Report No. 40130-STP Democratic Republic of São Tomé and Príncipe Country Integrated Fiduciary Assessment (In Four Volumes) Volume IV: Country Financial Accountability Assessment and Evaluation of Ongoing Reforms June 2007 Poverty Reduction and QK Procurement (AFTPC) Economic Management 3 QK Financial Management (AFTFM) Africa Region Africa Region Document of the World Bank Sfo Tomb and Principe Country Financial Accountability Assessment Table of Contents ABBREVIATIONS AND ACRONYMS i PREFACE I V EXECUTIVE SUMMARY V I CHAPTER I: CFAA 1 1. LEGAL AND REGULATORY FRAMEWORK 1 2. PREPARATIONOF THE BUDGETLAW 2 Presentationof the Budget Document 4 The Design of the Fiscal RevenueFramework 4 TheFiscalExpenditureFramework 5 Budget Nomenclature 8 Publicationof the Budget Document 9 3. BUDGET EXECUTION 10 Provision of Budget Allocations to Line Ministries 10 RevenueMobilization Process 10 Expenditure ExecutionProcess 12 Accounting management 15 Budget and Accounts Reporting 16 The Information System 17 4. CONTROLS 19 Administrative Controls (Internal) 19 Judicial Control 20 Legislative Control 21 5. DECENTRALISATION 23 6. PUBLIC ENTERPRISEMANAGEMENT 24 General Descriptionof The Public Enterprise Management System 24 General Recommendation 24 Specific Examples of the Public EnterpriseManagement System 25 7. COMBATINGCORRUPTION 29 The Absence of anInstitutionalNatureinthe Fight Against Corruption 29 Analysis of the Current Environment Affecting the Fight Against Corruption 29 MainRecommendation on Combating Corruption 30 8. HUMANRESOURCES 31 The Persistent HumanResourceProblem 31 MainRecommendation for HumanResourceCapacity Building 31 CHAPTER I1: EVALUTATIONOF ONGOINGREFORMSAS OF JUNE 2006 32 1. LE CADRE LEGAL ET REGLEMENTAIRE DANS LA REFORME DES FINANCES PUBLIQUES 32 11 L e Projet de Revision de la L o i Cadre 32 Les Actes Reglementaires d'application de la Future L o i Cadre 34 2. LA PREPARATION DE LA LO1DE FINANCES DANS LA REFORME DES FINANCES PUBLIQUES 36 Procedure et Calendrier Proposes 36 L a PresentationProposee duDocument Budgetaire 37 L e Cadrage Propose des Recettes Budgetaires 38 L e Cadrage Propose des Depenses Budgetaires 39 L aNomenclature Budgetaire 40 L a Publication du Document Budgetaire 41 3. L'EXECUTIONDUBUDGET DANSLA REFORMEDES FINANCESPUBLIQUES 42 L a Mise a Disposition des Credits aux Ministeres Sectoriels 42 L a Procedure d'Execution des Recettes. 42 Les Procedures d'Execution des Depenses 43 L a Gestion Comptable 44 L e ReportingBudgetaire et Comptable 47 L e Systeme d'Information 48 4. LESCONTROLESDANS LA REFORMEDES FINANCES PUBLIQUES 50 Les Contrdles Administratifs (Internes) 50 ListofAnnexes Annex 1: L e Programme de Modernisation des Finances Publiques de Sao Tome...................... 53 Annex 2 : L a Composante"Reforme des Finances Publiques" du PATRCG .............................. 56 Annex 3: L a Reference pour Sao Tome et Principe-- L a Reforme de Gestion des Finances Publiques d'hgola. .................,...........,,............................,..................................................... .. Annex 4: L e Contenu Detail16 du Projet de L o i Cadre des Finances Publiques de Sao Tome. ........57 58 Annex 5: Republique de Sao Tome et Principe Indicateurs de haut niveau sur la performance de la gestion des finances publiques, PEFA. ...................................................................................... 62 ListofChart Chart 1: Actual calendar for the preparation o fthe 2006 Budget Law........................................... 3 ListofTables x Table 2: Summary Matrix o f MainRecommendations............................................................... Table 1: Evaluationo f Current Public Finance Management Risks............................................... xvii Table 3: Execution Rate o f Tax Revenues...................................................................................... 4 Table 4: ExecutionRate o fNon-tax Revenues ............................................................................... 5 Table 5: ExecutionRate o fTotal Revenues.................................................................................... 5 Table 6: Execution Rate o fTotal Expenditures .............................................................................. Table 7: Initial Estimates inBudget Laws by category o f expenditures, in billions ofDobvas ......6 7 10 Table 9: Controls Conducted by the General Inspectorate o f Finance, 2004 - 2005.................... Table 8: Changes inFiscalRevenues, 2002-2004 ........................................................................ 19 ... 111 PREFACE The main objective o f this assessment o f public finance management in Sao Tome and Principe, known as the Country Financial Accountability Assessment (CFAA), i s to examine financial management mechanisms in the public sector and to assess the related fiduciary risks, without seeking to provide assurances for eventual proper use o f the public resources allocated.' The current CFAA was undertaken in June 2006 andfalls within a special context in Sa0 Tome.I n early 2005, the authorities launched apublicfinance management reform, based on the Angola model. At the request o f the authorities, this document contains three volumes: Volume Icontains the actual CFAA and provides an analysis o f current financial management (plus PEFA indicators. Volume I1provides technical evaluation o f the ongoing public finance reform as o f June 2006 .The thirdvolume presents the annexes. The importance o f this exercise lies in the fact that it i s taking place at an opportune moment for Sao Tome authorities who requested it, but also in the fact that the CFAA adheres, notably, to the recommendations stemming from previous diagnoses, which had been jointly conducted by the World Bank and the InternationalMonetary Fund, and which focused on public finance management within the context o f the HIPC Initiative (December 2003)* as well as on other observations made by other donor^.^ The mission concluded the CFAA analysis with an assessment of the PEFA indicators, based on available and measurable information in June 2006. This tool will prove particularly useful for the authorities as it will constitute a baseline against which it will be possible to measure, inthe coming years, the benefits o f the public finance reformbeing designed and adopted. PEFA indicators do not lead to any recommendations, nor do they try to assess the future impact o f this public financial management reform. Besides, these indicators do not deal with fiscal policy in terms o f the adequacy o f various expenditures. There is thus convergence and complementarity between the use o f PEFA indicators, and the analysis which can result from the CFAA diagnosis as such. Rather, the former informs the latter. In contrast, it i s in comparing a subsequent PEFA exercise with the table inthis document that any development can be noted, and then analyzed. The CFAA draws on the technical aspects of the themes examined, stemming from all documents provided by the authorities and from visits to the services. It i s underpinned by a dialogue which was established before and during the design o f the document. Therefore, the CFAA will also serve as the basis o f dialogue with the authorities, when the time comes, to take stock o f achievements and identify actions for actual monitoring o f the implementation o f its action plan, through the ongoing reform. All services and stakeholders involved inpublic finance management in Sao Tome (Ministry o f Finance, Ministry o f Plan, Administrative and Financial Directors (AFDs), the Accounting Tribunal, the National Assembly) should participate in this dialogue. This document will have an even greater impact as it accompanies the implementation o f a public finance reform, to which the authorities are committed; therefore, it i s also a tool for improving some aspects o fthis reform, notably inVolume 11. ' The analysis of the final useof funds allocated i s conductedspecifically within a Public ExpenditureReview, another World Bank Instrument. HIPIC Mission, CauneauandCatalan, December 2003 Tollini Mission Report, IMF, March2005, and MCC/USAID Report, July 2005. iv The CFAA focused on (i) framework, (ii) preparation; (iii) execution, legal budget budget (iv) internal and external control o f public finances, (v) the information system, (vi) human resources and (vii) public enterprises financial management. Risk assessment is one of the focal points of this study. Risks encountered in implementing the public finance reform involve both the Sao Tome government (budget formulation, preparation, execution, and tracking) and Development Partners in their roles as financiers o f development and poverty reduction operations. Consequently, the assessment seeks to ensure: i.Thatallgovernmentactivitiesareincludedinthebudget; ii.That public resources are spent inaccordance withthe objectives set out inthe budget law, or used inthe public interest; iii.Thatinformationrelatedtotheexecutionofthebudgetlawistimely,useful,reliable and comprehensive. The risks identified underscore the possibility that the reform may not avoid errors, omissions and/or embezzlements in the future. Therefore, it i s important for all partners to give the government the support needed to implement an action plan that translates the recommendations o f this report into actions. The CFAA was conducted by agreement between the Government, the African Development Bank, the World Bank, and the French Cooperation. The CFAA was closely coordinated with Country Procurement Assessment and the Public Expenditure Review and addresses the government's concern that the ongoing reform improves its financial management and creates the conditions necessary for more efficient use o f its resources, especially those allocated to poverty reduction. The CFAA team worked closely with partners who participatedinthis exercise, and was responsible for the exercise and for drafting the final report. This CFAA was led by Alain Catalan (WB Senior Financial Management Specialist) and the team comprised Messrs. Abdoulaye Coulibaly (African Development Bank), Nestor Coffi and Robert Cauneau (World Bank), and Yves Guerin (French Cooperation). Inthe field, the team also benefited from the comments and guidance o f the United Nations Development Program (UNDP). Quality control was provided through internal World Bank meetings, and by Messrs. Moustapha Ndiaye (LAC), Eric Nelson, (AFTP4) and Keiko Kubota (AFTP3). This CFAA also benefited from the support o f Messrs. Leif Jensen and Emile Finateu(World Bank, AFTFM). The CFAA team expresses its gratitude to the Vice-Prime Minister and Minister o f Finance o f Sao Tome and her administration for their availability and continuous support during this exercise, as well as for the high quality o f organization and coordination o f meetings prepared by the advisers, Agapito Dias and Zeferino Dos Santos Ceita. The mission met successively with the public finance reform committee, officials at Treasury, Budget, Taxation, General inspection o f Finance (IGF), the four public enterprises: ENASA (Airport), ENAPORT (Port) ,EMAE (Energy), CORFEIOS (Postal service) Planning, Customs, the Central Bank, the M o F information technology chief, as well as the AFDs in the Ministries o f Finance, Trade, Education, Infrastructure, and the Coordinator o f Governance Capacity Building Technical Assistance Credit (PATRCG). The mission also met with Accounting Tribunal authorities and with the public finance technical team at the National Assembly. The team i s also grateful to all donors present in Sao Tome who shared their comments with them during the CFAA process, and particularly with the Development Partners that participated directly in the exercise by providing funding for experts, notably France and the African Development bank (AfDB). V EXECUTIVESUMMARY A. Main Findings of the CFAA (Chapter I) of June 2006. - as 1. The main findings are based on an analysis o f the situation o f the public finance management as o f June 2006 (Vol. 1). A review o f the ongoing PFM reform as o f June 2006 i s presented in annex (volume 2 in French) o f this document. Descriptive documents are also presented inannex (volume 3 inFrench). Although the CFAA i s not a PEFA exercise, a table o f proposed PEFA indicators i s provided in the Annex. Table 2 notes, when possible, the link between the mainrecommendations o f the CFAA and related PEFA indicators. 2. The legal and regulatory framework. Public finance management in STP i s governed by Framework Law 1/86 o f 1986. This law establishes the management rules and defines the current system based on budget preparation and execution, but does not meet international standards, especially with respect to the application o f accounting regulations. 3. The 1986 law has not helped eliminate the many weaknesses inthe budget schedule; it i s not conducive to an ad hoc budget formulation based on, among other things, by a real macroeconomic framework, does not reinforce the budget execution process, particularly interms o f control, and has not prevented the undermining o f a coherent operation o f the public finance management system. 4. The next organic law will have to reform the entire public finance management system, not only in its institutional and organizational aspects, but also with regard to the expected outcomes interms o ftransparency and efficiency inthe use o f public resources. 5. In the current budget preparation system, the draft budget is formulated in a dual process, even though it i s presented in the form o f a single document: on the one hand, the recurrent budget, and on the other hand, the public investment program (PIP or investment budget). It would be advisable to come up with a budget that i s unified in its preparation and presentation, by involvingthe Directorates o f Planning and Budget, and by allowing an effective link between the PIP and the annual budget. Budget classifications are not in line with international standards, in particular, regarding functional classification and the codification o f poverty reduction expenditures. The staff involved in the process i s poorly motivated and the involvement o f ministries i s limited. There i s little consistency with the PRSP and the multi-year aspect i s not taken into account; the budget does not include all flows. Although in the current system the 1986 Framework Law establishes a clear and detailed schedule, it seems, however, that the National Assembly i s not able to conduct a real review o f the draft budget; furthermore, the budget preparation process has accumulated significant delays in many fiscal years. In the government's budget document, fiscal balance i s an accounting balance and not a real balance; finally, the budget document i s not comprehensive. 6. The process o f designing the tax revenue and expenditure estimates i s conducted by the Budget Directorate (BD. Currently, tax revenue assessment i s not reliable and forecast predictability i s reduced. The design o f the current expenditures framework i s limited by budget constraints, whereas investment expenditure i s predicated on foreign financing opportunities. 7. By and large, the expenditure execution rate is low and its evaluation is difficult for lack o f information, especially with regardto foreign-financed expenditures. The budget authorization vi limits are not respected. The link between the ending fiscal year and the beginning fiscal year i s not ensured and no supplemental budget i s voted. 8. Current risks pertain to: (i)the lack o f predictability stemming from the absence o f a medium term macroeconomic framework, and (ii) the difficulty controlling the wage bill, which could be worsened by the use o f two databases of active civil servants. 9. Inthe area of budget execution, the current system, basedonmonthly appropriations, is seriously disconnected from the resource mobilization schedule. The main risk i s that the officers authorizingpayments do not have the predictability required to efficiently execute their budget. 10. Though perfectible, the information system o f the Customs Directorate i s satisfactory, and this Directorate applies international standards in an informal way. However, there i s a significant need for continuing education, and internal control i s virtually nonexistent. With respect to tax administration, the information system i s inadequate and the amount o f outstanding taxes i s unknown. The tax system i s essentially declarative and delinquent payers are hardly sanctioned. 11. The current expenditure and capital expenditure procedures are cumbersome and frequently circumvented. The risk i s that the practice o f paying for services before they are provided may remain in force. The technical process o f payroll management seems to be under control inthe current practice, but it will be necessary to draft a relevant manual 12. The current information on the execution o f foreign-financed operations is incomplete. The most important thing i s to set up an information gathering system involving not only the government, but also the development partners. The risk i s that the execution o f foreign-financed investments may be poorly instead o f hardly monitored, seriously undermining public finance management? 13. The current system of accounting execution and management. Law No. 1 of 1986 remains the text o f reference governing public finance in STP. The current Treasury and Patrimony Directorate i s limited to two divisions: the Treasury Division and the Patrimony Division. 14. The Treasury division only exercises payment functions, consisting in authorizing expenditures liquidated and ordered by the Budget Directorate, solely responsible for issuing payment orders. Once approved, payment orders are transmitted on a daily basis to the central bank (BCSTP), the State's Cashier, depending on available cash flow. There i s no fixed policy governing Treasury management. 15. The Patrimony Division i s responsible for monitoring purchases and sales o f state assets. Any acquisition worth more than 25 million Dobras (about 21,000 U S dollars) is subject to procurement. Once prepared by the spending ministry,the file i s submitted for verification to the Patrimony Division, which, issues and monitors the call for tenders. 16. The current accounting system i s obsolete, as indicated inprevious evaluations. Present government accounting consists in recording, on a daily basis, expenditures and revenues undertaken by the Central Bank; no Treasury balance i s prepared. It i s impossible to monitor the amounts outstanding and payable based on accounting rules. Balance-sheet accounting i s not conducted. Given that there i s no accountant bookkeeping, no Treasury balance i s established and there i s no report from one fiscal year to the next. vii 17. The Information system. Inthe absence of regulation defining the mandate o f each directorate, and o f amanual with a clear definition of procedures, or o f qualified computer specialists, the systems being implemented were developed by replicating techniques used in manual monitoring of information, without little attempt to ensure consistency and without any global vision o f the information system. Computers are not set up as a network; in particular, there i s no link between the Budget and Treasury Directorates. A copy o f the data input in the Budget Directorate's database i s saved in one o f the databases o f the Treasury Directorate, but this copy is not utilized. Budget Directorate andTreasury Directoratestaff has to use diskettes to transfer data from several computers in order to capture the overall status o f budget implementation. Controls 18. Internal control i s particularly weak, sometimes nonexistent. 19. With regard to judicial controls, there is an Accounting Tribunal (Tribunal das Contas), which regularly and widely disseminates its activity reports, and which i s itself audited every year. 20. However, there i s a strong need for consistency between the internal and external control functions, especially as regards the exact distribution o f control tasks and prerogatives and the ex ante interventiono f the Accounting Tribunal on contracts, or even on the terms and conditions o f the review o f accounts for previous and future years. The risk i s a redundancy o f controls resultingina serious lack o f efficiency inprocedures and inpublic expenditure. 21. The National Assembly must set up a permanent training program for members o f Parliament inbudget monitoring and control. Decentralization 22. The principle o f decentralizing budget implementation in favor of sectoral ministries i s a given, but it seems difficult at this stage to appreciate the efficiency o f capacity building,the role and mission o f sectoral Administrative Financial Directors as well as the level o f implementation. As for administrative divisions, districts are, intheory, decentralized entities with an independent budget managed by local elected officials; however, they are closely dependent on the State. Finally, the specific organization o f the administration in the island o f Principe i s complex and inefficient. 23. The risk i s that there could be poor distribution o f operational and investment responsibilities among the different levels o f government, but also in accounting for the use o f resources, knowing that the objectives o f the regional administration o f Principe could be different than national objectives. 24. With respect to management o f major public enterprises, the authorities identified crucial needs for improving the management o f public enterprises that are includedby the current public finance reform process. The main C F A A mission examined the management procedures o f ENASA (airport), ENAPORT (port), EMAE (water and electricity), and CORREIOS (postal services) and their relationship to the State. The discrepancy between the statute o f the enterprises and the public finance management practices reflect shortcomings in the role o f the State in relation to these enterprises. The relationship between the State and public enterprises suffers from the fact that the latter's profits are fully transferred to the State's accounts; in addition, no subsidy i s provided to these enterprises to support their investment programs since viii 2002. The resulting financial situation is rather precarious and significantly undermines their development; the major risk inthe current management o f public enterprises i s the persistence o f their precarious financial situation, and even the total interruption o f their activities inthe short or medium-term (see chapter three o f the Public Expenditure Review for further details on the performance and fiscal impact o f state owned enterprises). 25. The fight against corruption. STP has undertaken an informal discussion about the fight against corruption, especially within political parties. A presidential decree, dated May 15, 2006, ratified the United Nations Convention against Corruption o f December 9, 2003. The legal framework i s not set up to the fight against corruption. STP does not have any anti-corruption law inits legal instruments; however, the judicial system (the Accounting Tribunal) i s set up and can receive and process any file concerning financial fraud o f all types, including personal profiteering from any operation relating to public funds. There i s no national entity to fight corruption, and within the ongoing reform o f public finance; there i s no provision for such a structure. 26. In practice, there can be no real debate on the institutionalization o f the fight against corruption in STP. Indeed, fundamental prerequisites are lacking in the country's institutional setup and are therefore incompatible with a true policy to fight any financial fraud. As a matter o f fact, a major prerequisite has to be addressed: a law must be passed on the forbid involvement o f members o f Parliament with private enterprises that are likely to be government suppliers, and holding any position within the public administration, especially at a senior level. 27. The risk o f mixing government's interests and personal interests o f institutional representatives i s highinthe current system. HumanResources 28. The low level o f human resource skills i s to a large extent the cause o f the dysfunctions exposed in Volumes 1 and 2 o f this report. Weaknesses were noted throughout the budget process. Indeed, they appear in the preparation, execution and monitoring o f the budget. The priority action to be implementedi s a long cycle o f general training inpublic finance over several months. This training, which would comprise a major practical component, should be taught by officials and public servants who are active invarious directorates o f the Ministry o f Finance. 