ICGFM Promotes Knowledge Transfer Among Public Financial Management Experts

Working globally with governments, organizations, and individuals, the International Consortium on Governmental Financial Management is dedicated to improving financial management by providing opportunities for professional development and information exchange.

Friday, December 19, 2008

Daniel Kaufmann Unorthodox Reflections on Governance and Crisis

Daniel Kaufmann’s farewell lecture from the World Bank, Governance, Crisis, and the Longer View: Unorthodox Reflections on the New Reality, has been posted at http://info.worldbank.org/etools/BSPAN/PresentationView.asp?PID=2363&EID=105 

Thursday, December 18, 2008

ICGFM May 2009 Conference “Country Perspectives on Public Financial Management during Global Economic Uncertainty”

23rd International Consortium on Governmental Financial Management (ICGFM) Conference

“Country Perspectives on Public Financial Management during Global Economic Uncertainty”

 May 18-22, 2009 (Miami, FloridaUSA)

Don’t miss the opportunity to join government leaders, public financial management experts, international donors and program managers at the 23rd International Consortium on Government Financial Management (ICGFM) International Conference.  ICGFM was established over two decades ago to serve as an international forum for public sector financial managers, with an emphasis on developing countries.

Representatives from Africa, Asia, Europe, Latin America, and North America – 50+ countries in 2008 -- will be gathering in Miami to discuss what their governments are doing in response to the global economic downturn and how they are preparing public financial management to deal with the economic uncertainty.

During the first three days, the key themes and areas of interest that will be addressed include:

  • Sustaining the public financial reform agenda
  • Managing revenue and debt
  • Managing the drain on the budget
  • Impacts on public private partnership projects
  • Changes to donor funding and development partner projects
  • Impacts on the implementation of international standards
  • Sustaining the delivery of results

The final two-days of the event will focus more on technical aspects related to Financial Management Policy, Budgeting and Accounting with specific consideration of the move to the use of country systems and the on-going drive to stamp out corruption.

23a Consorcio Internacional sobre la Gestión

Financiera Gubernamental (ICGFM) 

 “Perspectivas de varios países sobre la gestión de las finanzas públicas durante la incertidumbre económica mundial “

 18-22 mayo, 2009 (Miami, Florida – EE.UU.)

No pierda la oportunidad de unirse a dirigentes gubernamentales, expertos en la gestión financiera pública, donantes internacionales y directores de programa, en la 23 ª Consorcio Internacional sobre la gestión financiera del gobierno (ICGFM). ICGFM se creó más de dos décadas atrás, para servir como un foro internacional para directores financieros en el sector público, con un énfasis en los países en desarrollo.

Representantes de África, Asia, Europa, América Latina y América del Norte - 50 + países en 2008 - se reunirán en Miami para discutir lo que sus gobiernos están haciendo en respuesta a la recesión económica mundial y la forma en que se están preparando gestión de las finanzas públicas a hacer frente a la incertidumbre económica.

Durante los tres primeros días, los principales temas y áreas de interés que se abordarán son:

  • El sostenimiento de las finanzas públicas en la agenda de reformas
  • Gestión de ingresos y la deuda 
  • Gestión de desagüe sobre el presupuesto 
  • Cambios en la financiación de los donantes y asociados para el desarrollo de
  •    proyectos 
  • Efectos sobre la aplicación de las normas internacionales 
  • El mantenimiento de la entrega de resultados 

El final de dos días del evento se centrará en la formación y aspectos más técnicos relacionados con la Política de Gestión Financiera, Presupuesto y Contabilidad con especial consideración de la transición a la utilización de los sistemas de los países y la actual campaña para erradicar la corrupción.

