pfm briefing roadmap short may10 by LpQT6w

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									PFM Reform Roadmap and
     Developments
(A Presentation for the 27th DepEd National
Seminar/Workshop on the Preparation and
  Reconciliation of the CY 2012 Mid-Year
             Financial Reports)

        July 23, 2012, Tagaytay City

       By: Assistant Secretary Luz M. Cantor
                       Philippine PFM Reform Roadmap 1
                                                         1
                         Presentation Outline

PART I: PFM System Gaps/Weaknesses
  A.   What is PFM?
  B.   What ails the Philippine PFM system?

PART II: PFM Roadmap and Developments
  C.   Executive Order No. 55
  D.   PFM Reform Roadmap
  E.   PFM Governance Structure
  F.   PFM Reform Projects


                      Philippine PFM Reform Roadmap
                                                      2
PART I

PFM GAPS


           Philippine PFM Reform Roadmap
                                           3
                                          What is PFM?

Public Financial Management (PFM) is a system of
rules, procedures and practices for government to
manage public finances in the areas of:

 budgeting
 accounting
 auditing
 cash management
 management of public debt
 revenue generation
 public reporting on public sector financial
  operations

                      Philippine PFM Reform Roadmap   4
                                                          4
                 Benchmarks of a Good PFM


•   Credibility of the budget

•   Comprehensiveness and transparency

•   Policy-based budgeting

•   Predictability and control in budget execution

•   Accounting, recording and reporting

•   External scrutiny and audit


                           Philippine PFM Reform Roadmap
                                                           5
                 PFM Gaps in the Budget Process

                              PREPARATION


                        messy traffic of documents

                         lack of budget credibility

                         budget not results based
ACCOUNTABILITY                                                     AUTHORIZATION
                       lack of funding predictability

                  weak oversight of Congress and public

                   lack of efficient cash management
                 weak monitoring of contingent liabilities


                                EXECUTION




                                   Philippine PFM Reform Roadmap
                                                                                   6
               Messy Traffic of Documents

                  In the long run, Philippine PFM
This is now…       needs this kind of information
                                           system




                  Philippine PFM Reform Roadmap
                                                    7
           GAP/WEAKNESS                                            STRATEGIES
      Lack of credibility of the
      budget
                                                      Avoid re-enacted budgets, tighten
                                                      savings concept, flesh out lump sum
                                                      funds

                                                      Development of a Government Integrated
                                                      Financial Management Information
Budget supports targets in the Plan                   System (GIFMIS)

  More efficient, transparent and                     Engage CSOs in the budget process
  accountable budget execution

    Real time reporting on budget utilization
    by agencies and the Government.

         Pro-active CSO support for budget
         transparency                                                     DESIRED
                                                                          RESULTS


                                                Philippine PFM Reform Roadmap
                                                                                               8
       GAP/WEAKNESS                                          STRATEGIES
   Budget not yet results-
   based
                                                 Make agency accountability reports
                                                 performance based; improve costing
                                                 methodology for outputs

                                                 Strengthen results orientation of
                                                 Agency Performance Reviews (APRs)

                                                 Institutionalize results based
                                                 budgeting framework through the
                                                 OPIF
                                                 Institutionalize Zero Based
                                                 Budgeting (ZBB)



Budget decisions based more and more                      DESIRED
on physical and financial performance                     RESULTS


                                        Philippine PFM Reform Roadmap
                                                                                      9
     GAP/WEAKNESS
                                                        STRATEGIES
Lack of a common
classification system for
budgeting, accounting,                      Harmonize budgetary and accounting
auditing and cash                           classifications and reporting
management                                  Codify PFM rules and complete PFM Rules
                                            Manual for capacity building

                                            Identify common reporting requirements of
                                            oversight agencies and line departments

Consolidated FM reporting                   Revise New Government Accounting System
requirements based on harmonized            (NGAS) Manual and chart of accounts
classification of all accounts

 Real-time reports, access to financial
 data and control of obligations and
 disbursements for more effective
 financial control and accountability
                                                      DESIRED
                                                      RESULTS


                                          Philippine PFM Reform Roadmap
                                                                                        10
        GAP/WEAKNESS                                             STRATEGIES
   Lack of funding
   predictability                              DBM and DBCC to approve allotment and
                                               cash release program at start of year and
                                               update midyear


                                               BTr and DBCC to improve cash
                                               management practices


                                              Review validity of SAROs and NCAs

                                              Study feasibility of using GAA as budget
                                              release document and eliminate releases thru
                                              SAROs
Predictable and streamlined allotment and
cash release programs throughout the year
to support agency operations based on
                                                          DESIRED
DOFs reliable revenue forecasting and
programming.                                              RESULTS


