With reports of spending by some countries on materiel linked to their responses to the COVID-19 pandemic already tainted by irregularities, including major fraud, the International Monetary Fund (IMF) is seeking the implementation of measures by countries to offset what it describes as risks of diluted accountability and weakened fiscal control in the context of the pandemic.
Recognizing that circumstances of national crisis frequently create opportunities for fiscal irregularities and not infrequently, widespread corruption, the Fund is seeking full disclosure on procurement tenders and contracts as well as disclosure on “the beneficial ownership of firms awarded procurement contracts. Fiscal transparency also requires controlling and tracking the implementation of COVID-related policy measures using international standards,” the IMF stated in a briefing paper prepared in August by independent experts.
The Fund wants governments to “disclose the existence of COVID-19 funds on their websites and describe their key characteristics, including their legal mandate, objectives and policy rationale, sources of revenue, governance and management arrangements, and operating rules and procedures.”
Simultaneously, the Fund is seeking to push countries to make monthly or quarterly reports of revenue, and expenditures of the funds should be reported monthly or quarterly on a gross basis. “Public Accounts Committees of parliament and civil society organizations can be a powerful catalyst for enhancing the accountability of spending made through these funds,” the IMF says, asserting that “transparency can help promote more coordinated and effective responses to the emergency at the international level.”
Setting aside what the fund says is the desirability of undertaking audits of spending of COVID-19 funds in a timely manner – ideally within six months – the IMF is also calling for the implementation of “Innovative mechanisms, such as interim audits and concurrent controls.”
And in order to offset risks of what it describes as “diluted accountability and weakened fiscal control in the context of the pandemic,” the IMF is recommending a further menu of measures including enhanced reporting of crisis-related spending as well as disclosure of information on procurement tenders and contracts. Fiscal transparency, the Fund says, also requires “controlling and tracking the implementation of COVID-related policy measures, using a dedicated chart of accounts, ideally through the country’s FMIS,” and reporting using international standards.
The Fund also wants governments to disclose the existence of COVID-19 funds on their websites and describe their key characteristics, including their legal mandate, objectives and policy rationale, sources of revenue, governance and management arrangements, and operating rules and procedures.
Back in July the World Economic Forum had said that even before the COVID-19 pandemic, an estimated $455 billion of the $7.35 trillion spent annually on healthcare worldwide was lost to fraud and corruption. “Today, as governments are ramping up pandemic response spending to unprecedented levels and shoveling it out of the door with understandable urgency and desperation, the risk of corruption and misappropriation has increased exponentially.”
