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Speaking Notes for Media Briefing By Hon. Minister of Finance On The Public Financial Management ACT, ACT 921

Sept. 20, 2016    The Public Financial Management Act which the Ministry initiated in collaboration with the Attorney General’s Department and Key PFM Stakeholders started in 2015. It was passed into Law by Parliament on 3rd August, 2016 and has been assented to by his Excellency the President. The Law replaces the Financial Administration Act (FAA) of 2003 and its Amendments and the Loans Act of 1970. The Financial Administration Regulation (FAR) was however saved pending the development of new PFM Regulations.
2.     The passage of this Act has become necessary to codify the best practices that have emerged with the implementation of major reforms in budgeting and accounting since 2010 under the GIFMIS project. In addition, continuing fiscal challenges which require some structural changes are addressed in this Act. There are also provisions setting out new policy measures regarding borrowing and debt management among others.
3.     The Government as part of effort to progressively strengthen the structural foundation for more robust PFM systems has undertaken various reforms. The goal of these reforms is to establish efficient, transparent and accountable resource mobilization, allocation, management and use of fiscal resources to meet Ghana’s development priorities and commitments.
Key among the PFM reforms initiatives includes:

  • The introduction of GIFMIS in 2009, which was aimed at providing improved aggregate expenditure control, predictability for financial flows, expenditure and investment planning, ability to monitor expenditures and fiscal accountability.


  • The Chart of Accounts (CoA) was also updated to produce a single budget and accounting CoA as well as GFSM 2001-compliant.


  • Payroll Upgrade was undertaken and the latest version of the Oracle Payroll is being implemented and has been integrated with the Oracle Financials. The migration of Integrated Financials/Payroll was completed and moved onto the RAC environment to improve service delivery.


  • GIFMIS Interface with E-Monitor (MoF) for the Non Tax revenues was also implemented to improve Non Tax revenue collection.


  • GIFMIS Interface with CS-DRMS (MoF) for Debt Management is currently being implemented.


  • HRMIS to support position management, employee profile management and employee cost management under Public Services Commission is also on-going as well as e- Procurement under Public Procurement Authority


  • Interface with (TRIPS & GCMS), Ghana Revenue Authority (GRA) System. Bank of Ghana has provided a test instance for their Automated Clearing House (ACH) transfer of GCMS collections.


  • Programme Based Budgeting (PBB) in 2014. This budgeting approach focuses on improved result, efficiency, accountability performance and service delivery. In addition, the Hyperion Budget software was introduced to facilitate planning, preparation, aggregation, approval and reporting of budget information. These have helped improve budget management information.


  • Performance Reporting: The Ministry also introduced end year performance management as part of budget management.


  • Public Investment Management (PIM): This seeks to strengthen the framework for managing public investment and to improve on the efficiency and efficacy of capital expenditures for effective delivery of the Public Investment Program (PIP).

4.     The object of this Act is to regulate the financial management of the public sector within a macroeconomic and fiscal framework. For the purpose of subsection (1) of the Act, there shall be established (a) a framework to support a sound fiscal policy and the macroeconomic management of public funds (b) processes for the preparation, approval and management of a transparent, credible and predictable annual budget;
(c) mechanisms for the operation of the Consolidated Fund; (d) mechanisms for the management of public funds, assets and liabilities; (e) internal and external audit frameworks and correlative reporting and accounting systems; and a mechanism to oversee the matters specified under paragraphs (a) to (e).
5.     For the first time, we have provided a comprehensive, legislative framework for the operations of the entire public sector. This includes central government, local authorities, statutory funds and State Owned Enterprises (SOEs).
6.     The PFM Act has 104 Sections and key among the provisions includes:

  • General responsibility
  • Powers of Minister
  • Responsibilities of Chief Director
  • Duties of a Principal Spending Officer
  • Salary negotiations for public sector
  • Performance Report by a Covered Entity
  • Framework for effective risk management from public corporations and state-owned enterprises
  • Borrowing by public corporations and state-owned enterprises
  • Creation of Sinking Fund
  • Establishment of Audit Committee
  • Offences and penalties( Sanctions) among others

The Act is a key step in the move towards comprehensive and general government reporting and establishes government’s commitment to meet good economic governance requirements.
7.     The General responsibility as provided in the Act covers the Minister, Chief Director, Controller and Accountant-General, a Principal Account Holder, a Principal Spending Officer and any other public officer designated by the Minister to manage public funds in discharge of their respective responsibilities and exercise their powers in accordance with this Act and the Regulations.
8.     The development of this Act began with the commissioning of Messrs. Shawbell Consulting Firm under the Ghana Financial Management Information System (GIFMIS) Project to review the Country’s PFM legal framework. The Ministry also received technical assistance from the Fiscal Affairs and Legal Department of the International Monetary Fund (IMF) to review the PFM legal framework.
9.     The recommendations of these two institutions formed the basis of the draft Act. The process of developing this Bill has been led by the Ministry of Finance with the support of the Attorney General’s Department, key technical staff of all PFM institutions and technical assistance from DFID.
10.    The Ministry in collaboration with Key Government Institutions and the Drafting Division of the Attorney-General’s Department as part of the process also engaged Key Stakeholders including Institutes of Chartered Accountants, Professional Bodies, the Academia and the Civil Society Organisations among others. They deliberated on the issues on the Bill and provided inputs that were incorporated into the draft Bill.
11.    It is our expectation that when this Act is effectively implemented, it will help establish a single and comprehensive approach to macro-fiscal management, budgeting, treasury management, debt management and accounting and reporting for the use of all public fund.
12.    In conclusion, the passage of this Act is a significant milestone in our effort at addressing the persistent structural weakness in fiscal formulation especially relating to commitment control and contracts to bring effective fiscal discipline to the management of public resources.
13.    Additionally, we also want to acknowledge the very important role the Media plays in issues relating to public financial management and dissemination of information to the general public. We are certain that today’s Media briefing will go a long way to help communicate to the general public of the new PFM Act, Act 921 and some of its key provisions as well as the  sanctions as contained in the Act to help regulate the financial management of the public sector.
 14.   Thank you.

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