High Staff Turnover Woes Plague Timor-Leste’s Public Finance Management

The COVID-19 pandemic has exacerbated the challenges faced by Timor-Leste in addressing its high staff turnover rate in the public finance management sector. The country is struggling to retain skilled professionals, hindering its ability to implement effective financial policies and manage its assets.

Inefficient Staffing Levels

According to a recent report, Timor-Leste’s public finance management system is plagued by inadequate staffing levels, leading to inefficiencies and poor service delivery. The government has been grappling with high staff turnover rates, resulting in a shortage of experienced professionals in key positions.

Challenges in Budget Execution and Reporting

The country’s budget execution and reporting mechanisms are also in need of improvement. While the internal control framework is comprehensive, there are still issues with payroll controls and expenditure arrears. The Treasury system supports daily cash management but lacks coverage for all government operations.

Fragmented Public Investment Management

Timor-Leste’s public investment management is fragmented among various agencies, leading to a lack of harmonization in project management practices. The country needs to develop a centralized project management manual that guides government staff on how to conduct economic analysis, selection, costing, and monitoring of investment projects.

Improved Financial Reporting and Accountability

The report also highlights the need for improved financial reporting and accountability. Timor-Leste is considering a move from cash to accrual accounting using International Public Sector Accounting Standards (IPSAS), which will improve the quality of accounting and reporting. However, the internal audit function is partially in place but needs to be strengthened to align with international standards.

Expert Insights

“We need to prioritize staff development and retention in our public finance management sector,” said Dr. Maria Soares, a leading economist in Timor-Leste. “High staff turnover rates are not only costly but also hinder the government’s ability to implement effective policies.”

“Timor-Leste needs to invest in building its internal audit capacity and adopting a risk-based audit approach,” added João da Silva, an international auditor who has worked with the country.

“The government should focus on improving financial reporting and accountability by implementing IPSAS and strengthening its internal controls,” said Dr. Paulo Martins, a finance expert at the University of East Timor.

Conclusion

The government has acknowledged the challenges facing its public finance management sector and is working to address them. However, more needs to be done to retain skilled professionals, improve financial reporting, and strengthen internal controls. By prioritizing these areas, Timor-Leste can improve its public finance management system and enhance its economic stability.