The state Budget

State Budget definition and steps "The state budget fiscal program, which reflects the government's policies different, frame which includes making multiple selection policies and objectives which the government wants to achieve, as well as the choice of means, and programs that lead to achieving these goals; therefore close the budget provides information on decisions taken by the government for the distribution of resources among competing uses to satisfy the needs of the public.

The standard steps of the budgetary process is made up mainly 4 steps A. Formulation: by the executive authority through adding up all budget estimates from underlying departments, units and agencies, and the ministry of treasury plays the role of reviewing, modifying and adding up these separate budgets into big budget project. The government is the party implementing the programs accordingly they should be responsible for making financial estimates .The head of government passes the final general draft to the parliament for adoption and enactment providing the project with the power of law

B. Enactment and adoption: the parliament has the duty of reviewing the proposed budget, each subcommittee under the umbrella of one committee reviews part of the budget, listen to governmental justification of the budget items. The authority can reject the whole project, modify it or approves the appropriation bill using its legislative power in changing the budget project into executable matter .Its also important to state that this isnt only the role of the parliament, it also carries out final step in the budgetary process which is auditing the execution carried out by the government.

C. Implementation :Each unit that participated in preparing the budget draft is now responsible to turn the budget into reality and execute the items of expenditures and revenues collections listed within the approved appropriation bill

D. Audit and Control Made by the legislative authority to make sure governmental bodies had made the expenditures according to the appropriation bill

The Egyptian Budget preparation The following describes the budgeting process, from estimating revenues to the passage of annual budget legislation.

Functions of government institutions, government authorities begin their analyses to develop the budget for the following year. At the same time, the Finance Ministry evaluates the results of programs included in the prior years budget and analyzes the performance of the public institutions involved. This information is used to define an initial budgetary framework that includes expenses that are required by law or by contract, and the continued financing of programs that have been evaluated as successful.

Once priorities have been determined, the different public institutions design and submit their plans to expand successful programs or to create new programs to the Finance Ministry. The proposals must compete for financing from a common biddable fund. After the ministry have conducted a comprehensive process of technical analysis and discussion the finance Ministry concludes preparation of the budget proposal, which is then sent by the prime minister sent to council of people.

After the finance ministers address on the state of fiscal budget, Council of people begins to analyze the budget proposals of the executive for the different public institutions. To accomplish this, a special mixed budget commission is formed. The commission is divided into sub-committees, each of which analyzes the budget proposals of a different ministry.

During passage of the legislation, Council of people may effect modifications to the original bill through amendments or votes. However, Congress only has the power to decrease expenditures for the items proposed by the executive in the budget bill. After that, the president of the republic signs the budget into law.

On July 1 of the following year the budget law goes into effect, and activities related to carrying out the approved budget projects begins. The council of people is the authority that audits the implementation of the government according to the appropriation bill

Egyptian Budget from 2009 to 2014

The Egyptian budget is an itemized budget (traditional) and had showed deficit within the years 2009-2014 ,deficit is absorbed using borrowing as shown below Egypt's state Budget figures in details 2009Expenses

