REPUBLIC OF THE GAMBIA
2009 COUNTRY FINANCIAL ACCOUNTABILITY
ASSESSMENT
The World Bank
Africa Region
AFTFM
2009
69692
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The 2009 Country Financial Accountability Assessment for The Gambia. Page i
ABREVIATIONS AND ACRONYMS
AfDB African Development Bank
GBMAA Government Budget Management and Accountability (Act)
CFAA Country Financial Accountability Assessment
COSO Committee of Sponsoring Organizations
DfID Department for International Development
DNT Directorate of the National Treasury
DOSFEA Department of State for Finance and Economic Affairs
FPAC Finance and Public Accounts Committee
GDP Gross domestic product
GFS Government Finance Statistics
GMD Gambian Dalasi (local currency)
GRA Gambia Revenue Authority
HIPC Highly Indebted Poor Countries
IDA International Development Association
IFAC International Federation of Accountants
IFMIS Integrated Financial Management Information System
IMF International Monetary Fund
INTOSAI International Organization of Supreme Audit Institutions
IPSAS International Public Sector Accounting Standards
IT Information Technology
LGA Local Government Act
LGFA Local Government (Financial and Audit) Act
MTEF Medium-term expenditure framework
PEFA Public Expenditure and Financial Accountability
PFM Public financial management
PI Performance indicator
PRSP Poverty Reduction Strategy Paper
ROSC Report on Observance of Standards and Codes
SWAp Sectorwide approach
TIN Taxpayer Identification Number
The 2009 Country Financial Accountability Assessment for The Gambia. Page ii
Republic of The Gambia
2009 Country Financial Accountability Assessment
Contents
EXECUTIVE SUMMARY ......................................................................................................................................... v
INTRODUCTION ...................................................................................................................................................... 1
SECTION 1. FINANCIAL PLANNING AND BUDGET PREPARATION ................................................. 4 1.1. The legislative framework ...................................................................................................................................................... 4 1.2. Budget preparation ................................................................................................................................................................... 4 1.3. Multi-year and strategic budget perspective ................................................................................................................... 6 1.4. Budget comprehensiveness and transparency ................................................................................................................ 8 1.5. Assessment and Recommendations ..................................................................................................................................... 8
SECTION 2. ACCOUNTING, FINANCIAL REPORTING, INTERNAL CONTROL, AND INTERNAL AUDIT .................................................................................................................................................... 10
2.1. Accounting system and IFMIS .............................................................................................................................................. 10 2.2. Financial reporting .................................................................................................................................................................. 12 2.3. Internal controls and effectiveness of internal audit ................................................................................................. 13 2.4. Challenges and recommendations ..................................................................................................................................... 14
SECTION 3. EXTERNAL AUDIT ................................................................................................................. 17 3.1. National Audit Office: Constitutional and legal mandates....................................................................................... 17 3.2. Resources and financial autonomy .................................................................................................................................... 18 3.3. Audit reports ............................................................................................................................................................................... 19 3.4. Assessment and recommendations .................................................................................................................................... 20
SECTION 4. LOCAL GOVERNMENT ......................................................................................................... 22 4.1. Legislation and regulation .................................................................................................................................................... 23 4.2. Budget planning and preparation ..................................................................................................................................... 23 4.3. Accounting, reporting, and internal control .................................................................................................................. 24 4.4. Executive oversight .................................................................................................................................................................. 26 4.5. Assessment and recommendations .................................................................................................................................... 27
SECTION 5. STATE-OWNED (PUBLIC) ENTERPRISES ...................................................................... 29 5.1. Legislative and institutional framework and corporate governance .................................................................. 29 5.2. Corporate governance ............................................................................................................................................................ 30 5.3. Budget preparation ................................................................................................................................................................. 31 5.4. Accounting, internal control, reporting, and internal audit .................................................................................... 31 5.5. External audit and legislative oversight .......................................................................................................................... 32 5.6. Assessment and recommendations .................................................................................................................................... 32
SECTION 6. LEGISLATIVE SCRUTINY, PUBLIC ACCESS TO INFORMATION, ETHICS AND INTEGRITY .................................................................................................................................................... 34
6.1. Legislature and its institutions ............................................................................................................................................ 34 6.2. Legislative scrutiny of the annual budget law .............................................................................................................. 35 6.3. Legislative scrutiny of external audit reports ............................................................................................................... 36 6.4. Capacity issues ........................................................................................................................................................................... 36 6.5. Assessment and recommendations .................................................................................................................................... 37
SECTION 7. PROPOSED REFORM ACTION PLAN ............................................................................... 39
ANNEX A. PEFA PFM Performance Measurement Framework ........................................................... 41
The 2009 Country Financial Accountability Assessment for The Gambia. Page iii
ANNEX B. Fiduciary Risk Analysis ................................................................................................................ 83
ANNEX C. Calculation of Deviations by Budget Heads 2005-2007 .................................................... 85
ANNEX D. Terms of Reference for PFM Reform Oversight Steering Committee and Sub-Committee ............................................................................................................................................................. 91
ANNEX E. The Gambia Government’s Self Assessed Progress on PFM Reforms ........................... 94
The 2009 Country Financial Accountability Assessment for The Gambia. Page iv
PREFACE
The Country Financial Management Accountability Assessment (CFAA) for the Gambia was
conducted between March and June 2008, culminating in the in-country mission over two weeks
in March 2008 by a joint team of the Government officials, African Development Bank and
World Bank staff. The exercise covered six modules set out in the initiating memorandum
prepared and distributed in February 2008 to lay out the ground work and scope of this exercise.
Areas covered are in the public sector at both national and local government level only.
It is against this backdrop that exercise was designed with a view to assess the reforms and
progress made on the implementation of the 2003 CFAA recommendations, especially on key
PFM reforms such as IFMIS. The assessment was also intended to identify areas of continued
weaknesses that would require further effort and focused attention. The findings were of the
CFAA were communicated in forma of draft CFAA report in June 2009 and subsequently
validated at a workshop with key stakeholder facilitated by DOSFEA (now named as Ministry of
Finance and Economic Affairs). Comments from the Government of The Gambia arising from
the workshop and the draft CFAA have been incorporated in the final report.
The CFAA core team comprised of John Nyaga (Team Leader, AFTFM, HQ), Winston Cole
(AFTFM, Nigeria), and Loxly M Epie (AfDB), with the assistance of consultants Ulrich Johnson
(Local Government financial management) and Prof. James Ato Ghartey (Public Audit and
Parliamentary Oversight). The team also benefited from regular consultations with Hoon Soh,
Country Economist (AFTP4). The team also wishes to acknowledge the support provided by
Oumou G. Hainikoye (Program Assistant, AFTFM) for which the team is very grateful.
Mr. McDonald Benjamin (Country Program Coordinator) and Edward Olowo-Okere (Regional
Manager for Financial Management, AFTFM) ensured that appropriate quality assurance
arrangements were in place. The peer reviewers were Fily Sissoko (Senior Financial
Management Specialist, LCSFM), Joseph Kizito (Senior Financial Management Specialist,
LCSFM), Gert Van der Linde, (Lead Financial Management Specialist, AFTFM), and Ivor
Beazly (Sr. Financial Management Specialist, OPCFM). Valuable comments were also received
from Parminder Brarr (Lead Financial Management Specialist, AFTFM).
ACKNOWLEDGMENTS
The assessment team is grateful for the commitment demonstrated by the former Secretary of
State DOSFEA, Honorable Moussa Bala Gaye during the exercise. The team also appreciates the
contributions made by Mr. Mod Secka. Permanent Secretary, DOSFEA; Mr. Abdoulie Jallow,
Director of Budgets; Mr. Gabriel Mendy, Director of National Treasury; Mr. Baboucarr
Sankareh, Auditor General; Honorable Fatoumatta J. Ceesay, The Speaker, National Assembly
and members of the Finance and Public Accounts Committee, as well as the Quality Assurance
Manager; IFMIS Project Manager (Capacity Building and Economic Management Project); and
others. Mr. Badara Joof, Officer-in-Charge, World Bank Liaison Office, provided the team with
useful guidance in conducting the assessment. Also, the administrative support by Ms. Yassin
Saine Njie (Program Assistant, Banjul Liaison Office) was highly appreciated.
The 2009 Country Financial Accountability Assessment for The Gambia. Page v
Republic of The Gambia
2009 Country Financial Accountability Assessment
EXECUTIVE SUMMARY
The Country Financial Accountability Assessment (CFAA) is a diagnostic tool used to describe a
country’s public financial management (PFM) and accountability arrangements. The main
objectives of a CFAA are to identify systemic weaknesses in the use of public funds and suggest
ways of mitigating risks to the achievement of the country’s development objectives. Financial
accountability is critical because it is a reflection of the responsibility for the financial decisions
taken, their implications and results measured against agreed outcomes and expectation.
Generally, the fundamental fiduciary expectation is that public funds are used effectively,
economically, and efficiently for the purposes intended.
A CFAA considers the strengths of the financial accountability processes in both the entire
public sector. It is an assessment and not an audit; its findings cannot therefore provide complete
assurance on the status of financial accountability processes, procedures or systems. This report
focuses specifically on institutional arrangements and structural strengths and weaknesses in
processes, procedures, and systems in the public sector in The Gambia.
A CFAA is a "snapshot" at a particular point in time. This report acknowledges that in The
Gambia, there are ongoing PFM reforms which are at different stages of implementation. The
CFAA is not intended to supersede any of these reforms, but rather to highlight those issues that
are more directly associated with fiduciary risk.
A CFAA would therefore provide evidence-based assessment of issues, their diagnosis, and
suggested advice on their likely resolution and level of their fiduciary risk. Conducting a CFAA
or its equivalent is generally a necessary prerequisite for preparing the World Bank Country
Assistance Strategy. Many bilateral and multilateral development partners use these tools as a
basis for their programs, particularly in areas related to public financial management.
The CFAA in the Gambia
This draft CFAA for The Gambia updates the 2003 CFAA and is intended to inform the
proposed jointly funded development policy operation of the critical fiduciary risks that need to
be addressed.1 This development policy operation is intended to provide support to the
government in implementing the second Poverty Reduction Strategy Paper (PRSP) 2007-2011.
The World Bank Board of Directors discussed and approved the PRSP II along with the Joint
1 Development policy operation (budget support) under the name of ‘Public Sector Reform and Growth Grant’ was
approved by the World Bank’s Board in 2009.
The 2009 Country Financial Accountability Assessment for The Gambia. Page vi
Staff Advisory Note in July 2007. Subsequently, the second Joint Assistance Strategy that was
prepared together with AfDB in support of the PRSP II was presented to the World Bank’s
Board of Executive Directors and endorsed in February 2008. The Joint Assistance Strategy II
has taken into account the various PFM reform actions implemented following the 2003 CFAA
recommendations. Continuing development partner support is envisaged. Future plans include an
IDA disbursement of a single-tranche US$7 million operation in FY09, in which disbursements
from AfDB and the European Commission are expected to follow within the subsequent 6 and
12 months, respectively.
Since the 2003 CFAA, the World Bank, in partnership with multilateral and bilateral
development partners has established a Public Expenditure and Financial Accountability (PEFA)
framework. The PEFA approach uses a set of 28 high-level indicators of country PFM
performance structured into 3 broad categories (plus 3 indicators of development partner
practices) and a standard PFM performance report based on the indicator analysis to provide an
assessment of PFM performance. This report, however, is structured as a CFAA not a PEFA
report; it follows a similar format to the 2003 CFAA. The PEFA indicators, as applied in Annex
‘A’, support the CFAA fiduciary risk-oriented assessment, consolidate the factual database, and
allow transition to the PEFA framework in the future if desired. The analyses are based on
budget and financial statements for 2005-20072 reviewed by the assessment team, which
conducted the fieldwork in Banjul in March 2008.
These complementary analytical perspectives are summarized in the annexes. In particular,
Annex A provides a summary of the current status of the PFM system against PEFA indicators
and Annex B summarizes progress achieved to date in relation to the fiduciary risk benchmarks
identified in the 2003 CFAA.
Progress since the 2003 CFAA and Key PFM Risks that Remain
The authorities have implemented many of the recommendations made in the 2003 CFAA and
subsequent supporting studies. Though much remains to be done, elements of the PFM
framework have been significantly improved and fiduciary risk lessened in important respects. In
particular, the legal and regulatory framework has been strengthened by the enactment of the
Government Budget Management and Accountability Act (GBMAA) and issuance of revised
Financial Instructions (for the Implementation of the Budget Management and Accountability
Act) in 2004. Timeliness of financial reporting has also been improved significantly; the
introduction of an Integrated Financial Management Information System (IFMIS) has helped
achieve more timely and comprehensive within-year reports and facilitated preparation of the
annual financial statements.
Together, these changes have given more scope for an orderly, policy-oriented central
government budget process and help set a solid basis for further improvement. There are
however many remaining weaknesses, and progress in many important PFM areas has been less
rapid than advocated in the 2003 CFAA. The internal control system remains inadequate, lacking
capacity and systems to follow-up on known weaknesses in reconciliation and clearing of
2 These were the most complete financial statements available at the time of the assessment. Substantial work
subsequently to update the financial data as indicated in the Government’s Self Assessed Progress Note in Annex
‘E’.
The 2009 Country Financial Accountability Assessment for The Gambia. Page vii
suspense balances and other internal control flaws identified by audit. The internal audit function
remains relatively weak, unsupported, and ineffective. While efforts have been made to clear the
backlog of audit reports to be considered by the Finance and Public Accounts Committee
(FPAC) of the National Assembly (accounts covering the period 1992-1999 have now been
reviewed by FPAC), remedial action on these reports is neither timely nor effective; executive
response to these issues has been largely absent.
In order to realize the benefit of the positive changes that have occurred and to reduce overall
fiduciary risk, the Gambian authorities, together with development partners, will need to
intensify and sustain efforts in strategic areas of PFM reform. Current gains must be consolidated
and the remaining gaps in PFM accountability addressed. Overall systemic fiduciary risks will
remain high unless these issues are tackled in a sustained manner. Key points from the individual
PFM sections of the CFAA analysis are summarized below.
Government financial planning and budgeting. The main areas of concern in this component of
the PFM system are (a) to establish an orderly and policy-oriented budget process, and (b) to
ensure that budget execution is effectively monitored and remains in line with the fiscal policies
in the original budget. These conditions should apply both to management of domestic and
external resources. Good progress has been made, particularly in establishing a more orderly
budget process, as advocated in the 2003 CFAA. The enactment of the GBMAA Act has
strengthened the institutional and legislative framework. Significant improvements have also
been made to the budget classification/chart of accounts that now bring the classification broadly
into line with IMF-formulated standards of Government Finance Statistics (GFS), as well as
allowing activities to be linked to objectives and outputs. This latter feature of the classification
has provided a basis for implementation of a medium-term expenditure framework (MTEF) now
being put in place, consistent with the requirements of the GBMAA Act. Considerably more
work is required to develop a comprehensive MTEF, to align expenditure programs with PRSP
priorities and to improve review and adjustment of the budget during implementation. Many of
the tools to do so are now in place.
Accounting, internal control and financial reporting. The 2003 CFAA recorded unsatisfactory
performance on most aspects of the accounting, reporting, and control system, although it noted
that work was underway to strengthen the legislation and introduce an IFMIS. Significant
progress is now being made to remedy many of the weaknesses noted in the 2003 CFAA,
including improvement in bank reconciliation and timeliness of financial reports. Internal
controls however remain weak; and capacity for internal audit is still almost non-existent. It is
suggested that the authorities should maintain vigilance in the reconciliation of bank accounts to
ensure the credibility of financial reports. Challenges with respect to internal audits were noted
in the 2003 CFAA, but little appears to have been done to address them. Many of the potential
benefits now being put in place through the IFMIS and other control system improvements will
be lost unless timely action is taken in this area. A major and sustained effort to establish internal
audit processes that meet international standards is strongly emphasized in echoing the 2003
CFAA recommendation.
Local government. Local government administration and the decentralization process face a
multitude of challenges. Councils are unable to acquire the material resources required for
service delivery (e.g., waste disposal management) in view of their low revenue base. Local
The 2009 Country Financial Accountability Assessment for The Gambia. Page viii
government salary structure is in accordance with the Central Government’s integrated pay scale
structure, which is relatively uncompetitive when compared to the compensation framework
available in the private sector, not-for-profit organizations, as well as in some of the state-owned
(public) enterprises and donor agencies. While significant steps have been taken to improve the
legislative framework for a more decentralized system of government, the overall environment
for financial accountability of local councils has changed little since the 2003 CFAA. Many steps
are underway, but a sustained and long-term effort will be needed to establish a satisfactory level
of performance and reduce fiduciary risks in this area. This current CFAA recommends a long-
term program to address these issues, focusing first on establishing the local government
commission to provide an institutional basis for local councils to meet their mandate under the
Local Government Act, (LGA), 2002. However, in view of the weak capacity in the Local
Government across the board, it is appreciated that the recommendations may have to take a
much longer time to implement unless Technical Assistance is provided.
State-owned (public) enterprises. Little has changed in the overall environment of state-owned
enterprise (referred to as public enterprises in The Gambia) reporting and governance
arrangements since the 2003 CFAA. The risks of quasi-fiscal indebtedness remain high—and
this may possibly have increased in the current global financial environment. The framework for
financial accountability of public enterprises will need to be radically transformed to reduce
fiduciary risk from this perspective. The legislative framework under which public enterprises
are operating needs to be updated to take account of the changes and realities of present-day
challenges. The current legislation (the Public Enterprise Act and the Companies Act) need to be
updated and made mutually consistent with regard to the treatment of public enterprises. An
overarching public enterprise governance framework would be a desirable tool for the
government to consider. All of these reforms will in reality take considerable time to be fully
realized owing to the prevailing weak capacity to undertake the reform agenda in the sector.
Consequently, this CFAA recommends that a high-level council guide the long-term program
with technical assistance support from development partners.
External audit. Notable progress has been made in addressing the backlog of audit reports that
needed to be submitted to the FPAC of the National Assembly. This is an important step, but few
other substantive issues regarding quality of audit reports and responsiveness of the Executive
branch to audit recommendations of the 2003 CFAA have not been fully and adequately
addressed. Fundamental underlying weaknesses remain: on one hand, there is a lack of sufficient
capacity in the Auditor General’s Office to produce high-quality reports on time while, on the
other, accountability and compliance of the Executive agencies of government to implement
audit recommendations are quite weak and ineffective. One of the central recommendations of
this CFAA is that a high-priority program be initiated at the earliest time possible to establish a
stronger legislative framework for the Auditor General and provide resources and training to
ensure the National Audit Office has adequate capacity. Such an initiative would be a keystone
of future PFM reform—and would be closely linked to programs to build up the capacity of the
National Assembly and its FPAC to help ensure prompt and effective follow-up of the Auditor
General’s observations, which brings us to the following point.
Legislative scrutiny, public access to information, and ethical oversight. Relative to the 2003
CFAA, improvements in both FPAC discussions of the Auditor General’s report and in the
quality of budget information are having impact on the quality of National Assembly oversight
The 2009 Country Financial Accountability Assessment for The Gambia. Page ix
and giving the public better access to PFM information. These steps are encouraging and
demonstrate what can be achieved with well-directed efforts. The magnitude of the remaining
task is very large however, and addressing it will require a sustained commitment from the
Government and development partners. More work has yet to be done to provide the full range
of quality information needed to inform the public on PFM performance; and many of the
fundamental issues raised in the 2003 CFAA regarding FPAC consideration of the Auditor
General’s reports are a continuing concern. A sustained program of support is recommended to
establish a sound legal and institutional framework for the National Assembly and its key PFM-
related committees and to promote better access to budget information by the public.
Applying PEFA Framework in this CFAA
This CFAA attempts to act as a bridging platform for transiting to the PEFA Financial
Management Performance Measurement Framework by applying relevant performance
indicators (PI) as appropriate. The scores for these performance indicators are indicated and
discussed in Annex A. However, some of the indicators could not be scored because of either
lack of or limited access to sufficient data and information for analysis. In particular, the
following performance indicators were not scored: PI-4, Stock and Monitoring of Expenditure
Payment Arrears; PI-15, Effectiveness in Collection of Tax Payments; PI-19, Competition, Value
for Money and Controls in Procurement; and D1-3, Donor Practices related Indicators. The
Government has just recently created a donor aid coordination unit in the Department of State for
Finance and Economic Affairs (DOSFEA).3
Table 1 gives a summary of proposed activities (more fully discussed in chapter 8) for inclusion
in the action plan in relation to strategic priorities and desirable timeframe. These activities have
been drawn from the assessments and recommendations given in the PFM thematic sections. The
bolded activities (in left column of Table 1) mark the critically important areas that should be
given priority. The Government of The Gambia and development partners supporting the PFM
reforms should review and agree upon this draft action plan. Full recognition has been taken into
account of the progress and achievements already accomplished by the Government as well as
those at an advance stage of completion since the CFAA fieldwork was undertaken. In addition,
DOSFEA has documented its own self assessed progress made in some of key reforms which is
presented in Annex E of this report.
3 DOSFEA, which recently changed its name to Ministry of Finance (MOF), will be used throughout this report.
The 2009 Country Financial Accountability Assessment for The Gambia. Page x
Table 1. Draft Action Plan and Strategic Priorities
Activity Description Timeframe
National Coordination and Oversight
1. Establish PFM Reform
Oversight Steering
Committee
Set up PFM-ROSC under chairmanship of DOSFEA Permanent
Secretary and establish role, procedures, and agenda.
Short term
2. Establish thematic
subcommittees
As part of activity 1, set up subcommittees to plan, monitor,
review, and report on performance in each area.
Short term
3. Establish a PFM Monitoring
and Evaluation Unit Establish a technical monitoring and evaluation unit to prepare a
framework for tracking and evaluating performance in
compliance with agreed objectives and outcome targets.
Short term
Addressing Critical Institutional Weaknesses
4. Enact a National Audit
Act
Develop a stand-alone National Audit Act, incorporating
modern audit principles and strengthening independence and
authority of the Auditor General to replace the outdated 1964
legislation.
Medium term
5. Build capacity in the
National Audit Office
Develop comprehensive capacity-building and training
programs for audit staff. This could include specific education
and training for technician and terminal professional accounting
qualifications, training on audit standards and practices, risk
assessment techniques, and computer-assisted techniques. It
could also include twinning arrangements and exchange
programs.
Medium to
long term
6. Establish an effective
internal audit capacity in
Central Government
This activity should include (a) a detailed functional review of
the organizational structure of DOSFEA, the accounting
functions of the line ministries, and current business processes;
(b) strategy development for internal audit function throughout
the Central Government; and (iii) develop guidelines for internal
audit that will apply risk-based methods using the COSO
framework and meeting the International Standards on Auditing
(ISA) promulgated by the International Federation of
Accountants (IFAC)
Earliest
possible time
start—
progressive to
long term
7. Develop the National
Assembly Service to
strengthen parliamentary
review
Establish the National Assembly Service by an act of Parliament
to provide support services to facilitate the work of the National
Assembly.
Build capacity to support the National Assembly and the
National Assembly Service to enhance their effectiveness and
efficiency. This would include provision of study tours and
logistical support.
Earliest
possible time
start —
progressive to
long term
8. Enhance budget
transparency and public
A program that would (a) enhance technical standards of budget
presentation in line with international standards; (b) open the
sittings of the National Assembly and FPAC deliberations and
Short term to
long term
The 2009 Country Financial Accountability Assessment for The Gambia. Page xi
Activity Description Timeframe
access to budget and
accounts information
reports to the public; and (c) campaign to raise awareness of the
public’s right to PFM information, including:
Publishing budget on Government websites and specifying
that monthly or quarterly in-year outturn reports should be
published in the Government Gazette;
Annual accounts made public once presented in the
National Assembly: placed in public libraries, colleges, and
Government websites.
Consolidation of Successful Reform
9. Strengthening the budget
formulation and
thereafter consider the
merits for establishing
and adopting an effective
MTEF
DOSFEA to focus on strengthening the budget formulation
process by addressing existing weaknesses before moving
forward to applying MTEF in the process. A comprehensive
MTEF development program should include (a) an aggressive
PFM capacity-building program both within DOSFEA and line
ministries, departments, and agencies to train staff in program
budgeting techniques and development of programs linked to
national PRSP objectives; (b) development of the IFMIS
platform to support program management; and (c) development
of budget presentation to provide program performance
information to the National Assembly and the public.
Medium to
long term
10. Further improve
reconciliation by clearing
below-the-line account
balances
Eliminate miscellaneous postings by proper classification of
transactions. Clear outstanding balances on suspense and below-
the-line accounts.
Latest
feedback
indicated this
has been done
11. Improve reporting on
externally funded programs
Review reporting on externally funded programs with donors
and establish systemic improvements and mechanisms and
sanctions to improve reporting performance. The newly created
Donor Coordination Unit of DOSFEA will play a significant
role in this issue
Earliest
possible time
Long-term Reforms
12. Building a base for local
government effectiveness
and accountability
Establish a long-term program focused on (a) establishing the
local government commission; (b) a scheme of service for local
government; (c) a training and capacity-building program for
local council financial management staff; (d) personnel audit of
local councils; (e) resolution of the backlog of annual reports by
councils; (f) drafting of a financial manual as required by the
LGFA Act should be put in place; and (g) design and pilot
implementation of an integrated accounting system with strong
accounting controls.
Immediate
start— long
term
13. Public enterprise reform and
governance program
A long-term program of reform to focus on the following
critical issues: (a) monitoring and reporting on public enterprise
financial positions, with particular emphasis on payment arrears
or contingent liabilities that may give rise to future fiscal deficit
increases; (b) high-level review of the legislative, institutional,
and governance framework in which public enterprises operate;
(c) drafting of relevant legislation and regulations, and
governance frameworks; and (d) a capacity-building program
for financial management in public enterprises.
Immediate
start—long
term
The 2009 Country Financial Accountability Assessment for The Gambia. Page 1
INTRODUCTION
The Gambia is the smallest country on the African continental mainland, covering an area of just
over 11,290 square kilometers. It is geographically surrounded by Senegal except for the 80
kilometer coastal line interrupted by the mouth of the River Gambia, where it empties into the
Atlantic Ocean on the west coast of Africa. The Gambia acquired independence from the United
Kingdom in 1965. It suffered severe economic crisis in the 1980s leading to a coup d’état in July
1994 that interrupted democratic processes. It was not until 1997 that the country resumed civil
rule following an open national election. Since then, the ruling party has won a series of national
elections. In January 2007, a new government under the ruling party (Alliance for Patriotic
Reorientation and Construction Party of President of The Gambia, His Excellency Sheikh
Professor Alhaji Dr. Yahya A. .J. J. Jammeh) was elected, ushering a renewed hope for good
governance and the continuation of a working democracy.
Economic Performance in The Gambia
In 2003, The Gambia was ranked 160 out of 173 countries in the UN Human Development Index
but improved to 155 out of 177 in the 2007 ranking. The Gambia has an estimated population of
1.6 million, with an average per capita GDP of US$320 (Atlas method, 2007). Given its small
size, The Gambia is extremely vulnerable to external shocks. The country’s economy is
relatively undiversified and limited by a small internal market. Liberal trade policies and an
efficient port infrastructure have allowed the country to act as a regional re-export hub. Tourism
is a key driver of the economy and the country’s most significant foreign exchange earner.
Agriculture accounts for approximately one-third of GDP and more than 75 percent of
employment in crops and livestock farming. Groundnut farming is the most important
agricultural engagement in the country. Groundnuts account for approximately 60 percent of
domestic exports, and 55 percent of rural households engage in groundnut production. However,
groundnut farmers are among the poorest in the country, and the performance of the sector has
been poor in recent years. There are small-scale manufacturing activity features in processing of
peanuts, fish, and hides. Re-export trade normally constitutes a major segment of economic
activity. Gambia has benefited substantially from a rebound in tourism in the last decade.
However, the ongoing financial crisis and economic meltdown being experienced in the West
and the European financial capitals is expected to have a serious impact by scaling down the
number of tourists visiting The Gambia in the winter season. In turn, job loss for The Gambians
in the hospitality industry is probably going to be the most significant shock.
The country’s economic performance in recent years has been relatively strong but growth is
currently slowing down due to the global recession. The annual real GDP growth rate has
averaged 6.2 percent in the previous 5 years, compared to the estimated annual population
growth rate of approximately 2.8 percent. However, growth is expected to slow down to 4.6
percent in 2009 due to the impact of the global economic slowdown. Further downside risks
remain given the unstable global climate. The country also remains quite vulnerable to
exogenous shocks, including low rainfall and surface water shed on agriculture, and surging
import prices. The country’s relatively low levels of integration with the international markets
could protect it to a limited degree from the global economic slowdown. The tourism and
construction sectors will be adversely impacted by expected drop in tourists, remittances, and
The 2009 Country Financial Accountability Assessment for The Gambia. Page 2
foreign direct investment, but the performance of the agricultural sector is likely to be more
influenced by domestic crop production as opposed to external factors.
The average inflation rate declined from a high of 17.0 percent in 2003 to 2.1 percent in 2006.
