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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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Context of PFM Reform
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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Context of PFM Reform
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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Process of PFM Reform
A long term partnership among all stakeholdersA focus on peopleEnsuring ownershipEnsuring adequate communicationEducating stakeholdersMaintaining commitment
Rewarding successLearning from disappointments
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Process of PFM Reform
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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Process of PFM Reform
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