The financial sustainability of the state is a desirable goal, which can be achieved through voluntary initiatives that enhance the efficiency, integrity, and transparency of government administration. Among the initiatives in the field of transparency is the “Fiscal Transparency Charter” prepared by the International Monetary Fund. The charter includes a comprehensive framework for financial transparency.
Among the initiatives is also the adoption of best practices in the field of public budget transparency, prepared by the Organization for Economic Cooperation and Development, and it is appropriate to point out that the Ministry of Finance has adopted one of those practices, namely the Public Expenditure and Financial Accountability (PEFA) indicators, as these indicators provide a general framework for evaluating the administration. Public finance, and identifying its strengths and weaknesses. These indicators are considered a tool to assist the state’s public financial management in making the required improvements in it, which are based on the reliability of financial data and its disclosure, the transparency of public finances, and the effective management of assets and liabilities, including investments. But at this moment, we do not know whether the Ministry of Finance has benefited from these indicators, due to the absence of any published reports in this regard.
When we deal with the state’s financial data, we mean two types of financial data, the first type is represented by the state’s general budget data and its reports. Legislations have defined the general framework for organizing these data. Financial data related to the budget must be disclosed.
In my opinion, the general budget data is characterized by a great deal of transparency except within the limits of what is restricted by the law, and these data are also subject to the control of the legislative KIA represented by the National Assembly, and they are discussed in the relevant committee of the Council with the relevant authorities, and they are approved in a plenary session in the Council in light of what is included in the report of the committee Concerned prepared by the recommendations in this regard.
The law also requires that the state’s final account and the report on it be presented to the cabinet, and then it is submitted to the legislative KIA for consideration and issuance of the law for its adoption. The Bureau submits a report on the final account to both the legislative and the executive branches.
As for the second aspect, which is the most important in my opinion and is related to the financial statements of the sovereign funds, which are managed by the General Investment Authority KIA under its establishment law issued in 1982 (with the exception of pension funds that are separately managed by the Social Insurance Institution), and are considered the sovereign funds managed by the KIA The first sovereign wealth funds in the world, as it laid down its basic building block during the reign of the late His Highness Sheikh Abdullah Al-Salem Al-Sabah, and its legal form was framed during the reign of the late His Highness Sheikh Jaber Al-Ahmad Al-Sabah.
Unfortunately, what weakens the financial statements of these funds from my point of view is that they are not characterized by the required transparency in accordance with international standards, despite the KIA’s statement that it has one of the strongest governance structures and is characterized by complete transparency, and the KIA relies on its statement that its accounts are reviewed and verified by two of the largest International companies for an external audit, in addition to that they submit semi-annual data on their assets to the Audit Bureau, and an annual report. Statement of their accounts to both the Council of Ministers and the National Assembly.
Despite the KIA’s statement, its procedures did not enable it to be in the ranks of the highest transparent sovereign funds.