Fiscal discipline, characterized by reduced government domestic borrowing, provided the basis
for a significant slowdown of broad money growth. However, surging costs of consumer goods
such as food, energy, and oil imports pushed the annual rate of inflation to 5.0 percent in 2007
and 5.1 in 2008. Inflationary pressures were contained by a tight monetary policy and the
significant appreciation of the local currency due to strong inflow of remittances and reduced
debt service payments.
In general, the macroeconomic impact of international price increases has been relatively
modest, although the impact on the poor could have been significant. The Government
responded to the food price increases by reducing the sales tax on rice imports from 15 percent to
5 percent in July 2007 and eliminating it altogether in May 2008.
Governance in The Gambia
The political system is characterized by a relatively weak opposition; and the media is equally
weak, with limited public access to information. International observers, including Reporters
without Borders, the International Bar Association, and Amnesty International, have cited the
country’s shortcomings with freedom of the press and independence of the judiciary.
Strengthened governance could enhance the transparency and accountability of the public sector
and reduce the risk of policy slippages through greater country ownership.
The Government of The Gambia has been working with a range of development partners. In
addition to IDA, the other large development partners are the African Development Bank
(AfDB), European Union; Department for International Development of the United Kingdom
(DfID), the IMF, and multiple agencies of the United Nations. The Gambia has developed a
Poverty Reduction Strategy Paper (PRSP) for 2007-2011, which outlines a country strategy for
pro-poor inclusive growth. The PRSP is organized into 5 pillars:
Macroeconomic stability and public sector reform;
Promotion of pro-poor growth and employment through private sector development;
Improved basic social services;
Decentralization and strengthened local governance; and
Multisectoral programs on gender, HIV/AIDS, environment, nutrition, and population.
The PRSP initiatives were chosen based on their contribution toward the achievement of the
Millennium Development Goals. The PRSP was developed through a participatory and
consultative process. Stakeholder consultative workshops and focus group discussions were held
with representatives of the public and private sectors and civil society. Consultations reached
into local communities. Participatory Poverty Assessments, Community Scorecards, and “budget
games” were incorporated into the preparatory process. Nongovernmental organizations directly
participated in the drafting of the PRSP document.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 3
The IDA has been assisting The Gambia to establish a sound macroeconomic and sectoral
environment that is conducive to economic growth, and to develop its economic and social
infrastructure and human resources. The IDA-financed portfolio is presently comprised of 5
operations adding up to US$55.9 million equivalent. In aggregate, IDA has approved a total of
31 operations for The Gambia since the country became a member of the World Bank Group.
The current active portfolio is comprised of (a) Capacity Building for Economic Management
(closed December 2008); (b) Gateway Project; (c) Third Education Project, Phase 2; (d)
Community-Driven Development; and (e) The Gambia’s portion of a regional operation called
Africa Emergency Locust Project. There are also 3 trust fund-supported operations of which 2
are associated with IDA-funded projects while the other is a stand-alone operation named
Transformation of the Central Statistics Department into a Bureau of Statistics for The Gambia.
Public Financial Management Reform
Since the 2003 Country Financial Accountability Assessment (CFAA), significant gains in
several areas have been noted. Foreign direct investments have averaged 12.9 percent of GDP.
There has been notable improvement in domestic revenue averaged at 21 percent of GDP since
2004. Fiscal discipline has been improved, and this has brought domestic borrowing under
control from a high of 38 percent of GDP in 2001 to about 28 percent in 2007. Sustained fiscal
and monetary discipline has been complemented by significant improvements in public financial
management. The PFM reforms have helped to enhance accountability and transparency in the
use and management of public resources. This has resulted in shrinking the opportunities for
official corruption and abuse of public resources in the public sector. These reforms, for
example, have resulted in the establishment of the legislative framework that governs public
expenditures and revenue management as well as public procurement management. This led to
the creation of the Gambia Public Procurement Authority. Perhaps the most notable of the PFM
reforms is the design and installation of an Integrated Financial Management Information System
(IFMIS). The system is now operational in the Treasury, Department of State for Finance and
Economic Affairs (DOSFEA), Department of Education, Personnel Management Office,
National Audit Office, and Gambia Revenue Authority. This has had significant impact on the
backlog of the government financial statements. Other noteworthy reforms that contributed in
improving the public financial management are (a) strengthening the independence and
supervision and control function of the Central Bank of The Gambia; and (b) improved debt
management at both DOSFEA and the Central Bank.
The CFAA report continues in the following sections with a detailed analysis of the various
components of the PFM system, reviewing progress since the 2003 CFAA and assessing current
status. This CFAA has also attempted to apply the Public Expenditure and Financial
Accountability (PEFA) Public Financial Management Performance Framework where
appropriate and, by doing so, help to provide a bridging platform for transiting to full application
of the PEFA framework in future diagnostic studies. The PEFA scores for the applicable
Performance Indicators (PIs) are summarized in Annex A along with an accompanying analysis.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 4
SECTION 1. FINANCIAL PLANNING AND BUDGET PREPARATION
The key conditions of the budget process emphasized by the CFAA are that (a) the rules
governing the planning and resource allocation are clear and are implemented effectively; (b) the
process is comprehensive and links allocations clearly and reliably to government policies; and
(c) budget execution is effectively monitored and remains in line with the fiscal policies in the
original budget. These conditions should apply to management of both domestic and external
resources. Very similar requirements are specified under the PEFA framework.
Substantial improvement has taken place in the institutional and legislative framework for these
processes since the 2003 CFAA as a result of the enactment of the Government Budget
Management and Accountability (GBMAA) Act, 2004 and updating of Financial Instructions
that support the implementation of the Act. Combined with the introduction of a revised and
modernized chart of accounts, these changes are helping to establish a more orderly budget
process. Detailed description of the changes and the CFAA assessment is discussed in this
section.
Description of Performance
The institutional and legislative framework in The Gambia now sets out norms that are broadly
up to par with the international practice. The Constitution (1997) of The Gambia defines the
principles and overall legal and institutional framework for the management of public resources.
Section 102(b) empowers the National Assembly to review and approve proposals to raise
revenue by the government. It also stipulates that all revenues mobilized for the government
must be paid into the Consolidated Fund. The DOSFEA is mandated by the Constitution and the
BMAA Act to prepare and present the Annual Government Budget to National Assembly, which
in turn issues an Appropriation Act, authorizing the withdrawal of funds from the Consolidated
Fund. The Secretary of State for Finance and Economic Affairs has the administrative
responsibility to authorize withdrawal of public funds from the Consolidated Funds in
accordance with the limits set out in the Appropriation Act. The Directorate of National Treasury
is responsible for the preparation of the national accounts while the Auditor General has the
constitutional mandate and responsibility of auditing the public accounts.
The BMAA Act (article 31) allows that where there are substantial changes in the economic and
social conditions requiring larger expenditures than the original and revised budgets allow, the
Secretary of DOSFEA shall submit a supplementary budget to the National Assembly, detailing
the additional expenditures and sources of their financing. The revised and supplementary
budgets shall be presented and documented in the same manner and format as the original
Government Budget.
As part of the implementation of the 2003 CFAA recommendation, the formulation of the budget
has improved with the integration of the recurrent and development budget that was achieved
The 2009 Country Financial Accountability Assessment for The Gambia. Page 5
under the 2006 Budget. In addition, allocation resources have to some extent been based on
broad, DOSFEA-issued policy guidelines. However, sector-specific policies do not seem to be
reflected in the budgetary expenditures incurred, implying there is disconnect with the policy.
The poverty programs developed by sectors to implement the PRSP initiatives are costed and
included in their budget estimate submissions to the Directorate of National Treasury. However,
these have not yet been included and adopted in overall government budget estimates in view of
their variable quality. For the time being, the budget would continue to appropriate funds for a
single year on basis of the size of the overall resource pot and broad policy framework. As
capacity in sector departments improves over time, it is expected that the quality of future
estimates will improve to a point that will allow these projections to be included to provide
information on baseline costs of government programs in the medium term.
The most recent public expenditure reviews in education, health, agriculture and works,
construction, and infrastructure sectors have shown weakness in the formulation of budgets
implied by the weak linkages between expenditures and policies and unrealistic costing. This is
an important aspect for future capacity development efforts to focus on before too much attention
can be directed to the establishment of a MTEF in the budget management system.
The Secretary for DOSFEA draws up a detailed budget timetable, indicating the program and
activities of the budget exercise in its entirety, 10 months (due in February) before the end of the
financial year. The timetable is circulated to all Secretaries of State for various sector
departments (in line ministries) for their information and guidance requesting compliance by
March 31 each year. By the end of April each year, the Secretary for DOSFEA is required by law
to submit a Budget Framework Paper to the Office of the President outlining the draft
preliminary constraints (aggregate ceiling) and the outlook for the next fiscal period along with
an analysis of the current year’s budget performance for review.
The main budget preparation process begins each June when the Secretary of DOSFEA issues
the call circular to all sector departments and agencies. The call circular outlines the
Government’s macro-economic policy statement and the economic forecast for the next financial
year. It is against this backdrop that the budget ceilings are allocated to sector-specific
departments for both recurrent and development expenditures within which to limit their annual
budget estimates and expenditure proposals. All the departments are required to submit their
budget proposal to DOSFEA. Budget meetings are scheduled for bilateral consultations and
negotiations in defense of the proposals. The National Planning Commission plays a critical role
in reviewing the budget during the bilateral discussions. Sectors and departments also defend
their human resources budget proposals at the Personnel Management Office for approval of all
newly created staff positions. However, these discussions do not appear to persuade DOSFEA to
vary the set ceilings issued to sector departments. Subsequently, DOSFEA consolidates the
proposals and develops the final draft budget for the following financial year. The Secretary of
DOSFEA finally presents the draft final annual budget to the Cabinet for approval and
subsequently to the National Assembly for approval at least 30 days before the end of the
financial year. The entire budget process cycle, illustrated in Figure 1, shows the clockwise
sequence of events and the approximate timeframe in the year when they take place.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 6
Figure 1. The Gambia: Budget Preparation Process Calendar
January
April
Passing the budget
February
March
May
JuneJuly
August
September
October
November
December
DOSFEA draws
Budget processing
timetable)
Timetable issued
to Departs of
State
Budget Circular issued to
Depts of State
Chief Justice; Auditor General &
other Agencies authorized send to OP onwn Estimates
Submission to Parliament
Budget Framework Paper to OP
Consultatio
n with
Dep
arsof State
Clear guidance is given to the departments on how to prepare the estimates. The sector
departments in the IFMIS pilot use the Active Planner module to enter their estimates, while
those that are not online as yet are provided with templates that are in turn entered at the data
center in the budget office. Estimates for all departments are then consolidated to form the
overall budget estimates. All Permanent Secretaries and Heads of departments are instructed to
adhere to the budget preparation guidelines and observe the time by when their submissions are
due.
The GBMAA Act, 2004, article 22 (1) requires the Secretary of State to observe section 152 of
the Constitution (i.e., to prepare and lay before the National Assembly the Appropriation Bill
documents, at least 30 days before the end of the financial year). The law is explicit in the
manner and time of the presentation. The National Assembly is required to deliberate on the draft
estimates within 14 days of their receipt. Subsequent to the budget approval by the National
Assembly, an Appropriation Bill is laid before the Assembly and given due consideration before
it is passed within 7 days of its presentation. For the past 3 years, this requirement has been met
with the budget passed by the National Assembly before the start of the new financial year.
The Government has completed its second Strategy for Poverty Alleviation and plans to
implement it through a sectorwide approach (SWAp) and subsequently through the MTEF with
strong focus on attaining the targets of the Millennium Development Goals, subject to
strengthening its human resource and institutional capacity in the departments. As noted in the
PRSP, detailed sector plans will need to be developed and consistency with the PRSP must be
The 2009 Country Financial Accountability Assessment for The Gambia. Page 7
ensured. However, to achieve this level of reform in the budget process, capacity must first be
developed in DOSFEA on macro-economic analysis and forecasting. This also requires accurate
statistics for the various fiscal and monetary variables. Key sector data will need to be collected
and analyzed. All these actions will require time, commitment, and the support of the
development partners.
The Gambia Bureau of Statistics has developed a strategic plan for 2008-2011 in which pillar
two aims at “improving economic statistics for a better monitoring of program implementation
towards a sustainable economic growth”. Within this pillar the objective of producing key
economic indicators as well as other statistics through surveys will contribute to the preparation
of Medium-Term Sector Strategies. This work will ultimately contribute to the development of
the Medium-Term Expenditure Framework.
Since the introduction of IFMIS in DOSFEA, there has been gradual improvement in the
management of public resources, greater transparency, and improved Government
accountability. This has also resulted in timely financial reporting and imposition of controls to
ensure that expenditure is within budget and the available cash. However, it has proved much
more difficult to establish a strategic and policy-based budget formulation process from the
traditional incremental process that builds on past patterns of spending rather than analysis of
national policies and priorities. Despite there being the second PRSP (2008-2011) and a series of
Public Expenditure Reviews that were completed in the last 5 years, there has been relatively
little use for this information in influencing resource allocation and reflecting sectoral goals and
policies that are consistent with the PRSP.
More effort is needed to embed PFM review and output information systematically in the budget
process. The introduction of a GFS-based chart of accounts4 with the 2006 budget estimates has
been a significant step toward the goal of integrating the recurrent and development budgets. The
chart of accounts now permits allocations and analyses to be examined on a program basis and
thus be related to outputs, outcomes, and objectives. The classification is made up of 30
alphanumeric characters divided into 4 segments; but the segment for MTEF, which captures
outputs, outcomes, and objectives, is not yet being used.
Although the Government has also initiated the adoption of an MTEF from 2006, many issues
remain to be resolved. For an MTEF to materialize fully, it will be necessary to have (a) a
comprehensive macroeconomic framework, (b) clear sector goals that are embraced in the PRSP
(c) realistic estimate of available resources for the medium term, and (d) an effective and
efficient budget execution arrangement. Given this scenario, sectoral managers have little option
but to continue to prepare incremental annual estimates. The Government however remains
determined to adopt MTEF gradually over time when adequate capacity is developed.
Continuing this commitment will be the basis for success in establishing clear medium-term
linkages between PRSP priority outcomes and public expenditures programs.
4 This is based largely on the IMF GFS Manual (1986); the current GFS Manual (2001) has become the recognized
international standard.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 8
Section 22 of the Government Budget Management and Accountability Act, 2004, expounds the
provision of Section 152 of the Constitution, 1997, which require the Secretary for DOSFEA to
prepare and lay before the National Assembly the Appropriation Bill documents at least 30 days
before the end of the financial year. This should include the Government revenues and other
receipts that include tax revenues such as tax on personal income, corporate tax that is charged
on profits earned by the private companies, domestic taxes on goods and services (sales tax), tax
on accrued international trade gains, etc. Also included are non-tax revenues that are usually
levied on services rendered such as user charges, court fines, licenses, and proceeds from
disposal of public assets. The Appropriation Bill also includes revenues arising from domestic
and external grants, loans, and any other receipts paid to the Government.
Expected inflows from donors for development expenditure are captured in the budget
framework as shown and discussed in Section 6 on public access to information. Procedures are
not yet in place, however, to record actual expenditure in executing the projects. Donor-financed
project bank accounts are held in commercial banks and outside the control of the Directorate of
National Treasury. Steps are being taken to open ledgers for donor-assisted project bank
accounts in IFMIS so that returns from the executing agencies can be captured and reported in
IFMIS. Discussions are ongoing between the Government and the development partners with a
view to upgrade and harmonize reporting of actual spending with the Government’s IFMIS
through monthly and annual reports.
The budget is the main tool used to translate Government policy into practice. Therefore, it is
important for the Executive to be able to execute the budget as passed by the Legislature and
advise the Legislature promptly if economic and fiscal conditions change. A schedule of all
changes to the budget is disclosed in the annual financial statements.
The budget is revised during the year but the aggregate does not change. A schedule of all the
virements during the year is reported in the financial statements, and this provides an opportunity
for Legislature to seek explanation for the virements. The changes in the composition of the
budget across departments and economic classification means that the policy intent of the budget
is not followed stringently during execution. For the past 3 years, deviation from approved
budgets was more than 5 percent. These details are shown in Annex C. The credibility of the
budget is undermined as a result of the deviations. This indicates weaknesses in budget planning,
costing of activities, and procedures in expenditure control. Underlying these aggregate
variations are substantial variations at budget head level. A detailed analysis of compositional
variance between budget and actual is given in Performance Indicators 1 and 2 summarized in
Annex A. The budget remains an unreliable indicator of out-turns, though (partly as a result of
Public Expenditure Review efforts) aggregate deviations in expenditure have reduced in recent
years.
Good progress has been made in establishing an orderly financial planning and budget process,
as advocated in the 2003 CFAA. The enactment of the GBMAA Act has strengthened the
institutional and legislative framework. Significant improvements have also been made to the
The 2009 Country Financial Accountability Assessment for The Gambia. Page 9
budget classification/chart of accounts, bringing the classification broadly into line with IMF
GFS standards, as well as allowing activities to be linked to objectives and outputs. This latter
feature of the classification has provided a basis for the implementation of a medium-term
expenditure framework being put in place, consistently with the requirements of the GBMAA
Act. As a result of these changes, there is an integrated recurrent and development budget, even
though linkages between policies and budgets remain weak especially in sector departments.
The improvements described in Section 1 have significantly enhanced the potential to link
budget allocations effectively to policies over the medium term. However, additional work is
required to develop a comprehensive medium-term framework to align expenditure programs
with PRSP priorities and to improve review and adjustment of the budget during implementation.
It is worthwhile to note that many of the tools to do this are now in place. While the revised
classification and IFMIS provide valuable mechanisms that can help link expenditure programs
to national PRSP objectives, staff training, a viable career path, and a continuing political and
public interest in the process are essential for long-term success.
Recommendations:. The Government with the support of the development partners should
support efforts to strengthen budget formulation and thereafter support a comprehensive MTEF
development program that includes (a) a capacity-building program for both DOSFEA and sector
departments with a view to train staff in program budgeting techniques and development of
programs linked to national PRSP objectives; (b) further development of the IFMIS platform to
support program management; and (c) improvement of budget presentation to provide program
performance information to the National Assembly and the public.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 10
SECTION 2. ACCOUNTING, FINANCIAL REPORTING, INTERNAL CONTROL,
AND INTERNAL AUDIT
Both the PEFA and the CFAA frameworks place a strong emphasis on the establishment of a
sound, effective, and comprehensive accounting system. Increasingly, such systems require a
robust IFMIS as the basis for control, accounting, reporting, and analysis. The system should
embody effective internal controls and timely, comprehensive, and reliable financial and fiscal
reports both within-year and at year-end. An effective system of internal audit is an essential
PFM component to provide financial managers with continuing oversight of the integrity of all
aspects of the financial management system and beyond.
The 2003 CFAA recorded unsatisfactory performance on most aspects of the accounting,
reporting, and control system, although it noted that work was underway to strengthen the
legislation and introduce an IFMIS. Significant progress is now being made to remedy many of
the weaknesses noted in the 2003 CFAA, including improvement in bank reconciliation and
timeliness of financial reports. Internal controls however remain relatively weak, and capacity
for internal audit is still almost non-existent. Details on progress and performance status in each
area of the accounting, reporting, and control system is given in this section.
Description of Performance
Section 7(2) of the GBMAA Act enjoins the Head of the Directorate of National Treasury to
perform their functions under the supervision of the Permanent Secretary in accordance with the
Financial Instructions for the Implementation of the GBMAA Act. These Financial Instructions,
which were issued in 2004, detail the processes and procedures for implementing, managing and
accounting for government budget, and cash and bank account. It also details the duties and
responsibilities of the Directorate of National Treasury, Vote Controllers, and other public
officers. Regulation 59 enjoins the National Treasury with the approval of the Secretary of State
and in consultation with the Auditor General to prepare an Accounting Procedures Manual from
which departmental accounting instructions shall be derived.
Accounting policies are explicitly stated in the Annual Financial Statements of the Government
of The Gambia. These policies state the accounting basis — cash basis as defined by
International Public Sector Accounting Standards (IPSAS) — and principles of recognition of
revenue, expenditure, and fixed assets. Further clarification in the policies in relationship to
international standards, such as IPSAS and GFS 2001, will be required over time.
The Gambia, in line with most countries, has begun implementing a comprehensive IFMIS. The
EPICOR5 software-based platform was initiated in January 2007 and is being piloted in the
following departments and agencies:
5 EPICOR is off-the-shelf software that was configured to meet requirements of The Gambia and implemented as a
turnkey contract, including with training and support. Upgrades are provided as part of the annual maintenance and
support licenses.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 11
Department of State for Finance and Economic Affairs,
Directorate of National Treasury,
Department of Education,
Personnel Management Office,
National Audit Office,
Gambia Revenue Authority.
The Directorate of National Treasury maintains 4 types of bank accounts in the Gambia Central
Bank. The Accounting Unit in the National Treasury is responsible for bank reconciliation. This
Unit has 8 staff supervised by a principal accountant. The responsibility of this principal
accountant to authorize checks before printing and also be responsible for the supervision and
review of bank reconciliation reports goes against the key internal control principle of
segregation of duties. However, the Directorate of National Treasury has been reorganized, and
units are now headed by deputy directors and supported by principal or senior accountants in
charge of various sections. The reconciliation and payment processing responsibilities have been
separated from payments now handled by the Treasury Unit of the Directorate of National
Treasury.
The Gambia Central Bank provides details of all transactions going through the government
bank accounts on a daily basis in electronic format to the Directorate of National Treasury. The
transactions are imported into the IFMIS for automated bank reconciliation. The automated
system has greatly improved the timeliness and accuracy of bank reconciliation. [Note: The
EPICOR software system had a technical problem that caused the bank reconciliation reports
that the CFAA team reviewed not to balance. The Government has issued the certificate of final
acceptance of the phase-1 IFMIS implementation indicating that the technical problems have
now been resolved.]
Travel advances and operational imprest when issued should be accounted for before a
subsequent one can be authorized. The accounting system has been configured so that a request
for new advance or imprest on a budget line that has an outstanding balance cannot be processed.
Staff interest free loans based on a single month’s basic salary are given as an advance on salary
to be repaid typically over a period of six months. A ledger tracks payment directly through the
payroll system inputs, with reports showing outstanding loans for each employee and in total. An
end date is stipulated that automatically stops repayment when the loan is fully recovered.
Significant amounts of transactions are recorded below the line (suspense account). This
undermines the completeness of financial reports especially when they are not fully investigated
and cleared when compiling the annual financial statements. In principle, all transactions should
be identified either as revenue, expenditure, or financing to allow a clear picture of the overall
fiscal position.
Although a number of significant systemic improvements have been put in place, further work is
required to ensure that the system functionality is fully utilized. Through sustained effort by the
authorities, the IFMIS implementation achieved final acceptance on February 1, 2009, and all
outstanding functionalities, deliverables, and incidents had been delivered and resolved. The
challenges, good practice, and lessons learned documented in the Phase-1 IFMIS post-
The 2009 Country Financial Accountability Assessment for The Gambia. Page 12
implementation review should be used in rolling out the system and shared with other countries
that are considering implementation of IFMIS.
The Directorate of National Treasury operates a centralized payment system and is responsible
for the production of consolidated annual accounts. Departments are required to submit returns
for transactions on retained departmental revenues for consolidation by the National Treasury.
The statutory deadlines are March 31 and June 30 of each year for the preparation and audit of
government accounts for a financial year ending every December 31. Sub-section 41 (3) of the
GBMAA Act enjoins DOSFEA, following the reconciliation of its own accounts with
transactions of the Treasury main account, to consolidate and submit to the Auditor General the
annual statement of government accounts not later than 3 months after the financial year-end.
With IFMIS in place, the Directorate of National Treasury has been in a better position to
improve on the timeliness of completing the annual accounts for audit. The DfID is providing
technical support for the review of the controls and reporting capabilities of IFMIS to assess how
much reliance can be placed on the IFMIS reports.
With the assistance and intervention of key development partners, notably the World Bank and
DfID, in providing expatriate technical support to both the Directorate of National Treasury and
the National Audit Office, the Government has prepared Annual Statements of Public Accounts
covering the period 1992 to 2008 (at time of this CFAA). The accounts covering the period 1992
to 1999 have been prepared and audited and have also been subjected to scrutiny and review by
the Finance and Public Accounts Committee (FPAC).
Accounts for the periods 2000-2004 have also been prepared and audited. The draft audit report,
which was issued with a disclaimer opinion by the Auditor General because most of the
shortcomings in the 1992-1999 accounts had not been remedied, was submitted to the Treasury
in January 2008 for review and comments. The 2000-2004 audit reports were submitted to the
National Assembly in January 2009.
The 2005 and 2006 accounts were also prepared and submitted to the Auditor General in August
and September 2007, respectively. The 2007 accounts were independently prepared by the
Directorate of National Treasury and were submitted to the National Audit Office on August 29,
2008 (i.e., 8 months after the year-end, which is a great achievement). The 2008 account was
submitted within the statutory deadline on March 27, 2009. Government completely eliminated
the backlog of accounts preparation.
The Government does not have a national accounting reporting standard. The GBMAA Act,
2004 (42), requires certain information to be disclosed in the financial statements. However,
most of the required information is not disclosed. The annual financial statements for FY2005
and FY2006 basically show balance sheet for financial assets and a table of revenue and
financing statements supported by detailed schedules for departmental expense items for the
approved and revised budget, expenses, and variances. With the introduction of IFMIS,
significant improvements in the format of budget performance reports and annual financial
statements were made and designed in the system. The 2007 annual financial statements follow
the format of IPSAS 24, Presentation of Budget Information in Financial Statements. The
The 2009 Country Financial Accountability Assessment for The Gambia. Page 13
accuracy and timeliness of the annual financial statements has also improved as a result of
adopting a practice of preparing daily bank reconciliations.
Unreported extra-budgetary expenditure is relatively standard in public finance legislation to
allow spending that is authorized outside the annual Appropriation Act. It is important however
that all such expenditures or receipts be shown in the budget estimates and recorded in the annual
accounts and monthly budget reports. The GBMAA Act, 8(2) provides the following:
Notwithstanding the provisions of subsection 8(1) (which establishes the
principle of a single consolidated fund), an Act of the National Assembly
may provide: (a) for the payment of particular revenue or other money
into some other fund, which for the purpose of this Act is called extra-
budgetary fund, established for a specific purpose; and (b) for the
retention of revenue or other money by the budget agency that received it
for the purpose of defraying expenses of that budget agency, which for
the purpose of this Act is called departmental self-raised revenue.
Problems with recording and reporting such transactions commonly occur with respect to special
accounts set up to handle development partner funds. Vote Controllers that are authorized to
operate special bank accounts are required by GBMAA Act (40) to submit statements of revenue
and expenditure to the Directorate of National Treasury within 5 days of the end of each month.
However, this is not done by most of the departments; lack of reports makes it very difficult to
ascertain the value of such unreported transactions.
The budget estimates provide details of inflows expected from the major multilaterals and some
bilateral by economic classification. For FY2008, The Gambia Government is expected to
receive GMD 1,444,520 for development projects in the form of grants and loans to support a
total budget of GMD 5,873,114. This shows that 25 percent of the budget is donor funded,
increasing the importance that the budget be disclosed in financial statements under legislative
scrutiny.
There are two main types of voucher processing for non-salary expenditure; the IFMIS pilot sites
and the non-online sites. Segregation of duties and authorization controls are in place as
explained in PI-20 (Annex A). In the absence of internal audit reports and surveys to track the
rejection rate of payment vouchers for noncompliance with internal controls, it is difficult to
ascertain if the controls are applied as intended.
The Internal Audit Unit has 5 staff members who mainly carry out audit/inspection of banking of
revenue collections. Their internal audit work is not focused on system risk issues in the
operations. The DOSFEA can apply the GBMAA Act section 4 2(a) and (b) to prescribe
appropriate standards for internal auditing by adopting the International Standards for the
Professional Practice of Internal Auditing.
As noted in the 2003 CFAA, although the Internal Audit Unit reports directly to the Permanent
Secretary of DOSFEA, all staff in the unit are seconded from the National Audit Office.
Seconding of staff is based on the powers conferred by GBMAA Act, Article 160 (1) to the
Auditor General to undertake pre-audit. There is no formal scheme of training in internal audit
The 2009 Country Financial Accountability Assessment for The Gambia. Page 14
standards and practice. Often government staffs who receive training to tend leave the civil
service for better prospects elsewhere. To exacerbate the matter, the sector departments and
agencies do not have audit committees to direct and oversee an internal audit. The absence of an
effective public sector internal audit function weakens the control framework and poses a high
fiduciary risk to the use and accountability of public funds.
The Internal Audit Unit should be restructured in the short to medium term and change its
approach to audit and redirect its focus on risk-based auditing by adopting the COSO Enterprise
Risk Management Framework.6 The Unit should provide reasonable assurance regarding the
achievement of objectives of government departments in the following categories:
Conformity to the organization’s strategy,
Effectiveness and efficiency of operations,
Reliability of financial reporting,
Compliance with applicable laws and regulations.
Accounting: The introduction of IFMIS has greatly improved the accounting environment. The
challenge now is to periodically review the controls and reporting capabilities of IFMIS to
provide assurance that there are no security breaches and that reliance can continue to be placed
on IFMIS-generated reports. This CFAA recommends the strengthening of the control
framework that is appropriate for a computer-based environment. One option to explore is
providing for a well-trained staff with computer-based auditing skills in the Internal Audit Unit
that can focus on risk.
