Georgia : Country Financial Accountability Assessment

Abstract

A number of in-depth studies were
 conducted between the time of the preparation of the first
 draft CFAA report in May 2002 and the final mission in
 February 2003. These included a PER, CPAR and an IMF Report
 on the Observance of Standards and Codes (ROSC) mission.
 Each of these missions identified a number of serious
 weaknesses and made recommendations to address them. Some of
 these weaknesses had been identified in the CFAA report and
 others represented new findings. These new findings and
 their associated recommendations have been reflected in the
 final CFAA report, sometimes by explicit inclusion, other
 times by reference. As a result, this final report has a
 strong emphasis on the internal control framework and
 fiduciary risks and presents specific short- and medium-term
 recommendations to mitigate them. In conducting its mission,
 the team noted that the availability and reliability of
 financial information beyond routine budget utilization data
 is severely limited, precluding analysis in a number of
 areas. Improving the quality of reliable, complete and
 accurate financial information is essential for sound
 management decision-making. This report makes four priority
 and an additional twenty-one recommendations. They are
 designed to strengthen the legal foundation for internal
 financial control, construct a modem internal control
 framework, and develop the human capacity to administer them
 successfully. Internal controls must be the priority of the
 Government if it is to reduce its fiduciary risk. The four
 priority most areas of risk for the Government of Georgia
 include: implement a sound legal foundation for effective
 financial controls, build the internal audit function,
 strengthen the external audit function, and build staff
 capacities in financial management and auditing.