Public Sector Governance and Accountability Series: Budgeting and ...

Strengthening Public Expenditure Management in Africa 397
Internal Control and Reconciliation
Develop or strengthen internal audit. Establish a mechanism for
followup actions by the Madagascar Ministry of Finance on reports of
internal auditors.
Issue and enforce Madagascar Treasury regulations on surcharge and
penalties.
Standardize methodology, and disseminate results of expenditure tracking
and surveys, including the proportion of public funds that reach their
final destination.
Ensure that each office in the Treasury prepares a banking reconciliation
statement.
Reporting
Produce quarterly fiscal reports in a timelier manner (a maximum of four
weeks following the reference period).
Establish poverty-reducing tracking at the local level.
Strictly observe the legal limit for the complementary period.
Produce the final accounts according to the relevant regulations.
Reduce the number of imprest accounts.
Strengthen the supreme audit institution.
Improve cash planning.
Source: Adapted from material drafted by Daniel Tommasi, based on Lazare, Hélis, and
Nguenang 2004.
BOX 12.3 A Building-Block Approach to Budget Reform
in Ethiopia
The first objective of the budget reform is to strengthen the line-item budget.
Inputs must be well organized to promote effective external control. This
improvement, in turn, makes possible the introduction of techniques such
as cost centers that promote effective internal control. Improving the existing
budget process is done through a number of activities: simplifying
expenditure codes, improving the chart of accounts, and introducing a
financial calendar. The second objective of the budget reform is aid management.
The design of the budget formats identifies for the first time the
specific external source of funding and the amount of that funding by line
item of expenditure. The third objective of budget reform is to improve
expenditure composition.
The budget structure must reflect the stage of evolution of the financial
system. Control through a line-item structure is stressed because the process
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