Showing posts with label governance. Show all posts
Showing posts with label governance. Show all posts
Wednesday, September 10, 2014
Friday, December 13, 2013
Tuesday, December 7, 2010
Cooperation on Audit Standards, Internal Auditors and Supreme Audit Insitutions
Beryl Davis, Director, Standards and Guidance, Institute of Internal Auditors and Bonnie Derby, Senior Auditor of the GAO discussed cooperation on audit standards between internal auditors and supreme audit institutions at the ICGFM Winter Conference. The presentation described INTOSAI GOV 9150 Coordination and Cooperation between SAIs and Internal Auditors in the Public Sector paper.
Ms. Derby introduced the four cornerstones of good governance: public officials; the governing body; internal auditors; and external auditors (SAIs). She concluded that the relationship between internal auditors and SAIs is both critical and beneficial to good governance and the effective use of public resources.
Ms. Derby introduced the four cornerstones of good governance: public officials; the governing body; internal auditors; and external auditors (SAIs). She concluded that the relationship between internal auditors and SAIs is both critical and beneficial to good governance and the effective use of public resources.
Ms. Derby described the evolution of audit standards, and the roles and responsibilities for internal audit and supreme audit institutions.
According to INTOSAI GOV 9100 (Guidelines for Internal Control Standards for the Public Sector), internal auditors examine and contribute to the ongoing effectiveness and efficiency of the internal control structure through their evaluations and recommendations and therefore play a significant role in effective internal control. Management often establishes an internal audit function as part of its internal control framework. In this tradition, the role of internal auditors is a critical part of an organization's internal control structure.
Ms. Derby introduced the benefits of coordination including:
- Strengthen mutual accountability
- Improved risk management
- More efficient audits
Risks of cooperation on audit standards include:
- Compromise on confidentiality
- Possible conflict of interest
- Use of different professional standards
Ms. Davis advocates the convergence of audit standards. She described the coordination and cooperation on these standards including:
- Communication of audit planning and audit strategy
- Collaborating on certain audit procedures, such as collecting audit evidence or testing data
- Communication of audit reports to each other
Ms. Davis suggested that internal and external auditors could use certain aspects of each other’s work to determine the nature, timing, and extent of audit procedures to be performed. She surveyed the audience to determine that there was not significant coordination between internal and external audit in most countries:
- 24% use each others work, 69% do not
- 18% share training programs 64% do not
- 34% share reports , 52% do not
- 37% work together on strategy, 41% do not
Ms. Davis advocated cooperation between internal and external audit throughout the entire audit lifecycle. She emphasized that assessment and communication should be documented in respective audit documents.
Derby davis coordination et coopération entre les sai et les auditeurs internes du secteur public
View more presentations from icgfmconference.
Derby davis coordination and cooperation between sa is and internal auditors in the public sector
View more presentations from icgfmconference.
Monday, December 6, 2010
Addressing Current Governance and Risk Management Challenges in Governmental and
Alan N. Siegfried, Auditor General of the Inter-American Development Bank presented "Addressing Current Governance and Risk Management Challenges in Governmental and
International Organizations" at the ICGFM Winter Conference. The IaDB has been a prime mover in public financial management reform in Latin America and the Caribbean. He described the changes in the organization to improve the performance of the organization.
On a lighter note, Mr. Siegfried described the wonders of risk management thanks to George Costanza from the Seinfeld television series.
Mr. Siegfried described the current global economic challenges that generate uncertainty and unpredictability including turmoil in financial markets, changing regulatory environment and budget restrictions. Mr. Siegfried believes that this uncertainty presents the internal audit profession with an opportunity to demonstrate leadership in risk management, control and governance. He cautioned that internal audit is crucial to improve the credibility of governance structures. He warned the attendees that internal audit is often seen as inflexible and non-responsive to emerging risk. And, many organizations have cut disproportionately in oversight because of reduced budgets.
Mr. Siegfried described the important role of internal audit to help management identify risks, design risk management strategies, and monitor the effectiveness of control. He pointed He described lessons learned. Mr. Siegfried emphasized the differences between risk management, control and governance. He recommended that organizations must take some risk, otherwise the organization become stagnant.
Mr. Siegfried suggested that organizations must balance risk and opportunity. Risk management is about risk mitigation, not about eliminating risk. He described governance structures and the principles for enterprise risk management. He recommended more holistic views on risk management. He pointed out that Standard & Poors is now using enterprise risk management as part of organizational valuation.
Mr. Siegfried presented an overview of risk management for international organizations. He suggested that risk management does not need to be a centralized function. Accountability is critical regardless of whether centralized or decentralized risk management models are used.
He showed the roles that internal audit should take, could take and should not take in risk management. He spoke about risk velocity where problems can happen very quickly, like the earthquake in Haiti.
There is a significant value proposition to internal audit. Internal audit needs to move from recognized to trusted to valued. Mr. Siegfried provided an overview of the risk management evaluation framework. He provided a list of financial, compliance, strategic and operational risks to consider.
Mr. Siegfried concluded by suggesting that risks facing organizations are unprecedented and stakeholders’ expectations continue to increase. He recommended that individual practitioners and organizations must ‘raise the bar’ to most effectively represent and advocate for strong governance and risk management. Organizations need to move from hindsight to insight to foresight.
International Organizations" at the ICGFM Winter Conference. The IaDB has been a prime mover in public financial management reform in Latin America and the Caribbean. He described the changes in the organization to improve the performance of the organization.
On a lighter note, Mr. Siegfried described the wonders of risk management thanks to George Costanza from the Seinfeld television series.
