ZET - JamaicaGazette.com
Jamaica Government News and Information
Ministries, Departments and Agencies

Page 2

1. RATIONALE FOR THE CREATION OF A PUBLIC INVESTMENT MANAGEMENT SYSTEM (PIMS) IN JAMAICA The Government has committed to strengthen Jamaica’s public investment management system, as part of a comprehensive public financial management (PFM reform) agenda. This reform has seen the incorporation of public investment management as part of an enhanced fiscal governance framework that seeks to increase fiscal surpluses over time and concurrently reduce the debt to gross domestic product (GDP) ratio so that public resources can be allocated to public investment and other activities that have the potential to contribute to growth in the economy.

Cabinet Decision No X of March 2014 gave approval for the institutionalization of the Public Investment Management System (PIMS) and, in doing so, standardize the treatment of public investment across the public sector with respect to the entire project cycle.

Public investment projects are investments that require planning, execution, monitoring and evaluation carried out as an integrated set of activities aimed at meeting a development objective, at a specific cost and within a defined timeframe(Section 48A, FAA Act Amendments 2014). The Financial Administration and Audit Act (FAA Act) (Amended), 20141 sets out the elements of the strengthened Public Investment Management System (PIMS) which will seek to create a common framework for the preparation, appraisal, approval and management of all public investments in Jamaica, irrespective of the source of funding or procurement and implementation modalities. A key element of the system is the Public Sector Investment Programme (PSIP); a rolling 5 year plan of Cabinet approved public investment projects.

Since these amendments, more legislative and regulatory work has been done to further refine the PIMS and, by extension, the PSIP. In February 2015, additional amendments to both the FAA and PBMA provided for exceptions to the definition of public investment. The exception limits public investment to those undertaken by entities within the specified public sector. The specified public sector is defined as the public sector minus those entities that will be certified as commercial by the Auditor General and, therefore outside of the fiscal rules, as at April 1, 2017. It is anticipated that only a few entities will qualify and the specified public sector will encompass much more than 90% of the public sector. The ambits of the PIMS and PSIP, therefore, is quite extensive in scope.

The Financial Administration and Audit (Amendment) Act 2014 – Fourth Schedule (Section 48B (2) provides that an element of the Public Investment Management System shall be a Public Investment Performance Report. This is a comprehensive performance report on the Government’s Public Investment Programme, which shall be produced and published periodically by the Minister.

1 Gazette 31st day of March 2014, enacted April 1, 2014

...
June 12, 2021


Page 3

2. STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT The Project Development Objective (PDO) is to strengthen public resource management and support selected public sector institutions in facilitating a more enabling environment for private sector growth.

COMPONENTS

Component I: Strengthening the Public Investment Management System Component II: Strengthening the Budget Preparation Process and Results-Based

Budgeting (RBB) Component III: Adaptive Public Sector Approaches to Promote Fiscal

Sustainability Component IV: Strengthening Property Tax Compliance and Administration. Component V: Fostering Industrial Growth and Trade Facilitation Component VI: Project Management

COMPONENT I

The objective of this component is for the PSIP to incorporate public investment projects with estimated five-year operating and maintenance costs fully linked to long term development goals and medium-term priority areas.

This component will support the GOJ reform efforts through the following activities:

(i) Migration of the current web-based database to a robust platform to manage all information about public investment across the project cycle and linked to the budgeting and financial systems of the country (expected to be compiled into IFMIS);

(ii) Design and implementation of a public investment management training program for public sector;

(iii) Reviewing legislation and carrying out dissemination activities to integrate the PIMS with the administrative systems (including procurement and human resources);

(iv) Strengthening monitoring through Citizens Participation;

(v) Designing a fund for the funding of pre-investment financial and economic analysis and post-investment evaluations of the Borrower’s public investments; and

(vi) Provision of technical assistance for the implementation of the Public Financial Management Action Plan.

3. OBJECTIVES OF CONSULTANCY

Develop the draft of the Public Investment Performance Report as required by the FAA Act.

...
June 12, 2021


Page 2

1 | P a g e

1.0. Background:

1.1. Rationale for the creation of a public investment management system (PIMS) in Jamaica: The Government has committed to strengthen Jamaica’s public investment management system, as part of a comprehensive public financial management (PFM reform) agenda. This reform has seen the incorporation of public investment management as part of an enhanced fiscal governance framework that seeks to increase fiscal surpluses over time and concurrently reduce the debt to gross domestic product (GDP) ratio so that public resources can be allocated to public investment and other activities that have the potential to contribute to growth in the economy. Public investment projects are investments that require planning, execution, monitoring and evaluation carried out as an integrated set of activities aimed at meeting a development objective, at a specific cost and within a defined timeframe (Section 48A, FAA Act Amendments 2014). The Financial Administration and Audit Act (FAA Act) (Amended), 20141 sets out the elements of the strengthened Public Investment Management System (PIMS) which will seek to create a common framework for the preparation, appraisal, approval and management of all public investments in Jamaica, irrespective of the source of funding or procurement and implementation modalities. A key element of the system is the Public Sector Investment Programme (PSIP); a rolling 5 year plan of Cabinet approved public investment projects. The Objectives of the PIMS are to:

Promote growth and development and encourage capital formation for future investment

Maximize efficiency of public investment “through better selection and management of investment expenditure.”

