2005年-世界发展银行全球_Kosovo___Operational_Financial_Accountability_Review_82页_5mb

Kosovo Operational Financial Accountability Review Summary

Core Content

This report, titled Kosovo Operational Financial Accountability Review (OFAR), provides an analysis of the Public Financial Management (PFM) system in Kosovo, focusing on the challenges and areas for improvement in financial accountability and PFM practices. It outlines the current state of financial management, highlights the key issues, and offers recommendations to strengthen the system.

Main Objectives

• To identify key challenges in the PFM operational framework.
• To highlight areas where donor support may be needed.
• To support the Kosovo Standards Implementation Plan (KSIP) in achieving better financial accountability and management.

Key Findings

General Overview

• Kosovo's unique political and historical context presents significant challenges to PFM.
• The Provisional Institutions of Self-Government (PISG) are characterized by young, inexperienced, and fragmented organizations.
• Public resources are managed by two distinct structures: PISG and UNMIK, each with its own rules and systems.
• Capacity, organization, and coordination issues severely hamper meaningful resource allocation and financial management.
• The principle of annuality is undermined by the practice of carry-over of appropriations, leading to frequent and significant budget revisions.

Legal and Institutional Framework

• The Law on Public Financial Management and Accountability (LPFMA) reflects good international practices but is perceived as too demanding and leading to a "double standard" in its application.
• The legal framework is complex and not fully aligned with the current capacity of the PISG administration.
• The SRSG signs off on the Kosovo Consolidated Budget (KCB), despite the MFE being the responsible authority for budgeting.

Budgeting

• The budget is not used as a policy management tool due to inefficiencies in preparation.
• There is a need for more realistic budget estimates and a more predictable budget preparation calendar.
• The carry-over practice, stemming from previous procurement laws, is a major obstacle to effective budgeting.

Treasury and Cash Management

• The Treasury System is well-regulated but suffers from inefficiencies.
• Large cash surpluses are accrued at the end of the fiscal year due to carry-over practices, better-than-anticipated revenue, and significant mid-year revisions.
• The Treasury System has not been fully implemented across all central government Budget Organizations (BOs) and is still reliant on manual processes.
• There is no central account clearing mechanism, leading to idle balances in individual bank accounts.

Accounting and Financial Reporting

• Accounting practices are at an early stage and lack formal requirements and trained personnel.
• The use of a chart of accounts (COA) is not formalized, and no user's guide has been issued.
• Parallel systems and spreadsheets undermine data reliability and quality.
• The LPFMA's reporting requirements are too demanding and unrealistic given current capacity.

Internal Control and Audit

• Internal control and audit mechanisms are underdeveloped.
• The application of international standards such as COSO and ISPPIA is limited.
• The MFE and BOs lack the capacity for effective financial planning and management.

External Audit

• External audit practices are not well-established.
• The use of INTOSAI Auditing Standards is not fully implemented.
• The need for greater transparency and standardization in the audit process is evident.

Local Government Accountability

• Accountability arrangements for local governments are similar to those for central administration.
• There is a need for stronger institutional arrangements to ensure transparency and fairness in resource allocation.

Key Recommendations

• Revise the LPFMA and related legislation to align with current capacity levels and to avoid the perception of double standards.
• Abolish the practice of carry-over of multi-year appropriations and ensure unspent amounts are canceled or reappropriated in the following year.
• Enhance transparency in the budget revision process and encourage external scrutiny of the budget framework.
• Improve capacity and organization for budget planning and financial programming, including hiring and training staff.
• Implement the Treasury System across all BOs and ensure its use aligns with the development of financial management skills.
• Close all existing bank accounts and process all transactions via the Treasury's account in the BPK.
• Develop and implement a comprehensive accounting plan that includes hiring, training, and retention of competent accountants.
• Issue a formal COA and user's guide to standardize accounting practices and improve data quality.
• Strengthen internal control and audit functions to ensure effective financial management.
• Ensure the MFE and BOs have a formal process for submitting and discussing financial plans to determine quarterly cash envelopes.
• Legislate institutional arrangements for the arbitration of allocation disagreements, particularly involving the Budget Commission.

Conclusion

Despite progress since 2001, Kosovo's PFM system remains weak and underdeveloped. The report emphasizes the need for increased donor support, capacity building, and alignment with international standards to ensure effective financial accountability and management. The recommendations aim to address the key challenges and support the implementation of the KSIP.