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

Strengthening Public Expenditure Management in Africa 409
may need to be built from scratch. (Such a system is already in place in
almost all francophone countries and almost half of anglophone countries.)
In other countries, centralized or decentralized payments may be appropriate,
depending on the geographic distribution of the payments offices,
the telecommunications infrastructure, and the possibilities offered by
information technology. (However payments are organized, the cash
balances always need to be centralized.)
Introduce effective controls at each stage of expenditure (commitment,
verification, and payment), progressively relying on internal controls in
the spending ministries.
Set clearly defined procedures for registering transactions, notably for
commitments. (These procedures can be simple and do not require
extensive computerization or changes in the basis of accounting.)
Centralize monitoring of financial transactions.
Establish transparent and efficient procedures for procurement and,
where they already exist, ensure their enforcement.
Strengthen debt management, at first by ensuring timely tracking of borrowings
and repayments (on accrual basis) and eventually on a more
sophisticated basis to minimize debt service costs and reduce fiscal risk.
(For African countries that received large debt relief through the extended
HIPC process and expect future assistance largely in the form of grants,
the debt management capacity need not be large.)
Subsequently, after expenditure control is in reasonably good shape, operational
efficiency and effectiveness in budget execution can be improved:
Introduce flexible rules for virement (transfers between line items) and
regulated carryover provisions, especially for capital expenditure.
Progressively decentralize controls (after a reinforcement of procedures
for auditing and reporting).
Gradually introduce clear, simple performance indicators for major
expenditure programs that are capable of being monitored, with maximum
feasible participation by front-line civil servants and service users
and feedback into the budget preparation dialogue, not a mechanistic link
between results and funding. (The critical issue of performance measurement
and monitoring is discussed in some detail later in this chapter.)
Consider (very cautiously) possibilities for contracting out.
Most important, create new opportunities for participation and systematic
public feedback on the integrity and quality of expenditure.