Managing Budgetary Virements

Technical Notes and Manuals, April 18, 2016

Source details

Canonical URL

Managing Budgetary Virements

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Sandeep Saxena, Sami Yläoutinen
• Published: April 18, 2016
• Series: Technical Notes and Manuals
• DOI: https://doi.org/10.5089/9781513509051.005

Overview and Purpose

• Virements are described as useful instruments of budget flexibility.
• If carried out transparently and within accepted limits, virements can promote expenditure efficiency.
• Large, unregulated virements can undermine budget credibility and the budget’s relevance as principal policy and financial planning instrument.
• The note defines virements, clarifies their purpose, and specifies what general and country-specific considerations should guide the design of a virement framework.
• The note argues that countries should design virement policies maintaining balance between their budget flexibility and accountability needs, and keeping in view the legal-cultural environment and the state of development of their public financial management.

Key Findings

• Virements support expenditure efficiency when transparent and bounded by accepted limits.
• Unregulated or large virements pose risks to budget credibility and the budget’s role as the main policy and financial planning instrument.
• Virement frameworks need to be tailored to country-specific factors, including legal-cultural environment and public financial management maturity.

Design Considerations for a Virement Framework

• Balance between budget flexibility and accountability needs.
• Consideration of the legal-cultural environment.
• Consideration of the state of development of public financial management (PFM).

Policy Recommendations and Guidance

• Design virement policies that maintain a balance between flexibility and accountability.
• Specify clear limits and transparency requirements for virements to preserve budget credibility.
• Tailor virement regimes to country circumstances, reflecting legal-cultural constraints and PFM development.

Subject Coverage and Keywords

• Subjects: Budget execution and treasury management, Budget planning and preparation, Capital spending, Expenditure, Expenditure control, Public financial management (PFM).
• Keywords include: Africa, budget, budget execution, Budget execution and treasury management, Budget planning and preparation, budget reserves, budgetary appropriations, budgetary reallocation, budgetary virements, Capital spending, country, Expenditure control, government, number virement order, TNM, virement, virement policy, virement power, virement proposal, virement regime, virement rule.

Content in this bundle

• Box 1. Virement Regimes in OECD Countries; Box 5. Virements in South Africa
  • Box 1. Virement Regimes in OECD Countries; Box 5. Virements in South Africa (Markdown version)
  • Box 1. Virement Regimes in OECD Countries; Box 5. Virements in South Africa (PDF)