                                            Philippine PFM Reform Roadmap
                                                                                             11
   GAP/WEAKNESS
                                                STRATEGIES
Weak oversight role of
Congress and the public
over the budget process
                                               Capacity building
                                               for Congress and
                                               CSOs




                                                    DESIRED
                                                    RESULTS
Oversight Committees in Congress and
the public use DBM and COA reports
more extensively




                                   Philippine PFM Reform Roadmap
                                                                   12
       GAP/WEAKNESS
                                                        STRATEGIES
  Lack of efficient cash
  management
                                                 Improve Treasury Cash Management
                                                 operations

                                                 Complete inventory of agency bank
                                                 accounts and rationalize their
                                                 number
                                                 Shift to transaction-based fees for
                                                 government banking arrangement

Improved Cash Programming by BTr
and DBM

  Predictable and stable revenue inflows
  and cash disbursements                                  DESIRED
                                                          RESULTS


                                           Philippine PFM Reform Roadmap
                                                                                       13
         GAP/WEAKNESS
    Lack of accurate database                                     STRATEGIES
    on contingent liability
                                            Compel agencies to disclose their
                                            contingent liabilities


                                            Make DOF the authority on issuance of
                                            policy on contingent liabilities (for GOCCs
                                            and NGAs)

                                            Monitor and report regularly contingent
                                            liabilities
Improved system for capturing and
reporting all liabilities of government
                                            Develop database on contingent liabilities
entities; real and contingent


      National Government able to manage
      all its financial exposure
                                                      DESIRED
                                                      RESULTS


                                           Philippine PFM Reform Roadmap
                                                                                          14
     Where are we now?
  (PFM Gaps and weaknesses)
   Where are we going?
How are we going to achieve
        the reforms?


             Philippine PFM Reform Roadmap
                                             15
PART II

PFM ROADMAP AND
DEVELOPMENTS

          Philippine PFM Reform Roadmap
                                          16
PFM Reform Roadmap

       Master plan for
        improving the
        financial
        management system
        of the government

       Jointly formulated
        and approved by
        fiscal oversight
        agencies (COA,
        DBM, DOF, BTr) from
        2009 to 2011

 Philippine PFM Reform Roadmap
                                 17
                                            PFM reforms support
                                   Aquino Administration priorities
                                   “Kung walang corrupt, walang mahirap”
                   Anti-             Poverty      Rapid,         Just,           Integrity of the
                   corruption/       Reduction    Equitable      Inclusive &     Environment/
5 Priority Areas
                   Transparent,      &            &              Lasting         Climate Change
                   Accountable &     Empower      Sustained      Peace &         Mitigation &
                   Participatory     ment of      Economic       the Rule of     Adaptation
                   Governance        the Poor     Growth         Law


Societal Goal                  Inclusive Growth and Poverty Reduction


Sector Goal
                            Good Governance                   Fiscal Discipline


PFM Goal             Improve efficiency, accountability and transparency of public
                        fund use to ensure direct, immediate and substantial
                           delivery of public services specially to the poor.

                                                 Philippine PFM Reform Roadmap
                                                                                                    18
                                Executive Order 55

    Directing the Integration and Automation of
     Government Financial Management System
 (signed by President Benigno S. Aquino on 6 September 2011)


1. Installation of PFM systems:
   Government Integrated Financial Management
    Information System (GIFMIS)
   Treasury Single Account (TSA)
   Efficient Budget Release System
   Systematic Financial and Physical Reporting and
    Auditing

                            Philippine PFM Reform Roadmap
                                                               19
                                                        EO 55

2. Created the PFM Committee (formerly the
   GIFMIS Committee)
     Devise a 5-year plan for the development and
      installation of GIFMIS
     Oversee the implementation of the PFM Reform
      Roadmap
     Shepherd and champion the passage of
      supporting legislation needed in Congress
     Coordinate budgetary and donor funding




                        Philippine PFM Reform Roadmap
                                                                20
                                  PFM Governance Structure
                                    PRINCIPALS
                       (COA Chair, DBM and DOF Secretary)

                                   PFM COMMITTEE


                              PROJECT MANAGEMENT OFFICE

                                                                  PROCUREMENT UNIT


    PIU             PIU               PIU            PIU              PIU          PIU
GIFMIS DEVT       BUDGET        IMPROVEMENT      ACCOUNTING        LIABILITY     CAPACITY
  PROJECT      REPORTING &       OF TREASURY         AND         MANAGEMENT      BUILDING
              PERFORMANCE            CASH         AUDITING         PROJECT       PROJECT
                STANDARDS       MANAGEMENT        REFORMS
                  PROJECT          PROJECT         PROJECT



  TRACK 1           TRACK 2




                                         Philippine PFM Reform Roadmap
                                                                                            21
                           Funding Support
                                    AusAID