29. The CFAA assessed the risks encountered on the basis o f the current situation that i s without reforms. These risks concern Sao Tome government authorities (budget formulation, preparation, execution, and monitoring) as well as Development Partners, in their role as financiers o f development andpoverty reductionactivities. i x Table 1: Evaluationof Current Public Finance Management Risks4 Component Risklevel Comments Budget expenditure forecast High The estimates of expenditures are largely dependent on availability o f foreign financing. Budget revenue forecast High The evaluation of tax receipts is not reliable and the predictability o f forecasts is limited The procedure for this expenditure phase and the controls put in place are too vague and confusing; internal controls are not operational and are likely to Commitment, liquidationand become more and more redundant. The control on ordering o f budget expenditures Very high the effectiveness o f expenditures faces the risk that (administrative phase o f expendi- public authorities may not obtain value for their ture chain) money. There is conflict of interest with regard to the approval o fpublic contracts. Execution o f budget expenditures The high financial risk in this phase is systemic. payment (accounting phase of High The requisite controls to reduce this risk are not in expenditure chain) place; implementation decrees are non-existent; the staff is not trained; harmonization with the central bank is not done through a computer network. Execution o f personnel expendi- The execution o f personnel expenditures can be tures High affected by the lack o f coordination between the two existing rosters o f government employees. Though perfectible, the Customs Directorate's information system is satisfactory, and the Customs Directorate applies international standards in an informal way. However, there is a significant need for continuous training, and internal control i s Execution o f budget revenue Moderate virtually non-existent. For tax administration, the information system i s inadequate and the amount o f outstanding taxes to be collected i s not known. The tax system i s essentially declarative and violators are hardly sanctioned. The DGI has no adequate operating budget. Excessive use o f these procedures (early payment Budget expenditures waiver advances) may in the long run create a major procedures Very high financial risk because current texts on the responsibilities o f expenditure actors are still incomplete and very vague. At this stage, the single-entry accounting system Public accounting High does not allow full monitoring o f the government's financial operations. General public accounting regulations are not in line with international As on June 11th, 2006. X Component Risklevel Comments standards and are not compiled ina manual.? There are no regular budget monitoring status reports, no monthly accounting balances, and no Reporting Moderate computerization o f the government's financial operations table (TOFE). The lack o f discipline in the preparation of management accounts remains real. The shortcomings o f cash management monitoring by the Treasury do not present any significant risks Cash management Moderate in this area. However, the absence of accounts reconciliations and the impact o f future oil receipts could increase this risk if a real cash management policy i s not established. Public debt management Average The shortcomings o f public debt monitoring by the Treasury do not present any significant risks in this area. The fact that the government does not play its role inthe management of public enterprises, the lack of Public and parastatal enterprises Very high coordination in the management o f public sector enterprises, the absence o f systematic controls and o f efficiency in their management represent a major financial risk inpublic finance. The organization of administrative controls is very Very high weak. The reorganization and the definition of the Ex ante and ex post controls mandate o f the IGF are not consistent with those of the other control institutions; the Accounting Tribunal (i) is judge and jury with regard to public contracts, and (ii) has never issued a ruling on any management account. B. The Main Findings of the Evaluation of the Ongoing Reform (Chapter 11) - as of June 2006. Background 30. The public finance management framework in Sao Tome and Principe i s based on the 1986 Framework Legislation on Public Finance. The main findings of Bank and Fund assessments between November 2003 and March 2005 led Sao Tome authorities to seriously review the public finance management system as it has existed since its inception in 1986 and set out to reform it. 31. The reform contains the key elements needed for sound management o f public finances: (i)clear definitionofbasic budgetingprinciples, (ii) presentation o f successive phases of the budget preparation process, (iii) improvement o f budget presentation, (iv) implementation o f a modem accounting system, (v) strengthening the internal control function, (vi) implementation of the principle o f decentralizingbudget executionto line ministries. 32. The efforts o f the government in reforming it public finance management system i s supported by a World Bank TA credit (Governance Capacity building TA credit) launched in early 2005. xi Governance Capacity buildingTA Credit The Governance Capacity Building Technical Assistance Credit (GCB-A) ofUS$Smillionhasthree components: i)support o f the Public Finance Management reform, ii)strengthen the Oil Revenue Management and iii)support PRSP implementation. The public finance component o f the credit concentrates on the expenditure side o f the budget inagreement with another donor who i s to provide support for the reforms needed in revenue side (Tax and Customs Directorate mainly). The project has an integrated view o f the reform, including the entire budgetary cycle (budget planning, execution and control). I t includes revisions o f the legal and institutional frameworks as well as training staff. Consequently, it also supports improvements in the directorates o f planning and reform o f the antiquated procurement law. So far, the GCB-TA has supported: i)a new public finance organic law, approved in2006 that adopts new modern budgetary codes, including for the first time a functional classification ii) the set up o f an integrated budget implementation IT system that links the directorate o f Budget and the directorate o f Treasury ina single budget execution system; and iii)provide assistance on Public Fiance Management to the national institutions involved inthe supervision of petroleum revenues. For the remaining o f the life o f the credit, this component of the project will assist the Government to i)draft a new procurement law, ii) set up an accounting department and draft a public accounting plan, iii)improve the investment budgeting, iv) initiate a Medium Term Expenditure Framework, and v) improve the IT system to produce public accounts, integrate the centralbank, and improve its security. 33. In this reform, the authorities have opted for an integrated budget execution and accounting information system (SIGFE) based on a system that i s already operational inAngola, with references from Brazil. 34. There i s a real political will to reform and a supervisory structure involving a reform committee has been set up. It effectively analyses new measures, based on a schedule and special monitoring. However, ownership o f the reform is still superficial at the technical and administrative levels (within the services and within different services). For instance, the IGF project i s not discussed with Taxation, nor with the Accounting Tribunal; the Planning Directorate i s not involved at all inthe reform o f budget presentation; and the internal Treasury divisions are not aware o fthe technical content o f the reform. 35. The best Public Finance Management system and standard for Sao Tome and Principe. 0 A first option, proposed by the World Bank team5, was to align all existing public finance standards and regulations in the context o f the West African Economic and Monetary Union (Union Cconomique et monktaire de 1'Afrique de 1,Ouest- UEMOA). These directives are based on the old French fiscal system and define a budget nomenclature, public accounting regulations, and a government accounting system. However, a recent Fund study has underscored the difficulties encountered by UEMOAcountries inadjusting to established standards. 0 It then seemed preferable to the STP government, whose current public finance management system was inherited from Portuguese colonial regulations, to refer to other reform experiences in countries with the same legal structure, such as Angola HIPIC Mission ,Cauneauand Catalan, December 2003 xii and Mozambique6. Both countries started from the Portuguese colonial model and are now well advanced in the implementation o f their respective administrative systems, with computerized components in an integrated budget, treasury and accounting management system. The Sao Tome authorities finally chose the Angolan public finance management system (see Annex 3) and created a reform coordination unit. 36. At this stage o f implementationo f the reform, the STP government's main difficulty lies in establishing the reform implementation schedule. Indeed, the key phase of the reform is the transfer o f the financial management software from Angola to STP. Although the initial transfer agreement has never been questioned by Angola, the transfer itself had not yet occurred at the time o f the CFAA mission. The discussions between both countries led to an agreement to be signed in March 2007. The reform i s expected to be operational by January 1, 2008. This schedule i s yet to (i) validated in the framework o f the technology transfer from Angola, and be (ii) detailsofimplementingthevariousreformcomponentsmustbepreciseenoughtoensure the that adjustments and complements specific to STP have been well taken into account. At this point, the CFAA cannot assess the realism and the detailed content o f the project schedule. 37. Furthermore, unavoidable resistance inherent to the process o f change could undermine the launching o f the reform. There are still obstacles related to the lack o f human, technological, and materialresources. 38. The new legal and regulatory framework will be governed by a Draft Budget Framework Law (PLC) which was prepared in early 2006, but has not yet been adopted. The PLC sets forth the basic regulations defining the general budget preparation, execution, and accounting process. 39. However, the legal and regulatory framework, and the PLC in particular, remain a relatively weak link in the reform process, because some measures are not clear or are incomplete, notably the absence o f clear allocation o f responsibilities in the administrative and accounting phases, a budget schedule that i s too succinct and an internal control function that i s too vague in the law. No efforts were made to ensure overall consistency in the law. Furthermore, the PLC does not explicitly provide for the different implementation decrees that it i s supposed to induce. Even if the Reform Committee i s working on different laws relating to the Administrative Financial Directors the IGF and the Directorate o f Public Accounting, the PLC should clearly make provision for them, define the expectations; inparticular, it i s essential that a regulatory instrument be passed to create the General Public Accounting Standards. 40. With respect to budget preparation, the PLC defines the stages o f the budget preparation process; public finance reform will be based on an information system that should help accelerate the process. The contents o f the draft budget are fully described inthe PLC. Multi-year operations will, henceforth, be taken into account, and the limited nature of budget authorizations i s explicitly stipulated inthe PLC. Nonetheless, the notion o f carrying forward the outcomes o f the preceding fiscal year i s not included in the draft law; the proposed regulation only makes provision for deadlines for some stages and i s not sufficiently strict in terms o f respecting deadlines. The main risk o f the reform lies inthe fact that the government budget could continue to be implemented with delays o f several months every year. Finally, the requirement for a comprehensive report that includes external financing i s not stipulated, hence the risk o f less transparency. CfTollini Report, IMF, March2005 ... Xlll 41. The draft public finance budget framework law clearly presents the notions o f program and sub-program, but the budget nomenclature project i s incomplete with respect to a functional classification in line with international standards. The reform o f the nomenclature i s done in an isolated manner by the Budget Directorate. As a result, there i s the risk o f no collaboration with the Administrative Financial Directors in designing a new budget nomenclature, which would result in an incomplete and poorly accepted document. Also, the lack o f involvement o f the Planning Directorate i s likely to perpetuate the prevailing situation, thus preventing a really unified budget. Finally, the hture information system should help improve data conservation. The SAFE project effectively includes, among others, the management o f tax and customs revenues. Inthe Area ofBudgetExecution Revenues : 42. None o f the National Directorates that are involved in the collection o f government revenues was involved inthe design of the reform, and the draft budget framework law contains few regulations on the collection o f government revenues. Consequently, the major risk that emerges, from the perspective o f the reform being prepared, i s the fact that ownershp o f the reforms by the financial agencies will be more difficult, notably because o f the uncertainty that exists between future IGF responsibilities and current Tax Administration responsibilities with respect to tax control. Such a situation i s a source o f conflict and thus o f blockages on the part o f the civil servants concerned. Expenditures : 43. The draft framework law makes little provision for expenditure procedures; inparticular, it does not specify whether services or supplies should be provided before payment, and it does not address the reverse procedure. The risk i s that the practice o f paying for services before they are providedpersists, even when the new regulation will be implemented. 44. The draft framework law only provides for one category o f exceptional procedure, the advance payment regime, but its failure to be precise about the conditions under which advance payments can be made may result inthe abuse o f this procedure. 45. The draft framework law does not address aspects related to payroll management. It will therefore be necessary to draft legislation defining the modalities inthis area. The same goes for the execution of foreign financed operations. The risk i s that the execution o f foreign financed investments may not be adequately monitored, seriously harming the management o f public finances. 46. Inthe area o f accounts execution and management, the PLC defines the organization, the jurisdiction, the objective and the specific regulations governing the Treasury. It provides for the creation of the Directorate o f Public Accounting by defining its jurisdiction, responsibilities and special regulations, specifying that the Directorate o f Public Accounting i s responsible for (i) formulating and proposing accounting standards, (ii) formulating and updating the code o f legal requirements in accounting practice, (iii)executing the budget (iv) preparing periodic reports to be presented to the National Assembly, and (v) preparing general government accounting. xiv 47. Inaddition, the PLC creates and organizes the Directorate ofPatrimonyby enacting its organization and jurisdiction, defines what falls under government patrimony, and the specific principles and regulations governing it. 48. The PLC establishes the principles and regulations that are specific to government accounting, notably that the government prepare, at the end o f each fiscal year, tables that show budget balance as well as those that show budget execution and the results o f the exercise. These tables must accurately reflect all operations to allow economic and financial analysis. 49. The PLC i s a large-scale project wanted and initiated by the government; it consists o f an accounting system in line with international standards, underpinned by a government code o f legal requirements in accounting practice, a strengthened internal control system, and a computer system that allows the execution o f operations in a unique and comprehensive way. Sao Tome's code o f legal requirements in accounting practice, as planned under the reform, i s based on the current code in force in Angola and will help standardize the mode o f recording operations according to the double-entry accounting system. This code o f legal requirements in accounting practice will allow accurate and rigorous tracking o f budget execution by fiscal year, especially outstanding balances and amounts to be collected. 50. Unfortunately, the draft framework law i s incomplete, particularly with respect to: (i) the limitations for government revenues and expenditures, (ii)the responsibilities o f different operators inthe public expenditure chain (credit administrators and public accountants), and (iii) the introduction o f an accounting implementation instrument, such as the RGCP. 51. With respect to the accounting execution phase, no preparatory work has started in the services, nor has been shared with the Central Bank, which serves as the government's cashier. In this area more than in others, the mission did not note any ownership o f the modalities for implementing the different reform actions; there was rather a wait-and-see attitude, auguring some adjustment difficulties inthe future. The current risk inaccounting reform i s that efficiency may be considerably mitigated because o f the lack o f clarity inthe distribution o f responsibilities. 52. With respect to the information system, the information technology implemented under the reform will underpin the management o f all budget operations. Such information technology i s already operational in Angola, which serves as a reference for Sao Tome and Principe. The application will consist o f a single database shared by the Budget and Treasury Directorates, public accounting, and line ministries. Each service will have controlled access to this database, depending on its responsibilities. The use o f a single database will allow the tracking o f government operations inreal time, will avoid repeatedentry of the same information by different services, and will ensure greater security in the processing o f the information; the whole system will runon a network linking all stakeholders inthe government's budget process. 53. However, the perception o f the expected outcome o f the future information technology tool i s erroneous. Indeed, most o f the people interviewed believe this tool will solve all problems, whereas the reform must necessarily comprise, first and foremost, the revision o f laws and o f the organization and must include an important staff training component. 54. Furthermore, the technical timing o f the implementation of the information technology component i s still vague, and must be clarified, notably on the basis o f the convention that will be signed with the Republic o f Angola. The postponement o f a general implementation o f SAFE to January 1, 2008, seems realistic. Controls xv 55. The proposed reforms needto be consistent: (i) IGF's draft organic law7 is confusing the on ex-ante and ex-post controls, and on the jurisdiction for tax control of private enterprises; (ii) the current reform laws do not propose changes to the ex-ante intervention of the Accounting Tribunal on contracts, nor on the modalities for reviewing the management accounts o f the previous and htureyears. 56. The risk i s a redundancy of controls, which will result in a serious lack of efficiency in operations and inpublic spending. 57. The National Assembly should put in place a continuing training program to train membersofparliament inbudget trackingand control. 58. The table below defines, inthe current situation, and on the basis of the ongoing reform, the main recommendations that constitute an action plan aimed at strengthening and accompanying the implementation of government reform-both actions already listed in reform documents and those not yet identified at this stage. 'Ason June 2006 xvi x X X x x X X X X x x 3 523 100N - x x x x X X X x ; x x x x X X ze B W X x x x x ; sE X X X x x x x x x X 4 x x x x e 8 4 x x X 4 X L -> L z 3 X x x x X X x x X X X c EM X X X X x x x x x X .3 X I X l x x x < X x x x X X CHAPTERI: CFAA AS OFJUNE 2006 - 1. LEGALAND REGULATORYFRAMEWORK 1.1 The recommendations made since 2003 by the Bank and the Fund have focused on the need to review the legal and regulatory framework o f public finance in Sao Tome and Principe. Legal and Regulatory Framework 1.2 Public finance management in Sao Tome and Principe i s based on Framework Law No. 1/86 o f 1986. This law defines management rules and governs the current system based onbudget preparation and execution, but does not meet international standards, notably with respect to accounting practices. 1.3 There are a number o f specific laws that govern the different services in charge o f the budget process; these services have expressed the need to review the foundations o f budget elaboration and execution process. Assessment of the current framework 1.4 The 1986 Law did not eliminate the numerous weaknesses in the budget process in Sao Tome and Principe. It does not encourage adherence to the budget formulation schedule, nor ad hoc budget formulation underpinned notably by a real macro-economic framework, does not strengthen the budget execution process, notably interms o f control, and did not prevent the deterioration o f the public finance management system. 1.5 There i s no implementation guideline, in terms o f accounts management, such as a General Regulation for Public Accounting. Budget procedures manuals and accounting standards, notably in relation to the collection o f supporting documents, are absolutely necessary for real efficiency inthe expenditure cycle. 1.6 There i s no clear law on the administrative and financial directors (ADFs), defining their role and jurisdiction within the ministries, by stipulating, for example, that they are responsible for supervising and coordinating spending within the ministry, in line with the budget allocated and inaccordance with financial programming and accounting standards. 1.7 In their current form, the laws perpetuate the risk of impunity and the lack of transparency vis-a-vis the population. Recommendations 0 The recommendations from previous assessments should be incorporated into a new law reforming the entire public finance management system. The General Regulation for Public Accounting. Budget procedures manuals and accounting standards (RGCP), or an equivalent instrument, should be prepared. 1 2. PREPARATION OF THE BUDGET LAW 2.1 Budget management in Sao Tome and Principe covers the period from January 1 to December 31. Budget preparation i s launched halfway through the previous year and relies on central government structures. It also obtains technical support from some Development partners. Budget preparation procedure and schedule 2.2 The preparation of the draft budget is a dual process covering, on the one hand, the recurrent budget and, on the other hand, the investment budget. The Ministry o f Planning and Finance (MoF) i s solely incharge o f the budget preparation process, and two directorates are involved: the Budget Directorate (BD) prepares the recurrent budget, i s responsible for arbitration, and compiles the draft budget; while the Planning Directorate (PD) prepares the investment budget. The informationtechnology tools o f these two directorates are not compatible. Furthermore, these entities do not use the same budget nomenclature and, although there i s only one final budget document, there i s no real consistency between recurrent expenditures and capital spending. Debt data i s provided by the Debt Division, which was created recently. 2.3 The involvement of other Ministries in the process is limited and consistency with the PRSP i s weak. Recently, a joint BD and P D budget circular was launched; it sets expenditure ceilings for line ministries, as well as deadlines for submittingtheir budget proposals. Despite the existence o f a ceiling, the proposals submitted are generally very high and, consequently, o f questionable quality, as line ministryAdministrative Financial Directors (AFDs) are aware that they will obtain much less. Indeed, budget proposals are usually cut by at least half o f the amount requested. In general, there i s no clear consistency between planned expenditure and the strategies set out in the PRSP. This i s due in part to the absence o f directives in t h s regard from the PlanningDirectorate. 2.4 The staff involved in the process is poorly motivated. The lack o f coordination between the Budget Directorate and the Planning Directorate, as well as the limited involvement o f line ministries, result ina significant demotivation of staff. The budget preparation exercise i s seen as administrative work and not as the design o f an economic tool to serve the nation. It also seems that, because o f the low skill level, staff has great difficulty working simultaneously on the execution o f the current budget and on the preparation o f the next budget. 2.5 The multi-year dimension i s not taken into account and the budget does not include all flows. There i s no medium-term macro-economic framework and, as will be discussed in further detail in the next section, there are a significant amount o f extra-budgetary operations, both interms o f revenues and expenditures. 2.6 The legislation in force presents a clear and detailed calendar, which is not adhered to. The budget calendar i s defined by the public finance organic law o f 1986 (Art. 18 and subsequent). The main phases are as follows: presentation o f draft sector-based budget proposals to the M o F (June 30, 2006), presentationo f draft budget to the Council o f Ministers (August 15), tabling o f draft budget to the National Assembly (November l), and finally, voting on the draft budget by the National Assembly (prospective deadline: November 30). 