Rwanda
Organic Law on State Finances and Property
Organic Law 12 of 2013
- Published in Official Gazette special on 5 November 2013
- Assented to on 12 September 2013
- Commenced on 5 November 2013
- [This is the version of this document from 5 November 2013.]
Chapter One
General provisions
Article One – Purpose of this Organic Law
This Organic Law establishes principles and modalities for sound management of State finances and property.Article 2 – Scope of application of this Organic Law
This Organic Law shall relate to public financial management of Central Government, local administration, public institutions and parastatal organizations.Article 3 – Definitions of terms
In this Organic Law, unless the context otherwise provides, the following terms shall have the following meanings:1°public funds: all State monies received or to be received by the Minister, a public officer or any other authorized person including revenues collected by designated Government departments, donations, loans for the Government, and any other money that the Minister may direct to be paid into the accounts of the consolidated fund;2°compulsory/statutory payments: payments by the Central Government for contractual obligations, permanent agreements or special laws. Such payments shall also comprise payments for servicing public debt, refunds of taxes and other revenues in case they are provided for by law and court-issued legal claims on the State;3°consolidation: channelling public funds through the Public Treasury Single Account System and making payments according to the procedure prescribed in this Organic Law;4°uniformity: management of Central Government and decentralised entities with a uniform budget classification, chart of accounts, budget documentation and principles of public finance management;5°transparency: openness and information to the public on matters relating to public finance management;6°budget deficit: amount of budget expenditure, as provided for in Article 31 of this Organic Law, exceeding budget revenues as provided for in Article 30 of this Organic Law;7°appropriation: provision in the State Finance Law adopted by the Chamber of Deputies approving the maximum amount that a public entity may be allocated in making commitments and payments for specific purposes during a twelve (12) month period starting on July 1st and ending on June 30 of each year;8°consolidated fund: fund that includes all the revenues and other funds of the State;9°public institution: institution with legal personality, managed in accordance with laws governing public administrative entities and using the State finances and property for carrying out its specific activities for public interest;10°subsidiary entity: public entity without legal personality and administrative and financial autonomy supervised and funded through the Central Government or a Decentralized Entity to which it is affiliated;11°State Finance Law: law determining projected annual revenues and expenditures as well as the financing of the deficit of the budget approved by the Chamber of Deputies;12°Public Treasury Single Account: Central Government main bank account and its sub accounts maintained at the National Bank of Rwanda;13°accountability: responsibility of each chief budget manager to ensure prudent use, good management and lawful accounting of public funds;14°comprehensiveness: complete inclusion of all revenues, expenditures and budget financing in the budget;15°Ministry: Ministry in charge of finance;16°Minister: Minister in charge of finance;17°public officer: any person carrying out a duty provided within the public service and paid out of public funds;18°State finance Bill: State finance bill drafted and submitted to the Parliament pursuant to Articles 79 and 80 of the Constitution of the Republic of Rwanda of 04 June 04 2003 as amended to date;19°public property: movable and immovable assets of a public entity;20°Chief Budget Manager: administrative head of the public entity in charge of budget management as provided for in Article 18 of this Organic Law or any other competent public officer as provided for in Article 20 of this Organic Law;21°executive head: head who coordinates all the activities of a public entity;22°fiscal year: period of twelve (12) months from 01 July to 30 June of the following year;23°public debt: any State monetary liability or treasury bill issued by Central Government or decentralised entity or any other debt the State may take on;24°extra budgetary entity: public entity whose budget is partially financed through the annual State Finance Law;25°Public entity: a public entity with legal personality managed in accordance with laws governing public entities and which is entitled to a budget for fulfilling its mission;26°decentralized entity: local administrative entity with legal personality, administrative and financial autonomy and whose budget is partially financed by the Central Government;27°Central Government entity: a public entity to which the State allocates every year funds in the annual State Finance Law and which is wholly funded by the national budget.Article 4 – Fundamental principles of public finance management
In using public funds, the following fundamental public finance management principles shall be put into consideration:1ºcomprehensiveness;2ºtransparency;3ºaccountability;4ºuniformity;5ºconsolidation;6ºgender balance in public State finance management.Article 5 – Adoption of the State Budget
The budget of Central Government shall be adopted by the Chamber of Deputies, while the budget of decentralized entities shall be adopted by their respective Councils before the beginning of the fiscal year to which they relate.With regard to public institutions, classification, presentation and approval of their budgets shall be done by competent authorities provided for in laws establishing such public institutions, which shall adhere to general principles and provisions of this Organic Law.Article 6 – Regulations for the use of public finances
The public finances shall be used in public entities in accordance with the Law governing public procurement.Article 7 – Incurring extra budgetary expenditures
All revenues, including grants and loans and all expenditures shall be included in the budget of the concerned public entity.It is prohibited to incur extra-budgetary expenditures whatever their source.Article 8 – Consolidated Fund for Central Government
A public fund shall constitute all Government funds.For effective management of the budget in the Central Government, such a consolidated fund shall constitute all revenues, including external loans and grants.However, such fund shall not include revenues received by public institutions, decentralized entities and public funds received in accordance with specific legislation or through agreement between the Central Government and the development partners.The Minister or his/her delegate shall be the chief budget manager of the revenues and the expenditures in the Central Government consolidated fund.Article 9 – Consolidated fund in a Decentralised Entity
In a decentralized entity, the Council shall establish a consolidated fund and operate it in accordance with fundamental principles of public finance management as provided for in Article 4 of this Organic Law.All taxes established by law for decentralized entities and other public funds, including resources from Central Government, loans and grants shall constitute the Consolidated Fund established by the Council for the Decentralized Entity.The Executive Secretary or his/her delegate shall be the chief budget manager of the revenues and expenditures of the Consolidated Fund in a decentralized entity.Article 10 – Withdrawal of funds from the Consolidated Fund
