1. Basic PFM Training Program The World Bank Group
Parliament and PFM
Basic PFM Training Program
The World Bank Group

2. Outline of the Presentation
Overview
Parliamentary Functions and PFM
The Budget Process as part of PFM Systems
Parliamentary Committees
Differing PFM Systems: Implications for Parliamentary Oversight

3. Overview
Parliament is the institution that enacts the budget, monitors its implementation, and holds the government to account
It is through the “power of the purse” that parliaments exert their influence over the collection, allocation, and use of public resources for public purposes
Many legislatures are reasserting their role as active players in the budget process

4. Parliamentary Functions and PFM
Representative Function
Legislative Function
Legislative Framework (Budget and Finance Act, Audit Act, Anti-corruption Act, Public Procurement Act, Access to Information Act)
Oversight Function
Parliamentary Audit Committees
Accountability = Answerability + Enforcement

5. The Role of Parliament in Financial Oversight
An agent of anti-corruption
Legislative role
Legal frameworks
Incentives
Oversight role
Scrutiny through committees
Enhance oversight through anti-corruption commissions, SAIs and the media
Financial control role
The Budget Cycle

6. The Budget Process as part of PFM Systems
PFM deals with all aspects of resource mobilization and expenditure management in government:
Resource mobilization (Revenue/ taxation)
Prioritization of programs (Policy making/ planning)
The Budget Process
Efficient management of resources (Budget execution); and
Exercising controls (primarily internal controls, such as government accounting, banking, and fiscal reporting).

7. The Budget Process as part of PFM Systems cont’d

8. Parliamentary Committees
Ex-Ante Stage of the Budget Process:
Budget Committee and/ or Finance Committee
Finance Commission
Ex-Post Stage of the Budget Process:
Public Accounts Committee
Accounts and Operations of PACs
Use of Audit Reports
Relationship with the SAI
Finance Commissions
PFM systems and how parliaments engage PFM systems differ between Anglophone and Francophone systems. Ultimately, every parliament is different, with particular differences in budget execution and internal controls in different PFM systems.

9. Differing PFM Systems: Implications for Parliamentary Oversight
Differences in the PFM systems used in Francophone and Anglophone countries has an impact on how parliaments oversee budget execution and contribute to external control
The type of PFM system in place has implications for who in the government the parliamentary oversight committee holds to account:
Francophone system: Most appropriate starting point is the Ministry of Finance
Anglophone system: Most appropriate starting point is the line ministries
External control is influenced by the relationship between the parliament and the SAI

10. Conclusion PFM systems encompass more than just the budget process
Parliaments influence all elements of the PFM system; however, have the most clearly defined role in the budget process
Parliamentary engagement with the budget process influenced by two factors:
Type of parliamentary system
Type of PFM system