                               A$30M (P1.2B)
                                  Facility Grant


                                    WB-IDF
   GOP
                                Intl Devt Fund
  P978.5
(2012 Budget
 eGov Fund)                            EU

                                   LGU PFM



                                      ADB


               Philippine PFM Reform Roadmap
                                                   22
                                                    Outputs and Results

                                       PFM REFORMS ROADMAP


                                                                   GIFMIS            Better Mgt of
                          Results        Treasury
                                                                  Real Time           Contingent
                                                                                      Contingent
 Outputs                  Based           Single
                                                                  Financial            Liabilities
                                                                                      Liabilities
                         Budgeting       Account
                                                                 Information




              1. Build up        2. Review      3. Capacity            4. Improve         5. Develop &
Major                                           Building for         Treasury Cash
             Credibility of    Fund Release                                                Implement
Strategies                                     Congress and           Management
                 PFM            Procedures                                                   GIFMIS
                                                   CSOs                Operations




                                               Philippine PFM Reform Roadmap
                   Initial PFM Reform Projects
              Project                             Lead Agency
1. Improvement of Treasury Cash                            BTr
   Management Operations

2. Budget Reporting and                                    DBM
   Performance Standards

3. GIFMIS Development                       DBM, DoF/BTr, COA
4. Liability Management                                    DoF
5. Capacity Building                        DBM, DoF/BTr, COA
6. Accounting and Auditing Reforms                         COA


                           Philippine PFM Reform Roadmap
                                                                 24
              Improvement of Treasury Cash Management
                                      Operations Project

Objective
• to increase operational efficiency of implementing
   agencies while minimizing cost of treasury operations

Output and Timeframe
• a system of cash management that can keep daily
   cash balances of government at appropriate levels
• Treasury Single Account (TSA) in place by 2014




                           Philippine PFM Reform Roadmap
                                                           25
                            Budget Reporting and Performance
                                            Standards Project

Objective
• to produce quarterly reports within 2 weeks of next quarter (short
  term)
• to generate real-time reports on budget utilization and financial
  performance through GIFMIS (long term)
Output and Timeframe
• Consolidated and agency level budget execution and budget
  utilization reports published in COA and DBM website
• Harmonized forms by Dec 2012
• Unified Account Code Structure
• Framework on Performance Standards implemented by March
  2014

                               Philippine PFM Reform Roadmap
                                                                       26
                     GIFMIS Development Project

Objective
• to facilitate physical development of a working GIFMIS
   that can collect and organize financial information in a
   central database

Output and Timeframe
• Web-based GIFMIS Version 1 – initially for national
   government agencies (for completion in 8 months)
• Web-based GIFMIS Version 2 – for all government
   agencies (operational by 2016)


                            Philippine PFM Reform Roadmap
                                                              27
                      Liability Management Project


Objective
• to put in place a system for managing government's
   exposure to contingent and other liabilities

Output and Timeframe
• a complete list of liabilities of the national government,
   real and contingent (immediate)
• LM system established by 2013




                            Philippine PFM Reform Roadmap
                                                               28
                                   Accounting and Auditing
                                           Reform Project

Objective
• continue to enhance government accounting systems and
   strengthen external audit capacity

Outputs and Timeframe
• Harmonized PGAS with IFRS and IPSAS by June 2012
• Enhanced NGAS for GIFMIS Track 2 by Dec 2012
• Guidelines on the audit of multi-sectoral programs/projects
• Revised guidelines on participatory audit
• Intensified conduct of IT/ information systems audit (2012-
   15)


                            Philippine PFM Reform Roadmap
                                                                29
                        Capacity Building Project


Objective
• develop skills of personnel of oversight and
   implementing agencies on PFM competencies
• build stakeholder support for the reforms

Target Participants
• personnel of the oversight and implementing agencies
• legislators
• civil society organizations
• other stakeholders

                         Philippine PFM Reform Roadmap
                                                         30
                        PFM Reform Roadmap


Leading the way to the right path

                      Improved Public                  Beneficiary
                          Service

     Improved         • Direct                    The Filipino
     efficiency,      • Immediate                 People especially
 accountability and                               the poor
  transparency of     • Substantial
  public fund use




                            Philippine PFM Reform Roadmap
                                                                      31
‘…it is incumbent on all of us to confidently assert that
governments that do things right should have no problem
keeping our fellow citizens informed and engaged, and
are thus, partners of government in its fundamental task
of addressing the needs of the people.

The result is an empowered citizenry, which is the
essential aspiration at the heart of the digital revolution
sweeping the globe...’
                                           President Benigno S. Aquino III
                       Speech at "The Power of Open: A Global Discussion"
                                       Google New York, 75th Ave., New York
                                                        19 September 2011



                             Philippine PFM Reform Roadmap

								
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