Mr. Siegfried described the current global economic challenges that generate uncertainty and unpredictability including turmoil in financial markets, changing regulatory environment and budget restrictions. Mr. Siegfried believes that this uncertainty presents the internal audit profession with an opportunity to demonstrate leadership in risk management, control and governance. He cautioned that internal audit is crucial to improve the credibility of governance structures. He warned the attendees that internal audit is often seen as inflexible and non-responsive to emerging risk. And, many organizations have cut disproportionately in oversight because of reduced budgets.
Mr. Siegfried described the important role of internal audit to help management identify risks, design risk management strategies, and monitor the effectiveness of control. He pointed He described lessons learned. Mr. Siegfried emphasized the differences between risk management, control and governance. He recommended that organizations must take some risk, otherwise the organization become stagnant.
Mr. Siegfried suggested that organizations must balance risk and opportunity. Risk management is about risk mitigation, not about eliminating risk. He described governance structures and the principles for enterprise risk management. He recommended more holistic views on risk management. He pointed out that Standard & Poors is now using enterprise risk management as part of organizational valuation.
Mr. Siegfried presented an overview of risk management for international organizations. He suggested that risk management does not need to be a centralized function. Accountability is critical regardless of whether centralized or decentralized risk management models are used.
He showed the roles that internal audit should take, could take and should not take in risk management. He spoke about risk velocity where problems can happen very quickly, like the earthquake in Haiti.
There is a significant value proposition to internal audit. Internal audit needs to move from recognized to trusted to valued. Mr. Siegfried provided an overview of the risk management evaluation framework. He provided a list of financial, compliance, strategic and operational risks to consider.
Mr. Siegfried concluded by suggesting that risks facing organizations are unprecedented and stakeholders’ expectations continue to increase. He recommended that individual practitioners and organizations must ‘raise the bar’ to most effectively represent and advocate for strong governance and risk management. Organizations need to move from hindsight to insight to foresight.
Siegfried addressing current governance and risk management challenges in governmental and international organizations
View more presentations from icgfmconference.
Siegfried relever les défis de la gouvernance et de la gestion de risques actuels dans les organisations gouvernementales et internationales
View more presentations from icgfmconference.
Friday, June 11, 2010
Recent Public Financial Management Publications and other Resources
In this section we review some recent publications which may be of interest to readers of the Journal. We would be pleased to receive reviews and suggestions of other resources which we should refer to in future issues.
Fiscal ROSCS and PEFA Assessments: A Comparison of Approaches
Mario Pessoa and Richard Allen (2010)
http://blog-pfm.imf.org/files/note.pdf
This note summarizes the main similarities and differences in approach and coverage of fiscal ROSCs and PEFA assessments. These are two approaches used by international bodies to assess the quality public financial management in governments, especially those in the Global South.
A fiscal ROSC differs from a PEFA assessment in focusing particularly on transparency and accountability aspects of PFM systems, grouped under four pillars:
A PEFA assessment focuses primarily on the extent to which PFM systems and procedures deliver efficient and effective outcomes in the six critical areas. It covers fiscal transparency issues insofar as they affect PFM effectiveness. The emphasis is on the budget process itself, particularly in respect of the main PEFA indicator set, although PEFA assessments also include some description of the legal framework for fiscal management, reforms being undertaken, and public access to key information. PEFA assessments have also focused predominantly on low- and middle-income countries, while fiscal ROSCs have also been carried out in a substantial number of high-income countries.
Achieving Better Value for Money in Health Care
OECD Publishing (November 2009)
http://www.oecdbookshop.org/oecd/display.asp?K=5KSF5CRSGQNS&LANG=EN
Rising public health care spending remains a problem in virtually all OECD and EU member countries. As a consequence, there is growing interest in policies that will ease this pressure through improved health system performance. This report examines selected policies that may help countries better achieve the goal of improved health system efficiency and thus better value for money. Drawing on multinational data sets and case studies, it examines a range policy instruments. These include: the role of competition in health markets; the scope for improving care coordination; better pharmaceutical pricing policies; greater quality control supported by stronger information and communication technology in health care; and increased cost sharing.
Strategic Financial Management
http://www.audit-commission.gov.uk/nationalstudies/localgov/Pages/strategic-financial-management.aspx
This national study from the UK Audit Commission builds on the work done for the World Class Financial Management, especially financial governance and leadership, financial planning, and finance for decision making. The study will review how councils develop and use strategic financial planning tools and will help them to improve strategic financial management and links to the planning of services and other interventions. It will examine the costs and benefits of strategic financial planning, determine which approaches, if any, offer most benefits and identify the key principles of effective strategic financial and risk management.
No evidence that Public Private Partnerships provide value, says National Audit Office (UK)
http://www.publicfinance.co.uk/news/2009/11/no-evidence-that-private-funding-schemes-provide-value-says-nao/
Public Private Partnerships (PPPs) have spread from the UK to many countries, but there is increasing evidence that they may not provide value for money and the alternatives are not adequately researched. UK Ministers do not have strong evidence to show that PPPs offer the best value for money, UK government auditors have warned.
In evidence prepared for a parliamentary inquiry in November 2009, the National Audit Office warned: ‘Our view is that private finance can deliver benefits, but it is not suitable at any price or in every circumstance.’ The NAO paper noted that ‘assessing the pros and cons of alternative procurement routes is especially important in the recession’. Rising costs of private finance since the credit crunch had ‘implications for their value for money’.
The paper added: ‘We have yet to come across truly robust and systematic evaluation of the use of private finance built into PPPs at either a project or programme level’ – evidence that committee chair Lord Vallance described as ‘quite unequivocal’.
Systems to collect comparable data from projects using different procurement routes were ‘not in place’, the paper said. ‘Unless such systems are established, together with robust evaluation of the overall whole-life costs of alternative forms of procurement, government cannot satisfy itself that private finance represents the best VFM option.’