ICGFM  Le 23ème Conférence du Consortium International  sur la Gestion Financière Gouvernementale Management- La Conférence

“Perspectives des pays sur l’Administration de la Gestion Financière Publique pendant l’incertitude Économique Globale ”

 Du 18 au 22 Mai 2009 a Miami Florida-USA

Ne manquez pas l'opportunité de vous joindre aux leaders du gouvernement, aux experts de l'administration financiers publics, aux donateurs internationaux et aux directeurs des programmes au 23ème Conférence du Consortium International sur l'Administration Financière Gouvernementale (ICGFM).

ICGFM a été créé  il y a plus de deux décades pour servir d'un forum international pour les directeurs financiers du secteur public avec une accentuation sur les pays en voix de développement.

Les représentants de l'Afrique, de l'Asie, de l'Europe, de l'Amérique latine et de l'Amérique du Nord – plus de 50 pays en 2008 - se rassembleront à Miami pour discuter de leurs gouvernements en réponse à la baisse économique globale et comment préparer l'administration financière publique à confronter  l'incertitude économique globale.

Pendant les trois premiers jours, les thèmes clé de la conférence s’articuleront autour de :

  •        Amélioration de la réforme financière publique
  •        Gestion du revenu et la dette
  •        Gestion  et la canalisation du budget
  •        Impacts sur les projets de partenariat privés publics
  •        Changement aux projets de partenaire et de financement des donateurs
  •        Impacts sur l'implémentation de normes internationale

Les deux derniers jours de l'événement se concentreront sur l’éducation et plus sur l’aspect technique rattaché à la Politique d'Administration Financière, a la  Budgétisation et a la comptabilité avec une considération spéciale a  l'utilisation du systèmes des pays  pour combattre la corruption.


Friday, December 12, 2008

Opportunities for Country Revenue Through Taxing National Resources

The presentation by Philip Daniel of the IMF from the November 5th. DC Forum is now available at Scribd. The presentation is available at the ICGFM web site.

Opportunities for Country Revenue Through Taxing National Resources

Wednesday, December 10, 2008

Participants Agree that ICGFM Winter Conference was Useful and Aided in Professional Development

Surveys from participants at the ICGFM Winter Conference in Washington have been compiled. Participants agreed that the Conference was useful and aided professional development:

  • This conference provided me with useful information: 100% (agree or strongly agree)
  • This conference contributed to my professional development: 100% (agree or strongly agree)
  • Overall, the speakers presented their material effectively: 95% (agree or strongly agree)
Participants were asked to select the most effective presentations and sessions based on usefulness, applicability for current professional development, applicability for future professional development and interest. All sessions were rated highly. The sessions with the highest ratings were:

Participants requested workshop sessions earlier in the schedule and more interaction with presenters.  Thirteen participants volunteered to present at future ICGFM conferences.

Tuesday, December 9, 2008

ICGFM in the News

Recent ICGFM Internet Coverage includes:

Thursday, December 4, 2008

Navigation the ICGFM Blog

All blog entries going back to the May conference are available on the ICGFM blog. There is an 
 option at the bottom of every blog page to navigate to newer and older posts. There is also a blog archive feature available at the right and close to the bottom of each blog page showing the blog entries by year and by month. Clicking on the month will expose all entries for that month.

Leaving Comments on the ICGFM Blog

Some attendees at the ICGFM Winter Conference wished to add comments to blog entries.

All blog entries provide the ability to add a comment. Clicking the comment button will introduce the "add comment" form.  

You can leave a comment anonymously by selecting the "anonymous" option. Those of you with a blog can select your Google or OpenID login. This enables anyone who is interested in your comment to link to your blog. You can also leave your name and a link to your web site.

ICGFM Winter Conference Photos Available Online

Photos from the Winter ICGFM Conference are available at the ICGFM Flickr site at http://www.flickr.com/photos/icgfm/
If you would like any photos removed please e-mail icgfmconference@gmail.com.

Wednesday, December 3, 2008

December Conference Ends on a Positive Note

David Nummy of Grant Thornton LLP closed the Winter ICGFM Conference on Wednesday. Participants were asked if they thought that ICGFM should set up chapters in their countries. 64% agreed that this would be helpful.