2.7 The National Assembly i s not in a position to conduct a real review of the draft budget. First o f all, it i s given very little time for this review. Furthermore, the draft budget that i s 2 presented to the Finance Committee o f the National Assembly does not include the status o f implementation o f the budget for the current fiscal year. As well, this high-level body does not have deputies with expertise inbudget preparation, and the Accounting tribunal does not provide any assistance at this stage. In theory, the National Assembly may propose substantive modifications to the draft budget. However, as these proposals must be approved by the government to be implemented, one may consider that it practically has no roomto maneuver. 2.8 For several years, there have been significant delays in the budget preparation process. Thus, the effective calendar for the preparation o f the 2006 budget was as follows: (i) macro-economicframeworkwaspreparedinMay2005, duringanIMFmission; (ii) the the budget preparation circular was issued on August 18, 2005; on that basis, the line ministries budget proposals were presented to the M o F as o f September 2005; (iii) tax receipts data was provided in September, while revenue agencies consider that they can do so as o f April; (iv) after the data was keyed into the computer, the budget proposal was presented to the Council o f Ministers around October 2005, and (iv) the Council presented it to the National Assembly in December; (v) finally, the latter voted on the 2006 budget inFebruary 2006. 2.9 As Diagram 1 shows, although the macro-economic framework for the 2006 budget was prepared inM a y 2005, nothing was done for more than halfo f 2005 (orange arrow) to prepare the budget, and actual budget preparation work (green arrow) only started in August 2005, with the publication o f the budget preparation circular. This resulted in a concentration o f preparatory phases during the last third o f the year, limitingthe interest inbudget conferences and letting the parliamentary review period extend (red arrow) deep into the fiscal year concerned. Chart 1: Actual Calendar for the Preparation of the 2006 Budget Law I The 2006 budgetis voted inFebruary I Adoption of `06 B u d g e t L a w Tabling . 0 1Ilir draft Budeel H a l f , 3 PRESENTATIONOF THE BUDGET DOCUMENT 2.10 The budget is presented as a single document that contains both recurrent and investment expenditures, the latter stemming from the Public Investment Program (PIP) for the corresponding annual section. It includes central government and district operations, and contains government transfers. It presents budget estimates by type, by major institution and by ministry. Staffing positions are described for each ministry. The budget presents changes in revenues and expenditures over the five preceding fiscal years and includes a summary table o f the estimates for the coming fiscal year, giving a snapshot of the overall situation, notably financing needs. 2.11 Budget equilibrium is an accounting equilibrium, and does not present the actual budget situation. The budget i s presented as balanced in accounting terms, since the financing need i s covered by external (loans and especially grants) as well as internal resources, notably by accumulation o f arrears. One o f the main reasons i s the difficulty to fully finance investments included in the annual budget. Indeed, more than 80 percent o f them are financed with external resources. Furthermore, the assessment o f financing i s uncertain because foreign financed spending i s presentedinfull only for loans. Infact, a significant part o f grants i s not included. 2.12 The budget document i s not comprehensive. The comprehensiveness o f the budget document i s limited by the fact that a significant amount of revenue i s retained by the administrations which collect them, whereas these amounts should be paid into the Treasury. The main reason given i s related to the difficulties that these administrations experience in obtaining the appropriations needed for recurrent expenditures. They therefore keep these revenues to cover their own current expenses. As well, as stated in the preceding paragraph, a certain number o f expenses financed by grants are not included. Risks 2.13 The main risk lies in the fact that owing to incomplete knowledge o f the government's operations, understanding budget financing needs remains an exercise inapproximation. Recommendations 0 Draft and implement a law (General Public Accounting Standards) on public accounting standards, which will allow the establishment o f conditions for fulfilling the major budgetary principles defined inthe draft public finance framework law. THEDESIGNOFTHEFISCAL REVENUE FRAMEWORK 2.14 The BD i s responsible for designing the fiscal revenue framework. In fact, this Directorate sets the calendar for the production o f estimates by the revenue agencies (Taxation and Customs). Although fiscal revenue forecasts are established on the basis o f the output for the three preceding fiscal years, and although revenue agencies are questioned on assumptions o f unforeseen events, it i s this directorate that decides on the amount to include inthe budget. 2.15 The execution rate o f fiscal revenues for the previous years i s as follows: Table 3: ExecutionRate of Tax Revenues 1Execution Rate of 2002 2003 2004 2005 Tax Revenues 109.3% 111.3% 112.5% 100.8% 4 2.16 The execution rate of tax revenues was much higher than projected, from 2002 to 2004. The rate was very close to the projection for 2005. Table 4: ExecutionRate of Non-tax Revenues Execution Rate of 2002 2003 2004 2005 Non Tax Revenues 91.8% 119.7% 69.0% 79.5% 2.17 The execution rate o f non-tax revenues varies significantly. It i s worth noting that the weight o f non-tax revenues i s low since it represents only 15 percent o f current revenues in2005. Table 5: ExecutionRate of Total Revenues Execution Rate of 2002 2003 2004 2005 Non Total Revenues 106% 112.8% 99.0% 99.3% It is worthnoting that, except for 2003, the execution rates are close to projections. 2.18 The process for assessing tax revenues is not reliable. The participation o f revenue agency employees in the assessment of expected tax revenues i s very limited. Neither the Tax Directorate (TD) nor the BD has the capacity to analyze data. N o analysis i s currently done. The Director of Customs would like to have two employees specialize in the analysis o f statistical data available in the SYDONIA computer system. With respect to the Tax Directorate, the situation i s worsened by the fact that it does not have consolidated data o f past output. For all these reasons, the amounts budgeted are set at the level o f the BD. 2.19 The transparency of the estimates is weak. As presented, the revenues estimates included in the draft budget law are not transparent from the perspective o f either their spontaneous development (volume/wealth effect, etc.) or the action of the government (ratelpriceitax base change effect, etc.). An explanation of this issue would help improve transparency of government action and allow parliamentarians to better understand and analyze the choices underlying the preparation o f the draft budget law presented to them. It doesn't seem that there i s actually any action aimed at emphasizing one tax or another. The VAT has not yet been introduced, but its adoption could be envisaged only on a long term. Recommendations 0 Draft a regulatory instrument and a manual o f procedures to explain how revenues are assessed, to improve assessment and transparency. THEFISCALEXPENDITURE FRAMEWORK 2.20 As described in the preceding section, the recurrent expenditure budget is prepared by BD, while the capital expenditure budget is prepared by the PD, without any real coordination. There i s no Macro-Economic Medium-Term Expenditure Framework, and expenditure programming i s simply a renewal exercise, rather than the search for a vision for subsequent years. Thus, there i s no consistency between short term and long-term expenditures. TheRecurrent Expenditures Framework 2.21 As stated above, current expenditures estimates are prepared by AFDs inline ministries. They are supposed to respect the ceiling established in the budget circular; however, since the ministries expect significant cuts, they make much more substantial requests. The budgets 5 approved are, in contrast, much lower than these requests. Sometimes, the ceilings are even lowered when the government does not have sufficient resources overall. The budgets adopted are, in fact, often aligned with budget appropriations from the previous fiscal year, and the relevance o f assessment studies i s muchreduced. The Capital Expenditures Framework 2.22 The design of the investment expenditures framework is subject to the availability of external financing. Investment spending i s planned on the basis o f a gliding 3-year Public Investment Program, under the responsibility o f the PD. This document itself i s based on the PRSP. It i s prepared in collaboration with the structures responsible for projects, the various ministries as well as the Development Partners. 2.23 The PD i s responsible for analyzing projects prepared by the different ministries during the design o f the draft budget. To do this, it uses specific software, with which it i s fully satisfied, but which is not compatible with the software used by the BD.This incompatibility prevents the reconciliation o f recurrent expenditures with investment expenditures, since the nomenclatures used are not compatible. ThePayroll Expenditure Framework 2.24 With respect to payroll, the BD establishes an annual recruitment program for each ministry, althoughit is clear that recruitments are handledby the AFDs ineach ministrywhile the administrative management o f staff i s the responsibility o f the Public Service Directorate within the Ministry o f Public Administration. This program constitutes an expenditure ceiling. The use o f this program i s made possible by the existence o f a status o f budget units in each ministry. Finally, the Public Service Directorate i s now conducting a census o f civil servants (about 6,000) by submittinga questionnaire to each o f them, with the intention o f developinga single database which will be as comprehensive as possible, and which will also be used by the BD. TheExpenditure Execution Rate 2.25 The expenditure execution rate is weak overall. Table 6 below presents the total execution rates by major category. With respect to personnel expenditures, it appears that, except for 2002, salary payments largely exceeded budget appropriations. The other operational expenditures also surpassed appropriations, especially in 2002 and 2004. In contrast, the execution of investments was very weak. Except in 2003, the execution rate for investments financed on domestic resources reflects the lack o f domestic resources as well the poor absorptive capacity o f technical ministries. As for investments financed on external resources, the poor rate i s due not only to poor absorptive capacity, but also to the difficulty in finding financing. Table 6: Execution Rate of Total Expenditures 2002 2003 2004 2005 Execution Rate of Total 80.0% 84.9% 97.3% 72.7% Expenditures --- Payroll 90.5% 109.4% 111.8% 104.7% Recurrent Expenditure 122.5% 102.4% 117.0% 105.0% Investments 62.7% 75.4% 66.6% 47.5% -- External resources Internal resources 79.7% 192.9% 53.5% 55.4% 59.3% 55.8% 75.6% 45.7% - Public Debt --% 61.O% 123.0% 88.0% 6 TheRelative Weight of the Different Categories of Expenditure 2.26 The following table shows, from year to year, significant imbalances in recurrent expenditures estimates, notably in personnel expenditures and transfers. The relative weight o f recurrent expenditures in relation to the total budget i s on the rise. Investment expenditures budgeted also vary significantly from one year to another. Table 7: Initial Estimates inBudget Laws by category of expenditures, in billions of Dobras Type of Expenditure 2003 2003 2004 2004 2005 2005 Amount in YO Amount inYO Amount in YO Personnel 50.0 11.0 67.9 12.1 103.3 14.6 Procurement o f goods 36.4 8.0 50.6 9.0 58.3 8.6 and services Transfer 13.4 3.0 14.0 2.5 92.6 13.5 Other recurrent 18.9 4.2 29.0 5.2 27.7 4.1 expenditures SiTotal ordered exp. 118.7 26.2 161.5 28.8 281.9 40.8 Investments: -- Domestic resources 50.2 11.1 161.5 28.8 78.3 11.0 External resources 284.3 62.7 236.9 42.4 339.3 49.0 TOTAL 453.2 100.0 559.9 100.0 689.5 100.0 2.27 The assessment of expenditure execution is hampered by lack of information. Foreign-financed expenditures are included in the budget when they are loans. They are only partially reflected when they are grants. Very little information i s provided on the corresponding expenditure. Data on operations financed by bilateral cooperation are the least well-known, except for donors who have bank accounts inSao Tome and Principe. Overall, highly fragmented information on the execution o f donor-financed expenditures i s known much later than the other budget execution expenditures. 2.28 Budget authorization limits are not respected. In general, the benefit o f budget estimates i s largely reduced by the fact that execution departs significantly from budget authorizations. This i s the case, notably for all recurrent expenditures, whose estimates are most often establishedby simple renewal from one year to the next. 2.29 The link between the fiscal year that is ending and the one that i s starting is not assured. The outcome o f the preceding fiscal year-surplus or deficit-is not reflected in the budget. This absence o f carry-over i s comparable to the fact that the budget does not allow multi- year monitoring o f operations. Indeed, for current or investment operations, uncommitted expenses at the end o f a fiscal year are not carried over to the next year. This situation does not allow budget managers to properly manage their spending, notably as some o f this spending, mainly related to investments, must be executed over several years. The direct consequence o f this situation is that some investment operations are abandoned at the end o f a fiscal year o f as a result o f insufficient budget allocations. 2.30 N o supplemental budget is voted. Although this i s stipulated by the legislation in force, to take into account changes in the macro-economic framework as well as contingencies arising inthe management of a fiscal year, no supplementary budget has ever been voted. This situation has undesirable consequences, as the necessary adjustments during a fiscal year are done by the BD by simply increasing the initial budget authorizations, without the corresponding financing, 7 which should be ensured by reducing surplus items or by increasing resources. The budget thus ends up unbalanced overall, and its management inevitably leads to a closing deficit. Risks 2.31 Risks relate to (i)a lack o f predictability created by the absence o f a medium-term macro-economic framework, as well as (ii) the difficulty to control the wage bill, which could be worsened by the maintenance o f two databases o f active civil servants. Recommendations e Put inplace a medium-term macro-economic framework. e Associate the BD and the P D to ensure that, inthe interest of clarity and efficiency, the ministriesonly have a unique interlocutor. e Ensure that the Civil Service Directorate's future database o fpublic servants and that o f the BD are merged into one single database. e Integrate indraft legislationthe concept o f incorporatinginthe budget the outcome from the previous fiscal year, as well as the conditions for its financing. e Integrate indraft legislationthe requirement for comprehensive reports on budget execution. BUDGET NOMENCLATURE 2.32 The government's budget nomenclature is incomplete. It only comprises administrative and economic classifications (by type), and does not include functional classifications comparable to those defined by international bodies (COFOG). Efforts were made to introduce such a classification inthe 2004 and 2005 budgets, but remain largely insufficient. In the current system, the functional classification o f expenditures i s deduced from the ministry to which it i s attached, which i s inadequate. In fact, a ministry may cover several functions. Similarly, a function may involve several ministries. Furthermore, the nomenclature does not allow the monitoring o f expenditures by type o f financing, by program or by project. Neither does it contain program classifications, which would allow the linking o f planned expenditures and expected outcomes. 2.33 The nomenclature used in the Public Investment Program (PIP) by the Planning Directorate is different from the classification used in the annual budget document. It is therefore impossible to establish the link between investment spending from the PIP and current expenditures recorded inthe annual executionbudget. Risks 2.34 The lack o f collaborationwith AFDs inpreparinga new budget nomenclature may result in an incomplete and poorly-accepted tool. Similarly, the lack of involvement of the Planning Directorate may perpetuatethe current situation, which prevents the preparation o f a truly unified budget. 8 Recommendations 0 Finalize the budget nomenclature project by closely involving the ADFs inthe ministries as well as the PlanningDirectorate. Adopt the functional United Nations COFOG classification and integrate program classification. PUBLICATION OF THE BUDGET DOCUMENT 2.35 The proceedings of the budget debate in the National Assembly as well as the budgetary document itself are made public.Discussions preceding the vote of the budget by the National Assembly are broadcast on radio stations and some debates are televised. The Finance Committee of the National Assembly keeps the records o f discussions held during sessions, and prepares a report which i s published on the Internet. When the budget i s voted, the public i s informed and the contents disseminated inlocal newspapers as well as on the radio. Recommendation 0 Clearly indicate, inthe implementationdecrees, the types o f media to be usedto disseminate information on the preparation and the contents of the budget. 9 3. BUDGET EXECUTION PROVISIONOF BUDGET ALLOCATIONSTO LINEMINISTRIES 3.1 The current system i s based on a monthly provision o f resources, with a major discrepancy from the resource mobilization calendar. The current budget law provides that "Expenditures slated in the general government budget are authorized on the basis o f monthly limits, except for equipment expenditures that are in line with quarterly authorization rules." The mission noted that this i s adhered to in practice, but made it clear that the notion o f twelve planned allocations for recurrent expenditures i s not predicated on the assumption o f a late adoption o f the budget, but would apply even if the budget were adopted before the beginning o f the fiscal year. This timing i s not optimal, because it does not allow the establishment o f a link with available financial resources, whose appreciation and mobilization follow a much less repetitive logic. As a result, budget execution i s based on daily resources available, without real financial planning. Risks 3.2 The main risk i s that authorizing officers do not have the predictability that would allow them to execute the budget efficiently. Recommendations 0 Envisage resource provision arrangements that are compatible with financial programming. Quarterly provision o f resources seems to meet this need. REVENUE MOBILIZATION PROCESS 3.3 Tax revenues are mobilized by three directorates: the Taxation Directorate, the Customs Directorate, and the National Treasury Directorate. The table below shows that in2003, there was a reduction in the ratio o f tax revenues to the GDP, followed by a significant rise in 2004, reflecting the fact that efforts have beenmade int h s area. Table 8: Changes in Fiscal Revenues, 2002-2004 (In billions of Dobras) Category 2002 2003 2004 Tax revenues 95 87 131 Non-tax revenues 18 25 62 Total revenues 113 112 193 GDP 835.3 929.3 1069.3 Tax revenuesiGDP 13.5% 12.0% 18.0% The Customs Directorate (CD) 3.4 Though perfectible, the information system of the Customs Directorate i s satisfactory. The computer software used i s SYDONIA. This system i s installed as a network in the port o f Sao Tome's customs office. The Principe revenue office i s not equipped. It seems to provide satisfactory service, despite a few weaknesses. For example, it does not allow detailed control o f containers. Inaddition, the functioning o f the services suffers from a lack o f manuals o f procedures, since the employees fired in 1998 left with their work documents. However, this 10 information system should be improved with the installation o f a more recent version (Sydonia ++), withinthe framework o f a foreign-financed operation. 3.5 There is a significant need for continuous training. C D staff comprises about 40 people in Sao Tome, including 7 senior staff, and 2people in Principe. Only the director was trained in a customs school overseas. The Directorate neither has a customs school, nor a structure for continuous training. Managers were trained by Portuguese cooperation, but only at the time they were recruited. Officers and technicians also received on thejob training, at the time they assumed service. It should be noted that there i s no professional code o f ethics setting professional rules of conduct for customs personnel. 3.6 The resources available to the inspection section responsible for documents and merchandise controls are inadequate. This section operates both at the port and at the airport in Sao Tome. It ensures compliance with legal standards and revenue controls. Each inspector i s responsible for verifying declarations at the clearance phase and then merchandise at the removal phase. The collection o f customs duties i s made easier by the impossibility to use the credit removal procedure. In principle, merchandise can only be removed if the dues have been paid. Enforcement o f this rule i s facilitated by the fact that there i s only one exit point at the port. However, inspection services usually lack resources, both in terms o f personnel and operating funds. 3.7 The Customs Directorate applies international standards in an informal manner. In fact, although the government has not signed the convention with the World Trade Organization (WTO), the transaction value o f merchandise stipulated by this institution i s well used. Non- membership results from a failure to pay the requisite dues to the World Customs Organization (WCO). The Taxation Directorate (TO) 3.8 The information system is inadequate. First o f all, the services have many computers that are under-utilized, which have just been connected to the Internet. The communication system i s sub-optimal because there i s no network link between the two building the directorate uses. 3.9 The taxation system is essentially declarative, and delinquent taxpayers are not pursued. A fairly good software is used to monitor returns. Tax status i s easy to establish. There was a system for managing taxes, but it was abandoned because o f the volume o f archiving that it entailed. As a result, savings were made inthe editing o f registers and thus, o f paper. But the lack o f management accounting o f taxes owed does not allow optimal collection. Indeed, it i s difficult to identify delinquent taxpayers, and taxpayers who have not paid their taxes within the 60-day deadline are rarely bothered by collectors o f the directorate. Furthermore, the taxpayers database i s incomplete. Thus, only taxpayers who own businesses can be identified for income tax purposes. 3.10 The amount of outstanding taxes to be collected is unknown. Indeed, to the extent that most taxes are collected on a declarative basis, except for payroll taxes, which are withheld at the source, the amounts owing are difficult to assess. These amounts are only estimates. Collections are rarely undertaken and are very weak. Tax audits are planned, but not well targeted. 3.1 1 The TD does not have an adequate operatingbudget. Indeed, since the creation o f the ADFs, the operating budgets of directorates has been replaced by a common fund, which they 11 have no control over. To meet their operating costs, TD employees directly use part o f the revenues collected from disputed cases. These operations, both inrevenues and expenditures, are therefore extra budgetary. Thus, the lack o f operational allocations has a direct impact on tax collection rates. This situation i s worsened by the fact that officers do not have procedures manuals. R i s k s 3.12 The predictability in revenue collection suffers that they don't have the skill to figure out how to assess taxes properly (how many more businesses and how much more taxes are due to the government). Recommendations 0 Allocate sufficient resources to revenue agencies to enable them to operate adequately. 0 Improve the information system within the Taxation Directorate, to improve knowledge o f taxpayers and o f outstanding amounts to be collected. 0 Involve managers o f revenue agencies inthe preparation o f public finance reform. EXPENDITURE EXECUTION PROCESS NormalProcess 3.13 The expenditure process involves: (i) ministries, which issue spending proposals through their ADFs; (ii) the BD, which authorizes recurrent expenditures, and the Planning Directorate, which authorizes investment spending; (iii)the Treasury and Patrimony Directorate, which carries out a number o f ex-ante controls and which authorizes expenditure payments; and (iv) the Central Bank, which makes payments. 