2002年-世界发展银行全球_East_Timor_Public_Administration___Public_Expenditure_Management_and_Accountability_Note_82页_430kb

Summary of EAST TIMOR PUBLIC ADMINISTRATION: PUBLIC EXPENDITURE MANAGEMENT AND ACCOUNTABILITY NOTE

Introduction

This document provides an analysis of public expenditure management in East Timor, focusing on the transition from United Nations administration to independence, from reconstruction to development, and from aid dependence to fiscal independence. It outlines the current state of public expenditure systems and proposes recommendations to enhance their effectiveness in achieving macro-economic stability, poverty reduction, value-for-money, and good governance.

Core Content

Public Expenditure Review

• Revenue Trends: In FY2001, revenues amounted to $28 million, or 8% of GDP, with oil and gas accounting for about half. By FY2006, oil and gas revenues are expected to reach $215 million, making up 90% of total revenues and 43% of non-oil GDP.
• Expenditure Trends: In FY2002, total public spending was nearly $290 million, equivalent to 70% of non-oil GDP. The Consolidated Fund (CFET) accounted for 22%, the Trust Fund for East Timor (TFET) for 19%, and bilateral projects for 39%.
• Sectoral Expenditures:
  • General public services: 35% in FY2001, dropped to 16% in FY2002.
  • Social sectors (education and health): increased from 29% to nearly 40%.
  • Education: accounts for 25% of CFET spending.
  • Health: nearly 10% of CFET spending.
  • Defense and public order: 5% and 15% respectively.
• Economic Composition: Capital spending was 42% of CFET in FY2001, dropping to 19% in FY2002. However, the proportion of capital spending on administrative functions increased.
• Budget Execution: Execution rates were 86% in FY2001 and 81% in FY2002. Delays in procurement and supplier payments were a major issue, with only 19% of goods and services and 20% of capital spending actually paid out by February 2002.
• Deconcentration and Regional Distribution: Fund commitment and disbursement are highly centralized, with over 90% executed at the national level. Limited banking infrastructure hinders deconcentration at the district level.
• Public Spending and the Poor: Current spending is aligned with pre-independence objectives but lacks a strong pro-poor orientation. Subsidies in the power sector and tertiary education and health services are regressive, benefiting the rich more than the poor.

Expenditure Planning and Budgeting

Economic Monitoring and Forecasting

• Economic performance monitoring is limited due to lack of regular production statistics.
• The Ministry of Finance prepares forecasts for short to medium-term revenue estimates.
• A medium-term strategy for trade statistics development is needed.
• National capacity for economic forecasting should be developed as a medium-term goal.

Budget Coverage and Structure

• The FY2002 budget is consolidated, following international conventions.
• Transparency can be improved by including details of external financing agreements and oil and gas savings.
• The FY2003 budget introduced functional classification, detailed goods and services breakdown, and district-level expenditure tracking.

Budgeting, Expenditure Planning and Performance Management

• National staff have become more involved in budget preparation.
• Synchronization with the National Development Plan (NDP) helps focus on agency priorities.
• A two-stage budget process is recommended to address over-bidding.
• A formal review of performance indicators is needed to align with NDP goals.
• Regulation 2001/13 should be revised to establish a statutory budget process and performance management framework.

Development and Poverty Reduction Planning

• The National Development Plan (NDP) is expected to complete in mid-April 2002.
• A rolling, medium-term strategic planning instrument is recommended, linked to the Medium Term Fiscal Framework (MTFF).
• Integration of planning and financial management under the Ministry of Finance is advised.

Development Projects

• TFET has established project management procedures, but similar systems are lacking for core government.
• Procedures for project formulation, costing, and tracking need to be developed.
• A tracking system is essential to identify delays and budget overruns in projects.

Autonomous Agencies

• Three autonomous agencies were created in FY2002: Power Authority, Airport Authority, and Dili Harbor Authority.
• The Power Authority remains heavily reliant on budgetary subsidies.
• A realistic cost recovery plan and reduction of budgetary transfers are needed.
• A Public Enterprises Act is recommended to establish governance and accountability frameworks.

Management of Financial Assets

• Estimated oil and gas royalties and tax revenues over 20 years exceed $2,000 million.
• A statutory framework for managing savings is essential to ensure productive use.
• The framework should address revenue assignment, transparency, investment policy, and expenditure smoothing.

Budget Execution and Control

Budget Execution

• Centralized procedures ensure control over agency spending.
• A computerized system is being rolled out for real-time monitoring.
• Management responsibility should be gradually transferred to national personnel.

Liquidity Management

• Government lacks access to short-term borrowing.
• A rigorous cash-budgeting system is used to manage liquidity.
• Front-loaded disbursements are recommended for short-term liquidity needs.
• Access to short-term financing, such as oil and gas trust funds, is needed for long-term smoothing.

Accounting and Financial Reporting

• Monthly, quarterly, and annual reports are prepared on a modified cash basis.
• Regulation 2001/13 provides for complex accounting registers, including accrual accounting.
• A progressive implementation strategy is needed for these provisions, starting with TFET projects and extending to autonomous agencies and NGOs.

Personnel and Payroll Management

• Civil service management is centralized through the Civil Service and Public Employment Service (CISPE).
• A Civil Service Code is in preparation to regulate personnel management functions.
• Payroll control systems require agencies to verify staffing and attendance monthly.
• Reconciliation of payroll and personnel records is essential to prevent ghosting.
• Integration of payroll and personnel databases is recommended for the medium-term.

Procurement and Supply

• Central Administrative Services (CAS) manages procurement on behalf of agencies.
• Procedures now include the Public Works Department in specification drafting and contract monitoring.
• A computerized tracking system is being introduced to prevent unauthorized procurement.
• Procurement policies should standardize equipment and reduce maintenance costs.

Asset Management

• CAS maintains an incomplete asset register.
• A comprehensive stock take is planned before independence.
• A computerized asset management module links asset records with procurement and payments.
• A regulation on asset management is needed to define institutional responsibilities and disposal procedures.

Internal Audit, Inspection and Anti-Corruption Measures

• An Internal Audit Unit has been established in Treasury with limited staff.
• Additional staff are needed to support audit functions across the public sector.
• The Office of the Inspector General (OIG) investigates corruption and raises awareness.
• Statutory penalties for abuse of public funds are defined but difficult to enforce.

External Partners, Oversight and Consultation

• External assistance management is a key area for reform.
• Non-Governmental Organizations (NGOs) play a role in expenditure management.
• Legislative and audit oversight is important for accountability.
• Consultation and participation in expenditure management should be strengthened.

Action Plan

• Capacity and Capacity Building:
  • Develop national capacity for economic forecasting and budget execution.
  • Integrate expatriate staffing with extensive training programs.
  • Establish a statutory framework for managing oil and gas savings.
• Proposed Prioritization:
  • Focus on development projects and service delivery.
  • Ensure that budgetary support aligns with the NDP and MTFF.
  • Improve transparency and accountability in all expenditure areas.

This summary highlights the challenges and opportunities in East Timor's public expenditure management system, emphasizing the need for institutional reforms, better coordination, and increased transparency to support sustainable development and poverty reduction.