2010 Grant Thornton ICGFM Progress in Public Financial Management Reform

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Results of a Worldwide Survey

January 2010

Progress in Public FinancialManagement Reform

ICGFM

The International Consortium on Governmental Financial Management

Contents

1 Executive summary3 Progress in public financialmanagement reform9 The many roles of thegovernment financial leader11 Transparency13 Dealing with global economicuncertainty16 Conclusions

About the survey

In 2004, the International Consortium on Governmental Financial Management(ICGFM) asked Grant Thornton LLP (Grant Thornton) to conduct its first internationalsurvey of government financial executives, titled

Resisting Corruption in the PublicSector

. In 2009, Grant Thornton conducted a second survey on behalf of ICGFM,focused on public financial management reform. The purpose of this secondsurvey is to provide insight into the experience of national governments engagedin improving the management of public resources, making their finances moretransparent and their financial information more useful for managing public sectoroperations.

Survey methodology

Grant Thornton partners and staff conducted in-person interviews of nationalfinancial executives and donor organizations, using an open- and closed-endedsurvey instrument. We also designed and carried out a multilingual online surveyof the same target audience. Member firms of Grant Thornton International Ltdpromoted this survey in their respective countries, resulting in 65 completedsurveys. Copies of the survey instruments may be viewed at www.GrantThornton.com/publicsector under Publications.Of the in-person and online survey respondents, approximately 74 percentwere employed by a government, 9 percent by donor organizations and othernongovernmental organizations, 2 percent by academia and the rest by privatecompanies engaged in government service work. Participants represented 35countries across Africa, East Asia and Pacific, Europe and Central Asia, LatinAmerica and the Caribbean, the Middle East, South Asia, and North America.

Anonymity

Our survey does not attribute thoughts and quotations to any of the respondents,nor do we name them, their institutions or their specific countries. These measureswere essential to gain the confidence and full cooperation of the governmentofficials who participated in the survey.

Progress in Public Financial Management Reform

1

Executive summary

During summer 2009, 65 public sector officials from 35countries representing Africa, East Asia and Pacific, Europeand Central Asia, Latin America and the Caribbean, theMiddle East, South Asia, and North America participated inthe 2009 Survey on Global Financial Management Leaderssponsored by the International Consortium of GovernmentalFinancial Management (ICGFM). The survey explored thereasons why countries engage in public financial managementreform initiatives, the obstacles they face, the supportrequired for successful implementation, the role of financialmanagement leaders, the costs and benefits of transparency,dealing with global economic uncertainty and preventingfuture economic crises.Recent economic downturns have affected developed anddeveloping countries across the globe, causing a decrease inexports, taxes and general revenues, which has led to budgetshortfalls and growing demands for public services. Theseproblems have stimulated increased interest in public financialmanagement reform and demands for more accountability forgovernment officials.Public financial management reforms now under way in thecountries surveyed include adopting international accountingstandards, standardizing information systems, and improvingdebt and deficit management. The most commonly cited reasonsfor reform initiatives are increasing transparency of governmentand involving citizens in public financial management. As citizenconfidence in government increases, say survey participants, thepublic will give more social and fiscal support to government.Unmet human capital needs appear to be the greatestobstacle to public financial management reforms. Theseneeds include a lack of qualified financial management andaccounting professionals, inadequate education and trainingprograms and resources for hiring new personnel. Externalsupport, especially technical assistance and training, is criticalto overcoming the human capital barrier and ensuring thesuccessful implementation of reforms. Development partnersplay an important role in supporting governments to conductself-assessments, modernize and strengthen operations, andimplement performance evaluations.

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