Public Finance Management Act

The Public Finance Management Act is the principal law guiding how Dominica administers, monitors, and reports on its public finances. Passed to modernise outdated statutes, the Act establishes clear standards for budget formulation, spending controls, debt oversight, procurement, and financial reporting. It is central to Dominica’s commitment to accountability, fiscal responsibility, and transparency in the public sector.

Core Functions of the Act

Replacing earlier legislation such as the Finance and Audit Act of 1966 and aspects of the Finance Administration Act of 1994, the Act provides a comprehensive and modernized approach to managing public funds. It aligns national policy with international best practices and ECCU guidelines, ensuring that Dominica’s financial system remains stable and transparent even in periods of economic stress.

The law outlines responsibilities for all financial actors in government, from the Minister for Finance and the Accountant General to department heads and procurement officers. These roles are defined to prevent mismanagement, enforce legal compliance, and foster public trust in fiscal governance.

Fiscal Responsibilities Under the Act

The Act entrusts specific individuals and offices with oversight over revenue and expenditure. Their key responsibilities include:

• Minister of Finance: Prepares and submits the national budget and authorizes public spending via the Appropriation Act.
• Accountant General: Maintains government accounts, issues payments, and compiles financial statements for audit.
• Debt Management Unit: Manages public borrowing, ensures debt servicing meets fiscal targets, and monitors risk exposure.
• Director of Audit: Reviews and reports on the accuracy of financial records submitted by ministries and statutory bodies.

These roles are interlinked and function within a framework that emphasizes compliance, reporting discipline, and strategic decision-making.

Budget Process and Consolidated Fund Management

The Act mandates that the Annual Estimates of Revenue and Expenditure be presented to the House of Assembly within 45 days of the start of the financial year. Once passed, spending authority is granted via the Appropriation Act, allowing withdrawals from the Consolidated Fund, which holds all public revenues and approved financing.

If additional funds are needed during the year, supplementary estimates must be submitted and justified. Reallocation between budget lines is permissible but subject to oversight from the Budget Comptroller.

Debt Management and Fiscal Targets

Dominica’s public debt is regulated through strict ceilings and disclosure requirements. The Act complements other instruments like the Treasury Bills Act, providing legal cover for bond issuances and short-term government borrowing. The country maintains a fiscal target of keeping the debt-to-GDP ratio below 60%, in line with regional agreements.

The Debt Management Unit must issue quarterly reports detailing:

• New borrowing or guarantees approved
• Status of repayments and arrears
• Breakdown of fixed vs variable interest rate obligations
• Risk management strategies to mitigate external shocks

Procurement and Disposal of Public Assets

While procurement is governed directly by the Public Procurement and Disposal of Public Property Act, the Public Finance Management Act supports procurement discipline by requiring alignment with approved budgets and controls. All ministries and public entities are required to submit procurement plans and asset disposal notices for review.

Standards supported by the Act include:

• Use of transparent bidding procedures for goods, services, and works above designated thresholds
• Centralized procurement oversight through a Central Procurement Unit
• Proper documentation and storage of all procurement records for audit review
• Public advertisement of disposal processes, including auctions or scrapping
• Conflict of interest declarations from members of evaluation committees

These provisions ensure that procurement is not only competitive and fair but also integrated with the government’s larger financial strategy.

Monitoring, Reporting, and Enforcement

Every ministry is required to submit monthly and annual financial statements to the Accountant General, who consolidates them into national accounts. These are then audited by the Director of Audit and reviewed by the Public Accounts Committee.

The Act supports continuous improvement through internal audits, performance reviews, and public scrutiny. Violations can trigger disciplinary measures, legal action, or budgetary penalties. Public awareness of these reports further enhances the transparency and credibility of government operations.