Nummy Sequencing Pfm
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Presentation by David Nummy of Grant Thornton about sequencing of public financial management reform in emerging nation governments.
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Nummy Sequencing Pfm
- 1. The Phases of Public Financial Management Reform David Nummy, Executive Director, Grant Thornton FreeBalance International Steering Committee Cascais, Portugal January 30, 2008
- 2. Current PFM Reforms Initiation • Started in the early 1990s • Collapse of communism • Over 20 countries need to transition from command economy to market economy
- 3. Current PFM Reforms Influence of IFIs • Coincides with predominant view that macroeconomic stability is paramount • IMF need to grasp national accounts to support monetary stability • World Bank determines lack of basic governance expertise is more urgent than traditional development focus
- 4. Current PFM Reforms • Focus on PFM and resources available to support reform efforts draws expertise • Focus on PFM moves outside of eastern Europe and FSU • Over 15 Years, a pattern of phases of PFM reform has evolved in numerous countries
- 5. A Series of Questions Evolve Phase 1 -- How much money are we spending? Phase 2 -- What are we spending money on? Phase 3 -- Why are we spending money? Phase 4 -- How are we spending money?
- 6. Phase 1 – How Much Money Are We Spending? • Single Account Treasury • Unified budget • Eliminate extra-budgetary accounts • Customs and tax • Organic budget Law • Commitment accounting
- 7. Phase 2 – What Are We Spending On • Unified accounting classification • Unified chart of accounts • Accounting standards • FMIS
- 8. Phase 2 – What Are We Spending On • Macro-economic forecasting • Multi-year budgeting • Cash management • Debt management • MTEF • Auditing
- 9. Phase 3 – Why Are We Spending This Money • Program definition • Further refinement of chart of accounts • Development of analytical capacity • Greater explanation of spending in public documents • Performance budgeting • Decentralization
- 10. Phase 4 – How Are We Spending Money • Procurement • Civil Service Reform • Human Resource Management • Budget Support
- 11. Most Difficult Challenges to Overcome • Resistance to closing Ministry bank accounts • Donors inability to provide timely and usable information on their activities • Getting beyond cash rationing • Performance measures
- 12. PFM Evolution