Budget Reforms in Uganda: From Vision to Reality - A Personal Account

Posted by Florence Kuteesa[1]

When the Ugandan ministries of Finance (MoF) and Planning and Economic Development (MPED) were merged in 1998, a new department, Budget Policy and Evaluation, was created within the Budget Directorate. The department was mandated to coordinate the budget preparation process, and also introduce output-oriented budgeting within a medium-term perspective. I was appointed as the head and charged with the onerous tasks of establishing the new department and coordinating the desired reforms. Coming from the former MPED and with limited knowledge of the operations of the MoF, I was initially skeptical about the assignment. However, I chose to take “the bull by the horns” and enthusiastically took up the assignment.

I started from a humble beginning with a team of eight reform-minded staff, deployed from both ministries. This “dream team” (as it was later called) was comprised of individuals who had extensive technical competence and exposure in budget matters. The team was therefore eager to deal with the numerous challenges, including: inadequate coordination of budget processes within MoF and line ministries, and overly lengthy line-item based budget discussions. More often than not these processes complicated the decision-making process.

Internal Audit in the Public Sector: Underdeveloped and Underused

Posted by Sanjay Vani

Of 107 countries in which Public Expenditure and Financial Accountability (PEFA) assessments have been undertaken, only 2 scored A (or A+) and only 4 scored B (or B+) for the indicator on internal audit (performance indicator (PI) 21 in the PEFA methodology, see www.pefa.org). The vast majority—101 countries—scored either C or D for the effectiveness of internal audit. The internal audit indicator is the only PEFA indicator that has been uniformly rated so low across a broad spectrum of countries:  high income/middle income/low income, Anglophone/Francophone, and stable/fragile status. Even Norway, a high-income country, scored D for the internal audit indicator. We can therefore conclude that globally internal audit is not yet as firmly established in the public sector as external audit. This post analyzes some key factors that have contributed to this situation.

Improving Tax Collection Using XML and Object-Oriented Technologies

Posted by William B. Trautman*

The recent financial crisis has led not only to significant public budget deficits in the United States and around the world, but also to a heated debate over what to do about them. Some argue for increased government spending to fund stimulus programs while others argue for reduced spending. Little attention has been paid, however, to increasing the collection of tax that is already owed. While tax administration information technology projects have a long and spotty track record, the advent of electronic filing in XML format and related technologies has significant potential for improving the collection of tax revenue, particularly with respect to complex business enterprises and high-wealth individuals.

This post will discuss an XML-based technology that the US Internal Revenue Service (IRS) has tested on the largest U.S. corporate taxpayers over a recent 18-month period. The technology has yielded cost savings in terms of more streamlined audit planning and has identified significant corporate tax revenue that otherwise would have gone undetected. The technology is essentially a data management and analysis system that allows one to construct virtual economic enterprises with a degree of detail constrained only by the available data and estimate the tax compliance risk of those enterprises in real time.

Utah, Virginia, and Washington: Top Scorers in Government Performance in the United States

Posted by Mario Pessoa

According to research sponsored by the Pew Charitable Trusts in partnership with Governing magazine, the states Utah, Virginia, and Washington have the best managed administrations in the US. They all scored A- in a recent study—on a scale from D to A.

The State of Utah scored the highest A- (A minus). Utah makes use of strategic planning combined with performance measurement, has good coordination between executive and legislature, keeps a low level of public debt, and maintains a sustainable pension fund for public employees. Overall, it provides a large amount of data on the performance of programs and agencies.

Job Opportunity: World Bank Looking for PFM Expert Based at Center of Excellence in Finance in Slovenia

Posted by Bill Dorotinsky

The World Bank is looking for interested candidates to join the program for Public Expenditure Management Peer Assisted Learning (PEMPAL) of the Europe and Central Asia (ECA) Region as a Community Facilitator. Information about PEMPAL can be found at www.pempal.org.  While the recruitment for this Extended Term Consultancy assignment will be made through the World Bank Washington office, the Facilitator is expected to be permanently based at the Center of Excellence in Finance in Ljubljana, Slovenia. The initial duration of the assignment is 12 months, with a possibility for extension until June 30, 2012. The position is 100% funded by an external donor through a Trust Fund administered by the World Bank.

