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Cablegate: Imf On Public Finance Management Efforts in Rwanda

VZCZCXYZ0015
PP RUEHWEB

DE RUEHLGB #0935/01 2881211
ZNR UUUUU ZZH
P 151211Z OCT 07
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC PRIORITY 4790
INFO RUEHBS/AMEMBASSY BRUSSELS 0148
RUEHJB/AMEMBASSY BUJUMBURA 0160
RUEHDR/AMEMBASSY DAR ES SALAAM 0969
RUEHKM/AMEMBASSY KAMPALA 1729
RUEHKI/AMEMBASSY KINSHASA 0302
RUEHLO/AMEMBASSY LONDON 0120
RUEHNR/AMEMBASSY NAIROBI 1027
RUEHFR/AMEMBASSY PARIS 0342
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS KIGALI 000935

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN RW
SUBJECT: IMF ON PUBLIC FINANCE MANAGEMENT EFFORTS IN RWANDA

REF: A. KIGALI 743

B. KIGALI 209

1. (SBU) Summary. On October 12 a visiting International
Monetary Fund (IMF) team described for local diplomatic
missions its efforts to assist the Ministry of Finance and
other Rwandan ministries and agencies in improving Public
Finance Management (PFM --the effective and efficient use of
public funds by the government). The team described budget
offices at the Finance Ministry as well as program
implementing ministries and agencies as understaffed and
undertrained, despite being expected to use complicated
financial procedures and a new Organic Budget Law most
officials have never seen and do not understand. Better
coordination between the Auditor General's office, the
Finance Ministry and line ministries, and direct policy
linkages between individual ministry plans and directives
(which are often multi-year initiatives) and the annual
budget process, would improve the effective use of pubic
funds. According to the team, small concrete steps would do
much to improve PFM in Rwanda. End summary.

2. (SBU) Mission officers attended the October 12 briefing
by a visiting two-person IMF team at the local IMF offices.
The visiting team described a financial management system
that was overly complicated for Rwanda's needs, and operated
by small staffs who lacked proper training and oversight.
For example, the team said, line ministries typically had
only two PFM officers, an accountant and a budget execution
officer, to oversee large public programs with extensive
expenditures. The officers usually had only limited
qualifications for their duties. The Ministry of Finance and
the Auditor General's Office typically had staff assigned to
each line ministry, but they too lacked proper training, and
had limited linkages with their home offices.

3. (SBU) According to the team, the recently passed Organic
Budget Law was a solid piece of legislation, but was little
understood by those expected to implement it. A complicated
set of financial procedures further compounded the
difficulties these under-trained officers faced in carrying
out their legally prescribed duties. Said one IMF staff
member, regarding the four volumes of financial procedures,
"they are too long, and almost no one has been properly
trained in their use. They are fine for London or
Washington, but Kigali needs a simpler set of regulations."
The team noted that the Government of Rwanda's (GOR)
extensive decentralization plans put added pressure on
district budget offices, who had even less training and
smaller staffs to contend with increasing financial
responsibilities. (Note: last October a report by the
Auditor General expressed considerable concern at the lack of
proper documentation and auditing of the use of public funds
-- see ref B. The Prosecutor General this spring launched a
broad probe of 46 government entities, with several criminal
prosecutions begun, and some offices cleared of any
wrongdoing -- see ref A. End Note).

4. (SBU) The IMF team offered a series of small concrete
steps toward better PFM, including revised and simplified
financial regulations, focused training in those simplified
procedures, better coordination between the Auditor General's
Office, the Ministry of Finance, and line ministries, better
integration of line ministries plans (often multi-year) and
the annual budget cycle managed by the Ministry of Finance,
and more staff with higher qualifications. They described
Rwandan budget staff at various ministries and agencies as
"willing and enthusiastic," and noted these modest
improvements would be of "enormous" help to them. The IMF
team had formally presented these proposals to the Minister
of Finance, said the team, and the Minister had agreed with
many of them. At the conclusion of the meeting, the
assembled diplomatic missions agreed upon an informal
"policy" group of economic officers to track GOR efforts to
improve PFM.

5. (SBU) Comment. This IMF effort, coupled with assistance
from the European Union and other missions (ref A), are the
soft hand of advice and training, as an accompaniment to the
formal criticism of the Auditor General and indictments by
the Prosecutor General. Better training, better procedures,
and more staff should mean less errors and less temptation to
stray by government officers. End comment.


SIM

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