Public financial management
Sound public financial management (PFM) is the cornerstone of democratic governance, the effective use of public resources and poverty reduction. Strong and systematically applied PFM processes are a vital element in the fight against corruption and the wastage of public monies. It is also a precondition for ensuring the effective use of resources to service delivery like e.g. basic education and health services.
Since 2002, the Government of Sierra Leone has made significant headways in strengthening its public financial management framework and systems.
The public financial management reform process has been supported by the EU since 2001 by the provision of long-term technical assistance through a programme of institutional support to the Ministry of Finance. The UK Department for International Development (DFID), the International Development Agency (IDA – World Bank) and the African Development Bank (ADB) have all supported similar programmes, albeit until recently, in a relatively fragmented manner.
Major recent achievements in the area of PFM include establishment of the legal and regulatory framework for budgeting, accountability and procurement, the implementation of a financial management information system (IFMIS) in the Accountant General's Department rolled out to already ten ministries as of January 2010. Other achievements include the removal of the backlog of annual financial statements (the 2008 public accounts were produced within four months of the year end), the establishment of basic budgeting, procurement and accounting procedures in the local councils, the establishment of internal audit units in 15 Ministries and the immediate publication of the auditors' general report on public accounts as soon as they are transmitted to Parliament for parliamentary scrutiny.
In spite of these major breakthroughs in building credible PFM processes, weak budget credibility, fiscal management and expenditure controls remain challenging realities. The high degree of dependency of the Ministry of Finance to external technical assistance is also an issue that the donors and the Government have decided to resolve in a coordinated effort. The EU, DFID and IDA have indeed decided to join their efforts with a view to address remaining gaps in the area of PFM. They will support the Government's Integrated Public Financial Management Reform Programme (IPFMRP), a single framework for PFM reforms, by pooling their financial resources to support the implementation of the proposed reforms.
The IPFMRP presents the long term vision of the GoSL on PFM, i.e. that of systems and processes that can support the achievement of fiscal discipline; strategic, efficient and effective allocation and use of funds; and value for money, and probity in the use of public funds.
The EC has committed 8 million euros under the 10th EDF to contribute to the pooled fund that will support the implementation of the GoSL PFM reform agenda.