This Technical Assistance Report for Mali examines the performance of its public expenditure management system. The IMF report suggests that payments arrears can possibly be monitored overtime through the financial management system (PRED), based on the validation of invoices. The principle of requiring funds to be deposited in the Treasury must be clearly reinstated and observed. It recommends that agencies benefiting largely from subsidies or direct public financing should transfer funds in order of priority. Stock and assets accounting is being gradually implemented and rolled out as planned, with new software being currently deployed for line departments’ managers.


This Technical Assistance Report for Mali examines the performance of its public expenditure management system. The IMF report suggests that payments arrears can possibly be monitored overtime through the financial management system (PRED), based on the validation of invoices. The principle of requiring funds to be deposited in the Treasury must be clearly reinstated and observed. It recommends that agencies benefiting largely from subsidies or direct public financing should transfer funds in order of priority. Stock and assets accounting is being gradually implemented and rolled out as planned, with new software being currently deployed for line departments’ managers.

I. Optimize cash resources in a crisis context and with a medium-term outlook

A. Cash resource breakdown as a result of the crisis

1. Since 2011, the government has undertaken pooling its cash in a Treasury single account (TSA). A status report of its liabilities (at end-June and end-September) with each of the 13 commercial banks operating in Mali and holding government accounts was drawn up in 2011. The mission has been transmitted a reconciliation report cross checking each bank’s numbers with those of the Treasury (DGTCP), the Debt Management Office (DGDP), and the Central Accountant (ACCT). Furthermore, an impact study conducted in 2011 identified seven banks whose liquidity ratio could be weakened, by their loss of central government’s liquidities. In late 2011 and early 2012, the TSA was partially implemented, the Paymaster (PGT) and the Tax Collector (RGD) had an account with the WAEMU Central Bank (BCEAO) and the first repatriations of government assets from seven preselected banks were started.

2. In March 2012, the TSA was stalled in the wake of Sanctions by the Economic Community of West African States (ECOWAS); in other words, BCEAO stopped any transactions in government accounts. Hence PGT and RGD activities within the TSA, namely 80 percent of government accounting and financial operations, were stalled.

3. Fiscal continuity was assured at the expense of setbacks in the implementation of the TSA. The authorities reacted rapidly to prevent an interruption in payments. Accounts that had been previously closed in the commercial banks were reopened and the banks extended overdrafts to pay civil servants in March 2012. These overdrafts were adjusted by the government the following month. Shortly afterwards, the BCEAO resumed banking for the government but government banking with commercial banks is still maintained.

4. Cash resources are now dispersed among the commercial banks although banking with the BCEAO is still preferred. One hundred seventy-nine accounts have been opened on behalf of government accountants with a consolidated balance of CFAF 103.910 billion as at December 31, 2012. All spending agencies and co-financed projects included, the overall number of accounts opened with the commercial banks stands at about 3,400. That notwithstanding, the PGT and RGD now preferably operate with the BCEAO.

5. This situation is detrimental to cash management. The broad dispersal of liquidities makes preparing a regular government cash flow statement impossible. Each government accountant is responsible for monitoring his/her accounts and reconciling them with the bank statements (hardcopy statements are collected on a daily basis). The ACCT also conducts its own daily bank reconciliations for its accounts, but has difficulty in consolidating the overall bank reconciliation.

6. The Treasury continues to close dormant accounts. This process of closing inactive accounts is still being carried out. In early 2013, a cumulative amount of CFAF 6 billion was credited back to the Treasury’s accounts.

7. The structure of bank assets evolved during the 2012 crisis. The BCEAO provided a summary table of liquidity and coverage ratios of the liabilities of 13 banks operating on the local financial market at end-2011 and mid-2012 (see below). Liquidity ratios overall (only four banks saw an improvement) declined significantly. Changes in the coverage ratio were more mixed (six had improved and seven had worsened). The situation of one bank had seriously deteriorated in terms of owner equity. Furthermore, the data cover the period December 2011 to June 20122 and therefore do not eliminate some seasonal effects that would have been erased in a year-on-year comparison. The situation of the banks and the indications of uncertainty from the BCEAO point to the need to update the study conducted in 2011 on the effect of the migration of government liquidity to the TSA.


  • In these circumstances, the re-establishment of the TSA is a medium-term objective to be prudently pursued. A gradual, organized and well-managed approach is in order. The mission proposes proceeding in two stages:

    • - An initial general stage of surveying all mobilizable resources, during which the impact study conducted in 2011 would be updated.

    • - A second stage of phased re-introduction of the TSA with a timetable of transfers from 2013 onwards, tailored to the situation of the banks even if the relative volume of government assets deposited in accounts with them is usually small. Only afterwards would government accounts be gradually transferred.

Table 1.

Commercial banks, potential impact of the transfer of government liquidity to the TSA

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Methodological Notes:

The banks have been listed anonymously at the request of the BEAO National Director.

The liquidity ratio measures the ratio of assets that are available, encashable, or can be mobilized in the short term (maximum three months)—in the numerator—to liabilities that are callable in the short term and signature commitments that may be executed in the short term (maximum three months)—in the denominator.

The coverage ratio of medium- to long-term uses to stable resources measures the relationship of:

  • - the numerator comprising core capital; supplementary capital; deposits with a residual term of more than two years; resources with a residual duration of more than two years; bond borrowing and other borrowing at terms of more than two years;

  • - to the denominator comprising net fixed assets; assets of branches and agencies abroad; placement securities with a residual repayment period of more than two years, with the exception of securities having a BCEAO repurchase guarantee; public and similar securities and holdings of government loan securities with a residual term of more than two years; nonperforming loans (unpaid, in escrow, doubtful, and in litigation) not covered by provisions; performing loans with a residual duration of more than two years; assistance to banks and other financial institutions with a residual duration of more than two years; all other assets that can only be collected after at least two years.

B. In the short term, take stock of mobilizable resources

8. Efforts to close dormant accounts must continue. The first wave of closures shall apply to accounts with no activity for at least three years, in particular ACCT and RGD accounts, based on the tables provided. The process must be executed in particular for accounts with very few inventoried operations.

9. All the accounts of spending agencies must continue to be inventoried and monitored. The inventory of accounts opened by Central government accountants3 was conducted and completed by the National Treasury and Government Accounting Directorate (DNTCP). Reconciliation of these accounts is usually made by the accountants themselves. This first round of the inventory must be completed for all of the approximately 3,400 accounts opened by general government agencies identified in 2011,4 which may have since increased in number. A status report must be drawn up by cross checking the accounts with the banks. The DNTCP must also ensure discipline among autonomous agencies to restrain them from opening new accounts.

Reconciliation of the net Treasury position between the DNTCP and BCEAO

The November 2012 mission in the context of the IMF program detected considerable discrepancies between the monetary survey produced by the BCEAO and the Net Treasury Position (NTP) reported by the DNTCP. This February 2013 mission organized two meetings to reconcile the two. The scope and methodology for defining the NTP were therefore clarified in the presence of both parties.

  • - A decision was taken to limit the scope of the NTP to 179 accounts opened on behalf of government accountants, with a total balance of CFAF 103,910,279,067 at December 31, 2012.

  • - The accounts above pool the central government’s assets with those of the local authorities, on whose behalf the accountants are controlling expenses. The scope of the NTP redefined in this way matches the scope of “central government” as defined in the 2001 Government Finance Statistics Manual 1/ and WAEMU’s standards.

  • - The method used is the one envisaged in the 2001 Manual: the NTP described in the TOFE “above the line” is the result of the monetary survey produced regularly by the BCEAO. It is therefore an exogenous aggregate, has some elements that could be defined as below-the-line financing not TOFE balancing variables.

1/ 2001 Government Finance Statistics Manual published by the IMF.

10. The Treasury must have at its disposal a reliable survey of its banks in real time. The daily bank accounts are subject to direct collection of data from the banks by courier or fax. This circuit could be improved by introducing direct e-mail exchanges (secure messaging, for example). Similarly, for units already connected to the computerized accounting software (AICE), development of the banking module could be prioritized along with the roll-out of AICE at the ACCT.

