Tighten public finance management rules: IMF

07 Aug, 2020 - 00:08 0 Views
Tighten public finance management rules: IMF

eBusiness Weekly

Golden Sibanda
Government, through the Ministry of Finance and Economic Development, should formulate and enforce clear punishment mechanisms for breach of rules that govern public finance management, the International Monetary Fund (IMF) says.

Given current reform efforts in Zimbabwe, the IMF said, having accurate, comprehensive and timely statistics for all sub sectors of the general Government was imperative for achieving well-informed and successful policy outcomes.

The IMF, in a technical assistance report on Government Finance Statistics (GFS) released in July, based on the fund’s mission to Zimbabwe in April last year, said there was flagrant flouting of the public finance and debt management laws by most public entities in Zimbabwe.

This comes as audits into the use of public finances over the years have exposed sleaze, corruption, abuse of office and downright skulduggery related to the mismanagement of State finances by public officers.

“At present, there is a severe, and persistent lack of compliance with reporting requirements laid out in the PFMA (Public Finance Management Act) and PDMA (Public Debt Management Act).

“Part of this persistent (problem) is rooted in the lack of credible enforcement mechanisms, which allows public entities to continually operate with very little accountability,” the IMF report said.

In order to improve the GFS for policy and surveillance purposes, the IMF said authorities should enhance co-ordination and co-operation across ministries in terms of sharing of financial information for all public sector entities as defined in the PFMA.

The object of the Public Finance Management Act is to ensure transparency, accountability and sound management of public resources, expenditure, assets and liabilities of any entity.

IMF’s mission to Zimbabwe last year, concluded that the legal context under which current reporting practices for the general Government take place, that is the PFMA, remains largely not complied with.

“At present, co-operation with the AG’s (Accountant General’s) office in the Ministry of Finance and Economic Development from several ministries is extremely limited leading to a lack of financial accountability for local authorities, extra-budgetary funds, and State-owned enterprises (SOEs),” the IMF noted.

The IMF said moving towards more comprehensive coverage for GFS using a standardised and centrally monitored template, the Government would be better placed to implement and monitor policy changes across the entire general Government sector.

At the moment, coverage is limited to Budgetary Central Government, which only paints a narrow picture of the financial activities of all Government entities.

Evaluation by the IMF showed that the Accountant General’s office continues to receive very limited and unstandardised financial information for some other general Government sub-sectors.

As such, the global fund said the AG’s office needed to expand the compilation of financial statistics to include all extra-budgetary funds, local authorities, and social security funds using a standardised Government Finance Statistics Manual (GFSM) 2014

“Authorities across all ministries and other public entities need to formulate, and publish, an updated list of all public sector entities including exposed sleaze, corruption, abuse of office and downright skulduggery by public officers in all forms, local authorities, and SOEs,” the fund noted in its report.

However, the IMF also said the Government of Zimbabwe has fairly accurate records of institutional units, although work is needed on a centralised and consistent list of all units, especially for extra budgetary units.

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