Wages and Compensation of employees86134.6

Purchases of Goods and Services27099.1

Interests71065.8

Social Benefits73386.9

Other Expenditures28058.2

Purchase of Non-Financial Assets Investments)33392.6

Acquisition of Domestic and Foreign Financial Assets3561.7

Domestic and Foreign Loans repayment2832.1

Total expenses319137.2

Revenues

Taxes230565809000

Grants9479986000

Other Revenues88642109000

Total Revenues339906732000

Deficit94880.3

2010

Expenses

Wages and Compensation of employees56682

Purchases of Goods and Services16349

Interests105949

Social Benefits153229

Other Expenditures30405

Purchase of Non-Financial Assets Investments)25298

Acquisition of Domestic and Foreign Financial Assets4249

Domestic and Foreign Loans repayment98521

Total expenses490684

Revenues

Taxes230565

Grants9479

Other Revenues88642

Lending proceeds and Sales of Financial Assets and other11218

Total Revenues339906

Deficit150777

2011/2012Expenses

Wages and Compensation of employees110,497

Purchases of Goods and Services29,255

Interests100,800

Social Benefits154,454

Other Expenditures35,662

Purchase of Non-Financial Assets Investments)45,661

Acquisition of Domestic and Foreign Financial Assets6.633

Total expenses476,290

Revenues

Taxes232,232

Grants9,974

Other Revenues107,441

Total Revenues349,647

Deficit126,643

2012/2013

Expenses

Wages and Compensation of employees136,627

Purchases of Goods and Services28,675

Interests133,612

Social Benefits145,838

Other Expenditures33,325

Purchase of Non-Financial Assets Investments)55,618

Net Acquisition of Domestic and Foreign Financial Assets5313

Total expenses533,784

Revenues

Taxes266,905

Grants9021

Other Revenues117,549

Total Revenues393,475

Deficit134,995

2013

Expenses

Wages and Compensation of employees189.6

Purchases of Goods and Services35

Interests199

Social Benefits198.2

Other Expenditures40

Purchase of Non-Financial Assets Investments)68.2

Net Acquisition of Domestic and Foreign Financial Assets1.3

Total expenses533,784

Revenues

Taxes386.3

Grants2.1

Other Revenues144.4

Total Revenues532.8

Deficit198.5

Different Types of budget systems

A. TBS (Traditional Budgeting System) Traditional budgeting is one the first budgeting systems created. Traditional budgeting system is still commonly used in many organizations today. The reasons why governments still using traditional budget, this is due to framework of control. The role of the budget is to give focus to an organization, and help the coordination of activities and enable control. Traditional budgeting consumes too much time and too many management resources. A major criticism of the traditional budget system is that it does not deal with key Issues of government objectives, their links to the budget, the services to be delivered by the government; the search for the most efficient combination of inputs to deliver services. associated with an "input-oriented" budget preparation Program Budgeting In program, the budget shows the purposes of the expenditure, the costs of the programs proposed for those purposes, and measurements and results under each program. Therefore, such type of budgeting includes the following features: Government activities are divided into broad functions, programs, activities, and cost elements. A function corresponds to a broad objective of the government The operational aims of each program and activities are identified for each budget yearPlanning Program budgeting systems (PPBS) Performance-Based Budgeting (PBB) is an effort to turn funding into results, by outlining a general chain of cause-and-effect. It is a way to allocate resources to achieve specific objectives based on program goals and measured results.

Performance-Based Budgets use statements of missions, goals and objectives to explain why money is being spent by focusing on expected outcomes relative to the amounts to be expended, and then subsequently comparing the actual outcomes to those expectations, it is hoped that budgetary discipline can be imposed by the legislature and the executive branch.

Zero Based Budgeting ZBB The zero base budget assumes that budget for the next period will be zero. It first analysis the need of the various department and then budget is allocated to them. Here are some of the advantages and disadvantages of zero based budgeting

It helps in forming the budget more rationally than traditional budget. Since resources are allocated from lower priority area to higher priority area it reduces the surplus expenditure. Enables the top management to better evaluate the performance of various department heads.

It leads to better cost control among the various departments which in turn increases the efficiency of the whole organization as a whole. Zero based budgeting increases the overall communication and coordination within the organization and thus create a better environment in the organization. It requires more paper work and more personnel is needed which in turn increases the cost for setting up zero based budgeting system. It is more time consuming than traditional budgeting system and therefore it is resisted by various department heads.Time to change the budgeting system In Egypt Its time that the budgetary process in Egypt should change from the traditional system that is input oriented and doesnt link inputs to outputs even though its costly and time consuming, it does not deal with key Issues of government objectives, their links to the budget, the services to be delivered by the government; the search for the most efficient combination of inputs to deliver services. Associated with an "input-oriented" budget preparation.

We have 2 alternatives that are output oriented the PPBS and the ZBB.The PPBS This budget aims to link between funds and between the achievement of planned targets and is seen as a way to make decisions concerning the differentiation between alternative programs and competing to achieve certain goals ,ZBB focuses on how to achieve the goals and provide the means to assess the levels of funding raised, but ZBB is much more time consuming and costly than both traditional and PPBS,so we recommend depending on PPBS

References http://www1.worldbank.org/publicsector/pe/PEAMCourse04/DorotinskyBackCh3.pdf Younes A.ElBatrik, Public finance, Selected Topics, 4th edition, 2010.

http://www.howfoundation.org/documents/10157/61910/Budget+April+2013.pdf Kabelo Moeti, Titos Khalo, J. Mafunisa ,Public Finance Fundamentals,2007

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