Gov’t Outlines Plan to Improve Transparency in Spending

Minister of Finance Keat Chhon outlined a plan to improve transparency and accountability in government spending Mon­day while opening an international seminar on tracking public expenditures in the education sector.

“Until the budget is more credible, management cannot be held properly to account for the good management of the financial and other resources which the budget promises but often has not de­livered,” Keat Chhon said.

After establishing a “more credible” budget, the public financial man­agement reform program calls for accountability of managing financial inputs and then linkages between government policy and the budget, Keat Chhon said.

Though the 2003 books have not been officially closed, provisional budget implementation figures from the Ministry of Finance re­veal that the budget did not re­flect spending last year. So-called priority ministries, like education and health, spent much less money last year than they were allocated in the 2003 budget law, while the Finance and Interior ministries far outspent their earmarked amounts, the provisional numbers show. Through the first three months this year, provisional budget implementation figures show a sharp drop in spending compared to the same period last year, despite a jump in government revenue.

Keat Chhon said Monday the government is “already in the process of spending” money for this year’s budget.

Last week, officials from the ministries of Health and Agri­cul­ture complained that the Finance Ministry has been too slow to transfer funds.

Through the first three months of this year, provisional budget num­bers show that both ministries spent just a scant amount of their allocated budget under the 2003 law, reflective of a nearly 40 percent drop in overall spending compared to the first quarter of 2003.

Since a new government has not formed since the July 2003 na­tional elections, the National As­sembly has not met to approve a budget for 2004. Therefore, the government is authorized to use one-twelfth of the 2003 budget on a month-to-month basis.

A stinging report issued late last year by the World Bank and the Asian Development Bank found that most delays in budget execution occur at the payment stage. After ministries receive au­thorization for funds, the payment order is submitted to the Treas­ury for payment, or the Ministry of Finance if the payment is in foreign exchange.

A government adviser familiar with the budget allocation pro­cess recently put it like this: “Budgets in hand are fictitious. It forces decisions about who gets what to be made by people not in a position of authority.”

Though it is unclear how many of the recommendations from the report, the Integrated Fiduciary Assessment and Public Expend­iture Review, are being implemented in budget expenditures this year, Robert Taliercio, the Bank’s country economist, says the government has made pro­gress since the report was issued. “We have to realize this takes a long time to do,” Taliercio said of reforming the government’s public financial management.

The Public Expenditure Track­ing Surveys, launched Monday, are a direct follow-up study to the IFAPER. They will monitor how the education budget is executed from the national level down to the provincial, district and commune levels. A similar exercise has been planned for the Health Ministry.

The intention of the surveys is “to go down to the service pro­vid­er,” Taliercio said. Similar programs have been successful in Rwanda, Mozambique and Zam­bia, he said.

Keat Chhon said Monday the gov­ernment places a “high value” on the surveys. They will be used “to provide valuable insights into how we might best improve fi­nancial governance,” he added.

 

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