is a serious omission from the 2.01 proposal. 

    I think there is consensus that there is a need for an attribute that expresses the status of the budget data being reported.

    I don't think there is consensus on the level of detail that is required in explaining this status. I think we are too far into the 2.01 process to initiate this discussion, so my view is that unfortunately this will now have to wait until 2.02.

  • 0
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    David Carpenter

    This topic has now returned to the Modifications, Additions, Improvements forum for further consideration in future.

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    IATI Tech Team

    This item has been moved to the '2.02 Decimal Upgrade Proposals' forum for inclusion the upcoming decimal upgrade.

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    Bill Anderson

    I am in favour of adding a "budget-status" attribute to the budget element in the Activity Standard and the three budget elements in the Organisation Standard. 

    In my opinion the associated codelist should only contain two values: "Committed" and "Indicative". Any more detailed breakdown is likely to vary greatly between institutions.

    Guidance for the budget element should be explicit that where the budget-status is not specified the budget is assumed to be indicative and non-binding.

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    Yohanna Loucheur

    I don't see any issue with the proposal regarding the Organisation Standard, though I agree that we shouldn't have too many statuses - 2 seems enough.

    For the Activity Standard, however, this proposal seems contradictory with existing elements. 

    The Budget element contains the activity budget per quarter or year. The total value of the Budget is to be reported as a Transaction, type Commitment, which is defined as a firm written obligation. Therefore, the Budget element contains the annual or quarterly break-down of a firm written obligation - which means it cannot be indicative.  As such, the proposed guidance (if status is not specified) is erroneous; rather, is status is not specified the budget is assume to be committed.

    If we add "budget-status" to the Budget element of the Activity standard, adjustments will be required to the relationaship between Budget and Transaction-Commitment.

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    Herman van Loon
    Yohanna, in our current situation, activity budgets are internal decisions for the allocation of funds for an activity. Only after the approval of the activity budget, the legally binding commitments with suppliers are made. So in our case, activity budgets are by definition indicative. We therefore publish both the activity budget as well as the commitments. Their totals can differ because the contracting proces can lag behind the allocation of the activity budget. In the end not the whole activity budget needs to be used. So the addition of this budget status element seems to have added value.
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    Yohanna Loucheur

    This is interesting as it points to an area where some publishers' practice does not follow the standard's "soft rules" (as opposed to hard rules where the data would be flagged as not compliant), and where it's difficult for users to know that the data doesn't conform to the standard.

    It may be that there's value in adding this status element - though it may be useful to go back to why the rules were set the way they were originally (ie why the standard required firm obligations to be published, as opposed to indicative ones), just in case there were valid reasons to do so. 

    My point was that we need to be aware of the current linkages between the Budget and Transaction elements, and not discuss Budget in isolation.

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    IATI Tech Team

    This proposal has been discussed amongst the IATI Technical Team following the end of the initial suggestion phase of the v2.02 upgrade.

    The IATI Technical Team supports the principal of this proposal although there is work to be done to clarify if it is the standard, or the guidance (or both) that require modification.  Further discussion is invited.

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    IATI Tech Team

    Please see below for the technical implementation that is suggested in the Version 2.02 - Formal Proposal:

    New attribute: total-budget/@status

    • Add new attribute to the organisation standard: status

      • Example

        • Current
          <total-budget>
          ...
          </total-budget>

        • Proposed
          <total-budget status="1">
          ...
          </total-budget>

    • Append to definition:
      ‘The status explains whether the budget being reported is indicative or has been formally committed. The value should appear within the BudgetStatus codelist. If the @status attribute is not present, the budget is assumed to be indicative.’

     

    New attribute: recipient-org-budget/@status

    • Add new attribute to the organisation standard: status

      • Example

        • Current
          <reporting-org-budget>
          ...
          </reporting-org-budget>

        • Proposed
          <reporting-org-budget status="1">
          ...
          </reporting-org-budget>

    • Append to definition:
      ‘The status explains whether the budget being reported is indicative or has been formally committed. The value should appear within the BudgetStatus codelist. If the @status attribute is not present, the budget is assumed to be indicative.’

