Publication: Kosovo : Operational Financial Accountability Review

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World Bank
The main objective of the Operational Financial Accountability Review (0FAR) has been to identify an agenda for addressing key challenges in the Public Financial Management (PFM) operational framework, and point to areas where additional donor support may be needed. The audience of the OFAR is both the Kosovar authorities and the donor community. The OFAR is not an audit; it is not intended to, and does not, provide assurance on the specific uses to which Bank funds have been, or may be applied. The OFAR focuses on PFM arrangements in the PISG (Provisional Institutions of self Government), rather than in the United Nations Interim Administration Mission in Kosovo (UNMIK) administration, as the OFAR is intended to be used as a tool for strengthening local administration, particularly in a context where the PISG are anticipated to gain increased authority over their own resources, and UN (and, indeed, donor) support might progressively dwindle. The scope of the proposed OFAR is less than that of a full-scope CFAA. The reduced scope of the OFAR has been determined on the basis of: 1) a preliminary assessment of areas of most significant need in terms of capacity and institutional building; 2) a review of existing analyses and support by the Bank (including project financial management) and other development organizations, with the aim of eliminating or limiting overlaps; and, 3) discussions with the Ministry of Finance and Economy (MFE) and with members of the Bank's Kosovo team, with a view to identify priority areas for analysis. The legal framework for financial accountability and public financial management, as set out in the Law on Public Financial Management and Accountability (LPFMA), reflects good international practices, but appears to be too demanding for the PISG, and does not prevent the perception of double standards in its implementation. Furthermore, carry-over practices, and weaknesses in capacity, organization and coordination hamper budget preparation, and undermine the credibility of the budget as a policy management instrument. Financial accountability arrangements for municipalities highlight central control over budget execution, matching severe capacity limitations in the municipalities.
World Bank. 2005. Kosovo : Operational Financial Accountability Review. © Washington, DC. License: CC BY 3.0 IGO.
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