2010年-世界发展银行全球_Restructuring_Public_Financial_Management_Institutional_Arrangements___A_Case_for_Separation_of_Accounting_from_Auditing_Functions_Government_of_Bangladesh_30页_366kb

Summary of Policy Note: Restructuring Public Financial Management Institutional Arrangements – a Case for Separation of Accounting from Auditing Functions, Government of Bangladesh

Core Content

This policy note discusses the need for restructuring and strengthening the institutional arrangements of public financial management (PFM) in Bangladesh, specifically advocating for the separation of accounting from auditing functions. The current system, inherited from the Westminster model, has led to a combined cadre for accounting and auditing, which is considered outdated and inefficient in comparison to practices in other countries. The document outlines the historical evolution, current challenges, and proposed reforms to align Bangladesh's PFM with modern professional standards.

Main Objectives

• To strengthen the accounting and auditing functions of the Government of Bangladesh through a distinct cadre.
• To propose a phased approach for the separation of these functions, ensuring organizational restructuring, business process reengineering, and policy reforms.
• To provide the government with updated information on the current state of the accounting function and the prerequisites for full separation.

Current Concerns

• Inadequate compliance with contemporary financial reporting standards.
• Lack of independence for the external auditor (C & AG) from the executive arm of government, affecting accountability.
• Weak internal controls in line ministries, leading to heightened operational risks.
• Ambiguous roles and responsibilities of CAOs and CGA, causing inefficiencies.
• Limited authority of CGA over CAOs, leading to conflicts of interest and career misalignment.
• Insufficient financial expertise in existing cadre, unable to meet emerging challenges.
• Dual reporting systems complicate financial management and audit processes.

Proposed Way Forward

The note suggests a more empowered Controller General of Accounts (CGA) and independent Comptroller & Auditor General (C & AG), with a focus on organizational restructuring, clearer roles, and improved internal audit. It draws inspiration from India's experience (Box 1) and Canada's CFO model (Box 2) to advocate for:

• Functional reorganization of the accounting framework.
• Deployment of CAOs directly to line ministries.
• Creation of Financial Management Units (FMUs) in each ministry, including roles such as PAO, FA, CAO, and CIA.
• Reintroduction of the Financial Advisor (FA) position to provide financial expertise and support to line ministries.
• Separation of the BCS (Accounts and Audit) cadre into two distinct professional disciplines.
• New audit legislation to enhance the independence and authority of the C & AG.
• Modernization of internal audit and financial management systems to align with international standards.

Key Recommendations

Phase I: Restructuring of Financial Management and Accounting Functions

• Strengthen the CGA: Elevate the CGA to G-1 level, making them the Chief Accountant of the Government of Bangladesh.
• Executive control over CAOs: The CGA should oversee the appointment and performance of CAOs, ensuring career development and accountability.
• Deployment of CAOs: CAOs should be placed in line ministries to support financial management, with functional reporting to the Secretary and administrative control by the CGA.
• Financial Management Units (FMUs): Establish FMUs in each ministry, including PAO, FA, CAO, and CIA, to improve accountability and transparency.
• Redefine DDOs' roles: DDOs should be functionally accountable to CAOs for expenditure records and scrutiny by internal audit.
• Reintroduce the FA role: FAs should be appointed in large ministries to assist in budget planning, monitoring, and performance evaluation.
• Internal Audit Oversight: Establish Chief Internal Auditor (CIA) positions in line ministries, with supervisory responsibility over internal audit and program reporting.
• Human Resource Development: Implement a comprehensive HR program to reorient civil servants towards broader PFM issues, including training and strengthening local institutions like PFF and FIMA.

Phase II: Proposed BCS: Accounts (FM) and Audit Cadres

• Full separation of cadres: Split the combined BCS (Accounts and Audit) cadre into two distinct cadres – Accounts (FM) and Audit.
• New audit legislation: Introduce an Audit Act to enhance the independence and autonomy of the C & AG and its personnel.
• Clarify roles and responsibilities: Ensure clear demarcation between accounting and auditing functions to reduce overlaps and conflicts.
• Long-term HR goals: Transform current accountants and auditors into public finance managers through professional development.

Conclusion

The policy note emphasizes that without organizational restructuring, business process reengineering, and policy reforms, the transformation of PFM in Bangladesh will remain incomplete. It advocates for a phased and strategic approach to the separation of accounting and auditing functions, drawing from international best practices and highlighting the need for a motivated and specialized workforce. The ultimate goal is to enhance financial management performance, improve accountability, and align with global standards.

Key Information

• Legal Basis: Article 128 of the Bangladeshi Constitution mandates the C & AG to audit and report on public accounts.
• Historical Context: The CGA was established in 1984 to maintain and compile government financial statements.
• Current Status: Despite the 1984 reform, the C & AG continued to manage accounting and auditing until 2002.
• Need for Reform: The combined cadre is considered inefficient and outdated, and the government has initiated a three-year plan for phased separation.
• Challenges: Lack of clarity in roles, dual reporting systems, and limited financial expertise are major barriers to effective PFM.
• Supporting Institutions: The Public Accounts Committee (PAC), Financial Management Academy (FIMA), and Public Finance Foundation (PFF) are highlighted as key institutions for capacity building and professional development.

Annexes

• Annex 1: Comments from the Office of the Comptroller & Auditor General (C & AG).
• Annex 2: Comments from the Office of the Controller General of Accounts (CGA).

Boxes

• Box 1: Highlights India's experience with separating the audit and accounts cadre.
• Box 2: Outlines Canada's CFO model as a reference for institutional restructuring and strengthening.