     

    New attribute: recipient-country-budget/@status

    • Add new attribute to the organisation standard: status

      • Example

        • Current
          <recipient-country-budget>
          ...
          </recipient-country-budget>

        • Proposed
          <recipient-country-budget status="1">
          ...
          </recipient-country-budget>

    • Append to definition:
      ‘The status explains whether the budget being reported is indicative or has been formally committed. The value should appear within the BudgetStatus codelist. If the @status attribute is not present, the budget is assumed to be indicative..’

     

    New attribute: budget/@status

    • Add new attribute to the activity standard: status

      • Example

        • Current
          <budget type="1">
          ...
          </budget>

        • Proposed
          <budget type="1" status="1">
          ...
          </budget>

    • Add definition:
      ‘The status explains whether the budget being reported is indicative or has been formally committed. The value should appear within the BudgetStatus codelist. If the @status attribute is not present, the budget is assumed to be indicative

    New codelist: Budget Status [ADDED 15-Oct-2015 as it was erroneously omitted from the original proposal]

    • A new embedded codelist will be added: ‘BudgetStatus’, with values

      • Code: 1
        Name: Indicative

      • Code: 2
        Name: Committed
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    IATI Tech Team

    This proposal has been added as a GitHub issue, for inclusion in the version 2.02 development branch of the appropriate code repository:  

  • 0
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    IATI Tech Team

    Please note the technical plan for this proposal has been modified, as the addition of a new codelist (Budget Status) was erroneously omitted from the original post.

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    Yohanna Loucheur

    The proposal above does not seem to address the issue I raised on Sept 22, which is the relationship that exists in the current standard between the Budget element and the Transaction-Commitment element.  How will this relationship be modified?

    Also, to minimize the impact of the change on publishers, we would prefer that the status quo be assumed. In other words, if the @status attribute is not present, the budget is assumed to be committed - as is currently the case.  This way, those publishers who are already implementing the standard and do not need the new attribute do not have to change their system.

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    IATI Tech Team

    From the above it is can be seen that in some places the assumption that the commitment is legally binding isn't true. In the Netherlands for example, unlike in Canada, the budget starts out more indicative. You could also have a commitment that is legally binding, the budget could be revised and altered without violating the original commitment i.e going through several stages of planning before it’s made concrete.

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    Yohanna Loucheur

    The IATI standard defines commitment as "A firm, written obligation from a donor or provider to provide a specified amount of funds, under particular terms and conditions, for specific purposes, for the benefit of the recipient." http://iatistandard.org/201/codelists/TransactionType/

    This definition is in line with the DAC definition of what a commitment is.  The word "commitment" never applies to a tentative budget.

    Canada, like the Netherlands, has various stages of planning and approvals. We're all free to call these tentative budgets the way we want, internally.  However, within the IATI standard, we can't use the same word to mean different things. That's the whole point of a standard.

    Finally, as my main point seems to be missed in all this, here is the current definition of the Budget element:

    "The value of the aid activity’s budget for each financial quarter or year over the lifetime of the activity. The total budget for an activity should be reported as a commitment in the transaction element. The purpose of this element is to provide predictability for recipient planning on an annual basis."  http://iatistandard.org/201/activity-standard/iati-activities/iati-activity/budget/

    I hope this helps make the issue clearer. 

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    Yohanna Loucheur

    The IATI standard defines commitment as "A firm, written obligation from a donor or provider to provide a specified amount of funds, under particular terms and conditions, for specific purposes, for the benefit of the recipient." http://iatistandard.org/201/codelists/TransactionType/

    This definition is in line with the DAC definition of what a commitment is.  There is no such thing as a "tentative commitment".

    Canada, like the Netherlands, has various stages of planning and approvals. We're all free to call these tentative budgets the way we want, internally.  However, within the IATI standard, we can't use the same word to mean different things. That's the whole point of a standard.

    Finally, as my main point seems to be missed in all this, here is the current definition of the Budget element:

    "The value of the aid activity’s budget for each financial quarter or year over the lifetime of the activity. The total budget for an activity should be reported as a commitment in the transaction element. The purpose of this element is to provide predictability for recipient planning on an annual basis."  http://iatistandard.org/201/activity-standard/iati-activities/iati-activity/budget/

    I hope this helps make the issue clearer. 

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