the namibian approach towards modern pfm reforms

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PRESENTATION TO ICGPM ANNUAL

CONFRENCE, MIAMITHE NAMIBIAN APPROACH TOWARDS MODERNPFM REFORMS Presented : Maru TjihuminoAccountant General :NamibiaDate: 29th APRIL 5TH MAY 2012


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DEFINITIONS

Accountability and Transparency

Accountability is simply define to meanthat one is responsible, require toaccount for ones conduct, explicable,

understandableTransparency is defined to meanallowing lights to pass through so thatactions can be distinctly seen, easydiscerned, evident, obvious, easily

understood, open It therefore meansthat if public sector finance is viewedagainst accountability and transparencyit should conform and being

characterized by the aforesaid of else itcalls for immediate transformation


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Presentation Entails:

Introduction and DefinitionsThe Legal FrameworkEnablers

THE IFMS SYSTEMChallengesWHY PFM REFORMSFuture Plans

Questions and Answers


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The Legal Framework

According to Chapter 11 of the

Namibian Constitution the generalprinciple underpinning state policy is theactive promotion and maintenance ofthe welfare of the people. Article 126empowers the

Minister to present for consideration tothe National AssemblyEstimates of revenue, expenditure andincome

National Assembly to consider and passthe A ro riation Acts


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Legal Framework continueThe Legislation that provide the legalframework and prescribes controls and

administrative structures for themanagement of public funds is nothingelse than the Supreme Law theNamibian Constitution It serves as aguide for the drafting and enactment ofother legislation; more specific the StateFinance Act of 1991.

The Act and its accompanying TreasureInstructions dictate the whole Namibian

Budget Cycle, from its preparation


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ENABLERS , TOOLS AND EQUIPMENT

THE BUDGET CYCLEEXPENDITURE CONTROL FRAMEWORKACTION PLANSTHE PREVIOUS SYSTEMCURRENT INTEGRATED SYSTEMFUTURE INTEGRATED SYSTEMMEDIA, IT TOOLS, WEBSITE, FACE BOOKS


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BUDGET CYCLE

Monitoring &Control of theBudget

Approval ofthe NationalBudget byParliament Presentationof the NationalBudget inParliament

Printing & Publishingof the DevelopmentBudget & OperationalBudget

Approved ceilings toLine Ministries forthe finalization ofMTPs

Recommendationto Cabinet

BudgetHearing

Ministriessubmit budgetproposal toNPCS & MOFBudgetFrameworkacro-economicFramework

Start

BudgetImplementation

Issuing ofCirculars &budget ceilingto LM by MoF& NPC


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ISLANDS OF DATA

GENERALLEDGER

PAYROLLFUNDS

CONTROL

BANKRECON

MANUALCHEQUE

S & T

BUDGET

COBOL NATURAL / ADABAS

DELPHI EXCEL / MANUAL

UNIFACE / INFORMIX

DAMARA LOZI

GERMAN

FANIKALO

AFRIKAANS

T

T

T

PDMS

HRIMS

GREEK / SPANISH

T

CUSTOMS/

ASYCUDA

ABAL

ZULU

IRD/TAXES

PROGRESS

SETSWANA

MEDAID

NATURAL / ADABAS

LOZI

TT

DEBT

MANAGEME

NT

T

T

R

A

N

S

L

A

T

O

R


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INTEGRATED DATA

ENGLISH

G L

DEBT

MGMT

ORACLE

PDMS

HRIMS

ASYCUDA

IRD

BANKS

EXTERNAL

SYSTEMS

C M

P O

A P

A R

AM

BUDGET

DSA

Payroll

Med

Aid

HC


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Budget-Commitment-Expenditure

General Ledger

Budget

Budget

Committments

Actuals

TAWs

Virements

Requisitions

Purchase Orders

Invoices

PaymentsReceipts

TransfersBank chargesPayroll DSA

ChequeProcessing

Cash

Mgmt

IRD & Customs


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CHALLENGES

High labor turnoverLack of Legal muscles for the AGoffice from the Act as well as legalexpertise

Capacity constraintsHigh dependency on consultantsMany reforms take place at sametime (PFM reforms , PMS, EDRMS,etc.)