The advertisement for the position is posted at the World Bank web site. Applications should be submitted through the World Bank external JobWorld link (position number 101735). The deadline for applications is September 11, 2010.

How Accrual Accounting was Implemented in New South Wales (Australia) and in France

Posted by Tej Prakash

What is the coalition needed for introducing accrual accounting reforms? Have Ministries of Finance generally been resistant to introduction of these reforms? A paper on Accounting for Changed Accounting:  A Translation View Comparing Accrual Accounting Implementation in France and Australia, presented at the 12th Comparative Intergovernmental Accounting Research Conference in Modena (May 2009), by Mark Christensen and Sebastien Rocher, touches on these issues and traces in detail the move to an accrual based accounting system in France and New South Wales (NSW) in Australia. The research question posed by the authors is: what were the similarities and differences of NSW and France in their move from cash-based accounting? The paper uses the Actor Network Theory (ANT) approach to describe the process. ANT is based on the idea that for any institutional innovation to take place the interests of many actors interested in change have to converge. This convergence goes through different stages of identifying the problem, creating awareness, enrollment and mobilization of the actors. In the case of move to accrual accounting these actors were politicians and parliamentarians, bureaucrats and technicians, auditor generals and the news media.  

Are International Standards Having an Impact on Transparency and Performance?

Posted by David Nummy 1/

 
The International Consortium on Governmental Financial Management (ICGFM) has issued a call for speakers, panel members, and presentations to be made at its winter conference, which will be held this year at the offices of the Inter-American Development Bank in Washington, DC, from December 6-8. The theme of the conference will be: Practical Uses of New Standards to Enhance Transparency and Program Performance

US Financial Reform: A Surprise Boost for Public Financial Management in Resource-rich Developing Countries

Ian Gary, Senior Policy Manager, Oxfam America

On June 21, President Obama signed into law sweeping financial reform legislation meant to address fundamental weaknesses in financial regulation in the US that contributed to the financial crisis. Buried within the 2,000+ page legislation is a provision-making disclosure of payments from “extractive industry” companies (oil, gas, and mining) to governments around the world a legal requirement for any company registered with the US Securities and Exchange Commission (SEC). This historic measure will increase financial transparency in the oil, gas, and mining industry and help reduce the corruption, mismanagement, and conflict that are too often associated with natural resource extraction booms. It will also greatly support improvements in public financial management in resource-rich countries around the world. The civil society Publish What You Pay US coalition had been pushing for years for the passage of this requirement and had supported stand-alone legislation introduced in the US Congress in 2008 and 2009.
 
Secrecy of oil, gas, and mining company payments to governments fosters government corruption and violent conflict in resource-rich countries that are home to more than half of the world's poorest people. The IMF has identified more than 50 countries around the world as “resource-rich” according to its 2007 Guide on Resource Revenue Transparency.

New FAD Technical Note & Manual on the Interaction Between Government Cash Management and Other Financial Policies

Posted by Mike Williams

Good government cash management matters. It matters not only from the fiscal and budgetary perspective of cost effectiveness and efficiency, but also because of the benefits it can bring to other financial policies—in particular to debt management, to monetary policy, and to the development of the local financial markets. This interaction between cash management and other financial policies is the focus of a new IMF Fiscal Affairs Department (FAD) Technical Note and Manual.

There is a growing understanding of what constitutes good practice in government cash management. Guidance is available from FAD on the core components: the development of the Treasury Single Account (TSA) and cash flow forecasting and management. Although this TNM touches on those issues, I have written it primarily for governments and their advisers looking to develop a more sophisticated cash management function, and specifically to move towards more active cash management. 

A Stock-Take on African PFM

Posted by Matt Andrews

How strong has African PFM become? How do African public financial management (PFM) systems in place now facilitate effective public financial management? Where are the next challenges and how can they be met? A recent paper of mine addresses these questions, using PEFA analyses to identify central themes of the continent’s recent PFM story. The themes emerge from quantitative and qualitative data in 31 central government PEFAs completed prior to mid-2008 and tell a story in two parts: (i) across PFM processes, and (ii) across countries.