2004年-世界发展银行全球_Tajikistan___Country_Financial_Accountability_Assessment_62页_4mb

Tajikistan Country Financial Accountability Assessment Summary

Overview

This report, Report No. 29693-TJ, provides a comprehensive assessment of Tajikistan's financial accountability framework, focusing on public and private sector financial management. The assessment was conducted by a World Bank Task Team in 2002 and 2003, with close collaboration from Bank staff and government officials. The report outlines key challenges and recommendations for improving financial governance and accountability in the country.

Core Content

Country Context

• Government Structure: Tajikistan has four levels of government: central (Republican), city (Dushanbe), oblasts (Sugd, Khatlon, Gorno Badakhstan), and districts (jamoats). Each level has its own executive authority (khukumat).
• Governing Powers: The President holds significant authority, including the power to appoint and dismiss officials in the judicial and executive branches. The President is supported by a team of advisors and sector units that monitor policy development.
• Economic Background: The country's economic transition was shaped by the loss of Soviet Union transfers and the civil war in 1992. Despite these challenges, Tajikistan experienced strong economic growth (over 7% annually from 1999–2002), driven by industrial and agricultural sectors. However, the economy remains heavily dependent on cotton and aluminum exports, and the banking sector is weak. Over 80% of the population is below the poverty line, and 30% live in absolute poverty.
• Key Challenges: The country faces significant governance and institutional weaknesses, including fragmented budgets, poor cash management, weak internal and external audits, and inadequate oversight of state-owned enterprises (SOEs).

Main Views

Public Sector Financial Management

• Budget Management: The budget process is centralized in the Ministry of Finance (MoF), but the system is fragmented and lacks coherence. The Law of State Finances (2002) is modern, but its implementation is hindered by limited capacity and outdated procedures.
• Budget Execution: The Treasury plays a central role in budget execution, but cash and debt management systems are weak. There are issues with arbitrary payment dates, inefficient resource use, and lack of systems to track commitments and arrears.
• Accounting and Reporting: Public sector accounting is not fully integrated, with line ministries using accrual-based systems and the Treasury using cash-based methods. There is a lack of computerization in local treasury offices, which slows down the consolidation and analysis of financial data.
• Internal Controls: Internal audit functions have been weakened, with the Financial Control and Revision Unit disbanded in 2001. The existing control framework lacks clarity on the roles and responsibilities of internal and external audits.
• External Oversight: The State Financial Control Committee (SFCC) has legal powers but is constrained by limited capacity and lack of independence from the executive branch. Parliamentary oversight is also weak due to limited technical staff and inadequate scrutiny of budget submissions.

State-Owned Enterprises (SOEs)

• SOEs are a significant part of the economy, particularly in the energy sector, where quasi-fiscal expenditures are estimated at 6–10% of GDP.
• SOEs suffer from poor governance, lack of transparency, and inadequate monitoring and reporting.
• The Government has not fully integrated SOEs into the public financial management system, leading to risks of misreporting and misuse of funds.

Local Government and Community-Level Institutions

• Local governments and community institutions have weak budgeting, accounting, and reporting systems.
• There is a lack of coordination between central and local financial management systems.
• Internal and external audits at the local level are not well-developed, and the SFCC has limited capacity to monitor local finances.

Private Sector Financial Accountability

• Private sector financial reporting and auditing are underdeveloped, with limited awareness of financial accountability among businesses and professionals.
• The absence of foreign investment and the country's isolation contribute to the weakness in financial management practices.
• There is a lack of a modern auditing profession, with no international audit firms operating in the country.
• While commercial banks are required to follow International Financial Reporting Standards (IFRS), they have not adopted them due to capacity constraints.

Key Recommendations

For Public Sector Accountability

1. Improve Timeliness and Accuracy of Financial Reporting: Strengthen the links between local and central treasury systems and integrate accounting across budgetary institutions.
2. Develop the Budget Commission: Establish a functioning inter-ministerial Budget Commission to oversee medium-term forecasts, approve budget instructions, and set expenditure ceilings.
3. Create a Cash Management Unit: Set up a dedicated Cash Management Unit within the MoF, with appropriate staff training and capacity building.
4. Reform SOEs: Convert all SOEs into joint stock companies with clearly defined boards and prepare financial reports according to international standards.
5. Strengthen Internal Audits: Develop a comprehensive strategy for public sector internal audits, including staffing, methodology, and institutional arrangements.
6. Enhance External Oversight: Improve the capacity of the SFCC to conduct financial attestation audits and revise audit methodologies to align with international norms. Subordinate the SFCC to the Parliament in the long term.

For Private Sector Accountability

1. Adopt IAS as National Standards: Implement a fully translated version of International Accounting Standards (IAS) for public interest companies, including banks and SOEs.
2. Simplify IAS Requirements: Relax IAS reporting requirements for small and medium-sized entities in line with IASC guidelines.
3. Incorporate Private Sector Representatives: Include enterprise representatives, key SOEs, and audit firms in the Government's working party on financial reporting.
4. Apply Audit Requirements: Extend statutory audit requirements to financial institutions, listed companies, and SOEs, aligning with international standards.
5. Strengthen Audit Mechanisms: Develop mechanisms to monitor and license auditors in accordance with international norms.

Development Action Plan

• The Development Action Plan (DAP) is to be implemented by the President's Office, with significant roles played by the MoF, Majlisi Namoyanagon (Assembly of Representatives), and the SFCC.
• The DAP is a sequenced approach to addressing financial management weaknesses, focusing on short, medium, and long-term capacity building.
• A detailed matrix of proposed actions is included in Annex 1 of the report.

Fiduciary Considerations

• The World Bank and other development partners emphasize the need for tight control over Bank-funded projects until systemic weaknesses are addressed.
• Loan proceeds should be placed in a ring-fenced deposit account at a correspondent bank, with independent audits.
• The donor community is encouraged to develop a joint strategy to reduce transaction costs and improve coordination in financial management requirements, following OECD-DAC guidelines.

Conclusion

Tajikistan's financial accountability framework is weak and poses significant risks to the proper use of public and private sector funds. The report highlights the need for institutional and legislative reforms to strengthen governance, improve transparency, and build capacity in financial management. The CFAA serves as a critical diagnostic tool to guide future lending and reform strategies.