## _cr06393 ## Source details **Canonical URL:** [_cr06393](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr06393.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr06393.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr06393.pdf.json) --- ### Overall assessment - Albania participated early in the GDDS; metadata posted on the DSBB on May 22, 2000. - Meets all GDDS recommendations for coverage, periodicity, and timeliness except: - Timeliness of national accounts statistics. - Timeliness of the producer price index (PPI). - CPI, general and central government operations, analytical accounts of the central bank, and balance of payments meet SDDS requirements. - March 2006 ROSC reassessment is based on the DQAF (July 2003). - High-level conclusions: - Significant progress in adopting international statistical standards despite acute resource constraints. - INSTAT, MoF, and BoA have used substantial technical assistance and staff training from donors, including the IMF. - Agencies committed to upgrading statistics to support SDDS subscription, an inflation targeting regime, and EU accession. - Macroeconomic statistics adequate for surveillance in several areas; exceptions: national accounts (initiated 2000) and balance of payments to a certain extent. ### Prerequisites of quality and assurances of integrity - Institutional responsibilities clearly defined for INSTAT, MoF, and BoA; agencies consult users and participate in statistical meetings. - INSTAT (Law On Official Statistics No. 9180 of 2004): - Strengthens INSTAT’s independence; Statistics Council role redefined (Government Decision No. 704, November 11, 2005). - Confidentiality protected in law and practice; staff governed by Civil Servant Law and an internal Code of Conduct. - Major resource shortfalls: staff, facilities, IT, and financing are grossly inadequate. - NAS staffing: 8 staff (need at least 12 per Twinning Project); 155 total INSTAT employees (central + regional). - Ministry of Finance (OBL No. 8379 of July 29, 1998): - Macroeconomic Department designated to compile GFS; resources inadequate—MD comprises seven staff, only one charged with compiling GFS. - Oracle-based AMoFTS implementation in testing (November–December 2006), planned go-live January 2007. - Bank of Albania (BoA): - By tradition compiles monetary statistics; Statistics Department established November 2005. - Legal ambiguity: Article 58 (2) allows disclosure of individual reporters’ data to tax authorities—should be reviewed. - Statistical mandate enforcement constrained (authority only over banks; nonbank reporters not subject to fines). - Staff adequate for current monetary statistics but insufficient for expanded financial statistics and balance of payments; IT and integrated database support needed. - Cross-cutting resource recommendations: - Allocate additional staff and IT resources across agencies. - Upgrade INSTAT staff status and office facilities; continue staff training. - Increase financial resources to improve source data—prioritize capture of the nonobserved economy and remittances. - Sign and implement MOUs on data sharing among agencies. - Implement electronic (online) reporting for banks and a database-driven compilation system. ### Methodological soundness — summary by dataset - National Accounts - Concepts: Conform with 1993 SNA. - Scope: NAS produces (1) annual value added and GDP at current and constant prices and (2) annual expenditures of GDP at current and constant prices; income, capital, and rest-of-world accounts not regularly produced. - Classification: NACE Rev.1, CPA, COICOP, COFOG in use. - Basis for recording: Market prices used; nondeductible VAT excluded from intermediate consumption (not SNA-consistent); government accounts on cash basis. - Key methodological issues: weak source data (SBS, HBS limited), inadequate coverage of the nonobserved economy, limited cross-checks, statistical techniques for expenditure components rely on weak assumptions. - Timeliness: Preliminary GDP released 11 M after reference year (GDDS recommendation 9 M). - Recommendations: expand surveys (labor force, country-wide HBS), include nondeductible VAT in intermediate consumption valuation, expand annual accounts to income/capital/ROW, improve cross-checks (construction estimates), apply revision policy consistently, and improve timeliness via website dissemination. - Consumer Price Index (CPI) - Concepts and classification consistent with 1993 SNA and CPI Manual; COICOP used. - Weights derived from 2000 HBS covering urban households only (45 percent of all households). - Compilation: monthly; published within 9 days of reference period end. - Source/data quality issues: 2000 weights outdated; no replacement of nonresponding HBS households; enumerator checks insufficient. - Recommendations: update weights after HBS 2006, replace nonrespondents with similar households in HBS, introduce enumerator checks, update methodological guide and publish in Albanian and English. - Producer Price Index (PPI) - Follows 1993 SNA and Producer Price Manual; covers mining, manufacturing, energy, water supply; industrial classification NACE Rev. 1 (4-digit). - Weights from 1998 Structural Business Survey; base year 1998 needs updating (planned rebase to 2005). - Price collection nominally monthly but actually collected once a quarter for each month (due to cost) — publication lag: monthly figures published within nine weeks of end of quarter; first month of quarter published more than four months after reference period (GDDS timeliness not met). - Practices: missing prices imputed using average price (not monthly change); enterprises exiting not replaced promptly; PPI not validated against other sources (CPI). - Recommendations: rebase to 2005; move to chain-index; implement monthly collection and monthly publication; introduce enumerator checks; replace exiting enterprises; validate PPI with other price data; update methodological guide in Albanian and English. - Government Finance Statistics (GFS) - Concepts largely GFSM 1986-based; formal migration path to GFSM 2001 not articulated but accrual-compatible infrastructure under development (AMoFTS). - Scope: general government coverage includes ~1,520 budgetary central govt institutions, ~2,160 local govt units, and two extrabudgetary funds. - Basis for recording: cash basis; debt at face value; foreign currency converted at BoA official daily rates. - Sources: Treasury, DMFAS, project implementation units, extrabudgetary funds; gaps remain for donor-financed projects that do not pass through Treasury. - Timeliness and periodicity: exceed GDDS recommendations. - Recommendations: accelerate migration to GFSM 2001 reporting format (monthly cash flow, quarterly government ops, quarterly public debt), improve coverage of donor projects, implement national chart of accounts aligned with GFSM 2001 (7 digits planned for 2007), publicize revisions and revised data. - Monetary Statistics - Broadly consistent with MFSM; depository corporations survey covers BoA, 17 commercial banks, and 130 SLAs (elsewhere noted 133 SLAs). - Accounts: BoA and commercial banks on accrual; SLAs largely on cash basis (except loans) — recommend adopting accrual for SLAs. - Valuation: market valuation broadly applied; exceptions: holdings of nontradable long-term securities recorded at book value. - Source data timeliness: central bank analytical accounts meet SDDS; broad money and credit aggregates timeliness vary (e.g., broad money available ~6 weeks). - Key operational plans: SARS database/SARS redesign, electronic reporting implementation planned in 2007; SD structure review and expansion to include flows and IIP compilation (by first quarter 2007). - Recommendations: strengthen BoA law on confidentiality; implement electronic reporting and database-driven compilation; minimize errors in bank reporting; carry forward prior-month balances for late reporters and mark as provisional. - Balance of Payments (BoP) - Concepts follow BPM5; scope and classification align with BPM5. - Basis for recording: interest on cash basis; other transactions accrual. - Source data issues: many items based on infrequent/incomplete surveys (freight, insurance, smuggling adjustments; travelers’ expenditures; remittances; direct and portfolio investment; trade credit); grants to regional/local governments underreported. - Compilation system: manual Excel spreadsheets prone to errors; remittances estimated from subset of errors and omissions with a 10/90 split between compensation of employees and workers’ remittances based on a 1999 survey. - Timeliness: quarterly BoP meets GDDS and SDDS requirements (quarterly releases within 65–70 days). - Recommendations: implement database-driven compilation and electronic reporting (IT support), conduct quarterly remittance surveys from 2007, reestimate remittance split, tighten quality control and cross-checks, strengthen BoA law to impose sanctions on nonbank reporters and prohibit provision of individual reporters’ data to tax authorities, obtain public debt service schedule from MoF and record interest on accrual basis, require quarterly reporting by significant firms for direct and portfolio investment items, survey real estate/construction financed by unidentified FX inflows. ### Accuracy and reliability — cross-dataset issues - Source data shortcomings across datasets except monetary statistics: national accounts and BoP rely on weak administrative records and surveys. - CPI and PPI source data assessments need strengthening; unit value indices (UVI) for trade are of poor quality. - Deficiencies in statistical techniques observed in all datasets except GFS. - National accounts accuracy undermined by weak assumptions and limited cross-checks; doubts on plausibility of November 2005 revised national accounts data. - Construction sector nonobserved economy estimates rely too heavily on narrow labor-input data without sufficient cross-checks. - Validation practices: - CPI, GFS, and monetary statistics: sound assessment and validation procedures. - PPI, national accounts, and BoP: validation inadequate; manual compilation errors in BoP have been overlooked. - Revision studies: GFS and monetary statistics have routine revision practices; national accounts revision studies are ad hoc—recommend regular revision studies and consistent application of revision policy. ### Serviceability and accessibility - Periodicity: generally meets GDDS recommendations except national accounts and PPI. - Timeliness highlights: - National Accounts: Albania timeliness 11 M (GDDS periodicity: 10–14 months). - CPI: Albania timeliness 9 days (GDDS periodicity: M). - PPI (collected quarterly): Albania timeliness 4 M (GDDS periodicity: M). - Balance of payments: Albania timeliness 10 weeks (GDDS periodicity: Q). - Consistency: favorable across datasets except national accounts (expenditure approach not independently estimated; production approach dominates). - Accessibility: - All datasets except national accounts are readily accessible (user survey confirmed). - Metadata for CPI and PPI outdated and not translated into Albanian; methodological guides need updating and Albanian/English publication. - Users not clearly informed where/how to access latest national accounts data—recommend identifying dedicated page/publication and using INSTAT website for first dissemination. - Assistance: contact points provided across agencies, though recommendation to include named individual contact in publications. ### DQAF dimension ratings — selected entries (symbols from source) - Dimension 0. Prerequisites of quality: mixed (examples) - 0.1 Legal and institutional environment: National Accounts LO; CPI O; PPI O; GFS O; Monetary LO; Balance of Payments LO - 0.2 Resources: National Accounts LNO; CPI LNO; PPI LNO; GFS LNO; Monetary LO; Balance of Payments LNO - Dimension 2. Methodological soundness (selected) - 2.1 Concepts and definitions: mostly O; GFS LO - 2.2 Scope: National Accounts LNO; CPI LO; others O - 2.4 Basis for recording: National Accounts LO; CPI LO; Monetary LO; Balance of Payments LO - Dimension 3. Accuracy and reliability (selected) - 3.1 Source data: National Accounts LNO; CPI LO; PPI LO; GFS LO; Monetary O; Balance of Payments LNO - 3.3 Statistical techniques: National Accounts LNO; CPI LO; PPI LO; GFS O; Monetary LO; Balance of Payments LO - Dimension 4. Serviceability (selected) - 4.1 Periodicity and timeliness: National Accounts LO; CPI O; PPI LO; GFS O; Monetary O; Balance of Payments O - 4.3 Revision policy and practice: National Accounts LO; CPI O; PPI O; GFS LO; Monetary O; Balance of Payments O - Dimension 5. Accessibility (selected) - 5.1 Data accessibility: National Accounts LO; CPI O; PPI O; GFS O; Monetary O; Balance of Payments O - 5.2 Metadata accessibility: National Accounts O; CPI LO; PPI LO; GFS O; Monetary O; Balance of Payments O ### Principal recommendations (high-level extracted) - Cross-cutting: - Increase financing, staffing, and IT resources at INSTAT, MoF, and BoA. - Implement MOUs among data-producing agencies; improve data sharing timetables and responsibilities. - Implement electronic reporting by banks and a database-driven compilation system for monetary and BoP statistics. - Strengthen legal frameworks to ensure confidentiality and to provide enforcement/sanctions (BoA statute, Article 58 (2) clarification). - National Accounts: - Expand HBS coverage (country-wide) and conduct labor force survey (INSTAT planned labor force survey beginning 2007; country-wide HBS started October 1, 2007). - Broaden national accounts to income, capital, and rest-of-world accounts; include nondeductible VAT in intermediate consumption valuation. - Improve methods for nonobserved economy and construction estimates; use more cross-checks (LSMS, SBS, commodity flow). - Apply revision policy consistently; identify data status on all releases; improve timeliness via web dissemination. - CPI/PPI: - Update CPI weights (CPI weight update pending HBS 2006 results). - Rebase PPI to 2005 and transition to chain-index methodology; publish PPI monthly (medium term, requires monthly collection). - Introduce enumerator price checks; replace nonrespondents/enterprises that exit; impute missing prices using change in average price for related products (PPI—already applied); validate PPI against other price data. - Update methodological guides and publish them in Albanian and English. - GFS: - Accelerate migration to GFSM 2001 reporting; implement AMoFTS (testing Nov–Dec 2006; go-live Jan 2007). - Improve coverage of donor-financed projects; implement national chart of accounts aligned with GFSM 2001 (7-digit implementation planned for 2007). - Publicize revisions and revised data via Fiscal Statistics of Government and MoF database. - Monetary statistics: - Implement electronic reporting and SARS/DB improvements (BoA strategy plan: medium-term with duty defined for 2007). - Adopt accrual accounting for SLAs where material; revalue long-term securities using estimated fair value. - Reduce reporting lag: 20 days → 15 days → planned 10 days (from March 2007). - Implement measures to minimize errors in commercial banks’ reporting; when delays occur, carry forward prior-month balances and denote as provisional. - Balance of Payments: - Conduct more frequent remittance surveys (quarterly from 2007), freight and tourist surveys; reestimate remittance split between compensation of employees and workers’ remittances (replace 10/90 split based on 1999 survey). - Tighten data quality control and cross-checks; implement revised insurance reporting form (already implemented). - Require quarterly reporting by significant firms for direct/portfolio investment and trade credit; survey construction/real estate financed by unidentified FX inflows. - Implement automated BoP database and, as interim, link existing spreadsheets by formulas. ### Selected operational timelines and key numeric items (preserve exact figures) - INSTAT staffing: 155 employees central + regional; National Accounts Section (NAS) had 8 staff (need 12). - National accounts timeliness: preliminary GDP released 11 M after reference year (GDDS recommendation 9 M); new INSTAT schedule: first release within 11 months, second within 17 months, third within 23 months. - CPI publication lag: published within 9 days of reference period end. - PPI collection/publication: collected quarterly for each month; monthly figures published within nine weeks of the end of the quarter; index for the first month of each quarter not published until >4 months after reference period. - Monetary sector coverage: BoA, 17 commercial banks, and 130 SLAs (also cited as 133 SLAs in other sections); SLAs assets represent 0.4 percent of total assets of Other Depository Corporations. - GFS institutional counts: budgetary central government ~1,520 individual budget institutions; local government ~2,160 units. - AMoFTS implementation: testing/training November–December 2006; planned go-live beginning January 2007. - BoA reporting lag reductions: 20 days → 15 days → planned 10 days (from March 2007). - Planned surveys/timelines: - INSTAT labour force survey beginning in 2007; country-wide HBS started October 1, 2007. - BoA to conduct quarterly remittance household surveys starting 2007. - BoA Legal Department drafting a new Bank law expected to pass by end 2009. *Summary extracted from DQAF July 2003—Summary Results and related DQAF sections for Albania as presented in the source content.* ### 1. DQAF July 2003—Summary Results................................................................................8 ### DQAF July 2003—Summary Results ### Overall assessment - Albania was among the first countries to participate in the GDDS; metadata were posted on the DSBB on May 22, 2000. - Albania meets all GDDS recommendations for coverage, periodicity, and timeliness except for: - Timeliness of national accounts statistics. - Timeliness of the producer price index (PPI). - In CPI, general and central government operations, analytical accounts of the central bank, and balance of payments, coverage, periodicity, and timeliness have reached SDDS requirements. - The March 2006 ROSC is a reassessment based on the DQAF (July 2003). - Main high-level conclusions: - Significant progress in adopting international statistical standards despite acute resource constraints. - INSTAT, MoF, and BoA have used substantial technical assistance and staff training from donors, including the IMF. - Agencies show strong commitment to upgrading statistics to support: subscription to the SDDS; adoption of an inflation targeting regime; and EU accession aspirations. - Macroeconomic statistics are adequate for surveillance in several areas; exceptions are national accounts (initiated only in 2000) and balance of payments to a certain extent. ### Prerequisites of quality and assurances of integrity - Institutional responsibilities are clearly defined for INSTAT, MoF, and BoA. - Agencies consult with data users and participate in statistical meetings and seminars. - High levels of data quality awareness, professionalism, transparency, and ethical standards observed. - Key legal and resource points: - INSTAT: Law On Official Statistics adopted in 2004 strengthens INSTAT’s independence and contains key elements of the UN Fundamental Principles of Official Statistics. Statistics Council role redefined; selection provisions in Council of Ministers decisions of 2005 and 2003. Memorandums of understanding planned to address data sharing/coordination. Confidentiality protected in law and practice. Staff, facilities, IT, and financing are grossly inadequate. - MoF: Organic Budget Law and Guidelines on State Budget Performance mandate MoF responsibility for GFS. Resources inadequate to meet current and planned statistical programs. Internal reorganization in November 2005 should be monitored for outputs and efficiencies. - BoA: By tradition and supervisory authority, BoA compiles monetary statistics; BoA law does not explicitly spell out this statistical mandate. BoA has statutory mandate for balance of payments but enforcement constrained (authority only over banks; nonbank reporters not subject to fines). Confidentiality rigorously observed through law, Code of Ethics, and Regulation for Transparency and Confidentiality. Article 58 (2) of BoA law—allowing disclosure of individual reporters’ data to tax authorities—should be reviewed and clarified. Staff insufficient for balance of payments; monetary statistics staff adequate for current responsibilities but insufficient for planned financial statistics; additional IT and integrated database support needed. ### Methodological soundness - Albanian macroeconomic statistics follow internationally accepted standards and guidelines on concepts and definitions. - No formal migration path to GFSM 2001 has been articulated, but coordinated technical actions at the MoF (including accrual-compatible database infrastructure) are well advanced. - Improvements needed in: - Expanding scope of national accounts statistics. - Expanding scope of CPI. - Classification and sectorization are adequate across datasets. - Basis for recording: - Appropriate for PPI and GFS relative to GFSM 1986. - International standards not fully applied in other datasets. ### Accuracy and reliability - Source data shortcomings are present across datasets except monetary statistics; national accounts and balance of payments rely on weak administrative records and surveys. - CPI and PPI source data assessments could be strengthened. - Deficiencies in statistical techniques observed in all datasets except GFS. - National accounts accuracy undermined by weak assumptions and limited cross-checks; doubts cast on plausibility of revised national accounts data released in November 2005. - Estimation of construction activity for the nonobserved economy relies too heavily on narrow labor input data without sufficient cross-checks. - National accounts and PPI are not validated against other statistics; balance of payments validation overlooked errors. - CPI, GFS, and monetary statistics have sound assessment and validation procedures. - Revision studies for national accounts should be developed further. ### Serviceability - Periodicity and timeliness meet GDDS recommendations except for national accounts and PPI. - Consistency is favorable across datasets except national accounts, where the absence of independent expenditure approach estimates prevents consistency checks with production approach estimates. - Revision policy and practice: - GFS revision policy and practice information should be made public. - National accounts revision policy should be consistently applied and status of data clearly indicated on all releases. ### Accessibility - All datasets except national accounts are readily accessible (confirmed by a user survey). - Metadata accessibility for CPI and PPI could be enhanced by disseminating updated methodological guides in Albanian and English. - Users are not clearly informed where and how to access the latest national accounts data. ### Assessment by dataset and DQAF dimensions (summary of Table 1 ratings) Key to symbols: O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; NA = Not Applicable - Dimension 0. Prerequisites of quality - 0.1 Legal and institutional environment: National Accounts LO; CPI O; PPI O; GFS O; Monetary LO; Balance of Payments LO - 0.2 Resources: National Accounts LNO; CPI LNO; PPI LNO; GFS LNO; Monetary LO; Balance of Payments LNO - 0.3 Relevance: All datasets O - 0.4 Other quality management: All datasets O - Dimension 1. Assurances of integrity - 1.1 Professionalism: All datasets O - 1.2 Transparency: All datasets O - 1.3 Ethical standards: All datasets O - Dimension 2. Methodological soundness - 2.1 Concepts and definitions: National Accounts O; CPI O; PPI O; GFS LO; Monetary O; Balance of Payments O - 2.2 Scope: National Accounts LNO; CPI LO; PPI O; GFS O; Monetary O; Balance of Payments O - 2.3 Classification/sectorization: All datasets O - 2.4 Basis for recording: National Accounts LO; CPI LO; PPI O; GFS O; Monetary LO; Balance of Payments LO - Dimension 3. Accuracy and reliability - 3.1 Source data: National Accounts LNO; CPI LO; PPI LO; GFS LO; Monetary O; Balance of Payments LNO - 3.2 Assessment of source data: National Accounts O; CPI LO; PPI LO; GFS O; Monetary LO; Balance of Payments O - 3.3 Statistical techniques: National Accounts LNO; CPI LO; PPI LO; GFS O; Monetary LO; Balance of Payments LO - 3.4 Assessment and validation of intermediate data and outputs: National Accounts LO; CPI O; PPI LO; GFS O; Monetary O; Balance of Payments LO - 3.5 Revision studies: National Accounts LO; CPI O; PPI O; GFS O; Monetary O; Balance of Payments O - Dimension 4. Serviceability - 4.1 Periodicity and timeliness: National Accounts LO; CPI O; PPI LO; GFS O; Monetary O; Balance of Payments O - 4.2 Consistency: National Accounts LO; CPI O; PPI O; GFS O; Monetary O; Balance of Payments O - 4.3 Revision policy and practice: National Accounts LO; CPI O; PPI O; GFS LO; Monetary O; Balance of Payments O - Dimension 5. Accessibility - 5.1 Data accessibility: National Accounts LO; CPI O; PPI O; GFS O; Monetary O; Balance of Payments O - 5.2 Metadata accessibility: National Accounts O; CPI LO; PPI LO; GFS O; Monetary O; Balance of Payments O - 5.3 Assistance to users: National Accounts LO; CPI O; PPI O; GFS O; Monetary O; Balance of Payments O ### Principal recommendations (high-level extracted implications) - Strengthen financing, staffing, and IT resources at INSTAT to sustain reliable national accounts compilation and surveys. - Advance and formalize a migration path to GFSM 2001 and complete accrual-compatible database infrastructure at MoF. - Review and clarify Article 58 (2) of BoA law to remove ambiguity about disclosure to tax authorities and reinforce confidentiality assurances. - Enhance source data collection and cross-checks for national accounts and balance of payments; broaden validation practices for PPI and national accounts. - Make revision policies and practices publicly available, and consistently indicate data status on all national accounts releases. - Disseminate updated methodological guides for CPI and PPI in Albanian and English to improve metadata accessibility. - Monitor the MoF internal reorganization (November 2005) to ensure expected statistical outputs and efficiencies are realized. *Summary extracted from DQAF July 2003—Summary Results (Albania) as presented in the source content.* ### 0. Prerequisites of quality ### 0. Prerequisites of quality ### Assurances of integrity — INSTAT - Legal and institutional environment - Law On Official Statistics (Law), No. 9180 of 2004, gives INSTAT clear responsibility for the collection, compilation, and dissemination of official statistics. - The Law states that respondents’ data should be kept confidential. - The Law establishes the responsibilities of respondents to submit data to INSTAT. - Resources - INSTAT does not have the necessary resources to fully carry out its work program. - Too few staff are assigned to national accounts, and the CPI and PPI have only one professional each working on them. - Staff are well qualified, but turnover is a problem because compensation is at the lowest level of the civil service salary structure. - Computing facilities are adequate, but INSTAT has staffing constraints and technical difficulties in loading data products, particularly for national accounts, onto its website. - Staff also have to cope with restricted office space. - The Law requires that official statistics be produced in a cost-effective manner. - Staff are subject to a formal annual performance review. - INSTAT is active in seeking outside expert assistance to improve its methodologies and compilation systems. - Relevance - INSTAT monitors users’ needs through seminars and surveys. - Staff participate in international meetings which promote awareness of users’ needs. - Other quality management - INSTAT has a clear mission and is sensitive to all aspects of quality. - The Statistics Council, comprised of public and private sector representatives, supervises the operations of INSTAT. - Staff undertake regular assessments of the work program. - Professionalism - Professionalism and impartiality of official statistics are stipulated in the Law; it establishes that there should be no interference from the government or any other body. - The Law describes the roles and responsibilities of the Statistics Council and the Director General of INSTAT. - The Statistics Council can propose the appointment and dismissal of the Director General, subject to approval by the Prime Minister and the Council of Ministers. - Staff are subject to the rules and regulations in the Law on the Status of Civil Servants. - Hiring is through open competition and is based on qualifications. - Choices of data, techniques, and dissemination are solely based on statistical considerations. - Government has no internal access to the statistics prior to their release. - Staff are entitled to respond to erroneous interpretation and misuse of statistics. - INSTAT organizes seminars and briefings to aid understanding of the statistics by data users. - Transparency - INSTAT posts the Law on its website. - Questionnaires state the terms and conditions of the data collection and compilation, as well as the respondents’ obligations. - There is no access to the data prior to public release. - All publications are clearly identified with INSTAT’s name and logo. - INSTAT provides advance notice of major changes in methodology, source data, and statistical techniques, and provides more detailed information when the change is introduced. - Ethical standards - Staff behavior is governed by the Law on the Status of Civil Servants. - INSTAT has its own Code of Conduct for its staff. - All new staff attend an orientation program where they are informed of the ethical standards and professional culture of INSTAT. ### Assurances of integrity — Ministry of Finance (MoF) - Legal and institutional environment - The Macroeconomic Department in the MoF is specifically designated to compile GFS and to produce monthly and quarterly bulletins on fiscal statistics. - The Organic Budget Law (OBL) No. 8379 of July 29, 1998 authorizes the Minister of Finance to specify accounting procedures and reporting requirements for budgetary institutions, special and extrabudgetary funds, and local government. - The OBL requires the Minister to prepare annually a final statement of accounts to be presented to the Council of Ministers and the Parliament. - A presentation on the government debt (foreign and domestic) situation twice a year is also required. - The flow of budget execution data to the MoF is well established in the OBL, the Guideline on State Budget Performance for Fiscal Year, and other directives. - Resources - Existing staff resources are inadequate for current GFS compilation demands and do not allow capacity for additional development work. - Although good coordination exists across departments, only one staff is charged with compiling the statistics and furthering methodological development. - Relevance - Officials manifest a keen awareness of the need for ongoing quality improvements in fiscal data. - Queries received are instrumental in improving the content (tables and charts) of the MoF’s statistical publications, most recently reflected in the expanded presentation in Fiscal Statistics of Government. - The monthly publication Economy and Budget includes a short analysis of major fiscal and other macroeconomic developments during the period under review. - Other quality management - Compilers follow well-established procedures to check the accuracy and consistency of the data. - Reporting requirements, accounting systems, and audit rules generally ensure quality. - The Deputy Minister regularly meets with the heads of all district treasury offices and government spending units to discuss and clarify data reporting issues arising in the implementation of the OBL. - Professionalism - The OBL provides autonomy in carrying out budgetary, accounting, and GFS functions and gives the MoF independence to choose sources and methods. - The MoF publishes substantial information on statistical techniques on its website. - There is no evidence of political influence affecting compilation methods or data output. - The MoF regularly monitors media coverage of its data; the Spokesperson for the Minister comments on erroneous interpretations and misuse when deemed necessary. - Transparency - Terms and conditions under which GFS are compiled and disseminated are embedded in the OBL and the internal administrative regulations of the MoF, available on the MoF website. - There is no internal government access to the data before they are released to the public. - MoF officials do not typically provide commentary on the data. - The MoF has invited media to attend meetings where changes in methodology, source data, and statistical techniques are discussed to ensure awareness of initiatives relating to the adoption of a medium-term budget framework. - Ethical standards - Staff behavior is guided by the Law on the Status of Civil Servants, the related Ethical Code, and internal guidance. - Specific questions related to the law and code are included in public examinations for employment candidates. - Newly recruited staff attend mandatory training at the Public Administration Training Center. - Staff are reminded of ethical standards during annual performance reviews. ### Assurances of integrity — Bank of Albania (BoA) - Legal and institutional environment - The BoA, by tradition, is responsible for compiling and disseminating monetary statistics, although the BoA’s law On the Bank of Albania (Law) does not specifically confer this mandate. - No other agencies are involved in the compilation of monetary statistics in Albania. - The Law specifically assigns responsibility for balance of payments statistics compilation to the BoA. - A Statistics Department was established in 2005. - The Law provides that the BoA can request data from banks, juridical, and physical persons but does not provide a tool to enforce compliance by nonbank reporters. - Data confidentiality is rigorously observed in practice by the BoA, but the Law might be interpreted as not providing legal assurance that individual records would only be used for statistical purposes as they may be disclosed to tax authorities. - The BoA does not have an electronic (online) reporting system for banks and other financial institutions. - The BoA has established procedures for sharing data with INSTAT and the MoF, to be further strengthened by a memorandum of understanding with INSTAT. - Resources - Additional staff resources and funding (for surveys subcontracted to INSTAT) are needed for balance of payments and other external statistics such as the International Investment Position. - More resources are needed in the Information Technology Department for upgrading the database and implementing an electronic (online) reporting system for banks and other financial institutions. - Staff resources suffice for current compilation of monetary statistics, but more resources are needed to compile a financial corporations survey and flow data. - Facilities could be improved to allow for adequate staff space. - Relevance - The BoA strives to improve monetary and balance of payments statistics to meet users’ needs. - Staff participate in statistical meetings organized by international organizations and exchange views with other countries in the region. - Consultation with data users is undertaken. - Other quality management - The BoA’s activities are governed by the principle “quality creates confidence.” - The BoA considers comments and requests from external data users as important feedback for monitoring the quality of monetary and balance of payments statistics. - Professionalism - The Law ensures the independence of the BoA. - The BoA defines its own methodological procedures for compiling and disseminating monetary and balance of payments statistics, taking into account international standards. - Professional competence plays a key role in recruitment and promotion; training and professional development opportunities are provided. - Choices of statistical methodology are based solely on statistical considerations. - The BoA comments on public misuse of statistics and is active in developing a “culture of statistics,” including a training program for the media. - Transparency - Legal terms and conditions for compiling monetary and external statistics are made available to the public and summarized on the BoA’s website. - Access to statistics is provided simultaneously to all users when posted on the BoA’s website. - Monetary and balance of payments statistics are clearly identified as BoA products; when the BoA publishes data produced by other agencies it clearly indicates the source. - Advance notice of major changes in methodology, source data, or statistical techniques is given to the public. - Ethical standards - Ethical standards for BoA staff are established by the Code of Ethics of the Bank of Albania, covering integrity, objectivity, professional competence, efficiency, professional independence, maintaining confidentiality of data, and avoiding conflicts of interest. ### National Accounts — Dimensions 2 to 5 - Methodological soundness - Concepts and definitions: National accounts statistics are in conformity with the System of National Accounts 1993 (1993 SNA). - Scope: The National Accounts Section (NAS) of INSTAT does not produce all of the accounts needed to meet the minimum requirement set by the Intersecretariat Working Group on National Accounts. The tables and accounts produced are (1) annual value added and GDP at current and constant prices and (2) annual expenditures of GDP at current and constant prices. A plan is in place to expand compilation to cover the other required accounts. - Classification/sectorization: Classifications conform to international standards—activities by NACE Rev.1, products by CPA, individual consumption by COICOP, and government accounts by COFOG. - Basis for recording: Market prices are used to value flows and stocks, with some exceptions. Nondeductible VAT is excluded in the valuation of intermediate consumption, which is not in accordance with the 1993 SNA. There are no adjustments for holding gains/losses. Government accounts are not on an accrual basis. All enterprise data are on a net basis. - Accuracy and reliability - Source data: Compiled from numerous but insufficient source data; source data are hampered by poor questionnaire design (e.g., Structural Business Survey), limited area coverage of the Household Budget Survey (HBS), and insufficient frequency of surveys. - Source data do not provide sufficient estimates of the nonobserved economy. Unit value indices are of poor quality. Source data are not timely. - The statistical business register is of good quality. - Assessment of source data: Source data are adequately assessed for coverage, sampling, and nonsampling errors. Results from the assessment are used to improve source data. Imputation and adjustment for nonresponse are based on appropriate techniques. - Statistical techniques: Estimates of production from nonobserved activities, especially for construction, are based on too limited labor input data and productivity assumptions. Estimates of expenditure components rely on unusually weak assumptions, are not cross-checked against other data sources, and are based on a benchmark that is too limited. - Assessment and validation: Adjustments to remove discrepancies are not sufficiently detailed. Some information is used to validate intermediate results (e.g., Living Standard Measurement Survey). Supply and use tables are being developed. - Revision studies: Revision studies are done on an ad hoc basis only and normally in connection with a major change in methodology. - Serviceability - Periodicity and timeliness: National accounts meet the GDDS recommendation on periodicity, but not on timeliness. Preliminary estimates for GDP are released 11 months after the reference year, exceeding the 9-month recommendation. - Consistency: National accounts from the production approach are not independently estimated but made consistent with the expenditure approach through balancing items on the expenditure side. National accounts statistics are consistent with balance of payments, monetary, and fiscal statistics. - Revision policy and practice: Not all publications have an indication of data status (i.e., preliminary, revised, or final). Revised data are accompanied by analysis when major changes in methodology take place. INSTAT posted a revision policy on its website at the time of the mission. - Accessibility - Data accessibility: Dissemination media (publications and website) are fragmented. The actual release of national accounts does not strictly follow the advance release calendar. Statistics are presented to facilitate interpretation and comparisons. More detailed breakdowns are provided on request. - Metadata accessibility: INSTAT disseminates documents related to national accounts on concepts, scope, classifications, basis of recording, data sources, and statistical techniques—in hard copy and on the website. Summary information is provided in the GDDS metadata, updated at least once a year. - Assistance to users: Information on the website about INSTAT’s publications is not up-to-date. All INSTAT publications provide contact information. INSTAT’s website contains extensive catalogs of publications, documents, and survey results. ### Consumer Price Index — Dimensions 2 to 5 - Methodological soundness - Concepts and definitions: In general, the weights and price quotes used to compile the CPI are consistent with the 1993 SNA and the Consumer Price Index Manual. - Scope: The CPI weights are derived from the 2000 HBS, which only covered urban households, accounting for 45 percent of all households. In all other respects, the 2000 HBS was consistent with internationally accepted standards. - Classification/sectorization: Households are defined according to the 1993 SNA. COICOP is used to classify the CPI. - Basis for recording: The 2000 HBS did not collect data on the sale of second-hand goods; therefore, only the purchase value of such items is included in the CPI weights. CPI weights are based on household expenditure at purchaser prices. Prices are recorded in the period goods and services are purchased. - Accuracy and reliability - Source data: The sampling methodology for the HBS followed international best practice, but no attempt was made to replace non-respondents. Price collection is from all types of outlets, and product specification is as precise as possible. Data on prices are reported on a timely basis. - Assessment of source data: Price data are checked for outliers, but no checks are made on enumerators. - Statistical techniques: Current weights are for 2000, which is too long ago, considering the major economic changes since then. Temporary missing prices are imputed using a good methodology, also used for seasonally unavailable goods. Permanently unavailable items are replaced with similar products. New items are only introduced when the CPI is rebased. The weights include an estimate for imputed rent. Appropriate methodologies are used to derive the indices. - Assessment and validation: Price data are checked against other available sources (e.g., PPI). Any unusual values are investigated and amended, if necessary. - Revision studies: Revisions occur when the CPI is rebased. The revisions were fully assessed at the time of the last rebasing. - Serviceability - Periodicity and timeliness: The CPI is compiled monthly, in line with the GDDS recommendation. It is published within nine days of the end of the reference period, well within the GDDS recommendation of one month. - Consistency: The CPI is fully consistent from 1993 onwards, with appropriate techniques used to link the series when they are rebased. - Revision policy and practice: Revisions are only made to the CPI when it is rebased. The assessment of revisions resulting from the last rebasing was published. - Accessibility - Data accessibility: The layout of the publications is good, with charts as well as tables. On the website, data values are available in downloadable Excel spreadsheets. An advance release calendar is published at the beginning of the year, giving precise publication dates for the whole year. Publications are made available to all users at the same time. More detailed breakdowns are provided on request. - Metadata accessibility: The methodological guide published at the time of the last rebasing has not been kept up to date and has not been translated into Albanian. A brief description is included in INSTAT’s Yearbook. - Assistance to users: Publications give a general contact point for INSTAT, which provides an acceptable service to users. A catalog of publications is on INSTAT’s website. ### Producer Price Index - (Section header present in source; detailed content not provided in the supplied excerpt.) *Source: _cr06393 - 0. Prerequisites of quality* ### 2. Methodological soundness ### 2. Methodological soundness ### Producer Price Index (PPI) - Concepts and definitions - The PPI follows the concepts of the 1993 SNA and the Producer Price Manual. - Scope - The PPI covers all production industries, that is, mining, manufacturing, energy, and water supply. - Classification/sectorization - The industrial classification used is NACE Rev. 1 down to the class (4-digit) level. - Basis for recording - Market prices are used for the weights and the price quotes. - Source data - Prices are collected for each month, but only once a quarter, due to financial constraints. - The weights were derived from the 1998 annual Structural Business Survey. - The 1998 survey was also used to select enterprises from which prices are collected. - When one of these enterprises goes out of business, it is not replaced by another similar-sized firm. - Assessment of source data - Price data are checked for outliers, but no checks are done on enumerators. - Statistical techniques - Missing prices are imputed using the average price for the same, or related, products, rather than the monthly change in this average. - When an enterprise stops producing an item, that item is not replaced. - New products are introduced when they become significant. - Weights are used at all levels of aggregation, even within individual enterprises. - The base year of 1998 needs to be updated. - Assessment and validation of intermediate data and statistical outputs - The prices are not validated against other sources, such as the CPI. - Unusual movements in the PPI components are investigated. - Revision studies - The PPI is not subject to monthly revisions. - It has yet to be rebased, because such a revision study has not been necessary. - Periodicity and timeliness - The PPI is compiled monthly, in line with the GDDS recommendation. - However, the monthly figures are only published within nine weeks of the end of the quarter. - As a result, the index for the first month of each quarter is not published until more than four months after the end of the reference period, which does not meet the . timeliness (one to two months) recommended in the GDDS. - Consistency - The PPI is fully consistent over time since 1998. - The PPI is consistent with the CPI and with the national accounts, as it is used to deflate the production figures. - Revision policy and practice - The PPI is never revised. - Data accessibility - The layout of the publications is good, with charts as well as tables. - On the website, the data values are available in downloadable Excel spreadsheets. - An advance release calendar is published at the beginning of the year, giving precise publication dates for the whole year. - The publications are made available to all users at the same time. - More detailed breakdowns are provided on request, as long as they do not breach the confidentiality rules. - Metadata accessibility - The methodological guide, published when the PPI was first developed, has not been kept up to date and neither has it been translated into Albanian. - A brief description is included in INSTAT’s Yearbook. - Assistance to users - The publications give a general contact point for INSTAT, which provides an acceptable service to users. - A catalog of publications is on INSTAT’s website. ### Government Finance Statistics (GFS) - Concepts and definitions - A formal migration path from the current presentation to the GFSM 2001 framework has not been articulated. - Fiscal accounts are largely based on the methodology prescribed in the GFSM 1986, although divergences exist in the presentation of data. - The distinction between domestic and foreign financing and debt is adequately based on the residency criteria of the BPM5. - Scope - The scope of the general government sector is in line with the GFSM 1986 and encompasses budgetary central government (representing a total of about 1,520 individual budget institutions), local government (representing a total of about 2,160 units), and two extrabudgetary funds (the social security fund and the health insurance fund). - Classification/sectorization - Classifications are broadly in accordance with the GFSM 1986. - The economic classification of expense and the inclusion of privatization receipts under financing (rather than under net lending minus repayments) more closely approximate the GFSM 2001 framework. - A functional classification of expenditure is available. - Basis for recording - Transactions are recorded on a cash basis as provided for in the GFSM 1986. - Debt is recorded at face value, and amounts denominated in foreign currency are converted to leks at the official daily exchange rates provided by the BoA. - Source data - Weakness in source data is in the availability of data on certain external donor financed (grants) projects that do not pass through the treasury system. - Main data sources, which are timely, are reports of: i) district treasury offices; ii) the Debt Management and Financial Analysis System; iii) project implementation units for foreign financed project; and iv) the extrabudgetary funds. - Assessment of source data - Detailed procedures are used—payment orders are checked against financing plans submitted; internal controls are applied within and between reports; and cross-checks are made between the Treasury balance and other balances. - Results are monitored to guide internal planning. - Statistical techniques - Extensive use of administrative sources eliminates the need for estimations, surveys, and imputation. - Assessment and validation of intermediate data and statistical outputs - Transactions in each spending unit are reconciled with the change in balances on the relevant bank accounts, the records of the tax administration office, and the records of the Debt Office of the MoF, as relevant. - Revision studies - Discrepancies requiring revisions are documented in an internal memorandum prepared by the Budget and Treasury Directorates and sent to the Minister on a monthly basis for follow-up, if needed. - Periodicity and timeliness - Periodicity and timeliness exceed the GDDS recommendations. - Consistency - Data are internally consistent. - An interagency committee works to check consistency with the BoA’s monetary and balance of payments statistics and with INSTAT’s national accounts statistics. - Revision policy and practice - Owing to the long-term application of the GFSM 1986-based methodology, no advance notice of major changes in methodology occurs. - Revisions follow a regular schedule but are not made publicly available. - Technical descriptions of changes appear as footnotes in the quarterly bulletin Fiscal Statistics of Government. - Data accessibility - An advance release calendar exists. - Detailed tables (in Albanian and English) are disseminated in Fiscal Statistics of Government, which contains information on the final budget outcome in the June issue. - Preliminary annual data are disseminated in the December issue of the monthly publication Economy and Budget, which is released (in Albanian) in February (i.e., with a two- month lag). - The monthly Economy in Focus describes trends in public finance. - These are available free of charge and on the MoF website. - Metadata accessibility - GFS metadata are available on the MoF website, in the quarterly bulletin, and on the IMF’s DSBB. - Assistance to users - Contact information is available in all MoF publications and on the IMF’s DSBB. - A catalog of publications is available on the MoF website. ### Monetary Statistics - Concepts and definitions - Albania’s monetary statistics are broadly consistent with the methodology of the Monetary and Financial Statistics Manual (MFSM). - Scope - The MFSM guidelines are followed. - The depository corporations survey covers the Bank of Albania and all the other deposit-taking institutions (17 commercial banks and 130 savings and loans associations (SLAs)). - Classification/sectorization - Classification and sectorization principles are consistent with the MFSM guidelines. - Basis for recording - The accounts of the SLAs, with the exception of loans, are on a cash basis, which is not in accordance with the MFSM’s recommendations of accrual accounting. - The accounts of the BoA and of the commercial banks are produced on an accrual basis. - Market valuation principles are used in conformity with the MFSM’s guidelines, except for holdings of nontradable long-term securities, which are recorded at book value. - Source data - Source data provide the information needed as specified in the MFSM. - The source data are primarily generated from accounting records of the BoA, commercial banks, and SLAs. - Assessment of source data - Procedures are needed to minimize errors in commercial banks’ reporting and to speed up processes in correcting these errors. - The reporting system is reviewed at the end of each year, reflecting changes in reporting requirements. - Statistical techniques - When delayed reporting by banks occurs, the compilation of monetary statistics is delayed until such time as all banks’ reports are received by the BoA. - Delays in reporting are however a problem specific to a few banks. - Assessment and validation of intermediate data and statistical outputs - Statistical discrepancies and other potential problems are investigated and taken into account in future work programs. - Revision studies - Revision studies are carried out routinely to ensure the reliability of procedures and used to inform future statistical processes. - Periodicity and timeliness - The GDDS recommendations are met. - In the case of the analytical accounts of the central bank, the SDDS requirements have been achieved. - Consistency - Monetary statistics’ consistency is ensured by routinely checking the data on interbank positions and by maintaining consistent time series over a reasonable period. - Revision policy and practice - Monetary data are revised when errors are discovered. - The revised data and an explanation of the revisions are published. - BoA’s revision policy is posted on its website. - Data accessibility - The public has ready access to monetary data through the BoA website and its publications. - A database “Time Series” containing data and metadata is accessible through the BoA website. - An advance release calendar is posted on the BoA website. - Metadata accessibility - A comprehensive document on sources and methods for monetary statistics compilation is posted on the BoA website. - The metadata stored in the “Time Series” database provide various levels of detail for different needs of users. - The BoA posts financial sector metadata on the IMF’s DSBB website and regularly updates them. - Assistance to users - The BoA promptly responds to queries and information requests. - The BoA website provides users with detailed contact information and information about electronic and paper-based publications. ### Balance of Payments Statistics - Concepts and definitions - Concepts and definitions are according to BPM5. - Scope - The scope of data collection and compilation conforms to the recommendations of BPM5. - Classification/sectorization - Classification and sectorization are according to BPM5. - Basis for recording - Interest is recorded on a cash basis. - All other transactions are recorded according to satisfactory accrual procedures. - Transaction prices are used for valuation. - Imports are adjusted from c.i.f. to the f.o.b. basis and for smuggling. - Grossing and netting procedures are consistent with BPM5. - Source data - Source data, while timely, are based on infrequent and/or incomplete surveys, including those on freight, insurance, and smuggling adjustments for imports; travelers’ expenditures domestically and abroad; workers’ remittances; direct and portfolio investment; and trade credit. - Grants from abroad to regional and local governments are underreported. - Assessment of source data - Source data are regularly assessed by compilers. - As a consequence, the survey form for direct investment enterprises was revised, and quarterly surveys of remittances to households are planned. - Statistical techniques - The current manual compilation system based on distinct Excel spreadsheets is prone to error. - Remittances are calculated from a subset of errors and omissions, rather than being estimated directly. - The split of “total remittances” between compensation of employees and worker’s remittances should be re-estimated. - Assessment and validation of intermediate data and statistical outputs - Errors in intermediate outputs have resulted from manual calculation and/or data entry; these errors have been overlooked in the checking process. - Revision studies - Revisions are documented, and revision patterns are studied with a view to improving statistical processes. - Periodicity and timeliness - Periodicity and timeliness meet GDDS recommendations and SDDS requirements. - Consistency - Data are consistent internally and over time. - Balance of payments statistics are also consistent with other data sources and statistical frameworks such as international merchandise trade data, monetary statistics, and international transactions components of the national accounts. - Revision policy and practice - Within the current calendar year, errors are corrected for the quarter during which they occurred. - This revision policy is posted on the BoA website. - At the time of each major revision in data, the reason for the change is explained to users in a note or analytical article and, if appropriate, in the posted metadata. - Data accessibility - Data are released simultaneously to all interested users. - Data and analyses are published in hard copy free of charge and on the BoA website according to a preannounced schedule. - Summary and more detailed presentations, including charts, are available. - On request, even greater detail is provided. - Metadata accessibility - Metadata are provided in English on the DSBB and in Albanian, with greater detail, on the BoA website. - A summary, hardcopy, nontechnical explanation of the balance of payments and its significance has been published in Albanian. - Assistance to users - Contact points are indicated in all hardcopy publications and on the BoA website. - A catalog of publications is available in hardcopy and electronically. - Assistance is regularly provided on request. - Questions via e-mail are usually answered within 48 hours. *Source: _cr06393 - 2. Methodological soundness* ### 10. Based on the review of Albania’s statistical practices, discussions with the data- ### _cr06393 - 10. Based on the review of Albania’s statistical practices, discussions with the data- ### Cross-cutting recommendations - Allocate additional staff resources for the current and planned macroeconomic statistics compilation and dissemination programs, including for information technology support. - Maintain a stable complement of trained professional staff through, among other methods, upgrading the status of INSTAT staff in the hierarchy of the government civil service and upgrading office facilities in all the data-producing agencies. Continue emphasizing staff training and development. - Increase financial resources for improving source data, prioritizing the adequate capture of the nonobserved economy and remittances, which are particularly important in the Albanian economy. - Sign and implement the memorandums of understanding between data-producing agencies on the modalities of data sharing (e.g., identification of data to be shared, timetable, responsible unit within the agency, etc.). - Implement an electronic (online) reporting system for banks and other financial institutions to enhance the efficiency of monetary and balance of payments statistics compilation processes. Introduce a database-driven compilation system for monetary and balance of payments statistics. ### National Accounts — recommendations and implementation steps - Expand and improve surveys, e.g., labor force survey and country-wide HBS. - Expand the scope of annual national accounts to include the income account, the capital account, and the rest of the world accounts as intended in INSTAT’s Strategic Plan. - For the expenditure approach, rationalize the statistical technique to maximize the use of existing source data. For years when household final consumption cannot be separately estimated, derive a single balancing item on the expenditure side combining household final consumption, changes in inventories, and the statistical discrepancies. - Use more extensive data sources to cross-check validity of intermediate data. Estimates of construction activity (currently based on limited labor input data) should be assessed for consistency with other construction input and productivity estimates. - Include nondeductible VAT in the valuation of intermediate consumption to conform to the 1993 SNA’s concept of purchasers’ price. - Apply the revision policy consistently. Identify status of disseminated GDP (e.g., preliminary, revised, and final) in all releases. - Update the advance release calendar to reflect the recently adopted revision policy. - Identify clearly where users can obtain the official national accounts data (e.g., name of publication or a dedicated page on the INSTAT website). - Improve the timeliness of the data through greater use of the INSTAT website for the first dissemination of the data. Authorities’ responses and planned actions (selected) - The Department of Statistics, Bank of Albania, structure will be reviewed until the first quarter of 2007, and will be expanded to include among other things, the compilation of flows data, IIP and External Debt statistics. - INSTAT will conduct a labour force survey (beginning in 2007) as well as a country-wide household budget survey (already started on October 1st, 2007). - INSTAT is using the “Commodity Flow” method to improve GDP calculation from the expenditure side. - INSTAT will investigate LSMS data 2003-2004 and SBS data of the construction sector to reassess construction activity and better estimate GFCF (construction component). ### Consumer and Producer Price Indices — recommendations - Update the weights as soon as possible. - Publish the PPI every month. - Introduce checks on the prices reported by enumerators. - Replace nonrespondents to the HBS with similar households (CPI); replace enterprises that go out of business (PPI). - Include new items into the CPI as they become significant. - When an enterprise stops producing an item in the PPI, replace it with another product. - Deduct sales from purchases of secondhand goods when deriving the CPI weights. - Impute missing prices using the change in the average price for related products (PPI). - Validate the PPI results against all other available price data. - Update the methodological guides and publish them in Albanian and English. ### Government Finance Statistics — recommendations - Accelerate work aimed at formally adopting the GFSM 2001-based reporting format, including high-frequency data (monthly cash flow and quarterly government operations data) as well as quarterly nonfinancial public sector debt. - Improve source data coverage for external donor financed projects. - In the context of the development and implementation of the new Oracle-based IT infrastructure, construct and document as soon as feasible a national chart of accounts for all general government subsectors aligned with GFSM 2001 classifications. - Publicize revisions (within or outside any revision cycle) in, for instance, Fiscal Statistics of Government or the freely accessible database maintained on the MoF website. ### Monetary statistics — recommendations and practices - Apply fully the MFSM’s recommendations on market valuation and accrual accounting (e.g., use market prices to value securities held by banks for investment; adopt accrual accounting for the SLAs). - Implement measures to minimize errors in commercial banks’ reporting and to speed up processes in addressing these errors. - When delayed reporting by commercial banks occurs, carry forward the balance sheet for the previous month of the late reporting bank and make users aware of this technique. These data should be denoted as provisional. Authorities’ response - The BoA has included implementation of an electronic reporting and a database-driven compilation system in its strategy plan as a medium-term plan, with the duty defined to be fulfilled in 2007. - The Bank of Albania has trained Statistics Department staff to better comprehend statistical information produced by other institutions. ### Balance of payments statistics — recommendations - Conduct more frequent (e.g., quarterly) surveys on remittances; survey freight charges; and survey tourist expenditures biannually. - Re-estimate the split of total “remittances” between compensation of employees and workers’ remittances and explore the use of other data sources (e.g., Living Standard Measurement Survey) to check the plausibility of the estimates. - Tighten procedures on data quality control and cross-checks, particularly in the estimation of remittances. - Strengthen the BoA law to provide for the sanctions―including fines―needed to mandate survey responses from nonbank reporters, to inspect the financial accounts of firms, and to prohibit the provision of individual reporters’ data to tax authorities. - Implement the revised reporting form for insurance services. - Obtain the public debt service schedule from the MoF and record interest on an accrual basis. - Require quarterly reporting by significant firms of transactions in direct investment equity, debt, and reinvested earnings; in portfolio equity and debt; and in trade credit. - Estimate purchases of land and construction financed by unidentified foreign exchange inflows. - Conduct more frequent surveys on remittances and use other data sources (e.g., Living Standard Measurement Survey) to check estimates. ### GDDS coverage, periodicity, and timeliness (selected table entries preserved) - Real sector: National Accounts — GDDS periodicity: 10–14 months; Albania timeliness: 11 M. - Financial sector: Depository Corporations Survey — GDDS periodicity: 2–3 months; Albania timeliness: 6 weeks. - External sector: Balance of payments* — GDDS periodicity: Q; Albania timeliness: 10 weeks. - Price indices: Consumer price index* — GDDS periodicity: M; Albania timeliness: 9 days. - Price indices: Producer price index (collected quarterly) — GDDS periodicity: M; Albania timeliness: 4 M. - Labor market indicators: Employment — GDDS periodicity: A; Albania timeliness: 2 M. - Central bank aggregates* — GDDS periodicity: 1–2 months; Albania timeliness: 2 weeks. - Broad money and credit aggregates — GDDS periodicity: 1–3 months; Albania timeliness: 6 weeks. - Merchandise trade: Total exports and total imports — GDDS periodicity: M; Albania timeliness: 7 weeks. - International reserves: Gross official reserves denominated in U.S. dollars — GDDS periodicity: M; Albania timeliness: 7 weeks. - External sector: Public and publicly guaranteed external debt outstanding — GDDS periodicity: Q; Albania timeliness: 10 weeks. *Italicized entries and footnotes in the original table indicating SDDS coverage and encouraged categories are part of the GDDS comparison table.* *Source: Report on the Observance of Standards and Codes (ROSC)—Data Module, Albania (authorities’ responses and mission recommendations as presented in the provided document).