Bhutan became the fifth country in the world to be recognised by Public Expenditure and Financial Accountability (PEFA) framework for maintaining high standards of public financial management (PFM) system.
PEFA is a methodology for assessing a countryâ€™s public financial management performance while aspiring to reduce transaction costs and harmonising donors support among others.
However, the challenge, according to the finance secretary Nim Dorji is to sustain and further the reform efforts.
â€œBhutanâ€™s PFM is at a quite advanced level. But going forward, the government must place continued emphasis,â€ the World Bank country director, Qimiao Fan said.
To this effect, a multi-donor fund was established under the supervision of the World Bank. The European Union has contributed USD 3M and Austrian Development Cooperation has provided USD 1M. The grant agreement was signed on September 21 to help Bhutan manage public funds more effectively and improve the procurement and budgetary systems. In doing so, public service delivery and governance are expected to be enhanced.
Finance secretary Nim Dorji said the PFM in Bhutan has come a long way, from manual system to real time online system. Since the initial PEFA assessment in 2002, he said that Bhutan has made lot of reforms to ensure allocated resources are used efficiently.