ESV Project Preparation Mission

The Central Harmonisation Unit (CHU) at the Ministry of Finance of Georgia is since 2015 tasked to introduce and implement a modern system for Public Internal Financial Control (PIFC) at all levels of government. The PIFC reform aims to replace the traditional national control system in favour of one based on principles of economy, transparency efficiency and effectiveness in relation to managing and controlling public funds. Central to PIFC are the concepts of managerial accountability and functionally independent decentralised internal audit. The CHU has been successful in putting in place the decentralised internal audit function. In 2019 CHU approached the Swedish National Financial Management Authority (Ekonomistyrningsverket, ESV) with a request to establish a partnership to address the second leg of the PIFC reform: a modern Financial Management and Control (FMC) system. This implies a further shift away from the traditional centralized management system to allow for improved managerial accountability. It is an important element towards increased decentralisation and deconcentration and is included in the Public Finance Management (PFM) reform and the overall Public Administration Reform (PAR) of Georgia. The objective is that each public manager should be responsible for establishing and maintaining adequate financial management and control (FMC) systems to carry out the tasks of planning, programming, budgeting, accounting, controlling, reporting, archiving and monitoring. In October 2019 two experts from ESV conducted, with financial support from Sida, a scoping mission with the aim of a) getting a better understanding of the systems for financial management as well as the status of the Public Internal Financial Control reform in Georgia; and b) get to know the potential future partner organisation and learn more about their actual needs and gaps where ESV may provide support. The ESV scoping mission produced a substantive report on the state of financial management system in Georgia and outlined possible areas of support the ESV could offer to Georgian partners. The report described the steps towards a fully developed Project proposal. Furthermore it stressed the need for a special design phase where ESV and CHU would jointly prepare a project proposal to be presented to Sida ESV and CHU will conduct a set of analytical, consultation and scoping activities resulting in a project proposal that shall be submitted to Sida for possible financial support. To achieve this aim, ESV will conduct two missions in Georgia in January and February 2020. Apart of the missions both parties will actively work through skype and other means to ensure that the proposal reflects a consensus and commitment between the two parties. It is expected that the proposal will be ready and submitted to the Embassy of Sweden in Tbilisi no later than by the end of April 2020.