Pefa 2018 Mid Year Report

PEFA
Public Expenditure and Financial Accountability
2018 PEFA MID-YEAR REPORT FOR

PFM REFORMS IMPLEMENTATION &
MONITORING
30th June 2018

Table of Contents
ACRONYMS ......................................................................................................................................... 2
Purpose.................................................................................................................................................. 4
Methodology in Monitoring .................................................................................................................. 4
Structure of Reporting ......................................................................................................................... 5
Executive Summary ............................................................................................................................. 8
OUTCOME 1: AGGREGATE FISCAL STRATEGY................................................................ 10
A. Macroeconomic Management .............................................................................................. 10
1. Department of Treasury.................................................................................................... 155
B. Revenue Planning, Budgeting, Administration and Management .................................. 36
2. Internal Revenue Commission ......................................................................................... 39
3. PNG Customs Service ……………………………………………………………………………………………………….. 47
DEPARTMENT OF FINANCE (Non Tax Revenue Division) ................................................ 55

C. Macroeconomic Statistics ................................................................................................. 61
4. National Statistical Office .................................................................................................. 64
OUTCOME 2: STRATEGIC ALLOCATION OF RESOURCES ............................................ 68
D. Public Financial Management .......................................................................................... 68
5. Department of Finance............................................................................................................ 73
6. Department of National Planning and Monitoring ........................................................... 119
SCHEDULE 3: DEPARTME NT OF NATIONAL PLANN NING AND MONITORING ..... 122
7. DEPARTMENT OF PERSON NEL MAANGEMENT ............................................................ 126
8. Central Supply and Tenders Board ............................................................................... 140
9. Office of the Auditor General .......................................................................................... 145
OUTCOME 3: EFFICIENT SERVICE DELIVERY................................................................. 154
E. Performance of Public Service Against Service Delivery............................................... 154
10. National Economic and Fiscal Commission ............................................................... 155
SCHEDULE 3: NATIONAL ECONOMIC FISCAL COMM ISSION ....................................... 155
DETAILED PROGRESS IVE REPORT YEAR-T O-DATE BY DIVISION /PRO GRAM ..... 157
11. Department of Provincial and Local Level Government Affairs................................ 159
12. National Department of Health ..................................................................................... 163
13. National Department of Education ............................................................................... 167
F. Summary of Donor Support to PFM ..................................................................................... 171
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Department of Finance-PFM Reform Implementation and Monitoring Mid- Year Report-2018
ACRONYMS
ADB Asian Development Bank

AFS Annual Financial Statement
ANAO Australian National Accounts Office
APC Authority to Pre-commit
BPNG Bank of Papua New Guinea
CBOR Consolidated Budget Operating Rules
CPA Certified Public Accountants
CRF Consolidated Revenue Fund
CSDRMS Commercial Services Debt Recording Management System
CSI Case Selection and Investigation Division
DDA District Development Authority
EU European Union
FAR Fixed Assets Register
FBO Final Budget Outcome
FC Financial Controllers
FCD Financial Control Division
FED Financial Evaluation Division
FFR Financial Framework Review
FI Financial Instruction
FMD Financial Management Division
FMIP Financial Management Improvement Program
FMIP Financial Management Improvement Program
FMM Financial Management Manual
FRCD Financial Reporting and Compliance Division
FTB Finance Training Branch
GAAP Generally Accepted Accounting Principle
GST Goods and Services Tax
HR Human Resource
IA Implementing Agency
IFMS Integrated Financial Management System
IFMS Integrated financial Management System
KATS Kina Automated Transfer System
MTBF Medium Term Budget Framework
MTBO Medium Term Budget Outlook
MTBS Medium Term Budget Strategy
MYEFO Midyear Economic and Fiscal Outlook Report
NDoE National Department of Education
NDoH National Department of Health
NPC National Procurement Commission
NTRD Non Tax Revenue Division
NTRD Non Tax Revenue Division
PCaB Provincial Capacity Building Program
PDC Public Debt Committee
PDFMD Provincial and District Financial Management Division
PE Personnel Emoluments
PEFA Public Expenditure and Financial Accountability
PEFA Public Expenditure and Financial Accountability
PFMA Public Financial Management System
PFTAC Pacific Financial Technical Assistance Centre
PPP Public Private Partnership
PSTB Provincial Supply and Tenders Board
PTDT Provincial Treasurers and District Treasurers
ROSC Record of Observance of Standards and Codes in Accounting and Audit
SIGTAS Standard Integrated Government Tax Administration System
SNA System of National Accounts
SNG Sub National Government
SOE State Owned Enterprise
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SPID Structural Policy and Investment Division
TAs Technical Advisors
WB World Bank
WoG Whole of Government
WPA Waigani Public Accounts
YTD Year to Date
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PUBLIC FINANCIAL MANAGEMENT REFORMS
ANNUAL REPORT
Purpose
1. The purpose of this report is to provide the Mid-year Report for 2018 through the PEFA
Secretariat under the Department of Finance on the progress of the implementation of the
Public Financial Management reforms in the Public Expenditure and Financial
Accountability (PEFA) Road Map 2015 – 2018. The report serves to highlight key priority areas
that were implemented by 13 key national departments and agencies. The 13 Government
agencies that are implementing the PFM Reform Activities under the PEFA Road Map are
Department of Finance, Department of Treasury, Internal Revenue Commission, Customs,
Auditor General’s Office, Department of Personnel Management, National Planning, Central
Supplies and Tenders Board, National Statistical Office, Education, Health, Provincial Affairs and
National Economic and Fiscal Commission. The purpose of the report is to provide evidence of
the progress made against the reforms in the PEFA Road Map 2015 - 2018.
2. The National Government conducted a Public Expenditure and Financial Accountability

(PEFA) assessment between 2014 and 2015 led by the Department of Finance. The PEFA
Framework was applied to assess the strengths and weaknesses of the public financial
management system across government. The final report was cross examined by the
International Monetary Fund, a Reviewers Panel comprising of Development Partners, Private
Sector and Government representatives. It then passed a quality assurance check by the
International PEFA Secretariat. The Government then prepared a PFM Road Map based on the
weaknesses arising from the final report, PEFA Road Map 2015 - 2018 and Assessment. This
report is the 2018 Mid-year Report on the implementation of PEFA Road Map, as sanctioned by
the National Executive Council as major policy, institutional and operational PFM reforms in
October 2015. The 2016 Midyear and Annual Reports including the 2017 Midyear and Annual
Reports have previously been issued.
3. The PFM Reform monitoring is aimed at ensuring that the critical weak link areas are
strengthened so that the policies of government are implemented as intended and achieve
their objectives. The resulting impact is for the government to achieve an open and orderly PFM
system. The outcome is three fold; Achieving aggregate fiscal discipline by effectively controlling
the budget and fiscal risks; Achieving strategic resource allocation involving planning and
executing the budget in line with government priorities aimed at achieving policy objectives; and
ensuring efficient service delivery using budgeted revenues to achieve the best levels of public
services within available resources.
Methodology in Monitoring
4. The Department of Finance designed a set of monitoring instruments for National

Government Agencies in the Road Map to report against the implementation of PFM
reforms. Key objectives in Public Financial Management Reform Monitoring Framework are;
I) Revision and implementation of PFM Legal Framework.

II) Strengthen revenue and expenditure planning and budgeting aligned to approved
strategies and plans for a credible and policy oriented budget.
III) Improve budget execution and control, management, asset and liability management
and quality of financial reporting.
5. The instruments contained in the Reform Monitoring Framework include the;
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i. Logical framework
ii. Schedule 1: PFM reform summary – by Agency
iii. Schedule 2: Agency activity summary
iv. Schedule 3: Detailed progressive update year-to-date – by division or program
All activities outlined in these forms originate from the PEFA Road Map 2015 – 2018.
6. The Reporting Schedules were issued to the Implementing Agencies prior to the Reform
Monitoring Group meeting. All Implementing Agencies were required to populate Schedules 2
and 3 and resubmit to the DoF for consolidation by the first week of July for the Midyear Report
and the final updated report was due to be submitted in the last week of November for the
Annual Report. During the year consultations were held with agencies on the Road Map. DoF
met with DoT, IRC, DNPM, CSTB, DPLGA, NEFC, NDoH and NDoE. We noted delays in
submission of the final reporting schedules from NSO, CSTB and DNPM. Despite repeated
follow up no response was received from NSO.
Structure of Reporting
7. The report has been compiled according to reforms surrounding the three underlying
Outcomes of an open and orderly Public Financial Management System and five main
objectives of a PFM system.
Aggregate Fiscal Discipline is realised when;
 Actual aggregate expenditure is within the annual approved aggregate

expenditure budget for that financial year. In terms of revenue, annual actual
aggregate revenues collected in the financial year is at or above the annual
approved aggregate revenue budget for that financial year.
 The budget is executed with effective control while managing fiscal risks.
 The government budget is realistic and is implemented as intended.
Strategic Resource Allocation is realised when resources are strategically allocated and
executed based on approved policies, plans, budget and processes.
Efficient Service Delivery: This outcome is realised when delivery of services are performed
within budgeted revenues achieving its intended objective; when public services are delivered
within available resources.
8. Five main objectives having a direct impact in achieving these Outcomes are
Macroeconomic management, Revenue budget planning and management,
Macroeconomic statistics, Public financial management and Performance of service
delivery. The report is being outlined accordingly;
Outcome 1: Aggregate Fiscal Strategy
The underlying strategies leading to achieving aggregate fiscal strategies are;

A. Macroeconomic Management
B. Revenue Policy Planning, Budgeting, Administration, and Management
C. Macroeconomic Statistics
Outcome 2: Strategic Allocation of Resources
The underlying strategy leading to achieving strategic allocation of resources is a prudent and
orderly;
D. Public Financial Management
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Outcome 3: Efficient Service Delivery
The underlying strategy is efficiency in the;
E. Performance of Public Service against Service Delivery
9. A summary of the reporting schedules will follow each Outcome. The PEFA Road Map
contains a platform of impact areas for implementation over the three years following the 2015
PEFA Assessment against periods 2011, 2012 and 2013. The PEFA assessment revealed a
host of strengths and critical weak link areas that require immediate, to medium and long term
intervention. This 2018 Mid-year Report contains the results of the second and half year of PEFA
Road Map implementations.
10. This is aimed at strengthening the 7 Pillars of the Public Financial Management System
consistent with the 2016 PEFA Framework. The 7 pillars directly impact the following 3 main
outcomes of the PFM system.
The 7 Pillars of the PEFA Framework have PFM Reforms being implemented by National
Government Agencies.
Pillar 1. Budget reliability
Aggregate expenditure, expenditure composition and revenue outturn.
IA - Department of Treasury
Pillar II. Transparency of public finances
Budget Classification, Budget Documentation and Public access to fiscal information.
IA– Department of Treasury
Transparency of Public Funds measuring Central Government Operations outside of financial reports,
transfers to subnational governments
IA– Department of Finance
Performance information on service delivery.
IA are the National Economic and Fiscal Commission, DPLGA, Departments of Health and Education
Pillar III. Management of assets and liabilities
Fiscal risk reporting (monitoring SOE’s and SNG’s fiscal positions, Debt Management and Public
asset management (financial asset monitoring).
IA – Department of Treasury
Public investment management.
Public asset management (Non-financial Asset monitoring and transparency of asset disposal)
IA – Central Supply and Tenders Board
Pillar IV. Policy-based fiscal strategy and budgeting
Macroeconomic and fiscal forecasting, Fiscal strategy, Medium term perspective in expenditure
budgeting, Legislative scrutiny of budgets and the Budget preparation process.
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Medium term perspective in expenditure budgeting, Budget Preparation Process
IA – Departments of National Planning and Monitoring, Finance and Treasury
Pillar V. Predictability and control in budget execution
Revenue planning, budgeting administration, accounting for revenue and Revenue arrears.
IA – Department of Finance (Non-Tax Revenue), Internal Revenue Commission and PNG Customs
Service.
Predictability of in-year resource allocation, Expenditure arrears, Payroll controls, Internal controls on
non-salary expenditure and Internal audit.
IA – Departments of Finance and Treasury (in-year resource allocation)
Procurement, Asset management and monitoring
IA – Central Supply and Tenders Board.
Pillar VI. Accounting and reporting
Financial data integrity (bank accounts reconciliation, Advance/suspense accounts and integrity of
reports) and Annual Financial Reports
IA – Department of Finance and Office of the Auditor General
In year budget reports
Pillar VII. External scrutiny and audit
External audit and Legislative scrutiny of audit reports
IA – Office of the Auditor General
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Executive Summary
11. The PFM Reform Monitoring Group (RMG) is comprised of 13 Government Agencies
with the Department of Finance and PM&NEC as a Member of the National Management
Committee. The PFM RMG convened several meetings and consultations since 2016 and the
last RMG Meeting for 2017 was held in July 2017. Most of these meetings were chaired by the
Secretary for Finance. Member agencies of the PFM RMG are DoF (Chair), DoT, DNPM,
DPLLGA, PMNEC, AGO, IRC, PNG Customs Service, NEFC, NDoH, NDoE and NSO, DPM
and CSTB, hence a total of 13 agencies.
12. Each agency is a key implementing partner to the reforms in the PEFA Road Map. Great
strides have been made by the Department of Finance with the support of senior executive
management, the Secretary, Dr. Ken Ngangan and the Minister for Finance and Department of
Implementation and Rural Developemnt, Hon. James Marape. The PFM reforms impact on
policy reforms, review of legal framework and operational reforms. These reforms have been
endorsed by the National Executive Council and are consistent with the PFM Road Map 2015 -
2018.
13. The Department of Finance has led the Financial Framework Review Technical Working
Group comprising of Central Agencies, hence AGO, DJAG, Works, Health and
Education Departments, CSTB and CLRC in reviewing the financial legislative
Framework as planned and as scheduled. The major reform activity is the Financial
Framework Review (FFR). The FFR is the review of the Public Financial Management Act
(1995) and subsequently, the review of the Financial Management Manual and the
consolidation and streamlining of Finance Instructions. The objective of the FFR is to enable
the Act to be more conversant with international best practice. The PFMA Amendent Bill was
passed in the August 2016 sitting of Parliament with consequential amendments to other
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related legislations and became effective 1 January 2017. As a consequence of the PFMA
amendments, the FFR have undertaken a whole scale review of whole of government Trust
Accounts.
14. The Department of Finance and Treasury as the PFM Oversight agencies have 7 and 4
divisions respectively implementing the PFM Reform activities as per the PEFA Road
Map. The divisions in Treasury implementing the PFM Reforms include Budget Operations,
Macroeconomic Policy, Structural Policy and Investment and Financial Management divisions.
Whilst the 7 divisions in Finance implementing the reforms are Financial Management
Improvement Program, Financial Reporting and Compliance, Financial Control, Internal Audit
and Compliance, Non Tax Revenue, Corporate Service and Provincial and District Financial
Management Division.
15. The Integrated Financial Management Systems has been rolled out to all 43 government
departments and agencies and 7 statutory authorities as at 31st December 2017. All
central agencies and national departments have been implemented and run successfully on
IFMS whilst 7 statutory authorities are also using IFMS. The remaining Statutory Authorities
will have IFMS implemented in 2018. The IFMS roll out to the Provincial Governments & LLGs’
has also progressed well, with the East New Britain pilot province scheduled for full completion
in the first quarter of 2018. It is planned that the IFMS provincial roll out will be completed at
the end of 2019.
16. Other reforms implemented by the Department include the transformation of the
national government procurement operations. Targeting major procurement, the
government is moving to establish a National Procurement Commission to replace the Central
Supply and Tenders Board. Capacity issues and other operational challenges have limited the
performance of CSTB to a certain extent. The new procurement policy has been developed
and subsequently endorsed by NEC after going through various consultations. The NEC have
approved the drafting of Procurement Legislation. All other mandatory requirements have
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been met, hence the drafting instruction of National Procurement Policy and the draft
legislation was finally passed in Parliament in August 2018.
17. The National Governments Cash Flow forecasting operations are being reviewed by
DoF with the assistance of PFTAC. This is to enhance monitoring and reporting operations
of cash liquidity in the Waigani Public Accounts and the weekly transfer of data on the
availability of cash flow for determination of weekly forecasting to the Department of Treasury.
A Finance Instruction 1/2016 was issued to that effect in June 2016.
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18. Macroeconomic statistics have not been released since 2006. However, as at 31
December 2017, the National Statistical Office, in implementing its reforms under its PNG
Statistical Development Strategy released an updated report on Papua New Guinea’s National
Accounts Data 2007 - 2014. This report is based on nominal GDP (current price GDP) and the
Real GDP (constant price GDP) The report indicated an increase in the level of current price
GDP from K28.3 billion to K56.6 billion within the year 2007 to 2014 while the constant price
GDP reported an increase of K37.0 billion to K53.7 billion within the year 2006 to 2014. GDP at
constant prices of 2013 grew by an average of 5.8% over the years from 2007 to 2014. Over
the period from 2006 to 2014, current price GDP increased by 121.7% and constant price GDP
increased by 56.3%. The current price GDP increased at a greater rate than the constant price
GDP as it includes both increases in volume and in prices, whereas constant price GDP only
includes changes in the volume of goods and services produced in PNG. The GDP report, as
such, implies sufficient economic growth in 2016. At the time of this report NSO did not provide
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any progressive updates up to 30 June 2018. As such the above Macroeconomic statistics
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data is only for the year ended 31 December 2016.
19. The Department of Treasury is implementing major medium term policy reforms
through the PFM Road Map. Two policy reforms include a Medium Term Budget Framework
and a Medium Term Budget Outlook. Integration of a unified Investment and Recurrent Budget
is ongoing by unifying the budgetary process and the actual budget. Budget formulation
process is still being performed by departments, SOE’s and statutory authorities.
20. Transfer of revenue to WPA between IRC and PNG Customs Services has been
effective. IRC is currently enabling daily transfers. Accounts reconciliation reports by IRC can
now be produced upon request. PNG Customs Service transfers from a weekly basis are now
performed on a daily basis.
21. Development Partners support through the provision of Technical Specialists has been
requested by the DoF to support in various PFM reforms in the PEFA Road Map.
Highlighted areas included are the review of the procurement system, capacity building
program and in drafting of the audit act. Development Partners formed a Development
Partners Working Group on Public Financial Management in 2014. This core working group
comprising of the European Union, Department of Foreign Affairs – Government of Australia,
the World Bank and the Asian Development Bank, European Union and UNDP held their third
meeting in June 2016 with the DoF and the first meeting with Donors for 2018 was held on the
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10 October 2018.The objective of the meeting was to discuss the progress of the PFM
reforms under the PEFA Road Map, the current support towards the PFM reforms and the way
forward in supporting the reforms. Good progress has been made against the PFM reforms by
government and Development Partners have equally supported the reforms through the
provision of technical expertise in various capacities of the PFM portfolio since the launching of
the report in September 2015.
22. In compiling of the reporting forms for IA (Implementing Agencies) provided their
feedback in reasonable time. However, significant delays were experienced from some
agencies but data were finally provided except for National Planning Department, CSTB and
National Statistical Office for this Report. There was an information mismatch in the columns
for KPIs and Means of Verification. However for the purpose of the 2018 Mid-year report, these
issues have been resolved.
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23. Progress in implementing activities supporting macroeconomic management and
managing fiscal risks is slow with long term activities in medium term planning and
staffing issues. Revenue planning, budgeting, forecasting and management has made
excellent progress with new units created in IRC and DoF. National Accounts Data is 50% on
target with the release of 2015 GDP report. The capacity development plan has not been
developed as yet.
24. In the activities leading to PFM, DoF has completed a good number of activities. Good
Progress is being made in IFMS rollout, Financial Framework Review, Banking Framework
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and the Cash Flow Forecasting. As per Secretary’s directive on the 8 of September 2017
Finance Training Branch and PCaB will work in collaboration with the IFMS Project team in
training and post implementation support to the rollout of IFMS. A comprehensive training plan
for Finance encompassing input from FTB, PCaB, IFMS and FRCD is yet to be finalized.
Under FFR the PFMA (Amendment) Bill 2016 has been passed in Parliament in August 2016
and became effective 1 January 2017. Consequential amendments on other legislations to
PFMA were also passed in Parliament. There has been no progress on an advanced level
training program for public sector auditors with the IIA. Further the asset management policy is
yet to be finalized and implemented from FRCD in consultation with IFMS.
25. Work has not commenced on multiyear planning for migration of investment programs
into the recurrent budget by DNPM. A HR staffing and payroll audit plan was developed by
DPM but yet to be rollout. Increasing the number of personnel in Performance Auditing at AGO
is slow. The evaluation of service delivery by NEFC, DPLLGA, NDoH and NDoE has been
completed. Consultations have been completed between the stakeholders and DoF and a sub-
committee was formed. The TOR has been developed and part of the evaluation process is for
officers to travel to four districts in the country on fact findings exercise after the 2017 NGE.
The officers have travelled to the four districts of the four regions of PNG and successfully
conducted the survey and evaluation of the front line service delivery unit. The report on the
sub-national survey is at the final stage of completion hence the report will be presented in the
next RMG meeting.
OUTCOME 1: AGGREGATE FISCAL STRATEGY
A. Macroeconomic Management
Unified Annual Budget
26. The Department of Treasury is implementing the Budget using the 2014 Government
Finance Statistics cash reporting framework. The integration of budgets is ongoing
between the Investment budget and the operational (recurrent) budget. The budget formulation
process however is currently being performed by individual agencies then submitted to the
DoT and DNPM for collective decisions on the appropriate budget estimate ceilings.
27. The DoT released the Consolidated Budget Operating Rules (CBORs) in February 2015.
At this stage, the formulation of the budget still remains under separate agencies and cannot
be unified or brought under a single agency pending sensitive areas that need to be addressed
first, such as manpower transfers and re-allocating responsibility for aspects of the budgeting
process. The CBORs1 outline reforms in the budget process using the two stage approval
process. This process allows Government Departments, SOEs and SA to prepare one
integrated budget submission for operational and capital expenditure for consideration and
with multi-year budgeting estimates for three forward years. The estimates for capital projects
1
Department of Treasury, Consolidated Budget Operating Rules 2015
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are based on sectoral plans. Subnational projects are funded under the SIP. The PEFA Road
Map notes this planning process under the DNPM as the 3 Step Approach for prioritisation of
capital projects. This approach is the same approach noted in the CBORs.
28. The two-stage budget approval process includes an “initial concept approval” and a
“budget business case” after approval has been granted to the concept. This then leads
to the “final government approval stage”. The CBORs state that capital projects must only be
implemented by DoW. Activity 14.1 has seen the formal adoption of this budget planning
process in the 2018 budget. However, the full extent for absorption of capital projects into the
recurrent budget is not clearly mapped in the 2018 Budget according to Activity 14.2 under
DNPM.
Managing Medium Term Fiscal Risks
29. Work is yet to commence on the Medium Term Budget Framework and Medium Term
Fiscal Outlook. Preliminary discussions have commenced between Department of Finance
and Department of Treasury. It is anticipated that Government Agencies will have a ceiling for
the Budget year and the three forward years and should be incorporated in the Budget
Circular. It should also include major policy decisions and programmes. IFMS would include
budget estimates for each of four years, the budget year and three “forward” years beyond
the budget year. A review of the existing budget process and IFMS System configuration
changes will be required. Forecasts of fiscal aggregates (on the basis of main categories of
economic and functional or sector classification) are prepared for at least three years on a
rolling annual basis. Links between multi-year estimates and subsequent setting of annual
budget ceilings are clear and differences explained.
30. Demarcation of economic items of contingency items was not implemented in the 2017
Budget. There needs to be clear demarcation in the description of the contingency under the
economic item for contingencies. Treasury Department reported that the Secretary‟s advance
vote under the Division 207 is used as a contingency to cater for unbudgeted expenditures
such as natural disaster or other emergency and unforeseen expenditures.
Within each government‟s agencies‟ programs and operational activities, the economic item
227 acts as contingency to support funding shortfalls. So basically provisions were made for
contingency in the Budget.
Revenue Planning and Cash Flow Management
31. The 2018 MYEFO revealed that K5, 553.3 million of total aggregate revenue collected as
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at 30 June 2018 was below the actual expenditure of K5, 878.2 million, a fiscal deficit of
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K324.9 million . The mid-year fiscal performance shows only a modest deterioration in fiscal
conditions, which is significant given the impact of the February earthquake on expenditure
and revenue trends. At end June 2018 the fiscal deficit was K324.9 million or 0.4 per cent of
GDP with a revenue outturn of K5,553.3 million and an expenditure outturn of K5,878.2 million.
The extensive revenue measures approved in the 2018 Budget have generally been
implemented and the lift in gas production in late 2017 has supported higher resource tax
collections in 2018. Fiscal expenditures are significantly lower than budgeted at mid-year,
being only 39.9 per cent of budgeted spending levels, with higher personnel emoluments and
utility payment trends being offset by strict control of warrants over other discretionary
spending heads. Total net borrowing in the first half of 2018 amounted to K812.9 million, with
external financing accounting for K631.0 million (largely the proceeds from the Credit Suisse
final tranche) and domestic financing accounting for K181.9 million.
32. Reconciliations of accounts by IRC and PNG Customs to pool cash into WPA is
anticipated to be performed on a daily basis. PNG Customs was reconciling and
transferring on a weekly basis. The consequential amendment was made to PFMA requiring
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Mid-Year Economic and Fiscal Outlook 2018, Page 5
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full transfer of revenue collections to WPA by other revenue collecting agencies through
Revenue Sharing and or Withholding arrangements. Hence, MVIL and Worker‟s Permit Trust
Account Revenue Collection Arrangements is that all collections are deposited into CRF.
Medium term planning and revenue forecasting will require system configuration in IFMS in
order to enable forward planning of medium term plan estimates.
33. A Forward Estimates Planning Committee on Revenue Estimates is a platform for joint
revenue planning and budgeting by Treasury, IRC, PNG Customs, Department of
Finance and Bank of Papua New Guinea. The Department of Treasury is taking the lead in
formulating this Committee. It will be responsible for ensuring that revenue budget estimates
are realistic considering all macroeconomic factors and fiscal risks to the Budget, in the short
to medium term. The Forward Estimates Committee on Revenue Budgeting and Planning is
yet to be formed. This was to be formed by November 2015 and is still pending. This
committee would allow for joint consultations between key agencies on the determination of
realistic revenue estimates and midterm forecast. . However, the only working committee is
PDC (Public Debt Committee), hence PDC meets weekly to provide update on cash flow of
Waigani Public Account in order for effective management of cash flow to meet government’s
competing cash demands.
Improving Debt Management Practices
34. The total debt to GDP ratio based on the 2017 nominal GDP is 31.9 precent. That is 1.9
percent above the legislated debt limit of 30% according to the Fiscal Responsibility Act. The
level of Total Central Government Debt at the end of June 2018 totalled K24, 371.2 million or
29.8 per cent of GDP, an increase of K, 812.90 million (or 7.4 per cent) over 2017 actuals.
With the implementation of Government directives and, given seasonal monthly trends, it is
projected that the 2018 Budget deficit will be K1, 987.2 million, in line with the 2018 Budgeted
amount. At the same time the Government’s key priorities are expected to be fully funded. This
results in a debt to GDP ratio of 31.2 per cent, lower than the budgeted 32.2 per cent but
similar to the 2017 ratio of 31.2 per cent. Debt at these levels remains well within the range of
30-35 per cent of GDP as prescribed in the Fiscal Responsibility Act which places the debt
ratio on a clear downward path to achieve the 30.0 per cent target by 2022, again as
prescribed in the MTFS 2018-22.
The Department of Treasury is tasked with improving debt sustainability analysis. All loan
funding, On-lend, and State Guarantee and PPP project proposals have been evaluated in line
with the Medium Term Debt Strategy and Medium Term Fiscal Strategy prior for funding
approval through the normal budgetary process.
35. High priority considerations are given to the development of a comprehensive data
base on government loans, guarantees and Public, Private Partnerships by the end of
2017. The current CSDRMS has now been upgraded to cater for recording on-lending and
State Guarantees. Due to capacity issues in staffing and manpower constraint State
Guarantees have not been effectively recorded in the upgraded version of CSDRMS. The
national PPP Policy and Act has been released however certain issues need to be resolved
before it will be fully implemented, hence PPP framework will be fully implemented by 2019.
36. With the on-lending policy approved in 2013 for managing public debt, the Asian
Development Bank supported the DoT with the development of a framework for the Guarantee
Policy and Centralised Borrowing in April 2016. This has been translated into a Guarantee
Policy and a Borrowing Policy. These government policies will strengthen the process through
which state entities could apply for loans and guarantees. Treasury has a State Guarantee
Policy that was formulated in 2016 and was implemented since 2017. The records of all the
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State Guarantees is maintained by the Financial Management Division (FMD) in the
Operations Wing in Treasury.
Treasury has an on – Lending Policy that guides the State in terms of providing Government
Lending to State Owned Enterprises (SOEs/KCH ).
Treasury also has a Community Service Obligation Policy which is to assist SOE’s in terms of
providing service delivery in a transparent manner to the people in collaboration with the State.
Treasury has a Dividend Policy that was approved in 2015. The Policy is to guide State Owned
Enterprise’s (SOE’s) and Statutory Authorities (SA) in terms of paying dividends to the State.
Treasury is currently working on the revised version of the policy which will be submitted to
NEC in 2017, for approval.
CSDRMS has also been upgraded to cater for recording, On-lending and State Guarantees.
The On-Lending and Guarantee Policies will ensure borrowing is centralized to ensure
financing is undertaken on commercial terms and all Government assets and liabilities are
consolidated to determine the State’s net worth. All records will be kept by FMD of Department
of Treasury as is the appropriate Division that deals with the State’s Debt management.
Improving Expenditure Management

