[{"bbox": [126, 117, 1103, 180], "category": "Text", "text": "guidelines for Parastatals and State owned enterprises were published¹² but implementation is still\npending¹³."}, {"bbox": [126, 191, 1103, 537], "category": "Text", "text": "In addition, and similar to many other countries, **payroll and pension management** constitute\nmajor risk areas. A payroll systems audit conducted in 2015 identified systemic weaknesses in\npayroll management¹⁴. It has been reported that recommendations were implemented but the\nintegrity of the payroll data base is still a challenge. In addition, the long pending interface between\nthe payroll and the accounting system has finally been piloted in 2017, revealing further work to\nbe undertaken. Similarly, the decentralisation of the payroll to 6 pilot sites needs further roll out to\nall districts. With regards to **pension's management**, it is still handled manually with no recourse\nto systematic control mechanisms. The current level of defined public pension benefits is not\nsustainable¹⁵. Thus, internal control processes, particularly for payroll and pension management,\nshould be improved and institutionalised to effectively exercise control over the biggest budget\nitems (~30% of the budget). In addition, pension reforms should be implemented to increase the\nsustainability of pension liabilities."}, {"bbox": [126, 549, 1103, 1014], "category": "Text", "text": "A general underlying challenge, where little progress has been made, is **limited accountability by civil servants**, demonstrated by a culture of laissez-faire and hesitation to act on malpractice. Hence, the perceived 'inability' to enforce disciplinary measures becomes an invisible boundary to these challenges and in general to PFM reform implementation. Although structures are mostly in place to hold offenders to account, their effectiveness is limited or non-existent. Offenders find ways to frustrate any effort to implement disciplinary measures or prosecution through open-ended processes of legal arguments and counter arguments which, in the meantime, prevents any action being taken against presumed fraudsters. In addition, there are cases of in-action due to political interference. Finally, one of the major stumbling blocks identified in past PFM reform efforts was reforms in appearance only. Although laws have been changed, guidelines written, trainings delivered and workshops held, these activities have had limited impact on the actual processes and systems. Hence, it is important to focus on actively **managing change** to affect behaviour but also to manage the triangle tension between 'what is needed', 'what is implementable' and what is 'politically desirable'¹⁶. A recent WB report confirms this approach and points to guiding principles regarding reform processes: think not only about 'form' but also about 'function' and consider 'power asymmetries' to identify implementable policies¹⁷."}, {"bbox": [126, 1024, 1103, 1373], "category": "Text", "text": "Supporting the 'supply-side' of **domestic accountability** needs to be accompanied by support to the 'demand-side'. Malawi enjoys a vocal civil society landscape and the media is relatively free to operate, often acting as 'whistle blowers'. This is a precious asset the country enjoys, not to be taken for granted, and should be continuously supported but, in the past, CSOs have mainly gathered anecdotal evidence which alone cannot serve as analysis for decision making. Hence, there is a need to move the collated evidence from the local level up to the analysis at the broader level to serve as evidence in the decision-making process. Further, discussions around the gathered evidence have been characterised mainly by highly localised debates, rarely moving beyond the districts. In addition, Malawi lacks a critical mass in terms of professional staff trained in public financial management. Tertiary institutions do not have adequate programmes in this field. Hence, the country would benefit from enhanced PFM training in tertiary education in order to develop a corps of specialised PFM practitioners."}, {"bbox": [126, 1433, 937, 1456], "category": "Footnote", "text": "¹² http://www.ecgi.org/codes/documents/sector_guidelines_parastatal_soe_malawi_3feb2011_en.pdf"}, {"bbox": [126, 1453, 1102, 1499], "category": "Footnote", "text": "¹³ At the time of writing, the FY 2017/18 budget is severely affected by a large bailout of the Agricultural Development and Marketing Corporation (ADMARC), to the tune of about USD 30 million."}, {"bbox": [126, 1497, 1102, 1543], "category": "Footnote", "text": "¹⁴ Including the manipulation of the payroll system resulting in e.g. double payments, continuous leave allowances, salary arrears and over-payments to staff, etc., 'HRMIS and payroll systems audit, NAO 2015."}, {"bbox": [126, 1540, 489, 1564], "category": "Footnote", "text": "¹⁵ IMF ninth review, July 2017, page 50."}, {"bbox": [126, 1562, 735, 1585], "category": "Footnote", "text": "¹⁶ Guidance note on Sequencing PFM reforms, Jack Diamond, July 2012."}, {"bbox": [126, 1583, 753, 1629], "category": "Footnote", "text": "¹⁷ World Development Report: Governance and the law, World Bank, 2017:\nhttp://www.worldbank.org/en/publication/wdr2017."}, {"bbox": [608, 1667, 622, 1687], "category": "Page-footer", "text": "7"}]