Using Government Chart of Accounts for Tracking Aid Flows and Expenditures in the budget4

Tithokoze Samuel, Principal Budget Officer, Ministry of Finance, Malawi, describes the financial management systems in use at the ICGFM Winter Conference. She described the Integrated Financial Management System (IFMIS), use of Treasury Single Account (TSA) and expenditure management.

Ms. Samuel described the limitations of the IFMIS. Many transactions are not controlled by the IFMIS including domestic revenues, domestic debt, external loan, donor projects, payments at the council level. This information is uploaded from other information systems, although the data transfer tends to be a month late.

Ms. Samuel described the footprint of donor aid in Malawi. She described the use of the Aid Management Platform. The Government Chart of Accounts tracks donor support in the budget. However, she pointed out, donors have many different unique codes. She described the four Chart of Accounts segments and the donor codes. She pointed out that getting disbursement information from donors is delayed, yet the IFMIS is real-time. She described the difficulties matching information from the IFMIS and the AMP.

Ms. Samuel hopes that donors can be encouraged to use the IFMIS for disbursements in order to get real-time effective data. The Government COA demands a lot of detail that promotes transparency and accountability, she concluded. It is imperative that cooperating partners not using country expenditure system be encouraged to do so as this reduces time required to produce expenditure reports. She stated that it is possible to track all donor financed projects in the budget and the corresponding expenditures if country systems used.

Samuel using government chart of accounts for tracking aid flows and expenditures in the budget

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Samuel l’utilisation du plan comptable gouvernemental pour assurer le suivi des flux d’aide et des dépenses dans le budget

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Samuel utilizar el plan contable del gobierno para registrar los flujos de ayuda y los gastos en el presupuesto

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Malawi Experience in Aid Information Systems

Aaron Batten, Economist, Ministry of Finance, Malawi, described why aid should be managed at the country level. He described the aid profile of Malawi including funds that are on-treasury, on-budget and on-plan.

Mr. Batten described the problems associated with low technical capacity while managing data from multiple donors within the budget cycle. The Government of Malawi had only ad-hoc information from donors with at least half of the information unavailable to the government. This undermined the budget cycle. He described the process of implementing the Aid Management Platform (AMP) to coordinate aid with the country budget cycle. The biggest challenge was to establish consistent and timely donor reporting to the government.

Mr. Batten described the advantages of using an aid management system in Malawi. Malawi was able to tailor data standards to meet country needs. Donor funds are integrated at aggregate levels, but execution by the government is at a more detailed level. He showed some of the codes.

Mr. Batten found that timely and frequent aid information from donors is more important than accuracy for effective budget control and management. Unless aid information is given to recipients in a very timely manner it is often not very useful for budget control. The Government of Malawi accepts that some of the data may be inaccurate that will need to be fixed later.

Malawi changes classifications and modernizes functions. Therefore, systems much support this type of country level of dynamism according to Mr. Batten. Data needs and priorities change and donors need to be flexible. He concluded that donors need to be responsive and accountable at the country level to enable public financial management reform. The task for recipients is to utilize this information in a way that improves public financial management.

A survey of ICGFM attendees found that almost 1/3 of countries receive no aid information from donors.

Batten aid information management in practise malawi experiences

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Batten gestión de la información sobre ayuda en la práctica experiencias en malawi

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Batten gestión de la información sobre ayuda en la práctica experiencias en malawi

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Malawi using Aid Management Systems to Optimize Development during Financial Crisis

Naomi Ngwira, Director, Department of Debt and Aid, Ministry of Finance in Malawi discussed the use of the Aid Management Platform (AMP) from the Development Gateway Foundation. Aid finances half of the government budget and 80% of development expenditures. She pointed out that the software does not contain debt management functionality. The Government of Malawi intends to integrate AMP with the Integrated Financial Management Information System (IFMIS).
She described the Government of Malawi experience in financial management systems. Ms. Ngwira pointed out that the complexity of handling large volumes of information on aid requires a solution like AMP. The system facilitates entering in objectives and targets. She complemented the support from the Development Gateway, a non profit organization specializing in informatics solutions for emerging countries. Reporting has improved and is used by donors and the government.

Ms. Ngwira indicated that not all development partners provide timely and accurate data. The government discovered that only four donors disbursed within +/- 10% of submitted projections. This has not improved.

AMP has assisted the Government of Malawi to ensure that pledged money is fully disbursed. Reports can create peer pressure among donors. AMP can improve allocateive efficiency and enable managing for results.