Updated Fiscal Transparency Code Integrating Resource Revenue Issues

Posted by Alpa Shah, Sailendra Pattanayak and Thomas Baunsgaard[1]

The IMF has recently published an updated Fiscal Transparency Code (FTC) that includes a new fourth pillar (Pillar IV) covering specific transparency issues related to natural resource revenue management. The FTC is the most widely recognized international standard for disclosure of information about public finances, and forms part of IMF efforts to strengthen the institutional framework for fiscal governance, support policymaking, and improve fiscal accountability among its member countries. In this context, the FTC also forms the basis for IMF Fiscal Transparency Evaluations (FTEs).

PFM Reforms in the East African Community

Posted by Fazeer Rahim, Amitabh Tripathi and Paul Seeds[1]

The regional integration process in the East African Community (EAC)[2] has provided an opportunity for furthering PFM reforms amongst the partner states. The East African Monetary Union (EAMU) Protocol signed in November 2013 requires the partner states to harmonize their PFM laws and practices. It also requires the development of a regional surveillance framework to oversee macro-fiscal convergence ahead of the proposed monetary union in 2024. The EAC Secretariat plays a coordinating role to ensure that the key PFM directives are implemented and the monetary and financial cooperation requirements in the protocol are complied with.

Better Fiscal Reporting in East and Southern Africa

Posted by Jean-Luc Helis, Robert Clifton, Paul Seeds, and Amitabh Tripathi[1]

 Strengthening fiscal reporting is a priority reform in the countries covered by IMF’s AFRITAC South (AFS) and East AFRITAC (AFE). Improvements in this area have benefitted from other PFM reforms including the modernization of legal frameworks, enhancements of FMISs, improved fiscal transparency, and adoption of International Public Sector Accounting Standards (IPSAS). Progress, however, has been slow and uneven across the region. While Tanzania, South Africa, Seychelles, and Mauritius have achieved notable improvements, a lot more needs to be done in other countries.

The Politics of Revenue Forecasting

Posted by John Grinyer[1]

Realistic budgeting is vital to good public financial management. Get the numbers wrong and a plethora of problems can emerge - cash shortages, a buildup in arrears, cutbacks on capital investment spending, delays in paying salaries, and so on. Consequently much technical assistance over the years has focused on strengthening forecasting skills, in particular on revenue, which is of crucial importance given that the projected resource envelope is often the starting point for preparing the coming year’s budget.

Integrating PFM and Anti-Corruption Strategies

Posted by Concepcion Verdugo-Yepes[1]

Transparency International (TI) recently published its global Corruption Perceptions Index for 2018. The index, which ranks 180 countries by their “perceived levels of public corruption” (0 is highly corrupt,100 very clean), describes a largely gloomy picture of reality in most of the world’s regions. More than two-thirds of countries score below 50 out of 100. Most countries have seen no progress on corruption in the past seven years. While 20 countries have significantly improved their scores (including Estonia, Senegal, Guyana and Côte D’Ivoire), 16 countries have fallen back, including some advanced countries and emerging markets such as Australia, Chile, Malta, Hungary and Turkey.

IPSASB Approves a New Standard on Social Benefits

Posted by Paul Mason[1]

Accounting for social benefits has been the International Public Sector Accounting Standards Board’s (IPSAS) longest running and most controversial topic to date. With some gaps, the Board has been working towards a social benefits standard for almost sixteen years. It was therefore a cause for celebration when the IPSASB approved IPSAS 42, Social Benefits, at its December 2018 meeting in Kuala Lumpur, Malaysia.

GFMIS – A Tool for Improving Transparency and Accountability

Posted by Julie Cooper[1]

Over the past 30 years, governments around the world have sought to improve their public financial management (PFM) framework by utilizing information technology to streamline and automate practices. Government Financial Management Information Systems, or GFMIS, constitute the suite of electronic tools used to strengthen and automate the financial management processes used by the government. The automated functionality of GFMIS tools helps governments generate more accurate, reliable, and timely financial information, thus directly contributing to improvements in accountability, transparency, and combating corruption.

Tracking Invoices in the Kingdom of Eswatini

Posted by Alok Verma[1]

The Kingdom of Eswatini (formerly Swaziland), a small country in Southern Africa, has been struggling with a high fiscal deficit since 2016, following a prolonged drought and declining revenue from the South African Custom Union (SACU). An unrealistic budget, combined with large financing gaps and the operations of extra-budgetary entities and trading accounts have led to the rapid accumulation of expenditure arrears, amounting to 6 percent of GDP in July 2018.

Commitment Control: A Step Towards (or Beyond) Accrual Accounting

Posted by Ashok Rao[1]

The case for Commitment Control

Expenditure control is an integral part of expenditure management and constitutes a key element of fiscal discipline. It ensures that spending happens for stated purposes, is within authorized allocations, and adheres to fiscal norms. Federal, sub-national, and local governments across the world have time and again run into serious fiscal problems by allowing large expenditure arrears to build up. Arrears accumulate when expenditure is incurred without matching resources (in the form of liquid assets) to discharge the related liabilities. A well-designed Commitment Control system helps monitor and regulate expenditure arrears by tracking spending well before payment obligations materialize. It also helps regulate the availability of cash amongst spending units. Thus, appropriation controls and cash controls are inbuilt in Commitment Control.

Partnering with Local Communities to Create Public Infrastructure

Posted by Priya Goel[1]

This is the story of the greening of the Alwar district in Rajasthan through “Shramdaan” or the use of local, free or donated labor for the creation of infrastructure assets. Rajasthan is India’s driest state. Alwar is an important agricultural district in the State, but only 12 percent of the land area is irrigated. Until 1985, Alwar was declared a ‘dark zone’ with no ground water. It had once been green. In 1985, a local doctor, Dr Rajendra Singh, discovered that the villagers needed water more than his medicines. He found that the drying up of groundwater had resulted from indiscriminate deforestation, mining, poor agricultural practices, and the abandonment of traditional techniques of rainwater harvesting.