Question

The new Metropolitan Chief Executive (MCE) of Juamansan District Assembly was a pure party activist with no knowledge in public financial management. Because of his interest in politics however he was an ardent listener of proceedings in parliament and the work of the Public Accounts Committee. He vowed never to be a victim of the Auditor Generals report when it comes to public procurement.
On assumption of office the MCE gave the following instructions:
All procurement of goods, works and services for the Juamansan District Assembly should go through competitive tendering process
In the procurement plan for the next financial year, the Assembly will procure some goods, works and services using established private sector practices as permitted by the Public Financial Management Act 2016 (Act 921).
Required:
As an established District Finance Officer of Juamasan District Assembly for the past fifteen years write a memorandum to the new MCE explaining the circumstances under which his directives in (i) above will not be appropriate. Your memorandum should detail the circumstances under which our public financial management laws will allow his directive in (ii) above and the benefits that come with it. [Total Marks 16]

Answer 1

Answer (i) :-

Memorandum should contain the following :-

· Identify best practices for addressing public financial management issues.

· Identify legal design approaches that have proven effective, based on cross-jurisdictional experiences shared by presenters and fellow participants.

· Analyze and assess domestic public financial management legislation against international good practices.

· Develop and formulate recommendations on how to modify public financial management legislation through law reform to align it to international good practices.

· Explain to stakeholders proposed amendments to public financial management legislation and defend those proposals in discussions and consultation procedures with stakeholders.

Public finance covers the collection of revenues, exercise of spending, financing of deficits and management of public assets, debts and other liabilities. Public finance is conducted according to the principles of centralized and decentralized management. The duties of public administrations are clearly defined in their relevant laws and taken as a basis for resource allocation.

- Fundamental principles of public finance are as follows:

a) Public financial management shall be established and operated as a consistent whole.

b) Public finance shall be conducted in a manner to ensure the accountability of public officials.

c) Fiscal policy shall be formed and governed in concordance with macroeconomic and social objectives.

d) Public financial management shall be conducted in line with 4 the budget appropriated by the Turkish Grand National Assembly.

e) Public financial management shall ensure fiscal discipline.

f) Public financial management shall create the environment needed to develop the public choices in a manner to ensure economic, financial and social efficiency.

g) In ensuring production of goods and services of public administrations and meeting their needs, it is required to make costeffectiveness or cost-benefit.

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Answer (ii) :-

Benefit which comes from the above :-

a) In the preparation and implementation of the memorandums, it is essential to ensure macroeconomic stability together with sustainable development.

b) The spending authority vested to public administrations with the memorandum shall be exercised with a view to perform the duties and services stipulated in the laws.

c) The memorandums shall be prepared, implemented and controlled in conformity with the policies, targets and priorities envisaged in the development plans and programs, and according to the strategic plans, performance criteria and cost-benefit analysis of the administrations.

d) Memorandums shall be negotiated and evaluated together with the memorandum estimations of the next two years by considering strategic plans.

e) The memorandum shall provide a comprehensive and transparent view of the public fiscal operations.

f) All revenues and expenditures shall be indicated in the memorandums with their gross values.

g) It is essential not to allocate certain revenues for some specific expenditure.

h) It is essential to ensure revenue and expenditure balance in the memorandums.

i) Memorandums cannot be implemented unless they are accepted or approved by the Turkish Grand National Assembly or by the authorized bodies before the beginning of the relevant year.

j) Memorandums shall not contain issue irrelevant to memorandum.

k) Memorandums shall be prepared and implemented in line with a classification determined by the Ministry of Finance according to the international standards in a way to exhibit institutional, functional and economic results.

l) Clearness, accuracy and fiscal transparency are essential for memorandum revenue and expenditure estimations and for reporting of implementation results

m) All revenues and expenditures of public administrations shall be indicated in their memorandums.

n) Public services shall be provided with appropriations to be allocated to the memorandums in accordance with the methods, principles and purposes set forth by the legislation.

o) In the memorandums, appropriations shall be allocated to accomplish specific purposes.