BANGLADESH EXPERIENCE
PUBLIC FINANCIAL MANAGEMENT
AND
PROCUREMENT
A presentation for
Concurrent Session on
Public Financial Management and Procurement
Contents
Financial Management:
 Public Financial Management Reforms
 Lessons Learnt
 Harmonization, Alignment and Simplification-
broad picture
Future Challenges
Procurement
 Procurement Reform
 Lessons Learned & Contributions to
Harmonization
 Use of Country Systems: Procurement in relation
to PFM
 Future Challenges

PFM Reforms

Joint Diagnostic studies :
Committee on Reforms in Budgeting and
Expenditure Control ( CORBEC) – DFID and GOB;
 Way Forward for FM Reform in Bangladesh- DFID
and GoB
 Country Financial Accountability Assessment
(CFAA)- World Bank, UNDP and GoB
 PFM indicators as a part of on-going Joint Public
Expenditure,Procurement and Financial
Management Review -DFID, WB & GOB

PFM Reforms (continued)
Major
PFM Reforms: Policy & Operational
Reforms in Budgeting and Expenditure Control
(RIBEC), Financial Management Academy ( FIMA),
Reforms in Govt Audit ( RIGA)- DFID
Strengthening the Office of Comptroller and
Auditor General (STAG) – UNDP
ISMOF & EEFM- ADB
 Strengthening GOB’s FM Capacity and Building
Institutional Capacity of the Office of the C & AG World Bank
Development Support Credit I, II and III- World
Bank


ROSC Fiscal Transparency – IMF and
Financial Management Reform Program –FMRP
(DFID & Dutch)

PFM -Lessons from Harmonization
Lack of common understanding and proper
coordination among various Ministries and
Govt Departments
 Differing Development Assistance Strategy by
Donors
 PFM priorities often not synchronized and lost

Harmonization- Broad Picture

PEDP II:
 10 donors under one implementation FrameworkADB leads
 Common PFM system (Reporting and Auditing)
 Multi- lateral donors like WB and ADB
harmonized individual requirements ( Common
Withdrawal Application, audit reporting period)
 Agreed FM Improvement Plan
Harmonization- Broad Picture (continued)
•
HNPSP:
Pool and Non Pool Donors under common PFM
system - WB leads
•NO PIUs ; No Special Account
•Govt spent first including donors share
•Agreed Audit TOR with C & AG
•Common Audit and Reporting
•Strengthen FM Framework including
improvement plan for the Sector
Alignment of donor assistance on PFM along with
GoB priority plans, PRSP, ROSC, CAS, PER
PFM Task Force – a common platform by donors and
Govt led by MOF
An Aid Governance Group (ERD) consisting of Donor
and Govt – Country Harmonization Action Plan
•
Challenges :





DPs and GOB work under an uniform
development assistance strategy for PFM
Progress Monitoring mechanism and timely
adjustments of action plan
More Flexibility and Simplification of DPs FM
policy and procedures to achieve better
country outcome
More awareness on the value addition on
Harmonization and Alignment Approaches
More delegation of responsibility and
authority at country level
Procurement Reform: background
Low Level of
public
procurement
performance
constrained
national
development
The Country
Procurement
Assessment Report
(CPAR) identified
Key deficiencies in
the public
procurement system
CPAR Findings & Recommendations (2001):
Opaque public procurement practices are the single
most serious issue affecting whole public sector’s
activities
Set up a Public Procurement Policy Unit
 Issue Public Procurement Rules
 Streamline Proc. Process & Financial Delegation
 Develop Procurement Management Capacity
 Publish Contract Awards
 Introduce Appeal Procedures

Proc. Reform & Achievements
DSC II & DSC III

Procurement Law & Performance triggers
IDA Credit :
August 2002 / ~ $5 million/ 3 years
Bangladesh now has a transparent public procurement regulations,
accepted by most DPs

Established permanent procurement policy unit

Mandated harmonized procurement regulations & STDs

Publishing contract awards

Mandated annual procurement review (audit)

Mandated independent appeal procedures for protests

Streamlined financial powers & proc. approval process

Developed national trainers & Institutionalizing capacity
Lessons from Harmonization
Joint effort of the Government and DPs
Participatory Approach, Flexibility/Adaptability of
new reform Procedures
Country Ownership








Agreed CPAR (DPs & GOB)
GOB’s political commitment for proc. Reform
Implementation of all CPAR recommendations
Implementation of reform with credit (NOT grant)
Permanent policy unit with Government resources
Critical mass of national trainers (40 p)
Institutionalize proc. capacity with local institute
MIS for monitoring reform outcomes/performance
Contributions to Harmonization
Aid
Governance Group- ( ERD) Harmonizing Govt and
Donors procurement requirement along the Procurement
Regulations
Primary Education Development Program II
Country’s
own harmonized procurement regulations for
all local procurement (10 DPs & GOB agreed)
LocalAll
85% of procurement in PEDP II.
local procurement from common pool (DPs)
Annual
procurement review (audit) as per GOB Proc.
Regulations (by independent consultant)
HNPSP:
Harmonized Procurement Procedures & agreed plan for all
local procurement
Contributions to Harmonization

Seven IDA funded projects including other DPS
using Government Regulations for all local
procurement

Piloting use of PFM framework for procurement as
part of PFM baseline and performance indicators

Integrated analytical review of procurement with
PFM and Public Expenditure group- World Bank,
DFID and ADB

Centralized MIS in CPTU/IMED (using above
indicators) for effective monitoring of procurement
outcomes and performance (CPTU Website:
cptu.gov.bd)
Future Challenges





Compliance Monitoring of Procurement
Reform
Roll out the capacity building across the
country institutions including private sector
Piloting E-procurement
Mindset and Behavioral change by all parties
and
Sustainability of already established CPTU
and corresponding strengthening of IMED.