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The Socialist Republic of Vietnam The Public Financial Management Reform Project (PFMRP) Presented by Vice-Minister of Finance: Dr. Tran Van Ta.

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Presentation on theme: "The Socialist Republic of Vietnam The Public Financial Management Reform Project (PFMRP) Presented by Vice-Minister of Finance: Dr. Tran Van Ta."— Presentation transcript:

1 The Socialist Republic of Vietnam The Public Financial Management Reform Project (PFMRP) Presented by Vice-Minister of Finance: Dr. Tran Van Ta

2 Content Reform backgroundReform background Project goalProject goal Project description summaryProject description summary Sustainability and risk considerationsSustainability and risk considerations Project progressProject progress Lessons learnt so farLessons learnt so far

3 Reform background The Public Administrative Reform Master Plan over sets platformThe Public Administrative Reform Master Plan over sets platform The revised State Budget Law promotes decentralization, transparency, accountability, and administrative rationalization & streamlining.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,…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,…

4 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 processesFiscal 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 recordingPoor budgetary information: lack of fully consolidated budget, lack of a common accounting structure, lack of integrated, electronic data recording

5 Identified five areas of reform The PFMRP addresses the first 04 areas of reform: Budget managementBudget management Debt managementDebt management SOE fiscal risk managementSOE fiscal risk management Public asset managementPublic asset management To be addressed by the other 2 important projects: Revenue management:Revenue management:

6 The PFMRP’s project goal Aiming at good governance, contributing to poverty reduction.Aiming at good governance, contributing to poverty reduction. Objectives: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.

7 Project performance indicators Improved accuracy, timeliness, relevance, transparency and compliance with international best practices;Improved accuracy, timeliness, relevance, transparency and compliance with international best practices; Better planning of the State Budget and the Public Investment Program; andBetter planning of the State Budget and the Public Investment Program; and Greater fiscal sustainability.Greater fiscal sustainability.

8 Project description overview Component 1: Strengthening Treasury and Budget ManagementComponent 1: Strengthening Treasury and Budget Management Component 2: Strengthening State Budget and Investment PlanningComponent 2: Strengthening State Budget and Investment Planning Component 3: Strengthening Management of Public Debt and Monitoring of SOE Fiscal RisksComponent 3: Strengthening Management of Public Debt and Monitoring of SOE Fiscal Risks

9 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 structureThe 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 regimeReview of policies and business processes in the development of Unified Chart of Accounts/State Accounting regime Treasury Single Account.Treasury Single Account.

10 Component 2: Strengthening State Budget and Investment Planning Technical assistance for the piloting of the Medium- term Fiscal Framework (MTFF) and the Medium-term Expenditure Frameworks (MTEF)Technical assistance for the piloting of the Medium- term Fiscal Framework (MTFF) and the Medium-term Expenditure Frameworks (MTEF) Change management and communication of the new practiceChange management and communication of the new practice Design and implementation of a budget preparation systemDesign and implementation of a budget preparation system

11 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 debtTechnical assistance and capacity building to support strengthening of recording and management of domestic debt Procurement of systems for recording, consolidation and management of public debtProcurement of systems for recording, consolidation and management of public debt Inventory of SOE Fiscal RisksInventory of SOE Fiscal Risks

12 Sustainability & risk considerations Sustainability: an emphasis on training and ‘learning by doing’, a strong legal framework, making a platform for further development as committed.Sustainability: an emphasis on training and ‘learning by doing’, a strong legal framework, making a platform for further development as committed. Risks: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

13 Project progress Successfully completed the procurement of TABMISSuccessfully completed the procurement of TABMIS Reviewing of policies and business processes, organizational preparednessReviewing of policies and business processes, organizational preparedness Developing Unified Chart of AccountsDeveloping Unified Chart of Accounts Studying TSAStudying TSA Produced MTF&EF documents of good quality for the first timeProduced MTF&EF documents of good quality for the first time Established Middle Office, developing Public Debt Management and Mobilization Plan, domestic marketsEstablished Middle Office, developing Public Debt Management and Mobilization Plan, domestic markets Training and building capacityTraining and building capacity

14 Lessons so far The flexible project design allows additional interventions and adjustments to be discussed and agreed if necessaryThe 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 neededIndependent 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)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.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 prerequisiteEarly participation of project beneficiaries and all other stakeholders is a prerequisite

15 Thank you! & The Ministry of Finance looks forward to your cooperation and assistance


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