The Challenges of Public Expenditure Management in Case of MOFEC

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Date

2018-01

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Publisher

Addis Ababa University

Abstract

The public investment requirement of Ethiopia is increasing rapidly while there are challenges that undermine public sector performance toward achieving the PEM objectives: The critical problems with public expenditure management include lack of accountability and transparency in budget allocation and execution, weak internal control and monitoring in making continuous identification of problems and taking corrective actions when actual result deviate from budgeted. this study aimed to identify and analyze the practical challenges of expenditure management in both recurrent and capital budgets of MoFEC during the GTP period. The study employed descriptive research type approach using both primary and secondary data to answer the research questions. The collected data was analyzed using descriptive statistics. The study found out that MoFEC pursued the program budget procedure for allocating the annual expenditure budget for different programs and directorates. This study also identified that there is overspending and under spending of budget because of weak employee motivation, high turnover, lack of leadership commitment and lack of management alignment. Regarding the effectiveness of monitoring and controlling of expenditure budget, the finding indicated that: Financial reports are not presented in time, internal audit lacks sufficient auditors, the internal auditors are not free of interference & there is no performance audit. The researcher recommends that greater emphasis should be given to the budget allocation process, MoFEC should identify the causes of under spending and overspending, due attention should be given to the enforcement of financial rules and regulations, strengthen the skills & knowledge of employees, should apply performance audit.

Description

A Project Work Submitted to Department of Accounting and Finance School of Graduate Studies, Addis Ababa University in Partial fulfillment of the Requirement for the Degree of Master of Arts in Accounting and Auditing.

Keywords

Expenditure Management, MOFEC, Public Expenditure

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