http://www.fao.org/economic/ess/ess-events/sdg-indicator-2a1/en/

1. Workshop on SDG Indicator 2.a.1;
Turin, Italy, 27-28 March 2018
GFS METHODOLOGY – IDENTIFYING
EXPENDITURES
Sangita Dubey, Senior Statistician/Team Leader, FAO
Titus Mwisomba, Manager of Agriculture Statistics, Tanzania Bureau of Statistics
Giulia Gonnella, Statistician, FAO

2. TABLE A: Government expenditure on agriculture and
related functions
General Government
Central Government
State
Government
s
Local
Government
s
Consolidatio
n Column
General
Government4
Budgetary
Central
Government
Extrabudgetar
y Units
Social Security
Funds
Consolidation
Column
Central
Government3
Functional classification2 (1) (2) (3) (4) (5) (6) (7) (8) (9)
7 EXPENDITURE (TOTAL OUTLAYS)
704 Economic Affairs
7042 Agriculture, forestry, fishing, and hunting
→ Recurrent
→ Capital
70421 Agriculture (crops and animal husbandry)
→ Recurrent
→ Capital
70422 Forestry
→ Recurrent
→ Capital
70423 Fishing and hunting
→ Recurrent
→ Capital
7048 R&D Economic Affairs
70482 R&D Agriculture, forestry, fishing, and hunting
705 Environmental protection
7054 Protection of Biodiversity and Landscape
→ Recurrent
→ Capital
7055 R&D Environmental Protection
→ Recurrent
→ Capital
7z1
Other, please specify:
________________________
7z2
Other, please specify:
________________________
Central government
expenditure on
agriculture
Total central
government
expenditure
FAO GOVERNMENT EXPENDITURE ON AGRICULTURE
(GEA) QUESTIONNAIRE & INDICATOR 2.a.1
Indicator 2.a.1 numerator is based on the FAO GEA questionnaire.

3. INDICATOR METHODOLOGY – THE GEA QUESTIONNAIRE
• FAO GEA questionnaire developed
in collaboration with IMF, which is
responsible for the global compilation
of annual data on Government
Finance Statistics (GFS).
• Table A of the GEA questionnaire
developed to parallel IMF GFS
Questionnaire Table 7 – “Expenditure
by Function of Government (COFOG)”
• FAO questionnaire seeks more details
on Agriculture sector, plus
recurrent/capital breakdown
• Data sharing between FAO and the
IMF helps validate data and fill gaps.
• FAO-IMF coordination extends to
technical training
FAO GEA
Questionnaire
IMF GFS
Questionnaire

4. Table A of GEA questionnaireTable 7 of GFS questionnaire
• FAO GEA
Questionnaire
includes relevant
aggregates of
Table 7 of IMF
GFS
Questionnaire
• GEA requests
additional detail
related to
agriculture and
environmental
protection sectors.
The FAO GEA and IMF GFS Questionnaires
INDICATOR METHODOLOGY – THE GEA QUESTIONNAIRE

5. INDICATOR METHODOLOGY & CLASSIFICATIONS USED
Classification of the
Functions of
Government
(COFOG)
Government
Finance Statistics
Manual (GFSM)
2014
• Developed and led by the IMF
• International accounting framework
to compile fiscal accounts.
• applicable to all types of economies
• ensures globally comparable
statistics on government finance,
including government expenditures.
• classifies government activity
according to socio-economic
sectors, consistent with ISIC
• Led by OECD, also published by
United Nations Statistics Division.

6. GFS: INTRODUCTION & ANALYTIC OBJECTIVES
6
GFS is a quantitative tool that supports fiscal analysis
• Facilitates identification, measurement, monitoring, and
assessment of impact of a government’s economic policies and
other activities on economy
• Closely linked with other macroeconomic statistical systems (SNA,
BOP, MFS)
GFS data should enable assessment of
• management and policy decisions
• financial soundness of general government and public sectors
• Long term sustainability, liquidity constraints and financing needs

7. 7
Accounting rules in GFSM are the same as other
macroeconomic statistical systems
• Accrual-based recording: Recording of transactions
when transactions take place, i.e.
- Income is earned
- Resources are used
- Liabilities are incurred
- Assets are acquired
• Cash flow data: as additional requirement to allow
analysis of liquidity constraints/position
• Double-entry accounting: Every debit entry has a credit
entry and vice versa
GFS: ACCOUNTING RULES

8. 8
Revenue Expense Assets & Liabilities
 Taxes;
 social contributions;
 grants;
 other revenues
An increase of
net worth
resulting from
transactions
GFS FRAMEWORK
Key components covered by the GFS:
Excludes disposals of Assets
(= exchanges of one asset
for another)

9. 9
Revenue Expense Assets & Liabilities
A decrease of net
worth resulting
from transactions
GFS FRAMEWORK
Key components covered by the GFS:
Excludes acquisitions of Assets
(= exchanges of one asset for
another)
• Compensation of
government employees;
• Consumption of fixed
capital;
• Purchase of goods and
services;
• Interest paid on debt;
• Subsidies and grants;
• Social benefits.