Any withdrawal of funds from the Consolidated Fund in the Central Government or Decentralized entity is prohibited, except under the written permission issued, respectively, by the Minister or by the Chairperson of Executive Committee of decentralized entity, or their delegates.Pursuant to the State Finance Law or decision of the Council determining the budget of a Decentralized entity, withdrawal from the Consolidated Fund shall be performed:1ºif there is any amount to be paid with respect to compulsory/statutory charges;2ºif there is a reimbursement arising from moneys incorrectly deposited into the Consolidated Fund or which is not due to be paid into such a Consolidated Fund.The Minister or the Chairperson of the Executive Committee of the decentralized entity may, respectively, in case of any reason related to financial exigencies, suspend withdrawal, or prohibit authorization to payment, except for authorization granted by law on compulsory/statutory payments.Chapter II
Powers and responsibilities in public finance management
Article 11 – Powers to adopt the budget
The Chamber of Deputies and the Councils of the decentralized entities, in their respective capacity sall be the only organs with powers to adopt the annual budget and its revision. Prior to the adoption of the annual budget, members of the Chamber of Deputies and members of the Decentralized entity Council shall consider and provide comments on the Budget Framework Paper.The procedure for adoption of Central Government budget shall comply with Articles 79 and 80 of the Constituion of the Republic of Rwanda of 04 June 2003 as amended to date and the provisions of this Organic Law. The procedure for approval of local administrative entities budget shall be determined by instructions adopted by their respective Councils in conformity with principles included in this Organic Law, specific laws establishing such entities and the general guidelines issued by the Minister.The Chamber of Deputies, pursuant to the provisions of Articles 90 and 91 of the Constitution of the Republic of Rwanda of 04 June 2003 as amended to date and the Council of the decentralized entity shall have powers to revise the respective proposed budgets without altering the fiscal balance. Members of those entities shall ensure that the proposed amendments have the potential to reduce State revenue or expenditure and shall indicate proposals for the reduction.The Chamber of Deputies shall have the authority to require members of Cabinet and chief budget managers to appear before it and explain policies, programs and utilization of their budget.The Council of the decentralized entity shall have the authority to require members of the Executive Committee and chief budget manager to appear before it and explain policies, programs and utilization of the budget of the concerned decentralized entity.With respect to the extra-budget entities, the annual and revised budgets shall be approved by their competent organs. The total budget of such entities shall include transfers from Central Government.The annual and revised budgets of public institutions shall be approved by their competent organs.Article 12 – Responsibilities of the Cabinet
The Cabinet shall be responsible for the following:1ºto approve the Government’s broad strategic objectives and priorities for budgetary policies for the next fiscal year and for the next two successive years after the relevant fiscal year as outlined in the Budget Framework Paper;2ºto approve the Budget Framework Paper, especially the targets for aggregate revenues, aggregate expenditures, fiscal balance and part of public debt the State is obliged to pay;3ºupon request by the Minister, to approve regulations that define duties and responsibilities of chief budget managers and other matters that enhance sound management of public finance;4ºto approve the annual finance bill prepared by the Minister;5ºto approve the formula for allocation of grants to decentralized entities;6ºto consider and adopt consolidated quarterly budget execution report prepared by the Minister;7ºto consider and adopt the report of the State Finances of the year preceding the year of the consolidated budget as well as the budget execution report prepared by the Minister.Article 13 – Responsibilities of the Minister
The Minister shall have the following responsibilities:1ºto prepare and implement the macroeconomic and fiscal framework;2ºto advise the Government on the budgetary policies to attain national objectives and targets;3ºto promote sound public finance management, principles and practices in the use of public funds;4ºto prescribe the frequency, format and content of the reports to be prepared by public entities;5ºto ensure, within the resources available, efficient cash management to equitably meet the budgetary spending requirements of all public entities;6ºto coordinate, supervise and monitor the management of Government financial and physical assets and liabilities, including donations and loans;7ºto promote and enforce transparency and accountability in use of public funds, including the publication of reports as defined in Articles 63, 64, 65 and 66 of this Organic Law;8ºto ensure the adequacy of internal audit, to know and monitor risks related to management and internal audit arrangements, and collaborate with the Office of the Auditor General of State Finances, when considered necessary;9ºto monitor the establishment of audit committees in public entities, and issue regulations on their proper functioning;10ºto inform the Chamber of Deputies every quarter or whenever necessary, on macroeconomic and budgetary developments;11ºto ensure on a regular basis, that persons delegated to utilize the State budget comply with their responsibilities;12ºto prepare the annual consolidated Financial Statements for submission to the Auditor General of State Finances;13ºto perform any other duties necessary for the implementation of this Organic Law and other laws related to public finance.Article 14 – Powers of the Minister
In order for the Minister to perform his/her responsibilities as provided for in Article 13 of this Organic Law, he/she shall have the following powers:1ºto establish, following Cabinet decision, organs within his/her Ministry for implementing the requirements under this Organic Law;2ºto inform in writing, chief budget managers and outline their powers and responsibilities in finance management;3ºto ensure, in collaboration with other Ministers and chief budget managers, the establishment of organs in budget agencies for the accounting of all budgetary revenues and expenditures;4ºto establish, after consultation with the Ministry in charge of decentralized entities, mechanisms for coordinating the implementation of the provisions of this Organic Law that pertain to decentralized entities;5ºto issue instructions relating to appropriate relations with finance institutions;6ºto assign responsibilities and instructions on financial management in all public institutions;7ºto have unrestricted access to documents and financial management records of all public entities;8ºto prepare and submit to the Cabinet for approval regulations including financial management procedures;9ºto issue instructions of preparation, use, accounting, control, reporting and monitoring use of public funds in public institutions;10ºto issue regulations and instructions on the application of specific provisions of this Organic Law;11ºto approve the opening of bank accounts and signatories of all authorized officers;12ºto establish appropriate internal audit procedures applicable to public entities;13ºto establish in the Ministry, appropriate and coordinated procedures for treasury management;14ºto set up appropriate procedures to manage, monitor and report on public property;15ºto prescribe an appropriate financial management system, including classification of accounts, for use by public entities.Article 15 – Delegation of powers and responsibilities by the Minister
