Government of Montserrat’s Strategic Planning and Budgetary Processes

30th July, 2020

The Office of the Auditor General is pleased to announce that its report entitled Government of Montserrat’s Strategic Planning and Budgetary Processes was presented to the Legislative Assembly on July 28th, 2020. 

Background: The Ministry of Finance & Economic Management co-ordinates these processes across the public service.  Each year, Ministries and Departments provide their proposals and requests for spending, and these are evaluated and ranked against the Cabinet’s Policy Agenda and other criteria.   Funds are then allocated across Departments, programmes and projects according to their urgency and priority, subject to the total available budget for the year.

Key Findings:

  • Good governance overall.  There is adequate oversight of strategic planning, budgeting, and projects. Actual spending is kept strictly in line with actual revenues.
  • Restricted funding. The DFID’s emphasis on containing costs and headcounts creates rising pressures in all Departments. Very low to no growth in nominal terms means either stagnation or a decline in real spending and in real economic output.
  • Population is declining. The 2018 census showed a decline in Montserrat’s population since year 2011.  GOM’s SDP Goal #5 requires a doubling of the population from current levels. Falling population leads to (a) shortfalls in local tax revenues from budgeted levels, (b) very low growth or declines in real spending, and (c) little or no growth in real economic output.
  • Progress made in local economic models, forecasting, and statistical bases. The MOFEM has developed reliable home-grown econometric models and forecasts for Montserrat’s economy, earning high scores against the international PEFA benchmarks.   Since 2018, the Montserrat Statistics Department has launched a website, done a national census and labour-survey (in 2018), and published extensive data (in 2019 and in 2020).
  • Little/no insurance of public assets. Across the public sector, with very few exceptions, risks and assets are not independently insured. The GOM has a stated policy of self-insurance, but there are no funds or reserves to support this and this ultimately pose a potential unlimited liability.

Key Recommendations include:

  • Increase the funding for infrastructure to meet residents’ needs and rising health & safety standards.
  • Increase immigration & repatriation.
  • Plan better for inflation, contingencies, & currency fluctuations.

In response to this Audit Report (on page 26) the Honourable Financial Secretary commented:

It is good to see that overall Governance is deemed to be good, which includes strategic planning, budgeting process, project management, and the procurement of capital assets, with spending in line with revenues.  A number of concerns raised by the Auditors have been raised by the Financial Secretary on many occasions to the DFID and it is pleasing to see the Auditors reflecting those points.

The full audit report highlights several other findings and recommendations.   Their implementation will bring significant improvements.

The report in its entirety can be found at the Montserrat Public Library or by visiting Publications or by requesting an electronic copy from the Office of the Auditor General