3.14 The procedure for current operating expenditures i s cumbersome. It involves the following stages: 1. Request for pro-forma invoices from one or more suppliers or service providers by the AFD o f the line ministries; 2. Expenditure proposal developed by the DAF and submitted to the BD in support o f the pro-forma invoice; 3. Spending authorization given to the BD by the Prime Minister if the expenditure i s higher than 2 million Dobras and by the Cabinet if it i s higher that 5 million, For these operations, a. budget allocations must be sufficient, b. conformity with market prices is verified, and c. the budget imputation i s checked; 4. Once the service has been provided, transmission o f the bill by the supplier or service provider; 5. Verification of the expenditure done by the BD. Control o fthe service provided; 12 6. Transmission by the BD to the Treasury Directorate o f a payment order, along with supporting documentsjustifying the expenditure. 7. The division responsible for expenditures verifies the resources available, the exact budget imputation, and the supporting documents. If there i s no rejection, the payment request sent to the Central Bank. The supporting documentation i s then returned to the BD for archiving. The Division enters the data ina database similar to the one used by the BD. 8. Payment (once execution report i s sent directly by the works commission). 3.15 This procedure is often bypassed in current practice. Indeed, 50 percent o f expenditure payment requests are initiated when delivery or supply have not been completed. This practice results from the providers' lack o f confidence in the government's creditworthiness. Providers therefore stay informed about the status o f their files and only supply their goods or services when they are almost certain that they will be paid quickly. 3.16 Compared with recurrent expenditures procedure, the investment expenditure process requires also the involvement o f additional actors. These include: - The Patrimony Directorate o f the Treasury Directorate, which supports ADFs at the stage where the expenditure proposal i s deposited, then at the bidspreparation stage. - The HIPC Commission, which monitors expenditures made with this type o f financing; - The Planning Directorate, which authorizes the use o f budget allocations; - The bid opening committee, in the case o f a public contract. Its role i s to verify that competition rules are properly applied and that prices are not too different from market prices. However, the prices for the government are in general higher than market prices, because o f the extremely slow procedure. - The Accounting Tribunal ( tribunal das Contas), which intervenes beforehand to control all contracts. - The Public Works Executing Agency, which intervenes during procurement and duringcontract execution; - Ultimately, the Ministryo f Infrastructure, ifthis i sjustified by the technical nature o f the expenditure. The consequence i s a slow investment execution procedure Recommendation 0 Ensure that the stages o f the normal expenditure process are respected, by authorizing payments only after verification that the goods or services have been supplied. Streamline the expenditure process and come back on normal expenditure procedure. 13 Exceptional Procedures 3.17 The law in force as of June 2006 does not provide any exceptional procedures, but its Article 29 stipulates that "collection o f amounts that are not budget revenues i s done inthe form o f cash transactions, as a transfer to the entity to which it i s allocated". The list o f amounts inthis category i s not defined, and it seems that the use o f this procedure corresponds to extra-budgetary operations inministries, which collect revenues in exchange for services provided, then use them themselves to cover their own expenditures. These operations are not good practice as they are not budgeted, they are not audited and they distort budget revenues and expenditures. They should be phased inthe on-going reformprocess. Recommendations Clarify the conditions under which advance payments procedure and the exceptional procedures can be used. Payroll Management 3.18 The technical process for managing payroll seems to be well-mastered. Personnel expenditures management i s based on the concept o f budget items. Public service payroll expenditures are made on the basis o f a collective payment order issuedby the expenditure unit o f the BD. This division uses special payroll management software, which contains a personnel database. Payment itself i s done inpart by "payers", officers in sectoral ministries responsible for making these payments in cash, under the responsibility o f the Treasury Directorate. Other payments are done through wire transfers from the Central Bank. 3.19 The main risk lies in the fact the BD database i s different from the one used inthe Public Service Directorate. The two databasesmust merge into one single database. Recommendations 0 Adopt legislation establishing the modalities for payroll management by the BD. 0 Unifythe two databasesby end 2008 to provide anupto date tool for the government to manage its payroll. Foreign-Financed Expenditures 3.20 Information on the execution of foreign financed operations is incomplete. The execution o f operations financed by multilateral donors i s available within a satisfactory time. In contrast, information on bilateral cooperation varies in quality, and some development partners don't provide information on timely manner, but with some delays. The UNDP, for its part, conducts an annual inventory o f technical assistance operations. The integration o f operations related to the execution o f foreign financed investments inpublic accounting records i s done by the PlanningDirectorate. Risks 3.21 The lack o f full knowledge on the execution o f investments financed with external resources i s it makes sectoral investment programs more difficult to manage and may seriously hamper the management o f public finances. 14 Recommendations 0 Improve knowledge o f foreign-financed operations, notably those related to bilateral cooperation. ACCOUNTINGMANAGEMENT 3.22 Law No. 1/86 on financial administration i s the basic legislation that governed public finance in Sao Tome and Principe as o f June 2006. The Directorate o f the Treasury and Patrimony only comprises two divisions: the Treasury and the Patrimony, lacking an an accounting division. 3.23 The Treasury Division only plays the role of payer, which consists in authorizing expenditures verified and submitted for payment by the Budget Directorate, the sole payment authorizing office. The Treasury Division i s responsible for approving the payment o f securities (validation o f budget chapters, resource availability, budget imputation, services provided, etc.). After approval, the payment securities are kept by the Director o f the Treasury and Patrimony, who i s responsible for authorizing daily payments based on available cash, by transmitting them to the Central Bank, acting as the Government's Cashier.* There i s no fixed policy for cash management; this i s simply done on a daily basis. 3.24 The Treasury Division also comprises a debt management service made up o f two officers; debt i s managed using Excel spreadsheets. A special software for managing external debt (70 loan contracts amounting to about US$324 million) i s being implemented inthe service and set up as network inthe Minister's Office, the Treasury Directorate, and inthe Central Bank (CS-DRMS 2000 + system, version 2.1.). This software will only handle all loan management operations and will not be interfaced with the expenditure chain management software. The calculation o f the maturities will still be the responsibility o f the Budget Directorate and will follow the normal expenditure process. 3.25 The Patrimony Division i s responsible for monitoring the sale and purchase of government goods. The rules governing property management, set out in Law No. 48871 o f 1969 and Law No. 341 o f 1972 for acquisitions, and in Law 3708 for the sale o f goods, are old and date back to the colonial period. Any acquisition inan amount higher than 25 million Dobras (about US$21,000) i s subject to procurement. After preparation by the spending ministry, the file i s sent for validation by the Division o f Patrimony which, after acceptance, issues and monitors the call for bids. Evaluation of the Current System 3.26 The current accounting system i s obsolete, and recent assessments (HIPC-AAP, 2003; IMF, 2005) highlighted its weaknesses. The government's accounting i s limited to the daily recording o f expenditures and revenues by the Central Bank, but no summary statement o f expenditures and revenues i s produced by the Treasury, and no Treasury balance i s produced. In the absence o f a double-entry accounting system it makes not possible to know the government's true financial position. * Inthemajority of countriesin the sub-region,this role is playedby theTreasury 15 3.27 I t is impossible to monitor, from an accounting perspective, outstanding amounts to be collected and paid. The current accountant procedure for authorized expenditures and revenues to be collected does not allow the monitoring o f the outstanding amounts to be disbursed or to be collected, by the Treasury Division. The daily recordings o f revenues by the Central Bank are not subject to any consistency control among revenue authorities: Treasury, Taxation, Customs and Budget Directorates. 3.28 Treasury Balance sheet accounting i s not done. The government cannot know with certainty the composition o f its movable and immovable assets, its stock o f goods and consumptionmaterials, the status o f its medium and long term debt, domestic or foreign; and it i s not possible to establish any kind o f link between owned goods and general accounting. 3.29 Since no accounting i s done, no Treasury balance is established, there is no report from one fiscal year to another, and consequently, the Treasury can only provide to the authorities information interms o f paymentshncomings and disbursements. Recommendations 0 Develop a regulation on Public Accounting Process following the SAFE Organic Law. It must apply the provisions o f the framework law by defining the fundamental principles o f public accounting applicable to all organizations governed by this regime and by establishing budget execution rules for those who are involved in the budget process and whose mandate, prerogatives, obligations and responsibilities must be defined; as such, it i s meant to be a reference instrument to be complemented by other implementationdecrees as needed. 0 Draft manuals o f procedures and organize training seminars for the Treasury directorate. 0 Create a cash management committee. It i s necessary to implement a program based on a monthly cash flow estimates comprising priorities that should be pursued and respected by a Treasury commission that meets weekly under the responsibility o f the Director o f the Treasury. 0 Draft the regulatory framework, notably a standard list o f supporting documents, with a view to: (i) clarify exchanges between line ministries and the Ministry o f Finance by creating a common framework o f reference for the execution o f the government's budget; (ii)harmonize public expenditures payment rules by establishing homogenous procedures identified for the control o f spending operations; and (iii)design a management instrument that can accelerate the presentation and control o f payment orders for government expenditures. 0 Strengthen internal control and train MoPF and line ministry staff on internal control procedures. BUDGETAND ACCOUNTSREPORTING Description 3.30 Information on budget execution operations i s generated by information systems in different administrations: the Budget Directorate, the Patrimony and Treasury Directorate. These systems are not integrated, making it difficult to obtain comprehensive information on short 16 notice. Within the same Directorate, multiple and non-homogenous software are often used. For example, the units within the Patrimony and Treasury Directorate use three different applications to monitor the recording o f expenditures and edit reports. Data transfer i s done on paper, which entails considerable work and undermines data reliability. Thus, it i s difficult to reconcile entries from the Budget Directorate and those from the Treasury Directorate. The differences can be significant andto identify them can take a long time. 3.3 1 Monthly budget execution statements, which only present expenditures by type, are prepared by DTP from several sources, notably administrative accounts kept by the Budget Directorate, monthly accounting data from the Treasury, and extra-budgetary data. These statements present budget estimates and payment orders by ministry. They are produced at most two weeks after the end o f the period. It should be noted that ministries do not prepare any report on the execution o f expenditures in their departments. In fact, all transactions are done by the MoPF, which i s responsible for reporting on the overall budget. The National Assembly receives information as in the draft law o f the new budget there i s usually a summary o f the budget execution from the previous year. The National Assembly does not receive timely manner execution report on the budget law. No Treasury balance i s provided. Evaluation 3.32 The budget execution reports provided by MoPF are not consistent and do not help the government in making decision on the budget execution; nor allow monitoring that covers all accounting and budgetary positions. Recommendations 0 Produce a monthly cash balance. 0 Establishbudget execution reports based on budget classifications. 0 Computerize the production o f the government's flow o f funds table. 0 Incorporate in2006 draft organic law o f Finance, the notion o f carrying over the budget outcome o f the previous fiscal year, and incase o f deficit, determine the conditions for financing it. THEINFORMATION SYSTEM 3.33 In the absence of regulation defining the responsibilities of each directorate and of manuals clearly defining procedures, and inthe absence o f qualified informationtechnology staff, the systems currently implemented were developed by replicating the manual techniques for monitoring information, without any attempt at consistency and without a global view o f the information system. Pendingthe implementationo f the new tool, computers are not ina network; inparticular, the Budget and Treasury Directorates are not interrelated. The information entered into the database o f the Budget Directorate i s copied in one o f the databases o f the Treasury Directorate, but this copy i s not used. The expenditure "items" are entered at least three times in Treasury computers: (i) they are received from the Budget Directorate; (ii) they are when when sent to the Central Bank for payment; and (iii) when they are returned from the Central Bank after payment. The Budget and Treasury Directorates must transfer data on diskettes from various computers to have a global picture o f budget execution. 17 Recommendations 0 Sign convention with Angola to acquire and set up the integrated information system for the budget system. 0 Contact, as soon as possible, a consultant, independent from the national telecoms company (CST), with experience in conducting a network implementation study, implementing networks, or even monitoring network implementation in another country. 0 Reorganize and refocus the schedule for implementing the information system on a realistic basis o f what can be achieved. 18 4. CONTROLS 4.1 The execution o f budget expenditures i s subject to three sets o f controls: administrative, judicial, and parliamentary. Under the reform, administrative control i s the internal administrative control conducted primarily by the General Inspectorate o f Finance (IGF). External control i s done by the Accounting Tribunal (Tribunal das Contas TDC) and by the National Assembly. ADMINISTRATIVECONTROLS (INTERNAL) 0 The Creation of An Internal Control System Within the Treasury 4.2 Public finance reform has integrated the creation o f an internal control system, aimed at monitoring the proper use o f public resources, the reliability o f accounting operations, the strict application o f accounting rules and methods, as well as adherence to procedures. This internal control was the missinglink inthe 1986 system. 0 Internalcontrolwithin the Directorate of Customs is almost non-existent. 4.3 In fact, there is a unit responsible for control, but it only has one inspector. Its rare interventions are sometimes backed up by the Director herself, without any relation to the IGF, which i s supposed to supervise its actions. It should be noted that the Customs Directorate was consulted during the preparation o f draft legislation defining the jurisdiction o f the IGF, and it forwarded its opinion. A review o f these texts reveals that, as the IGF does not have its own customs inspectors, it will continue to have difficulties understanding customs issues. There i s therefore no risk o f duplication with respect to the controls exercised by the customs directorate. Incontrast, the IGFcould effectively exercisecontrols over the operation ofthe service. 0 Controls exercised by the General Inspectorate of Finance 4.4 The General Inspectorate o f Finance (IGF) i s the internal audit structure o f the Ministry o f Finance, responsible for controlling the use o f public funds. Its status i s governed by the 1983 law decree. The IGF has a total o f 10 inspectors, 4 with higher education and 6 with professional training in accounting. The material resources available to the IGF are very inadequate. The IGF prepares an annual work program, but i s often obliged to depart from it to conduct ad hoc controls requested by the MoF. This work program i s established in an inappropriate manner and needs prior approval by the Minister o f Planning and Finance. For 2004 and 2005, the missions conducted were distributed as follows: Table 9: ControlsConductedby the General Inspectorateof Finance, 2004 - 2005 Areas of verification 2005 2004 Public administrations 4 6 Public enterprises 4 2 Others (hotels and private enterprises)* 1 3 Total 9 11 * Tax control 19 JUDICIALCONTROL 4.5 The regulatory framework for judicial control is governed by Organic Law No. 15 o f October 27, 2003 creating the Accounting Tribunal (TDC) and defining its jurisdiction. This law makes reference to the laws on the operation of the TDC which are still inthe draft stage. 4.6 The president of the Accounting Tribunal is appointed by the President of the Republic from proposals submitted by the Cabinet. Intheory, the TDC has an established authority,, but it should be noted that in practice, this authority is not fully exercised, notably in terms o f recommendations formulated to the Government on necessary public finance reforms. The TDC plans to recruit more staff incoming years, especially at the higher level. 4.7 The TDC exercises three types of control: (i) control, (ii) ex-ante concomitant control (controliaudit of the management of government bodies); and (iii) successive verification or ex- post control. Through its ex-ante control authority, the TDC verifies actions, contracts, or other instruments that generate expenditure or that represent or can entail direct or indirect financial responsibilities for the government. Public contracts of an amount higherthan 250 millionDobras need TDC approval. 4.8 TDC resources come from the government budget, but primarily from revenues derived from fees paid by economic operators during audits (ex-ante) of their contracts: 3 percent on public contracts higher than 250 millionsDobras. Evaluation Strengths: 0 Regular preparation o f activity reports. 0 Wide dissemination of activity reports, presented to Parliament, to the President of the Republic, and to the media. 0 Annual audit of Accounting Tribunal accountsby a private accounting firm. Weaknesses: 0 TDC interventions are limitedprimarily to the ex-ante review of public contracts and, incidentally, to concomitant control, in other words, to management control of government bodies. The ex-ante control function i s exercised by the TDC in other countries whose systems are based on the Portuguese model. However, this system, whereby the TDC i s "judge andjury", diminishes its level of independence, but also no longer allows it to cover the risks that an ex-post control conducted by a different entity is supposed to mitigate. It should also be pointed out that this system does not comply with INTOSAI principles, which require the separation of internal audit functions (control of the executive by its own entities, hence primarily ex-ante control) from external audit functions, which should be conducted by a structure that i s independent of the executive, "Auditor General or Accounting Tribunal". Conscious of this reality, the Portugal's TDC has already chosen to gradually reduce its intervention inthe form of ex-ante control, in favor of increasing ex-post controls, something that Saotomeansauthorities may wish to consider. 0 Furthermore, the TDC still has not controlled government accounts for the past 15 years, although this i s required by organic laws. This function i s essential according 20 to the constitution o f Sao Tome & Principe, but also constitutes an indispensable element o f executive accountability to the Parliament and the citizens. In fact, this situation results notably from the absence o f public accounts productionby the MoF, but also certainly from the fact that the TDC mainly allocates its resources to ex-ante control functions and management control. 0 With respect to methodological tools, for the time being, the Sao Tome's TDC uses PortugalTDC's manual o f procedures inthe absence o f its own manual. Finally, human resources at the TDC are quite limited, particularly in terms o f staff with higher education and with special training inthe auditingprofession, instrategic issues for Sao Tome & Principe, and inoil sector management. Recommendations Use the opportunity provided by the ongoing M o F reform to clarify responsibilities for ex-ante control. Since this responsibility i s currently exercised primarily by TDC, it would be advisable to envisage a gradual reduction inthis type o f control infavor o f a structure reporting to the executive, in particular, for the control o f public contracts. 0 Establish, in collaboration with the M o F and Parliament, a work program that will allow it to catchup on the delay inreviewing general government accounts. 0 Envisage an improvement o f the institutions: in terms o f staff, material resources, methodological means, to improve its Performance and address the weaknesses mentioned above. Address immediate and important needs in terms o f training and methodology (manual o fprocedures, auditing guide). LEGISLATIVE CONTROL 4.9 The National Assembly i s made up of parliamentarians who are the product of the electoral process. The Constitution o f STP confers on the National Assembly the authority to exercise political control over the financial and economic activities o f the government. The economic and financial committee o f the National Assembly reviews the draft budget and makes recommendations for the plenary that must examine and approve the annual budget law. This committee receives reports from the TDC, which i s supposed to provide an assessment o f the contents and quality o f the financial and budgetary information transmitted to Parliament. These provisions are stipulated in the Constitution and in the laws governing the regulations o f the National Assembly. These controls can take the following forms: - Ex-ante analysis o fthe general government budget; - Monitoring o f budget execution/budget performance, based on ex-post analysis o f general accounts established by the government. 4.10 However, except for budget reviews by Parliament, the other prerogatives relating to the control o f government activities are hardly or not exercised because o f the government's failure to present its General Accounts. 21 4.11 In theory, there are regulatory instruments and laws which confer on the National Assembly the authority to invite the government to undertake changes and reforms o f laws and regulations. However, this authority i s hardly ever exercised. Evaluation The smooth operation o fthe National Assembly i s underminedby the following weaknesses: 0 Many parliamentarians have a limitedknowledge o f public finances. 0 The lack o f human resources, notably parliamentary assistants, to better understand public finance management tools (budget laws, government accounts, and other subsequent legislation). 0 The weakness, or even the lack o f tools such as computer equipment. The weakness o f periodic training for parliamentarians and their assistants. Recommendations Address the absence o f review o f the government's general accounts for the past 15 years. The National Assembly should play a pivotal role by proposing a flexible and non- partisan solution to reduce the delay (for example, a method for reviewing previous accounts all at once) and thus be ina position to start on a new basis. Strengthen cooperation between Parliament and the Accounting Tribunal (TDC) in relation to information exchange on budget executionby the government. Establish a continuous training plan for parliamentarians and National Assembly staff on how to prepare, formulate, and monitor budget execution and analysis o f the budget and the general government accounts. Enforce the discipline o f an annual budget vote within the regulatory time. Maintain, or even increase, its internal expertise, in particular by perpetuating the existence o f fiscal and policy analysis units. 