Transcript The Socialist Republic of Vietnam The Public Financial

The Socialist Republic of Vietnam
The Public Financial
Management Reform Project
(PFMRP)
Presented by
Vice-Minister of Finance: Dr. Tran Van Ta
Content
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Reform background
Project goal
Project description summary
Sustainability and risk considerations
Project progress
Lessons learnt so far
Reform background
• The Public Administrative Reform Master Plan over
2001-2010 sets platform
• The revised State Budget Law promotes
decentralization, transparency, accountability, and
administrative rationalization & streamlining.
• The reform areas are recommended from analysis
supported by the World Bank and other donors i.e. PER
2000, PER 2004, CFAA 2001, Vietnam Development Report 2003,…
Some weaknesses
• Fiscal sustainability concerns: declines in crude oil
revenues, mismatch between capital and recurrent
expenditures, salary reform pressure, extra-budgetary
accounts, non-performing loans to SOEs, and weak
prioritization processes
• Poor budgetary information: lack of fully consolidated
budget, lack of a common accounting structure, lack of
integrated, electronic data recording
Identified five areas of reform
The PFMRP addresses the first 04 areas of
reform:
• Budget management
• Debt management
• SOE fiscal risk management
• Public asset management
To be addressed by the other 2 important projects:
• Revenue management:
The PFMRP’s project goal
• Aiming at good governance, contributing to
poverty reduction.
• Objectives:
– to strengthen budget planning, execution, reporting
and accountability,
– to strengthen the links between budget management
and the developmental goals within a medium-term
expenditure framework; and
– to improve the management of public debt.
Project performance indicators
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Improved accuracy, timeliness, relevance,
transparency and compliance with
international best practices;
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Better planning of the State Budget and the
Public Investment Program; and
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Greater fiscal sustainability.
Project description overview
• Component 1: Strengthening Treasury and
Budget Management
• Component 2: Strengthening State Budget and
Investment Planning
• Component 3: Strengthening Management of
Public Debt and Monitoring of SOE Fiscal
Risks
Component 1: Strengthening Treasury
and Budget Management
• The Treasury and Budget Management Information
System (TABMIS) will be operational in all central,
provincial and district treasury offices, finance &
planning agencies, based on a new, integrated account
code structure
• Review of policies and business processes in the
development of Unified Chart of Accounts/State
Accounting regime
• Treasury Single Account.
Component 2: Strengthening State
Budget and Investment Planning
• Technical assistance for the piloting of the Mediumterm Fiscal Framework (MTFF) and the Medium-term
Expenditure Frameworks (MTEF)
• Change management and communication of the new
practice
• Design and implementation of a budget preparation
system
Component 3: Strengthening
Management of Public Debt and
Monitoring of SOE Fiscal Risks
• Technical assistance and capacity building to support
strengthening of recording and management of
domestic debt
• Procurement of systems for recording, consolidation
and management of public debt
• Inventory of SOE Fiscal Risks
Sustainability & risk considerations
• Sustainability: an emphasis on training and ‘learning by
doing’, a strong legal framework, making a platform for
further development as committed.
• Risks:
– System risks: costs of supporting and upgrading; Difficulties
in the integration of different accounting structures; Network
infrastructure preparedness.
– Organizational risks: Procurement and implementation
capacities; Substantial organizational changes; Acceptance of
new technologies, practices
Project progress
• Successfully completed the procurement of TABMIS
• Reviewing of policies and business processes,
organizational preparedness
• Developing Unified Chart of Accounts
• Studying TSA
• Produced MTF&EF documents of good quality for the
first time
• Established Middle Office, developing Public Debt
Management and Mobilization Plan, domestic markets
• Training and building capacity
Lessons so far
• The flexible project design allows additional interventions and
adjustments to be discussed and agreed if necessary
• Independent Verification and Validation (IV&V) and other
independent consulting services are needed
• Leadership oversight is reinforced by regular reports and
meetings and an empowered Project Management Unit (PMU)
• Change management and well-targeted training activities are
even more emphasized during the process.
• Early participation of project beneficiaries and all other
stakeholders is a prerequisite
Thank you!
&
The Ministry of Finance looks forward to
your cooperation and assistance