Study on Public Financial Management System in Bangladesh and the impact of

COVID-19 on PFMS

University of Dhaka

(A Project Paper submitted in partial fulfillment of the requirements for the award of the degree of
Master of Business Administration)
Submitted To

Ms. Hasina Begum

Assistant Professor
Department of Accounting & Information Systems
Faculty of business studies
University of Dhaka
Prepared By

MD. SHUVA SHEIKH

ID:11840040
MBA(Evening)
40th Batch

Date of Submission: May 27,2021

i
 Letter of Transmittal
May 27, 2020
Ms. Hasina Begum
Assistant Professor
Department of Accounting & Information System
University of Dhaka
Subject: Submission of Thesis Paper
Dear Ma’am,
It is an extraordinary joy and advantage to introduce the postulation report named " Study on Public
Financial Management System in Bangladesh and the impact of COVID-19” on PFMS as a necessity
to satisfy my MBA program effectively. I trust the thesis paper is a complete one inside the given time
and as indicated by your guidance.

All through the investigation, I have taken in a great deal just as got freedoms to comprehend functional
information about the public financial management system in Bangladesh as well as current pandemic
situation influence the PFMS. I'm appreciative and genuinely thank you for your direction in setting up
this report and it will be my pleasure if the report can fill its need.

Subsequently, I need to offer my thanks towards you to have your important oversight and valuable time
all through the report-planning period. In any case, such an ideas and explanations for this report will be
significantly recognized.

Thanking you.
With best regards,

MD. SHUVA SHEIKH

ID-11840040
EMBA Program
Batch: 40th
Department of Accounting & Information Systems,
University of Dhaka.

ii
 Acknowledgement

The thesis is relegated to me as a piece of the consummation of my MBA program. As we probably are
aware that nothing can be refined alone, this thesis can't be finished too without the supports and
commitment of my folks and omnipotent Allah.

As a matter of first importance, I might want to pass on my massive appreciation to all-powerful Allah
without whom achievement stays quiet. He generally shows the way and assists me with achieving my
objectives.

I offer my unique gratitude to my noteworthy personnel teacher Ms. Hasina Begum Assistant Professor

for his escalated supports and guidance without which the report can't be finished opportune. His rules
and ideas educated me to arrive at an effective way to finish the thesis report well. He guided me in
arranging the whole report. She has contributed energy to check the draft report and give her proposition
on different pieces of the thesis report. Without her help, it would have been difficult to set up a
comprehensive thesis.

To wrap things up, to my all companions and schoolmates for their support and participation lastly I like
to say that I have attempted substance to set up this report precisely. Be that as it may, there may be a few
mistakes to my restricted inclination and time limitation. In this respect, I look for your thoughtful thought
as I'm in this cycle of learning.

iii
 Executive Summary

This thesis paper is set up based on the “Study on Public Financial Management System in Bangladesh
and the impact of COVID-19” on PFMS. In my investigation I'm dissecting Public financial organization
(PFM) changes are an indispensable portion for propelling the association and duty in Bangladesh.
Discover how amazing monetary association assessments build up undertakings by seeing key dangers
and connecting with the execution of fitting activities and changes to facilitate those dangers. Bangladesh
is as of now all around put to advance modernize its PFM framework, increment government sufficiency,
and empower attempt in exceptional social and construction undertakings. The senior authority sees the
PFM challenges and what they mean for the open assistance movement and money related movement.
The thorough PFM Change Procedure may be an assertion of this insistence. The technique not from a
certain point of view seeing the key objections and targets of changes yet too sets out the key standards
and approach towards doing these movements. The fact is to supply widen gatherings and specialists with
distant better much better higher a more grounded an improved more grounded. And lastly I tried to find
out the impact of COVID-19 on PFMS in Bangladesh such as changing the policy and procedure of the
system of public management.

iv
 Student is Declaration

I announce that the submitted thesis paper/temporary job report is unique and exclusively delivered by
me. This isn't a duplicate in any structure from any sources. In the event that this paper/report is discovered
a duplicate work, which falls under the copyright infringement standards, this thesis paper/report, will be
considered dropped furthermore, can be accounted for to the fitting authority of the university.

………………………………………………..
Signature

MD. SHUVA SHEIKH

ID-11840040
EMBA Program
Batch: 40th
Department of Accounting & Information Systems
University of Dhaka.

v
 Table of Content
Chapter Contents Page Number
1.0 Introduction 1-2
1.2 Background 2
1.3 Scope of the study 4
Chpter-1 1.4 Objective of the study 4
1.5 Rationale of the study 4
1.6 Methodology of the study 4-5
1.7 Limitation of the study 5
2.0 Theoretical review 6
2.1 Governance Structure and Change Management Approach 6
2.3 Ministry of Finance 7-8
2.4 Implementation, monitoring, and evolution Division 8
2.5 Office of the Controller General of Accounts 9
2.6 Office of the Comptroller and Auditor General 10
2.7 Bangladesh Bank 10
2.8 Asian Development Bank 10
Chpter-2 2.9 Budgeting 10-11
2.10 Budgetary Channels 11-12
2.11 Funds Flow Arrangements under ADB-Financed Projects 13-14
2.12 Accounting and Reporting 15-17
2.13 Auditing Arrangements 15-19
2.15 Internal Control System 20
2.16 Summary of Risks and Issues, and Proposed Mitigating Actions 21-24
and Improvements
3.0 Introduction 25
3.1 Data Source 25-26
3.2 Data Analysis 26
3.3 Correlation Analysis 26-27
3.4 Regression Analysis 28
3.5 Sample Size 29
Chpter-3 3.6 Improvement of PFMS of Bangladesh 29-30
3.7 Various method that Bangladesh’s Govt. pursued for turn into the 30-32
current PFMS
3.8 Implement BACS covering the entire of general government 32
accounts furthermore
3.9 Coordination of Funding Sources 32
3.10 International PFMS method 32-33
3.11 Budget allocation during COVID-19 in Bangladesh 34
4.0 Overviews of the Budget 35
4.1 Theoretical aspects 35-36
4.2 Economic Reconstruction after Independence 36
4.3 Economic Policy and Planning 36-37

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 4.4 Government Budget Process 37-38
4.5 Institutional Framework 38
Chpter-4 4.6 Legal Framework 38-39
4.7 Budget Making Process
4.8 MTBF: Different Stages of preparation 39
4.9 Core Budget Documents Placed before the parliament 39-40
4.10 Ministry of Finance
4.11 Other factors that influence the public financial management 40-43
system in Bangladesh
5.0 Descriptive statistics 44
5.1 Impact of COVID-19 on public Financial management system in 45-48
Bangladesh
Chpter-5 5.2 Findings 48-50
5.3 Recommendations 50-52
Conclusion 53
References 54

ABBREVIATIONS AND ACRONYMS

PFMS Punic Financial Management System FAPAD The Foreign Aided Project Audit
Directorate
FIMA Financial Management Institute IMF International Monetary System
ADB Asian Development Bank EU European Association
IFRS International Financial Regulatory system WB World Bank
GAAP Generally accepted Accounting Principals GDP Gross Deistic Products
PECT Program execution and coordination team FMRP Monetary Administration Change Program
MOF Ministry of Finance NBR National Board of revenue
MTBF The medium-term budgeting framework PHE Public Health. Engineering Department
ERD Economic Relations Division PWD , Public Works. Public Works
IMED Implementation, Monitoring, and RHD Railway, Defense. Roads, Public Works
Evaluation Division Department
CGA Controller General of Accounts CRIB Economic Reconstruction after
Independence of Bangladesh
CAG Comptroller and Auditor Genera GBPB Government Budget Process of
Bangladesh
BRM Pakistan Resident Mission BMPB Budget Making Process of Bangladesh
ADP Asian Development Planning MTBF Different Stages of preparation in budget
of Bangladesh
CAO chief accounts officers PH Parliament House

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 Chapter-1

Introduction

1.0 Introduction

The public financial management system reports the country’s budgetary administration frameworks
covering essentially the zones of budgeting, reserves stream, bookkeeping and detailing, and examining
frameworks. This thesis moreover gives bits of knowledge into the quality of inside control frameworks,
staffing asset capacity, and data innovation structure. The aim is to supply extend teams and specialists
with distant better much better higher a stronger an improved stronger understanding of budgetary
administration frameworks to progress the quality of monetary administration evaluations amid extend
arrangement. Discover out how high-quality monetary administration appraisals bolster ventures by
recognizing key dangers and empowering the execution of suitable activities and changes to relieve those
dangers. Public financial management (PFM) changes are a key component for progressing the
administration and accountability in Bangladesh. Much appreciated to past endeavors by progressive
governments, Bangladesh is presently well placed to advance modernize its PFM framework, increment
government effectiveness, and empower venture in transformative social and framework ventures.
Whereas progressive PFM ventures have started numerous imperative changes, a few systemic issues stay
to be tended to. The prior PFM change encounter in Bangladesh focuses to the require for a more
prominent center on fewer needs to successfully development the change technique. In expansion, there's
a require for a compelling change management approach to guarantee that changes are understanding
functional PFM issues which improved PFM frameworks and forms lead to superior benefit conveyance,
open asset administration, and economic development. Bangladesh is entering this modern stage of PFM
changes with three key strengths: Firstly, the senior authority recognizes the PFM challenges and how
they affect the open service delivery and financial advancement. The comprehensive PFM change
methodology may be a declaration of this acknowledgment. The technique not as it were recognizing the
key objectives and goals of changes but too lays down the key standards and approach towards carrying
out these changes secondly, Bangladesh has made tremendous ventures in building gracious benefit
capacity within the past. These investments are not restricted to post-graduate degrees, proficient
certifications, and foreign trainings. Country-own educate such as the Established of Open Back and
Financial Management Institute (FIMA) have been created to supply high-quality trainings that are most
suitable for the neighborhood setting. These educate will play a central part in PFM changes going
forward; and lastly, through the wealthy PFM change involvement of the past, there's an advancing
understanding on what works and what doesn’t; how to keep the usage groups persuaded and manage
resistance to alter; and how to reach out to thousands of budget-holders within the nation to adopt new
and effective PFM hones.

1.2 Background

In 1971 Bangladesh was a modern nation, rising from strife and with an acquired open monetary
administration framework modeled concurring to desires of the colonial organization within the Indian
sub-continent. The Public Financial Management (PFM) framework has advanced over time to cater to
the advancement needs of the nation, but holds highlights of a framework centered on controlling inputs
with an accentuation on taking after regulatory orders. An arrangement of changes has been presented
over the final two decades, and much has changed since the acquired framework. Modern laws (strikingly
the Public Cash and Budget Management Act, 2009) were presented to order the standards of sound money
related administration. An arrangement of open monetary change programs was embraced from the 1990s
onwards, which without a doubt progressed the administration of open assets, but in any case fell brief of
desires. The reason of the unused PFM Technique 2016-21 is to construct on the past reforms and learn
from what has worked and what has not, in arrange to strengthen the essentials required for accomplishing
the overarching national objectives. Bangladesh has made exceptional improvement advance since
Freedom; in the final decade normal financial development rates come to 7 percent per year, and growth
has been comprehensive: destitution headcount rates have fallen from 31.5 percent in 2010 to 25 percent
in 2015. A few triumphs from the final decade are eminent and worth saying as they set the scene for the
following open monetary administration change technique. These include macroeconomic steadiness
which has upheld a private sector-led export oriented development, and a dynamic non-government and
private division which together with the open segment have given administrations that have contributed
to reductions in newborn child and maternal mortality rates, made strides sex balance and a rise in
completion rates in instruction. Future objectives is to reach middle-income nation status by 2021 and
advance reduce the destitution headcount to 15 percent of the populace. Beside I attached below a chart
of budget from 1972 to current of Bangladesh for better understanding.

