2004年-世界发展银行全球_Pakistan___Sindh_Provincial_Accountability_Assessment_40页_2mb

Sindh Provincial Financial Accountability Assessment Summary

Core Content

The Sindh Provincial Financial Accountability Assessment (PFAA) is a comprehensive evaluation of the public financial management (PFM) system in Sindh, Pakistan, developed by the World Bank. It aims to improve the transparency, accountability, and efficiency of financial management in the province, aligning with the broader Country Financial Accountability Assessment (CFAA) and the Sindh Structural Adjustment Credit (SAC). The report highlights the current challenges and outlines a set of recommendations for institutional and legal reforms.

Main Points

1. Fiscal Year and Currency

• Fiscal Year (FY): July 1 – June 30
• Currency Unit: Pakistan Rupees (PKR)
• Exchange Rate: US$1 = PKR 59.45 (as of November 19, 2004)

2. Key Acronyms and Abbreviations

3. PFM System in Sindh

• The budget process starts with the annual budget aligned with the medium-term objectives of the government.
• Line departments submit separate proposals for development and recurrent budgets.
• The development proposals are evaluated by the Planning and Development Department.
• The Finance Department compiles the overall budget, which is debated and approved by the legislature.
• Funds are held in the Provincial Consolidated Fund and the Public Account.
• Expenditure bills are submitted to District Accounts Offices for pre-audit and scrutiny before payment.

4. Current Problems

• The budget process lacks a medium-term vision and is not aligned with sectoral objectives.
• Expenditure is rigid, especially for salaries and debt servicing, leading to incremental budgeting.
• Low allocations to social sectors hinder poverty reduction.
• Civil society and elected representatives have limited participation in budgeting and monitoring.
• The provincial legislature lacks effective control over budget estimates and has a weak audit function.
• Block allocations are overused to manage unanticipated expenses.
• There is a lack of proper feedback mechanisms and internal control systems.

5. Recommendations

Budget Development and Execution

• Develop a Budget (Development & Implementation) Law to restrict expenditure and ensure fiscal discipline.
• Introduce program budgeting to align financial targets with service delivery goals.
• Establish Legislative Appropriations Committees for detailed budget scrutiny.
• Include professional bodies in development working parties and project formulation.

Accounting and Financial Reporting

• Improve the internal control and audit systems.
• Develop a new accounting system under PIFRA.
• Introduce performance indicators for service delivery and integrate them with the budget process.
• Focus on social sectors (education, health) for initial performance budgeting efforts.

External Audit

• Enhance the role of Departmental Accounts Committees (DACs) in resolving audit observations.
• Expand performance auditing in the province.
• Ensure audit coverage of all significant government assets and development outcomes.

Legislative Oversight

• Strengthen the Public Accounts Committee (PAC) to ensure continuous legislative review.
• Develop research capacity for oversight committees.
• Implement Public Finance Legislation to ensure sustainability of the Sindh Reforms Program.
• Achieve international fiscal transparency standards.

6. Devolution Impact

• Devolution has created new local government structures at the district, taluka, and union levels.
• Local Governments (LGs) are responsible for social services, but fiscal authority remains with the federal government.
• There are transitional challenges in financial accountability due to lack of clear rules and procedures at the local level.
• The Sindh Local Government Ordinance (SLGO) 2001 provides a structured governance plan but relies on ideal conditions.
• The Provincial Finance Commission (PFC) is tasked with resource distribution, fiscal transfers, and performance-based recommendations.

7. Action Matrix

• The report includes a time-bound action plan to implement the recommendations.
• Focus is on short-term measures that do not require substantial legislative action.
• The overall PFM risk rating for the province is "Medium".

Key Information

• The PFM system in Sindh is under-reformed and needs a comprehensive legal and institutional framework.
• Devolution has introduced new challenges, especially in fiscal accountability and resource management at the local level.
• Capacity building is essential for the long-term success of the PFM reforms.
• The Sindh Reforms Program, supported by the World Bank, includes civil service reform, fiscal restructuring, financial management, and procurement improvements.
• The PAC and DACs play a crucial role in financial oversight and audit resolution.
• The PFC is central to the fiscal distribution and resource allocation process.

Conclusion

The Sindh PFAA identifies opportunities for reform and proposes a comprehensive action plan to improve PFM and accountability. It emphasizes the need for institutional and legal reforms, enhanced legislative oversight, and improved internal control and audit systems. The ultimate goal is to ensure fiscal transparency, sustainable development, and effective public service delivery. The report concludes that the overall risk rating of the PFM system is "Medium", indicating that while there are challenges, the reforms can lead to significant improvements.