Bhutan and Effective Public Financial Management

accapr —  14 April 2014 — Leave a comment

By Jigmi Rinzin, Parliamentarian, Bhutan

While Bhutan has a very good monetary and financial mechanism in place, we have only just started on the evaluation front when it comes to public financial management.

It is important to mention that this is not a unique position for Bhutan. The entire South Asian region is undergoing a shift when it comes to evaluation. This offers the countries within the region a unique opportunity.

Being a member of the National Council, a view of the House of Parliament in Bhutan allows me a unique perspective. I look at the roles of parliamentarians beyond legislation.

I am a member of Parliamentarians’ Forum on Development Evaluation (PFDE) with colleagues from other South Asian countries. We collectively aim to provide enabling environments in our respective countries.

In Bhutan, I’m a member of the Evaluation Association of Bhutan (EAB) where we work towards facilitating the practitioners, evaluators and other stakeholders involved in monitoring and evaluation for effective and efficient conduct of their roles and responsibilities.

A National Council Member’s foremost mandate, besides legislation, is to review performance of governments, NGOs, civil society and other bodies critical to the functioning of the state machinery. When you have a duty to review state functionaries, monetary evaluation ends up having a great deal of relevance.

Bhutan has a designated office: a division under our Gross National Happiness (GNH) Commission (Bhutan’s Planning Commission) called the Research and Evaluation Division. This Division is the centre-coordinating agency for monitoring and evaluation in the country.

Since the implementation of the National Monitoring Evaluating System in 2006, the Royal Government of Bhutan has been working on developing the policy for this subject matter. There is a need for a comprehensive policy on evaluation to ensure transparency and accountability in public sector development projects.

As a parliamentarian, I play a role in ensuring the right policies are in place that provides the necessary enabling environments. Although this might sound broad, what it means in practice is ensuring that we concentrate on developing a complete and whole evaluation culture and system within Bhutan, which at the moment is something that needs to be worked on.

To go even further, Bhutan will need to work harder towards the application of international standards in order to strengthen decision-making, management and accountability. Implementing such standards can be achieved through development reforms.

Effective public financial management (PFM) can only be achieved through better quality accounting and public audit processes.

In Bhutan, we have the Royal Institute of Management (RIM) which provides high-level training in professional development for management and growth in the country. RIM provides formal MBAs, postgraduate certificates and diplomas.

Formed in 2010, Accounting & Auditing Standards Board of Bhutan (AASBB) is involved in spearheading the development of Bhutan Accounting Standards (BAS) and Bhutanese Standards on Auditing (BSA).

ACCA is a body that could provide substantial support to the Bhutan accounting profession. Adopting ACCA public sector programmes for local conditions could provide a path for sustained and improved training. ACCA could explore collaborating with the RIM and AASBB.

When it comes to the subject of corruption, Transparency International’s index of perception of corruption for 2013 placed Bhutan in 31st position among 177 nations and 1st in the South Asia region. For a new democracy, this ranking is impressive.

Our arrangements for audit and legislative accountability has played a key part in allowing Bhutan to rank the highest among South Asian nations when it comes to the perception of corruption.

Bhutan’s Public Accounts Committee (PAC) serves to reinforce our democratic culture by reiterating on principles of good governance, accountability, transparency and the public debate.

PAC members are chosen on the basis of their reputation for their integrity. The PAC is seen to add value to the audit reports through scrutiny of government performance. It reviews them, questions witnesses, examines facts and figures, gathers and sifts evidence, makes recommendations and conducts follow-up on their implementation.

These measures play a crucial part in creating a sound system and culture without which would translate to an increasingly difficult road ahead when it comes to continuing the Kingdom of Bhutan’s healthy track record of transparency.

Bhutan has achieved a lot in a little time and the challenge now is to sustain momentum in combating corruption and consolidating democratic culture in the country.

Through the PAC and other Committees, Parliament must go beyond financial scrutiny to assure every programme initiated by the government brings maximum value for money.

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