ABSTRACT
This chapter maps the role played by the central government and coordinating institutions in the formulation, execution, and accountability of subnational budgets in selected federal states. It presents the elements of a framework for sound public financial management across government levels and looks at European Union (EU) practices. The chapter draws on country experiences to analyze the various components of the budget cycle, from formulation to execution and compliance processes. It examines the role of two cross-cutting institutions in these processes: intergovernmental coordination bodies, and accounting standards and budget classification. This chapter has shown, very few federal countries have common or homogeneous guidelines for budget formulation, reporting, and auditing at the central and subnational governments (SNG) level. This is in large part due to the very essence of the federalist approach which grants autonomy to lower levels of governments to enhance the efficiency of spending and the welfare of local populations.