In Nigeria the government has also seen PPPs as an important way of acquiring public investment, but again recently suffered a set-back. Plans to concession airports to private investors in a public private partnership appear to have been abandoned due to opposition from the trade unions.
Greater Aid Transparency: crucial for aid effectiveness, ODI Project Briefings 35, London: ODI
Samuel Moon and Tim Williamson (January 2010)
www.odi.org.uk/resources/details.asp?id=4673
This paper sets out and explores the link between donor aid and recipient country budgets, and the role greater transparency about aid can play in improving budget transparency, the quality of budgetary decisions, and accountability systems. The paper goes on to explore how current initiatives to improve aid transparency can best support better budgets and accountability in aid dependent countries. These efforts provide an important opportunity to enhance the effectiveness of both the recipient governments’ own spending and the aid they receive from donors.
It concludes that publishing better information on aid requires compatibility with recipients’ budgeting and planning systems. The research findings suggest that recipient budgets bear many similarities, but this is not reflected in current formats for reporting aid. Finally, it concludes that the poorest countries will lose out if donors do not publish aid information that is easy to link with recipient government budget systems.
Publishing What We Learned: An Assessment of the Publish What You Pay Coalition
Mabel van Oranje and Henry Parham (2009)
http://www.publishwhatyoupay.org/en/resources/publishing-what-we-learned
Publish What You Pay (PWYP) is a global civil society coalition that helps citizens of resource-rich developing countries hold their governments accountable for the management of revenues from the oil, gas and mining industries. Natural resource revenues are an important source of income for governments of over 50 developing countries. When properly managed these revenues should serve as a basis for poverty reduction, economic growth and development rather than exacerbating corruption, conflict and social divisiveness.
The PWYP coalition was founded in 2002 by a small, ad hoc group of London-based NGO representatives to tackle the ‘resource curse’ by campaigning for greater transparency and accountability in the management of revenues from the oil, gas and mining industries. Since then, the PWYP coalition has grown to become a global network comprised of community organisations, international NGOs and faith-based groups in more than 70 countries.
The report discusses the origins and evolution of PWYP from 2002 to 2007. It also assesses the effectiveness of PWYP’s advocacy and policy endeavours and examines how the Coalition has operated internationally. In this sense, the report is not only a narrative of PWYP’s history and accomplishments, but a practical tool to shine a light on the strengths and challenges which face a global civil society coalition.
Carbon Trading: How it works and why it fails
Oscar Reyes and Tamra Gilbertson (November 2009)
Dag Hammarskjöld Foundation
http://www.tni.org/carbon-trade-fails
Carbon trading lies at the centre of global climate policy and is projected to become one of the world’s largest commodities markets, yet it has a disastrous track record since its adoption as part of the Kyoto Protocol.
This book outlines the limitations of an approach to tackling climate change which redefines the problem to fit the assumptions of neoliberal economics. It demonstrates that the EU Emissions Trading Scheme, the world’s largest carbon market, has consistently failed to cap emissions, while the UN’s Clean Development Mechanism (CDM) routinely favours environmentally ineffective and socially unjust projects. This is illustrated with case studies of CDM projects in Brazil, Indonesia, India and Thailand.
The UN climate talks in Copenhagen discussed ways to expand the trading experiment, but the evidence suggests it should be abandoned. From subsidy shifting to regulation, there is a plethora of ways forward without carbon trading – but there are no short cuts around situated local knowledge and political organising if climate change is to be addressed in a just and fair manner.
This accessible, well-researched book provides a devastating critique of both the theory and practice of carbon trading.
Why Has Domestic Revenue Stagnated in Low-Income Countries? London: The Centre for Development Policy and Research, Development Viewpoint 41
Terry McKinley (2009)
http://www.soas.ac.uk/cdpr/publications/dv/file55026.pdf
"There has been miserably slow progress in increasing domestic revenue in low-income countries since the 1990s. In order to find out why, this publication draws on an extensive analysis of disaggregated revenue data for low-income countries in sub-Saharan Africa, South and Southeast Asia, and Central Asia.
Based on this analysis, it is contended that the reigning 'tax consensus' has placed an inordinate emphasis on boosting domestic indirect taxes, and the value added tax (VAT) in particular. These taxes cover domestic goods and services in the formal sector.
At the same time, the 'consensus' has advocated eliminating import taxes (in order to liberalise trade) and lowering tax rates on corporate profits (in order to compete with other rate-cutting countries).
Consequently, trade taxes have been particularly hard hit while increases in direct taxes, which cover mainly personal income and corporate profits, have generally been anaemic.
Overall revenue has ended up stagnating because of the resultant reliance on boosting revenue from only one major component, i.e., taxes on domestic goods and services. The pre-eminent instrument for this purpose has been the VAT, which has replaced sales taxes (as well as import duties) in many countries.
ActionAid on Tax
http://www.actionaid.org.uk/doc_lib/accounting_for_poverty.pdf
ActionAid UK has published a report, Accounting for Poverty, to underpin its tax campaign. The report draws together a wide range of sources, some familiar and some new, to make the case for tax justice and development.
One new contribution is ActionAid’s calculation that, if every developing country were able to achieve tax revenues equivalent to just 15% of national income (the OECD average is 37%, while Bangladesh raises just 8%) $198 billion per year of new money would be available to fight poverty in the poorest countries.
A Study on Gap Analysis of Indian Government Accounting with International Standards
Government Accounting Standards Advisory Board (November 2008)
http://www.gasab.gov.in/pdf/Gap_Analysis.pdf
The Cash Basis International Public Sector Accounting Standard (IPSAS) may be the international standards for public sector accounting, but it cannot claim to represent best practice as it appears that not a single country has implemented this standard since it was first issued in 2003.