37. The total 2018 aggregate approved expenditure budget was K14, 717.9 million, however
the actual outcome for the first half of 2018 was 5,878.2 million for Expenditure and net
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lending .
To ensure the budget deficit remains on track in 2018 and the Medium Term Fiscal Strategy
(MTFS) is maintained, the Government has issued a number of directives to departments and
agencies. These comprise:
 The Government has instructed Organisational Staffing Personnel Emoluments Audit

Committee (OSPEAC) and the Department of Finance to introduce some hard budget
ceilings for employment levels and off-line payments to ameliorate these adverse
underlying trends and to bring this expenditure category (excluding the unbudgeted
pay increase) back on track;
 Following a number of audits on utility and rental charges, the Government has
introduced measures to control this expenditure and to bring it back on track by end
2018;
 The Government has established a high-level Task Force (Treasury, IRC, Customs
and Finance) focused on improving compliance and the pass through of departure tax
and import excise collections;
 The Government has instructed IRC to accelerate the establishment of the Large
Taxpayer Office in IRC;
 The Government has instructed IRC to implement fully the 2018 Budget changes to
the policy on export duty on old-growth logs;
 The Government has instructed the Treasury and Finance Departments to conduct, as
a priority, discussions with state entities to re-examine dividend inflows, particularly
relating to LNG dividends to Government; and
 The Government has instructed the Treasury Department to find additional savings in
the goods and services expenditure areas across all non-essential priority areas and in
non-essential capital works programs that are funded by the Government.
With the implementation of these Government directives and, given seasonal monthly trends, it
is projected that the 2018 Budget deficit will be K1,987.2 million, in line with the 2018 Budgeted
amount. At the same time the Government’s key priorities are expected to be fully funded. This
results in a debt to GDP ratio of 31.2 per cent, lower than the budgeted 32.2 per cent but
similar to the 2017 ratio of 31.2 per cent. Debt at these levels remains well within the range of
3
MYEFO 2018
13 | P a g e
30-35 per cent of GDP as prescribed in the Fiscal Responsibility Act which places the debt
ratio on a clear downward path to achieve the 30.0 per cent target by 2022, again as
prescribed in the MTFS 2018-22.
38. As at 31 June 2018, total warrant authorisation was K5, 878.2 million from the total
annual budget of K14, 7179. million, 40% of the total 2018 budget is expended
The likely expenditure overruns will resulted from the;

 Effects of compensation of employees (PE).
 Increase of donor grants related expenditures.
39. As at 31 December 2017 the GoPNG funded expenditure outcome for National
Departments, against the Supplementary Budget, was lower by K550.7 million and for
Commercial and Statutory Authorities (CSA) was lower by K34.1 million. Similarly, the
total expenditure outcome for the Autonomous Bougainville Government (ABG) was K165.2
million, which was K53.4 million or 24.4 per cent lower than the 2017 Supplementary Budget.
These savings reflect substantial reductions to goods and services outlays to these areas. In
contrast Provincial Government expenditure was higher by K406.3 million, mainly driven by an
overspending on PE. Efforts such as the roll out of the IFMS are ongoing at the provincial level
to better control PE and overall expenditure.
40. Budget funded trust accounts have been established since 2005 for Major National and
Provincial Investment Projects to give time to agencies to properly plan and implement
projects. A total of K12, 313.1 million (inclusive of the 2018 Budget Appropriations), has been
appropriated to Budget Funded Trust Accounts since 2005 for implementation of priority
budget expenditure programs. These trust accounts have largely been funded from additional
mineral revenue in supplementary and annual budgets.
The purpose of holding funds in Trust Accounts is to spread spending over time to help
manage inflationary pressures in the economy and to give time to agencies to properly plan
and implement projects across budget years. The opening balance of the Budget Funded Trust
Accounts as at 1st January 2018 was K140.1 million. Expenditure incurred by 30th June
totalled K30.8 million with K0.01 million received within the same period; thus, the closing
balance as at 30th June 2018 was K108.6 million.
41. As at the reporting date, the Trust appropriations for the 2018 Budget cannot be projected in
detail as all these funds were and could still be allocated directly to the department and
agencies concerned reflecting the changed arrangements under the new PMMR Act. The 2017
National Elections balance at start of 2018 period was K0.2 million. K0.1 million was paid to
service providers for outstanding election-related services rendered. Tuition Fee-Free (TFF)
expenditure of around K29.1 million out of the K89.8 million allocated was paid between 1st
January and 30th June 2018.
Asia-Pacific Economic Cooperation (APEC) 2018
Given that Papua New Guinea is hosting the APEC 2018 Summit, a trust account was
established to manage APEC-related expenditures. However, the respective account reports
were not available at the time this report was compiled.
42. The DoT is required to maintain and monitor the cost of government decisions. A
central monitoring system to keep stock of all new and old government decisions is yet to be
implemented. This will be applied to assess against policy changes, effects and costs on the
resource envelope and fiscal space. Treasury maintains a register of government decisions
through the existence of a “pressure list”. However, this is for the current year and may need
to include estimates over the medium term.
43. The following is the progressive update of PFM reforms from the Department of Treasury.
14 | P a g e
Department of Treasury
SCHEDULE 1: SUMMARY OF PEFA ASSESSMENT AND ROAD MAP PRIORITIES
MID - YEAR Period of Reporting: As at June 3Oth 2018

2018
AGENCY
Budget Operations Division;
Macroeconomic Policy Division;
DEPARTMENT OF
208 Divisions : Structural Policy and Investment
TREASURY Division; Financial Management
Division
FEB 2015 - DEC 2018

Duration of PFM Road
Map :
2015
PEFA Framework PEFA Critical to
PEFA Framework Performance
Pillar Description of the PI Report Improved Priority Areas
Indicator(PI)
Pillar Indicator Performance
Rating
Aggregate Expenditure Compared to Original

I Budget Reliability PI - 1 A -
Approved Budget Ongoing Integration of Budgets
Expenditure Composition Outturn compared 2017 Budget to contain a minimum

PI - 2 D+ Yes
to Original Approved Budget listing of all off
Aggregate Revenue Outturn Compared to budget revenue to all government

PI - 3 B Yes
Original Approved Revenue agencies
15 | P a g e
2018
AGENCY
DEPARTMENT OF
Division
FEB 2015 - DEC 2018

Map :
2015
Indicator(PI)
Rating
Comprehensiveness Incorporate in annual budget

II
and Transparency of PI - 4 Classification of Budget C Yes Medium Term Revenue and
Budget spending estimates with
Comprehensiveness of Budget details for debt service and

PI - 5 B Yes
Documentation expected changes on costs of
Extent of Reporting of Extra Budgetary service delivery (Education and

PI - 6 D Yes
Operations Health etc)
PI - 9 Public Access to Key Fiscal Information D Yes Estimate cost of Government

Decisions that have not been
PI 10 Fiscal Risk Management D Yes
fully implemented
Asset and Liability
III Management and Reporting on Debt and Strengthen debt management
Management PI - 13 D Yes
Expenditure Arrears practices to minimise funding costs
PI - 14 Credible Fiscal Strategy B+ Yes and risks
16 | P a g e
2018
AGENCY
DEPARTMENT OF
Division
FEB 2015 - DEC 2018

Map :
2015
Indicator(PI)
Rating
PI - 15 Revenue Budgeting C+ Yes Establish a comprehensive
Medium Term Perspective in Expenditure database on government loans,

Policy Based Planning PI - 16 D Yes
Budgeting guarantees and PPPs
and Budgeting
Orderliness and Participation in Annual
PI - 17 C+ Yes
Budget Preparation Process
Establish a unit to monitor
financial position and fiscal risk of
Accounting, Recording
VI PI - 18 Legislative Scrutiny of Annual Budget Law D+ Yes SOE's, Statutory Bodies and
and Reporting
Provinces
Predictability in the Availability of Funds to

PI - 21 D+ Yes
Support Service Delivery
17 | P a g e
DEPARTMENT OF TREASURY
SCHEDULE 2: SUMMARY OF KEY PRIORITY ACTIVITIES
Lead End
Activity Key Performance Lead Start
PFM Reform Priority Activities Actual Output YTD Division Date
No. Indicator/Output Agency Date
6. Enabling all revenues and expenditures through the budget
6.3 Demarcate clearly the Contingency The Secretary‟s advance vote

Economic Items in the IFMS in 2017 Budget under the Division 207 is
Discussions are still progressing on used as a contingency to
Contingency Economic items between cater for unbudgeted DoF/DoT Budgets Oct-17 Nov-17
DoT and DoF. expenditures. The economic
item 227 acts as contingency
to support funding shortfalls.
13. Reforms in Budgeting, strengthening debt management practices and monitoring of fiscal risks.
13.1 Continued integration of the recurrent and At this stage, the national
development budgets budget is not fully integrated
as a unified Budget. That is
Budget submissions are provided to evident in both Treasury and
both DNPM and Treasury-collective Planning briefing Budget
decisions are made. Budget reforms Committees such as NEC DoT Budgets Jan-16 Jan-17
for consolidating investments and separately rather than a fully
operations budget is consistent with integrated budget briefing by
the DoT issued CBORs. the joint departmental budget
team with Capital and
Operational Budget on one
matrix.
13.2 Improve coverage of the budget to include All extra budgetary revenues included Finance –Revenue and
information on all revenues of all in the Budget through approval of Treasury MEPD will provide Budget
government agencies - SOEs, SNGs, and a Consequential Amendments Bill 2016. insights on National DoT Jan-16 Nov-16
rudimentary balance sheet for general Governments agencies
government. revenues.
However, for the provincial
18 | P a g e
Lead End
and LLGs, revenue figures are
provided every year in annual
projections in their annual
budget estimates to Treasury.
13.3 The 2017 budget should contain at Summary of all off budget revenue Finance –Revenue and
minimum a listing of all currently “off from all government departments, Treasury MEPD will provide
budget” revenue to all government entities. SNG and CSA in the 2017 Budget insights on National
Governments agencies
revenues.
DoT Budget Jan-16 Sep-17
That additional unbudgeted
revenue must be approved by
the Treasurer in a revised
budget to the Treasurer
before they actually spend it.
13.4 Prepare medium-term estimates of changes Summary Report at budget There is no transfer of funds
(increases or decreases) in program funding preparation stage of changes in either from Capital to
during every annual budget process to Program funding for major capital Operational or vice versa. All
capture demographic (health/education) projects, and medium term estimates transfer movements are
changes. always within the respective
fund sources. In most cases,
transfers are usually done
within operational funds to
address funding shortfall and DoT Budgets Jan-16 Sep-17
to ensure government
agencies continue to perform
their core mandated
functions
This has be approved by the

Secretary or his delegate.
19 | P a g e
Lead End
13.5 Prepare medium-term estimates of changes Summary Report at budget Monitoring of the cost and
(increases or decreases) in program funding preparation stage of changes in payment of government
at annual budget process to capture the Program funding for major decisions is ongoing through
DoT Budgets Jan-16 Sep-17
effects of costs of government decisions government decisions not fully a pressures list maintained by
made in the past that have not yet been implemented, the DoT
fully implemented.
13.6 Prepare intensive revenue and expenditure Medium term forecast of revenues. Treasury produces medium
estimates for publication in 2017 budget of term forecasts for revenues
Medium Term expenditure budgeting.
medium term change estimates for and projections for
education and health and any other public A National medium term budget expenditure in its annual
service for which existing government policy frame work that takes into budget document Volume 1
will require spending changes. consideration all budget Economic and Development
sector/agencies fully costed medium Policies document. The
term budget submissions/strategy medium term forecasts for
expenditures are tied to the
MTDP2, fiscal policy and
strategy of the Government.
Hence the 2017 Budget
including previous budgets
reflect this approach. The DoT EPD/Bud Jan-16 Sep-17
budget is reviewed in the
course of the budget year
and any changes in existing
government policies requiring
spending changes are
reflected in the
supplementary budget as the
case of 2015 and 2016
Budget.
The 2 stage budget process

has been developed and
progressing to consider all
budget sector/agencies fully
20 | P a g e
Lead End
costed medium term budget
submissions and strategies.
System requirements
associated with proposed
reforms to the Budget
Process for PNG have been
produced and discussed with
IFMS since 2014.
Need to get line agencies

involved.
A formalised FEC is yet to be

established.
Treasury has conducted

13.7 Establish a Forward Estimates Planning
regular consultations with
Committee by 2015 for consultative
DoF-NTRD, IRC and Customs
planning on revenue estimates to formulate revenue
Functioning Forward Estimates DoT EPD/Bud Oct-15 Nov-17
estimates for the budget year
Committee on Revenue by 2015
as well as reviewing the
estimates during the year.
Discussions between these
agencies can be extended to
include the medium term
revenue estimates.
13.10 Develop a plan to convert all existing trust To address the issue of
accounts to a free cash balance status by repayment of short-term
July 2016 with estimates of the reduction in borrowing cost, FMD in
Government short-term borrowing costs collaboration with other key DoT FMD
Approved plan on free cash balance Mar-16 Nov-17
that would result. stakeholders, undertook
from trust accounts DoF FCD
another approach. In 2015,
an account called the Debt
Repayment Account (DRA)
was established with BPNG.
21 | P a g e
Lead End
The primary purpose of the
account was to build-up cash
to help with the management
and settlement of the
Government’s larger debt
service obligations when they
fell due.
13.11 Reduce time lag for release of warrants and Number of APC‟s approved per Subject to BMC/PDC
deliberation monthly and DoT Budgets Jan-16 Dec-17
APC for major procurement quarter
weekly.
13.12 Agencies have been consulted
to develop a medium term
Develop MTBF by 2018 budget framework with the
budget sectors and the
agencies, however, issues
Medium Term perspective in relate to agencies coming
budgeting. Coverage and content of with inflated cost that does
sector strategies. not match the revenue
envelope and the
A National medium term budget Government‟s Medium Term
frame work that takes into Fiscal Strategy. The DOT is DoT EPD/Bud Feb-18 Nov-18
consideration all budget working on addressing this
Sector/agencies fully costed medium through capacity building to
term budget submissions/strategy by train agencies to assist
2018. agencies to match their
expenditures to revenue
ceiling as a way forward to
come up with a medium term
budget framework that is
consistent with the overall
fiscal policy direction.
13.13 Develop a Medium Term Budget Outlook by Revenue Budgeting. Medium term The GoPNG National Budget
2020 have been guided by the Jan- Dec-
forecast of revenues. DoT EPD
Medium Term Fiscal Strategy 2017 2017
Medium Term perspective in (MTFS-5 years) since the first
22 | P a g e
Lead End
expenditure budgeting. MTFS in 2008. The MTFS is
the five year projections on
Credible Fiscal Strategy. Preparation
revenue, expenditure, deficit
and use of macro-economic forecasts and financing. The MTFS is
as basis for annual and medium term
based on 5 years
budgets.
macroeconomic forecasts and
Approved MTBO by 2020 is also guided by the
development policies of the
Government. Guided by the
MTFS the annual national
budget is formulated each
year. The MTFS also guides
the multi-year budget
approach adopted since 2014
and has been published in the
Volume 1 budget document
which provided medium term
expenditure at aggregate
level and at sectoral level.
However the challenge lies in
getting agencies to provide
realistic budget outlook
consistent with the revenue
envelop. As mentioned, this
requires capacity building.
13.16 A A high priority should be the preparation by Fully operational debt recording CSDRMS is being updated
Treasury of a comprehensive database on system for various debt portfolios - with the on-lent loans and
guarantees and loans state guarantees FMD is DoT FMD Oct-15 Oct-18
government loans, State and guarantees
(by end 2016) aware of.
13.16 B A high priority should be the preparation by Fully operational debt recording The PPP Framework is
Treasury of a comprehensive database on system for Public Private Partnerships important as it will enable the DoT SPID Oct-15 Oct-19
Public Private Partnerships (PPPs) (by end (PPPs) Government to assess and
23 | P a g e
Lead End
2016) prioritize projects to ensure
that they are achieved in the
most cost efficient manner.
13.17 Establishment of a unit to monitor the Establishment of a Financial Risk SPD has an already
financial position and fiscal risks of SOEs, Management Strategy for SOE and established Public Investment Ongoin
statutory bodies, and provinces which would Statutory Bodies. Branch (PIB) which monitors DoT SPID Oct-16 g
regularly provide submissions to NEC on the financial and fiscal
significant fiscal risks. position of SOE‟s.
13.18 Legislate and reinforce policies, Approved policy on a centralised The On-lending Policy was
procurement and reporting related to all borrowing system developed and approved in
Government Guarantees and Arrears to be 2013.
covered by DoT Approved policy on a Guarantees
The Guarantee Policy was
Approved Framework for Guarantees developed and approved in
and centralised borrowing 2016.
Currently DOT is in the

process of developing the Nov-
Centralised Borrowing Policy. DoT FMD Jan-16
18
A Framework for the
Centralized Borrowing has
been completed with
technical support from ADB in
April 2018. There is, however,
further financial assistance
required for Technical
Expertise to complete the
formulation of the policy.
24 | P a g e
DEPARTMENT OF TREASURY
SCHEDULE 3: DETAILED PROGRESSIVE REPORT BY DIVISION
Lead BUDGETS DIVISION Priority Action Reforms in Revenue Planning, Budgeting, Debt Management and monitoring of
Division Areas Fiscal Risks
Economic
Activities 13. Reforms in Budgeting, strengthening debt management practices and
Branch Administrative
monitoring of fiscal risks.
6 and 13
Social
 Ongoing Integration of Budgets
Law & Justice  2017 Budget to contain a minimum listing of all off budget revenue to all government
agencies
Provinces(lead)
 Estimate cost of Government Decisions that have not been fully implemented
CSA’s
Incorporate in annual budget Medium Term Revenue and spending estimates with details for
debt service and expected changes on costs of service delivery (Education and Health etc)
Activity Activity Means ofKPI Timeframe Progress update Constraints and issues
No. verification
6.3 Demarcate clearly the Contingency The Secretary‟s advance vote

Details of 2017 Budget Oct 2016 –
Economic Items in the IFMS in 2017 under the Division 207 is used
Classification of Nov 2016
Budget Contingency as a contingency to cater for
Economic items unbudgeted expenditures
such as natural disaster or
other emergency and
unforeseen expenditures.
Within each government‟s

agencies‟ programs and
operational activities, the
economic item 227 acts as
contingency to support
funding shortfalls. So basically
provisions are is made for
25 | P a g e
contingency in the Budget
13. Reforms in Budgeting, strengthening debt management practices and monitoring of fiscal risks.
13.1 Continued integration of the recurrent YTD, there is a unified budget At this stage, the national
2016 Budget Printed Jan 2016-
and development budgets document reflecting both budget is not fully integrated
concepts (test Jan 2017
documents) for capital and operational budget as a unified Budget. That is
cross checking under each agency. evident in both Treasury and
Planning briefing Budget
Minutes of Work is in progress for capital Committees such as NEC
Taskforce and operational alignment
separately rather than a fully
Meetings
Work is in progress for unified integrated budget briefing by
budget process. the joint departmental budget
Annual Budget team with Capital and
Introduction of the 2 staged Operational Budget on one
budget process is the ongoing matrix.
Unified Budget Process

 Unified process.
 Unified budget
documents.
Aligned capital and
operational expenditure.
The integration in budget

publication as well as budget
screening of proposals is
conducted by both DNPM and
Treasury.
Budget layouts and agencies

estimates for both the
operations and Capital are
captured under each specific
program.
13.2 Improve coverage of the budget to All extra budgetary Finance –Revenue and This activity is ongoing
Standard Jan 2016 –
include information on all revenues of all revenues included in Treasury MEPD will provide between DoF and DoT.
reporting Nov 2016
government agencies - SOEs, SNGs, and the Budget insights on National
template
Governments agencies 2016 Budget included
26 | P a g e
a rudimentary balance sheet for general Volume one of revenues. coverage of all revenues from
Weekly Report to
government. Budget Books However, for the provincial statutory bodies to the sub
PDC
contains all and LLGs, revenue figures are national Governments.
revenues provided every year in annual However, provision of
projections in their annual accurate revenue data to
budget estimates to Treasury. Treasury for budgetary
purpose is an area to improve
on.
13.3 The 2017 budget should contain at
Minimum listing of “Off budget” Jan 2016 – Finance –Revenue and Discussions are ongoing
minimum a listing of all currently “off
all agencies with revenue Nov 2016 Treasury MEPD will provide between DoT and DoF.
budget” revenue to all government “off budget” revenue information in insights on National
entities. Department of Treasury is
in the 2017 budget the 2017 Governments agencies
working on it through the
budget revenues.
MEPD branch
However, for the provincial
and LLGs, if there is an off
budget revenue then, the Volume 1 Budget book records
provincial and LLGs revise the this at classification level but
annual budgets to appropriate the detail should be with
the additional revenue that Department of Finance-
was not part of the initial Revenue section.
budget estimates.
That additional unbudgeted
revenue must be approved by
the Treasurer in a revised
budget to the Treasurer
before they actually spend it.
13.4 Prepare medium-term estimates of No transfer of funds
Jan 2016 – There is no transfer of funds Expenditures in IFMS are
changes (increases or decreases) in either from Capital
Sep 2017 either from Capital to lagging and not up to date
program funding during every annual to Operational.
Operational or vice versa. All resulting in reporting being
budget process to capture demographic transfer movements are lagged as well.
(health/education) changes. always within the respective
fund sources. In most cases,
transfers are usually done
within operational funds to
address funding shortfall and
to ensure government
agencies continue to perform
27 | P a g e
their core mandated functions
This has be approved by the
Secretary or his delegate.
13.5 Prepare medium-term estimates of

Pressures List Jan 2016 – Budget allocation Information on NEC Decisions
changes (increases or decreases) in
updated as at Jan 2017 recommendations are made to are not readily available and
program funding at annually budget first quarter. ensure core mandated presented to DoT hence
process to capture the effects of costs functions of government difficult to keep track of
of government decisions made in the agencies are sufficiently decisions and commitments
past that have not yet been fully “Pressures List” is a funded so they continue to made by the government.
implemented. record of the provide goods and services to However, we seek those
approved our people. All other political information and get them.
government commitments and pressures
decisions that were list are just listed with a brief
made and/or background for the attention
announced and yet of the decision makers.
to be implemented. If the government decides to
fund a commitment or
pressures list that is off
budget, then it is managed
through the contingencies
mentioned above.
13.11 Reduce time lag for release of warrants Timely release of YTD, releasing of Warrant
Projects are Jan 2016 – Subject to BMC/PDC
and APC for major procurement warrants from Authorities are still lagging
implemented Dec 2017 deliberation monthly and
Treasury due to cash flow situation
on a timely weekly.
experienced.
Timely receipt of basis
Warrant Authorities Warrants release is always
from Agencies subject to a work plan
provided by the responsible
agency together with the
availability of cash in Waigani
Public Accounts.
PDC has always managed the
expenditure in terms of
priorities. Release of Warrant
Authorities are based on
28 | P a g e
revenue coming into the
Public Account
Lead Macroeconomic Policy Priority Action 13.0 Reforms in Budgeting, strengthening debt management practices and monitoring of
Division Division Areas fiscal risks.
 Ongoing Integration of Budgets
Branch Fiscal and Monetary Policy
Activity  2017 Budget to contain a minimum listing of all off budget revenue to all government agencies
 Estimate cost of Government Decisions that have not been fully implemented
13
Incorporate in annual budget Medium Term Revenue and spending estimates with details for debt
service and expected changes on costs of service delivery (Education and Health etc)
Activity Activity KPI Means of Timeframe Progress update Constraints and issues
No. verification
13.
Reforms in Budgeting, strengthening debt management practices and monitoring of fiscal risks.
13.6 Prepare intensive revenue and Revenue Budgeting.
2017 Budget Jan 2016 – Treasury maintains a matrix Compliance by line agencies has been
expenditure estimates for Medium term
Dec 2017 of “data base” for policy very slow. May be helped with IFMS
publication in 2017 budget of forecast of IFMS reports to decisions with financial rollout.
medium term change revenues. produce implications as a “pressure
estimates for education and multiyear Treasury will need to establish a
list” to monitor this Policy
Medium Term ceilings by separate Data base or a central
health and any other public Decisions on a quarterly basis.
perspective in agencies under monitoring system to keep stock of all
service for which existing But this is for the current year
expenditure each sector. and may need to include new and old government decisions yet
government policy will require
budgeting. estimates over the medium to be implemented or policy changes
spending changes.
term. and their effects or costs on the
A national medium
29 | P a g e
term budget frame System Reports Multiyear Budget ceilings resource envelope and fiscal space.
work that takes into on costs of concept started in 2014 and is
consideration all resource Each Agency to have a ceiling for the
ongoing in 2016. System
budget envelope over Budget year and the three forward
requirements associated with
sector/agencies fully the medium years. Incorporated in the Budget
proposed reforms to the
costed medium term term Circular. Should also include major
budget process are being
budget policy decisions and programmes.
discussed with IFMS.
submissions/strategy
Treasury needs to get line IFMS must include budget estimates
for each of four years, the budget
agencies involved
An operational year and three “forward” years
Database for beyond the budget year.
government Policy
Decisions Review of the existing budget process
IFMS System configuration changes to