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3
1.3 Scope of the study

The study involves theoretical concepts for overview of the public financial management system and
impact of COVID-19 on PFMS in general and also provides some financial information, more focused on
budgetary system, process, channels, sources of finance, uses of finance. Starting with ADB, it gives a
general view of PFMS on its concept such as ministry of finance, planning, office of the comptroller
general of accounts, Bangladesh Bank, Asian development Bank to find out the study objective.

1.4 Objective of the study

The objective of this paper is to define whole public financial management system of Bangladesh and how
it gradually improved day by day and also try to find out the impact of current pandemic due to COVID-
19 on public financial management system of Bangladesh. Moreover, try to give the lack of this system
and give the recommendation for overcome the lacking.

1.4.1 Secondary objective of the study

The secondary objective in this study is to find out the changes of public financial management system in
Bangladesh due to COVID-19. Besides find out the impact of COVID-19 on our whole budgetary system
as well as the problem we have been faced ever and how we will solve the upcoming difficulties.

1.5 Rationale of this study

We know resources are limited in the world and also time is very constraints. Public financial management
system is a broader concept for a country, a sound economy of a country depends on a sound financial
management system. A good management system is rudder of a country like a boat.

1.6 Methodology of the study

The methodology of the study is as follows:

1.6.1 Nature of the study: This study is descriptive in nature and qualitative data which is totally depend
on expressing with the help of words.

1.6.2 Sources of Data collection

Primary data

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 There is no primary data yet

Secondary data

Newspapers, Internet, Televising, Journals, Annual Reports, Websites, Publications, Books etc.

My thesis paper is totally depending on secondary data sources because I was unable to collect primary
data due to pandemic situation and also we know PFMS is the internal beau acratic procedural fact the
general people do not inform by the government. So I had depended on totally secondary data sources to
complete my thesis paper but I am trying to make it more authentic, understandable and easygoing.

1.6.3 Data analyzing and reporting: I have used various parameters of thesis study to find out the actual
scenario of our PFMS system and used Microsoft excel, Microsoft office word.

1.7 Limitations of the study

There were many constrains or limitation while performing this study and the following limitations of the
study were,

Data availability

One major limitation of the study has the difficulty in collection of full set of data set, which is required
of comprehensive study on the issues to be covered in analysis. This study has conducted with data those
are available in the pubic website. The study half practically no scope of getting into full information of
public financial management system of Bangladesh. Because of the study is only conducted based on the
secondary data, therefore the accuracy of the study or research depends fully on the accuracy and
transparency of the secondary data used.

Investigate Documents

Relevant papers, past think about, and archives were not adequate. Numerous of the pro utilizing their
own component or way for the completion of their ponder. That’s why the displayed thoughts are
different.

Time constraint

Because of the time imperative, it was not conceivable to require interviews of work force from PFMS’s
employees which would have contributed to a clearer understanding of the PFMS’s internal performance

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 Chapter-2
Theoretical review
2.0 Theoretical review
“An economical Public Financial Management system is important for sound political economy
management,” aforementioned Dandan Chen, United Nations Agency Acting Country Director for Asian
country and Kingdom of Bhutan. “The program can depend on the successes of the government’s in
progress efforts to assist public agencies strengthen oversight and improve handiness of public resources
for effective and economical public service delivery. The emphasis in this chapter was on the hypothetical
aspects of overview of public financial management system of Bangladesh and based on previous studies
by the researchers to learn about how the theoretical aspects actually work. Under the conceptual, how
PFMS is changing, how changing governance structure, how change the management approach, how
develop budgeting system, how adapt accounting and reporting system with IFRS and GAAP, how
manage auditing arrangement how develop internal auditing system, how develop the ministry of finance,
how develop ministry of planning, effect of COVID-19 on PFMS and so on, was observed and the related
state of the theories was demonstrated. The past studies conducted by various researchers were examined
at that point. Some outcomes and relationships on of public financial management system of Bangladesh
and PFMS performance have been found from past research. Taking into that consideration, the
methodology for guiding this exam will be developed theoretical aspects.

2.1 Governance Structure and Change Management Approach

The program execution and coordination team (PECT) will be liable for establishing a forum for
institutional collaboration (PFM Reform Learning Hub at the Institute of Public Finance) for areas
requiring collective action and mutual learning and accountability and for a lot of systematic capturing,
sharing and replication of reform lessons. The Finance Division, the PECT, would lead the coordination
of the reforms with a lively support from the line ministries additionally because the development partners.
The committee (SC) headed by the Finance Secretary can comprise senior representatives from major
outlay ministries, cupboard Division, bourgeois and Auditor General, National Board of Revenue,
Economic Relations Division, and commission. PECT can encompass a minimum of six members from
the Finance Division and a minimum of 2 members from alternative lead PFM establishments.

6
Ste
Steering
Committee

Program PFM
Execution and Learning Hub
Coordination
Team

Program Program Program Program

Implementation Implementation Implementation Implementation
Team (MEW, Team (CAG) Team Team (-- -)
FD) (SOE,Monitorin
g Cell)

For example, support and coalition building sub-activities area unit in-built wherever the government’s
current ownership isn't at the best level, or capability building sub-activities area unit designed to cater for
capability challenges etc. The PFM Action Matrix promotes incentives for modification at 2 levels: (a) at
every activity level wherever the risks and challenges in achieving the modification have been totally
mentioned, and sub-activities area unit designed to manage those risks and challenges. (b) Together, these
modification management interventions can change the implementation groups to effectively manage each
technical and non-technical challenge that return up throughout implementation.

2.3 Ministry of Finance

Together with different relevant ministries and divisions, the MOF is answerable for the preparation of
the medium-term budgeting framework (MTBF) and therefore the annual budget (both organic process
and development). The Ministry of Finance (MOF), a key player within the post of public finances, is
responsible for government finance operations, as well as annual budget preparation, fiscal management,
debt management, taxation, and policy formulation.

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2.3.1 Economic Relations Division
In step with the “Allocation of Business” section of the principles of Business (1996), the most functions
of the ERD square measure as follows:
Mobilizing, negotiating, and allocating external help about food and commodity aid from bilateral
and trilateral sources;
Coordinative and process for approval all technical help programs, including assessing the
negotiation needs of bilateral donors and multilateral agencies;
Managing the interchange budget (but not foreign currency money flows) for development
imports, together with bridge funding for project or artifact aid;
Administering the economic wing of Bangladesh missions abroad; managing the country’s
external policy, that's to mention, economic and technical cooperation with different developing
countries and with developed countries, notably in matters associated with development finance,
transfer of resources, external debt, and technology transfer;
Negotiating and language all international agreements involving money, economic, and technical
cooperation, paying specific attention to economic and money issues; and
Collaborating with resident missions of trilateral agencies and bilateral donor countries.

2.4 Implementation, Monitoring, and Evaluation Division

The IMED is responsible for monitoring and evaluating the public sector development projects included
in the ADP. It provides support to all ministries and divisions in project implementation through its central
management information system, a structured way of collecting, compiling, and analyzing project
information, and gives feedback to the ministries and divisions on problems and bottlenecks in project
implementation. It also reports on the progress of public sector development projects to the National
Economic Council and its executive committee headed by the Prime Minister. In addition, the IMED
works on matters related to the Public Procurement Act (2006) and the Public Procurement Rules (2008)
through its Central Procurement Technical Unit, as well as on necessary amendments of these or other
documents in line with international best practices and experience gained in public procurement in
Bangladesh. The division also provides guidance and instructions regarding the interpretation and
implementation of these rules and other documents it issues.

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2.5 Office of the Controller General of Accounts
The CGA prepares monthly reports, and finance and appropriation accounts, of the government;
supervises the functions of accounts offices within the numerous divisions, districts, and upazilas (sub
districts), significantly those concerning the process of payments to civil officers and government entities,
and therefore the preparation of initial accounts; administers all payments; ensures the accuracy and
timeliness of accounts; provides knowledge and knowledge on accounts in line with the wants of the
Finance Division; and ensures the reconciliation of accounts between account offices, Asian country Bank,
and Sonali Bank, and between government payments and accounts offices and therefore the govt. offices
drawing claims from these offices.

2.6 Office of the Comptroller and Auditor General

Despite this provision, the CAG needs the approval of the Finance Division in certain administrative and
personnel matters, and its power to discharge its mandate is thus limited at times. According to the
Constitution and the CAG (Additional Functions) Act (1974), the CAG is responsible for auditing
government receipts and public spending to ascertain whether revenues have been duly received and
expenditures have been made in compliance with applicable rules. Articles 127–132 of the Constitution
contain provisions relating to the appointment and service conditions of the comptroller and auditor
general, including privileges, audit mandate, and reporting procedures. To a limited extent, the audit
likewise allows the government to find out whether expenditures have yielded value for money in
government offices, public bodies, and statutory organizations.

2.7 Bangladesh Bank

Bangladesh Bank performs all the core functions of a typical monetary and financial sector regulator, and
a number of noncore functions. The key functions of Bangladesh Bank are as follows:
formulating and implementing monetary and credit policies;
regulating and supervising banks and nonbank financial institutions;
promoting and developing the domestic financial markets;
managing the country’s international reserves;
issuing currency notes;
regulating and supervising the payment system;
collecting and furnishing credit information;

9
 implementing the Foreign Exchange Regulation Act (1947);
Preventing money laundering; and
managing deposit insurance schemes.

2.8 Asian Development Bank

Controller’s Department Loan, Administration Department
The Loan Administration Division of the Controller’s Department of ADB (CTLA) I responsible
for process disbursements of loans, grants, and technical help, and maintains accounting systems for
disbursements and for the asking and assortment of loan repayments.
Bangladesh Resident Mission
Most of the process of disbursements of ADB-funded comes is delegated by the CTLA to the East
Pakistan Resident Mission (BRM) Disbursement Unit, that processes withdrawal applications
received from the execution agency or the project management unit.

