Despite some improvements, Guyana’s public financial management still “inadequate”

Despite some improvements, Guyana’s public financial management still “inadequate” – IDB report

Mar 30, 2021 News

Kaieteur News – Even with some improvements to Guyana’s financial system, like the enactment of the Fiscal Management and Accountability (FMA) Act of 2003, the country’s public financial management (PFM) is still “inadequate”. Making these damning revelations is the Inter-American Development Bank (IDB) in its recent report titled: Economic Institutions for a Resilient Caribbean.
In the report, the IDB noted that in its Country Strategy for Guyana for 2016–2020, the enactment of the FMA Act of 2003 led to improvements in public financial management. The Act, together with the Audit Act (2004) and the Regulations for the Audit Act (2005), regulated internal auditing. This, the Bank said, is although most ministries remain without internal auditing offices.
In addition, the bank said that ICT upgrades and capacity-building fostered sustainability and improved transparency in Guyana’s public institutions.
Nevertheless, the IDB stated that PFM was still inadequate. In fact, the Bank noted that on the professional development (PRODEV) index, Guyana scores 2.0 on public financial management, well below the regional average of 2.9.
Public expenditure and financial accountability assessments, the IDB said, identified weaknesses across the following key areas: transparency in inter-governmental fiscal relations, including lack of information on the resources received by delivery units; management of assets and liabilities; policy-based fiscal strategy and budgeting.
Weaknesses also included predictability and control in budget execution, including insufficient legislative scrutiny of external audit reports; uncompetitive procurement, resulting in substandard provision and low value for money, and procurement inefficiencies, together with a lack of feasibility studies and rigorous project appraisals, which result in lower implementation and investment inefficiency; lack of any tender notices on the National Procurement and Tender Administration Board’s (NPTAB) website, which contradicts international practice; and lastly, inefficient and paper-based bureaucratic processes.
The Country Strategy further noted that fiduciary assessments identify specific areas for improvement for Guyana’s public investment management, particularly in State-owned enterprises. To this end, the IDB noted that the current framework undermines the provision of quality public services and the efficiency of expenditure management.
To address these weaknesses, the IDB said there is a need for reforms to simplify the budget classification system, which is rather complex, with many programmes, sub-programmes, and activities, and many economic classification codes. The bank also noted the need for improved accounting, recording, and reporting systems; improved transparency, including through performance information for service delivery, and, similarly, provide more detailed information (currently available only at aggregate levels) in in-year budget reports; enhance public investment management, fiscal risk reporting, and public debt management. Further, it highlighted the need to complete the upgrade of the Integrated Financial Management Information System (IFMIS) to allow the government to implement a sole PFM platform for all public expenditures (and thereby avoid payment arrears), streamline budgetary processes, phase out payments by cheque, and further implement a TSA.
Furthermore, on recommendations, the IDB called for the strengthening of the budget preparation process, macro-economic and fiscal forecasting, fiscal strategy, and medium-term perspectives in expenditure budgeting; as well as the strengthening of external scrutiny and audit, including legislative oversight.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News