Transcript 2008-12-01Petriashvl..

Public Finance
Management Reform
The Georgian Experience
2008 ICGFM Winter Conference
December, 2008
1
Introductions
 Speakers
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Papuna Petriashvili, Deputy Minister
Budget Department
Georgian Ministry of Finance
Liana Skhirtladze
MTEF Advisor
Georgian Minister of Finance
 Moderator
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Tim Grewe, Resident Advisor
US Department of Treasury
Office of Technical Assistance
2
Presentation Overview
 History
of Public Financial Reforms (PFR)
 Objectives of PFR
 Primary Elements
 Public Financial Management Vision
Strategy
 Medium Term Expenditure Framework
3
Reasons PFMR Initiated in
Georgia
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Develop Government Strategic Directions, make
priorities more sophisticated
Make a reasonable forecast on the bases of
good macroeconomic parameters
Develop united e-Treasury system
Tax reform
Improve revenue planning
Local budget system reform
Develop Integrated Information System
4
Reasons PFMR Initiated in
Georgia
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Anticorruption activities to improve State Finance
Management and increase transparency
Conformance to International Standards
Donor coordination and using the international
financial assistance money more effectively and
efficiently
Implement Neighbor policy and NATO entry
conditions (international liabilities)
Improve public finances and services
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PFM System Goals
 Maintain
fiscal discipline, macro-economic
stability and budget predictability.
 Promote a strategic approach in allocating
resources to priorities.
 Ensure the effective and efficient use of
resources.
 Accountability in the use of public
resources.
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PFRM Components
National
Priorities
Annual
Budget
Government
Strategy
Medium Term
Expenditure
Framework
Sector
Strategies
Basic Data &
Direction
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Budget Planning Reform
 Establish
program budgeting system.
 Improve budgeting and reporting for
PLE’s.
 Improve capital budgeting
 Extend reforms on local government level
 Improved public involvement and
information
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Resource Management Reforms
 Continued
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Treasury Reforms
E-treasury functional Design prepared
E-treasury System technical specification
prepared
Financial Module and Software Licenses
Procured
Financial Module customized
Security system designed and implemented
Pilot phase launched
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Resource Management Reforms
 Consolidating
and further improving
revenue management:
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Complete on-going reforms including
simplification of customs and tax codes.
Strengthen tax and customs administration.
Improve management of tax arrears
Implement risk based system for audit
identification
 Improve
oversight of MOF budget execution
 Improve capital asset management
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Macroeconomic Indicators
INDICATORS
Real GDP (growth rate)
Nominal GDP (USD in
millions)
2004
5.9%
2005
9.6%
2006
9.4%
2007
2008
2009
2010
2011
2012
12.4%
3.5%
4.0%
8.0%
8.0%
7.0%
5,125.5
6,411.2
7,761.9
10,175.5
13,120.6
14,207.3
16,252.7
18,957.2
21,704.1
Per capita GDP (USD in
1,187.2
millions)
1,478.4
1,758.7
2,315.4
2,985.6
3,232.8
3,698.3
4,313.7
4,938.7
Consumer price index
(on average)
5.7%
8.2%
9.2%
9.2%
10.0%
8.0%
8.0%
8.0%
7.0%
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Strategic Budgeting Reform Actions
 Budget
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reform goals
Improve budget and reflect comments of Independent
Public Expenditure Financial Accounting (PEFA)
Assessment
Simplify the budget process
Increase linkage between budget documents
Strengthen management and improve expenditure
policy
Improve budget process coordination
Increase transparency and availability to the public 12
Strategic Budgeting Reform Actions
Improve legislation base
 Integrarte MTEF into Budget process and
institutionalize it
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Introduce medium term thinking and medium term
action plan on the state and local level
Link state policy, planning and budget processes in
the medium term
Reallocate resources to meet government priorities
Basic Data and Direction Document (BDD)
 State Budget Forms
 State Budget Format
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MTEF and Annual Budget
MTEF should be closely linked to the technical and
institutional processes of the budget preparation
MTEF approach in annual budgeting
T
Budget
T +1
Forecast
Budget
T +2
Forecast
Budget
T+1
T +2
T +3
Forecast
T +4
T +5
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Budget Process Reforms
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Adoption of the regulation by the Govenment of Georgia
Complete involvement of spending agencies on all levels
Medium term action plan – a bases for developing the
BDD document
Fully integrate MTEF into budget process and format.
Improve linkages to BDD and sector priorities
 Comprehensive goals
 Performance indicators
GFS 2001 at all levels
Revised budget legislation
Improved intergovernmental finance systems (Formula)
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Budget Planning Reforms
 Improved
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and simplified budget systems:
Circular
Execution
 Strengthen
capacity of Parliament to
review budget proposals.
 Improve capital investment project
planning and budgeting.
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Lessons Learned
 PFRM
is an ongoing, multi-year process
 Multi-year systems provide stability
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Political transition
Economic swings
Conflicts
 Quality
of systems improve over time
 Political and Executive support required
for success
 Danger of “over-committing” to reforms
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What’s Next for PFRM
 Update
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Post conflict needs
PEFA Report
 Focus
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plan based upon:
for next three year:
PFMIS Implementation
Improved budget system law
Improved annual budget law
Implement MTF in local governments
Program budgeting system
Capital budgeting systems
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Questions and
Comments
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