Government of South Sudan Capacity Building Trust Fund

1. Government of South SudanCapacity Building Trust Fund Readiness Assessment for Professionalisation of Public Financial Management End of Assignment Presentation Tony Redmond Assistant International Director, CIPFA 22 November 2011 Professionalising Public Financial Management

2. Content of Presentation Methodology and conduct of the Readiness Assessment Outline structure of accountancy profession Analysis of issues/challenges encountered Identification of offsetting strengths Recommendations – Public Financial Management Recommendations – Government Accountancy Training Centre (GATC) Professionalising Public Financial Management

3. Terms of Reference • The study was required to cover the following areas:- • the current state of financial management reform in South Sudan:- • systems and procedures, progress in reform, extent of existing professionalisation, commitment to the idea; • the PFM human resource capacity development infrastructure of South Sudan:- • existing qualification provision (extent, accessibility, content), teaching institutions, • the role and activities of the local accountancy profession in South Sudan:- • size and scope, development state, extent and effectiveness of regulation, relationship with government • Examination of relationships between donor partners, government and profession • Business planning for GATC Professionalising Public Financial Management

4. The Accountancy ProfessionArchitecture - Institutions • International Federation of Accountants • Membership body for national professional bodies • Member bodies must meet certain rules about education standards, admission requirements, ethical and behavioural standards and life-long learning (pre- and post-qualifying development programmes) • National Accountancy Institutes • Assess suitability of aspirant members for admission • Develop and enforce ethical and behavioural codes of conduct • Provide technical and other forms of support to members • Adopt and enforce national and international accounting standards • Must act always in the public interest not just the sectoral interests of their members Professionalising Public Financial Management

5. The Accountancy ProfessionArchitecture - Standards • International Accounting Standards Board • Develops and disseminates standards for the practice of accountancy and audit worldwide – International Financial Reporting Standards (IFRS) and International Auditing Standards (IAS) • IFRS and IAS standards are mandatory on all bodies in membership of IFAC (but can be adapted for local use) • Public Sector Committee of IASB • Development of International Public Sector Accounting Standards (IPSAS) • International Organisation of Supreme Audit Institutions (INTOSAI) • External audit standards for the public sector – ISSAIs • National Accounting Standards Boards • Development of local standards and adaptation of international standards Professionalising Public Financial Management

6. Professionalism • Professionals:- • possess the wide range of underpinning knowledge and understanding to carry out their own work and also to comprehend the wider issues relating to how systems and procedures interact; • display work-related competences which enable them to deliver the outputs required of them efficiently and effectively and with minimum levels of supervision; • comply with independently established and enforced standards in the execution of their work and the exercise of their technical and managerial responsibilities; • have demonstrated their mastery of the necessary knowledge and competences through definitive, summative assessments conducted by an independent assessment agency; • are committed to a programme of lifelong learning to adapt and improve their knowledge, understanding and competence in line with developments in their field; • subscribe to an independent code of conduct which governs their attitudes and behaviour and breaches of which can lead to externally imposed sanctions on their continued status and earning capacity. Professionalising Public Financial Management

7. Professionalisation is........ • NOT training • a systemic transformation of the way work is done Professionalising Public Financial Management

8. Professionalisation • Professionalisation requires:- • the contextual conditions conducive to the establishment and sustainable development of the environment in which professionals can flourish; • the existence of individuals qualified to become members of the profession in that country • non‑financial managers and other role players having the skills, support and other resources to play their part in financial management, including taking responsibility for the resources they manage and formulating and controlling their budgets; • the presence, on a sustainable basis, of a recognised profession in the country, normally represented by a professional association, body or institute; • training capacity locally to provide the, products and services required by the financial management community in the country or region Professionalising Public Financial Management

9. Financial Management Reform in Emerging Countries • Currently three main (inter-connected) approaches:- • reform of technical systems, • new equipment and technology, • ad hoc (short course) training to support reform • Increasing concern amongst development partners at sustainability of this approach • High quality financial management is associated with the development of professionally qualified personnel backed by externally enforceable accountancy and audit standards • Long-term gains will be consolidated only through a step-change in the levels of competence of accountancy and audit professionals Professionalising Public Financial Management