* ### 20. Include non-deductible VAT in the valuation of intermediate consumption to conform ### 20. Include non-deductible VAT in the valuation of intermediate consumption to conform to the 1993 SNA’s concept of purchasers’ price. ### National Accounts: valuation, revisions, and dissemination - Recommendation 20: Include non-deductible VAT in the valuation of intermediate consumption to conform to the 1993 SNA’s concept of purchasers’ price. - Implementation steps and status: - Preliminary estimation of non-deductible VAT has started based on the limited data in disposition for this purpose. - Future action: design a new special survey addressed to all units of Public Administration, etc., to obtain all other variables (depreciation, etc.) in collaboration with the Ministry of Finance. - Recommendation 21: Apply the revision policy consistently. Identify status of disseminated GDP (e.g., preliminary, revised, and final) in all releases. - Status: National Account sector has recently adopted the revision policy and has disseminated information on the timeliness of national accounts data to the public; the status of data is indicated on the last publications of INSTAT. - Recommendation 22: Update the advance release calendar to reflect the recently adopted revision policy. - Status: INSTAT already updated the release calendar. - Recommendation 23: Identify clearly where users can obtain the official national accounts data (e.g., name of publication or a dedicated page on the INSTAT website). - Status: The recommendation is implemented already. - Recommendation 24: Improve the timeliness of the data through greater use of the INSTAT website for the first dissemination of the data. - Status: The recommendation is implemented already. ### Key statistics and operational notes (National Accounts) - New special survey to cover non-deductible VAT estimation and other variables (depreciation, etc.). - Revision policy: status labels (preliminary, revised, final) now indicated in INSTAT publications. --- ### B. Consumer and Producer Price Indices ### CPI and PPI weights, index methodology, and publication frequency - Recommendation 25: Update the weights as soon as possible. - Status: Update of weights for the CPI will be after the results of the Household Budget survey (HBS) 2006. - PPI methodological change: - Current PPI is a "fix– base– year" index and imposes many practical problems. - INSTAT intends to replace this approach with the chain index one. - In the chain-index, new weights could be assigned each year if felt necessary. - Chain-index methodology: each transaction compared with its previous year December price; these price relatives will be weighted to give index numbers for product groups and total PPI. - Renovation of product list was done using results of Business Structural Survey of 2004. - New questionnaire to compile the data of new PPI is prepared. - Creation of authentic data entry, in collaboration with IT staff, is in process. - Recommendation 26: Publish the PPI every month. - Status: Publishing PPI every month requires monthly data collection. Currently INSTAT visits enterprises quarterly and collects their data on monthly basis via enumerators. The recommendation will take place on medium term. ### Data quality checks, substitution, and imputation - Recommendation 27: Introduce checks on the prices reported by enumerators. - Status: New data entry will have an automatic check of prices reported. - Recommendation 28: Replace non-respondents to the HBS with similar households (CPI); replace enterprises that go out of business (PPI). - Status: HBS methodology does not foresee replacement of non-respondents with similar households. - PPI: replacement of enterprises will be once a year, in December. - Recommendation 29: Include new items into the CPI as they become significant. - Status: INSTAT analyzes new items when significant for the CPI and calculates their weights when possible. - Recommendation 30: When an enterprise stops producing an item in the PPI, replace it with another product. - Status: In the new PPI substitution of the item during the year is foreseen; item substitutions imply that the base price (previous December price) must be adjusted. - Recommendation 31: Deduct sales from purchases of second hand goods when deriving the CPI weights. - Status: In the HBS sales from purchases of second hand goods will be deducted and taken into consideration when deriving CPI weights. - Recommendation 32: Impute missing prices using the change in the average price for related products (PPI). - Status: The recommendation is already applied. - Recommendation 33: Validate the PPI results against all other available price data. - Status: INSTAT will work on validating PPI results with other sources, such as export–import data and short-term statistics CPI. - Recommendation 34: Update the methodological guides and publish them in Albanian and English. - Status: The update of the methodological guide is in process. ### Key operational notes (Price Indices) - CPI weight update pending HBS 2006 results. - Transition plan from fixed-base PPI to chain-index PPI with annual weighting option. - Data entry modernization includes automatic price checks and collaboration with IT staff. --- ### C. Government Finance Statistics ### Adoption of GFSM 2001 format and IT modernization - Recommendation 35: Accelerate work aimed at formally adopting the GFSM 2001-based reporting format, including for high-frequency data (monthly cash flow and quarterly government operations data) as well as quarterly non financial public sector debt. - Status and actions: - Albanian Ministry of Finance Treasury System (AMoFTS) (oracle financials application parameterized and customized on the Albanian public financial system) is in phase of testing, training and getting used to the system (November-December 2006). - MoF plans to go-live with the system at the beginning of January 2007. - Using the integrated centralized computerized treasury system will facilitate implementation of accrual accounting as required and provide reports in cash and modified accrual basis simultaneously. - Recommendation 36: Improve source data coverage for external donor financed projects. - Status and actions: - MoF has undertaken steps for strengthening public investment management in programming and implementation (reports entered in the AMoFTS). - Responsibility transfer from METE to MoF; new Public Investment Management Directory under General Budget Department established. - MoF has passed the State Debt Law in Parliament and expects future coverage of main public debt issuance and management issues. - Recommendation 37: Construct and document a national chart of accounts for all general government subsectors aligned with GFSM 2001 classifications. - Status: On 2007 MoF will implement the detailed (7 digits) chart of accounts for the general government (central, local, extra budgetary funds –SSI, HII) approximately with GFSM 2001 classifications. - Recommendation 38: Publicize revisions (within or outside any revision cycle) through, for instance, the publication Fiscal Statistics of Government or in the freely accessible database maintained on the MoF website. - Status: Ministry of Finance supports publishing revised data in Fiscal Statistics of Government and in the freely accessible database maintained on the MoF website (for reconciling with the banking system and budgetary units after the deadline of fiscal indicators reporting). ### Key operational notes (GFS) - AMoFTS implementation timeline: testing/training in November-December 2006; planned go-live beginning January 2007. - Chart of accounts: detailed 7-digit implementation planned for 2007, aligned approximately with GFSM 2001. --- ### D. Monetary Statistics ### Legal, reporting, and IT improvements - Recommendation 39: Strengthen the BoA law to provide full legal assurances that individual reporters’ data may be used only for statistical purposes. - Status: BoA’s Legal Department is drafting a new law on the Bank of Albania, expected to pass by end 2009, which will strengthen legal support for dissemination of monetary and financial statistics and ensure confidentiality of individual data and use for statistical purposes only. - Recommendation 40: Implement an electronic (online) reporting system for commercial banks and other financial institutions. - Status: BoA included this recommendation in its strategy plan as a medium-term plan; duty to be fulfilled in 2007. - Recommendation 41: Additional IT resources needed to design the SARS database and implement electronic reporting; additional SD resources to expand monetary statistics coverage and compile flow data per the Monetary and Financial Statistics Manual (MFSM). - Status: Department of Statistics structure will be reviewed until the first quarter of 2007 and expanded to include compilation of flows data; Sector of Monetary and Financial Statistics is working on a draft structure. - Recommendation 42: Further work to include compilation of flow data. - Status and note: Compilation of flows requires additional reporting on securities holdings to separate changes in values and transactions. BoA plans to draft this reporting requirement by the end of 2006. Data on changes in value due to exchange-rate changes for main categories could be identified from existing reports. - Recommendation 43: Revalue long-term securities for investment and available for trading held by the banking sector using estimated fair value. - Status: BoA will consider obtaining estimates of long term securities issued by nonresidents in special tables of the regular reporting system by commercial banks. Necessary data for a revision of Central Bank accounts are currently available. - Recommendation 44: Adopt accrual accounting for SLAs to apply fully MFSM guidelines on accrual accounting. - Status: BoA considers SLA accrual assets and liabilities not materially significant; total assets of such institutions represent only 0.4 percent of the total assets of Other Depository Corporations. - Recommendation 45: Implement measures to minimize errors in commercial banks’ reporting and speed up error resolution processes. - Status: BoA shortened reporting lag from 20 days to 15 days and will further shorten to 10 days starting from March 2007. - Recommendation 46: When delayed reporting by commercial banks occurs, carry forward the balance sheet for the previous month of the late reporting bank and make users aware of this technique; denote data as provisional. - Status: BoA has already adopted such practice. ### Key operational notes (Monetary) - Reporting lag reductions: 20 days → 15 days → planned 10 days (from March 2007). - SLA assets: 0.4 percent of total assets of Other Depository Corporations. --- ### E. Balance of Payments Statistics ### Surveys, remittances, and data quality - Recommendation 47: Conduct more frequent (e.g., quarterly) surveys on remittances; survey freight charges; and survey tourist expenditures biannually. - Status and actions: - Because remittances are a predominant item, several surveys will be conducted to households who receive money from family abroad on a quarterly basis; recommendation to be applied in 2007. - Analysis underway whether new coefficients need to be applied on freight and smuggled goods; a new survey will be conducted on big importing companies. - The new system ASYCUDA (still implemented) will facilitate estimation of freight; implementation in all system offices may take time. - Bank of Albania continues applying coefficients recommended by the last IMF technical assistance mission, 2006. - Bank of Albania conducts travel survey on quarterly basis due to seasonality and will continue; will start carrying out travel surveys at minor borders to improve benchmark data (IMF technical assistance mission, 2006). - Recommendation 48: Re-estimate the split of total “remittances” between compensation of employees and workers’ remittances and explore other data sources (e.g., Living Standard Measurement Survey). - Status: INSTAT is conducting a Household Budget Survey; results will be used by Bank of Albania to check plausibility of remittance estimates. - Recommendation 49: Tighten procedures on data quality control and cross-checks, particularly in estimation of remittances. - Status: Bank of Albania is revising estimation of remittances, checking source data quality and cross-checking calculations. - Recommendation 50: Conduct a new survey to re-estimate division of unidentified inflows of foreign exchange between compensation of employees and workers’ remittances (either banks/FX bureaus or households). - Status: Recommendation will take place in 2007. - Recommendation 51: Strengthen Bank of Albania law to provide sanctions including fines to mandate survey responses from non-bank reporters, inspect firms’ financial accounts, and prohibit provision of individual reporters’ data to tax authorities. - Status: Bank of Albania will revise legal status regarding statistics to establish right to necessary data, provide enforcement tools including new legal provisions; part of medium term strategy. - Recommendation 52: Implement the revised reporting form for insurance services. - Status: Bank of Albania has already implemented the new reporting form for insurance companies (last recommendation of IMF technical assistance mission, 2006). - Recommendation 53: Obtain the public debt service schedule from the MoF and record interest on an accrual basis. - Status: DMFAS used by MoF for monitoring external loan debt does not calculate accrued interest. With implementation of DMFAS 5.3 the calculation of accrual interest is previewed; consequently, in the balance of payments interest will be recorded on accrual basis. - Recommendation 54: Require quarterly reporting by significant firms of transactions in direct investment equity, debt, and reinvested earnings; in portfolio equity and debt; and in trade credit. - Status: Annual survey by Bank of Albania in cooperation with INSTAT currently takes place as Bank of Albania law doesn’t force direct reporting by firms. Recommendation will be applied in line with improvement of Bank of Albania legal framework. - Recommendation 55: Estimate purchases of land and construction financed by unidentified foreign exchange inflows. - Status: Bank of Albania is conducting a survey on construction companies and real estate agencies to find what portion of current housing boom is financed by unreported transactions between residents and nonresidents. This is the first survey of this kind; results will be analyzed to develop BoP estimation methods. - Recommendation 56: BoP division should improve coordination with INSTAT on survey design, execution, and follow-up to non-response. - Status: Productive relationship exists; both institutions are making efforts to improve survey quality starting with questionnaire designation and response rate improvement. - Recommendation 57: Provide IT support to BoP division to set up an automated database system to preclude manual data entry and accommodate electronic reporting by banks, including an ITRS if selected. - Status: This is a medium-term plan in Bank of Albania strategy plan. - Recommendation 58: Interim measure—link spreadsheets used for intermediate compilation of different portions of the balance of payments by introducing relevant formulas. - Status: BoP division has reorganized the excel files linked by relevant formulas into one BoP spreadsheet. ### Key operational notes (BoP) - Planned quarterly remittance household surveys from 2007. - DMFAS 5.3 implementation to enable accrual interest calculation. - Bank of Albania legal reforms and IT strategy are medium-term priorities to support improved reporting and automated processing. *INTERNATIONAL MONETARY FUND — ALBANIA. Detailed Assessments Using the Data Quality Assessment Framework (DQAF). Prepared by the Statistics Department. Approved by Robert W. Edwards and Michael Deppler. October 20, 2006.* ### 3. DQAF (July 2003): Summary of Results for Producer Price Index ................................96 ### 3. DQAF (July 2003): Summary of Results for Producer Price Index ................................96 ### Overview - Detailed assessment uses the generic DQAF structure and informs Albania’s ROSC—Data Module. - Coverage: national accounts, prices, government finance, money and banking, and balance of payments statistics (detailed assessment focuses on national accounts in the supplied excerpt). ### I. NATIONAL ACCOUNTS — Prerequisites of quality: Legal and institutional environment - The law On Official Statistics, No. 9180, dated February 5, 2004, sets the legal framework for collection, organization, production, and dissemination of official statistics; reflects elements of the UN Fundamental Principles of Official Statistics. - INSTAT is empowered under Article 8 to: - propose a program of official statistics to the Statistics Council and implement the approved program; - issue to all data-producing agencies, make public, and keep up-to-date the guidelines for professional standards in the production of official statistics; - examine procedures for producing statistics used by any official statistics-producing agency to ensure reliability, impartiality, and objectivity. - Institutional arrangements: - INSTAT is an independent government agency under supervision of the Statistics Council, which reports to the Council of Ministers. - Five-year national program and one-year operational plan; five-year program submitted for approval by Parliament, through the Prime Minister. - The Statistics Council approves INSTAT’s organizational structure and annual budget plan prior to submission to the Ministry of Finance. - Government Decision No. 704, dated November 11, 2005, establishes the Statistics Council with 11 members; INSTAT General Director participates but does not vote. - INSTAT, via its National Accounts Section (NAS), is the only official producer of national accounts statistics and is empowered to collect data from all entities; potential conflicts exist because no clear legal hierarchy establishes the law On Official Statistics takes precedence over other laws (example: law governing the Tax Administration Department might prevent access to audited records). ### Data sharing and coordination among data-producing agencies - Legal provisions: - Article 8 assigns INSTAT responsibility for proposing the official statistics program in coordination with other statistical institutions. - Article 12 states all institutions shall give INSTAT access to registers, data files, and data collected, processed, and stored in the domain of the agencies (applies to data needed for production of statistics). - Current practice and gaps: - INSTAT arranges and chairs quarterly advisory meetings and an annual meeting with heads of statistics departments of all ministries and data-producing agencies. - INSTAT establishes MOUs with statistical agencies that maintain administrative records; MOUs specify working arrangements, data to be provided, and timetables. - In practice, INSTAT generally has access to needed data, but data sharing process could be improved; delays in other agencies’ data production have adversely affected national accounts timeliness. - INSTAT has not finalized MOUs with key agencies (examples cited: Bank of Albania, Ministry of Finance, Ministry of Agriculture); MOUs expected to be finalized in the near future. - Recommendation: - Sign MOUs with key data-producing agencies. Enforce the implementation of MOUs to make sure that the necessary data are provided to INSTAT in the agreed format and timeframe. ### Confidentiality and reporter obligations - Legal provisions: - Law Articles 4 and 15 clearly stipulate confidentiality of individual reporters’ data; prevents nonstatistical utilization and unlawful disclosure. - Aggregate data must comprise at least three reporting units, and the share of any one unit should not exceed 85 percent of the total. - Article 14 obliges reporters to supply data completely, truthfully, in the form and within the time period requested, and free of charge. - Article 16 grants INSTAT the right to collect and use administrative statistics for the official statistics program. - Failing to provide information is an administrative offense subject to fines at various specific levels. - Operational issues: - All statistical system employees are required to protect confidentiality; violations incur fines and/or dismissal. - Due to lack of space, survey forms are processed in an open area; building entrance is guarded by security officers. - Recommendation: - Improve the security of physical work places to prevent possible access to survey forms by outsiders. ### Resources (staff, facilities, computing, financing) - Resource constraints and staffing: - INSTAT’s financial and staff resources are described as severely inadequate. - Eurostat study referenced: “A Global Assessment of the Statistical System of the Republic of Albania,” Eurostat and UN Economic Commission for Europe, April 2005. - As of April 2005, 155 employees are equally divided between the Central Directorate and the Regional Directorates. - The NAS has 8 staff, while at least 12 staff are required to implement its work program agreed under the Twinning Project approved by the government. - High staff turnover: of the eight NAS staff (including Sector Head), four joined the department just last year; apart from the Sector Head, only two have been with INSTAT for more than five years. - Cause of turnover: uncompetitive salaries compared with other government agencies. - Operational impacts: - Financial constraints delay or limit planned surveys; shortages have resulted in postponement or abolition of surveys and dissemination. - NAS compiles annual GDP by production and expenditure approaches; INSTAT is developing quarterly GDP and annual supply and use tables, albeit slowly. - Limited information technology constrains timely data processing and dissemination; INSTAT website lacks up-to-date information because of technical problems and lack of staff to post information. - Physical facilities limited: office space constraints (e.g., four staff in a small office), limited meeting facilities, lack of enclosed space for confidential processing. - Recommendations: - Provide financial resources to ensure implementation of a five-year national program of official statistics as required by the Law, particularly for censuses and surveys critically important to the production of the national accounts. Financial resources should be provided predictably to allow continuity in the implementation of statistical programs. - Provide sufficient staff resources commensurate with the implementation of the agreed statistical programs. Furthermore, staff compensation should be reviewed to ensure the competitiveness of INSTAT in attracting and retaining highly qualified staff. - Improve information technology to better facilitate data compilation and dissemination. ### Measures to ensure efficient use of resources - Legal and managerial context: - The Law requires production of official statistics to be cost-effective; work and cost of each statistical program must be proportionate to importance. - INSTAT staff are civil servants governed by Civil Servant Law (Nr. 8549, November 11, 1999) regarding efficient use of resources and staff performance. - Efficiency measures in practice: - Management promotes efficient use of resources, encourages consistency in concepts and methodologies across agencies, coordinates statistical work programs, minimizes respondent burden, and retains a core specialized team of survey enumerators despite contractual appointments. - Since 2005, INSTAT staff are subject to formal annual performance review. INSTAT also reports time spent on various work activities by individual staff for budgetary and work program planning. - INSTAT seeks outside expert assistance from Eurostat, the IMF, the World Bank, the Italian National Institute of Statistics, DFID, SIDA, and others. ### Relevance — monitoring user needs - INSTAT monitors users’ needs regularly via: - seminars for officials, media, academe, researchers, and students; - technical committees (e.g., Committee on Classification) to discuss user needs and technical issues; - a 2005 “Image Survey on INSTAT” with about 1,000 respondents; results to be used to improve processes and products; - participation in international statistical meetings and conferences (example: "Albania Statistics towards the EU" in December 2005). ### Other quality management processes - Quality focus: - INSTAT’s mission: provide transparent, neutral, and timely statistics to help users judge development of transformation processes. - Operations guided by Economic Commission for Europe and UN Fundamental Principles of Official Statistics. - Staff training programs emphasize data quality and operational culture. - Monitoring and planning: - The Law requires the Statistics Council to supervise implementation of the official statistics program. - INSTAT has internal monitoring processes; managers undertake regular formal and informal assessments to identify progress and problems. - Access to expert guidance from donor agencies and international organizations on methodology, source data, and dissemination strategies. - INSTAT gives priority to quality considerations and balances trade-offs between accuracy and timeliness; example: an accelerated compilation program added a third release of national accounts data, improving timeliness from 18 months to 11 months after the reference period. *Source: 3. DQAF (July 2003): Summary of Results for Producer Price Index ................................96* ### 1. Assurances of integrity ### 1. Assurances of integrity ### 1.1 Professionalism - Law emphasizes professionalism and impartiality in production of official statistics and INSTAT operations. - Article 4: - Protects professional independence of INSTAT staff and prevents interference from government, other state authorities, political parties, or any other interest groups. - Protects selection of data sources, statistical methods and procedures, contents, form, and timing of dissemination, and application of statistical confidentiality. - Roles and appointment: - Law describes roles and tasks of the Statistics Council members and of INSTAT’s General Director. - Appointment and dismissal of the General Director to be proposed by the Statistics Council and subject to approval of the Prime Minister and the Council of Ministers. - Human resources and professionalism: - INSTAT staff are subject to the rules and regulations of the Civil Servant Law (Nr. 8549, November 11, 1999). - Hiring through competitive recruitment based on qualifications. - INSTAT promotes professionalism via opportunities for professional development (courses, access to professional literature, encouragement of research) and presentation in international and regional conferences. - 1.1.2 (choices informed by statistical considerations): - Article 4 requires selection of techniques, definitions, and methodologies based only on statistical considerations. - Source data choices based on measurement objectives and data requirements, taking into account cost effectiveness and respondents’ burden. - Decisions on dissemination content, format, and timing based solely on statistical considerations. - Law (Article 17) specifies dissemination criteria, including simultaneous release to all users, appropriate media to provide broadest access, and fulfillment of requests for nonpublished data. - INSTAT’s practices follow the Law’s requirements. - 1.1.3 (commenting on misuse): - INSTAT staff respond to erroneous interpretation and misuse of statistics in accordance with Article 8 of the Law. - Staff uncertainty exists about the expected role and boundaries in practice. - INSTAT provides seminars and briefings to media and other users to encourage correct interpretation. - Recommendation: - Develop and disseminate staff guidelines to clarify the role and boundary of INSTAT’s staff in responding to erroneous interpretation and misuse of statistics. ### 1.2 Transparency - 1.2.1 (terms and conditions available): - INSTAT posts the Law on its website. - Article 4 guarantees respondents’ right to information on legal basis, purposes for which data are required, and protective measures for confidentiality. - All INSTAT questionnaires state terms and conditions of data collection and respondents’ obligation to provide information. - 1.2.2 (internal governmental access prior to release): - INSTAT provides equal access and simultaneous release of data to the public in strict adherence to the Law. - There is no prior access to the data before release. - 1.2.3 (products clearly identified): - Data released are clearly identified as INSTAT data. - All publications have the INSTAT logo and contact information. - 1.2.4 (advance notice of major changes): - INSTAT provides advance notice of major changes in methodology, source data, and statistical techniques, normally through proposals in statistical programs. - Law requires the five-year national program of official statistics containing development work be published in official gazettes. - INSTAT often provides details regarding changes when they take place (example: special publication explaining changes in the 2004 GDP estimates based on new methodologies and data sources). ### 1.3 Ethical standards - Staff behavior governed by the Civil Servant’s Law. - INSTAT has its own Code of Conduct. - All new staff attend an orientation program covering ethical standards and professional culture. ### 2. Methodological soundness ### 2.1 Concepts and definitions - 2.1.1: - INSTAT National Accounts Section (NAS) compiles national accounts broadly based on the System of National Accounts 1993 (1993 SNA) and consistent with the European System of Accounts 1995 (1995 ESA). - Time series available from 1996 onward. ### 2.2 Scope - 2.2.1 (scope consistency): - NAS does not produce all 1993 SNA tables and accounts needed to meet the minimum requirement of the Intersecretariat Working Group on National Accounts (ISWGNA) on a regular basis. - INSTAT produces: - annual value added and GDP at current and constant (previous year) prices by 25 major activity groups based on NACE Rev. 1 (a summary of nine activities is published); and - annual expenditure components of GDP at current and constant (previous year) prices. - NAS is developing a limited supply and use table (covering seven activities) and has begun to develop quarterly national accounts—these statistics are not currently being disseminated. - INSTAT has developed a strategic plan that includes compilation of other ISWGNA-specified accounts. - Recommendation: - Expand the scope of annual accounts to include the income accounts, the capital account, and the rest of the world accounts, as articulated in the INSTAT Strategic Plan. - Coverage and boundaries: - National accounts cover the whole territory of Albania in accordance with the 1993 SNA. - Concept of residence consistent with the 1993 SNA and the Balance of Payments Manual, fifth edition. - Migrant workers who work part of the year in another country are classified as resident of Albania. - Economic territorial enclaves such as embassies and free zones are included. - Production boundary broadly in accordance with the 1993 SNA with exceptions: - Own-account production of agricultural goods for own final consumption and construction of dwellings by households are covered. - Illegal outputs sold to willing buyers are not included; INSTAT and Eurostat are developing estimates for illegal activities’ production value, but estimates will not be included in GDP figures. - Asset boundary broadly conforms with the 1993 SNA (includes agricultural work-in-progress and tangible and intangible assets, e.g., development of software). - Capitalized production valued at cost of production. - Defense-related assets usable for civilian purposes are included in government consumption rather than capital formation. ### 2.3 Classification/sectorization - 2.3.1: - NAS follows the 1995 ESA for classifications and sectorization of institutional units and transactions. - Government Decision No. 327 (July 18, 1994) adopted the EU system of classification for ministries, central institutions, local authorities, state administration, and entities performing economic activities. - Classification of GDP by activities follows NACE Rev. 1 down to the four-digit level. - For dissemination, activities are grouped into nine major industrial groups: agriculture, hunting and forestry; extracting industry; manufacturing industry; construction; trade; hotels and restaurants; transport; post and communications; and other services. - Product classification follows the Central Product Classification (CPA) with a link to CPC. - COICOP and COFOG have been adopted but are not yet used in the national accounts. ### 2.4 Basis for recording - 2.4.1 (market prices valuation): - Valuation rules broadly follow the 1993 SNA. - Market output is valued at basic prices before taxes on products (VAT, import duties, excise, and other taxes) are added and subsidies on products deducted, as far as possible. - Some figures are valued at producer price or purchaser (market) prices, including subsistence agricultural production. - Output of government nonmarket services measured by aggregating costs. - Owner-occupied housing valued using market rental values. - Intermediate consumption excludes deductible VAT in line with 1993 SNA; problems with survey data result in nondeductible VAT being excluded. - INSTAT has an ongoing project to make appropriate adjustments. - Gross fixed capital formation valued at purchaser prices. - Import and export data valued f.o.b. and converted from foreign currencies using average monthly exchange rates based on BoA data. - No adjustment for holding gains/losses is made to the data for change in inventories. - Recommendations: - Include nondeductible VAT in the valuation of intermediate consumption. - Remove holding gains/losses from changes in inventories. - 2.4.2 (accrual basis): - Transactions are in principle on an accrual basis in accordance with the 1993 SNA. - Accounting law and standards oblige units to record accounts on an accrual basis. - General government accounts are on a cash basis, and no estimates are made to convert taxes and subsidies onto an accruals basis. - Work-in-progress for agricultural products is recorded when the harvest takes place. - Recommendation: - Make adjustments to estimate taxes and subsidies from cash to an accrual basis in collaboration with MoF. - 2.4.3 (grossing/netting): - Data collected from enterprises so transactions between establishments are netted out. - Enterprises with more than one establishment are very limited in Albania, so the impact of this deviation from 1993 SNA is small. *Source: _cr06393 - 1. Assurances of integrity* ### 3.1 Source data ### 3.1 Source data ### Source data collection and coverage - INSTAT reviews adequacy of source data regularly and proposes improvements, but lack of financial resources limits coverage expansion and frequency of surveys. - INSTAT maintains regular monthly, quarterly, and annual surveys covering a wide range of economic activities; surveys are often of inadequate quality (footnote 6 lists the regular program). - Ad hoc surveys supplement regular sources: Living Standard Measurement Survey (LSMS), Household Budget Survey (HBS) (currently covers urban areas only), 2001 Population and Dwellings Census, 1998 General Agricultural Census. - Lack of a labor force survey limits cross-checking of employment data. - Statistical business register: - Based on the National Register of Legal Entities (Tax Authority) and updated using results of surveys: quarterly large enterprises survey, annual SBS, quarterly retail trade survey, quarterly productive enterprises survey, quarterly construction enterprises survey, and FDI survey. - Register includes only legal enterprises and not establishments. - Does not include turnover data. - INSTAT introduced in 2005 the annual “Survey on Newly Created Enterprises” to update the statistical business register (employment and industrial classification). - Register stratification by number of employees: - small enterprises with 1-4 employees, - medium-sized with 5-49 employees, - large enterprises with 50 or more employees. - General Register of Agriculture-Economic Units