PESHAWAR: The KP government has initiated reforms to improve the performance of its 170 public sector entities (PSEs) including 14 companies, said White Paper on the annual budget for financial year 2024-25.
The PSEs and autonomous bodies function under various administrative departments to increase efficiency, reduce costs, and improve the effectiveness of public service delivery across its various sectors.
These entities have direct budgetary support aggregating to about Rs 60 billion (almost 4 percent of total provincial budgeted expenditure for FY 2024-25) in addition to off-budget support in terms of loans provided for development projects.
Recognizing the challenges related to performance evaluation, effectiveness and operational efficiency, the KP government has initiated several major reforms including the establishment of a Corporate Governance Unit (CGU) in 2019 with the primary objectives of enhancing board effectiveness, governance and self-sustainability assessment and performance management of the public sector entities.
The finance department has developed policy frameworks in compliance with the Public Financial Management Act, 2022, which are dually approved by the provincial government, include board of directors/governors, CEOs, finance & accounting, internal audit and risk management respectively.
Training sessions to 120 plus Board of Directors, CXOs and other officials were provided to appraise them on the policy frameworks approved by the provincial government. These policy frameworks were as building blocks for achieving consistency in practices and adopting international best practices in the governance and financial management of the PSEs.
The Finance department and the Administrative departments have no information regarding the financial position and performance and the governance structure of the PSEs.
To address this, the Finance department developed and hosts an online web-based application, providing a platform for stakeholders to access relevant information about the performance and governance of PSEs. This application has to different modules.
The first module is the financial management and reporting tool. The implementation of this module necessitates PSEs to consistently update and upload their financial data, ideally every month. This initiative offers several advantages to the stakeholders including the KP government.
Firstly, regular updating and uploading of financial data ensure that decers have access to the most current and accurate information regarding the financial health and performance of PSEs. This real-time data enables informed decision-making and facilitates timely intervention in cases of financial discrepancies or concerns.
Furthermore, the tool automates the generation of various essential reports, including the income statement, balance sheet, statement of cash flows, variance analysis report, and a Dashboard featuring key financial indicators. These reports provide decision-makers with comprehensive insights in the financial status, trends and performance metrics of the PSEs.
Moreover, the standardized formal of reports ensures uniformity and consistency in financial reporting across all PSEs. This standardized approach facilitates comparison and benchmarking of financial performance among different entities, enabling decision-makers to identify best practices, trends and areas for improvement across the sector.
Besides, these reforms, the Finance department has also furnished Governance Assessments and Financial Sustainability Reports to about 20 entities. These reports outline identified gaps and offer recommendations aimed at aiding administrative secretaries and Board of Directors in harmonizing their endeavours.
Copyright Business Recorder, 2024