2.9 Budgeting
2.9.1 Constitutional Provisions: The Consolidated Fund and the Public Accounts
On the opposite hand, all monies with reference to the state provident fund, national savings schemes, and
renewal and depreciation reserve funds are administered through the general public accounts. All inflows
of state receipts (tax and nontax revenues, grants, loans) are so attributable to the Consolidated Fund and
every one expenditures ar paid out of the fund. All other public moneys received by or on behalf of the
govt. shall be attributable to the general public accounts. CAG audit reports, as well as any vital
observations, are submitted by the CAG to Parliament through the President. Under the Constitution, all
revenues obtained, all loans raised, and every one moneys received by the govt. shall kind a part of one
fund, the Consolidated Fund.
2.9.2 Budget Process
The national budget has development and nondevelopment components. The nondevelopment budget
consists of the following: Nondevelopment budget = Recurrent expenditure + net lending + net food
outlay + non-ADP programs
The approved budget is enforced below varied rules and orders embodied within the General Monetary
Rules (2005), the Treasury Rules (1998; last amended in 2017), and therefore the Delegation of Financial
Power (2017), issued by the Finance Division. Then it submits

10
to the Finance Division Associate in Nursing estimate of the finance resources required for development
activities, given these projections and therefore the chance of getting aid and non-ADP assistance. ADP
comprise 95%–96% of state development budget, whereas non-ADP contribution consists of food
program, food for work together with transfer of sales take of food.
Net food outlay refers to web government disbursal (food imports in far more than exports) subsequently
provided as safety nets to the terribly poor. The Finance Division sets the ceiling on the event expenditure
of the ministries and divisions, supported these estimates, and therefore the FABA allocates funds to every
project among the expenditure limits, conjointly taking resource convenience under consideration. The
budget proposal is submitted on the primary The of Gregorian calendar month of every year and approved
by 30 June, giving the general assembly but a month to review the budget.7 mistreatment info from the
road ministries and divisions, it prepares, in Gregorian calendar month of every year, initial projections of
their project funding necessities for the approaching yr. it's conjointly to blame for collection the
nondevelopment budgets submitted by the road ministries, and for drafting the ADP on the basis of the
event allow the year. Most government comes enclosed within the ADP square measure processed and
approved by the Planning Commission.

2.10 Budgetary Channels

The Finance Division communicates the budget allocations (after approval) to the executive ministries
and also the individual chief accounts officers (CAOs) by distributing the budget books and documents
each Gregorian calendar month.9 The secretaries of the road ministries, because the principal accounting
officers of these ministries, are to blame for making the mandatory arrangements for distributing the
sanctioned funds among the controlling and disbursing officers underneath them. Ministries and divisions
should have unharnessed funds strictly as allotted within the budget, following the directions of Fund
unharnessed and Utilization for Development comes.10 External fund disbursements surpassing the
annual allotted budget need applicable news from the executive ministry and approval from the MOF. All
external help regarding the development budget is received and accounted for as receipts within the
Consolidated Fund by the CGA.
2.10.1 Fund Release from Nondevelopment Budget
In practice, the budget allocated for autonomous and semiautonomous bodies and local bodies as grants-
in-aid and special program funds from the nondevelopment budget is released in four quarterly
installments, of which the fourth requires approval from the Finance Division. The lump-sum allocations

11
for ministries, divisions, departments, directorates, and autonomous or semiautonomous bodies and local
bodies must be subsequently approved by the Finance Division if approval cannot be provided during
budget allocation.
2.10.2 Fund Release from Development Budget
The funds kept in these accounts can be spent only for the implementation of the specified program;
following the project pro forma.12 The administrative ministry or division submits periodic expenditure
statements, progress reports, and other required reports to the Finance Division. Without authorization
from the Finance Division, no fund transfers may be made from the special accounts in Bangladesh Bank
to project accounts in commercial banks.11 each project must have a special account to receive funds from
development partners. The administrative ministry or division sends account statements reporting funds
released and expenditures incurred on the 15th and 30th of each month to the Finance Division. The
Finance Division from time to time issues orders or instructions for the release of funds from the
development budget allocation. Funds can no longer be released after the project period unless the project
is again included in the RADP.
2.10.3 Expenditure Approval
Expenditure control is mandatory for all projects. Its objective is to ensure that funds are used properly
and effectively, and that spending conforms to the budget allocation, the financing agreement, and
applicable national laws and regulations on public financial management. External fund withdrawal,
spending, and payment must follow expenditure approval procedures, for control and supervision. Any
deficiencies in expenditure control are reported during the audit. The delegation of financial power for
development projects authorizes heads of administrative ministries, divisions, and directorates, as well as
project directors, to approve expenditures subject to budget allocation. In some cases, concurrence is
needed from ADB and other development partners according to agreements. Expenditures must meet the
following conditions for approval under the General Financial Rules:
Funds allocated are spent for the purposes for which they were approved.
Funds are spent strictly in accordance with the rules and regulations, and the expenditure is not
prima facie more than what the occasion demands.
Actual expenditure does not exceed the sanctioned allocation made for the respective items or
operating units.
No expenditure is incurred in anticipation of the authorization of annual budgets or grants without
the prior concurrence of the Finance Division.

12
2.11 Funds Flow Arrangements under ADB-Financed Projects
2.11.1 Direct Payment Procedure
The executing or implementing agency, on its approval of the claim of the contractor (on the basis of work
done, goods supplied, or services rendered), requests ADB through a signed withdrawal application with
supporting documents (refer to ADB’s Loan Disbursement Handbook for the list of required documents)
to pay directly from the loan account to the extent of ADB’s share of the expenditure. It is normally used
for large-value payments when the borrower has insufficient resources to refinance expenditure and there
is no provision for the use of the advance account procedure.18 the direct payment procedure may also be
used when payments must be made in currencies that the borrower may have difficulty obtaining.

Executing or Implementing Agency Asian Development Bank

Supplier
Document Cash
2.11.2 Advance Account Procedure
ADB advances an amount to the project’s advance account at Bangladesh Bank, and the bank in turn
credits the taka equivalent to the project’s operating account opened by the executing agency at a
commercial bank (the service bank). Payments from the advance account can be made only for eligible
project expenditures in domestic currencies.

Asian Development Bank Advance Account at Bangladesh Bank (US dollars)

Executing or Implementing Agency Finance Division

Contractor Project’s Operating Account (taka equivalent)

Document Cash
2.11.3 Commitment Letter Procedure

ADB pays from the loan account upon receiving confirmation from the appointed commercial
bank (negotiating bank), that has paid or has in agreement to pay the stated quantity within the
letter of credit in line with its terms.
The provider submits a claim to the negotiating bank as laid out in the terms of the letter of credit.

13
 The supplying bank directly problems AN recommendation to the negotiating bank concerning the
supply of the letter of credit, relating ADB’s commitment letter.
ADB problems a commitment letter to the appointed full service bank (normally the negotiating
bank as laid out in the letter of credit).
The corporal punishment or implementing agency opens a letter of credit in favor of its contractor
or provider in line with the approved contract.
Below this procedure, ADB irrevocably agrees to reimburse a poster bank for payments created or
to be created to a contractor against a letter of credit.
(ii) The corporal punishment agency submits a commitment letter request to ADB at the side of
the required supporting documents and a signed issuing type.

2.12 Accounting and Reporting

Article 131 of the Structure expresses that the yearly budgetary records of the public authority may be
kept up inside the casing and route supported by the CAG with the underwriting of the President. The
Account Code (Volume 1) gave by the CAG sets out the normal hints of the system of government
accounts. The procedures taken after in keeping up the records of the public authority are portrayed under.
2.12.1 Accounting Systems
Receipts of Government
All receipts in the interest of the public authority are stored with or moved to Bangladesh Bank. The
records are kept up by officials subordinate to the CGA. Each store is accommodated quickly by
Bangladesh Bank and the data is moved to the CGA by means of the bank's monetary frameworks. Moves

14
are accommodated against assortments. Notwithstanding, compromise isn't accomplished for charge
evaluations and unpaid debts, subsequently making a hole in fundamental income data for the CGA and
other intrigued partners that could mean a considerable loss of financial plan resources.
Payments on Behalf of Government
Bangladesh Bank is the solitary authority financier of the public authority. In places where the bank has
no branch, Sonali Bank fills the job. Bangladesh Bank and its branches go about as government depository
banks.
Accounting Process
The common divisions' bookkeeping workplaces, heavily influenced by the CGA, are coordinated into 49
boss records workplaces, which handle the exchanges, and divisions, remembering the exchanges of the
appended offices for Dhaka. This mechanized, web based framework permits online access and
connections working workplaces across a wide territory organization. A key idea of the framework's plan
is information stockpiling in a focal data set to empower admittance to all passages furthermore, reports
by means of a solitary basic UI. The divisional regulator of records and the region and upazila account
officials post month to month accounts that feed straightforwardly into the focal information preparing
unit.
Accounting Standards
The altered money premise of bookkeeping is utilized in keeping up the United Asset account and the
public accounts. The financial year in Bangladesh is from July to June of the next year. Any spending
allotment not paid out in real money by the end of the monetary tremendously year will pass.

2.13 Auditing Arrangements

2.13.1 Auditing Requirements
The CAG is liable for the review of nationalized organizations set up under the Organizations Act (1994)
Article 128(1) of the Constitution states: "Officials of the Public authority will be evaluated and given an
account of by the Evaluator General" The CAG reviews all records, books, vouchers, reports, money,
stamps and other government property.
2.13.2 Selection of Foreign-Funded Projects for Audit
The Foreign Aided Project Audit Directorate (FAPAD) is a specialized arm of the CAG. The FAPAD is
dedicated to providing independent assurance to Parliament as well as to development partners. Each year,
generally in July–August, it checks the approved ADP and identifies all projects subject to audit.

15
2.13.3 Types of Audits
Audit service Audit objective Audit output
Financial To determine whether the accounting statements were Certificate report
prepared in accordance with accounting principles,
complete and free from material misstatements caused
by error and fraud
Regulatory To determine whether transactions conform to the authority Certificate report
that governs them and funds are being used only to the
agreed extent and for the agreed purpose
Compliance To ensure that adequate controls are in place to secure the Management letter
desired project results and that controls are functional
throughout the life of the project
Performance To ensure that the project has conducted its business Management letter
economically, efficiently, and effectively to achieve the
planned objective

2.13.4 Audit Standards

The review followed reasonable evaluating norms or practices;
The budget reports are introduced genuinely, taking all things together material regards, and give
a valid and reasonable perspective on the undertaking's monetary position, monetary execution,
what's more, incomes;
The executing organization has utilized all the returns of ADB's credit or award just for the
proposed reason; The appropriate books and records are being kept up; Fixed resources exist as
expressed, alongside the connected interior controls;
The SOEs have been set up as per ADB's Credit Dispensing Handbook, sufficient supporting
documentation has been kept up to help claims expressed in the SOE for the repayment of qualified
uses and the liquidation of advances gave to the development account (where pertinent), and the
uses expressed in the SOEs agree with the affirmed project reason what's more, cost classifications
specified in the credit arrangement, and with the dispensing rates specified in the advance
arrangement;
The executing organization is utilizing assets financially, productively, and successfully; what’s
more, The CAG is rehearsing substance wide reviewing as per the danger based methodology, to

16
 add to strategy improvement, and executing global principles (Worldwide Principles of
Incomparable Review Foundations) notwithstanding public principles under the essential
arrangement of the CAG. Guaranteeing the nature of the review report is the focal point of
consideration of the Quality Confirmation Council and the Focal Quality Affirmation Group.
2.13.6 Audit Closure Mechanism
Report is submitted to Parliament and examined at the gathering of the Public Records Advisory group.
The finish of the report after its assemblage follows a review schedule that could take longer than expected
in light of a postponement accordingly from the examined substance. The ADB should hence intently
screen review issues and draw in with executing organizations to determine review discoveries.

