Budget Classification Design and Implementation: Tajikistan’s Administrative Segment

Tajikistan has embarked on a major reform of its budget classification. The main element of this reform is the inclusion of an adminsitrative segment in the budget classification. The attached article (Download TAJIKISTAN ADMINISTRATIVE CLASSIFICATION ) by John Zohrab, Robert Brudzynski, and George Gridilian provides a detailed description of the reason for this reform and of its key characteritics. 

The conclusions of the article are as follows:

"Although there is further work to be done to complete the implementation of the new administrative segment of Tajikistan’s budget classification, some preliminary conclusions can be drawn.

Conformity with Fiscal Transparency Code and Manual

The new administrative segment is internationally accepted in the sense that:

• It conforms almost completely  with the principles set out in the relevant IMF technical manual and in specific technical assistance reports; and
• Other donors and international experts funded by them working on PFM issues have explicitly or implicitly accepted it.

It is standardized in the sense that, subject to some clarification, its structure conforms consistently to its design principles. It has a uniform coding structure.

International Advisory Group for Government Payments

Posted by Rahul Kitchlu

Government payments play a critical role in the development of a national payment system given their scale and volume and the positive role they play in facilitating economic growth and innovation in the underlying retail payments infrastructure. The Payment Systems Development Group (PSDG) of the World Bank has convened an International Advisory Group (IAG) with a central mandate of supporting member governments improve efficiency of their national payment systems.

The objective of the IAG is to lead the development of an evidence based guidance framework for government payments that would provide guidelines on the design and implementation of such programs including the respective roles of public authorities and the private sector entities. The core members of the IAG comprise of representatives from the World Bank Group, other multilateral agencies and interested governmental authorities from member countries as well as other nongovernmental and private sector agencies. 

Want to Learn Cool Acronyms? Let’s talk about ISSAI (and INTOSAI GOV)

Posted by Franck Bessette

As part of the Johannesburg Accords signed in November 2010, the XXth INCOSAI (500 delegates from 152 Supreme Audit Institutions), the Congress of INTOSAI, the International Organization of Supreme Audit Institutions, emphasized the importance of the ISSAIs (International Standards of Supreme Audit Institutions) and INTOSAI GOVs by issuing the “South African Declaration on International Standards for SAIs”. With the adoption of over 40 new ISSAIs and INTOSAI GOVs, INTOSAI now – for the first time – has a comprehensive framework of international auditing standards, which the individual SAIs can use as a reference point for their activities. INCOSAI also underlined the need to use and apply these standards and guidelines in a practical context.

Still here? Well, then, you might be happy to know that while the ISSAIs state the basic prerequisites for the proper functioning and professional conduct of Supreme Audit Institutions and the fundamental principles in auditing of public entities, the INTOSAI Guidance for Good Governance (INTOSAI GOV) are providing guidance to public authorities on the proper administration of public funds. More on this at www.issai.org

A Whole System Approach to Strengthening PFM (CIPFA Conference)

 

Posted by Alan Edwards, International Director, CIPFA

Imagine a UK without CIPFA (or a USA without CPA or Nigeria without ICAN or…) and the Permanent Secretary at the Treasury (or…) inviting an overseas institute of public finance to help create a new qualification for public sector finance staff. That is the analogy we have been using when examining the issues to address when asked to provide PFM and professionalization support in other countries. I find that helps illustrate the scale of challenge involved and the need to think through the whole system impacts of change.

CIPFA’s Whole System Approach to PFM is a more formal and comprehensive analysis of all the key players and processes. CIPFA with the support of DFID has produced this paper to assist with the design of holistic PFM improvement programmes.

Public Investment Management: Linking Global Trends to National Experiences

Posted by Pasquale Lucio Scandizzo and Mauro Napodano

Public Investment Management has become a cornerstone in the budget reform of many developing and transition countries. The emphasis on management is a consequence of the recent importance of fiscal space earmarked for public investments as engine of growth.

A new book ‘Public Investment Management: Linking Global Trends to National Experiences', by Pasquale Scandizzo and Mauro Napodano (*), analyzes general methodologies and best practices in this field both at the macro and the project level. The book originates from a study performed for the Ministry of Finance of the Government of Brazil, on behalf of the International Bank for Reconstruction and Development. The study, which lasted two years, was conducted both for Brazil and for a sample of advanced countries.

Brasil: Desafios Na Implantaçäo Do Sistema De Custos No Governo Federal

Por Victor Holanda e Mário Pessoa

Como parte da reforma da gestão pública no Brasil, o governo federal implantou de forma inovadora um sistema de informação de custo (SIC) na área pública. Um dos principais objetivos é melhorar a decisão alocativa dos recursos orçamentários, mas isso ainda não foi alcançado. A ênfase é na mudança do papel do setor público como agente de uma gestão pública mais eficiente. O governo federal, espelhado na experiência bem sucedida do sistema integrado de administração financeira (SIAFI), decidiu criar um grande sistema de informação que permite que todos os gestores públicos tenham as informações financeiras necessárias a produção de informações de custo nas dimensões institucional (unidades Administrativas) e programática (por programa de governo), porém com a flexibilidade para definir centros de custos e atividades em um nível mais detalhado de acordo com as especificidades e necessidades de cada entidade.

Treasury Single Account: A Revolutionary Idea…in 1806!

Posted by Franck Bessette        

While the concept of a State Treasury (le Trésor in French) was created in France in the XIIIth century in the sense that public monies were at that time separated from the king’s personal cash-box, the French monarchy still used separate bank accounts for various purposes. The concept of the Treasury Single Account (TSA) in France was the result of the long struggle of the various revolutionary governments after 1789 to meet their cash needs. During most of the revolutionary period, private bankers, some of them in charge of collecting taxes, were providing central government with the necessary cash but at a very high cost. The creation of a TSA in France was a gradual process, mostly accomplished during the first half of the XIXth century. It would be difficult here to give a detailed account of the reforms of the Treasury system in France during this period but this post would like to briefly underline the three major steps of this process.

Brazil: Challenges in Implementing a Costing System for the Public Sector

By Victor Holanda and Mario Pessoa

As part of the public management reforms in Brazil, the federal government implemented in 2010 an innovative cost information system (SIC) in the public sector. A major goal is to improve budget allocation decisions but it is early days to see any tangible results. The emphasis of the system is on improving the efficiency of the public sector by changing the behavior of the public sector managers. The federal government, following the successful implementation of the integrated financial management information system (SIAFI) providing budgetary data, has created a large information system that allows all public sector managers to produce cost information according to two dimensions: institutional (administrative units); and programmatic (government programs), but with the flexibility to define cost centers and activities at a more detailed level according to the peculiarities and needs of each public entity.

Professionalisation of PFM – Lessons Learnt From Four Case Studies

Posted by Alan Edwards, International Director, CIPFA

The British love “Who Do you Think You Are” a BBC TV programme that explores celebrity family history. I tried to explore mine. The West Midlands Edwards family tree ran out with my great great grandfather when all I could find was that he was born in Wales – there are a lot of Edwards in Wales! But the common characteristic I found was that all my family were miners. Then I came along and became the first one to join a profession.

My tale of social mobility is replicated 100s of thousands of times around the world. The rise of the accounting profession correlates neatly with economic growth and rising living standards; hence my own and CIPFA’s interest in promoting professionalisation of PFM in the developing world. 

CIPFA will shortly be issuing a paper and four case studies on this topic following research kind supported by DFID. We will also be addressing the issue alongside many others at our upcoming international conference on PFM in Westminster, London on 15^th to 17^th March – see www.cipfa.org.uk/pfmconference. I have to say the line-up of speakers is fantastic. 

Association for Budgeting and Financial Management (ABFM) 23rd Annual Conference: Call for Papers, Presentations, and Panels

Posted by Professor James Savage, Professor & Executive Assistant to the President for Federal Relations Department of Politics, UVA

23^rd Annual Conference, Washington, DC.Thursday-Saturday, October 13-15, 2011

The Association for Budgeting and Financial Management, the preeminent association for the study of budgetary theory, practices, and institutions, invites proposals for panels, papers, and presentations for the 2011 ABFM conference. We especially encourage proposals from federal, state, and local practitioners. The focus of the conference is on budgeting and financial management at all levels of government in the United States, as well as international and comparative perspectives.

Healing Public Health Care Finances: Budget Reforms That Work

By Benedict Clements

Health care reform is tricky. On the one hand, providing access to affordable health care is of paramount importance. But spending on health care is putting enormous pressure on public purses all over the world, and it’s only getting worse.

How can we fix this? How can governments keep their health care promises to citizens without busting the budget?

A recent paper by the IMF’s Fiscal Affairs Department tries to help with these choices, presenting public health spending projections for fifty advanced and emerging countries, and posing reform options.

IMF PFM Divisions Seeking Technical Assistance Advisors (Public Financial Management Specialists): Job Number 1100050

The Fiscal Affairs Department (FAD) of the IMF is looking for well-qualified experts to fill headquarters-based consultant positions in the Public Financial Management (PFM) Divisions. The consultants’ appointment term would be for a period of two years, on a renewable basis, subject to satisfactory performance.

The advisor’s work may cover all aspects of PFM including legal and regulatory framework; budget preparation (including budget classification, medium-term budgetary frameworks, performance-oriented budgeting); budget execution (including expenditure control, treasury operations, cash management, accounting, fiscal reporting, and financial management information system), internal control and audit.

International Journal of Governmental Financial Management

Posted by Andy Wynne

The second issue of the International Journal of Governmental Financial Management for 2010 is now available.

In the first paper of this issue, Frans van Schaik considers the issue of materiality in government auditing in the context of the development of public sector specific guidance on this subject by INTOSAI, the international body for public sector external auditors, based on the private sector standards.  The paper finds significant evidence for the materiality level in the public sector to be different to that in the private sector, despite this evidence, such differences are not clearly documented in the auditing standard.  In the process, van Schaik reviews the key considerations for materiality for public sector auditors.

