Corruption in government can be detrimental to economic growth, development, and stability. It can lead to the misallocation of public funds and resources, and hinder economic development.
The Petrobras scandal in Brazil (which resulted in the country plunging into the biggest financial crisis since 1901) and the 1MDB scandal in Malaysia (described by the BBC as “one of the world’s greatest financial scandals”) are just two examples which highlight the widespread impact corruption can have.
The government plays a crucial role in combatting fraud and corruption through effective leadership, policy commitments and actively promoting transparency and accountability.
But what does it mean to “be transparent” about government financial activities? This article explores different transparency measures and their effectiveness in combatting government corruption.
Implementing Transparency Measures to Combat Government Corruption
When a government wishes to improve transparency, there is a range of measures that it can take, including open data initiatives, public procurement reforms, and financial disclosure requirements.
Open data initiatives provide citizens with access to government data, promoting accountability and transparency. Public procurement reforms promote transparency by increasing competition and reducing the risk of favouritism in the procurement process. Financial disclosure requirements further promote accountability by requiring public officials to disclose their financial interests in order to minimize the risk of corrupt or fraudulent behaviour.
In each case, the government is providing information publicly, increasing visibility and driving change in operating methods with the aim of improving accountability and building trust.
How Technology Can Enhance Transparency in Government Finances
While effective leadership, political will and a commitment to good governance are essential requirements within the government, those in power need to be supported and informed by efficient and robust technology.
This is where modern public financial management systems, such as the FreeBalance Accountability SuiteTM, come into play. These systems provide real-time data on government finances, making it easier to detect fraud, prevent corruption and ensure that resources are being invested as intended.
The comprehensive financial management tools in the FreeBalance Accountability Suite™ enable tracking and reporting of financial activities, meaning governments can effectively set goals, evaluate progress, monitor expenditures, track funds, and enforce spending controls.
The FreeBalance Accountability Suite™ further contributes to combatting corruption by enforcing financial control rules. Automating the enforcement of financial ceilings reduces the chance of manual error and human discretion in certain financial transactions.
The FreeBalance Accountability Suite™ also provides integration between systems to prevent corruption at interface points and e-procurement to enable civil society and competitors to monitor procurement.
FreeBalance can also help improve the transparency of public finances through the deployment of online portals. FreeBalance has provided other governments with PFM portals for budget transparency, aid transparency, e-procurement, government results, and invoice tracking.
These PFM online disclosure portals not only provide citizens with valuable information on how public money is spent, but they also inform potential vendors and suppliers with timely information on procurement opportunities. By making procurement transparent, private sector participation in economic recovery can be improved.
Efforts in improving transparency, accountability, and service delivery have shown to have an effect in improving a country’s score measured by various indices, such as the PEFA and the Open Budget Index. For example, the government of Guyana implemented FreeBalance technology to improve accountability and transparency in 2004 and has seen a great improvement in the country’s Corruption Perception Index score.
Transparency measures are crucial in combating government corruption and promoting good governance. Effective leadership, political will and a commitment to transparency and accountability are all needed, but this should be underpinned by clear and accurate data from robust technology solutions.
Good public financial management technology, such as the FreeBalance Accountability SuiteTM enhances transparency in government finances, making it easier to detect fraud, prevent corruption and develop strong, stable, and prosperous societies.