## 1.    Public Sector

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**Canonical URL:** [1.    Public Sector](https://www.imf.org/-/media/files/publications/cr/2018/cr18282.pdf)

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### Summary of mission outcomes and priority recommendations
- Mission dates: April 30–May 11, 2018.
- Mission objectives:
  - Provide training to GFS compilers on the Government Finance Statistics Manual (GFSM) 2014.
  - Review progress against recommendations from previous GFS TA missions.
  - Review the consistency of above-below-the-line fiscal statistics, and integration of flows and stocks of currently compiled GFS.
  - Identify source data, assess magnitude, and review mechanism for recording guaranteed debt and payment arrears.
  - Review current compilation of debt statistics and assist on improving compilation for reporting data to the World Bank-IMF Public Sector Debt Statistics (PSDS) database.
- Training delivered:
  - Attendance averaged to about six staff in each session.
  - First four days: 12 lectures.
  - Second half of the mission: hands-on training on downloading and uploading data files from the Integrated Correspondent System (ICS), filling the annual and monthly GFS questionnaire, and the quarterly PSDS questionnaire.
- Progress on previous TA recommendations:
  - Out of 43 recommendations from March and November 2016 missions: 6 were completed, 7 partly completed, 2 ongoing, 28 not done.
- Key findings on BCG GFS:
  - Significant accuracy, classification, coverage, and comprehensiveness issues undermine credibility of fiscal statistics.
  - A large and persistent statistical discrepancy averaged to about a third of total revenue in preliminary data for FY2016/17 and FY2017/18.
  - Capital budget classification includes spending not related to capital formation.
  - Close to half of BCG entities (referred to as “parastatals” or “autonomous” bodies) are not being reported on in the statement of operations.
- Local government assistance:
  - Developed a template and compiled data for 10 district councils using financial statements for FY2016/17.
  - Compiled: (1) statement on sources and uses of cash; (2) statement of operations; (3) balance sheet.
  - No data available for Maseru City Council (MCC).
- Chart of accounts review recommendations:
  - Align economic and functional classifications to GFSM 2014 economic classification.
  - Allow aggregation of transactions and stock positions by counterpart sectors.
  - Expand classification by votes to align with the public sector institutional table.
- Debt reporting:
  - Debt department staff were put in touch with World Bank staff for quarterly PSDS reporting.
  - Letter inviting the Ministry of Finance to start reporting QPSDS was sent to the Minister of Finance.
  - Central government debt liabilities data is readily available; comprehensive data for public corporations is not readily available (no data during mission for Lesotho Post Bank and the Public Service Defined Contribution Pension Funds).

Priority recommendations (selected high-weight actions)
- Immediate: Formalize the GFS technical working group by assigning responsibilities and dedicating staff resources for the collection and compilation of GFS. — Responsible: Ministry of Finance.
- Immediate: Finalize and adopt a public sector institutional table for consistent use across all macroeconomic statistics; and regularly review and update the table. — Responsible: Ministry of Finance.
- Immediate: Start collecting and compiling data for BCG entities not currently included in the BCG statement of operations, and start compiling data for local governments (including Maseru city council), and extrabudgetary units (EBU). — Responsible: Ministry of Finance.

### Detailed technical assessment and recommendations — milestones and outcomes
- Target outcomes and target completion dates:
  - GFS are compiled for the general government and its subsectors. — Target Completion: December 2019.
  - Institutional sectors are defined in accordance with GFSM 2014 guidelines. — Status: Completed.
  - Final comprehensive list of general government units exists and is disseminated. — Status: Completed.
  - Functional classification of expenditure transactions follows GFSM 2014 guidelines. — Target Completion: June 2019.
  - Economic classifications of revenue and expense follows GFSM 2014 guidelines. — Status: Completed.
  - Classification of stocks & financial assets & liabilities follows GFSM 2014 guidelines. — Status: Completed.
  - Institutional scope includes all significant general government institutional units. — Target Completion: December 2019.
  - The scope of flows includes all transactions of general government units. — Target Completion: December 2019.
  - The scope of stocks includes all financial assets & liabilities of general government. — Target Completion: December 2019.

A. Implementation of recent GFS TA missions’ recommendations
- Two prior TA missions under EDDI2: March 14–24, 2016 and October 24–November 4, 2016.
- Those missions made 43 recommendations in total; current status: 6 completed, 7 partly completed, 2 ongoing, 28 not done.
- Recommended action:
  - Assign responsibilities for following up on TA recommendations and follow through with implementation.