The key problem appears to be the mandatory requirement to produce consolidated accounts which should include all controlled entities (including government companies, business enterprises and all parastatal organisations). Many countries have decided that this is not practically possible, is too onerous or would produce misleading information. This includes a number of governments who would otherwise like to have implemented the Cash IPSAS including India, Malaysia, Mongolia, Ghana, Uganda and Malta.
This publication reviews the experience of the Government of India in comparing its approach to financial reporting to that outlined in the Cash Basis International Public Sector Accounting Standard. India is attempting to adopt this standard, but it does not accept some of the Standard’s key requirements, for example, the consolidation of government business enterprises and the disclosure of third party payments.
On the first issue, the document actively argues against providing such a consolidation. “Though this is fundamental requirement of Cash IPSAS” it says, “it is likely to cause more distortion than bringing in clarity in the financial statements of government” (page 9).
It is hope that the current review of the Cash Basis IPSAS will result in the development of a more practical standard which most governments which are not experimenting with the accrual basis will be able to use. However, what is really needed is some extensive research to identify current best practices in public sector accounting and to codify this. We need to develop international standards, from the bottom up, based on existing good practice not on pre-conceived ideas borrowed from the private sector.
Gender Budgeting: Practical Implementation Handbook
Sheila Quinn (2009)
http://blog-pfm.imf.org/files/gender-budgeting-practical-implementation-handbook.pdf
The book’s focus is “to act as a guide to the practice of gender budgeting." It is, however, not really suited for those who have no prior knowledge of gender budgeting; there are many other publications which articulate the rationale for, the background of, and the history of gender budgeting, and a sample of these are listed toward the end of the handbook in the resources section. The handbook assumes an understanding of gender budgeting, of the objectives of a gender equality strategy, of the ways in which gender inequality manifests itself, of the need for structural change in order to tackle unintentional gender bias, and of the basics of gender mainstreaming as a strategy to address gender equality. Gender budgeting, as a tool of gender mainstreaming, cannot be implemented without a grasp of these fundamentals.
Gender budget pilot initiatives have over the years brought about a new and deeper understanding of gender issues. Adopting a gender budgeting strategy requires prior experience in addressing gender equality. The chapter, "How to do Gender Budgeting" starts by discussing the type of experience and conditions that need to be in place in order to engage with gender budgeting. The temptation in using this handbook might be to skip these sub-sections and move ahead to the text dealing with specific tools and approaches. There is a considerable demand for specific tools, for the ABC of what to do, so to speak. However, the fundamentals cannot be by-passed or short-circuited. This is particularly the case if the practice of gender budgeting is to move beyond an analytic exercise to a mainstreaming strategy. The experience of many practitioners is that, since the tools need to be adapted, it is most important to focus on developing an approach based on local circumstances. The actual tools of analysis, of reformulation, and of mainstreaming will emerge when the goal has been identified.
What are the real risks of adopting accrual accounting?
Many conference presentations, journal articles and books extol the virtues and benefits of the public sector adopting accrual accounting, but few provide any real evidence of the actual experience. Two audit reports from the Auditor General of the Cayman Islands provide a brutally frank and honest account of what can go wrong.
In July 2008, the Auditor General, Dan Duguay, issued a special report, “describing a very grim assessment of the state of financial accountability reporting throughout the Cayman Islands Government”. Ten years after the Cayman Islands agreed to adopt accrual accounting, the first accrual accounts were 2.5 years late and the Auditor General found the “current situation deplorable” and he believed that “the legislative assembly has lost control of the public purse”.
In the second report, issued in April 2010, the Auditor General concluded that, “the state of financial accountability reporting has gotten worse in the two years since I last reported on this matter”. Despite the Government spending an additional $1 million in the last fiscal year to address the problem, the Auditor General assessed these efforts as being, “too limited and therefore; insufficient to address the situation”. He concluded his second report by saying, “I believe this situation has become a national crisis that could lead to tremendous consequences for the Cayman Islands Government if not addressed immediately”.
The Cayman Islands are not a poor country, the per capita income is one of the highest in the world and, as it is a tax haven and financial services centre, there are many qualified accountants available locally. If the introduction of accrual accounting can go so horribly wrong in the Cayman Islands, imagine what could happen in the many developing countries where accrual accounting is still actively being promoted for the public sector.
The next time you hear a speaker listing the many benefits claimed for accrual accounting ask what the actual evidence is from the few countries which have adopted this approach. The objective and authoritative studies, from the UK for example, suggest that the costs are significant and that the actual benefits are minimal. Now we have reports from the Cayman Islands of the very real risks involved of adopting this approach to public sector accounting.
The first report of the Auditor General on the State of Financial Accountability Reporting (July 2008) in the Cayman Islands Government is available from http://tinyurl.com/accrualcayman1
The second report of the Auditor General of the Cayman Islands, issued in April 2010, is available from http://tinyurl.com/accrualcayman2
Recent Public Financial Management Publications and Other Resources
Fiscal ROSCS and PEFA Assessments: A Comparison of Approaches
Mario Pessoa and Richard Allen (2010)
http://blog-pfm.imf.org/files/note.pdf
This note summarizes the main similarities and differences in approach and coverage of fiscal ROSCs and PEFA assessments. These are two approaches used by international bodies to assess the quality public financial management in governments, especially those in the Global South.
A fiscal ROSC differs from a PEFA assessment in focusing particularly on transparency and accountability aspects of PFM systems, grouped under four pillars:
- clarity of roles and responsibilities for PFM within government;
- open budget processes, covering all PFM-related processes of government;
- public availability of information, specifying the kinds of PFM information that should be accessible to the public; and
- finally, assurances of integrity, covering issues of data quality as well as the need for and quality of external scrutiny of PFM information.
