Budgeting procedures are designed for planning and controlling the allocation of public resources for capital investment programmes and operational expenditures, in line with national budget laws. Budgeting procedures do not necessarily replicate accounting rules although they are often influenced by them. In contrast to modern accounting standards, budget procedures can often be cash based and would therefore tend to disregard commitments entered into under SGs.
Guidance: Sound budget rules should be such that Governments examine SG proposals (i.e. exposure to risk) in the same way they consider spending proposals (i.e. cash disbursements). Incorporating the cost of bearing risk into budgets is advisable. If budget rules require governments to take account of the cost of an SG when it is issued, the temptation to use SGs unwisely will be much reduced. Governments should also reflect in their annual budgets the expected cost of meeting calls under their SGs, an allowance for administration costs and a margin to cover uncertainties.