B. Institutional coverage of the public sector
- Public sector comprises 135 entities/units as reviewed and expanded by the mission.
- Some units are not institutional units as defined in GFSM 2014 and are classified under the sub-sector controlling the unit.
- Agreement reached to classify Lesotho Highlands Development Authority (LHDA) as a central government EBU.
- Need to confirm status of some entities (examples noted: Lesotho Pharmaceutical Corporation privatized; Equestra Fleet Management in process of closure).
- Recommended actions:
  - Review, then finalize and adopt the institutional table of the public sector and use it consistently across all macroeconomic statistics (GFS, National Accounts, Monetary and Financial Statistics, External Sector Statistics).
  - Review and update the institutional table on a regular basis to incorporate new entities and/or remove defunct ones.

C. GFS compilation for the Budgetary Central Government (BCG)

Coverage
- Current coverage is incomplete and limited to entities whose transactions are recorded in the Integrated Financial Management Information System (IFMIS).
- Transactions pertaining to “parastatals” and “agencies”, other than grants sent from the BCG, are not recorded into IFMIS and therefore not in the BCG statement of operations.
- From the list overseen by the Private Sector Development (PSD) department, 24 parastatals and 2 agencies were identified that, according to GFSM 2014 sector classification, belonged to the BCG.
- Recommended action:
  - Start collecting on a more regular basis data on transactions for all parastatals and agencies classified as BCG entities and incorporate the data into the BCG statement of operations.

BCG parastatals and agencies (identified as belonging to BCG)
- Accommodation Catering and Tourism Enterprises (ACTE) — Parastatal
- Basotho Enterprise Development Corporation — Parastatal
- Bureau of Statistics — Parastatal
- Council for Higher Education — Parastatal
- Council of National Manpower — Parastatal
- Exams Council of Lesotho — Parastatal
- Hospital Boards — Parastatal
- Lesotho Casinos and Gambling — Parastatal
- Lesotho Electricity and Water Authority — Parastatal
- Lesotho Institute of Accounts — Parastatal
- Lesotho Medical Board — Parastatal
- Lesotho Millennium Development Agency — Parastatal
- Lesotho National Dairy Board — Parastatal
- Lesotho Opportunities Industrialization Center (LOIC) — Parastatal
- Lesotho Sports and Recreation Commission — Parastatal
- Lesotho Sports Council — Parastatal
- Liquor Licensing Board — Parastatal
- Mental Health Advisory — Parastatal
- National Manpower Development Secretariat — Parastatal
- Olympic Committee — Parastatal
- Roads Directorate — Parastatal
- Stadium Board — Parastatal
- TVET — Parastatal
- Youth council — Parastatal
- Tourism Licensing Board — Agency
- Trade Licensing Board — Agency

Basis of recording
- Recording in the BCG statement of operations is neither fully cash basis nor fully accrual basis.
- Authorities stated transactions are recorded on cash basis, but further discussion indicated recordings are not exactly on a cash basis due to lags between reporting and actual cash flows.
- Expense and transactions in nonfinancial assets recorded in the statement of operations are transactions currently “due for payment” in IFMIS (warrants issued, delivery approved, invoices received) but not necessarily paid immediately.
- IFMIS distinguishes “commitments” (when a warrant is issued or procurement request made) and “payment” (when transaction is posted in the general ledger as paid or payment instruction made).
- When treasury has instructed payment, CBL typically makes the payment in an average of three business days, except at fiscal year-end when processing volumes are high.
- IFMIS is not interfaced with CBL systems to pull information on actual payment dates (true cash recording).
- Recording expenditure transactions on a “commitment” basis in the statement of operations and recognizing the difference between commitments and payments in IFMIS as accounts payable would:
  - Bridge part of the time lag between commitments and cash payments.
  - Improve accuracy of GFS by recognizing payables currently buried in the statistical discrepancy.
  - Allow monitoring of transactions leading to arrears accumulation.
- Recommended actions:
  - Move towards recording transactions on a modified accrual basis and start recording expenditure transactions on “commitment” basis.
  - Start recording transactions below the line on accounts payable as the difference between commitment and payment transactions in IFMIS.