22 5. DECENTRALISATION 5.1 The Sao Tome & Principe archipelago i s made up o f two main islands: the island o f Sao Tome, which represents 9/10tho f the territory (about 859 km2), where some 160,000 inhabitants live inthe major cities; Sao Tome, the capital (50,000 inhabitants, including the agglomeration, or 113 o f the total population according to the 2001 census) or other smaller towns (Trinidad, Guadalupe, Neves, Santana, et.) and Principe Island, located north o f Sao Tome, with an area o f 136 km2 for a population o f 8,000 inhabitants, o f which 1,500 live in Santo Antonio, the main city. 5.2 Districts have very little financial resources. The islando f Sao Tome i s divided into six districts: Agua Grande, Me Zoxi, Lemba, Lobata, Canto Gal0 and Caue. Each district has its own administrative services placed under the supervision o f a district council elected by universal suffrage. The president, elected among the members of the district council, manages the government and local technical services. The only resources in these districts are government subsidies and a few local taxes (business taxes, taxes on cemeteries). Their employees are paid from the government's budget, and the Ministries o f health, education, and infrastructure have local offices. Thus, it i s difficult to know whether the districts are decentralized or deconcentrated entities. 5.3 The island of Principe is an autonomous region (article 116 o f the Constitution), with special status; it has its ownregional government and a regional assembly with full powers except for national defense, the army and foreign policy. 5.4 The administrative organization of the Island of Principe i s complex and inefficient. Financial administration o f the island o f Sao Tome i s a Directorate, and that o f the island o f Principe, which i s recognized as a regional entity, i s a delegation of the Sao Tome directorate. However, the actual organization i s different from what i s set out in the legislation. Indeed, because human resources in Principe are very limited, there i s in reality only one administrative entity encompassing the three new general directorates: Customs, Taxation, and Treasury. Furthermore, Principe has the status o f a regional entity with its own budget, and financial administration also falls under the authority o f the regional administration. Thus, this organization, which has 11 administrative officers reporting to 4 authorities, i s very complex and hardly efficient. This causes great difficulty in allocating operational and investment responsibilities among these authorities and in accounting for the use o f resources, given that the objectives o f the regional entity may runcounter to national objectives. Recommendations 0 Streamline the administrative organizationo f Principe. 23 6. PUBLICENTERPRISEMANAGEMENT 6.1 Public enterprise management i s not related the ongoing public finance reform. However, the authorities wanted to use this phase o f the reform to start a reflection on the management o f public enterprises, and requested an accurate assessment o f the main enterprises. 6.2 This report on the situation o f STP public enterprises (state owned enterprises - SOEs) stems from the review o f four (4) SOEs: ENASA (Airport), EMAE (Water and Energy), ENAPORT(Port) ,CORREIOS,(Postal Services) as well as ENCO (Fuel) which is mix owned . (51% owned by the State), the main supplier o f oil products. GENERAL DESCRIPTION THEPUBLIC ENTERPRISE OF MANAGEMENT SYSTEM 6.3 On the regulatory front, Sao Tome & Principe is not a member o f the Organization for the Harmonization o f Business Law in Africa (OHADA). However, the existence o f a regulatory framework i s reflected, at the level o f each enterprise, into its founding decree defining its status. 6.4 The statutes o f parastatal enterprises confers them autonomy in administrative and financial management, but all decisions are subject to approval by the technical ministry to which they report. With respect to governance, each enterprise has governance bodies in line with the regulatory frameworks. In practice, this translates into administrators who are responsible for management and who report to the government. In theory, management has administrative and financial autonomy, but in fact every decision i s under permanent control o f the government through the technical and financial supervisory ministries. 6.5 Apart from the existing internal audit mechanisms within each enterprise, the government regularly exercises external controls conducted by the General Inspectorate o f Finance (IGF), with particular emphasis ontax audits. 6.6 Onthe financial front, relations between the government and its enterprises are limited to the payment o f dividends and taxes to the Treasury. The government does not grant operating subsidies to compensate for losses stemming from regulatory policies or rate freezes. The government does not make any large investments either. Thus, without external financing, public enterprises are not in a position to invest in the maintenance and development required to effectively spur growth. Only EMAE recently received financial support from local commercial banks to support its ongoing restructuringprogram. GENERAL RECOMMENDATION 0 Corporatize these enterprises to limit government interfere inenterprise management, bringingthem fully inlinewith commercialpractices. 0 Explore management options. Two such options may be: o Foreign investment and possibility o fpublic-privatepartnership. o Consider adoptingperformance contracts (or retainer contracts) betweenthe government and these enterprises, instead o f the current omnipresence o fthe government. However, these contracts will needto be developed with outmost care to simplicity and ease o f monitoring results. 24 SPECIFIC EXAMPLESTHE PUBLIC ENTERPRISE OF MANAGEMENT SYSTEM 1. ENASA (Airport): 6.7 ENASA i s a public enterprise created in 1987 to manage airport operations and security. It has a board o f directors with 3 executive members responsible for management, all appointed bythe government for a renewable 3-year term. One tax adviser is appointed, a positionheldby a paid employee o f the enterprise; this employee handles management audits and reports directly to the Ministry o f infrastructures. Apart from this internal audit, the new management has just commissioned an external audit to examine management duringthe last five years'. 6.8 The statutes confer management autonomy, but in fact all decisions are subject to the approval o f the Ministry o f Infrastructures, notably with respect to personnel management (for example, strikes, salary increases, etc.). External audits are limited to IGF audits, a few o f which were limited to the regularity o f tax returns. 6.9 Annual turnover i s estimated at a little less than US$ 800,000, more than 80 percent o f which i s absorbed by the wage bill (130 permanent employees). Hence the recurrent deficits, which explain the enterprise's current precarious structural situation. Tax and social debt to the government have accumulated due to lack o f cash to settle them, even though taxes are declared. The same i s true with respect to the debt to EMAE, which i s not paid, creating tensions with this strategic supplier who regularly threatens to interrupt energy supply. Followingthrough with such a threat couldjeopardize the operation o f airport activities and further weaken the situation o f the whole country inrelation to external as well as domestic partners. 6.10 Each year, an activity program i s presented by management and approved by the ministry, but its implementation is limited owing to lack o f adequate financial resources. 6.11 A restructuring plan comprising a social component (partial reduction o f staff) and an operational component related to the renovation o f work tools (cleaning, maintenance; recuperation o f overflight fees) are under discussions but are not yet formalized. In strategic terms, an investment plan for renovating and developing airport facilities i s being finalized and will be followed by a campaign to seek financing for its implementation. 2. ENCO (fuel) 6.12 ENCO i s a limited liability company with mixed capital resulting from a 1998 privatization. Its purpose i s to trade oil products. Fifty-one (51) percent o f its capital i s held by the government, 40 percent by SONAGOL, and 9 percent by private individuals, including 3 percent for staff. The company owns its headquarters and 3 oil facilitiesidepots. 6.13 A board o f directors o f 5 members, including 2 executive administrators, is responsible for management; the General Manager i s appointed from proposals made by the government, and the deputy General Manager comes from SONAGOL. The tax council i s a committee o f 3 members representing each group o f shareholders; it i s responsible for internal audits and reports directly to the board o f directors. A general meeting o f shareholders i s held each year, during The audit mission has not yet started; the TOR and the conditions for selecting the auditor have not yet been published. 25 which management reports on its activities, listens to the report o f the tax council and decides on the distribution o f profit and on the orientations o f the company by adopting a plan o f activities and the budget. 6.14 An external audit is conducted each year to certify the financial statements submitted to shareholders. The IGF conducts frequent audits (on average 2 to 3 per year) and submits its observations and recommendations for implementation to ENCO management. In addition, a quarterly management report i s produced and communicated to the company's management structures, and then to the government, in particular the IGF, the Treasury, and the Ministry o f Planning and Economy. 6.15 Because o f the company's weak financial capacity and its inability to implement its development plan, it i s forced to be dependent on its shareholder-supplier, SONAGOL, which actually wields considerable control inthis strategic sector o fthe country's economy. 3. ENAPORT(Port) 6.16 ENAPORTis a public enterprise fully owned by the government; it enjoys administrative and financial autonomy in management; but this arrangement in principle i s still theoretical because in practice, all decisions are submitted for prior approval to the supervisory ministry (Ministry of Infrastructures). The company is managed by a board o f directors comprising 3 executive administrators, including the GM, all appointed by decision o f the supervisory technical minister. A tax council, appointed by the supervisory minister, i s responsible for management audits within the company. 6.17 The company employs 115 permanent staff, has an annual average turnover o f about US$1 million, and barely manages to balance its accounts. The profits made by the company are paid infull to the government inthe form o f dividends to the tune o f 80 percent and taxes on the balance. 6.18 Development plans are drafted to replace the faulty production tools and strengthen the service capacity o f port facilities. However, due to lack o f effective support from the government- shareholder, no financing could be mobilized for implementation. 6.19 On the financial front, claims on the central government stand at US$ 1 million, the equivalent o f one year's turnover, further weakening the financial situation of the company, which cannot compensate with the expenses due to the government (payment o f taxes and dividends, etc.). 6.20 On average, the General Inspection o f Finances conducts 2 audits per fiscal year, focusing in general on tax returns and the management system. Recommendations are in part implemented by company management for matters within its jurisdiction, but those under the purview o f the government are not implemented, owing to lack o f decision by the government. The same goes for the conclusions and recommendations o f external auditors who intervene each year. 6.21 The government's awareness o f strategic issues has remained very low, given the successive changes o f supervisory ministers, which has seriously undermined continuity in dialogue with the government to ensure real development o f the enterprise. As a result, there i s very little motivation of management, and consequently, weak service capacity inport facilities. 26 4. EMAE (Water and energy) 6.22 EMAE, a public enterprise currently fully held by the government, is responsible for water and electricity production and distribution. As the others SOE, there i s no effective autonomy in terms o f administrative and financial management, as political interference seem to persist. Thus, for example, the supervisory minister insists on approving the decisions o f the board of directors before implementation(see budget 2006). 6.23 A 7-member board o f directors manages the company, with a general manager selected on a competitive basis. External audits are conducted by IGF and focus primarily on taxes owed by the company. A recent audit established that the tax debt stood at US$ 200,000, and will be paidby the company despite disagreements on some aspects o fthe report. 6.24 Because o f structural production and management problems encountered in the past, a restructuring plan was adopted and led to the following developments since its implementation was launched by the new management: 1. Water and electricity rates have remained frozen for the last three (3) years. Thus, the increase in the price o f combustibles has helped reduce to zero any margin on electricity production. Since operating costs are only covered with water revenue, the enterprise does not have enough financial resources to fulfill its commitment to maintain operating tools and pay its suppliers. Hence the accumulated debt o f some US$ 1.5 million to ENCO-its main supplier o f combustibles-and the accumulation o f tax debt to the government. 2. The ongoing restructuring has allowed the implementation o f a new system o f computerized operations: automated counting o f consumption, coupled with a prepaid billing system and effective application o f new commercial and financial procedures limiting the free consumption that a certain category o f consumers enjoyedinthe past. 3. Ths restructuring i s supported by a development plan financed by commercial bank loans to the tune o f US$ 1.4 million; this involves increasing electricity productioncapacity by 27 MW through construction o f 3 hydro-electricity plants. 4. The current management consolidation has helped improve company cash flow thanks to the significant increase in turnover and to the systematic recovery o f claims; this has helped start the clearing of arrears to strategic creditors such as ENCO and the government and to respect the deadlines for repaying bank loans. 5. CORREIOS (postal services) 6.25 CORREIOS is a public company fully owned by the government; it enjoys administrative and financial management autonomy. The company i s managed by a board o f directors comprising 3 executive administrators; the board manages the company under the authority o f a chief executive officer. The whole management team i s appointed by the Minister o f Infrastructures. The company does not have tax auditors to perform management audit functions, nor external auditors. Only IGF conducts audits covering all aspects o f management, including the regularity o f the tax situation. Audit conclusions and recommendations are exchanged with the supervisory ministry, and then implemented. 6.26 Based on the non-audited financial statements for fiscal year 2005, it appears that the company has a turnover in the order o f US$ 250,000, employs some 50 permanent staff, and 27 makes profit of about US$20.000. These profits are paid infull to the government inthe form o f dividendsandtaxes. 6.27 Each year, an activity plan i s adopted by the board and submitted to the Ministry of Infrastructure for the approval and to the Ministry of Finance for information. A strategic development plan (2002-20050) exists but has not been implementedto date because of lack of financing. However, management estimates that this strategic plani s still up to date; it seeks to (i) rehabilitate work tools, (ii)propose a new technological offer due to the obsolescence of the current means of operation and the competition from other actors in the sector, despite the existence of a theoretical monopoly enjoyed by the company. However, the financing o f this strategic development plan remains uncertain given the inadequacy of funds and the weak capacity for mobilizing external financing. 28 7. COMBATING CORRUPTION 7.1 Inanticipationof future resources from the petroleum sector, andbased onthe necessary modernization o f public finance management, Sao Tome & Principe has started a reflection on the fight against corruption, notably within political parties. This reflection i s not yet formalized, but one may say that the fact o f knowing that legislationis called for inthis area may already be considered a first step towards strengthening transparency inthe management o f public funds. THEABSENCE AN INSTITUTIONALNATURE OF INTHE FIGHT AGAINSTCORRUPTION 7.2 A presidential decree, dated May 15, 2006, ratified the United Nations Convention Against Corruption on December 9, 2003. The main objectives of the Convention are to: (i) prepare and strengthen anti-corruption measures; (ii)promote and coordinate international assistance inthis area. The Convention calls for the adoption o f a legal and regulatory framework to fight corruption. 7.3 The legal framework i s not set up to fight against corruption. There i s no anti-corruption law inSao Tome & Principe's legal package. 7.4 However, the legal system i s organized and can receive and process any claims related to any type o f financial fraud, including personal profiteering inan action related to public funds. 0 The Accounting Tribunal reviews and hears any instance of conflict o f interest, and even conducts inspection missions within the services, including within the Budget Directorateandthe Treasury Directorate. 0 In its current phase of reflection on strengthening administrative control, the IGF hopes to play a key role in the sound management o f public finance, notably inthe context o f its draft framework decree establishing its main responsibilities in ex-ante as well as in ex-post control within the expenditure cycle. 7.5 Inaddition, a law requires that political leaders ina number of decision makingpositions declare their assets when they assume service. 7.6 There i s not national anti-corruption body, and inthe context o f the current public finance reform, no such institution i s planned. ANALYSISOFTHE CURRENTENVIRONMENT AFFECTING THE FIGHTAGAINSTCORRUPTION INPUBLICFINANCE 7.7 At this time, there can be no real debate on the institutionalization of the fight against corruption in Sao Tome and Principe. Indeed, key pre-requisite conditions are absent in the country's institutional life, a situation which i s incompatiblewith a real policy to fight any type of financial fraud. Inparticular, although the National Assembly i s the entity that should establish the legal principles for this fight, it i s hampered by the current statutory situation. 0 Some members o f parliament (MP) are engaged in private activities and continue to pursue them after assuming office, since their income as MPs are largely inadequate for 29 them to stop their private business. In fact, an M P may also head a company and win a public contract. 0 There are perhaps too many MPs (55 for a population that i s slightly less than 200,000 inhabitants); in particular, the country's political life i s based on the public service, and almost all National Assembly deputies are also senior government officials, i.e. civil servants. If the cyclical rotation of government teams, related to legislative elections, i s taken into account, one i s forced to acknowledge that both groups are inturn controllers and controlled. In this context, there is no obvious will to formalize the fight against corruption, either through an anti-corruption law or through the establishment of a national body dedicated to this issue. 0 Inthe same spirit, the law on the declaration of personal assets by political leaders is hardly respected.The interactionbetween controllers and controlled i s still too strong. 0 It also seems that there may be collusionbetween the political class and the courts. Inthis case, it seems difficult to create a real system of sanctions geared to sound management of public finance. MAINRECOMMENDATIONONCOMBATINGCORRUPTION 7.8 The debate on combating corruption cannot take place within the current highly politicized system in the Republic of Sao Tome and Principe. In fact, one major pre-condition mustbe fulfilled: 0 Legislation should be passedon the involvement of members of parliament, with private enterprises that may be government suppliers, as well as their ineligibility for any other public service function, notably at senior levels. 0 Make a follow up of previous decisions of the Accounting Tribunal. 0 Create on a long term a National Anti-corruption Committee/Observatory, similar to those inexistence inother countries inthe sub-region. 30 8. HUMANRESOURCES THEPERSISTENTHUMAN RESOURCE PROBLEM 8.1 The low level o f human resource qualifications, largely explain the dysfunctions revealed in Volumes Iand I1 of this report. These problems exist in all public finance management services or stakeholders. Weaknesses were noted throughout the budget process. They exist in budget preparation, execution, and control. 8.2 Several aspects o f human resource deficiencies were noted: 0 Managers, who are most often very competent, belong to a unique structure, often young, but responsible for almost all tasks related to organization, andimplementation. 0 There are few or no deputies who can replace the unit head with the same level o f efficiency. 0 There may be a shortage o f officers, who perform repetitive and sometimes redundant tasks duplicated by other services, with no clear sense o f the overall budgetary process. 0 A number o f young graduates abroad do not return to work for their country because there i s practically no economic incentive for them to do so. As a result, a unit only reflects the activities o f a very limited number o f people. 8.3 Finally all staff responsible for public finance management, including managers have the erroneous impression that information technology reform and the ensuing modernization will "solve all problems" as soon as it i s implemented. MAINRECOMMENDATION HUMAN FOR RESOURCE CAPACITY BUILDING 8.4 The measure that stands out as a priority i s a cycle o f general training in public finance management, over several months. This training, which would include a significant practical aspect, should be provided first to managers and civil servants working in the different directorates o f the Ministryo f Finance. 8.5 This training should constitute the knowledge base underpinning computer training on budget preparation and execution software, accounting software, personnel software. Recommendations: 0 Establish and implement a training plan in public finance management over several months. 0 Create incentives to encourage the return o f young expatriate graduates. 31 CHAPTER I1: EVALUTATION OF ONGOINGREFORMS AS OFJUNE 2006 1. LECADRELEGAL ET REGLEMENTAIREDANSLA REFORME DES FINANCES PUBLIQUES 1.1 Les recommandations formulees depuis 2003 par la Banque et Fonds avaient porte sur la necessite de revoir le cadre legal et reglementaire des finances publiques de Sao Tome. 1.2 Eneffet, une fois le choix fait du systeme de gestion de finances publiques a importer (( )) d'hgola, ilest predominant que ledit systeme soit adapte a Sao Tome, et surtout que les textes saotomeens soient adapt& en fonction des choix retenus. C'est sur la base de l'actuelle loi cadre portant sur la gestion des finances publiques, en date de 1986, que les autorites ont entame un processus de revision, dans le cadre de la preparation d'un nouveau projet de loi cadre. Uncomite en charge de la coordination de la reforme a ete m i s en place depuis le debut de 2006. L a validation des textes lkgaux et reglementaires lies a la reforme est l'une de ses premieres taches. 1.3 A l'appui de cette nouvelle loi cadre, un certain nombre de textes, du cadre legal ou du cadre reglementaire doivent &re pris. I1s'agit des textes d'application traitant de l'organisation et des attributions des acteurs de la gestion budgetaire et comptable. Ces textes porteront (i)sur la fonction d'elaboration budgetaire et d'execution de la phase administrative de la depense, (ii) sur la comptabilite, notamment portant a) creation d'une direction de la comptabilite publique a cote de la direction du Tresor et du patrimoine et b) une comptabilite du patrimoine ; (iii)sur le contr6le interne, notamment dans le circuit de la depense. Ces differents textes devront dormer lieu a la production des differents manuels sur chacune de ces fonctions. LEPROJETDEREVISION LALO1CADRE DE L e Contenuet L e Calendrier de PrCparationduDocument 1.4 S'appuyant sur les recommandations anterieures, le projet de loi des finances publiques - projet de loi cadre (PLC)- exprime les rkglesbasiquesdCfinissant la procCdure d'Claboration, d'exbcution et de comptabilisationdu Budget GCnCral de l'Etat;ildefinit les nomenclatures budgetaires de recettes et depenses sur un standard international, ainsi que le regime et la methode adoptee pour l'execution et la comptabilisation des actes et les faits administratifs executes pendant l'exercice financier ; le PLC introduit notamment le plan comptable en partie double, ainsi que la notion et les principes d'une comptabilite patrimoniale ; ildkfinit les regles de contr6le interne, rattache au pouvoir executif, et les attribution du contr6le externe ;ildefinit la notion de responsabilite de 1'Etat et de ses agents ; ;le PLC organise le reportingbudgetaire et comptable, et definit des dates de sa propre mise en ceuvre par le Gouvernement. (Une description dktaillke du PLC estproduite en annexe 4). 