2.14 Internal Control System

In Bangladesh, inner control is viewed as inseparable from the executives control practiced to be sensibly
guaranteed of
The adequacy and proficiency of activities;
The unwavering quality of monetary and actual advancement;
Consistence with relevant rules and methods; and
The defending of assets against misfortune because of misuse, misappropriation, waste,
misrepresentation, and inconsistencies. The nation's responsibility and straightforwardness
accordingly improve, and the presidential branch overall works all the more productively.
The IMED assesses the monetary and actual advancement of work plans across the government, especially
the work plans for advancement projects. The IMED is answerable for the oversight of inward control
approaches and strategies for the whole government. The services have commonly feeble interior control
frameworks, as an amazing number of review perceptions have been noted

17
2.15 Summary of Risks and Issues, and Proposed Mitigating Actions and Improvements

Issue Recommended solution

Budgeting
The MTBF prescribes a yearly budget and 3-year projections. Project teams should discuss the budgeting process with the
This rule is followed in revenue budget preparation but not in ministry and the executing agency to make sure that project funding
development budgeting. The ADP is prepared for only 1 year, (from government and ADB funds) is included in the ADP. Suitable
affecting the implementation of projects, which typically last measures should be included during project preparation to ensure
for 3–5 years. that the project has adequate capacity for budgeting and for fund
monitoring and reporting. ADB may engage the government in a
policy dialogue to improve government budgeting systems and
integrate the ADP with the MTBF, thus also extending the ADP
term to 3 years.
The current budget classification system requires budget The implementation of iBAS++, which adopts this system of budget
allocation from the ministry or division down to the department classification up to field or pay point level, is under way. Once it is
or directorate level only. The lack of provision for detailed commissioned, project teams should make sure that iBAS++
budget allocation to field-level implementation units could incorporates project budget and funding allocations, and that
result in inadequate budget allocation. project management staff have sufficient skills and capacity to use
iBAS++
Budget allocation and budget execution are largely manual iBAS++ implementation will automate budgeting and accounting
processes. processes. During project appraisal, project teams should see to it
that project management units use the full functionality of iBAS++.
Accounting

22
The iBAS++ is not fully integrated. Accounts offices in the An online system needs to be established up to the upazila level so
Presidency and offices up to the district level are connected to that data entry can be made online when transactions occur. In the
the server, and data inputs are made online. But upazila absence of an online system, project teams should design suitable
(subdistrict) offices are not connected and the officials measures to ensure that project budgets and expenditures are
concerned input data manually, to be copied into the system in recorded and reported accurately and completely.
nearby district-level offices.
Internal control systems related to PFM are largely missing in An internal control or audit unit in each spending unit is a must.
ministries and divisions. Strong scrutiny or oversight is Project teams should have an action plan for implementing a well-
necessary for proper budget execution. functioning internal control unit
CAO accountability is unclear. Currently, the CAO pre-audits This is a policy issue involving the CAG, the CGA, and executives
the invoices sent by ministries, divisions, departments, and of ministries and departments. Current provisions of acts and rules
directorates on behalf of the CAG before submitting the do not provide opportunities to solve this issue. These acts and rules
invoices for the issuance of checks and payment advices must be revised to clarify CAO accountability and responsibility.
ADB may consider future assistance and policy support for that
revision to improve accountability.
The budgeting and accounting system is already automated. A capacity-building strategy needs to be adopted to make available
iBAS is now in use, and the transition to the updated iBAS++ is a large group of skilled personnel across the country. A separate
ongoing. However, no risk management framework has been capacity-building pool can be established centrally.
established yet. The shortage of skilled personnel is evident.
There is also no formal training program for existing personnel.
Auditing
Under the Constitution, the CAG has auditor independence. But The revised Audit Act, providing both administrative and financial
its lack of independence in administrative and financial matters independence to the CAG, is currently under consideration by the

23
could compromise audit activities. Limited capacity and Ministry of Finance. The government must take steps to pass the act
inadequate human resources constrain the implementation of in Parliament. Capacity, logistics support, and human resources
international auditing standards. A shift in focus from micro should be increased as needed so that the CAG can implement its
aspects and small-value items to critical and high-priority items strategic plan and international standards in auditing. In recent
could bring more effective results in financial management and years, several reform activities and initiatives have taken place, but
governance reforms. those activities have sometimes been disrupted despite having some
positive results. ADB may consider future assistance and support to
enhance audit capacity and resources
There is a lack of follow-through on the resolution of audit Project teams should require executing agencies to resolve audit
findings and observations. findings and issues within an agreed time frame, during the
processing of new projects and the implementation of existing
projects.
Government Structure
The PFM structure is well defined for the central government The Ministry of Finance will play a vital role in bringing all the
and its ministries and departments. However, there is a lack of extra budgetary units and organizations under the same PFM
uniformity in the PFM system for corporations, autonomous structure. ADB may consider providing assistance and support for
and semi-autonomous bodies, and boards. reforms in the PFM structure for extra budgetary units.

24
 Chapter -3
Data and Methodology

3.0 Introduction

Methodology is the theoretical, systematic examination of methods applied to a field of study. The
tool was used to gather knowledge and data for knowing the overview of the public financial
management system and impact of COVID-19 on PFMS of Bangladesh. The thematic selected
research methodology is portrayed in different dimensions.
The objective of this paper is to define whole public financial management system of Bangladesh
and how it gradually improved day by day and also try to find out the impact of current pandemic
due to COVID-19 on public financial management system of Bangladesh. Moreover, try to give
the lack of this system and give the recommendation for overcome the lacking, the nature of the
analysis is therefore descriptive. For this analysis, a deductive method was chosen based on the
research approach. In this research, a quantitative approach was chosen to analyze the data the
chapter discusses the data form for this analysis, and where the data & information was collected
from. In addition, the criteria for data collection considered as information of study results,
selection of independent and dependent variables, and their interpretation will be discussed and
the research theoretical aspect will be established based on the previous analysis and empirical
aspect. Finally, the analytical process will be formulated, and then the process will be defined for
the study process.

3.1 Data Source

For this study, data has been collected from secondary sources like website of the ministry of
finance, report of the annual budget of our country, report of the audit general, World Bank report
etc.
To accomplish this research, the information needed are as following:
Newspapers
Internet
Television
Study related books and journals

25
 Annual budget Reports
Various public financial management system websites
Publications

3.2 Data Analysis

Within this analysis, various variables are used to evaluate the overview of the PFMS of
Bangladesh. The tool /procedure is used to analyze how to develop the system of PFMS of
Bangladesh from 1972 to 2020. This is as follows:
Correlation analysis.
Regression analysis.
Qualitative research
3.3 Correlation Analysis
A correlation is a statistical measure of the relationship between two variables. The measure is
best used in variables that demonstrate a linear relationship between each other. The fit of the data
can be visually represented in a scatter plot. Using a scatter plot, we can generally assess the
relationship between the variables and determine whether they are correlated or not.

r = 0.313977

26
Fiscal Year Crore in BDT Changes in % GDP growth in % Changes in % a b ab a^2 b^2

1972-73 786.00 0.266 (0.140) 5.195 0.11 5.11 0.576 0.01 26.14
1973-74 995.00 0.090 0.0333 0.653 0.09 0.65 0.059 0.01 0.43
1974-75 1,084.37 0.429 0.096 3.345 0.43 3.34 1.434 0.18 11.19
1975-76 1,549.19 0.284 (0.041) 1.723 0.28 1.72 0.490 0.08 2.97
1976-77 1,989.87 0.098 0.057 (1.120) 0.10 (1.12) -0.109 0.01 1.25
1977-78 2,184.00 0.144 0.027 0.622 0.14 0.62 0.090 0.02 0.39
1978-79 2,499.00 0.327 0.071 (0.473) 0.33 (0.47) -0.155 0.11 0.22
1979-80 3,317.00 0.238 0.048 (4.854) 0.24 (4.85) -1.157 0.06 23.56
1980-81 4,108.00 0.139 0.008 0.887 0.14 0.89 0.123 0.02 0.79
1981-82 4,677.00 0.013 0.072 (2.394) 0.01 (2.39) -0.031 0.00 5.73
1982-83 4,738.00 0.244 0.021 0.451 0.24 0.45 0.110 0.06 0.20
1983-84 5,896.00 0.136 0.039 0.192 0.14 0.19 0.026 0.02 0.04
1984-85 6,699.00 0.066 0.048 (0.437) 0.07 (0.44) -0.029 0.00 0.19
1985-86 7,138.00 0.191 0.033 0.199 0.19 0.20 0.038 0.04 0.04
1986-87 8,504.00 0.003 0.042 (0.106) 0.00 (0.11) 0.000 0.00 0.01
1987-88 8,527.00 0.239 0.038 (0.558) 0.24 (0.56) -0.133 0.06 0.31
1988-89 10,565.00 0.202 0.024 0.148 0.20 0.15 0.030 0.04 0.02
1989-90 12,703.00 0.020 0.028 0.495 0.02 0.49 0.010 0.00 0.24
1990-91 12,960.00 0.202 0.056 (0.615) 0.20 (0.61) -0.125 0.04 0.38
1991-92 15,584.00 0.130 0.03 0.360 0.13 0.36 0.047 0.02 0.13
1992-93 17,607.00 0.082 0.054 (0.155) 0.08 (0.15) -0.013 0.01 0.02
1993-94 19,050.00 0.100 0.047 (0.211) 0.10 (0.21) -0.021 0.01 0.04
1994-95 20,948.00 0.106 0.039 0.240 0.11 0.24 0.025 0.01 0.06
1995-96 23,170.00 0.062 0.051 (0.133) 0.06 (0.13) -0.008 0.00 0.02
1996-97 24,603.00 0.129 0.045 (0.007) 0.13 (0.01) -0.001 0.02 0.00
1997-98 27,786.00 0.063 0.045 0.133 0.06 0.13 0.008 0.00 0.02
1998-99 29,537.00 0.160 0.052 (0.109) 0.16 (0.11) -0.017 0.03 0.01
1999-00 34,252.00 0.125 0.047 0.117 0.12 0.12 0.015 0.02 0.01
2000-01 38,524.00 0.098 0.053 (0.041) 0.10 (0.04) -0.004 0.01 0.00
2001-02 42,306.00 0.060 0.051 (0.326) 0.06 (0.33) -0.020 0.00 0.11
2002-03 44,854.00 0.159 0.038 0.192 0.16 0.19 0.031 0.03 0.04
2003-04 51,980.00 0.101 0.047 0.095 0.10 0.10 0.010 0.01 0.01
2004-05 57,248.00 0.067 0.052 0.199 0.07 0.20 0.013 0.00 0.04
2005-06 61,058.00 0.142 0.065 0.019 0.14 0.02 0.003 0.02 0.00
2006-07 69,740.00 0.249 0.067 0.055 0.25 0.06 0.014 0.06 0.00
2007-08 87,137.00 0.147 0.071 (0.175) 0.15 (0.17) -0.026 0.02 0.03
2008-09 99,962.00 0.139 0.060 (0.190) 0.14 (0.19) -0.026 0.02 0.04
2009-10 113,815.00 0.161 0.051 0.093 0.16 0.09 0.015 0.03 0.01
2010-11 132,170.00 0.248 0.056 0.138 0.25 0.14 0.034 0.06 0.02
2011-12 165,000.00 0.162 0.065 0.009 0.16 0.01 0.001 0.03 0.00
2012-13 191,738.00 0.160 0.065 (0.085) 0.16 (0.08) -0.014 0.03 0.01
2013-14 222,491.00 0.126 0.060 0.008 0.13 0.01 0.001 0.02 0.00
2014-15 250,506.00 0.178 0.061 0.075 0.18 0.07 0.013 0.03 0.01
2015-16 295,100.00 0.154 0.066 0.079 0.15 0.08 0.012 0.02 0.01
2016-17 340,605.00 0.175 0.071 0.023 0.18 0.02 0.004 0.03 0.00
2017-18 400,266.00 0.161 0.073 0.074 0.16 0.07 0.012 0.03 0.01
2018-19 464,573.00 0.223 0.079 0.036 0.22 0.04 0.008 0.05 0.00
2019-20 568,000.00 - 0.082 - - - 0.000 - -
Mean 0.153 0.082 Sum 1.363 1.362 74.738

