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LG Accountability Debate Local Budgeting and Financial Management Course March 29-30, 2005.

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Presentation on theme: "LG Accountability Debate Local Budgeting and Financial Management Course March 29-30, 2005."— Presentation transcript:

1 LG Accountability Debate Local Budgeting and Financial Management Course March 29-30, 2005

2 Are LGs fundamentally different? Capacity Scale Diversity Dependence on intergovernmental system Reform Issues  Change Management?  Setting Hurdles and Incentives?

3 Are LG Budgeting and Financial Management (LBFM) systems fundamentally different? Budgeting? Financial Management? Standards  Clarity/Codification/Uniformity Reporting? Accountability?  Proximity to Citizens?

4 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 Small Municipalities 92.1% Transfers Significant differences, weaknesses in basic service delivery. Some model cities Rural Districts 96% Transfers Many areas lack basic infrastructure, including electricity. Weak administrative capacity.

5 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

6 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?


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