Commonwealth Country Self Assessment in Public Finance Management: 2009 report & lessons learnt
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Transcript of Commonwealth Country Self Assessment in Public Finance Management: 2009 report & lessons learnt
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Commonwealth Country Self Assessment in Public Finance
Management: 2009 report & lessons learnt
Kaifala Marah Commonwealth Secretariat
FMMCyprus 2009
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Overview
• Why trouble with self assessment?
• What did we assess?
• Lessons learnt (quantitative & qualitative outcomes)
• Challenges identified
• Some good practices to note
• Next steps
• Conclusion
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Why trouble with self assessment?
• Independent country assessments: are relative to own environment present little opportunity for data sharing learning is limited
• However, the CPFM-SAT presents a common platform for learning:
sharing of country experiences enhanced
• Assists COMSEC with intervention strategy
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Participating countries
Africa
Botswana
Ghana
Kenya
Lesotho
Malawi
Mozambique
Sierra Leone
Zambia
Asia
Brunei
India
Maldives
Singapore
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Participating countries ...
Caribbean
Barbados
Grenada
Jamaica
St. Lucia
Mediterranean
Cyprus
Malta
Pacific
Australia
New Zealand
Tonga
TOTAL: 21 from all regions
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What did we assess?
Countries self assessed 166 PFM attributes arranged under 5 main building blocks:
1. Structure of PFM: • Legislation and regulation• Role of authorities and committees, for example Public procurement (complaints review, etc) Revenue agencies Internal audit
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What did we assess...
Aid and debt management units Debt strategy committee, etc Resource and capacity building
2. Accountability and Stewardship
• Transparency and accountability (PACs, OAG, etc)• Accounting for public funds• Public asset management• Safeguarding public moneys• Reporting• Monitoring and evaluation
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What did we assess...
3. Planning and Resource Allocation• Planning budgets• Prioritisation and allocations• Flexibility and autonomy
4. Measurement• Financial data (moving from cash to accrual accounting)• Non financial data (performance targets easy to
understand, updated and institutionalised), etc• Chart of accounts• Expenditure reports, (full cost basis – depreciation,
evaluation) etc
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What did we assess...
5. Performance & Value Creation• Enhancing value• Efficiency and economy integrated in the budgetary
process• Incentives and penalty system built in the system• Effective procurement system (for example, black list of
non-performing contractors, etc) obtains
So, what are the quantitative outcomes?
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What did we assess?
Score for each of the attribute was done in the following:
Activity not yet established=1
Activity established=2
Activity implemented=3
Activity effectively implemented=4
https://gate.commonwealth.int/pfm
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Variables, biases skewing results
• Individual’s position (junior/senior), knowledge of PFM, style of answering, and experience in working with others
• Level of consultations, subjectivity, tough or soft stance taken on issues
• Human error, understanding of questionnaire, selectivity and omissions
• Nature of questions – political, etc.
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Lessons learnt (qualitative outcomes)
Overall, progress has been made across member countries, for example:
• There has been a floodgate of new PFM legislations especially since early 1990s
• A number of regulations being reviewed and updated
• Marked improvements identified in budget planning, consultation and allocation
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Lessons learnt...• E-financial management is thriving• Procurement functions devolved in some
economies; e-procurement being improved• Internal audit, asset and risk management
enhanced in some jurisdictions• Cash flows/management & debt
management enhanced• Monitoring/evaluation of performance
improved
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Challenges identified
1. Challenges in the following areas are faced by many of our jurisdictions:
• Intensions are mistaken for results; for e.g. legal frameworks mistaken for implementation
• Asset management: framework & implementation
• Risk management not mainstreamed
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Low profile of internal audit
1.Need for a conscious commitment to change the long held notion of internal audit
2. Craft a sustainable
medium term strategy
22 of 42 22 of 24
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Challenges identified...
• Ineffective debt strategy
• Managing tax exemptions (e.g user pay policy, etc), mostly absent
• Safeguarding public moneys
• Monitoring and evaluating public expenditure
• Monitoring, assessing, enforcing performance targets, etc
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Challenges identified...
• Cash management (inflows vs outflows)
• Transitioning from cash to accrual accounting
• Enforcing procurement compliance
• Establishing tax assessment tribunal
• Effective records management
• Old legislations in need of review
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Challenges identified...
2. Big Six PFM issues to note:
• Pre-election audits
• Financial autonomy of auditors general
• Declaration of assets by public officials
• Maintaining & publishing a black list of non-performing contractors
• Powers of parliament on budget tampering
• Chairmanship of PACs
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Some good practices to note
Australia:
• Financial autonomy of the National Audit Office is guaranteed
• FMA requires agencies to set up internal audit and a “fraud control plan”
• The Charter of Budget Honesty Act provides for Pre-Election Economic and Fiscal Outlook Report (PEFO)
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Some good practices to note
Singapore
• Tax exemptions fully funded under a user pay policy
• Effective asset management system in place
• Black list of non-performing contractors maintained and published
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Some good practices to note
India:
• Instruction manuals are updated and accessible
• Specialised training institutes established to enhance capacity
New Zealand:
• Effective debt management system in place
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Some good practices to note• Effective monitoring and evaluation• Assessment and review of performance• Budget flexibility: allows carry-forward of
activities • Systematic transition from cash to accrual
accounting
Malta:• Passed Local Loans Act as far back as in 1959
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Some good practices to note
• Efficient cash flow management system through “weekly swing operation” to forecast the inflow & out flow of cash
Cyprus:
• All government officials declare assets and liabilities
• Internal control reviews are carried out “daily, monthly and annually”
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Some good practices to note
Ghana:
• Internal audit agency – responsible for transforming internal audit and risk management
• The IAA reports directly to the President & report is tabled in Parliament
Grenada:
• Maintains a debt coordinating committee
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Some good practices to note
Jamaica:
• Zero balance account known as “clearing accounts” obtains in MDAs
Sierra Leone:
• Procurement appellate board exists
• Asset declaration provided for in the law
Kenya:
• Performance audits carried out
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Some good practices to noteTonga:• Debt sustainability policy put in place
St. Lucia:• Government vehicles insured
Maldives:• Independent commissioners declare asset
Botswana:• Government transportation system
effectively regulated
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Next steps
• The Commonwealth Secretariat: to commission a further study on country
specific good practices to enhance experience sharing. Areas to be identified by senior officials
propose that all country finance ministry websites to be linked to the Commonwealth PFM portal to enhance sharing, research and learning
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Next steps...
Crafted a medium-term response strategy to assist member countries in closing specific gaps under the Building Pyramids in the Valley project
Review CPFM-SAT against the 2011 self assessments
Provide a full and non-publishable report of the 2009 assessments to member countries
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Conclusion
“Learning is the key to both implementation and evaluation. We evaluate to learn, and we learn to implement. Evaluation is a method of inducing learning within an organisation geared for implementing. And it is not only evaluators but the programme personnel, the implementers, who are to do the learning. Were this not so, were evaluation isolated from implementation
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Conclusion……
The latter would be blind and the former would be dumb, and neither could change for the better”.
(Implementation, J.L Pressman & A Wildavsky)