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Mon 330 Petriashvlli

Mon 330 Petriashvlli



Public Finance Management Reform The Georgian Experience

Public Finance Management Reform The Georgian Experience
2008 ICGFM Winter Conference
December, 2008



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    Mon 330 Petriashvlli Mon 330 Petriashvlli Presentation Transcript

    • Public Finance Management Reform The Georgian Experience 2008 ICGFM Winter Conference December, 2008
    • Introductions
      • Speakers
        • Papuna Petriashvili, Deputy Minister
        • Budget Department
        • Georgian Ministry of Finance
        • Liana Skhirtladze
        • MTEF Advisor
        • Georgian Minister of Finance
      • Moderator
        • Tim Grewe, Resident Advisor
        • US Department of Treasury
        • Office of Technical Assistance
    • Presentation Overview
      • History of Public Financial Reforms (PFR)
      • Objectives of PFR
      • Primary Elements
      • Public Financial Management Vision Strategy
      • Medium Term Expenditure Framework
    • Reasons PFMR Initiated in Georgia
      • Develop Government Strategic Directions, make priorities more sophisticated
      • Make a reasonable forecast on the bases of good macroeconomic parameters
      • Develop united e-Treasury system
      • Tax reform
      • Improve revenue planning
      • Local budget system reform
      • Develop Integrated Information System
    • Reasons PFMR Initiated in Georgia
      • Anticorruption activities to improve State Finance Management and increase transparency
      • Conformance to International Standards
      • Donor coordination and using the international financial assistance money more effectively and efficiently
      • Implement Neighbor policy and NATO entry conditions (international liabilities)
      • Improve public finances and services
    • PFM System Goals
      • Maintain fiscal discipline, macro-economic stability and budget predictability.
      • Promote a strategic approach in allocating resources to priorities.
      • Ensure the effective and efficient use of resources.
      • Accountability in the use of public resources.
    • PFRM Components National Priorities Government Strategy Basic Data & Direction Medium Term Expenditure Framework Annual Budget Sector Strategies
    • Budget Planning Reform
      • Establish program budgeting system.
      • Improve budgeting and reporting for PLE’s.
      • Improve capital budgeting
      • Extend reforms on local government level
      • Improved public involvement and information
    • Resource Management Reforms
      • Continued Treasury Reforms
        • E-treasury functional Design prepared
        • E-treasury System technical specification prepared
        • Financial Module and Software Licenses Procured
        • Financial Module customized
        • Security system designed and implemented
        • Pilot phase launched
    • Resource Management Reforms
      • Consolidating and further improving revenue management :
        • Complete on-going reforms including simplification of customs and tax codes.
        • Strengthen tax and customs administration.
        • Improve management of tax arrears
        • Implement risk based system for audit identification
      • Improve oversight of MOF budget execution
      • Improve capital asset management
    • Macroeconomic Indicators
    • Strategic Budgeting Reform Actions
      • Budget reform goals
        • Improve budget and reflect comments of Independent Public Expenditure Financial Accounting (PEFA) Assessment
        • Simplify the budget process
        • Increase linkage between budget documents
        • Strengthen management and improve expenditure policy
        • Improve budget process coordination
        • Increase transparency and availability to the public
    • Strategic Budgeting Reform Actions
      • Improve legislation base
      • Integrarte MTEF into Budget process and institutionalize it
        • Introduce medium term thinking and medium term action plan on the state and local level
        • Link state policy, planning and budget processes in the medium term
        • Reallocate resources to meet government priorities
      • Basic Data and Direction Document (BDD)
      • State Budget Forms
      • State Budget Format
    • MTEF approach in annual budgeting Forecast Budget Budget Forecast Forecast Budget T T +1 T +2 T+1 T +2 T +3 T +4 T +5 MTEF and Annual Budget MTEF should be closely linked to the technical and institutional processes of the budget preparation
    • Budget Process Reforms
      • Adoption of the regulation by the Govenment of Georgia
      • Complete involvement of spending agencies on all levels
      • Medium term action plan – a bases for developing the BDD document
      • Fully integrate MTEF into budget process and format.
      • Improve linkages to BDD and sector priorities
        • Comprehensive goals
        • Performance indicators
      • GFS 2001 at all levels
      • Revised budget legislation
      • Improved intergovernmental finance systems (Formula)
    • Budget Planning Reforms
      • Improved and simplified budget systems:
        • Circular
        • Execution
      • Strengthen capacity of Parliament to review budget proposals.
      • Improve capital investment project planning and budgeting.
    • Lessons Learned
      • PFRM is an ongoing, multi-year process
      • Multi-year systems provide stability
        • Political transition
        • Economic swings
        • Conflicts
      • Quality of systems improve over time
      • Political and Executive support required for success
      • Danger of “over-committing” to reforms
    • What’s Next for PFRM
      • Update plan based upon :
        • Post conflict needs
        • PEFA Report
      • Focus for next three year:
        • PFMIS Implementation
        • Improved budget system law
        • Improved annual budget law
        • Implement MTF in local governments
        • Program budgeting system
        • Capital budgeting systems
    • Questions and Comments