Financial reporting: It is important that all expenditures or receipts be shown in the budget
estimates and recorded in the annual accounts and monthly budget reports. Significant progress
has been made in improving the timeliness of presentation of year-end financial statements to the
National Audit Office, and the format of 2007 financial statements represents a good step
forward from those of previous years. Nonetheless, the challenge will be on the consolidation of
this work and achievement of a satisfactory level of performance that meets international
standards.
However, improvement of the quality of the accounts to enable the National Treasury to get a
clean report from the Auditor General and the FPAC would depend on the prompt
implementation of the outstanding recommendations (mainly to clear a number of longstanding
items) of the Auditor General, the FPAC, and the CFAA, as well as other related observations
and recommendations from other sources.
Reporting on donor funds, and more generally on extra-budgetary operations, remains a major
challenge. The extent of the problem needs to be accurately determined and properly managed. It
is recommended that the Directorate for Central Projects Management and Aid Coordination
6
Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a U.S. private-sector initiative,
formed in 1985. Its major objective is to identify the factors that cause fraudulent financial reporting and to make
recommendations to reduce its incidence. COSO has established a common definition of internal controls, standards,
and criteria against which companies and organizations can assess their control systems.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 15
should take the lead on timely reporting on donor funds. Consultation with development partners
will be necessary. In both cases, continuing monitoring and reporting on progress will be
essential. This will ultimately enhance the quality of financial reporting that meets international
standards.
Internal controls: The introduction of IFMIS promises to bring into play major reforms to
internal control processes. It will be challenging for these controls to be consistently applied as
IFMIS is deployed to other sector departments and agencies. In this regard, it is recommended
that further work be undertaken to ensure that stronger controls are embedded in the IFMIS and
these are fully understood and subjected to independent oversight or third party review from time
to time.
As a consequence of improved bank reconciliation through IFMIS, reporting has become
timelier. It is however recommended that further effort be made (a) to improve reconciliation and
clearance of below-the-line (suspense) accounts; and (b) to address the continuing difficulties in
getting timely reports on externally financed accounts. It is also recommended that
improvements in bank reconciliation should be followed up with clearance of long outstanding
items in suspense accounts (below-the-line accounts).
Internal audit - Unless operations, especially those transacted through IFMIS, are subjected to
independent scrutiny, the reliability of reporting will be difficult to assure. Internal audit is a key
PFM criterion but is not operational in The Gambia. The challenges and constraints noted with
regard to internal audit in the 2003 CFAA remain unchanged in all respects. The Internal Audit
Unit does not comply with International Standards for the Professional Practice of Internal
Auditing as promulgated by the Institute of Internal Auditors. Capacity of the Internal Audit Unit
is seriously under-resourced in terms of human capacity and skills as well as financial and
logistical support.
Virtually no progress has been made in establishment of internal audit since the 2003 CFAA.
Several fundamental institutional changes should be made to allow for a proper internal audit
function that meets international standards. A clear environment of effective internal control
should be established, and the Government should develop a clear strategy for establishing
internal audit capacity as part of the management and control culture of its sector departments
and agencies. Only clear progress in these areas will provide an environment in which internal
audit can function effectively.
It is strongly recommended that the Government, with the assistance of development partners,
examine the options for establishing a well-functioning Internal Audit Unit. The option selected
should be guided by the strategy the Government is expected to prepare in the next 1 to 2 years,
drawing from a concept note prepared in December 2006 for the strengthening of the internal
audit function. This is in line with the policy measure in the Public Sector Reform and Growth
Grant to analyze and prepare options for establishing internal audit and control functions. To
help the Government in this work, these are the suggested options for consideration:
Independent audit agency that will be set up by an Act of the National Assembly,
Appropriate and comprehensive amendment in the GBMAA Act,
The 2009 Country Financial Accountability Assessment for The Gambia. Page 16
An internal audit unit located within and reporting directly to each Department of State,
or
A centralized Internal Audit Unit in DOSFEA providing a service to all other
departments.
The selected option will require legal backing and should be given due consideration in the
Government’s plan to review GBMAA Act, 2004. Considering the size of the country and the
limited number of qualified accountants in the public sector, a pragmatic way forward could be a
centralized Internal Audit Unit within DOSFEA that is responsible for setting standards and
monitoring compliance and able to provide an effective internal audit service for the whole
Government. Director-level leadership would be desirable, similar to that in the Budget and
Treasury, and with reporting to the Secretary of DOSFEA. The revised GBMAA Act should also
provide for the setup of audit committees preferably on basis of sectors considering the size of
the Government.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 17
SECTION 3. EXTERNAL AUDIT
An effective National Audit Office that has the authority, capacity, and independence to carry
out external audit of the Executive branch of Government is one of the most important elements
of a fully operational PFM system. Its absence poses a high degree of fiduciary risk in terms of
both potential misappropriation and likely failure to achieve public policy objectives. The 2003
CFAA highlighted the extremely limited resources available to the National Audit Office in The
Gambia, the lack of a modern Finance and Audit Act, and the problematic consequence in
meeting constitutional requirements on accounting, reporting, and auditing. Section 3 looks at
the issues relating to the National Audit Office and its institutional framework.
Description of Performance and Assessment
The Auditor General and the National Audit Office are dealt with under Part 2, Articles 158 to
160 of the Constitution. This also provides the manner of the appointment and removal of the
Auditor General, Article 158 (2) states that the President shall appoint the Auditor General after
consultation with the Public Service Commission. The President may terminate the Auditor
General’s appointment, giving unconditional powers to the President generally regarded as
impairing the independence of the external auditor.7
The Auditor General appoints the staff of
the National Audit Office after consultation with the Public Services Commission. In the case of
senior or professional staff, the appointments are as prescribed by Regulations of the Public
Service Commission.
Article 160 (1c) of the Constitution enjoins the Auditor General to audit and report on the
Government and public accounts of The Gambia at least once every year. The report is submitted
to the National Assembly within 6 months of the end of the immediately preceding financial year
to which each of the accounts relates. The report is to draw attention to any irregularities and any
other matter that, in the Auditor Generals’ opinion, ought to be brought to the attention of the
National Assembly [Article 160 (1d)]. Article 160 (1e) of the Constitution provides that after the
National Assembly has discussed the report, the Auditor General shall have the report published
for public information. It further provides that if there is any undue delay in the discussion of any
such accounts in the National Assembly, the Auditor General may publish the report in advance
of such discussion. However, it does not provide specific guidance on the threshold of such a
delay. Finally, Article 161 (9) grants the FPAC with the prerogative to extend the 6-month
period required by the Auditor General under Article 160 (1d) to report on the accounts to the
National Assembly.8
7 Between 1994 and 2008, there have been only 2 Auditors General: one from 1994 to 2000 and the other from 2000
to present. This creates an appearance of reasonable stability of tenure. However, any changes that do occur, as
noted, under the sole authority of the President, do raise questions regarding the independence of the Auditor
General. 8 Section 151 (3) of the Constitution appears to give unusual authority to the Auditor General over government
spending. It states that “No money shall be withdrawn from the Consolidated Fund or any other public fund of The
Gambia, including a withdrawal under subsection (4), unless the withdrawal has been approved by the Auditor-
General or a member of the National Audit Office designated by him or her for the purpose and it is made in the
The 2009 Country Financial Accountability Assessment for The Gambia. Page 18
Article 160 (2) provides the normal powers and protections granted to the Auditor General under
the International Organization of Supreme Audit Institutions (INTOSAI). These include (a) not
being subject to the direction or control of any other person or authority in the exercise of their
functions; (b) having power to disallow any item of expenditure that is contrary to the law and to
levy a surcharge;9 and (c) power to call for and to be provided access to all data and information
required for the performance of their functions. Article 161 (8) states that nothing in the
Constitution shall preclude the Auditor General, at the request of the head or governing body of
any public body, corporation, or institution referred to in Article 160 (1c), or on their own
initiative, from carrying out any special audit of such body, corporation, or institution. Where the
Auditor General carries out such a special audit, it shall be reported to the FPAC.
The National Audit Office checks and verifies calculations for pension and gratuity payments for
all civil servants. While this function is important because of the long-term nature of these
payments, it is questionable whether it is properly assigned as a function of an external audit;
normally it would be construed as an Executive responsibility, the effectiveness and propriety of
which would be subject to audit. In recognition of this anomaly, there are future plans to transfer
the payment of pensions and gratuities to the Social Security and Housing Finance Corporation.
Subsection 159 (4) of the Constitution reinforces the Auditor General’s financial independence
concept espoused in Article 152. The Auditor General is required to submit the annual estimates
of expenditure for the National Audit Office for the following financial year for presentation to
the National Assembly. The President shall cause the estimates to be placed before the National
Assembly without amendment but may attach to them his or her comments and observations. In
practice, the activities of the National Audit Office are constrained as a result of limited resource
allocation since the budget of the National Audit Office is still subjected to ceilings from the
Executive. The National Audit Office recognizes that it is not the only constitutional body, which
also includes the Legislature and Judiciary, which has been accorded a constitutional protective
financial shield, although it is actually not practiced. However, in 2007 the National Audit Office
used only 60 percent of its budgeted GMD 7,163,000 because it lacked the technical capacity to
undertake all its planned programs for the year.
The 1997 Constitution envisaged an autonomous audit service. An Act of the National Assembly
to establish such an independent institution is required and should be followed by specific human
resource policies and practices to attract and retain qualified professional auditors. The
remuneration structure for the National Audit Office makes it difficult to attract qualified
personnel. At the moment the National Audit Office has a staff compliment of 81, of whom 65
are in the professional cadre and 16 in administrative and support functions. Vacancies exist for
4 principal auditors and 9 senior auditors. In the absence of separate dedicated legislation to
provide for the independence of the National Audit Office, recruitment of auditors is still
processed though the Personnel Management Office; however, the National Audit Office is
allowed to participate in the recruitment process and in the interview of candidates.
manner prescribed by an Act of the National Assembly”. In practice, this provision does not appear to be
operational. 9 Under Section 45 of GBMAA Act, 2004, the Permanent Secretary of DOSFEA is also granted powers to surcharge
and is required to notify the Auditor General and Vote Controller of any surcharges.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 19
Because of this lack of capacity in the National Audit Office, the audit of most public enterprises
is outsourced to private audit firms. The National Audit Office is centralized in Banjul with no
physical presence in the regions making the audit of public enterprises in the regions irregular.
The National Audit Office has included in its strategy an objective for transforming itself into a
modern Supreme Audit Institution. Work is progressing on a bill to establish the National Audit
Office as articulated in the 1997 Constitution. A code of conduct that meets INTOSAI standard
has been developed and should be signed by all National Audit Office staff. The code of conduct
includes requirement for continuing professional development. However, since most National
Audit staff are not members of any recognized professional accountancy bodies, it is difficult to
implement continuing professional development in a structured manner.
Support for such reforms is also needed from the media and non-state actors to enable them to be
in a position to analyze the budget and annual financial statements. However, because of the
weak civil society and media in the country, it is unlikely to expect wide-spread public access to
information on use of public finances any time soon.
The National Audit Office receives direct support from development partners and other sources.
Also, the National Audit Office outsources some of its audit assignments, especially those of
state-owned enterprises and local authorities, to private accounting/auditing firms. The audited
body generally pays the fees. The National Audit Office continues to explore other avenues of
financial and technical support to improve its effectiveness and efficiency.
Sub-section 159 (3) of the Constitution provides for the accounts of the National Audit Office to
be audited by an appropriately qualified auditor or firm of auditors appointed by the FPAC. This
provision has not been exploited.
In addition to exercising such other functions as may be conferred by an act of the National
Assembly, Article 160 (1) of the Constitution outlines the functions of the Auditor General to
include both pre- and post-compliance audit and specifies the requirements to audit and report on
the public accounts of The Gambia at least once every year, and on the authorities, the courts, the
National Assembly, and all public enterprises within 6 months of the end of the immediately
preceding financial year to which each of the accounts relates.
After the Auditor General’s annual report on the accounts has been discussed in the National
Assembly, the Auditor General is required have the report published for public information.
Where there is any undue delay in the discussion of any such accounts or reports in the National
Assembly, Article 160 (e) permits the Auditor General to publish the report in advance of such
discussion. To complement this provision, Regulation 298 (2) of the Financial Instructions
directs that copies of publications relating to finance for limited or restricted circulation shall be
sent immediately upon publication to the DOSFEA library, the Department of Registry, and the
National Archives.
Some progress is being made on clearing the backlog of Auditor General’s reports not yet
submitted to the FPAC. The Audit Report of the Auditor General on the audited accounts of the
Government of The Gambia for the period July 1992 to December 1999 was submitted to the
The 2009 Country Financial Accountability Assessment for The Gambia. Page 20
National Assembly in September 2005. The FPAC recommended the need to address several
systemic issues.
The Audit Report raises two issues. First, technical accounting issues raised in the management
letter are not always fully acted upon by the Directorate of National Treasury in a timely manner.
Other issues raised concern the repetition of unresolved audit queries and findings year after
year. These issues, for example the recovery of monies due to the Government from public
officers, are referred to the FPAC, which then forwards to the Executive for a public response to
any pertinent queries. Recommendations are then made to the Executive for action. Non-
completion of audited accounts over the past 10 years means that accountability for such issues
has not been established. As a consequence, many of the same issues are repeated each year in
the audit reports.10
For the audit of the 2000-2004 accounts, the National Audit Office issued its draft report to the
Executive (DOSFEA). After comments and feedback from the Executive, the National Audit
Office will facilitate finalization and transmission of the report to the National Assembly. In its
reporting, the National Audit Office noted that the shortcomings in previous reports are still
recurring. The National Audit Office emphasized that it is critical for the Directorate of National
Treasury to improve on the accounts for 2005 and 2006. This would enable the most accurate
figures to be entered into IFMIS and give the most accurate opening balances for the beginning
of January 2007 operations. The IFMIS has helped to improve timeliness of bank reconciliation
at the Treasury and placed the Treasury in a better position to complete the annual statement of
public accounts in a timely manner as required by law.
The manner of publishing the Director of National Treasury’s accounts and the Auditor
General’s Annual Report for public information is not clearly articulated in the legislation. It is
not clear whether the Directorate of National Treasury and the National Audit Office should
publish its accounts and its audit opinion and report, respectively, or whether one set of audited
financial statements comprising both should be published. If the report is to be published for
public interest and promote and enhance accountability and transparency, then limited or
restricted publication as defined in the Financial Instruction 298 (2) is not the answer.
Publication through a website and other media avenues would provide the desired wide
circulation.
Good progress has been made in addressing the backlog of audit reports that needed to be
submitted to the FPAC for scrutiny. But, as reflected in PEFA PI-26 (Annex A), other
substantive issues regarding scope and quality of audit reports and responsiveness of the
Executive to audit recommendations should be addressed.
10
Issues on Treasury accounts by the Auditor General noted in the 2003 CFAA include limited internal controls and internal
audit, noncompliance with financial legislation, regulations and instructions, non-responsiveness of Government agencies to audit
queries, theft of funds, failure to collect revenue, missing revenue, lack of supporting documentation, failure to obtain
competitive tenders, poor recordkeeping and accounting, failure to recover salary and imprest advances, failure to maintain
inventories and inventory records, and lack of capacity or inadequate capacity.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 21
Despite the measures taken to clear the backlog of accounts being submitted to the FPAC,
fundamental underlying weaknesses remain. On the one hand, there is a lack of capacity in the
Auditor General’s Office to produce high-quality reports on time. On the other hand,
accountability and compliance of the Executive agencies with audit recommendations is almost
non-existent. This situation is generally met by mutual attempts to shift responsibility: the
inability of the Auditor General to meet statutory responsibilities is often attributed to the failure
by the Directorate of National Treasury to present timely financial statements. In a counter
response, the Directorate of National Treasury typically cites such things as lack of institutional
and human resource capacity, lack of supporting documentation, missing records and documents
resulting from commissions of inquiry in the mid-1990s, and other causes. What results a cyclic
blame-passing game.
Recommendation: It is imperative that steps be taken to resolve the cycle of inaction. These
steps should enjoy support and political goodwill from the highest level of the Government. One
of the central recommendations of this CFAA is that a high-priority program be initiated
immediately or in the short term with the aims of (a) establishing a stronger legislative
framework for the Auditor General; and (b) providing resources and training to establish
adequate capacity. In this regard, capacity building would likely depend initially on strong
support from development partners and include twinning arrangements and exchange programs.
Such an initiative would be a keystone of future PFM reform. It would also need to be closely
linked to programs to build up the capacity of the National Assembly and its FPAC to help
ensure prompt and effective follow-up to the Auditor General’s observations.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 22
SECTION 4. LOCAL GOVERNMENT
The Local Government (LG) Act 2002 (Schedule 1, part 1) specifies 7 local authorities each
subdivided into districts and wards for the election of council members. Eligible voters in the
local government area elect the chairperson, and the wards elect the councilors. Additional non-
voting members of the council include an alkalo or seyfo representative,11
a chief representative,
a youth nominee, a woman nominee, and other nominated members of local interest groups.
Each council is administratively headed by a chief executive officer who is responsible for the
management of the affairs of the local council. Most chief executive officers have experience
though few possess formal qualifications.
The legislative frameworks — LG Act, 2002 and the Local Government Finance and Audit
(LGFA) Act, 2004 — have been enacted to facilitate local government reforms and
decentralization programs. Following the adoption of the LG Act, election of all local councils
was held. In all local government areas, such structures as village development committees ward
development committees, and multi-disciplinary facilitation teams have also been established.
The institutional reforms embodied in the LG Act and associated policies center on developing
democratic and participatory processes and establishing community-level ownership of the
development process. This requires both local-level development of an accountable process and
increasing participation of local communities in public service decisions and delivery. Thus far
the main emphasis has been on establishing an adequate legal framework and developing local
administrative capacity.
The 2003 CFAA noted delays in promulgating the subsidiary legislation needed to implement
the institutional reforms envisaged under the LG Act — notably, the LGFA Bill had not been
enacted. As a consequence, local government budgetary controls and financial accountability
were recorded as an area needing improvement. Some advances have been made, but PFM and
accountability performance remains at a very low level in local government. The LG Act
provides for the collaboration of state and non-state actors with local authorities in the
implementation of the planning and development process. In Section 91, the LG Act states
“technical departments operating within the area of jurisdiction of every council shall support the
development process of the council through extension workers operating at ward and village
levels”. For these provisions to be implemented effectively, it is essential that effective financial
accountability mechanisms be established at local level. Addressing these issues is the key local
government focus of this CFAA, as discussed in this section.
11
Alkalo (plural, alkalolu) means village headperson. Seyfo means a district chief, the chairperson of district
authority comprising of all the alkalolu in the district.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 23
Description of Performance and Assessment
The LGFA Act was passed in 2004. Nonetheless, a backlog of needed supporting regulations,
manuals, and instructions still remains. Continuing delays in providing such guidance has led to
a considerable confusion over the roles and responsibilities of the local government executive,
particularly in the area of financial accountability. For instance, the LGFA Act provides for the
financial administration of all local authorities, but it does not prescribe what accounting records
are to be kept. This task is left to the financial manual, which is provided for in the Act.
However, the manual has yet to be formulated; once done, it would go before the National
Assembly and approved to become effective. The accounting system that is currently being used
is based on a 1985 financial memorandum for municipal and area councils.
As provided for in the LGFA Act, financial administration of the local authorities starts with the
preparation and approval of the budget, which must be done by September for the following year
after incorporating comments of the Secretary of State for Local Government. However, as yet,
the form and content of the budget is not prescribed except that it shall reflect (a) all revenues to
be collected or received and to be appropriated for each year and (b) take into account the
approved 3-year development plan. Definition of the budget form is required to be included in
the financial manual. The current practice is that the budget takes the form of a statement of
income and expenditure for the general operations and management of the council’s affairs and
for the performance of its functions.
The LGFA Act requires that a council allocates at least 60 percent of its budget for development
activities, excluding the recurrent costs of those activities. The remaining 40 percent of budget
shall fund recurrent costs, which include (a) emoluments and salaries of the council staff, (b) the
operation of wards and village development committees, and (c) all allowances for any services
rendered to councils as may be determined by the Secretary of State for Local Government.
Budgetary control in the councils is weak for the following reasons:
The budgets are not broken down into manageable cycles (e.g., monthly or quarterly) so
as to identify the timing of the cash flow.
The assumptions surrounding the budget preparation are sometimes unrealistic due to
incomplete financial information.
Budgeted revenues are consistently over-estimated with the effect that while recurrent
administration costs are maintained, expenditure on the provision of services and
development is cut to make up for budget shortfalls.
Expenditure is more or less dependent on the availability of cash rather than on budgetary
constraints.
Not all council budgets are approved on time according to statutory provisions.
Although the LGFA Act provides 60 percent of council revenue to development activities and 40
percent to recurrent activities, these targets have not been achievable in practice. Realistically,
The 2009 Country Financial Accountability Assessment for The Gambia. Page 24
these targets are not feasible for area councils given their high administrative overheads and low
revenue base. Furthermore, conditions vary between councils; municipal or town councils might
spend a greater proportion of their budget on day-to-day services such as road maintenance,
cleansing services, etc., while provincial councils might focus more on development aspects of
the local community. At the moment, councils fund up to 45 to 50 percent of development
expenditure. To ensure compliance with the legislation, councils are consequently forced to set
unrealistic or unattainable budgets either by underestimating recurrent expenditure or
overestimating revenues.
The LGFA Act and the financial manual are meant to specify the prescriptive rules and
regulations for the accounting framework. The draft manual has not yet been approved by
Parliament and is therefore not operational. The LGFA Act provides for accounts to be kept but
does not prescribe what accounting records are to be maintained. Current practice is still based
on the 1985 financial memorandum for municipal and area councils.
The accounting system in all but one council is maintained manually. Recordkeeping practices
do not follow good practice. While cashbooks, ledgers, vouchers, and receipt books are
maintained, other subsidiary books such as commitment control ledgers and vote books are not
maintained to ensure proper budgetary control and accountability of funds.
The level of accounting and recordkeeping is generally inadequate due to factors such as the
following:
Few skilled staff can be recruited; only a few councils have limited qualified personnel.
Most revenue and expense transactions are performed using cash and are not immediately
recorded in the cashbook. This practice gives rise to opportunities for fraudulent
operations.
Because of the limited number of staff, there is little segregation of duties between
recordkeeping and authorization of expenditure (i.e., weak internal control environment).
Revenue collectors maintain separate cashbooks and issue receipts; this gives rise to cut-
off errors arising from delays in submission of receipts to update the main cashbook. This
further distorts reporting and complicates bank reconciliations.
Collection of monies is largely unsupervised and increases the risk of fraud across
councils. Although some of the councils have introduced some solutions, there is no
established best practice.
With the issuance of fixed value tickets for car parks, markets, canteens, and other fees, it
is difficult to demonstrate that all tickets invoiced have been recorded in the counterfoil
receipt register.
Subsidiary control ledgers are not reconciled to daybooks recording the totals of invoices
and assessments raised or to the cashbook as means to reconcile collection of receipts
recorded.
All councils do not have the ability to produce auditable financial statements.
All councils have their accounting records on ‘paper based’ spreadsheets. This is not
recommended as the prime source of data recording in an accounting system because of
the lack of audit trail and lack of security on spreadsheet-based systems.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 25
The accounting procedures set out in the draft financial manual are not adequate to ensure that
standard reporting requirements are met. The following omissions represent significant
weaknesses:
The proposed manual provides for the maintenance of cashbooks to record all receipts;
apart from that, it does not specify what subsidiary records are to be maintained.
The classification of payments makes no provision for the analysis of expenditure
between development activities and other activities. It is therefore not possible to
determine whether councils have complied with the requirement that at least 60 percent
of the budget is allocated to development activities and not include recurrent costs of
such activities.
The proposed manual specifies that expense payments are to be recorded in the
cashbooks, but there is no requirement to maintain a commitment ledger or vote book.
The proposed manual provides no mechanism for the capture and reporting of
expenditure made against general grant, grant-in-aid, and equalization grant (the 3 forms
of central subvention to local government).
The proposed manual does not provide for differentiation of expenditure funded through
donor contributions. Lack of such transparency fails to demonstrate to donors that their
funds are properly and correctly applied — and as a consequence there will be less
incentive for development partners to use the local government accounting system.
The proposed manual does not prescribe any procedure to reconcile the general ledger to
the cashbook.
The proposed manual does not specify procedures to ensure that store’ ledgers or
inventory are reconciled to the expenditure on stock purchases as recorded in the main
accounting records nor to the revenue derived from disposal proceeds.
Beyond the pre-audit of expenditure outflows, internal controls are weak due to several factors
— including lack of segregation of duties in the accounting function, limited substantive internal
checks, failure to adequately specify many essential control procedures (as illustrated in the
preceding bullet points) and lack of an effective internal audit function — and do not correspond
to international good practice. It is evident also that there are inadequate reconciliation
mechanisms or controls that are necessary to ensure completeness and accuracy of the
accounting records.
Financial reporting is limited to the production of a trial balance only. A full set of financial
statements, including the production of a balance sheet and revenue statement, are not produced
by any of the councils.
With regard to the internal audit function, the LGFA Act specifies that the internal audit unit
shall prepare and submit quarterly audit reports to the council and forward a copy to the Local
Government Accounts Committee, the Auditor General, and the Secretary of State for Local
Government. The Act does not specify the scope of the internal audit function in any greater
detail. However, by observing the internal audit activities, it is evident that the unit’s work has
been limited to the pre-audit of expenditures. The internal audit function does not extend to
systems evaluation or internal controls evaluation, nor does it focus on risk management.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 26
Because of prevailing circumstances, any consideration to extend this service to village or ward
level would be unrealistic. Although the Act specifies the requirement for the creation of internal
audit unit in each council, it remains silent on their technical and professional requirements as
well as the need to set up appropriate policies, guidelines, and procedures.
The Directorate of Local Governance is responsible for performance reporting and monitoring
and evaluation of all local councils. This Directorate is under the responsibility of the Secretary
of State for Local Government within the Department of Local Government. The Directorate
supervises the overall administration of councils and assists them in budgetary and financial
management in addition to general administrative matters. The internal audit unit of each council
is expected to report quarterly to the Directorate of Local Governance on the financial
administration of all councils. On receipt and study of these reports, the Directorate dispatches its
inspectors to visit the councils for an on-site assessment of situation.
In addition, the LGFA Act establishes a Local Government Accounts Committee for all councils.
The Committee is charged with examination of reports produced by the Auditor General and the
internal audit unit(s). This Committee in turn reports to the Secretary of State for Local
Government, the Secretary of State responsible for finance, and the Auditor General. The
chairperson and the chief executive of the councils are required under the Act to implement the
recommendations of the Local Government Accounts Committee. The Auditor General is
required under the Act to incorporate the comments and recommendations of the Committee in
his own report to the National Assembly.
The LGFA Act does not, however, prescribe any sanctions on councils for poorly administered
council affairs, except that the LG Act provides that the Secretary of State for Local Government
may institute a commission of inquiry with regard to occurrence of a grave misdemeanor. When
the findings of the commission of inquiry confirm an offence has been committed, the Secretary
of State refers the matter to the President for appropriate action. The President may, with the
approval of a simple majority of the National Assembly, assume the executive powers of the
local council.
The Directorate of Local Governance is leading efforts to build institutional capacity in local
governments. Actions under way include the following:
Drafting legislation to establish the local government commission (this has been
delayed).
Establishing a scheme of service for local government.
Conducting personnel audits of local councils to streamline local government and address
the problem of excess staffing capacity.
Investigating optimal staffing establishment for local councils.
Identifying and attracting potential personnel to key positions in local government.
Developing a financial manual for local government.
With respect to external audit, the LGFA Act provides that the Auditor General shall at least
once a year have the accounts of the council audited and reported. The Act is silent about the
The 2009 Country Financial Accountability Assessment for The Gambia. Page 27
type of audit that is required. The current practice is that the Auditor General carries out an audit
on a transactional basis, which does not extend to an effective review of operational controls or
the provision of an opinion on councils’ financial statements. Local government councils do not
produce and publish a full set of traditional financial statements in accordance with IPSAS.
Reports on audited council accounts produced by the Auditor General have limited usefulness
since they are by their nature and structure basic management letters that are not backed up by
financial statements, thus giving no disclosure about the financial resource base and capacity of
the reporting entity. Furthermore, because of this limitation, there is neither an indication as to
whether the audit carried out by the Auditor General is in accordance with International
Standards on Auditing, nor is there any opinion given on the audit.
Local government councils are unable to acquire the material resources for service delivery (e.g.,
waste management disposal) because of their low revenue base. Local government salaries are in
accordance with Central Government’s Integrated Pay Scales, which are highly uncompetitive
when compared to rates paid in the private sector or by donor organizations. The combination of
overstaffing, low salaries, and history of political interference in the appointment and dismissal
of staff makes it impossible to attract and retain properly qualified personnel. In addition, there is
no formal performance appraisal system to identify, encourage, and remunerate well-performing
staff. Movement from one grade point to the next is automatic (within grade) annually.
