State Owned Enterprises (SOE) in the country have been urged to prioritize the use of strategic management and financial reporting in mitigating potential risks associated with noncompliance within the sector.
Making the call yesterday at the climax of a two-day strategic management and financial reporting workshop, Mr. Siafa Chowoe, Unit Director of SOEs at the Ministry of Finance Development and Planning (MFDP), said the event is intended to address the planning and reporting requirements as prescribed by the Public Financial Management (PFM) Law and to develop a way forward in mitigating any potential risk associated with noncompliance by SOEs.
Mr. Chowoe said the event was also aimed at strengthening the capacity of SOEs where there are gaps in terms of making their financial reports in various ministries and agencies in the country.
He said the PFM Law requires SOEs to submit quarterly and annual financial statements as well as their entity’s strategic plans to the Minister of Finance and Development Planning.
Chowoe explained that the workshop discussed the PFM Law and Regulatory requirements as well as the risk of noncompliance. He said that challenges faced by SOEs in the implementation of Sections 43-46 of the PFM Act of 2009 were also discussed.
Explaining further, Chowoe said his unit is the point of focus to collate, analyze and interpret financial and strategic plans submitted by SOEs to the MFDP with a goal to ensure strict compliance with the provisions of the PFM Law and its regulations.
Moreover, he said that submission of SOEs strategic plan, annual financial plans and periodic financial performance reports remains a challenge due to either misunderstanding or capacity gaps.
The two day event, he added, will improve efficiency and transparency to strengthen financial reporting within three years, focusing on strategic planning and annual budgeting.
For his part, Liberian economist Samuel Tweah said SOEs play a critical role in the development of the nation’s economy and therefore need urgent attention by all. SOEs have accounted for 11 percent of the public wage, he explained, thus contributing 4.3 percent to the country’s budget in the amount of US$22.6 million in the 2015/2016 fiscal year; while in Sierra Leone it accounted for 5 percent of the public wage bill.
He further stated that total expenses for all SOEs in 2014 amounted to US$33 million, which accounts for 13 percent of the public wage bill. SOEs are also expected to embrace the new standards of methods regarding strategic management and financial reporting.
The two day workshop brought together government employees, and was organized by the MFDP SOE Financial Reporting Coordination Unit.