Improve the quality of social and economic infrastructure in the country. PIMS is an integrated approach to managing the public investment portfolio and projects, which is:

Extensive; extends across all public entities and sectors • Inclusive; includes all type of public sector expenditures (actuals and

contingencies) • Complete; covers all steps and phases that a project has to complete through

its productive life, including the interaction with other administrative systems (budget, treasury, procurement, human resources, others).

Strategic; all projects and overall portfolio will be selected and oriented to add value to a larger development purpose

1 Gazette 31

st day of March 2014, enacted April 1, 2014

...
June 12, 2021


Page 3

2 | P a g e

The PIMS is also bolstered by other legislations and policy which existed prior to the 2014/15 FAA and PBMA Acts being amended. These also form part of the policy and legislative framework for the PIMS. The Ministry of Finance also undertook a review of the 5-year Public Sector Investment Programme (PSIP), which revealed that there were public sector projects being implemented which had inherent deficiencies and weaknesses which occupied fiscal space and was being resourced through provision in the PSIP and national budget. This brought into question the effectiveness and the due diligence with which prospective projects were being screened prior to entry into the PSIP. Some of the weaknesses identified included:

i. Poor project design & planning; ii. Weak institutional capacity to properly assess the long run feasibility and

sustainability of these projects; iii. Policy mismatch with project goals and objectives and national priorities; iv. Readiness/lack of preparedness of executing bodies to implement

projects. In response to these identified weaknesses, the Government of Jamaica in revising the FAA Act in 2014, also enshrined in law a body, the Public Investment Management Committee (PIMC), charged with the responsibility for the screening and appraisals of all public investment projects from specified public sector (SPS) entities which must be ratified through this body, for approval by Cabinet prior to entry in the PSIP. This led to the creation, under statute, of the Public Investment Management Secretariat (PIMSEC) to be the secretariat of PIMC to undertake the screening and appraisal of public investments and to provide advice to PIMC. PIMSEC became operational in 2015 under the Strategic Public Sector Transformation Project (SPSTP). 2.0. Introduction: 2.1. Strategic Public Sector Transformation Project: The Government of Jamaica (GOJ) received loan financing from the International Bank for Reconstruction and Development (IBRD) towards the cost of the Strategic Public- Sector Transformation Project (SPSTP). The Project Development Objective (PDO) is to strengthen public resource management and support selected public sector institutions in facilitating a more enabling environment for private sector growth. The project is being executed through six (6) Components divided into 2 thematic areas.

The first thematic area seeks to reinforce fiscal discipline and revenue enhancement through four main components: (a) Strengthening the Public Investment Management System (PIMS); (b) Strengthening the Budget Preparation Process and Results Based Budgeting (c) Adaptive Public-Sector Approaches to Promote Fiscal Sustainability and Project Management; (d) Modernizing of the Accountant General’s Department. The second thematic area seeks to support those institutions that sit at the interface

between the public and private sectors: Bureau of Standards of Jamaica (BSJ) through

...
June 12, 2021


Page 4

3 | P a g e

component 5, Fostering Industrial Growth and Trade Facilitation, that will support

strategic public-sector institutions essential to creating an enabling environment for the

private sector. The management of the project makes up the sixth component.

Strengthening of the Public Investment Management System (PIMS) is a sub-set of

Component 1 which falls under the first thematic area “Strengthening the PIMS”.

PIMSEC therefore currently operates under Component 1 of the SPSTP. The executing

agency for the project is the Ministry of Finance and The Public Service (MOF&PS) and

the Project Implementation Unit (PIU) is established within the MOFP to implement

the project. The project will support activities across selected service delivery ministries,

departments, and agencies (MDAs).

2.2. The Committee">Public Investment Management Committee (PIMC) Under Section 48 B (2) D of the amendments a Committee">Public Investment Management Committee is to be appointed to:

a. Screen all investment proposals for feasibility and consistency with government’s strategies and objectives

b. Review all projects for technical, financial, economic and environmental feasibility

c. Prioritisation of projects for financing and recommending to Cabinet their inclusion in the Public Sector Investment Programme, and

d. Reviewing project performance, monitoring risks to the achievement of objectives and continued relevance to government’s policy priorities

General Features of the PIMC: The main role of the Committee is to review/screen projects which are submitted for consideration for inclusion in the PSIP; review the recommendations of the PIMSEC concerning these projects and take a decision to approve, defer for further work or reject.

The two main functions of the PIMC in supporting this model are:

Project Approval - this is to ensure that project concepts and proposals are aligned with policy objectives and that submitted projects are technically, economically, and financially viable. Project approval is done in two phases

Phase one – Project concepts/ideas are assessed for alignment with policy positions as articulated in the PSIP Policy Paper, the Medium Term Social and economic Framework and the National Development Plan Vision 2030. It is after this approval that projects are approved to be fully designed.

Phase two – Project documents are appraised for financial and relevance approval, Funding agency for feasibility analysis, and submitted to Cabinet for final approval and inclusion in the PSIP.

Project Monitoring and Evaluation under PIMSEC - covers the pre- implementation stages of the project cycle, and involves design of the M&E

...
June 12, 2021


SEARCH