A PEFA assessment focuses primarily on the extent to which PFM systems and procedures deliver efficient and effective outcomes in the six critical areas. It covers fiscal transparency issues insofar as they affect PFM effectiveness. The emphasis is on the budget process itself, particularly in respect of the main PEFA indicator set, although PEFA assessments also include some description of the legal framework for fiscal management, reforms being undertaken, and public access to key information. PEFA assessments have also focused predominantly on low- and middle-income countries, while fiscal ROSCs have also been carried out in a substantial number of high-income countries.
Achieving Better Value for Money in Health Care
OECD Publishing (November 2009)
http://www.oecdbookshop.org/oecd/display.asp?K=5KSF5CRSGQNS&LANG=EN
Rising public health care spending remains a problem in virtually all OECD and EU member countries. As a consequence, there is growing interest in policies that will ease this pressure through improved health system performance. This report examines selected policies that may help countries better achieve the goal of improved health system efficiency and thus better value for money. Drawing on multinational data sets and case studies, it examines a range policy instruments. These include: the role of competition in health markets; the scope for improving care coordination; better pharmaceutical pricing policies; greater quality control supported by stronger information and communication technology in health care; and increased cost sharing.
Strategic Financial Management
http://www.audit-commission.gov.uk/nationalstudies/localgov/Pages/strategic-financial-management.aspx
This national study from the UK Audit Commission builds on the work done for the World Class Financial Management, especially financial governance and leadership, financial planning, and finance for decision making. The study will review how councils develop and use strategic financial planning tools and will help them to improve strategic financial management and links to the planning of services and other interventions. It will examine the costs and benefits of strategic financial planning, determine which approaches, if any, offer most benefits and identify the key principles of effective strategic financial and risk management.
No evidence that Public Private Partnerships provide value, says National Audit Office (UK)
http://www.publicfinance.co.uk/news/2009/11/no-evidence-that-private-funding-schemes-provide-value-says-nao/
Public Private Partnerships (PPPs) have spread from the UK to many countries, but there is increasing evidence that they may not provide value for money and the alternatives are not adequately researched. UK Ministers do not have strong evidence to show that PPPs offer the best value for money, UK government auditors have warned.
In evidence prepared for a parliamentary inquiry in November 2009, the National Audit Office warned: ‘Our view is that private finance can deliver benefits, but it is not suitable at any price or in every circumstance.’ The NAO paper noted that ‘assessing the pros and cons of alternative procurement routes is especially important in the recession’. Rising costs of private finance since the credit crunch had ‘implications for their value for money’.
The paper added: ‘We have yet to come across truly robust and systematic evaluation of the use of private finance built into PPPs at either a project or programme level’ – evidence that committee chair Lord Vallance described as ‘quite unequivocal’.
Systems to collect comparable data from projects using different procurement routes were ‘not in place’, the paper said. ‘Unless such systems are established, together with robust evaluation of the overall whole-life costs of alternative forms of procurement, government cannot satisfy itself that private finance represents the best VFM option.’
In Nigeria the government has also seen PPPs as an important way of acquiring public investment, but again recently suffered a set-back. Plans to concession airports to private investors in a public private partnership appear to have been abandoned due to opposition from the trade unions.
Greater Aid Transparency: crucial for aid effectiveness, ODI Project Briefings 35, London: ODI
Samuel Moon and Tim Williamson (January 2010)
www.odi.org.uk/resources/details.asp?id=4673
This paper sets out and explores the link between donor aid and recipient country budgets, and the role greater transparency about aid can play in improving budget transparency, the quality of budgetary decisions, and accountability systems. The paper goes on to explore how current initiatives to improve aid transparency can best support better budgets and accountability in aid dependent countries. These efforts provide an important opportunity to enhance the effectiveness of both the recipient governments’ own spending and the aid they receive from donors.
It concludes that publishing better information on aid requires compatibility with recipients’ budgeting and planning systems. The research findings suggest that recipient budgets bear many similarities, but this is not reflected in current formats for reporting aid. Finally, it concludes that the poorest countries will lose out if donors do not publish aid information that is easy to link with recipient government budget systems.
Publishing What We Learned: An Assessment of the Publish What You Pay Coalition
Mabel van Oranje and Henry Parham (2009)
http://www.publishwhatyoupay.org/en/resources/publishing-what-we-learned
Publish What You Pay (PWYP) is a global civil society coalition that helps citizens of resource-rich developing countries hold their governments accountable for the management of revenues from the oil, gas and mining industries. Natural resource revenues are an important source of income for governments of over 50 developing countries. When properly managed these revenues should serve as a basis for poverty reduction, economic growth and development rather than exacerbating corruption, conflict and social divisiveness.
The PWYP coalition was founded in 2002 by a small, ad hoc group of London-based NGO representatives to tackle the ‘resource curse’ by campaigning for greater transparency and accountability in the management of revenues from the oil, gas and mining industries. Since then, the PWYP coalition has grown to become a global network comprised of community organisations, international NGOs and faith-based groups in more than 70 countries.
The report discusses the origins and evolution of PWYP from 2002 to 2007. It also assesses the effectiveness of PWYP’s advocacy and policy endeavours and examines how the Coalition has operated internationally. In this sense, the report is not only a narrative of PWYP’s history and accomplishments, but a practical tool to shine a light on the strengths and challenges which face a global civil society coalition.
Carbon Trading: How it works and why it fails
Oscar Reyes and Tamra Gilbertson (November 2009)
Dag Hammarskjöld Foundation
http://www.tni.org/carbon-trade-fails
Carbon trading lies at the centre of global climate policy and is projected to become one of the world’s largest commodities markets, yet it has a disastrous track record since its adoption as part of the Kyoto Protocol.
