2007年-世界发展银行全球_Pakistan_-_Punjab_Province___Public_Financial_Management_and_Accountability_Assessment_82页_2mb

Summary Assessment of Public Financial Management and Accountability in Pakistan Punjab Province (May 2007)

Core Content

This report presents a Public Financial Management and Accountability Assessment (PFMAA) for the Punjab Province, conducted in May 2007. It updates the earlier assessment from May 2005 and evaluates the province's PFM system against the six core dimensions of PFM performance and donor practices, using the approved PEFA framework of June 2005. The assessment highlights both improvements and persistent weaknesses in Punjab's financial management system.

Main Points

1. PFM Performance Dimensions

• Budget Credibility:

  • Overall expenditure and revenue outturns show good performance.
  • However, the credibility of budget figures remains weak due to discrepancies in expenditure composition and unresolved payment arrears, especially affecting local government institutions.

• Transparency and Comprehensiveness:

  • The budget is generally transparent and comprehensive, but donor-funded project expenditures are not included in fiscal reports due to 'ring-fenced' arrangements.
  • Limited oversight of other public sector entities results in underestimation of aggregate fiscal risks.

• Policy-Based Budgeting:

  • Fiscal planning and the orderliness of the budget process are strong, aligned with the MTBF and policy-based budgeting framework.
  • The budget formulation process reflects a multi-year perspective and aligns with provincial policies.

• Predictability and Control in Budget Execution:

  • Predictability of funds for commitments and management of cash, debts, and guarantees are good.
  • Weaknesses exist in taxpayer registration, tax assessment, and internal controls, particularly for non-salary expenditures.

• Accounting, Recording, and Reporting:

  • In-year budget reports are timely, but the quality of annual financial statements is still a concern.
  • Reconciliation of fiscal and monetary balances remains a significant challenge due to limited integration of the IFMIS system.

• External Scrutiny and Audit:

  • External audit and legislative scrutiny are underperforming, with limited scope and follow-up.
  • Over 100,000 unresolved audit observations remained as of March 2006, indicating weak enforcement and monitoring of audit recommendations.

• Donor Practices:

  • Donor-funded projects show good predictability and are managed through national PFM systems.
  • However, investment projects are 'ring-fenced' and use parallel systems, limiting integration with the main PFM framework.

Key Findings and Recommendations

• Overall Improvement:

  • There has been an overall improvement in PFM performance since the May 2005 assessment, despite differences in the assessment frameworks.

• Persistent Weaknesses:

  • The reconciliation process for fiscal and monetary balances is a critical weakness.
  • There is a lack of comprehensive reporting on fiscal risks from state-owned enterprises (SOEs) and contingent liabilities.
  • Legislative and external scrutiny functions are not fully effective, with limited impact on accountability and transparency.

• Recommendations:

  • Improve reporting on expenditure arrears and enhance the effectiveness of tax assessment and taxpayer obligations.
  • Implement more frequent and systematic monitoring of fiscal risks from SOEs and government guarantees.
  • Strengthen procurement processes by adopting the new procurement law and establishing a central regulatory authority.
  • Enhance service delivery and budget execution through improved budget execution information at the unit level and updated financial rules.
  • Develop an internal audit system based on international standards.
  • Accelerate the implementation of the PIFRA to improve financial reporting and reconciliation.
  • Ensure timely publication of audited annual accounts and effective follow-up on audit findings.
  • Streamline reporting by the Public Accounts Committee (PAC) and increase public hearings to improve perceptions of legislative scrutiny.

Key Institutions and Partners

• Government of Punjab (GoPj): Managed the assessment process through a Steering Committee chaired by the Finance Secretary.
• Development Partners:
  • The World Bank Group
  • The European Commission
  • UK's Department for International Development (DFID)
  • Asian Development Bank (ADB)
• Task Team Members:
  • Ismaila B. Ceesay (World Bank)
  • David Johnson (DFID)
  • Sandra Nicoll (ADB)
  • Thorsten Bargfrede (EC)
  • Asif Ali, Hanid Muktar, Furqan Ahmed Saleem, Saeeda Sabah Rashid (World Bank)
  • Altaf Ahmad (World Bank, logistical support)
  • Professor Dr. Khawaja Amjad Saeed (review and resource person)
• Consultants:
  • Michael Jacobs (International Consultant)
  • Muhammad Zeeshan Tariq (National Consultant)
• Peer Reviewers:
  • Margaret Robinson and Julie Lynn (DFID)
  • Kathleen Moktan (ADB)
  • Nicola Smithers (World Bank)
  • Jean Louis Lacube (EC)
  • Andy Wynne (ACCA)

Conclusion

The PFMAA report serves as a basis for a renewed government reform agenda and is featured in the GoPj's 2007-08 Budget White Paper. It underscores the need for continued improvements in financial reporting, internal controls, and external accountability mechanisms to ensure efficient resource use and effective service delivery.