exists. - Recommendation: Expand source data and improve survey coverage (such as labor force survey, countrywide HSB) and improve questionnaire content and design. - Recommendation: Given resource limitations, review survey strategy to focus more on turnover rather than number of employees; use tax record data to include turnover data on the statistical register. - Recommendation: Improve effectiveness of survey system to optimize questionnaire content and design (e.g., appropriate classifications, valuation, etc.). ### Production approach — main source data and gaps - Annual Structural Business Survey (SBS) provides information on enterprises in production industries, construction, transport and communication, trade, and some service activities; classification by NACE. - SBS comprises: - samples for enterprises with 1-4 employees, - exhaustive coverage for enterprises with five or more employees. - Value of production in SBS based on sales/turnover, change in inventories of finished products, work in progress, capitalized production, and subsidies. Data on inventories are collected only from larger enterprises. - Annual enterprise balance sheets supplement SBS with data on value added, output, intermediate consumption, and turnover. - VAT files of the Directorate of Taxation provide information on taxes and turnover. - Financial sector and insurance data from BoA and the Insurance Supervision Authority. - Agricultural survey: - MoA conducts an annual “area sampling survey” method; sampling framework is outdated and not consistent with the 1998 agricultural census and the 2001 population census. - INSTAT and MoA cooperating to improve agricultural survey on the basis of the Agricultural Census. - Identified source data shortcomings for production approach: - SBS needs better coverage of intermediate consumption, change in inventories, employment, and gross fixed capital formation. - Lack of turnover data in the statistical register impedes survey selection and grossing-up. - Accounting conventions need improvement (e.g., for agriculture) to differentiate changes in inventories and capital formation. - Recommendation: Increase use of proper random sampling techniques; review questionnaire design, samples, and response rates. - Recommendation: Expand questions in the SBS to better capture intermediate consumption, gross fixed capital formation, and change in inventories of appropriate categories (work-in-progress, raw materials, inventories for resale, etc.). ### Production approach — mapping of activities to sources (selected entries) - Agriculture, hunting and forestry; Fishing: - Main sources: Agriculture balances; Survey on agriculture from MoA—detailed information about the supply and use of goods in both quantity and value terms. - Mining and quarrying (energy-producing materials / except energy-producing materials): - Main sources: Annual balance sheet of enterprise—profit and loss account; Structural Business Survey; Data from VAT files. - Manufacture of products (various groups) through Manufacture of machinery and equipment; Electricity, gas and water supply; Construction; Trade; Hotels and restaurants; Transport; Post and communication; Financial activities; Real estate, renting, and business activities; Public administration and defense; Education; Health; Other community, social, and personal service activities: - Main sources include Annual balance sheet of enterprise—profit and loss account; Structural Business Survey; Data from VAT files; Consolidated state budget reports; administrative data from relevant ministries; BoA and Insurance Supervision Authority reports; LSMS for imputed rent in real estate. - The annual SBS collects profit/loss, very limited breakdowns of intermediate consumption, and compensation of employees. ### Expenditure approach — main data sources and limitations - Expenditure components and main data sources: - Household final consumption: LSMS; Retail trade; Agricultural balances survey; Balance of payments of BoA; Annual balance sheet of enterprise; Administrative data from Ministry of Transport. (Breakdown by COICOP is not available.) - Final consumption expenditure of NPISHs: 1998 survey on NPISH on income and expenses. - Government final consumption expenditure: Administrative data from Ministry of Finance. - Acquisitions less disposals of tangible fixed assets: Annual Structural Business Survey; Annual Statement of Accounts of nonfinancial and financial enterprises; Administrative data from the Ministries. - Changes in inventories: Annual balance sheet of enterprise—balance sheet. - Exports and imports of goods: Directorate of Customs—customs statistics and Balance of Payments of BoA. - Exports and imports of services: BoA—Balance of Payments. - Source data for expenditure approach are very limited, especially household consumption. - HBS history and coverage: - First Family Budget Survey in 1998 covered only Tirana. - Second HBS in 2000 covered Tirana and other urban areas with 5,389 households. - INSTAT plans to launch the third HBS in 2006, which will cover the whole of Albania. - Data gaps: HBS not conducted regularly and not countrywide; data lacking for expenditure on private education and healthcare; consumption data for NPISHs from outdated 1998 survey. - Recommendation: Conduct HBS covering the entire country and establish a policy regarding survey frequency to allow compilation of national accounts using the expenditure approach. - Price statistics available: monthly CPI, monthly PPI, unit value indices (UVI) of foreign merchandise trade, annual construction cost index, and prices for agricultural products. UVI noted as unreliable because of inaccurate valuations. ### Consistency with national accounts definitions, scope, classifications, valuation, and time of recording - Source data are not sufficiently consistent with national accounts definitions, scope, and classifications. - Source data do not provide details on production taxes to allow proper valuation of transactions. - Since 2005, improvements were made to estimates for the nonobserved economy by integrating various source data and estimation methods. - Source data on production side provide at least 80 percent of formal activities. - SBS does not cover private production data on health and education, despite increasing private production in these sectors. - Laudable practice: new questionnaires are subject to field piloting (example: pilot to improve data on work in progress for the agricultural sector field-tested in 2005). - Recommendation: Launch the new HBS covering the entire country as soon as possible and establish survey frequency policy. ### Timeliness of source data - Timeliness is a major issue causing delays in national accounts production. - NAS indicated delays in obtaining administrative information from MoF, BoA, etc.; MOUs between INSTAT and other agencies are expected to improve timeliness. - Recommendation: Consider collecting statistical data from enterprises earlier and with less completeness than balance sheet data if needed to ensure timeliness. ### Assessment of source data quality and monitoring - INSTAT routinely assesses source data for accuracy: - An automatic computer program cross-checks data from various sources, assesses temporal consistency, and compares time series. - Staff confirm unusual responses from major respondents and pilot questionnaire changes. - INSTAT monitors sampling errors and has information on nonsampling errors. - SBS uses random sample methodology for enterprises with fewer than five employees. - Overall response rate is more than 95 percent. - Out-of-scope activities declined to about 17 percent in 2004. - Grossing-up factors are derived scientifically based on sample design. - Imputation is made only for item nonresponse using averaging within groups. - Staff routinely assess accuracy of budget execution data, balance of payments data, and price data. - NAS indicated technical assistance is being provided by Eurostat and UN Economic Commission for Europe to improve source data for economic and social statistics. *Source: _cr06393 - 3.1 Source data (IMF PDF chapter/section).* ### 3.3 Statistical techniques ### 3.3 Statistical techniques ### 3.3.1 Data compilation employs sound statistical techniques to deal with data sources - NAS procedures for minimizing errors: - A computer program, based on ACCESS and EXCEL, automatically cross-checks source data from the SBS, VAT files, and the statistical business register (of enterprises). - Automatic checks minimize errors relating to production, intermediate consumption, and gross value added by activities. - Automatic generation of report tables with built-in validation is performed. - SBS data processing, validation and editing: - Use of data and logical controls; some controls involve cleaning the data. - Outliers are not replaced or modified; they are resolved in the grossing-up stage (usually enterprises that have switched strata). - Imputation and adjustment for nonresponse: - Use alternative sources for the same respondent from tax records, average data for the relevant industry group, data for other enterprises with similar characteristics, or extrapolation. ### 3.3.2 Other statistical procedures (data adjustments, transformations, analysis) - Nonobserved economy estimation: - An internationally accepted methodology was introduced with very limited application; results were incorporated in the release of the 2004 GDP figure and the revised 1996-2003 GDP estimates. - Estimates were based on a labor input method comparing labor supply estimates from LSMS against labor demand from the SBS. - Cross-checked using a limited commodity flow approach; further cross-checks using other data sources were not done. - The assumption on labor productivity for nonobserved activities needs further investigation. - Example issue: estimate of additional value added by the construction sector from the nonobserved economy of 73 percent was not cross-checked with imports of building materials. - Prior methodology: fixed ratios created by sector experts. - Recommendation: - Improve methodology to estimate nonobserved activities, especially construction, by more cross-checking with other data sources for reasonableness. - Review estimates using more recent LSMS (2005) data and further investigate the productivity assumption for the construction sector. - Production approach details: - Estimates of output and intermediate consumption are compiled at the one- or two-digit levels of NACE. - Proper source data are available for output and intermediate consumption for all activities; fixed ratios are not used. - Problems: some source data do not allow precise identification of production data in accordance with the 1993 SNA (e.g., agricultural data do not allow correct identification of changes in inventories); no adjustment for holding gains/losses to changes in inventories; consumption of fixed capital is not based on the perpetual inventory method; government data not all on an accruals basis. - Positive practices: output of owner-occupied dwellings estimated from comparable rent market, the 2001 Population and Dwellings Census, and CPI; work in progress of large construction projects reported; work in progress of private home construction estimated; further improvements being developed for work in progress including household own production. - Price and deflation practices: - Double-deflation method implemented in November 2005, with corresponding deflators for output and product breakdown of intermediate consumption. - Detailed PPI and UVI used for output and intermediate consumption, split between domestic and foreign trade. - UVI data are not reliable owing to the inaccuracy of customs data. - Mission informed that PPI already includes prices for exports; if so, inappropriate to deflate output for domestic sales and exports separately. - Recommendation: If the PPI includes exported commodities, use it to deflate total output, given the very poor quality of UVI. - Volume measures of taxes/subsidies and trade margins: - Volume measures of taxes/subsidies are estimated based on a mix of different approaches; a new method applying base-year tax rates to the volume of transactions (subject to specific taxes/subsidies) has been developed and is anticipated to be implemented soon. - Output volume of trade margin is estimated using the CPI-as–deflator method, rather than the internationally accepted method of applying the base-year-margin rate to the corresponding volume of sales or by extrapolating the base-year-trade margin using volume extrapolators of sales. - Recommendation: Apply appropriate methods to obtain volume measures for taxes/subsidies and trade margins. - GDP measurement: - GDP volume change is measured using annual chain indices. - Total GDP is derived from production estimates. - Expenditure approach: independently derived components only available for exports, imports, government consumption, and part of gross-fixed capital formation. - New methodology adopted for revised GDP data (1996-2004) in November 2005 based on weak assumptions: - Benchmark values derived for 2000 using commodity flow techniques. - Household consumption for other years assumed to represent 90 percent of the increase in total GDP. - Statistical discrepancy, combined with changes in inventories, estimated under the assumption these represent no more than 10 percent of GDP at market price. - Consumption of NPISHs based on an NPISH/GDP ratio from a 1998 survey. - Changes in inventories are only collected for a limited coverage of enterprises and are derived by residual. - These weak assumptions are not provided to the public when data are released. - Recommendation: Rationalize methods used to derive expenditure components of GDP. - For years when final consumption components cannot be estimated, use a single balancing item on the expenditure side that combines household consumption, change in inventories, and statistical discrepancies; disseminate the methodology clearly to users. - Use data from the LSMS to improve household final consumption expenditure estimates. - Deflators and price indices: - Volume estimates of expenditure components derived using appropriate deflators. - Dedicated price indices/deflators used to deflate GDP components at least at the one-digit level of the corresponding classifications. - CPI used to deflate household final consumption. - Government final consumption expenditure derived by deflating the cost components of its output for final use. ### 3.4 Assessment and validation of intermediate data and statistical outputs - 3.4.1 Intermediate results validation: - Data from main sources are checked against other independent data sources whenever possible (e.g., balance sheets checked against tax records, volume and price trends). - 3.4.2 Assessment and investigation of statistical discrepancies: - Systematic procedure used to routinely assess potential discrepancies in intermediate data. - Adjustments to remove discrepancies are not necessarily based on appropriate techniques (e.g., limited source data on change in inventories resulted in estimates derived using a fixed ratio instead of improving source data). - Intermediate data cross-checked as far as possible, including commodity flow techniques, LSMS, and an ad hoc study, Living Conditions and Inequality in Albania by INSTAT. - Estimates of nonobserved construction activity based on labor input from very limited coverage and series of labor data without thorough cross-checking with other construction input material data. - Recommendation: Expand cross-checking of intermediate data using more available data. - 3.4.3 Investigation of statistical discrepancies and other problem indicators: - INSTAT is developing supply and use tables (SUT) to balance estimates by industry/product; experimental SUT currently limited, covering only seven activities. - With limited source data and lack of quality expenditure components, usefulness of SUT is doubtful at present. ### 3.5 Revision studies - 3.5.1 Revision analyses: - Revision studies and analyses have been carried out during methodological improvements. - No explicit directive exists for regular revision studies, but the national accounts team anticipates continuation. - Findings are used internally to investigate differences and improve methodology and source data. - Recommendation: Introduce a policy to conduct revision studies regularly. --- ### 4 Serviceability (selected sections) ### 4.1 Periodicity and timeliness - 4.1.1 Periodicity: - National accounts data compiled and disseminated annually, meeting the recommendation of the GDDS. - 4.1.2 Timeliness: - National accounts data disseminated within 11 months after the end of the reference period, compared with the GDDS recommendation of 9 months. - The 11-month timeliness was achieved for the preliminary 2004 GDP estimates in November 2005; 2004 GDP data later published in Structure and Changes of the Albania Economy Based on National Accounts in January 2006. - INSTAT adopted a new schedule for annual national accounts during the March 2006 mission: - The first release of preliminary data is within 11 months (in November of year t+1) after the reference year t, - the second release of revised data is within 17 months (in May of year t+2) after the reference year t, and - the third release of the final data within 23 months (in November of year t+2) after the reference year t. - To adhere to the improved schedule, source data must be made available to INSTAT by other agencies per the five-year national program of official statistics. - Recommendation: Improve timeliness of the national accounts to meet the recommendation of the GDDS. ### 4.2 Consistency - 4.2.1 Internal consistency: - GDP estimates from production and expenditure approaches are not independently derived; expenditure estimates are made to be consistent with production approach. - Prior to November 2005 more components were independently derived, but a combined residual of changes in inventories and statistical discrepancies remained; the balancing item averaged 17 percent of GDP during 2001–03. - GDP estimates at current prices, volume measures, and deflators are consistent within the “value=volume x price” framework, and totals are sums of components. - Recommendation: Improve methodology to derive independent expenditure components and assess consistency with production approach. - 4.2.2 Time consistency: - GDP figures for 1996 to 2004 are consistent. - Latest major revision in November 2005; INSTAT revised the entire series and published an accompanying methodological note. - 4.2.3 Consistency with other frameworks: - National accounts statistics are consistent with the balance of payments, financial statistics, and fiscal data. - INSTAT uses external data from the balance of payments and BoA financial sector data; MoF provides general government data and the same institutional classification is used. ### 4.3 Revision policy and practice - 4.3.1 Revision schedule: - INSTAT established a new revision policy improving timeliness from 18 to 11 months for the first release; revision policy and cycle disseminated on the website. - Recommendation: Apply the new revision policy consistently. - 4.3.2 Identification of preliminary/revised data: - Not all publications identify data status (preliminary, revised, final). - Recommendation: Clearly indicate the status of published GDP data. - 4.3.3 Public studies of revisions: - No official directive on conducting or disseminating revision studies, but INSTAT is carrying out comprehensive revision studies and published a special report, Structure and Changes of the Albanian Economy Based on National Accounts, January 2006, containing sizes of revisions between 2004 and 2005 releases; the publication is not widely disseminated and is not on the INSTAT website. - Recommendation: Disseminate all revision studies to the public. *Source: _cr06393 - 3.3 Statistical techniques* ### 5.2 Metadata accessibility ### 5.2 Metadata accessibility ### Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques - INSTAT disseminates various types of documentation related to national accounts on concepts, scope, classifications, and basis of recording, data sources, and statistical techniques—in hard copy and on the website. - For major changes in methodology, revisions of the national accounts estimates are explained to users. - The GDDS metadata provide a summary and are updated at least annually. - INSTAT’s website provides hyperlinks to various useful statistical information websites, including the GDDS website. ### Levels of detail and tailored metadata - National accounts metadata are presented with various levels of details—from a short release on the website (a note “Gross Domestic Product,” year—of a few pages) to a more extensive explanation in the Statistical Yearbook. - More specialized metadata with extensive technical information on national accounts are also produced occasionally, such as Structure and Changes of the Albanian Economy Based on National Accounts. ### Assistance to users — contact points and catalogs - All INSTAT publications provide contact information through the section responsible for data dissemination. - The website provides details on organization and structure, including contact information for the head of the NAS. - The GDDS provides more subject-specific contact information and can be accessed through INSTAT’s website. - INSTAT’s website contains extensive catalogs of publications, documents, and survey results. - The Law, under Article 16, requires INSTAT to publish the prices for its publications. - The website does not have the most up-to-date information on the latest publications; example: it shows the Statistical Yearbook 1991-2000 and Albania in Figures for 2004, while the latest issues are the Statistical Yearbook 1993-2001, published in 2003, and Albania in Figures for 2005. - Recommendation: Keep the catalogs up-to-date. ### Data Quality Assessment Framework — selected findings relevant to metadata, accessibility, and serviceability (July 2003) - 0.1 Legal and institutional environment: X — Strengthen data sharing of INSTAT with other statistical organizations as required by the Law on Official Statistics. Finalize MOUs among statistical agencies on the form of coordination. Implement the agreement on the MOUs. (Short-term.) - 0.2 Resources: X — Lack of sufficient financial and staff resources. Inadequate IT and facilities. Provide adequate resources commensurate to the agreed work programs. (Short-term.) - 2.2 Scope: LNO — The income, capital, and rest-of-the-world accounts are not compiled. Implement the strategic plan of INSTAT that includes production of higher order accounts. (Medium-term.) - 2.4 Basis for recording: X — Taxes are not appropriately classified to derive concepts of basic and market prices. Government accounts are on a cash basis. Data of enterprises are on a net basis. Classify appropriately taxes and subsidies when detailed tax data are available. Adjust government accounts to an accrual basis. Follow the 1993 SNA in grossing/netting of transactions among establishments of the same enterprises. (Short-term.) - 3.1 Source data: LNO — Source data are hampered by poor questionnaire design (e.g., Structural Business Survey), limited area coverage of the Household Budget Survey (HBS), and insufficient frequency of surveys. Source data do not provide sufficient estimates of nonobserved economy. Unit value indices are of poor quality. Source data are not timely. Assess the existing source data and surveys to optimize the survey content, consistency, and efficiency taking into account respondents’ burden. Ensure that various surveys are used efficiently and effectively to provide source data for national accounts, for example, more focus on turnover data. (Medium-term.) - 3.3 Statistical techniques: LNO — Estimates of expenditure components rely on unrealistic assumption and are based on too limited benchmark data from the 2000 HBS. Rationalize the methods used to derive the expenditure components of GDP. For years when final consumption components cannot be estimated, use a single balancing item on the expenditure side from combined household consumption, change in inventories, and statistical discrepancies. (Short-term.) - 3.4 Assessment and validation of intermediate data and statistical outputs: LNO — Limited validation of intermediate data. Expand further cross-checking of intermediate data by making more use of existing source data. - 3.5 Revision studies: LNO — Regular revision studies are not in place. However, INSTAT has conducted revision studies in connection with changes in methodology. - 4.1 Periodicity and timeliness: LNO — Timeliness of 11 months exceeds the GDDS recommendation of 9 months. - 4.2 Consistency: LNO — Internal consistency check is not used because GDP estimates from the expenditure approach are made to be consistent with the production approach through balancing items. Estimate GDP from the production and expenditure approaches independently and conduct rigorous consistency checks. - 4.3 Revision policy and practice: LNO — Need to build credibility in adhering to the new revision policy that has just been disseminated in March 2006. All publications need a clear identification of data status. Implement a regular revision policy. Give clear information on data status. (Short-term.) - 5.1 Data accessibility: LNO — Dissemination via publications is fragmented and not up-to-date on the website. Release of national accounts does not strictly follow the ARC. Disseminate clear information regarding publications on national accounts, including periodicity of the publications and time of issuance. Update and adhere to the ARC. (Short-term.) - 5.2 Metadata accessibility: X - 5.3 Assistance to users: LNO — Information catalog is not up-to-date. Keep information on catalogs up-to-date. (Short-term.) ### Price Statistics (Consumer Price Index) — governance, confidentiality, and resources - Legal framework: The Law On Official Statistics, No. 9180, dated February 5, 2004, sets out the legal framework for the collection, organization, production, and dissemination of official statistics in Albania. The Law reflects elements of the UN Fundamental Principles of Official Statistics and empowers INSTAT to propose and implement the program of official statistics. - INSTAT is an independent government agency under the supervision of the Statistics Council; the Statistics Council has 11 members appointed by the Council of Ministers. - INSTAT is the only official producer of price indices, through its Price Indices Sector. INSTAT is empowered by the Law to collect data from all entities. - Data sharing: The Consumer Price Index (CPI) program does not involve any data sharing with other data-producing agencies. - Confidentiality: The Law (Articles 4 and 15) clearly stipulates the confidentiality of data of individual reporters and prevents any nonstatistical utilization or unlawful disclosure. The Law also specifies that aggregate data should comprise at least three reporting units, and the share of any one unit should not exceed 85 percent of the total. - Physical security: Owing to the lack of space, survey forms are processed in an open area, but the entrance to the building is guarded by security officers. - Recommendation: Improve the security of physical work places to prevent access to survey forms by outsiders. ### CPI program staffing, resources, and recommendations - INSTAT’s financial and staff resources are severely inadequate. - Currently, 155 employees are equally divided between the Central Directorate and the Regional Directorates. - At present, only one professional works on the compilation of the CPI, with some clerical support for data entry. Although this is sufficient to operate the CPI program, the loss of the professional would endanger the program. - The shortage of financial resources has resulted in postponement or even abolition of statistical surveys and dissemination of statistics. - The qualifications and training of the professional staff are good. Computer systems are adequate for the CPI program. The physical facilities are limited in terms of office space (e.g., four or five staff in a small office). - Recommendation: Increase the number of staff working on the CPI to provide back-up for the CPI program. ### Management, relevance, and quality management processes - The Law requires the production of official statistics to be cost-effective; the work and cost of each statistical program must be in proportion to the importance of the work. - INSTAT management promotes efficient use of resources, encourages consistency in concepts and methodologies across different statistics agencies, coordinates statistical work programs among agencies, and seeks to minimize respondents’ burden. - Since 2005, INSTAT staff are subject to a formal annual performance review; INSTAT plans to initiate a program to measure managerial performance. - INSTAT seeks outside expert assistance from Eurostat, the IMF, the World Bank, the Italian Institute of Statistics, the United Kingdom’s Department for International Development, the Swedish International Development Agency, and others. - INSTAT monitors users’ needs regularly and adequately, organizes seminars and conferences, and conducted an “Image Survey on INSTAT” in 2005 with about 1,000 respondents; the results will be used to improve processes and products. - INSTAT’s operations are guided by the basic principles of official statistics adopted by the Economic Commission for Europe and the UN’s Fundamental Principles of Official Statistics. - Processes are in place to monitor quality and to deal with quality considerations in planning the statistical program; INSTAT has internal monitoring processes and access to expert guidance on statistical quality. *Source: _cr06393 - 5.2 Metadata accessibility* ### 1. Assurances of integrity ### 1. Assurances of integrity ### Professionalism - The Law emphasizes professionalism and impartiality in the production of official statistics and in the conduct of INSTAT’s operations. - Article 4 protects the professional independence of INSTAT staff and prevents interference from government, other state authorities, political parties, or any other interest groups—notably in: - selection of data sources, statistical methods, and procedures; - contents, form, and time of dissemination; and - application of statistical confidentiality. - Roles and tasks of the Statistics Council members and of the INSTAT General Director are described in the Law; appointment and dismissal of the General Director are proposed by the Statistics Council and subject to approval of the Prime Minister and the Council of Ministers. - INSTAT staff are subject to the Civil Servant Law (Nr. 8549, November 11, 1999). Hiring is through competitive recruitment based on qualifications. - INSTAT promotes professionalism via opportunities for professional development (courses, access to professional literature, encouragement of research presented at international and regional conferences). ### Source, methods, and dissemination guided by statistical considerations - Article 4 requires selection of techniques, definitions, and methodologies to be based only on statistical considerations. - Choices of source data consider measurement objectives, data requirements, cost effectiveness, and respondents’ burden. - Article 17 specifies dissemination criteria, including simultaneous release to all users, appropriate media for broad access, and fulfillment of requests for nonpublished data. - INSTAT’s practices follow the requirements of the Law. ### Right to comment and user engagement - INSTAT staff are entitled to respond to erroneous interpretation and misuse of statistics. - INSTAT provides seminars and briefings to media and other users to encourage correct interpretation. ### Transparency and ethical standards - INSTAT posts the Law on its website; Article 4 gives respondents the right to information on legal basis, purposes for which data are required, and confidentiality protections. - All INSTAT questionnaires state terms and conditions of data collection and respondents’ obligations. - INSTAT provides equal access and simultaneous release of data; there is no prior access to data before release. - Data released are clearly identified as INSTAT data; publications quote INSTAT’s name, logo, and contact information. - INSTAT provides advance notice of major changes in methodology, source data, and statistical techniques—normally through proposals in the statistical programs and by publishing the five-year program of official statistics in official gazettes. - INSTAT staff behavior is governed by the Law on the Status of Civil Servants and INSTAT’s Code of Conduct; all new staff attend an orientation covering ethical standards. --- ### 2. Methodological soundness ### Concepts and classifications - Weights and price quotes used to compile the CPI are consistent with the 1993 System of Accounts (1993 SNA) and the Consumer Price Index Manual. - Weights and prices are classified at the detailed 7-digit level of COICOP for all products. - Households and their transactions are defined according to the 1993 SNA; COICOP is used to classify the CPI. ### Scope and coverage - The weights for the existing CPI were derived from the 2000 Household Budget Survey (HBS), which only covered urban areas, accounting for 45 percent of all households. - A new HBS, currently in preparation, will cover rural as well as urban households. - The 2000 HBS covered all households irrespective of size or income level and captured purchases of market goods and services and own-account production for own final consumption; purchases of illegal goods were not collected. - Recommendation: Change the weights as soon as possible to cover the whole of Albania. ### Basis for recording and valuation - CPI weights are based on household expenditure at purchaser prices; items to be priced are specified precisely, including type of outlet. - Prices are recorded in the period they are purchased (accrual basis). - The 2000 HBS did not collect data on sale of secondhand goods; only purchase value of such items is included in CPI weights. - Recommendation: Try to collect sale of secondhand goods in the new HBS, and use this in deriving the CPI weights. --- ### 3. Accuracy and reliability ### Source data and survey design - CPI weights derived from the 2000 HBS covered only urban households; new HBS will cover urban and rural households. - The structure of household consumption has changed significantly since 2000. - The HBS uses a two-stage sampling methodology: random sample of enumeration areas, then interval sampling of households. - In 2000, 6,000 households were selected, but only 5,387 responded; no attempt was made to replace nonresponding households, likely introducing a downward bias (high-income households more likely to refuse). - Price collection covers all types of outlets including informal