BD’s progress is poor: US report

Bangladesh could not make any significant progress in fulfilling minimum requirements of fiscal transparency for the fiscal year (FY) 2015, a US report has said.
The report has suspected that such opacity in the financial matters acts as an enabling factor for corruption.
According to the Fiscal Transparency Report 2015 released by the US Department of State on June 12 in Washington, the budget did not include expenditures to support executive offices and it was unclear whether these represent a significant outlay.
The report that covered fiscal management of 140 governments across the globe and made such observations on Bangladesh.
It said while the budget is publicly available and breaks down expenditures and revenues, financial allocations to and earnings from state-owned enterprises are included only in the aggregate.
"Information on earnings from state-owned enterprises is included in supplementary budget documents but information on allocations to state-owned enterprises is not available," the report said.
In conducting the FY 2015 review, the Department assessed the fiscal transparency of governments during the January 17-December 31, 2014 period. In reaching a conclusion, the Department considered information from U.S. embassies and consulates, other U.S. government agencies, international organizations, and civil-society organizations. U.S. diplomatic missions consulted foreign government officials, international organizations, and civil society to obtain information for these assessments.
The FY 2015 fiscal transparency-review process evaluated whether the identified governments publicly disclose budget documents, including expenditures broken down by ministry and revenues broken down by source and type and whether the government has an independent supreme audit institution or similar institution that audits government's annual financial statements and whether such audits are made publicly available.
It further assessed whether the process for awarding licences and contracts for natural resource extraction is outlined in law or regulation and followed in practice, and whether basic information on such awards is publicly available.
According to the report, some 60 governments, including that of Bangladesh, did not meet the minimum requirements of fiscal transparency. However, of these, nine governments made significant progress toward meeting the minimum requirements of fiscal transparency.
On Bangladesh part, the report said the supreme audit institution has not produced and made publicly available verifications of government's annual financial statements within a reasonable period of time and the process for awarding natural resource-extraction licences and contracts is outlined in law or regulation and basic information on the awards is publicly available.
"Bangladesh's fiscal transparency would be improved by including in the budget more details on allocations to and earnings from state-owned enterprises and expenditures to support executive offices and publishing an audit of the government's financial statements by the supreme audit institution within a reasonable period of time," the US State Department suggests.
The report made it clear that the assessors do not assess corruption. A finding that a government "does not meet the minimum requirements of fiscal transparency" does not necessarily mean there is significant corruption in the government and a finding that a government "meets the minimum requirements of fiscal transparency" does not necessarily reflect a low level of corruption.
Fiscal transparency fosters greater government accountability by providing a window into government budgets for citizens, helping citizens call their leadership to accountability, and facilitating public debate.
Fiscal transparency represents a critical aspect of effective public financial management, builds market confidence, and underpins economic sustainability, it said.
"Improving fiscal transparency has clear economic and development benefits. Transparent fiscal systems provide information to legislatures, markets, civil society, and citizens that have a stake in fiscal decision-making processes," the State Department said in the report.
Governments that operate with greater fiscal transparency enjoy better access to domestic and international credit markets, are less prone to destabilizing debts and deficits, and are better able to address fiscal risks, it added.
Talking about the issue, Executive Director of Policy Research Institute (PRI) Dr. Ahsan H. Mansur told FE that the fiscal transparency was very crucial for a country like Bangladesh as it could lead corruption and misuse of resources.  
"But unfortunately the matter is never discussed in the parliament," he said.
He said defence part of the national budget lacks fiscal transparency. "We know nothing about the defence budgeting and defence procurement system". "Why does the secrecy still exist? he asked saying that the issue should be made public in details for the sake of transparency," he said.
He also said the national budget has information on public funds to be used for salary purpose to support executive offices but it is unclear how the cash funds are being spent.
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