PFTAC FY2016 Overview Scott Roger Apia, 25 February, 2016
Topics Overview of progress and achievements in FY2016 PFTAC Finances
Progress and achievements in FY2016 In FY2015 Annual Report, the work program indicated a shift in emphasis in CD had begun in FY2015 and would continue in FY2016. This was anticipated in the Program Document. Through FY2016 we have seen steady progress with implementation of that shift: In public financial management (PFM) an increased emphasis on integrating fiscal planning and budgeting in a medium-term framework, and with closer links to forecasting and policy analysis;
In revenue administration, a shift towards CD to strengthen organization, tax core functions, including compliance, risk management and taxpayer services; In financial supervision, a new programs to support on-site bank examination, and building modern legal and supervisory frameworks for credit unions; In statistics, more emphasis on strengthening data sources and methodology; In macroeconomics, focusing CD more on integrating models into policy making, and addressing data issues.
At a more granular level, we can point to more specific achievements: In PFM: Additional PEFA assessments, re-assessments & roadmaps begun or completed, with strong country ownership; Significant headway was made by PNG towards improving financial management information and cash management; Fiji made important progress in improving budget reporting transparency; Vanuatu made important progress in strengthening internal audit.
In revenue administration: The program to strengthen core processes and tax compliance has strengthened further, though it will take some time to see major results; Fiji completed a Tax Administration Diagnostic Assessment; Kiribati has made significant progress in overcoming initial teething problems with VAT; The Pacific Islands Tax Administrators Association (PITAA) took significant steps towards establishing itself as a regional resource and reform leader.
In financial supervision: The on-site bank examination program is being implemented, including reporting of findings; Several countries are in the process of modernizing credit union legal and supervision frameworks; Credit union financial reporting templates have been developed for use by regulators, including establishing ratio analysis and standards.
In statistics: Fiji has made significant progress in developing quarterly GDP data; Solomon Islands published their annual GDP estimates without assistance, following several capacity-building missions; Several countries are making more effective use of tax data in improving GDP estimates in a cost-effective way. In macroeconomics: Progress has been made in several countries, notably including Cook Islands and Tonga, in strengthening policy analysis and forecasting frameworks, and using them in budget preparations.
In statistics: Fiji has made significant progress in developing quarterly GDP data; Solomon Islands published their annual GDP estimates without assistance, following several capacity-building missions; Several countries are making more effective use of tax data in improving GDP estimates in a cost-effective way. In macroeconomics: Progress has been made in several countries, notably including Cook Islands and Tonga, in strengthening policy analysis and forecasting frameworks, and using them in budget preparations.
Extensive use of workshops, frequently in collaboration with development partners, e.g.: High level Dialogue on Enhancing Resilience to Natural Disasters and Workshop on Strengthening Fiscal Frameworks in the Pacific Islands (with IMF); Deep Sea Minerals workshop (with SPC); PASAI workshop; Medium-term Expenditure Workshop for National Sustainable Development (with UNESCAP); Annual meetings & workshops with AFSPC, PITAA, OCO, Credit Union Congress, etc.
Regional and subregional workshops accounted for 18% of CD; Fiji, Samoa, PNG, Vanuatu and Tonga were particularly important users of country-specific CD. Fig. 2: Country distribution of PFTAC TA in FY2016 (Percentage of total mission days) Tonga Vanuatu 8% 9% Tuvalu 2% Timor-Leste 3% Solomon Islands 4% Samoa 11% Niue 1% RMI 3% Cook Islands 6% Regional 18% Fiji 11% FSM 4% Kiribati 4% Nauru 2% Palau 4% PNG 10%
PFTAC Finances Total spending in FY2016 estimated at $5.6 million, down from $6.2 million in FY2015. LTX salaries & travel 45% STX costs 29% Conferences & workshops 11% Overshoot of $0.4 million compared with March 2015 projection Fig. 3 PFTAC expenditure components in FY2016 (in US$ millions) HQ CD, backstopping & Proj. mgmt, Training & $0.38 Conferences, $0.67 STX CD delivery, $1.60 Misc., eval'n & SC, $0.15 Trust Fund, $0.36 LTX Travel, $0.46 LTX Salaries, $2.03
Activity Table 1: PFTAC Estimated Budget Position in FY2016 2015 Revised Program Budget in US$ millions FY 2015 FY 2016 FY 2016 Expenses Budget Remaining Out-turn Estimated Difference 2012-16 1,2 Projection out-turn 2 Long-term experts 9.80 8.77 1.03 1.98 2.03 2.03 0.00 Short-term experts 5.81 5.27 0.54 1.75 1.10 1.59 0.49 Travel 2.56 2.32 0.24 0.58 0.39 0.46 0.06 Workshops and seminars 2.93 2.40 0.52 0.70 0.77 0.72-0.05 HQ TA delivery, backstopping & project 1.77 1.69 0.08 0.50 0.34 0.35 0.01 management Evaluation & SC 0.63 0.41 0.22 0.28 0.16 0.03-0.14 Miscellaneous 0.22 0.23-0.01 0.04 0.03 0.03 0.00 Total TA Delivery 23.72 21.09 2.63 5.83 4.83 5.21 0.37 Trust fund management (7%) 1.66 1.48 0.18 0.41 0.34 0.36 0.03 Grand Total 3 25.38 22.57 2.81 6.23 5.17 5.57 0.40 1 To April 30, 2016 2 Based on IMF data for FY2012-2015 and PFTAC estimates for FY2016 3 Fiji and IMF contributions not included FY 2012 FY 2016
Table 2: PFTAC Consolidated Financial Status December 31, 2015 Units as indicated Phase IV - Signed Agreements Secured (US$ dollars) LOU Status Contribution Currency Pledge (Contribution Currency) Contributions Received (US$) Balance (US$) ADB 1,000,000 signed 7/29/2011 U.S. dollars 1,000,000 1,000,000 - EU 1,345,339 signed 07/01/2011 Euros 1,000,000 1,345,339 - New Zealand NZAID 7,052,475 signed 06/16/2011 NZD 8,900,000 7,052,475 - Australia DFAT 7,500,000 signed 05/25/2011 U.S. dollars 7,500,000 7,500,000 - Korea 2,181,029 signed 02/15/2012 W (Korean Won) 2,500,000,000 2,181,029 - EU (ACP) 1,391,400 signed 10/04/2013 Euros 1,000,000 1,391,400 - EU (2nd LOU) 4,656,781 signed 12/27/2013 Euros 3,500,000 4,656,781 - Total 25,127,024 25,127,024 0 FAA transfer of remaining funds: New Zealand 165,058 Completed 12/2015 U.S. dollars 165,058 165,058 - Subtotal 165,058 Grand Total 25,292,082 25,292,082 0
PFTAC funding in Phase IV completed with final $0.2 million payment by New Zealand in December. This brings total donor funding to $25.3 million.