27
3.4 Regression Analysis

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.313976651
R Square 0.098581337
Adjusted R Square 0.078985279
Standard Error 0.081605828
Observations 48

ANOVA
df SS MS F Significance F
Regression 1 0.033501816 0.033502 5.030672 0.029762255
Residual 46 0.306337514 0.00666
Total 47 0.33983933

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 0.148292053 0.011803131 12.56379 1.78E-16 0.124533581 0.172050524 0.124533581 0.172050524
X Variable 1 0.021096502 0.009405837 2.242916 0.029762 0.002163534 0.040029471 0.002163534 0.040029471

The main purpose of correlation, through the lens of correlation analysis, is to allow experimenters
to know the association or the absence of a relationship between two variables. When these
variables are correlated, you’ll be able to measure the strength of their association. Overall, the
objective of correlation analysis is to find the numerical value that shows the relationship between
the two variables and how they move together. Here our correlation is positive. Regression analysis
helps to determine the functional relationship between two variables (x and y) so that you’re able
to estimate the unknown variable to make future projections on events and goals. The main
objective of regression analysis is to estimate the values of a random variable (z) based on the
values of your known (or fixed) variables (x and y). Linear regression analysis is considered to be
the best fitting line through the data points which I shown by my calculation through changes in
budget amount and annual GDP growth.

28
3.5 Sample Size
The sample of the study consists of Bangladesh government budget system that’s means one
specific country’s annual budget. Annual Time Series data for both independent and dependent
variables were extracted from the respective annual budgeted figure from the period 1972-2020.
The methodology for the analysis is discussed in this Chapter. The approach used in the segment
is based on the approach of the previous study, learned by analysis of the theoretical aspect. All
the details related to the variables, figure have been given. After that the regression analysis model
and methodology and the tools used in the study were developed. Finally, the research method is
developed, and defined the procedure for the study process.

3.6 Improvement of PFMS of Bangladesh

Public monetary change programs were embraced from the 1990s onwards however have not
satisfied assumptions. The country's populace is developing and the high number of exchanges
heighten the intricacy of creating productive changes. PFM, for example, fortified homegrown
responsibility and upgraded homegrown assets preparation are basic to improving Bangladesh's
development. The reasoning for the new PFM change methodology, is to set up a PFM framework
that is strong of the seventh Long Term Plan objectives and which is properly focused on to the
primary spaces of PFM shortcoming yet steady with the Public authority's limit and obligation to
address them. Five Year Plan Requirements Key Implications for PFM Reform. Domestic resource
mobilization to increase revenues by 8.4% of GDP, in order to fund increased public investments.
Strengthen PFM systems. Build a centrally managed database for the physical assets of the
government. Increase public expenditure efficiency to allow reprioritization and deliver more
resources with resources available. Increase PFM in local government, and enhance SOE
oversight, audit and legislative oversight, and citizen oversight. The plan is designed to be
implemented by 2021. It is aimed at increasing PFM's popularity and reducing the size of the
federal government. It was designed to have a positive impact on the economy and reduce the
budget deficit. It also aims to increase the public sector's role in the PFM budget. It calls for a
reduction in PFM spending. The PFM Change Procedure (PFMRS) 2016-2021 was received in
August 2016. It means to fortify the rudiments needed for accomplishing the all-encompassing
public objectives specified in Vision 2021 and resulting Five-Year Plans. DT Worldwide gives
specialized help to help the limit of the Public Leading body of Income (NBR), the Workplace of

29
the Officer and Reviewer General (OCAG), and the Public Parliament to carry out essential change
needs in the space of Homegrown Income Assembly (DRM) and homegrown responsibility, as
distinguished inside the PFMRS.

3.7 Various method that Bangladesh’s Govt. pursued for turn into the current PFMS
3.7.1 DT Global is focused on accomplishing the accompanying key outcomes.
Fortifying the institutional limit of the NBR and improve its income organization framework. This
will eventually bring about improved quality and idealness of outside reviews. This will
eventually be bringing about expanded expense assortment and improved income administration.
3.7.2 Improve accounting and reporting to international public sector accounting standards
(IPSAS)
CGA's obligation regarding monetary detailing and account records. CGA readies the united
allocation records and account records for the President and afterward Parliament. The need issue
is concerning the postponed idealness of detailing; that is the creation of these archives. It would
be fitting for the CGA to build up a system to improve this practicality. The CGA will continue to
make the records accessible to the public. The Bangladesh government has created a significant
section of the entire PFM framework in Bangladesh. They incorporate the Bangladesh Railway,
Defense. Roads, Public Works Department (RHD), Public Works. Public Works (PWD), Public
Health Engineering Department, Public Health. Engineering Department (PHE) and Telecom
Department. They also have their own PFM, which includes the Bangladesh Roads Department,
which also includes the Defense Roadways Department and the Public Works Department.
The Bangladesh Government has also created its own PFM framework.
3.7.3 Modernize the Internal Audit Function
PMFM Act 2009 states that one of the obligations and duties of the Principal Accounting Officer
will be "To guarantee a proficient and straightforward monetary administration and inward control
measures at the pertinent Ministry or Division or Division" The remainder of Section 19 (a) of the
Public Moneys and One of the public accounts is called the "Public Accounts”. The Act states that
the financial plan has been set up as per headings and distributions depend on needs to accomplish
the essential goals of the GoB. Inner controls and inside review stay a space of significant
shortcoming across the PFM framework. Despite progress that has been made since the last PEFA,
inward review doesn't assume a considerable part. There are pockets of pockets of inward review

30
in specific services however. In July 2005 the Finance. Division of the Service of Finance gave an
Internal Control Manual. The manual gives direction to carry out inner control. In the Foreword to
the Internal Control manual the at that point the. Clergyman for Finance set up autonomous
Ministries and Departments.
3.7.4 Reform Actions to Strengthen Parliamentary Oversight
Receive instruments to guarantee opportune reactions to PAC proposals, and give effectively open
and comprehendible information for general society. First PAC Report of the Ninth Parliament of
Bangladesh. Bangladesh Institute of Parliamentary Studies(BIPS) to work out the plan for the
panel gatherings as they don't have adequate openness on the subject they are managing.
Bangladesh Parliament has 56 minutes of time to complete the work of a panel. The panel will be
able to conduct an examination of each member of the panel.
3.7.5 Reform Actions to Update the Legal Framework
Appoint a commission to review and update the PFM legal and regulatory
framework with a 1-year tenure
Commission to review and recommend and make required changes in the
PFM legal and regulatory framework as policy reform priority with
particular focus on the following:
PFM rules for local government bodies
Fiscal transparency
Enforcement mechanism
External audit
Implement recommendations of the commission
3.7.6 Leverage iBAS++/BACS, e-procurement and other financial management information
systems as enablers to improve PFM
A successful FMIS is essential to accomplishing key PFM destinations. The FMIS has a total
financial control, for productive spending execution to convey administrations and for productive
spending. FD is driving the turn of events and the new FMIS (iBAS). FD assumed control of the
Public Expenditure Management Strengthening Program in 2014. The PEMSP will give an
improved monetary control system. It will uphold both the money and accumulation bases of
bookkeeping. The framework ought to give electronically to spending accommodation and survey,
for electronic accommodation of bills by drawing and dispensing officials. The program will create

31
yearly budget reports dependent on IPSAS and GFS. The project was initiated under the past
benefactor financed SPEMP project. The funding for that project was completed in 2014, and FD
has assumed control.

3.8 Implement BACS covering the entire of general government accounts furthermore, to
give an improved budgetary control system and to help monetary dynamic at various levels
in the public authority
In accordance with the Article 131 of the Constitution of the People's Republic of Bangladesh, the
new BACS was submitted to the government on December 9, 2015. The BACs is a nine section
various leveled grouping structure separated into various leveled groups. The determined portions
incorporate the determined portions which incorporate the extra posted sections. There are also
extra sections for economic and budgeting sections. The overall record of iBAS ++ is kept up in
the overall record. Inferred portions are not dictated by the clients rather these are created by the
government and other coding components. The budget is set up to meet the current and future
requests of the public monetary administration arrangement.

3.9 Coordination of Funding Sources

The financing sources ought to be chosen. It very well might be both from government's own
sources and the outer sources. Equal subsidizing support from the two sources is expected to
address the consequence of losing energy in taking forward changes. The solid coordination
components set up to organize outside contributor support under the reusable umbrella trust store
(SPPE) have limited the dangers of covering support through two-sided approaches and have
limited exchange costs for benefactors and government.

3.10 International PFMS method

I am trying to mention here India and Pakistan’s PFMS method to give clear understanding the
international PMS method and also trying to comparison with Bangladesh PFMS method.