An operational data cover medium term perspective
base on costs of
resource envelope
over the medium
term
13.7 Establish a Forward Estimates
Functioning Forward Minutes of Original DOT to inform the existing Forward year estimates are based
Planning Committee by 2015
Estimates meetings timeframe DoF-NTRD, IRC and Customs more on the outlook of the economy.
for consultative planning on Committee on stakeholders regarding the Revenue administrative agencies such
revenue estimates Revenue by 2015 Oct 2015 – discussions on forward year as DoF-NTRD, IRC and Customs
Nov 2015 revenue estimates by August. focuses more on collections during the
budget year with little assessment
Treasury has had regular
3 x consultation done on the collections outlook for the
consultations with DOF-NTRD,
meetings between Now time medium term. This would now require
IRC and Customs to formulate
DOT, Finance NTRD, frame DOF-NTRD, IRC and Customs not only
annual revenue estimates for
IR and Customs Sep2016 – focus on revenue collections for the
the budget year as well as
annually to budget year but to also conduct
Nov 2017 reviewing the estimates
discussing medium analysis on the outlook for the
during the year. However,
term revenue collections.
discussions between these
estimates
agencies can be extended to
include the medium term as
well as formation of the
committe.
30 | P a g e
13.12 Develop MTBF by 2018 Each Agency to Discussions are underway to The functionality of setting
A national medium Feb 2018 –
have a ceiling get agencies and sectors to operational and capital ceiling is
term budget frame Nov 2018
work that takes into for the Budget prepare a fully costed strategy present in IFMS but needs system
consideration all year and the that takes the form of a configuration for medium term
budget sectors and three forward medium term budget frame planning.
agencies fully costed years work.
Drafts to be reviewed and discussed.
medium term
budget submissions Operational and May require review of the
or strategy Investment existing budget process
budget ceiling
Approved MTBF which will be
administered by
Treasury.
13.13 Develop a Medium Term Revenue Budgeting. Medium term Need to adopt the multiyear ceilings
Jan 2020 –
Budget outlook by 2020 Medium term annual concept at the agency and sector
Dec 2020 System requirements
forecast of forecasting for level.
revenues. all fiscal and associated with proposed
economic data. reforms to the Budget Process
Medium Term for PNG have been produced
perspective in Drafts (ceilings) Need to get line agencies involved.
and discussed with IFMS since
expenditure from agencies 2014. Compliance by line agencies has been
budgeting. will be reviewed very slow. May be helped with IFMS
and discussed. rollout.
Credible Fiscal
Strategy.
Preparation and use
of macro-economic
forecasts as basis
for annual and
medium term
budgets.
Approved MTBO
31 | P a g e
Lead Financial Management Priority Action 13.0 Reforms in Budgeting, strengthening debt management practices and monitoring of
Division Division Areas fiscal risks.
 Establish a comprehensive database on government loans, guarantees and PPP.
Loans and Execution
Branch
Activity 13
Activity Means of
Activity KPI Timeframe Progress Update Constraints and issues
No. Verification
13.
13.10A Develop a plan to convert all
Approved plan on Mar 2016 - To address the issue of repayment
existing trust accounts to a free
free cash balance Nov 2017 of short-term borrowing cost, FMD
cash balance status by July from trust accounts in collaboration with other key
2016 with estimates of the stakeholders, undertook another
reduction in Government short- approach. In 2015, an account
term borrowing costs that called the Debt Repayment
would result. Account (DRA) was established
with BPNG. The primary purpose of
the account was to build-up cash
to help with the management and
settlement of the Government‟s
larger debt service obligations
when they fell due.
13.16 A A high priority should be the
Update a registry for CSDRMS System Jan – Dec, Treasury has a State Guarantee The State‟s Debt
preparation by Treasury of a
State Guarantee and Report 2016 Policy that was formulated in 2016 Recording System was
comprehensive database on On-Lending loans at and is to be implemented in 2017. upgraded in 2018 and all
government loans and State Registry Report
the Department of on-lent loans and state
guarantees The records of all the State
Treasury (DoT). guarantees are expected
Guarantees is maintained by the
to be registered and
Currently, all debt Financial Management Division
updated in CS-DRMS by
data are recorded in (FMD) in the Operations Wing in
Oct 2018.
the CSDRMS and Treasury
IFMS respectively.
Treasury has an On – Lending
Policy that guides the State in
terms of providing Government
Lending to State Owned
Enterprises (SOEs/KCH ).
32 | P a g e
Treasury also has a Community
Service Obligation Policy which is
to assist SOE‟s in terms of
providing service delivery in a
transparent manner to the people
in collaboration with the State.
Treasury has a Dividend Policy that

was approved in 2015. The Policy
is to guide State Owned
Enterprise‟s (SOE‟s) and Statutory
Authorities (SA) in terms of paying
dividends to the State. Treasury is
currently working on the revised
version of the policy which will be
submitted to NEC this year 2017,
for approval.
CSDRMS has also been upgraded
to cater for recording, On-lending
and State Guarantees.
13.18 Legislate and reinforce policies, Treasury has a State Reviewing the Jan 2016 – The On-lending Policy was
procurement and reporting Guarantee Policy effectiveness of the Jan 2017 developed and approved in 2013. Financial assistance
related to all Government that was formulated enforcements required for Technical
Guarantees and Arrears to be in 2016 and is to be (instructions etc). The Guarantee Policy was Expertise to complete the
covered by DoT implemented in developed and approved in 2016. formulation of the policy.
2017. The records of
all the State Currently DOT is in the process of
Guarantees is developing the Centralised
maintained by the Borrowing Policy.
Financial A Framework for the Centralized
Management Borrowing has been completed
Division (FMD) in the with technical support from ADB in
Operations Wing in April 2018. There is, however,
Treasury. further financial assistance
required for Technical Expertise to
33 | P a g e
complete the formulation of the
policy.
Lead Sectoral Policy Division Priority Action 13.0 Reforms in Budgeting, strengthening debt management practices and monitoring
Division Areas of fiscal risks.
 Strengthened debt management practices to minimise funding costs and risks
Activity  Establish a comprehensive database on government loans, guarantees and PPPs
Branch
Sectorial
13
Activity Means of
Activity KPI Timeframe Progress update Constraints and issues
No. verification
13.
13.16 B A high priority should be the The PPP framework is important The PPP Act was passed in
The PPP Framework is Ongoing as it will enable the Government 2014 and the law was
preparation by Treasury of a
outlined in the Act and
comprehensive database on to assess and prioritize projects gazetted in early 2018 but the
is currently being
Public Private Partnerships (PPPs) to ensure that they are achieved Act is currently being
progressed. Once
(by end 2016) in the most cost efficient reviewed for amendments as
operational the PPP
manner. The Government will it is considered more
Centre should be able
use PPPs – as a procurement bureaucratic and process
to maintain a PPP
mechanism to deliver quality driven.
database undertaken
standard public asset
in the country as well
(infrastructure) services to the
as provide the
people.
information on PPP
arrangements going
Currently a work plan is being
forward.
drafted for the full
implementation of the PPP
legislation in 2019 going forward.
13.17 Monitor the financial position and SPD has an already established Timely submission of annual
Fully functional unit for Statement F Oct 2017 Public Investment Branch (PIB) financial reports by the
fiscal risks of SOEs, statutory
monitoring of financial reporting is part –
bodies, and provinces which which monitors the financial and agencies for reporting of
positions of SOE‟s, of financial
would regularly provide fiscal position of SOE‟s through Statement F.
SNGs and SNGs performance
submissions to NEC on significant KCH by using Dashboard
reporting which
34 | P a g e
fiscal risks. This role also may under the new Annually reporting/monitoring. As well as
apply to the unit in PFMA will be the provide financial reporting of Capacity and staffing is an
DoF – Statutory mandated certain Commercial Statutory ongoing issue for continuity of
Authorities Monitoring responsibility of Authorities to Finance through initiatives.
branch. DoF can clarify Finance. However the reporting of the Statement F.
and Update. the Reporting is
presently being
done by Treasury
SPD and
submitted to
Finance.
35 | P a g e
B. Revenue Planning, Budgeting, Administration and Management
Revenue Collection, Cash flow Forecasting and Management
44. Revenue receipts from IRC, Customs and Non-Tax Revenues account for 87% of the total
4
budget for 2017 from operational and capital receipts recorded into WPA. IRC and Customs
alone account for 79% of total revenue whilst Non-Tax accounts 8% of the total revenue.
Total Revenue and Grants projections for 2018 have been revised up by K213.2 million in the 2018
MYEFO, compared to the 2018 Budget estimates. As a result, the revised Total Revenue and
Grants is projected at K12, 943.8 million compared to the 2018 Budget estimate of K12, 730.7
million.
These revised projections highlight improvements in Mining and Petroleum Tax driven by the
increase in international commodity prices and the expansion of gas production in the final quarter
of 2017. It also highlights an increase in Goods and Services Tax (GST) reflecting enhanced IRC
compliance activities and reduced GST refunds due to GST offsets against other tax heads. It also
reflects expectations that dividend and PMMR Act transfers targets will be achieved. Importantly,
underlying tax and non-tax collection trends continue to improve in line with the new Medium Term
Revenue Strategy operationalized in the 2018 Budget.
These trends represent a net improvement over the recent MYEFO reports that resulted in major
unplanned adjustments to the budget and to the productivity of fiscal expenditures.
Excluding donor grants, which are unchanged from the budget estimate, tax revenue estimates
have been increased by K182.5 million and other revenues by K30.6 million.
TAX REVENUE
Tax revenue collections in the first half of the year have been generally on par with budget
projections for most tax heads except for salary and wages tax. In total projected increases in these
taxes amount to an increase of K182.5 million on the 2018 Budget estimate of K9,639.4 million.
Taxes on Income, Profits and Capital Gains

Taxes on Income, Profits and Capital Gains (TIPCG) are projected to increase marginally by K2.8
million compared with the 2018 Budget estimate. This reflects projected increases in MPT,
Corporate Tax and Interest Withholding Tax which more than offset a projected decrease in Salary
and Wages Tax (SWT) by K119.2 million.
In the first half of the year, SWT collections amounted to K1,493.2 million, which is lower than
expectations and clearly relates to some decline in employment in the non-mineral sector,
significant GST refund offsets and delay in SWT payments from Statutory Bodies. The downward
revision to SWT also takes into account anticipated positive compliance activities undertaken by the
IRC, as well as the anticipated increase in the public wage bill as a result of the back-payment of
the 3.0 per cent salary increment for public servants for 2017 and another 3.0 per cent for 2018.
45. IRC is seeking to have the reconciliation functions automated through IFMS accounting.
PNG Customs Services has reconciled the backlog of accounts reconciliations for all their accounts.
Trust Accounts reconciliations have been improved greatly minimized all serious backlogs to prior
years and Months.
46. PNGCS transfers to WPA are now performed on a daily basis through the KATS System.
PNGCS nationwide is now cashless and cheque less. All receipts are paid through electronic
banking. This has given rise to an unprecedented increase in revenue collections compared to
previous periods due to the improvements in automated export and import registration system
4
Department of Treasury, 2018 MYEFO Report Page 30-33
36 | P a g e
through the ASYCUDA system. The system issues an import and or export company tax code
number to tag and identify the commercial import or exporter as the taxpayer.
47. PNGCS has prepared a Policy Paper on the cost of foregone revenue which exceeds K600.0
million. This policy paper has since been approved by NEC and procedures are now underway for
collecting foregone revenue.
48. Consequential Amendments to PFMA on 100% revenue collection of non-tax revenue to CRF
before being disbursed through Budget Appropriation or NEC decisions on Revenue Sharing for
non-tax revenue. By amendment of the PFMA in 2016 has given rise to the enactment of the Public
Money Management Regularisation (PMMR) Act, 2017. The PMMR Act has removed all public body
and statutory body their powers to retain public money.
It is anticipated that that by 2020 all Statutory bodies will be on the government payroll including
their annual budget appropriations, by this it means all revenue collected by SA to partly fund their
operation will be transferred in totality to WPA.
49. In June of 2016, the DoF with the support of PFTAC released a draft Report on Cash Flow
Forecasting System for GoPNG. The forecasting system provides measures and mechanisms in
strengthening weekly, monthly and yearly cash flow forecasting reports. It recommended that cash
flow forecast should be categorised for recurrent (operational), investment programs (PIP) and debt
financing. Furthermore, warrants should be released based on cash availability. Revenue forecast
from IRC, Customs and Non Tax should be pooled on a daily basis.
st 5
50. At December 31 2017, revenue forecast against actual revenues collected were below forecast
for IRC, Customs and Non Tax. Actual Salaries exceeded the forecast. Grants to Statutory
Authorities and Provincial Governments were 10% less than the forecasted value. All other
Operational and Capital Payments were less than the forecasted amounts resulting in savings.
Hence, aggregate fiscal responsibility by controlling the issuance of warrant authorities needs to be
undertaken.
Revenue Budgeting and Planning
51. It is imperative that the Forward Estimates Committee on Revenue planning and budgeting
be formulated as soon as practicable and meet regularly to discuss realistic estimates. This
Committee was to have been formed in October 2015, according to the Activity 13.7. It would be
responsible for realistic revenue planning and forecasting on annual and medium term budget
estimates for revenue projections on a weekly, monthly quarterly and annual basis from IRC,
Customs and Non Tax Revenue as well as other receipts for each financial year.
However, according to Treasury forward year estimates are based more on the outlook of the
economy. Revenue administrative agencies such as DoF-NTRD, IRC and Customs focuses more on
collections during the budget year with little assessment done on the collections outlook for the
medium term. This would now require DOF-NTRD, IRC and Customs not only focus on revenue
collections for the budget year but to also conduct analysis on the outlook for the collections.
52. The current process in annual revenue planning, budgeting and forecasting needs to involve the
engagement of the stakeholders who are responsible for collection of these receipts in providing
their annual revenue budget estimates.
53. The Department of Finance undertook a cash pooling project and in May 2016 a draft report
was released. The Cash pooling project was undertaken with the support of PFTAC. The
mechanism which was discussed already and currently pending with the BPNG is aimed at
generating a pooling facility to establish a net cash position for government. This will be drawn from
all receipts tax and non- tax revenue receipts. It is being planned and proposed that Cash balances
5
Department of Treasury, 2017 FBO Report Page 9-23
37 | P a g e
from trust accounts are to be moved through the Banking Framework Project from ANZ and
Westpac to BPNG except for trust accounts in BSP.
A draft report was compiled in June 2016 and is still pending with BPNG to be effectively
implemented.
Revenue Arrears Management and Administration Compliance
54. IRC has developed an effective revenue arrears or debt recovery plan through its debt
modelling system. It is being tested under the Standard Integrated Government Tax
Administration System (SIGTAS) Roll out program. SIGTAS is an automated tax administration and
management system management enabling tax payers and business houses to apply for tax
identification numbers.
55. IRC developed a risk management plan which is currently being reviewed. Following the
approval of this plan an operational audit compliance plan would be developed. IRC follows a risk
management process but this has to be documented. Tax Audit to finalise the Compliance
Improvement Strategy.
56. A debt management system for revenue arrears in PNGCS is fully operational and is being
managed by a debt management section. Quarterly debt management reports are generated
through the debt recoding system. A fully functional and updated Debt database is producing up to
date revenue arrears management reports.
57. An appeals tribunal has not been established in PNGCS as yet. As at June 2016, no appeals
were received by PNGCS.
58. Reconciliation of Non-tax revenue receipts at WPA is currently not being performed for receipts
form SNG. Non Tax revenue is developing a Non Tax revenue arrears registry to record Non Tax
revenue arrears to the state.
59. The following is the progressive report from IRC, PNG CS and DoF – Non Tax Revenue Divisio
38 | P a g e
2: INTERNAL REVENUE COMMISSION
AGENCY Period of Reporting : As at 30th June, 2018

2018 MID YEAR
Corporate Services Division; Tax Audit
INTERNAL REVENUE Division; Policy and Advisory Division;
Divisions :
216 Debt & Lodgement Enforcement
COMMISSION Division; Case Selection & Intelligence
Division
Duration of PFM Road FEB 2015 - DEC 2018
Map :
2015 PEFA
Critical to
PEFA Framework Report
Pillar PI PEFA Framework Performance Indicator(PI) Improved Priority Areas
Description of the Pillar Indicator
Performance
Rating
Reforms in Accounts
Reconciliation and risk
IV Policy Based Planning and PI – 15 Revenue Budgeting C+ Yes
management practices for
Budgeting
internal revenue collection
Improve Accounts reconciliation
V Predictability and Control PI - 19 Revenue Administration Compliance D+ Yes Risk Management Process
in Budget Execution
Strengthen Compliance Audits
PI - 20 Accounting for Revenues Development an Audits Plan

D+ Yes
Establish a Risk Management Unit
Page | 39
INTERNAL REVENUE COMMISSION
Activity PFM Reform Priority Key Performance Actual Output YTD Lead Lead Start End
No. Activities Indicator/Output Agency Division Date Date
16. Reforms in Accounts Reconciliation and risk management practices for internal revenue collection
16.1 Improve accounts 3.1 REVENUE ACCOUNTING

reconciliations processes in SOLUTION SCOPING STUDY
order to avoid serious The scoping study commissioned by
backlogs Finance & Administration Division to
look into solutions for all the issues
identified was completed in
September 2017 (Green Cloud
Consulting Australia). The report is
available on request.
The aim of the scoping study was
to find solutions to the following
issues:
i. Data export from SIGTAS and
import into IFMS;
An automated daily ii. Timely and accurate reporting of Finance & Sep-
Dec-17
reconciliation report tax payments received as reported Administratio 15
IRC
in the daily Collector Statement n Division
(C/S) both in NCD and in the
provinces, daily transfers based on
the C/S, and transfer rules
including compliance with Good &
Services Tax Revenue Distribution
Act 2003;
iii. Bank reconciliation of all the
revenue receiving and revenue
distribution bank accounts
(although the latter bank accounts
have been set-up on IFMS and fully
reconciled for 2016, a review is
warranted);
Page | 40
iv. IRC internal and external
reporting requirements: IRC
management reporting needs;
legally authorised external
recipients reporting needs; timely
and accurate reporting.
Following the scoping study, a

Project Plan was prepared in
November 2017 (available on
request). The Project Plan has been
approved by DOF IFMS team. The
implementation of the Project Plan
is scheduled for the second week of
January 2018.
3.2 TAX RECONCILIATION

SYSTEM
For 2017, the reconciliation
between SIGTAS tax receipts and
the IRC revenue bank accounts
have been performed using the Tax
Reconciliation System (TRS); an
internally generated Access
database managed by the ASI
SIGTAS (TRS) Advisor working with
Revenue Accounting officers. The
TRS reconciles SIGTAS taxpayer
transactions with all the revenue
receiving bank accounts (BSP,
Westpac, ANZ, NY FED A/c) and
the BPNG Admin Account. The 2016
reconciliation has been completed.
Reconciliations for 2017 have been
made up to the month of October
2017. However, the TRS is only
Page | 41
meant to be a temporary solution
and will be replaced using SIGTAS
and IFMS once the Project Plan has
been successfully implemented.
Presented below is the TRS bank
reconciliation for the month ended
31st August 2018 (reconciliations
for September and October
available on request):
3.3 TRUST ACCOUNT

RECONCILIATIONS
IRC manages and reconciles a total
of 37 bank accounts, of which, 26
bank accounts are Trust Accounts.
The trust accounts are set up in
IFMS and are fully reconciled up to
October 2017. Reconciliations for
November 2017 are currently in
progress and due to be completed
by 11th December 2017.
Presented below is the status of the
bank reconciliations for the Trust
Accounts:
16.2 Improve risk management An approved and fully IRC
processes, develop a operational risk management IRC follows a risk management
process and management plan process but this has to be CSI
structured risk management
plan, Strengthen compliance documented. Nov-
An active audit compliance Dec-17
audits and an develop audits 15
plan plan or strategy for IRC with Tax Audit to finalise the Tax audit
support from risk profile. Compliance Improvement
Strategy.
16.3 Update taxpayer education Number of taxpayers voluntary Taxpayer Education and Awareness IRC Sep-
pamphlets and circulars, and compliance through tax Outreach through a more targeted Dec-17
15
education and awareness approach is being progressed by Policy &
other information
Page | 42
dissemination to improve IRC with a focus to specific Advice
voluntary compliance with provisions of the Income Tax Act
tax laws (ITA).
Goodwill tours and Tax Awareness

on recent legislation amendments is
being planned throughout the
major centres.
The presence of IRC Tax Centres in

the Regions is assisting with
taxpayer education and awareness.
16.4 Part of the SIGTAS Rollout IRC Debt &

Review definition of 'revenue Number of staff recruited for program. Lodgement
Jan-
debt and arrears' within IRC placement in the new division Enforcement Dec-17
Automated debt recovery 16
legislation
report
16.5 CSI division structure to be put in IRC Case

place to properly assign roles and Selection &
The IRC to establish a risk Capable staff have been responsibilities.
management division to
Intelligence Mar-
Identified and placed in the Dec-17
manage risk to revenue Job descriptions to define tasks. 16
division
Standard Operational Procedures
being put in place.
Page | 43
INTERNAL REVENUE COMMISSION
Strengthen Accounts Reconciliation and Risk Management Practices.
Division Corporate Services Division; Tax Priority Action
 Improve Accounts reconciliation
Audit Division; Policy and Areas
 Risk Management Process
Advisory Division; Debt &
 Strengthen Compliance Audits
Lodgement Enforcement
 Development an Audits Plan
Division; CSI Division Activity 16
 Establish a Risk Management Unit
Large Business Audit &
International
Branch
CSI – International and
Domestic
Taxpayer Education and
Awareness
Activity Constraints and
Activity KPI Means of verification Timeframe Progress update
No. issues
16.0 Reforms in Accounts Reconciliation and risk management practices for internal revenue collection
Able to provide Partially achieved: Need to have IMFS
reconciliation report accounting module
 Scoping study
upon request. But still configured and
needs more work in completed and operational in order to
Project Plan Prepared
Improve accounts reconciliations terms of timeliness and automated
consistency and also Sep 2015 - for implementation in reconciliations.
16.1 processes in order to avoid serious An automated daily Q1 2018,
reconciliation the integrity of the Dec-2017
backlogs  Required resourcing
information. More work
to be funded by
is been currently done
PGF/DFAT.
on this to improve.
16.2 Improve risk management processes, Develop and apply a IRC in collaboration with the
Risk identification able Nov 2015 – Very minimal
develop a structured risk Risk Management World Bank is in the process
Page | 44
management plan, strengthen Process to be done by Division Dec 2017 of implementing the Risk
compliance audits and an develop Based Audit (RBA) approach
Audit Compliance Meeting and
audits plan Profile taxpayers and currently piloting the
Plan/Strategy communication
that exhibit risk automated risk assessment
breakdown.
instrument that should be
An active audit used as RBA to improve risk
compliance plan for assessment and audit IT
IRC. systems.
Tax audit have started initial

discussions to develop the
plan. This will also be
dependent on the risk based
audit approach.
Compliance strategy to be
finalised.
Goodwill tours undertaken in

Resource constraints,
Kokopo and Buka.
suitable officers for this
task to take place.
General Tax Awareness in
Port Moresby, Kokopo and
Buka.
More effort will be put
An informed taxpayer into this activity in 2017
Tax Agent liaison meeting
Update taxpayer education Improve taxpayer population. but again, this will be
held in Port Moresby,
pamphlets and circulars, and other voluntary Nov 2015 - dependent on funding.
16.3 Kokopo
information dissemination to improve compliance through Dec-2017
voluntary compliance with tax laws tax education and
Targeted tax awareness
awareness Delays in the update of
session conducted ENBP &
information.
AROB
Other Goodwill tours planned

for Morobe and the Highlands
Regions.
Page | 45
Part of the SIGTAS Rollout
An active debt collection Lack of Funding on
program.
system in SIGTAS. Capital funding to assist
with rollout.
PEFA team raised this item
with our Legal Services for Staff training
Develop an effective
further explanation.
Review definition of 'revenue debt debt recovery Plan Jan 2016 Powers to write-off
16.4 and automate the limited. IRC will be
and arrears' within IRC legislation Dec-2017
debt recovery writing to increase power
process on the write-offs.
Delay from other
stakeholders
The implementation of
the regular risk is The IRC follows the regular
conducted at central procedures of tax risk Minimal Staff capacity.
Risk assessment to assessment covering the 5 Need to recruit more
organizational level of
become a part of main steps of the risk personnel.
IRC.
the IRC overall risk management cycle : Data gathering is a key
management element in the risk
The IRC is Identification - Analysis-
system. assessment process. IRC
implementing the basic Prioritisation-Treatment -
The IRC to establish a risk is having problem
OECD Activity Evaluation
16.5 management division to manage risk All core processes getting external data
recommendations on accomplished from 3rd party
to revenue should define clearly The IRC aims to identify and
Compliance Risk information holders
the respond to the most
Management6 for tax including government.
roles/responsibilities important compliance risks
authorities. agencies.
of each within core obligations of a
team/personnel taxpayer.
involved in risk
assessment
Case Selection & Intelligence
Division Established in April
2016
Page | 46
1. PNG Customs Service
2018 MID YEAR Period of Reporting : As at 30th June,2018

AGENCY
Trade and Revenue Division; Internal
Divisions : Audit Section; International and Public
211 PNG CUSTOMS SERVICE Affairs Section; Economic and Fiscal
Division; Modernisation Division
Map :
2015
Indicator(PI)
Rating
Reforms in Accounts Reconciliation
and risk management practices for
IV Policy Based Planning PI – 15 Revenue Budgeting C+ Yes
internal revenue collection
and Budgeting
V Predictability and  Improve accounts reconciliation

 Full integration in Asycuda
Control in Budget
D+ Yes  Update Risk Management Plan
Execution  Strengthen Compliance Audits
PI - 19 Revenue Administration Compliance  Establish a centralised customs arrears
tax data base
 Establish a unit to management all
revenue arrears
 Improve timeliness of transfer of funds
between BPNG, WPA and Customs
through KATS system
 Re-establish the Appeals Tribunal to
clear unresolved cases
 Provide a review on cost of foregone
revenue
Page | 47
SCHEDULE 2: SUMMARY OF KEY PRIORITY ACTIVITES
PNG CUSTOMS SERVICE
Activity Key Performance Actual Output YTD Lead Lead Start End
PFM Reform Priority Activities
No. Indicator/Output Agency Division Date Date
16. Reforms in Accounts Reconciliation and risk management practices for internal revenue collection
Trade and
Most Accounts are Revenue
reconciled. CUST
Division
(TRA)
Improve accounts reconciliations Reconciliation of all Trust
16.6 processes in order to avoid serious Trust Accounts reconciliation Accounts updated to Sep-15 Jun-16
backlogs minimised by one month February 2016 with the
exception of Revenue
Subsidiary at BSP and
Revenue Admin. At BPNG.
Should settle them by next
month.
The Internal Audit Section CUST Internal Audit

is managing risk and Section
compliance through the
Improve risk management by reviewing ASYCUDA system in
Strategic Risk Management Plan
the strategic risk management plan and managing risks and
Reviewed
16.7 developing a risk based audit plan to compliance audits. The Sep-15
strengthen compliance audits. Fully ASYCUDA system is an
integrate ASYCUDA system. importer and exporter tax
ASYCUDA system fully integrated.
registration system
A Strategic Risk
Management Plan was
developed in 2011 but
needs review to date.
Page | 48
PNG Customs Service website Awareness conducted in all

fully operational and accessible. Regions and a updated CUST International
website and Public
Update client education pamphlets and Number of Pamphlets distributed Affairs
circulars, and other information There have been 3 section
16.8 dissemination to improve voluntary Number of Circulars issued awareness programs that Sep-15 Dec-17
compliance with customs laws. Establish PNGCS took part in for this
a detailed plan. Approved communication plan year. We have plans for 2
more later this year.
5 awareness workshops Pamphlets are always
conducted distributed during the
awareness; we cannot put
a figure on it.
Updated Debt database.