Promotion from one grade to the next depends on the recommendation by the respective head of
the department.
These problems reflect directly with public financial management. Staff engaged in the finance
function has limited professional accountancy and public finance qualifications. Only a few
councils possess personnel with recognized accounting qualifications, and this general lack of
qualified accounting personnel consequently impacts negatively on the quality, accuracy, and
timeliness of financial recordkeeping and the production of financial statements.
By their nature, these problems will require long-term resolutions. The immediate emphasis
should be to establish a sound basic institutional infrastructure and initiate a long-term program
of capacity building. Key recommendations to improve financial accountability are as follows:
Ensure that legislation establishing the local government commission is passed to provide
an institutional basis for local councils to meet their mandate under the LG Act.
Establish a scheme of service for local government that will govern appointments,
promotions, discipline, and pay and reward to employees.
Initiate training and capacity-building programs for local council financial management
staff.
Undertake personnel audit of local councils to streamline their staffing capacity.
Initiate a process to resolve the backlog of annual reports by councils for FY2006 and
FY2007.
The financial manual as required by the LGFA Act should be accepted and passed
legislatively and put in place so as to prescribe the requirements of the accounting records
to be maintained by local authorities.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 28
Design and initiate pilot implementation of an integrated accounting system with strong
accounting controls (manual or computerized as appropriate).
While significant steps have been taken to improve the legislative framework for a more
decentralized system of government in The Gambia, the overall environment for financial
accountability of local councils has changed little since the 2003 CFAA. Many steps geared to
this are underway, but a sustained and long-term effort will be needed to establish a satisfactory
level of performance and reduce fiduciary risks in this area.
The PEFA analysis looks at sub-national government only to the extent that it affects the national
fiscal aggregates. The main PEFA performance indicator of relevance, PI-8, Transparency of
Inter-Governmental Relations, does not link directly to local government financial
accountability. This indicator would have been more useful if service delivery functions were a
responsibility of the local government. Functional devolution is yet to happen and fiscal transfers
from the Central Government mainly cover administration expenses. Development of the
capacity of the Directorate of Local Governance, sub-sectoral departments, and other
Departments of State to assist the decentralization process is a key objective of the Public Sector
Reform Sector Strategy Paper 2007-2011. However, in view of the weak capacity of the local
government subsector, it is doubtful that this reform will be realized any time soon as initially
envisaged.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 29
SECTION 5. STATE-OWNED (PUBLIC) ENTERPRISES
With respect to state-owned enterprises, the main fiduciary risk and PFM management concerns
are the extent to which the Central Government has a formal oversight role that enables it to
monitor and manage fiscal risks with national-level implications arising from these entities. In
The Gambian context, state-owned enterprises are generally referred to as public enterprises.
The 2003 CFAA noted several national-level fiscal risks that could arise from public enterprises
and many weaknesses in the institutional arrangements that are necessary to monitor and manage
such risks. Progress in strengthening the public enterprise management framework is reviewed in
this section.12
Description of Performance and Assessment
The legislation and regulation framework governing the existence and operation of public
enterprises is based on The Gambia Constitution, 1997. Key elements of supporting legislation
are the Public Enterprise Act, 1990, and, to some extent, the Companies Act, 1955 as amended.
In addition, there are the specific individual acts of the National Assembly creating respective
public enterprises. Section 175 of the Constitution defines a public enterprise as a body corporate
or other institution, wholly owned or controlled (i.e., at least 51 percent or more) by the
Government. Section 175 also provides for the establishment of the board of directors or other
governing body (commission or agency) of a public enterprise. It confers to the President of The
Gambia the authority to appoint members of the board of directors, and also lays down the basic
eligibility criteria for appointment to a public enterprise board.
Those appointed to the position of director should be citizens of The Gambia, even though the
legal framework is not as explicit on this aspect. Out of necessity, the practice has required the
appointees to be Gambian nationals of integrity, who are competent and mature enough to
undertake the responsibility of the position. The Constitution has clearly excluded certain
persons from qualifying to be directors of public enterprises by virtue of the position or
responsibilities they hold at the time. The President appoints the chief executives of public
enterprises in consultation with the board of directors or its equivalent body and the Public
Service Commission. Although this procedure is the norm, there are rare exceptions to this
practice. For example, the Secretary of State for DOSFEA is empowered to appoint the Board of
Directors of The Gambia Divesture Agency under the same legislation that created the Agency.
In a rare occurrence, this legislation is in conflict with the Constitution, which always prevails
being the supreme law of The Gambia. As the rule, except for the chief executive of a public
enterprise appointed by the President, the board of directors or equivalent governing body
appoints every other staff person of a public enterprise.
12 Representatives interviewed for this assessment were visited at The Gambia Civil Aviation Authority, The
Gambia Ports Authority, The Gambia Public Procurement Authority, The Gambia Revenue Authority, and The
Gambia Divesture Agency.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 30
Section 175 provides for establishment of a monitoring committee of the National Assembly.
This committee has a mandate to prescribe the manner in which a public enterprise should be
accountable to the National Assembly and should be able to monitor efficiency, transparency,
and probity of public enterprise operations. The reality however is that, largely because of a lack
of resources, the monitoring committee has never been set up. As a consequence, The Gambia
Divesture Agency has taken on the de facto role of supervising the performance of public
enterprises. The legal basis for such operations is dubious. The limited capacity of The Gambia
Divesture Agency with only 4 staff makes it difficult to provide effective oversight of public
enterprise performance. The last report on the performance of The Gambian public enterprises in
2006 covered two sections, one on enterprises with accounts and the other on enterprises without
accounts. The analysis was simply a presentation of audit reports.
The Public Enterprise Act and the Companies Act, complemented by the individual public
enterprise acts, provide a corporate governance framework broadly in line with international
benchmarks. The framework sets out the responsibilities of the board of directors, the rights of
equity holders, and the requirement for full disclosure of financial information through annual
financial plans and budgets and accurate and timely financial reporting. In theory, the National
Assembly would provide an additional assurance of governance through its proposed monitoring
committee if this measure becomes operational. In practice, implementation of governance
practices has been inadequate.
A governance issue of concern is that the law is unspecific about the role of senior government
officials who double in roles as ex officio board members of public enterprises. In such cases,
Government could appear to be in breach of rules of conflict of interest by influencing Board
decisions as well as Government enterprise policy. In addition, because government institutions
are a major consumer of goods and services produced by public enterprises, these senior
government officials could influence payment decisions by virtue of their official government
position. Lack of clear articulation of this potential conflict of roles has been a major underlying
concern in public enterprises that provide or supply services, such as utilities, to government
institutions that have had long outstanding arrears.
The absence of the audit committees within the boards of some public enterprises exacerbates the
inadequacy of governance in public enterprises, even though audit committees are not legally
required. An effective audit committee can strengthen the oversight mechanisms and monitoring
of how management implements auditors’ recommendations. An audit committee typically
draws its membership from among the independent directors, one of whom would be a financial
expert. An audit committee would watch against poor or fraudulent financial reporting, oversee
the audit process and engagement of the auditor, assess the independence of the auditor, and
scrutinize the financial reports and the auditor’s report and management letter. The audit
committees facilitate discussion with the auditors on a whole array of issues ranging from
accounting treatment to identification of risks and practical and effective ways of mitigating
them.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 31
Public enterprises, by and large, define their source of funds as being (a) a DOSFEA subvention,
(b) internally generated revenues, (c) legally authorized loans or grants as authorized by friendly
countries and lending institutions, and (d) any other monies as may legally be received by or
made available for the purpose of performing its functions. With these funds, a public enterprise
is required to meet its day-to-day recurrent operating costs such as staff salaries, office rent,
allowances to the board members, and capital costs used for expansion.
Public enterprises in The Gambia are required to prepare their budget estimates according to the
same timetable as the ministries, departments, and agencies. This ensures that public enterprises,
which receive substantial level of government subventions, have their budgetary needs included
in the Government budget. Generally, public enterprises receive budget preparation guidelines
from DOSFEA circulars reflecting the policy framework and national economic factors
necessary to consider in preparing budgets. Public enterprises that require government
subventions usually consult with DOSFEA on their budget proposals before agreement is
reached with DOSFEA on the final budget. However, any cutbacks of requested subventions
could mean a cutback in services — or an accumulation of unpaid debt. Some public enterprises
have tried to augment their revenue base by increasing fee tariffs in consultation with the
Government.13
The Public Enterprise Act, the Companies Act, and individual enterprise acts together impose
basic accountability and reporting requirements, including submission of annual reports and
establishment of effective financial management structures and procedures. With regard to
annual reports, public enterprises are required to prepare a report of their activities during the
preceding year and submit by each April 30 to the Secretary of State of their respective parent
ministries. The Secretary of State is obliged to table the report to the National Assembly.
Each of the public enterprises assessed for this CFAA was found to have the finance and
accounting department headed by a senior-level manager who is a professionally qualified
accountant. However, this will not be the case in every public enterprise finance and accounting
department because of the few professionally qualified accountants in the country,. Most of the
enterprises (except for the Gambia Revenue Authority that has a couple of professionally
qualified accountants) struggle to retain the single accountant they have on staff. Staff
development strategy among the public enterprises could help to reverse this trend in the next 10
years if special attention is paid to utilizing the training institutions for accountants in sub-
regional countries such as Ghana, Nigeria, Kenya, and South Africa.
Most of the public enterprises assessed by the CFAA have documented their accounting
procedures in manuals and folders of instructions. These procedures have established systems of
13
For example, the Gambia Public Procurement Authority receives a subvention for only part of its staff wage bill,
which accounts for 50 percent of the total budget. The Authority is expected to close the wide gap with internally
generated revenues from sale of tender documents and other services rendered to its clients, some of whom are
ministries, departments, and agencies that have no funds for such a service.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 32
internal control and set authorization limits for various levels of expenditures on the basis of
budgets sanctioned by their respective board of directors.
Internal audit in most public enterprises in The Gambia is relatively weak. Only a few of the
public enterprises have an internal audit unit that can claim to practice an effective modern
internal audit function, primarily because they do not have the independence and capacity to
meet international benchmarks. Even then, internal audit units are staffed with 1-3 persons, with
maybe one who is a qualified accountant. This limited level of competence, capacity, and
independence does not meet the required standards of an effective internal audit function in a
large public enterprise such as The Gambia’s Revenue Authority and Ports Authority. It has also
been shown that recommendations made by the internal auditors are in most cases not
implemented. Under these limited circumstances, there is little use of an enforcement
mechanism, such as an audit committee provides, to oversee the implementation of
recommendations of both the internal and external auditors.
Public enterprises are required to prepare and submit their annual financial statements (annual
accounts) within 3 months following the end of the financial period (January to December) to the
Auditor General who has the constitutional mandate to audit public enterprises. The audited
annual financial statements of public enterprises and the Auditor General’s report are required to
form part of the Auditor General’s overall annual report to the National Assembly.
Failure of the relevant committees of the National Assembly to consider reports of the Auditor
General on public enterprises in a timely manner has been a long-standing issue. In late 2007, the
FPAC met with the Public Enterprise Committee and jointly reviewed and interviewed chief
executive officers and finance managers of 40 public enterprises and agencies on their financial
reports for 2003/04. Continuation of this effort, together with an emphasis on follow-up by the
relevant Secretaries of State, would help to improve governance and PFM performance in this
area.
Little has changed in the overall environment of public enterprise reporting and governance since
the 2003 CFAA. The risks of quasi-fiscal indebtedness remain high and have possibly increased
in the current global environment especially as recessions in advanced economies triggered by
the global financial crisis are adversely affecting The Gambia’s tourism receipts and remittances
inflows. This has widened the current account deficit and the international reserves falling by
nearly 2 months of imports and slower growth compared to the IMF projections in the third
Poverty Reduction Growth Facility review. The decline in Government revenue would impact on
subventions to public enterprises.
The environment for financial accountability of public enterprises should be radically
transformed to reduce fiduciary risk from this source. The legislative framework under which
public enterprises are operating should be updated to take account of the changes and realities of
present day needs and competitiveness. Current legislation (the Public Enterprise Act and the
Companies Act) should be updated and made mutually consistent with regard to the treatment of
The 2009 Country Financial Accountability Assessment for The Gambia. Page 33
public enterprises. An overarching need in this regard is the establishment of a public enterprise
governance framework. All of these reforms will take considerable length of time to be
completely put in place, but action should be urgently taken in order to reduce the potential fiscal
risks that could arise from the mismanagement of public enterprises. The following are some of
the key recommended actions:
The DOSFEA and specifically the Directorate of National Treasury should take a lead
role in monitoring and reporting on public enterprise financial positions, with particular
emphasis on payment of arrears or contingent liabilities that may give rise to future fiscal
deficit increases.
A high-level public enterprise governance council should be established to review the
legislative, institutional, and governance framework in which public enterprises operate.
The proposed council should oversee drafting of relevant legislation and regulations,
governance frameworks (including capacity and skills mix of board members, conflict of
interest, internal audit arrangements, and establishment of audit committees).
A capacity-building program for financial management in public enterprises should be
initiated.
Consideration should be given to the divestiture program for public enterprises and, if
needed, a program that is realistic could be developed and implemented.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 34
SECTION 6. LEGISLATIVE SCRUTINY, PUBLIC ACCESS TO INFORMATION,
ETHICS AND INTEGRITY
Oversight of the Executive branch of government by the Legislature and, more generally, public
access to information and participation in public decision-making are key factors in establishing
sustainable accountability in PFM systems and tangentially averting corruption. The 2003 CFAA
expressed concern that continuing lack of capacity in the National Assembly and limited access
to information by the public would seriously endanger and threaten the entire public
accountability system. This section reviews the current status of this element of PFM and
progress in addressing the 2003 CFAA concerns.
Description of Performance and Assessment
The unicameral National Assembly consists of 53 members, of which 48 members are directly
elected by the public citizenry while the remaining 5 are nominated by the President. Members
serve a 5-year term. For the 2007-2012 National Assembly, there are 44 members in the majority
side (39 elected and 5 Presidential nominees) and 9 minority members.
Article 100 of the Constitution empowers the National Assembly to exercise legislative power of
The Gambia by passing bills to be assented by the President. Article 102 provides oversight
functions and additional powers to the National Assembly. These include (a) review of reports
on the activities of the Government and such other reports as are required to be made in
accordance with the Constitution, (b) review and approval of proposals for raising revenue by the
Government, (c) examination of the accounts and expenditure of the Government and other
public bodies funded by public monies and the reports of the Auditor General thereon, and (d)
advise the President on any matter which lies within his or her responsibility. In the exercise of
its powers and performance of its functions, Article 108 grants absolute operational
independence and immunity to the National Assembly from any court action.
Article 109 enjoins the National Assembly to appoint the following 4 standing committees —
Public Appointments, Finance and Public Accounts, Privileges, and Defense and Security — and
such other type committees that it considers necessary for the exercise of its functions. Article
109 vests all the trial powers, rights, and privileges in the High Court in each of the National
Assembly Committees for the purpose of effectively performing their functions.
There are 33 standing committees of the National Assembly. The Speaker of the National
Assembly chairs 12 of these committees. Except for the Privileges Committee, the Speaker
chairs the 4 constitutionally mandatory standing committees. The Finance and Public Accounts
Committee has 9 members, 3 of whom are from the opposition (i.e. the minority party). The
FPAC is typically responsible for overseeing government expenditure and operations to ensure
that they are efficient, effective, and honest. It is seen as a crucial mechanism for ensuring
accountability and transparency in government financial operations and management. However,
The 2009 Country Financial Accountability Assessment for The Gambia. Page 35
the FPAC secretariat is incapable of providing well-researched technical analytic financial
management input and advice of any value to the oversight process; its audit reports mainly
cover findings from transaction audits and less on systems and performance management issues.
Also, in The Gambia, the fact that the FPAC is chaired by the Speaker of the National Assembly
with the Majority Leader as the Vice Chair appears unconventional relative to common practice
in many countries. The conventional practice is to have a minority member chair the FPAC to
provide for reasonable assurance of objectivity, and checks and balances.
The minority constitutes only 17 percent (9 out of 53) of the membership of the National
Assembly. With this mix of membership, the most plausible decision-making process would
appear to be through consensus building. This presents a strong argument for having someone
other than the National Assembly Speaker serve as FPAC Chair due to the appearance of conflict
of interest.
Article 111(1) provides for the establishment of a National Assembly Service to provide services
and support for the National Assembly. The National Assembly Service has not been
legislatively established as envisaged by the Constitution. Subsection (2) provides for the
establishment of a National Assembly Authority with the Speaker as Chairman who appoints 4
other members to supervise the National Assembly Service. The Clerk of the National Assembly
serves as Secretary of the National Assembly Service and the Administrative Head of the
National Assembly.
The budget documents submitted to the National Assembly do not contain detailed explanation
of the fiscal policies and the medium-term fiscal framework, except for summary statements in
the Budget Speech. For this reason, scrutiny of the budget mainly covers the revenue and
expenditure estimates for Government programs.
After the DOSEFEA Secretary presents the proposed budget to the National Assembly by
November, it is passed to the FPAC. In order for FPAC to perform its function effectively,
GBMAA Act 2004, section 28, empowers the National Assembly to appoint technical staff to
assist in gathering information, conducting research, and analyzing issues pertinent budget
scrutiny. The National Assembly is constrained by lack of skilled staff required to provide the
FPAC with technical support and therefore uses simple traditional procedures to scrutinize the
budget estimates by calling Vote Controllers to defend their respective budgets.
According to section 152 (1A) of the Constitution, the National Assembly is required within 14
days of submission of the proposed budget to consider and approve the estimates. The estimates
should be laid at least one month before the end of the preceding financial year. Once laid, the
National Assembly is required within 7 days of the introduction of the Appropriation Bill to
consider and pass the Bill [section 152 (3A) of the Constitution].
To meet these tight deadlines, Financial Instruction 75 requires the Secretary for DOSFEA to
ensure that the budget estimates are submitted to the President not later than 60 days before the
end of the current financial year. In effect, if the Executive lays the budget estimates according to
the maximum time allowed (no later than November 30), The National Assembly has only 3
The 2009 Country Financial Accountability Assessment for The Gambia. Page 36
weeks to pass the budget. The National Assembly has over the past 3 years taken up to 3-4
weeks to pass the budget.
The GBMAA Act, 2004 allows for supplementary budgets to be submitted to the National
Assembly when there are changes in economic circumstances warranting such an action. The
revised and supplementary budgets would be presented and documented in the same manner and
format as the original budget. The expenditure statements in the annual accounts show details of
the approved budget, the revised budget, the actual expenditure for the reporting year, and the
variance. This disclosure provides an opportunity for the National Assembly to ascertain whether
the budget has been implemented as passed.
Section 160 of the Constitution provides that within 6 months of the end of the immediately
preceding financial year, the Auditor General’s audit report is first discussed in open sessions by
the FPAC that then submits a report to the National Assembly. It is only at this point that the
audit report is generally made public. As noted in Section 5, the Auditor General submitted
reports from 1992-1999 in September 2005 to begin tackling the backlog of overdue audit
reports. The FPAC commenced deliberations on the said reports in October and November 2005.
The FPAC reconvened in December 2006 to complete its deliberations and proceedings, and
write its report for ratification and adoption by the National Assembly in December 2006. With
the assistance of some senior members of the Gambia Association of Accountants and others, the
FPAC made extremely useful, insightful, and professional observations and recommendations.
The Auditor General’s reports raised 58 issues and queries. After its thorough review, the FPAC
regrouped the issues into following thematic areas for policy guidance and necessary action:
Implications of the Auditor General’s disclaimer.
Nonconformity/noncompliance of the Accountant General and Director of National
Treasury with the statutory reporting format and disclosure requirements.
Backlog of accounts resulting in loss/misplacement of accounting records, payments
vouchers, other source documents, and institutional memory.
Imbalance of over GMD 800 million accumulating from 1992 to 1999.
Determining a cut-off point and restating the beginning/opening balances to continue
preparation of accounts from that point forward.
Perennial, rampant, and widespread shortage of Revenue Collection Books (official
receipts) at the Directorate of National Treasury, sub-treasuries, and other revenue-
collection departments and centers.
Implications for ‘IFMIS and the National Emergency Fiscal Committee.’
Functions and placement of public sector internal auditing.
Non-settlement of bills by Government to quasi-government service providers.
When there is a huge backlog of public accounts, there is difficulty in how to assess the extent to
which audit recommendations will be pursued. However, the FPAC and the Public Enterprises
Committee held joint committee sessions to review the accounts of 49 government agencies in
The 2009 Country Financial Accountability Assessment for The Gambia. Page 37
open public sessions for the first time in the Republic of The Gambia. As exemplified by this
exercise in public participation and information sharing, the FPAC expressed desire to work
more closely with the media and relevant civil societies. Past presidents of the Gambia
Association of Accountants provided technical assistance to the National Assembly that enabled
them to review 49 government agencies. The FPAC will follow this exercise with a report. The
latest FPAC report available was in December 2006 on the annual accounts covering the periods
1991-1999.
Significant improvements have been introduced to the budget format and the quality of budget
information available to the National Assembly and the public, largely because of the
introduction of the IFMIS and introduction of a GFS-compliant chart of accounts. More work
should be done to provide the full range of quality information needed to inform the public on
PFM performance and enhance quality of public expenditure.
Basic procedures continue to be in place and are operational. No major progress has been made
since the 2003 CFAA in strengthening the roles of National Assembly and the FPAC in
reviewing the budget estimates.
While many of the fundamental issues in the 2003 CFAA regarding FPAC consideration of the
Auditor General’s reports remain of concern, important steps have been taken to open public
sessions and to clear some of the backlog of reports. In terms of PI-28, Legislative scrutiny of
external audit reports, the score remains low (Annex A), but significant improvement now
appears achievable in the next few years if the reforms are expedited and sustained.
As outlined above, reforms both in terms of FPAC discussion of Auditor General’s reports and
improvements in the quality of budget information are having impact on the quality of National
Assembly oversight and giving the public better access to PFM information. These steps are
encouraging, and demonstrate what can be achieved with well-directed efforts. The magnitude of
the remaining task remains large however, and addressing this will require a sustained
commitment from the Government and development partners. Such a program would be an
essential adjunct to the proposed program to develop the capacity and authority of the Auditor
General.
Recommendations. The Government should improve the legal and institutional framework for
the National Assembly. It should establish the National Assembly Service by an Act of
Parliament, including provision of support services to facilitate the work of the Parliament. A
major capacity-building program should be initiated to support the National Assembly and the
National Assembly Service to enhance their effectiveness and efficiency. This program should
include provision of study tours and logistical support. An Act to further strengthen the
independence of the Auditor General is also needed.
Improvement of public access to budget information will be an important element of the
capacity-building program. Part of this work would relate to further technical analysis and
enhancement by DOSFEA to bring budget information more fully in line with international
standards. Allied to this technical improvement, all sittings of the National Assembly and its key
The 2009 Country Financial Accountability Assessment for The Gambia. Page 38
PFM-related committees should be open to the public, budget and accounts data should be
published on the Government website, and there should be a continuing campaign to raise public
awareness of the availability of and rights to PFM information.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 39
SECTION 7. PROPOSED REFORM ACTION PLAN
The review in this CFAA 2009 has established that many of the CFAA 2003 recommendations
have not been fully implemented. The challenge of limited capacity and absence of a robust
monitoring arrangement to ensure that the 2003-recommended action plan was implemented
have been major factors contributing to the lack of progress. It will be important to build on any
successful progress and to address the fundamental factors impeding further progress. In this
regard, the proposed action plan for CFAA 2009 carries over the outstanding activities of CFAA
2003 that have not been implemented but are still relevant based on the current situation.
The proposed PFM reform action plan is aligned with the Pillar I of the Government’s PRSP that
includes all aspects relating to economic management, including macroeconomic stability, public
finance management, public debt management, divestiture, and civil service reforms.
The action plan requires full support of all stakeholders and should coordinate all ongoing PFM-
oriented reforms in a comprehensive and monitorable framework. Some measures can be
implemented in a relatively short timeframe; most will probably require sustained support over
many years. First, it is critical that the overall strategy of reform should be clearly understood
and, second, that the Government provides strong, committed, and continuing leadership for the
reform program. The leadership role goes beyond taking ownership of the process, which has
substantially improved since the 2003 CFAA.
Reform strategy: There are a number of elements to be balanced in the action plan to address the
identified weaknesses and reduce PFM fiduciary risk. The following critical institutional
weaknesses identified in the CFAA 2009 should be tackled immediately with a clear long-term
commitment:
Ineffective internal audit function;
Weak capacity, independence, and authority of external audit; and
Weak legislative and public oversight.
Wider civil service reforms are needed to support and sustain the PFM improvements that
have been registered thus far. If these relative issues are not tackled, technical improvements
in PFM systems are unlikely to be sustained.
Consolidation of successful reforms: The gains made in Central Government management in
terms of introduction of an IFMIS and modern chart of accounts must be translated as soon as
possible into more effective policy-linked planning and control. And performance in these areas
should be rigorously monitored.
Long-term institutional reform: The PFM successes in Central Government cannot be
immediately transferred to other elements of general government (local government) or the
public sector (public enterprises) because of capacity constraints and of the need for deeper
policy development on reform of public enterprises. Only initial steps have been taken in each
The 2009 Country Financial Accountability Assessment for The Gambia. Page 40
area; and in each, there is a need to map out a long-term strategy and corresponding long-term
action plan for these components.
Timeframe and prioritization: The action plan must consider the ability of the Government to
implement the reforms. For this reason, the action plan is divided between short-term (1-2 years)
and medium-term (3-5 years) actionable items. As well, reform activities are prioritized and
sequenced such that the critical issues are addressed in order to build a platform for future
reforms. Quick wins can be achieved by addressing the critical issues first, build confidence, and
capture the attention of all stakeholders to support the reform agenda.
Oversight: A PFM reform oversight steering committee under the chairmanship of the
Permanent Secretary for DOSFEA and reporting to the Secretary for DOSFEA should be set up
to provide oversight for the recommended reform activities of CFAA 2009. The CFAA 2003
lacked sufficient mechanism for monitoring and oversight of its recommendations. Development
partners supporting the reforms should be co-opted in the committee. The oversight committee
should have support of sub-committees with direct responsibility for implementing the thematic
areas of the reform. The sub-committee could meet monthly under the leadership of a PFM
Reform Coordinator who should be appointed or recruited. Quarterly implementation reports will
then be submitted for review by the steering committee at quarterly meetings. The PFM Reform
Coordinator will produce an annual report, and the Secretary for DOSFEA will present it at a
public PFM Forum. (Annex D suggests terms of reference for the proposed steering committee).
The 2009 Country Financial Accountability Assessment for The Gambia. Page 41
ANNEX A. PEFA PFM Performance Measurement Framework
Summary of PEFA - PFM Performance Scores
A. PFM-OUT-TURNS: Credibility of the budget Scores
PI-1 Aggregate expenditure out-turn compared to original approved budget B
PI-2 Composition of expenditure out-turn compared to original approved budget C
PI-3 Aggregate revenue out-turn compared to original approved budget B
PI-4 Stock and monitoring of expenditure payment arrears NS
B. KEY CROSS-CUTTING ISSUES: Comprehensiveness and Transparency
PI-5 Classification of the budget B
PI-6 Comprehensiveness of information included in budget documentation B
PI-7 Extent of unreported government operations D+
PI-8 Transparency of inter-governmental fiscal relations D
PI-9 Oversight of aggregate fiscal risk from other public sector entities. D+
PI-10 Public access to key fiscal information D
C. BUDGET CYCLE
C(i) Policy-Based Budgeting
PI-11 Orderliness and participation in the annual budget process B
PI-12 Multi-year perspective in fiscal planning, expenditure policy and budgeting D+
C(ii) Predictability and Control in Budget Execution
PI-13 Transparency of taxpayer obligations and liabilities C
PI-14 Effectiveness of measures for taxpayer registration and tax assessment C
PI-15 Effectiveness in collection of tax payments NS
PI-16 Predictability in the availability of funds for commitment of expenditures C
PI-17 Recording and management of cash balances, debt and guarantees B
PI-18 Effectiveness of payroll controls C+
PI-19 Competition, value for money and controls in procurement NS
PI-20 Effectiveness of internal controls for non-salary expenditure C+
PI-21 Effectiveness of internal audit D
C(iii) Accounting, Recording and Reporting
PI-22 Timeliness and regularity of accounts reconciliation C
PI-23 Availability of information on resources received by service delivery units D
PI-24 Quality and timeliness of in-year budget reports B+
PI-25 Quality and timeliness of annual financial statements D+
C(iv) External Scrutiny and Audit
PI-26 Scope, nature and follow-up of external audit D+
PI-27 Legislative scrutiny of the annual budget law C+
PI-28 Legislative scrutiny of external audit reports D+
D. DONOR PRACTICES
D-1 Predictability of Direct Budget Support NS
D-2 Financial information provided by donors for budgeting and reporting on project and program aid NS
D-3 Proportion of aid that is managed by use of national procedures NS
NS = Not Scored
The 2009 Country Financial Accountability Assessment for The Gambia. Page 42
Description of Legal Framework for PFM
1. The overriding legal framework for the management of public funds is the Constitution of the
Republic of The Gambia 1997; chapter IX of the 1997 Constitution deals with finance and sections 158
to 160 provides for the existence of the Auditor General and the National Audit Office.
