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TEPAV launches Public Financial Management Project in TRNC… The project aims to identify the steps to be taken for the TRNC to have a  modern financial management setup in compliance with the EU standards  
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30/07/2015 - Viewed 1608 times

 

ANKARA- TEPAV has launched the Public Financial Management Project in the Turkish Republic of Northern Cyprus (TRNC). Expected to last 4 to 5 months, the current status of the TRNC Public Financial Management will be assessed from the perspectives of both legislation and implementation. In consultation with the Ministry of Finance, the Supreme Audit Institution and other public bodies, the steps necessary for TNRC to achieve a modern financial management structure in compliance with the EU standards are to be identified.

On the project, TEPAV researchers note that it is relatively easier to switch to new institutions via legislative change but it requires considerable capacity to implement that legislation in a sound manner. “We believe that a small country with capacity constraints should not be cooped up in a very complex framework. Therefore we will strive to formulate a simpler framework in our project, albeit one that allows the materialization of all the targets of financial management. Moreover, there is a significant capacity building component to the project,” the researchers said.

Emphasizing that the strong support on the part of the TRNC government for the project improves the prospect of success, the researchers added:

“As we all know, the new coalition between UBP and CTP has recently assumed the government seat in the TRNC. The government agenda declared last week includes three direct commitments in the field of Public Financial Management:

1-    The pilot practice of performance budget on the expenditures side of the budget will start in 12 months and the performance-based practice will start to be implemented fully in identified institutions and ministries within 36 months.

2-    For fiscal transfers to be taken under control, an analysis will be carried out in the institutions and organizations receiving transfers and a performance-based resource utilization will be launched within 24 months.

3-    A Public Financial Management Law that will comply with the EU acquis and allow medium- and long-term planning in order to achieve a sustainable structure in public finance will be ratified in 24 months, while the Public Internal Financial Control Law that will enable the control of the expenditures in line with the principles of transparency and accountability will be passed in 26 months.

The restructuring of the Public Financial Management will also be critical in the event of the positive conclusion of the settlement and reunification negotiations conducted with the Greek Cypriot administration and the formation of a federal structure. Southern Cyprus is an EU member and the institutional setup of Euro-zone countries regarding financial management have been transformed drastically over the past years within the framework of the resolutions made in the aftermath of the 2010 debt crises. A new law on financial framework has been accepted, allowing the transition to medium-term spending and budgeting. Medium-term financial targets and rules have been adopted and the newly founded financial board will monitor compliance with these rules and targets and inform the public. In the case that a federal state is established, TRNC also needs to formulate a financial infrastructure in these standards and immediate action is necessary to this end. The government appears to be well aware of the urgency of the matter.”

3rd project conducted by TEPAV in the TRNC

TEPAV has carried out the “Functional-Institutional Review of the State in the Turkish Republic of Northern Cyprus” in the 2011-2012 period.[1] The project reviewed the public institutions and fundamental public policies from an institutional and functional point of view and developed recommendations. Another advisory project was carried out on the restructuring of the Cypriot Administration of Foundations in 2013. The Public Financial Management Project is TEPAV’s third project involving the TRNC.

 


[1] http://www.tepav.org.tr/tr/yayin/s/694

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