CUST TRA –DEBT
Establish a centralised customs tax Centralized customs tax arrears PNGCS has a Debt MANAGEMNT
arrears data base to capture all arrears database fully operational Management Section with SECTION
established by different divisions of the TRA Division that is
16.9 Quarterly Customs Tax Arrears responsible for all PNG May-16 May-17
Customs - Post Clearance Audit,
Enforcement, Intelligence and Debt Report Customs debts.
Management
Latest quarterly report of
April 2016, revealed a
recovery of K2.4 million in
Debts to be collected.
A fully functional and
Establish a centralized unit that manages The Debt Management section updated Debt database is
1610 manages all debts for PNG producing up to date CUST TRA May-16 Dec-17
all revenue arrears
Customs revenue arrears
management reports.
PNG Customs is now
Improve timeliness of transfer of funds Revenue is cleared and
16.11 cashless and cheque less Sep-15 Mar-16
to WPA from KATS System with BPNG transferred promptly. Revenue is CUST TRA
nationwide. Revenue is
transferred on a daily basis
paid electronically from
Page | 49
bank to bank on a daily
basis through the KATS
System.
Penalties for non-compliance are PNGCS has seen increased
issued through a Demand Letter the level of compliance rise
Review penalties for non-compliance to CUST TRA
and should be paid within 21 by stakeholders
accommodate increase in penalty rates
16.12 days. That is stipulated in the Nov-15 Jun-16
to enhance international best practice in PNGCS Debt recovery guidelines. Revenues are paid
payment of revenues electronically from bank to
Consistent with international best bank
practice
There is no physical
existence of a tribunal for
PNGCS. Modernisatio
Establish an appeals tribunal to redress Fully functional appeals tribunal n Division
CUST
16.13 appeals and backlog of unresolved cases The Customs Act, 1951 Oct-15 Mar-16
within 6 months Reduce backlog of cases to 1 has legislation for
month establishment of an
Appeals Tribunal, however,
the physical tribunal is yet
to be set up.
A Policy paper has been
prepared on the review of
Policy Paper on review of cost of
the cost of foregone
foregone revenue - confirmed
revenue and has been
approved.
Policy Decision on approved Economic
Review existing policies and procedures Procedures are now and Fiscal
16.14 review recommendations - Jul-16 Jan-17
on cost of foregone revenue underway in collecting CUST Division
confirmed
foregone revenue.
Procedures on obtaining foregone
Foregone revenue is being
revenue- confirmed
published in the PNG
Customs Service Annual
Database on Foregone revenue
Reports.
Page | 50
PNG CUSTOMS SERVICE
Strengthen Accounts Reconciliation and Risk Management Practices.
Division Trade and Revenue Priority Action Areas
 Improve accounts reconciliation
Administration
 Full integration in Asycuda
 Update Risk Management Plan
Activity 16
 Strengthen Compliance Audits
Revenue Accounting Section  Establish a centralised customs arrears tax data base
 Establish a unit to management all revenue arrears
Branch(s) Internal Audit
 Improve timeliness of transfer of funds between BPNG, WPA and Customs
through KATS system
 Re-establish the Appeals Tribunal to clear unresolved cases
Provide a review on cost of foregone revenue
Means of Constraints and

Activity No. Activity KPI Timeframe Progress update
verification issues
16. Reforms in accounts reconciliation and risk management practices for internal revenue collection
Trust accounts Bank End of July Trust Accounts updated to The Accounts section
reconciliation delay by one Reconciliation 2016 February 2016 with the of PNG Customs
month Reports exception of Revenue needs more officers to
Subsidiary account at BSP and be recruited to assist
Revenue Admin at BPNG. in the process.
Both are expected to be
settled by July.
Improve accounts reconciliations
16.6 processes in order to avoid serious Should settle them by next
backlogs month
Due to funding constraints, No funds to recruit
we are engaging students officers even as
who are on holidays to assist casuals.
in reconciliation as job
experiences within accounts
section. There are about 5
students engaged.
Page | 51
Revised and approved Reviewed Sept 2015 –
Strategic Risk Management Strategic Risk Nov 2015
Improve risk management by A Strategic Risk Management No issues. Date
Plan Management
reviewing the strategic risk Plan was developed in 2011 extended to Nov 2016
Plan
management plan and developing a but needs to be reviewed.
16.7 To be Hopefully into early
risk based audit plan to strengthen completed Due to Divisional Priorities, we part of 2017
compliance audits. Fully integrate by 2017 have not started the review
Asycuda system. yet. The customs internal
Audit section is responsible
for this.
Number of workshops Reports on December The International and Public

client 2016 Affairs Section are responsible
Number of pamphlets and
education for stakeholder awareness
Update client education pamphlets and other circulars disseminated
awareness and they also update the PNG No issues.
circulars, and other information Customs Service website.
16.8 dissemination to improve voluntary
Number of persons Customs is currently engaged
compliance with customs laws. Awareness is ongoing
attended in awareness in Goroka, then
Establish a detailed plan. for our stakeholders
to Lae during the shows
there. We had stalls there and
the Lae stall was nominated
as one of the best stalls.
Reports of all May 2016 – Managing the level of debt Manpower

Centralised Tax Arrears arrears May 2017 has greatly improved and requirement to
Data base operational through an operational support debt recovery
database. are a Senior Advising
Establish a centralised customs tax
Officer Debts, an
arrears data base to capture all arrears The 2015 debts has been
Advising officer and a
established by different divisions of reduced by 90%, 2016 the
16.9 recovery officer.
Customs - Post Clearance Audit, outstanding yet to be
Enforcement, Intelligence and Debt collected totals to 10% in These are new
Management outstanding revenue arrears.. positions created and
personnel are yet to
The outstanding debt to date
be recruited.
is at K679,898.04 a big
reduction from the last report. Will continue to
recoup all outstanding
Page | 52
An established centralised Structure of By 2017 A well-functioning Debt Require 3 more
unit to manage revenue the Unit Management section exists positions under the
arrears however additional manpower new structure
Establish a centralized unit that specific to arrears recovery
1610
manages all revenue arrears are yet to be recruited.
New positions are considered
Considered for the
under the new structure.
new structure in 2017
Prompt disbursement of Weekly August PNG Customs is now cashless

revenue to WPA on weekly reports on the 2016 and cheque less nationwide.
No issues.
Improve timeliness of transfer of funds basis transfer of Revenue is paid electronically
16.11 funds from bank to bank. All good with
to WPA from KATS System with BPNG
increased revenues
PNG CS has realized an
unprecedented increase in
revenue collections
Revised Penalties for non- Reports on Already Revenue projections are

compliance Penalties for effective in expected to rise by 10% over
Review penalties for non-compliance Non- May 2016 the projected figure
to accommodate increase in penalty Compliance No issues.
16.12 The effect of non-compliance
rates to enhance international best
charges has led to an May take it into
practice in payment of revenues
unprecedented increase in consideration to
revenue collections increase penalties in
2017
Fully operational and Established September The Customs Act, 1951 has
functional Appeals Tribunal Appeals 2016 legislation for establishment
Tribunal of an Appeals Tribunal;
however, the physical tribunal No issues.
Establish an appeals tribunal to
Report of Appeals Tribunal is yet to be set up.
16.13 redress appeals and backlog of
unresolved cases within 6 months
So far no appeals have been
received.
Should be considered
The customs Modernization
in 2017
Division is tasked to establish
Page | 53
a Customs Tribunal
Policy and procedures on Published in June 2016 2014 and 2015 Annual
cost of foregone revenue the PNG Reports are ready for NEC. It
designed and approved Customs is through these reports that
Service revenue foregone are None.
Review existing policies and
Annual Report published.
16.14 procedures on cost of foregone
revenue The Database of foregone
Considerations are
revenue is being managed by
before
the Economic and Fiscal
Parliament to reduce
Division and is up to date.
exemption provisions
by Treasury.
Page | 54
DEPARTMENT OF FINANCE
2018 MID - YEAR Period of Reporting : As at 30th June 2018

AGENCY
Division :
DEPARTMENT OF FINANCE NON TAX REVENUE
206
Map :
2015
Pillar Description of the PI PEFA Framework Performance Indicator(PI) Report Improved Priority Areas
Rating
Design and implement a new
Performance Information for Achieving
I Budget Reliability PI - 8 D Yes Government banking
Efficiency in Service Delivery
framework
 Timely Accounts
PI – 9 Public Access to Key Information D Yes
Reconciliation
Asset and Liability  Reduce time on transfer of
III PI - 10 Fiscal Risk Management D Yes
Management Funds to WPA
 Cash Forecasting/mid-year
PI - 11 Public Investment Management D Yes
cash forecast revisions
 Establish banking
PI - 12 Public Asset Management D+ Yes arrangements to use cash in
accounts established
Management and Reporting on Debt and using GoPNG funds outside
PI - 13 D Yes
Expenditure Arrears WPA
Predictability and
V Control in Budget PI - 22 Effectiveness of Payroll Controls D+ Yes
Execution
Effectiveness of Internal Controls for Non-
PI - 24 D+ Yes
Salary Expenditure
PI - 25 Effectiveness of Internal Audit D+ Yes
Page | 55
Expenditure and Revenue Arrears Management
5.
Develop a central non-tax arrears registry to NTRD has begun planning
Fully functional non-tax
5.2 maintain and monitor non-tax revenue to register Non tax revenue DoF NTRD Oct-15 Dec -17
arrears database.
arrears to the State arrears.
Enabling all revenues and expenditures through the budget
6.
Consequential Amendments
Consequential Amendments to on PFMFA Aug 2016 on
6.1 Prepare NEC submission to have 100% PFMA on 100% revenue Arrangements that 100% DoF NTRD Aug 2016 Dec-17
revenue collections to be transferred to collection to CRF collections are deposited
WPA into CRF
Reverse arrangement on
Consequential Amendments to withholding Sharing Trust
Maintain revenue withholding sharing trust PFMA on 100% revenue Accounts to have 100%
6.2 DoF NTRD Aug 2016 Dec-17
accounts and have 100% revenue collections to CRF revenue collections
collections transferred through CRF before transferred through CRF
sharing. before sharing
Demarcate clearly the Contingency Mapping 2014 GFS with
Economic Items in the IFMS in 2016 Budget current IFMS chart of
Account to clearly identify
Mapping 2014 GFS with
the contingency economic
current IFMS Chart of Account
6.3 items in IFMS in 2016 DoF NTRD Aug 2016 Dec 17
in 2016 Budget and replicating
Budget. Working closely
for 2017 and 2018 Budget.
with the GFS 2014 Project
Team headed by
Department of Treasury.
Page | 56
SCHEDULE 3: DETAILED PROGRESSIVE REPORT
Lead
Priority Action
Division Non-Tax Revenue Reforms in collection in Non-Tax revenue
Areas
Activity 5 and 6 : 6. Expenditure and Revenue Arrears Management
Rates Review and 7. Enabling all non-tax revenues through the budget
Compliance
Branch(s)
Monitoring and Research
Activity Means of Constraints and

Activity KPI Timeframe Progress update
No. verification issues

5.
Develop a central non-tax arrears  Lack of funding to
registry to maintain and monitor System Report PFMA 2016 amendments conduct an
non-tax revenue arrears to the have been passed and extensive research
State endorsed by parliament in into creating a
August 2016. database that
contains all the
Sect 71D of PFMA Arrears required
Management and collection – information.
Database interface in IFMS  Lack of funding to
Fully functional create the actual
Oct 2015 – with PNG Customs, IRC and
5.2 non-tax arrears database.
Oct 2017 Dept of Treasury, IT support
database.  Lack of a skilled IT
in IFMS ,collaborative
approach to collect arrears personnel to
and recourses support to develop the
collect arrears. database.
Working on TOR for

establishment of database
Tax arrears
Page | 57
6.
6.1 Prepare NEC submission to have All revenue Approved Aug 2016 – 1: Amendment of the PFMA  Lack of funding for
100% revenue collections to be collections are Consequential Dec 17 in 2016 has given rise to the awareness
transferred to Waigani Public transferred to CRF Amendment Bills enactment of the Public workshops
Accounts 2016 Money Management  Additional activities
Regularisation (PMMR) Act, to the project
2017. requires well trained
human resources.
 Agencies unwilling
2: The PMMR Act has to comply with
removed all public body and PMMR Act.
statutory body their powers  Legal implications
to retain public money.
3: By 2020 all Statutory

bodies will be on the
government payroll including
their annual budget
appropriations.
6.2 Maintain revenue withholding All revenue Approved Aug2016 – 1: Similar to 6.1 above, the  Lack of funding for
sharing trust accounts and have collections are Consequential Dec 17 PMMR also addressed this awareness
100% revenue collections transferred to CRF Amendment Bills because we are clawing back workshops.
transferred through CRF before 2016 90% revenue collections  Extra activities
sharing. from the statutory bodies requires manpower
beginning January 2018 and  Political influences
give them back 10% and an impeding the PMMR
additional amount base on Group to carry out
need. their mandated task.
Page | 58
 Agencies
intentionally
2: We are also sweeping
misleading their
back
minister of the
Monies sitting in bank PMMR impact.
accounts from;  Most, if not all
agencies holding
back appropriation
(a) Expired for former years. All
appropriations formers years
appropriation should
(b) Left over funds in
go back to CRF.
trust accounts from
completed projects
(c) Expired trust
accounts
(d) Investment deposits
from statutory bodies
and public bodies
3: The sweeping exercise

starts in quarter 1 2018
6.3 Demarcate clearly the Mapping 2014 GFS 2017 Budget Feb 2017 – 1. Joint work on this with  The most and only
Contingency Economic Items in with current IFMS Dec 2017 Department of Treasury and current constrains
the IFMS in 2016 Budget Chart of Account in IFMS team is on going. faced by the PNG
2016 Budget and GFS Team is
replicating for 2017 collection of reliable
and 2018 Budget. 2: Revenue chart of accounts data from national
for national is completed departments, state
after being cleansed to owned agencies,
remove duplicate revenue provincial
heads, or economic items Governments and
LLG to compile a
GFS Chart of
3: The GFS work with Accounts that is
Page | 59
treasury is already completed applicable to IFMS.
in 2017 awaiting Treasury to
finalise and inform the public
implement the GFS 2014 in
the IFMS budgeting and
reporting.
4: configuration of revenue
chart of accounts using GFS
2014 in the IFMS rollout is to
provinces and districts is in
progress with ENPG being
the first recipient.
Page | 60
C. Macroeconomic Statistics
Improving national accounts data collection, analysis and reporting
60. Improving and maintaining an effective system of reporting National Accounts Statistics is Strategy 4 of the NSO Corporate Plan
2015 – 2019. NSO has three primary KPIs7 to supporting this strategy;
i. Compiling the national accounts based on the 2008 System of National Accounts (SNA) Euro-Stat edition established.
ii. GFS compiled and reported annually from administrative data from national and SNGs.
iii. Import of Census of business activities and other data to National accounts and GDP estimates compiled and reported.
61. In May, the National Statistical Office (NSO) attended the 5th Meeting for the Steering Group on Regional Economic Statistics in
Bangkok. A report was provided on the coordination of national accounts data between stakeholders in PNG. The meeting presented the progress of
reforms under the national Statistical Development Strategy (SDS). A proposal to implement the SDS was presented to NEC in early May as part of the
road map for towards improving national accounts data.
62. NSO has formed a NSO Reform Secretariat Commission chaired by DoT that meets on a monthly basis to report on the progress of
statistical data collection. The NSO steering committee is chaired by the Secretary, DNPM. Issues confronting NSO has been the difficulty in
obtaining core sets of economic data due to the independence of the stakeholder‟s legislations responsible for supplying the statistical data sets.
Hence, data sets are not supplied on a timely basis to NSO. The following are the Core Sets of Economic Statistics that are being required by NSO but
are yet to be reported against.
- Price and cost
- Demand and supply
- Income and wealth
- Money and banking
- Revenue and expenditure on government funding
- Labour market
- Natural resource and environment
The following Indicator data sets have not been supplied to NSO and therefore not fulfilled in the reporting for national accounts.
Core Data Set Indicator
7
National Statistical Office Corporate Plan 2015 – 2019, p14
Page | 61
Prices and Costs Producer Price Index
Demand and output Short Term Indicator(STI) – Industry output
STI - Services output
STI - Consumer Demand
STI - Fixed Investment
STI - Inventories
Economy Structure Statistics
Productivity
Labour Market Labour supply and demand
Hours Worked
Natural Resources and Environment Natural Resources and Environment
63. Majority of data are supplied by NSO, BPNG, Finance and Treasury Departments, IRC amongst others. The PNG National Accounts Data
2007 – 2014 was released in December 2016 using the SNA 2008 and classified according to the PNG Standard Industrial Classification 2014 8.
64. Other issues are implementation of the Statistical National Accounts and Environment Statistics Accounting. The following are pending
to be developed; New SUT with ESA 2010 standards; independent annual estimates; institutional sector accounts; improvement in the quarterly
national accounts; improvement of business register; administrative data and classification and leading to improvement to national accounts.
65. The Australian Bureau of Statistics (ABS) supported NSO in enhancing the business register and with Technical Assistance in the
compilation of the national accounts statistics. IMF‟s PFTAC has been supporting NSO in compiling the Household Income Expenditure Survey
(HIES) and the national accounts statistics. NSO is seeking support for a TA in the collection and analysis of export and import indices and towards the
2018 HIES.
Enhancement of capacity of NSO
8
PNG National Accounts 2006 - 2014
Page | 62
66. NSO is being required to develop a capacity building and enhancement plan for its officers in the collection and analysis of national
accounts data. Furthermore, the NSO is keen on recruiting graduates for its Statistical Division. A capacity building plan is yet to be developed
according to Activity 20.1. A good number of officers have attended training both in country and overseas when opportunity arises however there is a
need to develop a training plan relevant to address the skills constraint of the workplace.
67. The following is the progressive report for NSO.
Page | 63
2. National Statistical Office
2018 MIDYEAR Period of Reporting: As at 30th June 2018

AGENCY
NATIONAL STATISTICAL
204 Divisions : Economic Statistical
OFFICE
Map :
2015
Pillar Description of the PI PEFA Framework Performance Indicator(PI) Report Improved Priority Areas
Rating
Improvement in the quality of Reforms in Reporting on
PI - 8 D Yes Reporting of Socio Economic
macroeconomic statistics
Indicators
 Improvement in the
Public Access to Timely and reliable and
compilation of economic
Comprehensiveness PI - 9 evidenced based National Accounts and D Yes statistics through
II and Transparency of Economic statistics. institutional capacity
Budget building
An improved set of economic statistics data  National Accounts Training
for national accounts, business statistics, program focusing on up-
PI-14 B+ Yes skilling officers ain areas of
International Trade and Consumer Price
Index Statistics data analysis, report writing
and research methods.
Page | 64
NATIONAL STATISTICAL OFFICE
Activity Key Performance Actual Output YTD Lead Start End

PFM Reform Priority Activities Lead Division
No. Indicator/Output Agency Date Date
20. Reporting of Socio Economic Indicators
Work Program to enable officers to Publication of 2016/ 2017

undertake compilation work in GDP estimates
National Statistical Office to develop a individual industries according to
20.1 capacity enhancement program for its the PNG Industrial Classifications More graduates to be Oct 2015 Jun18
officers in the analysis of national PNGSIC as per the requirements of recruited as more Economic NSO Economic
accounts data the System of National Accounts Statistics Division positions Statistical
compilation practises will be created in new NSO Division
Restructure.
NSO released 2006 to 2013 Economic
National Accounts Statistical
Publication of National Accounts publications in 31 March NSO Division
Data 2016.
20.2 Provide an updated national account Jun 17 Dec 18
GDP and National Accounts
data
Report on GDP per capita 2006 – estimates are compiled
2013 according to industry and
institutional sector
Page | 65
NATIONAL STATISTICAL OFFICE
NSO REFORMS AIMED AT IMRPOVING THE QUALITY OF NATIONAL ACCOUNTS

Lead Economical Priority Action
STATISTICS AND THE WIDER INIIATIVES TO IMPROVE THE OVERALL QUALITY OF
Statistical Areas
Divisio MACRECONMIC STATISTICS PRODUCTION IN PNG
Division
n  Improve the quality of compilation of national accounts
 Enhance the institutional capacity of the Economic Statistics through Human Resource
Activity 20
National development and infrastructure investment.
Accounts
Branch
Statistics
(s)
Business
Statistics
Consumer
Price Index
Internation
al Trade
Activit Means of Timefr
Activity KPI Progress update Constraints and issues
y No. verification ame
20 Reporting of Socio Economic Indicators
Annual GDP Oct 15 Australian Bureau of Go PNG funding has not been sufficient enough
Institutional
Publication –Jun Statistics (ABS) was to support training
capacity building 17 providing technical
the human resource NSO needs to recruit University Graduates in
assistance in
the National Accounts Statistics Branch.
and infrastructure compilation of the
20.1 development National Accounts Still need Technical Advisors to assist in fully
Statistics in the last 12 implementing the SNA 2008.
National
months since July
Statistical
2015.
Office to
develop a The IMF Regional
capacity Office PFTAC also
Page | 66
enhancement assisted in the reform
plan for its activities of the NSO in
officers in the introducing the
analysis of administrative data
national source such as GST of
accounts the IRC.
data As a result NSO
produced GDP series
data from 2016 –
2013.
Provide an
To have GDP National Jun16 31 March 2016 – Go PNG funding is insufficient to support
updated
estimates reported Accounts – Released 2006 to 2013 national accounts analysis and reporting.
national through the Report Dec18 series GDP nominal
accounts Production approach Estimates.
data and in order to establish NSO has been experiencing difficulties in
analysis Apart from the Survey
a good industrial obtaining economic statistics data from
of Business Activities
and sectoral organisations as they are governed by their own
data from NSO, the
representation of laws and regulations.
20.2 GST data from IRC is
their contribution to
used mostly for the
GDP.
Non-financial
Quarterly Report on Corporation sector
national accounts under data sharing
data. arrangement between
NSO and IRC. Also the
Business Liaison
Survey data from the
BPNG were used.
Page | 67
OUTCOME 2: STRATEGIC ALLOCATION OF RESOURCES
D. Public Financial Management
Legal Framework Revision
68. The DoF formed a TWG to deliberate on the Financial Framework Review Process. The
European Union supported the Department with technical placement of a legal expert on the FFR
Project. Consolidation of amended PFMA will be ready by end of November 2018 by FLC. PFMA,
PMMR and Procurement awareness roll out will be massively carried out in October - November
2018. Gazettal and Publication will be in December 2018. Procurement Act commencement will be
in January 2019.
69. Awareness will be conducted with Executive Management with NPMD, Treasury and Finance with
the support of donor partners. Under the FFR project the NPC Act also look set to be successfully
amended in parliament whilst PMMR Act was passed in Parliament, All Consequential Amendments
with the revised bill was passed in the floor of Parliament in the August 2016 Sitting of Parliament.
st
The revised PFMA became effective 1 January 2017.
70. Some of the issues addressed under the FFR amongst others, are the differentiation of the
functions of the DoT and DoF. Others include, but not limited to, the procedures for applying for
statutory authority status, broadened powers of the DoF in directing inspections into statutory
authorities by Finance Inspectors or Financial Controllers, powers for maintaining and collecting
expenditure revenue and arrears to government and transforming the functionality of FIs into legal
instruments. Following the passing of the PFMA Bill, the new Act is set to roll out nationwide
immediately after the awareness of the Bill. The FFR have reviewed hence modernising and
streamlining the Financial Management Manual and the Finance Instructions following the approval
of the Act making the document user friendly however attracting serious penalties for non-
compliance. The FMM and FIs are waiting for the National Procurement Law to be passed in
Parliament so procurement matters in the FMM will be removed to the new Procurement Act.
The National Procurement Policy was developed as per directive by NEC to establish the new
National Procurement Commission (NPC) to independently manage the entire procurement system
in the country. The NPC Draft Bill (new NPC Act) is ready before NEC to be passed in Parliament,
thus the government will table in the floor of Parliament. The new National Procurement
Commission will replace the Central Supply and Tenders Board.
Expansion of integrated Financial Management System
71. Integrated Financial Management System has gone live to 43 National Departments and
8Statutory Authorities and a business case and prototype is being developed for the East
New Britain Province as at June 2016 and completed in 2017, hence ENB will be fully into
IFMS and retire from PGAS by the first quarter of 2018. Two Provinces being piloted for IFMS
roll-out are ENB and Central province. The ENB Province & LLGs used IFMS Budgeting for 2018
Budget whilst Central, Oro, Morobe, ESP, New Ireland provinces & LLGs using IFMS to input 2019
Budget. The 14 Remaining Provinces will use IFMS for 2020 Budget. The total of 15 Provincial
Finance Officer‟s & their District Finance Officer‟s are online on IFMS hence the 3 Provincial
Governments online are ENB, Central and Oro. The entire provinces and districts are targeted to be
covered by 2019.
72. Issues affecting the implementation of the roll out of IFMS to government systems
nationwide are being inhibited by the current condition of lack of ICT infrastructure. The
current configurations for central agencies were not applicable to statutory authorities. The business
case for Statutory Authorities IFMS configuration was designed and approved in March 2016 and
Page | 68
an initial piloting of the system was run at IRC and was successfully configured. In relation to bank
reconciliations for IRC, all revenue distribution bank accounts (totalling 27) and one revenue
receiving account have been set-up in IFMS and fully reconciled for 2016 with monthly
reconciliations for 2017.
IFMS roll out is on target and full rollout is being mapped to 2018 and 2019 for all agencies to be
online including SNG.
National Procurement and Asset Management
73. Legal clearance has been sought for a Policy Submission on the establishment of the National
Procurement Commission (BPC). Due to serious staffing capacities and other challenges CSTB will
be transforming its operations to have an effective and efficient procurement framework that support
the development aspiration of the government. The reforms in procurement will affect the entire
government procurement system at all levels of government encompassing both minor and major
procurement. A national procurement policy has been developed that addresses all procurement
matters administered by CSTB including the Act under the PFMA. . NPC will be the autonomous
procurement entity that will oversee the operations of the PSTB, DSTBs and other Specialized
Tenders Board that current procurement requirements are administrated through CSTB and under
PFMA.
The National Procurement Policy was successfully sanctioned by NEC and directed for the creation
of new National Procurement Commission to be established to independently manage the entire
procurement system in the country. The Draft Bill (NPC Act) is ready before NEC to be passed in
Parliament, thus the government will table this Bill in the floor of Parliament. The new National
Procurement Commission will replace the Central Supply and Tenders Board with a broader function
to effectively and efficiently manage the government’s procurement. The current procurement
legislation under PFMA will be removed to the new NPC Act.
74. The Good Procurement Manual (GPM) Part B Chapter 1 (Procurement Planning) and
Chapter 10 (Enforcement & Compliance) requires all government agencies to submit their
th
procurement plans to the DNPM by February 28 annually. However, this has not been
monitored due to staffing issues surrounding CSTB and there has been noncompliance by
government agencies. The procurement manual, the National Procurement Policy and National
Procurement legislation will be integrated and legislated to give more powers to the national
procurement system.
9
75. The Department of Finance is currently drafting a national fixed assets policy . The purpose
of this policy is to ensure that a documented, controlled and audited procedure exists within all
Government agencies. All departments will be required to maintain an integrated Fixed Assets
Register in identifying each item of Fixed Asset by Historic Cost, Code, sub account, location and
NetBookValue. Registration of fixed assets will be in accordance with the Generally Accepted
Accounting Principle (GAAP), PFMA and Procurement Act. The system of recording all fixed assets
will be managed through IFMS using the consolidated Fixed Assets Register (FAR) module called
Assetware Manager. This software will be installed in IFMS and rollout to all agencies. Depreciation
will not be accounted for in IFMS only cost price.
Timeliness and Quality of Submission of Financial Reports
76. Enhancing of data integrity for mandatory reporting is improving due to the implementation
of the expansion of IFMS. Since 2016 MYEFO and FBO have been prepared with IFMS system
9
Draft National Fixed Assets Policy in progress
Page | 69
reports. IFMS rollout has increased the capacity of government agencies to produce real time
financial reports. The current offline practice of updating IFMS agencies and SNGs affects data
integrity. Online reporting will lead to the compilation of financial reports with increased data
integrity by government agencies. GoPNG Public Accounts for 2012, 2013 and 2014 has been
completed and successfully presented in Parliament by Minister for Finance and Rural
Development, Hon. James Marape. The Department is now in the process of completing the 2015
and 2016 Public Accounts, hence intended to table in Parliament in 2018. Once IFMS is fully
interfaced online the compilation of Public Accounts would be produced on a timely basis.
77. The DoF through the PCaB Program developed a M&E system tool for reporting against the
status of 491 monthly bank accounts reconciliations and 341 Accounts annual financial
statements for SNGs. The tool displays the timeliness of submission and periodical delays in the
submission of financial reports from Provinces, Districts and LLG’s operating and revenue accounts.
For the second year of its monitoring and implementation for the year 2017, the timely reporting of
BR have indicated 65% submitting on time whilst reporting of AFS improved by 93% as well.
A system for monitoring national agencies - Departments, CSA and SOE’s submission of BRs and
AFS has been developed and we are just waiting for the confirmation of the concern officers to
disclose the information to the public. Our M&E tool can cater for the monitoring of BR and AFS
submission regardless of system as it deals with month and year of submission.
Cash Forecasting/ Midyear cash Forecast Revision, design and implementation of a new
government banking framework
78. The DoF was supported with a specialist in cash management from IMF PFTAC in 2016 to
review the existing business practices surrounding cash management and to make
recommendations for improvement. In June 2016, a draft issues paper on GoPNG Cash Flow
Forecasting System was released. The comprehensive review into cash management operations
revealed that cash forecasting was vital in revenue budgeting and expenditure management.
79. Transfer of funds to WPA is performed on a daily basis. Accounts reconciliation and
management between revenue collection agencies, BPNG and DoF are performed on a daily basis.
IRC was successful in configuring its accounts reconciliations automated through the IFMS
accounting system. . All revenue distribution bank accounts and revenue receiving account have
been set-up in IFMS and fully reconciled for 2016 with monthly reconciliations for 2017.
.
80. Analysis of actual weekly and monthly revenue inflows trend from 2017 against the annual
budget revenue for 2017 revealed the need to execute revenue forecasting projections for
the future years. The shortfall in revenue collections between January to December 2017 implies
that expenditure requirements from January to December 2017, needs to be controlled and within
cash flow limits. Warrant Authorities need to be controlled with respect to the availability of cash
flow. Recommendations included the issuance of a weekly cash flow forecast spread sheet and
Statement of Balance for the DoF. This is consistent with the road map requirement for the
department; updating the weekly PDC reporting whilst adopting the GFSM 2014 and IPSAS formats
of reporting; planning annual revenue budget estimates using current years actual revenue outturn.
10
81. Reform proposals for a Government Banking Framework , in June 2016 has been drafted to
manage balances in TA and pool the balances relative to WPA Trust Accounts held in Banks.
Trust Accounts held in ANZ and Westpac bank will be transferred to BPNG, except for BSP. This
Product has been submitted to BPNG for consideration. It is currently pending final consideration
and response by BPNG. A draft policy paper was issued in May 2016.
10
Department of Finance, Draft Cash Pooling Project
Page | 70
82. FCD has instituted an expenditure arrears management system through the development of
a central expenditure arrears registry of all government expenditure arrears. Shortly, FCD
would be in a position to implement financial controls inspections in line departments under the
amended PFMA 20016. Between January and December 2016, Trust Accounting had vigorously
upgraded its accounting procedures, reporting and management of trust accounts through the
engagement of a Technical Specialist through DFAT – Government of Australia. However until
recently the government has sanctioned the review of all government trust accounts and the FFR
team with key stakeholders has commenced the review on all of government trust accounts.
Reforms in Payroll System
83. Alesco/HR payroll interfacing is continuing in loading all government employees on Alesco.
As at December 2017, 80% of all employees paid from other source apart from Alesco has been
subsumed into created positions on Alesco. Agencies with casuals were encouraged to identify to
create line positions to absorbed casual officers.
Agencies especially Provinces and Hospitals are slowly absorbing their casuals. Furthermore, 10,541
village court officials have been placed on the payroll, 171 Christian Health Education Staff have
been uploaded onto Alesco and 262 Land mobilisation officers are now on the payroll. The
integration and interfacing is ongoing. Re-categorization of genuine casuals employed under
Employment Act of 1978 to be absorbed into the integrated Alesco payroll system.
84. Payroll Audit has not been implemented by DPM as yet. Consultation have taken place between
AGO and DPM. DPM has installed system controls on allowances for unattached officers and cost
benefit analysis for agencies to ascertain their financial ability compared to their fortnightly
expenditure trend. HR audit for WoG salary reconciliation has been put on hold due to financial
constraints. Meanwhile, no progress has been made on recruitment of personnel for payroll
monitoring.
85. In strengthen staffing and position establishment controls a Business case process has
been drafted. Approval of the business process for WoG to increase control and management of
personnel emolument expenditure and to assist with the annual Budget cycle or preparation was
prepared. Desktop analysis is regularly conducted as and when changes are made to the position
occupancy register through the following activities: Resignation, Retrenchment, Retirement, Death,
Leave, Terminations, Contracts Administration, Recruitment and Selection and Salary increments
86. Awareness on Business process for HR and Payroll management has commenced with
number of Provincial administrations and their respective Provincial Health Authorities
as at December 30th 2017 The Human Resource Business Process is rolled out to all National
Departments, Provincial Administrations, Public Health Authorities, Public Hospitals and Government
Funded Statutory Authorities. The Department has commenced work on the HR Business Process in
partnership with PNGIPA to covert the business procedures manual into a national qualification.
Responses to Annual Audit Reports
87. PAC and AGO Reports to the Department of Finance are to be followed up through the
“”Finance Minute”. Two positions within the FRCD have their job descriptions clearly outlining the
duties of responding through a Finance Minute. The Australian National Audit Office is supporting
the AGO with a specialist to train and guide the personnel. Discussions were finalised between
Internal Audit Division and Financial Reporting & Compliance Division (FRCD) to have FRCD to
review audit reports and follow up through Finance Minute.
Page | 71
Development Partners Support under the PFM Road Map
88. The EU supported the PEFA assessment and is continuing in the implementation of the PEFA Road
Map. Technical support to AGO is in the review of the Audit Act of the Auditor General’s Office
(AGO). In the DoF four technical specialists are supporting the department’s teams in the review of
the financial framework, review of the audit function, roll out of the IFMS at sub-national levels and
in the cash management function of the whole government.
89. Australia High Commission is continuing its support towards capacity building to the SNGs in
financial reporting through the PCaB program within the DoF and through UNDP. The Twinning
program under the DoF is running into its fourth year with 2 officers attached to the DoF, Canberra.
90. The ADB support particularly to the DoT is on the MTFS and macroeconomic assessments.
91. The World Bank supported the government through the DoF with the Reports on Observance of
Standards and Codes (ROSC) Accounting & Audit assessment and is following closely the
implementation of the ROSC recommendations with various private sector agencies, IPA and
academic institutions. Ongoing support in PFM is towards strengthening PFM systems in the
NDoH. Interventions prior to 2015 by DPs in strengthening GoPNG PFM systems are noted in
Section F.
92. The following schedules are covering DoF, DNPM, DPM, CSTB and AGO.
Page | 72
Department of Finance
MID-YEAR Period of Reporting : As at 30th June 2018