2. The Finance and Audit Act, 1964 has been revised and the Budget Management and
Accountability (BMAA) Act, 2004 is now in place to provide for the control and management of public
monies, for the powers and duties of the Legislature and Executive branch in the preparation,
presentation, approval, execution, and reporting of Government budget and for matters connected
therewith. At the local level, the Local Government Act, 2002 is supported by the Local Government
(Finance and Audit) Act, 2002.
3. The BMAA Act, 2004 provides for the establishment of the Directorate of the National Treasury
(DNT) to replace the Accountant General's Department. The DNT head is required to perform his or her
duties under the direct supervision of the Permanent Secretary in accordance with the Financial
Instructions. The Financial Instructions (1989 Edition) has been replaced with a revised Financial
Instruction dated 2004. An Accounting Procedures Manual was issued in October 2006 to provide
detailed guidance for the business processes to be performed in using the EPICOR package that is used
for the Integrated Financial Management Information System (IFMIS).
4. The Public Procurement Act inspired from the UNCITRAL Model Law was prepared in 2001 with
technical assistance from the International Trade Center. The Law adopted by Parliament became effective
July 2003 and established the Gambia Public Procurement Authority, which replaces the centralized
Tender Board (Major and Minor Tender Boards). A key feature of the Act is that it puts in place
mechanisms for the decentralization of procurement activities to Government entities. Implementing
regulations and standard bidding documents were also prepared and issued during 2002-2003.
5. Gambia Revenue Authority Act, 2004 provides for the establishment of the Gambia Revenue
Authority to administer, assess, and collect revenue, to provide for the efficient and effective
administration of the revenue collecting system, and for matters connected therewith.
6. The Income and Sales Act, 2004 revises and consolidates the laws relating to income tax and
sales tax and for matters connected therewith. This Act repealed The Income Tax and National Sales Tax
Act.
Income Tax (rates for informal sector) Regulations, 2007 provides that the Commissioner
General shall determine whether a business size is small, medium, or large for the purposes of the
rate of tax payable based on the turnover of the business. The regulation has a schedule of the
annual rate of tax for the informal sector.
Income Tax (Taxpayer Identification Number) Regulations, 2007 enjoins the Commissioner
General to issue Taxpayer Identification Number (TIN) if satisfied with the documentary
evidence that are required to be provided under the Regulation by (a)an individual (resident and
non-resident)(b)a company (c)a partnership, society and trust, and (d) body of persons.
Description of Institutional Framework for PFM
7. The Department of State for Finance and Economic Affairs (DOSFEA) according to the 1997
Constitution and the BMAA Act, 2004 is primarily responsible for the control and management of public
monies in a transparent and accountable manner.
8. To carry out this function effectively DOSFEA has established the following organizational units.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 43
Directorate of National Treasury
Budget Office
Economic Management and Policy Unit
Debt Management Directorate
Internal Audit Department/Division – This exists in name only.
9. The National Planning Commission works closely with DOFSEA to ensure smooth
implementation of the Governments Poverty Reduction Strategy.
10. Gambia operates a centralized PFM system, except for the IFMIS, that allows Departments to
enter their transactions remotely to the DNT-maintained centralized database.
11. The Central Bank of Gambia maintains the Treasury Main Account for the Government as well
as other departmental bank accounts. Bank accounts are also held at some commercial banks.
12. Key to improving policy formulation and monitoring and evaluation of budget implementation is
availability of timely, reliable and accurate data. In this regard, Government has established the Gambia
Bureau of Statistic as a semi-autonomous organization replacing the former Central Statistic Department.
The Statistic Act was revised in 2005 and new organizational structures have been put in place to ensure
that the institution operates more efficiently and effectively.
13. The National Planning Commission, Gambia Public Procurement Authority, and the Gambia
Revenue Authority are other key PFM institutions that together with DOSFEA and the line departments
ensure the smooth running of the PFM system.
14. To ensure oversight the National Audit Office has a constitutional mandate to audit all public
funds. The Auditor General is appointed by the President after consultation with the Public Service
Commission and is required by the Constitution to submit his audit report to the National Assembly
within six months of the end of the immediately preceding financial year. The Finance and Public
Accounts Committee (FPAC) of the National Assembly on receipt of the Auditor General’s report holds
public hearings in which public officials are called to provide explanations for the various audit queries
raised in the report. Recommendations and sanctions are then made for implementation by the Executive
branch.
15. The Local Government Act, 2002 established the local governments with their responsibilities to
perform key service delivery functions. At the moment this is not being done because capacity to perform
these services is yet to be built at the local councils. The Central Government still maintains regional-
level departments.
Integrated Assessment of PFM Systems
16. The following section describes an integrated assessment of the critical dimensions of
performance of an open and orderly PFM system:
Credibility of the budget. The budget is realistic and is implemented as intended.
Comprehensiveness and transparency. The budget and the fiscal risk oversight are
comprehensive and fiscal and budget information is accessible to the public.
Policy-based budgeting. The budget is prepared with due regard to government policy.
Predictability and control in budget execution. The budget is implemented in an orderly and
predictable manner, and there are arrangements for the exercise of control and stewardship in the
use of public funds.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 44
Accounting, recording and reporting. Adequate records and information are produced,
maintained, and disseminated to meet decision making control, management, and reporting
purposes.
External scrutiny and audit. Arrangements for scrutiny of public finances and follow up by
Executive branch are operating.
Budget credibility
PI-1. Aggregate expenditure out-turn compared to original approved budget
17. The budget is the main tool that is used to translate government’s policy into practice. Therefore,
it is important for the Executive to be able to execute the budget as passed by the Legislature all other
things been equal. This requires budget discipline by keeping planned expenditure within the
Government’s ability to raise revenue or debt that is not prohibitively expensive.
18. Poor performance in 2005 and 2006 can be attributed to the shortfalls in collection of domestic
revenue. In 2007, domestic revenue was marginally exceeded but this is overshadowed by the aggregate
over-expenditure of 7 Percent.
Table A1. Comparison of Original Budgeted and Actual Expenditures, 2005-2007
2005 2006 2007
Budgeted primary expenditure (billion Dalasi) 1,689 1,855 2,392
Actual primary expenditure (billion Dalasi) 1,375 1,940 2,575
Difference between actual & budgeted primary expenditure
(billion Dalasi) (314) 85 183
Difference as percentage of budgeted primary expenditure (18.6)% 4.5% 7.7%
PI-2. Composition of expenditure out-turn compared to original approved budget
19. In addition to respecting the budget aggregates, it is equally important for the composition of the
budget either at administrative or functional level to be respected to allow the policy intent of the budget
to be met.
20. The deviations in aggregate spending as reflected in PI-1 are further manifested at the
administration level with expenditure composition exceeding overall deviation in primary expenditure by
more than 5 percent in 2005, 2006, and 2007. Annex C further shows that key service delivery ministries
such as Education, Health and Social Welfare, Works, and Justice have spent less than budgeted as
opposed to Finance and Economic Affairs, Office of the President, Interior and Religious Affairs.
However, Education and Health and Social Welfare have continued over the period to be ranked amongst
the top five spending ministries.
21. Miscellaneous budget mainly comprises payment for arrears and guarantees with some amounts
for local travelling expenses and contingency other charges. The budget for miscellaneous expenses has
increased from 6 percent in 2005 to 22 percent in 2007 and represents the highest budget for 2006 and
2007. This increase was due mainly to the comprehensive compilation of all domestic arrears, which were
agreed upon with creditors to be paid over three years starting in 2006. Commitments resulting from
The 2009 Country Financial Accountability Assessment for The Gambia. Page 45
hosting the African Union Summit in 2006 also caused some increase in miscellaneous expenditure. Such
high allocation of resources to miscellaneous expenses crowds out allocation to service delivery
expenditure.
PI-3 Aggregate revenue out-turn compared to original approved budget.
22. To ensure fiscal discipline it is important to accurately forecast domestic revenue to guide the
allocation of funds for budget execution. The indicator shows that the Government is reasonably able to
forecast and collect domestic revenue with collections only short by 3.6 percent and 5.2 percent in 2005
and 2006, respectively. Collection exceeded forecast by 10.2 percent in 2007.
Table A2. Comparison of Original Budgeted and Actual Domestic Revenue Receipts, 2005-2007
2005 2006 2007*
Budgeted receipts (GMD millions) 2,817.15 3,164.20 3,342.70
Actual receipts (GMD millions) 2,717.10 2,998.10 3,682.21
Difference between actual and budgeted receipts (GMD millions) (100.05) (166.10) 339.51
Difference as percentage of budgeted receipts (3.6)% (5.2%) 10.2%
Source: Published budget estimates and actual collection reported in Directorate of National Treasury final accounts. *Draft as at end Dec 2007
23. The sum of GMD 4,202,200 is projected for 2008, representing 24.35 percent of nominal GDP.
PI-4. Stock and monitoring of expenditure payment arrears
24. A high level of arrears can indicate a number of different problems such as inadequate
commitment controls, cash rationing, inadequate budgeting for contracts, under-budgeting of specific
items, and lack of information.
25. The miscellaneous vote in the budget estimate is mainly made up of payment for arrears and
guarantees. The 2006 and 2007 financial statements show details of payment of arrears of GMD236,326
and GMD548,537, respectively, but the 2005 financial statements does not disclose this information. The
stock of expenditure payment arrears at the start of the year is not shown in the budget (See PI-6) to allow
calculation of arrears paid as a percentage of actual total expenditure for the corresponding fiscal year and
to assess changes in the stock of expenditure payment arrears.
26. Prior to the implementation of IFMIS in 2007, outstanding commitments were not disclosed in
the annual financial statements. The 2008 financial statement has a Statement of Outstanding
Commitments totaling GMD48.327million as submitted by Vote Controllers, from the various
departments of state (ministries) as reflected in the Table below. The statement provides information on
the outstanding commitments at the end of the financial year, which the Government has entered into for
the supply of goods and services for each vote summarized and analyzed in terms of functions of
government, and between operating and capital commitments.
27. There is no clear policy on the number of days required to pay suppliers invoices making it
difficult to age outstanding payments. Salary payments are up to date.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 46
28. Arrears to suppliers as December 2006 was GMD 336,000 but corresponding figures for 2005 are
not available as shown in the Table A3 extracted from Report on the Gambian National Debt Strategy and
New Financing Analysis Workshop, February, 2007.
Table A3. December 2005 December 2006
Amount
(GMD‘000)
% Amount
(GMD‘000)
%
A. Marketable Instrument
91-Day Treasury bill 617.25 14 365.19 8
182-Day Treasury bill 961.25 22 906.35 19
364-Day Treasury bill 2,809.14 64 3,376.21 73
SUB-TOTAL 4,387.64 4,647.75
B. Non-Marketable
Government bonds 250 250
Treasury notes 535 535
Central Bank loan 606 75
Suppliers arrears - 336
SUB-TOTAL 1,391 1,196
GRAND TOTAL 5,778.64 5,843.75
Sources: Central Bank of The Gambia and DOSFEA 2007
The 2009 Country Financial Accountability Assessment for The Gambia. Page 47
Indicator Score Brief explanation of status as at the reporting period
A. Credibility of the Budget
PI-1. Aggregate expenditure
out-turn compared to
original approved budget
B
Based on domestically-financed primary discretionary expenditure
(i.e. excluding debt service charges and donor funded project
expenditure) deviations between original budget and outturns were:
2007: 7.7% 2006: 4.5% 2005: (18.6)%
Actual expenditure deviated from budget by more than 10% in no more than one out of the 3 years
PI-2. Composition of
expenditure out-turn
compared to original
approved budget
C
Deviations between original budget and outturns were:
2007: 5.0% 2006: 19.0% 2005: 5.1 %
Variance in expenditure composition exceeded overall deviation in
primary expenditure by more than 10% only in 2006 out of the last
three years.
PI-3. Aggregate revenue out-
turn compared to original
approved budget
B
Actual revenue collections as a % of budgeted domestic revenue
obtained from Ministry of Finance fiscal tables were:
2007: 110.2% 2006: 94.8% 2005: 96.4 %
PI-4. Stock and monitoring
of expenditure payment
arrears
NS
Data not available for dimension (i) to score this indicator.
(i) Stock of expenditure
payment arrears (as a
percentage of actual total
expenditure for the
corresponding fiscal year) and
a recent change in the stock
NS Government has been paying off large amounts of arrears over the
last few years but full details of the payments were not made
available to the team to do the necessary calculation and assess
changes in debt stock.
IFMIS became operational in 2007, and outstanding commitments
are now disclosed in the annual financial statements.
(ii) Availability of data for
monitoring the stock of
expenditure payment arrears
C List of outstanding commitments are now available in IFMIS since
2007. However, the list does not show aged balances to categorize
them into arrears.
Data on the stock of arrears is generated on an ad hoc basis as was
done as part of the 2007 Gambian National Debt Strategy and New
Financing Analysis Workshop
29. The indicators demonstrate some level of fiscal indiscipline. The effect is that the credibility of
the budget is undermined since budget execution does not fully reflect its policy intent. Furthermore,
ministries, departments, and agencies will lose trust that DOSFEA will make the necessary budgetary
provisions to implement planned programs and the public will in turn also lose confidence that public
services will be rendered efficiently.
Comprehensiveness and transparency
PI-5. Classification of the budget
30. The classification system (chart of accounts) must be robust to allow the tracking of spending on
the following dimensions: administrative unit, economic, functional and program. Such chart of accounts
The 2009 Country Financial Accountability Assessment for The Gambia. Page 48
will enable The Gambia to report expenditure in GFS format and align and track poverty-reducing
expenditure in the poverty reduction strategy.
31. The chart of accounts is made up of 30 alphanumeric characters divided into four segments as
follows.
Source: Accounting Procedures Manual dated 23/10/2006
32. The 2006 budget estimates were completely mapped to the new chart of accounts, and the 2007
budget estimates were produced using the new chart of accounts for IFMIS. Reporting by functions of
Government is currently achieved through mapping tables. An overview of the functions of government
at sub-functional level is provided in the budget estimates. The Directorate of National Treasury has
The 2009 Country Financial Accountability Assessment for The Gambia. Page 49
produced draft formats for preparing financial statements that will include Classification of Functions of
Government (COFOG) reports at sub-functional level. The level of detail for functional analysis in the
budget is derived from the responsibility segment through mapping tables with the following sub-
functional analysis:
General
General public services
Defense
Public order and safety
Social Education
Health
Social security and welfare
Housing and community amenities
Recreational, cultural , and religious affairs Economic
Fuel and energy
Agriculture, forestry, fishing, and hunting
Mining and mineral resources, and manufacturing
Transportation and communication
Other economic affairs Other
Debt interest
Indicator Score Brief explanation of status as at the reporting period
PI-5. Classification of the budget
B
The classification system is robust to prepare budgets by
administrative unit, economic, functional and program. The
Accounting Procedures Manual provides a detailed
description of the chart of accounts and is widely
understood by various users.
However, the MTEF segment of the chart of accounts is
not utilized and there is room for improvement in ensuring
that budget execution reports are classified at sub-
functional level.
PI-6. Comprehensiveness of information included in budget documentation
33. It is important for especially the Legislature and other users to have the full picture of the budget.
The underlying assumptions for the budget should also be disclosed for better understanding of the
estimates. Table A4 shows the elements that are contained in the budget.
Table A4. Elements of the Budget
Available
Macro-economic assumptions, including at least estimates of aggregate growth, inflation and exchange rate.
The macro-economic assumptions that underpin the preparation of the estimates are
not explained in the budget. However, the Budget Speech talks about the expected
growth rate in the real sector and monetary developments in exchange and interest
Yes
The 2009 Country Financial Accountability Assessment for The Gambia. Page 50
Table A4. Elements of the Budget
Available
rates. The impact of these on the budget estimates is not clearly explained.
Fiscal deficit, defined according to GFS or other internationally recognized standard.
Financing of the fiscal deficit is categorized in a table in the budget estimates.
Gross Surplus /Deficit (-)
Financing
Domestic borrowing, domestic amortization, foreign amortization,
payment of arrears, exceptional financing
Memorandum
GLF Expenditure + Foreign Amortization
Debt Service
Domestic Borrowing + Net Surplus/Deficit
Yes
Deficit financing, describing anticipated composition.
The composition of how the deficit will be financed is described in the budget.
Yes
Debt stock, including details at least for the beginning of the current year. No
Financial assets, including details at least for the beginning of the current year.
Details of financial assets are not included in the budget.
No
Prior year’s budget outturn, presented in the same format as the budget proposal.
Provisional actual figures are presented for the prior year (2006)
Yes
Current year’s budget (either the revised budget or the estimated outturn), presented in the same format as the budget proposal.
Current year’s budget is included but without outturns to assess execution of the
budget.
Yes (revised budget)
Summarized budget data for both revenue and expenditure according to the main heads of the classifications used (refer to PI-5), including data for the current and previous year.
Partly
Explanation of budget implications of new policy initiatives, with estimates of the budgetary impact of all major revenue policy changes and/or some major changes to expenditure programs.
No
34. For the budget and fiscal reports to be comprehensive it must cover all aspects of financial
statements (revenue, expenditure, assets, and liabilities) for the various budgetary entities. The GBMAA
Act, 2004 allows some entities to retain internally generated revenue, but these are not included as part of
the budget estimates making it incomprehensive.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 51
35. Some amount of information is available in the budget estimates for expected disbursements from
development partners. This is far from comprehensive; and even for those that are captured in the budget,
actual expenses are not included in out-turn reports.
PI-7. Extent of unreported government operations
36. Extra-budgetary funds and sources of external financing should be integrated into the budget and
financial statement in order to provide a complete picture of public funds. Current transfers account for
15.5 percent (GMD 522,044) of recurrent expenditure (GMD 3,367,719). Fifty-two percent (GMD
273,496) of the transfers are to public authorities. Use of extra-budgetary funds can result in loss of
aggregate expenditure control since they are outside the control of DOSFEA. Less transparency may also
lead to inefficiency or misuse of funds.
37. The GBMAA Act, 2004 (2) provides that “Notwithstanding the provisions of subsection (1), an
Act of the National Assembly may provide: (a) for the payment of particular revenue or other money into
some other fund, which for the purpose of this Act is called extra-budgetary fund, established for a
specific purpose; and (b) for the retention of revenue or other money by the budget agency that received it
for the purpose of defraying expenses of that budget agency, which for the purpose of this Act is called
‘departmental self-raised revenue’”.
38. Vote Controllers that are authorized to operate special bank accounts are required to submit
statements of revenue and expenditure to the Directorate of National Treasury within five days of the end
of each month [GBMAA Act, 2004 (40)]. However, this is not done by most of the Departments; lack of
reports makes it even more difficult to ascertain the value of such unreported transactions.
39. The budget estimates provide an overview of how expenditure will be funded by showing grant
and loans expected from bi-laterals and multi-laterals development partners and the portion funded by the
Government. For 2008, The Gambia Government expected to receive an amount of GMD 1,444,520 for
development projects in the form of grants and loans to support a total budget of GMD 5,873,114. The
provisional figures for 2006 in the budget estimate are not categorized by the economic classification
because of lack of reports as stated above.
40. Donor funds are managed through special bank accounts operated by the project implementation
unit and approved by the Directorate of National Treasury. With the new chart of accounts, it is possible
for donors to submit returns to the Directorate of National Treasury so that the transactions can be
captured and reported in fiscal reports. However, this is not been done. The effect is that government
programs are under-reported thus undermining government accountability for the use of these funds.
41. The Ministry of Finance and Economic Affairs (previously the DOSFEA) has set up a Project
Management and Aid Coordination Unit to improve coordination, monitoring, and comprehensive
reporting of aid flows in the country. In consultation with all stakeholders, including the civil society
organizations, the unit prepared the first Aid Coordination Report in 2009.
Indicator Score Brief explanation of status as at the reporting period
PI-6. Comprehensiveness of
information included in
budget documentation
B
Five out of the nine elements are included in the 2008 budget
estimates.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 52
PI-8. Transparency of intergovernmental fiscal relations
42. There are three forms of central subvention to local governments (a) general grant; (b) grant-in-
aid; and (c) equalization grant. The criteria for making these horizontal transfers to the seven councils are
not clear. The Finance and Audit Act however provides that 60 percent of council’s revenue shall be
devoted to development activities and 40 percent to recurrent activities. Transfers from the Central
Government are mainly to cover administration expenses. Functional devolution is yet to take place to
make this indicator relevant.
43. According to the Finance and Audit Act, the preparation and approval of the budget must be done
by September each year incorporating comments of the Secretary of State for Local Governments and
Lands. This timeline is to ensure that the budgetary needs of the councils are factored in the Central
Government budget. With delays in the preparation of council budgets, the Central Government uses its
best judgment to estimate the budgetary needs of the councils. The effect of this is that reliable
information on allocations is not available to the councils at the start of the year.
44. Despite the fact that Financial Instructions for the GBMAA Act, 2004 apply to councils; current
practice is still based on the old Financial Memorandum for Municipal & Area Councils published in
1985. Financial reporting is limited to the production of a trial balance only. A full set of financial
statements including the production of a balance sheet and income statement are not produced by any of
the councils. This makes it impossible for fiscal reports for the councils to be consolidated and analyzed
according to Central Government reporting format.
Indicator Score Brief explanation of status as at the reporting period
PI-7. Extent of unreported
government operations
D+
(i) Level of unreported extra-
budgetary expenditure
C
Transfers to public authorities disclosed in the budget are
8% of total recurrent expenditure (GMD 273,496 out of
GMD 3,367,719). However lack of returns from the public
enterprises makes it difficult to ascertain the full value of
extra-budgetary funds.
With strict cash management measures put in place in
recent years and rationalization of bank accounts;
Institutional and Governance Reviews are gradually being
integrated in fiscal reports.
Reporting on donor funds, and more generally on extra-
budgetary operations, remains unsatisfactory.
(ii) Income/expenditure
information on donor-funded
projects
D Grants and loans expected from donors are included in the
budget estimates but actual expenditure during the year is
not included in outturn reports – GMD 1,444,520 out of
GMD 5,873,114 (i.e., 25%).
The 2009 Country Financial Accountability Assessment for The Gambia. Page 53
PI-9. Oversight of aggregate fiscal risk from other public sector entities
45. Public enterprises and the councils could create debt for the Central Government if their financial
position is not closely monitored. In this regard, the Financial Instructions for the GBMAA Act apply to
(a) all departments and constitutional institutions; (b) the Gambian Revenue Authority; and (c) all
subvented agencies.
46. The DOSFEA is represented on the board of all public enterprises and exercise oversight by
reviewing the annual budgets and audited financial statements. However, a consolidated overview of
public enterprise operations and possible aggregate risk to Central Government is not undertaken.
47. The Finance and Public Accounts Committee recently reviewed the annual audited accounts of
public enterprises in joint open sessions with the Public Enterprises Committee of the National Assembly.
The revitalization of the Committees in the National Assembly has created public interest in
accountability by various public officials.
Indicator Score Brief explanation of status as at the reporting period
PI-8. Transparency of
intergovernmental relations
D
(i) Transparency and objectivity
in the horizontal allocation
among subnational
governments.
D Apart from the high-level requirement that 60% of council’s
revenue shall be devoted to development activities and 40% to
recurrent activities, transfers to the councils are not based on a
transparent rule based allocation formula.
(ii) Timeliness of reliable
information to subnational
governments on their allocations
D Transfers from the Central Government are mainly to cover
administration expenses and functional devolution is yet to take
place. Information on the expected transfers is not reliable in
determining the budgets for the councils.
(iii) Extent of consolidation of
fiscal data for general
government according to
sectoral categories
D No local government data is included in the national budget.
Sectoral breakdown is not done. Most of sectoral spending is
still under national ministries, departments, and agencies.
Councils still use the 1985 Financial Memorandum for
Municipal & Area Councils. The classification system and
report format are different from that of the central government.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 54
Indicator Score Brief explanation of status as at the reporting period
PI-9. Oversight of aggregate
fiscal risk from other public
sector entities
D
(i) Extent of monitoring public
enterprises
D
Apart from recent discussion of audit reports by the FPAC and
Public Enterprise Committee of National Assembly, little
progress has been made on establishing basic reporting and
accountability mechanisms since the 2003 CFAA
(ii) Extent of Central
Government monitoring of
subnational governments’ fiscal
position. D
Limited progress has been made by Directorate of Local
Governance to establish effective mechanisms of local
government reporting and accountability. Unavailability of
annual financial statement limits the scope to monitor the local
government fiscal positions annually.
PI-10. Public Access to key fiscal information
48. Without transparency, there can be no accountability. For this reason, it is essential for
Government to make key fiscal information available to the public in a timely manner. Elements of
information made available by The Gambia Government to the public include:
Elements Available (i) Annual budget documentation. The public can obtain a complete set of
documents through appropriate means when the documents are
submitted to the Legislature.
Partially
(ii) In-year budget execution reports. The reports are routinely made
available to the public through appropriate means within one month of
their completion.
No
(iii) Year-end financial statements. The statements are made available to the
public through appropriate means within six months of completed audit.
No
(iv) External audit reports. All reports on Central Government consolidated
operations are made available to the public through appropriate means
within six months of completed audit.
No
(v) Contract awards. Award of all contracts with value above approximately
US$100,000 equivalent are published at least quarterly through
appropriate means.
No
(vi) Resources available to primary service units. Information is publicized
through appropriate means at least annually, or available upon request,
for primary service units with national coverage in at least two sectors
(such as elementary schools or primary health clinics).
No
49. Although the annual budget estimate is printed by the Government Printer, it is not easily
obtainable in the Government Bookshop nor is it posted on the DOSFEA website. The DOSFEA has a
website (http://www.dosfea.gm/) but is not being effectively used to promote transparency and
accountability by uploading key fiscal reports and policy papers.
50. In-year budget outturn reports are made available to the departments on a regular basis but such
reports are not made public. Year-end financial statements have not been published for over 10 years.
There was a huge backlog of preparation of annual accounts but the Directorate of National Treasury has
The 2009 Country Financial Accountability Assessment for The Gambia. Page 55
now submitted accounts to the Auditor General’s Office up to 2006. These accounts are not made public
until they are audited and the FPAC issues its report.
51. The FPAC has reviewed accounts up to 1999 but is yet to issue its report. The 2000-2004
accounts have been audited and await comments from the Executive before finalization and submission to
the National Assembly.
52. Contract opportunities are made open in the national press, but awards are not published. Public
Expenditure Tracking Surveys (PETS) are not performed annually.
Policy-based Budgeting
PI-11. Orderliness and participation in the annual budget process
53. Article 152 of the Constitution provides for Annual Estimates and Appropriations. Article 152 (1)
enjoins the President to cause the Secretary of State responsible for finance to prepare and lay before the
National Assembly, at least 30 days before the end of the financial year, estimates of the revenue and
expenditure of The Gambia for the following financial year.
54. The estimates shall include estimates that under the Constitution are to be submitted directly to
the President for presentation by the President to the National Assembly. These estimates include those of
the National Assembly, the Judicature, National Audit Office, and the Independent Electoral Commission.
The Chief Justice and any other authority that is entitled to draw up its own estimates for direct
presentation by the President to the National Assembly shall provide the President with such estimates at
least 90 days before the end of the previous financial year. The National Assembly is required to give
consideration to and approve the estimates within 14 days of the estimates being laid before it. The
National Assembly shall, within 7 days of the introduction of the Appropriation Bill, give consideration to
and pass the Bill.
55. Budget call circulars are issued around June each year. Departments have 3 weeks to prepare for
consultative workshops to ensure participation in the formulation process. About 3 months is given for
the preparation of the budget before bi-lateral discussions are held with DOSFEA to review the budget for
consistency with national policies in the PRSP. The National Planning Commission plays a critical role in
reviewing the budget during the bilateral discussions.
56. All Departments of State are required to form a Budget Task Force headed by the Secretary of
State and comprising Heads of departments (units) and stakeholders. The Budget Office is concerned
about the quality and completeness of estimates received, thus doubting the existence or capability of the
task force in certain sectors. The Budget Committee at DOSFEA only discusses a consolidated budget
coming from the Permanent Secretary. Both recurrent and development budgets are integrated.
57. Ceilings for other charges, development, and personnel emoluments are issued with the budget
call circular. At this stage the Cabinet is not formally involved in approving the ceilings. The Cabinet is
involved in the process at the point when the budget is ready for submission to the National Assembly.
However, each Secretary of State would have been involved in the preparation of his/her own budget. A
Indicator Score Brief explanation of status as at the reporting period
PI-10. Public access to key
fiscal information
D The budget estimates are printed by the Government Printer but
are not readily available to the public.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 56
holistic review of the ceilings by Cabinet would ensure that national policies are properly articulated in
the budget and reflect Government’s priorities in the allocation of ceilings.
58. Revenue-generating departments are required to develop their revenue budgets using GDP
growth, inflation figures, projected sales, strength of the work force, and other key variables. The macro-
economic targets by the Gambian authorities in formulating the budget were for the next 3 years at a GDP
growth rate of 4.5 percent, an average inflation level of 5.0 percent, and a fiscal deficit averaging 3.1
percent of GDP for the same time period. Sectoral ceilings were set with the above key macroeconomic
variables in mind and based on the prevailing economic conditions of the country.
