Cash Reporting in Developing Countries: The Case of Nepalese Central Government

Pawan Adhikari and Frode Mellemvik argue that developing countries have few alternatives other than to accept the rules and standards developed and prescribed by international standard setters, so as to ensure external legitimacy and financial support. Their paper explores Nepal’s move towards the implementation of International Public Sector Accounting Standards (IPSAS). This study shows an interesting case of how public sector accounting in developing countries is being influenced by international organizations, particularly the World Bank and professional accounting institutions. However, it is not clear from this study that such an approach is ensuring that public financial management reforms are focussed on the key areas in Nepal.

Abstract
International organizations such as the International Accounting Standards Board (IASB), the International Federation of Accountants (IFAC), and the International Organization of Supreme Audit Institutions (INTOSAI) have in recent years acquired accounting expertise by gaining the power to command agendas and standards. The impact of these organizations in the accounting world seems greater and more influential in developing countries. Developing countries are left with few alternatives other than to accept the rules and standards developed
and prescribed by these organizations, so as to ensure external legitimacy and financial support. In the context of developing countries, the implementation of accounting standards is seen as imperative in order to avert the possible financial and economical crisis. This paper aims to explore Nepal’s move towards IPSASs, contributing to the literature concerning the role of international organizations in disseminating IPSASs in the developing world.
Adhikari, Mellemvik IPSASs in Developing Countries a Case of Nepalese Central Government

Sovereign Wealth Funds

The next paper, by Hany H. Makhlouf, provides a useful introduction and overview of sovereign wealth funds. These funds managed by 23 countries, mainly those with significant income from natural resources, for example, oil, have been of increasing interest in recent years and are expected to grow in the future if, as expected the price of crude oil triples in price over the next 20 years. However, the global economic meltdown had a major impact on their success and led many to a re-think of their strategic approach.

Sovereign Wealth Funds

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

Public Procurement during Financial Crisis

Pamela Bigart from the World Bank is passionate about public procurement. Ms. Bigart described the trends of public procurement during the financial crisis at the 23rd Annual ICGFM Conference.


Ms. Bigart stated that public procurement represents 10% to 15% of GDP in many countries. Procurement can range as high as 70% of government budgets. She indicated that governments are trying to invest more in infrastructure and to stretch budgets to do more with the current financial crisis. Making procurement more efficient translates to obtaining more value for money.

Friday 915 Public Procurement Reforms Bigart

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Ms. Bigart indicated that most public procurement systems focus on rule compliance. She noted that the purpose of procurement is to achieve a net service delivery.

Ms. Bigat described how public procurement increases business confidence and acts as a vehicle for foreign investment. These companies often partner with local companies to help build capacity. However, many countries are developing trade restrictions. She noted that the United States has been using a "buy American" program. Some countries are not following trade agreements. Although trade preferences sounds like a good idea, it is not sustainable in the long term. Companies that have an advantage within a country are often unable to compete globally.

Ms. Bigart described the difficulties in calculating value for money. The World Bank has had difficulty finding appropriate measurements. Most public procurement tends to focus on the initial cost and whether the cost is competitive.

Procurement officers are often viewed as clerical staff who insist on running to the rules. This can often result in delays to important and critical services. Emergency situations mean that organizations like the World Bank needs to lend more quickly and be much more flexible in rules in order to achieve service results.

Many systems are focusing less on the input side such paying for goods, works or services, to a focus on the service delivery side, according to Ms. Bigart. Focusing on results often brings in the community to determine the quality of service delivery.

Ms. Bigart says that the private sector capacity needs to be built in order to support public procurement. Many countries have transitioned from a command to a market economy. In these economies there was no notion of procurement, only public investment. Governments can help the private sector to develop. She emphasized that competition creates efficiencies and enables companies to complete globally.

Ms. Bigart described how Public Private Partnerships (PPPs) can enable building private sector capacity. She believes that this reduces the burden on the government to raise money. Many countries do not have an appropriate legal structure to handle PPPs.

A fair, open, and transparent public procurement environment is required to achieve competitive proposals, according to Ms. Bigart. Good governance encourages more companies to bid on public tenders. She advocates publishing procurement information and procurement rules as a quick win. This information should be user friendly.

Many countries are opening up their budget information that helps the private sector to understand future procurement opportunities, according to Ms. Bigart. It is a good and early source of information for the private sector.

Ms. Bigart says that investments in procurement technology such as publishing tenders has resulted in better service delivery, even in countries under stress. Data collected with procurement technology can provide analytical insight to improve procurement processes. Management and automated controls assist in providing sound and efficient systems. She advocates the integration of procurement and government financial management technology. Controls enable governments to manage to the budget and be able to pay vendors on a timely basis.

Lessons learned from public procurement include:

• Procurement is linked as part of Public Financial Management reform
• Procurement reform costs money and takes time
• Some reforms can deliver results in the short term
  Reform cannot be effective if isolated from broader public sector management and financial management reform
• Reforms require long term commitment to achieve sustainable results
  

Ms. Bigart described "pork barrel politics", earmarks and "road to nowhere" as examples of politicians resisting procurement reform in the United States. She completed her discussion about how procurement has improved in countries under stress like Liberia and Sierra Leone. Public procurement systems can contribute to recovering faster from the global economic crisis.

Benefits of ICGFM Sustaining Membership

Consulting and software companies are expanding into emerging markets. Companies with public sector products and services expertise enjoy the benefits of ICGFM - access to public financial management leaders from around the world.

ICGFM Sustaining Membership

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