2018 AGENCY
Divisions/Programs : FMIP - IFMS/FFR, FCD, IACD, / NTRD,
206 DEPARTMENT OF FINANCE FRCD, PDFMD, CSD -FTB

Map :
2015
PEFA Critical to
PEFA Framework
Pillar PI PEFA Framework Performance Indicator(PI) Report Improved Priority Areas
Description of the Pillar
Indicator Performance
Rating
IFMS Expansion
I Budget Reliability PI - 2 Expenditure Composition Outturn D+ Yes
Comprehensiveness and
II PI - 5 Comprehensiveness of Budget Documentation B Yes  Complete Roll out of IFMS
Transparency of Budget
Extent of Reporting of Extra Budgetary  Development of Interface with
PI - 6 D Yes
Operations payroll and other PFM Systems
Transparency of Intergovernmental Fiscal  Ensure data integrity and
PI - 7 B Yes
Relations Quality
Design and implement a new
Performance Information for Achieving
PI - 8 D Yes Government banking
Efficiency in Service Delivery
framework
PI – 9 Public Access to Key Information D Yes  Timely Accounts Reconciliation
Asset and Liability  Reduce time on transfer of
III PI -10 Fiscal Risk Management D Yes
Management Funds to WPA
 Cash Forecasting/mid-year
PI - 11 Public Investment Management D Yes
cash forecast revisions
 Establish banking arrangements
PI - 12 Public Asset Management D+ Yes to use cash in accounts
established
Page | 73
Management and Reporting on Debt and using GoPNG funds outside
PI - 13 D Yes
Expenditure Arrears WPA
Predictability and
Legal Framework Revision
V Control in Budget PI - 22 Effectiveness of Payroll Controls D+ Yes
 Integration of FI/Finance
Execution
Manual and IFMS Training
Effectiveness of Internal Controls for Non-
PI - 24 D+ Yes Manual
Salary Expenditure
D+
PI - 25 Effectiveness of Internal Audit Yes
Accounting, Recording Accounts Reconciliation and Financial Data
VI PI - 26 D+ Yes
and Reporting Integrity
Quality and Timeliness of in year Budget
PI - 27 D Yes
Reports
Quality and Timeliness of Annual Financial
PI - 28 D Yes
Reports
External Scrutiny and Independence and External Audit of the
VII PI - 29 D+ Yes
Audit Governments Financial Statements
Page | 74
1. Activities for IFMS Implementation
IFMS accounting functions used by 25 25 central government 22 National Agencies end of
central government departments, 2015 Dec-15
1.1 departments, representing 25 DoF IFMS Feb-15
representing 25 per cent of recurrent
budget percent of recurrent budget
43 National Agencies and 8 Jan-17
IFMS accounting used by 100% of All Government Agencies to be Statutory Authorties all using
1.2 covered by Jan 2017 IFMS as at end of Dec2018. DoF IFMS Feb-15
central government departments
ENB Pilot completed Dec

2017.
IFMS accounting pilot implementation in 2 Provinces to be covered by 2017
1.3 DoF IFMS Dec-16 Mar-18
two provinces Central & Oro Provincial
Governments online IFMS
since 1st Qtr 2018.
ENB Prov & LLGs used IFMS
Budgeting for 2018 Budget.
100% provinces to be covered by Central, Oro, Morobe, ESP,
IFMS budgeting used by all provinces
1.4 April 2018 NIP provinces & LLGs using DoF IFMS Jan - 18 Dec - 19
and districts
IFMS to input 2019 Budget.
14 Remaining Provinces will
use IFMS for 2020 Budget.
All provinces and districts using 15 PFOs & their DFOs online
IFMS accounting used by all provinces
1.5 IFMS by December 2018 on IFMS. DoF IFMS Jan-18 Dec-18
and districts; retirement of PGAS
3 Provincial Governments
online. ENB, Central, Oro.
2. Activities for Cash Management Reform
Final Draft Banking Framework Banking Framework proposal
Department of Finance begins work on
2.1 revised by December 2015 is being submitted to BPNG for DoF FCD Oct-15 Oct-16
revised banking framework
consideration and still
Page | 75
pending.
Recruitment of 3 Accountants in Recruited 3 new officers
Increased staffing to support broad- Nov-15
2.2 November 2018 another 4 officers to be DoF FCD Nov-18
based cash management reform
recruited
Reforms to trust is ongoing.
Draft Reform Proposal by June
Reform proposals developed to manage
2.3 2016 DoF FCD Nov-17 Jun-18
balances in trust relative to WPA
Personnel recruited for Cash Unit established

Cash forecasting unit established in
2.4 Forecasting Unit DoF FCD Dec-17 Oct-18
Department of Finance
Reconciliation is done on a
Reconciliation backlog eliminated; All backlog of Bank Reconciliations Daily basis & electronically
2.5 eliminated DoF FCD Jan-16 Dec-16
reconciliations conducted on a daily basis through IFMS.
Banking framework reforms submitted to NEC Submission and Decision of Awaiting BPNG concurrent to
2.6 Banking Framework before NEC Submission DoF FCD Mar-16 Jun-16
NEC for approval
3. PFM Legal Framework Review

FFR Secretariat established
within the Financial Reporting
& Compliance Division (DoF)
Oct-15
Modernised and updated PFM Nov-15
FFR Technical Working Group
legislative framework
established – comprised of key
3.1 Initiate PFM Legislative Framework DoF FRCD
government departments and
Review agencies
March - June-16
DoF is the Chair of the
16
Technical Working Group
Inception report approved for

FFR Technical Advisor
Page | 76
TWG approved FFR work plan,

monthly report to Secretary by
FFR Team, consolidation of
views and comments by TWG
and finalisation of drafting
instruction
Propose changes to Public Finance NEC endorsement and approval on PFMA (Amendment) Bill 2016 FRCD
Management Act 1995, Financial the policy submission and accompanied by consequential
Management Manual and Finance Parliament passage of the bill amendments tabled in
Instructions Parliament and passed
Amended PFMA and amended

consequential legislation
certified by the Speaker and Aug-16
Clerk of Parliament DoF
3.2
Minister‟s advice to the Head

Gazettal Notice for the enforcement of State on the gazettal for the Dec-16
of the amended law Act to come into force on 1st
Jan 2017.
Page | 77
Revise Finance Management Manual and Finance Management Manual ( FRCD

3.3 Draft FMM and FI integrated DoF Aug-16 Dec-16
Instructions FFM) final Version is ready
Consolidation of amended FRCD

PFMA will be ready by end of
November 2018 by FLC On
3.4 Implement PFM Legal Framework PFMA Consolidation DoF ongoing
PFMA, PMMR and Procurement going
awareness roll out will be
massively carried out October
Page | 78
- November 2018. Gazettal
and Publication will be in
December 2018. Procurement
Act commencement will be in
January 2019.
A modernised and updated National NEC has endorsed the FRCD

Procurement system National Procurement Policy
NEC decision on the policy

submission: -
Creation of National Procurement

Commission
3.5 Review of National Procurement System Jun17
DoF Dec 19
Creation of National Procurement
Policy
Enactment of procurement law
National Procurement Act has

been passed Parliament. The
Review PFMA to allow SOE's, Statutory review into the SOEs is still
3.6 Authorities to follow public Tender Amended PFMA Certified outstanding and will Dec 18
DoF FRCD FEB 16
Process in some respects commence soon
Rationalization of statutory bodies &

Review of Statutory Bodies, SOEs and SOEs IDCE hearing on Trust DoF/DoT/
3.7 FRCD Aug-17 ongoing
Trust Accounts Account for Public Bodies 90% PMNEC
Develop astringent framework for
the establishment of new statutory completed
Page | 79
bodies & SOEs Action statement forwarded to
agencies concerned
Streamline trust accounts
Those require new TAs are
being assisted – on going
Rationalize SOE management
Statutory bodies review 2018
systems & governance structures.
IDC hearing for Statutory
Bodies and Province - 2018
Timeliness and Quality of Submission of Annual Financial Statements

4.
Increased number of qualified 21 officers graduated from

officers. UPNG 2018 with various
Improved levels of competency and qualifications, MBAs and
skills. Degree in Public Sector
Develop a comprehensive capacity Accounting.
4.1 building training plan on compilation of Increased number of multi-skilled DoF Jan-18 Dec 18
only PGaS sites are used for
Annual Financial Statements officers. FTB/IFMS/P
compiling the AFS. Central and
CAB/
ENBP are on IFMS and to-date
IFMS rollout PFO/DFO training plan FRCD/PDFM
no AFS is been compiled.
for 2018-2019 D
In 2018 – 17 officers from

Roll out of training plan in AFS to all SNG Increased number of qualified
National Agencies are
4.2 and National Agencies completed by National/ PFO/DF officers. DoF Jan - 18 Dec-18
completing final year in UPNG
2019
Public Sector Accounting
Increased number of multi skilled
Page | 80
officers. Degree program.
3 completing respective MBA
programs.-UPNG/DWU.
Number of AFS reports training 20 PFO/DFO officers
conducted commenced 1st year UPNG
Number of AFS workshops Public Sector Accounting
conducted Degree program.
Number of staff trained in AFS
6 officers in IBS pursing
Business Accounting degrees.
Number of OJT, Coaching and
Mentoring facilitated 6 officers pursing Diploma in
Number of staff supported with Accounting @ PNGIPA
OJT, coaching and mentoring
5 officers completing
Certificates in Accounting @
PNGIPA.
98% Timely Submission of
AFS as PCAB Summary
Dashboard Report
2017 Financial information is

being compiled. The Public
Ensure compliance to PFMA S. 19 for Accounts has already updated
reports from central government to 2017.The AGO is currently
4.3 Improved timely & quality Reports DoF FRCD Sep-15 Dec-15
agencies and SNG to consolidate fiscal here Auditing the 2015,2016 &
information in 2015 2017 Annual Accounts. Started
Auditing on the 9th November
2016
5. Expenditure and Revenue Arrears Management
System Report on expenditure A register have been inputted

arrears DoF FCD Oct-15 Oct-16
and currently in use by officers
5.1 Develop a central expenditure arrears
Page | 81
registry to maintain and monitor arrears to input or record arrears and
of the State claims as they are submitted.
Develop a central non-tax revenue NTRD commenced operations
Operational non tax revenue arrears
5.2 arrears registry to maintain and monitor into registering Non tax DoF NTRD Oct-15 Oct-16
registry database
non-tax revenue arrears to the State Revenue arrears
6.
NEC Submission outlined the
draft Consequential
Amendments Bills 2016 is
Consequential Amendments to
seeking to have Revenue
Prepare NEC submission to have 100% PFMA on 100% revenue collection
Sharing arrangements such as
6.1 revenue collections to be transferred to to CRF before being disbursed DoF NTRD Oct-15 Jun-17
that for MVIL and Worker‟s
Waigani Public Accounts through Budget Appropriation or
Permit Trust Account have
NEC decisions on Revenue Sharing
100% of their Revenue
Collections, transferred into
the CRF.
Already implemented per
directive by PM in 2014/105,
however its implementation is
being controlled due to other
Abolish revenue withholding sharing
6.2 Approved Consequential policy directives. DoF NTRD Sep-15 Dec-16
trust accounts
Amendment Bill 2016
To be implemented through
the Consequential
amendments once approved.
Demarcate clearly the Contingency This activity is yet to be
DoF/ FCD
6.3 Economic Items in the IFMS in 2016 2017 Budget implemented. Oct-15 Nov-15
DoT Budget
Budget
7. Timeliness and Quality of Bank Reconciliations
DoF
Greatly improved on timeliness of
Progressive improvement to FMTB
Bank Reconciliations.
date as monitored by PCAB‟s
7.1 Develop Training Plan and conduct M & E tool.
Training in compilation of Bank 2 day workshop addressing
Page | 82
reconciliations in order to raise No. of workshops to address Quality Quality Bank Reconciliation-
compliance levels of National Agencies issues.
and SNGs 128 DFO/DF officers in Lae in
No. of PFO/DFO attended to
Sept 2017 attended workshop.
workshop.
Write-off/write on upskilling
Workshop for 25 PDFM
Write on write off exercises in
D/FTB/FRCD officers by PCAB
progress in provinces to address the
in Pom in preparation for
quality aspects of Bank
Write on write off exercise.
Reconciliation in PGAS.
IFMS Bank Rec yet to be rolled out.
2018-2019 Joint IFMS rollout
Strategy for IFMS Bank Rec- one on
trainings to PFO/DFO, PA &
one training.
PNG Association of Public Finance LLG as per IFMS Schedules.
Managers & Accountants
CSD/Assoc
Compliance to PFMA in ensuring that Accounting Functions exists in National Agencies and SNGs
8.
Conduct an assessment to measure level The Department of Finance had To enhance good governance
of compliance to PFMA and Financial requested technical assistance from through increasing
Management Manual by Government PFTAC and they had engaged a transparency and
agencies in order to establish an short term consultant in Ms Susan accountability of budget
accounts payable and receivable Morrison to conduct an assessment spending grants allocated to
branches of the internal audit systems within agencies to improve service
8.1 the PNG PFM space. Ms Morrison delivery. DoF FCD/IACD Mar-16 Jun-16
carried out a detailed evaluation
and submitted her findings on Cases Aug 2014 Apr 2018
“Strengthening Internal Audit to to
through Capacity Development” in a Mar 2018 July 2018
35 page report.
Page | 83
General 238 79
Other
135 132
Depts
Under Sec 5 of PFMA to setting up 300
audit committees and internal audit unit Finance
194 61
across the entire public sector. Dept
Total 567 272
Reconciliation of Suspense accounts

9.
2012, 2013 and 2014 Public
Accounts have been
completed are with NEC to be
tabled. 2015 and 2016 are
Reconciliation of Suspense accounts with the Auditor General
conducted before year lapses annually Office for auditing. Technical
Ongoing
9.1 Annual Public Accounts Report Advisory Support through DoF Dec-15
DFAT to the DoF strengthened FRCD
the position of the DoF to
produce the reports. We still
have a huge task from
clearing suspense from Alesco.
Ongoing process.
Reforms in Internal Auditing
10.
Number of participants attended Under Public Sector Audit
Facilitate advanced level training Audit training Program (PSAP)
program for public sector auditors in 100 internal auditors have
consultation with the Institute of Internal Number of Audit Committees been trained over period of
Auditors established time across the public sector
10.1 Number of PSAP training provided Training provided on two DoF IACD Jan-16 Jan-17
phases –on job training as
well as soft training Funded by
PSAP Trust Account
(Ausaid & GoPNG)
Page | 84
Reforms in Asset Management

11.
First draft for Fixed Asset
Develop national standards and Management Policy will be
procedures for maintaining and Approved National Fixed Asset
11.1 circulated for review and DoF FRCD Sep-15 Dec-15
registering fixed assets Registry
comments soon before it is
finalised
Capacity Building Training Plan

12.
Develop a comprehensive capacity Per CSD/HR Training records.
building training plan for PT and DT CSD/HR/PD
Officers in PFM areas FM
2018
3 officers pursing resp. MBA
Strategic Management
@ UPNG/DWU.
Number of DOF staff, Provinces and
17 officers from National
District managers & accountants
Agencies - final year -Degree
enrolled for accounting degrees,
program -Public Sector
diplomas, certificates
Accounting – UPNG.
20 officers from PFO/DFO -1st
year Public Sector Accounting
No. of DOF staff progressing
12.1 PNG Association of Public Finance Degree- UPNG. DoF Jan-17 Jun-17
through other educational
Managers & Accountants
institutions,
6 officers- Business
Accounting Degree – IBS.
1 officer – Bachelor of
No. of Staff progressing through
Management - DWU
professional development - CPAPNG
6 officers- Diploma in
exams
Accounting – PNGIPA
5 officers- Certificate in
No. of outsourced Training Courses
Accounting- PNGIPA
addressing soft skills transfer
Approx. 90 officers from DOF
embarked on CPA Exams. CSD/Assoc
Progressive results per HR
Page | 85
Records.
As per HR Training records.
*Professional Development with CPAPNG No. of officers progressing through Approx 31 DOF officers
respective exams. progressing through with
12.2 respective professional exams DoF CSD/Assoc
in CPA & CAT categories.
PNG Association of Government Incorporation of Association IPA -Incorporated in Dec 2014

Accountants & Public Finance Managers.
Interim office holders appointed. Interim Board Members
appointed.
Officially launched Association of Launched by Chief Secretary-

Government Accountants & Public Government. Ambassador I.
Finance Managers Lupari in 2018
12.3 Launch drive for applications for Certificates for membership to DoF CSD/Assoc
membership. Association issued – 16 Aug
Develop Professional Development In collaboration with CIPFA,

programs UK.
Offer professional development In collaboration with CIPFA UK

courses
Reforms in Budgeting, Trust accounting and strengthening debt management practices and monitoring of fiscal risks.
13.
With the PGAS version – there
Stricter discipline on the use of trust were no strict discipline in
accounts and their replacement Legalised Trust Instruments reports
13.8 DoF FCD Oct-15 Dec-15
wherever possible by end-year carryover
provisions. With IFMS is with strict
discipline, currently no request
Page | 86
so far, Trust accounts
managed by DOF have
decreased.
Approx 500 T/Accounts

decreased to 100 T/Accounts.
Very few request received for

establishment of new Trust
Accounts since 2017.
By 31.12.2020 all new trust

accounts will be on IFMS.
A new banking framework was

designed with support from
New trust accounts should have a free
PFTAC to pool cash and
cash balance status for general cash
13.9 Report on pooling system assesses the net cash position DoF FCD Jan-17 Dec-17
management purposes until funds are
needed for implementation of government. This is in
discussion with BPNG.
Issue FI to effect the cessation of Completed and ready for

To be legislated in the new PFM
13.14 transfer of lapsing funds into trust issuance DoF FCD Jun-16 Dec-16
Act
accounts
The inventory on trust
Conduct a robust inventory on all trust
13.15 accounts held with National Agencies System Report of Trust Accounts accounts is up to date as it is DoF FCD Jun-16 Dec-16
and SNG regularly being updated.
All budget submissions should

outline estimates of both
expenditure and revenue
Legislate SOE's and Statutory Authorities
Under Part VIII of the revised
13.18 to make/provide full disclosure of all Reports of expenditures, DoF FRCD Jun-16 Jun-17
PFMA
source revenues to the DoF. revenues and receipts is
mandatory under Part VIII of
PFMA
Page | 87
External Audit
18.
Two positions performing the

duties of following up of PAC
recommendations are
DoF FRCD Feb-17 Jun-17
prescribed in the Job
Create a suitable post/unit responsible
Descriptions of a Senior
for conducting follow-up of the PAC
18.3 Accountant and Accountant
recommendations to raise issues through
Number of Finance Minutes issued under the Frameworks Branch
the issuance of "Finance Minute" to
of FRCD, DoF.
relevant government agencies
FRCD & IA&CD may decide as
concerned.
to which division will be
tasked to take up the
responsibility of responding to
PAC recommendations.
SCHEDULE 3: DETAILED PROGRESSIVE REPORT BY PROGRAM
Lead Financial Management Improvement Priority Action Reforms in Financial Framework and Reporting
Program Program (FMIP) Areas 1. IFMS Implementation
 Complete roll-out of IFMS retire PGAS by 2018
 Development of Interface with payroll and other PFM Systems with checks and
Activities controls
Integrated Financial Management System
 Ensure Budget data integrity and quality and coherence
(IFMS) 1,3, 4 and 7
Programs  Establishment of an IFMS management unit within the Department of Finance
proper, rather than in the FMIP project
Financial Framework Review(FFR)
Provincial Capacity Building Program
 Integration of Finance instructions/Finance Manual and Integrated Financial
(PCaB)
Management System(IFMS) Training Manual
Page | 88
4. Timeliness and Quality of Submission of Annual Financial Statements
 Capacity Development
 Capacity Development
Activity Means of
No. verification
IFMS Implementation
1.
22 National Agencies end of 2015
1.1 Implement IFMS 25 central government Budgeting and Feb 15 – Dec
accounting functions to departments online accounting 15
25 central government with accounting functionality
departments, functions enabled
representing 25 percent
of recurrent budget for
central agencies Functional
reports
1.2 Implement IFMS 100% of central Functional Feb 15 – Jan 43 National Agencies and 8 The absence of Government
accounting to all central government reports 17 Statutory Authorties all using wide communications
government departments departments using IFMS as at end of Dec2018. infrastructure for IFMS
central agencies IFMS inhibits wide-scale
implementation of IFMS.
A mixture of Digicel Private

links, DoF MAN network and
Internet are in place across
all National Agencies
enabling access to IFMS
1.3 IFMS accounting pilot Two (2) sub-national Functional Dec 16 – Feb ENB Pilot completed Dec 2017.
implementation in two pilots completed reports 17
provinces
o Central & Oro Provincial
East New Britain and Governments online IFMS
Central Provinces since 1st Qtr 2018.
Page | 89
1.4 IFMS budgeting used by All Province & LLG Functional Apr 15 – Apr ENB Province & LLGs used IFMS
all provinces and districts budgets input to IFMS reports 18 Budgeting for 2018 Budget.
Central, Oro, Morobe, ESP, New
Ireland provinces & LLGs using
IFMS to input 2019 Budget.
14 Remaining Provinces will use
IFMS for 2020 Budget.
1.5 IFMS accounting used by 100% Provinces & LLG Functional Jan 18 – Dec
all provinces and districts using IFMS. reports 18
15 Provincial Finance Officer‟s &
PGAS retired. their District Finance Officer‟s
online on IFMS.
3 Provincial Governments online.
ENB, Central, Oro.
4.0 Timeliness and Quality of Submission of Annual Financial Statements

Number of Finance
4.1 Develop a comprehensive Quality in AFS Jan-16 - Mar- At the moment, only PGaS sites
Officials from 89
capacity building training from 16 are used for compiling the AFS.
districts up-skilled in
plan on compilation of government Central and ENBP are on IFMS
compiling AFS
Annual Financial agencies and to-date no AFS is been
Statements compiled.
Number of Trainings
per year
Trainings are aligned to IFMS
Activities for the Advisers only.
However, for the AFS, no training
has been done
Need to advise the PCaB Advisers
to become the members to the
CPSA.
Roll out of training plan in Number of staff

4.2 Quality in BR Apr-16 - Nov- No Roll out plan has been
AFS to all SNG and participating in Public
and AFS from 16 developed but Advisers have
National Agencies Sector Accounting
Page | 90
completed by 2019 (Degree) government taken it up through their
Enrollment to CPA PNG agencies Quarterly Work plans to provide
professional program OJT to compile AFS at the SNG.
Number of short This is an on-going activity
coursed and
Some of the Advisers have
workshops conducted
enrolled in the CPA Professional
& number of
qualification program at their own
attendees.
costs.
Number of Provinces
covered by PCaB
program
4.3 Ensure compliance to Improved timely & Real time reports Sep 15 – Dec Timely submission of reports have
PFMA S. 19 for reports quality Reports on bank 15 been continuously been
from central government reconciliations monitored and progress to date is
agencies and SNG to and AFS very good. The quality of the
consolidate fiscal reports are also been progressed
information in 2015 well through the write on/off
exercise. Only Oro province has
achieved this while other
provinces are still pending.
Central and ENBP have gone into
IFMS and they don‟t fall in the
meaning of write on/off
Thirdly, IFMS is progressing well
in the SNG and quality of the
reports should not be an issue
after it is fully implemented.
7.1 Develop Training Plan and Improved Arrears in Up to date Jan-16 - Dec-
Training of trainers in Principles
conduct Training in Bank Rec Reports. production of 17
Training through OJT is a of Bank Reconciliation to
compilation of Bank Bank reinforce understanding to
2017 FMTB Training continuous program for the Bank
reconciliations in order to Reconciliations embrace IFMS Bank
raise compliance levels of Plan approved for and AFS by Reconciliation through PGaS
Page | 91
National Agencies and implementation. government system. This is made possible Reconciliation.
SNGs agencies. through the Advisers‟ Quarterly
PCAB Capacity PCaBs concentration of Capacity
Work plans building is currently targeting
Development Plan is
developed PCaB Provinces.
Advisers are now equipped with

the skills training to pass on the
skills to the PFO and DFOs to
prepare the IFMS‟ Drawing
Accounts bank reconciliation. This
will commence in October 2018 in
all the PCaB sites in the country
IFMS Training Plan is