32
India
PFMS began during 2009 with the goal of
following subsidizes delivered under all
Arrangement plans of Legislature of India. The
degree was expanded to cover direct installment to
recipients under all Plans. Step by step, it has been
imagined that digitization of records will be
accomplished through PFMS.
PFMS was created utilizing a design which was
conceived in 2009. The essential capacity of PFMS
today is to work with sound Public Monetary
Administration Framework for Legislature of
India. PFMS has interface with the Center
Financial Framework (CBS) of more than 300
Banks, including all Open Area Banks, all
Provincial Country Banks, significant private area
banks, Hold Bank of India, India post and
Agreeable Banks.
2.2 million individuals including ward-young men,
attendants, paramedics, experts, specialists and
experts are covered. The PFMS is being utilized to
get protection charge installments from all clinical
and care staff working in emergency clinics.
Pakistan
Pakistan has broad authoritative and institutional
constructions for PFM. While there has been huge
advancement in transforming the PFM frameworks.
The PFM changes are expected to guarantee
imagined profits by ongoing activities. The
government and Khyber will continue to make
changes to the framework to make it more effective.
Bookkeeping and evaluating are government
commands which are performed by workplaces of
AGP and Regulator of Records (CGA). Pakistan has
received a brought together PFM framework, which
is provisioned under the Constitution of Pakistan,
through articles 78-88, setting out the administration
of government.
In this regard, ADB is. evaluating the possibility of
Pakistan: Coronavirus Dynamic Reaction and
Consumption Backing (CARES) Program. The
Venture focuses on The Venture. on The public
authority to address the episode of Covid-19 illness
(Corona virus)
Bangladesh
Public Financial Management (PFM) changes are a
critical segment for improving the administration and
responsibility in Bangladesh. On account of past
endeavors by progressive governments, Bangladesh is
presently well placed to additionally modernize its PFM
framework, increment government effectiveness, and
empower interest in extraordinary social .
Bangladesh's PFM Change Strategy (PFMRS) 2016-
2021 was gotten in August 2016. The arrangement is
intended to be executed by 2021. It is pointed toward
expanding PFM's fame and lessening the size of the
national government. It was intended to decidedly affect
the economy and diminish the spending shortage. It
likewise plans to expand the public area's job in the
PFM financial plan.
Emergency didn't advance from comparative market
issues and can't be tended to by comparable approaches.
Public authority needs to give food to every one of the
individuals who lost their vocation. The method of help
for them must be extraordinary.
33
3.11 Budget allocation during COVID-19 in Bangladesh
New Allotments (annualized) considering Coronavirus for FY21 Tk in crore Distribution
for Coronavirus related crisis wellbeing reaction 10,000 Paying the premium on a
motivator bundle for organizations 3,000 Sponsor the bank advance revenue whose
installment was deferred during the April-May period 2,000 Money impetuses for focused
populace (2,500 for 50 lakh families) 500 Remuneration for relatives of the expired
community workers 322 Motivations for ranch automation 200 Renegotiating plan for little
pay ranchers and dealers in the farming area 3,000 Credit for independent work adventure
(through Palli Sanchay Bank, Probashi Kallyan Bank, Karmasangsthan Bank and PKSF)
2,000 Absolute 21,022.
Complete steady portion for Interest Installments is Tk. 6,731 crore; of which, homegrown
- Tk. 5,456 crore (88.9% of aggregate)
The rate of implementation of original ADP in FY20 is likely to be not more than 60%
even in best case scenario in view of COVID-19
Surprisingly share of Health, Nutrition, Population & Family Welfare in ADP FY21 (6.4%)
remained same as in FY20 despite this being the most important sector in view of COVID-
19. It includes only one new project related to COVID-19 titled “COVID-19 emergency
response and pandemic preparedness” co-financed by World Bank. Also, no COVID-
related project was found in the list of ‘Unapproved projects without allocation’
Labor and Employment are expected to receive the third highest share (18.6%) of project
aid – mainly for one single project “To Support the Returnee Migrant Workers and
Incentives for Expatriates” (accounting for 16.3% of total project aid expected) from GEF
– will help returnee migrants to cope with COVID-19 if can be successfully implemented.
The ADP for FY2021 did not follow required allocative priorities in view of the need to
respond to the ongoing COVID-19 pandemic .Allocation for HNPFW remained
unchanged; has risen only marginally for Agriculture, Social Welfare and Labor &
Employment sectors compared to FY20  Limited effort towards exploring new projects
to address COVID-19 emergencies Only one COVID-related project was included in health
sector.

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 Chapter -4

Overviews of Budget & theoretical aspects

4.0 Overviews of the Budget

In the previous chapter, various methods used for this study was discussed. The methodology that
has been used is based on the method used by the previous researchers. The data regarding the
variables for the corresponding years will be reviewed in this chapter. Before going to discuss
overviews of the budget we know about our economy which is in 1971, the year Bangladesh
accomplished freedom from Pakistan, the new country was alluded to in unfamiliar circles as an
"worldwide crackpot," an injured warrior nearly past any expectation of recuperation.
Bangladeshis themselves, reviewing the "global crazy person" portrayal, frequently pick the
similitude "endless crate," suggesting that regardless of how much help is given to the economy,
there will consistently be a requirement for additional. In its initial seventeen years of autonomy,
Bangladesh didn't flourish, nor was it ready to improve significantly the personal satisfaction for
its colossal populace. However, it didn't lose ground all things considered and became dynamic in
financial fields that were not anticipated even a couple of years sooner. Also, if the economy
actually appeared to be perilously balanced near the very edge of calamity - a dry spell, a hurricane,
also, Bangladesh was a significant maker and exporter of instant pieces of clothing and frozen fish.

4.1 Theoretical aspects

Dependent variables: The dependent variable is the variable being evaluated and calculated in an
experiment and is 'dependent' on the variable that is independent. One example of dependent
variables is the symptoms of depression, depending on the independent variable.

In my qualitative research, the dependent Variable is current situation of public financial

management system of Bangladesh. Government Budget is an itemized accounting of the
payments received by government (taxes and other fees) and the payments made by government
(purchases and transfer payments). Here I show some chart and concept to describe the PFM:

A budget deficit occurs when a government spends more money than it takes in. The opposite of
a budget deficit is a budget surplus.

35
Independent variable: The independent variable s the variable that changes or controls the
experimenter, and is assumed to have a direct effect on the variable of dependent. ... The dependent
variable is the variable being tested and calculated in an experiment and is 'dependent' on the
variable that is independent.

In my research independent variable are Economic Reconstruction after Independence of

Bangladesh (CRIB), and Economic Policy and Planning of Bangladesh (EPPB), Government
Budget Process of Bangladesh (GBPB), Institutional Framework of Bangladesh (IFB), Legal
Framework of Bangladesh (LFB), Budget Making Process of Bangladesh (BMPB), MTBF:
Different Stages of preparation in budget of Bangladesh (MTBF), Ministry of Finance (MOF),
Parliament House (PH), Investigators (IN) as independent variables

4.2 Economic Reconstruction after Independence

Eight to ten million people escaped to India and got back to autonomous Bangladesh by 1972. The
new country had not many experienced business visionaries, directors, managers, architects, or
specialists. India submitted US$232 million in guide to Bangladesh between December 1971 and
January 1972. Biggest single component in Indian guide was 900,000 tons of food grains. The
U.S. and the World Bank from there on became driving unfamiliar guide givers, writes Bhagwat.
The World Bank coordinated a consortium of 26 global monetary organizations and unfamiliar
governments keen on helping Bangladesh's turn of events. Bhagwat: The monetary circumstance
confronting Bangladesh as it arose out of the conflict of freedom in 1971 remembered the most
noteworthy country populace thickness for the whole world, he writes. The conflict of autonomy
had disabled the transportation framework. Many street and railroad spans had been annihilated or

36
harmed. Money Clergyman Tajuddin Ahmad presents to the country today the primary financial
plan of Bangladesh. The absolute size of the public financial plan is Take 786 crores. He calls
upon individuals to set themselves up to continuously bear the expense of advancement and to put
together it with respect to the nation's own assets.

4.3 Economic Policy and Planning

After West Pakistani proprietors of modern endeavors escaped in 1971, the public authority of
Bangladesh held onto their plants as deserted properties. It was the base of digitalization of PFMS
of Bangladesh although that time everything was manual. The primary government foundation
liable for organizing public recovery and improvement was the Arranging Commission. The wide
targets of the Third Five-Year Plan were to decrease destitution, cut down the pace of populace
development to 1.8 percent yearly, increment trades by 5.9 percent and homegrown reserve funds
by 10%. The economy slowly got back to the levels of the last part of the 1960s, yet it was still
among the world's most unfortunate and least created nations. Unfamiliar responsibilities in the
early and mid-1980s were around. The Second Five-year Plan (1981-85) and the Third five-year
plan (1985-90) put the arranging interaction in the groove again.

4.4 Government Budget Process

Concept of budget

A spending plan (from old French baguette, tote) is a monetary arrangement and a rundown of
every arranged cost and incomes.

An administration financial plan is an authoritative report that is regularly passed by the governing
body, and endorsed by the president.

The two essential components: Incomes and Costs.

Incomes are gotten essentially from charges and non-charge income. Government costs remember
spending for ebb and flow products and enterprises, which market analysts call government
utilization; government speculation uses like foundation venture or examination use; and move
installments like joblessness or retirement benefits, Social Wellbeing nets. Because of modern
public financial management system of Bangladesh our income is increase from previous.
Government develop the system of collecting VAT, TAX and other income sources. Below I

37
compared balance of trade between Bangladesh and Pakistan. It shows how much difference
between two countries. We know we are always negative balance of trade that means we import
more than export Pakistan also same but our situation is better than them.

4.5 Institutional Framework

Ministry of Finance mainly responsible to prepare and place the budget before the parliament. It
is most important independent variable to develop the PFM system into digitalization. Three
divisions involved to made our PMS system up to date. We know everything was manual in our
PFM system but need to compare the modern world so we had to change our system also.

Finance Division
Economic Relations Division
Internal Resources Division (National Board of Revenue)

Other Ministries/Agencies:

Planning Commission
Line Ministry/Division/ Agencies

4.6 Legal Framework

Legal framework of a country is more important to good manage a PFM system that’s why
different time we made different rules and regulation for our system development. Among those
the public moneys and budget management act,2009 is most crucial for digitalization of our public
financial management system.

38
 Constitution of Bangladesh, 1972 (Ch.II, Legislative and Financial Procedure, Article
80-92, 87-Annual Financial statement)
Rules of Procedure of Parliament of the People’s Republic of Bangladesh 1973 (Rule-
111-127)
General Financial Rules, 1951, updated 1998 (Budget, Grants and Appropriations)
Preparation of the Budget (Secretariat Instruction, 1976 updated 2008)
The Public Moneys & Budget Management Act, 2009

4.7 Budget Making Process

It is the vital element of PFM system and sound budget allocation depend on it. To digitalization
of PFM system below MTBF and other long term budget was liabled.

Bangladesh started implementing MTBF in 2004-05 and completed over 5 years.

At the helm is the BMRC (Budget Monitoring and Resource Committee)
Headed by the Minister for Finance and performs the functions of co-ordination of the
overall resources and expenditure programmers of the government;
Finalizes the estimates of domestic resources. After determination of requirements for the
non-development budget, the remaining internal resources are set aside for the
development budget.

4.8 MTBF: Different Stages of preparation

Below are the different stages of budget preparation of digitalization of PFM system that keep the
system up to date.

Firstly, Finance Division issue BC-1 with Preliminary Indicative Expenditure Ceiling for
each Line Ministry
Secondly, Line Ministry prepare Ministry Budget Framework (MBF) with the help of
departments/agencies (up to district level)
Thirdly, Finance Division and Planning Commission jointly review and finalize agreed
Budget numbers and MBFs
Fourthly, Finance Division issue Budget Circular-2 with Ministry-wise Indicative
Expenditure Ceilings

39
 Fifthly the estimates are reviewed and finalized by FD
Finally, Budget is presented to the Parliament

4.9 Core Budget Documents Placed before the parliament

Budget Speech of the Finance Minister

Budget in Brief
Annual Financial Statement
Supplementary Budget (Additional demand for grants for the ongoing year)
Combined Demand for Grants
Consolidated Fund Receipt
Medium Term Budget Framework
Detailed Budget
Annual Development Program(ADP)
Bangladesh Economic Review

4.10 Ministry of Finance

The Service of Account is a service of Bangladesh. The service is answerable for state money,
including the state spending plan, tax assessment and financial arrangement in Bangladesh. It is
driven by the Money Clergyman of Bangladesh. The division should answer to the Parliament of
Bangladesh. MoF is main guardian of PFM system of a country as our MoF is now totally
digitalized. It contains four divisions:

Money Division
Monetary Relations Division
Interior Assets Division
Bank and Monetary Establishments Division

Finance Division

It is a Bangladesh government division under the Ministry of Finance responsible for controlling
government expenditure and budget.