Mr. Nummy summarized the conference takeaways:

  • There is general agreement that the "big bang" approach to PFM reform is not the way to go.
  • PFM reform should be anchored on strategy rather than instruments.
  • Political will is critical to insure success.
  • The reform pace should be driven by the culture.
  • Corruption remains a problem.
  • Beware of "quick wins".
  • PEFA was agreed to be an excellent tool for self-assessment, but not necessarily for external assessment.

ICGFM Workshops Discuss PFM Lessons Learned

Public financial management experts and practitioners from around the world worked together for knowledge transfer at the ICGFM Winter Conference in Washington DC. Three workshop groups were created and conclusions were presented to the entire conference.

Workshop Group 1: Africa focus
Workshop Group 2: Latin America focus

Workshop Group 3: Rest of World focus

ICGFM Overview in Arabic

A quick video overview of the ICGFM Confernce in Washington, presented in Arabic.

Medium Term Expenditure Frameworks Used Differently with Different Affects

Surveys at the ICGFM Winter Conference shows that Medium Term Expenditure Frameworks (MTEF) are used differently in countries and with varying affects.

Survey: If your country has an MTEF, do the forecasts for years 2 and 3 have any legal significance?
  1. Yes: 17%
  2. No: 61%
  3. Indicative significance only: 26%

Survey: What was the major expected benefit of the MTEF in your country?

  1. Linking policy goals and budget allocations: 50%
  2. Overcoming the problem of year end lapsing of budget appropriations: 8%
  3. Medium term planning: 42%

Survey: To what extent has MTEF reforms achieve expected benefits?

  1. Benefits mainly achieved: 14%
  2. Benefits partly achieved: 55%
  3. Very little realization of benefits: 34%

Donors are using Country Systems for Managing Funds

A survey at the ICGFM Winter Conference showed how donors are using country systems to manage funds and programs:

  1. 100% of the time: 13%
  2. 75% of the time: 10%
  3. 50% of the time: 37%
  4. 25% of the time: 33
  5. 0% of the time: 7%

Where is PFM Transparency Most Needed

40% of respondents to a survey at the Winter ICGFM Conference said that performance reporting is the most needed affect of public financial management transparency. The voting was:

  1. Strategic priorities: 17%
  2. Budget priorities: 9%
  3. Financial reporting: 34%
  4. Performance reporting: 40%

The Fallacy of Best Practice

Michael Ruffner of the United States Department of the Treasury discussed the "Fallacy of Best Practices." Mr. Ruffner described the role of technical assistance from the US Treasury. He pointed out that there is broad agreement for public financial management reform. However, there are different motivation for this agreement. Nevertheless, this creates a virtuous circle in theory that improves economic growth, promotes prosperity, stability and peace.

Mr. Ruffner believes in the "first things first" approach rather than the "big bang". He described how certain reforms and the ways these are sequenced can be much different. He believes that in the case of PFM reforms, governments learn from each other. We need more efficient international learning so that countries can more effectively understand what works and why it worked. He emphasized the need to separate good principles from fads in PFM reform. Successful PFM reforms require a set of enabling conditions.

There is no single model of reform according to Mr. Ruffner. Changes rules and structures do not change behaviour. Understanding the problem defines the range of instruments required for reform. Formulaic reforms are not calibrated to the country context. He warned that behavioural change requires a longer commitment than the donor attention span. He further described how technical assistance can fail to meet government needs.

Mr. Ruffner emphasized that ownership is the most important determinant for success. It is the "buzz word" of the moment. He pointed out that real ownership by the government is the exception. He described the negative consequences of using diagnostic tools like PEFA. He cautioned that technical assistance should be led by practitioners.

Mr. Ruffner introduced a systems view for effective technical assistance that shows the relationship among financial institutions, enforcement, tax administration, budget and debt management.