Developed
Page | 92
12. Capacity Building Training Plan
12.1 Develop a comprehensive Number of trainings Training Reports Jan 16 – Jun PCaB in consultation with FMTB Focus of training and trainer up-
capacity building training conducted for PTs & 16 and IFMS is ready to deliver the skilling now is IFMS oriented
Raise level of
plan for PT and DT DTs. PFM areas of training. This due to timing and resource
quality in
Officers in PFM areas depends on the sub national limitations.
reporting officers needs and requirements.
PCaB is ready to deliver these
trainings at any time
Responsibility for reporting on the

Association is now to be handed
over to AS HR Enhancements.
Page | 93
Reforms in Legal Framework and Financial Reporting
Financial Reporting and Compliance Priority Action
Lead
Division Areas
Division 3. PFM Legal Framework Review
Branch/ 11. Reforms in Asset Management
 Frameworks Activities 3, 4, 11
Program 18. External Audit
 Financial reporting and 18:
Activity Means of
No. verification
FFR Secretariat established

Oct 16 -
within the Financial
Nov 16
Reporting & Compliance
Division (DoF) Completed activity.
FFR Technical Working

Group established –
Modernised and comprised of key
updated PFM government departments
legislative and agencies
3.1 framework
Initiate PFM Legislative Framework Review DoF is the Chair of the
Technical Working Group
Inception report approved

for FFR Technical Advisor
TWG approved FFR work

plan, monthly report to
Secretary by FFR Team,
consolidation of views and
comments by TWG and
Page | 94
finalisation of drafting
instruction
3.2 Propose changes to Public Finance NEC endorsement Dec 16 – PFMA (Amendment) Bill Completed
Management Act 1995, Financial and approval on Jan 17 2016 accompanied by
Management Manual and Finance the policy consequential amendments
Instructions submission and tabled in Parliament and
Parliament passage passed
of the bill
Amended PFMA and
amended consequential
legislation certified by the
Gazettal Notice for
Speaker and Clerk of
the enforcement of
Parliament
the amended law
Minister‟s advice to the
Head of State on the
gazettal for the Act to
come into force on 1st Jan
2017.
Revise Finance Management Manual and

3.3 Draft FMM and FI Aug 16 – Finance Management Completed – ready for
Instructions
integrated Dec 16 Manual ( FFM) final Version issuance
is ready
3.4 Final draft of revised Finance Management PFMA Consolidation Ongoing Consolidation of amended Awareness on amended
Manual and Instructions PFMA will be ready by end PFMA,FMM, Procurement
of November 2018 by FLC Act & FI to be completed
towards the end of 2018
PFMA, PMMR and
Page | 95
Procurement awareness
roll out will be massively
carried out October -
November 2018. Gazettal
and Publication will be in
December 2018.
Procurement Act
commencement will be in
January 2019.
Awareness will be
conducted with Executive
Management with NPMD,
Treasury and Finance with
the support of donor
partners
Review of National Procurement System
3.5 A modernised and Jun 17 - Completed
updated National Dec 19
NEC has endorsed the
Procurement
National Procurement
system
Policy
NEC decision on
National Procurement Act
the policy
2018 has been passed in
submission: -
Parliament in the 2018
Creation of National September sitting and will
Procurement commence January 1st
Commission 2019
Creation of National
Procurement Policy
Enactment of
procurement law
National Procurement Act

3.6 Review PFMA to allow SOE's, Statutory Amended PFMA Certification Feb 16 – Completed and review of
has been passed
Authorities to follow public Tender Process Certified of amended Nov 16 SOEs pending
Page | 96
in some respects PFMA Parliament. The review into
the SOEs is still
outstanding and will
commence soon
3.7 Review of Statutory Bodies, SOEs and Rationalization of Aug 17 – Completed and review of
Trust Accounts statutory bodies & Dec 17 SOEs pending
IDCE hearing on Trust
SOEs
Account for Public Bodies
90% completed
Develop astringent Action statement
framework for the forwarded to agencies
establishment of concerned
new statutory
Those require new TAs are
bodies & SOEs
being assisted – on going
Statutory bodies review
Streamline trust 2018
accounts
IDC hearing for Statutory
Bodies and Province - 2018
Rationalize SOE
management
systems &
governance
structures.

4. 3 Bank
System Dec 18 – 2017 Financial information Bank Reconciliation training
Ensure compliance to PFMA S. 19 for Reconciliations and
reports. March 19 is being compiled. The - Ongoing by Bank Rec.
reports from central government agencies AFS are received Public Accounts has Support Team
and SNG to consolidate fiscal information in timely and are already updated to
2015 prepared according 2017.The AGO is currently
to approved here Auditing the
Page | 97
standards 2015,2016 & 2017 Annual
Accounts. Started Auditing
on the 9th November 2016
9
Reconciliation of Suspense accounts
9.1 Reconciliation of Suspense accounts
Annual public Reconciled Dec 15 – Reconciliation of suspense
conducted before year lapses annually
accounts accounts Dec 16 accounts has been updated
and Public Accounts
Reports for 2012, 2013
and 2014 have been
released. The 2015 Public
Accounts Report is in the
process of being
completed.
11.
Reforms in Asset Management
11.1 Develop national standards and procedures No feedback received from
Developing a Approved Sep 15 – Working document for
for maintaining and registering fixed assets IFMS team on the working
National Fixed Fixed assets Dec 15 Fixed Asset Policy
Asset Registry policy submitted to IFMS team to document submitted to
asses and report. The asses and report earlier on.
Asset classification codes
will be configured in the
The Asset classification
Fixed Asset Model in the
IFMS as categorized in the codes are yet to be
current PFMA. configured in the Fixed
Asset Model in the IFMS as
Once the configuration on categorized in the current
the classification of the PFMA. The delay is due to
code is done, the National shortage of manpower as
Fixed Asset Policy will then all staff are fully engaged in
Page | 98
be finalized and enforced the roll out of IFMS at the
by all state agencies. sub-national levels.
13 Reforms in Budgeting, Trust accounting and strengthening debt management practices and monitoring of fiscal risks.
13.18 Legislate SOE's and Statutory Authorities to

Under Part VIII of All budget submissions
make/provide full disclosure of all source
the revised PFMA should outline estimates of
revenues to the DoF.
both expenditure and
revenue
Reports of expenditures,
revenues and receipts is
mandatory under Part VIII
of PFMA
18.
External Audit
18.3 Create a suitable unit responsible for
Number of Finance Unit formally Feb 17 – Letter has already
conducting follow-up of the PAC
Minutes issued established Jun 17 prepared to transfer PAC
recommendations to raise issues through
from IACD to FRCD
the issuance of "Finance Minute" to
relevant government agencies concerned. Still awaiting for
Secretary‟s endorsement
letter on the transfer of
audit function from IACD
to FRCD
Page | 99
Division Provincial and District Priority Area Capacity Building Enhancement for Provincial and District Treasury Officers
Financial Management
Activity 12: 12. Capacity Building Training Plan for provincial and district treasury officers in PFM areas.
Branch Regional offices in the
Division
Activity Means of
No. verification

56 staff waiting All financial reports 56 staff will be graduating this
12.1 Develop a comprehensive Jan 16 – Need to work in collaboration
for graduate are submitted to year
capacity building training plan Jun 16 with CSD – FTB, PCaB, IFMS,
this year Department of
for PFM and DFM Officers in PFM ITD, FRD
Finance on time 35 staff are enrolled at PNGIPA
areas
35 officer on for Diploma and Degree Timeframe needs to be
study at Currently working programs. extended
PNGIPA in 2017 with PCaB and FRCD On going
Incorporate with existing CSD or
to discuss on quality
DoF Training Plans
of issues Logistic issues in rural districts
in transport, communication
and electricity hindering
training to be delivered
Funding constraints
Lack of commitment and

support from SNG
20 PFM & DFMs Closely working with Funding constraints would see
are selected for OSD & CSD to 4 selected at UPNG and the only few selected
Ongoing
Staff rotation studies identify suitable and rest work in progress
hardworking officers
Page | 100
for studies
2018-2019 Ongoing workshops All staff will be programmed to

& training partake in the training
DPFM,FMTB Currently working Ongoing -Financial constraints
IMFS & others with FMTB & IFMS on
training programs -logistics and communication
issues will be hindering
Stake holders and training to be delivered.
3-4 October PFMs & DFMs invited guest will Provincial & District Finance
300 plus Yearly Financial constraint is the
conference in Buin South Managers and accountant and
delegations will participate to present major hindrance why most
Bougainville CEOs/DAs will attend
attend to papers officers are not selected for
discuss issues the conference.
financial
reforms
Page | 101
Lead Corporate Services Division Priority Action 4. Timeliness and Quality of Submission of Annual Financial Statements
Division Areas
Branch/  Finance Training Branch
Activities 4,7
Program and 12
Activity Activity Performance Means of Verification Timeframe Progress Update (and Constraints/Reasons
for Non-Achievements
Page | 102
No. Indicator achievement) towards KPI
Develop a
4.1 No. of PFO/DFOs rolled IFMS Rollout to FMTB structured with dotted lines Challenges of reporting
comprehensive capacity
out to. PFO/DFOs training to FMIP for periods 2018-2019 to to two divisional heads.
building training plan Jan-18 –
reports assist with rollout of IFMS to the 21
No. of on-the-job- Dec- 18 Change management
On the job-reports PFOs/89 DFOs
trainings issues: attitudes/ new
specifying relevant
FMTB Trainers progressively learning grounds.
data
upskilling into IFMS oriented
training.
Strategic Management CSD/ HR Reports Upskilling administrative personnel
to assist with delivering training.
CSD / HR Reports
3 officers progressing through
Number of officers –
Masters in Business Administration
National Agencies -
@ UPNG/DWU.
attending UPNG Bachelor
of Accounting degree CSD/HR Reports
programs
17 officers from National Agencies
CSD /HR/ Training
No. of officers – completing final year in UPNG
reports
PFO/DFO pursing UPNG Public Sector Accounting Degree
Public Sector Accounting program.
CSD/HR Reports
Course
20 Officers majority from
PFO/DFOs commenced first year of
OSD/CSD/HR UPNG Public Sector Accounting
No. of officers pursing
Reports Degree.
CIA/DIA courses @
PNGIPA 1 officer pursing a Bachelor in
Management @ DWU.
PCAB/ IFMS/Training
reports. 6 officers pursing a Degree in
Business Accounting @ IBS
Number of Officers campus.
pursuing professional
officers pursing Diploma in
development with
Accounting at PNGIPA
CPAPNG
officers pursing Certificate in
Workshops, Conferences,
Accounting at PNGIPA
workplace trainings
Page | 103
programs
Roll out of training plan Implementation of IFMS

4.2 Jan 18 – IFMS in joint efforts with PCAB
in AFS to all SNG and Rollout Training Plan
Dec- 19 Advisors/ FMTB trainers to
National Agencies 2018-2019 implement rollout to Provinces &
completed by 2019
Districts Finance offices from 2018-
Periodic Training 2019.
Reports. .
Periodic Workshop
Reports. All efforts to use the PFO/DFO
Database Report Rollout trainings to upskill the PCAB
recording target group Advisors / FMTB Trainers to deliver
trained in PFO/DFOs. system oriented trainings in an
effort for finally being able to
Fortnightly and monthly generate AFS from IFMS.
training and capacity
development report
from PDSAs
Monthly Training &

Capacity Dev Dashboard
report from PCAB HQ
Training and workshop

reports from PDSAs
M & E Checklist signed
off by PCAB Mgt
IFMS periodic Training

reports
Page | 104
7.1 Develop a Training Plan Improved timeliness of Approved Plan for Jan 18 – Dec IFMS Rollout trainings conducted in: FTB/PCAB to
and conduct training in Bank Reconciliation implementation. – IFMS 2019 assist with IFMS
Central, Oro, Morobe, East Sepik, New
compilation of Bank Reports received at HQ. Rollout to PFO/DFO Rollout to sub
Ireland, Western Highland, Jiwaka, Enga,
reconciliations in order training plan national levels
Simbu, Eastern Highlands, West New
to raise compliance levels 2018-2019.
Per PCAB‟s M & E Tools. Britain, Madang, Milne Bay, Fly River.
of National Agencies and Improved quality of
SNGs Bank Reconciliation IFMS Trainings to enhance the production
reports. of bank Reconciliation & AFS in Upskilling of
PFO/DFOs. FMTB Trainers/
No. of OJT training,
No. of training sessions PCAB Advisors
coaching and mentoring
conducted. progressing
to all NAs and SNGs in
during IFMS
Bank Reconciliation. No. of officers in SNG
rollout trainings
and NAs trained IFMS Bank Reconciliation training not
to PFO/DFO to
rolled out yet at date of this report.
date.
IFMS Bank
BRS team – DOF (FRCD) assisting
Reconciliation skills. No. of target group
National Agencies with IFMS Bank
facilitated in
Reconciliation.
OJT/coaching &
mentoring. PCAB/ BRS assisting with Bank
Reconciliations for the PFO/DFOs rolled
No. of skilled officers in
to.
generic Bank
Reconciliation.
No. of IFMS trainings

conducted. (National
Agencies)
No. of Agencies trained
No. of staff trained
Page | 105
12.
Capacity Building Training Plan
Jan 18 – Dec
UPNG MOA – Degree Training meetings/ Target group is PFMs, DFMs and
12.1 Develop a – 2019
in Public Finance & scheduled reports respective PF/DF Accountants.
comprehensive capacity
Accountancy.
building training plan Per CSD/HR Training A total of twenty eight (28) officers have
for PF and DF Officers in records. benefited & graduated from UPNG in
PFM areas 2016.
*Career Development
Plan for PF, DF offices Another 26 DOF officers had graduated in
3 year Staff
Page | 106
Development Plan for July 2017 with Degrees & MBAs
Dept, PF & DF Offices
No. of trainings/ Twelve (12) officers completed their
Workshops to be Degree and MBA program in Oct 2017
conducted for and graduated in 2018.
PFOs/DFOs. No. of PF & DF officers
trained.
PFMs to be responsible for recommending
provincial & district staff training needs.
PCAB Advisors mentoring & Coaching at

subnational levels.
Page | 107
12.2 Professional Development *Professional No. of officers Approx 31 DOF officers progressing
Cash-flow
with CPAPNG Development with progressing through through with respective professional
constraints
CPAPNG respective exams. exams in CPA & CAT categories.
12.3 PNG Association of

Incorporation of Cash-flow
Government
Outsource training Association in PNG in Collated information identifying external constraints
Accountants & Public
programs that address Accreditation with training providers –referred to FAS CSD-
Finance Managers.
soft-skills transfer CIPFA, UK June 2017
training needs for Officially launched in
August 2018 by Chief Respective divisions to recommend
PFOs and DFOs.
Secretary Government. accordingly for external training in
Improved levels of Ambassador Isaac Supervisory, HR, middle management
professionalism and Lupari courses, soft skills Trainings.
conduct.
No. of applications Per HR Training records.
Page | 108
received for
membership.
Incorporated with IPA in Dec 2014
Develop professional
Interim Executives from DOF duly
development programs
appointed.
Offer professional
development courses.
Officially launched in August 2018.
Official Launching of
Association. Interim status: maintained through Govt
Budgetary Support.
Issued Certificates of Membership to

Launch membership Association in various categories on 16
drive August 2018 at Holiday Inn.
In collaboration with CIPFA, UK
In collaboration with CIPFA, UK
Reforms in Internal Audits Compliance

Lead Internal Audits Priority Action Areas
and Compliance
Division 8. Compliance in Accounting Functions
Division
 Compliance to PFMA in ensuring that Accounting Functions exists in National
Activity 8 and 10.
Agencies
Branch/ and SNGs
Program
10. Reforms in Internal Auditing
Activity Activity Performance Indicator Means of Timeframe Progress Update (and Constraints/Reasons for
Page | 109
No. Verification achievement) towards Non-Achievements
KPI
8.
Conduct an Undertaking co-sourced For internal auditors to learn
8.1 Mar 16 –
assessment to audits with the trainers on the job on IT audits of
Jun 16
measure level of system application, audit of Internal Audit positions not
compliance to revenue collection, audit of attractive
PFMA and regional accounts and payroll
Financial audits.
Management Lack of technical internal audit
Manual by The Department of Finance To minimise opportunities for training and development of
Government had requested technical abuse. audit specialists.
agencies in order assistance from PFTAC and
to establish an they had engaged a short
accounts payable term consultant in Ms Susan Lack of or on commitment by
and receivable Morrison to conduct an the head of government
branches assessment of the internal agency non – attendance of
audit systems within the PwC in 2014 performed the Audit Committee.
PNG PFM space. Ms Morrison survey to measure the
carried out a detailed effectiveness of the audit
evaluation and submitted committees.
her findings on
“Strengthening Internal Internal Audits Solutions
Audit through Capacity Limited in 2017 was engaged
Development” in a 35 page to study and identify
report. challenges for functioning of
audit committees under PSAP
and make suitable
recommendations.
PSAP board has
commissioned a survey on
Under Sec 5 of the PSAP program. To conduct awareness on
PFMA to setting up Public Sector Program (PSAP)
300 audit to all stakeholders.
committees and
internal audit unit Review of Public Sector Audit To all government agencies
across the entire Program in 2017 on the requirement under
public sector. Section 5 of PFMA to
Page | 110
establish internal audit units
PSAP program at present and form audit Committees
does not receive any funding
from any donor. In the past For implementation of the
it had received some funding amended act section 5 (C) of
from AusDFAT and EU. PFMA.
In the light of the studies

and recommendations by To assist agency internal
PwC (2014), IASL (2017) audit capacity and up skilling.
and PFTAC (2017), and the
new PFMA requirement for Recruiting of new Graduates
audit committees in all to gradually replace old
agencies and Article 81 of workforce
Alotau Accord II on good
governance, there is a need To enhance good governance
for funding capacity through increasing
development of internal transparency and
audit functions in institutions accountability of budget
across PNG. This is all the spending grants allocated to
more necessary as while agencies to improve service
IFMS ensures the control of delivery.
public finance mechanisms,
internal audit through
operational audits can
ensure the control of public
service delivery mechanisms.
Both these are
complimentary for linking
public expenditure to service Cases Aug Apr
delivery. 2014 2018
to to
Mar July
IACD to organise media 2018 2018
release on Public Sector
Audit program and General 238 79
IACD to issue circular notice
Page | 111
on the requirement of PMFA Other
135 132
Depts
Issue new FI on the
requirements of new PFMA Finance
194 61
reforms. Dept
IIA to develop training for all Total 567 272

public sector internal auditor
graduates to IACD
The Phones Against

Corruption Program through
UNDP PNG by virtue of a
small scaling up funding
received under the UNDP-
AusDFAT joint initiative for
“Anti Corruption for Peaceful
and Inclusive Societies”
(ACPIS) in 2018. The
funding is to enable scaling
up the program to all audit
committee agencies.
10. Reforms in Internal Auditing
10.1 Facilitate To train Public Sector Jan 16 – Under Public Sector Audit  Lack of soft skills
advanced level Internal Auditors Jan 17 Program (PSAP)
training program  Lack of funds
100 internal auditors have
for public sector under PSAP Trust
been trained over period of
auditors in Account
time across the public sector
consultation with to continue with
the Institute of Training provided on two training
Internal Auditors phases –on job training as
well as soft training Funded
by PSAP Trust Account  Up skill Report
(Ausaid & GoPNG) writing
Aus-aid funding ceased in  Write up an audit

2015 Dept. of Finance has plan
Page | 112
taken on the initiative for the
program to continue  Lack of technical
internal audit
MOU signed between
training and
Department of Finance and
development of
UoT in Lae
audit specialists
Refresher courses in internal
auditing two phases Basic  Lack of qualified
and intermediate level. - K internal auditors in
800,000 public sector
Ongoing refresher courses for
internal auditors - IACD –  Lack of funding
Training provide by most Provincial
Accounting firms Audit Committee
Meetings are held
Trained 60 Internal Auditors
Refresher training Basic 35  Lack of Knowledge
in 2015 and 35 in 2016 and skill
personnel‟s in the
audit unit.
 Limited Auditors to
support the
program
 Lack of or no
commitment by
the head of
government
agency of non-
attendance of
Audit Committees
 Agency heads not

taking the
ownership of the
program
Page | 113
 Agency Heads
show little interest
in the audit
matters
 Funding provided
to Internal Audit
units in various
agencies is in
sufficient for their
operation
 Internal Audit
positions not
attractive
 No incentives
attached to
internal audit
positions
Page | 114
Lead Financial Controls Priority Action 2. Cash Management Reform
Division Areas
 Design and implement a new Government banking framework to solve the cash
management problem
• Cash Management
 Timely Accounts Reconciliation
Activities
Branch(es) • Expenditure Control  Reduce time on transfer of Funds to WPA
2,5,8, 9 and  Cash Forecasting/mid-year cash forecast revisions
• Trust Accounting
13
5. Arrears Management
8. Compliance to PFMA in ensuring that Accounting Functions exists in
National Agencies and SNGs
9. Reconciliation of Suspense accounts
13. Reforms in Budgeting, Trust accounting and strengthening debt
management practices and monitoring of fiscal risks.
Means of
Activity No. Activity KPI Timeframe Progress update Constraints and issues
verification
2. Cash Management Reform

Project plan The reform proposal for a
2.1 Department of Finance Final Draft Banking Oct 15 - Oct The draft Cash flow forecasting
drafted and Government Banking
begins work on revised Framework revised by 16 system has been drawn up with the
submitted to
banking framework December 2015 support of PFTAC. Framework – Submitted to
BPNG for
comments BPNG for consideration and
still pending because of
broader issues regarding the
Commercial Banks and BPNG
in line with the government
securities and other banking
issues.
Staff on
2.2 Increased staffing to Recruitment of 5 Nov 15 - Nov 3 new officers have been recruited to 4 more officers to be recruited
Strength. No
support broad-based cash Accountants by 16 the new Cash Unit. in the new restructure.
vacancies
management reform November 2016
against
approved
Page | 115
structure.
It is being planned and proposed that Completed
2.3 Reform proposals Nov 16 - Jun
Cash balances from trust accounts
developed to manage 16
Report of Cash are to be moved through the Banking
balances in trust relative
Pooling. Framework Project from ANZ and
to WPA Draft Reform Proposal
Westpac to BPNG, not trust accounts
by June 2016 in BSP.
A draft report was compiled in June
and is still under discussion with the
BPNG.
2.4 Completed
Cash forecasting unit Number of Personnel Approved Dec 15 - Oct Unit established with 2 new officers
established in Department recruited for Cash structure 16
of Finance Forecasting Unit
Completed
2.5 Reconciliation backlog All backlog of Bank Jan 16 - Dec Reconciliations is done on a daily
IFM System
eliminated; reconciliations Reconciliations 16 basis & electronically through IFMS.
report
conducted on a daily basis eliminated Reconciliation is up to date
BPNG approval
The reform proposal for a
2.6 Banking framework NEC Submission Approval of Mar 16 - Jun A Project Plan has been drafted and
reforms submitted to NEC project plan by 16 submitted to the BPNG to get BPNGs Government Banking
NEC Decision on
for approval BPNG concurrence and views before a NEC Framework – Submitted to
Banking Framework
Submission is drafted BPNG for consideration and
still pending because of
broader issues regarding the
Commercial Banks and BPNG
in line with the government
securities and other banking
issues.
5.0
5.1 Develop a central
Operational Report on Oct 15 – Oct A register have been inputted and Completed
expenditure arrears
Page | 116
registry to maintain and expenditure arrears Expenditure 16 currently in use by officers to input
monitor arrears of the registry for whole of arrears or record arrears and claims as they
State government Arrears are submitted.
database
management.
8.0
Compliance to PFMA in ensuring that Accounting Functions exists in National Agencies and SNGs
8.1 Conduct an assessment Finance Instruction on SNG Non tax
March 2016 – The exercise has been rolled out and We have been informed that
to measure level of Non tax revenue Reconciliation
Jun 2018 cashless system is currently being all FC are all recalled to
compliance to PFMA and collections report
practice in all agencies payments and Finance Headquarter due to
Financial Management receipts are now being done through compliance Issues.
Manual by Government Number of EFTPOS & IFMS and PGAS EFTPOSs.
agencies in order to CRS installed generated (Revised PFM to all FC to
receipts agencies)
establish an accounts
Number of Agencies &
payable and receivable Need strategies to work on to
SNG with CRS and
branches improve
EFTPOS System
installed And should come up with how
best they can address the
interest of the state or line
agencies.
13.0 Reforms in Budgeting, Trust accounting and strengthening debt management practices and monitoring of fiscal risks.
13. 8 Stricter discipline on the

This clause has been Revised Trust Oct 15 – Dec With the PGAS version – there were This activity was implemented
use of trust accounts and
included in the Trust Instruments 15 no strict discipline in reports this year.
their replacement instruments. With IFMS is with strict discipline,
wherever possible by end-
year carryover provisions. Currently no request so far, Trust
accounts managed by DOF have
decreased Approx. 500 T/Accounts
decreased to 100 T/Accounts.
Very few request received for
establishment of new Trust Accounts
Page | 117
since 2017. Trust Accounts are now
better managed and controlled
By 31.12.2020 all new trust accounts
will be on IFMS
13.9 New trust accounts
Approved banking NEC Decision on Jan 17 – Dec Provisions for free cash balance form
should have a free cash
framework new banking 17 trust accounts is being included in
balance status for framework the new banking framework. Its
general cash completed and now with BPNG for
management purposes their views.
until funds are needed for
implementation
13.14 Issue FI to effect the

PFM amended Act Report of Jun 16 – Dec This has been included in the new Completed and ready for
cessation of transfer of
transfer of 16 Public Finance (Management) Act issuance
lapsing funds into trust lapsing funds Amendment Bill 2016 to be legislated
accounts Finance Instruction into Trust and enforced.
Accounts.
13.15 Conduct a robust
Inventory update Annual Budget Jun 16 – Dec The inventory on trust accounts is up Nil
inventory on all trust
document 17 to date as it is regularly being
accounts held with updated.
National Agencies and
SNG MYEFO and FBO
Page | 118
SCHEDULE 1: SUMMARY OF PEFA ASSESSMENT RESULTS AND PRIORITY AREAS
Department of National Planning and Monitoring

2018 AGENCY
DEPARTMENT OF
PUBLIC INVESTMENT
229 NATIONAL PLANNING AND Divisions :
PROGRAMS
MONITORING
Duration of PFM Road Map
FEB 2015 - DEC 2018
:
2015 PEFA
PEFA Framework Critical to
PEFA Framework Performance Report
Pillar Description of the PI Improved Priority Areas
Indicator(PI) Indicator
Pillar Performance
Rating
ADOPTION OF THE 3 STEP
Comprehensiveness
II PI - 5 Comprehensiveness of Budget Documentation B Yes APPROACH FOR
and Transparency of
PRIORITISATION OF CAPITAL
Budget
PROJECTS
Extent of Reporting of Extra Budgetary
PI - 6 D Yes
Operations Step 1
Initial Screening of Proposals
Prioritization based on
PI - 9 Public Access to Key Fiscal Information D Yes
national/regional objectives
Projects approved in Step 1
Asset and Liability PI - 11 Public Investment Management appropriations made to fine tune
III D Yes
Management plans and costings and time of
completion
PI - 12 Public Asset Management
D+ Yes
Page | 119
2018 AGENCY
DEPARTMENT OF
PUBLIC INVESTMENT
229 NATIONAL PLANNING AND Divisions :
PROGRAMS
MONITORING
Duration of PFM Road Map
FEB 2015 - DEC 2018
:
2015 PEFA
PEFA Framework Critical to
PEFA Framework Performance Report
Pillar Description of the PI Improved Priority Areas
Indicator(PI) Indicator
Pillar Performance
Rating
PI - 16 Medium Term Perspective in Expenditure D Yes Step 2
Budgeting Review of detailed plans and
costings. Reprioritisation of
Policy Based Planning Projects
IV
and Budgeting PI - 17 Orderliness and Participation in Annual C+ Yes
Budget Preparation Process Step 3
List of Approved Projects after
PI - 18 Legislative Scrutiny of Annual Budget Law D+ Yes review of detailed plans and
reprioritisation.
Page | 120
DEPARTMENT OF NATIONAL PLANNING AND MONITORING
Activit Key Performance Actual Output YTD Lead Lead Start End Date
y No. Indicator/Output Agency Division Date
14. Reforms in process for prioritization of capital projects
14.1 Formal adoption of the 3-step process NEC Decision No.?? Budget preparation in the
for prioritization of capital projects for current reform is financing
2016 budget if the road map is Stage 1 Budget project/programs (activities)
approved by NEC Submission Circular which are Already linked to
Sectoral plans. That‟s the
Step 1: Initial Screening of Proposals.
Stage 2 Budget Alignment exercise. The
Prioritization based on national/regional
Submission Circular circular requires that the
objectives. Projects approved in Step 1 PIP Wing-
sectors prioritizes what they DNPM &
appropriations made to fine tune plans All Mar-16 Sep-16
Stage 3 Budget prefer to implement/fund Treasury
and costing and time of completion divisions
Screening based on their sectoral plan, so
they provide DNPM/Treasury a
Step 2: Review of detailed plans and
2017 National Budget sectoral priority
costing. Reprioritization of Projects
Step 3: List of Approved Projects after

review of detailed plans and
reprioritization
14.2 Report on multi-year prioritizing Work has already commenced