11. The BCEAO agreed to provide simulations of government asset transfers. The 2011 impact study could be quickly updated. The timetable of transfers from government accounts with the commercial banks to the TSA could then be set up according to the study and not only at the initiative of the accountants.

12. Generally speaking, the mission wished to commend and underscore the climate of cooperation that has been restored between the Treasury and the Central Bank and the willingness expressed by the BCEAO National Office to work with the government after the difficult times in March 2012.

C. Pool all government resources in the medium term

13. The TSA must be reintroduced and completed according to a strategy and a realistic timetable. The DNTCP is the key administrative stakeholder in defining and monitoring the strategic approach and putting it into perspective. The approach will be the following: to define the scope of the TSA at the different stages of its re-implementation, the technical arrangements for transfers, focusing specifically on the management or closure of pending operations, and the accountants involved; to manage changes and to train accountants; to finalize the TSA banking arrangement with the BCEAO; and lastly, to design and to follow-up on transfers of liquidities to TSA accounts (TSA subaccounts are impossible in the BCEAO operating system).

14. The timetable for transfers will be based initially on the conclusions of the impact study and the BCEAO’s enhanced simulations. For central government accounts opened with the commercial banks, the completion of transfers, or at least of the maximum number of accounts, should be planned for end-2013 so as to begin upcoming FY 2014 with a clear scope for the TSA and start a full-fledged cash management.


  • The TSA must gradually incorporate all government liquidities.

    • - A first step will be to transfer the central government’s core liquidities into the TSA—namely the hundred and seventy-nine accounts opened to date with the commercial banks on behalf of central government accountants (scope of the NTP).

    • - A second step, will be to pool in the TSA all autonomous agencies’ liquidities (including their own resources) meeting certain criteria for inclusion, which are yet to be defined (the criteria would exclude agencies mostly providing merchant services).

    • - A third step would be to collect the Malian counterpart funds for co-financed projects in an escrow account opened with the BCEAO for donors who accept the principle.

Figure 1.
Figure 1.

Gradually pool cash resources in the TSA

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001

15. This requirement to deposit the funds of all agencies should be grounded by law. The principle of requiring funds to be deposited in the Treasury must be clearly reinstated and observed in accordance with the principle of a single account noted in the 2009 WAEMU directive. This implies the prior clarification of existing texts on public funds deposits (mainly autonomous agencies) in the Treasury. This adaptation of the legislation should completed by 2013.

16. Agencies benefiting largely from subsidies or direct public financing should transfer funds in order of priority. A classification of agencies should be drawn up using several criteria defining their proximity to the central government. They would then be categorized as “government operators” and therefore should be compelled to deposit their funds (own resources included) in the TSA. To do so, the DNTCP should be given the authority to assess the situation with respect to predefined financial criteria and to submit proposals for the government to make relevant decisions. The implementation of this classification / inclusion approach could possibly start as soon as 2014.

Example, in France, of criteria defining agencies’ inclusion in the category of “government operators”

An agency may be classified as a government operator on the basis of a number of criteria defined to reflect the tightness of its links with the central government:

- the agency provides public service, which can explicitly be included in a policy defined by the government;

- Financing provided mostly by the central government, directly in the form of subsidies or indirectly through the allocation of resources, in particular fiscal resources. This does not exclude the possibility of the operator exercising additional market activities;

- Direct control by the government, which is not limited to economic or financial control but arises from government oversight.

It is also possible to classify as government operators institutions that do not meet all the criteria described above, but are considered as important because of:

- their weight in loans or in the attainment of the objectives of the ministries that fund them;

- The use or occupation of property appropriated by or made available to the government.

Source: France, Budget Directorate “Forum on Performance.”

17. National counterpart funds of co-financed projects may also be deposited in the TSA. Particular thought must be given to projects co-financed by foreign donors in the interest of security and transparency of financial operations between different stakeholders. To date, projects co-financed by foreign donors fall under financing agreements whose primary (or only) purpose is to set up, call for, and pay government contributions into accounts opened with the commercial banks. While government deposits should be driven by the projects’ achievements, the practice is that government disbursements comply with the disbursement schedule stated in the agreements whatever the degree of projects’ general progress. Completion and formal closure of projects are not properly followed up and the government funds are kept until a project ends, even if its completion is delayed.

18. The monitoring of national counterpart funds used in co-financed projects should be improved. Donors have two legitimate demands, first, to assure that their funds are actually being used for the project; and, second, to ensure that the government contributes the pre-agreed amount. For this purpose, a project account is usually opened with a commercial bank. Funds are currently credited to this account, which is operated by the project manager, as a result of which the government can no longer track the use of the funds.

19. Provided that the partners agree, it is proposed that the principle of depositing national counterpart funds in an escrow account be established. Using this approach, for a given project, the annual tranche of credits would be deposited in an escrow account located in the BCEAO, which would assure the technical and financial partners (TFP) that the government will meet its obligations. The project account would then be funded from the escrow account, in tranches. After using the first advance, the replenishment of the account would be conditional upon verification of use, to allow the government to find out the end-use of the deposits. The implementation of this solution in future projects therefore requires the establishment of a single escrow account at the BCEAO with as many nonfungible lines as there are projects or, if this setup is impossible, as many accounts as there are new projects based on this model.

20. The project escrow account at the BCEAO would not be fungible with government cash flow. It would be used to ensure the safety and transparency of the government’s quotas in the eyes of foreign donors. Government funds deposited in the escrow account could presumably be mobilized at any time by project heads to provide financial coverage for invoices pertaining to each project. These invoices would then be paid through the account(s) opened in the commercial bank network.


  • Introduce in upcoming projects’ financing agreements the principle of depositing national funds in an escrow account opened with the BCEAO.

D. Adapt the accounting and financial architecture to optimize the TSA

21. TSA transfer and deployment operations require an adaptation of the government accounting and financial architecture to streamline data collection and cash flows and to facilitate their management.

Figure 2.
Figure 2.

Proposed architecture of accounts opened with the BCEAO

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001

22. In the proposed scheme, cash surpluses are regularly swept from regular accounts to a pivot account (ACCT). Cash from revenue collection (RGD and local tax collectors) is transferred to the ACCT to enable the ACCT to resupply the PGT with cash and to operate its own payments. Following the gradual transfer of funds from agencies to the ACCT account, the ACCT will be able to act as the centralizing accountant of the banking operations for all public entities. Agencies’ revenue and expense operations will be accounted in their respective ledgers prior to the transfer to the ACCT for bank reconciliation. The reconciled operations will then be transmitted to the agencies for the accountants to balance their ledgers.

23. Senior accountants rely on their BCEAO accounts to operate their daily transactions. The accounts opened for the RGD and the PGT can be used for regular spending and revenue collection transactions. The accounts of the eight regional treasurers stand for their own operations and for centralizing the secondary accountants’ (tax collectors’) revenue and expenditure operations. Once the transactions are reconciled by the ACCT, they are communicated to the senior accountants to balance their respective ledgers.

24. There is need for a training plan and support for treasury units. The TSA opened with centralizing accountants (RGD and regional treasurers), and their interactions with secondary accountants must be comprehensively described in manuals on accounting procedures with training materials and tailored support to the units. The training timetable should be synchronized with the 2013–14 timetable of transfers from the commercial bank accounts to the TSA.

25. Petty cash management at the regional level should be customized with the assistance of a banking partner yet to be defined. Given that BCEAO cannot cover petty cash operations (small amounts of revenue and expenses) throughout the country, these should be operated by a commercial bank, ideally the one with the largest network. The so-collected liquidities should then be regularly redeposited to the ACCT’s account and accounted for in the year-end balance. The commercial bank in charge of the operations should be chosen through a bidding process resulting in an operating agreement. The pace of re-deposits from the bank to the Treasury deserves attention; a weekly frequency seems realistic.

Figure 3.
Figure 3.

