strengthening public financial management through transparency in timor-leste

Strengthening Public Financial Management through Transparency in Timor-Leste

International Consortium on Governmental Financial Management

May 17, 2011

Confusion?

Strengthening Public Financial Management in Timor-Leste 2

Strengthening Public Financial Management in Timor-Leste

Congress cuts transparency funding

How can Timor-Leste afford government transparency?


Timor-Leste United States Comparison

Independence 2002 1776 3.4%

GDP Per Capita $2,600 $47,400 5.5%

GDP Growth 8% 2.7% 338%

Unemployment 20% 9.7% 206%

Below poverty line 42% 12% 350%

Life Expectancy 67.95 78.92 86%

Literacy 58.6% 99% 59%

globalization


= competition


choice


citizens are watchingStrengthening Public Financial Management in Timor-Leste

empowered


Democratic Republic of Timor-Leste

(RDTL)Transparency

Objectives



build civil society


build infrastructure


build capacity


build citizen involvement in government


improve government performance


?


GDP Per Capita (PPP, logs)

UG

AN

DA

PAPU

A N

EW

GU

INEA

AU

ST

RA

LIA

-3

-2

-1

0

1

2

3

209 Countries

Norm

aliz

ed G

overn

ment

Eff

ect

iveness

Index

HIGH

LOW

Benefits of Transparency Government Effectiveness and GDP*

* At purchasing power parity

Source: The World Bank

Higher the government effectiveness = higher the country GDP Per Capita



UG

AN

DA

PAPU

A N

EW

GU

INEA A

US

TR

ALI

A

-3

-2

-1

0

1

2

3

207 Countries

Norm

aliz

ed

Voic

e a

nd

Acc

ounta

bili

ty Ind

ex

.

HIGH

LOW

Benefits of Transparency Voice and Accountability and GDP*



Higher the government accountability = higher the country GDP Per Capita



UG

AN

DA

PA

PU

A N

EW

GU

INE

A

AU

ST

RA

LIA

-3

-2

-1

0

1

2

3

204 Countries

Norm

aliz

ed C

ontr

ol of

Corr

upti

on Index

HIGH

LOW

Benefits of TransparencyControl of Corruption and GDP*



Higher the control of corruption = higher the country GDP Per Capita


= stability


= investor confidenceStrengthening Public Financial Management in Timor-Leste

avoid theresource curse


technology leapfrog


use what works


skip what doesn’t work


skip stages


modernize


rapidly


review

Transparency and Accountability

The next generation of public financial management technology will allow the public to

track the budget live, to see where every dollar is being spent, and to gain renewed confidence in the

process

Democratic Republic of Timor-Leste Vision


sequenced



Public Financial Management – Foundation for Country Growth

FMIS(software and

hardware)

Human Resource

Development

Capacity Building

(Training)

GoTL LAWS

Procurement Commission

Autonomous Agencies

Ministries

Decentralization

Public Financial Management

1. International StandardsStrengthening Public Financial Management in Timor-Leste

IPSASInternational Public Sector Accounting Standards


http://www.ipsas.org/en/ipsas_standards.htm

EITIExtractive Industries

Transparency Initiative


http://eiti.org/

GFSGovernment Financial Statistics


http://www.imf.org/external/pubs/ft/gfs/manual/gfs.htm

MTEFMedium Term Expenditure Frameworks


http://bit.ly/iQjU5q

IATIInternational Aid Transparency Initiative


http://www.aidtransparency.net/

2. Manager’s Dashboard


review


integration with macro-economic data

examines budget execution data

integrated with back-office procurement & commitment

accounting within IFMIS

3. Document Management


manages correspondence with

senior managers

repository for freedom of information

4. e-Procurement Portal


review


integrated with back-office procurement & commitment

accounting within IFMIS

vendor alerts

tender results published

government tenders published

5. Transparency Portal


review


www.transparency.gov.tl

http://www.transparency.gov.tl/

subscribe

drill down

articles

Expenditures, Transparency Portal

10 years of data

drill through the chart of accounts

Expenditures, Transparency Portal

export to xls, doc, pdf, html, xml

track commitments

Lessons Learned


1. Leadership


Goodbye Conflict, Welcome Development

Timor-Leste will be the country that goes down in history as the nation to put a stop to falling victim to large

companies and the resource curse

Prime Minister Xanana Gusmão


2. Learn from the mistakes of othersStrengthening Public Financial Management in Timor-Leste


When we in the developing world face these types of crisis, which we do on a more regular basis than our colleagues in

more economically advanced nations — then we are repeatedly told to increase our openness to the global

economy, to trust in the market but to regulate them well. To be honest this approach has worked

