Business

Gov't faces challenges with public sector reform

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Sunday, November 12, 2017

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Auditor General Pamela Monroe Ellis, in examining the components of Minister of Finance and the Public Service Audley Shaw's Fiscal Policy Paper (FPP) Interim Report, says that the final wage settlement for public sector workers could exceed the contingency provisions in the current budget.

“This is a risk to the expenditure budget and the overall fiscal programme, which requires the attainment of the legislated target of nine per cent of GDP by financial year 2018/19,” Monroe Ellis said.

She added that, of note, section 48D of the Financial Administration and Audit (FAA) Act requires that “fiscal risks are to be managed prudently with particular reference to their quality and level”.

The issue raised by the Auditor General comes in the wake of the delayed negotiations between the ministry and the government employees, especially those represented by the trade unions which fall under the umbrella of the Jamaica Confederation of Trade Unions (JCTU).

It also comes on the heels of recent calls from the International Monetary Fund (IMF) for the government to step up the pace of its public sector reform, as well as the need to increase the level of funds available in the annual budget to do things other than compensating government workers.

Incidentally, the Auditor General's report – tabled in the House of Representative recently – was based on her examination of the FPP Interim Report tabled by Shaw, at the end of September.

Amendments to the Financial Administration and Audit (FAA) Act and the Public Bodies Management and Accountability (PBMA) Act in March 2014 enabled the Government to adopt the enhanced fiscal rules, requiring that the annual Estimates of Revenue and Expenditure (Budget), and the accompanying FPP, be tabled simultaneously in February of each year, commencing in February 2015.

This allows for approval of the annual budget, prior to the end of the fiscal year on March 31.

However, in 2016 the unexpected general election prevented the tabling of the budget in February. But this year, things are back to normal. The Estimates of Revenue and Expenditure were tabled on February ninth, allowing for the approval of the budget by both Houses on March 31.

Under the enhanced fiscal rules, the Minister of Finance is required to table the FPP Interim Report within six months of the passage of the Budget, which means that Shaw's tabling of the report on September 26 fell within the required timeline.

The Auditor General's responsibility, as set out in the FAA Act, is to examine the components of the Minister's FPP and report to the Houses of Parliament.

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