Cash flows and the TSA

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001


  • Open a small number of accounts at the BCEAO, namely 11 accounts opened with the BCEAO constituting the TSA, organized as follows:

    • - The account opened at the ACCT is the TSA’s pivot account.

    • - The PGT and the RGD each retain the accounts they currently have.

    • - An account will be opened for each of the eight regional treasurers.

  • Organize petty cash transfers from the regions through an intermediary commercial bank.

E. Start to actively manage cash and debt

26. The annual cash plan, appended to the budget law, is not used for intra-year management. Previous TA missions recommended the establishment of a database, the production of a daily cash survey, and an intra-year rolling cash plan. The annual cash plan now appended to the budget law is a step in the right direction, but its projections for monthly revenue and expenditure are based on data from the previous fiscal year. Currently, the instruments for cash management and for revenue and expenditure tables are not suitable. They are used mainly as hypothetical fiscal targets for spending and collector units. The cash flow technical committee is as a consequence able to follow up on fiscal targets for revenue and expenditure, but has no reliable vision of actual cash revenue collection.

27. The cash plan must be updated at the beginning of, and monitored throughout, the fiscal year. The implementation of real, active cash management is now based on the consolidation and enhancement of the current system with, in particular, the continuous integration of fiscal, accounting, and financial forecasts taking a dynamic approach. The current monthly cash flow table can be used as a sound basis for the new system. In the medium term (mid- or end-2014), following the transfer of the government accounts from commercial banks to the TSA, and the implementation of the AICE cash management module, the ACCT should be able to produce a consolidated daily cash survey.

Update the appended cash plan in the budget law for intra-year tracking

Break down the annual cash plan structure during the fiscal year based on actual revenue and expenditure executed from the TSA accounts (gradual inclusion based on the timetable of transfers from commercial bank accounts).

Switch approaches from pursuing fiscal targets on revenue and expenditure management, to following up on actual cash flow.

Introduce stock items (balances after reconciliation and fiscal position vis-à-vis the banks, treasury unit arrears, bonds maturing at the beginning of the fiscal year) and flows (unpaid commitments and pending invoices, with the help of the financial controllers’ network).

Update the monthly projections with actual cash flows instead of reports on budget execution.

28. Cash management within a full-fledged TSA, allows fine tuning debt policy. Currently the Treasury bond planning seems not to be linked to cash flow projection. A sound and dynamic cash plan would allow a better phased issuance of bonds, or any other debt instruments, to maintain the TSA at its relevant balance.

29. Bank arrears should be taken into account in the cash plan. As a first step, all arrears pending with the commercial banks should be balanced prior to the transfers of liquidities from commercial banks to the TSA. The 2011 survey on the fiscal position of the DNTCP and the DGDB should be updated beforehand. The cash plan and its disbursement schedule should address the ongoing government bank-arrears clearing policy and the related banking agreements.

30. Continue to monitor the sequence of expenditure flow upstream from appropriations. An apparently simple and pertinent intra-year fiscal regulation mechanism was established. This consists of giving notification5 of appropriations (by ministerial decree prepared by the DGB) based on cash projections (Treasury forecasts). Thus, in 2012, notification was given only of appropriations for mandatory expenditure (on a quarterly basis) in accordance with the budget. Allocations for operating expenses were reduced (by up to 20 percent). Investment spending was notified only in special cases documented by the requesting line ministries. This approach involving appropriate synergies between the Treasury and the DGB should be maintained to contain expenses based on projected resources.


  • Use the existing cash plan appended to the budget law and update it to foster intra-year cash management.

II. Organize the Expenditure Chain to Control Delays and Arrears

A. Keep spending within a context of scarcity and risk

31. The 2012 scarcity of finance drove budget management into hurdles. Box 4 below gives a synthetic view of this particularly tense fiscal year.

32. Spending is therefore subject to dual tensions. Scarce resources have severely restricted services, hence the risk of fiscal indiscipline as seen in Senegal in 2008.6 At the same time, the depletion of foreign financing and the temporary freezing of assets have further exacerbated the cash crunch.

33. In 2012, faced with constraints and risks, the government controlled the budget execution with a firm hand.

  • The medium-term framework was reframed. Even though the budget pre-debate with the Parliament7 could not take place in 2012 because of the country’s instability, reports on the execution of the budget were transmitted to the National Assembly in due time.

  • The government proposed a LFR to strike out CFAF 400 billion in appropriations.

  • Appropriations were notified based on available resources to safeguard mandatory expenses as a priority (wages, contractual spending) to the detriment of other expenses (current operations and non-committed investments).

FY 2012

The events of March 22, 2012 had major repercussions on budget execution in 2012. The temporary freezing of government assets in the BCEAO led to a cash flow crisis and recourse to advances from the commercial banks. The suspension of aid resulted in a very restrictive policy to prevent fiscal slippage.

The LFR, based only on domestic revenue, was revised downwards by one-third of the resources.

Major revenue revisions in 2012

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Overall, expenses were reduced by CFAF 400 billion and each item was reduced in various proportions.

Operating expenses: remunerations—CFAF 228 billion for the government and CFAF 79 billion for local authorities—were safeguarded, as were scholarships (CFAF 18 billion), which are equated with those expenses. The same is true of mandatory spending on communications and energy (CFAF 30 billion). The other operating expense items, equipment, travel, etc. were cut back by 25–30 percent.

Expenses on the debt, capital and interests, were cut by close to 50 percent. As a result, the 2012 tranche of CFAF 7.5 billion of the commercial banks’ overdrafts-reducing plan, initiated in 2011 by the DND, could not be carried over.

Investment continued to plummet with a reduction of over 70 percent. Only a few domestically funded investments were maintained.

Salient points of the 2012 expenditure review
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This policy prevented an irreversible slide. The overall deficit (excluding grants) and the fiscal deficit, base year 2012, are estimated by the government at 0.0 percent of GDP, compared with -7.5 percent and -0.3 percent in 2011.

Prudence was maintained in 2013 within a deteriorated economic situation and no external financing was incurred to back the budget. The deficit is CFAF 50 billion for about CFAF 1,000 billion in resources.

34. Expenses were also contained by controlling end-of-year spending. In keeping with the 2011 FAD recommendations, two key measures were implemented:

  • The supplementary period was limited to one month (circular n°03346/MEFB-SG of October 10, 2012), with the additional outcome of better circumscribing the fiscal year.

  • Deposit orders have been prohibited (circular n° 03396 MEFB SG of October 12, 2012). These orders used to allow the PGT to pay for goods and services beyond the close of the fiscal year. This mechanism, which is equivalent to a massive and uncontrolled carry-forward of cash, formerly caused, in the subsequent fiscal year, cash flow tensions compromising the execution of the budget.

35. Finally, the government is sending multiple warnings to fend off fiscal indiscipline. The communication from the Minister of Economy, Finance, and Budget (MEFB) was toughened with regard to expense-related “extrabudgetary” risks, which correspond to goods or services provided without the financial controller’s approval. Provisions in the initial budget law of the year recall that any government employee who commits extrabudgetary expenses, or commits expenses in excess of appropriations, is personally and financially liable; and that in this case, the government is not accountable. The MEFB combines two leverages in this policy: the implementation of departmental rules (circular 00390 MEFB SG of February 4, 2013, in particular) and communication to creditors on invoices and payment-related documents. This policy seems to be bearing fruit; in 2012 only one “extrabudgetary” expense of CFAF 500 million was found.

36. Significant liabilities accumulated despite these proactive steps toward good management. The year-end amount of liabilities rose as a result of the cash flow tensions, subsequent government’s commitments with the banks, the issuance of bonds, and the accumulation of sizable overdue debts. According to the Treasury and the National Public Debt Directorate (DNDP), liabilities at end-2012 rose by 2 percentage points since 2011, to 35 percent of GDP:

  • Domestic debt liabilities amounting to 5 percent of GDP, of which CFAF 25 billion in payment arrears (invoices still pending 90 days after being recorded on the books);8 CFAF 15 billion (invoices pending less than 90 days);9 CFAF 111 billion in commitments to the banks9 (overdrafts, debt securities, miscellaneous obligations);

  • External debt liabilities amounting to GDP 30 percent,10 including CFAF 29 billion (GDP ½ percent) in external arrears.