With the exception of powers to issue regulations, the Minister may delegate, in writing or through regulations relating to finances, part of his/her powers and responsibilities to the Permanent Secretary and Secretary to the Treasury or any other public officer of the Ministry.Delegation so given does not divest the Minister from the accountability relating to the exercise of delegated power or the performance of the assigned responsibilities.The Minister may suspend, change or revoke any delegated power given to any delegated person, or any decision taken by the delegated persons if it is clear that they do not fulfill their responsibilities in an appropriate manner.Article 16 – Powers and responsibilities of the Secretary to the Treasury
Under the general directives and the powers given by the Minister, and within the responsibilities prescribed by the Cabinet for all Permanent Secretaries, the Secretary to the Treasury shall have the following powers and responsibilities:1ºto oversee and ensure the implementation of policies relating to the use of public funds and other tasks assigned to the Ministry;2ºto delegate, in writing, part of his/her powers and tasks to public officers directly under him/her without prejudice to his/her responsibilities;3ºto advise chief budget managers on any matters concerning the application of this Organic Law;4ºto establish an effective system for the collection and coordination of all information to ensure timely and effective preparation of the budget;5ºto ensure Government spending maintains macroeconomic stability and reflects the sovereignty of the value of the national currency;6ºto put in place mechanisms that ensure smooth running of the Treasury in the overall context of macroeconomic management;7ºto chair the Treasury Management Committee responsible for managing the Consolidated Fund. The members of such a committee and its functional modalities shall be determined by the financial regulations;8ºto coordinate and monitor systems of financial and risk prevention, internal audit and reporting in all Ministries and other public entities;9ºif deemed appropriate, to require any chief budget manager, whose accounts are subject by the law to the audit of the Auditor General of State Finances, to supply information, as he/she considers necessary;Subject to the other provisions of this Organic Law, the Secretary to the Treasury or his/her delegate, have the power to inspect all operations from which they may find necessary to require all information relating to public funds.Article 17 – Paymaster of State Budget
The President of the Republic shall be the overall paymaster of the State Budget.The Minister shall be the delegated Paymaster of the State Budget.Article 18 – Chief Budget Manager
Given the organisational structure of public entities in Rwanda, the chief budget manager shall be:1ºthe Director General of Corporate Services in the Office of the President of the Republic;2ºthe Clerk of the Senate;3ºthe Clerk of the Chamber of Deputies;4ºthe Director General of Corporate Services in the Prime Minister’s Office;5ºthe Secretary General in the Supreme Court;6ºthe Director General of Administration and Finance in the National Intelligence and Security Service;7ºthe Secretary General in the Office of the Auditor General of State Finances;8ºthe Secretary General of the National Public Prosecution Authority;9ºthe Permanent Secretary in the Ministry;10ºthe Permanent Secretary in the Office of the Ombudsman;11ºthe First Counselor in the Embassy or any other authorized officer in the Embassy approved by the Minister;12ºthe Vice Rector in charge of finance in public higher learning institution;13ºthe Executive Secretary of a National Commission;14ºthe Executive Secretary of the Province;15ºthe Executive Secretary of the City of Kigali;16ºthe Executive Secretary in a decentralized entity;17ºthe Director General of a public institution or any other authorized officer in the public institution approved by the Minister;18ºany other lawfully authorized officer.Article 19 – Responsibilities of the Chief Budget Manager
The Chief Budget Manager shall have the following responsibilities:1ºto prepare the mid-term plan, the annual action plan, and annual budget for funds provided by the public entity under his/her responsibilities;2ºto exercise control over the execution of the budget of the public entity under his/her responsibility, in compliance with all provisions of this Organic Law as well as regulations issued by the Minister;3ºto maintain accounts and records of the public entity under his/her responsibility in accordance with the financial regulations prescribed by the Minister;4ºto prepare and transmit reports to the Ministry as provided for in this Organic Law and in regulations issued by the Minister with a copy to the Executive head of the public entity under his/her responsibilities;5ºto prepare and implement cash flow plans in consultation with the Ministry;6ºto manage effectively, efficiently and in a transparent manner all the public funds for the public entity under his/her responsibility in accordance with relevant legal provisions;7ºto establish and maintain effective, efficient and transparent systems of internal controls and risk management;8ºto supervise and ensure proper use of public funds at the disposal of subsidiary entities under his/her responsibility;9ºto provide any other information as may be required by the Ministry and Office of the Auditor General of State Finances;10ºto implement the audit recommendations of the Ministry and Auditor General of State Finances;11ºto ensure compliance with all the provisions of this Organic Law, regulations issued by the Minister and other laws relating to public finance.Article 20 – Delegation of powers by the Chief Budget Manager
The Chief Budget Manager may delegate part of his/her powers to any relevant public officer under him/her after informing the Minister in writing, with a copy to the Executive Head of the relevant public entity.In case the Chief Budget Manager delegates his/her powers to any person, he/she shall remain fully accountable.Article 21 – Responsibilities of the Executive Head
Without prejudice to other legal provisions, the Executive Head of a public entity shall have the following responsibilities:1ºto provide strategic guidance on the priorities to be funded in the preparation of the budgets of the public entities under his/her responsibility;2ºto provide guidance on budget reprioritisation where necessary in accordance with relevant legal provisions;3ºto monitor the use of public funds and management of assets at the disposal of the public entities under his/her responsibility;4ºto advise the chief budget manager on effective use of public funds.Article 22 – Relations between the Chief Budget Manager and the Executive Head of the public entity
The Chief Budget Manager shall not be victimized, discriminated, demoted in rank, dismissed, removed from office or otherwise subject to disciplinary action solely because he/she acted in compliance with the provisions of this Organic Law.Any directive by the Executive Head to the Chief Budget Manager of the public entity having financial implications for the public entity shall be in writing.Any act by the Chief Budget Manager individually or jointly with the Executive Head of the public entity that contravenes the provisions of this Organic Law, shall be sanctioned in accordance with Article 73 of this Organic Law.Article 23 – Submission of activity reports to the Minister in charge of decentralized entities
