Treasury to activate new financial reporting system

Finance Minister Ken Lipenga revealed on Wednesday that government and the World Bank have concluded grant negotiations and will be signing a financial agreement in the near future to activate the Financial Reporting and Oversight Improvement Project (FROIP) in the civil service.

Lipenga observed that implementation of the reform programme will be with assistance from various financial and technical donors.

“Government recognises that sound macroeconomic management including Public Finance and Economic Management (PFEM) is one of the most important underlying principles for budget support. In this regard, government is stepping up efforts in PFEM reforms through the implementation of the PFEM reform programme,” he said.

The minister confessed that government has not made progress on this as planned but said he is happy that the FROIP is now in its final stages of preparations.

He said government is aware of the challenges of budget support with regard to accountability, transparency and results management pledging that government would ensure that Malawi accounts for “every penny and shifts focus to results” as donors would like to see happen.

“This we will do not only for the sake of resources coming from outside but also for domestically generated resources. We strongly believe that this is what we should be doing for our own people who gave us the mandate to lead them,” Lipenga said.

He said currently, a public expenditure review, supported by the World Bank is underway to further improve the efficiency and effectiveness of operations in the government.

The review team, he said, would be engaged to see how it can input into the 2012/14 budget.

In his remarks, Germany’s Ambassador to Malawi Peter Woeste said effective use of FROIP would help any austerity budget.

“Auditing is also one of the areas that form part of the open budget index. This year’s open budget index shows that budget openness in Malawi is improving. Malawi has moved five steps up the ladder. Better than all its neighbouring countries,” said Woeste in Lilongwe.

FROIP is a project that focuses on the Integrated Financial Management System (IFMIS) and accounting, internal audit and external audit.