U4 Helpdesk Query
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U4 helpdesk replyWeak public financial management (PFM) systems are highly vulnerable to corruption risks. At the same time, corruption can only be effectively prevented and combated if strong, compliant and accountable PFM institutions and practices are in place. There are thus two closely related facets of issues that one needs to consider - how to minimize and address corruption risks and opportunities within the PFM system and how to use the PFM institutions and practices as tools for preventing and detecting corruption. Such a broad discussion is out of the scope of this query, which will focus on providing information relevant to corruption and PFM in Ghana, but we would however like to refer you to two sources that you may want to consult. The U4 Anti-Corruption Resource Centre has this year launched a focus programme area on corruption and PFM, which consists of expert discussions and papers focusing on corruption issues in budgeting, revenue administration and others. The TI Source Book (2000) contains a chapter on Good Financial Management and TI's online Anti-Corruption Handbook (2005) contains a resource page on corruption and Supreme Audit Institutions. With regards to information on Ghana, listed below you will find
i) an overview of country corruption diagnostics, ii) references to
recent PFM assessment tools by the WB and IMF that evaluate the performance
and accountability of Ghana's PFM institutions and practices, and
iii) brief descriptions of anti-corruption bodies and initiatives
(government, civil society and/or donor coordinated) with relevance
to PFM systems and reforms. Finally, some links to additional recommended
resources are provided. Part I: Corruption Snapshot/DiagnosticsGhana's New Patriotic Party (NPP) and President Kufuor came to power
in 2001 with a strong anti-corruption platform and a "zero tolerance
for corruption" pledge. Indeed, in regional terms, Ghana has
faired rather well in recent years as compared to other African countries.
So, for example, TI's Corruption Perception Index 2004 rates Ghana
(with a score of 3.6) as the 7th least corrupt country out of 36 countries
surveyed in Africa. In global terms, Ghana ranked as 64th out of the
145 surveyed countries. The Center for Public Integrity, an international
think-tank, gives Ghana a 'moderate' rating in its Public
Integrity Index, which tracks corruption, openness and accountability
in 25 countries. Whilst Ghana has assured a moderate rating in comparison to its regional peers, national surveys indicate that the public perception of corruption remains at rather alarming levels. Ghana Integrity Initiative's Survey of 2005 indicates that of 900 interviewed respondents, 92.5% thought that corruption is prevalent in Ghana, with 61% reporting that corruption has worsened in the country. Interestingly, however, when asked whether they believe in the government's declared commitment to fight corruption, 51.1% of the surveyed respondents said that they did so. The top three most corrupt public institutions are perceived to be the Police, Ministry of Education and Customs. Several bodies important for the Public Financial Management systems were also named amongst a total of 26 institutions. These include the Internal Revenue Service (at 9), Banking Institutions (at 11), Audit and VAT Services (at 24), and Ministry of Finance (at 26). None were named as 'most corrupt' by more than 6% of the respondents, however. Past tools relevant to measuring corruption in PFM systems include the Revenue Authority Staff Integrity Reviews (2000) and the Budget Transparency and Participation Case Study (2002). Part II: Assessments of Ghana's Public Financial AccountabilityAmongst qualitative assessments of transparency and accountability
relevant to PFM systems, IMF's
2004 Report on the Observance of Standards and Codes - Fiscal Transparency
Module is of interest. The section "description of practice"
contains an account of such issues in Ghana's PFM system as integrity
assurances, public availability of information, open budgeting, etc.
In addition, the report notes that Ghana has in recent years been
making substantial efforts to improve fiscal transparency, including
introduction of new and more comprehensive public financial management
legislation, a strengthened system for controlling expenditure commitments,
improved annual budget statements and voluntary participation in revenue
reporting through the Extractive Industries Transparency Initiative.
While the report acknowledges that Ghana already meets the standards
of the fiscal transparency code in several areas, it also stresses
that the country still falls short in several others. Weaknesses in
external and internal auditing, oversight, incomplete fiscal reporting
are listed amongst these shortfalls. The 2004
Ghana Country Financial Accountability Assessment (CFAA) is a
comprehensive review of the accountability of Ghana's PFM system.
It was undertaken by staff of the Government of Ghana (GOG), the International
Monetary Fund (IMF) and the World Bank (WB), with the support from
donor-funded consultants and other stakeholders. Part III: Anti-Corruption Initiatives and Bodies with Relevance to Pubic Financial ManagementGovernment: The Office of Accountability was established by the President in 2003 to monitor corruption in the public service, particularly by political appointees and senior civil servants. According to the Chair of the Office, Mrs Florence Sai, "the Office of Accountability was established for the early detection and prevention of actions or practices by political appointees. The main object of the Office is, therefore, prevention and this makes it rather different from traditional and more orthodox institutions, which generally are for detecting, proving and punishing culprits for what has already been done". The mandate of the office is derived from the executive authority of the President and premised on a code of conduct, which should guide the performance of all political appointees to ensure accountable stewardship, honest and transparent service delivery and avoidance of any practice that could be perceived as corrupt. The Serious Fraud Office is a public investigative agency set up under the Serious Fraud Office Act, 1993 (Act 466) to investigate public acts likely to result in serious financial or economic loss to the state. We have limited reports as to its effectiveness in practice. The Ghana Integrity Initiative recommends in its conclusion to the survey 2005 that "the Parliament should consider reforming and reviewing legislative instruments establishing the Serious Fraud Office (SFO) to make it sufficiently independent as well as grant it powers of prosecution. This would go a long way to increase public confidence in such institutions, which have been established as instruments of accountability. This would help ensure that acts of corruption and abuse of office do not go unpunished".
The GACC has developed an action plan and drawn strategies for combating corruption. A good description of these efforts, along with analysis of lessons learnt, is contained in a paper by GACC's Secretary General presented at an ADB workshop. With regards to civil society activities around issues of relevance
to PFM, Ghana's Integrity Initiative will, as one of its core activities,
be focusing on programmes monitoring the implementation of and adherence
to the Public Procurement Act. Danish DANIDA has signed a mulit-year
funding support agreement with the NGO. SIDA is funding a capacity building programme of the national audit office through AFROSAI-E/SADCISAI. The regional group AFROSAI-E was conceived as a spin-off from INTOSAI Development Initiative's regional training programme in English-speaking Africa to support capacity development among its members. The 22 members of AFROSAI-E are all also members of the Southern African Development Community Organisation of Supreme Audit Institutions (SADCOSAI). The mission of AFROSAI-E/SADCOSAI is to "co-operate with SAIs
and help them reach the level of audit performance necessary to fulfil
their mandates". The institutional strengthening of SAIs will
add to the dissuasive effect that results from the presence and action
of a strong and effective SAI in the public sector. The regional project
will provide SAIs with basic tools to undertake the fight against
fraudulent practices and embezzlement in their areas of jurisdiction.
The project runs until 2007. For further information, you may contact: [top] Part IV: Recommended additional resources1.
U4 Resource Centre Focus Area on Corruption and PFM
2.
Good Financial Management 3.
Corruption and Supreme Audit Institutions 4.
Ghana Diagnostics 5.
Ghana Anti-Corruption News and Developments
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