1.5 L e projet de loi cadre a et6 ClaborC debut 2006 par les consultants en charge de l'appui technique de la mise en ceuvre de cette reforme. I1 doit encore etre discute et valide par les autorites. Evaluationduprojetde loicadre. 1.6 L'expose d'intention de la part des autorites est de faire succeder A la loi cadre 01/86 un texte nouveau qui marquera une revision totale de fond)). Ce nouveau texte doit definir le (( 32 SAFE et son fonctionnement pour une gestion saine et efficace des finances publiques, et conforme aux normes internationales. 1.7 Dans l'esprit, ce texte marque effectivement un changement certain dans la gestion des finances de 1'Etat. Une (i)meilleure transparence par des classifications budgktaires conformes A une vision moderne et unifiee des finances, (ii) unplancomptable enpartiedouble et unsuivibudgetaire et comptable -quine laisse pas de place aux incertitudes dupasse recent-, (iii) un contr6le qu'on souhaite affirmer comme une valeur indispensable, y compris (iv) une responsabilisation de 1'Etat et de ses agents, sont autant de points qui doivent aboutir a une future gestion saine des finances de Sao Tome. 1.8 NCanmoins, le PLC reste un maillon assez faible du dispositif de la rCforme, car ilest assez peu clair sur bon nombre d'aspects de fonds, et tres incomplet, voir parfois ne repondant pas aux recommandations anterieures. I1demeure donc unfacteur de risque des sa mise en ceuvre. Notamment, 0 L e PLC est tres peu clair sur la repartition des responsabilites au sein des phases administratives et comptables : ildevrait Ctre plus precis, tout en restant simple, dans la description du " qui fait quoi" en termes d'engagement de la depense et d'ordre de paiement. 0 L a partie sur l'klaboration du budget gagnerait en clarte si (i) calendrier complet un etait defini et si (ii) une repartition des t8ches etait proposee entre les services du Plan et ceux du Budget. Cette absence de repartition a comme consequence que les deux administrations concernees sont loin de ((travailler ensemble ))pour la preparation de la LdF 2007. 0 Dans le domaine de l'execution budgetaire et comptable, le texte pourrait entrainer des confusions d'attributions en termes de liberations des credits, et plus gentralement en termes de programmation des credits. 0 MCme les attributions de la future fonction de direction de la comptabilite publique, pourtant bien precises, ne permettent pas d'envisager sereinement sa relation avec le Tresor public. Si c'est a la direction de la comptabilite publique de tenir la comptabilite et de suivre le compte general de l'Etat, qu'est ce qu'il reste au Tresor ? L a direction de la comptabilite publique devrait avoir des fonctions separees des fonctions de gestion A proprement parle, notamment elle devrait plut6t traiter de toutes les questions relatives a la reglementation comptable et a son respect. 0 Dans le domaine du reporting, la balance du tresor doit Ctre imperativement mensuelle, et les entites independantes devraient avoir une date limite en N+l pour deposer leurs etats definitifs. 0 L a fonction du contr6le interne est non seulement trQ imprecise dans le texte, mais contradictoire notamment lorsqu'elle fait reference aux principes d'independance de l'audit. Par definition, le contrble est unoutil a la disposition du pouvoir executif, par exemple du MEF, pour permettre a celui-ci de corriger ses erreurs suffisamment t6t dans la chaine de la depense et d'ameliorer la qualite interne de gestion. I1y manque une veritable definition du contr6le interne, qu'il soit a priori ou a posteriori dans la chaine de la depense et, une fois de plus, ily manque le qui fait quoi D, (( 33 0 Seule l'attribution relative a l'avis formule par le Tribunal des comptes est evoquee dans le texte, alors que les regles actuelles de visa des marches publics par le Tribunal des comptes ne sont pas cohkrentes avec les regles d'independance du contrblejuridictionnel des finances publiques. 1.9 L e PLC est marque par l'absence totale de disposition portant notamment (i) sur les sanctions et peines qui peuvent Ctre appliquees en cas de fraude ou d'erreur ayant entrain6 des prejudices, ni ne font reference a des textes qui les definissent ainsi que (ii) sur la forme et les delais de presentation et diffusion des informations budgetaires et comptables a la societe ; le texte n'indique pas non plus s i 1'Assemblee communiquera ce type d'information a la population et de quelle maniere. 1.10 Enl'ktat, le PLC pkrennise le risque d'impunitk et de manque de transparence vis- a-vis de la population. 1.11 Enfin, l'une des graves defaillances du PLC est qu'il ne prevoit pas explicitement les differents textes d'application qu'il est cense induire. MCme s i le Comite de la reforme travaille sur differents textes portant sur les DAFs,l'IGF, la Directionde la ComptabilitePublique, le PLC devrait les prevoir explicitement, en definir les attendus ;notamment, ilest totalement necessaire qu'untexte reglementairesoit pris, portant Reglement General de la ComptabilitePublique. Recommandations 0 L e PLC doit faire l'objet d'un examen attentif et de corrections ou complements avant le 31 decembre 2006, pour Ctre discute et valide debut 2007 au plus tard, et doit repondre clairement aux recommandations faites depuis 2004, LES ACTESREGLEMENTAIRES D'APPLICATION DE LA FUTURE LO1CADRE L e Contenu et le Calendrier de PrCparation des Documents 1.12 L'organigramme institutionnel du budget, son manuel de procedure et le manuel d'elaboration des lois de finances et le projet de loi de finance 2007 sont prevus d'Ctre elabores et presentes au comite de la reforme, puisdevront etre valid& en conseil des ministres. 1.13 L e texte portant creation du plan comptable et des operations de comptabilisations de 1'Etat a ete elabore et presente au comitk de la reforme en janvier 2006, mais n'est pas encore valide en conseil des ministres. I1 en est de mCme pour la direction du Tresor et du Patrimoine, incluant son nouvel organigramme, ainsi que pour la direction de la Cornptabilite Publique (creation.). 1.14 L e texte sur le contrble interne a et6 elabork par 1'Inspection genkrale des Finances valide par le comite de la reforme et est sur le bureau du conseil des ministres depuis l'ete 2006. L e projet de dtcret-loi propre a l'IGF ( au stade d'examen et d'approbation par le gouvernement) confere a cette Inspection la responsabilite en tant que structure centrale de contrble interne, d'exercer le contrble dans les domaines budgktaire, Cconomique, financier et patrimonial, en s'assurant de la legalite, de la rtgularite, ainsi que de l'economie et de l'efficience. L'IGF doit (i) realiser des audits, inspections, evaluations, enquCtes, recherches, examens des entites publiques et privees relevant de son champ d'investigation; (ii) formuler, dans le contexte de ses audits et autres travaux qu'elle rdalise, des recommandations afin d'ameliorer l'organisation, le 34 fonctionnement et de la gestion des entites contr61ees et (iii) un avis sur les comptes des donner entreprises publiques. 1.15 L e texte sur la deconcentration et le renforcement des competences en finances publiques desDAFs a ete redige ;ila Cte present6 au ComitC de reforme. Evaluation. 1.16 Aucun projet de texte d'application n'est encore valide. D e plus, iln'y a aucun texte d'application, en termes de gestion comptable, a commencer par un reglement General de Comptabilite publique. L'absence de manuels des procedures budgetaires, puis des procedures comptables, notamment le recueil des pieces justificatives sont absolument necessaires pour une veritable efficacite de circuit de la depense. 1.17 L e projet de loi organique de 1'IGF est confus, notamment quant au champ d'intervention et aux attributions de 1'IGF. A la lecture du projet de decret, 1'IGF effectuera tant du contr6le a priori, que du contr6le A posteriori, ainsi qu'elle aura une competence de contr6le fiscal des entreprise privees. Or, ilest genkralement admis que les fonctions de contr6le a priori et celles a posteriori ne peuvent pas Ctre assurees par une mCme entite, ceci afin d'tviter que ladite institution ne soit juge et partie. I1 ressort egalement que les responsabilites respectives de la direction des imp6ts et de celles de 1'IGF dans le contrdle fiscal des entreprises privees ne sont pas clarifiees. 1.18 L e projet de texte sur les Dafs definit le r61e et le champ d'action des directeurs administratifs et financiers au sein des Ministeres en stipulant notamment qu'ils sont charges de superviser et coordonner les dtpenses du Ministere en fonction des budgets alloues et en respectant les programmations financieres et les regles comptables. Recommandations 1.19 Les principaux textes d'applications doivent &re valid& la mise en ceuvre de la reforme (au plus tard courant 2007). L e RGCP, ou untexte equivalent doit &re produit Unveritable contr6le interne doit Ctre organise, avec repartitions des responsabilites et manuels de procedures A la cle. L e texte sur 1'IGF doit Ctre revu, et faire l'objet d'un consensus entre tous les acteurs de la gestion des finances publiques L e texte sur les DAFs doit Ctre approuve en Conseil des Ministres avant la mise en ceuvre de la reforme, pour permettre la nomination effective des personnels dans les differents Ministeres, et leur formation. 35 2. LA PREPARATIONDELA LO1DEFINANCES DANS LA REFORME DES FINANCES PUBLIQUES 2.1 L e PLC doit corriger les aspects negatifs qui ont et6 constate par les evaluations qui ont conduit A cette reforme. Ces constations avaient porte sur le fait que (i) le projet de budget est elabork d'une maniere duale : d'une part le budget des operations courantes, d'autre part celui des operations d'investissement ; (ii)l'implication des ministeres dans la procedure est peu developpee et la coherence avec le DSRP est faible; (iii)Les personnels impliquks dans le processus sont peu motives ; (iv) la dimension pluriannuelle n'est pas prise en compte et le budget n'englobe pas tous les flux ;(v) le calendrier d'elaboration et validation du projet de la loi de finances n'est jamais respecte, et (vi) 1'Assemblee Nationale n'est pas en mesure d'effectuer une veritable etude duprojet de budget. 2.2 L e chapitre porte sur les modalitts d'elaboration de la L o i de finances telles que proposkes par le PLC. PROCEDUREET CALENDRIER PROPOSES Evaluation Les Forces 2.3 L a future loi cadre fixe les Ctapes de la prockdure. L e projet de loi cadre des finances publiques stipule (article 25) que le Gouvernement soumet le projet de budget a 1'Assemblee nationale au plus tard le 30 septembre de l'annCe precedente. L'Assemblee nationale examinera le projet et le votera au plustard le 15 dtcembre de l'annke precedente (article 26). 2.4 L e futur systkme d'information devrait permettre d'accClCrer le processus. Les autorites ont indiqut que l'outil informatique au coeur de la reforme A venir devrait permettre un raccourcissement de certains delais, notamment ceux impartis a la compilation manuelle des avant-projets sectoriels, grice a une saisie acceleree des donnees de previsions budgetaires dans la future base de donnees unique. LesFaiblesses 2.5 L a future rkglementation ne prCvoit de date limite que pour certaines phases : - Elle ne fixe pas de date, idealement t6t dans l'annee, pour le debut de la procedure de preparation du budget, notamment la date d'etablissement du cadre macro- economique et celle de communication de la circulaire relative a l'elaboration du budget. D e plus, la pratique qui consiste a attendre que soit produite la circulaire sur l'elaboration du budget pour entreprendre la premiere action raccourcit le delai de preparation. - L a longueur excessive du dtlai imparti au Conseil des ministres pour valider le projet de budget n'est pas remise en cause par le projet de texte de la reforme, alors que si le dialogue entre le MEF et les ministeres sectoriels dans le cadre des conferences budgetaires etait effectif, le dklai d'examen et d'approbation du projet de budget par le conseil des ministres pourrait Stre reduit a deux semaines, comme dans beaucoup de pays de la sous-region. 36 2.6 Elle n'est pas suffisamment contraignante quant au respect des dClais : - L'article 27 du projet de loi cadre prevoit, en cas d'absence de vote du budget au 31 decembre de l'exercice precedent, la possibilite de recours aux douziemes provisoires. Dans la pratique, cette mesure, qui permet le paiement de dkpenses courantes sur la base des depenses de l'exercice precedent, est autorisee par undecret du President de la Republique des le debut du mois dejanvier. Mais le texte ne fixe pas les conditions du recours a cette procedure, et son utilisation risque ainsi de banaliser le non-respect du calendrier budgetaire. - L'instabilite gouvernementale constitue un argument souvent evoquee pour justifier le retard dans le processus d'tlaboration du budget de l'annke suivante. Or, le projet de loi cadre est silencieux sur ce point. L e principe du respect du calendrier devrait pourtant predominer, quitte A ce que ce calendrier, en demarrant suffisamment t6t dans l'annee precedente, permette a une nouvelle equipe d'introduire les changements budgetaires qui refletent la politique a venir de 1'Etat. 2.7 Le principal risque h i d e dans le fait que le budget de I'Etat continue a entrer en vigueur avec plusieurs mois de retard. Recommandations 0 Completer le projet de loi cadre afin qu'il englobe la totalite du cycle de preparation budgetaire et le faire demarrer par l'etablissement du cadre macro-tconomique en avril et la lettre circulaire en mai Npour le budget N+1. 0 Allonger le delai devolu aux conferences budgetaires et reduire en consequence celui reserve a la validation du Conseil des ministres. 0 Reduire l e champ d'application et les conditions du recours aux 12emes provisoires et ne les autoriser que pour des situations exceptionnelles (exemple : cas de guerre ou de catastrophe naturelle). 0 MCme en cas d'elections, faire preparer le budget de l'exercice N+l par les techniciens du MEF; le fait de respecter unprocessus demarre suffisamment t6t dans l'annee, permettrait aux decideurs d'une nouvelle equipe gouvernementale de disposer du temps necessaire pour proceder a de nouvelles orientations. 0 Former les services impliques dans la preparation budgetaire, afin de leur permettre de proceder aux differentes phases dans les delais fixes. LAPRESENTATIONPROPOSEEDUDOCUMENT BUDGETAIRE Description et Evaluation Les Forces 2.8 L e projet de loi-cadre Cnonce clairement les grands principes budgktaires. Dans son article 13, il prksente le principe de l'unite budgetaire, confirmant ainsi que le document budgetaire doit &re un document unifie contenant aussi bien les operations de fonctionnement que celles d'investissement. I1 Cnonce egalement le principe de l'universalite, qui dispose que toutes les recettes et toutes les depenses, qui par nature font partie integrante de la sphere publique nationale doivent Ctre inscrites dans le budget de 1'Etat. I1 stipule Cgalement que les 37 sommes doivent Ctre inscrites dans le budget pour leur montant brut, sans compensation entre les recettes et les dkpenses. Cela signifie donc que l'ensemble des depenses financees sur ressources exttrieures devrait &re inscrit au budget. I1 en est de mCme pour les recettes perques et conservees par certains ministeres. Ce projet de texte enonce egalement le principe de l'equilibre, quisignifie que l'ensemble des depensesdoit &re couvert par desrecettes. 2.9 L e contenu du projet de budget est dCcrit de manike exhaustive. Dans son article 24, le projet de texte enonce les elements devant &re integres dans le projet de budget et permettant la justification de la politique budgetaire retenue. I1 s'agit notamment des tableaux de prevision des recettes courantes et de capital, des tableaux de plafonds autorises de dkpenses courantes et d'investissement et les elements necessaires a la justification de la politique budgetaire : plan economique et social, tableau de l'execution de l'annee en cours, fondement de la prevision des recettes fiscales et limites de la depense, tableau de financement global precisant l'origine des ressources, transferts au profit des organismes publics. L e projet de budget doit enfin &re accompagne des projets de budgets de tous les organismes publics autonomes. Les Faiblesses 2.10 L e cadre fix6 par le projet de texte est imprecis. S'il enonce bien les grands principes devant permettre une presentation Claire et exhaustive du budget, le projet de loi-cadre reste sur beaucoup de points tr6s imprecis. I1n'kvoque pas les moyens qui devront &re m i s en ceuvre pour parvenir au respect de ces principes. I1 reste notamment silencieux quant aux conditions de respect de l'obligation de dkp& dans la compatibilite publique et donc dans les caisses du TrCsor de l'ensemble des recettes de l'Etat, de maniere A assurer une plus grande exhaustivite dubudget. 2.11 Le principal risque reside dans le fait que, en raison d'une connaissance seulement partielle des operations de 1'Etat, I 'appreciationdu besoin definancement du budget demeure un exercice t r h approximat$ Recommandations 0 RCdiger et mettre en ceuvre un texte (Reglement General sur la Comptabilite Publique) sur les regles de la comptabilitepublique quipermettra de fixer les conditions durespect des grands principes budgetaires definis dans le projet de loi-cadre sur les finances publiques. LECADRAGEPROPOSEDESRECETTESBUDGETAIRES Evaluationde la prCvision des recettes budgCtaires Les Forces 2.12 L e futur systeme d'information devrait permettre d'ameliorer la conservation des donnees. L e projet SAFE englobe effectivement, entre autres, la gestion des recettes d'imp6ts et de douanes. Les Faiblesses 2.13 L e processus de cadrage des recettes budgktaires n'est pas formalise. L e projet de loi- cadre n'kvoque les aspects relatifs au cadrage des recettes budgetaires que dans son article 3 qui traite des objectifs du SAFE: a Etablir et harmoniser les r6gles et les procedures de programmation, d'execution, de contrale et d'evaluation des ressources publiques D. 38 2.14 I1 existe un risque r&el de sous-&valuation des recettes budgktaires par rapport au potentiel existant. Recommandations 0 Rediger un texte reglementaire et un manuel de procedures explicitant le mode d'evaluation des recettes, afin de perrnettre une meilleure evaluation et une meilleure lisibilite. 0 Developper la base fiscale par la recherche de gisements nouveaux (TVA, etc.) LECADRACEPROPOSEDESDEPENSES BUDCETAIRES Description et Evaluation de la prCvision des dCpenses budgktaires Les Forces 2.15 Les opCrations a caracthe pluriannuel seront dCsormais prises en compte. Dans son article 17, puis dans les articles 19 et 21, le projet de texte prevoit le principe de la pluri-annualit6 de certaines operations likes a des engagements contractuels ou aux operations se regroupant dans le cadre de programmes. 2.16 L e caracthre limitatif des autorisations budgCtaires est explicitement stipulC. Pour tt un exercice donne, les dotations budgetaires constituent la limite maxima a utiliser pour la realisation de depenses publiques D. 2.17 L a possibilitC pour 1'AssemblCe Nationale de modifier le budget initial (loi de finances rectificative) est prhue. Dans l'alinea 1 de l'article 34, le projet de texte precise en effet que ((Les modifications des limites fixees dans le Budget de l'Etat sont effectuees par une loi sur proposition du Gouvernement D. Les Faiblesses 2.18 L a notion de reprise du rCsultat de l'exercice prCcCdent n'est pas contenue dans le projet de texte. Ainsi, les conditions de l'emploi d'un Cventuel exckdent de l'exercice precedent, ou bien, cas beaucoup plus frequent, les conditions du financement du deficit de l'exercice precedent, ne sont pas precisees. L e tableau de financement du budget de 1'Etat ne contient donc que les elements de l'exercice qui commence et, de ce fait, ilest incomplet. 2.19 L'obligation de rapports exhaustifs n'est pas stipulCe. Si le projet de loi cadre prevoit bien que le service en charge de la comptabilitt publique doit, entre autres charges, Cmettre des rapports d'inforrnation periodique et que le compte general de 1'Etat de fin d'exercice doit contenir le rapport du gouvernement sur les resultats de la gestion budgetaire, ilest totalement silencieux sur la notion d'exhaustivite, et donc sur le fait que ces rapports doivent contenir,entre autres, l'infonnation sur l'exkcution des operations sur financement exterieur. 2.20 Les risques se rapportent (i) au manque de visibilitk que cr&e 1'absence de cadre macro- &conomique a moyen terme, ainsi que (ii) a la difficult& de maitrise de la masse salariale, qui pourrait itre aggravdepar le maintien de deux bases de donnkes desfonctionnaires en activitk. 39 Recommandations 0 Mettre en place uncadre macro-Cconomique a moyenterme. 0 Associer la DGB et la DGP afin que, pour plus de clarte et d'efficacite, les ministeres n'aient plus qu'un seul interlocuteur. 0 S'assurer que la future base de donnees des fonctionnaires de la Direction de la Fonction Publique et celle de la DGB seront fusionnees en une base de donnees unique. 0 IntCgrer dans les projets de textes la notion de reprise du resultat reporte de l'exercice precedent dans le budget, ainsi que les conditions de son financement. 0 Integrer dans les projets de textes l'obligation d'exhaustivite des rapports sur l'exkcution du budget. LANOMENCLATURE BUDGETAIRE Descriptionet Evaluationde la NomenclatureBudgCtairedans le Cadre de la RCforme Les Forces 2.21 L e projet de loi-cadre sur les finances publiques presente clairement les caracteristiques minimales de la nomenclature budgetaire. En effet, ildkveloppe la notion de programmes et de sous-programmes, prevoyant ainsi que la nouvelle nomenclature budgetaire devra prendre en compte ces notions. Et surtout, dans son article 23, le texte stipule que la nomenclature doit permettre de classer les operations, aussi bien de capital que de fonctionnement courant, d'une part selon les criteres economique, geographique et par source de financement pour les recettes et, d'autre part, organique, territorial, economique, fonctionnel et par source de financement pour les depenses. 2.22 Unprojet de nomenclature budgetaire a ete initie par la direction du budget, sur la base des classifications programmatique et economique, en coherence avec la future nomenclature comptable. I1est prevu qu'elle sera utiliske pour la preparation et l'execution dubudget de 2007. Les Faiblesses 2.23 L a reforme de la nomenclature est realisee de maniere isolee par la DGB. Les DAFs des ministeres sectoriels n'ont pas et6 associks aux travaux et, bien qu'une premiere mouture du projet soit elaboree, ils n'en ont pas encore ete destinataires. I1en est de mCme de la Direction du Plan, dont la collaboration est pourtant essentielle, dans l'objectif de parvenir a un budget coherent entre operations d'investissement et de fonctionnement. 2.24 L e projet de nomenclature budgetaire est incomplet. En effet, bien que le projet de loi- cadre soit exhaustif et clair sur les caracttristiques de la hture classification, ilne semble pas que le projet de nomenclature comprenne une classification fonctionnelle conforme aux nonnes internationales. 2.25 L'absence de collaboration avec les DAFs dans le travail de conception d'une nouvelle nomenclature budgktaire risque d'aboutir ci un outil incomplet et mal acceptti De mgme, 40 I'absence d'implication de la direction du Plan risque d 'entrainer la persistance de la situation qui prkvaut actuellement et qui empgche d 'aboutir d un budget rkellement unijZ Recommandations 0 Finaliser le projet de nomenclature budgetaire en associant etroitement les DAFs des ministeres ainsi que la Direction duPlan. 0 Adopter la classification fonctionnelle COFOGdes Nations Unies. Integrer une classification des programmes. LAPUBLICATIONDUDOCUMENT BUDGETAIRE Evaluation du Dispositif de Publication du Document BudgCtaire dans L e Cadre de la RCforme Les Forces 2.26 L e projet de loi-cadre est explicite sur le th&me de la publication des informations budgbtaires, puisqu'il stipule, parmi les principes listes dans son article 13 : ((Principe de publicite, conformement auquel la L o i de Finances, les tableaux de recettes et les tableaux de depenses, ainsi que les autres informations Cconomiques et financiitres jugees pertinentes, doivent &re publies dans le Bulletin de la RepubliqueD. Les Faiblesses 2.27 I1reste cependant silencieux sur la nature des supports de publication. Si le principe est enonce, iln'est pas precise comment les donnees relatives au budget doivent Ctre portkes a la connaissance dupublic. 2.28 Le principal risque rkside dans le fait que, en I'absence de prdcision sur la nature des supports d utiliser pour la diffusion des documents budgktaires, la pratique actuelle, qui semble satisfaisdnte, soitprogressivement abandonnke. Recommandations 0 Faire preciser dans les textes d'applications la nature des supports mediatiques a utiliser pour la diffusion des informations relatives a la preparation et au contenu du budget. 