Public Finance Management

The EU Delegation financed a first Public Expenditure and Financial (PEFA) Accountability assessment in Dominica in 2007. This first assessment showed a rather positive framework in the country. The main strengths included the credibility and comprehensiveness of the budgetary process, predictability and control in budget execution and in quality and timeliness of in year budget reports and financial statements. The weaknesses identified were related to the transparency of PFM systems. Specifically, to the oversight of fiscal risk from public sector entities, weak procurement systems, internal and external audit.

A repeated PEFA exercise was launched in March, 2010, lasting for approximately five months. The exercise was taken very seriously by the authorities, with a high level of representation at both the introductory and closing workshop of the PEFA process. The PEFA process went relatively smoothly with good cooperation from the relevant stakeholders and other donors. As a result the report was very thorough, and considered satisfactory by the authorities.

As a result and fostered by the PEFA 2010 assessment findings, the Government developed a three-year PFM Reform Action Plan with the technical support of CARTAC. The plan was formally approved by the Government in January 2011. It assigns level of priority to actions, identifies the agency responsible for implementing the actions, defines key performance indicators, establishes timelines, identifies possible sources of donor support, and its cost. The Plan proposes improvements not only in areas of clear weakness but also improvements to aspects that scored favourably in the assessment. Some of the improvements require minor adjustments to processes and procedures and making greater use of existing systems. Major initiatives include creation of a large and medium taxpayer unit, development of a cash flow forecasting model, the enactment of modern procurement and contract administration legislation, creation of a central internal audit committee, and formulation of rules for in-year amendments to the budget. Therefore, it can be said that the framework represents a major improvement in relation to previous PFM Plan. The timetable seems also to be rather objective assuming that several of the targets are currently under execution. Overall, the PFM Action Plan is considered a relevant and credible framework.

One of the general conditions for the disbursement of 10th EDF resources is an updated PFM Action Plan. The Office of the NAO, in collaboration with the PFM Focal Point and other Heads of Department of the Ministry of Finance, has been engaged in the continuous updating of the Action Plan in order to efficiently track the Government’s progress with reference to the following key PFM areas:

  • Credibility of the budget
  • Comprehensiveness and transparency
  • Policy-based budgeting
  • Predictability and control in budget execution
  • Accounting, recording and reporting
  • External scrutiny and audit