2004年-世界发展银行全球_FYR_Macedonia___Country_Financial_Accountability_Assessment_116页_8mb

FYR Macedonia Country Financial Accountability Assessment Summary

Core Content

This report, Report No. 28258-MK, is a Country Financial Accountability Assessment (CFAA) conducted by the World Bank in March 2003, updated through October 2003 and January 2004. It evaluates the public financial management (PFM) framework in FYR Macedonia, focusing on fiduciary risks and financial accountability in the government's use of its own and donor funds. The assessment includes recommendations to strengthen financial management and control systems, and it is closely aligned with the Public Sector Management Adjustment Loan (PSMAL) and the Country Assistance Strategy (CAS).

Main Objectives and Scope

• To identify fiduciary risks in the PFM system.
• To evaluate the design and implementation of the public financial management framework.
• To support dialogue between the government and development partners on financial accountability.
• To assist in capacity building for financial management and auditing.

The CFAA uses a value-at-risk approach, reviewing progress on previously identified PFM reforms and assessing areas for further improvement. It also includes a self-assessment of the government's financial management system, comparing internal and external evaluations.

Key Findings

Fiduciary Risk Overview

The global fiduciary risk to the government is assessed as moderate, based on the evaluation of PFM components. However, several areas are identified as significant or high risk:

PFM Component	Risk Rating	Explanation
Scope of Budget Entity	Significant	Large EBFs operate outside of TSA, and public enterprise performance is not monitored.
Internal Controls / Internal Audit	Significant	MOF is not proactive in enforcing internal controls and internal audit is not yet developed.
Capacity Development	High	No strategic human resource plan exists to develop trained staff in financial management and audit.

Budget Formulation

• Budget formulation is rated as moderate.
• The first year of a multi-year budget framework was implemented.
• A 400 M MKD set-aside was introduced for new policies.
• Overall compliance with hard budget ceilings is good.

Budget Execution

• Budget execution is rated as moderate.
• A TSA (Treasury Single Account) system is in place, and commitment accounting was implemented in September 2003.
• Arrears continue to increase year over year.
• Revenue collection systems are well designed, and the Treasury system is sound.

Revenue Collection and Management

• The Public Revenue Office (PRO) and Customs Agency have sophisticated cashless systems.
• These systems ensure payments are appropriately captured, recorded, and remitted to TSA.
• However, audit coverage is low, and the State Audit Office (SAO) needs strengthening in terms of independence, visibility, and effectiveness.

Extra-Budgetary Funds (EBFs)

• In 2002, 40% of central government spending came from EBFs not fully integrated into the budgetary control system.
• Several EBFs have deficient governance structures and weak expenditure controls.
• The Health Insurance Fund is identified as the greatest fiduciary risk.
• EBFs are planned to be integrated into the TSA starting in 2005.

Autonomous Agencies

• The Privatization Agency has deficient governance arrangements.
• The MOF needs to formalize its relationships with public enterprises and establish regular reporting mechanisms.

Internal Audit

• Internal audit is underdeveloped across the government.
• Only a nascent internal audit unit exists in the MOF and a few other entities.
• The MOF is taking steps to strengthen internal audit by:
  • Increasing staff resources.
  • Hiring a qualified Director of Internal Audit.
  • Retaining a consultant to develop legislative and training frameworks.

External Audit

• The SAO needs legislative changes to ensure independence and effectiveness.
• Audit coverage is low, and the SAO is unable to express an opinion on the government’s final budget report.
• The parliamentary Committee on Financing and Budgets can support SAO by reviewing its reports.

Public Sector Management and Capacity Building

• The government lacks a strategic human resource plan.
• There is a shortage of skilled financial and audit professionals.
• A long-term capacity development strategy is needed, including training programs and donor support.
• The regional Center for Financial Excellence in Slovenia may serve as a temporary solution for training needs.

Recommendations

• Strengthen governance structures of EBFs and bring them into the TSA.
• Implement a comprehensive internal audit system across all budget entities.
• Enhance external audit independence and effectiveness through legislative reform.
• Improve public accountability and legislative scrutiny.
• Develop a strategic capacity building plan for financial and audit staff.
• Ensure transparent reporting and accountability in public enterprises and EBFs.
• Provide training and support to financial and audit staff.
• Establish dividend policies for undistributed profits in EBFs.
• Improve budget planning and execution by enhancing monitoring and control mechanisms.

Conclusion

The PFM system in FYR Macedonia is still evolving, with improvements needed in multiple areas. The government's capacity to implement financial reforms is limited, and donor support is crucial. The CFAA team has provided 41 recommendations, emphasizing the need for institutional strengthening, capacity development, and enhanced accountability. The overall risk assessment is moderate, with significant risks in internal controls and internal audit. The CFAA serves as a foundation for future PSMAL conditionalities and reform strategies.