markets, but outlet selection is not based on scientific techniques; outlets are selected visually to cover types within each area. - Prices are collected for 2,062 different products; most products are priced in 10 outlets, with fewer outlets for items with low regional variation. - A total of 20,174 price quotations are collected each month. - Prices are collected by contract enumerators employed by regional offices between the 5th and 25th of the month; each item is collected on the same day every month. - Price specification is precise to ensure the same item is selected monthly. - Prices are collected in 11 cities; it is not considered feasible to collect prices in more rural areas. - Recommendation 1: In the new HBS, replace nonresponding households with similar households in the same locality. - Recommendation 2: Investigate the feasibility of selecting outlets scientifically. ### Assessment of source data and quality control - Only assessment routinely made is checking for outliers; survey methods provide no information on errors. - No checks are made on the quality of data reported by enumerators (no revisits of a sample of outlets to double-check price quotes). - Recommendation: Introduce a program of checks on the reliability of the price quotes reported by the enumerators. ### Compilation techniques and treatment of missing data - CPI compilation software does not undertake automatic checks; checks are done manually. - Temporarily missing items are imputed using the monthly change for the respective group; this can be done for three consecutive months; if still missing the item is replaced with a similar product. - Seasonally unavailable items are imputed using values for the related group. - New items can only be introduced into the CPI when it is rebased. - No adjustments are made for quality change in products. - Recommendation 1: Update the CPI compilation software to incorporate a range of automatic data checks. - Recommendation 2: Introduce new products into the CPI as soon as they become important. - Recommendation 3: When a quality change is detected, try to make an adjustment to the CPI. ### Specific procedures and indices - CPI weight for housing services includes an estimate for imputed rent for owner-occupiers based on average rent paid by tenants in the 2000 HBS; adjusted for higher rent in Tirana. - Limited data prevented more detailed geographical breakdown for imputed rent (only about 5 percent of households in Albania pay rent). - Elementary-level indices are derived using the monthly price relative constructed from average prices for each product. - INSTAT plans to adopt geometric means for the new CPI; investigation indicates similar results to existing method. - Higher-level indices use the Laspeyres formula. - Current weight reference period is 2000; price reference period is December 2001. The 2000 weights were uprated to prices of December 2001. - The new weight reference period will be within seven years of the old one but is considered too long given rapid changes in consumption patterns. - Recommendation 1: When deriving imputed rent for the new weights, use the most detailed geographical breakdown possible. - Recommendation 2: Try to undertake an HBS at least every few years, if not every year. ### Validation and revisions - CPI compiler validates data against other available price indices, such as the PPI, to ensure similar movements. - Unusual movements in CPI components are investigated during compilation and data are revised if necessary. - Only one CPI is produced so no internal differences exist to investigate. - Once published, the CPI is not subject to revision except when new weights are introduced. - At the time of the last rebasing, differences between old and new weights were assessed. - Publications do not make it clear that the CPI is not subject to revisions. - Recommendation: Include a statement on the revision policy for the CPI in every publication and on the website. - At the time of the last rebasing, details of the impact of the new weights were published. --- ### 4. Serviceability ### Periodicity and timeliness - The CPI is compiled and published monthly, meeting GDDS recommendations and SDDS requirements. - The CPI is published within nine days after the end of the reference period, within the GDDS recommendation of one to two months and the SDDS requirement of no more than one month. ### Consistency - Only one official CPI series is produced; data are consistent within this dataset. - The CPI is fully consistent from 1993 onwards, with appropriate techniques used to link old and new series at rebasing. - Checks between the CPI and other price indices, such as the Producer Price Index (PPI), ensure they are largely consistent. ### Revision policy and practice - Revisions are only made to the CPI when it is rebased. - Preliminary and/or revised data are not clearly identified in publications. - Studies and analyses of revisions were made public at the time of the last rebasing. --- ### 5. Accessibility ### Data dissemination and user access - Publications have good layout with charts and tables; press release provides aggregate data while other publications provide detailed breakdowns. - CPI disseminated via press release and other publications; data are included on the INSTAT website with a downloadable Excel spreadsheet. - An advance release calendar is published at the beginning of the year showing CPI release dates and is strictly followed; the calendar on the website shows last year’s calendar. - Recommendation: Update the advance release calendar on the INSTAT website. - Users can pick up the CPI press release from the INSTAT office; INSTAT sends the press release by post or email to those on a circulation list. The website is freely available. - More detailed breakdowns than published are made available on request. ### Metadata and documentation - A methodological guide, produced with technical assistance from a foreign expert, was published in English when the CPI was developed; it has not been subsequently updated and is not posted on the website. - A brief methodological guide is given in INSTAT’s Yearbook. - Recommendation: Produce and publish an updated methodological guide in Albanian and English. - Levels of detail in documentation are currently adapted to intended audiences, but more detailed and up-to-date information is not made available. *Source: _cr06393 - 1. Assurances of integrity* ### 5.3 Assistance to users ### 5.3 Assistance to users ### Contact points for each subject field - Publications provide a general contact point for the dissemination branch of INSTAT and this appears to provide a good service to users. - Recommendation: Include contact details for a named individual in all publications. ### Catalogs of publications, documents, and charges - A catalog of INSTAT publications, including prices, is on its website. ### Accessibility and user assistance (from DQAF summary for Price Statistics: CPI) - DQAF assessment: 5.3 Assistance to users — X (Practice Observed). - Related accessibility note: Documentation is out-of-date and only available in English. - Serviceability-related DQAF items: - 4.1 Periodicity and timeliness — X - 4.2 Consistency — X - 4.3 Revision policy and practice — X - 5.1 Data accessibility — X - 5.2 Metadata accessibility — X ### Resource and operational constraints affecting user assistance - Only one person is dedicated to CPI compilation. (Table note under 0.2 Resources: "Only one person is dedicated to CPI compilation.") - INSTAT’s financial and staff resources are described as severely inadequate. - Current staffing: 155 employees are equally divided between the Central Directorate and the Regional Directorates. - For the PPI program: at present, only one professional works on the compilation of the PPI, with some clerical support for data entry; the loss of the professional would endanger the program. ### Legal and institutional context relevant to user assistance and transparency - Law On Official Statistics, No. 9180, dated February 5, 2004, sets out the legal framework for collection, organization, production, and dissemination of official statistics. - The Law (Articles 4 and 15) stipulates confidentiality of individual reporters’ data; Article 14 specifies reporters’ obligation to supply data; Article 16 allows INSTAT to collect and use administrative statistics; Article 17 specifies dissemination criteria including simultaneous release to all users. - Civil Servant Law referenced: Nr. 8549, November 11, 1999. ### Recommendations and operational improvements related to user assistance - Include contact details for a named individual in all publications. - Improve the security of physical work places to prevent access to survey forms by outsiders. - Increase the number of staff working on the PPI to provide backup for the program. *Source: _cr06393 - 5.3 Assistance to users* ### 2. Methodological soundness ### _cr06393 - 2. Methodological soundness ### 2.1 Concepts and definitions - The PPI follows the concepts of the 1993 SNA and the Producer Price Manual. - Industrial classification: NACE Rev. 1 down to the class (4-digit) level. - A product-based PPI exists using the CPC classification down to the 8-digit level, but the product-based PPI is not published nor used by anyone in INSTAT. - Recommendation: Cease production of the product-based PPI. ### 2.2 Scope - The PPI covers all production industries: mining, manufacturing, energy, and water supply. - Agriculture is covered but is not considered reliable because sizable nonenterprise activities are not included; it is planned to drop the agriculture sector when the PPI is rebased. - The PPI price collection program separately identifies prices for exported goods from those for domestic sales, but the published PPI measures changes in all prices, including those for exports. - Recommendation: Cease publication of the PPI for agriculture. ### 2.3 Classification/sectorization - All classifications used are based on internationally accepted standards. ### 2.4 Basis for recording - Weights for the PPI are based on turnover at market prices. - PPI weights are derived from sales and are recorded on an accrual basis. - Data are reported only at the enterprise level; transactions between establishments of the same enterprise are netted out. ### 3. Accuracy and reliability #### 3.1 Source data - Weights and price collection programs are based on the Business Register and annual Structural Survey of 1998. - The Business Register is derived from tax records and updated annually; only the number of employees is supplied. The annual Structural Survey is used to collect data on turnover. - When an enterprise ceases business, it is not replaced; instead, the weights of the other enterprises in that subindustry are recalculated to give the same total. - Original enterprises were selected to cover 80 percent of the turnover of each subindustry; coverage of turnover is likely to have reduced over time. - Informal activities unlikely to register with tax authorities are not covered. - INSTAT is changing the base year of the PPI to 2005. The price questionnaires are being redesigned with the aid of international experts. - Recommendation: Replace any enterprise that goes out of business with another enterprise of a similar size in the same subindustry. #### 3.1.2 Source data reasonably approximate requirements - Source data for both prices and weights fully meet the needs of the PPI program. #### 3.1.3 Source data timeliness - Prices are collected for each month but only once every quarter because enumerators are used; cost precludes monthly collection. - During the month following the end of each quarter, regional INSTAT offices send out enumerators to collect data for each month of the previous quarter. Forms are sent to headquarters within 45 days of the end of the quarter for processing. - Recommendation: Introduce monthly price collection as soon as possible, which will require additional resources. #### 3.2 Assessment of source data - Enterprises are not selected using random sampling techniques, so error rates cannot be derived. - Reported data are reviewed in headquarters for extreme values, which are queried with respondents. - Data collected by enumerators are occasionally double-checked when a problem is identified; no regular program of such checks exists for the PPI program. - Recommendation: Introduce random checks on the accuracy of the PPI price data collected by enumerators. #### 3.3 Statistical techniques - The computer software does not incorporate any checks on the data. Results of queries of data from enterprises are not documented. - Missing prices are imputed using the change in the average price of the other quotes for the same, or similar, products, irrespective of the length of time the price has been missing. Permanently unavailable products will not be replaced until the weights are changed. - New products reported by surveyed enterprises can be introduced: a base year price is imputed using the change in prices for related products; a base-year weight is derived by deflating the current period price using the PPI for the relevant group; other enterprise weights are adjusted to accommodate the new item. - Recommendations: - Incorporate computerized data checks into the compilation procedures. - Document any changes made to source data. - When an enterprise permanently ceases production of an item, replace it with another item. #### 3.3.2 Other statistical procedures - Each product price reported by every surveyed enterprise is inputted to the computer; an elementary index is derived for each quote using the change in price since the base year. - Elementary indices are aggregated for every enterprise using base year weights; enterprise indices are weighted together for each subindustry and higher levels. - Weight reference period is 1998—the same as the base year for the PPI. - The PPI was expanded to cover energy and water supply in 2000, but weights for these activities remained from 1998. - INSTAT recognizes that changing the base year to 2005 is needed and that 2005 is too long after 1998. - Since the PPI was introduced in 1998, INSTAT has not needed to link a new index to the old one, but they are aware of the correct procedure. - Recommendation: Rebase the PPI to 2005 as soon as possible and introduce a regular program for rebasing the index at least every six years. #### 3.4 Assessment and validation of intermediate data and statistical outputs - No comparisons are made between the industry-based and product-based PPIs, or with the implicit deflators from the national accounts. The CPI data are compared to the PPI. - Recommendation: Validate the PPI results with all other available price indices. - Any unusual movements in PPI components are investigated and the data are changed if necessary. - The same prices are used in both the industry-based and product-based PPIs, so scope for differences is limited. #### 3.5 Revision studies - The introduction of the new 2005 base year will be the first time the PPI will have been revised. - Recommendation: When the PPI is rebased, investigate the differences over the old index. ### 4. Serviceability #### 4.1 Periodicity and timeliness - The PPI is compiled monthly, in line with the GDDS and SDDS. - The PPI for the months of each quarter is not published until about nine weeks after the end of the quarter; the index for the first month of each quarter is not published until more than four months later. - This does not meet the SDDS requirement of one month or the GDDS recommendation of two months. - Recommendation: Work towards publishing the PPI each month and within one month of the end of the reference period. Use the INSTAT website to disseminate the PPI data in a more timely manner. #### 4.2 Consistency - The weight for each enterprise in the industry-based PPI includes all its activities, not just those for which prices are collected; industry weights are not consistent with those for the product-based PPI. - The PPI is fully consistent over time since the 1998 base year. - The PPI is checked for consistency with the CPI and is used in the deflation of the national accounts. #### 4.3 Revision policy and practice - No revisions have ever been made to the PPI. - Publications do not make it clear that the PPI is not subject to revisions. - Recommendations: - Include a statement on the revision policy for the PPI in every publication and on the website. - Publish the results of the investigation of the impact of the new 2005 rebasing. ### 5. Accessibility #### 5.1 Data accessibility - Publication layout is good and incorporates charts as well as tables. - The press release provides fairly aggregate data and only provides the data for the months of the quarter in question. - Recommendation: Include a time series of at least one year in the press release and on the website. - The PPI is disseminated via a press release and other publications; data are included on the INSTAT website with a downloadable Excel spreadsheet. - An advance release calendar is published at the beginning of the year showing PPI release dates; dates are strictly followed. The advance release calendar on the INSTAT website shows the calendar for last year. - Recommendation: Update the advance release calendar on the INSTAT website. - Interested users can pick up the PPI press release from INSTAT offices; INSTAT also sends the press release by post or email to anyone on a circulation list; the website is freely available. - More detailed breakdowns than are published are made available on request, subject to confidentiality rules. #### 5.2 Metadata accessibility - When the PPI was developed, a methodological guide produced with technical assistance from a foreign expert was published in English; it has not been subsequently updated and is not posted on the website. - A fairly brief guide is given in INSTAT’s Yearbook. - Recommendation: Produce and publish an updated methodological guide in Albanian and English. - Levels of detail: an appropriately brief guide is included in the Yearbook, but more detailed and up-to-date information is not made available. #### 5.3 Assistance to users - Publications give a general contact point for the dissemination branch of INSTAT, which appears to provide a good service to users. - Recommendation: Include contact details for a named individual in all publications. - A catalog of INSTAT publications, including prices, is on its website. *Source: _cr06393 - 2. Methodological soundness* ### 0.1 Legal and institutional environment ### 0.1 Legal and institutional environment ### Legal framework and institutional responsibilities - The Organic Budget Law (OBL) No. 8379 of July 29, 1998 provides principles governing preparation, proposal, and approval of the State budget and responsibilities for its implementation, including compilation of government finance statistics (GFS) (Chapter V) for the consolidated general government. - The OBL authorizes the MoF to specify accounting procedures and statistical reporting requirements for budgetary institutions, special and extrabudgetary funds, and local governments. - The OBL requires the Minister to prepare an annual final statement of accounts that broadly conforms to the classifications of A Manual of Government Finance Statistics 1986 (GFSM 1986) to be presented to the Council of Ministers and the Parliament. - A presentation on the government debt (foreign and domestic) situation twice a year is required. - Within the MoF, responsibility for GFS is primarily located in the General Directorate of Macroeconomic and Fiscal Policies (MD), which compiles statistics through collaboration with the General Treasury Directorate (Treasury), General Budget Directorate (Budget), the Information Technology, and Debt Departments. - Collaboration modalities and a detailed timetable for monthly, quarterly, and annual GFS dissemination are outlined in the Guideline on State Budget Reporting for Fiscal Year XXXX, MoF Protocol Number 295 of January 16, 2006 and other directives. - A draft new OBL (under internal review at the time of the mission), prepared with DFID technical assistance, aims to strengthen the legislative basis for MoF data collection, processing, and dissemination in support of a medium-term budget framework; it is expected that the new law will be enacted in 2007. - Note: In Albania, GFS refers to fiscal data compiled and disseminated, for analytical purposes, according to internationally accepted standards contained in A Manual of Government Finance Statistics 1986 (GFSM 1986). The authorities indicated an intent to begin migrating toward the Government Finance Statistics Manual 2001 (GFSM 2001) and requested IMF training and technical assistance during late 2006 to facilitate this. ### Data sharing and coordination - The flow of administrative budget data to the MoF from other ministries and government agencies is well established. - MoF is collaborating with INSTAT to formalize data sharing protocols through a bilateral agreement under final review, expected to be implemented in 2006. - The Treasury maintains source accounts on the central, local, and extrabudgetary (Social Security Fund and the Health Insurance Fund) government transactions and ensures timely flow of these source data to the MD, which compiles and disseminates GFS. - Contacts are maintained between MoF (Treasury and Debt Directorates) and the BoA on external financing and debt to avoid duplication of effort and reporting. - A National Statistics Council, on which the MoF is represented, provides a forum for regular meetings to discuss data sharing and coordination. ### Confidentiality and reporting mandates - GFS data are obtained as a by-product of budget and treasury systems; adequate procedures are in place to protect confidentiality of fiscal data. - MoF staff are guided by the Law on the Status of Civil Servants (Civil Service Law) of 1999 relating to disclosure of confidential data; access to confidential data requires clearance and is tightly supervised. - All fiscal data are obtained from budget and treasury systems, which require that all 36 district treasury offices (DTOs) provide the Treasury with detailed monthly reports on operations of central and local government units. - MoF provides hands-on training for DTO staff and Treasury officials visit DTOs to resolve reporting issues; returns from social security and health care institutes are regularly provided through established mechanisms. ### Recommendation (from source) - Increase―by restoring the position lost in the November 2005 restructuring―and strengthen staff resources dedicated to working on GFS through the establishment of a stable complement of trained professional staff and a funding horizon that is amenable to medium-term planning and sustained statistical development. Nominate staff for GFS training at the IMF. --- ### 0.2 Resources ### Staffing and training - Staff resources are inadequate for current GFS compilation demands and do not allow capacity for additional development work. - The MD currently comprises seven staff. - Footnote: Consisting of a Director, two―currently vacant―Heads of Unit (Statistics and Forecasts, and Fiscal Analysis, respectively), and two specialists for each of these units. - Only one person―a recent university graduate recruited in 2005―is charged with compiling the general government statistics disseminated in the quarterly Fiscal Statistics of Government and the monthly Economy and Budget publication, and must also develop Albania’s GFS methodology and underlying MoF accounting and reporting rules needed for GFSM 2001 implementation. - As part of overall downsizing implemented in 2005, the MD lost two positions, one of which would have been assigned to GFS compilation and related development activities; the Budget, Treasury, Debt, and Information Technology Departments have seen similar reductions. - No MD staff have been trained in the GFS methodology or EU debt and deficit methodologies; more resources are required to develop and implement GFSM 2001 and EU fiscal data-reporting requirements. - Training note: One staff—from the Macroeconomic and Treasury Departments, respectively―attended the three-week GFS course at the IMF’s Joint Vienna Institute in summer 2006. The mission suggested nominating a candidate for the six-week GFS course in Washington in February 2007; the authorities were supportive. ### Computing and facilities - Current computing resources are largely outdated and lack flexibility to access government accounting records and automatically compile fiscal data in conformity with GFSM 1986 or GFSM 2001. - A World Bank-financed project is underway to increase Treasury accounting system automation; the modern Oracle system includes customized modules—Budget, Treasury, Accounting, Debt, Tax, Customs, Social Security, Health Insurance, BoA, among others. - The system is designed to automate aspects of data collection, processing, database maintenance, and the compilation and dissemination of GFS. - The system is expected to be fully operational by end-2006. - Footnote: Formally scheduled for completion in June 2006; several actions remained, including hardware generalization (World Bank financed), network infrastructure, online connectivity, and testing for full implementation (three to six months), which may extend the implementation period. - The system will facilitate construction and storage of bridge and derivation tables linking accounting and budgeting source data to the GFS analytical framework, aiding GFSM 2001 compilation. - Adequate protection of computer resources is provided, including emergency back-up systems; building facilities appear adequate. ### Measures to ensure efficient use of resources - MoF management is aware of constrained budgetary scenario and seeks to set priorities to ensure efficient use of resources. - Work flows are regularly monitored but not directly costed because GFS is a by-product of the overall budget process. - Given limited staff and other resources, no further efficiency gains are envisioned. - Staff performance is assessed via an annual performance review exercise as stipulated under the Civil Service Law. --- ### 0.3 Relevance ### Monitoring user needs and utility - Officials display awareness of need for ongoing quality improvements in fiscal data. - Official requests and queries influence content (tables and charts) of MoF statistical publications; this is reflected in expanded presentation in Fiscal Statistics of Government. - Increasing participation of MoF staff in technical meetings and seminars organized by international and regional organizations provides input on new and emerging data requirements. - Feedback from the National Statistics Council and occasionally other government units helps ensure users’ needs are monitored. --- ### 0.4 Other quality management ### Quality focus and monitoring processes - MoF staff demonstrate high awareness of quality as central to budget, treasury, and debt operations underlying GFS compilation; workplace rules and regulations stipulate quality commitment. - Compilers follow established procedures to check accuracy and consistency of data. - The Deputy Minister regularly meets with heads of all DTOs and government spending units to discuss and clarify data-reporting issues and OBL provisions regarding inspection, monitoring, accounting, reporting, and auditing of execution of state and local budgets and financial plans of special funds (Article 2). - The Supreme State Audit, fully independent, has a mandate to undertake independent review of fiscal data regularly and advise on quality issues. - Footnote: The Supreme State Audit is an independent external audit institution in the Republic of Albania. Its functions and assignments are determined in the constitution and Organic Law No. 8270, dated 23.12.1997 (completed with relevant amendments in Law No. 8599, dated 1.06.2000) On the Supreme State Audit. - Processes are in place to check coverage, classification, missing or erroneous recordings, internal consistency, and consistency between data from alternative sources (INSTAT’s GDP figures and the BoA’s Unified Treasury Account and external debt data). - Deviations between MoF, INSTAT, and BoA data are thoroughly checked, for example in regular meetings of the interagency National Accounts Steering Committee (for the twinning project), in which the Director of the MoF’s MD participated. --- ### 1 Assurances of integrity ### Professionalism - The MoF has established a tradition of professional independence; work on an updated OBL aims to extend its prerogatives and authority in compiling and disseminating Albania’s GFS. - The annual final statement of accounts data are audited by the Supreme State Audit to ensure impartiality. - The Supreme State Audit audits government final accounts and carries out a detailed annual audit program of central government agencies, extrabudgetary funds, and state-owned enterprises; findings and recommendations are published regularly. - No evidence exists of political interference in choice of data sources and statistical techniques for GFS compilation. - The OBL gives the MoF independence to choose sources and methods, considering costs and resources. - MoF publishes substantial information on its statistical techniques on its website (in Albanian), which is linked to the IMF’s DSBB and Albania’s GDDS fiscal metadata. - The MoF monitors media coverage of its data; the Spokesperson for the Minister comments on erroneous interpretations and misuse of official statistics when necessary. The MD, in consultation with other directorates, provides technical advice and explanatory material to aid interpretation of statistics. ### Transparency and ethical standards - Terms and conditions under which GFS are compiled and disseminated are embedded in laws and internal MoF administrative regulations; the OBL (available on the MoF website) defines transparency in detail. - There is no internal governmental access to fiscal data prior to release. - The MoF is clearly identified as the source of fiscal data. - MoF invites users, including media, to meetings where changes in methodology, source data, and statistical techniques are discussed; MoF publications contain footnotes to alert users of such changes. - The Civil Service Law and related Ethical Code govern ethical conduct; specific questions related to the law and code are included in public exams for employment candidates. - Newly recruited staff attend mandatory training at the Public Administration Training Center, including ethical guidelines; MoF Customs and Tax Departments have special codes of regulations governing staff behavior. - Staff are reminded of ethical standards during annual performance reviews. *Source: _cr06393 - 0.1 Legal and institutional environment (Government Finance Statistics).