Project assistance completion report : economic and financial management training, 669-0184

Although the project failed to instill a commitment to fiscal responsibility within the GOL, it did have a positive impact in a number of areas. GOL finances were brought into a more orderly state through establishment of an automated payroll; a chart of accounts for budgeting, revenue recording, and other financial functions; an automated cash management system; and an accounting system. A GSA procurement system was also implemented, but its effectiveness was hampered by three factors: the GOL's poor payment history, preference among many firms for other bidding processes, and perceived corruption in the awarding of GSA contracts. Training was provided to more than 225 employees in one or more of the following areas: management, budgeting, government accounting, purchasing, and payroll. The lasting impact of this training was lessened by frequent changes in key ministry personnel. The project-established Economic and Financial Management Committee (comprised of the Ministers of Finance, Planning and Economic Affairs, and Commerce and Industry and the Director of the Bureau of the Budget) has been helpful in exploring policy issues, but has not yet achieved the expected level of influence in policy dialogue. Two key lessons were learned. (1) Institutional changes needed to reduce expenditures must be supported by the highest levels of the host government. In this project, advisors felt that GOL officials were removed from office when they attempted to introduce fiscal restraint. (2) Successful solutions to financial problems such as those of the GOL require careful planning, training, long-term monitoring, and management commitment.