ICGFM Survey Report: Public Financial Management Changes from the Financial Crisis Long-Term Effect

Public Financial Management Responses to an Economically Challenging World

Jason Levergood, Senior Manager at Grant Thornton LLP, provided an overview of the ICGFM Worldwide Survey, Public Financial Management Responses to an Economically Challenging World on December 7th. at the ICGFM Winter Conference. Public financial managements from over 50 countries were surveyed in 2010.

The survey found that the financial crisis and stimulus packages have had significant impact on public financial managers. Yet, in this environment of doing more with less, governments have accelerated reforms including support for international standards and improvements in transparency.

Mr. Levergood described the survey results for stimulus programs, use of public private partnerships (PPPs), infrastructure investment and increasing transparency. 76% of respondents said that their countries have made or renewed a strong commitment to public fianncial management transparency. 80% of respondents said that their countries are adopting international standards. The survey found that the use of the eXtensible Business Reporting Language (XBRL) is gaining interest but has not been widely adopted in government.

The survey concludes with the observation that "public financial managers face some of the most challenging times in decades in meeting their responsibilities, but they have faced them no only with a variety of policy measures but with an unprecedented commitment to transparency".

Grant thornton global financial management leaders responses to an economically challenging world

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Grant thornton leaders internationaux de la gestion financière réponses à un monde de défis économiques.pptx

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Grant thornton líderes globales de la gestión financiera respuestas a un mundo económicamente exigente

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Public Financial Management Responses to an Economically Challenging World 2011 ICGFM Survey

Main Session of ICGFM PFM Conference Comes to an End

The main session of the 24th. ICGFM International Conference: Public Financial Management in the Era of the "New Normal" came to an end this afternoon in Miami Florida. ICGFM President, James Ebbitt closed the main session. Detailed workshop sessions begin on Thursday.

Conference co-chair, David Nummy reflected on the changes because of the financial crisis. He observed that many countries that were considered the most stable have been more adversely affected by the crisis. Transparency and accountability demand has increased thanks to the crisis as the public questions how countries got into the crisis and how stimulus money is being spent.

Public financial managers are becoming more important. PFM managers are increasing their role in government. It is a robust and important profession according to Mr. Nummy.

Mr. Nummy suggested that XBRL adoption is reaching critical mass. XBRL promises to improve efficiencies and transparency.

Impact of Financial Crisis on Ongoing PFM Reforms

Conference c0-chair David Nummy introduced today's theme at the 24th Annual ICGFM Conference. The conference theme is Public Financial Management in the Era of the New Normal - post financial crisis. The focus today will be on the impact of the financial crisis on ongoing PFM reforms. Mr. Nummy observed that PFM reforms have been accelerated because of the financial crisis. Government realize that improving governance, efficiency and effectiveness is necessary because of reduced government revenues.

50% of attendees believe that transparency and accountability is the most important reform initiative during this era of the "new normal".

Rakesh Verma received an award for the longest trip to ICGFM at 34 hours.

Financial Crisis accelerates PFM Reform

David Nummy introduced the second day of the 24th Annual ICGFM Conference by reflecting on the recent article from the IMF PFM blog. This recent article agrees with the conclusion from last year's conference in Miami - the financial crisis is accelerating PFM Reform.

Last year's conference found wide agreement that public financial reform is key to overcoming the financial crisis.

Impact on Trade Resulting from the Financial Crisis

Stephen Lande, Adjunct Professor, Georgetown University School of Foreign Service and President of Manchester Trade discussed the lessons learned from financial crisis. Trade continues to be a major part of world economic activity and the source of much public revenue. Mr. Lande described how the reaction to the great depression was uncoordinated - building walls across boarders. The reaction to the 2008 financial meltdown has been coordination. There has been continuous consultations across G-20 countries. And, there has been general agreement on how to implement growth through Keysian economics.

Many countries reacted to the financial meltdown by considering protectionism. For example, members of the US Congress talked about a "buy America" policy for the stimulus package.

The WTO was able to show that protectionism restricts growth and financial stability. A report in March 2009 showed that there was no indication of any pattern of protectionist measures.

World Trade fell in 2009 because of global supply chains. There was a shortage of trade finance. Mr. Lande presented the relative rate of growth in 2009. He suggests that there is a new power balance with growth in developing countries by 5.6% vs. 0.8% in developed countries. China has emerged as the leader of world recovery. African countries also escaped the worse effects. Economic reforms in African countries enabled absorbing shocks better. Countries that relied on manufactured goods were hit by reduced exports.

