How to Improve the Financial Oversight of Public Corporations

Richard Allen and Miguel Alves

No 2016/005, IMF Fiscal Affairs Department from International Monetary Fund

Abstract: Many studies have highlighted how failures of public corporations (otherwise known as state-owned enterprises) can result in huge economic and fiscal costs. To contain the risks associated with these costs, an effective regime for the financial supervision and oversight of public corporations should be put in place. This note discusses the legal, institutional, and procedural arrangements that governments need to oversee the financial operations of their public corporations, ensure accountability for their performance, and manage the fiscal risks they present. In particular, it recommends that governments should focus their surveillance on public corporations that are large in relation to the economy, create fiscal risks, are not profitable, are unstable financially, or are heavily dependent on government subsidies or guarantees.

Keywords: FADHTN; HTN; ownership policy; management board; oversight regime; equity holding; trading enterprise; government priority; well-functioning internal audit regime; political orientation; public corporation sector; government unit; government request; government entity; Business enterprises; Contingent liabilities; Quasi-fiscal operations; Public employment; Fiscal risks; Africa (search for similar items in EconPapers)
Pages: 21
Date: 2016-11-23
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