The best available solution rather than the so-called best practice is the most effective approach according to Mr. Ruffner.
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Tuesday, December 2, 2008

The Use of Social Auditor Control

84% of respondents to an ICGFM survey agreed that the concept of social auditor control would work in their country. Only 4% of respondents indicated that this process is in practice in their countries.

Good Practices for Sequencing PFM Reforms

Philip Joyce, Professor of Public Policy and Public Adminstration of the George Washington University (centre) moderated an ICGFM panel to get development partner perspectives for the sequencing of public financial management reform.

Sanjay Vani, Lead Financial Specialist at the World Bank (left), suggested that there in no golden rule for every situation, but there are many case studies about what does not work. He pointed out that a good accounting systems must be available for any reform to be successful. Many reforms are thrust on a county that works at first, but eventually fail because of a lack of political will. Countries need to take leadership over reform programs. Mr. Vani pointed out that there are many interdependencies among reform programs.

Marco Cangiano, Division Chief, International Monetary Fund (second from left), compared reform to making an excellent wine. He suggested that the notion of "quick wins" is consultant lingo that is very attractive to politicians. He cautioned about taking reform short cuts. Getting the data right is unrewarding work but is essential to reform. Mr. Cangiano pointed out that human resources is the most important determinant of successful reform.

Laura Trimble, Associate Director of Budget and Financial Accountability, Office of Technical Assistance, U.S. Department of Treasury (second from right), suggested that it is critical to understand what the country problem is. That way, the country understands the need. She believes that budget planning is not best first step. Cash management and expenditure forecasts are a more important first step. Monitoring and reporting, procurement and other reforms require accounting systems as a prerequisite.

Deborah Spietzer, Financial Management Specialist, Inter-American Development Bank (right), suggested that countries should start with the basics. Legal reform is required before embarking on public financial management reform. She recommends a top-down approach, big picture to small picture, beginning with strategic planning before executing the reform. She suggested that the "big-bang" approach should be avoided. Often, these projects are lead by donors and not the government. Ms. Spietzer described how coordination among donors has become difficult because there are so many multi-lateral and bi-lateral donors. Donors are moving to aid harmonization, yet there remains inconsistent advice among donors.

There were many questions about the best way to work with donors. Panel members recommended that countries should own reform. Nevertheless, donor conditionality can limit country flexibility. Mr. Cangiano pointed out that conditionality is becoming less strict and that there are ways to leverage any conditionality to encourage legal reform.

Good practices described by panel members included communications management to all stakeholders and civil servants and the provision of incentives to civil servants.

Capacity Building in Government

Doris de Miranda Coutinho President of the Audit Court of the State of Tocantins in Brazil describes capacity building efforts in the State. Mr. Pedro Gill, the translator adviser of Tocantins Court provided the translation to English.

Public Financial Management Reform in India

C.A. Singh discusses the public management reform implications of decentralization and the unique characteristics of reform in India.

Case Study PFM Reforms in the Brazilian State of Tocantins

Ambassador Addor Neto, the Secretary for Multidimensional Security of the Organization of American States (right), introduced Doris de Miranda Coutinho (left), President of the Audit Court of the State of Tocantins in Brazil. The State of Tocantins was formed in 1988. Ambassador Neto described Mrs. Coutinho as a pioneer in financial management.

Mrs. Coutinho introduced the control systems for performance and audit implemented by the State of Tocantins. Mrs. Coutinho suggests that the State is reaching maturity. Tocantins is in an area of poverty, but is showing economic growth.

The State of Tocantins has improved capacity through increasing salaries. Independent courts, Parliament and audit organizations are responsible for control and oversight. There is a decentralized approach that includes municipal treasuries.

Mrs. Coutinho introduced a series of problems in financial management experienced in Tocantins including:

  • Low budgetary resources
  • Poor use of public monies
  • Lack of transparency
  • Lack of technical capacity in the government
  • Inefficient political system
  • Mistrust of government
  • Lack of societal control

The Court of Accounts has been moving from older paradigms. It has been difficult to move to this new model of management. There have been some successful management programs including training public agents and citizens.

