Public Money Management Regularization Act (2017)

Overview

Public Money Management Regularization (PMMR) is a financial control system introduced by the government as part of the financial reforms process arising out of the Public Expenditure & Financial Accountability (PEFA) assessment in 2015, to ensure an effective and efficient regulation of Non-Tax Revenue derived from fees and charges imposed by state agencies and the timely remittance of these revenues into the governments Consolidated Revenue Fund to assist finance the governments National Budget.

These improvements also ensured good governance, transparency and accountability in the management of public revenue. Any revenue generated by a Public or Statutory Body in carrying out its functions rightfully belongs to the Independent State of Papua New Guinea. These functions include all forms of provision of goods or services, including fees imposed for regulatory purposes.

Implementation

The PMMR Act was passed by the National Parliament in November of 2017. It was ratified by the Speaker of the National Parliament on the 14th of February 2018 and commenced implementation in March 2018.. It simply requires 90% of all Non-Tax Revenue generated from fees and charges imposed by state agencies to be remitted into the Consolidated Revenue Fund and that state agencies are entitled for 10% to sustain their operations in addition to their annual budgetary allocations.

Agencies requiring further financing are required to submit a proposal for that through the PMMR Strategic Budget Committee (PMMR SBC) to determine and make recommendations to the Treasurer for approval, by ratifying the SBC’s recommendation. The Department of Finance and the Department of Treasury have successfully identified, reviewed, and swept government agency’s accounts containing Non Tax Revenue.

Under the PMMR implementation exercise all existing accounts held by Public and Statutory bodies in various commercial banks have been closed. An agency as per PMMR Act is required to have one (1) – Revenue Account; Operating Account; and Mirror Account to be held with Bank South Pacific (BSP).

A mirror account is temporary holding account for each agency, as required under the PMMR Sweeping Exercise. The mirror account will be closed at the conclusion of the sweeping exercise pending that the agency conforms to the operationalization of the PMMR requirements. The agency’s operating and revenue accounts are permanent, which the Department of Finance has internet visibility over for monitoring purposes daily.

Objectives
  1. PMMR objective is to ensure that the management and control of Non-Tax Revenue is strengthened.
  2. NTR raised by Public and Statutory bodies, rightly belongs in the Consolidated Revenue Fund (CRF) and should be appropriated for expenditure by Parliament as per the Public Finance Management Act (1995)
  3. Some Public and Statutory bodies have retained these Non-Tax Revenue without authority to meet operational and other expenditures outside the budget process. This was unacceptable to the Government.
  4. Some, but not all, Public and Statutory bodies have legislation in place which allowed them to retain Non-Tax Revenue, but those provisions have always offended against the best principles of Public Financial Management.
  5. The government is strongly committed to improve and effectively manage the allocation of public resources so that Parliament is the only body that determines the total allocation of public resources.
Related Documents
  1. Public Money Management Regularization Act
  2. Finance Instruction PMMR Act
  3. Management of PMMR Funds
  4. Treasury Instruction of PMMR Act

Conclusion

The PMMR Act will cease to operate on the 31st of December 2019. From 1st January 2020, all public money shall be paid to the nominated bank accounts of the Consolidated Revenue Fund and no money shall be remitted to any public or statutory body without following the governments’ annual appropriation process.