A Public Financial Management Framework for Resources-Producing Countries

This working paper overviews the challenges posed by resource revenues management and the policy prescriptions to meet them, and focuses on the Public Financial Management (PFM) framework and reforms that resource-producing countries should adopt. The paper outlines a PFM framework and reform path that take into account the institutional diversity of resource-producing countries. In the short term, the proposed reforms highlights the tools that could be implemented even where the PFM system is rather basic, while over the medium and long term they aim at converging with best international PFM practices.

This study explored the perspectives of reformers on public financial management (PFM) reforms in Ghana. This research, an exploratory qualitative study focused on unearthing the perspectives of reformers in PFM reforms. Reformers, as identified in this study were individuals in the PFM landscape who were middle level civil servants implementing reforms formulated by politicians and top bureaucrats. They try to enhance the management of public finances in the country by implementing the reforms. Participants were made up of 22 individuals involved in PFM reforms, purposively selected for one-on-one interviews from the civil service in Ghana. Another eight individuals participated in a focus group discussion. Public financial management reforms have been ongoing in Ghana for over two decades now. Findings showed that respondents believed in the reforms they participated in and reported levels of enthusiasm and dedication to achieving the aims of the reforms. The findings from this study indicated that the success of the roll out of PFM reforms depended not only on the known success factors such as the implementation arrangements and leadership but also on the reformers’ perspectives and their power of influence on the reforms amongst others. Keywords: public financial management (PFM), PFM reforms, perspectives

Forensic Finance and Budgeting Process Within the Public Financial Management (PFM) Framework in the African Context

During Apartheid era the Public Service of the RSA did not adhere to principles of good governance like (PFM), transparency and accountability. They were actual lip or spoken conceptual frameworks, but not executed to the latter. As a consequence (PFM) operational systems and processes experienced insurmountable challenges ranging from embezzlement and squandering of public funds. Unprecedented failures by government institutions and employees to comply with financial legislation led to fraud and corruption skyrocketing. Mammoth task facing democratic government was to overhaul and transform Apartheid regime PFM systems. The amalgamation and integration of SA’s Public Service into single unit was indispensable yet it caused gigantic challenges. One of the pressing challenges faced democratic government was to gain citizenry confidence, therefore public financial management reforms, transparency and accountability was at the epicenter to gain legitimacy. The SA’S Constitution affirms that execution of (PFM) regulatory reforms, systems and strategies must aligned with PFMA. Despite democratic government innovations of improving government financial operations and performances, some provincial and local governments had not complied with public performance-measurement. That led to some being placed under national or provincial administration under section 100 and 139 (1 and 4) or 137 of the MFMA under the SA’s Constitution. Theoretical frameworks and systems of performance measurement were designed to assist the employees to achieve efficiency, effectiveness and decision making. Successful changes envisaged by the democratic regime required financial, technical and human resources to bolster the process. Literature emphasized that resources are fundamental elements needed in improving public sector and subsequently bring the envisaged change. Literature consistent findings highlights that organizational change does not come cheap and it requires incentives and trade-offs to be successful. SA’s government changes were needed to redirect the scarce resources of the state towards a new host of avenues, developing new strategies, processes, practices, plans to implement proposed change, and redeployment of employees with expertise. Strategic interventions became an indispensable phenomenon why the change was envisage at that point. There was an urgency of reorganizing and restructuring governmental operational systems to test the recent innovations. Failure to provide necessary resources to beef up envisage change would have led to feeble execution efforts coupled with high levels organizational failures. PFM is the case study taking into cognizance PFMA’s impact in handling public revenue in government institutions like Department of Public Works. PFMA is an Act crafted to strengthen the objectives of sound public financial management. PFM and PFMA had to ensure that financial modernization and improvements were implemented. PFMA, of 1999 must safeguard that management manages operations with distinction, be held accountable by eradicating fraud, corruption, and wasteful expenditure in government. Twenty four years after 1994 democratic dispensation SA’s public service transformation continues, but government struggle to produce clean financial audits. SA is constitutional democracy mandated to implement PFMA in all government institutions. The study assesses success rate at which financial management reforms like PFMA, PFM, Integrated Financial Management System (IFMS) and New Public Financial Management (NPFM) mechanisms has achieved in handling public finances. PFM must ensure proper utilization of public funds by meeting defined standards of probity, regularity, efficiency and effectiveness.

The chapter examines the critical role of good governance and robust financial management in building stable democratic states in the Pacific Islands. It explores the role of ICTs in public financial management (PFM) as a means to this end and identifies some of the factors that lead to the success or failure of e-government initiatives in this core government activity. The chapter outlines the dominant PFM reform agendas in the Pacific, including those of the World Bank and the IMF, which have been endorsed by the Pacific Islands Forum Economic Ministers Meeting, and the role of PFM systems and effective audit systems in combating corruption. The need for capacity building and leadership in embedding public financial management reforms are discussed and the chapter concludes with a discussion of some issues emerging from the chapter: the value of centralized versus decentralized systems and the tension between development assistance and sovereignty. The chapter argues that ownership of the public finance reform agenda by Pacific governments and a commitment to good governance is essential for sustainable PFM reforms in the region and for development.