### Classification issues and required reclassifications
- Overall finding: The current classification of transactions in the BCG statement of operations is broadly aligned to the GFSM 2001/2014, but there remain transactions that are improperly classified. Missions reiterated recommendations from March and November 2016 and identified additional items requiring reclassification.
- Transactions requiring reclassification in the statement of operations:
  - Withholding tax
    - Current recording: receipts on withholding tax recorded in their entirety as other taxes on income, profits, and capital gains.
    - Required action: use LRA details to distinguish between amounts paid by individuals and by corporations and reclassify as tax on income paid either by individuals or corporations.
  - SACU revenue
    - Current recording: classified separately in the statement of operation.
    - Required action: reclassify SACU revenues into appropriate GFS revenue categories for international comparability and include total SACU revenues as a memorandum item for monitoring.
    - Classification guidance:
      - (i) Customs component → Taxes on International Trade and Transactions-Customs and import duties.
      - (ii) Excise component → Taxes on Goods and Services–Excise.
      - (iii) Development component → Grant–from international organizations.
  - Rand compensation
    - Current recording: recorded as Tax on Property–Recurrent taxes on net wealth.
    - Mission finding: the transfer is an unrequited transfer from a foreign government.
    - Required action: reclassify as Grant–from foreign governments.
  - Students’ scholarships
    - Current recording: scholarship payments recorded in entirety as other expense–current transfers.
    - Key statistics:
      - Students’ scholarship payments amounted to 1.8 percent of GDP in FY 2017/18.
      - Averaged a little more than 2 percent of GDP in recent years.
    - Feature: scholarships are repayable upon completion at varying rates: 100 percent (employed abroad), 60 percent (private sector in Lesotho), 50 percent (government).
    - Current problem: repayments are not recorded in the statement of operations; repayments are processed into a “revolving fund” in “trust money accounts” and reflected only as change in government deposits, creating a statistical discrepancy due to missing counterpart entries.
    - Required action: track repayments (with Manpower Development Secretariat, the treasury, and the CBL), apportion scholarship payments between:
      - other expense–current transfers (nonrepayable component), and
      - increase in loan assets (repayable component);
      - when repaid, record decrease in loan assets matching increase in currency and deposits currently recorded.
  - Capital budget transactions
    - Current practice: capital budget transactions include compensation of employees, purchases of goods and services, grants, subsidies, social benefits, and other expense; grants to other levels of government are currently correctly added to grants in the current budget, but other categories are also added to corresponding categories in the current budget.
    - GFSM 2014 guidance: reclassify compensation of employees and purchases of goods and services as acquisition of nonfinancial assets if meant for own-account capital formation (fixed assets) (GFSM 2014 § 6.9 and 6.27).
    - Required action: if capital budget items are for acquisition of nonfinancial assets, classify as acquisition of nonfinancial assets; otherwise, classify under the appropriate expense category (e.g., health and education spending not involving fixed assets).
  - Interest expense on behalf of members of Parliament
    - Current recording: includes payments of interest on loans incurred by Parliamentarians with commercial banks.
    - GFSM principle: interest is payable by units incurring liabilities (GFSM 2014-§ 6.63).
    - Required action: reclassify interest paid on behalf of Parliamentarians as compensation of employees, as wages and salaries in kind.
  - Debt payments on behalf of others
    - Finding: past instances where government paid interest on behalf of other institutional units (other general government units, public and private corporations).
    - Required actions:
      - Identify all such transactions and reclassify accordingly (GFSM 2014 § A3.30 – A3.31).
      - If interest paid on behalf of other general government units → reclassify as a grant unless government acquires an effective claim (then record as a loan asset).
      - If interest paid on behalf of public or private corporations → record as a capital transfer if no effective claim, or as acquisition of a financial asset (equity or loan) if an effective claim is acquired.
      - Repayments by these institutional units should be recorded as reduction of loan assets, not as revenue.
  - Debt assumption
    - Finding: no evidence of recording of debt assumed by government in the BCG statement of operations.
    - Data point: 89.7 million maloti assumed during FY2016/17 (61.6 million maloti: CGM/Presitex Industry; 28.1 million maloti: TZICC) reported in 2016/17 annual debt bulletin and pre-audited consolidated financial statements for the year ending March 2017.
    - GFSM guidance: statistical treatment depends on whether the new debtor acquires an effective financial claim on the original debtor and the relationship/status of the original debtor (GFSM 2014 § A3.26 – A3.29).
    - Required actions:
      - If government acquired an effective claim → record increase in government liabilities (loan from commercial banks) and increase in loan assets (claim on original debtors).
      - If government did not acquire an effective claim → record a capital transfer as counterpart to liability assumed.
  - Policy lending (on-lending)
    - Finding: on-lending transactions are not comprehensively recorded. Pre-audited consolidated financial statements show on-lending stock:
      - 926 million maloti (year ending March 2016).
      - 1,045 million maloti (year ending March 2017).
    - Current recording: loans recorded when incurred by BCG but not when on-lent; repayments by borrowing institutional units not comprehensively recorded.
    - Required action: comprehensively record transactions related to on-lending (loans on-lent and repayments) in the statement of operations.
  - Rent expense
    - Current recording: recorded as rent expense.
    - Mission finding: these are rentals (payments for goods and services) rather than payments to owners of natural resources.
    - Required action: reclassify as purchases of goods and services.
  - Pension liabilities
    - Current recording: pension liabilities recorded in the statement of operations between FY2008/09 and FY2013/14.
    - Mission finding: these did not constitute government pension liabilities; government runs an autonomous defined contributions employment-related pension fund since 2008. Transactions related to bridging contribution-benefit gaps remained on the pension fund books.
    - Required action: reclassify these transactions as a transfer not elsewhere classified under other expense.

