Discussions on fiscal transparency were held in Apia during April 2001, and November 17–29, 2003. The team for both missions comprised Messrs. Tom Wilson (PFTAC financial management advisor until October 2003, and member of the IMF’s Panel of Fiscal Experts) and Murray Petrie (IMF panel expert). In November 2003, the mission met with the Prime Minister, the Deputy Prime Minister and Minister of Finance, the Leader of the Opposition, the Chairman of the Public Accounts Committee of Parliament, an Opposition member of the Public Accounts Committee, the Deputy Governor of the Reserve Bank of Samoa, the Clerk of the Legislative Assembly, officials from the Office of the Auditor General, and a wide range of staff in the Ministry of Finance. Meetings were also held with officials in the Ministries of Agriculture, Commerce Industry and Labour, and Revenue, and with the Public Service Commission. In addition the mission met with the President, Vice President, and members of the Executive of the Samoa Chamber of Commerce, the President and other officers of the Samoa Umbrella for Non Governmental Organizations, the Co-Managing Director of KVA Consult Ltd., the Director of the Institute of Samoan Studies at the National University of Samoa, and the Australian and New Zealand High Commissions. Toward the end of the mission, the mission gave a presentation on the Fiscal Transparency Code and the mission’s preliminary findings. All those whom the mission had met were invited to attend.
At the village level, some public services are provided in-kind (e.g., land for public schools), but essentially all general government expenditures are covered in the central government budget.
The authorities commented that such agreements have subsequently been established with all trading enterprises as part of the 2004–05 Budget. However, the full operationalization of the Act is dependent on the Companies Act 2001 coming into force, which is currently under review.
In recognition of the conflicts of interest this can create, the prime minister has recently removed himself from the chairmanship of two of the largest public enterprises (Polynesian Airlines Ltd. and Samoa Tel) and appointed replacements from the private sector. He has indicated publicly that he expects his Cabinet colleagues to follow his example.
A Memorandum of Understanding (MOU) between the central bank and the government to take effect from 2005 will see the Bank assume responsibility for meeting the cost of open market operations, and for the management of all of Samoa’s foreign exchange reserves (at present around one third of these are managed by the ministry of finance). The MOU also contains initiatives to strengthen the balance sheet of the central bank through a waiver for an undefined period of the transfers to the government required under the Central Bank Act of a share of the Bank’s net profit and of the balance in the Revaluation Account.
The authorities advised that in early 2004 a member of parliament replaced the undersecretary as the deputy Chair.
The authorities advised that a Financial Management Improvement Project (FMIP) 2003–08 Implementation Plan has been endorsed by the CEO of Finance, the focus of which is on the operationalization of the PFMA. In support of this, work has commenced on the development of the subordinate regulations and instructions, which is expected to be completed by the end of 2005 to tie in with the implementation of a new Financial Management Information System (FMIS) and development of procurement instructions.
The budget documents comprise the Budget Address, the Economic Statement to Support the Budget, the Statement of Economic Strategy, the Estimates of Receipts and Payments, and the Appropriation. This is complemented by a three year statement of the government’s priorities, the Strategy for the Development of Samoa 2002–2004.
While identified as book fees, the proceeds of these collections can be, and are, used from time to time to finance other educational services. These expenditures, amounting to $700,000 in 2001–02 (or about 0.2 percent of total government spending), have been reported in the Public Accounts in recent years but remain undisclosed in the budget documents.
These categories do not align comprehensively with either the 1986, or 2001 GFS standards.
The authorities commented that the recognition and disclosure of all assets and liabilities across the government is a performance indicator in the MoF Corporate Plan for 2004–07.
The authorities advised the FMIP 2003–08 Implementation Plan includes development of two year forward estimates.
The authorities commented that medium-term economic forecasts and underlying assumptions are produced, (based on the MRMSX module developed by the World Bank), for the consideration of Cabinet as part of the budget process. The appropriate disclosure in the Budget Papers will be considered as part of FMIP.
This information is however not provided to the IMF’s Statistics Department for inclusion in the GFS Yearbook.
See Samoa: Hardship and Poverty Status Discussion Paper, Asian Development Bank, September 2003.
This provision was inserted in the PFMA 2001 to secure its passage through the Parliament.
While there is currently a three year backlog in the annual reports of the controller and chief auditor that contain the detailed management reports on transactions of the Public Account, the Public Account Report for the year ended 30 June 2002 prepared by the ministry of finance, together with its formal certification from the controller and chief auditor that the financial statement was free from material misstatement was tabled in the Legislative Assembly in January 2003.
The authorities commented that whilst there is a commitment to such appointments, the limited size of the private sector has associated independence and confidentiality issues for potential candidates,
The authorities advised that they are in the process of finalizing a tender process for the purchase of a new financial management information system (funded by AusAid). The intention is that the system be operational for the commencement of the 2005–06 fiscal year. It is expected that the system will facilitate improved reporting, including on a GFS basis.
For Polynesian Airlines Holdings Ltd, there is a very large discrepancy between the value of the government’s investment, as shown in the Public Accounts, and the value of shareholder equity in the Company’s financial statements for 2000–01 (the latest publicly available financial statements). This discrepancy is increasing over time, as the annual payments to the airline from the budget are treated in the budget and the Public Accounts as capital injections rather than as operating subsidies.
The authorities advised that these reports have subsequently been tabled in Parliament, and that the 2002/03 report is scheduled to be tabled in the December 2004 sitting of Parliament.
The authorities acknowledged general support for the identified actions and commented that the majority are associated with the full operationalisation of the PFMA 2001 and Public Bodies Act 2001, together with the implementation of a new financial management system and supporting processes. These initiatives will be progressed through the FMIP 2003–08.