The review of the PFM Act, which dates back to 1995, is an essential component of the Public Financial Management (PFM) Reform which was launched in September last year. The PFM reforms are expected to improve the efficiency and effectiveness of government action and public service delivery, and reinforce transparency and accountability of public finances. They are also expected to contribute considerably to the success of the decentralisation process.
Ambassador of the European Union to Papua New Guinea H.E Ioannis Giogkarakis-Argyropoulos said on the occasion of the announcement of the commencement date for the Amendment to the Public Finances Management Act , “I would like to commend Hon. Minister Marape, Secretary Ngangan and all associated officials for their work on the Amendment to the Public Finances Management Act (PFMA) which was approved in August by Parliament and successfully certified on 9 November. The amendments are expected to be effective as of 1 January 2017. I am pleased that the European Union (EU) was the first development partner to respond to the request for technical assistance from the Department of Finance for the implementation of the reforms, and notably for the Review of the Financial Framework.
The EU contribution is in the form of capacity building and provision of technical expertise to the Department of Finance. The technical work started early this year, and it was overseen by a Technical Working Group consisting of representatives of all concerned Government agencies.
The Amendment was tabled for discussion in Parliament in August following a public consultation which was announced on 5 April 2016. The manuals and instructions to support the implementation of the amendment are scheduled to be completed shortly and this work is also supported by technical assistance provided by the EU.
In addition to the Review of the Financial Framework, the EU contribution, to the tune of K3.7 million, aims at improving the Cash Forecasting and Audit functions, facilitating the roll out of the Integrated Financial Management System at sub-national level and accompanying Behavioural Change. Eventually, these PFM reforms will pave the way for PNG's development partners to align further their financial support with the national systems and procedures”.