The Minister of Finance Designate, Dr Mohammed Amin Adam, has appealed to chief directors and heads of all Ministries, Departments and Agencies (MDAs) to ensure strict compliance with their stated budgets for the year in order to curtail overruns.
To achieve this, he said, it was imperative that they engaged their political heads and not commit to projects which had not been budgeted for no matter which quarters they are coming from.
Dr Adam made the call at the opening of a day's sensitisation and training workshop on the government's new strategy to deal with the challenge of the Spending Arrears Clearance and Prevention Strategy and Evidentiary Requirement (SACPSER) for prosecution under the Public Financial management (PFM) Act in Accra yesterday.
"I would therefore appeal to all chief directors and heads of the covered entities to embrace these expenditure reforms as you go through today's sensitisation session and provide your input to strengthen the measures. I would count on you to engage your political heads on the government's policy direction to ensure the effective implementation of the measures at your various entities," he emphasised.
He said the accumulation of arrears which had become prevalent in many emerging and sub-Saharan African economies had increased in recent years and become a key economic policy challenge, stressing, "In Ghana, arrears constitute a sizeable portion of public expenditure that require pressing reforms."
The minister said the government had prioritised and resolved to address the issue of arrears which had been accumulated over the years as a result of disregard for budget commitments.
"In the Public Financial Management (PFM) Act, 2016, Act 921 and its Regulations as well as the five-year Public Financial Management Strategy: 2022-2026, Government has rightly prioritised and resolved to address this challenge," he said.
Dr Adam said the SACPSER was a comprehensive strategy designed and approved by the government to deal with and prevent the accumulation of arrears.
"This is in direct response to the constant accumulation of arrears, which indicates the challenges associated with effective execution of planned budget operations occasioned by rigidity of the budget (where some revenue lines are earmarked for the Statutory and Other Earmarked Funds), unbudgeted expenditures, weak commitment control and poor expenditure management (including issues of MDAs committing the government without recourse to the Ministry of Finance and the Medium-Term Expenditure Framework) as well as the non-application of PFM sanctions to serve as a deterrent to culpable officials," he emphasised.
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The Director of Budget at the Ministry of Finance, Mr Isaac Fraikue, explained that the workshop was to bring to the attention of the covered entities government's policy to address the weak commitment controls and expenditure management.
He said as part of the measures to prevent future accumulation of arrears, the government had established the Public Financial Management Compliance Desk (PFM- CD) at the Ministry of Finance.
"The work of the PFM-CD is to develop and propose for implementation various measures to enhance and enforce compliance with the Public Financial Management laws to promote strict budget commitment control; and ensure transparency in public procurement and accountability in the use of public funds," he emphasised.
Mr Fraikue appealed to the heads of the MDAs to be abreast of the new strategy and ensure that there was full compliance.