* ### 2. Methodological soundness ### 2. Methodological soundness ### 2.1 Concepts and definitions - The concepts and definitions used to compile budget and financial execution data generally follow the guidelines of GFSM 1986. - The distinction between domestic and foreign financing and debt is based on the residency criteria of the IMF’s Balance of Payments Statistical Manual (fifth edition, 1993). - A formal “migration path” from the current GFSM 1986-based presentation to the GFSM 2001 framework has not been articulated. - The compilers of fiscal statistics expressed interest in moving toward the GFSM 2001 framework, considering it superior for fiscal policy purposes and aligned with Albania’s national data requirements given the rapidly evolving economy. - The authorities identified a series of technical actions in the Budget and Treasury Departments aimed at facilitating migration that is well advanced. - An accrual-compatible data infrastructure (Oracle) is being put in place by the IT Department with the financial support of the World Bank; the system and modules will provide the MoF advanced fiscal data management and GFS compilation capabilities. - The mission provided limited technical assistance primarily aimed at facilitating GFSM 2001-based data reporting to STA and explored the feasibility of establishing a migration path for implementing the GFSM 2001. - Based on demonstrated commitment of the MoF staff, significant progress may be possible. Recommendation: - Establish a documented plan to migrate in stages toward fully implementing the GFSM 2001 methodology and identify all the institutional units that would play a significant role in the migration. ### 2.2 Scope - The scope of the general government sector in Albania is in line with international standards and encompasses: - the budgetary central government (President, Parliament, Council of Ministers, 14 ministries, 8 nonministerial departments, and various central institutions, which represent a total of 1,522 individual budget institutions), - local government (36 districts and 43 municipalities [including Tirana, which is both a district and a municipality], which represent a total of 2,163 individual units), - and two extrabudgetary funds (the social security fund and the health insurance fund). - In accordance with the provisions in the 1998 OBL, statistics broadly consistent with the GFSM 1986 are produced for the National Budget: the consolidated general government, state budget (all components), local government budgets (all components), State Social Insurance Fund budget, and the Health Insurance Fund. - These data cover basic revenues and expenditures, special funds of line ministries, and investment projects (domestically and foreign financed) when associated grants/loans/financing pass through the Unified Treasury Account maintained at the BoA. - Owing to source data limitations, compiling data on investment projects financed through grants provided by foreign donors remains problematic. - Data are provided on general government gross debt, classified by residency (i.e., domestic and foreign) of the counterparty to the liabilities. - Fiscal data cover all economic flows of the general government and the stock of general government debt, in accordance with GFSM 1986. - Monthly data are considered preliminary, while quarterly and annual data are considered final. - All datasets are based on full coverage of the general government sector. ### 2.3 Classification/sectorization - Accounting data are generally classified using the methodology set out in GFSM 1986 and are provided separately for each level of government, as well as for the consolidated general government. - There are some improvements over the GFSM 1986 classifications in the national presentation: - The breakdown of expenditure (economic and functional classification) more closely approximates the GFSM 2001 framework. - Inclusion of privatization receipts and of general government’s lending to nonfinancial corporations in financing (instead of in net lending minus repayments) is in line with the GFSM 2001. - Classification for State Budget revenues and other receipts (Article 4 of the OBL) consist of: - tax revenues; - non-tax revenues including economic activities of budget institutions, administrative fees and user charges, fines and forfeitures, repayment of loans and other non-tax revenues according to the law; - revenues from the sale of state property; - domestic and external grants, both grants in cash, in-kind and commodities; - domestic and external borrowing by the government for financing capital investment and any budget deficit; - other revenues in accordance with law. - All revenues raised or received form one Consolidated Fund, the cash resources of which are maintained in a single account called the Unified Treasury Account at the BOA. - The expenditure classification for budget institution expenditures and other payments (Article 7 of the OBL) consists of: - current expenditure including salaries, wages and allowances, expenditure on goods and other services, current transfers, and interest payments; - capital expenditure including construction, reconstruction, acquisition and transfer of capital assets; - lending and equity participation; - repayment of principal on borrowing. - Article 12 of the OBL stipulates that the means allowed for financing the deficit is articulated in the State Budget. Chapter IV of the OBL provides guidelines on transactions pertaining to government borrowing and debt. - The authorities indicated that the classification of data for each subsector of general government according to GFSM 2001 is being carried out. - A bridge table has been created from the “budget classification” to the national presentation of fiscal data used in Fiscal Statistics of Government. - Additional bridge tables (i.e., destination codes) from those data are used to compile data according to the economic and functional classifications of the GFSM 1986 framework, as prescribed in the OBL. Recommendation: - Streamline interdepartmental (Budget, Treasury, Debt, and Information Technology) tasks that support the adoption of GFSM 2001-based data compilation, including for high-frequency data (monthly cash flow and quarterly government operations data) as well as quarterly nonfinancial public sector debt. ### 2.4 Basis for recording - Prices are used to value flows and stocks reflect actual cash payments (GFSM 1986 guidelines). - In accordance with the GFSM 1986, flows are valued on the basis of the amount of cash received (cash deposits) and cash payments made (cash withdrawals). - Debt is recorded at face value (i.e., the amount to be repaid at the end of the contract), rather than market value. - Amounts denominated in foreign currency are converted to leks at the official daily exchange rates, as provided by the BoA. Recommendation: - Commensurate with the phased migration toward the GFSM 2001 framework, market prices should be used to value all flows and stocks. - Recording is done on a cash basis (GFSM 1986 guidelines). - Recording of operations through the Treasury system (used for monitoring budget execution) is on a strictly cash basis. - The State Social Security Fund and the Health Insurance Fund use the accrual basis of recording but use the cash basis for reporting to the MoF for budget execution (and GFS) purposes. Recommendation: - Commensurate with the phased migration toward the GFSM 2001 framework, provisions should be made for recording transactions on an accrual basis. - Grossing/netting procedures are broadly consistent with internationally accepted standards (GFSM 1986 guidelines). - All transactions are shown on a gross basis, except for tax refunds and financing transactions, which are shown net. - Fiscal data on the subsectors of the general government are recorded on a gross basis, and intersectoral flows are eliminated in consolidation. ### 3. Accuracy and reliability #### 3.1 Source data - Current administrative systems provide data covering the full range of economic stocks and flows for general government (central and local government units as well as extrabudgetary funds). - The main data sources of GFS are the administrative systems for monitoring budget execution and debt management based in each of the 36 DTOs, which are required to report as specified by the MoF under the provisions of the OBL. - The basis of the Treasury’s fiscal database comprises reports of: 1) the DTOs―budget execution and financing; 2) the Debt Management and Financial Analysis System (DMFAS), which includes short-, medium- and long-term debt; 3) project implementation units for foreign-financed project; 4) the extrabudgetary funds. - Surveys are not needed because all information is provided through administrative sources. - The only significant weakness in source data is the availability of data on certain external donor financed (grants) projects that do not pass through the treasury system. - These sources allow consolidation for general government and its subsectors and may also be used to provide information on some stocks and accounting information. - The Treasury keeps data sources under continuous (monthly) review. - The Treasury (Accounting Department) has developed reports and formats to collect, process, and store financial information in a timely and efficient manner. - Any changes in the presentation of financial information and budget execution are coordinated processes between the reporting and compiling units. Recommendation: - Strengthen source data coverage with regard to external donor financed projects by requiring that large projects pass through the Treasury (Accounting Department) system, including for the purpose of reconciling fiscal data with data in other macroeconomic statistical areas. #### 3.1.2 Source data alignment - Definitions, scope, sectorization, time of recording, and valuation of transactions and debt embedded in source data are identified in the OBL and the Guidelines on State Budget Performance and in the monthly reports. - All general government units report according to the national “budget classification,” which serves as a harmonizing chart of accounts. - The social security and health funds have their own charts of accounts; the MoF has designed reporting forms for these funds sufficiently detailed to allow compilation of GFS. - Using data from the Treasury system together with reported data from these funds, the MoF is able to compile GFS for the consolidated general government sector and its subsectors. Recommendation: - In the context of the development and implementation of the new Oracle-based IT infrastructure, construct as soon as feasible a national chart of accounts for all general government subsectors aligned with GFSM 2001 classifications. #### 3.1.3 Timeliness of source data - Source data are timely pursuant to the Guideline on State Budget Reporting. - Monthly reports from the budget execution agencies are submitted by each of the 36 DTOs within 5 to 10 days of the end of the month. - Annual reports of unaudited data are available by February 15. - Reports from the social security and health insurance funds are received with similar timeliness. - BoA reports on the cash balances of all general government spending units are timely. - Central government debt data are submitted by the 11th of the month after the reference month, and the data are finalized by the 17th of the month; these data serve as the basis for recording state debt in DMFAS. - The final budget execution data approved by Parliament and used for compiling GFS are available within six months after the end of the fiscal year. - Preliminary consolidated annual general government data are available in February. #### 3.2 Assessment of source data - Source data are assessed carefully; all data come from administrative and accounting sources required to report detailed monthly data under the OBL and Guidelines on State Budget Reporting. - Numerous automated and manual procedures check the accuracy of budget execution data: - payment orders checked against financing plans submitted; - internal controls applied within and between reports; - cross-checks between the Treasury balance and other balances (i.e., the Unified Treasury Account at the BoA); - data subject to internal and external audit. - Results of reviews are monitored and made available to guide internal planning. - A similar approach is employed for assessing data from local governments and the two extrabudgetary funds. - Data inconsistencies, out-of-trend values, and inconsistencies with other related data sources are confirmed with DTOs and other reporting units and documented as they occur. - GFS compilers address accuracy questions through direct contacts with reporters. - Procedures for routine discussions of data reconciliation are in place for monitoring monetary and fiscal records related to government deposits and external debt. - The status of the data used for each period is noted in the GFS publications (e.g., preliminary/revised/final). #### 3.3 Statistical techniques - All data come from administrative and accounting sources required under the OBL; procedures to allow for estimation are not needed, and no surveys or imputations are employed. - Preliminary data are routinely replaced by final data; few changes occur between preliminary and final data due to extensive checks. - GFS data are based on comprehensive information and compilation procedures that strive to minimize processing errors (coding, editing, tabulation). - Generally accepted statistical methods are used to adjust/consolidate GFS derived from accounting records. - Suspect submissions or data discrepancies identified in consolidation are investigated and resolved, frequently through direct contacts. - MoF staff reported that further refinements are being tested to permit greater accuracy in consolidating stock and flow statistics. - No other statistical procedures are employed. Recommendation: - To facilitate compilation and ensure continuity, fully document the bridge tables being developed to link national charts of accounts with GFSM 2001 classifications. *Source: _cr06393 - 2. Methodological soundness* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Assessment and validation of intermediate data and statistical outputs ### Validation of intermediate results - Fiscal data reported by the BoA and INSTAT are fully consistent with the MoF data. - Financing data are checked and validated with BoA data on government deposits, the issuance of domestic securities, and sources of external financing. - Reports of the DTOs and other spending agencies sent to the MoF (Treasury) are validated to ensure proper classifications. - Evidence indicates well-established procedures to fully ensure that accounting data are accurate and that final reporting of statistics is based only on the latest most accurate and reliable source data. - Significant effort is expended on internal and external audits and on reconciling data. - Note: “All public sector entities are subject to external audit.” (footnote 25) ### Assessment and investigation of statistical discrepancies in intermediate data - All discrepancies between GFS and intermediate budgetary data, and those between the intermediate budgetary and accounting data, are investigated. - Expenditure by economic type and by function is cross-checked for consistency. - Fiscal data are cross-checked against other intermediate data, such as information from tax and customs administrations and the transactions for the government executed by the BoA. ### Investigation of discrepancies and other indicators of problems in statistical outputs - Discrepancies between the banking system (data on government accounts at commercial banks and at the BoA) and between budget execution reports (e.g., between the deficit/surplus and financing and between financing and changes in gross debt) are investigated and resolved to the extent possible before release of data. - External debt stocks and related flows are checked with creditor information. - Such reconciliations are carried out in preparing the MoF’s fiscal package (part of the annual budget cycle). - The MoF attempts bilateral data reconciliations with external donors and creditors and investigates significant discrepancies; cooperation is limited when external donors provide resources directly to recipients/projects (see 3.1.1). --- ### 3.5 Revision studies ### Routine studies and internal use - Cross-checks with intermediate data that give rise to discrepancies requiring revisions are documented in an internal memorandum (issues, conclusions, and recommendations) prepared by the Budget, Treasury, MD, and Debt Directorates (as relevant). - The memorandum is sent to the Minister on a monthly basis, as needed. - Follow-up is usually at the level of Deputy Minister with the data-providing agency, usually by phone but occasionally through formal letters and on-site meetings. - The resulting documentation (outcome) is used as a reference to address similar future occurrences and to inform statistical processes. --- ### 4 Serviceability ### 4.1 Periodicity and timeliness - With the inception of the regular publication of the quarterly publication Fiscal Statistics of Government in 1998, Albania exceeds the GDDS recommendations for the periodicity of fiscal data―and has met or exceeded the SDDS prescriptions―as follows: - Statistics for consolidated general government operations are disseminated both on a quarterly and an annual basis. - Statistics for central government operations are disseminated monthly in the publication Economy and Budget. - Monthly statistics for central government debt are disseminated quarterly. - Statistics for central government budgetary operations are disseminated on both a monthly and quarterly basis. - Statistics for central government debt are disseminated both quarterly and annually. - Timeliness: With the inception of the regular publication of the quarterly publication Fiscal Statistics of Government in 1998, Albania exceeds the GDDS recommendations for the timeliness of fiscal data―and has met or exceeded the SDDS prescriptions―as follows: - Preliminary annual statistics for general government operations are disseminated within one quarter. - Monthly statistics for central government operations are disseminated within one month in the publication Economy and Budget. - Quarterly statistics for central government debt are disseminated within one quarter. - Quarterly statistics for central government budgetary operations are disseminated within one quarter. - Preliminary annual statistics for central government debt are disseminated within one quarter. ### 4.2 Consistency - Internal consistency: - Disseminated central government finance data are internally consistent; concepts, definitions, and classifications for monthly, quarterly, and annual fiscal data are the same. - Data are internally consistent for the general government account and other levels of government, with the sum of monthly transaction data equaling the annual data. (footnote 26) - On the revenue and expenditure sides, aggregates are consistent with their components, and balances are consistent with these aggregates. - In consolidating general government accounts, staff fully reconcile transfers from the budget to other levels of governments. - During recent years, statistical discrepancies have been minimal in the final annual data. - Consistency over time: - Fiscal data are consistent with expected trends and reflect discretionary changes, external shocks, and developments in economic activity. - Changes due to major methodological improvements or changes in the statistical system are explained through footnotes, and time-series are revised in relevant publications. - The historical series in the underlying fiscal database for the general, central, and local governments is reconstructed and available free on the MoF website (in Albanian). - Consistency with other data sources/frameworks: - An interagency committee checks consistency with the BoA’s monetary and balance of payments statistics and with INSTAT’s national accounts statistics. - The definition of general government in GFS is the same as in monetary statistics; GFS financing data and data on government financial assets and liabilities held by other sectors are broadly consistent with monetary and financial statistics. - Grants and other transactions are largely consistent with balance of payments data, although shortcomings remain in obtaining details on many significant grants in kind from abroad (see 3.1.1). - Intersectoral inconsistencies have occurred due to structural changes and revisions to national accounts; MoF recognizes changes in GDP figures stemming from methodological changes through footnotes to Fiscal Statistics of Government. - The MD is preparing supplemental tables cross-checked against INSTAT’s national accounts aggregates (savings, net lending/borrowing, government consumption, gross fixed capital formation, consumption of fixed capital). ### 4.3 Revision policy and practice - Revisions schedule and transparency: - Monthly and quarterly fiscal data are preliminary and can be revised in annual figures owing to changes in reported data, such as reclassification of previously disseminated monthly data or on release of audited annual data. - Preliminary data are checked extensively; revisions are marginal when preliminary data are replaced with final data. - Minor errors are recorded in the next reporting period; significant errors are applied to the period in which the activity took place. - Since 2004, revisions have followed a regular annual cycle; however, the revisions cycle is not made known to the public, and reasons underlying revisions are not explained. - Government domestic debt statistics: no regular, well-established, and transparent schedule for revisions that is publicized. - Foreign debt statistics are revised to take late submissions into account; these practices are not made known to the public. - Recommendation: “When revisions, inside or outside any revision cycle, are called for, they should be made known to the public (e.g., through the publication Fiscal Statistics of Government and documented in the freely accessible database maintained on the MoF website).” - Identification of preliminary and revised data: - Preliminary data are identified, and distinction is made between previously disseminated data and revised data in the MoF’s publications. - Studies and analyses of revisions made public: - Owing to the nature of the statistics and full coverage of the general government sector, no specific studies or analyses of revisions to monthly data―which tend to be routine and generally small both in size and number―are made public. - Note cross-reference: see also 3.5.1. --- ### 5 Accessibility ### 5.1 Data accessibility - Presentation and interpretability: - The MoF website permits easy access to the bilingual (Albanian/English) Fiscal Statistics of Government publication, which contains a GFSM 1986-based national presentation of fiscal data and a hyperlink to lengthy time series data. - Most fiscal data are presented to allow major aggregates and balancing items to be identified and related to detailed underlying data. - The national presentation is used mainly to monitor budget implementation and to formulate future fiscal policy. - For annual figures, a large number of GFS time series are available; by special request, the MoF provides data for government consumption and other national aggregates. - Recommendation: “In addition to disseminating the national format, disseminate general government finance statistics when feasible, according to the GFSM 2001.” (footnote 27) - Dissemination media and format: - Detailed tables (in Albanian and English), broadly consistent with GFSM 1986, are disseminated in the quarterly Fiscal Statistics of Government, which also contains information on the final budget outcome in the June issue. - All these data are released by the MoF on its website. - Preliminary annual data are disseminated in the December issue of the monthly bulletin Economy and Budget, released (in Albanian) in February (i.e., with a two-month lag). - General government operation data are available cumulatively for the year-to-date. - The monthly publication Economy in Focus describes trends in public finance along with highlights for the real, monetary, and external sectors. - A new publication, Main Macroeconomic Indicators, is disseminated on the MoF’s website. - Time series and more detailed breakdowns are available free through the Treasury’s Web-based database and on request in paper or electronic formats. - Release schedule and equal access: - A calendar of release dates for fiscal data is included in the online catalog (see 5.3.2). - Annual, quarterly, and monthly data are released as per directives in the OBL and the Guideline on State Budget Reporting, posted (in Albanian) on the MoF website. - Statistics are made available to all users at the same time, free through hardcopy and web formats; there is no prior release or preferential access to the data. - Non-routinely disseminated statistics: - Nonpublished, nonconfidential, disaggregated data are made available upon request without charge. - The availability and terms under which nonpublished but nonconfidential data are made available have not been publicized in MoF publications. ### 5.2 Metadata accessibility - Documentation of concepts and methods: - Sufficiently detailed statements (in Albanian) on accounting concepts, scope, classifications, and basis of recording are contained in the OBL and serve as the basis for compiling GFS that broadly conforms with GFSM 1986. - Bridge tables showing links between source (accounting) data and GFS are documented but not disseminated. - GFS metadata prepared by the MoF for participation in the GDDS are available on the IMF’s DSBB website, which is linked to the MoF’s website, and are regularly updated. - Recommendation: “Prepare additional documentation (in English) explaining the concepts, scope, classifications, basis of recording, data sources, and statistical techniques used in compiling GFS, as well as differences from internationally accepted standards and guidelines (ideally with reference to the GFSM 2001, given the planned migration to this standard).” (footnote 28) - Level of detail: - Presentations of fiscal data are thorough enough for experts to assess strengths and weaknesses of government finance statistics. - Level of detail in monthly and quarterly releases appears to meet the needs of most users. - Metadata in the quarterly Fiscal Statistics of Government orient users concerning the basic framework for the fiscal statistics. ### 5.3 Assistance to users - Contact points: - Prompt and knowledgeable service and support is available. - The quarterly Fiscal Statistics of Government and the monthly information bulletin Economy in Focus provide users with contact information for queries (an individual [Director of the MD], a contact phone number, an e-mail address, and the MoF’s website). - Similar information is given in the monthly Economy and Budget. - The GDDS metadata on the IMF’s DSBB website, linked to the MoF website, also list contact persons for fiscal data. - Catalogs and charges: - A concise catalog of publications is available on the MoF website. - All data disseminated through hard copy and web-based media are provided free of charge. --- *Source: _cr06393 - 3.4 Assessment and validation of intermediate data and statistical outputs (PDF chapter/section).* ### 4. Serviceability ### _cr06393 - 4. Serviceability ### 4. Serviceability (Sections 4.1–4.3) - 4.1 Periodicity and timeliness: O - 4.2 Consistency: O - 4.3 Revision policy and practice: LO - "Revisions, inside or outside any revision cycle, should be made known to the public (e.g., through the publication Fiscal Statistics of Government)." - "Disseminate information on revisions on the MoF website (short-term)." ### 5. Accessibility (Sections 5.1–5.3) - 5.1 Data accessibility: O - 5.2 Metadata accessibility: O - 5.3 Assistance to users: O --- ### Monetary Statistics — 0. Prerequisites of quality ### 0.1 Legal and institutional environment - Responsibility and legal basis - The Bank of Albania (BoA) is, by tradition, responsible for compiling and disseminating monetary statistics; the BoA’s law On the Bank of Albania (Law) does not specifically spell out this mandate. - Article 3 (4) of the Law: BoA has responsibility for conducting monetary policy, which requires monetary statistics. - Article 24 (5) and Article 27 of Chapter IV of the Law define BoA authority to establish rules for reporting information, binding upon banks, juridical, and physical persons. - Law No. 8365 of July 2, 1998 On Banks in the Republic of Albania (Banking Law): reporting relationship between BoA and banks under Articles 41 and 43. - Chapter IV, Article 24 (3) of the Law: “The Bank of Albania shall prepare periodic analyses on economic and monetary matters, publish the outcome and submit proposals and measures to the Government of the Republic of Albania.” - Chapter VIII, Article 69 of the Law: BoA shall “publish monthly its summary balance sheet;” and at year-end prepare report and financial statements; publication form determined by the Bank after Supervisory Council approval. - The responsibility for compiling monetary statistics resides with the BoA’s Statistics Department (SD), created in November 2005 based on the BoA’s Supervisory Council Resolution No. 79 of October 31, 2005. - Recommendations (legal) - "Strengthen the BoA law to provide full legal assurances that individual reporters’ data may be used only for statistical purposes." ### 0.1.2 Data sharing and coordination among data-producing agencies - Internal arrangements - Accounting and Payments Department (APD) produces monthly BoA balance sheet data and provides them to SD in hard copy and floppy disk. - Commercial banks transmit monthly balance sheet data to the BoA’s SD (Office of Administration of the Reports (OAR)) in hardcopy and on floppy disk. - Savings and loans associations (SLAs) submit individual report forms quarterly to the OAR through two unions. - BoA uses a unified reporting system for commercial banks and a database system for storage and common access. - OAR checks source data accuracy and forwards to SD’s Office of Monetary and Financial Statistics (OMFS). - SD coordinates with the Supervision Department to incorporate revisions from on-site supervision. - External coordination - Formal data-sharing agreements exist with INSTAT and the Ministry of Finance (MoF). - A Memorandum of Understanding with INSTAT, covering provision and sharing of data with a defined timetable, is in the final stage of completion and expected to be signed in the near future. - BoA receives data from INSTAT and MoF and disseminates them through publications and website. ### 0.1.3 Confidentiality of individual reporters - Legal provisions and practice - Article 58 (1) of the Law: prohibits unauthorized access, disclosure, or use of nonpublic material information by BoA staff or affiliates. - Article 58 (2) states such persons may disclose nonpublic material information to tax authorities of the Republic of Albania—possible interpretation gap on exclusive statistical use. - BoA documents: "Code of Ethics of the Bank of Albania" and "Regulation for Transparency and Confidentiality in the Bank of Albania" contain confidentiality provisions; posted on BoA’s website (www.bankofalbania.org). - Operational safeguards: database security measures, password protection of the computer center, perimeter security, visitor screening, Protocol and Archive Office keeps hard copies for 10 years before transfer to State Archive. - Practical exceptions - In some instances disclosure of individual banks’ information cannot be avoided (e.g., a dominant position in a given instrument). Example: one Albanian bank with branches outside the country—its position in Shares and other equity in the other depository corporations survey can be identified and is publicly known because the bank publishes its balance sheet statement. ### 0.1.4 Statistical reporting mandate and enforcement - Legal basis for reporting - Chapter IV, Articles 24 (5) and 27 of the Law empower central bank to collect data. - Banking Law Articles 41 and 43 provide formal provisions for reporting by banks; Article 44 specifies penalties "in case of violation of its provisions." - Law No. 8782 of May 2001 On Savings and Loans Associations (Articles 47 and 50) and BoA Regulation No. 44 of June 2005 provide legal basis for SLAs reporting. - Systems and practices - Automatic System of the Statistical Reports (SARS) database contains data reported by commercial banks for supervision and monetary statistics; SARS does not yet contain SLA data. - Monetary statistics compilers currently use Excel files to generate monetary data rather than SARS. - A BoA working group reviews reporting requirements. - BoA provides written instructions to reporting banks, SLAs, and unions; SD staff contacts reporting banks via e-mail and telephone. - Electronic (online) reporting system not yet introduced. - Recommendation (reporting systems) - "Implement an electronic (online) reporting system for commercial banks and other financial institutions to enhance efficiency of monetary compilation." ### 0.2 Resources - 0.2.1 Staff, facilities, computing resources, financing - Current staff resources suffice for monetary compilation but more resources are needed to implement plans to compile other financial statistics (financial corporations survey and flow data). - Computing resources are deemed adequate in quality and quantity for collection, compilation, and dissemination. - Physical office conditions and staff distribution are not adequate; space constraints and staff sharing offices. - Funding: BoA provides funding for current statistical program; medium-term funding should be planned to ensure a fully automated process of collection and processing. - SD structure and staff - SD has two units—the Sector of Financial Statistics (SFS) and the Sector of Balance of Payments and Surveys. - Within SFS, OMFS is in charge of compiling and disseminating monetary statistics. - One specialist and the head of OMFS are directly involved in compiling and disseminating monetary statistics. - Staff qualifications: university degrees in finance or economics; participation in IMF monetary and financial statistics courses; head of OMFS engaged in postgraduate studies; participation in seminars by other central banks and international institutions. - BoA’s salary levels: adequate and generally higher than those in government ministries in Albania. - All OMFS staff are equipped with computers; IT Department responsible for computing resources and emergency operation protection. - Data entry into SARS is manual because reporting units do not transmit data electronically. - Recommendations (resources and IT) - "Although current staff resources suffice for monetary statistics compilation, additional resources are needed in the Information Technology Department to (1) design the SARS database for a better performance including the generation of monetary data and (2) implement an electronic (online) reporting system for commercial banks and other financial institutions. More resources are needed in the SD to expand monetary statistics to cover also other financial corporations and to compile and present flow data for the financial sector, as recommended by the Monetary and Financial Statistics Manual (MFSM)." - 0.2.2 Measures to ensure efficient use of resources - Efficiency channels: - Managers evaluate staff performance monthly, semiannually, and annually. - Periodic reviews of work processes to reprioritize work. - SD staff participates in review of regulatory acts and drafts to incorporate statistical requirements (example: participation in review of banks’ chart of accounts). - SD consults outside experts when necessary (IMF or other central banks). - Strategic planning: - Medium-term development plans include statistical activities; plan for 2003–05 posted on BoA website; new plan for 2006–08 being finalized. - Clear budgeting procedures; BoA budget prepared based on departmental requirements and approved by Supervisory Council; SD reviews resources within annual program and budget. ### 0.3 Relevance - 0.3.1 Monitoring relevance and utility - BoA monitors relevance through: - Providing detailed explanations on monetary statistics on its website. - Encouraging suggestions and comments in publications and on website; providing an e-mail address for queries. - Planning surveys to identify users’ needs; first survey planned for end-2006. - Stakeholder engagement: - November 2000: BoA and INSTAT organized first conference "Statistical Information in Albania." - BoA staff participate in meetings organized by other Albanian data-producing agencies. - December 2005: open forum on preconditions for adopting inflation targeting; SD staff participated. - January 2006: BoA set up an inflation targeting task force with representatives from management, Research Department, and Monetary Policy Department; SD staff participate. - International engagement: - BoA staff participate in international statistics conferences and seminars. - Albania is among the first countries to prepare and transmit to the IMF Statistics Department (STA) monetary data using the new standardized report forms (SRFs) designed in accordance with the methodology in the MFSM. ### 0.4 Other quality management - 0.4.1 Processes to focus on quality - BoA management emphasizes statistics and data quality; establishment of SD signals increased importance. - Principle: "quality creates confidence." - BoA staff sensitive to different dimensions of data quality. - 0.4.2 Processes to monitor quality of the statistical program - SD collaborates with Supervision Department to verify reporting practices and consistency with BoA guidelines and regulations. - Validation procedures by OAR based on a Manual of Control Procedures agreed by SD and Supervision Department to ensure consistency between statistical and supervisory reporting forms. - Investigation protocol: unusual movements trigger in-depth investigation; Supervision Department informed. - Consultation: SD regularly consults with other BoA departments (Monetary Policy Department, Supervision Department, Research Department) to identify data requirements. - External and internal audits: - Law Article 68: BoA’s annual financial statement shall be examined by an authorized external auditor in compliance with international auditing standards; audit report to be published. - Currently Deloitte & Touche performs an external audit of the BoA. - Central Bank Survey produced by OMFS is audited quarterly by BoA’s Internal Audit Department. - Banking Law Articles 39 and 40 set rules for external audit of commercial banks. - Law On Savings and Loans Associations Article 49 contains provisions for auditing SLAs’ accounts by external auditors. - 0.4.3 Processes to consider quality in statistical program planning - BoA management recognizes trade-offs between accuracy and timeliness. - Data accuracy is checked at all preparation stages; timeliness is recognized as a key parameter. - BoA presents final data for other depository corporations within the timeframe established under the IMF’s GDDS. *Source: _cr06393 - 4. Serviceability (extracted content provided).