10. 10
GFS FRAMEWORK
Key components covered by the GFS:
Revenue Expense Assets & Liabilities
 Fixed assets;
 Inventories;
 Valuables;
 Nonproduced assets
• Nonfinancial Assets
• Financial Assets
• Liabilities
Net investment in nonfinancial assets =
Acquisitions of nonfinancial assets -
Disposals of nonfinancial assets -
Consumption of fixed Capital

11. GFS FRAMEWORK
transactions
that affect the
stock of non-
financial
assets without
changing net
worth
transactions
that imply a
decrease in
net worth.
Net
Investment
in non-
financial
assets
Expense
Expenditure = +

12. DISCUSSION: EXPENSE VS NET INVESTMENT IN NON FINANCIAL
ASSETS
Groups
Ministry/
Institution
Department/
Program
Activity
Description
Expense
(Y/N)
Net
Investment in
Non Financial
Assets (Y/N)
Ministry of
Agriculture
Administration and
HR Management
Acquisition Of
Household &
Institutional
Equipment
Ministry of
Livestock
Development
and Fisheries
Fisheries
Development
Division
Basic Salaries -
Pensionable
Posts

13. DISCUSSION: EXPENSE VS NET INVESTMENT IN NON FINANCIAL
ASSETS
Groups
Ministry/
Institution
Department/
Program
Activity
Description
Expense
(Y/N)
Net
Investment in
Non Financial
Assets (Y/N)
Ministry of
Agriculture
Administration and
HR Management
Acquisition Of
Household &
Institutional
Equipment
N Y
Ministry of
Livestock
Development
and Fisheries
Fisheries
Development
Division
Basic Salaries -
Pensionable
Posts Y N

14. DISCUSSION: EXPENSE VS NET INVESTMENT IN NON FINANCIAL
ASSETS
Groups
Ministry/
Institution
Department/
Program
Activity
Description
Expense
(Y/N)
Net
Investment in
Non Financial
Assets (Y/N)
Ministry of
Natural
Resources
and Tourism
Tourism Acquisition of
Vehicles and
Transportation
Equipment
Ministry of
Community
Development,
Gender,
Elderly and
Children
Gender
Development
Current
Subsidies To
Non-Financial
Public
Corporations

15. DISCUSSION: EXPENSE VS NET INVESTMENT IN NON FINANCIAL
ASSETS
Groups
Ministry/
Institution
Department/
Program
Activity
Description
Expense
(Y/N)
Net
Investment in
Non Financial
Assets (Y/N)
Ministry of
Natural
Resources
and Tourism
Tourism Acquisition of
Vehicles and
Transportation
Equipment
N Y
Ministry of
Community
Development,
Gender,
Elderly and
Children
Gender
Development
Current
Subsidies To
Non-Financial
Public
Corporations
Y N

16. DISCUSSION: EXPENSE VS NET INVESTMENT IN NON FINANCIAL
ASSETS
Groups
Ministry/
Institution
Department/
Program
Activity
Description
Expense
(Y/N)
Net
Investment in
Non Financial
Assets (Y/N)
Ministry of
Health and
Social Welfare
Curative Services Employer Social
Benefits In Cash
Ministry of
Water and
Irrigation
Water Resources Acquisition Of
Intangible Non-
Produced Assets

17. DISCUSSION 1: EXPENSE VS NET INVESTMENT IN NON FINANCIAL
ASSETS
Groups
Ministry/
Institution
Department/
Program
Activity
Description
Expense
(Y/N)
Net
Investment in
Non Financial
Assets (Y/N)
Ministry of
Health and
Social Welfare
Curative Services Employer Social
Benefits In Cash
Y N
Ministry of
Water and
Irirgation
Water Resources Acquisition Of
Intangible Non-
Produced Assets N Y

18. UNDERSTANDING EXPENDITURES IN THE FAO GEA
QUESTIONNAIRE
GFSM
Expenditures

19. Recurrent
expenditures:
flows incurred for
the provision of
goods and services
to the community
on a nonmarket
basis, and
redistribution of
income and wealth
by means of
transfer payments
Capital expenditures: amounts used for
the acquisition of nonfinancial assets
(i.e., fixed assets; inventories; valuables;
and non-produced assets).

20. DISCUSSION: HOW ARE EXPENSES, RECURRENT EXPENDITURES,
CAPITAL EXPENDITURES, ETC. RELATED?
Groups
Flows incurred for the
provision of goods and
services to the community on
a nonmarket basis, and
redistribution of income and
wealth by means of transfer
payments
Amounts used for the
acquisition of nonfinancial
assets (i.e., fixed assets;
inventories; valuables; and
non-produced assets).
A decrease of net worth
resulting from transactions
Transactions that affect the
stock of non-financial
assets without changing net
worth
?

21. DISCUSSION: HOW ARE EXPENSES, RECURRENT EXPENDITURES,
CAPITAL EXPENDITURES, ETC. RELATED?
Groups
flows incurred for the provision
of goods and services to the
community on a nonmarket
basis, and redistribution of
income and wealth by means
of transfer payments
amounts used for the
acquisition of nonfinancial
assets (i.e., fixed assets;
inventories; valuables; and
non-produced assets).
A decrease of net worth
resulting from transactions
transactions that affect the
stock of non-financial
assets without changing net
worth
?
Recurrent
Expenditure
=
Expense
Capital
Expenditure
=
Net acquisition
of nonfinancial
assets