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February 2012

February 29, 2012

Implementation of the LOLF in France: A Thwarted Ambition?

Posted by Maximilien Queyranne

The French Audit Office recently published a report on the status of the implementation of the organic budget law (LOLF) of August 1, 2001, ten years after its promulgation and five years after its full entry into force on January 1, 2006.

The LOLF introduced in France the key principles of the “new public management” adopted in many OECD countries, including the use of program budgets, the granting of greater financial autonomy to managers, and a transition to accrual-basis accounting. This article, which is not intended as a summary of that very complete report highlights certain lessons that may be of use to countries that have also decided on and undertaken a “budget-based government reform.”

The LOLF led to advances in many areas in France:

Continue reading "Implementation of the LOLF in France: A Thwarted Ambition?" »

La mise en œuvre de la LOLF en France : une ambition déçue ?

Posté par Maximilien Queyranne

La Cour des comptes française a récemment rendu public un rapport dressant le bilan de la mise en œuvre de la loi organique relative aux lois de finances (LOLF) du 1er août 2001, dix ans après sa promulgation et cinq années après sa pleine entrée en vigueur au 1er janvier 2006.

La LOLF a introduit en France les grands principes de la « nouvelle gestion publique » adoptée dans de nombreux pays de l’OCDE, avec la mise en place de budgets de programme, la dévolution d’une plus grande autonomie financière aux gestionnaires, et le passage à une comptabilité en droits constatées. Cet article, qui n’entend pas constituer un résumé de ce rapport très complet identifie certaines leçons qui pourraient éclairer les pays qui ont eux aussi décidé et entrepris une « réforme de l’Etat par le budget ».

La LOLF a apporté en France des avancées dans de nombreux domaines :

Continue reading "La mise en œuvre de la LOLF en France : une ambition déçue ?" »

February 27, 2012

Restoring Fiscal Sustainability to the US

Posted by David Walker[1]

The United States faces a financial crisis, with soaring debt levels and trillions of dollars in unfunded health and social security obligations. Radical reform is required to avert disaster argues the country’s former Comptroller General.

America was once the world’s leading creditor nation: now it is the world’s largest debtor nation. Today, the greatest threat to the US government’s future is its own fiscal irresponsibility. In this regard, while Osama bin Laden has been held accountable for his actions, it’s now time for policy-makers to put the government’s finances in order before the markets hold the country accountable for its inaction.

In March 2011, the Comeback America Initiative (CAI) and Stanford University released a Sovereign Fiscal Responsibility Index (attached below) based on each country’s fiscal space, path, and governance. Fiscal space was defined as the amount of additional debt a country could theoretically issue before a fiscal crisis is imminent; the fiscal path is an estimate of the number of years before it will hit maximum debt capacity; and fiscal governance is an indicator of the strength of a government’s institutions, its fiscal controls, and its transparency and accountability to its citizens.

The US ranks far below the average in all three of these categories and it is 28th out of 34 countries in the area of fiscal responsibility and sustainability – below Spain and Italy and only a few notches above Greece, Ireland, and Portugal. The report suggests that the US could face a debt crisis just two to three years from now.

Continue reading "Restoring Fiscal Sustainability to the US" »

February 22, 2012

Accrual Accounting Essential for Government Transparency and Accountability!

Posted by Ian Ball [1]

In this post Ian Ball, CEO, International Federation of Accountants, argues that it is time for governments to take their accounting responsibilities seriously and to modernise their financial management practices. The eurozone debt crisis has highlighted widespread financial reporting failures and must lead to extensive reform, including adoption of accrual accounting and budgeting practices. Politicians and Ministries of Finance must be pressured to implement these reforms before the next crisis hits.  

The sovereign debt crisis has emphasised the seriousness of the results of poor financial management and financial reporting. Obviously, government actions to limit the impact of the global crisis have exacerbated their financial positions, as many governments acquired significant assets and liabilities, gave guarantees of various kinds, and engaged in massive fiscal stimulus programmes. But the situation now would not be as dire if so many governments had not already made commitments that they did not account for properly, and may not be able to meet.

Governments in general are clearly accounting very poorly for their financial performance and position. This could, and should, lead to significant reform. We saw how financial reporting failure in the private sector a decade or so earlier led to dramatic action, including the passage of the Sarbanes-Oxley Act 2002 in the United States, and the creation of regulatory bodies for private sector audits in most major countries.