This book outlines the limitations of an approach to tackling climate change which redefines the problem to fit the assumptions of neoliberal economics. It demonstrates that the EU Emissions Trading Scheme, the world’s largest carbon market, has consistently failed to cap emissions, while the UN’s Clean Development Mechanism (CDM) routinely favours environmentally ineffective and socially unjust projects. This is illustrated with case studies of CDM projects in Brazil, Indonesia, India and Thailand.
The UN climate talks in Copenhagen discussed ways to expand the trading experiment, but the evidence suggests it should be abandoned. From subsidy shifting to regulation, there is a plethora of ways forward without carbon trading – but there are no short cuts around situated local knowledge and political organising if climate change is to be addressed in a just and fair manner.
This accessible, well-researched book provides a devastating critique of both the theory and practice of carbon trading.
Why Has Domestic Revenue Stagnated in Low-Income Countries? London: The Centre for Development Policy and Research, Development Viewpoint 41
Terry McKinley (2009)
http://www.soas.ac.uk/cdpr/publications/dv/file55026.pdf
"There has been miserably slow progress in increasing domestic revenue in low-income countries since the 1990s. In order to find out why, this publication draws on an extensive analysis of disaggregated revenue data for low-income countries in sub-Saharan Africa, South and Southeast Asia, and Central Asia.
Based on this analysis, it is contended that the reigning 'tax consensus' has placed an inordinate emphasis on boosting domestic indirect taxes, and the value added tax (VAT) in particular. These taxes cover domestic goods and services in the formal sector.
At the same time, the 'consensus' has advocated eliminating import taxes (in order to liberalise trade) and lowering tax rates on corporate profits (in order to compete with other rate-cutting countries).
Consequently, trade taxes have been particularly hard hit while increases in direct taxes, which cover mainly personal income and corporate profits, have generally been anaemic.
Overall revenue has ended up stagnating because of the resultant reliance on boosting revenue from only one major component, i.e., taxes on domestic goods and services. The pre-eminent instrument for this purpose has been the VAT, which has replaced sales taxes (as well as import duties) in many countries.
ActionAid on Tax
http://www.actionaid.org.uk/doc_lib/accounting_for_poverty.pdf
ActionAid UK has published a report, Accounting for Poverty, to underpin its tax campaign. The report draws together a wide range of sources, some familiar and some new, to make the case for tax justice and development.
One new contribution is ActionAid’s calculation that, if every developing country were able to achieve tax revenues equivalent to just 15% of national income (the OECD average is 37%, while Bangladesh raises just 8%) $198 billion per year of new money would be available to fight poverty in the poorest countries.
A Study on Gap Analysis of Indian Government Accounting with International Standards
Government Accounting Standards Advisory Board (November 2008)
http://www.gasab.gov.in/pdf/Gap_Analysis.pdf
The Cash Basis International Public Sector Accounting Standard (IPSAS) may be the international standards for public sector accounting, but it cannot claim to represent best practice as it appears that not a single country has implemented this standard since it was first issued in 2003.
The key problem appears to be the mandatory requirement to produce consolidated accounts which should include all controlled entities (including government companies, business enterprises and all parastatal organisations). Many countries have decided that this is not practically possible, is too onerous or would produce misleading information. This includes a number of governments who would otherwise like to have implemented the Cash IPSAS including India, Malaysia, Mongolia, Ghana, Uganda and Malta.
This publication reviews the experience of the Government of India in comparing its approach to financial reporting to that outlined in the Cash Basis International Public Sector Accounting Standard. India is attempting to adopt this standard, but it does not accept some of the Standard’s key requirements, for example, the consolidation of government business enterprises and the disclosure of third party payments.
On the first issue, the document actively argues against providing such a consolidation. “Though this is fundamental requirement of Cash IPSAS” it says, “it is likely to cause more distortion than bringing in clarity in the financial statements of government” (page 9).
It is hope that the current review of the Cash Basis IPSAS will result in the development of a more practical standard which most governments which are not experimenting with the accrual basis will be able to use. However, what is really needed is some extensive research to identify current best practices in public sector accounting and to codify this. We need to develop international standards, from the bottom up, based on existing good practice not on pre-conceived ideas borrowed from the private sector.
Gender Budgeting: Practical Implementation Handbook
Sheila Quinn (2009)
http://blog-pfm.imf.org/files/gender-budgeting-practical-implementation-handbook.pdf
The book’s focus is “to act as a guide to the practice of gender budgeting." It is, however, not really suited for those who have no prior knowledge of gender budgeting; there are many other publications which articulate the rationale for, the background of, and the history of gender budgeting, and a sample of these are listed toward the end of the handbook in the resources section. The handbook assumes an understanding of gender budgeting, of the objectives of a gender equality strategy, of the ways in which gender inequality manifests itself, of the need for structural change in order to tackle unintentional gender bias, and of the basics of gender mainstreaming as a strategy to address gender equality. Gender budgeting, as a tool of gender mainstreaming, cannot be implemented without a grasp of these fundamentals.
Gender budget pilot initiatives have over the years brought about a new and deeper understanding of gender issues. Adopting a gender budgeting strategy requires prior experience in addressing gender equality. The chapter, "How to do Gender Budgeting" starts by discussing the type of experience and conditions that need to be in place in order to engage with gender budgeting. The temptation in using this handbook might be to skip these sub-sections and move ahead to the text dealing with specific tools and approaches. There is a considerable demand for specific tools, for the ABC of what to do, so to speak. However, the fundamentals cannot be by-passed or short-circuited. This is particularly the case if the practice of gender budgeting is to move beyond an analytic exercise to a mainstreaming strategy. The experience of many practitioners is that, since the tools need to be adapted, it is most important to focus on developing an approach based on local circumstances. The actual tools of analysis, of reformulation, and of mainstreaming will emerge when the goal has been identified.