37. As an example, the mission studied the case of the Ministry of Health,11 based on financial data transmitted by the Directorate General of Budget. This sample is particularly illustrative of liquidity shortage issues but also of habitual management practices with traditionally low volumes of spending at the beginning of the year and spectacular increases at year-end.

38. Payroll services were maintained despite the March 2012 TSA shutdown. The central payroll office managed to pay civil servants’ compensation steadily, albeit variation in volumes of payments occurred from month to month.

39. The monthly budget execution evolved from slow at first to massive by year-end for all expenditures except payroll.

Figure 4.
Figure 4.

FY 2012, Ministry of Health, monthly volumes of payment validation and payments (CFAF)

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001

40. Available cash could barely cover departmental needs. The year-end increase of the volume of invoices caused a sharp rise in overdue payments (the red surface area in the graph below).

Figure 5.
Figure 5.

FY 2012, Ministry of Health, cumulative volumes of payment validations and payments (CFAF)

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001

41. The amount of payments arrears (in the sense of the WAEMU standards) has increased considerably. The volume of arrears is kept within an annual average of 4.2 percent of the ministry’s overall expenditure (including wages), however it peaked at 6.6 percent on October 31, 2012.

Figure 6.
Figure 6.

FY 2012, Ministry of Health, Arrears at more than 90 Days (CFAF)

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001


  • In the context of a return to better fortunes with the resumption of foreign financing, the government can prioritize disbursements to take account of the departments’ capacity to re-commit expenses and the Treasury’s capacity to disburse. In that context, priorities should, logically, be scheduled as follows:

    • - Reframe and prioritize appropriations, in particular the ones linked to the foreign financing, through a LFR.

    • - Maintain mandatory expenses (wages and pending commitments).

    • - Reduce liabilities such as domestic and external arrears, and resume clearing commitments to banks according to the suspended plan.

    • - Resume public investment starting with committed investments.

    • - Gradually resume operating expenses.

B. Monitoring payments arrears

42. The government implemented monitoring payments arrears, but the policy needs further improvement. This mechanism tracks arrears from formal reception of invoices by the paymaster, far downstream in the expenditure sequence after the invoice has been validated, authorized, approved, and transmitted to the paymaster. Therefore, the mechanism is not able to track arrears according to the WAEMU definition and the government’s stipulations in its letter of intent,12 which provides for monitoring arrears from validation of invoices.


  • Monitor arrears from invoice validation (see Annex III).

Monitoring of payments arrears from the validation of invoices

This chart summarizes the key points for monitoring payments. After the payment has been committed by the authorized authority (after approval by the CF) the debt occurs when the goods or services are delivered as ordered. This step is traditionally called “validation.” To pay for the expenses, after approval by the CF, and the authorized authority then issues an invoice and registers it in the financial information system (PRED). The invoice is sent to the paymaster for its processing (reception, checking, bookkeeping, and final payment), According to the WAEMU and IMF standards, arrears are validated invoices that are not paid within 90 days.

The mechanism implemented by the Treasury had its weaknesses:

  1. From the PRED data base, the DGB considered invoices checked by the paymaster in 2012, that is, invoices that had been received and checked. Within this sample, the DGB divided invoices issued more than 90 days prior and not paid—CFAF 15 billion—from invoices issued less than 90 days prior—CFAF 23 billion. The DGB then considered the first group as arrears.

  2. This mechanism underestimates the amount of arrears. The starting point of the arrears’ lag time does not include in the expenditure chain pending expenses for which the service has been provided but the invoice has not yet been issued or transmitted to the paymaster or for which the paymaster has not yet checked the invoice. For the Ministry of Health, for example, the total amount of unpaid payment orders received no more than 90 days prior total CFAF 4.01 billion and those received more than 90 days prior total CFAF 390 million.

Proposed improvements:

Good cooperation from the PRED IT team allowed the mission to use all the Ministry of Health’s commitments filed for FY 2012 (4,032 producing about 20,150 acts). It reprocessed these data from PRED using the methodology presented in Annex III and was able to quantify the arrears in accordance with WAEMU’s definition at CFAF 713 million. For this ministry, the conversion of arrears from the DGB’s to the WAEMU’s definition meant multiplying them by a factor of 1.8. When applied to the whole scope of FY 2012 government expenditure, this method can allow the DGB to quantify arrears more precisely.

C. Toward a smoother pace for budget execution

43. The objective is to step up volumes of payment early in the fiscal year and to lower the volumes at the end of the year. The pace of fiscal year observed at the Ministry of Health (see above) shows that expenses tend to stagnate at the start of the year and take off at the end. The origin of this erratic pace of expenditure lies in the problems the departments face in starting their fiscal year and the fact that a large number of investment expenses must be completed within the FY even though they are constrained by a long procurement process and by the actual execution of the work. However, the Ministry of Economy, Finance, and Budget has already taken several measures to smooth and facilitate the budget execution.

44. Managers have better information on transfers of appropriation. According to 2011 FAD recommendations, the possibility of switching appropriations across budget items within the fiscal year was clarified by two decrees on October 11, 2012, on transfers.

45. At close of FY 2012 managers were tentatively allowed to carry appropriations forward to the next FY. Spearheading the implementation of the WAEMU legislation, the government authorized carrying forward the following: pledged appropriations subject to the cancellation of an equal amount for other items in the next FY budget; investment appropriations to a maximum of 10 percent of the initial budget, subject to availability of cash. In both cases, a decree from the MEF must be obtained to allow the carry forward.

46. The authorities made advances, which could eventually have an impact on revenue. A study was conducted on improvement in the collection of government property revenue and the adoption laws on the capital gains tax on real estate conveyances and on land taxes.

47. The whole of government’s investment expenses can hardly be completed within the FY. They continue to be governed by appropriation notifications for the reception of goods and thereby follow a long process that is difficult to implement within a single year. This is the main reason why managers are used to pushing through their last invoices at the very end of the year.

48. Some contracts executed over several years need better monitoring. Commitment and payment timetables are not yet tracked by a commitment authorization mechanism. However, there are promising signs of improvement in multiyear expenditure management:

  • The DGB’s considered implementing this mechanism on a narrow scope in FY 2014.

  • The Ministry of Health tracks payments on previous commitments through a table recorded by the stock accountant.

49. It is proposed to pursue the above initiatives to smooth monthly management volumes. The challenge is to ease the pace of the year-end expenses by starting off the fiscal year earlier and by following up on multiyear commitments and appropriations, which requires improving monitoring multiyear contracts.


  • Shorten the supplementary period by starting management earlier in the following year (reform under way);

  • Inform managers of the availability of their appropriations (current practice is satisfactory);

  • Extend existing practices to multiyear contracts, so as to execute payments over several fiscal years, conditional upon monitoring multiyear expenses (a commitment-appropriation control mechanism is being considered);

  • Start the practice of carrying forward appropriations for pending expenses at the end of the fiscal year, subject to cash availability.

D. Continue streamlining the expenditure chain

50. The expenditure chain follows a conventional procedure (notification, commitment, approval by the CF, monitoring of work, control of deliveries, payment authorization, bookkeeping, and payment). The decentralization of payment authorizations is almost complete, compared with other countries of the subregion; the sectoral ministers and regional governors are secondary payment authorization agents (ordonnateurs secondaires), and the directors of financial affairs, directors of finance and stocks (ministerial DAF and DFM), and the regional budget directors (regional DRBs) act on delegation as payment authorization delegates. The senior payment authorization agent (ordonnateur principal), the MEF,13 is upstream of the process and can therefore block expenditure upstream, if necessary.

