Strengthening Public Financial Management through Transparency in Timor-Leste
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Transcript of Strengthening Public Financial Management through Transparency in Timor-Leste
Strengthening Public Financial Management through Transparency in Timor-Leste
International Consortium on Governmental Financial Management
May 17, 2011
Confusion?
Strengthening Public Financial Management in Timor-Leste 2
Strengthening Public Financial Management in Timor-Leste
Congress cuts transparency funding
How can Timor-Leste afford government transparency?
Strengthening Public Financial Management in Timor-Leste 4
Timor-Leste United States Comparison
Independence 2002 1776 3.4%
GDP Per Capita $2,600 $47,400 5.5%
GDP Growth 8% 2.7% 338%
Unemployment 20% 9.7% 206%
Below poverty line 42% 12% 350%
Life Expectancy 67.95 78.92 86%
Literacy 58.6% 99% 59%
globalization
Strengthening Public Financial Management in Timor-Leste
= competition
Strengthening Public Financial Management in Timor-Leste
choice
Strengthening Public Financial Management in Timor-Leste
citizens are watchingStrengthening Public Financial Management in Timor-Leste
empowered
Strengthening Public Financial Management in Timor-Leste
Democratic Republic of Timor-Leste
(RDTL)Transparency
Objectives
Strengthening Public Financial Management in Timor-Leste 10
Strengthening Public Financial Management in Timor-Leste
build civil society
Strengthening Public Financial Management in Timor-Leste
build infrastructure
Strengthening Public Financial Management in Timor-Leste
build capacity
Strengthening Public Financial Management in Timor-Leste
build citizen involvement in government
Strengthening Public Financial Management in Timor-Leste
improve government performance
Strengthening Public Financial Management in Timor-Leste
?
Strengthening Public Financial Management in Timor-Leste
GDP Per Capita (PPP, logs)
UG
AN
DA
PAPU
A N
EW
GU
INEA
AU
ST
RA
LIA
-3
-2
-1
0
1
2
3
209 Countries
Norm
aliz
ed G
overn
ment
Eff
ect
iveness
Index
HIGH
LOW
Benefits of Transparency Government Effectiveness and GDP*
* At purchasing power parity
Source: The World Bank
Higher the government effectiveness = higher the country GDP Per Capita
Strengthening Public Financial Management in Timor-Leste
GDP Per Capita (PPP, logs)
UG
AN
DA
PAPU
A N
EW
GU
INEA A
US
TR
ALI
A
-3
-2
-1
0
1
2
3
207 Countries
Norm
aliz
ed
Voic
e a
nd
Acc
ounta
bili
ty Ind
ex
.
HIGH
LOW
Benefits of Transparency Voice and Accountability and GDP*
* At purchasing power parity
Source: The World Bank
Higher the government accountability = higher the country GDP Per Capita
Strengthening Public Financial Management in Timor-Leste
GDP Per Capita (PPP, logs)
UG
AN
DA
PA
PU
A N
EW
GU
INE
A
AU
ST
RA
LIA
-3
-2
-1
0
1
2
3
204 Countries
Norm
aliz
ed C
ontr
ol of
Corr
upti
on Index
HIGH
LOW
Benefits of TransparencyControl of Corruption and GDP*
* At purchasing power parity
Source: The World Bank
Higher the control of corruption = higher the country GDP Per Capita
Strengthening Public Financial Management in Timor-Leste
= stability
Strengthening Public Financial Management in Timor-Leste
= investor confidenceStrengthening Public Financial Management in Timor-Leste
avoid theresource curse
Strengthening Public Financial Management in Timor-Leste
technology leapfrog
Strengthening Public Financial Management in Timor-Leste
use what works
Strengthening Public Financial Management in Timor-Leste
skip what doesn’t work
Strengthening Public Financial Management in Timor-Leste 25
skip stages
Strengthening Public Financial Management in Timor-Leste
modernize
Strengthening Public Financial Management in Timor-Leste
rapidly
Strengthening Public Financial Management in Timor-Leste
review
Transparency and Accountability
The next generation of public financial management technology will allow the public to
track the budget live, to see where every dollar is being spent, and to gain renewed confidence in the
process
Democratic Republic of Timor-Leste Vision
Strengthening Public Financial Management in Timor-Leste
sequenced
Strengthening Public Financial Management in Timor-Leste
Strengthening Public Financial Management in Timor-Leste
Public Financial Management – Foundation for Country Growth
FMIS(software and
hardware)
Human Resource
Development
Capacity Building
(Training)
GoTL LAWS
Procurement Commission
Autonomous Agencies
Ministries
Decentralization
Public Financial Management
Strengthening Public Financial Management in Timor-Leste
1. International StandardsStrengthening Public Financial Management in Timor-Leste
IPSASInternational Public Sector Accounting Standards
Strengthening Public Financial Management in Timor-Leste
EITIExtractive Industries
Transparency Initiative
Strengthening Public Financial Management in Timor-Leste
GFSGovernment Financial Statistics
Strengthening Public Financial Management in Timor-Leste
MTEFMedium Term Expenditure Frameworks
Strengthening Public Financial Management in Timor-Leste
IATIInternational Aid Transparency Initiative
Strengthening Public Financial Management in Timor-Leste
2. Manager’s Dashboard
Strengthening Public Financial Management in Timor-Leste
review
Strengthening Public Financial Management in Timor-Leste 40
integration with macro-economic data
examines budget execution data
integrated with back-office procurement & commitment
accounting within IFMIS
3. Document Management
Strengthening Public Financial Management in Timor-Leste
manages correspondence with
senior managers
repository for freedom of information
4. e-Procurement Portal
Strengthening Public Financial Management in Timor-Leste
review
Strengthening Public Financial Management in Timor-Leste 44
integrated with back-office procurement & commitment
accounting within IFMIS
vendor alerts
tender results published
