Parliament on Wednesday ratified the Public Financial Management Bill, 2016, which is designed to address persistent weaknesses and promote discipline, transparency and accountability in the management of public funds.
There was resounding ‘aye’ from both sides of the House in favour of the Bill when the Speaker, Mr Edward Doe Adjaho, put the final question to seal the discussion and debates on the Bill.
Both sides of the house had lauded the content of the Bill, which is expected to help address the wide differences regarding proper use of state funds by public officials.
The Bill comes in the wake of the need to strengthen public finances, promote fiscal discipline and consolidate existing laws to regulate the financial management of the public sector within the macroeconomic and fiscal framework.
“The legal framework for public financial management is currently scattered among a number of different legislation’s.
“There is therefore a need to integrate all existing legislation into an overreaching enactment, which reflects a more coherent framework for the fiscal management of the public sector,” a report of the Finance Committee on the Bill said.
The report explained that Public Financial Management had experienced systemic weakness including lack of credibility in the budget process, unpredictability during budget execution.
Limited expenditure controls and cash rationing, all of which contribute to the problem of chronic and persistent arrears.
“In order to address these shortcomings, the Public Financial Management Bill introduces and formalises a number of significant process improvements in fiscal development principles and practices, public financial management and budget execution that have been introduced over the years but which are not reflected currently in legislation.
“The Bill also provides for the macroeconomic, fiscal, regulatory, accounting and accountability framework for dealing with the management of money and property of the Government.
“It addresses the persistent weakness in fiscal failures in accountability mechanisms and provides a clear budget process map that strengthens the link between fiscal strategy and failure,” the Committee report said.
The Bill has 111 clauses and one Schedule. Preliminary provisions in relation to the object and application of the Act are provided in clauses 1and 2; the various roles and responsibilities of the actors in the management are specified in clauses 3 to 10.
Provision is made in clauses 11 to 18 for the formulation of macroeconomic and fiscal policies. Clause 10 specifies the scope of application of clauses 11 to 18.
It gives the Minister the power to extend the application of clause 11 to 18 to local government authorities and public corporations in addition to the Central Government.
The preparation, approval and management of the budget is catered for in clauses 19 to 35. Clause 36 empowers the Minister to create Sinking Fund for the redemption of specified medium to long term debt obligations of Government and clauses 37 and 39 provide for the sources of money for and the administration of the Sinking Fund.
Clauses 40 to 43 deal with payment from Sinking Fund as well as the accounting and auditing of the Fund.
Cash and asset management is dealt with clauses is dealt in clauses 44 to 34. The clauses specifically deal with the management and use of Government moneys, Treasury Single Account, collection, deposit and retention of Government revenue.
Clauses 55 to 81 deal with the management of public debt. Notable among the provisions are the creation of an Office with the Ministry to handle public debt management, debt management objectives and strategy and debt financing arrangements among others.
Duties of Principal Spending Officer in terms of management of moneys of covered entity supervised by the Principal Spending Officer are dealt with in clause 81.
Accounts and audit provisions are dealt with in clauses 82 to 88 whiles Audit Committees are provided for in clauses 89 to 91.
Provisions on the oversight of Local Government Authorities, Public Corporations and State-Owned Enterprises are stipulated in clauses 92 to 99.
Miscellaneous provisions are dealt with in 100 to 111.
The clauses among others provide for offenses and penalties, surcharge a public officer for a loss or deficit in public funds, guidelines for the effective implementation of the Act and fiscal impact analysis of legislation and proposals.