There are strong similarities between the French and French-inspired African PEM systems in terms of the legal setting, rules, and procedures. However, there are differences in practice, particularly in accounting and reporting, audit, and external control. Among the African countries themselves, there are many common features but also marked differences in audit and external control.
Cambodia meets 5 out of 16 PEM benchmarks, compared with an average of 6–7 for the 26 Highly Indebted Poor Countries (HPIC) assessed in 2004. These results indicate a modest improvement on those reported in the World Bank’s Integrated Fiduciary Assessment and Public Expenditure Review (IFAPER) in 2002–03, using HIPC AAP guidelines, under which Cambodia met only three benchmarks out of 15.
30. Serious PEMweaknesses remain, across most of the areas covered by the MDRI assessment :
Budget formulation does not provide an accurate record of public sector spending plans
The internal audit units in MDAs and Financial Management unit in ACGEN should be strengthened by: (1) defining more clearly their roles and the relationship among them; (2) requiring internal auditors to authorize payments within IFMS; (3) training internal auditors in use of computer-assisted audit techniques; and (4) following-up on reports of internal auditors and financial controllers.
The Local Government Reform Program should also address the PEMweaknesses at the subnational level. An important first step will be to adopt the same financial
Mr. David John Goldsbrough, Mrs. Isabelle Mateos y Lago, Mr. Martin D Kaufman, Mr. Daouda Sembene, Mr. Tsidi M Tsikata, Mr. Steve K Mugerwa, Mr. Alex Segura-Ubiergo, and Mr. Jeff Chelsky
made over time in some countries (e.g., Mozambique and Tanzania) to put in place the institutional arrangements for imple-menting/updating the strategic road map.
More generally, the three-way linkage between the PRSP, medium-term expenditure frame-work, and budget is typically poor, reflecting some combination of limited costing and priori-tization in the PRSP and the generally poor state of PEM. 3 Of these, the PEMweaknesses are probably the most fundamental challenge, requiring comprehensive institutional reforms and capacity improvements without which any en
. Reference to the French PEM system is historical, not dictated by necessity. Consequently, budgeting rules should be consistent not only with the historical, institutional, and legal context of each country, but also with its administrative and implementation capacities and means. African countries need to devise a budgeting system tailored to their specific needs. In that vein, the focus should shift from sophistication in design to robustness in practice.
PEMweaknesses: a francophone problem or an African problem?
As was discussed when this study compared
This report assesses the Observance of Standards and Codes on Fiscal Transparency for Tanzania. Tanzania has implemented a number of reforms in recent years to enhance fiscal transparency. The most notable reforms in fiscal management are: implementation of a comprehensive Integrated Financial Management System; institution of a public expenditure review process on a continuous basis in the context of a medium-term expenditure framework; and enactment of a new legal framework for fiscal management and procurement. Many new initiatives are in the process of being implemented to further enhance fiscal transparency and good governance.
, Rwanda, Tanzania, Uganda, and Zambia) to report on their poverty-related expenditures , exposed the basic weaknesses. Indeed, of the eight HIPC countries in the review group, only half passed the average benchmark in fiscal reporting. In part, the problem was an inadequate classification system to identify and tag poverty-related expenditures, but in part there has been a failure of the system to report in an accurate and timely manner. In response, the authorities were encouraged to develop action plans to overcome PEMweaknesses, in coordination with TA from donors
This report focuses on IMF Technical Assistance Evaluation—Public Expenditure Management (PEM) Reform in Selected African Countries. Most of the countries examined were colonies of the United Kingdom, inheriting similar and relatively simple budget systems based on an interpretation of the “Westminster model” around the time of independence. Country reviews suggest that PEM problems are widespread and that there are few areas in the PEM systems of the countries covered that do not require strengthening in some way.
The Selected Issues paper discusses Cambodia’s poverty and growth, private sector development, public financial management reform, and debt sustainability. It summarizes the Poverty Assessment and describes the regime of tax incentives, costs, and limits for private investment. It also summarizes the assessment of Cambodia’s Public Expenditure Management system and Public Financial Management Reform Program. It highlights the key reform priorities, and provides historical background on Cambodia’s external and domestic debt. It also includes a statistical appendix and a summary of the tax system.