Country Greenland
Project Title Assessment of the Public Finance Management (PFM) System in Greenland
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Key Topics:

Public Finance Management (PFM), Public Expenditure and Financial Accountability (PEFA), Budgeting, Public Procurement, Macro-Economics, Fiscal Process, Legislative Framework, Education Sector.


Project Description and Objectives:

The association of the Overseas Countries and Territories (OCTs) with the Community is laid down-in part IV of the EC Treaty that defines the objectives of their association regime. These territories are constitutionally linked with four Member States (France, UK, Netherlands and Denmark). Based on Greenland's OCT status, a new comprehensive partnership has been established, as defined in the Council Decision 2006/526/EC of 17 July 2006 on relations between the European Community on the one hand, and Greenland and the Kingdom of Denmark on the other  and the Commission regulation of 20 April 2007 implementing Council Decision 2006/526/EC . Article 11.2 of the Council Decision states that financial assistance shall be granted as budget support.


The Programming Document for the Sustainable Development if Greenland adopted on the 22 June 2007 specifies that education and training is the focal area for support in areas other than fisheries for the period 2007-2013, and foresees that an annual amount of maximum of € 25 million (in 2006 prices) will be granted as budget support.


The assessment of the public finance management, including public procurement, is an essential step in order to implement any kind of budgetary support.


In this respect, the overall objective of the current assignment is to carry out an independent review of the Public Finance Management system in Greenland, with specific reference to the education sector.


More specifically, the objective is to assess the quality, transparency, accountability and effectiveness of public finance management, including an assessment of the public procurement, paying special attention to its openness and transparency.


Services Provided:

Extensive Review of the economic situation and economic policy:

  • Assessment of the general economic situation through analysis of the main macroeconomic variables and identification of possible constraints or trends that could constitute a potential risk for the future economic stability of the territory concerned;
  • Assessment of the evolution and sustainability of the fiscal deficit;
  • Assessment of the present situation of relationships with the concerned Member State and other donors if applicable, as well as the sectoral strategies mainly in the educational sector.


Extensive Review of Public Finance Management following PEFA methodology:

  • Provision of an elaborate description and analysis of the legal and institutional framework, budgetary process, budgetary procedures in place including the public tendering procedures and on-going reforms;
  • Provision of an overview and description of the global and sectoral financial flows including a description of revenue generation (block grants from Denmark, own tax collection, customs duties, special levies etc.) and system for allocation of total revenues;
  • Analysis of the monitoring, reporting and control (internal and external) mechanisms of the budgetary process and the timeframes within which these controls operate;
  • Identification of implemented or ongoing actions based on recommendations of previous audits and evaluation of performance;
  • Identification of a set of key indicators to measure budgetary effectiveness and efficiency;
  • Comprehensive assessment of the public procurement legal framework, procedures and practices (openness, effectiveness and transparency).


Development of M&E Guidelines for periodic review:

  • Development of a monitoring and evaluation guide for periodic review of public sector management performance including the definition of milestones and targets jointly agreed between the EC and the Greenlandic Authorities.


Following from the assessment of the PFM system and the economic situation, a justified opinion on the eligibility criteria concerning public finance management (PFM) has been provided, as well as practical recommendations for public finance management monitoring in Greenland.  A workshop has been held to present and discuss the main findings of the exercise.