2003年-世界发展银行全球_Zambia_-_Public_Expenditure_Management_and_Financial_Accountability_Review___Country_Financial_Accountability_Assessment_Annex_Volume_2_82页_6mb

Zambia Public Expenditure Management and Financial Accountability Review Summary

Core Content

This report, titled Zambia Public Expenditure Management and Financial Accountability Review (PEMFA), is a comprehensive assessment of financial accountability in the Zambian public sector. Conducted by the World Bank in 2003, it focuses on the institutional arrangements, processes, and systems in place to manage public finances. The review is part of the Public Expenditure Management and Financial Accountability Report (PEMFAR), and it highlights both the strengths and weaknesses of Zambia's financial management framework.

Main Issues

Budget Preparation and Implementation

• Weak Budget Estimates: Annual budget estimates often do not reflect the true cost of activities, leading to credibility issues.
• Discretionary Authority: The Ministry of Finance (MFNP) has broad authority to propose supplementary appropriations without parliamentary approval, which undermines budget discipline.
• Lack of Transparency: The line item format of the budget obscures genuine policy priorities.
• Inadequate Integration: Activity-Based Budgeting (ABB) is introduced but not fully integrated across ministries.

Revenue Controls

• ZRA Success: The Zambia Revenue Authority (ZRA) is effective in revenue collection and has robust accountability arrangements.
• Funding Concerns: Long-term funding mechanisms for ZRA need review due to possible donor funding declines.
• Border Post Controls: There is a need to review controls at border posts.

Budget Releases

• Unpredictable Releases: Budget releases are often inconsistent with monthly estimates, leading to underfunding of projects and the accumulation of arrears.
• Lack of Coordination: Decisions on budget releases are not informed by commitments made by line ministries, resulting in poor cash flow planning.

Expenditure Controls

• Weak Internal Controls: Despite good financial regulations, internal controls are undermined by poor enforcement and cash rationing.
• Unrecorded Arrears: Payment vouchers are often recorded only after cash is available, leading to unrecorded arrears.
• Unauthorized Overdrafts: Some agencies use unauthorized overdrafts to cover expenditures beyond their budget.

Payroll Controls

• High Emoluments: Personal emoluments account for a significant portion of public spending, posing a major financial risk.
• District Payment Challenges: Civil servants in districts without banks are at risk of cash mismanagement.
• Payroll Database Issues: There is a lack of systematic updating of payroll databases, leading to payments to individuals who have left, died, or transferred.

Capital Expenditure Controls

• Significant Financial Losses: Late payment penalties and interest on contracts lead to substantial financial losses.
• Inadequate Reporting: The accounting system does not separately record late payment costs, obscuring the magnitude of losses.
• Poor Contract Awareness: The Ministry of Works and Supply often lacks awareness of project contracts until payment requests are received.

Internal Audit

• Resource Constraints: Internal auditors are well-staffed at the central level but lack resources and follow-up in line ministries.
• Limited Impact: Without sanctions, internal audits may not be effective in deterring financial misconduct.

Accounting and Reporting

• Poor Compliance: Despite sound legal provisions, compliance with accounting procedures is lacking.
• Commitment vs. Expenditure Confusion: Commitments are often recorded when checks are issued, not when they are made, leading to distorted financial information.
• Reconciliation Issues: There is no systematic reconciliation of fiscal accounts with the Bank of Zambia, and within MFNP, reported expenditures and cash releases are not reconciled.

Financial Management Information Systems (FMIS)

• Manual Processes: Reliance on manual procedures and outdated technology hinders the reliability and timeliness of financial information.
• IFMIS Development: The Government has initiated development of an Integrated Financial Management Information System (IFMIS), but it is still in early stages.

External Audit

• Limited Independence: The Office of the Auditor General (OAG) lacks independence due to insufficient resources and budgetary control by MFNP.
• Staffing and Compensation: Civil service conditions make it difficult to attract and retain qualified auditors.

Parliamentary Oversight

• PAC Challenges: The Public Accounts Committee (PAC) lacks independence and professional staff, with its decisions often influenced by the ruling party.
• Funding Dependency: The PAC's work is dependent on funding from MFNP.

Anti-Corruption Commission (ACC)

• Increased Resources: The ACC has received more funding since 2002 but faces challenges in maintaining autonomy due to political changes.

Public Debt Management

• Weak Policy Framework: There is no clear policy for contracting and repaying public debt.
• Ministerial Discretion: The Minister of Finance has wide authority to contract debt without parliamentary oversight.
• SOE Contributions: Restructuring of state enterprises and arrears to domestic suppliers contribute to public debt growth.

Local Governments

• Funding Challenges: Local Governments (LGAs) face difficulties in budget management due to unrealistic expenditure estimates and limited revenue.
• Procurement Issues: Not all LGAs have implemented procurement procedures, leading to inefficiencies.
• Audit Quality: Audits are conducted but vary in quality and timeliness.

Key Recommendations

• Improve Budget Credibility: Use historical data to compare budget estimates with actual expenditures and take policy actions to reconcile differences.
• Reduce Discretionary Authority: Limit the Ministry of Finance's authority to deviate from the approved budget.
• Enhance Predictability: Implement quarterly cash flow plans and align annual releases with the budget.
• Ensure Accurate Payroll: Institute procedures to reconcile payroll lists with actual workforce.
• Enforce Commitment Recording: Ensure checks are issued only after goods or services are received.
• Separate Capital Expenditure Costs: Record interest, penalties, and other price variances separately to inform cash management.
• Strengthen Internal Audit: Increase staffing and funding for internal audit and track implementation of recommendations.
• Clarify Accountant General's Role: Elevate the Accountant General to report directly to the Secretary to the Treasury and clarify responsibilities in legislation.
• Improve Reporting Timelines: Require monthly expenditure reports and restrict funding for ministries that fail to submit them on time.
• Enhance Transparency: Present annual financial reports to Parliament within 6 months and AG's reports within 9 months.
• Strengthen OAG Independence: Establish an Audit Board to oversee the OAG's budget and human resources.
• Secure PAC Funding: Provide a more secure funding source for the PAC and strengthen its authority to follow up on recommendations.
• Revise Debt Legislation: Update the Loans and Guarantees (Authorization) Act to include government debt policy and ensure parliamentary oversight.
• Improve SOE Oversight: Tighten financial oversight of state-owned enterprises (SOEs) and set borrowing limits to reduce contingent liabilities.

Conclusion

The report concludes that there are significant weaknesses in the public financial management system of Zambia, including poor compliance with regulations, weak accountability institutions, and inadequate information management. Long-term improvements require not only technical reforms but also legal and institutional changes to ensure transparency, accountability, and effective use of public resources.