Minister of Finance Emilia Pires


3. Transparency

is not an Option



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

20

40

60

80

100

Mobile cellular telephone subscribers Per 100 inhabitants

YouTubeFacebook

TwitterSMS

citizen auditors

4. Transparency = Performance > Embarrassment


Role of Civil Society• NGO’s can help organise literacy groups and provide

materials. They can provide private education andeducation for the blind. They can provide school

materials for students, and assist with school equipmentchairs and books

• NGO’s can help us organise and run technical trainingcourses in our villages

Timor-Leste National Vision


5. Sequenced Holistic Multiple-Year PFM Strategy


Improve budget execution

Improve government capacity

Improve transparency & accountability

Improve government performance

review


Public Financial Management – Foundation for Country Growth

6. Build Capacity



review

• Training beyond software– IT capacity– Project management– Government accounting

• Beyond training– Adaptable help– E-Learning– Knowledge management

• Intuitive systems– Translation including

terminology– Simple & goal-oriented

interfaces

• Mentoring

PFM ModernizationAlignment with Capacity Building

7. Require Sustainability in Partner Performance


8. Adopt International Standards


9. Leverage Open Systems


Transition to Open Environment: Transparency

Domain Closed Transition Open

Transparency Access to Information Document Machine Readable

Data Availability Data for Sale Publish as Exception Do not Publish as Exception

Mode Publish, Audited & Vetted Mixed Near Real-Time

Publishing

ROI Reason Revenue Generation What are they going to do with the data?

Government as Platform

Target Business Community Civil Society & Press Citizens

Transition to Open Systems: Technology

Domain Closed Transition Open

Integration Proprietary within Suite

Support for Industry Standards

Service Oriented Architecture

Middleware Proprietary = Customer Lock

Proprietary/Open Tactical approach

Open Standards = Customer Choice

Viewpoint Open Systems reduce system performance

Open Systems extend value

Open Systems = Extensibility

Extensibility High Costs Need for vendor Ecosystem

Low Cost Application Assembly

10. Leapfrog is possible


Timor-Leste United States Comparison

1. Standards GFS, IPSAS, EITI, IATI, MTEF ? Leaped

2. Performance Management Manager’s Dashboards Various tools across

government To leap

3. Document Management

Manager Document Management

Various Records & Correspondence Catching Up

4. e-Procurement August 15 FedBizOpps To leap

5. Transparency Transparency Portal Data.gov & others - underfunding

Leaping

www.revenuewatch.org


http://www.revenuewatch.org/

How?


Timor-Leste United States

Strategic Vision Holistic 1 Year Budgets, complex election cycles

Government Structure Unitary Federal

Civil Society & Media Seen as Improving Results Seen as “Special Interests”

Government Intervention Seen as Good Seen Suspiciously

1. Standards Ease to Move to International Standards

Long History of Entrenched National Standards

2. Performance Management

Single system data source Multiple entrenched systems3. Document Management

4. e-Procurement

5. Transparency

Links

• Open Systems Enable Government Transparency Leapfrog http://www.freebalance.com/blog/?p=1559

• E-Government Transparency in Developing Countries http://www.cutter.com/offers/egovt.html

• Developing Countries can Leapfrog Developed Countries in Government Transparency http://tech.state.gov/profiles/blogs/how-developing-countries-are

• More: [email protected]


http://www.freebalance.com/blog/?p=1559

http://www.freebalance.com/blog/?p=1559

http://www.cutter.com/offers/egovt.html

http://www.cutter.com/offers/egovt.html

http://tech.state.gov/profiles/blogs/how-developing-countries-are



mailto:[email protected]

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