The Government of Sierra Leone through the Ministry of Finance is set to “Improved Cash Management through the establishment of the Treasury Single Account (TSA) and strengthen the Cash Management Committee”.
This reduces accumulation of arrears and short term borrowing costs.
This was disclosed by a team led by the Minister of Finance and Economic Development (MoFED), Mr. Momodu Kargbo on Thursday during a pre-legislative stage of a Bill entitled “the Public Financial Management (PFM) Bill 2016”, a stage which gives parliament the opportunity to scrutinize government legislative policy before a bill’s text is firmly entrenched.
The open-door meeting which was hosted by the Finance Committee took place at the Conference Room l of Parliamentary Building.
Presenting the Bill, the Legal Adviser of MoFED, Mr. Farid Alghali said MoFED in collaboration with key stakeholders, including the International Monetary Fund (IMF) and the World Bank (WB) undertook an extensive review of the Government Budgeting and Accountability Act of 2005 (GBAA 2005) since 2008, stating that the objective of the review was to improve the legal framework governing public financial management in Sierra Leone.
He disclosed that the ensuing benefits of enacting the PFM Bill includes strengthen financial controls, accountability and probity in the utilization of resources across government, sound financial and economic management and governance of anticipated resources from Extractive Industries.
Mr. Alghali said the main features of PFM Bill includes introduction of cash planning requirements and strengthening of accounting, financial reporting, and auditing by aligning public sector accounting with international standards and broadening the scope for budget documentation and financial reporting, adding that it also contains establishment of a Transformational Development Fund Account (TDFA), a Transformational Development Stabilization Fund (TDSF) and an Intergenerational Savings Fund (ISF).
Other features, he said, are provisions for the management of Extractive Industry revenues to provide resources to support the government’s transformational development agenda; to ensure that spending takes into account the overall absorptive capacity of the economy and to insulate the budget from Extractive Industries revenue volatility and provisions to establish and calibrate the fiscal rule and its application to the annual budget process.
Making her contribution, Hon. Bernadette Lahai said she was expecting the presentation to explain to them the salient deviation from the original act to where they are going by actually leading them through the document, pointing out some of the key deviations and those contentious issues raised by Parliament through the Office of the Clerk and how those issues have been brought on board.
Other Parliamentarians raised similar issues, while others were asking for clarification and explanation on certain areas in the PFM Bill.
The Team from the Ministry of Finance responded to some of the issues raised by them and the unanswered questions are to be adequately settled in the Well before the approval of the PFM Bill.
Responding to Hon. Lahai comment, Mr. Alghali highlighted most of the contentious issues including Section 5 (1) (f) and (l) give MOFED control over public moneys through TSA and control over Extractive Industry revenues.
He said there is no such provision in the current provision in GBAA 2005.
The Clerk comments or suggestions on the issue is “This is contentious with several Ministries Department and Agencies (MDAs), complaining and asserting that it is contrary to their own governing Acts. A list of such MDAs and their governing legislation to be compiled requiring them by His Excellency’s Executive Order to amend their Acts in line with provisions in the PFM Bill/Act 2015”.
According to Mr. Alghali, the consultative committee resolutions are: “It was agreed that the TSA provisions in the PFM Bill relate to the management of government resources and not the transfer of those resources out of agency accounts. The controversy relating to the TSA and the transfer of resources is resolved by the proposed Fiscal Management and Control Bill (FMCB) 2016 which has the object of directing agencies of Government to transfer all revenue into the Consolidated Fund. It was agreed that an amendment be made to the FMCB, as currently drafted, to remove the schedule and insert a blanket provision which removes the right of retention of the relevant agencies”.