Reforms In budgeting and expenditure control could help bring In good government through establishing trans-Kirency and accountability, nance Minister M Saifur

Rahman said on Saturday.

Bangladesh could become economically self-reliant, even as early as next year, if excessive wastages in government expenditure were eliminated and a measure of good governance could be introduced, Rahman added

He was addressing as the chief guest at the inaugural session of the seminar on ■Reforms in Budgeting and Expenditure Control" at the t\>bUc Administration Training Centre (PATC) at Savar

Noting that the present budgeting system has major inadequacies', a draft report identified the problems In budgeting as: complex and confusing budget documenta, revenue and development bud g«ds from same resources but no integrated considerations, no budget ceilings provided in advance to departments; man power planning not Integrated but pay-roll is most of budget

cost: 3-year budget only for development and not integrated annual budget and lack of modern technology in preparation.

Saying that the "whole administrative system has to be completely reformed and restructured". the Finance Minister acknowledged that in the budgetery process there Is no effective linkage between current budget with development programmes, manpower planning Is never integrated and top level resource allocation meetings are never held.

"Government accounting, at the moment, is no accounting at all as you cannot make any head or tall out of It," he said, adding that accounting and au ditlng "should be completely isolated and their functions separated "

The Finance Minister went on to note that there are 'a kit of grey areas' which can neither be placed In the revenue nor the development budgets

Retrenchment benefits for excess public sector workers, which would need an ailoca lion of about Tk 500 million in the upcoming budget he

pointed out Is one such area.

Allocations for the Food-for-Work Programmes is placed in the expenditure budget by the government, he added, while the donors place It in the development budget.

"It Is very difficult to know from the budgetcry process as to how much is actually spent on expenditure and how much on development," the Minister said.

The draft report prepared by the International Management Consultants Limited and SF Ahmed A Co, suggested simplifying budget presentation, better integration In preparation of the revenue and expenditure budgets, making lop level resource allocation exercise In ministries with advance ceilings, incorporate manpower plAnnlng Integrate 3 year budgets for revenue and development and computerising budget production

In finance administration, the report concluded, respon sibilities and Unes of command need to be clearly Identified while It Is Imperative to properly segregate audit and ar counts

The primary problems tn finance administration were identified aa: (allure to property separate audit and accounts; Incomplete departmentalisation; lack of a system for monitoring budget compliance and the absence of copies of regulations or forms for accounts preparation tn the accounting offices

The draft report on "Reforms in Budgeting and Expenditure Control" suggested that, in finance administration. It is essential to modernise, translate, reprint and issue rules and regulations; bring about complete departmentalisation; upgrading the accounting offices within ministries and legislation to separate accounts and audit.

Concluding that the present accounting system has ceased to function effectively," the report Identified the problems in the accounting systems as: lack of published audited accounts since 1985-86 for appropriation and since 1987 88 for finance. failure to reconcile with Bangladesh Bank; delay in placing accounting information, which is unreliable and little used and the evolution of parallel systems requiring multiple returns.

It suggested a crash programme to bring accounts up-to-date, make proper forms available tn all offices and add listing machines, provide improved training and supervi-, sion and start computerisation.

Identifying the specific problems 1n the food account as lack of transparency and incorrect accounting, the report suggested getting the accounting and management systems right and ensuring that donors comply with government pol-ky

Noting that the present revenue collection system "positively discourages collections" and has weak control and accounting, the report recommended a study to Improve revenue collection with a goal to substantially enhance domestic resource mobilisation.

In regard to foreign aid, the report pointed out that there are multiple systems of "bemusing complexity" as the government is "donor driven" to put in systems for each donor while there Is also a lack of proper control over funds.

The report suggested getting the accounting system for foreign aid right, ensuring that donors comply with govern ment policy and simplifying the system by abolishing most commercial bank accounts.

On banking and cash management. the draft report said that there is a "complete failure" to reconcile bank balances with accounts and there is no effective cash management system within the government.

The lack of bank reconciliations is a fundamental system failure and the concepts of cash management by government is not properly understood." It concluded.

The report suggested making the bank reconciliations work and initiate the introduction of cash forecasting and management.

Noting that the present classification structure is "cumbersome" and fails to provide important information, the report underlined the need for a modernised system as part of the reforms.

The draft report also identified the "urgent" need to begin computerisation, upgrading the audit and accounts training academy and other training programmes, saying "without training all reforms will fall."

The inaugural session of the seminar was also attended by Finance Secretary Nasimuddin Ahmed, Additional Finance Secretary Syed Amir-ul Mulk and consultant Dr Michael Perry.