The Executive Committee of the decentralized entity shall submit quarterly and annual budget execution reports to the Council.The Council, after examination of the report submitted by the Executive Committee of the decentralized entity, shall submit it to the Minister in charge of decentralized entities through the Provincial Governor or the Mayor of the City of Kigali. The Minister in charge of finance shall receive a copy of such a report.Article 24 – Responsibilities of the Chief Executive Officer of a public institution in public finance management
Every public institution shall have a Chief Executive Officer who shall be accountable for finance management for the purposes of this Organic Law.The Chief Executive Officer of a public institution shall prepare and implement the budget of this public institution, ensure good financial management, keep books of accounts and submit reports and related explanations to the Minister and Auditor General of State Finances as determined by this Organic Law, with a copy to the Chairperson of the Board of Directors.Chapter III
Planning, budget preparation and approval
Article 25 – State planning
The Director General in charge of planning in the Ministry shall be responsible for monitoring and coordinating State planning activities based on national planning.The Minister’s instructions shall determine his/her specific responsibilities.Article 26 – Budget instructions and guidelines
The preparation and approval of the budget shall follow the budget cycle on the basis of the calendar included in the instructions issued by the Minister.The instructions of the Minister shall, among others, indicate:1ºthe modalities for preparation of annual budget and medium term expenditure framework;2ºthe format and contents of the State finance bill;3ºtimeframe for the preparation and submission of the Budget Framework Paper;4ºthe timeframes for the preparation and submission of State finance law;5ºroles and responsibilities of various stakeholders in the budget process;6ºother pertinent information to assist public entities to develop plans and budget.Article 27 – Sources of State finances
Money allocated to Central Government budget shall come from the following sources:1ºtax revenues;2ºnon tax revenues;3ºloans and grants;4ºproceeds from sale of assets;5ºother revenues prescribed by the law.For decentralized entities, the sources of finances as well as their management shall be determined by the relevant law.Article 28 – Composition of State expenditures
The expenditures of Central Government or decentralized entities and other entities shall consist of:1ºcurrent expenditure, including employee compensation costs, payments of goods and services, transfers and payments relating to servicing of debt;2ºexpenditures relating to development projects;3ºGovernment lending subventions and shares in parastatals for attaining specified purposes.Article 29 – Emergency budget reserve of Central Government
In Central Government entities, a budget line shall be provided for in the budget of the Ministry to meet urgent and unexpected expenditure.The amount of expenditure meant for emergency budget reserve shall not exceed three percent (3%) of the total current budget.Before using such an amount, the Minister shall transfer the required amount to the relevant budget line under the budget of the public entity which will use it and specify the purpose of the unexpected expenditure.The Minister shall prepare quarterly reports to Cabinet and Chamber of Deputies on the use of such amount.An Order of the Minister shall determine the modalities for application and use of the emergency budget reserve as well as the purpose of the application.Article 30 – Emergency budget reserve of a decentralized entity
In decentralized entity, the Council is authorized to establish a budgetary line to meet urgent and unexpected expenditure.The amount of expenditure meant for emergency budget reserve shall not exceed three percent (3%) of the entity’s own revenues.The Chairperson of the Executive Committee of the decentralized entity, in consultation with other members of the relevant Executive Committee, shall authorize the use of such amount and report quarterly to the Council on its use.An Order of the Minister shall determine the modalities for application and use of the emergency budget reserve as well as the purpose of the application.Article 31 – Budget deficit and surplus
The State finance law shall determine the manner in which budget surplus is to be used and budget deficit to be financed. The budget deficit shall be financed through borrowing or use of reserves accumulated by the State.Article 32 – Preparation and presentation of the budget framework paper
The Minister shall prepare and submit to both Chambers of the Parliament, by not later than 30th April of each year, the Budget Framework Paper.The Budget Framework Paper shall be approved by Cabinet before submission to both Chambers of the Parliament.The Budget Framework Paper shall contain at least the following annexes:1ºthe basic macroeconomic indicators;2ºthe fiscal projections for the relevant period;3ºthe mid-year budget execution report of the current year;4ºthe borrowing and loan servicing projections;5ºthe projections of grants by source;6ºthe guidelines on earmarked tranfers to decentralised entities;7ºthe projected internally generated revenues and related expenditures of Central Government entities;8ºthe consolidated summaries of revenues and expenditures of decentralized entities;9ºthe revenues and expenditure projections of public institutions;10ºthe amount of dividends paid by companies in which the State holds shares and the part of the amount which will go to the budget;11ºthe securities issued by the Government;12ºthe gender budget statement.The Parliament shall submit comments on the Budget Framework Paper to the Cabinet.Such comments shall be submitted to the Cabinet not later than 30th May of the current fiscal year.Article 33 – Format of revenue budget appropriation
The revenues of Central Government or decentralized entities shall adhere to internationally accepted standards of classification of revenues.The revenue estimates of Central Government or decentralized entities shall be appropriated according to chapters and articles in which they are provided for.For appropriation purposes in decentralized entities, variations in classification and presentation of the budget may be done to reflect particular organization of decentralized entities.The Minister shall be notified of such variations and their implications on financial reporting.Article 34 – Determination of expenditure budget appropriation
The expenditure estimates of the Central Government or decentralized entities shall be based on the existing policies according to national priorities indicated in the medium term strategy and action plan during that period.Expenditures relating to development projects shall be provided for in the State budget in the form of multi-year allocations and implemented through annual payments drawn from allocated credits.Expenditure estimates shall be prepared by public entities, basing on the available resources and the guidelines issued by the Minister.Except for the Ministries and other entities established by the Constitution of the Republic of Rwanda, all public entities that allocated a budget in the State Finance Law shall be established through a specific law.Expenditure estimates of each public entity shall be organized in a programmatic, economic and functional classification, in line with international accepted classification standards of expenditures.Article 35 – Approval of Finance Bill
