PRESENTATION TO ICGPM ANNUAL CONFRENCE, MIAMI

THE to edit Master subtitle style Click NAMIBIAN APPROACH TOWARDS MODERN PFM REFORMS Presented : Maru Tjihumino Accountant General :Namibia Date: 29th APRIL 5TH MAY 2012

DEFINITIONS
Accountability and Transparency

Accountability is simply define to mean that one is responsible, require to account for ones conduct, explicable, understandable Transparency is defined to mean allowing lights to pass through so that Click can Master subtitle seen, easy actionsto edit be distinctlystyle discerned, evident, obvious, easily understood, open It therefore means that if public sector finance is viewed against accountability and transparency it should conform and being characterized by the aforesaid of else it calls for immediate transformation

Presentation Entails:
Introduction and Definitions The Legal Framework Enablers THE IFMS SYSTEM Challenges WHY PFM REFORMS style Click to edit Master subtitle Future Plans Questions and Answers

The Legal Framework

According to Chapter 11 of the Namibian Constitution the general principle underpinning state policy is the active promotion and maintenance of Click to edit the people. Article 126 the welfare ofMaster subtitle style empowers the Minister to present for consideration to the National Assembly Estimates of revenue, expenditure and income National Assembly to consider and pass the Appropriation Acts

Legal Framework continue

The Legislation that provide the legal framework and prescribes controls and administrative structures for the management of public funds is nothing else than the Supreme Law the Click to edit Master subtitle style Namibian Constitution It serves as a guide for the drafting and enactment of other legislation; more specific the State Finance Act of 1991. The Act and its accompanying Treasure Instructions dictate the whole Namibian Budget Cycle, from its preparation

ENABLERS , TOOLS AND EQUIPMENT

THE BUDGET CYCLE EXPENDITURE CONTROL FRAMEWORK ACTION PLANS THE PREVIOUS SYSTEM CURRENT INTEGRATED SYSTEM FUTURE INTEGRATED SYSTEM MEDIA, IT TOOLS, WEBSITE, FACE BOOKS Click to edit Master subtitle style

BUDGET CYCLE
Start Macroeconomic Framework M onitoring & Control of the Budget Budget Click to Implementationedit Budget Framework Issuing of Circulars & budget ceiling to LM by MoF & NPC M inistries submit budget proposal to NPCS & MOF B udget Hearing

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Recommendation to Cabinet Approved ceilings to Line Ministries for the finalization of MTPs

Approval of the National Budget by Parliament

Presentation of the National Budget in Parliament

Printing & Publishing of the Development Budget & Operational Budget

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ISLANDS OF DATA

COBOL

PAYROLL

PDMS HRIMS

NATURAL / ADABAS

FUNDS CONTROL

GREEK / SPANISH
T

DAMARA
T

LOZI

ABAL

UNIFACE / INFORMIX

PROGRESS

T Click to edit Master subtitle style

CUSTOMS/ ASYCUDA

GENERAL LEDGER

IRD/TAXE S

ZULU
T R A N S L A T DEBT O MANAGEME R

FANIKALO
T

SETSWANA

DELPHI

BANK RECON MANUAL CHEQUE GERMAN S&T

EXCEL / MANUAL

NATURAL / ADABAS

BUDGET

MEDAID

AFRIKAANS

NT

LOZI

INTEGRATED DATA

ENGLISH AM

BUDGET DSA

ORACLE

AR Payroll

AP

GL Med Aid

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PO HC
EXTERNAL SYSTEMS PDMS HRIMS ASYCUDA IRD BANKS

CM

DEBT MGMT

Budget-Commitment-Expenditure
Budget TAWs Virements Requisitions

Budget

General Ledger
IRD & Customs

Committments

Purchase Orders

Invoices

Click to edit Master subtitle style Actuals

Receipts Cheque Processing Payroll DSA Bank charges
Cas h Mg mt

Payments

Transfers

CHALLENGES
High labor turnover Lack of Legal muscles for the AG office from the Act as well as legal expertise Capacity constraints High dependency on consultants Click to edit Master subtitle style Many reforms take place at same time (PFM reforms , PMS, EDRMS, etc.)

