The World Bank (WB) has availed a 20 million U.S. dollars grant to Zimbabwe to assist it in improving its public finance management system (PFMS).

World Bank
World Bank

WB senior financial management specialist, Daniel Yaw Domelevo said the public financial management enhancement project is expected to commence before year end.

“We have availed a 20 million grant for the Public Financial Management Enhancement Project which will assist government in improving its financial reporting through installing new models of software,” Domelevo said Monday at a regional conference of chartered accountants.

The WB official said the grant would also help to improve government’s internal audit and control systems that will also enable it to check compliance with the requirements of financial management and the law.

Strengthening the public financial management system is one of the key targets that Zimbabwe is seeking to achieve under a two-year International Monetary Fund (IMF) Staff Monitored Program.

Under the SMP running until December 2015, the IMF has undertaken to assist Zimbabwe put its public finances on a sustainable course while protecting infrastructure investment and priority social spending, increasing diamond revenue transparency and reducing financial sector vulnerabilities and restructuring the central bank.

Introduced over a decade ago, the PFMS was expected to be effective and user friendly but the situation on the ground is that line ministers continue to have problems in the budgeting process and internal controls.

Beyond this, Domelevo said the WB will help the office of the auditor general to perform its function and assist government departments to improve their auditing skills.

He said the WB will further assist parliament in its capacity building so that members have a better appreciation of audit reports.

The program will also be extended to local government and city councils around the country, he said.

Domelevo said the only way that government and local authorities could improve their reporting in the near future was to go the Public Private Partnership (PPP) route as the private sector possessed skills that are devoid in government structures.

Meanwhile, Domelevo called on the Zimbabwe government to migrate from the crude cash based accounting to accrual based accounting which shows a better reflection on public finance performance.

According to the International Federation of Accounts (IFAC), no government can be considered transparent until they adopt accrual based accounting.

Domelevo said Africa is lagging behind in adoption of accrual accounting as compared to other regions.

“Governments must implement the necessary institutional arrangements required to enhance public sector financial management transparency and accountability,” he said.

An integral and essential part of these arrangements is the use of accrual-based accounting through the adoption and implementation of International Public Sector Accounting Standards (IPSAS) which promotes greater transparency and accountability in public sector finances and allows for enhanced monitoring of government debt and liabilities for their true economic implications.

He said transparency can help the struggling country to attract cheaper international credit. Enditem

Source: Xinhua

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