State Releases Fiscal Transparency Report

On June 27, 2023, the U.S. Department of State published its 2023 Fiscal Transparency Report, revealing that out of 141 global posts surveyed, only 72 governments met the basic criteria for fiscal transparency.

Fiscal transparency refers to the clarity and accountability in the public financial management system of a government. It is seen as a fundamental requirement for maintaining market confidence and ensuring economic sustainability. Effective fiscal transparency provides insights into government budgeting and expenditure, thus facilitating citizen oversight and fostering an informed public debate.

The yearly report, which assesses the fiscal transparency of governments eligible for U.S. assistance, revealed that 69 governments fell short of the minimum fiscal transparency standards. However, 25 of these governments demonstrated significant progress toward meeting these standards.

The report provides a comprehensive assessment of the transparency of processes for awarding government contracts and licenses, and the reliability of budget documents.

This year's evaluation also factored in whether governments with sovereign wealth funds had a sound legal framework in place, if military and intelligence budgets were subject to oversight, and if there was an effective supreme audit institution established. For the first time, governments were also assessed on the public availability of information on debt obligations.

The data collection period for the 2023 report spanned the full calendar year of 2022. The majority of the governments reviewed were identified as recipients of U.S. assistance in the 2014 Fiscal Transparency Report.

According to the Department of State, the annual report helps to ensure that U.S. taxpayer funds allocated for foreign assistance are used appropriately and that governments are held accountable for their financial management practices.

The annual FTR is prepared by the Office of Macroeconomic Affairs (OMA) of the State’s Bureau of Economic and Business Affairs (EB) in collaboration with State’s Bureau of Energy Resources (ENR) and the U.S. Agency for International Development (USAID).

Every year, as mandated by Congress, the EB/OMA assesses fiscal transparency data collected from 141 of our global posts - all recipients or potential recipients of U.S. foreign aid - against a set of minimum standards. 

To meet the minimum requirements of fiscal transparency, governments must make key budget documents publicly available within a reasonable timeframe. These documents should be substantially complete and generally reliable. Additionally, governments are required to follow a transparent process for awarding government contracts, particularly for natural resource extraction.

For more information, including country-by-country assessments, the [full report] can be accessed on the Department of State's website.