59. In developing estimates for personnel emoluments, departments are required to discuss their
staffing needs with the Personnel Management Office. Employment of new staff that creates new posts is
not allowed, although existing vacant positions can be filled. New Details of Establishment and Nominal
Rolls are sent to the Department of State for Finance and Personnel Management Office.
60. Clear guidance is given to the Departments on how to prepare the estimates. The IFMIS pilot
departments use the ‘Active Planner’ module to enter their estimates, and those that are not yet online are
provided with templates that are entered at the Data Center in the Budget Office. Estimates for all
departments are then consolidated to form the overall budget estimates.
61. All Permanent Secretaries and Heads of departments were urged to adhere to the 2008 budget
preparation guidelines and the timely submission of their proposals as indicated in the timetable below.
Timetable for 2008 Budget Preparation
Activity Date
Release of call circular June 6, 2007
National Consultative Workshop
on Participatory Budgeting June 26, 2007
Deadline for submission of details of
establishment and nominal rolls to DOSFEA
and Personnel Management Office August 14, 2007
Observed
Bilateral Consultations Begins August 18, 2007
Bilateral Consultations To be released
62. The GBMAA Act, 2004, 22 (1) requires the Secretary of State in accordance with section 152 of
the Constitution to prepare and lay before the National Assembly the Appropriation Bill documents, at
least 30 days before the end of the financial year. For the past 3 years, this requirement has been met with
the budget passed by the National Assembly before the start of the new financial year:
FY2008, DOSFEA submitted on Nov. 20, 2007 and National Assembly passed on Dec. 24, 2007.
FY2007, DOSFEA submitted on Nov.17, 2006 and National Assembly passed on Dec. 27, 2006.
FY2006, DOSFEA submitted on Nov. 25, 2005 and National Assembly passed on Dec. 20, 2005.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 57
PI-12. Multi-year perspective in fiscal planning, expenditure policy and budgeting
63. Section 152 (4) of the Constitution of The Gambia states that “In addition to presenting the
estimates for the following financial year, the President may cause to be prepared and presented to the
National Assembly (a) fiscal and monetary programs and plans for economic and social development
covering periods exceeding one year, and (b) estimates of revenue and expenditure in respect of such
programs and plans”. Following this directive with its annual budget under preparation, the Government
has completed its second Poverty Reduction Strategy Paper with its 5 pillars.
I. Improving the enabling policy environment to promote growth and poverty reduction.
II. Enhancing the capacity and output of productive sectors — agriculture, fisheries, industry, trade,
tourism and infrastructure — with emphasis on productive capacities of the poor and vulnerable
populations.
III. Improve coverage of the basic social services and social protection needs of the poor and
vulnerable.
IV. Enhance governance systems and build the capacity of local communities and civil society
organizations to play an active role in economic growth and poverty reduction.
V. Mainstreaming cross-cutting issues — gender, youths, population, HIV/AIDS, nutrition, and
environment — into the development process.
64. The sectoral ceilings are divided into two categories: (a) poverty programs and (b) discretionary
spending. Sectors are at liberty to re-allocate resources from discretionary spending to poverty programs
but not vice versa. The reason for this being the fact that spending for poverty reduction purposes is
classified as priority. The poverty programs that are planned to implement the PRSP initiatives are costed
and included in the budget estimates.
Indicator Score Brief explanation of status as at the reporting period
C(i) Policy-Based Budgeting
PI-11. Orderliness and
participation in the annual
budget process
B
(i) Existence of and adherence
to a fixed budget calendar B Budget call circular is issued around June each year.
Departments have about 2 months to prepare budgets before
bilateral consultations start. However, capacity constraints
undermine the quality and completeness of the budgets
produced.
(ii) Guidance on the preparation
of budget submissions C Ceilings and clear instructions are given to the departments but
the Cabinet as a whole only approves after departments have
completed the budget.
(iii) Timely budget approval by
the Legislature
A
For 2006, 2007, and 2008 the budget has been passed by the
National Assembly before the start of the new financial year, as
stipulated in Section 22 (1) of the BMAA Act, 2004.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 58
65. Pillar I includes all aspects relating to economic management, including macroeconomic stability,
public finance management, public debt management, divestiture, and civil service reforms.
66. The implementation strategy for the second PRSP will be through sector-wide approaches
(SWAps) and the medium-term expenditure framework (MTEF) with strong focus on attaining targets of
the Millennium Development Goals. As noted in the PRSP, detailed sector plans will need to be
developed, and consistency with the PRSP must be ensured. To do this, capacity will first have to be
developed in DOSFEA on macro-economic analysis and forecasting. This also requires accurate statistics
for the various fiscal and monetary variables. Key sector data will need to be collected and analyzed.
67. The Gambia Bureau of Statistics has developed a strategic plan for 2008-2011; pillar two of the
plan aims at “improving economic statistics for a better monitoring of programs implementation towards
a sustainable economic growth”. Within this pillar the objective of producing key economic indicators as
well as other statistics through surveys will contribute immensely in the preparation of meaningful
medium-term strategies from which activities can be mapped out with costs to prepare medium-term
expenditure budgets.
68. A move toward implementing medium-term expenditure budgets should be a gradual process
starting with sensitization and capacity development across all sectors but more specifically within the
National Planning Commission and DOSFEA. A properly sequenced activity plan for the introduction of
medium-term expenditure budgets, targeting budget planners for the various sectors, will be needed.
69. The budget preparation process has evolved over the years with integration of the development
and recurrent budgets. Estimates for donor-funded projects with details of the project and the donor
agency are now included in the budget estimates with a summary overview of the funding broken down
by Gambia local fund and grant and loans from listed development partners. This has improved the
transparency of the funding source of the budget.
70. The Government conducted a debt sustainability analysis in 2007 for external and domestic
debt.14
Staff of IMF in August 2008 issued the report, Update on Joint IMF/IDA Debt Sustainability
Analysis.15
Tables A5 and A6 from the 2008 budget estimates show that debt payments for FY2008
accounts for 21.06 percent of total expenditure compared to 26.39 percent in 2007 and 34.21 percent in
2006; this represents a reduction of 13.56 percent from 2006. Borrowing from the banking system has
stopped since FY2007 though strict cash controls a situation made possible with IFMIS as the main tool.
The budget over the 2006, 2007, and 2008 on average is about 75 percent funded by the Gambia Local
Fund.
Table A5. Budget Estimates
2006 % 2007 % 2008 %
Recurrent 1,684,066 37.60 2,095,976 38.58 2,409,561 41.03
Development 1,262,828 28.19 1,902,772 35.02 2,226,558 37.91
Debt 1,532,598 34.21 1,433,909 26.39 1,236,995 21.06
Totals 4,479,491 100.00 5,432,657 100.00 5,873,114 100.00
14 Report on the Gambian National Debt Strategy and new financing analysis workshop organized by WAIFEM & DRI, February
12–22, 2007
15 The last DSA was presented to the Fund Executive Board on December 19, 2007 (IMF Country Report No. 08/109,
Appendix I) and to the World Bank Executive Board on December 20, 2007 (Enhanced HIPC Completion Point Document
and MDRI, Report No. 41413-GM).
The 2009 Country Financial Accountability Assessment for The Gambia. Page 59
Table A6. Overview of Debt Service
GMD (thousand) %
2006 2007 2008
Provisional Approved Estimate
4 Debt interest 965,127 846,350 767,494 62.05
40 Domestic interest 721,872 615,000 545,000 71.01
4001 Short-term T-bills and other
government
677,727 615,000 545,000 100.00
4003 Loans from banking system 44,145 0 0 0
41 Foreign interest 243,255 231,350 222,494 28.99
4101 Foreign governments 78,246 81,303 66,620 29.94
4102 Multilateral organizations 165,010 150,047 155,874 70.06
9 Amortization 965,921 587,559 469,501 37.95
90 Domestic amortization 541,429 0 0 0
9004 Loans from banking system 541,429 0 0 0
91 Foreign amortization 424,492 587,559 469,501 100
9101 Foreign governments 138,857 201,366 152,358 32.45
9102 Multilateral organizations 285,635 386,193
Indicator Score Brief explanation of status as at the reporting period
PI-12. Multi-year perspective
in fiscal planning,
expenditure policy, and
budgeting
D+
(i) Multi-year fiscal forecasts
and functional allocations
D
The Government prepares an annual budget despite its
constitutional requirement in Section 152 (4). Functional
analysis is available in the budget estimates but in the absence
of sector strategies for all budgeting entities allocation is
based more on administrative basis.
(ii) Scope and frequency of
debt sustainability analysis C Debt sustainability analysis for external and domestic debt
was undertaken in 2000 and updated in 2007.
(iii) Existence of costed sector
strategies
C
Statements of sector strategies for key Departments of Health
and Agriculture were prepared for PRSP II but not fully
costed.
Aggregate fiscal forecasts do not exist to ensure consistency.
(iv) Linkages between
investment budgets and
forward expenditure estimates C Efforts have been made to integrate the development and
recurrent budget. The absence of MTEF budgets makes it
difficult to plan properly the recurrent cost implications for
major investments.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 60
Predictability and control in budget execution
PI-13. Transparency of taxpayer obligations and liabilities
71. The Gambia Revenue Authority (GRA) Act, 2004, established the Gambia Revenue Authority
that only started full operations in 2007 as it was going through its setup stages. Part 1, Article 149 of the
Constitution makes imposition and approval of waiver or variation of tax the exclusive preserve of the
National Assembly. Tax exemptions have been curtailed.
72. Tax rates and procedures are clearly displayed at collection points. The Income Tax (Rates for
Informal Sector) Regulations, 2007 has broadened the tax base. The Regulations provides a schedule of
the annual tax rates and the payable date. The GRA Commissioner General is responsible for determining
the size (small, medium, or large) for the purpose of the rate of tax payable.
Tax appeals mechanism
73. The Income and Sales Tax Act, 2004, section 229 establishes the Tax Tribunal to hear appeal
cases by taxpayers. Decisions of the Tax Tribunal can be appealed in a High Court that can make a final
decision on the matter or remit the case to the Tribunal for reconsideration.
74. The Chief Justice appoints the President of the Tax Tribunal from the High Court, and the
Secretary of State for Finance appoints the other members with consent of the Cabinet. Procedure
guidelines for the Tribunal are being drafted, but at the time of the CFAA mission the President and
members had not been appointed.
Indicator Score Brief explanation of status as at the reporting period
PI-13. Transparency of
taxpayer obligations and
liabilities
C
(i) Clarity and
comprehensiveness of tax
liabilities
B The tax laws and regulations are clear about tax liabilities.
Discretions and tax exemptions have been curtailed.
(ii) Taxpayer access to
information on tax liabilities
and administrative procedures
C Taxpayers have access to some information on tax liabilities
and administrative procedures. The GRA is in the process of
actually putting most of the procedures into action.
(iii) Existence and functioning
of a tax appeals mechanism D The Income Tax and Sales Act makes provision for the Tax
Tribunal but the Board has not been appointed.
PI-14. Effectiveness of measures for taxpayer registration and tax assessment
75. The Income Tax (Taxpayer Identification Number) Regulation 3 of 2007 brought into effect the
Taxpayer’s Identification Number.
76. Extensive campaigns were done to educate the public about the Identification Number. The GRA
requires the following documentation before processing an application for assigning the Taxpayer
Identification Number: national ID card, passport, birth certificate, and business registration certificate. In
the case of a partnership or trust, the identification number for each partner or trustee is required.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 61
77. Banks and the Vehicle License Authority are now requiring taxpayer identification number before
allowing individuals to open bank accounts and register vehicles.
78. The GAMTAXNET computer system is being developed for a comprehensive GRA database of
all potential taxpayers. The taxpayer identification number for all government workers is gradually being
captured in the payroll system. The ASYCUDA 2.7 application is being used by the Customs
Department. The improved tax administration arising out of this reform initiative has contributed to
average domestic tax revenue of 21 percent of GDP since 2004.
79. The Internal Audit Unit in GRA is not yet fully functional to assess the controls over the
registration system and compliance in declaring obligations. A self-assessment system is being piloted
with the first set of returns due at the end of March 2008 after extensive sensitization of the public.
Indicator Score Brief explanation of status as at the reporting period
PI-14. Effectiveness of
measures for taxpayer
registration and tax
assessment
C
(i) Controls in taxpayer
registration system B The requirements for assigning taxpayer identification number
are linked to other government registrations systems, such as
national ID card and business registration, and also the banking
system.
(ii) Effectiveness of penalties
for noncompliance with
registration and declaration
obligations
C Penalties for noncompliance and declaration of obligations exist
in the various tax laws and regulations, but the administrative
arrangements for implementation are not yet in place.
(iii) Planning and monitoring of
tax audit and fraud investigation
programs
D The Internal Audit Unit in GRA is only now being set up.
PI-15. Effectiveness in collection of tax payment
80. Taxes and other sources of revenue are collected in cash. The Gambia Revenue Authority has
transit accounts in Trust Bank Ltd. in the 4 regions of the country and the balances on these accounts are
transferred to the Central Bank of Gambia every Tuesday and Thursday.
81. Burang immigration collection point receives cash directly from the public; the cash could be
held for weeks before taking it to Sorma immigration post where the cash could again be held for a month
before payment to a sub-treasury for subsequent payment to the Central Bank.
82. The current situation poses a serious risk by holding cash in mostly unsecured environments.
Also, Government could be borrowing when in fact it has a lot of idle cash sitting outside the banking
system. The collection process can be improved by involving commercial banks in the collection process.
In all locations where commercial banks exist, tax collectors should be requested to pay all collections
into holding bank accounts on the same or next day after collections. On a weekly basis, the commercials
will in turn transfer the balance on the holding account to the Central Bank, and the commercial banks
will be paid transfer charges that will be less than the cost of any borrowings.
83. The sub-treasuries will submit returns of all collections to the National Treasury, which will be
matched with credit advice from the Central Bank to pass the relevant accounting entries.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 62
84. The GRA Research Unit has been tasked to identify suitable tax districts.
Indicator Score Brief explanation of status as at the reporting period
PI-15. Effectiveness in
collection of tax payments
NS
(i) Collection ratio for gross tax
arrears, being percentage of tax
arrears at the beginning of a
fiscal year, which was collected
during that fiscal year
NS Information on tax arrears is not complete and therefore
difficult to calculate collection ratio.
(ii) Effectiveness of transfer of
tax collections to the Treasury
by the revenue administration
B GRA has regional bank accounts in Trust Bank Ltd., which
transfers balance in those transit accounts every Tuesday and
Thursday to the Central Bank of Gambia.
(iii) Frequency of complete
accounts reconciliation between
tax assessments, collections,
arrears records and receipts by
the Treasury
C
PI-16. Predictability in the availability of funds for commitment of expenditures
85. Departments are required to submit annual cash plans based on their approved budgets. The cash
plans are updated monthly and used by DOSFEA to make monthly cash allotments into sub-cash books.
Commitment is controlled by availability of cash allocation rather than budget.
86. The GRA is not involved in the monthly cash allocation process. It expressed the need for its
involvement to ensure that allocations are not only made based on current cash positions, but that
forecasts for collections should also be considered.
87. Local purchase orders are printed from the system for supply of goods and services. Suppliers
have been sensitized that payment can only be made for deliveries against local purchase orders printed
from the system. This is a reliable process since the system has inbuilt controls to check for availability of
cash from the requisition stage. Once a local purchase order is assigned to a request, cash is ‘tied’ for that
transaction and does not form part of the cash that is reclaimed if unutilized at the end of the month.
88. Detailed budget execution reports showing available, budget, cash balance, and outstanding
commitments to assist departments to monitor and plan budget execution are made available to the
various departments. Cash allotments unutilized by departments at the end of each month are withdrawn
and form part of the consolidated cash position used to make allocations based on current cash plans.
89. Votes for purchase of equipment and furniture are centralized at DOSFEA. Votes for individual
departments are not ring-fenced, and there are instances in which departments are unable to purchase
items such as computers or repair vehicles because the vote has been exhausted by the time they make a
request. Accountability for expenses incurred under this vote is blurred since the vouchers and payments
are authorized by DOSFEA, but another department used the asset.
90. Budget allocations are made but the main control mechanism for commitment is cash allocations.
Cash allocations are adjusted frequently based on the overall cash balance in the Treasury Main Account.
Ministries, departments, and agencies are not involved in the decision making process of cash allocations
beyond the submission of their monthly cash plans.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 63
Indicator Score Brief explanation of status as at the reporting period
PI-16 Predictability in the
availability of funds for
commitment of expenditures
C
(i) Extent to which cash flows
are forecast and monitored C Cash flow forecasts are prepared annually but the updates are
simplistic. There is insufficient evidence of linkage of the cash
plans with procurement plans.
(ii) Reliability and horizon of
periodic in-year information to
ministries, departments, and
agencies on ceilings for
expenditure and commitment
C Departments are given cash allocations on a monthly basis. Un-
utilized cash is withdrawn and forms part of the total cash
available for subsequent allocations. The main control for fiscal
discipline in budget executions is based on availability of cash
allocation rather than budget.
(iii) Frequency and transparency
of adjustments to budget
allocations, which are decided
above the level of management
of ministries, departments, and
agencies
C Budget allocations are based on the approved budget and cash
plans. There are significant in-year adjustments to the cash
allocations by DOSFEA without dialogue with the departments.
The criteria for the adjustments are not quite clear even though
most of the Directors in DOSFEA are involved in the decision
making process.
PI-17. Recording and management of cash balances, debt, and guarantees
91. Debt data recording and management is spread between the DOSFEA and Central Bank of The
Gambia using CS-DRM 2000+ System. However, private debt, debt contracted by local governments and
public enterprises and grants are not recorded for a comprehensive assessment and analysis of debt
burden and formulation of aid strategy.16
92. The Gambia is at high risk of debt distress based on external debt burden indicators (Box A1). A
priority fiscal policy has been the reduction of debt service and the stock of public debt in order to expand
the fiscal space for PRSP-related expenditures. The country received substantial debt relief through HIPC
completion point achieved in December 2007. As a result interest payment declined from a peak of 47
percent of recurrent expenditure in 2005 to 24 percent in 2008.
Box A1. Conclusion of Update on Joint IMF/IDA Debt Sustainability Analysis
The Gambia’s debt situation has improved since the last debt sustainability analysis due to an improvement in the
overall fiscal balance in 2007 and a decline in new borrowing. But given continuing risks, it will be important for
the authorities’ to finalize and implement the planned national debt strategy as soon as possible.
IMF/IDA staff recommendation is that new borrowing be on highly concessional terms and that the authorities
exercise restraint in contracting new loans. The major risks to debt sustainability include lower than expected
economic and/or export growth, higher than expected new borrowing, or a deterioration in fiscal performance.
93. All departmental bank accounts are maintained at the Central Bank of The Gambia. The GRA
maintains transit revenue bank accounts in the regions at Trust Bank Limited that transfers proceeds in the
16 Report on the Gambian National Debt Strategy and New Financing Analysis Workshop, February 2007.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 64
accounts twice weekly. Some non-tax revenues are held at collecting points and sub-treasuries sometimes
for more than a month before remitting to the Central Bank. Bank reconciliation is automated and done
daily by the Directorate of National Treasury. The accounting system can consolidate cash balances held
at the Central Bank. The consolidated balance will not show the true cash position of the government
since there will be idle cash held at some sub-treasuries.
94. Section 155 of the Constitution of the Gambia, 1997, provides for the contracting of loans.
Financing of the deficit is clearly explained in the budget as required by GBMAA Act, 2004 36 (1). The
proceeds of any borrowing are credited to the consolidated fund from which all government payments are
made.
Indicator Score Brief explanation of status as at the reporting period
PI-17. Recording and
management of cash balances,
debt and guarantees
B
(i) Quality of debt data
recording and reporting
C DOSFEA and Central Bank of The Gambia maintains data of
debt at Central Government, but it is incomplete since debt by
public enterprises and local councils is not included.
GBMAA, 2004, 39 (1) requires DOSFEA to maintain debt
records.
(ii) Extent of consolidation of
the government’s cash balances
B Cash balances held at Central Bank and the regions are
consolidated twice a week. Extra-budgetary funds in public
enterprises do not form part of the consolidation process.
(iii) System for contracting
loans and issuance of
guarantees.
B The budget estimates sets the limits for borrowings as required
by GBMAA Act, 2004 36 (1).
Loans and issuance of guarantees are under the control of
DOSFEA guided by the limits set in the budget estimates
(Section 155 of the Constitution of The Gambia).
PI-18. Effectiveness of payroll controls
95. The payroll consists of three man categories: (a) civil servants; (b) uniformed officers
(Departments of State); and (c) sub-vented agencies. A Civil Service Reform Study carried out by the
World Bank and AfDB showed that the sectoral spread of the payroll is on the following order: general
administration, 9 percent; uniform services, 31 percent; economic services, 6 percent; and social services,
54 percent. Salaries, wages, and other personnel expenditure account for 27.55 percent of recurrent and
development expenditure for 2008 and 4.55 percent and 5.38 percent of GDP for 2007 and 2008,
respectively. It is therefore important to have effective payroll controls in place.
96. Pay and benefits are spread across 12 grades for specified positions. There is a fixed grade for
employees on special arrangements. There are instances in the payroll where the positions for some
employees are not stated; these “unknown” positions account for about 10 percent of the payroll. This
means that the correct grade cannot be ascertained. A decision went into effect March 2008 to suspend the
pay of all employees without approved positions in the system. About 50 percent of the staff photographs
have been captured in the system and follow-up is being made with Departments of State to capture the
rest. This will make identification of employees in the system easier.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 65
97. Each employee is assigned a unique Personal Identification Number, but these are not consistent
in the system since the numbers used in the legacy system were transferred to the Human Integrated
Technology System. With the establishment of the Gambia Revenue Authority, all employees are being
assigned Taxpayer Identification Number (TIN). Seventy-five percent of the taxpayer identification
numbers have been captured on the system and follow-up of missing numbers is being undertaken. The
DOSFEA decided to implement a “No TIN No Pay” strategy at the end of March 2008. There are plans to
later use the Taxpayer Identification Number as the key identifier in the system for all employees.
98. As part of the implementation of IFMIS, the Government has installed the Human Integrated
Technology System. The modules purchased include the following.
Payroll
Payroll history
Change of status
Leave administration
Misconduct
MS Office Integration
General ledger integration
Benefits management
Email alerting
99. Once the IFMIS is stabilized, it will be useful to extend the Human Integrated Technology
System to the Personnel Management Office to take advantage of functionalities in the following modules
to improve on human resources management:
Attendance sheet
Time keeping management
Medical management
Training administration
Career path and succession planning
Appraisal management
Recruitment management
100. Changes to the system are controlled by use of various input forms with provision for
authorization by the submitting department and the Directorate of National Treasury as follows:
Employee standing data form for new employees
Permanent earnings/deductions
Period earnings
Cost center changes
Employee left service
Bank account details for salary transfer
Employee pay point changes
The 2009 Country Financial Accountability Assessment for The Gambia. Page 66
101. After entry clerks input changes in the system, a proof list is printed for checking by a supervisor
to confirm that the changes in the system reflect what is authorized in the change forms. The supervisor
and the principal accountant are the designated officials with access privilege to ‘update payroll with
profile data’. The payroll calculation is then run by the supervisor who prints a series of control reports to
further check for consistency and accuracy.
102. The signature list used by employees to sign for their net pay only shows employee ID number,
position/job, and the net pay with provision for the employee’s signature. Other pay details such as
allowances, tax, and other deductions are not shown in the signature list. It is important for the signature
list to show these details so that the employee can check before signing for his/her pay. Pay-slips can be
generated from the system, but this is not regularly done. The pay-slip also does not show cumulative
figures.
103. During budget preparation, human resource planning is done to establish the number employees
for each position in the various departments. The details of establishment are listed in the budget estimate
by showing the number of approved positions for the various units in the departments. However, the
numbers can be exceeded since the payroll system does not restrict entry above the budgeted numbers.
Exception reports can be produced from the system for further enquiry.
104. Amendments to the payroll are often delayed by two to three months mainly due to delays by the
departments in completing and submitting the amendment forms to the Payroll Unit in the Directorate of
National Treasury. The Payroll Unit should receive all amendment forms by the fifth day of every month.
Amendment forms received late are processed the following month with retroactive adjustments. Late
forms for deletions are however acted upon. The payroll is run by the twentieth day of every month to
ensure that employees are paid on or before the end of the month.
105. Payroll audit is conducted annually. The Personnel Management Office conducted payroll audit
in 2007 only for Gambia Public Transport Corporation, Gambia Ports Authority, and two local councils.
The report is being finalized but the main findings included employees paid at wrong grades and cost
centers and cases of employees that have retired or left the service but their names remain on the payroll.
Before the implementation of the Human Integrated Technology System, the Personnel Management
Office received payroll printouts from the Directorate of National Treasury for analytic review and
assessment of vacant posts; these reports are now infrequent.
106. The authorities are taken steps to capture the human resource details of all employees in the
system. This will ensure that changes in personnel details are immediately reflected in the payroll. The
authority to change personnel details will be retained by Personnel Management Office.
Indicator Score Brief explanation of status as at the reporting period
PI-18. Effectiveness of payroll
controls
C+
(i) Degree of integration and
reconciliation between
personnel records and payroll
data.
C The Human Resource Information System maintained by
Personnel Management Office is incomplete. However, the
Directorate of National Treasury periodically submits the
complete payroll master files to Personnel Management Office
for review. Steps are being taken to capture human resource
details in IFMIS so that all personnel and pay records will be on
a common database
The 2009 Country Financial Accountability Assessment for The Gambia. Page 67
Indicator Score Brief explanation of status as at the reporting period
(ii) Timeliness of changes to
personnel records and the
payroll
B Up to 2-3-months delay occurs in effecting changes to
personnel records and the payroll for a minority of employees
due to late submission of amendment forms. When received
retroactive adjustments are made for the affected employees but
this is not widespread.
(iii) Internal controls of changes
to personnel records and the
payroll.
C There is segregation of duties in the payroll unit. Clerks input
changes based on authorized forms from the Departments of
State and Supervisor in the payroll unit checks before the profile
data is updated. All changes in the system create detailed audit
trails. Payroll procedures are clearly articulated in the payroll
manual.
Personnel details are not yet fully captured in the system and
put under the control of the Personnel Management Office.
(iv) Existence of payroll audits
to identify control weaknesses
and/or ghost workers.
C Within the past 3 years only partial payroll audits were
undertaken by conducting unannounced head counts by some
Departments of State.
PI-19. Competition, value for money and controls in procurement17
Indicator Score Brief explanation
PI-19. Competition, value for
money and controls in
procurement
(i) Use of open competition for
award of contracts that exceed the
nationally established monetary
threshold for small purchases
(ii) Justification for use of less
competitive procurement methods
(iii) Existence and operation of a
procurement complaints
mechanism
PI-20. Effectiveness of internal controls for non-salary expenditure
107. It is the responsibility of DOSFEA to establish effective internal controls to ensure that only
genuine payments are made in line with the approved budget and existing rules and regulations. It is also
important to ensure that payment obligations remain within the limits of projected cash availability,
thereby avoiding creation of expenditure arrears.
17
The Country Procurement Issues Paper (CPIP) prepared in 2005. The government was in the process of
initializing the implementation of an action plan based on CPIP findings. It was therefore considered premature to
assess procurement indicator dimensions while the government was busy implementing CPIP recommendations.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 68
108. There are two main types of voucher processing for non-salary expenditure: the IFMIS pilot sites
and the non-online sites. Processing for non-online sites is as follows:
Department of State prepares a request for purchase on a prescribed form that matches the IFMIS
input screen. The request form is completed by cost centre and authorized by the Vote Controller.
The request form is used to obtain quotations from potential vendors. The Department of State
evaluates the quotations according to the existing procurement regulations and guidelines. After
the award is made to the selected vendor, a request for purchase order is sent to the Directorate of
National Treasury after authorization by the budget holder, head of accounts, and Vote
Controller.
The requests are received in the receiving unit of the Directorate of National Treasury where the
signatures of the Vote Controller permitted to authorize payment vouchers and other accounting
documents are checked, as per section 2.7.4.3 of the Accounting Procedures Manual dealing with
‘Authorizing Staff’. The Data Center in the Directorate of National Treasury enters the purchase
order request in the IFMIS. The entry checks not only for approved budget availability but for
sufficient cash budget. Cash availability is calculated as cash allocation less expenses to date and
less outstanding commitments and obligations. If cash budget is not available, the request will be
rejected. The supervisor in the Data Center checks the entry in the system and, if correct,
approves the request and a system numbered purchase order is printed and sent to the Department
of State for signature of the authorizing Vote Controller. The purchase order creates a
commitment in the systems that will ring-fence funds for that particular purchase.
The vendor then delivers supplies based on the purchase order. On receipt of the goods, the
Department of State prepares a goods received note based on the vendor’s delivery note. A
payment voucher that matches the payment voucher screen of the IFMIS is then prepared and
authorized by the designated officials and forwarded to the Directorate of National Treasury for
payment.
