Corruption in Nigeria
Joint Africa Institute
Seminar on the Role of Parliamentarians in Promoting Good Public Financial Management and Accountability in Africa
Tunis, November 19-23, 2007
Public Financial Management and Corruption[1]
Public Financial Management (PFM) ordinarily covers the management of government revenue, expenditure and cash. Corruption defined as the diversion of public resources for private use can affect any of these operations, at the level of the national and sub-national administrations. This paper focuses on circumstances that are prone to corruptive practices in managing expenditure and cash at the national level. It does not discuss revenue.
The outline of the paper is as follows: Sections I and II provide an overview of PFM and corruption, respectively. They are followed in Section III by a brief analysis of the relationship between corruption and the budget process and the requirements for reducing this malfeasance.
I. An overview of PFM
What is PFM?
PFM can be defined as framework of laws, regulations, traditions and practices for managing government finances in order to achieve macro-fiscal stability (real growth with low inflation, no payment arrears, sustainable debt, etc.), an optimal allocation of resources (increased social welfare), efficiency of public spending (more public goods and services at lowest market prices), and good governance (transparency and accountability). PFM regulates procedures that apply in four broad areas: budget, treasury, accounting, and control.
The budget is prepared by the executive branch which, in turn, sends it to the legislature for debate and adoption. A good budget is timely, comprehensive and presented using a simple and easily understandable terminology. After approval, it is implemented by the government which is responsible for providing timely budget execution reports. The budget is executed at four key stages: commitment, verification, payment order, and payment.
Treasury procedures and operations
Seminar on the Role of Parliamentarians in Promoting Good Public Financial Management and Accountability in Africa
Tunis, November 19-23, 2007
Public Financial Management and Corruption[1]
Public Financial Management (PFM) ordinarily covers the management of government revenue, expenditure and cash. Corruption defined as the diversion of public resources for private use can affect any of these operations, at the level of the national and sub-national administrations. This paper focuses on circumstances that are prone to corruptive practices in managing expenditure and cash at the national level. It does not discuss revenue.
The outline of the paper is as follows: Sections I and II provide an overview of PFM and corruption, respectively. They are followed in Section III by a brief analysis of the relationship between corruption and the budget process and the requirements for reducing this malfeasance.
I. An overview of PFM
What is PFM?
PFM can be defined as framework of laws, regulations, traditions and practices for managing government finances in order to achieve macro-fiscal stability (real growth with low inflation, no payment arrears, sustainable debt, etc.), an optimal allocation of resources (increased social welfare), efficiency of public spending (more public goods and services at lowest market prices), and good governance (transparency and accountability). PFM regulates procedures that apply in four broad areas: budget, treasury, accounting, and control.
The budget is prepared by the executive branch which, in turn, sends it to the legislature for debate and adoption. A good budget is timely, comprehensive and presented using a simple and easily understandable terminology. After approval, it is implemented by the government which is responsible for providing timely budget execution reports. The budget is executed at four key stages: commitment, verification, payment order, and payment.
Treasury procedures and operations
References: The Corruption Notebooks 2006, Stories From the Worldwide Struggle Against Abuse of Power, Edited by Jonathan Werve and Global Integrity, Global Integrity, 2007. Dorotinsky William and Pradhan Sanjay in The Many Faces of Corruption, Tracking Vulnerability at the Sector Level, Edited by J. Edgardo Campos and Sanjay Pradhan, The World Bank, 2007. Isaksen, Jan (2005), The budget Process and Corruption, Chr. Michelsen Institute, U4Issue 3:2005. The Many Faces of Corruption, Tracking Vulnerability at the Sector Level, Edited by J. Edgardo Campos and Sanjay Pradhan, The World Bank, 2007. Manual on Fiscal Transparency, Fiscal Affairs department, IMF, Revised edition, 2007.