Mrs. Coutinho described the multi-year training program, FORMAP, to improve public agent capacity. Costs for in-person training was found to be too expensive. Distance learning was begun in 2008 and is showing very good results.

The expansion of 59 to 139 municipalities has disrupted financial management. Some municipalities are unable to generate very much revenue.

SICAP, a computerized Integrated System of Control and Public Accounting has been implemented. This system has been used by other States in Brazil. The system allows control over municipal budgets and enables eliminating budget items that are unlikely to be beneficial.

Participatory budgeting is supported. Plenary sessions of the Court are broadcast to improve transparency. A transparency portal provides procurement, contracts and budgetary information to citizens. This has resulted in increased participation and has reduced non-compliance.

Mrs. Coutinho recognized that programs need financing in order to be sustainable.
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Some Skepticism about Donor Assistance

Donor, government representatives and consultants make up the membership of ICGFM. A survey at the ICGFM Winter Conference found that only 18% of respondents believe that donors tailor recommendations to the country situation. 81% believe that donors do not appropriately consider country circumstances when making recommendations.

Should Countries Create National Standards or Adopt International Standards?

71% of survey respondents at the Winter ICGFM Conference recommend that countries should adopt international standards rather than create national standards.

The Challenge of Reforming Budgetary Institutions in Developing Countries

Richard Allen of the International Monetary Fund introduced his draft paper on reforming budgetary institutions in Developing Countries.

His presentation and draft paper answers three questions:

  1. What are the main factors that determine the development of budgetary institutions over time?
  2. What lessons can developing countries learn from the long experience of more advanced countries in reforming their budgetary institutions?
  3. How can the international financial institutions (IFIs) and other providers of financial and technical support, facilitate the process of reform in developing countries—what adjustments are required to the approaches and models they currently apply?

Mr. Allen presented the case for changing the current approached and models applied by IFIs.

3661767 - Sequencing Paper, July 2008 Version - 5 - DMSDR1S

Case Study PFM Reforms in Costa Rica

Jason Orlando of the US Treasury introduced Fabian Quiros Alvarez, the General Sub-Director of the National Budget of the Ministry of the Treasury, Costa Rica. Mr. Orlando indicated that the PEFA tool was effectively used for government self-evaluation.

Mr. Alvarez described how small reforms have been very successful in Costa Rica. He attributed much of the success through the alignment with donors.

Mr. Alvarez described the budget planning reforms in the unitary government, particularly how performance planning and indicators in budget preparation is used. There have been some challenges because there remains a tendency to favour effectiveness measurements.
Mr. Alvarez emphasized the importance of the multi-year approach to planning and project planning. This reform has been difficult to implement. The Government of Costa Rica develops many multi-year scenarios.
Auditing and oversight of budget execution reform has been implemented by the Government of Costa Rica.
The Inter-American Development Bank has evaluated the financial management system in 18 countries in Latin America. Costa Rica has been evaluated as far above the average. However, challenges remain.
Mr. Alvarez described how political will is required for reform. Reform is often thought to be a problem of supply. In reality, there needs to be the creation of demand. Reform and modernization is not just about generated reports, it is about monitoring and evaluation.
Realistic expectations and a gradual approach is required for effective reform, according to Mr. Alvarez. Reforms are medium term and practitioners cannot expect immediate changes. Governments need to reflect on results to show improvement. Rules need to be simplified to be more effective.
The Government of Costa Rica operates on an accrual basis of accounting for expenditures but not yet for revenues. Costa Rica is creating new public sector accounting standards adapted from international public sector accounting rules.
Mr. Alvarez described how the government builds capacity in human resources. Continuous training is required. A fundamental change to a performance oriented civil service is required.
The Government of Costa Rica has developed numerous measurements for quality. Mr. Alvarez described how governments need to benchmark with reforms in other countries. The purpose of financial reform improves governments by sustained improvements.