The Data Center captures details on the purchase voucher that will be checked by the supervisor
before printing a system-generated voucher to be attached to the documents received from the
Department of State.
The set of documents are passed on to the Accounting Unit where a supervisor also independently
checks the accuracy of vouchers for correct coding and adequacy of supporting documents; if all
is found satisfactory, the supervisor approves check printing.
There are 4 authorized signatories to the Treasury Main Account — the Director the Directorate
of National Treasury and 3 principal accountant — and any 2 can sign. There is no delineation in
amounts; this means that any 2 of the principal accountants can sign a check of any amount
without the knowledge of the Director the Directorate of National Treasury. This is possible
because at the moment there is no compensating control of ensuring that a list of all payments is
sent to the Director at the end of the day.
109. Vendors are aware of the new system and warned not to accept any purchase order that is not
generated from the IFMIS. The commitment system has improved confidence in the government payment
system, which in the past could only receive supplies upon effecting the payment usually by check.
110. For pilot sites, since they are connected directly to the central database by wireless radio links,
requests are made directly and the process does not proceed if funds are not available. All approvals takes
place in the system at the pilot site that then sends a listing of all approved payments to the Directorate of
National Treasury for check printing since a centralized payment system is in place. The signed checks
are then dispatched to the Department of State for collection by the vendor. Transactions for sites not yet
connected are processed centrally at the data centre in the Directorate of National Treasury.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 69
111. The process could be made more efficient by using the Taxpayer Identification Numbers as
vendor codes for suppliers and bank account details to make payments directly into the vendors’ bank
accounts with remittance advice sent to the Department of State for collection by the vendor. The IFMIS
system has functionality for electronic file transfer that will be implemented after vendors are made
familiar with the process.
112. The Accounting Procedures Manual provides detailed business process descriptions for the
various transactions and also month/year end procedures. It also lists the required data capture forms and
explains the purposes. The types of reports (notification, listings and flash reports) to be produced by
Vote Controllers are clearly spelled out. Familiarization and training workshops are held regularly, and
key control procedures are displayed conspicuously in the National Treasury.
113. While the internal controls in the business process are widely understood, awareness of the
provisions in the GBMAA Act, 2004, and the Financial Instructions is limited mainly to staff in the
Directorate of National Treasury. However, the Directorate rejects few vouchers. Efforts are needed to
disseminate and train public officers on the provisions of the Act and Financial Instructions. The training
should be used as an opportunity to highlight issues that need amending based on initial experience in the
implementation of IFMIS.
PI-21. Effectiveness of internal audit
114. The Institute of Internal Auditors defines internal auditing as an independent, objective assurance
and consulting activity designed to add value and improve an organization’s operations. It helps an
organization to accomplish its objective by bringing a systematic, disciplined approach to evaluate and
Indicator Score Brief explanation of status as at the reporting period
PI-20. Effectiveness of
internal controls for non-
salary expenditure
C+
(i) Effectiveness of expenditure
commitment controls. B IFMIS ensures that payment cannot be made without adequate
‘cash’ budget.
The expenditure controls in place effectively limit commitments
to actual cash availability and approved budget allocations
except for external debt payment, which in any case is managed
by the Central Bank of The Gambia.
Outstanding commitments at the year-end are carried over and
provided for in the next budget for payment. Payment terms are
not yet fully developed to ascertain actual expenditure arrears.
IFMIS is not yet fully rolled-out, but transactions for sites not
yet connected are processed centrally in the Directorate of
National Treasury.
(ii) Comprehensiveness,
relevance and understanding of
other internal control rules/
procedures.
C The Accounting Procedures Manual provides detailed business
process descriptions for the various transactions and other basic
internal controls. Although the controls are widely understood,
there is no functioning internal audit department to provide
assurance that the controls are working as intended.
(iii) Degree of compliance with
rules for processing and
recording transactions.
C Only a limited number of vouchers are rejected for payment
because of noncompliance with procedures. With the absence of
a functioning internal audit department, internal audit reports or
surveys are not available to ascertain compliance, and this poses
serious concerns that significant controls could be breached.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 70
improve the effectiveness of risk management, control, and governance processes. As an independent
function reporting to an organization’s top management, internal audit is able to assess the internal control
systems implemented by the organization and contribute to ongoing effectiveness. Internal audit often
plays a significant monitoring role. In order to preserve its independence of judgment, COSO cautions
that internal audit should not take any direct responsibility in designing, establishing, or maintaining
controls it is supposed to evaluate. It may only advise on potential improvement to be made.
115. Public sector internal audit in The Gambia is not sufficiently elaborated in the GBMAA Act.
2004. Apart from Article 160 (1) of the Constitution, which assigns the pre-audit function to the Auditor
General, only section 4(1d) specifically enjoins the DOSFEA to carry out budget execution and internal
auditing.
116. The Internal Audit Unit has an establishment of 5 staff members (i.e., 1 principal internal auditor,
2 senior auditors, and 2 accounts trainees), all of whom completed high school as the highest level of
education. Apparently none of them is a professionally qualified accountant nor possesses certification of
the Institute of Internal Auditors. The current budget estimate has provision for 22 personnel for the Unit.
There is no audit charter or manuals in place that lay down the Unit’s functional responsibilities. Such a
charter would provide institutional structure for the internal audit function for government departments.
The DOSFEA can use section 4 2(a)(b) to prescribe appropriate standards for internal auditing by
adopting the International Standards for the Professional Practice of Internal Auditing.
117. Prior to the implementation of IFMIS, the Internal Audit Unit was mainly involved in pre-
checking of payment vouchers for budget availability before endorsing the payment. Checking for
availability of funds is an in-built functionality of IFMIS, thus rendering the former role of the Internal
Audit Unit redundant. The Unit now concentrates on inspection of revenue by checking that collections
are banked intact on a regular basis. This falls far short of the updated roles and responsibilities expected
of such a unit.
118. When the Internal Audit Unit is restructured in the short to medium term, it will need to change
its approach and re-focus on modern risk-based auditing by adopting the COSO18
Enterprise Risk
Management framework. The Unit will provide reasonable assurance regarding the achievement of
objectives of government departments in the following categories:
Conformity to the government’s poverty reduction strategy and more specifically the Department
of State strategy,
Effectiveness and efficiency of operations,
Reliability of financial reporting,
Compliance with applicable laws and regulations.
18
Committee of Sponsoring Organizations of the Treadway Commission is a U.S. private-sector initiative, formed
in 1985. Its major objective is to identify the factors that cause fraudulent financial reporting and to make
recommendations to reduce its incidence. COSO has established a common definition of internal controls, standards,
and criteria by which companies and organizations can assess their control systems
The 2009 Country Financial Accountability Assessment for The Gambia. Page 71
Indicator Score Brief explanation of status as at the reporting period
PI-21. Effectiveness of
internal audit D
(i) Coverage and quality of the
internal audit function D In the past, the internal audit staff performed pre-audit of all
government payments. Since the implementation of IFMIS in
2007, the work of this Unit is now limited to revenue inspection
with no internal audit focused on systems monitoring. The Unit
is not staffed with professional auditors and internal audit
standards are not in use.
(ii) Frequency and distribution
of reports D Reports are not regularly produced even on the inspection of
revenue. The principal internal auditor is supposed to report to
the Permanent Secretary DOSFEA but instead reports to
Director of the Directorate of National Treasury.
(iii) Extent of management
response to internal audit
findings
D In the absence of internal audit reports there can be no follow-up
on findings.
Accounting, Recording and Reporting
PI-22. Timeliness and regularity of accounts reconciliation
119. For financial information to be reliable, recorded information must be regularly verified through
timely reconciliation to ascertain the authenticity and accuracy of recorded information.
120. The Directorate of National Treasury maintains 4 types of bank accounts in the Gambia Central
Bank:
Consolidated Revenue Fund Bank Account – each Department of State has an account to deposit
revenue collected. The individual Department’s revenue bank account is transferred to the
Treasury Main Account every other day.
Treasury Main Account from which all payments out of the consolidated fund are made.
Special Deposit Account holds special deposits such as court deposits.
Special Project Accounts for donor-funded projects.
121. Bank reconciliation was done by the Accounting Unit in the Directorate of National Treasury,
which has 8 staff supervised by a principal accountant who authorizes checks before printing. The
responsibility of this principal accountant to authorize checks and also be responsible for the supervision
and review of bank reconciliation reports goes against the key internal control principle of segregation of
duties. As part of the new Directorate of National Treasury organizational structure, the reconciliation and
payment processing responsibilities are separated with payments handled by the Treasury Unit of
Directorate of National Treasury.
122. The National Audit Office and Gambia Revenue Authority, as autonomous government agencies,
have separate bank accounts and are responsible for printing and signing their own checks. Cashbooks are
maintained in the IFMIS for these bank accounts, but the agencies are responsible for reconciling their
own bank accounts.
123. The Gambia Central Bank provides details of all transactions going through the government bank
accounts on a daily basis in electronic format to the Directorate of National Treasury. The transactions are
The 2009 Country Financial Accountability Assessment for The Gambia. Page 72
imported into the IFMIS for automated bank reconciliation. The system of automated bank reconciliation
has greatly improved the timeliness and accuracy of bank reconciliation. The EPICOR software had
technical problems that caused the bank reconciliation reports not to balance.
124. The Government of The Gambia has rationalized the structure of its bank accounts, which are
now being reconciled almost on real-time basis. Unresolved differences accumulated over the years (up to
the end of 2006) for the old Treasury Main Account and the various below-the-line accounts (before
rationalization) are being compiled to seek the necessary approval from the Auditor General to write-off
the differences. Investigation and resolution of outstanding items are being actively pursued by a full-time
staff of the Directorate of National Treasury. There are indications that this has been resolved but it is
important going forward to verify that the bank reconciliation functionality is performing as intended to
ensure the quality of reports produced from IFMIS.
125. Travel advances and operational imprests when issued should be accounted for before a
subsequent one can be authorized. The accounting system has been configured so that a request for new
advance or imprest on a budget line that has an outstanding balance cannot be processed.
126. Staff interest-free loans/advances based on a single month’s basic salary are given as an advance
to be repaid, mostly over a period of 6 months. A ledger tracks payment directly through the payroll
system inputs, with reports showing outstanding loans for each employee and in total. An end date is
stipulated that automatically stops repayment when the loan is fully recovered.
127. Significant numbers of transactions are recorded within ‘below the line’ (suspense account)
balances as shown in Table A7. This undermines the completeness of financial reports especially when
they are not cleared in compiling the annual financial statements. In principle, all transactions should be
identified as either revenue, expenditure, or financing to allow a clear picture of the overall fiscal
position.
Table A7. Below-the-Line Balances for FY2004-06
FY2004 FY2005 FY2006
Below-the-line balances 90,979,868.17 176,471,176.21 244,779,170.47
Project and clearance accounts 35,982,013.76 77,907,603.36 51,380,331.60
Deposit accounts -13,572,176.51 8,431,585.45 73,295,564.30
Advance accounts 20,074,334.55 24,567,550.08 27,461,545.71
Personal accounts 18,884,815.28 17,140,745.29 17,560,756.28
Remittance accounts 29,610,881.09 48,423,692.03 75,080,972.58
128. Although significant systemic improvements have been put in place, further work was required to
ensure that the system functionality is fully utilized. Through sustained effort by the authorities, the
IFMIS implementation achieved final acceptance on February 1, 2009, and all outstanding functionalities, deliverables, and incidents had been delivered and resolved. A post Quality Assurance Review of the implementation will assist the Government to document the good practice adopted for this implementation in order to share experiences with other countries.
Indicator Score Brief explanation of status as at the reporting period
PI-22. Timeliness and
regularity of accounts
reconciliation
C
The 2009 Country Financial Accountability Assessment for The Gambia. Page 73
PI-23. Availability of information on resources received by service delivery units
129. Although there is a second tier of government, local councils are not yet given the responsibility
for direct service delivery. Central Government Departments maintain presence in the various regions to
undertake service delivery.
130. The location segment of the chart of accounts could, but does not at the moment, capture
expenditure to enable analysis of spending by regions or districts because the budget is not classified by
regions or districts. The sub-sub-entity characters in the accountability and responsibility segment that
could be used to identify service delivery facilities such as schools and public health centers are not yet
operational. Such analysis would be useful in carrying out a Public Expenditure Tracking Survey.
Generally, the Survey looks beyond financial reports by actually tracing expenditure to the point of use as
service delivery centers such as schools and hospitals. In this regard as well as improving location based
financial data through the IFMIS, it is important to establish linkages between Education Management
Information Systems and Health Management Information Systems to cross-check services with financial
transactions.
131. No comprehensive data collection and analysis has been done to track expenditure to actual
delivery of resources to service delivery centers within the past 3 years. Considerable and long-term
efforts would be required to disaggregate the budget and produce financial reports at the service delivery
and geographical location levels.
PI-24. Quality and timeliness of in-year budget reports
132. Timely and accurate financial reports are important for DOSFEA to monitor the overall budget
performance and if necessary to identify new actions to get the budget back on track. Line ministries
equally need to monitor their budgets to ensure that the affairs for which they are accountable are
adequately resourced.
133. Since the implementation of IFMIS centralized database, the DOSFEA now produces in-year
budget reports covering both revenue and expenditure on a monthly basis and on request for the line
Departments. The itemized commitment and expenditure report shows details of (a) the annual approved
budget, (b) allocation to date, (c) expenditure for the month, (d) expenditure to date, (e) outstanding
(i) Regularity of bank
reconciliations C Bank reconciliation is done on a daily basis for Treasury-
managed bank accounts based on electronic data received from
the Central Bank, but the bank reconciliation reports show that
unexplained differences since end 2007 remain unresolved for
over 8 weeks after the year-end.
(ii) Regularity of
reconciliation and clearance
of suspense accounts and
advances
C Reconciliation of suspense accounts takes place frequently, but
not all items are cleared. Significant balances of over GMD 20
million on advances have been brought forward in FY06 (GMD
27.5 million), FY05 (GMD 24.6 million), and FY04 (GMD 20.1
million).
Indicator Score Brief explanation of status as at the reporting period
PI-23. Availability of
information on resources
received by service delivery
units
D No comprehensive data collection on resources to service
delivery units in any major sector has been collected and
processed within the last 3 years.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 74
commitments, and (f) available balance. The report provides cost center sub-totals for the Departments.
Actual revenue collected is also compared against the revenue estimates.
134. Departments that are not yet connected online to the IFMIS still maintain Vote Charge Books.
These Departments reconcile the IFMIS-generated reports with the Vote Charge Books and call the
attention to any discrepancies to the attention of the Directorate of National Treasury for correction.
Indicator Score Brief explanation of status as at the reporting period
PI-24. Quality and
timeliness of in-year
budget reports
B+
(i) Scope of reports in
terms of coverage and
compatibility with budget
estimates
B In-year budget performance reports cover both revenue and
expenditure. The commitment and expenditure report allows
direct comparison to the original budget according to the chart
of accounts at both commitment and payment stages.
(ii) Timeliness of the issue
of reports A The reports are prepared and issued on a monthly basis and
also available on request.
(iii) Quality of information B There are some concerns on the accuracy of the reports
because of unexplained differences in bank reconciliation
reports, but they do not compromise the usefulness of the
reports.
PI-25. Quality and timeliness of annual financial statements
135. Availability of timely and comprehensive financial statements that are prepared in accordance
with acceptable accounting standards contribute to transparency and accountability in the use of public
funds.
136. The Directorate of National Treasury operates a centralized payment system and is responsible
for the production of consolidated annual accounts. Departments are only responsible to submit accounts
for retained departmental revenues.
137. With the assistance and intervention of key development partners, notably the World Bank and
DfID, in providing expatriate technical support to both the Directorate of the National Treasury and the
National Audit Office, the Government has prepared the Annual Statements of Public Accounts covering
the period 1992 to 2008. The Accounts covering the period 1992 to 1999 have been prepared, audited,
and they have been subjected to FPAC scrutiny and review.
138. Accounts for the periods 2000-2004 have also been prepared and audited. The draft/tentative
Audit Report issued with a disclaimer because most of the weaknesses had not been remedied —such as
noncompliance with financial regulations, and lack of supporting records and documentation due to poor
recordkeeping and accounting in the 1992-1999 accounts —was submitted to the Treasury by the Auditor
General in January 2008 for Treasury’s review and comments. The 2000-2004 audit reports were
submitted to the National Assembly in January 2009.
139. The National Audit Office is still awaiting comments from the Treasury on the 2000 to 2004
report. Subject to receiving feedback from the Treasury and convincing arguments to the contrary, the
Auditor General’s Disclaimer Opinion on these accounts will prevail.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 75
140. The 2005 and 2006 accounts have also been prepared and submitted to the Auditor General in
August and September 2007, respectively. The 2007 accounts were independently prepared by the
Directorate of National Treasury and submitted to the National Audit Office on August 29, 2008 (i.e.,
eight months after the year-end, which is a great achievement). Government has now eliminated the
backlog in the preparation of the accounts.
141. The National Audit Office is auditing the 2005-06 financial statements in parallel with the audit
of the 2007 financial statements. The National Audit Office targeted March 2009 for completion of the
2005-06 audits, but this will depend on how quickly the Government can respond to National Audit
Office’s audit queries on the accounts. If this is successfully cleared, the audit report for the 2007
financial statements should be issued in September 2009.
142. The DfID is also providing technical support for review of the controls and reporting capabilities
of IFMIS to assess how much reliance can be placed on the IFMIS reports.
Table A8. Timeline of Preparation, Audit, and Review of Public Accounts and Financial Statement
Financial year
Date submitted by
Treasury to
Auditor General
Date Audit Report issued by
Auditor General Date FPAC report issued
July 1992-
December 1999
March 2003
September 2005
December 2006
2000-2004
Feb 2007
January 2008 -
Draft report submitted and
awaiting Government comments.
Not issued
2005
Aug 2007
Not yet submitted
Not issued
2006
Sep 2007
Not yet submitted
Not issued
2007
August 2008
Not yet submitted
2008 March 2009
143. The statutory deadlines for the preparation and audit of the 2007 accounts are March 31 and June
30, 2008, respectively. Subsection 41 (3) of the GBMAA Act enjoins DOSFEA, after reconciling its own
accounts with the transactions of the Treasury Main Account, to consolidate and submit to the Auditor
General the annual statement of Government accounts, not later than 3 months after the end of the
financial year.
144. The Government does not have a national accounting reporting standard. The GBMAA Act, 2004
(42) requires information on at least the following to be disclosed:
Details of revenues and expenditures according to the appropriation structure. [NOT MET]
Balance sheet showing the assets and liabilities of the Consolidated Fund, with qualifying
information on the significance of the figures shown. [NOT MET; figures available but no
commentary provided.]
The 2009 Country Financial Accountability Assessment for The Gambia. Page 76
Summary of statement of receipts into and payments from the Consolidated Fund, showing
revenues, other receipts, expenditures, and financing of the Consolidated Fund for the financial
year. [MET]
Summary of outstanding public debt, both external and domestic, at the end of the financial year,
shown in terms of debt instruments and debt holders. [NOT MET]
Statement of amounts guaranteed by the Government at the end of the financial year with respect
to loans and other contingent liabilities. [MET]
Summary of outstanding loans issued by the Government at the end of the financial year. [NOT
MET]
Summary statement of revenue arrears to be collected by each budget agency. [NOT MET]
Summary statement of expenditures re-allocated during the financial year from unallocated
expenditures heading. [MET, list of virements shown]
Summary statement of investments made from the Consolidated Fund. [NOT MET]
Summary statement of unpaid commitments outstanding for the supply of goods and services for
each vote at the end of the financial year. [NOT MET, but improvement since 2007]
Summary statement of stores and other assets at the end of the financial year. [NOT MET]
145. The annual financial statements for FY2005 and 2006 basically show balance sheet for financial
assets and a table of revenue and financing statements supported by detailed schedules for departmental
expense items for the approved and revised budget, expenses, and variances. With the introduction of
IFMIS, significant improvements in the format of budget performance reports and annual financial
statements were made and designed in the system. The 2007 annual financial statements follow IPSAS
24, Presentation of Budget Information in Financial Statements. The accuracy and timeliness of the
annual financial statements has also improved as a result of adopting a practice of preparing daily bank
reconciliations.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 77
Indicator Score Brief explanation of status as at the reporting period
PI-25. Quality and timeliness
of annual financial statements D+
(i) Completeness of the
financial statements C Accounts were not prepared annually. Bank account
balances are not complete as there are substantial
transactions recorded below the line with suspense
accounts not cleared at year-end.
Auditor General issued a disclaimer because of such
factors as noncompliance with financial regulations,
lack of supporting records and documentation, and poor
recordkeeping and accounting.
(ii) Timeliness of submission of
the financial statements B There is noncompliance with statutory reporting dates.
Annual statements are generally not submitted for
external audit within 15 months of the end of the fiscal
year.
1991-1999 accounts were submitted in Mar 2003.
2000-2004 accounts were submitted in Feb 2007.
2005 accounts were submitted Aug 2007.
2006 accounts were submitted Sep 2007.
2007 accounts were submitted Aug 2008.
2008 accounts were submitted Mar 2009.*
* a marked improvement in timeliness.
(iii) Accounting standards used
D GBMAA Act recommends use of international
standards. Financial statements up to 2006 are not
prepared according to IAS, and the format is not
consistent over time. The 2007 financial statements
represented progress toward compliance with IPSAS.
External Scrutiny and Audit
PI-26. Scope, nature and follow-up of external audit
146. To promote transparency and accountability, high-quality audit reports, which include financial
audits and some aspects of performance audit covering all public funds, should be made available to the
public in a timely manner. It is important for the external auditor to be independent so that audit reports
will be free from bias.
147. In addition to exercising such other functions as may be conferred by an act of the National
Assembly, Article 160 (1) of the Constitution outlines the functions of the Auditor General to include
both pre- and post-compliance audit; and specifies the requirements to audit and report on the public
accounts of The Gambia at least once in every year, and the Authorities, the Courts, the National
Assembly, and all public enterprises within 6 months of the end of the immediately preceding financial
year to which each of the accounts relates. With limited capacity in the National Audit Office, audit of
most public enterprises are out-sourced to private audit firms.
148. After the Auditor General’s annual report on the accounts has been discussed in the National
Assembly, the Auditor General is required to cause the same to be published for public information.
Where there is any undue delay in the discussion of any such accounts or reports in the National
The 2009 Country Financial Accountability Assessment for The Gambia. Page 78
Assembly, Article 160 (e) permits the Auditor General to publish his or her report in advance of such
discussion.
149. Some progress is being made on clearing the backlog of Auditor General’s reports not yet
submitted to the FPAC of the National Assembly. The Report of the Auditor General on the audited
accounts of The Government of the Gambia for the period July 1992 to December 1999 was submitted to
the National Assembly in September 2005. A clear emphasis was given by the FPAC on the need for a
number of systemic issues to be addressed.
150. The audit report raises two issues: (a) Technical accounting queries in the management letter are
not always fully acted upon by the Directorate of National Treasury in a timely manner; and (b) other
issues raised concern the repetition of unresolved problems. These issues, such as the recovery of
amounts 19
owed to the Government by public officers, are referred to the FPAC, which then forwards to
the Executive branch for a public response to any pertinent queries. Recommendations are then made to
the Executive for action. Non-completion of audited accounts over the past 10 years means that
accountability for such issues has not been established. As a consequence, many of the same issues are
repeated each year in the audit reports.20
151. Audit of the accounts for 2000-2004 are nearing completion by the National Audit Office. The
National Audit Office has issued its draft/tentative report to the Executive (DOSFEA). The National
Audit Office is awaiting comments from the Executive for finalization and transmission to the National
Assembly. Meanwhile, the National Audit Office noted that the shortcomings in the previous reports are
still recurring. The National Audit Office emphasized that it is critical for the Directorate of National
Treasury to improve on the accounts for 2005 and 2006. This would help to obtain accurate figures for
IFMIS. The IFMIS has helped to improve timeliness of bank reconciliation at the Treasury and placed the
Treasury in a better position to complete the annual statement of public accounts in a timely manner as
required by law.
19
Travel Allowances and Imprest issued to public officers for official purposes that remain outstanding is an
example. 20
Issues on treasury accounts by the Auditor General noted in the 2003 CFAA include limited internal controls and internal
audit, non compliance with financial legislation, regulations and instructions, non-responsiveness of Government agencies to
audit queries, theft of funds, failure to collect revenue, missing revenue, lack of supporting documentation, failure to obtain
competitive tenders, poor record keeping and accounting, failure to recover salary and imprest advances, failure to maintain
inventories and inventory records, and lack of capacity or inadequate capacity.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 79
PI-27. Legislative scrutiny of the annual budget law
152. No money can be withdrawn from the Consolidated Fund except if authorized by an Act passed
by the National Assembly.
153. The budget documents submitted to the National Assembly do not contain detailed explanation of
the fiscal policies and the medium-term fiscal framework, except for summary statements in the Budget
Speech. For this reason, scrutiny of the budget mainly covers the revenue and expenditure estimates for
Government programs.
154. The procedure for scrutiny of the budget by the National Assembly begins with it being presented
to the Secretary for DOSFEA then passed to the FPAC. In order for FPAC to perform its function
effectively, section 28 of the GBMAA Act, 2004, empowers the National Assembly to appoint technical
staff to assist in gathering information, and conduct research and analysis of issues pertinent to its
deliberations and resolutions on the budget. The National Assembly is constrained due to lack of skilled
staff to provide the FPAC with technical support, and therefore uses simple traditional procedures to
scrutinize the budget estimates by calling Vote Controllers to defend their respective budgets.
155. According to section 152 (1A) of the Constitution of The Gambia, the National Assembly is
required, within 14 days of the estimates being laid before it, to give consideration to and approve the
estimates. The estimates should be laid at least one month before the end of the preceding financial year.
Once laid, the National Assembly is required within 7 days of the introduction of the Appropriation Bill
to give consideration to and pass the Bill according to section 152 (3A) of the Constitution of The
Gambia.
156. To meet these tight deadlines, Instruction number 75 of the Financial Instructions to implement
the GBMAA Act, 2004, requires the Secretary for DOSFEA to ensure that the budget estimates are
submitted to the President not later than 60 days before the end of the current financial year, including a
consolidation of such estimates to be submitted directly to the President by the Chief Justice or any other
authority, provided under the Constitution.
157. In effect if the Executive lays the budget estimates according to the maximum time allowed
(November 30), the National Assembly has only 3 weeks to pass the budget as opposed to a minimum of
Indicator Score Brief explanation of status as at the reporting period
PI-26 Scope, nature and
follow-up of external audit D+
(i) Scope/nature of audit
performed
C Central government financial transactions are centralized. The financial
statements produced by the Directorate of National Treasury covers all
the Department of State and the audit by the Accountant General is
predominantly transaction level testing mainly concerning adherence to
the approved budget and compliance with the PFM Laws and
regulations,
Significant issues are identified and reported in the management letter.
Audit standards used are disclosed to a limited extent.
(ii) Timeliness of submission of
audit reports to Legislature
D 1992 to 1999 accounts submitted by Treasury in March 2003. Audit
report issued in September 2005.
2000-2004 accounts submitted in Feb 2007. Draft report submitted to
Treasury for review and comments in January 2008. Still working on
2005 and 2006 reports.
(iii) Evidence of follow-up on
audit recommendations D FPAC has reviewed 1992-1999 audit report and issued follow-up
recommendations in December 2006. The recommendations have not
been implemented.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 80
2 months to allow proper scrutiny. The National Assembly has over the past 3 years taken up to 3-4
weeks to pass the budget (refer to PI-11).
158. The GBMAA Act, 2004, allows for supplementary budgets to be submitted to the National
Assembly, where there are changes in economic circumstances warranting such an action. The revised
and supplementary budgets are to be presented and documented in the same manner and format as the
original budget. The expenditure statements in the annual accounts show details of the approved budget,
the revised budget, the actual expenditure for the reporting year, and the variance. This disclosure
provides an opportunity for the National Assembly to ascertain whether the budget has been implemented
as passed.
159. As evidenced in PI-1 and PI-2, there are extensive instances of virement. In this respect, virement
schedules are attached to the financial statements. (Box A2).
Box A2. Virement Allowance in The BMAA Act, 2004
Subsection (4). Virements are allowed:
(a) among expenditure items of a budget agency up to a maximum of 75 percent of the appropriation of giving or
receiving expenditure items, at the request of the budget agency and the approval of the Secretary of State; and
(b) among budget agencies under the same supervising department, at the request of the supervising department and
the approval of the Secretary of State, provided that the amount being vired does not exceed 50 percent of the total
appropriations and the giving or receiving expenditure items of each budget agency.
Subsection 5. Where the amount to be vired exceeds the limits set under subsection (4), the approval of the Secretary
of State is required.
Subsection 6. No virement is permitted between personal emoluments and other charges.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 81
Indicator Score Brief explanation of status as at the reporting period
PI-27 Legislative scrutiny of
the annual budget law C+
(i) Scope of the Legislature’s
scrutiny
C Fiscal policies and medium-term fiscal framework are not
detailed in the budget (see PI-6). Therefore, legislative scrutiny
mainly involves review of revenue and expenditure estimates.