51. Delays still occur in the expenditure chain but do not exceed WAEMU’s average time line for validation and payment. The average time from commitment to payment in the Ministry of Health is between three months and one week. Accounting operations require close to 30 percent of that time. The lag time owing to the intervention of the CF is comparatively brief (less than 5 percent). The debt14 “invoices and payment” stage is slightly longer (52 days) than the “commitment” stage (50 days) and accounts for more than half of the line items, hence the pressing need to speed up spending at this level.

Figure 7.
Figure 7.

Average lag times noted at the Ministry of Health

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001

52. The integration of accounting and fiscal information systems was continued pursuant to the recommendations made in 2011. The deployment of PRED5 is satisfactory. In 2013, 71 sites were connected: DAF and DFM, financial control, and DGB and DRB in the regional capitals. The interconnection of public institutions continues, thereby enabling interfaces between computerized accounting systems (AICE, and “DEPENSE”) and the budget application (PRED 5). Progress ahead would consist, on the one hand, in replacing “DEPENSE” by AICE for less than 20 percent of expenditures and, on the other hand, properly interfacing the revenue applications with the budget.

53. The adaptation of information systems (IS) is paramount to implementing program budgeting, consistent with the entire PFM system. The need to prepare the IT master plan envisaged in 2011 is urgent. In 2012, this work would have been outsourced but the selected contractor withdrew following the March events. The still-planned work on SDI is part of the 2013 timetable for the reform plan PAGAM/GFP II.

54. The financial comptroller, whose methods of intervention have improved, helps to secure spending. His double intervention, first before commitment and second before authorization of the payment, is a deterrent to potential mismanagement. To limit the impact on lag time, the decentralization of the CF continued at a steady pace covering all regions and ministries going forward. The checks implemented in 2011 improved the actual provision of services. A further step, recommended by the WAEMU harmonized fiscal framework, will simplify ex-ante controls. However, the mission proposes that the current procedures be retained in the short term for domestic internal controls are not sufficiently well-developed to ensure proper use of public finance.

55. Comprehensive financial controls must be strengthened by an effective system of supervision and control. The function of the CF is crucial in the expenditure chain because the CF acts from the origin of expenditure (commitment approval), to the approval of invoices (certification of actual deliveries), and the last phase before payment (approval for payment authorization). Given the high stakes involved in their actions, controllers are by no means protected from solicitation. It is therefore important to strengthen control of the CF duties. The Auditor General (BVG) plans to conduct surveys of financial control.


  • Maintain existing financial supervision arrangements in the short term.

  • Strengthen supervision of CF, in particular through BVG surveys.

E. Improve the execution of expenditures by type

56. The conventional procedure for regular expenses is largely effective albeit susceptible to fraud. In his annual report, the Auditor General often points out fraudulent practices, many of which occur in the expenditure stages. Better supervision and streamlining of processes and delays15 (particularly in transmitting paper documents) can help reduce these bad practices.

57. Wages are regularly paid with prior payment authorizations, but payments are not properly secured. Compensation is deposited in the banks as a lump sum with a list of the employees to be paid. The banks are in charge of depositing the pay to the employee accounts they hold. This form of indirect payments gives no assurance that the pay will actually reach the end recipient. The same can be said for “billetage,” which consists of hiring a cash payer (billeteur), who would pay wages against a receipt from the employees. In both cases, the government cannot ascertain that all payments have reached their proper recipients.


  • Issue payroll transfer orders to banks with a specific breakdown of employees and organize reports from the banks on the actual payment of the salaries.

  • Deposit salaries in the banks to reduce the practice of using cash payers and strengthen their supervision.

58. Ease the accountants’ operations upstream of the process. Prior the actual payment accountants must run a certain number of checks. In a context where cash flow is crucial, they could conceivably be sensitive to the lag time between accepting the payment order, completing controls, and checking the availability of resources. With the likely resumption of foreign financing and, as a consequence, a sharp increase in the volume of expenditure, it is expected that the number of invoices will rapidly increase to meet the pressing demand from departments, and risk creating bottlenecks among the paymasters. It is therefore key to anticipate the recovery by making every effort to improve the quality and pace of operations at paymasters’ offices.


  • Increase the paymasters’ staff to improve the quality and speed of controls.

59. Controls of foreign-financed investments should be strengthened. Controls over externally funded investments are more relaxed than on domestic resources despite the massive volume of external funding. About 430 investment projects are budgeted and executed within the investment expenditure budget (BSI), which is the annual tranche of the three-year investment plan (PTI). In the initial budget law for 2012, which was the last reference budget before foreign assistance was frozen, only 28.4 percent of the BSI’s CFAF 460 billion were domestically financed (CFAF 130 billion). The other CFAF 328 billion was externally financed—53 percent with loans and the rest with grants. Given the limited time the mission could spend on this topics, some of the below recommendations are merely exploratory. However, with aid about to resume, it is essential that the BSI management be evaluated by experts so that donors be reassured that their funds are being properly used and that Mali can better develop public investments to leverage growth.

60. The selection and planning of investment projects can be improved. Projects are selected and then included in planning on the basis of a formal policy document against criteria of varying importance, but conformity with these criteria is often poorly documented.


  • Significantly reduce the number of selection criteria giving preference to those that are measurable and review only documents that are complete.

  • Include economic and financial criteria to ensure that selected investment projects are sustainable over time and optimize related appropriations.

61. Strengthen the budgeting of donor-funded projects. Some standardized project documents have almost no content and most are not up-to-date when they are due, preventing the government from making informed choices, thereby hampering efficient resource allocation in the budget.

62. Projects must have results. Past contracts reaching completion should be scrutinized if they seem unnecessarily costly. One possible method would be to assess the completed projects in terms of budget execution with respect to (i) national and foreign disbursements compared to projections; (ii) capital spending compared to operation costs; and (iii) the projects’ achievements (infrastructure built compared with plans, results achieved compared with expectations). Consequences should be drawn from this analysis before extending the initial timetable. As an overarching rule, all projects upon completion should be subjected to an ex post evaluation to verify their results.


  • Reinforce the BSI management capacity (tools and methods), by the following actions: appraising the project database of the National Directorate of Planning and Development (DNPD); mapping and improving the IS used by the line departments and the donors; enhancing the training of national professionals and providing them with standardized instruments, particularly for reporting; and strengthening the coordination of the DNPD with the line departments.

  • Enhance follow-up by organizing regular inspections on project implementation, by permitting assessment bureaus to cancel contracts in the event of poor practices, and by fending off undesirable practices through random inspections in situ.

  • Improve project evaluation before, during, and after project implementation. This will further improve selection of projects, allow interim assessment prior to contract extension, help complete projects within reasonable deadlines, and facilitate a final assessment of results.

III. Pace of implementation of partially interrupted reforms

A. Quantitative tally of the implementation of 2011 FAD recommendations

63. Understandably, the implementation of 2011 recommendations has been put on hold. However, the Ministry of Finance largely prevented backtracking and even made some limited progress. The framework described below takes stock of the implementation of these recommendations.

Quantitative assessment of implementation of the 2011 recommendations

The level of implementation 1/ (1.66/ 3.00) is lower in 2013 than it was in 2011 (1.93/3.00) yet achievements were maintained.

Faced with 2012 events and with the scarcity of resources, cash management developed considerably and controls improved through the gradual implementation of the national internal control strategy (SNCI). The implementation of fiscal instruments reached a 1.5 level. However the mission noted no major backtracking in reforms. Owing to a shift in priorities, no progress has been made in accounting and modernizing the legislative and regulatory framework.


Heading: Average Level of Implementation by Category Labels (clockwise from top of hexagon): 1) Strengthening accounting; 2) Legislative and regulatory framework; 3) Coherence of fiscal instruments; 5) Internal and external controls; 6) Budget Execution; 6) Cash management

Of the 65 recommendations made by the 2011 IMF Fiscal Affairs Department mission 47 were completed in 2012 and 2013.

Recommendations mainly cover program budget (PB) and its direct corollaries (managing reforms, transcribing directives into national law, and budgeting) but they also call for strengthening the PFM basics such as accounting, cash management, and internal and external control.