government tenders published
5. Transparency Portal
Strengthening Public Financial Management in Timor-Leste
review
Strengthening Public Financial Management in Timor-Leste 46
www.transparency.gov.tl
subscribe
drill down
articles
Expenditures, Transparency Portal
10 years of data
drill through the chart of accounts
Expenditures, Transparency Portal
export to xls, doc, pdf, html, xml
track commitments
Lessons Learned
Strengthening Public Financial Management in Timor-Leste 52
1. Leadership
Strengthening Public Financial Management in Timor-Leste
Goodbye Conflict, Welcome Development
Timor-Leste will be the country that goes down in history as the nation to put a stop to falling victim to large
companies and the resource curse
Prime Minister Xanana Gusmão
Strengthening Public Financial Management in Timor-Leste
2. Learn from the mistakes of othersStrengthening Public Financial Management in Timor-Leste
Goodbye Conflict, Welcome Development
When we in the developing world face these types of crisis, which we do on a more regular basis than our colleagues in
more economically advanced nations — then we are repeatedly told to increase our openness to the global
economy, to trust in the market but to regulate them well. To be honest this approach has worked
Minister of Finance Emilia Pires
Strengthening Public Financial Management in Timor-Leste
3. Transparency
is not an Option
Strengthening Public Financial Management in Timor-Leste
Strengthening Public Financial Management in Timor-Leste
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
20
40
60
80
100
Mobile cellular telephone subscribers Per 100 inhabitants
YouTubeFacebook
TwitterSMS
citizen auditors
4. Transparency = Performance > Embarrassment
Strengthening Public Financial Management in Timor-Leste
Strengthening Public Financial Management in Timor-Leste
Role of Civil Society• NGO’s can help organise literacy groups and provide
materials. They can provide private education andeducation for the blind. They can provide school
materials for students, and assist with school equipmentchairs and books
• NGO’s can help us organise and run technical trainingcourses in our villages
Timor-Leste National Vision
Strengthening Public Financial Management in Timor-Leste
5. Sequenced Holistic Multiple-Year PFM Strategy
Strengthening Public Financial Management in Timor-Leste
Improve budget execution
Improve government capacity
Improve transparency & accountability
Improve government performance
review
Strengthening Public Financial Management in Timor-Leste
Public Financial Management – Foundation for Country Growth
6. Build Capacity
Strengthening Public Financial Management in Timor-Leste
Strengthening Public Financial Management in Timor-Leste
review
• Training beyond software– IT capacity– Project management– Government accounting
• Beyond training– Adaptable help– E-Learning– Knowledge management
• Intuitive systems– Translation including
terminology– Simple & goal-oriented
interfaces
• Mentoring
PFM ModernizationAlignment with Capacity Building
7. Require Sustainability in Partner Performance
Strengthening Public Financial Management in Timor-Leste
8. Adopt International Standards
Strengthening Public Financial Management in Timor-Leste 67
9. Leverage Open Systems
Strengthening Public Financial Management in Timor-Leste
Transition to Open Environment: Transparency
Domain Closed Transition Open
Transparency Access to Information Document Machine Readable
Data Availability Data for Sale Publish as Exception Do not Publish as Exception
Mode Publish, Audited & Vetted Mixed Near Real-Time
Publishing
ROI Reason Revenue Generation What are they going to do with the data?
Government as Platform
Target Business Community Civil Society & Press Citizens
Transition to Open Systems: Technology
Domain Closed Transition Open
Integration Proprietary within Suite
Support for Industry Standards
Service Oriented Architecture
Middleware Proprietary = Customer Lock
Proprietary/Open Tactical approach
Open Standards = Customer Choice
Viewpoint Open Systems reduce system performance
Open Systems extend value
Open Systems = Extensibility
Extensibility High Costs Need for vendor Ecosystem
Low Cost Application Assembly
10. Leapfrog is possible
Strengthening Public Financial Management in Timor-Leste
Timor-Leste United States Comparison
1. Standards GFS, IPSAS, EITI, IATI, MTEF ? Leaped
2. Performance Management Manager’s Dashboards Various tools across
government To leap
3. Document Management
Manager Document Management
Various Records & Correspondence Catching Up
4. e-Procurement August 15 FedBizOpps To leap
5. Transparency Transparency Portal Data.gov & others - underfunding
Leaping
www.revenuewatch.org
Strengthening Public Financial Management in Timor-Leste
How?
Strengthening Public Financial Management in Timor-Leste
Timor-Leste United States
Strategic Vision Holistic 1 Year Budgets, complex election cycles
Government Structure Unitary Federal
Civil Society & Media Seen as Improving Results Seen as “Special Interests”
Government Intervention Seen as Good Seen Suspiciously
1. Standards Ease to Move to International Standards
Long History of Entrenched National Standards
2. Performance Management
Single system data source Multiple entrenched systems3. Document Management
4. e-Procurement
5. Transparency
Links
• Open Systems Enable Government Transparency Leapfrog http://www.freebalance.com/blog/?p=1559
• E-Government Transparency in Developing Countries http://www.cutter.com/offers/egovt.html
• Developing Countries can Leapfrog Developed Countries in Government Transparency http://tech.state.gov/profiles/blogs/how-developing-countries-are
• More: [email protected]
Strengthening Public Financial Management in Timor-Leste 74
Goodbye Conflict, Welcome Development
Strengthening Public Financial Management in Timor-Leste