Govt consolidates laws on managing public finances
The government has started a process to consolidate all laws on managing public finances to improve reporting, accountability and transparency.
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The consolidated laws will repeal the Loans Act of 1970, (Act 335), as well as the much recent Financial Administration Act 2003, (Act 654) and introduce much stringent provisions on accountability and reporting by not only the Ministry of Finance but the Executive, as well as ministries, departments and agencies (MDAs) to enhance transparency.
The Chief Economic Planning Officer and Group Head of the Public Financial Management (PFM) Reforms, Ms Eva Esselba Mends, told the Daily Graphic in an interview that the bill, when passed into law, would for the first time introduce into the budget statement, performance criteria with emphasis on qualitative outcomes and results rather than on efforts such as the number of projects undertaken.
“What we are going to do is to introduce for the first time, performance reports, not just to the Ministry of Finance but to Parliament as well. So we will have MDAs go to Parliament every year with a report on their performance,” she said.
Currently, the only reporting is a couple of paragraphs by MDAs in the budget statement or when they appear at the Parliamentary Committee hearings, but Ms Mends said those arrangements did not make them accountable enough.
The consultative process
The consultative process to finalise the draft Public Financial Management Bill is currently nearing an end, as the Steering Committee has already met with relevant stakeholders to make inputs into the bill. The process is part of the broader public financial management reform that will touch on several aspects of public finances.
The Public Financial Management Reform Group is being led by the Ministry of Finance with representation from key agencies and ministries such as the Controller and Accountant General’s Department, the Attorney-General’s Department; the Bank of Ghana, the Ghana Revenue Authority, the Internal Audit Agencies and some Heads of Service.
The Steering Committee has so far met with all PFM agencies, chief directors of MDAs, civil society organisations with economic orientation and some think tanks within academia.
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From today, it will meet development partners and proceed to meet other CSOs with social and accountability orientations.
Ms Mends said the law would create an overarching framework for the efficient allocation of resources by any ruling government, while demanding increased accountability and transparency from them.
Some key objectives
There are provisions to regulate fiscal policy formulation and management, budget formulation and management, with the aim of making the Executive more accountable to the public and Legislature.
To that end, Ms Mends said there would be more publication of fiscal data and assumptions underlying government fiscal policy, reports, how state-owned enterprises (SoEs) were performing and statutory funds reports, all captured as part of the budget.
This will be similar to how the Petroleum Funds Utilisation Reports are captured as part of the budget.
“We would want to share that with the Ghanaian populace so that they hold not just the Ministry of Finance accountable, but all other agencies responsible for collecting, spending and accounting for state funds.”
Fiscal responsibility
Key in the draft is the requirement for the government to develop a fiscal strategy document to be approved by Cabinet and Parliament. It will be a medium-term document which will spell out all the underlying assumptions and the risks of policies and targets. The document will be published and accessible to the public.
Although this does not sanction directly, it enables the wider public to hold the government accountable for things in the document.
Sanctions regime
However, the draft law has a whole section on sanctions that errant officers would suffer.
According to Ms Mends, the sanctions are so explicitly stated that nobody is left in doubt about an aberration and the associated sanction(s).
“There are clearly defined sanctions for non-compliance and that is again another difference in the new legislation. In the current law, sanctions are discretionary and range from queries to repayments, refunds and reimbursements. But this one actually criminalises non-compliance and some grievous non-compliance issues,” she explained.