Conduct multi-year planning for PIP Wing-
of investment projects for on this. DNPM &
completed investment programs to be All Jan-17 Nov-17
migration to recurrent budget in Treasury
absorbed into the recurrent budget divisions
2017
Page | 121
SCHEDULE 3: DEPARTMENT OF NATIONAL PLANNNING AND MONITORING
Lead PUBLIC INVESTMENT PROGRAM Priority Action 14. Reforms in process for prioritization of capital projects
Division Areas
ADOPTION OF THE 3 STEP APPROACH FOR PRIORITISATION OF CAPITAL PROJECTS
BUDGETS Step 1 Initial Screening of Proposals

Activity 14.0
Branch/ Prioritization based on national/regional objectives
Program Projects approved in Step 1 appropriations made to fine tune plans and costing
and time of completion
Step 2 Review of detailed plans and costing. Reprioritization of Projects
Step 3 List of Approved Projects after review of detailed plans and reprioritization
Activity Performance Means of Timeframe Progress Update (and Constraints/Reasons for
No. Activity Indicator/Outpu Verification achievement) towards Non-Achievements
ts KPI
14. Reforms in process for prioritization of capital projects
14.1 Formal adoption of the 3-step process for NEC Decision Budget Submissions are
Mar 2016 –
prioritisation of capital projects for 2016 No.?? Stage 1 complete made at the agency level,
Mar 2017
budget if the road map is approved by NEC whilst the requirement is
Stage 1 Budget seeking Sector submissions
Submission
Circular
Not all submissions are

List of prioritized Ongoing Activity made within the required
proposals consistent period
within sectoral
plan/provincial
plans is required
Preparation of Sector
1st Stage ceilings by Treasury is
Submission report is affecting the projected
Page | 122
prepared for NEC timeframe to respond back
to sector agencies
PFD are submitted 1. List of sector priorities

for only New Budget preparation in the
consistent with the Stage
programs or current reform is financing
1st Stage Budget
projects project/programs
submission circular- not
(activities) which are
addressing the report
Already linked to Sectoral
strategy of having projects
plans. That‟s the Alignment
aligned to sectoral plans
exercise. The circular
2. Treasury need to set
requires that the sectors
sectoral ceilings to address
prioritizes what they prefer sectoral projects
to implement/fund based
on their sectoral plan, so
they provide
DNPM/Treasury a sectoral
priority
Cost Benefit
Analysis reports for Intensive CBA training is
major investment required
projects is required
in the PFD
Stage 2 Budget
1. PFD submissions were
Submission List of sector priorities
Jun 2016, not indicated in the Stage 1
Circular consistent with the Stage 1
Jun 2017 list
Page | 123
2nd Stage 2. PFD submissions deviate
Submission report is from the scope of the initial
prepared for NEC submission list in Stage 1
3. PFD require extensive

editing to align to Gov plans
and policies
Stage 3 Budget Formal budget Capital Investment Budget

Aug 2016
Screening screening process (offline) Master Matrix
through the
relevant budget
committees
IFMS Budget Execution

Often there are many
changes in the
recommendations.
Text input must be

standardized and improved
2017 National
Nov 2016
Budget
The Budget submission

circular recommends that
Revised Sectoral
sector ceiling-plans and
Plans and Costing
costing of sectoral plans
reviewed and projects are
reprioritised
Page | 124
14.2 Conduct multi-year planning for completed Report on multi- List of investment projects 1. Programs/projects
1st Stage 2017 Mar 2016,
investment programs to be absorbed into year prioritizing of to be migrated to 2017 funded over 5 years are
Budget Submission Mar 2017
the recurrent budget investment Budget recommended to the
circular
projects for Operations budget
migration to screening for consideration
recurrent budget in
2017 2. Only completed and
operational
List of investment programs/projects are
projects to be considered for operational
migrated to 2017 budget consideration
Budget
3. DNPM must prepare full
assessment of
programs/projects when it
recommends these to
migrate to the Operation
Budget
2nd Stage Budget July 2016, complete

Submission circular July 2017
2017 National Nov 2016,

Budget Nov 2017 2016 complete
2017 Annual Capital Dec 2016, 2016 complete

Program/project
Investment budget Dec 2016
implementation
Cashflow &
Workplan
submission circular
Page | 125
Department of Personnel Management
MID - YEAR Period of Reporting: As at 30th June 2018

2018 AGENCY
DEPARTMENT OF
220 Divisions : HR ADVISORY SERVICES AND
PERSONNEL MANAGEMENT CAPACITY BUILDING
OCT 2015 - DEC 2018
Map :
2015
PEFA Critical to
PEFA Framework PEFA Framework Performance
Pillar PI Report Improved Priority Areas
Description of the Pillar Indicator(PI)
Rating
 Loading all government
employees on Alesco
PI - 22 Effectiveness of Payroll Controls D+ Yes
Predictability and Control in
V  Development Manpower and
Budget Execution
Payroll Audit Plan for national
Agencies
 Strengthen position
establishment controls
PI - 24 Effectiveness of Internal Controls for Non- D+ Yes
Salary Expenditure  Fortnightly salary reconciliation
between Alesco, BPNG and
BPNG
 Increase staff on strength in
payroll monitoring
Page | 126
MID - YEAR Period of Reporting: As at 30th June 2018
2018 AGENCY
DEPARTMENT OF
220 Divisions : HR ADVISORY SERVICES AND
PERSONNEL MANAGEMENT CAPACITY BUILDING
OCT 2015 - DEC 2018
Map :
2015
PEFA Critical to
PEFA Framework PEFA Framework Performance
Pillar PI Report Improved Priority Areas
Description of the Pillar Indicator(PI)
Rating
Page | 127
DEPARTMENT OF PERSONNEL MANAGEMENT
Activity Key Performance Actual Output YTD Lead Lead End Date
PFM Reform Priority Activities Start Date
No. Indicator/Output Agency Division
15. Reforms in payroll system
15.1 One Payroll System Ensuring All Genuine casuals DPM HRAS&CB 2008 Dec-2017
receiving salaries outside of the Providing Technical
Alesco payroll are absorbed assistance in absorbing DoT MIS, MCAR May
all genuine casuals onto continue
line positions. into 2018
Minor refinement to the structure
Create positions to cater
for genuine casuals
Inform Treasury to
transfer funds from item
211 to 111.
NID Cards for All Public Servants NID cards to be uploaded 2018
Ongoing
to strengthen 1PPP
arrangement
15.2 Strengthen staffing/position Conducting desk top DPM HRAS&CB June and
establishment controls Quaterly Staffing & Establishment Staffing & establishment Ongoing
Reviews for the whole of reviews to ensure the DoT Recurrent
Government staff numbers from activity
MIS
Treasury (Budget Book
Quarterly Budget Reviews for the Volume 2a) Agency‟s
whole of Government Positional occupancy
register and the
Page | 128
Establishment report
from the Alesco
Participate in the budget

Reviews to ensure the
right staff numbers are
budgeted for per the
Staffing & establishment
review figure
15.3 Conduct fortnightly whole of Cost-Benefit Analysis is DPM MCAR Recurrent

Government Payroll Analysis on conducted as a normal activity
compliance activity and HRAS&CB/
Personnel Emolument Expenditure
Fortnightly Expenditure Reports reported upon. MIS
are furnished fortnightly, monthly
and quarterly and 6 monthly to
monitor the PE expenditure trend WoG PE Expenditure
Fortnightly report is
tracked and reported on
fortnightly basis
15.4 Conduct more awareness on Business DPM HRAS&CB Nov 2014 UFN
process for HR and Payroll Business Process
workshops has been on PNGIPA MIS Funding
management Rolling out of the HR Business
halt due to funding constraints
Process workshop to requesting limited
constraints
Agencies
The Department has further roll
commenced work on the outs
Conversion into a National
HR Business Process in
Qualification Framework at
partnership with PNGIPA
PNGIPA
to covert the business
procedures manual into a
June 2016
national qualification. June 2017
15.5 Re-Balancing Personnel Emolument Personnel Emoluments Budgets in A notional exercise to re- DPM HRAS&CB Nov 2014 UFN
2017 appear unevenly balanced balance the “PE” Budget
Budget Allocations in 2017 & Funding
Page | 129
Implementing NEC Decisions304/2016 and do not support priority areas situation is hereby PNGIPA MIS constraints
& 71/2017 undertaken to see if limited
benefits can be gained further roll
that might improve the outs
situation for priority areas
June 2016 June 2017
15.6 Develop HR Staffing and payroll audit Yet to be developed DPM MCAR
Approved Staffing and Payroll
plan for national agencies and sub- Audit Plans
national agencies
15.7 Staffing & establishment Reviews Public servants and DPM JUN-17 Slow
A theoretical exercise to re- teachers are all drawing progressing
balance the “PE” Budget situation salaries from „one‟
has been undertaken to see if basket. Therefore, it is
benefits can be gained that might equally important to
improve the situation reconcile all records
together
15.8 Develop and Review a user friendly To capture all staffing DPM,DOT
S&E reporting template for all numbers and other With
Template populated and used
agencies mandatory allowances for Agencies
during the quarter 1 S&E Review
budget consideration
DEPARTMENT OF PERSONNEL MANAGEMENT

SCHEDULE 3: DETAILED PROGRESSIVE REPORT Y EAR-TO-DATE BY DIVISION/PROGRAM
Division Human Resource Advisory Priority Action Areas 15. Reforms in Payroll System
Services & Capacity Building  Loading all government employees on Alesco
Page | 130
 Development Manpower and Payroll Audit Plan for national Agencies
Branch/ Staffing & Establishment
 Strengthen position establishment controls
Activity 15
Program HR Client Services Branch  Increase staff on strength in payroll monitoring
 Fortnightly salary reconciliation between Alesco and BPNG
Activity No. Activity Performance Means of Timefram Progress Update (and Constraints/Reasons for
Indicator/Outputs Verification e achievement) towards Non-Achievements
KPI
15. Reforms in payroll system
Set up on Alesco all employees 80% of all employees paid

Re-categorization of Loading all On going
of departments, ministries, and from other source apart
genuine casuals Government Capacity issue
public authorities regardless of employed under employees on from Alesco has been
the nature of their position Employment Act of 1978 Alesco subsumed into created DPM not having access to
to be absorbed into the positions on Alesco. PGAS Rep
integrated Alesco payroll
Agencies with casuals were ort on item 112
system Circular Instruction
to cease PGAS encouraged to identify to
create line positions to Agencies ignorant on DPM‟s
15.1 payments –
genuine casuals absorbed casual officers. instructions on the same.
being transferred
Agencies especially
to Alesco.
NID Cards for All Public Provinces and Hospitals are
Servants slowly absorbing their
NID cards to be casuals
Score rating has
uploaded to
improved from D to C
strengthen 1PPP
arrangement
 Reconcile the 2017
Fortnightly desk top Agencies to inform Quarterly &
budget
analysis of staffing OSPEAC on timely Ongoing Slowly implementation of CI
numbers against the basis on their appropriation
15/2015
Strengthen staffing/position funding capacity. staffing against the actual
15.2
establishment controls requirements to budget, staffing
DoT and DPM through and establishment
ensure funding is
OSPEAC to conduct
appropriated ceiling
staffing & Establishment
accordingly.
Reviews every quarter.  Identify any
Page | 131
discrepancies in the
staffing figures (as
Score rating improves Agencies require to
from D to C submit per Table 6 of the
reconciliation Budget Book) and
reports to DPM & match against
DoT on the Alesco & Agency
changes in staffing actual
90% of all data in the
numbers for
 Identify any in- Alesco System has been
subsequent
updates on the balance in the 2017 cleansed.
payroll budget and agree
Restrictions are imposed on
on rational options
selections, structures
to minimise the
pending assessment of their
Cost Benefit over-expenditure in
expenditure trend prior to
Analysis is the PE budget
exemption.
conducted for
agencies to  Undertake
Costings are not
ascertain their verification of
accompanying the requests
financial ability as vacancies,
delays processing of their
compared to their unattached and
requests on time.
expenditure trend aging employees
for each fortnight. based on Non reconciliation of the
information and Staffing against the
Validated vacancies data already with approved establishment and
will be locked in DPM (or yet to the positional occupancy
the system to come) Register delays
avoid manipulation implementation
 Reach agreement
on the way forward
in terms of agency
priority needs
OSPEAC is operational and

currently.
System control tools for

locking vacancies is in
discussion
Page | 132
 Provide the avenue Financial constraints.
Strengthen the S&E Compile report for
for OSPEAC TWG to
reviews before the OSPEAC and CACC Non-implementation of
quarterly reconcile budget,
second quarter budget for ratification existing structures before
for consideration in the staffing &
proposing a new structure
revised budget establishment
figures
 Provide the
government with a
realistic plan of
action on the
following:
Exemption to approve re-

organisation structures
Exemption to advertise
Conduct fortnightly whole of
essential vacancies within
Government Salary
2017 budget ceiling
15.3 reconciliation from Alesco and
Agency‟s Positional Occupational Exemption to recruit against
Register essential vacancies
Decision to retire aging

public servants
Decision to retrench public

servants consistent with the
reform agenda.
Agreed establishment and

staffing numbers corrected
in the Integrated HR Payroll
system and locked
2017 Budget in-balance is

corrected
Page | 133
Page | 134
Implementation schedules Financial constraints
Agencies need to Pending
drawn up for
be capacitated with Funding
relevant HR implementation in 2017
Business Process Competent and reliable HR
Officers
Business process
Conduct more awareness on Workshop conducted for Business Process workshops
15.4 Business process for HR and sub-national agencies has been on halt due to
Payroll management funding constraints
Conversion into a The Department has

National Qualification commenced work on the
Framework at PNGIPA HR Business Process in
partnership with PNGIPA to
covert the business
procedures manual into a
national qualification.
Page | 135
Agencies need to Pending A notional exercise to re- Financial constraints
be capacitated with Funding balance the “PE” Budget
Personnel Emoluments
relevant HR situation is hereby
Budgets in 2017 appear
Business Process undertaken to see if
unevenly balanced and
benefits can be gained that
do not support priority
might improve the situation
areas
for priority areas
Hospitals and PHA‟s:

After re-prioritizing Agency
donate
savings:
K 24.0 Million savings
from under expended
Hospitals and PHA‟s to National Depts.
give Underfunded by around K
Re-Balancing Personnel 91 Million
Emolument
Hospitals and PHA‟s:
15.5 Budget Allocations in 2017 & donate K 66.8 Million Provincial Govts.
Implementing NEC savings from under Underfunded by around K
Decisions304/2016 & 71/2017 expended National Depts 22 Million
to give:
Teachers:
National Depts: donate K Underfunded by around K
13.5 Million savings from 205 Million
under expended National
Depts to give:
Before the Budget Re-
Balance exercise: Agencies
National Depts: donate K over expended 87 No.
92.3 Million savings from Agencies under expended
under expended 57
Provincial Govts. to give:
After the Budget Re-
Balance exercise: No.
Agencies over expended 57
National Depts: donate K
No. Agencies under
3.7 Million savings from
Page | 136
under expended Teacher expended 87
agencies to give:
Approved Staffing and

Yet to be developed
Develop HR Staffing and payroll Payroll Audit Plans
15.6 audit plan for national agencies
and sub-national agencies
Page | 137
Projected K400 + million Public servants and Ongoing Slow progress Financial Constraints
pay bill deficit by end of teachers are all
2017 based on Alesco drawing salaries
transactions alone from „one‟ basket.
Therefore, it is
This does not take into
equally important
account the agreed 3%
to reconcile all
pay increase in 2017 for
records together.
most awards (another
K100 million) S & E is not about
number game only.
Strict cost saving
It is about how you
measures are still in
manage your
force from Circular
Human Resource-
Instructions in 2015 and
Therefore,
2016
understanding your
Staffing & establishment Personnel Emoluments HR Business
15.7 Budgets in 2017 appear process is of
Reviews
unevenly balanced and paramount
do not support priority important including
areas the agency
priorities
A theoretical exercise to
re-balance the “PE” Managing attrition
Budget situation has is also important
been undertaken to see
if benefits can be gained
June 2017 OSPEAC exempted all
that might improve the DPM 15/2015
Hospitals, Law & Order
situation (If time permits
NEC Decision Sectors and IRC & Customs
I will present the
304/2016
findings)
NEC Decision
Restrictions on
71/2017
recruitment, Structures.
Page | 138
Develop and Review a user
To capture all Going DPM, DoT with Agencies Relieve misinterpretation of
friendly S&E reporting template
staffing numbers data‟s
for all agencies Template populated and
and other
used during the quarter
mandatory
1 S&E Review
15.8 allowances for
budget
consideration
Page | 139
9. CENTRAL SUPPLY & TENDERS BOARD
2018 MIDYEAR Period of Reporting: As at 30th June, 2018

AGENCY
268 CENTRAL SUPPLY AND TENDERS Divisions : Training, Market/Industrial

BOARD Development, Compliance & Audit (TMCA).
Map:
2015
PEFA Critical to
PEFA Framework
Rating
Reforms in Procurement
Comprehensiveness and Planning
II PI – 9 Public Access to Key Information D Yes  Develop procedures for
Transparency of Budget
submission of Procurement
Plans
 Establish an independent
Asset and Liability procurement system
III PI - 11 Public Investment Management D Yes  Establish a MIS for
Management
procurement complaints
 Establish a Complaint unit
Page | 140
CENTRAL SUPPLY AND TENDERS BOARD

PFM Reform Priority Activities Lead Agency
No. Indicator/Output Division Date Date
17. Procurement Planning
In consultation with Finance, Treasury Issuance of a Finance Since September 2015 CSTB, DoF and CSTB Nov-15 Dec-16
and Planning develop procedures for Instruction or Policy awareness was conducted by DNPM TMCA
gathering 2016 procurement plans Instruction to all agencies CSTB Training Team during visit
on the submission of annual to Central Agencies, Provinces,
procurement and Districts and LLGs that
acquisition plans which is a PROCUREMENT PLANS are a
mandatory requirement by STATUTORY REQUIREMENT.
March 28th each year
17.1 No instruction was issued for
2016 Financial Year.
CSTB conducted a review and

awareness of the existing
Procurement Planning
Procedures (as per the PFMA
and Good Procurement Manual
[GPM])
CSTB to review structure and raise Establishment of a new CSTB has under the 2015 CSTB, DoF, DoT CSTB Apr-16 Apr-17
current staff ceiling for monitoring Division – Training, restructure established a new & DPM TMCA,
Market/Industrial Division – Training, DoF CS,
Development, Compliance & Market/Industrial Development, DoT
17.2 Audit (TMCA) (with Compliance & Audit (TMCA). BUDGETS
consultation DPM and DoF) & DPM
Recruitment has been
Number of personnel conducted with one more
recruited position to be filled.
Page | 141
No. Indicator/Output Division Date Date
CSTB to establish an independent Fully operational Existing Procurement Complaint CSTB and DoF CSTB - Feb-16 Feb-17
procurement complaint system and Procurement Complaint System needs reactivating TMCA
management information system for System through a Policy (Financial)
resolution of procurement complaints Instruction.
Upgraded Contract
Registration System (CRS) - This has not been effected as
17.3 MIS. yet.
CRS (MIS) needs to be

upgraded. A new complaint
system new installation
(Hardware and Software)
started in February 2016
Establish a Complaint unit to handle A Complaints Handling CSTB TMCA division and its CSTB CSTB Feb-16 Mar-17
procurement complaint issues Response Procedure to section – Marketing initially will TMCA
accommodate the attend to all Complaints made
requirements of through to CSTB Secretariat and
Stakeholders (OC, AGO, establish contact with the other
17.4 ICCC, Police Fraud Unit, member stakeholders.
SSOl) in Compliant handling
with CSTB and its
responsible division.
Number of complaints
registered
Page | 142
CENTRAL SUPPLY AND TENDERS BOARD
SCHEDULE 3: DETAILED PROGRESSIVE REPORT
Reforms in Procurement Planning

Division Training, Market/Industrial Priority Action
Development, Compliance Area
 Develop procedures for submission of Procurement Plans
& Audit (TMCA).
 Establish an independent procurement system
 Establish a MIS for procurement complaints
Branch Training, Market/Industrial Activity 17
 Establish a Complaint unit
Development, Compliance &
Audit (TMCA).
Activity Means of
No. verification
17. Procurement Planning
17.1 In consultation with Finance,

Finance Instruction Annual Nov 15 – Visited 5 provinces and 2 Funding shortfall to conduct workshops
Treasury and Planning develop
Procurement central agencies
procedures for gathering 2016 Dec 16 Professional negligence and arrogance by
cost conducted training
procurement plans agencies
Policy Instruction workshops
Mandatory requirements and deadlines by
Reviewed existing all stakeholders and Agencies is not being
Number of procedures from observed and respected
Procurement Plans collections, collation,
Procurement Units and Officers are not
registered tabling and submission of
established within the Departments and
Plans (Head Of Agencies‟
Agencies – low skills and knowledge.
approvals and to CSTB).
The linking of Procurement Plans to
National BUDGETTING is not effectively
executed.
17.2 CSTB to review structure and
Establishment of a The new Apr 16 – Feb Currently, the new New division with new functions and roles
raise current staff ceiling for
new Division – approved 17 Division has 4 out of 5 (mostly overlapping) resulting a slow
monitoring Training, organization officers executing duties progress.
Market/Industrial of training, Marketing,
Page | 143
Development, structure Compliance & Audits. Need funds to build capacity and upskill
Compliance & Audit officers and possibly whole of CSTB
(TMCA) (with
consultation DPM
and DoF)
CSTB to establish an Fully operational
Updated system Feb 16 – Feb The development of this Funding is the only setback (Lack Budget
independent procurement Procurement
report - eCRS 17 system is being sourced inclusion and submission)
complaint system and Complaint System
and eRecords to an IT company. Stage
management information Review and update of CRS and
17.3 MGT of the 1 of the eCRS review and
system for resolution of eDocumentation (eRecords) took place
CSTB registry eRecording of Registry
procurement complaints but incomplete.
documents Documents is near
completion. A review of
CIT was conducted.
17.4 Establish a Complaint unit to A Complaints
Feb 16 – Mar A new Division has been Stronger (effective) and regular (efficient)
handle procurement complaint Handling Response
17 established the TMCA, communication amongst All stakeholders
issues Procedure to
taking the lead in is required.
accommodate the
handling procurement
requirements of At present (to date) the Complaint
complaints. All
Stakeholders (OC, Handling is still a CSTB executive and
stakeholders are being
AGO, ICCC, Police procurement division matter.
challenged by their own
Fraud Unit, SSOl) in
Acts when complaints are All stakeholders are independently and
Compliant handling
heard. Legal implications thru their Acts are attending to
with CSTB and its
may impede the process Procurement and related matters. Greater
responsible
due to the independence awareness is required.
division.
of various legislations at
CSTB/TMCA has a Complaints Registry
hand from for instance
Number of system (needs upgrading or review), has
ICCC Act, AGO Act and
complaints attended to:
the OC Act.
registered
1) 15 Customer/Agency Complaints
2) 04 Ombudsman Commission
Number of cases
3) 03 RCPNG/Fraud Squad Office
heard
All the above are known cases involving
Number of cases TMCA were all satisfactorily settled.
solved
Page | 144
OFFICE OF THE AUDITOR GENERAL
2017 MIDYEAR Period of Reporting : As at 30th June 2018

AGENCY
OFFICE OF THE AUDITOR Divisions :

502 Performance Audit
GENERAL
Map :
2015
PEFA Critical to
PEFA Framework
Rating
Accounts Reconciliation and Financial Data Reforms in External
PI - 26 D+ Yes
Integrity Audit
 Raise Staffing in
Quality and Timeliness of in year Budget
Accounting, Recording PI - 27 D Yes Performance Auditing
VI Reports
and Reporting
 Establish a unit to follow
Quality and Timeliness of Annual Financial up PAC recommendations
PI - 28 D Yes
Reports through the "Finance
Minute"
External Scrutiny and Independence and External Audit of the
VII PI - 29 D+ Yes
Audit Governments Financial Statements
Page | 145

18. External Audit
Currently ten (11) staff in PAD

the Division
Corporate
No New staff recruited in Division
2017 and to date due to
Executive
Dept Of Personnel
Management (DPM) Division
restrictions on recruitment.
The draft structure was

completed and provided to
the Human Resource
Increase staffing in Performance The Auditor General proposed
18.1 Branch. The draft AGO Jan-16 Jun-17
Auditing the number to be increased to
restructure was not
30 officers
approved due DPM
recruitment restrictions.
Further, AGO new
organisational structure
which was furnished to
DPM for vetting, has not
been granted approval and
still pending.
Page | 146
AGO has an ANAO advisor

who is engaged for 3 years
to guide and train the
As above
national officers on
performance auditing.
Two (2) staff attended

short attachment at
Melbourne State Audit
The staff development is office in August 2016.
ongoing. AGO has send staff to
ANAO for long and short term The office conducted in-
training as well as in- house house training on 1 July
training. Also on the job training 2016 with help of ANAO
as well in undertaking the audit advisor.
Develop staff to conduct
assignment.
18.2 performance audits for significant An officer (team leader) AGO Jan-16 Dec-17
public services Number of staff trained and attended 2 weeks
certified performance audit
workshop in China in
Number of personnel on short November 2016.
term attachment
Two (2) offices attended
Number of in-house trainings and completed one year
conducted attachment with Australian
National audit Office
Number of On-the-job trainings (ANAO) in years 2016 and
conducted 2017. The officers were on
performance audit work
attachment.
In 2018, an officer on
attachment at ANAO
Canberra Australia for work
experience in performance
Page | 147
auditing.
Staff development is on-

going. In-house training
and on the job training are
undertaken in audit
assignments.
Two (2) officers are

participating in Pacific
Association of Supreme
Audit Institution (PASAI)
and International
Development Institution
(IDI) sponsored
Cooperative Performance
Audit on Preparedness for
Implementation of
Sustainable Development
Goals (SDGs) from
December, 2017 to
November 2018.
Create a suitable post/unit AGO PAD &

The AGO 4 divisions/branches Currently no unit has been
responsible for conducting follow- NGAD/DoF
are responsible for the follow up created in the office.
up of the PAC recommendations of the PAC recommendations DoF(lead)
18.3 Requires AG and Divisional Feb-17 Jun-17
to raise issues through the related to their portfolios. /AGO
issuance of "Finance Minute" to heads concurrence on the
matter. At present there is
relevant government concerned.
no unit created in the AGO.
Page | 148
There are 4
divisions/branches within
the AGO who are
responsible for the follow
up of the PAC
recommendations related
to their portfolios.
Within the DoF, the task of

reviewing Audited Financial
Statements lies within the
FRCD, Frameworks Branch.
Two officers within the
DoF(lead)
branch are expected to FRCD Feb-17 Jun-17
perform this duty. The /AGO
positions carrying this
responsibilities are
designated Senior
Accountant – PAC and
Accountant.
Page | 149
18. Reforms in External Audit