Economic Relations Division

40
The Monetary Relations Division (ERD) is one of the four divisions of the Service of Account, of
the Public authority of Individuals' Republic of Bangladesh. The other three divisions of the
Service of Account are: Money Division, Bank and Monetary Organizations Division, and Interior
Assets Division.

Internal Resources Division

Inner Assets Division is a Bangladesh government division under the Service of Money
answerable for administering income assortment in Bangladesh.

Bank and Financial Institutions Division

Bank and Monetary Foundations Division is a Bangladesh government division under the Service
of Money liable for dealing with all state claimed banks, monetary establishments, and stock
exchanges

4.11 Other factors that influence the public financial management system in
Bangladesh

Taxes of Bangladesh

Income tax: The historical backdrop of personal duty in Bangladesh traces all the way back to
1860 when it was presented by the English Raj under the title Annual Assessment Act. From that
point forward different changes have occurred.

Value added tax: The standard pace of Tank is 15% demanded on exchange estimation of a large
portion of the imports and supplies of products and ventures.

Corporate tax rate: Cigarette makers, banks and insurance agencies are all affected by the law.
The law goes into effect covering the whole area from May through September. It covers the area
from the 24-hour area to the area with the greatest area of the United States. The area is not the
same as the US as the UK; it's the U.S. and it's a state. It's the area that is trying to catch up with a
nation that has lost its way in a major earthquake or tsunami. For instance, the law covers the
region from May to September with the area losing its main source of electricity for the first time
in over a year. The state is also trying to regain its lost tax revenue. It may be the case that the area
loses its tax revenue for a total of $1 billion.

41
National Board of Revenue: The Public Leading body of Income (NBR) is the focal expert for
charge organization in Bangladesh. Officially, it is the joined office to the Inner Assets Division
(IRD) of the Service of Money (MoF) Under the general control of IRD, NBR oversees the extract,
Tank, customs and personal duty administrations. NBR is answerable for the detailing and
persistent re-evaluation of assessment approaches and duty laws in Bangladesh. NBR is made up
of 3434 officials of different evaluations and 10195 supporting staff positions. The primary
obligation is to activate homegrown assets through the assortment of import obligations and
assessments.

Bangladesh Government Revenue: Government Revenues refer to all receipts the government
gets, including taxes, custom duties, revenue from state-owned enterprises, capital revenues and
foreign aid. Government Revenues are part of government budget balance calculation. Collection
of revenue system is also part of PFMS so its improvement effects the whole system. Beside I did
the comparison between two countries about revenues such as Bangladesh with Pakistan that
represent different year different amount of revenue collection by the both country but we are the
Bangladesh government has more revenue than Pakistan.

Bangladesh Government Spending: Government Spending refers to public expenditure on goods

and services and is a major component of the GDP. Government spending policies like setting up
budget targets, adjusting taxation, increasing public expenditure and public works are very
effective tools in influencing economic growth. Comparison of spending is pretty different than
revenue. Here we can see, spending of Pakistan is more than the Bangladesh but in 2019 was
opposite scenario.

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Fees and Charges of Bangladesh government:

There are different sorts of expenses and charges that identify with exchange (both import and
fare) exercises. Nonetheless, such expenses and charges are not forced or gathered by a solitary
organization (for example Customs), as these fall under the purview of various boundary
offices/GoB offices associated with exchange related exercises.

Bangladesh Government Debt to GDP: For the most part, Government obligation as a percent
of Gross domestic product is utilized by financial backers to gauge a country capacity to make
future installments on its obligation, in this manner influencing the nation getting expenses and
government security yields. Day by day our debt to GDP is decreasing that’s means we are
becoming stronger to manage our own budgetary system by own finance so it is best sign for our
country as well as budgetary system. In 2002 our debt to GDP was 50 crores but it now 31.7 crore
so we are now becoming the more self-financer. We are making our largest project like Padma
Bridge, Flyover, Highways, and so on in our own funds.

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 Chapter-5
Analysis and Findings
5.0 Descriptive statistics
Public financial management system is a complex and bureaucratic procedure which involve
various sector of a country. In context of Bangladesh it is a more challenging task to implement
by successfully. We know Bangladesh is under developing country with its hundreds problem like
corruptions, miss use of law, unemployed problem and so on. As a result, Bangladesh is very low
to improve or digitalization of public financial management system. Now world is going to turn
into a modern era, according to the modern era Bangladesh is also have to turn into itself
modernization as soon as possible. Bangladesh is also trying to move to the digitalization it’s all
sectors, private sectors is moving fast to the digitalization but public sector is not. In this thesis
paper I tried to find out the whole system of changes of public financial management system in
Bangladesh and impact of COVID-19 on PFMS of Bangladesh. That’s why I had to look into the
government budget system of Bangladesh from 1972 to today. To complete my thesis, I took some
independent variable and tried to find out the relationship between dependent variables through
the method of correlation analysis, regression analysis, diagrams, charts, historical data etc. In the
previous our PFMS was manual system now it is follow the computerized system, after 2012
present government of Bangladesh took many program to reform the PMS of Bangladesh, first
reform program was 2016 to 2020 and present reform program is 2021 to 2023. In this thesis I
wanted to compared with country like India, Pakistan to our PMS that changes how many and
whose PMS is more effective to successfully implementation. Here I mentioned Various variable
that directly and indirectly influence the PMS like revenue and expenditures, deficit or surplus
information, Balance of trade and so on. Besides I showed the budget allocation and what factors
depend on the budget allocation. And lastly, I tried to give the snapshot of the impact of COVID-
19 on PFMS of Bangladesh that changes the system. Moreover, I tried to explore every individual’s
participation and procedure that helping our PFMS of Bangladesh into modernization and different
steps that took government to sustain in pandemic situation. PFM has been a foundation of
Bangladesh's administration changes. The 2016-2021 Bangladesh's PFM change methodology is
an achievement for the Public authority of Bangladesh.

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5.1 Impact of COVID-19 on public Financial management system in Bangladesh

Bangladesh is one of the world's quickest developing economies. The nation has sought after trade
situated industrialization. The monetary area of Bangladesh is the third biggest in the Indian
subcontinent. Bangladesh is deliberately significant for the economies of Nepal and Bhutan, as
Bangladeshi seaports give sea admittance to these landlocked districts and countries. China sees
Bangladesh as an expected entryway for its landlocked southwest, including Tibet, Sichuan and
Yunnan. Starting at 2020, Bangladesh's Gross domestic product per capita pay is assessed
according to the IMF information at US$5739 (PPP) and US$2064 (nominal) in PPPP. The
economy faces difficulties of the country's developing data innovation area. The public authority
advances the Computerized Bangladesh conspire as a feature of its endeavors to build up the
nation's developing Data innovation area. The country has a population of more than 250 million
people. It is ranked 35th in the world in terms of population and 30th by buying power equality.
The Coronavirus pandemic has uncovered the separation points of the country's delicate medical
services framework. Taking off quantities of diseases will prompt driving millions into destitution.
The reposed lockdowns will additionally debilitate the economy. Shortcomings in family
utilization, business venture and profitability are presently plainly noticeable and these key
variables are currently keeping down monetary development. Just unqualified money move
relating to the lowest pay permitted by law can improve their monetary difficulty. The emergency
has by and by uncovered the weaknesses and disparities characteristic in the current improvement
model sought after by Bangladesh. The government seems to have felt certain enough in getting
the full handle of the pandemic emergency and its monetary and monetary results empowering it
to introduce the financial plan. In a particularly financial climate setting macroeconomic
boundaries can be exceptionally difficult. The effect of Coronavirus has caused the spending plan
greater in size this monetary year. The spending shortage remains at TK 190,000 crore representing
6% of Gross domestic product. The nation is presently reeling under extreme negative financial
and social effect emerging from the pandemic. A 'Angular' recuperation is generally improbable,
writes Ravi Agrawal. The government has no option other than mounting the required financial
reaction to the approaching monetary emergency brought about by the Pandemic. The country
needs to spend more as joblessness rises and yield further decays, he says. The report also gives
various key strategy activities to manage the negative monetary aftermaths. They incorporate
debilitating extravagance consumptions and focusing on open use to make occupations, says

45
Agrawat. The account serve carried out the spending. plan with an expense of to 568,000. crore
for the monetary year 2020-21. In Bangladesh spending shortage is financed through getting from
inward and outer sources, unfamiliar awards and bonds. George Soros has recommended a simple
way out for the European Association (EU) to escape the current emergency by selling 'ceaseless
bonds' on which the chief doesn't need to be reimbursed. The Soros Worldview of Monetary
Shortage Financing will just include Bangladesh Bank to purchase government obligation identical
to the spending shortage needed to react to the pandemic emergency and afterward discount that.
For an exchange subordinate nation like Bangladesh, this can help swelling extensively. The
account serve called attention to that the public authority would expand cash supply while
moderating any inflationary tension on the economy. The financial shortfalls can broaden the
current record shortage and push up loan fees. The country doesn't have profound and fluid security
markets, making it rather not compelling. For Bangladesh, it is a crucial time for the economy.
Financial recuperation is probably going to be a since quite a while ago moved interaction to return
to where the economy was before the emergency. What makes a difference isn't what amount is
acquired, but how and where it is spent. Assuming there is something to show for shortage
spending, there is a case for public getting. At this basic point on schedule, that will require keeping
the financial improvement going until recuperating is guaranteed. Whenever mission is cultivated,
it very well may be moved back. The test will be at one time the infection is managed, to speed up
comprehensive development in the Recuperation stage. The most noticeably terrible
apprehensions for agricultural nations like Bangladesh have not yet been figured out. The IMF and
the WB conjectures are right, the cycle of Recuperation will require some investment, yet the most
noticeably bad.

Overview Actual Q2 Q3 Q4 Q1 2022

GDP Annual Growth Rate (%) 5.20 4.5 4.5 4.5 4.5 7.5
Unemployment Rate (%) 5.30 6 6 6 5.4 5.4
Inflation Rate (%) 5.32 6.5 3.5 5.5 5.3 5.5
Interest Rate (%) 4.75 4.75 4.75 4.75 5 5.5
Balance of Trade (BDT -181.80 -80 -90 -160 -160 -110
Billion)

46
 Current Account (USD 3534.00 -750 -350 -550 -550 -550
Million)
Current Account to GDP (%) -1.50 -1.5 -1.5 -1.5 -1.5 -1.5
Government Debt to GDP (%) 31.70 35.1 35.1 35.1 35.1 36.5
Government Budget (% of -5.35 -7 -7 -7 -7 -7.5
GDP)
Corporate Tax Rate (%) 25.00 25 25 25 25 25
Personal Income Tax Rate (%) 30.00 30 30 30 30 30

5.1.1 Impact on Economy

Almost 13% of individuals have gotten jobless, being ladies in casual business almost certain than
men to see their functioning hours reduced. The pandemic has negatively affected practically all
areas of the economy. An expected 1,000,000 piece of clothing laborers, or one-fourth of the labor
force, were laid off due to declining orders for export. PM Sheik Hasina declared an upgrade
bundle adding up to some US$8bn on 5 April. The upgrade bundle is worth an estimated $8bn
according to PM Hasina. The world's largest economy has seen a decrease of fares by 16.93 percent
and imports by 17%.

