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The Minister of Finance, Mr Seth Terkper

Public Financial Management Bill in the offing

All legislations on public financial management are to be structured into one law to enhance efficiency, revenue generation and expenditure management.

The Public Financial Management Bill, when passed into law, will not only repeal several Acts such as the Financial Administration Act (FAA) and the Loans Act, but will also make budget implementation more rigorous with control and commitment.

 

It will also spell out stiffer and more enforceable sanctions on erring officials both as a deterrent and preventive measure to safeguarding public finances – revenue generation and expenditure management.

These came to light at the Steering Committee Meeting of Public Financial Management Reform Group in Accra.

The group is being spearheaded 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.

Clearer roles

The Minister of Finance, Mr Seth Terkper, who opened the consultative steering committee meeting in Accra today, said the law would become the overarching law that would consolidate all laws bordering on public financial management.

In line with that, he said, the roles of the chief director of the Finance Ministry, treasury officers of various ministries as well as the budget officers would be clearly outlined for effective implementation of the budget.

“I think sometimes some of the lapses are a result of the roles not being properly defined or some overlapping roles. So the consolidation is also reviewing some of the roles so that accountability will be enhanced,” Mr Terkper explained in an interview after the opening session.

Mr Terkper stated that the exercise would also ensure comprehensiveness in the management of every public fund wherever they are transferred or generated, without exception, including state-owned enterprises (SoEs), saying “there must be a method of accounting for these funds.”

He, however, emphasised the need for proper regulation and strong monitoring by ministries and agencies to arrive at a very effective public financial management system for the country, because there were some processes currently going on that required legislations to firm them up.

An example, he said, was the Treasury Single Account (TSA) at the Bank of Ghana which had been introduced as part of the first phase of the Ghana Integrated Financial Management Information System (GIFMIS), which will be given compliance enforcement.

Scope of the bill

The Group Head of the PFM Reform, Ms Eva Esselba Mends, explained that the consolidated law would cover the management of all public funds, rather than just the Consolidated Fund.

This means the law would bring a more structured oversight monitoring by the Minister of Finance over all 14 public funds such as the National Health Insurance Fund, the Road Fund, the District Assemblies Common Fund, the Petroleum Funds as well as the emerging Ghana Infrastructure Investment Fund (GIIF).

Essentially, she said, the consolidated law would address issues related to budget, debt management and public sector accounting, reporting and auditing. For budget, it will address issues such as defining clear roles for chief director and budget director; introduction of Fiscal rules and moving the budget towards a more general government reporting.

Towards debt management, a debt office is being proposed, with a more centralised but expanded role for debt management, as well as an annual borrowing plan and updates.

On reporting, there will be roles for the Controller and Accountant General, the deputy Controller and Accountant General and roles and responsibilities for principal spending officer.

Mr Mends said the steering committee was working towards Cabinet approval before the end of the year.

The Committee is receiving technical assistance from the Fiscal Affairs, and Legal Departments of the International Monetary Fund (IMF), with which the country has a fiscal stabilisation programme. — GB

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