Countries were able to avoid many potential negative effects of the financial meltdown because of coordination and good practices, according to Mr. Lande. He speculated on what this means to the United States, Africa and Latin America. He warned that the Greek crisis and the heated growth in China could have future negative ramifications.

Mr. Lande spoke about the has the duty free/quota free treatment from least developing countries. There has been some reaction to this from developed country textile industries. He disagrees with the notion of "least developing countries" because it was never meant for trade. He advocates that duty free/quota free should apply to all countries in Africa, yet 13 of them are not considered least developed countries.

Stephen Lande is viewed by many to be the "Father” of both the US Generalized System of Preferences (GSP) and the Caribbean Basin Initiative (CBI), and an early force in creating the North American Free Trade Agreement (NAFTA) is a distinguished international trade expert in the United States. Mr. Lande is Adjunct Professor at Georgetown University School of Foreign Service, and has lectured widely in Africa, Latin America, Europe, and Asia.

Stephen lande financial crisis and trade - final

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Jim Ebbitt, President of ICGFM, Opens the 24th Annual Conference in Miami

James Ebbitt, President of the International Consortium on Governmental Financial Management (ICGFM) opened the 24th Annual International Conference in Miami USA. The theme of the conference is "Public Financial Management in the Era of the New Normal." Mr. Ebbitt of Mosley and Associates, said that the greatest benefit of the conference is networking - to share good practices across countries. He emphasized the ICGFM mission of improved global financial management.

Mr. Ebbitt suggested that government budgets are under siege. "The new normal is frightening". He called on financial managers in government around the world to improve fiscal discipline. He believes that the answers that government professionals are looking for may be in the room today. Mr. Ebbitt said that the "new normal" of the post-financial crisis world requires increased transparency and accountability in government.

Mr. Ebbitt is formerly the Acting Inspector General for the U.S. Agency for International Development (USAID) and has worked extensively with Supreme Audit Institutions in foreign countries.

Public Financial Management in the Era of "The New Normal"

24th. Annual International Consortium on Governmental Financial Management (ICGFM) Conference Announced


Jim Ebbitt, President of ICGFM, provided an overview of the upcoming Annual Conference, during his closing remarks at the Winter Conference Inter-American Development Bank.

Mr. Ebbitt, of Mosley and Associates, introduced the theme of the 24th. ICGFM Conference, to be held from May 16 to 21 in Miami Florida, as the "New Normal" of Public Financial Management (PFM):

• More erratic revenue flows for mineral-based economies
• Unprecedented debt loads in era of stimulus programs
• Increasing competition in the global economy
• Unexpected currency fluctuations
• Increasing demand for transparency and good governance

The 2009 Annual Conference attracted public financial management professionals from more than 50 countries. This upcoming conference is an excellent venue for public servants to learn and share good practices.

Mr. Ebbitt also pointed out that the conference is an excellent opportunity for organizations to reach the global Public Financial Management market at a single event. Sponsorship opportunities are available.

2009 ICGFM Sponsorship Opportunities

Recovery and the Transparency Initiative

ICGFM Sustaining Members, Grant Thornton and the Association of Government Accountants have published a survey of Government CFOs in Canada and the United States.


Recovery and the Transparency Imperative

The survey uncovered eight principles of financial transparency and six levels of "recovery university". Participants ranked the importance of activities necessary to achieve unqualified audits. The survey recommends:

• Mind the basics of public financial management like budgeting and controls
• Invest carefully to optimize resources
• Improve financial reports
• Increase transparency

Government Budgeting in Times of Crisis

Three videos from the 23rd ICGFM Conference in Miami from Kevin Page are now available. Mr. Page, the Parliamentary Budget Officer in Canada, described the challenges in legislative oversight during the current international financial crisis.

Public Financial Management Key to Overcoming the Financial Crisis

ICGFM surveys delegates at conferences to determine the state of public financial management. The surveys at the 23rd Annual ICGFM Conference presented interesting evidence of a renewed focus on public financial management reform because of the financial crisis. PFM professionals from over 40 countries participated in the Miami conference. The largest contingent of delegates came from Africa.

Most of the participants are public servants from emerging countries. These participants believe that public financial management reform has become more critical because of the crisis. The surveys suggest that many countries are facing similar challenges and can learn from each other. Most use the ICGFM and other PFM conferences to learn and execute good practices (63%). The lack of political will was noted in numerous polls as the first or second most important barrier for reform. Nevertheless, the majority of delegates come from countries with formal PFM reform programs (68%).