### Recording of project disbursements
- Finding: Recording of transactions related to project disbursements remains a challenge despite compilation matching annual disbursements with expenditures on external capital grants and loans.
- Disbursement forms in-year:
  - (i) direct payments from creditor/donor to a supplier of goods abroad (goods shipped to the country);
  - (ii) direct payments from creditor/donor to a supplier of services (resident or nonresident);
  - (iii) cash transfers to project management accounts within Lesotho banking system.
- Problem: changes in deposits of project accounts (accumulation or drawdowns) are reflected in total government change in currency and deposits, but counterpart above-the-line revenue (disbursement) or expenditure entries may be missing due to lack of comprehensive information on “actual” disbursements and associated spending.
- Consequence: compilers may record all disbursements as spent while some may remain as deposits, creating discrepancies between above-the-line and below-the-line transactions.
- Recommended temporary remedy: identify all government project accounts at the CBL funded with external capital grants and/or loans and adjust expenditure with the change in stock positions in these accounts (upward for drawdowns, downward for accumulation) until comprehensive information on actual disbursements and spending is available.

### Recommended actions (specific to classification and project disbursements)
- Implement all reclassifications recommended during the mission.
- Identify all transactions not currently included, or partially included, in the BCG statement of operations (specifically: (i) students’ scholarships, (ii) debt assumptions and debt payments on behalf of others, (iii) on-lending), incorporate them, and adjust data historically.
- Start to adjust transactions in nonfinancial assets with the change in the stock positions of accounts of government projects at the Central Bank of Lesotho (CBL) funded with external capital grants and/or loans.

### Data accuracy and statistical discrepancy
- Finding: The statistical discrepancy in the BCG statement of operations is high.
- Contributing factors to the statistical discrepancy include:
  - Transactions not comprehensively included in the statement of operations (see paragraph 17 items).
  - Coverage discrepancy: above-the-line coverage limited to a narrow set of institutional units, while deposits data from depository corporations include all central government entities (including BCG entities not currently included and EBUs).
- The mission provided Figure 2 showing trends of the statistical discrepancy and magnitude relative to GDP and to the fiscal balance.
- Recommended actions:
  - Reduce the statistical discrepancy to less than 1 percent of GDP.
  - Ensure proper data management to maintain consistency between the “MF_SGO_DB” and “MF_MTFF_DB” files; ensure that updates to either file are reflected in the other whenever there is an update.
- Data management finding: inconsistencies existed between the “MF_SGO_DB” (used to aggregate monthly fiscal data) and the “MF_MTFF_DB” (used for projections and the medium term fiscal framework); differences were due to updates made to one file and not reflected in the other; changes were made to reconcile the files.

### GFS compilation for local government
- Coverage
  - Finding: No local government GFS is currently compiled for consolidation with BCG GFS.
  - Local government structure: 10 district councils and one city council, Maseru City Council (MCC).
  - Data availability: 10 district councils report comprehensive data to the Ministry of Finance allowing compilation of GFS statements; no data available for MCC.
  - Mission output: audited annual financial statements for the 10 district councils for FY2016/17 were reviewed and three GFS statements compiled: (i) statement of sources and uses of cash; (ii) statement of operations; (iii) balance sheet.
- Templates and basis of recording
  - Templates were created using district councils’ financial statements to compile the three GFS statements.
  - Finding: district councils’ financial statements include noncash transactions on liabilities (accounts payable included in at least Maseru, Leribe, and Botha Bothe).
- Classification and systems
  - Finding: all district councils use the same chart of accounts consistently; chart of accounts is comprehensive and distinguishes expense categories (41: salaries in post and allowances; 42: travel and transport; 43: operating costs; 47: grants; 48: other expense) and nonfinancial asset transactions (53: fixed assets).
  - Issue: the district councils’ classification differs from that used for BCG entities and is not currently used in EPICOR IFMIS; only grants from BCG are recorded in IFMIS.
- Recommended actions for local government GFS:
  - Use the template created during the mission to compile GFS for district councils for previous years and start compiling GFS for district councils regularly.
  - Collect data and start compiling GFS for Maseru City Council.
  - Introduce the new chart of accounts in financial reporting of local governments (district councils and Maseru City Council).
  - Introduce all local governments’ financial data in the new IFMIS.

