This is the fifth year since Government formally moved to a system of Programme Budgeting. This move changed the essence of the budgeting approach from a budget system based on the cost of desired inputs to a budget system linked to the results expected from the proposed expenditure. As part of that move, the MTEF (including individual Medium Term Plans) replaced the Estimates of Revenue and Expenditure as the reference book on which Parliament decided expenditure.

The new focus on results together with the need to continue monitoring expenditure inevitably means that the performance of each Office, Ministry and Agency has to be “accounted” for against its allocated expenditure. In this regard, the Accountability Report sets out the annual progress of each Ministry towards meeting its targets with the resources allocated to it by Parliament, hence its essential role in public budgeting.

In this light, the individual accountability report of each O/M/A arguably becomes the core of budget monitoring since it provides detailed insights on each Vote‟s specific reasons for failing to achieve its targets or for over/under-spending since it is acknowledged that certain events outside the O/M/A‟S control can result in a failure to meet its targets or in a substantial variance between budgeted and actual expenditure.

The present Report is divided in two main blocks. The first block presents a general overview of the overall performance of Government in meeting its targets and the actual outturn of the main fiscal indicators -namely revenue, expenditure, budget balance and public debt- vis-à-vis their estimated values. The second part of the document includes the individual Accountability Report of each Office, Ministry and Agency providing detailed explanations of their individual performance and their budget execution for 2008/09.

The annual Accountability Reports are nonetheless only a part of the Government‟s mechanisms for monitoring the performance of Ministries and holding accountable for their allocated resources. Another such mechanism is the Performance and Effectiveness Management Programme (PEMP) (included in the MTEF), which provides complementary indicators to assess whether a Vote is on track to meet its targets.

While acknowledging the importance of Accountability Reports, the Ministry of Finance identified the need to obtain more timely information on the O/M/A‟s progress both in terms of achievement of its targets as well as expenditure. In this light, the different Votes are also required to submit quarterly reports on progress against performance and budget. Those are then scrutinised and all the corrective measures necessary to optimise the achievements of targets and budget expenditure are discussed.