The Minister shall present the Finance Bill to the Cabinet for approval before submission to the Parliament.In accordance with Article 79 of the Constitution of the Republic of Rwanda of 04 June 2003 as amended to date, the Minister, following Cabinet’s approval, shall submit the Finance Bill to the Parliament not later than 15th June of each year.Before the approval of the State Budget, the Senate shall submit to the Chamber of Deputies its opinion on the Finance Bill.The Chamber of Deputies shall adopt the Finance Law before 30th June of each year.Once the budget is approved by the Chamber of Deputies of the Parliament, it shall be published in the Official Gazette of the Republic of Rwanda.Article 36 – Budget format of decentralized entities
The expenditure estimates in decentralized entities, shall be based on existing and proposed expenditure policies of decentralized entities and in conformity with medium term strategies established by the State.The organization and documentation of the budget of decentralized entities, including the amount of the expenditures to be approved, shall follow the general principles relating to State budget, except with variations in order to reflect particular organization of the decentralized entities.Article 37 – Budget format of public institutions
With regard to public institutions, classification and presentation of documentation of the budget shall be approved by competent organs in accordance with the general principles relating to the budget of public entities.Article 38 – Contents of the Finance Bill
The Finance Bill submitted to both Chambers of the Parliament shall contain:1ºthe draft State Finance Law;2ºthe detailed and summary estimates of revenues, including:a)the revenue estimates for the current fiscal year;b)the data projections for the two (2) years following the fiscal year;3ºthe detailed and summary estimates of expenditures, including:a)the expenditure estimates for the current fiscal year;b)the expenditure projections for the two years following the fiscal year.4ºthe summary and detailed estimates of Central Government transfers to decentralised entities;5ºthe projections relating to public debt;6ºthe summary estimates of the budget balance, both for the current fiscal year and the projections for the two years following that fiscal year.Article 39 – Contents of the draft budget for decentralized entities
In decentralised entities, the draft budget document submitted to the Councils shall contain:1ºthe draft Council decision determining the budget;2ºthe detailed and summary estimates of revenues, including:a)the revenue estimates for the fiscal year;b)the revenue projections for the two years following the fiscal year;3ºdetailed and summary estimates of expenditures, including:a)the expenditure estimates for the current fiscal year;b)the expenditure projections for the two years following the fiscal year;4ºthe summary and detailed estimates of revenues by source, including transfers from Central Government and own revenues;5ºthe summary and detailed estimates of expenditures by source, including expenditures funded from own revenues, by own activities and Central Government transfers.Article 40 – Approval of the budget of decentralized entities
The Executive Committee shall approve the draft budget before submission to the Council.The approval process of the budget in decentralised entities shall, in principle, follow the same procedures as for the Central Government, with variations to reflect particular conditions of decentralised entities.When the draft budget of a decentralized entity is approved by the Council, it shall be made public through appropriate media including publication on the entity website.Article 41 – Revision of the budget
Basing on the mid-year budget execution report as provided for under Article 65 of this Organic Law, the Minister or the Chairperson of the Executive Committee of the decentralized entity may submit a revised draft budget, proposals for policy revision of revenue and expenditure and related estimates to the Chamber of Deputies or to the Council of such an entity.The proposed changes shall be consistent with the approved medium-term strategies and budget framework. If they are different from the approved budget framework, the reasons thereof shall be notified to the Cabinet and Chamber of Deputies or to the Council of the decentralized entity.The timetable for submission and approval of the Revised budget by the Cabinet and the Chamber of Deputies shall be stipulated in regulations meant for the application of this Organic Law.The revised budget shall provide details on how the emergency reserve budget was used.The revised budget shall be submitted to the Chamber of Deputies or to the Council for approval, and prepared in the same manner as the original budget.Before the revised State budget is approved, the Senate shall submit to the Chamber of Deputies its opinion on the revised State finance bill.The revised budget of the central Government shall be published in the Official Gazette of the Republic of Rwanda while the revised budget of the decentralized entities shall be published according to procedures provided for in Article 40 of this Organic Law.Chapter IV
State budget execution
Article 42 – Preparation and approval of expenditure plan
After the submission of the Finance Bill to both Chambers of the Parliament, the Secretary to the Treasury shall require the chief budget managers to prepare and submit to the Ministry on the basis of the draft budget, provisional annual expenditure plans broken down by month and quarter consistent with the public entity procurement plan.Timetable for submission of the proposed expenditure plans to the Ministry shall be stipulated in regulations meant for the application of this Organic Law.Upon the adoption of the annual budget, the Minister shall inform the chief budget manager of each public entity of its approved budget and request for a detailed final annual expenditure plan based on the approved budget.After examining the annual expenditure plan of the public entity, and taking into account the available resources, the Minister shall issue to the Chief Budget Manager authorization for execution of the budget.Authorization shall be issued on a quarterly basis and on each budget item. Depending on the available resources, the Minister may decide to issue the authorization on a monthly basis.For decentralized entities, the Executive Committee Chairperson shall inform the subsidiary entities that are entitled to the budget and require them to prepare and submit a detailed annual expenditure plan. The modalities of preparation and approval of the expenditure plans in decentralized entities shall be provided for in financial regulations.Article 43 – Budget commitments
In accordance with the authorization issued by the Minister, budget entities shall make commitments based on the approved expenditure plans for the quarter or the month as the case may be.In making commitments, the chief budget manager shall comply with this Organic Law and other related laws as well as the regulations issued by the Minister.Article 44 – Limitation to implement approved expenditure plan
