Many thanks for attending the Second PIFMA meeting in Rarotonga. Many thanks again to our hosts, the Government of Cook Islands, for the excellent time we all had. We covered several topics, in addition to the main theme of the meeting “ Improved Cash Management Practices and Control of Commitments”. We also decided on a new logo for PIFMA. Many thanks to all the participants who made very interesting suggestions, and to Susan, who made available the final prize we gave to the winner.

We heard that cash planning should enable line ministries to plan expenditure effectively and allow the MoF to be responsive to cash needs of Line Ministries. There are always timing problems between payments and cash availability, regardless of how good the budget is. Therefore cash plans need to be formulated carefully and must be updated every month and on a rolling basis. The steps to develop annual cash plans were also outlined, stressing the importance of being extra careful in generating estimates of revenues and expenditures. We also heard of the need to ensure that commitments are controlled and that the best budgeting or cash management techniques would not be useful without effective control of commitments.

Importantly, the generic Cash Management and Commitment Control Manuals were introduced to the participants, and we agreed that each participant would review them and make comments on the application of these manuals in their own country to PFTAC by April 30th, 2007. This time is now fast approaching and I look forward to your feedback.

We also heard about the importance of audit, accrual accounting, the way PIFMA could contribute to the FEMM decision-making process and the cash management aspects of SWAps. Perhaps the most interesting part of the meeting was the presentations made by all the participants on the progress made in the PFM area in their countries over the last one year.

We shall shortly be placing all the material, including copies of the Cash Planning and Commitment Control Manuals, and several photographs, on the PIFMA web site for you to download. As promised in my earlier newsletter, PFTAC has nearly completed the task of collating the material from the last workshop on medium term fiscal frameworks at Nadi and these shall shortly be sent to the printers.

We also decided on the next topic for the Third PIFMA meeting – “Asset and Debt Management including PFM HR issues”.

Lastly, we thank Palau for kindly offering to host the next PIFMA meeting in their beautiful country.

Thank you once again for making the second PIFMA meeting such a success.

Suhas Joshi
PFM Advisor, PFTAC