Continue reading "Accrual Accounting Essential for Government Transparency and Accountability!" »

February 16, 2012

Modernización de la gestión de caja

Juan Ramón Ruiz

TNM_09_03_SPA_web (2) Lienert 1
¿Cuáles son los principales objetivos de una gestión de caja moderna? ¿Cuáles son las buenas prácticas de gestión de caja en los países desarrollados? ¿Cuáles son las características principales del marco para la planificación de caja a corto plazo? ¿Cuáles son los principales desafíos que se deben abordar para mejorar la gestión de caja en los países de ingreso bajo y mediano? ¿Qué secuencia deberían seguir las reformas de la gestión de caja?

Estas son las preguntas que responde la Nota Técnica elaborada por Ian Lienert. Esta Nota indica que una gestión de caja eficaz contribuye al cumplimiento ordenado de las metas operativas de la política fiscal, la estrategia de gestión de la deuda pública y la política monetaria. Los cuatro objetivos principales de una gestión de caja moderna son: (1) garantizar que se disponga de fondos en efectivo suficientes para pagar los gastos en el momento de su vencimiento; (2) obtener préstamos sólo cuando sea necesario y minimizar los costos del endeudamiento público; (3) maximizar el rendimiento de los saldos de caja inactivos, y; (4) gestionar los riesgos, invirtiendo los excedentes temporales de manera productiva y con garantías adecuadas.

La Nota Técnica distingue nueve características importantes que pueden observarse en  la gestión de caja moderna y eficaz en los países avanzados de la Organización para la Cooperación y Desarrollo Económico (OCDE), de las cuales seis de ellas tienen carácter fundamental, y otras tres son recomendadas. Entre ellas tiene especial importancia la centralización de los saldos de caja del gobierno, estableciendo un sistema de Cuenta Única de Tesorería (CUT).

Continue reading "Modernización de la gestión de caja" »

February 14, 2012

It’s the Years, Not The Mileage: IMF Analysis of Pension Reforms in Advanced Economies

Posted by Bendict Clements on iMFdirect

Indiana Jones, the fictional character of the namesake movies, once said “It’s not the years, it’s the mileage.” This quote comes to mind as many advanced economies wrestle with pension reform and the best way to ensure both retirees and governments don’t go broke.

Our view, explained in a new study, is that the years do matter.

Our analysis shows that gradually raising retirement ages could help countries contain increases in pension spending and boost economic growth. Further cuts in pension benefits, or raising payroll contributions, are also options countries could consider, although many countries will find many advantages in raising retirement ages.

The challenge is to reform pension systems without hurting their ability to provide income security for the elderly and prevent old-age poverty.

Continue reading "It’s the Years, Not The Mileage: IMF Analysis of Pension Reforms in Advanced Economies" »

February 10, 2012

Blog Reform: A PFM Success Story!


Dear Readers,

For the first time since the blog's launch in 2007, we have introduced a significant modernization of the PFM blog's layout. We hope you enjoy the new design, especially the new global hit counter to track the geographic reach of the blog. Most of all, thanks for making the PFM blog a success!

-The PFM Blog Team

IMF and CEF Strengthening Cooperation on Fiscal Management in South East Europe

Posted by Brian Olden and Norman Gillanders

Given the challenging international economic environment, the IMF and the Center of Excellence in Finance (CEF),[1] based in Ljubljana, Slovenia, are intensifying their cooperation. The global economic and financial crisis has contributed to an increase in the level of demand in South East Europe (SEE) region for technical assistance and cooperation in the public financial management and revenue administration areas. The IMF has been providing technical assistance through a Japanese Government funded program for some years. The program recognizes that measures to mitigate the impact of the crisis, and promote fiscal consolidation, should be anchored in sustainable medium-term fiscal policies. While the key priority has been to support longer term institutional reform, it has been necessary also to assist the authorities in some shorter-term measures to mitigate the immediate impact of the crisis. Many countries in the region are candidates or potential candidates for membership of the EU, and implementing reforms aimed at improving institutional capacity is an important element of the EU accession process.

Working with the CEF - Why it makes sense

In 2011 the IMF’s regional PFM and Revenue Administration advisors, located at the CEF in Ljubljana, had a mixed agenda with a number of requests to assist with specific weaknesses in institutional or management capacity that the economic crisis has highlighted, coupled with ongoing reform agendas to strengthen institutional capacity over the longer term. Technical assistance was delivered through a mixture of short individual missions, longer missions with teams bolstered by IMF headquarters staff and regional experts, targeted short-term experts visits and ad hoc desk-based research and reviews. A significant segment of the work also consisted of identifying training needs in the SEE region and, in close cooperation with the CEF, delivering workshops and seminars. This combination of CEF training and IMF technical assistance creates synergies and increases the impact of capacity development efforts in CEF member countries.[2]

Continue reading "IMF and CEF Strengthening Cooperation on Fiscal Management in South East Europe" »

Blog Reform: A PFM Success Story?

Dear Readers,

For the first time since the blog's launch in 2007, we have introduced a somewhat new look for the PFM Blog. We hope you enjoy the new design, and especially the new global hit counter to track the geographic reach of the blog. Let us know if you have any suggestions for further improvements. Most of all, thank you for making the PFM Blog a success, and please remember that we are always open to posts on alternative approaches, successes and failures, or lessons learned from other organizations, practitioners in the field, and government officials struggling with the implementation of reforms!

The PFM Blog Team

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

February 09, 2012

Job Offer: Lead Financial Management Specialist Based in Dakar, Senegal (World Bank Job Number 120145)

Posted by Renaud Seligmann

Background/General Description

The Financial Management unit (AFTFM) is a part of the Africa Region’s Operation Services Department (AFTOS). It advises and supports Regional Management and Task Team Leaders on financial management in operations, and works on public financial management (PFM). Specifically, AFTFM is responsible for: (i) operational financial management support to the Region’s portfolio; (ii) policy advice to Government on PFM and private sector accounting and auditing; and (iii) capacity building activities to improve borrowers' financial management systems, including support for designing lending operations that focus on PFM and private sector accounting and auditing reform or capacity development. 

The Lead FMS will report to the Regional Manager for Financial Management (RMFM) and will be part of the regional financial management team. She/he will work with AFR FM Team and country teams, including Task Team Leaders and Administrative and Client Service (ACS) staff. AFTFM is highly decentralized (about 90 percent of staff is located in Country Offices). The Lead FM Specialist will have Unit/Regional and specific country-level duties and accountabilities. At the Unit/Regional level, the Lead FM Specialist is accountable for the quality of PFM work in Francophone AFR as well as compliance with the guidelines issued by the FM Sector Board (FMSB) with a special focus on Francophone countries. In that capacity, she/he (i) supports the RMFM in meeting the work program objectives and coaching CO and HQ FM staff; and (ii) contributes to the development of the overall financial management strategy and work program of the Region and oversees its implementation.  Specific country-level responsibilities include: (i) coordination and quality assurance of PFM work in Francophone countries; (ii) lead PFM expert for certain Francophone countries, providing TA to Government, leading tasks and assisting task teams on PFM issues, and supporting the preparation and supervision of PRSCs and DPOs; and (iii) mentoring Francophone FMS on PFM.

Continue reading "Job Offer: Lead Financial Management Specialist Based in Dakar, Senegal (World Bank Job Number 120145)" »

February 08, 2012

Does the “Accrual” Emperor have any Clothes?

Posted by Holger van Eden

In late 2010, the Dutch Ministry of Finance (MoF) sent a letter [Download Netherlands] to parliament refuting the idea to move central government accounting and budgeting to an accrual basis. Due to language issues the argumentation of the Ministry received perhaps less attention internationally then it deserved. The letter emphasizes that international experience with accrual accounting, and especially with accrual budgeting, has been mixed at best, and that the push for accruals is being led by a misunderstanding of the applicability of private sector accounting standards and practices to the government sector. The main concerns of the Dutch Finance Ministry pertain to the increase of complexity of accrual documents, the decrease of accessibility for parliament, the limited added value of accrual information in government decision making (especially for policy ministries), the tendency of accrual information to shift allocative authority from the political to the administrative level, and last but not least the high costs of introduction and maintenance.

Continue reading "Does the “Accrual” Emperor have any Clothes?" »

February 06, 2012

Job Offer: Regional Public Financial Management Advisor Based in Tanzania (IMF Job Number 1200072)

Posted by Duncan Last

The Fiscal Affairs Department (FAD) of the International Monetary Fund is looking for an expert to fill a Public Financial Management (PFM) Advisor position in the IMF East Africa Regional Technical Assistance Center (AFRITAC East) based in Dar es Salaam, Tanzania. AFRITAC East covers seven countries in the region, namely Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Tanzania, and Uganda. The initial appointment term would be for a period of one year starting June 2012, renewable by mutual agreement subject to satisfactory performance.


The Advisor may be asked to provide technical assistance on a wide range of PFM areas including:

  • the legal, regulatory, and institutional framework for budgeting and public financial management;
  • medium-term budget/expenditure frameworks and annual budget formulation;
  • program/performance budgeting and management;
  • budget classifications and chart of accounts;
  • budget execution and financial control, government banking, cash and debt management arrangements, treasury management;
  • financial management information systems, and accounting and reporting; and
  • fiscal decentralization.

The Advisor is expected to provide direct technical assistance—diagnostic reviews, technical advice, training, preparation of technical manuals, and support to planning of PFM and related organizational reforms—as well as supervision of the work of short-term experts hired to deliver specific aspects of the work program.

Advisors in AFRITAC East are subject to technical guidance by FAD staff based in Washington, DC, while being under the administrative management of the AFRITAC East Coordinator.

Continue reading "Job Offer: Regional Public Financial Management Advisor Based in Tanzania (IMF Job Number 1200072)" »

February 03, 2012

Capacity Building and Why Reforms Fail

Posted by David Gentry

Rarely can you find a technical assistance related document that does not refer to the need for capacity building. It is equally rare that capacity constraints are well defined in those documents. What capacities are we talking about? The customary concept of capacity, in the context of technical assistance, is the ability to successfully implement a reform decision. For example, if a country decides to introduce a new tax policy, does it have the administrative ability to implement it? Let’s call this implementation capacity. This type of capacity is a common focus of technical training. However, experience suggests there are two other categories of capacity that play crucial roles in the success of PFM reforms: pre-implementation capacity and post-implementation capacity.

Pre-Implementation Capacity

Pre-implementation capacity is the ability to choose a specific reform that has a reasonable chance of success. It is common, certainly it is in my personal experience, for ministries of finance to agree to reform agendas not really suited to them and then fail to fully execute.

On the surface it may be difficult to distinguish between pre-implementation and implementation capacity. In the pre-implementation period there are two points of possible adjustment: the reform aim itself and the capacity to implement the reform. In other words, I can lower the hurdle bar or I can learn to jump higher. Since it may be unreasonable to expect extraordinary improvements in my jumping ability in the short run, adjusting the hurdle bar is often the chief determinant of success.

Continue reading "Capacity Building and Why Reforms Fail" »

February 01, 2012

Second Forum of Senior Budget Officers of Central AFRITAC Member States (FHFB): The FHFB Takes Off

Posted by Abdoulahi Mfombouot

The Second Forum of Senior Budget Officers of Central AFRITAC (AFC) Member States (MS) was held on January 9–13, 2012 in Libreville, Gabon and addressed the theme of Budget Reform: An International Dynamic to the Benefit of Government Action.

The delegates from all the MSs and the representatives of the principal TFPs[1] that work in public financial management (PFM) took part in the event. The public finance directors from the WAEMU and CEMAC attended as well. The Gabonese Budget Minister chaired the forum’s opening and closing ceremonies, preceded on both occasions by the AFC Director. The World Bank Resident Representative in Gabon addressed the forum’s closing session on behalf of all the TFPs.

At the conclusion of the exchanges, the delegates prepared the general summary of their work and elected a new executive bureau chaired by Mr. Yves Fernand Manfoumbi, Director General of the Budget for Gabon, and the Vice Chairman, Mr. Aboubakar Malloum Goni, Director General of the Budget for Chad. Mr. Abdoulahi Mfombouot was appointed Technical Secretary of the FHFB. In addition, an action plan was adopted for the coming year. The third forum is scheduled for January 2013 in N’Djamena, Chad.

Continue reading "Second Forum of Senior Budget Officers of Central AFRITAC Member States (FHFB): The FHFB Takes Off" »

La Deuxième édition du Forum des Hauts fonctionnaires du budget des Etats membres de l’AFRITAC Centre (FoHBAC) : Le FoHBAC prend son envol

Posté par Abdoulahi Mfombouot

La deuxième édition du Forum des Hauts Fonctionnaires du Budget des Etats Membres (EM) de l’AFC s’est tenue du 9 au 13 janvier 2012 à Libreville en République gabonaise, sur le thème général La réforme budgétaire: une dynamique internationale au service de l’action publique.

Les délégués de tous les EM ainsi que les représentants des principaux PTFs[1] intervenant dans le domaine de la gestion des finances publiques ont participé à l’événement. Les directeurs en charge des finances publiques de l’UEMOA et de la CEMAC y ont également pris part. Les cérémonies d’ouverture et de clôture du forum ont été présidées par le ministre du budget de la République gabonaise précédé à chaque fois par le Directeur de l’AFC. La représente Résidente de la Banque Mondiale au Gabon a pris la parole lors de la clôture du forum au nom de tous les PTFs.

Au terme des échanges, les délégués ont établi la synthèse générale de leurs travaux et élu un nouveau bureau présidé par M. Yves Fernand Manfoumbi, DGB du Gabon et le Vice-président M. Aboubakar Malloum Goni, DGB du Tchad. M. Abdoulahi Mfombouot a été nommé Secrétaire technique du FoHBAC. Un plan d’action a également été adopté pour l’année à venir. La troisième édition du Forum est prévue pour janvier 2013 à N’Djamena en République du Tchad.

Continue reading "La Deuxième édition du Forum des Hauts fonctionnaires du budget des Etats membres de l’AFRITAC Centre (FoHBAC) : Le FoHBAC prend son envol" »

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