Presentation on theme: "LG Accountability Debate Local Budgeting and Financial Management Course March 29-30, 2005."— Presentation transcript:
LG Accountability Debate Local Budgeting and Financial Management Course March 29-30, 2005
Are LGs fundamentally different? Capacity Scale Diversity Dependence on intergovernmental system Reform Issues Change Management? Setting Hurdles and Incentives?
Are LG Budgeting and Financial Management (LBFM) systems fundamentally different? Budgeting? Financial Management? Standards Clarity/Codification/Uniformity Reporting? Accountability? Proximity to Citizens?
Case 20 Big Cities (>1 million) 40% OSR, 60% Transfers Reports of financial impropriety, wide-spread citizen dissatisfaction. Significant arrears in debt and contractor payments. 100 Medium Cities 65% Transfers Mixed picture. Significant capital needs. Reports of arrears, though quality of data very poor. 1000 Small Municipalities 92.1% Transfers Significant differences, weaknesses in basic service delivery. Some model cities. 3200 Rural Districts 96% Transfers Many areas lack basic infrastructure, including electricity. Weak administrative capacity.
Challenge IMF/WB Mission Arrives and Notes Lack of Decentralized Financial Accountability IMF Recommendation to shift to Comprehensive & Uniform Accrual Accounting System Channel public resources to LGUs that meet financial accountability standards Country Director keen to ramp up lending to LGs
Task Report to CD on 2-3 year work program to strengthen local financial accountability What diagnostic work will you do? Do you have the right instruments? Define a strategy to enhance LBFM accountability Is accrual accounting focus appropriate? Where? What is Bank’s role in supporting this strategy?