The National Assembly is not involved early in the preparation
process and receives the budget after it has been finalized
between DOSFEA and the Departments.
(ii) Extent to which the
Legislature’s procedures are
well established and respected
B On presentation of the budget to the National Assembly, the
FPAC reviews the budget by calling Vote Controllers to
defend their estimates by using simple procedures without
technical/professional support.
(iii) Adequacy of time for the
Legislature to provide a
response to budget proposals
both the detailed estimates and,
where applicable, for proposals
on macro-fiscal aggregates
earlier in the budget preparation
cycle (time allowed in practice
for all stages combined)
C The budget is required by law to be submitted at least a month
before the year-end and in practice has been submitted over the
past 3 years 6 weeks before the year-end and passed 2 weeks
before the start of the financial year to which it relates (see PI-
11).
Proposals on macro-fiscal aggregates are not debated by the
Legislature early in the budget preparation cycle.
(iv) Rules for in-year
amendments to the budget
without ex ante approval by the
Legislature
B The GBMAA Act, 2004, stipulates the circumstances in which
a revised and supplementary budget can be submitted.
Virement is also allowed within specified limits and categories.
The Financial Instruction elaborates on the processes and
approvals required for amendments and virements.
Administrative reallocations take place across most budget
lines but are reported in the virement memorandum.
PI-28. Legislative scrutiny of external audit reports
160. The Legislature has a key oversight role over the Executive in executing the approved budget.
This role is performed through scrutiny of external audit reports and questioning of accounting officers.
161. Section 160 of the Constitution provides that within 6 months of the end of the immediately
preceding financial year, the Auditor General shall report on the annual statement of public accounts to
the National Assembly and draw attention to any irregularities in the accounts audited and to any other
matter which, in his or her opinion, ought to be brought to the notice of the National Assembly. The
FPAC may extend the time for submission of any audit report to the National Assembly.
162. The Auditor General’s report is first discussed in open sessions by the FPAC that then submits a
report to the National Assembly. It is only at this point that the Audit Report is generally made public.
The Auditor General submitted reports from 1992-1999 in September 2005 to begin tackling the backlog
of overdue audit reports. The FPAC commenced deliberations on these reports in October and November
2005. The FPAC reconvened in December 2006 to complete its deliberations and proceedings and write
its report for ratification and adoption by the National Assembly in December 2006. With the assistance
of some senior members of the Gambia Association of Accountants and others, the FPAC made
extremely useful, insightful, and professional observations and recommendations. The Auditor General’s
The 2009 Country Financial Accountability Assessment for The Gambia. Page 82
Reports raised 58 issues and queries. After its thorough review, the FPAC regrouped the issues into the
following thematic areas for policy guidance and necessary action.
Implications of the Auditor General’s Disclaimer.
Nonconformity/noncompliance of the Accountant General and Director of National Treasury with
the statutory reporting format and disclosure requirements.
Backlog of accounts resulting in loss/misplacement of accounting records, payments vouchers,
other source documents, and institutional memory.
Imbalance of over GMD 800 million accumulating from 1992 to 1999.
Determining a cut-off point and restating the beginning/opening balances to continue preparation
of accounts from that point forward.
Perennial, rampant, and widespread shortage of Revenue Collection Books (official receipts) at
the Directorate of National Treasury, sub-treasuries, and other revenue-collection departments
and centers.
Implications for IFMIS and the ‘National Emergency Fiscal Committee.’
Functions and Placement of Public Sector Internal Auditing.
Non-settlement of Bills by Government to quasi-government service providers.
163. The FPAC and the Public Enterprises Committee held joint committee sessions to review the
accounts of 49 government agencies in open public sessions for the first time in the Republic of The
Gambia. Past presidents of the Gambia Association of Accountants provided technical assistance to the
National Assembly to enable them to review the 49 agencies. The FPAC expressed desire to work more
closely with the media and relevant civil societies.
164. With the huge backlog of public accounts that have only recently being brought up to date, it is
difficult to assess the extent to which audit recommendations are implemented
Indicator Score Brief explanation of status as at the reporting period
PI-28 Legislative scrutiny of
external audit reports D+
(i) Timeliness of examination of
audit reports by the Legislature (for
reports received within the last 3
years)
D There was a huge backlog of accounts that have only recently
been brought up to date. The latest FPAC report was issued in
2006 for annual accounts for 1991-1999.
(ii) Extent of hearings on key
findings undertaken by the
Legislature
C Open public sessions were held for the first time in the Republic
of The Gambia. For its review of the 1991-1999 audit reports,
35 witnesses from a cross-section of the population were
invited.
(iii) Issuance of recommended
actions by the Legislature and
implementation by the Executive
C Recommendations were issued in the review of the 49 public
agency accounts. These accounts are so old that the relevance
and accountability from the concerned individuals are
questionable.
There has been no white paper on the FPAC recommendations.
Also, the recommendations have not been implemented.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 83
ANNEX B. Fiduciary Risk Analysis
1. A fiduciary risk assessment aims to provide guidance on whether it is reasonable to
expect that the resources allocated will be used for the intended purpose and that the expenditure
will represent value for money. The CFAA and PEFA assessments provide data that can be
applied to making broad fiduciary risk assessments that help meet several demands. First, there is
a demand from the public for government transparency and accountability. Second, particularly
following the 2005 Paris Declaration on Aid Effectiveness, development partners are
increasingly aiming to work through government PFM systems. Third, the need for PFM reform
is increasingly seen as a key development need in its own right. A fiduciary risk assessment
helps identify priority areas for reform in country systems to meet these various demands.
2. This fiduciary risk summary considers 9 good practice principles and 18 benchmarks as a
basis for assessing relative fiduciary risk in The Gambia PFM system. These principles and
benchmarks are identical to those used in the 2003 CFAA.
Fiduciary Risk Summary
Good practice principles and
benchmarks (in CFAA 2003) Status as at December 2008
1. A clear set of rules governs the
budget process
1.1. A budget law specifying fiscal
management responsibilities is in
operation
1.2. Accounting policies and account
code classification are published
and applied
Weaknesses noted in the 2003 CFAA have been addressed, but
impact in terms of clearly linking expenditure to policy so far has
been limited. The GBMAA Act is in place and its requirements in
terms of budget preparation are being followed. A comprehensive
and robust classification is in place, broadly compliant with IMF
GFS standards and embodying a program classification. This
classification has improved fiscal reporting at the aggregate level
and has helped initiate an MTEF. However weakness in budget
formulation will persist unless capacity in program budgeting is
developed and this jeopardizes full establishment of MTEF.
2. The budget is comprehensive
2.1. All general government activities
are included in the budget
2.2. Extra-budgetary expenditure is
not material
Some steps have been taken to address problems of below-the-line
accounts, but little has been done to resolve problems of extra
budgetary funds and special accounts for donor funds, particularly
with regard to reporting. Local government spending is not included
in general government reports.
3. The budget is aligned with national
development strategy (supports pro-
poor strategy)
3.1. Budget allocations are broadly
aligned with any medium term
expenditure plans for the sector
or for the overall budget
The new chart of accounts facilitates linkage of expenditure to
objectives, outputs, and outcomes. Preliminary work is underway to
introduce MTEF and link expenditures to PRSP priorities, but
progress so far has been limited.
4. The budget is a reliable guide to
actual expenditure
4.1. Budget out-turn shows a high
level of consistency with the
budget
Regular overspending against original estimates indicates that
budget estimates are still unrealistic. Potential indebtedness of public
enterprises also poses a quasi-fiscal threat, which is not properly
taken into account at either the budget formulation or reporting
stage.
5. Expenditure within the year is
controlled
The introduction of the IFMIS has significantly improved the
possibility of applying effective controls and the timeliness of
The 2009 Country Financial Accountability Assessment for The Gambia. Page 84
Good practice principles and
benchmarks (in CFAA 2003) Status as at December 2008
5.1. In-year reporting of actual
expenditure is timely and reliable
5.2. Internal controls operate to
prevent fraud and error
5.3. Systems operating to control
virement, commitment, and
arrears
reporting in comparison to the situation in 2003. Computerization
also has the capacity to provide more reliable audit trails and opens
the system to application of computer-aided audit techniques.
Weakness in internal audit, as well as lack of capacity in external
audit, and lack of follow-up by the National Assembly will put these
gains at risk over the long term.
6. Government carries out
procurement in line with principles
of value for money and
transparency
6.1. Appropriate use of competitive
tendering rules
6.2. Decision making is recorded and
auditable
6.3. Effective action taken to identify
and eliminate corruption
The Country Procurement Issues Paper (CPIP) prepared in 2005
assessed the public procurement system and recommended that
Gambia Public Procurement Authority should not carry out both the
regulatory and operational control functions, procedures and
documentation should be further streamlined and simplified, and the
threshold for prior review should be reviewed and raised if
necessary. The Government revisited these recommendations and
now plans on preparing and implementing an action plan based on
the CPIP findings.
7. Reporting of expenditure is timely
and accurate
7.1. Reconciliation of fiscal and bank
records is carried out routinely
7.2. Audited accounts are submitted to
parliament within the statutory
period
The IFMIS has permitted a significant improvement in bank
reconciliation compared with the situation reported in 2003. It
should also allow more timely submission of accounts to the Auditor
General. Further action is required on clearance of below-the-line
accounts. Audited accounts continue to experience delays in
submission to parliament, but much of the previous backlog has now
been submitted to the FPAC.
8. There is effective independent
scrutiny of government expenditure
8.1. Government accounts are
independently audited
8.2. Government agencies are held to
account for mismanagement and
criticisms and recommendations
by the auditors are followed up.
The Auditor General’s Office lacks capacity, and its independence
and authority continue to need strengthening. Action has yet to be
taken on establishing an Audit Act. Despite reduction in the backlog
of audited accounts considered by the FPAC, little action on follow-
up to audit recommendations is evident.
9. The budget process is transparent
9.1. Information on fiscal activities is
available in the public domain
9.2. Information presented in a way
that facilitates policy analysis
and promotes accountability
The GFS-compliant chart of accounts and IFMIS has permitted
better and more comprehensive presentation of aggregate fiscal data
with the budget and financial statements. These improvements have
yet to be put fully into practice, and a great deal more needs to be
done to provide adequate budget information to parliament and the
public
The 2009 Country Financial Accountability Assessment for The Gambia. Page 85
ANNEX C. Calculation of Deviations by Budget Heads 2005-2007
Note: Data based on budget estimates from DOSFEA and Annual Financial Statements from Directorate of National Treasury.
Methodology uses PEFA analytical framework for performance indicators PI-1 and PI-2 (see www.pefa.org).
Deviations for 2007
Functional head Budget Actual Difference Absolute Percent
15 Miscellaneous 522,956 561,588 38,632 38,632 7.4%
20 DOS Education 288,943 285,976 -2,967 2,967 1.0%
12 DOS Finance & Economic Affairs 285,799 351,440 65,641 65,641 23.0%
21 DOS Health & Social Welfare 236,180 227,923 -8,257 8,257 3.5%
10 DOS Foreign Affairs 144,446 178,703 34,257 34,257 23.7%
08 DOS Interior & Religious Affairs 142,218 167,114 24,896 24,896 17.5%
01 Office Of The President 137,557 169,571 32,014 32,014 23.3%
07 DOS Defense 113,102 130,637 17,535 17,535 15.5%
18 DOS Works, Construction & Infrastructure 109,996 105,275 -4,721 4,721 4.3%
17 DOS Agriculture 86,193 99,886 13,693 13,693 15.9%
13 Pensions And Gratuities 72,979 59,975 -13,004 13,004 17.8%
27 DOS Tertiary & Higher Education 47,062 39,014 -8,048 8,048 17.1%
16 DOS Local Government & Lands 36,053 29,138 -6,915 6,915 19.2%
03 Judiciary 24,802 23,665 -1,137 1,137 4.6%
19 DOS Trade, Industry & Employment 22,975 24,345 1,370 1,370 6.0%
25 DOS Fisheries 22,483 34,015 11,532 11,532 51.3%
02 National Assembly 19,156 17,474 -1,682 1,682 8.8%
22 DOS Youth & Sports 16,790 19,013 2,223 2,223 13.2%
11 DOS Justice 13,361 7,721 -5,640 5,640 42.2%
23 DOS Water Resources, Forestry & Environment 10,284 9,365 -919 919 8.9%
Sum of other Departments of State 29,166 24,047 -5,119 5,119 17.6%
Total expenditure 2,382,501 2,565,885 183,384 183,384 7.7%
Composition variance 2,382,501 2,565,885 300,202 12.6%
The 2009 Country Financial Accountability Assessment for The Gambia. Page 86
Deviations for 2006
Functional head Budget Actual Difference Absolute Percent
15 Miscellaneous 452,840 393,596 -59,244 59,244 13.1%
20 DOS Education 284,196 301,221 17,025 17,025 6.0%
21 DOS Health & Social Welfare 207,684 169,173 -38,511 38,511 18.5%
10 DOS Foreign Affairs 126,846 213,860 87,014 87,014 68.6%
08 DOS Interior & Religious Affairs 118,523 141,995 23,472 23,472 19.8%
12 DOS Finance & Economic Affairs 117,787 188,131 70,344 70,344 59.7%
01 Office Of The President 103,407 133,846 30,439 30,439 29.4%
17 DOS Agriculture 89,088 66,217 -22,871 22,871 25.7%
07 DOS Defense 78,171 93,140 14,969 14,969 19.1%
18 DOS Works, Construction & Infrastructure 75,583 43,158 -32,425 32,425 42.9%
13 Pensions And Gratuities 47,385 47,221 -164 164 0.3%
19 DOS Trade, Industry & Employment 24,603 18,837 -5,766 5,766 23.4%
16 DOS Local Government & Lands 21,606 17,270 -4,336 4,336 20.1%
25 DOS Fisheries 17,240 14,418 -2,822 2,822 16.4%
03 Judiciary 15,513 13,482 -2,031 2,031 13.1%
02 National Assembly 15,142 14,136 -1,006 1,006 6.6%
22 DOS Youth & Sports 12,381 10,588 -1,793 1,793 14.5%
11 DOS Justice 9,901 6,850 -3,051 3,051 30.8% 24 DOS Communications, Information & Technology 9,342 9,077 -265 265 2.8%
09 DOS Tourism & Culture 9,151 8,478 -673 673 7.4%
sum of other Departments of State 19,045 34,980 15,935 15,935 83.7%
Total expenditure deviation 1,855,436 1,939,677 84,242 84,242 4.5%
Composition variance 1,855,436 1,939,677 434,157 23.4%
The 2009 Country Financial Accountability Assessment for The Gambia. Page 87
Deviations for 2006
Functional head Budget Actual Difference Absolute Percent
20 DOS Education 279,726 271,120 -8,605 8,605 3.1%
12 DOS Finance & Economic Affairs 234,760 171,295 -63,466 63,466 27.0%
21 DOS Health & Social Welfare 234,201 147,034 -87,167 87,167 37.2%
08 DOS Interior & Religious Affairs 129,736 121,146 -8,590 8,590 6.6%
10 DOS Foreign Affairs 122,285 161,587 39,302 39,302 32.1%
15 Miscellaneous 98,252 21,186 -77,066 77,066 78.4%
18 DOS Works, Construction & Infrastructure 96,499 50,578 -45,921 45,921 47.6%
01 Office Of The President 95,083 96,465 1,382 1,382 1.5%
07 DOS Defense 84,054 86,029 1,975 1,975 2.3%
17 DOS Agriculture 82,682 57,910 -24,772 24,772 30.0%
13 Pensions And Gratuities 47,385 45,418 -1,967 1,967 4.2%
19 DOS Trade, Industry & Employment 25,517 21,998 -3,520 3,520 13.8%
16 DOS Local Government & Lands 22,680 16,520 -6,160 6,160 27.2%
22 DOS Youth & Sports 20,469 18,432 -2,037 2,037 10.0%
03 Judiciary 19,847 16,099 -3,748 3,748 18.9%
23 DOS Water Resources, Forestry & Environment 19,533 11,849 -7,684 7,684 39.3%
02 National Assembly 18,150 16,760 -1,390 1,390 7.7%
09 DOS Tourism & Culture 14,179 9,099 -5,080 5,080 35.8% 24 DOS Communications, Information & Technology 14,128 10,187 -3,941 3,941 27.9%
11 DOS Justice 11,855 7,879 -3,976 3,976 33.5%
Sum of other Departments of State 17,929 16,508 -1,421 1,421 7.9%
Total expenditure deviation 1,688,950 1,375,098 (313,852) 313,852 18.6%
Composition variance 1,688,950 1,375,098 399,170 23.6%
The 2009 Country Financial Accountability Assessment for The Gambia. Page 88
The 2009 Country Financial Accountability Assessment for The Gambia. Page 89
The 2009 Country Financial Accountability Assessment for The Gambia. Page 90
The 2009 Country Financial Accountability Assessment for The Gambia. Page 91
ANNEX D. Terms of Reference for PFM Reform Oversight Steering Committee
and Sub-Committee
Government of The Gambia
Background
The successful implementation of the PFM reform agenda is critical for the Government to
achieve the objects of Pillar I of the PRSP with all aspects relating to economic management,
including macroeconomic stability, public finance management, public debt management,
divestiture, and civil service reforms.
The CFAA 2003 made several recommendations. Since its completion, most of the
recommendations are yet to be fully implemented. The PFM Reform Oversight Steering
Committee is needed to provide oversight for the implementation of the PFM action plan. A
coordinating office that will be staffed with officials whose duties are dedicated toward the
implementation of the reforms is necessary to ensure sustainable since change is continuous in
such a dynamic environment.
A Steering Committee will provide a forum for better coordination between development
partners and the Government. The comprehensive reform action plan also forms the basis for all
development partners to converge in support of the Government’s reform agenda.
Mandate
The mandate of the PFM Reform Oversight Steering Committee is to monitor and coordinate the
PFM reform program in the Government of The Gambia.
Membership
The PFM Reform Oversight Steering Committee will be chaired by the Permanent Secretary
DOSFEA who will regularly update the Secretary for DOSFEA on the status of implementing
the PFM reform action plan. The full membership of the Steering Committee will comprise the
following:
Chairperson, Finance and Public Accounts Committee (National Assembly)
Auditor General
Permanent Secretary, Personnel Management Office
Director of Budget
Director of Treasury
Director of Internal Audit
Commission General, National Planning Commission
Commissioner General, Gambia Revenue Authority (GRA)
Representatives from development partners
Representative from civil society
PFM Reform Coordinator and Secretary of Steering Committee
Vote Controllers of State Departments will be required to attend meetings as the need arises.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 92
Duties of the PFM Reform Oversight Steering Committee
The duties of the Steering Committee are as follows:
Identify and prioritize actions needed to improve public financial management by
undertaking diagnostic studies;
Monitor the National Action Plan and targets and check that they are consistent,
practicable, and realistic and will strengthen the Government in achieving its
developmental goals;
Identify the institutions and individual officers who will report to the Steering Committee
on progress in their respective actions;
Analyze reasons for delays or shortfalls in performance and make recommendations to
the respective authorities for corrective actions;
Set up sub-committees (and/or recognize existing project steering committees) for more
detailed progress monitoring and reporting to the main PFM Reform Oversight Steering
Committee through the secretariat;
The Steering Committee will produce annual reports, copies of which will be made available to
civil society organizations and nongovernmental organizations active in transparency and
accountability to ensure that adequate voice is given to the electorate.
Meetings
The PFM Reform Oversight Steering Committee will meet on a quarterly basis. The PFM
Reform Coordinator will ensure that the Technical Advisory Sub-Committees meet monthly to
monitor progress of implementation.
The PFM Reform Coordinating Office
This is the Secretariat of the PFM Reform Oversight Steering Committee. The Reform
Coordinator will be secretary of the Secretariat with responsibility for leading and coordinating
the overall PFM reform agenda, and reviewing and updating the Action Plan by consolidating
reports from the various sub-committees for the attention of the PFM Steering Committee.
Sub-Committees
The recommended sub-committees will cover the following topics:
Change management and capacity building,
Planning and budgeting,
Procurement, budget execution and payroll,
Internal audit and records management
Accounting, Recording and Reporting
External Scrutiny and Audit
The 2009 Country Financial Accountability Assessment for The Gambia. Page 93
Donor practices
The sub-committees will provide technical advisory services to the PFM Steering Committee;
the members of the sub-committees will be drawn from the expertise of relevant Departments of
State. The activities of the sub-committees will be coordinated by focal staff from the Secretariat,
who will serve the role of secretary to the sub-committees. Roles and responsibilities of the sub-
committees include the following:
Actively implement the activities in the Action Plan,
Continuously review the business processes to identify areas for improvement;
Identify resources needed to implement the Action Plan;
Identify capacity-building needs;
Obtain and document verifiable evidence of meeting the indicators in the Action Plan;
Carry out any other activities that may be assigned by the PFM Steering Committee; and
Submit progress report to the PFM Reform Coordinating Office.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 94
ANNEX E. The Gambia Government’s Self Assessed Progress on PFM Reforms
The Government’s Response on the Draft Report
The Gambia’s key development strategy is outlined in its second Poverty Reduction Strategy Program
(PRSP) 2007-2011. The PRSP is underpinned by analytical and strategic studies, including the Country
Financial Accountability Assessment (CFAA) of 2003. The Government of The Gambia has been
pursuing strategic changes in its public financial management (PFM) systems aimed at improving
efficiency, effectiveness, and quality of basic public goods and services with overall goal of poverty
reduction through steady growth and a stable micro-economic environment.
1. Revision of the Legend and Regulatory Framework With an objective of addressing shortcomings identified during the Public Expenditure Reviews, the
Government replaced the old Finance and Audit Act, 1964 (amended in 1991) with the Government
Budget Management and Accountability (GBMAA) Act, 2004. New Financial Instructions have been
issued to support the implementation of the GBMAA Act.
The structure of the public accounts has been revised to meet generally acceptable accounting practices.
With effect from 2007, the Government of The Gambia adopted the cash-based International Public
Sector Accounting Standards (IPSAS) in the preparation of its accounts. New accounting procedures
have also been developed to provide for the specific procedures and tasks required under the Act.
2. AID Coordination
The Ministry of Finance and Economic Affairs (MOFEA) has set up a Project Management and Aid
Coordination Unit to improve coordination, monitoring, and comprehensive reporting of aid flows in the
country. In consultation with all stakeholders including civil society organizations, the Unit prepared the
first Aid Coordination Report in 2009.
3. Planning and Budgeting
The transformation of the budget into a more policy-oriented tool continues to be a major objective under
the PFM reforms. In this regard, the Government is engaged in formulation a medium-term expenditure
framework (MTEF), which would link the PRSP priority outputs and outcomes with public expenditure
programs.
4. Debt Management
A priority fiscal policy has been the reduction of debt service and the stock of public debt in order to
expand the fiscal space for PRSP-related expenditures. The primary balance has been maintained as a
significant surplus and domestic borrowing constrained. The Gambia received substantial debt relief
through HIPC completion point achieved in December 2007. As a result, interest payment declined from
a peak of 47 percent of recurrent expenditure in 2005 to 24 percent in 2008. This has allowed the
Government to reverse the decline in civil service compensation by raising salaries by 20 percent in 2008,
with further increases envisaged in the future years. The MOFEA is now engaged in preparing a debt
management strategy.
5. Revenue Mobilization
For efficient revenue collection, the Government enacted the Gambia Revenue Authority (GRA) Act in
2004 and created The Gambia Revenue Authority. This brought together the Customs and Excise
The 2009 Country Financial Accountability Assessment for The Gambia. Page 95
Department and the Central Revenue Department into an independent and semi-autonomous body under
the MOFEA. The Income and Sales Tax Act was revised in 2004 to enhance the revenue collection
efforts. Furthermore, the two automated tax collecting systems, GAMTAX net (for domestic taxes) and
ASTCUDA 2.7 (for Customs taxes) have been upgraded to improve tax administration and management.
The introduction of the taxpayer identification numbers and tax self-assessments by firms are some of the
tax initiatives introduced. The improved tax administration arising out of this reform initiative has
contributed to average domestic tax revenue of 21 percent of GDP since 2004, one of the highest in the
West African Region.
6. Public Procurement
A new Procurement Act was also enacted in 2001 and puts in place mechanisms for the decentralization
of procurement activities of Government entities. The Government has set up the Gambia Public
Procurement Authority, which replaces the centralized Tender Board, (Major and Minor Tender Boards).
7. Decentralization
In order to increase the efficiency to effectiveness of the local government reforms and the
decentralization program, the Local Government Act, 2002 and the Local Finance and Audit Act, 2004
were enacted. The Finance and Audit Act, 2004 provides that:
Central Government will have to pay for the functions carried out by the councils on behalf of
government.
Local councils have the right to share a certain amount of resources mobilized by the Central
Government from within the geographical jurisdiction of councils.
Councils have legal sanctions to mobilize resources on their own to finance their own initiatives.
The Act requires the Central Government to provide 25 percent of local councils’ development
budgets and also general, conditional, and equalization grants. The operationalization of the
decentralization framework and program remains in respect of human resources, institutional
processes, and logistics.
8. Private Sector
To increase private sector development and reduce the fiscal burden of government as a result of its
involvement in commercial activities, the Gambia Divestiture Agency was set up to help plan and to
facilitate the divestiture of government assets. Some government holdings of private sector shares have
been fully or partially sold. The privatization of state-owned (public) enterprises has been slow, although
recent divestiture studies have been made in the area of housing and social security, transport, and
telecommunication with a view of enhancing private sector development.
9. National Statistics
Key to the effective implementation of any reform is the availability of timely, reliable, and accurate data.
In this regard, Government has established the Gambia Bureau of Statistics as a semi-autonomous
organization replacing the former Central Statistic Department. The Statistics Act was revised in 2005,
and new organizational structures have been put in place to ensure that the institution operates more
efficiently and effectively. This reform is expected to result in the durability of timely and reliable
statistical data that will significantly improve policy planning and formulation together with effective and
efficient resource allocations.
The 2009 Country Financial Accountability Assessment for The Gambia. Page 96
10. Expenditure Control and Automation of the Budgeting/ Accounting Systems
All payments for appropriated and statutory expenditures are subject to expenditure controls.
Departments are issued cash allocations on a monthly basis. The total cash released is contingent upon the
availability of domestic resources in the Consolidated Revenue Fund.
As a major reform, the Government has established an Integrated Financial Management Information
System (IFMIS), which began operations in January 2007 and covers the entire Central Government,
including embassies and sub-treasuries. New chart of accounts has been developed on the basis of
International Accounting Standards and the IMF Government Finance Statistics (GFS). The new chart of
accounts facilitates comprehensive reporting of financial transactions in terms of PRSP initiatives, debt
services, and economic and functional classifications of the budget.
The IFMIS implementation has spurred an intensive capacity-building program in accounting and
computer-technology training. The University of The Gambia, with government support, has introduced
a 4-year Bachelor of Accountancy degree program with 17 out of 30 students enrolled from Government
agencies. About 40 graduates have received computer-technology training in Taiwan, the Republic of
China.
11. Oversight
Other PFM reforms include the setting up of an anti-corruption unit in 2005 under the Office of the
President following recommendations of the Commission of Enquiry regarding management of state
funds of public servants. Also there are institutional reforms for both Internal Audit Office and the
National Audit Office. The focus is on improving capacity and legislative reforms to make the National
Audit Office more independent in terms of its budget approval and appointment of the Auditor General.
12. Public Service Reforms
Closely linked to the PFM reforms are the public service reforms to improve the quality and delivery of
the civil service. A comprehensive civil service reform is being undertaken with the technical assistance
from UNDP. To ensure the availability of timely and accurate human resource information, the
Government is putting in place a Human Resource Information System that will be integrated with IFMIS
payroll and pension module. This will improve in the management of the government payroll and
pension transfer.
13. Budget Planning and Monitoring
The IFMIS has helped to prepare more realistic budgets. Significant developments include:
Overview of the complete budget that summarizes the IMF fiscal tables;
Expenditure budget funding overview that summarizes the sources of financing debt service,
recurrent and development budgets;
Economic overview that summarizes by category terms;
Preparation of departmental expenditure classified by PRSP policy programs and sub-programs
and poverty interventions.
14. Budget Execution and Monitoring
The 2009 Country Financial Accountability Assessment for The Gambia. Page 97
Although the analysis and monitoring of data improved since 2006, central control of departmental/
ministerial expenditure still remains an issue. The IFMIS project since 2007 has significantly improved
fiscal discipline. The strategic allocation of available funds is established firmly as the responsibility of
the spending departments.
15. Accounting and Reporting
With regard to the timeliness and reliability of accounting and reporting, the backlog of accounts was a
major issue at the time of the CFAA 2003. The following initiatives were taken to clear the backlog:
1991-1999 accounts produced in 2003 with the assistance of the IMF,
2000-2004 accounts produced in 2007 by the Directorate of National Treasury,
2005-2006 accounts produced in 2008 with the assistance of DfID.
With IFMIS implementation, the 2007 and 2008 accounts have been prepared in accordance with the
cash-based IPSAS and the provisions of the GBMAA Act, 2004 and its associated regulations.
The 2008 government accounts were submitted to the Auditor General on the March 27, 2009, thereby
meeting the statutory timeline.
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