The Secretary to the Treasury or the Executive Secretary of the decentralized entity may reduce, depending on the insufficiency of cash, quarterly or monthly limits on commitments and payments below the amount earlier authorized.Such limits shall be notified to the budget entities before the relevant period to which they apply, with sufficient time so that they can revise expenditure plans if necessary.Article 45 – Provisional budget
If the Chamber of Deputies does not adopt the annual budget before 30 June, or if its publication delays, provisions of Article 80 of the Constitution of the Republic of Rwanda of 04 June 2003 as amended to date shall apply. The Prime Minister shall authorize by an Order a monthly expenditure on provisional basis of an amount equal to one-twelfth (1/12) of the budget of the preceding year.If the Council of a decentralized entity does not approve the annual budget before 30 June, or if its signature is delayed, the Chairperson of the Executive Committee, in accordance with instructions of the Council, shall authorize monthly expenditure on provisional basis of an amount equal to one-twelfth (1/12) of the budget of the preceding year.This provision shall apply only to current expenditures and on funds relating to ongoing development projects.Authorization issued according to Paragraphs One and 2 of this Article shall apply only to existing activities for which funds were allocated in the preceding annual budget. Funds used in such manner shall be allocated to the new fiscal year once approved.Revenue shall continue to be collected in accordance with the existing laws.Article 46 – Reallocation of appropriated budget
During budget execution, chief budget managers shall be allowed to make reallocation of funds between programs subject to the following conditions and limits:1ºthe Chief Budget Manager can reallocate funds from one program to another within the same entity to a cumulative maximum of twenty percent (20%) of total budget for the program;2ºreallocation from one program to another in excess of twenty percent (20%) of total program budget can only be approved by the Minister;3ºreallocation of funds between recurrent and development expenditure budget can only be effected with the approval of the Minister.It is prohibited to reallocate funds from employee costs to other expenditure categories without the approval of the Chamber of Deputies.No reallocation of funds from one public entity to another is permitted without the approval of the Chamber of Deputies.The Minister shall issue guidelines on modalities of budget reallocation to give effect to the above conditions and limits.Article 47 – Processing of payments
No payments shall be made without first establishing the commitment to pay, except for compulsory payments, direct debits and other urgent payments, except upon approval by the Minister.Chief budget managers shall be required to ensure the timely receipt of all invoices by the entity and their recording in a specific period, and submission of payment requests to the Ministry, before the due date for payment.Without prejudice to Paragraph One of this Article, no payment of contributions to international organizations shall be made without a ratified agreement. Payment of contributions to local organizations or individuals shall only be made with the approval of Cabinet.Article 48 – Cessation of budget commitments
Expenditure commitment shall end on 15 May of the same year, unless otherwise authorized by the Minister. Payments in respect of committed funds are allowed until 30 June of the year.At the end of the last working day of each fiscal year, all appropriations and other authorizations for expenditure shall immediately lapse.All unused funds of public entities shall be transferred to the Treasury.The Minister shall issue specific instructions concerning transfers of unused funds and settlement of commitments that remain unpaid as at 30 June.In decentralized entities and extra budgetary entities, unused funds will not be transferred to the Treasury; they will be instead used as initial amount of the budget for the next fiscal year.Article 49 – Budget reallocation in decentralized entities
For budget reallocation in decentralized entities, the Minister shall provide guidelines relating to procedures of reallocations of funds from one budget line to another.Notwithstanding the provisions of Paragraph One of this Article, reallocation of funds from one budgetary line to another shall not be allowed between the employee costs and other expenditure categories except where approved by the Council of the decentralized entity.Chapter V
Borrowing, debt management, investment and banking arrangements
Article 50 – Authority to borrow
The Minister shall be the sole person with the authority to borrow or to permit borrowing for purpose of financing the Central Government budget deficit or to raise loans for other public entities.The Minister shall also be the sole authority to give and approve guarantees and security for the loans granted to public institutions by financial institutions.For decentralized entities, the Council of each entity may borrow loans only for development projects upon authorization of the Minister. However, the Minister shall, by use of instructions, determine the maximum amount that the Council may borrow without prior authorization from the Minister.The members of organs of decentralized entities shall not have powers to give guarantees but may pledge securities for a debt. An Order of the Minister shall determine the procedures for giving and approving guarantees and pledging securities by decentralised entities.Public institutions may borrow, but with authorization of the Minister.Article 51 – Purpose of borrowing
On the basis of a funding proposal prepared and presented by the Minister to the Chamber of Deputies for approval, the Government may borrow money:1ºto finance annual budget deficits;2ºto refinance maturing debt or a loan paid before the redemption date;3ºto boost foreign currency reserves;4ºto maintain credit balances on a bank account of the consolidated Fund;5ºto regulate monetary conditions should the necessity arise;6ºfor any other purpose necessary for sound fiscal policy and effective debt management.The Minister shall have the powers to select, after consultations with the National Bank of Rwanda, the form, terms and conditions of borrowing, with the aim of maintaining and improving national sovereign debt ratings.Article 52 – Limits of borrowing
While voting the annual budget, basing on the recommendations of the Central Government, the Chamber of Deputies shall set the overall general limit of the source of new borrowing as well as the securities that may be given by Central Government. Debt of third parties to be taken over by the Central Government shall be included within this limit.Subject to the approval of the Chamber of Deputies, the Minister may recommend different limits on:1ºtotal domestic borrowing, including short term overdrafts;2ºtotal foreign borrowing.Without prejudice to the provisions of Paragraph One of this Article, overdrafts granted to the Treasury by the National Bank of Rwanda shall conform to the relevant provisions of the Law relating to advances and loans to the State by the National Bank of Rwanda.The Minister may also request the Chamber of Deputies, for each budget year, to set a limit on the total Government securities in favour of third parties.Article 53 – Debt monitoring
The Minister or the Chairperson of the Executive Committee of the decentralized entity shall be the sole authorities to ensure that all payments required to meet debt obligations emanating from loans approved by the Chamber of Deputies or Council of the decentralized entity are budgeted for and payments made to creditors according to the repayment provisions of the loan agreements.Article 54 – Prepayment and conversion conditions
