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- 5 Marks
Question
The Ghana Integrated Financial Management Information System (GIFMIS) was launched to eradicate or reduce the endemic challenges in the public financial management system. Many experts hailed it as the panacea for the developmental challenges of Ghana.
Required:
In reference to the above, explain FIVE (5) challenges that the GIFMIS promises to address in public financial management in Ghana.
Answer
- Poor Budgeting and Budgetary Control:
Before GIFMIS, public financial management faced issues with poor budgeting and lack of effective budgetary control, leading to overspending. GIFMIS provides a reliable budgeting framework and enhances budgetary control through real-time budget performance monitoring. - Weak Expenditure Control:
Previously, expenditures on activities, programs, and projects without budgetary provision were common, leading to unbudgeted spending and increased liabilities. GIFMIS ensures that all expenditures are supported by budget commitments, thereby preventing overspending and unplanned liabilities. - Delay in Financial Reporting:
Manual and unintegrated financial reporting systems led to delays in producing timely financial reports, which hampered accountability and decision-making. GIFMIS strengthens financial reporting by enabling the provision of timely and accurate financial information. - Low Integrity of Financial Information:
The manual processing of financial data resulted in unreliable information. GIFMIS enhances the integrity of financial information by providing a platform that integrates various financial management processes, ensuring data accuracy and reliability. - Poor Cash Management:
Managing government cash resources was problematic, with separate accounts maintained by individual entities, leading to inefficiencies. GIFMIS introduces a Treasury Single Account (TSA) system, improving cash management by consolidating government funds. - Weak Revenue Management:
Issues like delayed lodgment of tax revenues collected by commercial banks caused revenue losses. GIFMIS addresses these challenges by enabling real-time revenue lodgment into the consolidated fund, reducing delays and potential losses. - Poor Human Resource/Payroll Management:
The existence of ghost names on payrolls was a significant issue. GIFMIS integrates human resource data with the payroll system, ensuring that only qualified employees are paid, thereby saving government funds.
- Tags: Budgeting, Financial Reporting, GIFMIS, Public Financial Management, Revenue management
- Level: Level 2
- Topic: Public sector financing initiatives
- Series: JULY 2023
- Uploader: Theophilus