The Public Financial

Management Reform
Project
(PFMRP)

Presented by
Vice-Minister of Finance: Dr. Tran Van Ta
 Content
• Reform background
• Project goal
• Project description summary
• Sustainability and risk considerations
• Project progress
• Lessons learnt so far
 Reform background
• The Public Administrative Reform Master Plan over
2001-2010 sets platform

• The revised State Budget Law promotes

decentralization, transparency, accountability, and
administrative rationalization & streamlining.

• The reform areas are recommended from analysis

supported by the World Bank and other donors i.e.
PER 2000, PER 2004, CFAA 2001, Vietnam Development Report 2003,
…
 Some weaknesses
• Fiscal sustainability concerns: declines in crude oil
revenues, mismatch between capital and recurrent
expenditures, salary reform pressure, extra-budgetary
accounts, non-performing loans to SOEs, and weak
prioritization processes

• Poor budgetary information: lack of fully

consolidated budget, lack of a common accounting
structure, lack of integrated, electronic data recording
 Identified five areas of reform
The PFMRP addresses the first 04 areas of reform:
• Budget management
• Debt management
• SOE fiscal risk management
• Public asset management

To be addressed by the other 2 important projects:

• Revenue management:
 The PFMRP’s project goal
• Aiming at good governance, contributing to
poverty reduction.
• Objectives:
– to strengthen budget planning, execution, reporting
and accountability,
– to strengthen the links between budget
management and the developmental goals within a
medium-term expenditure framework; and
– to improve the management of public debt.
 Project performance indicators
• Improved accuracy, timeliness, relevance,
transparency and compliance with
international best practices;

• Better planning of the State Budget and the

Public Investment Program; and

• Greater fiscal sustainability.

 Project description overview
• Component 1: Strengthening Treasury and
Budget Management

• Component 2: Strengthening State Budget and

Investment Planning

• Component 3: Strengthening Management of

Public Debt and Monitoring of SOE Fiscal
Risks
Component 1: Strengthening Treasury
and Budget Management

• The Treasury and Budget Management Information System

(TABMIS) will be operational in all central, provincial and
district treasury offices, finance & planning agencies, based
on a new, integrated account code structure

• Review of policies and business processes in the

development of Unified Chart of Accounts/State
Accounting regime

• Treasury Single Account.

 Component 2: Strengthening State
Budget and Investment Planning

• Technical assistance for the piloting of the Medium-

term Fiscal Framework (MTFF) and the Medium-
term Expenditure Frameworks (MTEF)

• Change management and communication of the new

practice

• Design and implementation of a budget preparation

system
 Component 3: Strengthening
Management of Public Debt and
Monitoring of SOE Fiscal Risks

• Technical assistance and capacity building to support

strengthening of recording and management of
domestic debt

• Procurement of systems for recording, consolidation

and management of public debt

• Inventory of SOE Fiscal Risks

Sustainability & risk considerations
• Sustainability: an emphasis on training and ‘learning
by doing’, a strong legal framework, making a
platform for further development as committed.

• Risks:
– System risks: costs of supporting and upgrading;
Difficulties in the integration of different accounting
structures; Network infrastructure preparedness.

– Organizational risks: Procurement and implementation

capacities; Substantial organizational changes; Acceptance
of new technologies, practices
 Project progress
• Successfully completed the procurement of TABMIS
• Reviewing of policies and business processes,
organizational preparedness
• Developing Unified Chart of Accounts
• Studying TSA
• Produced MTF&EF documents of good quality for the
first time
• Established Middle Office, developing Public Debt
Management and Mobilization Plan, domestic markets
• Training and building capacity
 Lessons so far
• The flexible project design allows additional interventions and
adjustments to be discussed and agreed if necessary

• Independent Verification and Validation (IV&V) and other

independent consulting services are needed

• Leadership oversight is reinforced by regular reports and meetings

and an empowered Project Management Unit (PMU)

• Change management and well-targeted training activities are even

more emphasized during the process.

• Early participation of project beneficiaries and all other stakeholders

is a prerequisite
 Thank you!
&
The Ministry of Finance looks forward
to your cooperation and assistance