10. The Recognition StudyWhat Happened? • Arrived Monday 7 November (departing pm Tuesday 22 November) • Meetings with • Government finance professionals in • the Audit Chamber • the Ministries of Finance of Central Government and East Equatoria State • The Local Government Board • Human Resource Development - Ministry of Labour • Donor partners – World Bank, JDT, DFID, USAID, CIDA, AfDB • Donor Coordination Unit of MoFEP • GATC and the University of Juba • Project managements in PFM field – MoFEP, CBTF • Coordinator of embryo accountants’ association • Study of various documents from MoFEP, Ministry of Labour, donor partners, GATC consultants • Final Report and recommendations due by 31 December 2011 Professionalising Public Financial Management

11. So where do we go from here.......? We can’t go on like this............ But we mustn’t change anything...... Professionalising Public Financial Management

12. We can’t go on like this....The Challenges • Low or very low capacity throughout the public financial management system • Lack of effective ‘soft’ support systems – HRD policies and procedures, job descriptions, financial regulations and codes • Absence of strategic vision of how to tackle these • Efforts to address needs heavily concentrated on Juba • Uncoordinated approaches between donor partners and individual government institutions – supply led initiatives • Minimal skills transfer to date – capacity replacement rather than capacity development • Workbased training not related to professional development • GATC in its current manifestation is unsustainable • Short-term consultancies in GATC have failed to achieve any real improvement in standards or extent of professional development • No local professional body in either private or public sector hence no local accounting or ethical/behavioural standards • No access to international standard qualifications in the profession • Widespread concerns about work ethic in the civil service Professionalising Public Financial Management

13. Some Rays of Sunshine! • Things can only get better! • Widespread recognition in government that standards must be raised • Government plans for budget support from donor community – incentive to improve • Data on accountants working in central ministries now being collected (but needed for budget, internal audit and procurement specialists as well) • Audit Chamber strategic plan completed and awaiting approval • Ministry of Labour strategic plan on HRD in the civil service nearing completion • PFM donor group now established and operational under the leadership of the World Bank • First stirrings of activity in establishment a local professional association Professionalising Public Financial Management

14. But we must change things.......Some Big Answers…….. Long Term strategy (up to 15 years in 5-year tranches) based on improved information and communications INTEGRATION INTEGRATION INTEGRATION between technical reform projects and training strategy donor-funded initiatives and identified/prioritised training needs (and with each other) workplace training and professional development PFM HRD strategy and civil service HRD strategy professional development and skills transfer to local personnel professional and technical training and basic skills development training strategy and recapacitation of GATC training strategy and ‘software’ developments in PFM institutions public and private sector professionalisation Commitment to see the strategy through – no more ‘two-year’ solutions! Professionalising Public Financial Management

15. .......Leading to the Big Idea Appoint a PFM Capacity Building ‘Czar’ who would:- be the custodian of the strategic plan coordinate with government and donor partners on implementation of the plan packaging activities into specific projects specifying and tendering for implementation of packages oversee the recapacitation of GATC ensure extensive skills transfer at all levels of the PFM system provide assistance to the emerging accountants’ association be recruited initially with the support of an international professional body with substantial PFM experience work with PFM institutions on the development of ‘software’ start work no later than mid 2012 Professionalising Public Financial Management

16. Recommendations Two sets General PFM Short-term (January to June 2012) (Foundation Stage) Medium Term (July 2012 to June 2015) (Intermediate Stage) Long term (from July 2015) (Implementation Stage) GATC Short term Medium term Long term Professionalising Public Financial Management

17. CIPFA International Certificate and Diploma in Public Financial Management • Certificate Stage • Financial Accounting (including introduction to audit) • Management Accounting (including budgeting) • ‘Local’ Module (Public Financial Management in South Sudan) • Diploma Stage • Financial Management • Financial Reporting in the Public Sector • Auditing and Assurance • Managing Organisations • Professional Stage • Conversion to full CIPFA professional qualification Professionalising Public Financial Management

