The invitation for new SAFE Trust Fund applications is now open until 9 February 2018
Also available in: Español
Note from the editors: The following is an interview with Patricia Arriagada, former acting Comptroller General of Chile, and Patricio Barra Aeloiza, Head of Accounting Analysis Division of the Comptroller General Office, who have been instrumental in recent reforms of public financial management systems in Chile.
Starting in 2010, Chile embarked on a journey to improve public sector accounting by converging to an international standard of financial reporting by 2016. The country expects to produce its first fully compliant financial statements in 2019. One main objective of this reform is to ensure that financial information generated by the government accounting system is comprehensive, reliable, and useful for decision-making. Another is to increase the levels of fiscal and financial transparency and accountability in the public sector.
These reforms were driven by the Comptroller General office, is what is known as a “Supreme Audit Institution,” and is responsible for monitoring revenues and expenditures in all parts of the government – in particular, ensuring the quality and credibility of financial management and financial reporting.
The invitation for new SAFE Trust Fund applications is now open until 7 March 2016
What is SAFE?
In today’s world, international aid is fickle, financial flows unstable, and many donor countries are facing domestic economic crises themselves, driving them to apply resources inward. In this environment, developing countries need inner strength. They need inner stability. And they deserve the right to chart their own futures.
This is within their grasp, and last week the launch of an unassuming-but-powerful tool marked an important step forward in this quiet independence movement. It’s called the TADAT, or Tax Administration Diagnostic Assessment Tool. At first glance, this tool may look inscrutable, technical, and disconnected from development. But listen.
These are exciting times for those of us who believe in the potential of greater budget accountability to help tackle some of the world’s most pressing problems. The upcoming release of the Open Budget Survey promises to shed some light on three pillars of accountable budgets: transparency, participation, and oversight.
The importance of budget transparency is now well established. Recent years, however, have seen growing recognition that, along with access to information, it is critical that the public is provided with formal opportunities to engage in how budgets are managed.
Melissa Thomas, author of Govern like us, speaking at the World Bank recently raised a very interesting question: is our expectation that poor countries with limited resources can deliver high-quality governance unrealistic?
Can these countries provide the public goods and services that citizens demand and need, to be able to forge a strong social contract?
She compares the levels of revenue per capita in rich and poor countries and finds that in the poorest countries, levels of revenue per capita are so low that it would be years, or even decades, until they have enough to provide a decent level of public goods and services.
It is in that context that I thought of Sri Mulyani’s appeal during the Spring Meetings when she spoke of the need to clamp down on tax evasion and avoidance and boost the domestic resource mobilization (DRM) capacities of developing countries as a means of finding resources for financing development going forward.
Two decades ago, when I interned at the French Embassy’s economic mission in Moscow, I was asked to look into bankruptcy laws and their implementation. The Embassy wanted to advise French companies on how to get business done in the new Russia—we are talking mid-1990s—when there were no reliable guidebooks on how to navigate the transition to a market economy.
So I was asked to read recently approved, Western-inspired bankruptcy laws, given a phone book and asked to find two dozen companies around Moscow. I was to meet with their CEOs and find out how insolvency and bankruptcy procedures actually worked in practice.
I came away with one key finding: In fact, the distortions brought about by hyperinflation, bartering and the transition from Soviet to Western accounting meant the liquidity and solvency ratios that underpinned the institution of bankruptcy had essentially become meaningless.
The SAFE Trust Fund application (Word document) is now open until 27 February 2015.
What is SAFE?
SAFE means Strengthening Accountability and the Fiduciary Environment. It is a Trust Fund group administered by the World Bank and established by the Swiss State Secretariat for Economic Affairs (SECO) and the European Commission with the aim of improving public financial management in the Europe and Central Asia region. This Trust Fund group provides support for activities to assess public financial management (PFM) performance, identify and implement actions to achieve improvements and share knowledge and good practices across countries in the region.
- public finance management
- public finance
- world bank
- Public Sector and Governance
- Private Sector Development
- Financial Sector
- Europe and Central Asia
- Macedonia, former Yugoslav Republic of
- Kyrgyz Republic
- Bosnia and Herzegovina
King James had it right early on. “All Treasurers, if they do good service to their masters, must be generally hated”, he remarked after he couldn’t protect his own treasurer Lionel Cranfield from being thrown into the Tower of London in chains. Cranfield had made too many powerful enemies by opposing an expensive war the treasury couldn’t afford. His many successors through the ages can probably relate without too much difficulty.