In our second paper, Doug Hadden provides a case study of public financial management reforms in Kosovo. This post-conflict country has sequenced legal reform, improved governance, and achieved international public financial management standards under difficult conditions.  Hadden points out that there are numerous lessons in the Kosovo experience linking reform to context that can be leveraged by governments around the world.

PEFA: Marco de medición del desempeño en materia de GFP -- revisión de tres indicadores

Por Secretaría del PEFA

1. Antecedentes y proceso

El programa del PEFA ha introducido ajustes a los indicadores respecto de los cuales la experiencia recogida en los cinco años transcurridos desde la puesta en práctica del marco de medición del desempeño en materia de gestión de las finanzas públicas (GFP) ha demostrado que las calificaciones no siempre reflejan correctamente el nivel de desempeño del sistema. En junio de 2010, el Comité Directivo del PEFA solicitó comentarios a todas las partes interesadas acerca de las revisiones propuestas a los siguientes indicadores:

· ID-2 Composición del gasto efectivo en comparación con el presupuesto original aprobado;
· ID-3 Ingresos efectivos agregados en comparación con el presupuesto original aprobado;
· ID-19 Transparencia, competencia y mecanismos para la tramitación de reclamaciones en materia de adquisiciones.

Se recibieron comentarios de los asociados del PEFA, otras organizaciones donantes, gobiernos asociados, consultores y personas físicas. En algunos de los 20 comentarios específicos si bien se planteó más de una cuestión, en ninguno de ellos se rechazaron las propuestas (y varios comentarios en realidad eran análisis en los que se hacía hincapié un aspecto en particular).

PEFA: Cadre d'évaluation de la performance -- révision de trois indicateurs

Posté par le Secrétariat PEFA

1. Contexte et démarche suivie

L’expérience des cinq années écoulées depuis le lancement du Cadre d’évaluation de la performance (PFM) montre que les notes attribuées au titre de certains indicateurs ne reflètent pas toujours correctement le niveau de performance du système. Le Programme d’examen des dépenses publiques et d’évaluation de la responsabilité financière (PEFA) a donc modifié les indicateurs concernés. En juin 2010, le Comité directeur du PEFA a invité toute partie intéressée à faire part de ses commentaires sur les modifications proposées pour les indicateurs suivants :

· PI-2 Composition effective des dépenses par rapport au budget initialement approuvé
· PI-3 Recettes réelle totales par rapport au budget initialement approuvé
· PI-19 Passation des marchés publics : transparence, concurrence et mécanismes de dépôt de plaintes

Les partenaires PEFA, d’autres organismes bailleurs, des consultants et des particuliers ont formulé une vingtaine d’observations spécifiques, couvrant parfois plusieurs points, mais aucun n’a rejeté les modifications proposées (plusieurs commentaires étaient en fait une analyse d’éléments spécifiques).

Topical Trust Funds Aim to Expand IMF's Capacity Building

As part of a drive to meet large demand from its members for practical, on-the-ground help—termed technical assistance—the IMF has set up two new donor-supported funds to boost capacity building.

The funds, known as topical trust funds, aim to total $55 million and are dedicated to specific capacity-building activities.

The new trust funds—Managing Natural Resource Wealth and Tax Policy and Administration--are currently budgeted at $25 million and $30 million respectively over the next five years and will begin operating in May 2011. The IMF’s first trust fund—Anti-Money Laundering/Combating the Financing of Terrorism--was launched in 2009.

The Long and the Short of It—Government Debt Plans in 2011 and Beyond

By Carlo Cottarelli

 
As we said in the just-published Fiscal Monitor update, fiscal policy this year in some leading advanced economies is shaping up to be quite different from what was expected just last November.

The United States and Japan are delaying their earlier plans to reduce their public deficits, choosing instead to provide further support to their economies. The change in plans is even more remarkable if you look at the cyclically adjusted balance. You can see this in the charts. Some of the change in the fiscal stance with respect to our earlier projections is attributable to the somewhat better than projected fiscal results in 2010, a point to which I will return in a moment. Most of it, however, is due to additional stimulus measures introduced during the last two months. These two countries need to strengthen their fiscal adjustment credentials by detailing the measures they will adopt to lower deficits and debt over the medium term.

Job Offer: Senior Researcher (Finance and Economics) With the Scottish Parliament REF: P2549

An exciting opportunity for a high calibre individual to support MSPs and parliamentary committees in scrutinising public expenditure and revenue, and the Scottish economy.

Applications are invited from suitably qualified and experienced candidates to fill a secondment opportunity as a Senior Researcher with the Scottish Parliament, Holyrood, Edinburgh (subject to the donor organisation’s agreement).  The assignment will provide additional capacity to support the Parliament’s scrutiny of the public finances and the economy and will last for a period of twelve months from 1 April 2011 to 31 March 2012.  As a secondee, the successful candidate will remain on their current terms and conditions of employment with their existing employer. To give some indication of the level the person will be expected to work at, the current salary range for the post is £39 - £47,000.