Icgfm Conference Polls

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Important Role of Public Financial Management Reform in the Financial Crisis
ICGFM delegates believe that government financial experts have an important role in identifying financial issues (92%). The delegates believe that the G20 can do more to overcome the financial crisis (70%).

The majority of countries represented at the conference have formal PFM reform programs (68%). Increased transparency (30%), improved budget expenditure (26%) and improved accountability (24%) were cited as major factors encouraging reform.

The most important resources needed by countries for PFM reform include employee training (32%) and automated financial management systems (24%). When asked to determine the most important type of technical assistance required, the implementation of an Integrated Financial Management Information System received twice as many votes (33%) as the number two choice, from 10 choices.

PEFA assessments have been carried out in many of the countries represented at the conference. Most respondents (72%) believe that PEFA assessments can improve PFM reform.

International Changes Required
The emphasis should be on green growth (70%) according to the majority of delegates at the conference. Somewhat more than half believe that the IMF and World Bank need to undergo reform as well as countries (57%). Many believe that there should be an international regulator (56%), but most believe that national governments will be reluctant to allow this (70%).

Common Problems and Solutions
ICGFM delegates believe that the financial crisis will continue for two years or more (77%). Most indicated that their country faces similar challenges as the United States (72%). Most have a local banking crisis (59%) that is reducing domestic financing for infrastructure (68%). Most countries represented (60%) have developed a stimulus program.

Public Private Partnerships were discussed as a solution to find more financing (40%), although many (23%) thought that PPPs are created for political reasons.

Some countries are seeing a reduction in donor funds since the financial crisis (39%). Most agree that there is poor aid coordination (68%).

Country legislative branches require more budget expertise (60%) according to delegates.

Transparency and Accountability
Transparency and accountability issues were discussed. Most delegates believe that their government does not adequately communicate with the local media (67%). More believe that the local media does not adequately report local economic events (74%).

More than half of delegates say that governments do not effectively inform the public about public spending (55%). This lack of effectiveness is attributed, most often, to a lack of political will (62%). Yet, transparency and accountability represents 2 of the 3 leading motivators for PFM reform, according to delegates.

Finance and Technology for More Effective Systems

Christine Walker, the CFO of the Canadian International Development Agency (CIDA) discussed the impact of the government stimulus package and the use of technology during a keynote at the 23rd Annual ICGFM Conference.

The stimulus package requires identifying risks. Based on these risk, internal controls need to be established. Effective reporting is essential. This need effective IT systems. Systems in use by the Canadian government were not designed to handle quarterly reporting, according to Ms. Walker.

Finance and Technology for More Effective Systems

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The budget bill that passed in January. Each department to receive the money needed to design systems and programs to achieve parliamentary approval. All submissions were accumulated to a single bill that was passed in Parliament, which has never been done in Canada before.

The challenge for government departments is the complex procurement process for all purchases over $25,000. This process is designed to protect the government. Ms. Walker suggested that it was very difficult to quickly manage stimulus procurement. Hiring people to help was very difficult and the government found that they had capacity problems. Vendors are able to appeal to the Canadian International Trade Tribunal should there be any mistake in the procurement process. This can delay procurements by over a year.

Ms. Walker identified numerous risks of delay such as complex environmental assessments and just-in-time project reporting. She indicated that the monitoring and reporting burden became significant. Timely and accurate information is required. The government needed to asses a certain level of risk. CIDA has created a vendor assessment and audit process to help pre-select a short list of vendors.

Parliament wants to know non-financial information. They want to know progress to date against the project plan. Governments are not used to reporting on financial and non-financial at the same time. It is imperative to use IT systems to compare projects according to Ms. Walker. Parliamentarians will demand why projects have not been completed in their ridings. She believes that the political environment will be very challenging. No one wants to be a CFO in the Government of Canada, according to Ms. Walker. IT systems are critical to support effective financial management for the stimulus package.

PFM Reform in a Crisis

Kevin Page, Parliamentary Budget Officer of the Parliament of Canada believes that the financial crisis can motivate public financial management reform.

Government Budgeting in Uncertain Times

Kevin Page, Parliamentary Budget Officer, Parliament of Canada discussed budgeting in highly uncertain times at the 23rd Annual ICGFM Conference. Kevin Page, Parliamentary Budget Officer, Parliament of Canada discussed budgeting in highly uncertain times at the 23rd Annual ICGFM Conference. Parliamentarians in Canada are somewhat upset because of the unanticipated large surpluses. Canada has also had some high profile cost overruns.