Division Performance Audit Priority Action Areas
 Raise Staffing in Performance Auditing
Branch
 Establish a unit to follow up PAC recommendations through the "Finance
Activity 18
Minute"
Activity Means of
No. verification
18. External Audit
Number of personnel Approved No new staff recruited in No structure has being

recruited Structure year 2017 due to approved by DPM, No
recruitment freeze by budgetary support and
Department of Personnel slow recruitment process.
Management (DPM).
However, AGO envisages
that Performance Audit
Division staff strength
would be increased to 30.
Increase staffing in Performance Jan16 - Currently ten National (11)
18.1
Auditing Jun17 staff in the Division
The Branch Structure was
not approved by Human
Resource Branch due to
Recruitment Freeze by
DPM and Main AGO
Organisation Structure
submitted to DPM had not
been granted approval.
Page | 150
Number of Officers on Short HR Report Two (2) Staff completed Yet to develop the AGO
Term attachment 10 months attachment performance audit manual.
program at ANAO in 2016 AGO does not have
Number of in house training
and 2017. sufficient financial
conducted
resources to attract
Two (2) staff attended
experienced performance
short attachment at
auditors both internal and
Melbourne State Audit
external job markets.
Office in August 2016.
An officer attended a 2
weeks Performance Audit
Work Shop at Malaysia in
July 2017 sponsored by
Asian Association of
Develop staff to conduct performance Jan16- Supreme Audit Institution
18.2
audits for significant public services Dec17 (ASOSAI).
An officer (team leader)

attended attend 2 weeks
performance audit
workshop in China in
November 2016.
Two (2) officers
participate in IDI/PASAI
6th Cooperative Audit on
Preparedness for
implementation of SDGs
from December 2017 to
December 2018.
Page | 151
Staff development is on-
going. In-house training
and on the job training are
undertaken in audit
assignments.
One (1) staff is currently
on attachment at ANAO
Australia for performance
auditing work experience
from January to November
2018.
AGO internal report. Finance DoF and AGO have not The PAC
Minute discussed the matter, recommendation`s
although the time frame is depends on the
in 2017. AGO has its own effectiveness of PAC. No
internal arrangement to discussion has taken place
conduct the PAC follow up between the three (3)
recommendations of PAC stakeholders.
by the respective AGO
Divisional Heads
Create a suitable post/unit responsible
Currently no unit has been
for conducting follow-up of the PAC
created in the office.
recommendations to raise issues Feb17- Requires AG and Divisional
18.3
through the issuance of "Finance Jun17 Heads concurrence on the
Minute" to relevant government matter.
agencies concerned.
DoF has two approved Job No progress has been This activity needs to be
positions in the Finance Descriptions made on the review of undertaken as it has been
Reporting and Compliance PAC recommendations or formally endorsed and
Division Frameworks Audited Financial incorporated into the JD‟s.
Branch. Designated with the Finance Statements review
The officers and division
responsibilities of reviewing Minute recommendations
concerned have not aware
PAC recommendations and
of the said responsibilities.
reviewing audited financial
statements submitted by Approved Both DOF and AGO needs
AGO. Senior Accountant – Divisional to discuss the issuance of
Page | 152
PAC and Accountant. Structure and receipt of a “Finance
Minute”.
Finance Minute from AGO
Page | 153
OUTCOME 3: EFFICIENT SERVICE DELIVERY
E. Performance of Public Service Against Service Delivery
93. An assessment will be conducted into the performance of public service to frontline
service delivery units. The performance of public service to frontline service delivery units such
as schools and rural and urban clinics will be conducted by NEFC, NDoH, DPLGA,and NDoE as joint
implementing partners. These agencies have formed a subcommittee and already reported to the
PFM RMG on the design, the targeted areas for study, the data and other technical requirements
and resources to enable this study.
94. The evaluation will be conducted on the reforms in determining if salaries and
remunerations of the Public service in the Service Sector, particularly health and
education are based on transparent and equitable rules. The Terms of Reference was
prepared and an evaluation design drafted. A subcommittee was formed ready to commence this
process. NDoH, NDoE, DPLGA are responsible for providing the necessary data required for this
assessment. DPM will be called to support where necessary.
95. Funding support was the cause of the delay until Secretary Finance has approved the allocation of
funding support for the team to conduct the evaluation study. And the timeframe reviewed. The
subcommittee is currently waiting for finalisation of travel arrangements to travel to the four
districts to conduct the review to determine if the allocation of positions for education and other
services for which salary support is provided to SNGs is based on transparent and horizontally
equitable rules.
96. The following forms are the agencies noted above.
Page | 154
National Economic and Fiscal Commission
MIDYEAR
2018 AGENCY
Period of Reporting : As at 30 th June, 2018
NATIONAL ECONOMIC & Divisions/Programs : Policy Analysis
507
FISCAL COMMISSION
Map :
2015
Indicator(PI)
Rating
Reforms in
Transparency of Intergovernmental Fiscal
PI - 7 B Yes determination if
Relations remuneration for
Service Sector
Comprehensiveness Performance Information for Achieving Conduct analysis into
PI - 8 D Yes
II and Transparency of Efficiency in Service Delivery determining if salaries and
Budget remunerations of positions
of SNG in the service
sector(health and
PI - 9 Public Access to Key Fiscal Information D Yes
education) are based on
transparent and equitable
rules
Page | 155
NATIONAL ECONOMIC AND FISCAL COMMISSION
Activity Key Performance Actual Output YTD Start End Date
No. Indicator/Output Date
19. Determination of allocation of positions in education and other services for which salary support is provided to SNG
Prepare evaluation design for a review to Evaluation Design was

determine if the allocation of positions completed and endorsed
by the PEFA Sub- NEFC
for education and other services for
19.1 committee and sent to the Dec-16 Jan-17
which salary support is provided to SNGs Evaluation Design for the actual
is based on transparent and horizontally Department of Finance
analysis in 2017
equitable rules
Applicable in 2017 Funding support was NEFC

19.2 Begin Analysis of SNG approved, team to travel in Jan-17 Oct-18
whole of July 2018
Page | 156
SCHEDULE 3: NATIONAL ECONOMIC FISCAL COMMISSION
DETAILED PROGRESSIVE REPORT YEAR-TO-DATE BY DIVISION/PROGRAM
19. Reforms in the current rules and formulae’s of applied in the
Lead Priority Action Areas
determination SNG Salary/Grade levels for Public Service in the Social
Division Sector – Health/Education
 Conduct analysis into determining if salaries and remunerations of positions of SNG
Activity 19
Branch/ in the service sector(health and education) are based on transparent and equitable
Program rules
Activity Activity Performance Means of Timeframe Progress Update (and Constraints/Reasons

No. Indicator/Outputs Verification achievement) towards KPI for Non-Achievements
19 Determination of allocation of positions in education and other services for which salary support is provided to SNG
1. Evaluation Design 1. Evaluation was

Sub-
completed and
Committee
2. Implementation endorsed by the PEFA
meeting
Plan Sub-committee. This
minutes
includes the following;
No.1,2,3
Activity completed
3. Monitoring & 2. Implementation Plan
Evaluation was completed and
Prepare evaluation design for a review Framework endorsed by the Sub-
to determine if the allocation of Committee
positions for education and other 4. Project cost
Dec16 - 3. Monitoring &
19.1 services for which salary support is
Jan17 Evaluation Framework
provided to SNGs is based on
transparent and horizontally equitable 5. Field Survey was completed
rules Questionnaire
4. Project cost was
6. Terms of References completed but awaiting
funding
5. Questionnaire was
completed
6. Terms of References
for stakeholders were
Page | 157
completed
Funding support was approved
Review Analysis in 2017 Funding constraints has
Jan17 - Oct by Secretary so the sub-
19.2 Begin Analysis of SNG finally been provided so
17 committee will travel out to
team will travel to the
provinces for the evaluation
four districts.
and analysis in July 2018
Page | 158
DEPARTMENT OF
PROVINCIAL
232 AFFAIRS AND Period of Reporting: As at 30th June 2018
LOCAL LEVEL Divisions : Internal Audit
GOVERNMENT
Duration of PFM FEB 2015 - DEC 2018
Road Map:
PEFA
2015
Framewor Critical to
PEFA
k PEFA Framework Improved
Pillar PI Report Priority Areas
Descriptio Performance Indicator(PI) Performan
Indicator
n of the ce
Rating
Pillar
Transparency of
PI - 7 Intergovernmental Fiscal B Yes Reforms in determination of remuneration for
Comprehe Relations Service Sector
nsiveness
and Performance Information for Conduct analysis into determining if salaries and
II remunerations of positions of SNG in the service
Transpare PI - 8 Achieving Efficiency in D Yes
ncy of Service Delivery sector(health and education) are based on transparent and
Budget equitable rules
Public Access to Key Fiscal
PI - 9 D Yes
Information
Page | 159
#SCHEDULE 2: SUMMARY OF KEY PRIORITY ACTIVITIES
DEPARTMENT OF PROVINCIAL AFFAIRS AND LOCAL LEVEL GOVERNMENT
Key Actual Output YTD End Date
Activit PFM Reform Performance Lead Start
Lead Agency
y No. Priority Activities Indicator/Outpu Division Date
t
Prepare evaluation Stakeholder

design for a review engagement Evaluation Design was
to determine if the meetings completed and
allocation of endorsed by the PEFA
NEFC Finance/Admin
positions for Sub-committee and
sent to the Department & Internal
education and other /DPLGA
of Finance Audit
19.1 services for which Approved ToR for Dec-16 Jan-17
Evaluation /NDoH
salary support is
provided to SNGs is /NDoE
based on Approved
evaluation design
transparent and
horizontally
equitable rules
Analysis and Finance/Admin

research No progress & Internal
forms/template Applicable in 2017 NEFC Audit
tool (Awaiting Funding)
/DPLGA
Begin Analysis of Evaluation report /NDoH
19.2 findings Jan-17 Oct-17
SNG
/NDoE
Analysis and
research forms
Final report
Page | 160
DEPARTMENT OF PROVINCIAL AFFAIRS AND LOCAL LEVEL GOVERNMENT
19. Reforms in the current rules and formulae’s of applied in the determination
Lead Internal Audit Priority Action
SNG Salary/Grade levels for Public Service in the Social Sector –
Areas
Division Health/Education
Branch(s) Internal Audit  Conduct analysis into determining if salaries and remunerations of positions of
Activity 19
SNG in the service sector (health and education) are based on transparent and
equitable rules
Activity Means of Timefr
Activity KPI Progress update Constraints and issues
No. verification ame
7. Evaluation was
Evaluation Funding required for the
completed and
Design evaluation to cover selected
Prepare Functional Sub- endorsed by the
provinces
evaluation design Committee PEFA Sub-
for a review to committee. This
determine if the includes the
Lack of accurate data
allocation of Approved following;
Evaluation Design
positions for
8. Implementation Plan
education and
Dec16 - was completed and
19.1 other services for ToR endorsed by the
Jan17
which salary Sub-Committee
support is
provided to SNGs 9. Monitoring &
is based on Evaluation
transparent and Framework was
horizontally completed
equitable rules
10. Project cost was
completed but
awaiting funding
Page | 161
11. Questionnaire was
completed
Terms of References for

stakeholders were
completed
Final Report Funding constraints has finally
been provided so team will
Approved Funding support was
Begin Analysis of Jan17 - travel to the four districts in
19.2 Evaluation Report approved by Secretary so
July of 2018.
SNG Oct 17 the sub-committee will travel
out to provinces for the
Analysis and evaluation and analysis in
Research Forms July 2018
Page | 162
13. National Department of Health
ANNUAL Period of Reporting : As at 30th June 2018

2017 AGENCY
NATIONAL Divisions
HEALTH :
Health Economics Planning
240
DEPARTMENT
Duration of PFM
FEB 2015 - DEC 2018
Road Map
:
Critica
2015
PEFA l to
PEFA Framework PEFA
Framework Impro
Pillar PI Performance Report Priority Areas
Description ved
Indicator(PI) Indicato
of the Pillar Perfor
r Rating
mance
Performance
Comprehen
Information for
siveness PI - 8 D Yes
Achieving Efficiency in Reforms in determination of remuneration for Service Sector
and
II Service Delivery
Transparen
cy of Public Access to Key Conduct analysis into determining if salaries and remunerations of
Budget PI - 9 D Yes positions of SNG in the service health sector are based on transparent
Fiscal Information
and equitable rules
Page | 163
NATIONAL DEPARTMENT OF HEALTH
Actual Output Star End

Activity PFM Reform Priority Key Performance YTD Lead Lead t Date
No. Activities Indicator/Output Agency Division Date
19. Determination of allocation of positions in health and other services for which salary support is provided to SNG
Prepare evaluation design for a

review to determine if the Approved evaluation design.
Evaluation team NEFC Strategic
allocation of positions for health
Evaluation design tool and established as Policy Dec- Jan-
19.1 and other services for which /DPLGA
adopted by the evaluation planned. Division 16 17
salary support is provided to
team /NDOE
SNGs is based on transparent .
and horizontally equitable rules /NDOH
ToR
NEFC
Evaluation team to
use the evaluation /DPLGA Strategic
Approved evaluation designs
tool to start the Policy
and analysis /NDOE
analysis and Division Jan- Oct-
19.2 Begin Analysis of SNG provide regular
Analysis /NDOH 17 17
briefs to the
government on the
Research Forms
status of the
analysis in the 2
pilot provinces.
Page | 164
SCHEDULE 3: DETAILED PROGRESSIVE REPORT Y EAR TO DATE BY DIVISION
NATIONAL DEPARTMENT OF HEALTH
19. Reforms in the current rules and formulae’s of applied

Lead Policy and Planning Priority Action Areas
in the determination SNG Salary/Grade levels for Public
Divisio Service in the Social Sector – Health/Education
n  Conduct analysis into determining if salaries and remunerations of
Activity 19
positions of SNG in the service sector(health and Education) are
Branch Health Economics based on transparent and equitable rules
/
Progra
m
Means of
Activity Timefram Constraints and
Activity KPI verificatio Progress update
No. e issues
n
19. Determination of allocation of positions in health and other services for which salary support is provided to SNG
19.1 Prepare evaluation design for a

Establishment of the Evaluation 12. Evaluation was
review to determine if the
valuation team team in completed and
allocation of positions for Funding required
consisting of the place endorsed by the
education and other services for for the evaluation
relevant central PEFA Sub-
which salary support is provided Evaluation to cover selected
agencies & led by committee. This
to SNGs is based on transparent Design provinces
NEFC includes the
and horizontally equitable rules following;
Dec16 -
Tool Lack of accurate
Develop the evaluation Jan17 13. Implementation
developed data
design tool Plan was
and tested
completed and
endorsed by the
Cost of service delivery Sub-Committee
14. Monitoring &

Evaluation
Framework was
Page | 165
completed
15. Project cost was

completed but
awaiting funding
16. Questionnaire
was completed
The needed funding The sub-committee

support was approved by to finalize travel
Analysis and Research Final Report
Secretary Finance so the arrangements for
Tools Jan17 -
19.2 Begin Analysis of SNG Regular team will travel out to this exercise
Analysis done in two briefs being Oct 17 conduct analysis in the
pilot provinces i.e. one provided to four pilot districts.
well off versus one less the PEFA
well-off provinces team
Page | 166
14. National Department of Education
ANNUAL Period of Reporting : As at 30th June 2018

2017 AGENCY
NATIONAL
DEPARTMENT
OF Division :
236 FINANCE
EDUCATION
Map :
PEFA 2015
Framework PEFA Framework PEFA Critical to
Pillar Description PI Performance Report Improved Priority Areas
of the Indicator(PI) Indicator Performance
Pillar Rating
Performance
Comprehen
Information for Reforms in determination of remuneration for Service
siveness PI - 8 D Yes
Achieving Efficiency in Sector
and
II Service Delivery
Transparen
cy of Public Access to Key Conduct an analysis into determining if salaries and
Budget PI - 9 D Yes remunerations of positions of SNG in the education sector are
Fiscal Information
based on transparent and equitable rules
Page | 167
SCHEDULE 2: NATIONAL DEPARTMENT OF EDUCATION
SUMMARY OF KEY PRIORITY ACTIVITIES
Actual Output YTD End

Activity PFM Reform Priority Key Performance Lead Lead
Start Date Date
No. Activities Indicator/Output Agency Division
Prepare evaluation DoE

design for a review to
Evaluation Design was NEFC
determine if the
completed and endorsed
allocation of positions An approved /DPLGA
by the PEFA Sub-
for education and other evaluation
committee and sent to the /NDOE Jan-
19.1 services for which salary design Dec-16
Department of Finance 17
support is provided to /NDOH
SNGs is based on ToR
Completed the terms of
transparent and reference for the study in
horizontally equitable consultation with sub-
rules committee NEFC as a lead
agency.
NEFC DoE
NEFC as lead agency is
working on the evaluation /DPLGA
An evaluation analysis based on the
/NDOE
analysis terms of reference for the
department. /NDOH
Research Oct-
19.2 Begin Analysis of SNG The analysis will Jan-17
17
methods commence after the
evaluation following the
assessment by the
stakeholders.
Field Survey Questionnaire

will be used.
Page | 168
19. Reforms in the current rules and formulae’s of applied

Lead Payroll Priority Action Areas
in the determination SNG Salary/Grade levels for Public
Division HROD and Finance Service in the Social Sector – Health/Education
Activity 19
Branch Budget and Planning  Conduct analysis into determining if salaries and remunerations of
positions of SNG in the service sector(health and education) are
based on transparent and equitable rules
Activity Means of Timefram Constraints
Activity KPI Progress update
No. verification e and issues
Evaluation Activity
Evaluation Design was
Report completed
Approved evaluation completed in consultation
design with the sub-committee
Prepare evaluation design for a and with NEFC as a lead
Minutes of
review to determine if the agency. It was endorsed
Meeting
allocation of positions for and sent to the
education and other services Dec16 - Department of Finance
19.1
for which salary support is Jan17
provided to SNGs is based on It comprised of the
transparent and horizontally following:
1. Evaluation Design;
equitable rules
2. Implementation
Plan;
Page | 169
3. Monitoring &
Evaluation
Framework
4. Project cost
5. Field Survey
Questionnaire
6. Terms of References
Attended three sub-

committee meetings on
the terms of reference.
Evaluation The needed funding The sub-
Analysis tool employed
Report support was approved by committee will
Jan17 - Finance so the sub- finalize travel
19.2 Begin Analysis of SNG committee will travel out arrangements
Oct 17
to the our pilot province in for SNG
July 2018 analysis and
survey.
Page | 170
F. Summary of Donor Support to PFM
A matrix of PFM support by Donors to the GoPNG as of December 2017
No: Donor and Type of PFM support National Agency

DFAT & UNDP DoF
Provincial Capacity Building (PCaB) supports;
1. Enhancing accountability and transparency within PNG public finances

2. Capacity building for Provincial and District Treasuries
3. Improving financial management capacity at subnational levels
4. Minimizing risk of corruption
5. Establishing Public Expenditure & Fiscal Accountability frameworks
6. Supporting efforts for the rollout of the IFMS in provinces
1 7. Monitoring of national and subnational PFM indicators
New initiatives trialled include;
1. SMS approach for combating corruption

2. Improve mobile communication (voice and data) for all Provincial and District Finance Offices (with Digicel)
3. Social accountability as baseline information for new PCaB provinces
There are advisers in 10 Provinces focusing on bank reconciliation, monthly financial reporting and increasing compliance. A review of
PCaB is underway and there is intention to extend PCaB until 2019.
DFAT National Agencies

Provincial Local level Governments Program (PLGP). i.e. DPLGA, NEFC,
Finance, DIRD and
The program's PFM support includes assistance in; Provincial and
District
1. Integrated budgeting and planning, Administration.
2
2. Internal revenue forecasting, collection and usage
3. Better integration of Provincial and District Finance Offices with Provincial administrations
4. Procurement regulations and processes,
5. Personal emoluments and payroll over-runs-loss of revenue, and cash flow blockages, and
6.Continued support to National Economic Fiscal Commission (NEFC) work on the Reform of Inter-Governmental Financing
Arrangements (RIGFA) and annual Provincial Expenditure Reviews.
Page | 171
DFAT Department of
Economic and Public Sector Program (EPSP) PFM advisory support in; Finance, Treasury,
IRC, PAC
1. Department of Treasury - Financial Management Advisor, Support to the Budget Review, Economic Policy Coordination and
3 Governance.
2. Internal Revenue Commission - Governance and Change Management Advisor,
3. Internal Revenue Commission - Internal Integrity Advisor,
4. Public Accounts Committee - Legal Counsel, and
5. Department of Finance - General Ledger Branch and Trust Account Management
DFAT Department of
Finance, Treasury,
Strongim Gavman Program (SGP) and Twinning AGO, IRC
1. Department of Treasury – Senior Policy Advisor, Senior advisor at Budgets Division, 2 x Advisor
Structural Policy and Investments, 2 x Advisor revenue and forecasting and Revenue policy
2. Department of Finance - Senior Strategic Management Advisor and Internal Audit Advisor
4
3. Auditor General‟s Office – Audit Management Advisor, and Provincial Service Performance Advisor
4. Internal Revenue Commission – Senor Advisor and x2 Advisor at Taxation Audit
SGP support in Finance is helping to increase accountability in PNG's budget execution, encourages greater levels of PFM rules
compliance and helps steer the strategic direction of the Dept.
The planned advisory support to AGO will contribute to increase financial and service delivery accountability
DFAT Department of
Public Sector Audit Program (PSAP) Finance And
5 Provinces
This is small grants program that supports training facilities, equipment and workshops. SGP Internal Audit Advisers through PSAP
have helped increased the number of Provincial Audit Committees from 17 to 36 since 2008.
DFAT
Policy Development Activities - Four Service Delivery Support Activities are now being implemented and are designed to:
6 a. Increase the timeliness, reliability and targeting of cash flows to provinces;

b. Deliver a provincial performance audit (to better understand and foster accountability in the PNG system);
c. Analyse the role of provincial and district finance offices and provide GoPNG options for policy reform;
d. Understand and provide reform options for Health Facility Financing (in cooperation with AusAID‟s health sector)
Page | 172
EU Department of
Institutional Capacity Building of the National Authorising Officer's System in PNG programme phase 2 (ICB 2) National Planning
and Monitoring
The overall objective of the programme is to contribute to the strengthening of the mobilisation, management and coordination of all and Department of
international development assistance to PNG, ensuring its effectiveness and alignment with national strategies and development Finance
plans.
7
60% of the funds of the Technical Cooperation Facility under this programme are reserved for actions in support to Public Financial
Management reforms.
Ongoing support to PFM includes contribution to review the Financial Framework, Procurement Policy, to improve the Financial Audit
function, for the roll out of the Integrated Financial Management System, improve Cash Management, and for Behavioural Change.
EU Department of
Joint Institutional Assessment of Country Systems of the Department of Education (DoE) Education
The objective of the project is to strengthen the ability of the DoE to implement the Universal Education Plan (UBE), which also
includes upgrading the PFM system (against international benchmarks) consequently paving the way for the increase of use of PFM
8 country systems to channel ODA funds.
The project, which was divided in 2 phases, consisted of:
Phase 1: An assessment of the DoE (covering central and Milne Bay provincial, district and local levels of the DoE) (Assessment
released in May 2012)
Phase 2: Drafting a road map for
sector reform (Road map released in April 2014)
ADB Treasury, Finance

9
Strengthening Public Financial Management Phase II
PFMTA Phase II activities include the following:
i) Support for establishing financial and performance monitoring frameworks for statutory bodies within the Department of
Finance;
ii) Advisory services and analysis for the evaluation of a proposed Infrastructure Development Authority; and
iii) iii) Analysis of sub-national funding mechanisms and their potential to be used for counter-part funding contributions
towards ongoing infrastructure projects.
ADB DJAG
10
Supporting Anti-Money Laundering and Counter Terrorism Financing in PNG
Page | 173
Support to provide the PNG Government with expert legislative technical drafting assistance to assist in converting newly developed
AML/CFT policies into Financial Action Task Force (FATF) and Asia Pacific Group (APG) compliant laws and regulations.
ADB DJAG/BPNG
11 Supporting National AML Risk Assessments in the Pacific
Support for undertaking AML-CFT National Risk Assessment‟s in line with the revised 2012 FATF standards.
ADB – SOE Reform and Capital Market Development (PSDI Phase III) Regional technical assistance facility co-financed by
ADB, DFAT and MFAT. Ongoing activities in PNG relevant to PFM include:
Reform of capital markets and the financial sector including microfinance and superannuation regulation and business environment;
BPNG, Treasury,
12 Reform of business legislation and regulation, including support for collateralized debt frameworks; IPBC, SOE's, DPE
et al.
Reform of State-owned Enterprises (SOEs) and promotion of public-private; partnerships (PPPs) including transaction advisory
services (PNG Ports, NAC) and the implementation of Government‟s Community Service Obligation (CSO) policy;
Promotion of competition policy
frameworks and consumer protection.
WB Treasury
(Secretary of
Reports on Observance of Standards and Codes (ROSC) Accounting & Audit Finance continue
The ROSC AA assessment focuses on the strengths and weaknesses of the accounting and auditing environment that influence the to support the
quality of corporate financial reporting and includes both a review of both mandatory requirements and actual practice. For the PNG ROSC following
13 ROSC AA there is a specific focus on SOE, SME, and the CPAPNG. the ROAC
Assessment, but
has requested
Treasury take on
responsibility for
implementation)
WB National
Department of
15 Health Sector Public Expenditure Review and evaluation of rural health function grant; technical assistance to Health
National Department of Health (NDOH) on public financial management.
Page | 174
Reports "Below the glass floor" and "In search for solution" review expenditure by provincial administrations on rural health from
health function grants and provincial internal revenue" from 2006 -2012. Technical assistance builds the capacity of NDOH to
conduct similar analyses in-house and assist in budget preparation, submission and execution.
Page | 175

Pefa 2018 Mid Year Report

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PEFA

Public Expenditure and Financial Accountability

2018 PEFA MID-YEAR REPORT FOR

30th June 2018

DEPARTMENT OF FINANCE (Non Tax Revenue Division) ................................................ 55

ADB Asian Development Bank

2. The National Government conducted a Public Expenditure and Financial Accountability

4. The Department of Finance designed a set of monitoring instruments for National

I) Revision and implementation of PFM Legal Framework.

5. The instruments contained in the Reform Monitoring Framework include the;

Aggregate Fiscal Discipline is realised when;

 Actual aggregate expenditure is within the annual approved aggregate

Outcome 1: Aggregate Fiscal Strategy

The underlying strategies leading to achieving aggregate fiscal strategies are;

Outcome 2: Strategic Allocation of Resources

D. Public Financial Management

The underlying strategy is efficiency in the;

E. Performance of Public Service against Service Delivery

Pillar 1. Budget reliability

Aggregate expenditure, expenditure composition and revenue outturn.

Pillar II. Transparency of public finances

Budget Classification, Budget Documentation and Public access to fiscal information.

IA– Department of Treasury

IA– Department of Finance

Performance information on service delivery.

Pillar III. Management of assets and liabilities

Public investment management.

IA – Central Supply and Tenders Board

Pillar IV. Policy-based fiscal strategy and budgeting

IA – Departments of National Planning and Monitoring, Finance and Treasury

Pillar V. Predictability and control in budget execution

IA – Departments of Finance and Treasury (in-year resource allocation)

Procurement, Asset management and monitoring

IA – Central Supply and Tenders Board.

Pillar VI. Accounting and reporting

IA – Department of Finance and Office of the Auditor General

In year budget reports

Pillar VII. External scrutiny and audit

External audit and Legislative scrutiny of audit reports

IA – Office of the Auditor General

OUTCOME 1: AGGREGATE FISCAL STRATEGY

Unified Annual Budget

Managing Medium Term Fiscal Risks

Revenue Planning and Cash Flow Management

Improving Debt Management Practices

Improving Expenditure Management

 The Government has instructed Organisational Staffing Personnel Emoluments Audit

The likely expenditure overruns will resulted from the;

Asia-Pacific Economic Cooperation (APEC) 2018

SCHEDULE 1: SUMMARY OF PEFA ASSESSMENT AND ROAD MAP PRIORITIES

MID - YEAR Period of Reporting: As at June 3Oth 2018

FEB 2015 - DEC 2018

Aggregate Expenditure Compared to Original

Expenditure Composition Outturn compared 2017 Budget to contain a minimum

Aggregate Revenue Outturn Compared to budget revenue to all government

FEB 2015 - DEC 2018

Comprehensiveness Incorporate in annual budget

Comprehensiveness of Budget details for debt service and

Extent of Reporting of Extra Budgetary service delivery (Education and

PI - 9 Public Access to Key Fiscal Information D Yes Estimate cost of Government

FEB 2015 - DEC 2018

PI - 15 Revenue Budgeting C+ Yes Establish a comprehensive