Government Expenditure Management and Control in Ethiopia

Abstract

In some developing countries because of weak expenditure management process that have room for an exaggerated request, the spending is likely to be for less priority. In these circumstances, the best reaction would be to improve expenditure budget preparation. Since expenditure management is easy at budget preparation than later during the execution of the budget. This article discussed Public expenditure management and control in Ethiopia. The management and controlling of public financial resources is crucial because society’s needs and demands are unlimited whereas resources are limited in nature. The problems and controversial issue related to public expenditure management and controlling are reflected in the budget preparation, approval, execution, and Audit phase of expenditure management cycle. Owing to these problems, this study used non parametric chi- square goodness-of-fit techniques for testing the hypotheses. Therefore, the result showed that there is a problem of linking the work plan with expenditure budget preparation. It is also revealed that purchasing of goods and services is not based on the annual action plan by sectors. In other word, this indicated that there is a problem of budget preparation and execution. On the other hand, In relation to budget approval, the result indicated that Legislature has effective systems of check and balance on public expenditure.  The test was also undertaken to check auditor’s satisfaction in relation to the support they get to conduct their task. The test result indicated that auditors have a problem of motivation with the financial and material support to carry out audit work to achieve their objectives.. Finally, this paper forwarded the following recommendations: first, there should be further strengthened the program budgeting system introduced by MOFED in 2004. Second, to minimize rush spending, especially, yearend purchasing, it is good to take the experiences of Australia that carries over up to 10% of the remain expenditure to the next fiscal year. Third, the national anti corruption institution should further strengthened in relation to expenditure management and control. Finally it is better for the legislature to reconcile what is reported and what is actually happened at the grass root level. In addition, the auditors should be properly encouraged to do their job effectively and efficiently.

Keywords: Public Expenditure management, Growth and transformation plan, legislature, Executives and Auditors