SISTAFE

Norway has provided support to the SISTAFE reform since the beginning of the reform in 2002. The current bilateral agreement is the third agreement aiming at supporting the Public Financial Management Reform and amounts to 40 million NOK over four years (2006-2009).

The implementation of the reform has led to significant improvements in public financial management as documented in the PEFA-study published in 2008. Some of the key outputs from the reform that have led to these improvements are:

• a legal framework
• significantly improved liquidity management and control of cash transfers within Government
• improved control of bank accounts
• an IT-based tool for budget execution and accounting
• improved IT capacity and skills in central institutions within Government
• improved timeliness and quality of key management documents, including annual budgets, state accounts, PES and budget execution reports
• new procurement regulations.

The improvements have also led to more donors using the Government's public financial management system for projects and common funds. This means that more development aid is now on-budget than previously and more aid is also channelled through the Treasury. By doing this it is possible to have a complete overview of both the Government's internal resources and the use of development aid. This improved overview is in itself an important achievement for increased transparency of public finances and reduced fiduciary risks.