BANGLADESH EXPERIENCE

PUBLIC FINANCIAL MANAGEMENT

AND
PROCUREMENT

A presentation for
Concurrent Session on
Public Financial Management and Procurement
 Contents
Financial Management:
 Public Financial Management Reforms
 Lessons Learnt
 Harmonization, Alignment and Simplification-
broad picture
 Future Challenges
Procurement
 Procurement Reform
 Lessons Learned & Contributions to
Harmonization
 Use of Country Systems: Procurement in relation
to PFM
 Future Challenges
 PFM Reforms
 Joint Diagnostic studies :
Committee on Reforms in Budgeting and
Expenditure Control ( CORBEC) – DFID and GOB;
 Way Forward for FM Reform in Bangladesh- DFID

and GoB
 Country Financial Accountability Assessment

(CFAA)- World Bank, UNDP and GoB

 PFM indicators as a part of on-going Joint Public

Expenditure,Procurement and Financial

Management Review -DFID, WB & GOB
 PFM Reforms (continued)
Major PFM Reforms: Policy & Operational
Reforms in Budgeting and Expenditure Control
(RIBEC), Financial Management Academy ( FIMA),
Reforms in Govt Audit ( RIGA)- DFID
Strengthening the Office of Comptroller and

Auditor General (STAG) – UNDP

ISMOF & EEFM- ADB

 Strengthening GOB’s FM Capacity and Building

Institutional Capacity of the Office of the C & AG -

World Bank
Development Support Credit I, II and III- World

Bank
 ROSC Fiscal Transparency – IMF and
Financial Management Reform Program –FMRP
(DFID & Dutch)
 PFM -Lessons from Harmonization

 Lack of common understanding and proper

coordination among various Ministries and
Govt Departments
 Differing Development Assistance Strategy by
Donors
 PFM priorities often not synchronized and lost
 Harmonization- Broad Picture
 PEDP II:
 10 donors under one implementation Framework-

ADB leads
 Common PFM system (Reporting and Auditing)

 Multi- lateral donors like WB and ADB harmonized

individual requirements ( Common Withdrawal

Application, audit reporting period)
 Agreed FM Improvement Plan
Harmonization- Broad Picture (continued)
• HNPSP:
•Pool and Non Pool Donors under common PFM
system - WB leads
•NO PIUs ; No Special Account

•Govt spent first including donors share

•Agreed Audit TOR with C & AG

•Common Audit and Reporting

•Strengthen FM Framework including

improvement plan for the Sector

Alignment of donor assistance on PFM along with
GoB priority plans, PRSP, ROSC, CAS, PER
PFM Task Force – a common platform by donors and
Govt led by MOF
An Aid Governance Group (ERD) consisting of Donor
and Govt – Country Harmonization Action Plan
 Challenges :
 DPs and GOB work under an uniform
development assistance strategy for PFM
 Progress Monitoring mechanism and timely
adjustments of action plan
 More Flexibility and Simplification of DPs FM
policy and procedures to achieve better country
outcome
 More awareness on the value addition on
Harmonization and Alignment Approaches
 More delegation of responsibility and authority at
country level
 Procurement Reform: background

Low Level of The Country

public Procurement
procurement Assessment Report
performance (CPAR) identified
constrained Key deficiencies in
national the public
development procurement system
 CPAR Findings & Recommendations (2001):

Opaque public procurement practices are the single

most serious issue affecting whole public sector’s
activities

 Set up a Public Procurement Policy Unit

 Issue Public Procurement Rules
 Streamline Proc. Process & Financial Delegation
 Develop Procurement Management Capacity
 Publish Contract Awards
 Introduce Appeal Procedures
 Proc. Reform & Achievements
DSC II & DSC III

 Procurement Law & Performance triggers

IDA Credit : August 2002 / ~ $5 million/ 3 years

Bangladesh now has a transparent public procurement regulations,

accepted by most DPs
 Established permanent procurement policy unit
 Mandated harmonized procurement regulations & STDs
 Publishing contract awards
 Mandated annual procurement review (audit)
 Mandated independent appeal procedures for protests
 Streamlined financial powers & proc. approval process
 Developed national trainers & Institutionalizing capacity
 Lessons from Harmonization
Joint effort of the Government and DPs

Participatory Approach, Flexibility/Adaptability of

new reform Procedures

Country Ownership

 Agreed CPAR (DPs & GOB)

 GOB’s political commitment for proc. Reform
 Implementation of all CPAR recommendations
 Implementation of reform with credit (NOT grant)
 Permanent policy unit with Government resources
 Critical mass of national trainers (40 p)
 Institutionalize proc. capacity with local institute
 MIS for monitoring reform outcomes/performance
 Contributions to Harmonization
AidGovernance Group- ( ERD) Harmonizing Govt and Donors
procurement requirement along the Procurement Regulations

Primary Education Development Program II

Country’s own harmonized procurement regulations for all
local procurement (10 DPs & GOB agreed)

Local- 85% of procurement in PEDP II.

All local procurement from common pool (DPs)

Annual procurement review (audit) as per GOB Proc.

Regulations (by independent consultant)

HNPSP:

Harmonized Procurement Procedures & agreed plan for all

local procurement
 Contributions to Harmonization
 Seven IDA funded projects including other DPS using
Government Regulations for all local procurement

 Piloting use of PFM framework for procurement as

part of PFM baseline and performance indicators

 Integrated analytical review of procurement with

PFM and Public Expenditure group- World Bank,
DFID and ADB

 Centralized MIS in CPTU/IMED (using above

indicators) for effective monitoring of procurement
outcomes and performance (CPTU Website:
cptu.gov.bd)
 Future Challenges

 Compliance Monitoring of Procurement

Reform
 Roll out the capacity building across the
country institutions including private sector
 Piloting E-procurement
 Mindset and Behavioral change by all parties
and
 Sustainability of already established CPTU and
corresponding strengthening of IMED.