Forum Public Financial Management Roadmap – Improving Macroeconomic Stability for Sustainable Growth

Several Forum Island Countries (FICs) have undergone a Public Expenditure and Financial Accountability (PEFA) assessment as part of the implementation of the Public Finance Management (PFM) Roadmap endorsed at the Forum Economic Ministers’ Meeting (FEMM) in August last year.

The PFM Roadmap sets out the key principles which should guide sustainable PFM reforms in the region and provides a broad framework within which these principles may be applied. The Roadmap recognises the importance of government not only taking ownership of the PFM reform process, but providing leadership as well, if the PFM process is to succeed. It also highlights the role of PEFA assessments using internationally recognised standards in identifying critical weaknesses in a country’s public financial management system and in building consensus around the PFM reform agenda.

The 2010 FEMM approved the Roadmap for strengthening PFM as part of the tools for implementing the Forum Compact on Strengthening Development Coordination in the Pacific.

Speaking in support of the PFM Roadmap, Forum Secretary General Tuiloma Neroni Slade emphasised that FICs recognise the need to improve their public financial management to deliver the macroeconomic stability vital for sustainable growth and to enable efficient and effective service delivery.

“An effective public financial management system is essential to the functioning of government. It covers planning, collection, spending, reporting and audit of public monies and involves systems and staff in every agency of government. Fundamentally, effectiveness of these systems means creating stronger resilience to help with delivering national, regional and international development needs in the region,” said Mr Slade.

He said that one of the key decisions taken by the FEMM in 2010 was “the need for periodic assessments of the PFM system, to allow progress against reform objectives to be tracked and priorities to be reassessed.”

“Ministers noted that assessment could be strengthened by establishing a central point for supporting the Public Expenditure and Financial Accountability assessment process in the Pacific, and in this regard, agreed that such a resource be coordinated by the International Monetary Fund’s Pacific Financial Technical Assistance Centre (PFTAC).”

Forum Secretary General Mr Slade added that, “the Forum Secretariat continues to work closely with PFTAC to implement the PFM Roadmap, and most recently have jointly progressed PEFA assessments for the Federated States of Micronesia and the Republic of the Marshall Islands. “

“This demonstrates,” he added, “the spirit of the Forum Compact at work”.

Mr Matt Davies, the Co-ordinator of PFTAC, said that regular assessments should form the core of FICs PFM reform processes.
“Periodic assessments of the PFM system allow progress against reform objectives to be tracked and priorities to be reassessed. They also provide a basis for productive dialogue with development partners.”
Mr Davies added: “PEFA assessments should be accompanied by an update of governments’ PFM reform strategies. An assessment can only contribute to improvements in PFM if the reform process takes account of its findings and development partner support adapts to any resulting changes in priorities.”

“Action plans could include explicit targets relating to the anticipated change in PEFA markings, with additional actions that would be designed to enable this objective to be reached. Action plans should also clearly articulate the development partner support and capacity building that is required to achieve their objectives. PFTAC and its partners remain engaged with Member governments to support the design and implementation of PFM reform implementation plans,” Co-ordinator of PFTAC, Mr Davis said.

He noted that PFTAC will continue to liaise with the Forum Secretariat to co-ordinate future PEFA assessments and also share lessons from PFM reform efforts through relevant Forum processes.

ENDS.

For enquiries, contact Mr Johnson Honimae, the Forum Secretariat’s Media Officer on phone 679 331 2600 or email johnsonh@forumsec.org.fj