By: Emma Rumney From Public Finance International

Public sector and accountancy professionals have convened in the Caribbean in hopes of strengthening the region’s public financial management.

The International Monetary Fund has praised the Bahamas for the successful implementation of a new value added tax (VAT), which has brought more than $500m for the government in the last fiscal year.

The three-day conference is sponsored by the World Bank, the International Federation of Accountants, the Bahamian government and Canada’s chartered accountancy institute and kicked off in Nassau yesterday. It aims to re-energise efforts to improve PFM and public sector transparency and accountability, which are integral to economic growth in the region.

Opening the conference, Michael Halkitis, Bahamas minister of state for finance, said: “Public sector spending comprises a significant proportion of Caribbean gross domestic product. Given the sums involved, it’s vital that we get our houses in order.”

Halkitis added. “Enhanced public financial budgeting, accounting and reporting, based on accrual accounting, will enable us to shine a light in every corner of our finances and bring sustainability to government expenditure.”

The event aims to bring closer inter-governmental collaboration and strengthen relationships between public sector leaders and the accounting profession.

Alta Prinsloo, chief operating officer of IFAC, said the institute was a proud supporter of an event it hoped would stimulate communication, consultation and collaboration across Caribbean governments.

“The last global financial crisis highlighted the inherent weaknesses of heavily indebted governments around the world, including in the Caribbean. Managing and forecasting public revenues and expenditure, and controlling fiscal imbalances, can only be achieved by robust accounting practices.”

A recent report by the World Bank found the region faces a number of public financial management challenges.

Statutory frameworks and regulatory practice are not in line with international best practice standards, there are long delays in putting together the financial statements of governments and state-owned companies, and the region suffers a significant shortage of qualified accountants.

None of the countries fully implement accruals accounting, few have implemented the International Public Sector Accounting Standards and most do not define in statute financial reporting or auditing standards.

Samia Msadek, director of the World Bank’s Governance Global Practice, emphasised that strengthening PFM is critical to prosperity for the region.

“How governments manage taxation, borrowing and spending is essential to economic growth, to poverty reduction, and to ensuring that the Caribbean’s residents can improve their lives through inclusion and shared prosperity.”

The IMF last month praised the Bahamas for the successful introduction of VAT, which netted the government an additional $500m in the last fiscal year.

For more on this story go to: http://www.publicfinanceinternational.org/news/2016/04/ifac-backed-conference-improve-caribbean-pfm-kicks-bahamas