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BANGLADESH EXPERIENCE

PUBLIC FINANCIAL
MANAGEMENT AND
PROCUREMENT
A presentation for
Concurrent Session on
Public Financial Management and Procurement

Contents
Financial Management:
Public Financial Management Reforms
Lessons Learnt
Harmonization, Alignment and
Simplification- broad picture
Future Challenges
Procurement
Procurement Reform
Lessons Learned & Contributions to
Harmonization
Use of Country Systems: Procurement in
relation to PFM
Future Challenges

PFM Reforms
Joint

Diagnostic studies :

Committee on Reforms in Budgeting and


Expenditure Control ( CORBEC) DFID and
GOB;
Way Forward for FM Reform in BangladeshDFID and GoB
Country Financial Accountability Assessment
(CFAA)- World Bank, UNDP and GoB
PFM indicators as a part of on-going Joint
Public Expenditure,Procurement and Financial
Management Review -DFID, WB & GOB

PFM Reforms (continued)


Major

PFM Reforms: Policy & Operational

Reforms in Budgeting and Expenditure


Control (RIBEC), Financial Management
Academy ( FIMA), Reforms in Govt Audit
( RIGA)- DFID
Strengthening the Office of Comptroller and
Auditor General (STAG) UNDP
ISMOF & EEFM- ADB
Strengthening GOBs FM Capacity and
Building Institutional Capacity of the Office
of the C & AG - World Bank
Development Support Credit I, II and IIIWorld Bank

ROSC Fiscal Transparency IMF and

Financial Management Reform Program

PFM -Lessons from


Harmonization
Lack

of common understanding and


proper coordination among various
Ministries and Govt Departments
Differing Development Assistance
Strategy by Donors
PFM priorities often not synchronized
and lost

Harmonization- Broad Picture


PEDP

II:
10 donors under one implementation
Framework- ADB leads
Common PFM system (Reporting and
Auditing)
Multi- lateral donors like WB and ADB
harmonized individual requirements
( Common Withdrawal Application, audit
reporting period)
Agreed FM Improvement Plan

Harmonization- Broad Picture


(continued)
HNPSP:

Pool and Non Pool Donors under common


PFM system - WB leads
NO PIUs ; No Special Account
Govt spent first including donors share
Agreed Audit TOR with C & AG
Common Audit and Reporting
Strengthen FM Framework including
improvement plan for the Sector
Alignment of donor assistance on PFM along
with GoB priority plans, PRSP, ROSC, CAS, PER
PFM Task Force a common platform by
donors and Govt led by MOF
An Aid Governance Group (ERD) consisting of
Donor and Govt Country Harmonization Action
Plan

Challenges :
DPs

and GOB work under an uniform


development assistance strategy for PFM
Progress Monitoring mechanism and timely
adjustments of action plan
More Flexibility and Simplification of DPs FM
policy and procedures to achieve better
country outcome
More awareness on the value addition on
Harmonization and Alignment Approaches
More delegation of responsibility and
authority at country level

Procurement Reform: background


Low Level of
public
procurement
performance
constrained
national
development

The Country
Procurement
Assessment
Report (CPAR)
identified Key
deficiencies in the
public
procurement
system

CPAR Findings & Recommendations (2001):

Opaque public procurement practices are the


single most serious issue affecting whole public
sectors activities

Set up a Public Procurement Policy Unit


Issue Public Procurement Rules
Streamline Proc. Process & Financial
Delegation
Develop Procurement Management Capacity
Publish Contract Awards
Introduce Appeal Procedures

Proc. Reform & Achievements


DSC II & DSC III

Procurement Law & Performance triggers

IDA Credit :

August 2002 / ~ $5 million/ 3 years

Bangladesh now has a transparent public procurement regulations,


accepted by most DPs

Established permanent procurement policy unit

Mandated harmonized procurement regulations & STDs

Publishing contract awards

Mandated annual procurement review (audit)

Mandated independent appeal procedures for protests

Streamlined financial powers & proc. approval process

Developed national trainers & Institutionalizing capacity

Lessons from Harmonization


Joint effort of the Government and DPs
Participatory Approach, Flexibility/Adaptability of
new reform Procedures
Country Ownership

Agreed CPAR (DPs & GOB)


GOBs political commitment for proc. Reform
Implementation of all CPAR recommendations
Implementation of reform with credit (NOT grant)
Permanent policy unit with Government resources
Critical mass of national trainers (40 p)
Institutionalize proc. capacity with local institute
MIS for monitoring reform outcomes/performance

Contributions to Harmonization
Aid

Governance Group- ( ERD) Harmonizing Govt and Donors


procurement requirement along the Procurement Regulations
Primary Education Development Program II
Countrys

own harmonized procurement regulations for all


local procurement (10 DPs & GOB agreed)
LocalAll

85% of procurement in PEDP II.

local procurement from common pool (DPs)

Annual

procurement review (audit) as per GOB Proc.


Regulations (by independent consultant)
HNPSP:
Harmonized Procurement Procedures & agreed plan for all
local procurement

Contributions to Harmonization

Seven IDA funded projects including other DPS


using Government Regulations for all local
procurement

Piloting use of PFM framework for procurement as


part of PFM baseline and performance indicators

Integrated analytical review of procurement with


PFM and Public Expenditure group- World Bank,
DFID and ADB

Centralized MIS in CPTU/IMED (using above


indicators) for effective monitoring of procurement
outcomes and performance (CPTU Website:
cptu.gov.bd)

Future Challenges
Compliance

Monitoring of Procurement

Reform
Roll out the capacity building across the
country institutions including private sector
Piloting E-procurement
Mindset and Behavioral change by all
parties and
Sustainability of already established CPTU
and corresponding strengthening of IMED.