Training and Related Efforts Needed To Improve Financial Management in the Third World

ID-79-46: Published: Sep 20, 1979. Publicly Released: Sep 20, 1979.

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To identify the causes of inadequacies in the developing countries' ability to establish sound financial management in the public sector, GAO visited five countries in Latin America, including some of the more developed and some of the lesser developed countries. Using the results of this study GAO held a symposium on the need to improve financial management and the whole spectrum of public administration in developing country governments.

The major weakness in government accounting in the countries GAO visited is a lack of integrated financial information, produced in a timely manner, that can be used as a management tool in decisionmaking. Comptroller General offices in these countries have traditionally emphasized precontrol or postcontrol voucher audits. These audits, primarily concerned with the legality of transactions, place little or no emphasis on financial controls, management systems, program evaluations, or the economy and efficiency of operations. The relatively small number of trained and experienced people in developing countries are often reluctant to work for the government, because of the low pay and ineffective civil service systems which neither protect career employees from political actions nor provide for merit promotions. Training offered by institutions in developing countries in financial management and control is often inadequate and of poor quality. Two of the biggest problems in this area are an insufficient supply of qualified, full time faculty members and a shortage of current textbooks and teaching materials translated into the local language. Assistance is needed to strengthen developing countries in improving financial managemant in government; however, agreement on the measures to insure these improvements is also required.

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