OECD Budgetary Reform Agenda for CESEE Countries
The document discusses improving budgetary and financial management reforms in Central and Eastern European countries. It notes that in the past, some countries had large budget deficits, spending more than budgeted each year and delays in auditing. Previous governments approached reforms by centralizing activities in the Ministry of Finance and developing action plans. Pressure from parliament, auditors, and the Ministry of Finance's monitoring role helped drive reforms. The document questions if the same centralized approach through the Ministry of Finance could work for these countries and whether reforms have succeeded in creating managerial accountability, strong auditing functions, and transparent financial management at local levels given challenges like reluctance to lose power and take responsibility. It ends by asking what change strategies could be used to implement transparent
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OECD Budgetary Reform Agenda for CESEE Countries
- 1. OECD SBO CESEE, The Hague, 26-27 June 2014 Shaping a budgetary reform agenda
- 2. 2 A picture • Budget deficit 10% GDP • Every year was spent more than budgeted • General complaint: more invoices than expected • In 1985 government rendered its account 1978 • No sufficent certainty about lawfulness • No attention paid to NAO’s annual report
- 3. 3 Approach by succeeding cabinets • Central activities: MoF • Activities in LM’s • An action plan with a time schedule • Measures to reduce budget deficit • Political wish to improve the situation • A matter of responsibilities
- 4. 4 Pressure • Parliament • NAO • Opinion internal auditors • Monitoring role MoF
- 5. 5 Improving financial management in CESEE countries? • Managerial accountability • Strong audit function • Important role for MoF: CHU
- 6. 6 Same approach applicable? • Central activities: MoF • New PIFC law • By-laws, rulebooks • Activities in LM’s • Create Finance Affairs Units • Distribution of budgets
- 7. 7
- 8. 8 Do we succeed? Analysis of current situation: gap analysis Development of Action Plan / Road Map Managerial accountability? Afraid of losing power? To bear responsibility? Based on trust; our society is based on distrust Monitoring role MoF?
- 9. 9 What would you do? Which change strategy? Content is easy Orderly budget preparation, multiyear estimates Realistic macroeconomic assumptions All expenditures and revenues in the budget Sound financial management in LM’s How to implement transparent financial management? Negative incentives? Positive incentives? Front runners? A dream?