* ### 1. Assurances of integrity ### 1. Assurances of integrity ### 1.1 Professionalism — impartiality, methodology, and staff development - Legal and institutional independence - "The Bank of Albania shall be entirely independent from any other authority in the pursuit of its objectives and the performance of its tasks." (Article 1 (3) of the Law). - The BoA defines its own methodology for compiling and disseminating monetary statistics, taking into account international standards. - BoA activities are established by the Supervisory Council (Governor, two Vice-Governors, and six other members). Article 44: Governor appointed by the President on recommendation of the Prime Minister; appointed for a seven-year term; responsible to Parliament; can only be removed by Parliament. - Personnel policies and professional competence - Recruitment and promotion are based on relevant aptitude and expertise; minimum requirements include education background and written tests. - Professional development through on-the-job training, full post-university studies supported by the BoA’s Human Resources Department and SD, IMF-organized monetary and financial statistics courses, and technical assistance from the IMF and other international organizations. - Following IMF technical assistance, BoA staff started implementing MFSM methodology and preparing SRFs for transmission of monetary data for publication in International Finance Statistics. - Research and quality assessments - SD staff produced a self-assessment using the IMF’s Data Quality Assessment Framework (DQAF), published in the BoA’s Economic Bulletin of June 2005. - SD staff prepared a paper comparing Albanian data dissemination practices with the IMF’s Special Data Dissemination Standard (SDDS), published in the BoA’s Economic Bulletin of September 2005. - SD staff published "A survey of time series on deposits, loans, and net foreign assets of the Bank of Albania" in the BoA’s Economic Bulletin of December 2005. - Media engagement and user guidance - BoA tracks use and interpretation of monetary statistics in financial press and mass media; Press Office provides clarification and may contact reporters to correct erroneous interpretations. - BoA organizes seminars and has a training program for the media (March–July 2006 program; SD conducted a seminar on April 27, 2006 on how to "read" and correctly interpret BoA statistics). ### 1.2 Transparency — access, identification, and advance notice - Legal and procedural transparency - Laws and regulations (BoA law, Banking Law, SLA law, and BoA regulations) are available on the BoA website. - Advance release calendar for key external and financial data, monetary data, and metadata are posted on the website. - BoA publications indicate the BoA website address for additional information and working papers. - Equal access and product identification - Access to statistics is provided simultaneously to all users when data are posted on the BoA’s website. - Monetary statistics are clearly identified as BoA products, with name and logo; sources are indicated when BoA publishes data produced by other agencies; BoA requests attribution for reproduction/re-dissemination. - Advance notice - Advance notice is given of major changes in methodology, source data, or statistical techniques. ### 1.3 Ethical standards — staff conduct and integrity - Code of Ethics - Ethical standards established by the Code of Ethics of the Bank of Albania; guidelines cover integrity, objectivity, professional competence, efficiency, professional independence, confidentiality of data, and avoiding conflicts of interest. - New staff informed of the Code during training; staff reminded periodically of ethical standards. ### 2. Methodological soundness ### 2.1 Concepts and definitions — adherence to MFSM - Framework and coverage - BoA analytical accounts for the central bank and other depository corporations are consistent with MFSM guidelines. - Depository corporations survey consolidates analytical accounts of the BoA, all registered domestic and foreign commercial banks, and the SLAs. - Analytical accounts of other depository corporations cover commercial banks and SLAs in accordance with MFSM. - Key aggregates identified - Net foreign assets - Net claims on central government - Claims on resident sectors other than government (broken down by claims on state and local government, public nonfinancial corporations, other nonfinancial corporations, other financial corporations, and other resident sectors) - Currency in circulation outside depository corporations - Deposits included in broad money - Deposits excluded from broad money - Loans - Other items (net) - Definitions of monetary aggregates - M1 is defined as currency in circulation plus demand deposits and sight deposits in national currency of residents other than central government. - M2 is defined as M1 plus term deposits in national currency of residents other than central government. - M3 is defined as M2 plus foreign currency deposits of residents other than central government. - Implementation and reporting - BoA prepared a plan to implement MFSM methodology, revising procedures and formats and preparing SRFs for collection and reporting in full compliance with MFSM sectorization and classification principles. - In January 2005, the BoA reported to STA test monetary data based on the SRFs. - BoA staff began preparations to expand institutional coverage to compile and disseminate data on the entire financial sector. - Recommendation - It would be desirable that further work in the area of monetary statistics include compilation of flow data. ### 2.2 Scope — institutional coverage - Depository corporations sector composition (at end-February 2006) - BoA, 17 commercial banks, and 133 SLAs grouped in two unions. - Commercial bank ownership: 11 banks have foreign capital, three banks have foreign and domestic capital, and three banks have domestic capital only. - Consistency with MFSM - Commercial banks and SLAs are the deposit-taking institutions classified as Other Depository Corporations (ODCs) and are the only institutions issuing liabilities included in the M3 aggregate. - All domestic branches and domestic headquarters of depository corporations are covered. ### 2.3 Classification/sectorization — residency and instrument classification - Sectorization and residency - Sectorization fully conforms with MFSM; definition of residency consistent with BPM5 and the 1993 SNA. - Resident sector subdivided into: nonfinancial public corporations; private nonfinancial corporations; central government; local government and public administration; depository corporations; other financial corporations; other resident sectors (households and nonprofit institutions serving households). - Financial instrument classification - Instruments identified: monetary gold and SDRs; currency and deposits; securities other than shares; loans; shares and other equities; other accounts receivable/payable. - Instruments classified by type, maturity, and currency denomination (domestic and foreign). - Currently, depository corporations in Albania do not engage in insurance technical reserves or financial derivatives; these instruments are not identified in institutions' balance sheets. - Treatment of specific operations - Securities repurchase operations treated as collateralized loans consistent with MFSM recommendations. - BoA does not currently engage in gold swaps. ### 2.4 Basis for recording — valuation, accruals, and grossing/netting - Valuation practices - Loans and deposits recorded at book value, not adjusted for expected loan losses; provisions for expected loan losses recorded separately on liability side and included in other accounts payable. - Treasury bills held by BoA and commercial banks recorded at market value. - For commercial banks, investment securities other than treasury bills recorded at acquisition price and not revalued until redemption; long-term securities available for trading recorded at acquisition price. - Positions denominated in foreign currencies revalued at BoA’s official exchange rate (mid-point between buying and selling market exchange rates of six commercial banks that account for most interbank foreign exchange transactions). - Positions with the IMF revalued monthly using end-of-period official BoA exchange rate of the Albanian lek (ALL) to the SDR. - Gold revalued monthly using end-of-period closing price for gold on the London Bullion Metal Auction and the official U.S. dollar/ALL exchange rate. - Holding gains and losses from market value or exchange rate changes recorded in the revaluation account. - BoA does not yet compile data on flows (transactions, revaluations, and other changes in the volume of assets) as recommended by MFSM. - Recommendations on valuation - Revalue long-term securities for investment and available for trading held by the banking sector using estimated fair value. - Accrual recording - Accounts of the BoA and commercial banks recorded on an accrual basis; accrued interest receivable and payable are classified under appropriate sector and instrument category. - SLA accounts are reported on a cash basis, with the exception of loans recorded on an accrual basis. - Current practice of including interest arrears with underlying instruments is consistent with MFSM. - Financial transactions recorded at the time they occur; positions between BoA and commercial banks are checked for consistency and differences investigated and documented. - Recommendation: Adopt accrual accounting for SLAs so as to apply fully the MFSM guidelines on accrual accounting. - Grossing/netting procedures - Accounts of central bank, commercial banks, and SLAs are collected and compiled on a gross basis; claims on particular transactors are not netted against liabilities to those transactors. - Provisions against loans shown on a gross basis on the liability side; loans included in domestic credit on a gross basis on the asset side. - Broad money survey shows underlying gross data for net foreign assets and net claims on central government. - In the broad money survey, claims and liabilities between depository corporations are canceled out appropriately while preserving presentation of claims on or liabilities to other domestic sectors and nonresidents. ### 3. Accuracy and reliability ### 3.1 Source data — coverage, accuracy, and timeliness - Institutional registers and primary sources - Comprehensive and up-to-date financial sector institutional units register available from the Supervision Department. - Source data for central bank: balance sheet data prepared by BoA’s APD on a monthly basis, generated by an electronic general ledger system based on complete accounting records. - Source data for commercial banks: monthly balance sheets and annex tables reported to the BoA. - Source data for SLAs: quarterly individual balance sheets transmitted by the two unions of the SLAs to the BoA. - Data submission, processing, and validation - Source data transmitted in hard copy and floppy disk to the OAR where accuracy is checked; OAR contacts banks and SLAs to correct errors. - Data entry in the SARS database is manual. - Commercial banks use an accounting manual prepared by Ernst and Young adopted for reporting to the BoA; SLAs do not have an accounting manual. - BoA Regulation No. 44 of June 2005 states SLAs’ reports to the BoA should fulfill SD and Supervision Department needs and follow accounting principles and charts of accounts of banks. - Reporting system reviewed at end of each year; most recent revision in December 2005 added detailed information on maturity of deposits to adjust deposits for monetary aggregates purposes. - Supplementary sources and on-site validation - Supplementary data used where balance sheet data insufficient (e.g., maturity of deposits; securities held in BoA portfolio including accrued interest and valuation gains/losses). - Information from on-site supervision of commercial banks and SLAs used to validate reported data. - Recommendations on reporting systems - Develop electronic (online) reporting and fully computerized data entry procedures. - Approximation to required definitions and classifications - Source data reported per BoA requirements reasonably approximate MFSM definitions, scope, timing of recording, and classification. - One deviation: securities held to maturity recorded at acquisition price. - OAR and monetary statistics compilers maintain regular contact with reporting units to resolve data issues. - Timeliness of source data - APD makes BoA monthly balance sheet data available to the SD no later than 10 days after the reference month, except December for which final data are available two-three months later (when the outcome of the annual external audit of the BoA becomes available). - Commercial banks transmit monthly balance sheet data to the OAR in hard copy and on floppy disk by the 20th day after month-end. - Unions of the SLAs submit individual balance sheets to the OAR on a quarterly basis by the 50th day after quarter-end. - While most commercial banks respect reporting deadlines, a few banks may at times be delayed, adversely affecting timeliness of monetary statistics. *Source: _cr06393 - 1. Assurances of integrity* ### 3.2 Assessment of source data ### 3.2 Assessment of source data ### 3.2.1 Source data assessment practices - Source data (censuses, sample surveys, administrative records) are routinely assessed for coverage, sample error, response error, and nonsampling error; results are monitored and made available to guide statistical processes. - The BoA monetary data compilers, in collaboration with other BoA units involved in source data collection such as the OAR, review the reporting system for adequacy in providing reliable and timely source data. - Through the SARS database, automatic control of the consistency of individual reports is implemented; the documentation/outcome of this control is made available to the Supervision Department. - Compilation of central bank data is monitored on a quarterly basis by the BoA’s Internal Audit Department. - Source data are reviewed against previous periods to identify out-of-trend items; identified inconsistencies are investigated with reporting units. ### Findings on reporting and timeliness - Commercial banks usually respect reporting deadlines but frequently make errors in their reporting. - It takes several days for the OAR to check returns, contact banks with errors, and correct errors. - OMFS staff generally receives checked and corrected balance sheet data in about 30–35 days after the month-end. - The timeliness of monetary statistics is about 40 days. - Albania aims to subscribe to the IMF’s SDDS and to reduce the time lag of monetary statistics to one month; procedures are needed to improve the accuracy of data reporting by banks. ### Recommendation (from 3.2.1) - Implement measures to minimize errors in commercial banks’ reporting and to speed up processes in addressing these errors. ### Related assessment summary entries (from the Data Quality Assessment Framework table) - 3.1 Source data: assessed as X. - 3.2 Assessment of source data: assessed as X with comment: "There is need to improve the accuracy of the banks’ reporting." - Plan for improvement: "Implement measures to minimize errors in banks’ reporting and to speed up processes in addressing these errors (short-term)." --- ### 3.3 Statistical techniques ### 3.3.1 Data compilation techniques - The compilation of the other depository corporations survey does not use particular statistical techniques because source data are collected from the entire targeted population of ODCs. - Current procedure: delay the compilation of monetary statistics until all commercial banks’ reports are received by the BoA; this practice affects timeliness. ### Recommendation (from 3.3.1) - When delayed reporting by commercial banks occurs, carry forward the balance sheet for the previous month of the late reporting bank and make users aware of this technique. The data should be denoted as provisional. ### 3.3.2 Other statistical procedures - Conversion of foreign-currency accounts into domestic currency equivalents is checked during the BoA’s verification of compliance by depository corporations with accounting and reporting rules. - Monetary data are not seasonally adjusted. --- ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4.1 Validation of intermediate results - Accuracy and reliability of reported source data for the BoA and commercial banks are checked against other sources; e.g., government securities holdings and government deposits are checked against records of the Monetary Operation Department. ### 3.4.2 Assessment and investigation of statistical discrepancies - BoA monetary data compilers identify statistical discrepancies (e.g., discrepancies in interbank [including central bank] positions) and, in collaboration with the APD and Supervision Department, investigate their causes. ### 3.4.3 Investigation of indicators of problems - Procedures exist to investigate large and unexplained movements in monetary and credit aggregates to detect possible classification and sectorization errors, usually by contacting reporting units for explanations. --- ### 3.5 Revision studies ### 3.5.1 Routine studies and use of revision analyses - The BoA studies and analyzes revisions as part of its data quality control process. - The OAR prepares a monthly document containing errors found in reporting systems by commercial banks and the SLAs; this document is made available to the Supervision Department and is taken into account during on-site supervision. - For errors found, commercial banks and the SLAs are required to revise past periods to incorporate changes in monetary statistics series. - The SD regularly maintains relevant documentation on analyses of revisions. --- ### 4 Serviceability ### 4.1 Periodicity and timeliness - Periodicity: both central bank and other depository corporations data are monthly, meeting GDDS recommendation and SDDS requirement. - Broad money survey is disseminated about 40 calendar days after the end of the reference period (complies with GDDS recommendation of two–three months but does not meet SDDS requirement of one month). - Data on the analytical accounts of the central bank are disseminated within two weeks after the end of the reference month (in compliance with the SDDS requirement). - Some selected (daily) indicators for the central bank are available to internal users only. ### 4.1.2 Timeliness (related objectives) - Albania aims to reduce the time lag of monetary statistics to one month as part of subscribing to the IMF’s SDDS. --- ### 4.2 Consistency ### 4.2.1 Internal dataset consistency - BoA monetary statistics are internally consistent. - No significant discrepancies exist between central bank’s and commercial banks’ data on interbank positions because the check for consistency is one of the control criteria used by the OAR before compilation. - A reconciliation of stock and flow data is not available because the BoA does not yet compile flow data for monetary statistics; the BoA does not yet compile flow of funds accounts. ### 4.2.2 Consistency over time - Monetary statistics series in accordance with the MFSM’s methodology are available since December 2002. - Constructing monetary series based on the new methodology for earlier periods is not possible; the BoA is creating detailed “bridge tables” to enable continuity of indicators before and after methodology changes. - Time series are stored in the “Time Series” database accessible through the BoA’s website to allow analysis of trends and patterns. ### 4.2.3 Consistency with other frameworks - Monetary statistics compilers communicate with balance of payments compilers and the MoF to check consistency with flow data from the balance of payments and government finance statistics. - Net foreign assets in monetary statistics are consistent with foreign assets and foreign liabilities of the banking sector in the corresponding measure of the balance of payments. - Central government securities and deposits with the BoA in monetary statistics are reconciled with MoF records. - Definition of general government in monetary statistics is the same as in GFS; monetary data are broadly consistent with GFS financing data and data on government financial assets and liabilities held by other sectors. --- ### 4.3 Revision policy and practice ### 4.3.1 Revision schedule - Monetary data disseminated on the BoA’s website or in its publications may be revised any time a need for revision occurs. - Revisions usually occur when changes arise in commercial banks’ balance sheets owing to auditing outcomes or on-site inspection of the BoA. - The BoA’s revision policy is posted on its website. ### 4.3.2 Identification of revised data - Revised data are identified on the BoA’s website. ### 4.3.3 Public availability of revision studies - Studies and analysis of revisions are made available to the public. --- ### 5 Accessibility ### 5.1 Data accessibility #### Presentation and formats - Statistics published by the BoA are generally presented clearly and in different levels of aggregation. - The BoA’s website provides data, metadata, explanatory notes, a calendar for dissemination, and user-friendly tables with key indicators. - Statistical bulletins (Economic Bulletin, Monetary Policy Report) include comments on current developments, accompanied by charts and tables. #### Dissemination media and schedule - Statistics are disclosed through the BoA’s website and publications, accessible without distinction to any interested user. - An advance release calendar for monetary statistics is posted on the BoA’s website; release follows announced dates. - Data are released simultaneously to all users when disseminated on the BoA’s website. - Statistics not routinely disseminated are made available upon request. ### 5.2 Metadata accessibility - A comprehensive document, “Methodology of Monetary and Financial Statistics, Bank of Albania, June 2003,” is posted on the BoA’s website. - The “Time Series” database contains monetary data and metadata. - The GDDS metadata for the financial sector are posted on the IMF’s Dissemination Standards Bulletin Board website and regularly reviewed and updated. - Metadata in the “Time Series” database provide various levels of detail for different user needs. ### 5.3 Assistance to users - Contact information is posted on the BoA’s website for comments, queries, and requests concerning monetary data. - Users frequently request assistance via email, telephone, or mail; assistance is promptly provided. - No comprehensive user surveys have been carried out, but the BoA reviews comments, queries, and requests from external and internal users for feedback. - The list of BoA’s publications is available on its website; the Sector of Publications maintains and updates a list of regular recipients. - BoA publications are provided to other users upon request free of charge. --- *Source: _cr06393 - 3.2 Assessment of source data (excerpt).* ### 0.1 Legal and institutional environment ### 0.1 Legal and institutional environment ### 0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified - The Bank of Albania (BoA) has statutory responsibility for producing balance of payments statistics under Article 27 of the statute On the Bank of Albania (Law, enacted in 1997), which authorizes the BoA to “compile the balance of payments of the State of Albania as well as coordinate and direct the statistical system of this balance of payments.” - Article 27 requires “banks, institutions, juridical and physical persons” to deliver statistical data in accordance with the reporting system approved by the BoA. - The Balance of Payments and Surveys Section (BoPS), within the BoA’s Statistics Department, is responsible for compiling the balance of payments. - The Statistics Department was established in November 2005 following a management decision to upgrade the BoA’s statistical functions. - Footnote: BoA Supervisory Council Resolution No. 79 of October 31, 2005. ### 0.1.2 Data sharing and coordination among data-producing agencies are adequate Findings - Several government agencies provide timely and reasonably complete data to BoPS: - General Directorate of Customs (Customs): foreign trade data. - Ministry of Finance (MoF): official external debt, government guaranteed debt, official foreign financing, and government expenditures abroad. - Ministry of Economy: data on privatization of state-owned companies purchased by foreign direct investors. - National Petroleum Agency: reports on direct investment performed as drilling activity. - Ministry of Interior: benchmark of arrivals and departures of travelers for tourism receipts and expenditures estimates. - INSTAT (national statistics agency) has statutory authority to conduct surveys and has conducted surveys for BoPS with BoA financial support (foreign direct investment surveys, household remittance surveys, travel expenditure surveys). - Some surveys suffered from being conducted long after the target period, incomplete geographical coverage, or requesting only stock and not transactions data. Recommendation - BoPS should strive to improve further coordination with INSTAT with respect to survey design, execution, and follow-up to nonresponse. ### 0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only Findings - Confidentiality assured through: Law (Article 58), “Code of Ethics of the Bank of Albania,” and “Regulation for Transparency and Confidentiality in the Bank of Albania” (available on BoA website). - These instruments forbid BoA officials/staff from disclosing/transferring individual reporters’ data to virtually all third parties. - Exception in Article 58: “Such persons [viz., officials or employees of the BoA] may disclose nonpublic material information to tax authorities of the Republic of Albania.” - Although no BoA report has disclosed individual reporter data to tax authorities, the existence of the exception may deter reporting. - BoA regulations address prevention of indirect disclosure (e.g., dominant bank/instrument revealing individual data when aggregated). - Procedures limit dissemination by securing databases and restricting personnel access to individual reporter data. Recommendation - The statute On the Bank of Albania should be revised and clarified to ensure that data collected for statistical purposes may not be disclosed to tax authorities. ### 0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response Findings - BoA has statutory mandate to collect data for balance of payments but enforcement authority only over banks; nonbank reporters are not subject to BoA penalties. - BoA lacks authority to conduct surveys among nonbank entities; response to first INSTAT FDI survey was less than desired. - BoPS actions to encourage reporting: direct contact with companies, assurances of confidentiality, explaining policy importance, providing published analyses. - Attempts by BoPS staff to collect surveys directly were largely unsuccessful; BoA relies on INSTAT for surveys. Recommendation - Amend the statute On the Bank of Albania to: - Give BoA authority to survey firms, households, or individuals about transactions with nonresidents. - Grant BoA statutory authority to inspect financial accounts of firms that may be transacting with nonresidents, with absolute protection against disclosure of individual records to third parties. - Grant authority to impose effective sanctions, including fines, on nonreporters. - Rationale: bring BoA powers in line with countries with advanced statistical systems for BOP compilation. ### 0.2 Resources #### 0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs Findings - Number and qualifications of BoA staff for BOP compilation are inadequate for current responsibilities. - Computing capacity for compilation is currently adequate; all staff have computers; no unified compilation database exists. - Physical working conditions are inadequate regarding office space. - Funding for BOP statistics is sufficient only for limited current activities. - Within BoPS: - Five specialists work in the balance of payments compilation and analysis unit. - Three survey specialists work in the surveys unit. - Staff qualifications: college degrees in finance or economics and statistics; two have master’s degrees in economics. - Three staff have participated in IMF balance of payments statistics courses. - Workload is constrained by data unavailability (examples: lack of quarterly household remittance survey, failure of direct investment enterprises to report, absence of periodic trade credit survey). - BPM5 will soon require collection of data on international portfolio investment by nonbanks; staff capacity is not available to compile other external sector statistics such as IIP and external debt per the 2003 External Debt Statistics guide. - BoPS staff also have additional responsibilities (drafting speeches, writing analyses). - Compilation uses independent spreadsheets unlinked by formulae; a database-driven system with automatic cross-checks and elimination of manual entry is needed. - Information Technology Department provides protection against corruption and emergency operations; backups are on-site only, not outside Tirana. - Current BoPS personnel and software would be overwhelmed by full, effective statutory authority and associated tasks. - Crowding hinders staff effectiveness; improved physical arrangements would enhance productivity. - More experienced survey design staff and increased funding for more frequent/larger surveys are required. Recommendation - Expand staff size, information technology support, and physical plant to meet BPM5 data collection requirements and to realize benefits from gathered information. - Increase financial support from the BoA, including funding for surveys conducted with INSTAT. #### 0.2.2 Measures to ensure efficient use of resources are implemented Findings - Efficiency measures: monthly, semiannual, and annual staff performance reviews; staff training; periodic reviews of work processes under GDDS; design of cost-effective reporting requirements. - Regular contacts with IMF and other central banks review and enhance methodology. - Clear budgeting procedures exist; Department of Statistics reviews resources and assesses future funding needs within the BoA annual budget program. ### 0.3 Relevance #### 0.3.1 The relevance and practical utility of existing statistics in meeting users’ needs are monitored Findings - Albanian public perceives BOP statistics relevance as limited. - Statistics Department actively seeks to meet internal users’ and IMF European Department needs and strives to comply with international standards. - Department organizes annual seminars with users (media, banks, academicians) to obtain feedback and improve understanding. - Ad hoc meetings with banks clarify classification and other questions. - BoA publications and website provide contact information for comments, queries, and requests, which are usually addressed promptly. - Statistics Department participates in international meetings and exchanges experiences and requirements with other countries and meets other Albanian data-producing/user agencies to clarify statistical needs. ### 0.4 Other quality management #### 0.4.1 Processes are in place to focus on quality Findings - BoA management emphasizes statistics and data quality, initiates improved data flows, and highlighted statistics importance by establishing the Statistics Department in November 2005. - Management encourages analytical research and appropriate methodologies. - BoA has requested and received several IMF technical assistance missions to improve BOP compilation methodology and adopt international standards. - Extensive improvement plans are listed in Albania’s GDDS metadata on IMF’s DSBB. #### 0.4.2 Processes are in place to monitor the quality of the statistical program Findings - Internal processes identify and resolve issues at collection, compilation, and dissemination stages. - When errors are discovered, compilers revise statistics for earlier quarters within the current calendar year. - Frequent contact exists between less experienced staff and those with external instruction; contacts with international experts and foreign BOP compilers are less frequent. #### 0.4.3 Processes are in place to deal with quality considerations in planning the statistical program Findings - User comments and requests provide important feedback for quality monitoring. - Frequent contacts with internal users (Research Department, Monetary Policy Department) and external users inform planning quality improvements. - BoA management and staff recognize trade-offs among data quality dimensions and have increased attention to improving timeliness of BOP data dissemination. 