Public officers found guilty of misappropriating public funds will face a maximum of 5-year jail sentence.
This is the punishment outlined in the newly passed Public Financial Management Bill, 2016.
Per the Bill, defaulting officials will be liable to a minimum of six months if found guilty under law.
The decision was arrived at by the Members of Parliament after initial disagreements over the minimum and maximum jail terms to be slapped on offenders.
The PFM Bill
The new law repeals the Financial Administration Act of 2003 and its amendment and the Loans Act of 1970.
The law seeks to regulate the financial management of the public sector within a macroeconomic and fiscal framework, as well as define the responsibilities of persons entrusted with the management and control of public funds, assets, liabilities and other resources.
It also seeks to ensure that public funds are sustainable and consistent with the level of public debt and also makes provision for accounting and audit of public funds.
In the medium term, the law is expected to bring about a more efficient, effective and economical use of the resources of the government and contribute to the achievement of national goals.
Seth Terkper defends PFM Bill
Addressing the Legislature to solicit support for the passage of the Bill, Finance Minister, Seth Terkper was hopeful the law will streamline the management of the country’s financial resources.
“The primary need for us is to have an omnibus law that will regulate our public financial management in a better way,” he stated.
Mr. Terkper added that the PFM Bill will also cushion government against the risks associated with public institutions like the State Owned Enterprises (SOEs) and the Ministries, Departments and Agencies (MDAs).
“It is important that we have in our public financial management law best practices in relation to public debts, practices in relation to financing; deficits and enhance further the fiscal risks that often come with quasi fiscal institutions like SOEs and MDAs,” he added.
Observations of Finance Committee
According to Parliament’s Finance Committee, the Bill proposes a significant modification to the funding account structure of government by the establishment of a Treasury Single Account which is a consolidated bank account system for processing all central government receipts and payment transactions.
The treasury single account is a virtual account that gives the Controller a view of all balances held in all government accounts at any point in time.
It is however not a replacement of a Consolidated Fund established under the 1992 Constitution.
The Bill further introduces a debt management office within the Ministry of Finance with the responsibility of handling debt management operations, carrying out risk assessment for government guarantees and supplier credit agreements and placing the feasibility of borrowing requirements within an overall government fiscal strategy.
The Minority in Parliament had raised concerns over the fast pace with which the House was considering the Bill for passage.
They argued that the decision has also been informed by conditions under the IMF’s extended credit facility program.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana