Friday, October 28, 2011

Politicians exerting more pressure on budgets

Source: The National, 27th October 2011
THE Department of Finance and Treasury is often forced to look outside of the budget to meet unspecified political projects, a forum on budget and finance was told yesterday.
A treasury manager told the Port Moresby forum at
Hideaway Hotel that, often, this added stress and
pressure on department workers.
Assistant secretary, social sector of the budget division, Ruth Veapi attributed this to political decisions made to expend money outside of the budget.
The forum was organised by the Institute of National Affairs.
Veapi advised public servants attending the forum to be prudent in their own budget estimates and to ensure their political bosses were educated on budget processes and the legal requirements under the Public Finances Management Act.
With the 2012 budget due in two weeks, Finance and Treasury, in conjunction with the INA, is staging the forum on “Adapting to change: A review of the government financial controls in PNG”.
Participants would discuss at length the poor response in complying with audit standards, the breaching of financial accounting requirements and the need for greater enforcement.
This year, the total national budget was K9.5 billion. Of this:
lK2.2 billion was for servicing debt. About a quarter of the budget was used on interest and amortisation of loans;
lK2.1 billion was for the development budget; and
lK5.2 billion was for recurrent expenses in the 48 national departments and 36 statutory bodies.
A supplementary budget of K781.8 million was handed down last month, derived mainly from increased commodity prices. Of this, K665.8 million was new appropriation to fund free education while K116 million was to settle the various memorandum of agreements.
Veapi also stressed on the need to “engage ministers earlier in the budget process” and “the Planning Department throughout the budget”.
“Development and re­-
current budgets need closer alignment to ensure recurrent costs of development projects can be met,” she said.
It was also revealed that although the National Planning and Finance departments were located inside Vulupindi Haus at Waigani, communication between staff of the two departments had been non-existent, often resulting in government funds ending up in the wrong hands

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