Without prejudice to the provisions of Article 50 of this Organic Law, the Minister, under the general guidance of Cabinet decisions on matters relating to the budget and macro economic policy, in consultation with the National Bank of Rwanda, and with the consent of the lender, may:1ºrepay a loan before its maturity date;2ºmodify contractual terms and conditions of any existing loan;3ºconvert a loan into any other loan or shares.Article 55 – Subsidies to public entities
The Minister, subject to Cabinet approval and in consultation with the National Bank of Rwanda, may provide subsidies to public entities or buy shares for such public entities with the aim of promoting government policies.An estimate of the amount committed for subsidies to public entities or shares of those public entities shall be included in the State annual budget.The Minister shall, each year, set the overall limit of resources for subsidies to public entities or share participation.Each year, the amount ceiling of subsidies to public entities or share participation shall be determined by Cabinet and approved by the Chamber of Deputies.The annual consolidated financial statements shall disclose the names of public entities for which shares are bought and amounts granted to them.Article 56 – Maintaining of debt records
The Minister shall, in consultation with the National Bank of Rwanda, maintain a detailed record of all public debt and Government securities or guarantees on third party debt, as well as the repayment plan under that debt.The Minister shall also maintain a detailed record of Government loans to public entities and repayment plan of such loans.Interest and principal payments to the Government shall be recorded in an appropriate register monitored and recognized as State revenues.Public entities shall maintain detailed records and accounts of borrowing and debt servicing, as prescribed by the Minister’s instructions, to enable disclosure of liabilities to the State and other parties.Article 57 – Debt Management
The Minister shall prepare and publish each year the public debt management strategy. He shall enact instructions on any borrowing and loans the Government may from time to time guarantee.In formulating debt management guidelines and implementing the annual debt management strategy, the Minister shall, each year, consult with the National Bank of Rwanda, so as to avoid any possible conflicts among the objectives of fiscal, debt management, trade, monetary and exchange policies.In accordance with written agreement with the Minister, the National Bank of Rwanda shall provide all the services required for the execution of decisions on effective management of public debt.Article 58 – Investment of public funds
The Minister may invest public funds in companies and financial institutions. The proposals for such investments shall be included in the annual budget.The Minister may, upon advice by the Treasury Management Committee and for a short period, invest surplus funds in the Treasury Single Account, in short term liquid asset, and inform Cabinet.The proceeds from investment of public funds shall be deposited in the Treasury Single Account.A decentralized entity may invest funds in companies and financial institutions, subject to the criteria and guidelines provided for in financial regulations.The procedures for investment and other matters relating to investments shall be determined by an Order of the Minister.Article 59 – Investments in Government projects
Investing in Government projects shall be based on the Government policy of investment. An Order of the Minister shall determine the financial management of Government projects.Article 60 – Management of bank accounts in Central Government entities
All Central Government revenues shall be credited into a single Treasury Account in the National Bank of Rwanda.The Minister shall ensure that there are sufficient funds in the Single Treasury Account before payments are authorized.The Single Treasury Account may include sub-accounts for specific government transactions.Where necessary, Treasury transit accounts may be opened in other banks upon approval by the Minister.The Minister, on behalf of the State, may enter into an agreement with any bank or financial institution on matters related to receipt, custody, payment or transfers of public funds, or any other matter related to Government transactions with banks and financial institutions.No bank account of a Central Government entity shall be opened, whether in or out of the Country, without prior written authorization of the Minister.Any public officer who receives public funds shall promptly deposit them in a designated account in a bank or financial institution account.The procedures for management of bank accounts in public entities shall be determined in the financial regulations.Article 61 – Management of bank accounts in decentralized entities
For a decentralized entity, opening of a bank or financial institution account shall require prior written approval by the Minister.With the approval of the Minister, the Chairperson of the Executive Committee may enter into an agreement with a commercial bank or financial institution on the receipt, custody, and payment of money pertaining to the decentralized entity transactions with the bank.The Chief Budget Manager of the decentralized entity shall ensure that there are sufficient funds in their bank and financial institution account before any payment is authorized.Any public officer who receives public funds relating to a decentralized entity shall promptly deposit them in a designated account in a bank or financial institution.The procedures for management of bank accounts in decentralized entities shall be determined in financial regulations.Chapter VI
Accounting, reporting and audit
Article 62 – Accounting standards
Without prejudice to legal provisions, an Order of the Minister shall determine the accounting standards and policies applicable to all public entities.The format, content and frequency of reporting by public entities shall be prescribed in the financial regulations.Article 63 – Office of the Accountant General
The Accountant General shall be responsible for monitoring and coordinating accounting activities and for setting and promoting compliance with the accounting and financial reporting standards applicable to public entities.The specific responsibilities and functioning of the office of the Accountant General shall be provided for in the regulations issued by the Minister.Article 64 – Year-end procedures for closing books of accounts
Before the end of the fiscal year, the Accountant General shall issue directives concerning the procedures of closing the books of accounts and preparing annual budget execution reports, financial statements and activity reports.Article 65 – Budget execution report
All public entities shall prepare and submit their quarterly budget execution reports to the Minister.Public institutions shall submit their quarterly budget execution reports after approval by the relevant competent authority.On a quarterly basis, the Minister shall prepare and submit a consolidated budget execution report to Cabinet.The Minister shall prepare and submit through Cabinet, a mid-year consolidated budget execution report to the Chamber of Deputies.The format and content of the budget execution reports shall be prescribed in the financial regulations.Article 66 – Preparation and submission of financial statements by public entities