Mr. Page described some of the challenges in the Parliamentary Budget Office. They do not have access to the same information as the executive. And, in the case of a minority government, there tends to be more political partisanship.

Icgfm Budgeting In Times Of Crisis A Canadian Perspective

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El Proceso Presupuestario en Tiempos de Gran Incertidumbre La Perspectiva del Oficial del Presupuesto

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The Canadian economy has weakened quickly according to Mr. Page. This includes job losses and reductions in consumer and business confidence. He described his office's analysis of stimulus. There was significant debate about whether Canada needed stimulus or whether any stimulus would be affected. Canada selected a stimulus of 2.5% of GDP. Mr. Page pointed out that many believe that Canada can do more because of a good debt to GDP ratio compared to Canadian trading partners.

The analysis by the Budget Office found that stimulus program will increase deficits significantly. The office believes that the Department of Finance estimates for revenue are overly optimistic. The Office also found that the net effect of the stimulus could be much lower because of reductions in taxes and the expectation that provinces and municipalities will match certain program. The opposition parties in Canada have been using these figures.

Is the Canadian stimulus package targeted and temporary? Mr. Page found that the stimulus package was very much targeted. However, not a lot of the package was oriented to low income people. The Office analyzed the Infrastructure Canada department where 1/3 of planned grants have not been disbursed.

The Office found that the stimulus package is temporary and meets the Government objectives. Mr. Page warned that these measures could become more permanent. Revenue can become constrained through structural deficits. The budget did not address how objectives for the reduction of debt to GDP ratios will be affected.

Mr. Page complimented the government in providing an excellent quarterly report on the stimulus. The Budget Office is tracking Canadian GDP. The government expectation for an increase in GDP has proven incorrect for the first quarter of 2009.

The crisis can enable governments to have more effective planning and targets. The Canadian government has not identified the medium term targets.

Lessons learned in Canada because of the crisis includes:

• Need for improved transparency and financial reporting. This includes culture change.


• Opportunity for increased scrutiny and accessibility to economic analysis


• Manage for long-term results and effects like the aging population and the affects of climate change

Iraq, Budgeting and the Financial Crisis

Officials from the Government of Iraq presented a paper at the 23rd Annual ICGFM Conference discussing the drain from the budget, the affect of oil prices and improving financial management.

Managing the Drain on the Budget - Arabic

Publish at Scribd or explore others: Business & Economics Research iraq budget management

Managing the Drain on the Budget

Publish at Scribd or explore others: Business & Economics Research iraq budget management

Gestion du drainage du Budget

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Controlando las pérdidas del presupuesto

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ICGFM Conference, a Good Forum for Solutions for the Financial Crisis

ICGFM President, Jim Ebbitt, talks about knowledge transfer among conference participants. Solutions for the financial crisis are coming from members in over 40 countries.

Good Government Financial Management Helps Countries During Financial Crisis.

Behxhet Brajshori from the Government of Kosovo described the establishment of public financial management in Kosovo. The financial management system in Kosovo is modern and integrated throughout the country.

Mr. Brajshori described many of the challenges in Kosovo including a majority of population under 30 and high unemployment. Remittances to Kosovo is expected to reduce because of the global crisis.

Country Responses to the Financial Crisis Kosovo

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Réponse des Pays à la Crise Financière Kosovo

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The Government of Kosovo has changed new tax rates in response to the financial crisis. Income and business taxes have been reduced. VAT and tobacco excise taxes have been increased.

Despite the difficulties in the international financial market, the Kosovo financial system continues normal operations. The banking sector which represents the largest share of the financial market in Kosovo is characterized with a significant growth in terms of financial intermediation. Deposits and loans in banks in Kosovo have increased since 2005. The financial sector in Kosovo continues to grow, increasing its contribution to the economic development as well as the range and quality of products offered to clients.

Mr. Brajshori described the recent PEFA assessment and comparing 2009 with 2007. "A", "B" and "B+" indicators have improved. 12 indicators have improved. He concluded that Kosovo has improved government financial management.

The recent financial crisis in the international financial market is having an impact in the real sector in economies more exposed to the crisis. Mr. Brajshori says that the Kosovo economy is an open economy and may absorb some impacts of the potential recession in the region and EU.
A very important instrument for stimulating the consumption and investments in Kosovo is prudent fiscal expansion, according to Mr. Brajshori.

Measures taken by the Government of Kosovo because of the financial crisis includes:

• Budget reserve increase -200.mill euro for 2009.