1. Assurances of integrity ### 1.1 Professionalism #### 1.1.1 Statistics are produced on an impartial basis Findings - BoA independence for BOP compilation established in Article 1 and Article 27 of the Law. - BoA is governed by the Supervisory Council: Governor, two Vice-Governors, and six other members who may be academicians or professional/business persons. - Governor appointed for a seven-year term by the President on recommendation of the Prime Minister (Article 44); Governor can only be removed by Parliament. - Governor and Board members are not permitted to belong to a political party. - Code of Ethics includes “Principle of Integrity,” “Principle of Objectivity,” and “Principle of Independence” from political parties. - Recruitment and promotion emphasize professional competence; Human Resources Department sets educational and testing requirements; department heads interview candidates. - Most BOP staff have professional qualifications in economics, banking, accounting; some have postgraduate degrees; most have received IMF training and attended BoA seminars. #### 1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations Findings - Data sources are selected solely on statistical grounds and are similar to regional peers. - Quarterly BOP data dissemination follows a regular schedule decided by BoA and preannounced via the Department of European Integration and Public Relations. - Dissemination modes are determined by the Statistics Department based solely on statistical considerations. #### 1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics Findings - BoA monitors use of publications in the media. - Statistics Department participates in seminars and debates; prepares explanatory notes and corrections in response to misinterpretations. - BoPS contacts reporters or users to correct erroneous interpretations when needed. *Source: _cr06393 - 0.1 Legal and institutional environment* ### 1.2 Transparency ### 1.2 Transparency ### Public availability of terms, manuals, and contact information - The laws and regulations under which statistics are collected, processed, and disseminated by the BoA are available to the public. - The statutes On the Bank of Albania and On Banks in the Republic of Albania and the regulations issued by the central bank are available on the BoA website. - BoA publications indicate contact telephone and fax numbers, as well as the address of its website, where more information about the BoA, other data series for balance of payments and related statistics, and relevant working papers are disseminated. - Manuals, report forms, and detailed instructions and background on balance of payments data collection systems are available on the BoA website in the Albanian language. - The BoPS maintains personal contact with the main data suppliers. ### Internal governmental access prior to release - There is no internal government access to balance of payments data prior to their publication. ### Identification of products - Balance of payments publications are clearly identified as BoA’s products with its name and logo. - The data are specifically attributed to the BoPS. - All BoPS statistical publications contain a contact address and phone number. ### Advance notice of methodological changes - In recent years no major changes have occurred in balance of payments methodology, source data, or statistical techniques. - Detailed changes in sources and compilation techniques have occurred but notice of detailed changes has not been provided in advance; changes are identified and explained in BoPS publications when data are published. ### Ethical standards - “The Code of Ethics” establishes principles and rules for BoA staff integrity, objectivity, professional competence, professional independence, and maintaining confidentiality of data. - New staff are made aware of the ethical standards when they join the organization. - Staff are reminded periodically of the standards by announcements and periodic assessments, including performance reviews. ### Recommendation (Transparency / Ethics) - (Implicit in text) Continue periodic reminders and assessments to ensure staff adherence to “The Code of Ethics.” --- ### 2.0 Methodological soundness ### Concepts and definitions (BPM5 conformity) - The framework for balance of payments statistics follows the BPM5. - Results are produced according to the IMF’s standard presentation and a national presentation is also produced and used in BoA publications. - Current, capital, and financial accounts are defined according to BPM5 guidelines; the current account balance in principle equals (with sign reversed) the net capital and financial account balance. - The financial account records transactions in assets and in liabilities separately. - A double-entry system is applied; the remaining net residual (after estimation of remittances as a primary residual) is reflected in the errors and omissions item. - Resident institutional units are defined in conformity with BPM5; companies, including branches with foreign capital, are residents if they operate in the territory of Republic of Albania. - Foreign direct investment transactions are defined by applying the 10 percent ownership rule. - All units of foreign general governments in the territory of Albania (e.g., embassies, military bases, etc.) are not considered residents. ### Scope of data collection - The scope of data collection by the BoPS in principle is consistent with BPM5 recommendations. - BoPS compiles data on the basis of import and export declaration forms provided by the Customs Office. - Transit trade is excluded properly from merchandise trade; an estimate for smuggling and shuttle trade is included in the trade balance. - Services and most income items are reported by banks; supplemented by reports from communications and insurance firms. - A data model provides estimates of compensation of employees and workers’ remittances. - The MoF supplies information on official grants from abroad. - Banks report direct investment transactions they can identify; in 2004 BoPS, with INSTAT, initiated annual surveys of foreign direct investment—data were collected but response rate and data accuracy were less than desired. - It is planned to introduce results of the second survey, conducted in December 2005, and incorporate them in the balance of payments. - Banks report portfolio investment transactions. ### Classification and sectorization - Transactions are classified according to the standard components of the BPM5. - Construction services are identified through BoPS reports submitted by the banking system; banks generally cannot identify construction services supplied by nonresident firms for projects completed in less than a year. - External debt transactions by the government are attributed to the general government sector; public enterprise debt transactions are attributed to other sectors. - Loan transactions of the banking sector are classified separately from currency and deposit transactions of this sector. - There is currently no separate item for financial derivatives, as these instruments have not been yet introduced in the banking system. ### Valuation (market prices) and currency presentation - Valuation principles follow BPM5 methodology: - Market valuations are used for goods; a Customs Office unit monitors market prices to assess market-equivalent prices for goods to ensure arm’s length reporting. - Services are recorded at transaction prices. - Financial asset and liability transactions are in nominal value. - Exports are valued f.o.b.; imports are collected on a c.i.f. basis and converted to f.o.b. using ratios derived from customs documents. - Ratios are reestimated whenever Customs revises forms; the most recent revision was in 2003 with the introduction of ASYCUDA, providing detailed data by product category on freight and insurance charges initially for large Customs posts. - New estimates for freight are fairly high by international standards; next re-estimation planned in 2006 may indicate lower freight costs if infrastructure improves and freight volume grows. - In 1993, BoPS began compiling balance of payments statistics in U.S. dollars. - Starting in 2004, balance of payments is being compiled and published in euros as well. - BoPS now compiles monthly balance of payments in euros and converts into U.S. dollars using the average monthly exchange rate, or the average quarterly rate for transactions reported only quarterly. - For commercial banks’ deposits, cash, own portfolio investment abroad, and changes in banks’ capital due to reinvestment of dividends, transaction estimates are based on changes in stock positions; an exchange rate valuation adjustment is incorporated when this procedure is used. ### Basis for recording (accrual) - The majority of individual transactions are recorded on an accrual basis; exceptions include some interest income and payments recorded when due for payment. - Specific recording rules: - Goods: time of customs declarations; ownership change considered the month cleared by Customs. - Drawdowns of loans: recorded at time of actual disbursement. - Services and other items: largely based on banking reports using time of payment. - With monthly reporting by banks, bank interest receipts and payments closely approximate accrual accounting. - The MoF has prepared a public debt service schedule; public debt comprises the bulk of Albania’s external debt. - Recommendation: The BoPS should obtain the public debt service schedule from MoF and record interest payments on an accrual basis. ### Grossing/netting procedures - In line with BPM5 recommendations, current and capital account transactions are recorded and published on gross terms. - Financial account transactions are recorded on a net basis, separately for individual asset and liability components. --- ### 3.0 Accuracy and reliability ### Source data coverage and collection programs - Creation of the Statistics Department in November 2005 initiated efforts to improve coverage, detail, and accuracy of balance of payments (and monetary) source data. - Improvements constrained by a banking system only partially computerized and by absence of a publicly recognized tradition that data reported for statistical purposes will be used for statistical purposes only. - Attempts to use surveys to estimate compensation of employees and workers’ remittances have been unsuccessful. - Direct reporting by nonbank firms or individuals of direct or portfolio investment transactions does not exist. - Data providers to BoPS include BoA’s own account (reserve assets and transactions with banks), government agencies (MoF, Ministry of Interior, National Petroleum Agency, Ministry of Economy), INSTAT, General Directory of Customs, commercial banks, other administrative sources, and private entities (including foreign firms providing mobile telephone services). - Travel receipts and expenditures are estimated from quarterly entry and exit reports; estimates of average expenditure are applied to arrival/departure numbers supplied by the Ministry of Interior. - The insurance services report form deviates from BPM5; the February 2006 IMF mission helped develop a new reporting form for insurance companies to be applied. - MoF accounts of general government revenue include less than half of the value of grants reported by donors; underreporting seems to originate with grants received directly by regional and local governments; MoF expressed interest in cooperating with BoA to improve coverage. - INSTAT conducted a household remittance survey covering 1,033 households extrapolated using the latest Living Standards Measurement Survey; the survey was carried out a year after the reporting period and results were considered unsatisfactory and are not applied to compilation. - Plan to conduct quarterly household surveys; when available BoPS will decide whether results are accurate and credible for compilation. - Current estimates for direct investment are limited to bank reporting; direct investment not split between debt and equity; in quarterly data the whole amount is classified as “other capital.” - Reinvested earnings of direct investment enterprises are not reported by banks. - BoPS checks that major transactions are included, such as large privatizations. - Surveys of direct investment enterprises have been initiated but data coverage and accuracy have not met expectations and are not used in compilation. ### Direct investment surveys and business register development - Second annual survey (carried out by INSTAT) of direct investment enterprises concluded. - First survey (conducted in 2004 to cover data through 2003) started with an initial population of 2,600 companies and found about 1,000 active and relevant companies. - The survey response was approximately 80 percent, but overall quality of data was poor; missing and inaccurate data partly due to complicated survey form with inadequate definitions. - A second survey will be used as a base for building a business register for enterprises with direct investment. - The sample is based on the INSTAT business register; survey questionnaires will be constructed according to the accounting principles of contacted companies. ### Banking system reporting and data review - The balance of payments compilation system is based on a banking system report and a set of forms and surveys. - Banking system report is based on the foreign exchange record; banks classify external transactions monthly in accordance with BPM5 components and report totals to BoPS. - Data for portfolio investment by banks, bank lending and borrowing, and reserves come from bank reporting or BoA transactions. - BoPS administers banking reports and controls them for accuracy and new recording issues. - Source data are kept under continuous review to ensure comprehensiveness and responsiveness to new data demands. - Reporting system reviewed at end of each year to identify required changes; supplementary data are required from banks and other reporters in monthly submissions prior to annual evaluation. - BoPS organizes annual and ad hoc meetings with the banking system and firms engaged in transactions with nonresidents to identify new developments. ### Recommendations to improve source data (explicit) - Improve the coverage, detail, and accuracy of source data to produce a balance of payments statement that better serves policymakers and the public. - Specific recommended improvements: - If complete coverage of trade transactions by ASYCUDA does not permit direct summation of freight and insurance charges, reestimate the c.i.f. to f.o.b. adjustment of imports every other year. - Periodically reestimate the smuggling adjustment, in part through comparative surveys in domestic markets of prices and places of origin of goods known to have cleared customs versus similar imports that apparently have not. - Survey average expenditures per traveler biannually. - Cooperate with the MoF to improve coverage of grants from abroad to regional and local governments. - Survey households quarterly for remittance receipts to check the remittances estimate. - Require direct quarterly reporting by the larger direct investment enterprises. - Survey real estate investment for financing outside the banking system (direct investment by Albanian citizens or others resident abroad). - Survey brokers and banks for portfolio investment by nonbanks. - Survey larger international trading firms for trade credit. - Introduce the corrected reporting form for insurance companies at the earliest possible date. ### Source data quality, timing, and approximation to standards - For most items, source data requested from banks, government agencies, or other enterprises reasonably approximate BPM5 definitions, scope, classification, valuation, and time of recording. - Report and survey forms are field-tested before use. - BoPS provides guidance via detailed reporting instructions and ad hoc assistance. - Timeliness: - Customs data are available in an electronic version within one month of the end of the reference month. - Banking system reports and other reports are usually provided either in hard copy or electronic version 20 days after the end of the reference month. - Travel services data are provided through quarterly surveys with results provided in time for balance of payments compilation. *Source: _cr06393 - 1.2 Transparency* ### 3.2 Assessment of source data ### 3.2 Assessment of source data ### Source data assessment and practices - Source data include censuses, sample surveys and administrative records; these are routinely assessed for coverage, sample error, response error, and nonsampling error, and results are monitored and made available to guide statistical processes. - The BoPS regularly reviews banking system data-entry procedures to avoid miscoding and misreporting. - Data sources are checked with available related indicators and for temporal consistency. - Inclusion and accuracy of high-value transactions are confirmed. - As a consequence of missing data and poor data quality in the first foreign direct investment survey, the survey form was revised to reflect accounting codes familiar to company owners and financial managers; source data have been analyzed to refine and target the sample of companies surveyed. - The household survey used to estimate remittances will be conducted quarterly, rather than annually, and shortly after the end of each quarter to improve reporting accuracy. - Based on BoPS surveys of Customs documents, freight and insurance adjustments of imports from c.i.f. to f.o.b. have been revised; revision of the smuggling adjustment is in process. ### Key findings on source-data quality - Customs-based adjustments are applied for temporary imports and exports, imports to bonded warehouses and for duty-free sales, and diplomatic and personal goods. - A fixed coefficient of 10 percent is added to imports reported by Customs as an estimate of smuggling and under-invoicing of imports. - A survey was carried out to estimate the extent of smuggling (including shuttle trade). - Separate data on trade with Albania are not available from any partner country because of the small volume of transactions. - Freight and insurance charged on goods imports are estimated by BoPS based on surveys of imports at Customs entry points. - Imports and exports of goods for repair are not identified separately by the Customs Office and so are included with other goods; the value of goods for repair is believed to be small. ### Remittances and unidentified foreign exchange inflows - A data model is employed to estimate the primary residual—unidentified inflows of foreign exchange, or “remittances,” as measured by imports of goods and services not financed by exports or payments through the banking system. - Of total apparent unidentified inflows of foreign exchange, 10 percent is classified as compensation of employees (an income item) and 90 percent is classified as workers’ remittances (a transfer item). - The 10/90 split is based on a survey of banking system clients conducted by the BoPS in 1999. - Financial account investment transactions, such as direct investment by Albanian citizens resident abroad in land and structures, are not taken into account in estimating unidentified foreign exchange inflows. - The estimation-model structure was specified in 2000; detailed changes in its components have been limited since then. - Given the significant intermediate residual, BoPS compilers have limited the debits in the estimation model to current account items (i.e., to imports of goods and services). ### Recommendations on source data - Because “remittances” are an important item in the Albanian balance of payments, a new survey should be conducted to reestimate the division of unidentified inflows of foreign exchange between compensation of employees and workers’ remittances. This survey could be either among banks and foreign exchange bureaus or among households, whichever the BoPS considers to be more feasible and cost-effective. --- ### 3.3 Statistical techniques ### Compilation systems and IT - BoPS compilation procedures are generally sound, but additional IT support would enhance accuracy and timeliness. - For compilation of balance of payments data, MS Excel spreadsheet applications are used; separate sections of the balance of payments fall under responsibility of different individual staff. - Computers and spreadsheets are not linked; no complete database exists showing all balance of payments data. - Current system is prone to mistakes when re-entering intermediate data and is cumbersome when making revisions. - An automated database system utilizing electronic reporting by banks would avoid manual data entry and combining separate spreadsheets; support of programmers and other IT technicians is required to introduce such a system. ### Recommendation on IT - IT support should be provided to the BoPS to set up an automated database system that will preclude the need for manual data entry and could accommodate fully electronic reporting by banks, including an ITRS if this option is selected. ### Statistical adjustments and estimation techniques - BoPS adjustment procedures are sound with the use of periodic reviews and re-estimations of parameters. - Freight and insurance on imports are estimated from Customs-entry-point surveys. - A data model is used to estimate the primary residual (unidentified inflows); allocation between compensation of employees and workers’ remittances uses the 10 percent / 90 percent split from the 1999 survey. - Net errors and omissions have grown modestly as a percentage of total trade; since 1996 the net errors and omissions item has been consistently positive and occasionally large (apparently again for 2005). --- ### 3.4 Assessment and validation of intermediate data and statistical outputs ### Validation practices - Intermediate results are validated using other sources whenever possible; newspapers and information agencies are monitored for large international transactions (e.g., privatizations). - Survey data are checked against banking system records. - Data on freight earnings are regularly assessed relative to value of trade flows based on BoPS methodology. ### Travel data and benchmarking - Travel-related transactions are based on two data sources: - A quarterly survey of 1,000 travelers carried out by INSTAT on behalf of the BoA, covering both residents and nonresidents and used to estimate daily spending and average duration of travel. - The number of travelers reported by immigration authorities. - The traveler survey may be inadequate as a benchmark because it covered only the busiest border crossings and omitted others; expenditure data are multiplied by immigration counts to estimate totals. ### Compilation errors and spreadsheet issues - Independent, unlinked spreadsheets and manual entry make procedures error prone; compilation errors have included incorrect algebraic signs and omitted items. - Linking spreadsheets via formulas or introducing a database-driven compilation system would virtually eliminate such errors. ### Recommendation on interim procedures - During the interim before a database-driven compilation system can be introduced, the spreadsheets currently in use for intermediate compilation of different portions of the balance of payments should be linked by introduction of relevant formulas. ### Reconciliation efforts - BoPS monitors the development in the usual errors and omissions item, which relates to unrecorded or unidentified transactions arising from the income, official transfers, capital and/or financial accounts. - BoPS has tried to reconcile trade data with that of other trading partners, but trade with Albania is insignificant to partner countries and not shown separately in their data. --- ### 3.5 Revision studies ### Revision monitoring and practices - BoPS carefully monitors revisions of individual records; revisions are documented as to the cause, identified by the staff member making the amendment, and signed off by a supervisor. - BoPS checks that revisions flow through to aggregates and compares aggregates with the same month in the previous quarter’s publication; changes are checked to ensure they can be explained. - Staff study revision patterns to improve methods; examples include estimation of trade credit and freight coefficients of imports due to large revisions in these items. - With near completion of ASYCUDA, trade data revisions are becoming infrequent. - Persistent errors or implausible estimates have prompted BoPS to revise data collection or estimation procedures. --- ### 4 Serviceability ### 4.1 Periodicity and timeliness - Balance of payments data are compiled and disseminated quarterly and annually—performance meets GDDS recommendations and SDDS requirements. - Quarterly balance of payments data are released 65–70 days after the end of the reference quarter, meeting the SDDS requirement of 90 days. - Delays occur only in exceptional cases (e.g., concluding quarter of the calendar year when banking system reports later). - Annual balance of payments statistics are disseminated within three–four months after the reference period, within the GDDS recommendation of six months. ### 4.2 Consistency - Balance of payments statistics are internally consistent; checks ensure subitems are consistent with aggregate data and annual statistics are the sum of quarterly data. - The IIP is not prepared; development of methods (but not resources) to compile the IIP is included in the short-term plan. - Time series data are available back to 1993 (monthly and quarterly). - Major methodological changes are implemented infrequently; revised or new methodologies are not used to revise data back beyond the current calendar year. - Explanations for methodological changes are provided in quarterly releases and metadata disseminated in Albanian. - Balance of payments trade-in-goods data are reconciled with international merchandise trade data; publications show methodological differences from International Trade Statistics methodology (mainly c.i.f. to f.o.b. adjustments and smuggling). - National accounts international transaction components are based on BoPS-supplied balance of payments data. - Banking sector transactions in the balance of payments are reconciled with balance sheet data used in monetary and financial statistics. - Balance of payments components for debt are fully consistent with corresponding external debt data because data collection processes are coordinated. ### 4.3 Revision policy and practice - The revisions policy: revisions are made to data for the current calendar year only; errors detected are corrected for the quarter in which they occurred, within the current calendar year. - Revisions are discussed with users on request; major revisions may be explained in table footnotes and analytical articles. - The revision policy is posted on the BoA website in Albanian and English. - No balance of payments data are identified as preliminary; published data are subject to revision within the current calendar year only and revised data are noted as such. - Brief statements explaining important revisions are provided in annual publications of the BoA and shown in annexes. --- ### 5 Accessibility ### 5.1 Data accessibility and dissemination practices - Albanian balance of payments statistics are disseminated according to BPM5 standard components, with time series published on the BoA website. - Statistics are disseminated with charts and tables, press releases and descriptive analyses for the current period. - Balance of payments statistics are available on the BoA website on a monthly basis and are also disseminated through quarterly press releases and annually in the Balance of Payments Bulletin on paper and in electronic format. - In December each year, the Public Relations Department posts on the BoA website the release schedule of balance of payments statistics for the next five calendar quarters. - Quarterly balance of payments data are sent initially by e-mail and hard copy in a press release to the media and to all users who have registered on the BoA website; about a week later the same press release and data are posted on the BoA website. - BoPS meets requests for additional information without a fee and supplies additional or more disaggregated data on trade or other balance of payments transactions on request. ### 5.2 Metadata accessibility - Metadata in Albanian and English are provided annually in the Balance of Payments Bulletin (yearbook) and in Albanian on the BoA website; metadata are also available from the IMF’s DSBB. - A comprehensive document of sources and methods is published yearly in the annexes of the Balance of Payments Bulletin; it includes concepts, definitions, classifications, data sources, compilation methods, and information on surveys (response rates, survey monitoring and studies of nonsampling errors), and survey features (method, sample frame, sample design and selection). - The GDDS metadata and related descriptions are reviewed and updated annually. - A short brochure with general information about the balance of payments is published in Albanian only, available in hard copy and on the BoA website; more specialized information such as working papers or item analyses is published on the BoA website. ### 5.3 Assistance to users - Prompt and knowledgeable assistance is provided; BoPS has provided assistance with papers and theses according to administrative regulation approved by the Supervisory Council of Bank of Albania and published in the official bulletin of 2002. - All publications and the BoA website provide telephone and fax numbers and the e-mail address (public@bankofalbania.org) for the Department of European Integration and Public Relations; department or section producing each document is identified though individual names are not supplied as contact points. - BoA personnel usually respond to e-mail enquiries within 48 hours. - Recommendation: A larger, faster server would substantially facilitate downloads from the BoA website, which at times are slow. - A complete list of BoA’s balance of payments hard-copy publications and similar information available via the Internet is included on the BoA website in Albanian and English; all publications are available free of charge in hard copy or on the Internet. *Source: _cr06393 - 3.2 Assessment of source data* ### 0. Prerequisites of quality ### 0. Prerequisites of quality ### 0.1 Legal and institutional environment - Assessment: Practice Not Observed (X). - Key findings: - Absence of sanctions and authority to inspect financial accounts of firms other than banks. - Statistical information may be disclosed to tax authorities. - Plans for improvement: - Amend BoA statute (medium term). ### 0.2 Resources - Assessment: Practice Not Observed (X). - Key findings: - Staff size, IT support, offices, and funding (to INSTAT) for surveys inadequate. - Plans for improvement: - Add resources (short term). ### 0.3 Relevance - Assessment: Practice Not Observed (X). ### 0.4 Other quality management - Assessment: Practice Not Observed (X). --- ### 1. Assurances of integrity ### 1.1 Professionalism - Assessment: Practice Not Observed (X). ### 1.2 Transparency - Assessment: Practice Not Observed (X). ### 1.3 Ethical standards - Assessment: Practice Not Observed (X). --- ### 2. Methodological soundness ### 2.1 Concepts and definitions - Assessment: Practice Not Observed (X). ### 2.2 Scope - Assessment: Practice Not Observed (X). ### 2.3 Classification/sectorization - Assessment: Practice Not Observed (X). ### 2.4 Basis for recording - Assessment: Practice Not Observed (X). - Key finding: - Public debt interest recorded on cash basis. - Plans for improvement: - Use accrual basis data from MoF (short term). --- ### 3. Accuracy and reliability ### 3.1 Source data - Assessment: Practice Not Observed (X). - Key findings: - Important data absent or incomplete; some estimates outdated. - Plans for improvement: - More frequent, wider or new surveys; require reporting of direct and portfolio investment; cooperate better with INSTAT and MoF (short/medium term). ### 3.2 Assessment of source data - Assessment: Practice Not Observed (X). - Key finding: - Manual data entry; separate (unlinked) spreadsheets for compilation. ### 3.3 Statistical techniques - Assessment: Practice Not Observed (X). - Key finding: - Outdated basis for splitting total “remittances.” - Plans for improvement: - Database-driven compilation (short term). - Reestimate split of total “remittances” between compensation of employees and workers’ remittances (short-term). ### 3.4 Assessment and validation of intermediate data and statistical outputs - Assessment: Practice Not Observed (X). - Key finding: - Errors in manual compilation overlooked. - Plans for improvement: - Link spreadsheets by formulas (immediately). ### 3.5 Revision studies - Assessment: Practice Not Observed (X). --- ### 4. Serviceability ### 4.1 Periodicity and timeliness - Assessment: Practice Not Observed (X). ### 4.2 Consistency - Assessment: Practice Not Observed (X). ### 4.3 Revision policy and practice - Assessment: Practice Not Observed (X). --- ### 5. Accessibility ### 5.1 Data accessibility - Assessment: Practice Not Observed (X). ### 5.2 Metadata accessibility - Assessment: Practice Not Observed (X). ### 5.3 Assistance to users - Assessment: Practice Not Observed (X). --- ### GDDS guidance and plans for improvement (selected points from source) - Dissemination recommendations: - Dissemination of documentation on methodology and sources used in preparing statistics. - Dissemination of component detail, reconciliations with related data, and statistical frameworks that support statistical cross-checks and provide assurance of reasonableness. - Integrity recommendations: - Dissemination of the terms and conditions under which official statistics are produced, including those relating to the confidentiality of individually identifiable information. - Identification of internal government access to data before release. - Identification of ministerial commentary on the occasion of statistical releases. - Provision of information about revision and advance notice of major changes in methodology. - Access recommendations: - Dissemination of advance release calendars. - Simultaneous release to all interested parties. - Plans for improvement: - Develop and disseminate plans for improvement for all areas with shortcomings. - Identify needs for assistance in the metadata to help prioritize donor and technical assistance activities. --- ### Users’ Survey — summary of results (mission March 8–22, 2006) - Survey participation: - Questionnaire sent to ministries and state agencies, banks, embassies and international organizations, and the private sector. - Questionnaire completed by 24 out of a sample of more than 100 users. - Follow-up meeting attended by eight users. - Coverage and detail: - Users broadly satisfied with coverage of monetary, prices, and balance of payments statistics. - Least satisfied with national accounts statistics (lowest relative rating). - Monetary statistics received the highest relative rating for level of detail. - Periodicity and timeliness: - Users somewhat satisfied with periodicity of price indices and monetary and balance of payments statistics. - Less satisfied with national accounts periodicity. - Users dissatisfied with the timeliness of national accounts and balance of payments statistics. - Data release and revisions: - Significant proportion of users were not aware that advance release calendars are produced by all the agencies. - Strong feeling that statistics are not always released on the dates specified in the advance release calendars, particularly national accounts. - Only for the price indices did more than 50 percent of users feel that release dates were met. - Concern about inconsistent values for GDP being published by different agencies. - Accessibility: - Users most satisfied with accessibility of monetary statistics, least satisfied for national accounts. - For price indices and monetary statistics, a significant majority satisfied with explanatory notes, methodological descriptions, and references. - Suggestion for INSTAT, MoF, and BoA to be more active in promoting users’ awareness of availability of statistics. - Users felt seminars for users were a good idea but noted some past seminars were not perceived as successful. - Users praised BoA’s website and were generally satisfied with assistance from INSTAT, MoF, and BoA. - Overall quality rankings (scale 1 to 5, 1 = poor, 5 = excellent): - Highest: monetary statistics. - Next: prices. - Next: balance of payments statistics. - Next: government finance statistics. - Lowest: national accounts. *Source: _cr06393 - 0. Prerequisites of quality* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr06393.pdf_