Public Financial Management Reform Program and Rural Development Ministries

A strong PFM system supports aggregate control of budget resources, prioritization, accountability, and efficiency in the management of public resources and delivery of services. This is critical to the achievement of public policy objectives, including the Millennium Development Goals (MDGs).1 In the country context and due to Cambodia’s recent past, there exist overwhelming challenges to public financial management. A joint assessment of the World Bank and the ADB – the 2003 Integrated Fiduciary Assessment and Public Expenditure Review (IFAPER) – concluded that weaknesses in PFM had high costs in terms of allocative and operational efficiency, and identified the need for critical public financial management reforms as a key priority2. The assessment noted that Government capacity was seriously constrained, both human and financial. In the area of public financial management, there was a scarcity of qualified and competent finance specialists and line managers. Civil service was not adequately compensated; salary continued to be meager and often an outright disincentive for efficient performance and outcome. Institutional accountability arrangements were regarded as insufficient,