5.1.2 Impact on Education

Bangladesh has roughly 200,000 instructive establishments the nation over and more than 40
million students. In Spring, Bangladesh shut the entirety of its instructive organizations to diminish
the spread of Coronavirus. Leader Sheik Hasina declared that they could stay shut until September
2020, except if the circumstance improves. The HSC tests, which were booked to be booked to
held in April 2020, were delayed indefinitely. Some training specialists needed every one of the
instructive establishment of Bangladesh shut until November. Others needed every one of the
instructive foundations in the nation to resume by October. They said that the entirety of the
schools will return just if the Covid-19 bend smoothest or decreases.

5.1.3 Impact on Transportation

Bangladesh suspended all flights, both homegrown and global, to deal with the spread of the
infection. At first non-stop trips to the UK and China were excluded from the flight suspensions.

47
The UK was suspended in April also making China the sole exception. Worldwide flights
continued from Dhaka air terminal on 16 June 2020. Show of a Coronavirus negative testament
got compulsory for all Bangladeshi nationals wishing to travel abroad from 23 July 2020.

5.1.4 Impact on Migrant workers

It is imagined that around ten million Bangladeshis work abroad. A huge number of these
specialists have been compelled to get back to Bangladesh, to a great extent on account of
occupation lay-offs. Kuwait has proposed a bill which would see 200,000 of the 350,000
Bangladeshi laborers there constrained to leave the Bay state.

5.1.5 Impact on Rohingya refugees

At the hour of the pandemic Bangladesh was lodging over 1,000,000 Rohingya outcasts in
displaced person camps in Cox's Bazar. One out of ten families in the camps were accounted for
to have at any rate one individual over the age of five with an ongoing ailment or incapacity.
Starting at 23 June 2020, 46 Rohingya evacuees had tried positive for the infection and five
passing’s had been confirmed. An examination by Save the Kids and other did in May 2020 tracked
down that 40% of Rohingya youngsters in the Camps communicated being frightened of kicking
the bucket of the infection or losing friends and family to it. There are worries that Coronavirus
could be decimating for old Rohingya displaced people, especially as in June 2019 Acquittal
Worldwide had detailed that more established Rohingya refugees are frequently being abandoned
in the compassionate reaction efforts.

5.2 Findings

The following findings were discovered throughout the study-

There are three general remove exercises from the execution of the 2007-12 PFM change
methodology that would contend for more noteworthy concentration and doing less things
yet upgrading completeness in this system. The exercises show that: (a) getting across
numerous fronts at the same time is unavoidably painfully slow in the Bangladesh climate;
(b) the absence of spotlight on couple of needs has left a portion of the more principal PFM
changes ―incomplete‖; and (c) the specialized obligation to change in certain units and

48
divisions in organizations might be vital yet isn't probably going to be adequate for
exhaustive changes to be carried out across all organizations.
A few restrictions in the pre-2007 changes were seen during the arrangement of the 2007-
12 system. The 2016-21 procedure is in this manner expected to zero in on substantial and
achievable specialized arrangements. On a very basic level the institutional construction
inside the public authority has not changed. The Yearly Advancement Program keeps on
being neutral with the MTBF interaction. The more profound commitment in spending the
board undertakings is still an issue for PFM rehearses. The PFM technique should address
the climate for change to the extent that this should be possible.
Political interest in PFM changes to prepare charges has become over in ongoing years.
The new PFM change technique is quick to mirror the issues that have solid issues. A lot
more grounded for charge preparation.
The project neglected to acquire support from the Arranging Commission. A key to
effective PFM change, hence, lies in getting high level political support. The 2007 PFM
Change System takes note of the need to build up more extensive possession by
Administration of any PFM measure.
Gaining from "what works and what doesn't" is an on-going cycle and will require the PFM
technique 2016-21 to be adaptable to increase activities that are working. Understanding
the specialized and institutional protections is a decent beginning stage, yet this likewise
needs to keep on being observed during execution.
Political responsibility and country responsibility for PFM changes are basic. Champions
are required at all levels to lead the execution at those levels. Backing is regularly required
from the more extensive political initiative if the changes are to be effectively executed.
PFM changes should be driven by the need advancement consequences of government.
The PFM framework contains a more extensive scope of various segments, and there is a
peril that PFM change plans become over-burden with many exercises and activities. On
account of the need to first get the fundamentals right‖ prior to moving to more intricate
PFM changes. For instance, Monetary Administration southwestern data Frameworks
(FMIS) changes are unpredictable and require center around building the building the limit
of organizations, frameworks and community workers.

49
 The PFM Change measure has a two-level administration structure containing a
Controlling Advisory group (SC) and a Program Execution and Coordination Group
(PECT) The Directing Council will involve senior agents from significant spending
services, Bureau Division, Public Leading group of Income, Evaluator General and others.
The PECT will comprise of at any rate six individuals.
Bangladesh is perhaps the most over populated on the planet with an expected 165 million
individuals. PFM viability has likewise been testing. Different tasks were embraced that
just incompletely accomplished their destinations.
In a climate like Bangladesh, specialized arrangements should be supplemented by non-
specialized exercises to satisfactorily carry out changes. Specialized specialists can help
plan country customized proposition based on practical evaluations and prerequisites
which can give the ground to more noteworthy advancement. However, there will be
numerous non- specialized difficulties like the requirement for significant level political
help.
Lack of transparency in the public financial management system in Bangladesh.

5.3 Recommendations

While the procedure planned is actually exceptionally stable, insight from past change
endeavors have shown that this is inadequate in itself to prompt fruitful PFM change.
So past history is main element to develop the current PMS.
Task groups ought to talk about the planning measure with the service and the
executing office to ensure that task financing from government and ADB reserves is
remembered for the ADP.
Reasonable measures ought to be incorporated during project arrangement to guarantee
that the project has satisfactory limit with regards to planning and for reserve checking
and detailing.
The execution of iBAS++, which receives this arrangement of spending grouping up
to field or pay point level, is in progress. When it is appointed, project groups should
make sure that iBAS++ joins project financial plan what's more, financing
distributions, and that project the executives staff have adequate abilities and ability to
utilize iBAS++

50
iBAS++ execution will robotize planning and bookkeeping measures. During project
evaluation, project groups should see to it that project the board units utilize the full
usefulness of iBAS++
An online framework should be set up to the upazila level with the goal that information
passage can be made online. Project groups ought to plan reasonable measures to
guarantee that project financial plans and uses are recorded.
Task groups ought to talk about and plan plan game plans to restrict admittance to the
bookkeeping. The plan would also set up approval controls on changing passages.
An inner control or review unit in each spending unit is an unquestionable requirement.
Venture groups ought to have an activity plan for carrying out a well-working inner
control unit.
This is an arrangement issue including the CAG, the CGA, and heads of services.
Current arrangements of acts and rules don't give freedoms to tackle this issue. These
demonstrations and rules should be reexamined to explain CAO responsibility and
obligation.
A limit building methodology should be received to make accessible an enormous
gathering of workers. A different limit building pool can be set up midway.
The updated Review Act gives managerial and monetary freedom to the CAG. The
public authority should take steps to pass the demonstration in Parliament.
Limit, coordination’s backing, and human assets ought to be expanded depending on
the situation so that the CAG can carry out its key guidelines. As of late, a few change
exercises and activities have occurred, yet those exercises have now and again been
disturbed.
Venture groups ought to require executing organizations to determine review
discoveries and issues inside a concurred time span, during the preparing of new
projects and the execution of existing projects.
The Service of Money will assume a fundamental part in bringing all the extra
budgetary units and associations under a similar PFM structure. ADB may consider
giving help and support for changes in the PFM.
Guarantee harmonization and citizen information sharing across the NBR, Survey and
refine new direct duty law (Medium Term)

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Strengthen and operationalize the macroeconomic model and database, build capacity
and produce fiscal risk matrix for presentation to Coordination Council.
Grow new fit monetary detailing structure and arrangements for SOEs, get ready SOE
law and guidelines manual and think about creating extensive legitimate system, build
up an operational procedure dependent on the medium term obligation methodology.
Harmonize budget timetables for the development and revenue budgets by having a
joint Planning Commission-Finance Division budget circular.
Review the stock of development projects and IMED ‘s list of low-performing projects
and take actions, establish PIM Unit in Programming Division.
Conduct an assessment of local government PFM systems and identify the areas for
strengthening and reform.
Enhance training and professional capacity to conduct more ISSAI-compliant audit,
and roll out ISSAI compliant audits, organizational restructuring of OCAG.
Should improve timeliness and public availability of audited financial statements
(Appropriation Accounts and Finance Accounts).
Adopt mechanisms to ensure timely responses to PAC recommendations, and provide
easily accessible and comprehendible data for the public.
Should strengthen capacity of staff and technical support to committees.
Adopt and implement plan for full implementation of iBAS ++ to all
ministries/divisions, directorates, DDOs up to Upazila level and SAEs.
Integrate the employee and pension databases with IBAS++, ensure timely payment of
beneficiaries.
Adopt and implement the new budget and accounts code.
Develop a change management plan.
2021-2022 budget should be for the poor people budget.
To address the wellbeing crises of Coronavirus, the public authority should seek after
an expansionary financial approach. The spending plan for FY2021-22 should go for
extended public use.

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Conclusion

The public financial management system reports the country's budgetary organization systems
covering basically the zones of planning, saves stream, accounting and itemizing, and inspecting
structures. This report additionally gives pieces of information into the nature of inside control
systems, staffing resource limit, and information development structure. The point is to supply
broaden groups and experts with far off better much better higher a more grounded an improved
more grounded comprehension of budgetary organization structures to advance the nature of
money related organization assessments in the midst of expand plan. Find out how excellent
financial organization examinations reinforce adventures by perceiving key risks and engaging the
execution of appropriate exercises and changes to ease those threats. Public monetary
administration (PFM) changes are a vital segment for advancing the organization and
responsibility in Bangladesh. Much appreciated to past attempts by reformist governments,
Bangladesh is as of now all around put to progress modernize its PFM system, increase government
adequacy, and enable endeavor in extraordinary social and structure adventures. Though reformist
PFM adventures have begun various basic changes, a couple of foundational issues stay to be
tended to. The earlier PFM change experience in Bangladesh centers to the need for a more
noticeable focus on less necessities to effectively advancement the change method. In extension,
there's a need for a convincing change the board way to deal with ensure that changes are
understanding practical PFM issues which improved PFM systems and structures lead to prevalent
advantage movement, open resource organization, and financial turn of events. Bangladesh is
entering this cutting edge phase of PFM changes with three key qualities-The senior authority
perceives the PFM difficulties and what they mean for the open help conveyance and monetary
progression. The exhaustive PFM Change Strategy might be a statement of this affirmation. The
Method not figuratively speaking perceiving the key destinations and objectives of changes yet
too sets out the key principles and approach towards doing these progressions. Bangladesh has
made gigantic endeavors in building generous advantage limit inside the past. These ventures are
not confined to post-advanced educations, capable confirmations, and unfamiliar trainings.

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