Heading: Type and Number of Recommendations Blue columns: 1) Legislative and Regulatory Framework, 2) Coherence of Fiscal Instruments; 3) Internal and External Audits; 4) Budget execution, 5) Cash Management; 6) Management of Agencies.

1/ Methodology: each recommendation was evaluated on a scale of 1 (not implemented) to 2 (in progress) and 3 (completed). Recommendations to be completed after 2012 were not included in the score. The overall rating is a non-weighted average of the scores for each recommendation.

B. Incomplete development of the legislative and regulatory framework

64. Transcribing WAEMU directives into national law is challenged by the architecture of domestic legislation. In regard to the Constitution, the country must adopt at least two organic laws: one to transcribe the LOLF directive16 into a finance responsibility law (FRL) with, among others, provisions related to the country’s commitment in the convergence, stability, growth, and solidarity pact; and another one to transpose the Transparency directive17 as a legal code for public financial management (PFM). Both organic laws will ground any further legislation related directly or indirectly to government finance. As for the central government, the upcoming legislation will cover the budget, public accounting, budget classification, the chart of accounts or the Government fiscal table; and, lastly, for local governments, the chart of accounts.

Rising issues in transcribing WAEMU directives into national law

A logical legal system would require that the directive on budget laws be transposed through an organic law that grounds the regulation on public accounting and the annual budget. In this rationale, texts transposing classification directives (budget, chart of accounts, and GFS table) would derive from the public accounting regulation.

However, Article 70 of the Malian Constitution 1/ favors regulation to rule the budget instead of legislation at ordinary or organic level. Paradoxically, under the same article, the rules of public accounting are explicitly governed by law. To overcome this problem the government initially considered three options:

Option 1: File an ordinary draft law on the budget and then raise the level of this law after the Constitution is revised.

Option 2: Submit a draft organic law considering that this procedure would be legally more binding for the government than the one favored by the Constitution and would thereby not violate the spirit of the Constitution if the Assembly agrees with the procedure. This option would require a prior legal study.

Option 3: Wait for the revision of the Constitution before submitting a draft organic law.

1/ Memorandum item: the only reference to public financial legislation mentioned in Article 70 of the Constitution outlining the scope of the law is the following: “the law determines […] the fundamental principles: […] of government accounting.” There is no other reference in the Constitution to an organic law organizing the preparation, content, and approval of the budget law.

65. The government is making up for lost time in transcribing directives. The technical work is either far advanced or completed. The committee to monitor and implement the directives established in 2010 has endorsed the draft FRL and the PFM transparency code. Key regulations are also ready; Directive n°08/2009/cm/WAEMU of June 26, 2009 on budget classification, for example will be transcribed through a decree yet to be signed.

66. The government opted to file a draft ordinary law. Considering setting up a referendum to revise the Constitution as a major difficulty at this juncture, the government decided first to transpose the transparency code and the directive on the budget as ordinary laws and, later on, to upgrade these laws to organic law when the Constitution is revised.

67. This could take place in the first half of 2013. The two pre-draft laws were endorsed by the Cabinet in November 2012 and the National Assembly would examine them before the end of the current legislature session.18 The draft law on the budget will be placed on the agenda and the one on the transparency code will be raised shortly. The complete transcription of directives into the domestic legal and the derived regulations should be completed by end-2013, two years after the deadline set by WAEMU.

68. No option is envisaged for upgrading the Financial Audit Section of the Supreme Court, which poses similar legal problems.


  • Ensure that the PFM regulations are published as soon as the laws are adopted, so that they can be implemented in time for FY 2014.

  • Facilitate the legal framework implementation with instructions and guides to ensure a quick and large buy-in and to foster its use.

C. Holding ground in the reform of fiscal instruments

69. A timetable for the budget preparation was timely disseminated but the budget pre-debate (DOB) held in 2011 was not repeated in 2012, because of institutional instability (suspension of institutions after the coup d’état). Nonetheless the Directorate General of Budget (DGB) reframed the medium-term fiscal framework (MTFF), (typically used as the platform for the DOB) taking into account suspended foreign financing and plummeting revenue. The budget law and all its required appendices were eventually voted in compliance with the constitutional time frame.

70. The program budget (PB) documentation improved with a reduction in the number of objectives and indicators for each program, but it was technically impossible to properly appropriate the budget by program given the uncertainty of fiscal resources.

71. The implementation of commitment authorization (AE/CP) started for domestically funded public investments. The DGB plans to expand this approach within the 2014 budget. However, technical assistance would be useful to encourage this nascent reform.

72. Public policy reviews were not launched but the control bodies embraced this new function. The BVG and the public-service supervisory office (CGSP) began to consider ways to build capacity to assess public policy (BVG) and to evaluate the performance of CGSP.


  • Continue to improve the PB of the ministries based on the program review conducted in 2010–11.

  • Strengthen the capacity of the BVG and the CGSP to assess public policy and the performance of public utilities.

D. Slow improvements in fiscal reporting

73. Despite the ongoing rollout of the computerized accounting system there has been little progress toward improving accounting. Due to the very difficult context of 2012, the January 2012 FAD recommendations have been put on hold and are still applicable, albeit according to an updated timetable.

74. Draft regulation on accounting (RGCP), and the government chart of accounts (PCE) have not evolved. They would be published following the transcription of WAEMU PFM directives (transparency, budget laws, and general accounting principles) into law in 2013.

75. The rollout of the AICE was continued in 2012 and into 2013. The new system already implemented in the office of the Paymaster General (PGT) in early 2011, was rolled out in the district of Bamako Tax collector Office (RGD) in 2012 and then, in early 2013, in the regional treasury of Koulikoro. This occurred after training treasury units in mid-December 2011 and in October 2012. For a temporary period the old and new systems kept running in parallel.

76. The AICE system was easy to handle because of its similarity in structure to Microsoft software. In the RGD, interfaces with the revenue applications of the DGI (ISGTAS) and the DGD (ASYCUDA) were tentatively implemented in early 2012 then blocked in March of 2012. Technically, the interfaces do function but are not fully synchronized with AICE. In Koulikoro, the interfaces with the DGI and DGD applications are not operational yet. The interface with PRED5 (the budget expenditure management system) is active.19 The roll out of AICE in the ACCT was scheduled for early 2014 pending to 2013 works on analytics, concepts, development and implementation.

77. Continue to rollout AICE is key to improve the quality of the government accounting. Its implementation in the ACCT is a particularly important step to facilitate fiscal reporting at the national level, with the production of financial and statistical statements (in particular the GFS Table).

78. It is proposed that the technical assistance, suspended since 2012, resume to roll out AICE. The MEFB benefited from IMF technical assistance financed by the Kingdom of Belgium to develop and implement this system. The assistance was suspended in March 2012 but it could resume. The resumption of this project, which had borne fruit until it was suspended, seems critical for consolidating the deployment of AICE.

79. The creation of an inter-departmental IT coordination unit is strongly recommended to help as follow: steer and monitor design and development, interfaces, and integration; adapt to changes in the accounts in compliance with the PCE; and train IT teams to ensure buy-in and maintenance of appropriate skills.

80. The procedure to centralize accounts (all subaccounts included) in the monthly balance sheets is cumbersome. The balances issued from AICE must be manually recaptured into the ACCT tables (pending the rollout of AICE in the ACCT). The accounts of customs and tax collectors attached to the RGD are still kept in single entry form and must be manually input to the RGD’s accounts. The senior accountants still centralize their related accountants’ reports on hard copy and re-capture these data in AICE manually. Furthermore, Treasury buildings in the Northern Territory were hard hit and must be rebuilt.

81. The practice of “adding on days to the month” has an impact on the reliability and quality of accounting and financial data. The practice of sending numerous invoices to paymasters around the 25th of the month to catch up with monthly fiscal targets is still widespread and delays monthly closings.