41 3. L'EXECUTION DUBUDGET DANSLA REFORME DESFINANCES PUBLIQUES 3.1 L e chapitre porte sur les modalites d'exkcution telles que proposees par le PLC. LAMISE DISPOSITIONDESCREDITS AUX MINISTERES A SECTORIELS Evaluationdudispositifde publicationde mise a dispositiondes crCdits Les Forces/Les Faiblesses 3.2 L e projet de loi-cadre sur la gestion des finances publiques ne fixe pas de rhgle pour la mise a disposition des credits budgetaires. Un complement de reglementation sera donc necessaire afin que les ministres, actuellement simples gestionnaires de credits, mais dans un proche avenir totalement responsables de l'exkcution de leur budget, puissent disposer d'une visibilite suffisante dans la programmation de leurs depenses. 3.3 Le principal risque est que les ordonnateurs ne disposent pas de la visibiliti qui leur permettrait une exkcution efJicace de leur budget. Recommandations 0 Completer le projet de loi-cadre par des dispositions sur la mise a disposition des credits qui soit compatible avec la programmation financiere. Une mise a disposition trimestrielle des credits semble repondre a ce besoin. LAPROCEDURED'EXECUTION RECETTES.DES Descriptionet Evaluationde la ProcCdured'ExCcutiondes Recettes Les ForcedLes Faiblesses 3.4 Aucune des trois directions generales qui interviennent dans le recouvrement des recettes de 1'Etat n'a ete associee a la conception de la reforme. Cette situation pourra gtnerer des consequences graves. En effet, dans la mesure ou la DGI n'a pas ete sollicitee pour l'etude du projet de loi organique de l'IGF, cette institution de contrBle a souhaite integrer a la liste de ses futures attributions celle qui consiste A effectuer des contr6les fiscaux. L a technicite de ce type d'intervention n'autorise pourtant pas une autre solution que celle qui consiste a en confier la pratique qu'a la seule DGI. 3.5 L e projet de loi-cadre contient peu de regles sur le recouvrement des recettes de 1'Etat. I1 presente les trois phases de la procedure: a) procedure administrative de verification de l'existence du fait generateur de l'obligation correspondante, b) liquidation, c'est-a-dire calcul de la somme due et identification du redevable et c) recouvrement, action qui consiste a encaisser la recette qui sera inscrite dans les comptes du Trtsor Public. En outre, l'article 33 pose expressement le principe selon lequel les recettes liquidkes mais non recouvrtes au cours de l'exercice de liquidation deviennent une creance de 1'Etat a la fin de l'exercice. I1en decoule que ces sommes doivent faire l'objet d'actions de poursuites de la part des agents des directions 42 concemees. Ainsi, ce projet de texte, qui ne constitue certes qu'un cadre general, est tres peu explicite quant a la procedure durecouvrement des recettes de 1'Etat. 3.6 Leprincipal risque qui imerge, dupoint de vue de la riforme en cours depreparation, se rapporte aufait que les rigiesJinanciBres ont &tijusqu 'b cejour ecarties des itudes prialables et que I 'appropriation de la riforme en sera rendueplus dijjficile. Recommandations 0 Octroyer aux regies financieres les moyens suffisants pour faire face a leurs missions. 0 Interesser financierement les agents charges du recouvrement des sommes dues a 1'Etat. 0 Mettre en place uncode d'ethique au sein de la Direction Gherale des Douanes. 0 Ameliorer le systeme d'information de la Direction Generale des ImpGts, en vue d'une meilleure connaissance des contribuables ainsi que des sommes restant a recouvrer. 0 Associer les cadres des regies financieres a la preparation de la reforme des finances publiques. LES PROCEDURESD'EXECUTION DEPENSES DES Description et Evaluation de la ProcCdure Normale d'ExCcution des DCpenses Les Forces/Les Faiblesses 3.7 L e projet de loi-cadre fournit peu d'C1Cments sur la prockdure normale de la dkpense. En effet, dans son article 30, le projet de loi-cadre stipule bien que la procedure de la depense contient trois phases : l'engagement, la liquidation et le paiement. I1 ne precise pas toutefois si les prestations ou foumitures doivent Stre realisees avant le paiement de la depense, et n'apporte donc pas de reponse A la pratique de la procedure inversee Cvoquee plus haut. 3.8 L'un des principaux risques riside dans le fait que, m6me lorsque la nouvelle riglementation sera entree en vigueur, la pratique du paiement de prestations avant leur rialisation perdure. Recommandations 0 Faire respecter le phasage de la procedure normale de la dtpense, notamment en n'autorisant les paiements qu'apres la verification que le service ou la prestation ont et6 fournis. Les ProcCdures Exceptionnelles Les Forces/Les Faiblesses 3.9 L e projet de loi-cadre prevoit une seule catCgorie de procCdure exceptionnelle, la rCgie d'avances. I1 stipule dans l'article 30 que ((I1 peut &re autorisk de realiser des depenses sous la procedure de regie d'avances, afin d'effectuer des depenses de faible montant et pour lesquelles le suivi de la procedure normale n'est pas exige D. L e texte reste cependant silencieux 43 quant a la nature des sommes en cause, quant au montant limite en-deqA duquel la procedure est utilisable et quant a laqualite de l'agent charge d'effectuer la depense. 3.10 Le manque depricision du projet de loi-cadre sur les conditions d 'utilisation des caisses d 'avancesrisque de conduire une utilisation abusive de cetteprocidure. Recommandations 0 Completer le projet de loi-cadre en precisant les conditions d'utilisation de la procedure des caisses d'avances. L a Gestion de la Solde Les ForcedLes Faiblesses 3.11 L e projet de loi-cadre est silencieux sur les aspects relatifs a la gestion de la solde. I1sera donc necessaire de rediger untexte precisant les modalites dans ce domaine. 3.12 Le principal risque &side dans le fait que la DGB et la Direction de la Fonction Publique utilisent deux bases de donnies desfonctionnaires dgirentes. Recommandations 0 Prendre untexte fixant les modalites de la gestion de la solde par la DGB. Les DCpenses FinancCes sur les Ressources ExtCrieures Les Forces/Les Faiblesses 3.13 L e projet de loi-cadre est silencieux sur les aspects relatifs aux depenses sur ressources exterieures. I1sera donc necessaire de rediger untexte precisant les modalites dans ce domaine. 3.14 L'absencede connaissancecomplde sur 1'execution des investissementsfinances par des ressources extirieures nuit a la visibiliti des ministres et risque de contraindre fortement le pilotage desfinances publiques. Recommandations 0 Ameliorer la connaissance des operations sur financement exterieur, notamment celles relatives a la cooperation bilaterale. LAGESTION COMPTABLE Description 3.15 L e PLC definit l'organisation, les competences, l'objet et les regles spkcifiques dkvolus au Tresor Public. I1prevoit la creation de la Direction de la Comptabilite Publique en dkfinissant ses competences, attributions et regles spkcifiques en specifiant notamment que la Direction de la Comptabilite Publique est chargee (i) d'klaborer et proposer les normes, procedures techniques, rapports, methodologie tendant a l'hannonisation et l'uniforrnisation de la comptabilitk, (ii) d'klaborer et mettre ajour le plan comptable, (iii) d'executer le budget de 1'Etat (v) d'klaborer les 44 rapports pkriodiques A presenter a 1'AssemblCe Nationale et (vi) d'elaborer la comptabilite generale de 1'Etat . 3.16 L e PLC Cree et organise en outre la Direction du Patrimoine de 1'Etat en Cdictant son organisation, ses competences, definit ce qui releve dupatrimoine de l'Etat, et les principes et les regles specifiques qui le regissent. L e texte organise la gestion des biens de l'Etat, ventes, acquisitions, amortissements, l'elaboration de documents etablissant des inventaires physiques a rapprocher de la comptabilite generale de l'Etat, la redaction des notes et instructions reglementaires relatives a la gestion de ce patrimoine. 3.17 L e PLC pose les principes et les regles specifiques a la comptabilite de l'Etat, notamment que le gouvernement elabore, a la fin de chaque exercice les tableaux faisant ressortir l'equilibre budgetaire ainsi ceux faisant apparaitre l'execution du budget et les resultats de l'exercice. Ceux- c i doivent refleter avec exactitude toutes les operations afin de permettre une analyse Cconomique et financiere. Evaluationde GestionComptableduPLC. Les Forces 3.18 L e PLC marque une reforme d'envergure voulue et initiee par le gouvernement ; ily a une reelle volonte de renforcer le rdle et les attributions des administrations financieres par la refonte et la creation de trois directions : Tresor Public, Comptabilite Publique, Patrimoine ; ce qui facilitera la repartitiondes tkhes et des responsabilites dans ces trois domaines, sans risque de confusion, ou de desinteressement pour l'une de ces fonctions. 3.19 L'adoption d'un plan comptable d'Etat et la tenue d'une comptabilite en partie double sont des elements cles de cette reforme, qui amenent les institutions de finances publiques de Sao Tome au niveau des standards internationaux. ; 3.20 L a creation d'un systeme de contr6le interne ayant pour objet de surveiller la correcte utilisation des ressources publiques, la fiabilite des operations comptables, l'application stricte des regles et des mtthodes comptables ainsi que le respect des procedures represente le maillon manquant du systeme de 1986. (cf chapitre 4 sur les contr6les) Les Faiblesses: 3.21 L e projet de loi cadre est incomplet notamment en ce qui concerne (i) prescription des la recettes et des depenses de l'Etat, (ii) la responsabilite des differents intervenants dans la chaine de la depense publique (administrateurs de credits et comptables publics) et (iii) ilnefaitpasetat des rapports administratifs entre Sao Tome et l'ile de Principe. 3.22 A defaut de redaction et d'adoption avant la mise en euvre de la reforme de l'ensemble des textes, legislatifs, reglementaires, de la redaction de manuels d'utilisateurs, d'instructions et de notes de service decrivant avec la plus grande clartt et la plus grande rigueur les mecanismes qu'implique la reforme, de formation des agents ilserait a craindre que cette reforme n'atteigne pas le seuil requis d'efficacite, voir alourdir et ralentir les procedures. Recommandations 0 Produire unRGCP, qui doit se substituer a l'ancienne reglementation. I1devra mettre 45 en application les dispositions de la loi cadre en definissant les principes fondamentaux de comptabilite publique applicables a l'ensemble des organismes soumis a ce regime et en arrCtant les regles &execution des budgets par les divers intervenants au processus budgetaire, dont ilprecise les attributions, les prerogatives, les obligations et les responsabilites ; ila de ce fait vocation a constituer untexte de reference qui sera, selon les besoins, complete par d'autres textes d'application ; 0 RCdiger des manuels de procedures et organiser des skminaires de formations au personnel ; 0 CrCer un comitC de gestion de trksorerie. I1 convient de mettre en ceuvre une programmation basee sur un plan prkvisionnel mensuel de tresorerie contenant des priorites qui devraient &re exploitees et respectees par une commission de tresorerie se reunissant hebdomadairement sous la responsabilite de la Directrice duTresor ; L e Plan Comptable dans le Cadre de la RCforme en Cours Tableau2. Classificationcomptableretenue: 1.ACTIF 2. PASSIF 1,l Circulant 2,l Circulant 2,2 Exigible a moyen et long terme 1,2 Realisable a moyen et long terme 2,3 Patrimoine (Profonds Propres) 1,3 ImmobilisC 4. RECETTES 3. DEPENSES 4,l Recettes Courantes 3,l Depenses Courantes 4,2 Recettes de Capital 3,2 DCpensesde Capital 5. PERTE de I'EXERCICE 6. EXCEDENT de I'EXERCICE 5,1 Resultat BudgCtaire 6,l Resultat BudgCtaire 6,2 Resultat Extra-Budgetaire 5,2 Resultat Extra-Budgetaire 7.COMPTESD'ORDFU?(Actif) 8. COMPTESD'ORDRE (Passif) 7,l ExCcution Budgetaire Recettes 8,l PrCvision Budgetaire de Recettes 7,2 FixationBudgetaire de la DCpense 8,2 Execution Budgetaire de la depense 7,3 Executionde laProgrammationFinancibre 8,3 Execution de laProgrammationFinanciere 7,4 ExCcution des DCpenses 8.4 Execution des Depenses 7,5 Execution de Contrats 8,5 Droits et Obligations constatees 8,9 Autres Comptes d'Ordre du Passif 7,9 Autres comptes d'Ordre d' Actif Les Forces : 3.23 L e plan comptable de Sao Tome tel que prevu par la reforme s'inspire de l'actuel plan comptable applique en Angola. L'adoption d'un plan comptable de l'etat adapte aux normes et exigences de Sao Tome, dans le cadre de la reforme en cours normalisera la fagon d'enregistrer les operations selon les principes de la comptabilite tenue en partie double. Ce plan comptable permettra de suivre avec precision et rigueur et par exercice l'execution du budget de l'Etat, notamment de suivre les restes a payer et les restes a recouvrer. En outre, il permettra aux autorites politiques saotomeennes de disposer de rapports periodiques et de tableaux de syntheses 46 indispensables a la prise rapide de decisions et la gestion d'un Etat moderne, tout en facilitant les differents contrdles : contrdles internes, de la Chambre des Comptes, de 1'IGF et du Parlement. L a classification retenue a sept niveaux venant en complement de la nomenclature budgetaire doit permettre de disposer d'une information comptable precise et rigoureuse. Les Faiblesses 3.24 Dans sa presentation thkorique, iln'y aurait pas de faiblesse dans ce plan comptable ; neanmoins, son implementation doit s'appuyer sur une adaptation aux operations de Sao Tome. L'absence d'examen portant sur cette adaptation reste la seule faiblesse. En effet, la simple transposition duplan comptable angolais a Sao Tome, la non association a la redactionde ce plan comptable et a la redaction d'un manuel de procedures, des differents acteurs (DAF, Tresor, Impdts, Douanes) et des differents services de contrdles (IGF, Chambre des Comptes) risquerait de ne pas couvrir tous les aspects budgetaires, financiers et patrimoniaux de 1'Etat. Recommandationssur le NouveauPlanComptable Rediger le cadre reglementaire, notamment une nomenclature des pieces justificatives dans le but (i) de clarifier les echanges entre d'une part les Ministres sectoriels et d'autre part le Ministere des Finances en creant un cadre commun de reference pour l'execution du budget de l'Etat, (ii) d'harmoniser les regles de paiement des depenses publiques en arrCtant des procedures homogenes et identifiees pour le contr6le des operations de depense et (iii)constituer ainsi uninstrument de gestion propre a accelerer la presentation et le contrdle des dossiers d'ordonnancement des depenses de 1'Eta Former le personnel du MEF et des rninisteres depensiers et mettre en place les services charges des contrdles internes qui devront en outre &re charges de la formation. LEREPORTING BUDGETAIRE COMPTABLE ET Description 3.25 Dans le projet de loi cadre il est prevu la prise en compte des operations a caractere pluriannuel (articlesl7, 19 et 21), 3.26 Ce projet pose les principes est les regles specifiques a la comptabilitt de l'Etat, notamment l'elaboration, a la fin de chaque exercice des tableaux faisant ressortir l'equilibre budgetaire ainsi ceux faisant apparaitre l'execution du budget et les resultats de l'exercice, en precisant qu'ils doivent refleter avec exactitude toutes les operations afin de permettre une analyse economique et financiere. Evaluation 3.27 L a notion de reprise du resultat de l'exercice precedent n'est pas contenue dans le projet de texte. I1en resulte que les conditions d'emploi d'un Cventuel excedent de l'exercice precedent, ou que les conditions du financement du deficit de l'exercice precedent, ne sont pas precisees. 3.28 L a production d'etats de suivi budgetaire sera assuree par le systeme informatique, mais aucun texte n'en prevoit les modalites de production. 47 Recommandations 0 Inclure la notion de reprise duresultat de l'exercice precedent dans le projet de texte 0 Etablir imperativement une balance dutrksor mensuelle 0 Etablir des etats de suivibudgetaire, sur la base des classifications budgetaires 0 Automatiser la production duTOFE. 0 Integer dans les projets de textes la notion de reprise du resultat report6 de l'exercice precedent en ce qui concerne le budget, et determiner en cas de deficit les conditions de son financement. LESYSTEME D'INFORMATION 3.29 En l'absence de reglementation fixant les attributions de chacune des directions et de manuels definissant clairement les procedures, qu'en l'absence de personnels qualifies en informatique, les systemes actuellement m i s en euvre ont ete developpks en rkpliquant les techniques de suivi manuel des informations, sans veritable recherche de coherence et sans vision globale du systeme d'information. Jusqu'a la mise en place du nouvel outil informatique, l'outil informatique n'est pas en reseau, notamment les directions du budget et du tresor ne sont pas relikes entre elles. Les saisies effectuees dans la base de donnkes de la direction du budget fait l'objet de copies dans l'une des bases de donnkes de la direction du tresor mais cette copie n'est pas utilisee. Les ((Titres ))des dkpenses sont saisis au moins A trois reprises dans les ordinateurs du trksor, (i)leur reception de la direction dubudget, (ii)l'occasion de leur envoi a la banque a A centrale pour paiement et (iii) lorsqu'ils reviennent de la banque centrale apres paiement. Les services de la direction du budget et de la direction du TrCsor doivent effectuer des transferts sur disquettes provenant de plusieurs ordinateurs pour obtenir la situation globale d'execution du budget. Ce que sera le Systltme Informatique dans la RCforme 3.30 L e systeme informatique dans la reforme reposera sur la nouvelle reglementation en matiere de depenses publiques. I1tiendra compte de l'ensemble des regles de gestion relatives aux Directions du Budget et du Tresor et de la Comptabilite Publique. Sur l'aspect technique, le principal logiciel de gestion des operations de 1'Etat sera directement transpose de celui fonctionnant en Angola. 3.31 L'application disposera d'une base de donnees unique partagee entre les directions du budget du trksor, de la comptabilite publique, et les ministeres sectoriels. Chaque service aura acces a cette base d'une maniere contr6lee en fonction de ses attributions L'utilisation d'une base de donnees unique permettra de suivre les operations de 1'Etat en temps reel, d'eviter la saisie repetee des mCmes informations par les divers services et apportera ainsi une plus grande stcurite dans leur manipulation. Les DClais d'ImplCmentation du SystkmeInformatique dans la RCforme 3.32 En mars 2006, il a ete procede a l'analyse et approbation du Plan Directeur d'Informatique qui permettra de gerer la politique d'action et assurer l'homogtneite des actions et des moyens a Ctre utilisee dans les systemes de la fonction des finances publiques; son programmed'implementation a egalement et6 approuve en mars 2006. 3.33 A la meme kpoque, le choix du systeme angolais a ete fait ; la structure des techniciens pour le faire fonctionner (profil et nombre) a ete definie. 48 3.34 Les negociations de transfert avec 1'Angola prevues de fevrier a aoQt 2006 ont commence a la mi-juin2006, ou des premieres reunions entre les deux pays ont eu lieu, pour definir le contenu forme1 du transfert du logiciel angolais de gestion des finances publiques. Lors de ces reunions, 1'Angola a indiquk qu'une convention definissant les modalites et le timing de ce transfert devait &re etablie. L e projet de convention a ete etabli enjuillet 2006, et cale la mise en ceuvre informatique de telle sorte que SAFE soit operationnel au ler janvier 2008. 3.35 Les discussions avec la CST portant sur la mise en reseau n'ont veritablement debute que vers le 10juin 2006. (Cf paragraphe suivant) L a Creationd'un ReseauInformatiqueentreActeurs des FinancesPubliques 3.36 Les premieres discussions de concertation entre le Comite de la reforme (son president) des finances publiques et la Compagnie Saotomeenne de Telecommunications -CST- (son directeur commercial) a propos du reseau infonnatique a installer entre les acteurs des finances publiques ont eu lieu le 9juin 2006. 3.37 L a CST a indique 3 modes de transmission des donnees : --- par cable classique par fibre optique par reseau radio (transmission sans fil) 3.38 L a CST a indique les avantages et inconvenients des trois systemes, notamment qu'elle n'etait pas favorable au reseau sans fil, car elle ne maitrisait pas la technologie, et qu'elle estimait ce mode c o m e peu sQr. L a CST a estime qu'il fallait relier les principaux acteurs par fibre optique, qu'elle designes comme etant le MEF, la Prksidence, le Parlement. 3.39 Dupoint de vue delais, la CST a indique que des lors qu'elle ttait payee, elle pouvait travailler ((jour et nuit )) sans toutefois qu'aucune etude ne permettre d'estimer concretement les delais. 3.40 I1semble assez clair que (i) la CST n'a jamais ete contactee assez tat dans le processus et ne dispose d'aucune etude technique permettant de comparer skrieusement les options, et en determiner le temps de mise en ceuvre ; (ii) la CST ne maitrise pas du tout les technologies qui deviennent les plus courantes, notamment le reseau sans fil. L a raison d'instcurite n'est pas realiste, car ce type de transmission est de plus en plus repandu. (a titre d'exemple, le principal hate1de Sao Tome fournit ce service a ses clients). Recommandations 0 Acceltrer le rythme des rencontres avec 1'Angola pour aboutir le plus rapidement possible B la definitiodsignature de la conventionliant les deux pays Contracter de toute urgence un consultant independant de la CST et ayant deja proctder a une etude de mise en reseau dans un autre pays, voir a sa mise en ceuvre ou au suivi de sa mise en ceuvre. 0 Reorganiser et recadrer les actions detaillees du volet informatique contenues dans le projet de chronogramme de mise en ceuvre du systeme infonnatique sur la base rkaliste de ce qui peut &re realise. 49 4. L E S C O N T R O L E S DANS LA REFORME D E S FINANCES PUBLIQUES 4.1 L e chapitre porte sur les modalites de contr6les budgetaires et comptables telles que proposees par le PLC (contr6le administratif) ou a l'appui de la reforme (contr6lejuridictionnel et parlementaire). 4.2 L'execution des depenses budgetaires est soumise a un triple contrble, administratif, juridictionnel et parlementaire. L a reforme prevoit que le contr6le administratif est le contr6le interne a l'administration exerce principalement par 1'Inspection Generale des Finances (IGF). L e contr6le externe est exerck par le Tribunal des Comptes et par 1'Assemblee nationale. LES CONTROLES ADMINISTRATIFS(INTERNES) 0 L a CrCation d'un Systkme de ContrBle Interne au Sein du TrCsor 4.3 L a reforme des finances publiques a intkgre la creation d'un systeme de contr6le interne, ayant pour objet de surveiller la correcte utilisation des ressources publiques, la fiabilite des operations comptables, l'application stricte des regles et des methodes comptables ainsi que le respect des procedures. Ce contr6le interne representait le maillonmanquant du systeme de 1986. 0 Les contrbles exercCs par 1'Inspection GCnCrale des Finances. 4.4 L e projet de loi cadre -PLC- prCt a &tre presente a l'examen du gouvernement, definissant le cadre legal et reglementaire s'appliquant aux services de finances publiques, appeles SAFE, va dans le sens d'une modification en profondeur des missions et attributions de 1'IGF. Cette nouvelle reglementation confire la responsabilite principale du contr6le administratif a l'IGF, qu'il soit a priori ou A posteriori. Elle prevoit egalement la mise a disposition au niveau des differentes administrations financieres de cellules en charge de contr6le interne. 4.5 L e projet de decret-loi propre a 1'IGF ( au stade d'examen et d'approbation par le gouvernement) confire A cette Inspection la responsabilite en tant que structure centrale de contr6le interne, d'exercer le contr6le dans les domaines budgetaire, Cconomique, financier et patrimonial, en s'assurant de la legalite, de la regularite, ainsi que de l'economie et de l'efficience. L'IGF doit (i)realiser des audits, inspections, evaluations, enquCtes, recherches, examens des entites publiques et privtes relevant de son champ d'investigation; (ii) formuler, dans le contexte de ses audis et autres travaux qu'elle realise, des recommandations afin d'ameliorer l'organisation, le fonctionnement et de la gestion des entites contr61Ces et (iii) donner un avis sur les comptes des entreprises publiques. 4.6 Par ailleurs, en vue d'ameliorer le fonctionnement de l'IGF, le projet de decret propose la creation d'un Fond Independant destinee au financement de 1'IGF. Outre la subvention de l'Etat, ce fonds sera alimente principalement par 50% du produit des amendes appliquees par 1'IGF et 25% du produit des amendes appliquees par d'autres entites, resultantes d'infractions detectees par IGF. Evaluation du futur contr6le Interne Forces 4.7 Les reformes proposees permettront certainement d'apporter des debuts de reponses aux faiblesses du systeme de contr6le interne. Deux aspects semblent constituer des reels progrks par rapport au systeme actuel : 50 0 L a creation des cellules ou responsables d'audit interne dans les directions et dans les rtgies financieres avec unlien fonctionnel (quireste a preciser) avec I'IGF. 0 L e systeme d'information integre d'execution budgetaire et comptable (SIGFE) inspire d'un systeme fonctionnant deja en Angola, avec des references issues du Bresil devrait inclure des dispositions renforCant le systeme de contr6le interne (niveau eleve de fiabilitt) en incorporant notamment des contr6les automatiques. Faiblesses 0 L e projet de loi organique de 1'IGF est confus, notamment quant au champ d'intervention et aux attributions de 1'IGF. A la lecture du projet de decret, 1'IGF effectuera tant du contr6le a priori, que du contr6le a posteriori, ainsi qu'elle aura une competence de contr6le fiscal des entreprise privees. Or, ilest generalement admis que les fonctions de contr6le a priori et celles A posteriorine peuvent pas Ctre assurees par une mCme entitk, ceci afin d'eviter que ladite institutionne soit juge et partie. I1 ressort egalement de nos entrevues et de nos analyses que les responsabilites respectives de la direction des imp& et de celles de 1'IGF dans le contr6le fiscal des entreprises privees ne sont pas clarifiees. 