Public Financial Management

Chita Marzan

Richard Neves

PFM – ObjectivesAdhering to the new PEFA framework:

PFM laws and institutions

Budget preparation *

Budget execution and control *

Coverage and quality of fiscal reporting *

Integration of asset and liability management *

Identification, monitoring and management of fiscal risks *

*verifiable through PEFA indicators

PFM Objectives - Contributors PFTAC is not the only agency providing technical assistance.

Other bilateral and multilateral programs in place.

Continued coordination and engagement across the different providers is vital for country success.

PFM – Key Results Over Time (based on the PEFAs)

0

1

2

3

Policy BasedBudget Preparation

Budget Executionand Control

Fiscal ReportingCoverage and

Quality

Asset and LiabilityManagementFramework

Fiscal RiskMonitoring andManagement

Earliest PEFA Latest PEFATop 4 Base Top 4 Prior

Country First Assess

Last Assess

NumAsses

Cook Islands 2011 2015 3Fiji 2005 *2013 3FSM 2011 *2016 2Kiribati 2009 1

Marshall Islands 2011 1Nauru 2010 *2016 2

Niue 2011 1Palau * 2013 1

PNG 2005 2015 4

Samoa 2006 *2014 5Solomon Islands 2008 *2012 3

Timor-Leste 2007 2014 3Tonga 2007 * 2014 3Tuvalu 2011 *2015 3Vanuatu 2006 *2015 4

* Self Assessment

PFM – Where Have Improvements Been?

Across the all countries the biggest gains appear to be in two core PFM function areas:

coverage and quality of fiscal reporting (moved from D to C) driven mostly by an improvement in the timeliness of annual reports and in year reports; and

budget execution and control (moved from D to C+) driven mostly by improvement of payroll controls.

Where should we aim to be?

What level is sufficient at core function level which allows for successful sequencing beyond that, for example, MTB.

PFM – Where Have Improvements Been?

Fiscal Reporting

Budget Execution

and Control

Managing Assets

Policy Based

Budget

Manage Fiscal Risk

From D to C Improvements in the timeliness of annual reports and in year reports

From D to C+ Improvement of payroll controls

Majority of countries still weak

Managing Fiscal Risk

Samoa

FY17– PFM Highlights

Fiscal ReportingFiji Samoa

Tonga

Manage Assets and Liabilities

Cash management

Samoa Solomon Islands

PIMA Timor

Budget Execution and

ControlFMIS PNG

Internal Audit Vanuatu

Risk Based Audit Workshop

Policy Based Budget

PreparationFiji RMI

Pensions RMI FSM Palau

Strengthen Institutions

(FSM Nauru Vanuatu Fiji)

PFM FY17 - Resource Usage

432

204

157

188

28

165

0

100

200

300

400

500

600

700

FY17 Budget FY17 Actual

LTX STX Cancelled Deferred

PFM FY18 – Work Plan Resources

204

245

188

451

28

165

0

100

200

300

400

500

600

700

800

FY17 Actual FY18 Planned

LTX STX Cancelled Deferred

Budget Execution and Control

Strengthening Internal Audit and Internal Controls.

FY18 – Workplan Priorities

Policy Based Budget

PreparationStrengthening

budget preparation and transparency

Strengthen Institutions

Planning and prioritization of

PFM reformsFiscal ReportingAdoption of IPSAS Improving Chart of

Accounts

Improving Institutions and Frameworks Legal framework covering all stages of the public financial management

cycle is enacted by Governments of Fiji, and Solomon Islands.

PEFA self-assessments in Kiribati, Palau and Tokelau.

PFM Reform road maps are developed/updated FSM, Nauru, Kiribati, Palau and Tokelau.

TA is coordinated regionally with development partners.

Strengthen Budget Preparation Fiji: Improved budget documentation.

RMI: Improved budget development and documentation.

Regional workshop on expenditure forecasting.

Budget Execution and Control Regional workshop on strengthening budget execution controls.

Internal audit charter and internal control risk framework developed in Fiji.

Payroll and procurement audit manual developed and auditors inVanuatu are trained.

Improve Coverage and Quality of Fiscal Reporting.

The new chart of accounts of Fiji and Tonga is aligned with international financial reporting standards.

Comprehensiveness and quality of fiscal reports in Fiji, Nauru, PNG, Samoa, Solomon Islands, Tonga, and Vanuatu, is enhanced.

Improve Integration of Asset and Liability Management Framework.

Cash flow forecasting capacity in Samoa and Solomon Islands is enhanced.

Improved Cash Management Regulations is approved and implemented in Solomon Islands.

Strengthen Identification, Monitoring and Management of Fiscal Risks Fiscal risk indicators for monitoring SOE’s in the financial sector, and

non-commercial sector SOE’s in Samoa.

Framework for monitoring and reporting of contingent liabilities arising from SOE’s in Fiji.

Key issues and capacity-development needs of Niue, as well as quick wins, in monitoring and managing fiscal risks.

Regional workshop on improving fiscal oversight of SOEs.