82. The monthly balance sheet is delivered after the delivery time fixed by the ACCT (45 days). The annual balance sheet is usually finalized in April/May of N+1. Delays in producing the government’s balance sheet do have repercussions on the financial statement. At the time the mission was in Mali, the treasury was unable to produce any balance sheet for end-2012, even a tentative sheet.

83. The monthly balance sheet is delivered after the delivery time fixed by the ACCT (45 days). The annual balance sheet is usually finalized in April/May of N+1. Delays in producing the government’s balance sheet do have repercussions on the financial statement. At the time the mission was in, the treasury was unable to produce any balance sheet for end-2012, even tentative.

84. Stock and assets accounting is being gradually implemented and rolled out as planned, with new software being currently deployed for line departments’ managers. At the time of the mission’s visit, 41 offices were using the software and some were benefiting from training sessions. This rollout is essential for the implementation of accrual accounting in the medium term.


  • Resume technical assistance and secure domestic funds to continue the rollout of AICE in the ACCT and the regions according to the existing agenda.

  • The following 2011 recommendations still largely apply: (1) reduce the supplementary accounting period to one month after the end of the fiscal year; (2) improve the quality of accounting by clearing specific accounts in the ledger (reciprocal, third-party, and financial accounts); (3) deliver in due time monthly and annual balance sheets; (4) continue to roll out stock and asset accounting to inventory fixed assets (government property), stocks, and liabilities, to ultimately provide an opening balance.

E. Poor management of autonomous public agencies

85. The mission noted little progress in this medium-term reform. The budget law for 2013 created new agencies and of the 100-odd autonomous public agencies (EPAs) in existence, only nine regularly produce fiscal reporting. The dissemination of the agencies’ chart of accounts has not started and the legal regime applicable to EPAs has remained largely unchanged. The government has seemingly given up these works, despite their being deemed crucial since 2008, thereby hampering budget comprehensiveness and quality of reporting.


  • The 2009–11 recommendations still apply: (1) ensure that EPAs regularly submit quarterly reports on budget execution and financial risks to the DGB, to the DNTCP, and to the line department Administrative and Financial Directorate (DAF) concerned; (2) widely disseminate the DNTCP’s chart of accounts designed for EPAs and make its use mandatory; and (3) extend the practice of result-based management agreements (based on results and verifiable indicators) with agencies, on a voluntary basis.

  • In the long run, the government should clarify its policy ruling the establishment of new agencies, and ensuring agencies’ fiscal and financial autonomy. It should also deploy a consistent management system for agencies, in which the execution of expenditures is streamlined through the appointment of a single paymaster per agency, specifically the paymaster currently handling government transfers to the agency.

F. Development of ex post controls

86. Ex post controls are performed by three agencies: external control is performed by the accounting section of the Supreme Court and by the Auditor General; internal control is performed by the general supervisory office for the civil service, assisted by control bodies in the line ministries.

Accounting Section of the Supreme Court

87. The accounting section of the Supreme Court is phasing in its 2009 strategy for checking accountants’ financial statements. Ledgers from 1960 to 1991, which could not be examined because of the lack of key documentation, were cleared under the law of January 2013 (not yet promulgated) with the dual advantage of finally settling ancient ledgers and reducing the number of statements to be reviewed. Senior government accountants’ ledgers from 1992 through 2008 are being reviewed and auditors’ opinions will be issued following the promulgation of the January 2013 law.

88. The review of post-2008 accounts could not yet be undertaken.

Progress clearing accounts from 1992 through 2008

It had been decided that the accounts from 1992 through 2008 would be administratively settled, following a summary review. The table below shows that, technically, the settlement of the accounts of the all government’s main accountants, and 2 percent of the local government accountants, has been completed. The settlement of accounts for the public entities, however, has not yet begun.

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Comments: Given difficulties in inventorying and collecting data from local governments and, above all, EPAs, prior facilitating actions are needed from the MEF. The scope of the review of the senior government accountants will encompass government transfers to EPAs but not the EPAs’ own resources management.

89. Legal strides have benefited the Accounts Section although it is still facing serious difficulties in developing as a Supreme Audit Institution (SAI). The increase of the section’s staffing and the improvement of its hiring policies have been approved by law. Conversely, the draft law on the status of its members has been on hold since 2011, thus hampering the development of the section into an SAI when a forthcoming revision of the Constitution allows such a conversion.

90. The Section’s resources are still limited although its needs in training and capacity reinforcement are considerable. This reform still needs better prioritization in the government agenda.

91. The section’s branch charged with enforcing budgetary discipline (CDBF) should become operational. The CDBF is grounded on the section’s legal status, to strengthen the framework of management accountability which is paramount in the struggle to fend off budget mismanagement.


  • In the short term, boost the resources of the Accounts Section so that it can perform its new missions: certification of government financial statement; review of the draft budget review law (LdR).

  • Operationnalize the CDBF as rapidly as possible.

  • Jointly with the MEF, organize collecting needed EPAs’ and local government’s data and improve their reliability to allow the Section perform its tasks in the longer term.20

Office of the Auditor General

92. The BVG’s scope is broad ranging from certifying the quality of the fiscal reporting (accuracy and sincerity), to verifying performance. He is therefore able to detect irregularities, fraud, and mismanagement. In 2011, his investigations of 13 spending units included nine financial audits and one performance audit.

93. The scope of his authority was recently extended to evaluating public policy under the law of February 8, 2012.

94. The BVG capacities foster his credibility. He is an external auditor, independent of the government; he sets his own agenda, and refers cases directly to the attorney general. His resources are ample, his management strict, and his employees well trained.

Comptroller General of the civil service and ministerial inspections

95. The Comptroller General of the civil service (CGSP) coordinates implementation of the national internal control strategy. This strategy is implemented in the line ministries by supervisory committees to oversee the quality of internal audits carried out by the line ministries’ internal control. The CGSP supervises and coordinates the internal control through harmonized agenda and joint missions.

96. A risk management approach is being gradually implemented. In November 2012, The CGSP, with the support of the World Bank, organized training in a risk-based approach. Two pilot ministries were selected (Health and Education) and three others should benefit from training in 2013 (Transport, Equipment, and Finance).

Support Unit for control bodies

97. The follow-up of recommendations is monitored by the control bodies themselves and a unit supporting the supervisory structures (CASCA) established in the office of the President of the Republic. CASCA consolidates the reports and can refer cases to the attorney general for criminal violations. There is still room to improve the monitoring of recommendations, particularly with respect to sharing post-control analysis of experience. Thus, the 2011 recommendation about a study of external control bodies still applies.


  • Develop information sharing among control bodies concerning their respective methods and implement training focused on the use of common tools.

  • Mutually exchange information drawn from audits with two options: (i) systematically transmit the reports of each structure to the others, by establishing operating units; or (ii) use CASCA, adding to its current task (e.g., management of all reports sent to the President of the Republic) the task of disseminating more condensed analyses to the control bodies. In either case, it is advisable to pay particular attention to cases of poor practices21 flagged by the audits.

  • Designate a unit to be responsible for monitoring the plan to combat corruption, specify the frequency of its operation, and other details.

IV. Update PAGAM GFP II with a view to resuming reforms

98. The following recommendations are intended to update the reform plan without challenging it. The approach proposed below conforms with the 2011 proposition to include FAD recommendations in the reform plan (PAGAM GF2) for implementing the WAEMU harmonized fiscal framework. The approach’s rationale is to keep the plan unchanged except for an update of deadlines (see Annex II).

A. Coping in the Short-term with pitfalls from the 2012 crisis

99. Urgent action must be taken to rectify the post-2012 crisis situation. Some recommendations quoted above must be undertaken immediately in order to catch up in 2013 with the pace of reforms achieved in 2011. The main recommendations are:

  • Start to gradually pool central government’s cash ;

  • Anticipate the resumption of external financing by reframing appropriations through a supplementary budget and by reviving the plan to clear liabilities.

  • Smooth budget execution in 2013 to absorb foreign assistance and financing for this crucial year for the recovery;

  • Improve budget execution control, in particular the monitoring of arrears based on validation.