• Fiscal policies reform (cut in personal income tax ,profit tax rates etc.)


• Strengthening transparency and accountability in using the public revenues.


• Enhancing sound regulations,


• Promoting integrity in financial market.


• Strengthening the regional cooperation and development of trade market.


• Through privatization, increasing the investments especially FDI (Foreign Direct Investment) and than consumption.


• Reduction of government expenditures.

Challenges remain for economic development, unemployment, investment growth and European integration.

The Media has Amplfied Confusion and Fear on the Financial Crisis

Rolf Rosenkranz, the Editor of the Development Executive Group, discussed how the international news media has covered the financial crisis. Mr. Rosenkranz keynote at the 23rd Annual ICGFM conference was titled “The Financial Crisis, Networks and Future of News.”

Mr. Rosenkranz pointed out the global reach of American media, particularly on-line. He pointed out that the media began to recognize the crisis in August of 2008. Rather than focus on the causes, the media focused on potential solutions - and not very well. In October, Iceland made more news than the Olympic games. The G20 conference in April 2009 was a milestone event where the media began covering the financial crisis on a global basis.

The Financial Crisis, Networks and Future of News

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La crisis financiera, las redes y el futuro de las noticias

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Crise Financière, Réseaux et Avenir des Nouvelle

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Much of the media presented the crisis as "gloom and doom." Mr. Rosenkranz favourite headline from the Netherlands was: "Withdraw cash from ATM machines while you can." These articles amplified confusion and fear. Journalists are not experts in financial information. The overload of negative news created desensitization.

Mr. Rosenkranz pointed out the changes in media:

• Concentration


• Privatization


• Less collective bargaining


• Reduction in pay


• Shift in generation


• More contractors

Mr. Rosenkranz suggests that these changes have created self-censureship, reduced investigative reporting and opportunities for corruption. Information is not the same as news. As media is not the same as the press. He asks whether the press should be a "lap dog" or a "watchdog".

Who is winning the news war? Americans who use the Internet consume more international news than newspapers. And, the US media is reducing investments in overseas news. He quoted Nick Davies, the author of “Flat Earth News about Journalism's cardinal sins:

• Publish easy-to-gather stories


• Select safe facts and ideas


• Provide “false balance”


• Give audiences what they want

The use of news aggregators like Yahoo and Google could spell the end of the traditional news media. Internet users are heading to these sites instead of the local press.

Social media is a major change by turning readers into publishers and creating interactions. Mr. Rosenkranz showed statistics indicating significant use of social media in Asia. Credibility remains a problem with traditional and social media. He believes that specialized network like PEMPAL and Devex provides this credibility.

Mr. Rosenkranz introduced the objectives of the Devex news and social networking sites.

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What is Green Sustainable Financial Management?

Robert Vos of the United Nations explains the need to think sustainability in maintaining financial security.

How has the Financial Crisis Changed the PPP Market

Filip Drapak of the World Bank says that there have always been financial crisis. The current crisis is wider reaching than those in the past. Mr. Drapak spoke about the impact on infrastructure project public private partnerships with the financial crisis at the ICGFM Spring Conference.

How the Financial Crisis has Changed the Market for Public Private Partnerships (PPPs)

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Cómo la crisis financiera ha alterado el mercado para asociaciones entre los sectores público y privado (PPPs)

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Comment la Crise Financière a-t-elle Changé le Marché pour les Partenariats Secteur Public/Privé (PPP)

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Infrastructure programs provide significant investment opportunities even in the financial crisis. Mr. Drapak suggests that PPP economics have changed. In particular, emerging countries are seeing a lack of funding on both the equity and debt side. There is a general lack of interest of investors and operators in PPP for infrastructure projects.

Before the financial crisis most experts did not make provisions for economic cycles. Equity bubbles are present every 13 years and last 2 1/2 years on average. Housing bubbles have larger impacts.

New debt calculations and risk management concerns can mean that many cost-benefit analysis do not show a positive value for money. Equity financing has increased as an overall percentage, creating high costs. Governments need to look at broader factors in order to better evaluate PPP projects.

The rule had been that larger projects were more attractive to the private sector. Risk and equity factors mean that projects need to be of a more modest size to gain financing.

The government of the United Kingdom has created a method to improve PPP projects called DFC (Direct Funding Competition). The French Institute for PPP is advocating flexible financing rates.

Mr. Drapak concludes that PPP economics are only temporarily jeopardized by the financial crises. He recommends that PPP is not solution in time of financial crises, and should not be leveraged to stimulate the economy.