What are the real risks of adopting accrual accounting?
Many conference presentations, journal articles and books extol the virtues and benefits of the public sector adopting accrual accounting, but few provide any real evidence of the actual experience. Two audit reports from the Auditor General of the Cayman Islands provide a brutally frank and honest account of what can go wrong.
In July 2008, the Auditor General, Dan Duguay, issued a special report, “describing a very grim assessment of the state of financial accountability reporting throughout the Cayman Islands Government”. Ten years after the Cayman Islands agreed to adopt accrual accounting, the first accrual accounts were 2.5 years late and the Auditor General found the “current situation deplorable” and he believed that “the legislative assembly has lost control of the public purse”.
In the second report, issued in April 2010, the Auditor General concluded that, “the state of financial accountability reporting has gotten worse in the two years since I last reported on this matter”. Despite the Government spending an additional $1 million in the last fiscal year to address the problem, the Auditor General assessed these efforts as being, “too limited and therefore; insufficient to address the situation”. He concluded his second report by saying, “I believe this situation has become a national crisis that could lead to tremendous consequences for the Cayman Islands Government if not addressed immediately”.
The Cayman Islands are not a poor country, the per capita income is one of the highest in the world and, as it is a tax haven and financial services centre, there are many qualified accountants available locally. If the introduction of accrual accounting can go so horribly wrong in the Cayman Islands, imagine what could happen in the many developing countries where accrual accounting is still actively being promoted for the public sector.
The next time you hear a speaker listing the many benefits claimed for accrual accounting ask what the actual evidence is from the few countries which have adopted this approach. The objective and authoritative studies, from the UK for example, suggest that the costs are significant and that the actual benefits are minimal. Now we have reports from the Cayman Islands of the very real risks involved of adopting this approach to public sector accounting.
The first report of the Auditor General on the State of Financial Accountability Reporting (July 2008) in the Cayman Islands Government is available from http://tinyurl.com/accrualcayman1
The second report of the Auditor General of the Cayman Islands, issued in April 2010, is available from http://tinyurl.com/accrualcayman2
Recent Public Financial Management Publications and Other Resources
Wednesday, May 20, 2009
Improved Governance in Haiti
Amos Durosier, the Directeur Général of Unité de Lutte contre la Corruption (ULCC) in Haiti, speaks about the improved governance in his country.
Does Donor Aid Reduce Transparency?
Vivek Ramkumar of the Open Budget Initiative suggests that donor aid does not necessarily reduce transparency. He responds to the assertion in the book "Dead Aid".
How will the Discovery of Oil in Uganda affect Governance?
Nandala Mafabi Nathan, Chairman, Public Accounts Committee, Parliament of Uganda and Tindamanyire Kabondo Gaudioso, Member of Parliament, Parliament of Uganda discussed the effects of the discovery of oil in Uganda on goverance.
Main Conference Ends Today - Workshops Begin Tomorrow
Participants to the 23rd Annual ICGFM Conference woke up with the sun this morning. The main headline in USA Today delivered to hotel rooms of the Marriott Biscayne bay,demonstrated the need for good goverance and knowledge sharing.
The press is often quick to point out allegations of corruption and mismanagement in emerging countries. The sensational headline "Corrupt Afghan officials hurt aid" implies that governance procedures such as parliamentary budget oversight is robust in developed countries. Yet, ICGFM members heard a different story from David M. Walker, the former Comptroller General of the United States on Monday. And, the openning keynote this morning by Kevin Page, the Parliamentary Budget Officer of the Parliament of Canada promises to be as enlightening
Tuesday, May 19, 2009
Helping Citizens Understand how Public Funds are Spent
Nandala Mafabi Nathan, Chairman, Public Accounts Committee, of the Parliament of Uganda discussed how to help citizens to understand how public funds are spent. Governments need to provide clear information on budget plans and account for its actions. Without this action citizens will not make governments accountable.
It is very difficult to provide information to citizens in developing countries because of the lack of Internet access. An independent and effective media is required to support accountable government.
Wednesday, May 13, 2009
Monday, April 6, 2009
An In-Depth Look at PFM Reform in Vietnam
Public Financial and Civil Service Reform in Vietnam: Great Strides Made
April 1, 2009
The April ICGFM DC Forum presented intriguing analysis of reform in the government of Vietnam. Guest speaker Dr. Clay Wescott, Director of the Asian-Pacific Governance Institute and Visiting Lecturer at the Woodrow Wilson School described "evidence based public administration reform".
Dr. Wescott and two graduate students completed a comprehensive on site study of the Government of Vietnam Financial, and Human Resource infrastructure. This was done through interviews contrasted with historical facts and statistics. The analysis suggests that the country has seen remarkable improvement in public sector reform as compared with neighbouring and competing countries.
April 1, 2009
The April ICGFM DC Forum presented intriguing analysis of reform in the government of Vietnam. Guest speaker Dr. Clay Wescott, Director of the Asian-Pacific Governance Institute and Visiting Lecturer at the Woodrow Wilson School described "evidence based public administration reform".
2009 04 01 Towards Evidence Based Public Administration Reform In Viet Nam
View more presentations from icgfmconference.
Dr. Wescott and two graduate students completed a comprehensive on site study of the Government of Vietnam Financial, and Human Resource infrastructure. This was done through interviews contrasted with historical facts and statistics. The analysis suggests that the country has seen remarkable improvement in public sector reform as compared with neighbouring and competing countries.
Vietnam has become leading competitor in the global market. The strategy for expedited growth began in 2001. This growth has been attributed to various factors especially the improvement in tax revenue implementation, expenditure reform and public financial management.