18. Short Term General PFM Immediate, comprehensive training needs assessments (TNAs) in MoFEP and line ministries of central government (accounting, budgeting, internal audit and procurement) and the Audit Chamber Two-month scoping study to develop, cost in detail and gain agreement for the strategic plan Immediate start on workbased training in the Audit Chamber (using earmarked funding) GATC Develop strategic relationship with appropriate national and international bodies Conduct feasibility and developmental study for the delivery of CIPFA’s International Certificate and Diploma (IBD) at the Centre (later in 2012) including training of trainers Identify and earmark up to 30 potential trainees for first iteration of ICD who will form faculty of GATC once qualifications completed Establishment of provision to support ‘stranded’ ACCA students Move responsibility for GATC from planning to accounting directorate of MoFEP Upgrade and make new appointment to posts of Head of GATC and deputy Install a generator (PLEASE, SOMEONE!) and make plan for rehabilitation Review overall business plan, make detailed implementation plan and GAIN GOVERNMENT AGREEMENT TO MAKE THE CHANGES NEEDED Professionalising Public Financial Management

19. Medium Term - 1 General PFM Appoint and deploy PFM ‘Czar’ Develop job descriptions, job specifications, management structures and other regulatory requirements of MoFEP, Audit Chamber and GATC Commission and implement workbased training in MoFEP based on workplace competences identified in TNAs Develop management capacity in PFM institutions in cooperation with Ministry of Labour HRD strategies and plans Conduct ‘Recognition Study’ covering all PFM institutions – deployment and retention of qualified staff Develop internal training and professional development capacity in MoFEP and Audit Chamber to complement professional development courses in GATC Develop and deliver training in finance for non-financial managers throughout central government in conjunction with Ministry of Labour Conduct comprehensive in-depth TNAs for States and local authorities and commence training delivery Provide support (and funding) for development of local professional body following IFAC guidelines (including strategic and business plans) and seek sponsor organisation to assist with IFAC accession Critically appraise progress and prepare/modify plans for long-term implementation Professionalising Public Financial Management

20. Medium Term - 2 GATC Operate one full iteration of CIPFA ICD course for pilot group from July to December 2012 Send best three (?) performers to the UK on secondment to complete full CIPFA professional qualification Plan for implementation of full chartered accountancy qualification (including fast track scheme for senior staff) locally in conjunction with supporting professional body(s) Work with Ministry of Higher Education etc to establish recognition of qualifications Support University of Juba to update and further develop degree and diploma courses (especially public sector options) Provide study tour facilities/secondments for GATC management to similar government training establishments abroad Using successful graduates implement longer-term CIPFA ICD training programmes from early 2013 Integrate professional training plans with basic skills development provision Implement business plan – recruitment and deployment of managers, teaching faculty and support staff and rehabilitation of facilities Develop necessary competences to support workplace training in PFM institutions Capacitate Centre to provide training in States as well as Juba Professionalising Public Financial Management

21. Long Term - 1 • General PFM • First long-term plan to be conducted on five-year basis • Roll out lessons learned and procedures developed in central government to the States and local authorities • Roll out training for non-financial managers to States and local government • Continue to implement workbased training programmes in coordination with overall PFM and capacity building strategies • Implement strategic and business plans for local accountancy association recruiting and training staff and developing membership, technical, educational and disciplinary procedures • Initiate and implement process of application for membership of IFAC Professionalising Public Financial Management

22. Long Term - 2 • GATC • Continue to provide basic, foundation and intermediate level qualifications and tailored short-course training • Develop and implement qualifications courses relevant to the private sector • Implement professional stages of existing qualifications (including the fast track scheme) • Work with new accountants’ association to develop education and training policies and functions • Continue to recruit and develop suitable faculty staff to cope with expanded responsibilities • Establish teaching and assessment operations at State level Professionalising Public Financial Management

23. GATC Business Plan • Overall aim – to create a centre of excellence for the provision of accountancy, audit and procurement education and training for government and, ultimately the private, sector in South Sudan • The way forward • Change the attitude of government and government employees to working and studying at the Centre • Improve government supervision and expand government funding • Forge strategic partnerships with international and domestic players • Strengthen management and operational capacity • Improve physical infrastructure • Transfer skills to local personnel • Develop effective quality assurance procedures • Change the business model – funding through fees and charges for services provided rather than through government budgets • Develop national coverage through delivery of teaching/ training in States Professionalising Public Financial Management

24. Please get in touch www.cipfa.org.uk tony.redmond@cipfa.org.uk Professionalising Public Financial Management

25. A Final Thought........... We can’t go on like this............ But we WILL change things...... Professionalising Public Financial Management

26. Thank you Professionalising Public Financial Management