This rapid review draws on literature from academic, policy and non-governmental organisation sources. There is a huge literature on climate governance issues in general, but less is known about effective support and the political-economy of adaptation. A large literature base and case studies on climate finance accountability and budgeting in governments is nascent and growing. Section 2 of this report briefly discusses governance of climate change issues, with a focus on the complexity and cross-cutting nature of climate change compared to the often static organisational landscape of government structured along sectoral lines. Section 3 explores green public financial management (PFM). Section 4 then brings together several principles and lessons learned on green PFM highlighted in the guidance notes. Transparency and accountability lessons are then highlighted in Section 5. The Key findings are: 1) Engaging with the governance context and the political economy of climate governance and financing is crucial to climate objectives being realised. 2) More attention is needed on whether and how governments are prioritising adaptation and resilience in their own operations. 3) Countries in Africa further along in the green PFM agenda give accounts of reform approaches that are gradual, iterative and context-specific, building on existing PFM systems and their functionality. 4) A well-functioning “accountability ecosystem” is needed in which state and non-state accountability actors engage with one another. 5) Climate change finance accountability systems and ecosystems in countries are at best emerging. 6) Although case studies from Nepal, the Philippines and Bangladesh are commonly cited in the literature and are seen as some of the most advanced developing country examples of green PFM, none of the countries have had significant examples of collaboration and engagement between actors. 7) Lessons and guiding principles for green PFM reform include: use the existing budget cycle and legal frameworks; ensure that the basic elements of a functional PFM system are in place; strong leadership of the Ministry of Finance (MoF) and clear linkages with the overall PFM reform agenda are needed; smart sequencing of reforms; real political ownership and clearly defined roles and responsibilities; and good communication to stakeholders).

PurposeCountry comparative studies especially in Africa on public procurement reforms toward financial control and accountability of public expenditure are limited. Meanwhile, these kinds of studies have potential for providing useful insights on how value for money through public procurement is being ensured across Africa. This paper attempts to provide this. The purpose of this paper is to highlight several policy recommendations for public management aimed at improving public procurement and public financial management (PFM) systems in Africa.Design/methodology/approachThe paper adopts a qualitative case study using secondary data drawn from Global Integrity Index (GII) of the Transparency International and the World Bank’s Country Policy and Institutional Assessments databases to investigate variables that influence public procurement practices in three purposively selected African countries. The comparative approach for presenting some of the experiences of countries in public procurement methods is used in this paper.FindingsThe findings suggest three main variables, namely, government structure and economic variables, complicated by socio-cultural values interact to influence public procurement and PFM systems in the case study countries.Research limitations/implicationsData for the GII indicators used were only available from 2013, which restricted the discussion of those indicators to a short span (2013–2015).Social implicationsThe socio-cultural milieu within which public procurement takes place has implications for how governance structures function to deliver value-for-money public procurement.Originality/valueThis study adds value by comparing three countries within Africa to reveal common variables which influence public procurement and PFM systems.

The public financial management (PFM) reforms undertaken over the years in India have produced some enduring results and provide opportunities to build upon an already existing institutional framework. The role of a sound PFM system in implementing policy decisions, establishing fiscal discipline, ensuring results from the spending of public resources, and improving service delivery has been getting increasing attention in India. The chapter discusses two important PFM reforms—outcome budget and medium-term expenditure framework (MTEF)—and provides policy options to move forward. Specifically, it suggests the need for a better coordination and consultative process in the parliamentary system of democracy in India in the budget-reform process.

Contrary to the currently dominant view, it was not poor governance nor the associated corruption which were the prime causes of the development of poor public sector financial management in Sub-Saharan Africa. It was the economic problems across Sub-Saharan Africa, especially in the late 1970s and early 1980s, which led to a decline in the quality of public sector financial management and governance. The economic problems primarily arose from external events over which African governments had little or no control. Public sector financial managers across Sub-Saharan Africa, far from being the cause of the decline in the quality of public financial management, could be considered heroes and should be recognised as the key experts on the history, capabilities and short-comings of the systems they manage. As such, they should lead incremental reform programmes to re-build their systems rather than attempts at comprehensive and complex reforms effectively led by foreign consultants and the international financial institutions.