There are ample investment opportunities in Vietnam. The presenters cautioned that there is a lack of transparency and concerns about public agency corruption.
The team recommends improved training and transparency. Transparency can be improved through a more independent financial watchdog with strong powers.
There are ample investment opportunities in Vietnam. The presenters cautioned that there is a lack of transparency and concerns about public agency corruption.
2009 04 01 Implementation Of Civil Service Legislation In Vietnam
View more presentations from icgfmconference.
Civil service reform in Vietnam requires capacity building and retention. The growth in the private sector has provided more opportunities outside government. Improved capacity building will enable improvement in public financial management. Compensation strategies are needed to improve retention of talented civil servants.
The team recommends improved training and transparency. Transparency can be improved through a more independent financial watchdog with strong powers.
Saturday, March 28, 2009
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
View more presentations from icgfmconference.
Saturday, March 14, 2009
ICGFM Announces Student Membership Program
Many students want to make a difference in the world after graduating.
ICGFM is a forum of ideas, practical knowledge and opportunity. The International Consortium on Governmental Financial Management is pleased to extend learning opportunities to college and university students.
Icgfm Student Membership
View more presentations from icgfmconference.
Students can interact with expert practitioners from around the world. ICGFM conferences, publications, forums and social network include thought leaders from International Financial Institutions, governments, consulting and software firms. An opportunity to learn. An opportunity to tap into career aspirations.
Thursday, March 5, 2009
Public Financial Management Reform - A Literature Review Available
The African Development Bank, CIDA, DFID, Dutch Ministry of Foreign Affairs, SIDA have collaborated to publish "the first phase of what is intended to be multi-donor evaluation of PFM reform. The first phase – a literature review to synthesise the main theoretical approaches and findings from evaluations of PFM reform programmes, and to identify knowledge gaps – was led by DFID."
PFM Lit Review Final
PFM Lit Review Final
An In-Depth Look at PFM Reform in Vietnam
DC Forum
An In-Depth Look at PFM Reform in Vietnam
The April 1 DC Forum to be held at the Carnegie Endowment focuses on the exciting public financial management reforms in Vietnam.
Regarded as one of the most determined reformers in Asia, Vietnam has transitioned from a war-torn centrally planned economy to one of the most vibrant and fastest growing economies in the world. This session will present the results of two in-depth and in-country studies of reform in Vietnam; one sponsored by the United Nations Development Program, and the other by the Woodrow Wilson School of Public and International Affairs of Princeton University. The first looks at PFM reform, and concludes that considerable progress has been made in PFM and related reform components, but that consolidation and further improvement needs to occur. The second argues that adopting elements of a position-based civil service is key to PFM and related reforms, since Government must be capable of attracting and retaining skills in macroeconomic forecasting, accounting, auditing, treasury management, and ICT needed to implement such reforms.
The presentation will be led by Dr. Clay Wescott, Director of the Asia
-Pacific Governance Institute, and Visiting Lecturer at the Woodrow Wilson School. He has invited graduate students who worked on the civil service part of the research to present their findings. Dr. Westcott has held senior positions with the Asian Development Bank, UNDP, Development Alternatives Inc., Price Waterhouse and the Harvard Institute for International Development. Dr. Wescott has degrees in Government from Harvard College (A.B., 1968, Magna cum Laude), and Boston University (PhD, 1980). Dr. Wescott has invited Saskia P. Bruynooghe and Trina Alejandra Q. Firmalo to join him. They are second year MPA students at the Wilson School, who conducted the research on strengthening the civil service in Vietnam.
This in-depth view of reform in one of the most significant developing countries in Asia will undoubtedly be a fascinating insight into issues that face countries around the developing world.
Register for this presentation or the entire season
The International Consortium sponsors a learning forum and luncheon the first Wednesday of each month from January through June, and from September through December, at The Carnegie Endowment for International Peace. Sessions begin at 11:45 and details can be found on the Upcoming Events page. Summaries of the presentations and question-and-answer periods which follow are published on the ICGFM blog
Tuesday, January 6, 2009
Aid for Africa
It is not too late to register for the upcoming DC Forum on January 7th. Dr. Julius Cole will be speaking about the work of Africare, the oldest and largest African-American led organization assisting Africa.
According to the Africare web site:
Complementing and extending our work in those focus areas,
- Water resource development
- Environmental management
- Literacy and vocational training
- Microenterprise development
- Civil-society development and governance
Wednesday, May 21, 2008
Public Financial Management is the Core of the Core for Governance
IMG_0684
Originally uploaded by ICGFM
Jim Brumby of the World Bank says that PEFA has been mainstreamed at the World Bank. PEFA (Public Expenditure and Financial Expenditure) also provides an opportunity for dialog among countries and with donors. Mr. Brumby also asserted that public financial management is the "core of the core" for governance at the World Bank.
Countries like to compare with other countries and see the rate of progress over time. This leverages the objective comparitive information available through PEFA. PEFA also provides discipline in the World Bank to improve internal processes.
Mr. Brumby (standing)said that the country needs to be "in the driver's seat" for PEFA to be effective.
Follow up actions by donors and countries, the case of pefa
View more presentations from icgfmconference.
Case studies from Mali, Malawi and Columbia were presented by husitha D. Pilapitiya of Casals & Associates (left). Dr. Miguel Angel Moralesrussi Russi, the Controller of Bogota Colombia, (near right) andJohn Sitton of Emerging Markets Group, (far right). Reference was made to the presentation from the previous day.
(Located at http://icgfm.blogspot.com/2008/05/introduction-to-pefa-framework-to.html)
Mr. Brumby says that the HR indicators from the PEFA model are being piloted at the World Bank.
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