0 Composte de 10 inspecteurs dont seulement quatre de formation superieure, la mission de 1'IGF consiste en effet a auditer l'ensemble des administrations financieres ainsi que toutes les entreprises qui beneficient, a untitre ou A un autre, de financement de 1'Etat. L'intervention de ce service est balbutiante, bien qu'il ait effectue un certain nombre d'audits dans des services publics dont quelques-uns uns ont permis de deceler des faiblesses. Son intervention est contrainte par un manque de moyens materiels et humains. L e nombre de missions realiskes par an (une dizaine) se revele trb faible, et surtout laisse un nombre important d'entites relevant de son champ non contr61Cespendant plusieurs annees. 0 L'IGF ne dispose pas de manuel de contr6le pour la conduite des missions, mCme s i il semblerait qu'elle utilise celui du Portugal. Par ailleurs, les inspecteurs beneficient tres rarement de formation continue dans le domaine de l'audit et de la comptabilitk. 0 L a portee du contrble de 1'IGF est limitee a la fois par son effectif quantitatif et qualitatif reduit, et le dksaveu de son autoritt de contr6le par les structures contr61ees. Recommandations 0 Creer une structure de contr6le interne au sein de la Direction GenCrale des Douanes. 0 Revoir le projet de decret de 1'IGF afin de (i) clarifier ses missions et attributions, et (ii)orienter ses missions principalement sur le contrble a posteriori. 0 Rkorganiser 1'IGF pour ameliorer son efficacitk et le ratio entre le nombre d'inspecteurs et les rapports produits. 0 Mettre en place unprogramme de formation aux techniques de contr6le. 0 Developper un manuel des procedures de contr6le afin d'harmoniser et ameliorer la qualite des rapports. 0 Envisager une assistance technique de longue durke afin de mettre a niveau les inspecteurs. 51 ANNEXES 52 Annex 1: L e Programme de Modernisation des Finances Publiques de Sao TomC Ce programme resulte de la volonte des autorites de reformer et de moderniser la gestion des finances publiques du pays. I1 decoule des evaluations realisees par la Banque mondiale, notamment le rapport H P C de novembre 2003, ainsi que par d'autres bailleurs de fonds.l0 Les autorites ont choisi d'adopter pour Sao TomC le programme de modernisation de gestion des finances publiques en vigueur en Angola. C'est d'ailleurs avec l'accord de ce pays, et aussi son appui technique, que l'unite de la reforme de Sao Tome devrait effectuer ce transfert d'outil et de connaissance. (cf fin de l'annexe) . La Modernisation du Svstkmede Gestion des FinancesPubliaues S'appuie sur Ouatre Composantes: e L e cadre legal et reglementaire, notamment le projet d'une nouvelle loi cadre (loi organique) definissant les principes fondamentaux du systeme de gestion des finances publiques. e L a composante ((Organisation et gestion )) portant sur la gestion budgetaire, financiere et patrimoine de I'Etat, incluant I'aspect comptable et le contrble interne. Cette composante porte specifiquement sur la phase d'elaboration du budget, d'extcution du budget, de programmation budgetaire et gestion de tresorerie, et de comptabilisationdes operations de 1'Etat. L a composante G systeme integre de gestion informatisee ))regroupant les outils de gestion de donnkes, d'integration des operations consolidees et unreseau de circulation de l'information. L a composante des ressources humaines, dont le but est d'assurer la perennite de la reforme en formant et recyclant les cadres actuels des finances publiques, au MEF ou dans les ministeres sectoriels, pour une gestion homogene et actualisee par les personnels des administrations. Les ObiectifsMaieurs De La Rkforme Sont e Renforcement de capacitk de la fonction de gestion des finances publiques e Modernisationet perennisation des procedures budgetaires e Renforcement de la gestion de tresorerie et de la gestion de la dette e Amelioration de la gestion des actifs de 1'Etat 0 Garantie de transparence dans la gestion des finances publiques e Reorganisation des procedures de gestions des biens patrimoniaux de 1'Etat e Renforcement de la fonction (( Comptabilite de 1'Etat )) 0 Mise en Oeuvre d'instmments de validation et de contrble e Appropriation du cadre reglementaire et des manuels e Garantie d'un fonctionnement intkgre de systeme de gestion. "11 s'agit notamment du Rapport Mission Tollini du FMI, de Mars 2005, et du rapport MCCKJSAID dejuillet 2005.. ... 53 Pour la realisation de ces principaux objectifs, des activites sont dkveloppees, notamment la definition du milieu informatique sur lequel s'appuieront les applications, le reseau et les protocoles de communication des donnees, la mise en ceuvre d'une equipe technique infonnatique appropriee. L e programme est m i s en Deuvre grace a une assistance technique et une coordination technique. [faire reference au petit encadre d'hgela- voir email par Nestor] Les Fondamentaux de La Riforme de Gestion des Finances Publiaues. 0 Un systeme comptable et un systeme de contr6le interne embrassent en un cercle toutes les operations d'execution budgetaire, ainsi que la gestion financiere et de patrimoine. 0 Sur le cercle ci-dessus, se greffent les phases de planification et d'elaboration budgetaire (depenses) ainsi que la gestion des recettes, la gestion de la dette, la paye de la fonction publique la gestion patrimoniale. 0 L a phase d'elaboration du budget est reorganisee par (i)la mise en ceuvre de classifications budgetaires aux standards internationaux, et par (ii) une procedure d'elaboration organisant les interventions des acteurs concerne. 0 Pour une meilleure regularit6 dans le temps des depenses de l'Etat, la programmation budgetaire est financiere s'appuie sur (i) une deconcentration de 1'exCcution du budget par les DAFs des ministeres sectoriels, (ii) une gestion et unplan de tresorerie, et (iii) compte unique duTresor. un 0 L a procedure de la depense publique est divisee en phases d'engagement (note de Cabinet), de liquidation (note de liquidation) et de paiement (Ordre bancaire) pour permettre une rationalisation et une harmonisation des actes de depenses. 0 Un plan comptable en partie double sera mis en ceuvre, et permettra de suivre l'ensemble de 1'exCcution comptable des operations de 1'Etat. Les Ccritures comptables seront generees automatiquement par le systeme. 0 Une direction de la Comptabilite publique sera Cree, au c6te de l'actuelle direction du Tresor et duPatrimoine. 0 Tous les actes et faits administratifs de finances publiques de la chaine de la depenses (engagement, liquidation et paiement) seront enregistres et trait& en temps reel dans le systeme. Le Calendrier de La Mise en C#Zuvrede a Rkforme de Gestion des Finances Publiaues. L a r6forme est pr6vue pour Ctre opCrationnelle au 1" janvier 2007. Ce calendrier a ete elabore par les consultants en charge d'assister le MPF pour la definition et la mise en ceuvre de cette reforme. I1 fait l'objet d'un chronogramme etabli debut 2006. L e dessin de cette reforme a eu lieu enjanvier fevrier et mars 2006. L'ensemble de projets de textes ont et6 prepare par les consultants de mars A mai 2006, de telle sorte qu'ils puissent Ctre valides soit par le parlement pour la loi cadre, soit par le Gouvemement pour les autres textes institutionnels ou les dkcrets d'application dans la periode allant dejuin A juillet 2006. C'est de mars a aoi3 2006 que devait Ctre organis6 tous les services, notamment ceux touchant A la gestion comptable. D'aoQt a septembre, les systemes informatiques gerant la planification, les imp6ts et la douane devaient &re operationnels. 54 En mars 2006, le Plan Directeur d'hformatique a ete valid& A la mCme epoque, le choix du systhme angolais a et6 fait. Enrevanche, les negociations de transfert avec l'Angola prevues de fevrier a aoiit 2006 n'ont pas commence avant la mi-juin2006, ou des premibres reunions entre les deux pays ont eu lieu, pour dkfinir le contenu forme1 du transfert du logiciel angolais de gestion des finances publiques. Lors de ces reunions, 1'Angola a indique qu'une convention definissant les modalites et le timing de ce transfert devait Ctre etablie. D e telle sorte qu'a mijuin, la date d'installation dbfinitive du systkme SIGFE, initialement fixbe a la mi-aodt, s'avkrerait plut&, au mieux, vers la dernikre partie de 2006, au mieux. I1 s'ensuit l'impossibilite manifeste d'avoir le temps rtaliste de proceder aux adaptations et tests necessaires avant dkcembre 2006 (cette phase etait initialement prevue sur 3 mois, de septembre a dkcembre 2006). D e plus, la mise en reseau etait prevue enjuillet 2006, mais les discussions avec la CST n'ont veritablement debut6 que vers le 10juin 2006. 55 Annex 2 : La Composante"RCforme des FinancesPubliques" duPATRCG L a conception de la reforme dans le cadre du Projet PATRCG a kt6 elaboree sur la base des diagnostiques du systeme de la gestion financiere suivis des recommandations elaborks par la BM, et le FMI. Les autorites indiquent que ce dernier a souhaite realiser untravail de diagnostique plus approfondi, ce qui a retard6 environ d'une annee le demarrage de la plupart des activites du projet. A ce stade, le projet a permis le recrutement de 3 consultants &rangers et quelques nationaux pour la realisation et mise en Oeuvre de la reforme : a) L e Consultant-Coordinateur est en charge d'aider le Cabinet du Ministre du Plan et des Finances dans la definition, la reglementation, le developpement et la mise en Oeuvre de la reforme de finances, c'est-a-dire assister dans la definition des directives et dans la conception du nouveau systeme d'administration financiere, ainsi que la coordination technique de sa mise en Oeuvre. L e consultant devra aussi aider les autorites a organiser le processus de qualification de MPF, de maniere a realiser les changements necessaires pour l'implantation des reformes; developper un plan comptable base sur la methode de departs plies, qui couvrira, de forme integree, tous les aspects budgetaires, financiers et patrimoniaux des actes ou les faits engages. Elaborer de manuel d'utilisation du plan de comptes. Elaborer des propositions legales qui dkfinissent le systeme comptable de l'Etat, leur organisation systematique et leur elargissement les comptes generaux de l'Etat. b) L e Consultant specialis6 dans le Budget a pour t2ches de definir les bases pour la fixation des directives budgetaires: reviser et mettre ajour la nomenclature budgetaire en l'ajustant aux normes internationalement acceptees; elaborer le systeme de codification budgetaire; reviser et optimiser le processus de collecte, d'kvaluation et de traitement des propositions budgetaires sectorielles; reviser et ameliorer le processus budgetaire du Programme d'Investissements Publics et redefinir l'interface avec le Plan; identifier l'actuelle situation de developpement informatique et definir le projet logique du nouveau systeme; ;Ctablir les parametres pour l'elaboration du diplbme legal qui fixe les procedures d'execution budgetaire et financiere annuelle; ajuster l'organigramme et le statut organique de la Direction du Budget les nouvelles procedures de gestion; definir et mettre en Oeuvre un plan de qualification des divers intervenants dans le processus, specifier le contenu programmatique; etablir les phases d'integration des fonctions dans le SIGFE (Systeme IntegrC d'Administration Financiere de l'Etat); identifier et elaborer les objectifs et les actions necessaires au developpement des travaux c) L e Consultant informaticien doit definir la plate-forme technologique au service su SAFE. I1doit etablir la strategie d'expansion dureseau informatique. L a reforme de finances publiques connait unretard significatif. Les raisons majeures du retard de la mise en Oeuvre de la reforme sont le fait d'avoir un retard dans les contacts avec l'Angola, detenteurs officiels du logiciel de gestion de finances SAFE, ainsi que l'absence d'uncoordinateur national a temps complet. Comme consequence de ces retards, le tableau et le plan comptable ainsi que la nouvelle nomenclature budgetaire destine au Budget General de l'Etat qui devaient etre en fonctionnement partiel le 31decembre 2005 ne sont toujours pas operationnels. L a mise en Oeuvre est reportee A fin 2006. Mais l'annke 2006 etant une annee d'elections, avec des modifications dans le gouvernement et dans d'autres institutions de l'Etat, le projet PATRCG n'est pas convaincu de reussir a assurer l'accomplissement du programme et les objectifs pour 2006, et donc la mise en Oeuvre de SAFE enjanvier 2007. 56 Annex 3: L a RCfCrence pour Sao Tom6 et Principe -- La RCforme de Gestion des Finances Publiques d'Angola. Enjuin2002, le ministere des Finances d'hgola a approuvt sonprogrammede modernisationde gestion des finances publiques, qui represente une gigantesque avancee vers une gestion plus moderne et transparente. Ce programme est rythme lors de sa mise en euvre par l'installation d'un systeme integre de gestion des finances publiques de 1'Etat -SIGFE en portugais, depuis 2004. a) L e programme est compose de trois volets : (i) modernisation de la gestion des finances, (ii) informatisationde cette gestion et (iii) Formation dupersonnels, et des cadres b) L'efficacite de ce projet s'appuie sur (i)un systeme comptable de l'Etat, (ii) plan un comptable de l'Etat, incluant une comptabilite patrimoniale et (iii) des normes de comptabilitepubliques conformes aux standards internationaux de finances publiques. c) les principes fondamentaux de ce programme sont au nombre de quatre: (i)la planification des operations coordonnees et intkgrees, (ii)la transparence des informations, (iii) l'aide a la decision pour la meilleure utilisation possible des ressources de 1'Etat et (iv) le contr6le et la validation du compte general de 1'Etat. d) L a definition du SIGFE angolais L e SIGFE est un systeme de traitement de donnees sur une plate-forme informatique de derniere generation qui permet de traiter toutes les operations budgetaires et comptables en temps reel, de maniere integrke, et comptabilisee. Les qualites du SIGFE sont (i) une base de donnees unique, une mise en reseau intranet et internet, une securisation des donnees sur trois niveaux, une interface agreable, interactive et intelligente, une consultation en ligne et untraitement journalier des operations financieres. 57 Annex 4: L e Contenu DCtaillC du Projet de Loi Cadre des Finances Publiques de Sao Torn&'' L e titre 1 du projet de loi cadre [PLC] decrit l'ensemble des fonctions et acteurs de la gestion des finances publiques. Cet ensemble, le Systeme d'Administration Financiere de l'Etat (( D,est appele SAFE. L e SAFE est compose des services du Budget de l'Etat, du Tresor Public; de la Comptabilite Publique ; du Patrimoinede l'Etat ;et des entites en charge du Contrdle Interne (art.1). L e PLC s'applique a toutes les composantes de l'Etat, y compris les organes de souverainete et les entreprises publiques qui n'auraient pas de cadre legal specifique (art.2). L e SAFE Ctablit et harmonise des regles et procedures de programmation, gestion, execution et contrdle budgetaire et comptable. (art 1 et 3), sur la base des principes de rkgularite, d'effcacite et de resultats (art 4)* Les services du SAFE dispose uniquement d'une autonomie administrative, au sens oh ils peuvent emmetre des actes reglementaires (art 5 et 6). L e SAFE; procede a 1'exCcution des recettes et des depenses, et gere le patrimoine de l'Etat, (art 7) ;ilest coordonne par le ministre des finances (art 8) L'exercice de gestion des finances publiques correspond a l'annke civile (art 9) L e titre 2 du PLC est consacre aux fonctions du budget de l'Etat, regroupkes sous le sigle SOE (art 10). Cela comprend toutes les fonctions budgetaires d'elaboration du Budget de 1'Etat; d'evaluation du projet de loi de finances, de mise en Oeuvre dubudget vote, et de programmation des depenses, en liaison avec le Tresor public ; de revision budgetaire si necessaire, et de production des differents etats d'execution budgetaire (art 11) L a notion de budget de 1'Etat ))est definie dans l'art 12. (( Les grands principes budgetaires sont l'annuitk, unite, l'universalite, la specificite, la non compensation, la non consignation, l'kquilibre, et la publicite (art 13) le mCme article prkvoit quelques exceptions au principe de non consignation et une exception au principe de specificite. L e PLC definit la notion de recette publique et ses modalites budgetaires, ainsi que la notion de depense publique et ses modalites budgetaires (art 14 et 15). Les regles budgetaires portant sur les accords internationaux et notamment les dettes qui en resultent sont evoquees aux articles 16 et 17 L e budget fait l'objet de classifications organique, territoriale, economique et fonctionnelle ; les depenses de 1'Etat peuvent Ctre classees par programme et sous programme (art 18). L e budget-programme est definit et son articulation est decrite (art 19)' ainsi que la notion de sous-programme (art 20). Les modalites de preparation dubudget et les classifications budgetaires sont decrites (art 21 et 22), sur la base d'un budget de fonctionnement et unbudget d'investissement. L e projet de budget doit correspondre au programme economique et financier du Gouvernement, et doit Ctre accompagnk d'un certain nombre de documents l'expliquant (art 23). Version communiquee comme etant la dernihe version en cours de traitement (10juin 2006) 58 L e projet de budget doit etre presente a 1'Assemblte nationale au plus tard le 31 octobre de l'annee N-1 (art 24). Celle-ci devra adopter le budget au plus tard le 30 novembre N-112; l'approbation du budget conduit a autoriser le Gouvernement a proceder aux recettes, aux depenses et toute operation liee a la gestion des finances publiques (art 25). Ce m6eme article indique que les deputes ne peuvent modifier unilateralement les depenses ou les recettes. Si le budget n'est pas vote a temps, des dispositions temporaires de reconduction du budget precedent sont mises en aeuvres, notamment sur le principe de douziemes (art 27)13 (( )) L e gouvernement doit prendre toute dispositionpour mettre en applicationla loi de finances (art 28). L e PLC decrit respectivement les principes et les phases de l'execution des recettes et de l'execution des depenses (art 29 et 30) ; notamment, le circuit de la dkpense s'execute en trois phases : l'engagement, la liquidation et le paiement. Les restes a payer sont definis (art 31) avec une obligation d'etre reduits a la fin de l'exercice suivant ; l'annulation de recettes et de dkpenses sur exercice courant est due et reportee sur l'exercice suivant lorsqu'elle est executee sur l'exercice suivant (art 31) Les restes a recouvrer sont comptabilises a l'issue de l'exercice.(art 32). Des fonds speciaux peuvent etre constitues par des recettes directement attaches a des objectifs de depenses (art 33). Des modifications au sein du budget sont de la competence du Gvt soit par virement de credits, soit par utilisationd'une dotationprovisoire ;les virements de credits entre entites doivent &re balances (art 34). L e reporting budgetaire est assure par une communication semestrielle a 1'Assemblee dans les 45 jours suivant le semestre considere (art 35). Les fonctions de Tresor public (sigle STP) correspondent aux fonctions de recouvrement, de programmation de la depenses et de gestion de moyens de paiement (art 36) Plus precisement ils'agit de veiller a l'equilibre financier, gkrer les actifs financiers et meubles, elaborer la programmation financiere ; elaborer les statistiques des Finances, gerer le compte unique du tresor, participer a la formulation de la politique de financement de la depense publique, gkrer la dette publique interne et externe ; et realiser et gkrer les operations de credit public (art 37). L e Tresor public a pour objet l'elaboration de la programmation financiere, les dtboursements et les paiements relatifs a l'execution budgetaire et financiere (art 38). . Les principes de gestion du Tresor Public sont l'unite de tresorerie, l'equilibre de tresorerie (absence de deficit de tresorerie), exhaustivite du recouvrement des recettes (art 39). L e compte unique du TrCsor est defini (art 40) comme un compte bancaire, pouvant comporter des sous- comptes ; induisant l'interdiction de proceder a l'ouverture de comptes bancaires pour un service particulier de 1'Etat. L e Gvt est le seul responsable dans la definition des modalites de gestion du compte unique dutresor (art 40). L a dette Publique comprend les obligations financieres supposees en vertu de lois, de contrats et accords et de la realisation &operations de credit. L a dette interne et la dette externe sont definies (art 41). I' Ou le15 dkcembre selon une autre version du projet de texte. I3 n'y a pas d'article I1 26 dans la version presentee comme ultime( 10juin 2006). 59 Les fonctions de comptabilite publiques (sigle SCP) portent sur la reglementation comptable de finances publiques, tant sur les procedures et methodologies que la mise a jour du plan comptable, mais aussi sur les registres d'operations comptable, les etats de suivi comptables a destination de 1'Assemblee, et l'elaboration ducompte general de 1'Etat (art 42 et 43). L'objet de la comptabilite d'Etat et les principes qui la regissent sont clairement exprimes (art 44 et 45), notamment d'immuabilite, de materialite, de suivi comptable, et de respect du delai comptable ; surtout, le plan comptable est en partie double (art 46). L e regime comptable est sur la base d'une comptabilitk de caisse pour ce qui est des recettes et d'engagement pour les depenses (art 48)' le tout sous la monnaie nationale (art 49). Un etat budgetaire, un etat comptable-matibre et une balance du Tresor seront etablies a chaque fin d'exercice (art 50 a 52). Les transferts et virements en comptabilite matibre sont regis et repondent a des principes de valeurs bien etablis (art 53 et 54). L e compte general de l'Etat a objet de decrire l'exkcution budgetaire et financiere, ainsi que presenter le resultat de l'exercice et l'evaluation de la performance des services et institutions de l'Etat (art 55). I1doit Ctre elabore clairement afin de rendre possible son analyse economique et financiere et doit refleter les principes de regularite, de la legalite, et d'efficacite economique et financieres dans l'utilisation des fonds publiques. I1doit correspondre aux standards internationaux de comptabilite d'Etat (art 56). I1doit decrire les informations completes portant sur (i)les recettes perques et depenses payees par l'Etat, (ii)le financement au deficit budgetaire, (iii) les comptes de tiers, (iv) l'equilibre des mouvements de caisse, (v) les actifs et passifs financiers et patrimoniaux de l'Etat, (vi) les avances et leurs regularisations (art 57). Les entites independantes doivent presenter mensuellement leurs etats budgetaires et financiers au MEF (art 58) L e compte general de 1'Etat doit Ctre accompagne d'un certain nombre de rapports d'execution et de documents dont les balances (art 59). L a date limite de production du compte general d'Etat au Tribunal des Comptes (Cour des comptes) est fixee au 30 avril N+l ;le Tribunal des comptes doit transmettre son avis a 1'Assemblee au plus tard le 31 juillet N+l.L'Assemblee doit examiner le compte general d'Etat dans la session suivante de la reception de l'avis formule par le tribunal des comptes (art 60). Les services en charge du suivi patrimonial des actifs de 1'Etat (en sigle SPE) (art 61) doivent gerer les biens patrimoniaux de l'Etat, en faire l'inventaire chaque annee, harmoniser les valeurs physiques et les valeurs comptables, proposer le cadre reglementaire y afferant, le tout sur la base de principes specifiques tels que l'inalienabilitk des biens de l'Etat, leur insaisissabilite, des principes de mise en concurrence lors d'achat ou de vente de biens de l'Etat, et d'amortissement comptable (art 62 a 64). Les actes relatifs a la variation dupatrimoine sont du domaine de 1'Etat (art 65). Les services qui remplissent les fonctions de contr6le inter -SCI en abrege- (art 66) sont en charge d'inspections et d'audits des procedures de recouvrement et d'utilisation des ressources publiques, incluant la production et l'harmonisation des normes et les procedures. .ces services doivent verifier le caractere legal et reglementaire, mais aussi d'efficacite Cconomique des procedures dans l'utilisation des ressources de l'Etat. 11s sont sous la responsabilite duMEF (art 67 et 68), et les principes qui les regissent (notamment d'independance) doivent correspondre aux standards internationaux en termes d'audit (art 69). L a responsabilite personnelle des gestionnaires de biens publics s'appuie sur une presentation annuelle des comptes *u en fin de gestion- (art 70) et leur responsabilite peut Ctre mise en cause dans le domaine 60 disciplinaire, civil et criminel. Les dommages causes a des tiers ouvrent droits a reparations ; le recouvrement indu ou tout acte frauduleux fait l'objet d'une procedure disciplinaire etiou criminelle et 1'Etat peut se retourner contre tout fonctionnaire ayant engage sa responsabilite (art 71). I1 appartient au Gouvernement de mettre en Oeuvre la presente L o i au plus tard le 31 decembre 2006, (revoquant ainsi toute legislationprecedente) et mettre en Oeuvre le 1" janvier 2007 les differents aspects de la refonne de gestion des finances publiques (art 72 a 74) 61 .. 8e, 3 m d 3S Ye, m Y k5 E*8 I: Iu I a c a i- a u P G S e 'F. 0 0 m -0 M_m -du M a , i t - I a I I u a cp a a a M sm TI .M .-* E 0 ; Y -e e, .a, .EM i *e, 3 .-m u t .-* TI B c u e, L .-7.- 0 D 3 'e, e, k 8P ? a u TI 0 eEk c. c m e, n P C *e, c 0. 0 C - s 0 c - a a n - - ce W t: a, 2 L z0 E a B U