The Effectiveness of Reforms in Public Sector Accounting and Financial Management: The Case of Spain, 2010-2015

The Effectiveness of Reforms in Public Sector Accounting and Financial Management: The Case of Spain, 2010-2015

This study provides a critical examination of the effectiveness of budgeting and financial management practices in public institutions, offering a critical examination of the profound inefficiencies in budgeting and financial management practices, using Chibombo Town Council as a case study. Against a backdrop of systemic fiscal governance failures in Zambia, it argues that weak financial controls, inaccurate forecasting and a pervasive lack of transparency are not merely administrative shortcomings but fundamental barriers to effective service delivery. Crucially, this research establishes a direct causal link between these financial management failures and the impediment of public service delivery. Employing a mixed-methods approach and a case study design, the research argues that despite the existence of formal Public Financial Management (PFM) frameworks, their practical implementation is severely undermined by entrenched operational deficiencies. The findings reveal profound inefficiencies: budgeting processes are characterized by a lack of transparency, inadequate stakeholder involvement and misalignment with strategic goals, while financial management is crippled by ineffective internal controls and outdated systems. The study posits that technical reforms are insufficient without concurrently addressing the pervasive issues of capacity constraints, political interference and a culture of impunity. Consequently, this paper contends that holistic public financial management (PFM) reforms; prioritizing robust internal controls, enhanced stakeholder participation, and modernized systems, are not optional but imperative. These reforms are a prerequisite for breaking the cycle of resource wastage, rebuilding public trust and achieving sustainable development goals. The study provides empirically grounded recommendations for transforming budgetary processes to ensure public funds directly and effectively serve citizen needs.

The article explores an approach to implementing modern digital technologies, such as blockchain solutions, in the public finance management system, considering global experience. The purpose of the article is to develop recommendations for the implementation of digital technologies into the existing public finance management mechanism of modern Ukraine to reduce objective risks from the “human factor” in corporate and public management, and, in accordance with the goal, 5 research tasks are set and solved in the article. The author analyzes key challenges in public finance management, particularly the negative impact of the human factor, and proposes solutions aimed at minimizing errors, enhancing transparency, and reducing corruption risks. Existing methodologies and frameworks for evaluating digital technologies, such as the digital maturity models of the OECD, the World Bank, ISO 37122, as well as methodologies from NIST and the EU, are examined. The study develops a new methodological approach to the comprehensive evaluation of technologies, encompassing six key criteria: process automation, transparency, security, decentralization, efficiency, and implementation cost. A technology assessment system is proposed for each criterion, along with a mathematical model for calculating an integrated indicator. This methodology enables the classification of technologies as either key or auxiliary in the context of the digital transformation of the public finance management mechanism. The article emphasizes the unique potential of decentralized technologies, such as blockchain, in minimizing the impact of the human factor. The primary contribution of the study lies in creating a scientific basis for enhancing the efficiency of public administration by introducing modern digital technologies capable of minimizing the adverse effects of the human factor. Applying the developed technology evaluation methodology will provide a well-founded means to identify priority areas for the digital transformation of Ukraine’s public finance management system, taking into account global experience and national specifics.

The chapter provides a state-of-the-art review of New Public Financial Management (NPFM) reforms in Italian central and local government by focusing on the vast renewal process, which, in the past decade, saw the Italian public administration seeking to change the functioning principles typical of a formal legal administration. The chapter outlines the contemporary state of the Italian public sector, the most significant changes in administrative laws, and the contemporary features of Italian public financial management systems. The complexity of the whole reform process and its slow implementation make it hard to provide a macro-evaluation. That said, the chapter concludes that there are still many cultural and technical impediments to be overcome in order to implement effectively the reforms formally approved by the Parliament. On reflection, it would appear that slow adaptation is probably better than attempts to convert quickly to the new management model.

Effective public financial management (PFM) systems rely on robust audit trails and transparent reporting mechanisms to ensure accountability, detect irregularities, and maintain institutional integrity. Across emerging economies, however, weaknesses in audit documentation, inadequate financial disclosure, and poor internal control practices continue to undermine fiscal responsibility and erode public trust. This study empirically examines the interrelationship between audit trails, financial transparency, and internal control effectiveness within public financial management systems across Nigeria, Kenya, and Ghana. Using a quantitative cross-sectional design, data were collected from 420 respondents drawn from ministries, departments, and agencies (MDAs) in the three countries. Structured questionnaires measured audit trail quality, transparency indicators, and internal control performance, while regression analysis determined the predictive influence of audit trails and transparency on control effectiveness. Results revealed that audit trails and financial transparency jointly explained 52 percent of the variance in internal control effectiveness across the sample. Organizations with comprehensive audit documentation, digitized transaction records, and timely financial disclosure exhibited significantly higher control scores than those relying on manual or fragmented systems. Among the three countries, Kenya demonstrated the strongest correlation between digital audit trail integrity and control performance (r = 0.72, p< 0.01), reflecting the impact of its integrated financial management information system (IFMIS). Conversely, Nigerian institutions showed relatively weaker associations, attributed to low automation and irregular financial reporting. Regression results further indicated that audit trail strength (β = 0.46, p< 0.001) and financial transparency (β = 0.33, p< 0.001) are significant predictors of internal control effectiveness. The findings emphasize that strengthening audit trails through digital integration, regular reconciliation, and secure data archiving enhances not only accountability but also operational control within PFM systems. Financial transparency acts as a reinforcing mechanism that promotes compliance, mitigates corruption risk, and builds stakeholder confidence. The study concludes that institutionalizing real-time audit documentation and open financial disclosure practices are indispensable for effective internal control and fiscal governance in developing economies. Policy recommendations include investment in audit automation, capacity building for internal auditors, and mandatory disclosure frameworks aligned with international public sector accounting standards.