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Future Plans

Continuous professionalDevelopmentEffective use of the IFMS systemInterface and integration withother systemsWork towards the Implementationof International Public SectorAccounting Standards(IPSAS)More interaction with keystakeholders PAC, AuditorsGeneral among others, CIPFA,

AFRO-SAI, ISAR, ICGFM


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THE NAMIBIAN PFM REFORM AGENDA


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Introduction

Best Practice is a management idea which assertsthat:

there is a technique, method, process, activity,incentive or reward that is more effective atdelivering a particular outcome than any othertechnique, method, process, etc.

Among the various methods andimplements used in each element ofeach trade there is always onemethod and one implement which isquicker and better than any of therest (Frederick Taylor, 1919)


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Introduction

Best practiceas a notion, does not commit organizations to oneinflexible, unchanging practiceis a philosophical approach based aroundcontinuous learning and continual improvementdoes not have one template or form for everyoneto follow

With respect to PFM, implementation of best practicesinvolves continual PFM improvement, i.e. PFM Reform


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Introduction

Why PFM Reform?Governments are constantly seeking new ways to:

Create high level of transparency andaccountability in government financesuse public resources efficientlysecure long-term economic successfight corruption

create the highest level of transparency andaccountability in government financescreate mutual trust between Government andCitizens


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Comprehensive Framework for PFM

Reform

Proces

s

Conte

nt

Conte

xt


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Context of PFM Reform

The Why of Reform?What forces are driving the reform?

Common Drivers of PFM ReformEndogenous forces e.g. financial pressure, politicalagenda, Parliamentary pressure, changes in theaccountability environment, etc.Extraneous forces, e.g. external pressures, reforms

in other countries, etc.


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Common characteristics of the context of successfulPFM reforms

Predominance of endogenous forcesStrong accountability environmentStrong political commitmentFelt need for change or buy-in by civil servants

Donor support


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SomeConstraining/RestrainingForces

Political discontinuityResistance to changeEconomic factors

Social issues


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Context of PFM ReformDiagnosis

Identify pressures for reformInternalExternal

Evaluate commitment to reformInternalExternal


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Process of PFM Reform

The How of ReformSome useful lessons

Home-grown and country-led publicservice reform program that includes

PFM reformImplementation of PFM reform as partof an overall public service reformStrong political commitmentSound change management strategy

Attention to practical issuesthe traditional mores and culturethe prevailing economic and politicalconditions

Arrangements to monitor progress ofreform


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A long term partnership among all stakeholdersA focus on peopleEnsuring ownershipEnsuring adequate communicationEducating stakeholdersMaintaining commitment

Rewarding successLearning from disappointments


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Carefully formulating the Change1. Adopting practices that were evolved in

other countries2. Adapting practices that were evolved in

other countries to suit local conditions3. Evolving indigenous practices

Options 2 & 3 recognise heterogeneity amongcountries, but they are not mutuallyexclusive


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Sensible learning from outsideAttention to roles and responsibilitiesPoliticians, civil servants and other

stakeholderscentral and line agencies

Constantly revisiting and if necessary, revising thereform program and strategy

Flexibility, patience and honesty


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Content of PFM Reform

The What of ReformThe changes

Common Contents of PFM ReformLegal Framework for PFM

Planning and BudgetingBudget execution accounting,internal control (including internalaudit), procurement, in-year reportingFinancial Reporting and TransparencyExternal Audit

Parliamentary Oversight


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Policy-based budgeting:

Preparing the budget withdue regard to government

policy

External scrutiny and audit:Effective arrangements forscrutiny of public finances

and follow up by theexecutive

Six

criticaldimensions of PFMsystem

performance

Predictability and control in budgetexecution:

Implementing the budget in a predictablemanner and exercising appropriate

control and stewardship in the collectionand use of public funds

Budget credibility:Realistic budget, and

implementation ofbudget as intended

Comprehensiveness andtransparency :

Comprehensive budget andfiscal risk oversight, andaccessibility of fiscal andbudget information to the

public

Accounting, recording and reporting:

Adequate records and informationproduced, maintained and

disseminated to meet decision-making,control, management and reporting

purposes

Content of PFM Reform


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CONCLUSION

Accountability and transparency are veryimportant building blocks that can

ensure enduring good governance whichcan sustain and galvanize quality growthand development.

A well defined implementation strategies

on PFM reforms with clear goals andobjectives , that can be monitored andevaluated at interval levels will minimizefailure and secure success.

What get measured ,


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Thank

QUESTIONS AND ANSWERS

the namibian approach towards modern pfm reforms

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