Tue 1000 Alvarez
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Governments More Concerned about Budget Execution than Future Budgets

A survey of public financial management practitioners at the ICGFM Winter Conference concluded that governments pay more attention to budget spending than future spending.

  1. More attention to future budgets: 28%
  2. More attention to actual budgets: 48%
  3. Equal attention to actual spending and future budgets: 28%

Government Will Pay More Attention to PFM Reforms

A survey of public financial management practitioners at the ICGFM Winter Conference concluded that there will more more attention to PFM reforms because of the current financial management crisis.

  1. More attention: 79%
  2. Less attention: 13%
  3. No change: 8%

Case Study PFM Reforms, A South African Perspective

Jim Brumby, Lead Public Sector Specialist of the World Bank (left) described how public financial management reform has helped South Africa to achieve political stability and economic growth. Mr. Brumby suggested that the Government of South Africa has been innovative in risk management.

Freeman Nomvalo the Accountant General of the National Treasury, Government of South
Africa (right), introduced the Financial Management Improvement Project in South
Africa including critical factors that contributed to its success. Mr. Nomvalo described the changes in public financial management in South Africa from a lack of uniformity in financial management and strategic plans towards an accountability framework.

The reform process in South Africa has been executed in four phases. The first phase (1994-1998) saw the introduction of a new classification system compatible with Government Financial Statistics (GFS) and Medium Term Expenditure Frameworks. Information from across government entities were integrated with a data warehouse.

The second phase (1999-2002) saw the introduction of the Accounting Standards Board and improved economic classifications in aid of effectively managing increased government expenditures. Mr. Nomvalo described how South Africa adapted GFS to provide more effective decision-making information.

During the third phase (2003-2006), the government introduced a framework for Public Private Partnerships (PPP). Additional frameworks and policies, in areas such as procurement, were provided. Mr. Nomvalo described how the government empowered managers to manage within a framework. A risk management framework was developed.

The latest phase began in 2007. A project for an Integrated Financial Management System has started with an expectation of full deployment in the next three years. This project includes some off-the-shelf components and some custom development.

Mr. Nomvalo described how effective oversight required a consistent method of reporting and moving towards an accrual basis of accounting. The Government of South Africa operates on a modified cash basis but reporting has many accrual features. The government has developed a framework for improving service delivery and improving capacity.

The Government of South Africa has adapted practices from other countries to create a Financial Capability Maturity Model that has been rolled out through the national government. There are plans to roll this out across all governments.

Mr. Nomvalo described the financial framework process that links priorities with budget preparation and service delivery. Mr. Nomvalo commented that what most people describe as "budget execution" should be described as "service delivery."

Why the process works in South Africa was described. Roles and responsibilities are well defined. Reporting timeframes are clearly. Mr. Nomvalo indicated that political will is necessary for reform and that political reform is much more than politicians. Important civil servants much also have the political will.

Some of the challenges faced by the reform project include migrating to accrual accounting and ensuring that reports are relevant and understandable. Mr. Nomvalo indicated that all stakeholders need to buy into the reform. South Africa has experienced situations where managers are not prepared to spend even though there are funds available. There is no system of financial management that can work without strong oversight.

The Constitution of South Africa requires the development of national standards. These national standards are consistent with IFRS and somewhat more advanced than IPSAS.

The Government of South Africa is implementing the IFMS, focusing on capacity building and working on government-wide reporting. A performance framework is being developed to measure value for money. There remains challenges in measuring outcomes.

The South African experience showed that the following elements were critical for successful PFM reform:
  • Focus on addressing the country's problem
  • Implement a legal framework that underpins the reform
  • Provide a clear definition of roles
  • Engage in broad consultation
  • Set clear expectations for reporting
  • Sustain political will with government
  • Provide a clear vision

    Mr. Nomvalo warns that although the South African Government has made great strides, there remains considerable challenges.

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