Trust and accountability in managing public funds

Strong trust and accountability should be at the heart of all government financial management. Through Certification to the Good Financial Grant Practice (GFGP) standard, government departments receiving funds can address the issues of trust and accountability in public financial management across the globe.

Government departments receiving funds use taxpayer’s money to invest in public assets and they need to be accountable on how they use those resources effectively. Greater trust must be established between themselves and the public. The pitfall is lack of public trust in monitoring and providing much-needed public services such as healthcare and education.

Over the last few decades, many government departments have faced significant trust and accountability issues in managing public funds. Despite the implementation of various reforms, these issues often persist and there is much to be done to strengthen the financial governance of funds allocated for the delivery of public services.

The fundamental finance management obstacles encountered by government departments receiving public funds include:

1. budget estimates which are set without adequate supporting documentation;
2. lack of scrutiny in assessing the existing capacities for managing public funds;
3. weak financial management and accountability by government departments;
4. human capacity constraints in effective management of public funds;
5. inadequate governance structures that effectively direct on how public funds must be managed.

Shift in managing public funds

According to the Review of Public Financial Management Reform Literature (2008), Effective Public Financial Management (PFM) systems are required to maximise the efficient use of resources, create the highest level of trust and accountability in government finances and to ensure long-term economic success.1

Although the PFM systems vary from country to country, they are of no use if the financial information being fed into them is not fit for purpose.

Through Certification to the international Standard known as the Good Financial Grant Practice (ARS 1651:2018), government departments can address the issues of trust and accountability in their management of tax-payers money. Certification to the Good Financial Grant Practice (GFGP) standard provides the assurance that their underpinning PFM activities have been independently verified as being fully compliant to the requirements of GFGP standard.

The GFGP standard sets an internationally accepted benchmark of what represents best practice in all aspects in the management of grant funding and can be implemented by organizations of any type, size and complexity. The standard was approved by the African Organization for Standardization in June 2018 and it covers four practice areas for managing funds (Financial Management, Human Resource, Procurement and Governance).

Currently, the Standard is being implemented by more than 250 organizations in 45 countries in Africa, America, Europe and Asia and has been adopted in Rwanda, Uganda, Tanzania and Kenya as their national standard for government fund receivers.

The GFGP standard is one of the three components of the Global Grant Community (GGC), a financial governance platform of the African Academy of Sciences (AAS) that aims at using the disruptive power of technology to digitize, standardize and de-risk funding globally. The other two components of the GGC are (i) the GFGP Pre-Certification Assessment to the requirements of GFGP standard and (ii) GFGP Certification Scheme in which competent audit firms are licensed to Audit and certify organizations (e.g. government fund receivers) for their compliance to the requirements of the GFGP standard.

Benefits of becoming certified to the GFGP global standard:

The certification to the GFGP standard enables government departments receiving public funds to;

1. ensure that relevant capability is available for managing public funds in a manner that create an impact in the society.
2. enhance and maintain trust and accountability over budget planning and implementation for public funds.
3. strengthen operational efficiency in maintaining the fiscal discipline, and ensure citizens get value for money from their taxes.
4. identify new capacity development needs for a more robust management of public funds.

The process of Certification to the GFGP standard works in a similar way to the ISO 9001 certification. In fact, government departments will be audited and certified by independent and competent GFGP audit firms. They can use their certification to the GFGP Standard as an essential tool to demonstrate their ability to consistently manage public funds in a manner that meets the citizen needs and expectations.

Certification to GFGP will enhance trust and accountability in managing public funds which should be at the heart of all government departments to enrich public trust and ascertain that governments are acting in their interest at all times.

Certification to GFGP will also enable government departments to implement strong financial management systems and ensure that public funding is only used for the purpose they have been awarded to create better conditions and an enabling environment for a country’s development.

Government departments receiving funds across the globe are therefore encouraged to become certified to GFGP standard. Further information on how to get certified to the GFGP Standard can be viewed on the Global Grant community webpage (www.globalgrantcommunity.com)

Blog written by Vincent Nkundimana, the Global Grant Community Program Officer at the African Academy of Sciences.