Public Financial Management for PRSP - Deutsches Institut für ...

Stefan Leiderer et al.
ing due to observed weaknesses in the expenditure control system. Initially,
the cash budget system was devised as a temporary measure, but it remains in
place as a central tool for budget control and stabilisation. In order to improve
planning security for spending agencies, at least partially, a credit ceiling
allocation system was introduced. This system provides spending agencies
with a tentative three-month allocation forecast. Each ministry and public
agency holds various bank accounts (for personnel, administration, loans,
donors, projects, programmes etc.) at commercial banks. The ceilings or
spending limits for each ministry, public agency and category of expenditure
are determined by the Accountant General and are then communicated to the
Reserve Bank of Malawi and commercial banks holding government accounts.
Controlling Officers can draw cheques and payments based on the
spending limits from their respective bank accounts and the Reserve Bank of
Malawi only reimburses cheques within the respective ceilings to the commercial
banks. (European Commission 2002, 53; World Bank 2003, 7).
At the beginning of each month all line ministries are required to submit an
Expenditure Return Report to the MoF. This report provides information
about all the expenditures incurred during the month. These reports are based
on information from cost centres of line ministries and districts. The timely
submission of the Expenditure Return Report is a prerequisite for the release
of funds in the following month (European Commission 2002, 13, 55).
Until recently, reporting was done manually. However, in 1996 the government
started implementing an Integrated Financial Management Information
System (IFMIS) to computerise all records. This system should help to provide
timely and accurate financial information, to improve and strengthen
financial control, to introduce a standardised integrated financial management
reporting system for the GoM at various operational levels and to provide the
Accountant General with an upgraded computerised accounting system
(World Bank 2003, v).
Monitoring, budget control and evaluation
The government has developed a master plan for monitoring and evaluating
the progress of implementing the MPRSP at a strategic level. This plan consists
of five components:
— Poverty Reduction Strategy Monitoring
— Poverty, Vulnerability, and Inequality Monitoring
62 German Development Institute