DHAKA, JUNE 27, 2019 – World Bank (WB) has said Bangladesh must empower its local government institutions through administrative and fiscal decentralization to achieve upper-middle income status.
It said this in a new WB report dubbed “Local Government Public Financial Management System Assessment”. The report released today mentioned local government institutions (LGI) suffer from weak pubic financial management practices, hindering their service delivery capabilities.
The assessment identified LGIs’ weak capacities relating to public financial management. These are: limitations in planning and executing budgets, inadequate book keeping and financial reporting, lack of internal controls over cash management and weaknesses in audit management process, among others, according to a press release.
In addition, LGIs still largely maintain transaction records manually. They need to expand the use of IT in accounting system and integrate with the government IBAS ++ system. Further, IT technologies should be used in administration and service delivery monitoring.
“We have seen globally LGIs with the participation of the communities are best placed for providing basic services such as education, healthcare, water supply and sanitation, and local law and order,” said Dandan Chan, World Bank Acting Country Director for Bangladesh and Bhutan.
“Through successive projects, the WB has supported the government’s decentralization agenda. There are successes to build on: a predictable and transparent financial resource transfer system covering all the Union Parishads – the lowest tier of local government – has improved planning, participatory budgeting, and transparency,” added Chan.
From September 2018 to March 2019, the assessment was conducted by the Policy Research Institute (PRI) on behalf of the WB.
Over the last decade, Bangladesh has improved its policy and legal framework and has taken concrete steps to effectively decentralize the local government, said Planning Minister M A Mannan.
“These steps have contributed to the country’s robust economic growth that benefitted majority of the population, but the work is not yet complete. Our government is committed to taking further measures to empower the local government,” he added.
The Assessment made several recommendations and those are further administrative and fiscal decentralization, adequate staffing, stronger monitoring capacity, improved understanding of budget, multi-year budgets, timely release of budget transfers, expanded revenue collection efforts and strengthened LGI audits etc.