B. Revising the 2011 action plan timetable

100. For the longer-term reforms, the approach proposed in 2011 is still applicable. Although the overall reform pace was slower in 2012, the PFM system did not suffer major setbacks, and there is no need to rethink the rationale and the sequencing of the reform plan. The mission therefore proposes maintaining the same sequence of events proposed in 2011 while rolling forward deadlines.

101. Resuming the implementation of WAEMU’s fiscal framework should reach key milestones in improving public services through a sounder use of public finance. The 2011 plan was grounded on several key pillars and four strategic milestones subject to certain individual prerequisites. The milestones (below in bold), and their prerequisites are the following:

  • Submit to the National Assembly the draft budget appropriated by programs, when the directives have been transcribed in national law and the IS adapted.

  • Devolve budget execution to managers, following the gradual transfer of capacities to the line ministries and the establishment of an accountability regime for financial comptrollers and budget managers.

  • Prepare an opening balance, following the prior improvement of government accounting, the inventory of government’s financial and nonfinancial assets and liabilities, and the integration of expenditure and revenue management system on an accrual basis.

  • Certification by the SAI of the government’s financial statement to back up the parliament’s debate on budget, which requires building the SAI’s capacity to enable it fulfill its tasks.

102. The 2012 freeze in reforms has resulted in delaying the achievement of the four strategic milestones by one year. Accordingly, the overall proposed schedule is now as follows:

  • the 2015 budget appropriated by programs by 2014;

  • the first opening balance by end-2017;

  • Devolution of budget management completed in 2018, for a full fledged decentralized management in 2019;

  • First certification of the government’s financial statement by end-2018.

C. Create cross-department dynamics for a noticeable impact

103. PB should be used for its very purpose: to obtain measurable results by improving public services. To do so, line ministries and spending agencies should be encouraged to initiate the reform momentum. This mobilization may take different forms:

  • A high-level cross-department workshop, recording the conclusions of the government seminar held in 2011, would sensitize all departments about the implementation of WAEMU’s harmonized fiscal framework.

  • Strengthening the MEFB capacity to mobilize departments and spending agencies through thematic workshops, for example;

  • A sounder program-budget framework, by capitalizing on the four program reviews undertaken in 2010 and 2011, and by expanding the scope of these reviews to cross-department topics, such as decentralization of budget management.

104. During the next legislature, the government should seize the opportunity to increase the involvement of national representatives in the 2013 budget pre-debate. Taking into account the political agenda (the July elections), 2013 could give rise to a discussion about sensitizing representatives. The discussion should focus on the broad medium-term strategy based on the MTFF and should complete informing the parliament about ongoing reforms. Parliamentarians’ capacity building could be envisaged to prepare for the upcoming renewed budget documentation.

105. In the longer term the government should undertake periodic reviews of results of the programs’ public policies. Such reviews have been conducted in countries that practice program budgeting to determine the effectiveness and efficiency of public policies and to make the necessary policy corrections. They could be carried out in Mali by cross-department teams composed of auditors from line ministries and the MEF, under the CGSP’s coordination.

D. Use the budget as leverage to improve public services

106. Two milestones are planned:

  • In 2014, the appropriation of the 2015 draft budget by program: this milestone consists, in compliance with the directive, in presenting the PB as the main body of the budget law, to allow each program to be voted on. Among other budget appendices, the government should, during a transitional period, present indicative appropriations according to the existing line item budget. This appendix would not be subject to a vote but would contain useful information, especially with respect to local appropriations by region.

  • The devolution of budget management in 201822 is intended to make program managers progressively more accountable, decentralize budget execution to a reasonable extent that is fairly close to the current organization of management, and allow the budget managers, after one or more fiscal years, to practice fungibility of wage expenditure.

E. A progressively more accurate reflection of the government’s fiscal position

107. The WAEMU directives provide three main innovations:

  • Income and expenses are recorded as they occur. This means that flows are recorded in the accounts at the time the creditors’ rights and debtors’ obligations are acknowledged; chart of account category 9 is therefore eliminated, and invoices are directly recorded in categories 6 and 7.

  • All government’s assets (fixed assets, stocks, cash, etc.) and liabilities (loans, loan loss provisions, and expenses, etc.) are accounted for. The government’s assets and liabilities are reported in a balance sheet along with contingent liabilities (or assets), which may give rise to future costs.

  • Public accounting is more similar to the private system, producing financial statements to be certified by the SAI (balance sheet, income statement, cash flow statement, and GFS).

  • In the medium term, a more realistic, regular, and comprehensive accounting system can play three roles: as a vector of information, a management and decision-making tool, and support for supervision. The mission proposes gradually implementing this new accounting in three waves: (1) in the short term, stabilization of the modified cash-basis accounting system; (2) in the long term, introduction of accrual accounting and preparation of an opening balance sheet; and (3) production of financial statements.

F. Introduce a new accountability framework

108. The WAEMU directives introduce several challenging innovations, for the internal and external control bodies. To fully benefit from these innovations, it is proposed that internal and external controls be developed to reach two milestones: (1) the Account Section of the Supreme Court develops as an Audit Court by WAEMU’s definition, with the capacity to review and comment on the government financial statement; (2) frame the managers’ accountability when budget management is devolved.

109. Figure 8 describes the updated approach. It staggers the actions needed to create cross-department dynamics, to use the PB as leverage for improving public utilities, to provide a truer reflection of the fiscal position, and to revise the accountability framework.

Figure 8.
Figure 8.

Medium-term reform projections

Citation: IMF Staff Country Reports 2013, 295; 10.5089/9781475570557.002.A001

G. Project reforms over the medium term

110. The objectives prescribed by the mission are ambitious but, in light of the results obtained before the events of March 2012, they are achievable. They will enable Mali to significantly improve PFM and, in terms of future growth, to get the maximum return on its external financing. The mission recommends (Figure 8 below) scaling the reform over time and not undertaking the strategic policy focuses (blue columns) unless the prerequisites have been met (arrows).

H. Coordinate Technical Assistance

111. Many of the actions to be taken require coordinated technical assistance. The mission met with donors at the start and at the end of its visit to Bamako. All donors agreed on the need to avoid duplication or to leave “blind spots” (overlooking parts of the reform). It was therefore agreed that a simple, summary technical assistance map would be drawn up to facilitate coordination and synergies in the future.

112. Two blind spots emerged from this map (Annex I):

  • Developments in the Audit Court does not have proper coverage. Apart from the support provided by the European Union in 2010, there is no upcoming project.

  • The public procurement sector has apparently been neglected; only one program run by Canada has been announced to date.

113. For its part, the IMF Fiscal Affairs Department plans to continue providing assistance in the areas described in Box 9 below.

FAD Technical Assistance for 2013–14

The Fiscal Affairs Department intends to continue providing technical assistance in close coordination with AFRITAC West in the following areas:

  • Assistance with the expenditure chain: this means evaluating the expenditure process, proposing efficiencies to improve its effectiveness, and consolidating the implementation of a monitoring mechanism for payment lags and arrears by the Ministry of Finance.

  • Method of evaluating public policies and PB performance: the assistance will seek to provide the BVG and the CGSP with the most effective tools for tasks recently devolved to them. The planned deliverable consists of a general approach, a method of evaluation, and concrete proposals for their management.

  • Cash management: the following is proposed: resume suspended assistance to pool funds in the TSA, selection methods and criteria for repatriation of EPA funds, and assistance in implementing the escrow account for national counterpart funds for projects.

  • Management of the BSI: expert advice will consist of reviewing the methods and the BSI database to facilitate its monitoring; reviewing the methods of project evaluation and monitoring to make capital spending management more dynamic.

  • Management of multiyear investment spending: this assistance could be led by West AFRITAC to support implementation of authorized commitments and allocated payments (AE/CP) as well as the mechanism for carrying forward appropriations.

Mali: Technical Assistance Report
Author: International Monetary Fund. Fiscal Affairs Dept.