Future Plans
Continuous professional Development Effective use of the IFMS system Interface and integration with other systems Work towards the Implementation Click to edit Master subtitle of International Public style Sector Accounting Standards(IPSAS) More interaction with key stakeholders PAC, Auditors General among others, CIPFA, AFRO-SAI, ISAR, ICGFM

THE NAMIBIAN PFM REFORM AGENDA

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Introduction
Best Practice is a management idea which asserts that: there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc. Among the various methods and

implements used in each element of each trade there is always one Click to edit Master subtitle style method and one implement which is quicker and better than any of the rest (Frederick Taylor, 1919)

Introduction
Best practice as a notion, does not commit organizations to one inflexible, unchanging practice is a philosophical approach based around continuous learning and continual improvement does not have one template or form for everyone to follow With respect to PFM, implementation of best practices involves continual PFM improvement, i.e. PFM Reform Click to edit Master subtitle style

Introduction
Why PFM Reform? Governments are constantly seeking new ways to: Create high level of transparency and accountability in government finances use public resources efficiently secure long-term economic success fight corruption create the highest level of transparency and accountability in government finances create mutual trust between Government and Citizens Click to edit Master subtitle style

Comprehensive Framework for PFM Reform

Conte xt Conte nt Proces s

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Context of PFM Reform

The Why of Reform? What forces are driving the reform? Common Drivers of PFM Reform Endogenous forces e.g. financial pressure, political agenda, Parliamentary pressure, changes in the accountability 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 successful PFM reforms Predominance of endogenous forces Strong accountability environment Strong political commitment Felt need for change or buy-in by civil servants Donor support

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Context of PFM Reform

Some Constraining/Restraining Forces
Political discontinuity Resistance to change Click to edit Master subtitle style Economic factors Social issues

Context of PFM Reform

Diagnosis Identify pressures for reform Internal External Evaluate commitment to reform Internal External

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Process of PFM Reform

The How of Reform Some useful lessons
Home-grown and country-led public service reform program that includes PFM reform Implementation of PFM reform as part of an overall public service reform Strong political commitment Click to edit Master subtitle style Sound change management strategy Attention to practical issues Arrangements to monitor progress of reform
the traditional mores and culture the prevailing economic and political conditions

Process of PFM Reform

A long term partnership among all stakeholders A focus on people Ensuring ownership Ensuring adequate communication Educating stakeholders Maintaining commitment Rewarding success Learning from disappointments Click to edit Master subtitle style

Process of PFM Reform

Carefully formulating the Change 1. Adopting practices that were evolved in other countries 2. Adapting practices that were evolved in other countries to suit local conditions 3. Evolving indigenous practices Options 2 & 3 recognise heterogeneity among countries, but they are not mutually exclusive Click to edit Master subtitle style

Process of PFM Reform

Sensible learning from outside Attention to roles and responsibilities Politicians, civil servants and other stakeholders central and line agencies Constantly revisiting and if necessary, revising the reform program and strategy Flexibility, patience and honesty Click to edit Master subtitle style

Content of PFM Reform

The What of Reform Common Contents of PFM Reform
The changes Legal Framework for PFM Planning and Budgeting Budget execution accounting, internal control (including internal audit), procurement, in-year reporting Click to edit Master subtitle style Financial Reporting and Transparency External Audit Parliamentary Oversight

Content of PFM Reform

Budget credibility: Realistic budget, and implementation of budget as intended External scrutiny and audit: Effective arrangements for scrutiny of public finances and follow up by the executive

Six critical Comprehensiveness and transparency : dimension Comprehensive budget and s of PFM fiscal risk oversight, and accessibility of fiscal and system budget information to the Click to edit Master subtitle style performa public nce
Policy-based budgeting: Preparing the budget with due regard to government policy

Accounting, recording and reporting: Adequate records and information produced, maintained and disseminated to meet decision-making, control, management and reporting purposes

Predictability and control in budget execution: Implementing the budget in a predictable manner and exercising appropriate control and stewardship in the collection and use of public funds

CONCLUSION

Accountability and transparency are very important building blocks that can ensure enduring good governance which can sustain and galvanize quality growth andClick to edit Master subtitle style development. A well defined implementation strategies on PFM reforms with clear goals and objectives , that can be monitored and evaluated at interval levels will minimize failure and secure success.

What get measured ,

QUESTIONS AND ANSWERS

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Thank you