Public entities shall prepare and submit monthly financial statements to the Ministry by the fifteenth (15th) day following the end of the month.The public entities shall also prepare and submit to the Ministry annual financial statements in a period of one month from the end of the fiscal year.Public institutions shall submit their financial statements on a quarterly basis after approval by the relevant competent authority. Public institutions shall also prepare and submit their annual financial statements in a period of two (2) months from the end of the fiscal year.All public entities shall submit their annual financial statements to the Auditor General of State Finances not later than 30 September of the following fiscal year.The procedures for financial management, accounting and reporting by subsidiary entities shall be provided for in an Order of the Minister.During the audit of the financial statements of public entities and the consolidated financial statements, the public entity and the Ministry respectively, may in consultation with the Auditor General of State Finances, effect the necessary adjustments with a view to achieving a fair presentation of the financial position of the entity or Government. Where adjustments of a public entity’s financial statements are carried out before finalization of the audit of the consolidated financial statements, these adjustments shall be communicated to the Ministry to facilitate a corresponding adjustment to the consolidated financial statements.The specific format and content of the financial statements shall be prescribed in the financial regulations.Article 67 – Preparation and submission of consolidated financial statements
The Minister shall prepare and submit to the Auditor General of State Finances, not later than 30 September of the following fiscal year, consolidated financial statements.The consolidated financial statements shall include Central Government entities, extra budgetary entities and decentralized entities.Financial information relating to public institutions, Government investments and public debt shall be included in the financial statements as annexes.Article 68 – Preparation and submission of annual activity reports
All public entities shall prepare and submit to the Ministry not later than 30 September an annual activity report corresponding to the previous fiscal year.The activity report submitted by the public entity shall specify how plans for gender balance have been implemented.A copy of the annual activity report shall be reserved to the relevant line ministry and the Prime Minister’s office.The annual activity reports by public institutions shall be approved by the competent authorities before submission to the Ministry.The format and content of the annual activity report shall be prescribed in an Order of the Minister.Article 69 – Audit of financial statements
In respect of provisions of Article 183 of the Constitution of the Republic of Rwanda of 04 June 2003 as amended to date, the Auditor General of State Finances shall carry out an audit of finance and property of the State, decentralized entites, public institutions, parastatal organisations and Government projects.In accordance with Article 184 of the Constitution of the Republic of Rwanda of 04 June 2003 as amended to date, the Office of the Auditor General of State Finances shall submit to both Chambers of Parliament in joint session prior to the commencement of the session devoted to the examination of budget of the following year, a complete report on the balance sheet of the State budget of the previous fiscal year.The report shall indicate the manner in which the budget was utilized, unnecessary expenses which were incurred or expenses which were contrary to the law and whether there was misappropriation or general squandering of public funds.A copy of the report shall be submitted to the President of the Republic, Cabinet, President of Supreme Court and Prosecutor General.The Parliament, after receiving the report of the Auditor General referred to in this Article, shall examine it and take appropriate decisions within a period not exceeding six (6) months.Institutions and public officials to which a copy of the annual report of the Auditor General of State Finances is addressed shall implement its recommendations by taking appropriate measures as regards irregularities and other shortcomings which were disclosed.Each Chief Budget Manager or any public officer of a public entity may be required by the Parliament, Chamber of Deputies, to provide explanations of use of public funds.The Chief Budget Managers shall be responsible for implementing the recommendations of the Auditor General of State Finances aimed at improving the effective management and use of public funds.The Auditor General of State Finances shall ensure that the annual audit reports are published.Article 70 – Internal audit function
The Government Chief Internal Auditor shall be responsible for providing indicators for internal audit and risk management and monitor and coordinate services of internal auditors in public entities.The Minister’s instructions shall determine specific responsibilities of the Government Chief Internal Auditor.Chapter VII
Non compliance with the laws and sanctions
Article 71 – Effect of non compliance with laws governing public finance management
Non compliance with provisions of this Organic Law and other legal instruments relating to management of public finance shall be subject to sanctions provided for by law.Article 72 – Scope of non compliance with the laws
A public officer shall fail to comply with the requirements of this Organic Law and other legal instruments on public finance if he/she:1ºdoes not prepare and submit reports;2ºdoes not respect the timelines specified;3ºfails to provide the information requested by the Ministry;4ºobstructs the implementation of the provisions of this Organic Law;5ºviolates the provisions of this Organic Law leading to loss of public funds or compromises service delivery.Article 73 – Sanctions for non compliance with the laws
Depending on the nature and magnitude of non compliance with this Organic Law and other legal provisions relating to public finance, the following sanctions shall be applicable:1ºadministrative sanctions imposed on a public officer by a competent authority in accordance with the Statute for Public Service;2ºsanctions against an entity: withholding of treasury transfers of the entity and/or freezing of the entity bank accounts by the Minister;3ºpenalties against a public officer in accordance with the Penal Code.Chapter VIII
Transitional and final provisions
Article 74 – Public finance management in public institutions
Public institutions shall comply with the provisions of this Organic Law. A specific law shall prescribe the procedures of management of finance and property in public institutions.Article 75 – Procedure for disposal of public property
Provisions concerning the State movable and immovable property including purchasing, donations and bequests, managing, selling and monitoring not included in this Organic Law shall be provided for by special laws.Article 76 – Drafting, consideration and adoption of this Organic Law
This Organic Law was drafted in English, considered and adopted in Kinyarwanda.Article 77 – Repealing provision
The Organic Law nº 37/2006 of 12/09/2006 on State Finances and Property as amended and complemented to date and all prior legal provisions contrary to this Organic Law are hereby repealed.Article 78 – Commencement
This Organic Law shall come into force on the date of its publication in the Official Gazette of the Republic of Rwanda.History of this document
05 November 2013 this version
Commenced
12 September 2013
Assented to