### New chart of accounts
- Current chart of accounts (COA) was introduced in 2009 along with current IFMIS.
- A new COA is being developed to address shortcomings of the existing classification which does not allow independent reporting of administrative, functional, and economic classification at a granular level due to lack of segmentation.
- The new COA includes 10 segments, each for a different type of classification (functional, economic, administrative, etc.) and is expected to address existing issues with classification.

### Economic and functional classification review
- The new chart of accounts (COA) is broadly aligned with the GFSM 2001.
- The mission reviewed the new COA at the authorities’ request and found that a few adjustments are required for both the economic and functional classifications to be aligned to the GFSM 2014.
- The mission recommended using the COA update as an opportunity to align classifications to the GFSM 2014 now, rather than deferring alignment to a later COA revision.
- The authorities noted that not shifting to a GFSM 2014-consistent classification was intended to avoid substantial deviation from the existing chart of accounts.

Mission comments and improvement objectives
- Primary aims of the comments for improving the COA:
  - (1) Use the COA update opportunity to align the economic and functional classifications to the GFSM 2014 economic classification.
  - (2) Allow aggregation of transactions and stock positions by counterpart sectors.
  - (3) Expand the classification by votes to align with the public sector institutional table.
- Recommended Action:
  - All recommendations made for required changes on the economic and functional classifications of the COA should be implemented for consistency with the GFSM 2014.

### F. Public Sector Debt Statistics — Coverage findings
- Current coverage of compiled and disseminated debt statistics is limited:
  - Coverage is limited to central government external debt and budgetary central government domestic and external debt.
  - No data is currently compiled on extrabudgetary units (EBU) domestic debt.
  - No debt data is currently compiled and disseminated for public corporations and the public sector.
- Financial statements for the 10 district councils (local governments) for FY2016/17 indicated no borrowing, but included small values on accounts payable liabilities.
- There was no information available on MCC to determine whether it borrowed.
- Public corporations: there are only eight public corporations:
  - Three are financial and five are nonfinancial.
  - Financial corporations: CBL, Lesotho Post Bank, and Lesotho Pension Fund. Data on these should be readily available.
- Debt liabilities of CBL were included in the QPSDS reporting template, but excluded IMF loans that are also included in the budgetary central government loan liabilities.

F. Public Sector Debt Statistics — Mission support and data activities
- The mission introduced the authorities to the World Bank’s Quarterly Public Sector Debt Statistics (QPSDS) reporting and had the Bank invite the authorities to start reporting quarterly debt PSDS.
- The mission assisted in filling a QPSDS reporting template with data on:
  - external central government debt;
  - budgetary central government domestic and external debt;
  - and CBL for 2016: Q3 to 2018: Q3.

Recommended Actions:
- Fill the QPSDS reporting template for quarters prior to 2016: Q3 and disseminate the data.
- Start compiling data on debt statistics for extrabudgetary units, and local governments, and consolidate with BCG data into general government debt statistics.
- Collect and compile debt statistics for public financial and public nonfinancial corporations.
- Start disseminating debt statistics on a quarterly basis to the World Bank PSDS database.

### G. Data Dissemination — integration with STA and templates
- Annual and monthly data dissemination to the IMF’s Statistics Department (STA) should now be easier.
- The mission incorporated into the authorities’ main compilation file, the “MF_SGO_DB” file, two sheets:
  - one for the annual time series GFS questionnaire;
  - and one for the high frequency (monthly) GFS questionnaire.
- The two sheets were linked directly to the data in the “MF_SGO_DB” file so that any changes to the data in the file are directly incorporated into the sheets.
- Dissemination of annual data would only entail copying and pasting data into the annual timeseries questionnaire and uploading the file onto the Integrated Correspondent System (ICS).

G. Data Dissemination — reclassifications and impact
- The annual and monthly GFS templates were pre-populated with revised data incorporating recommended reclassifications. Some reclassifications require further refinement.
- Reclassifications marginally affect fiscal aggregates:
  - Total revenue remains unchanged.
  - Reclassifications from/to expenditure to/from transactions in financial assets and liabilities averaged to a little less than 1 percent of GDP in data for the last 5 years (Figure 3).
- Reclassifications included in the pre-populated annual and monthly GFS templates:
  - Taxes on property exclude the RAND compensation;
  - Taxes on goods and services (excises) include 30 percent of the SACU receipts (the exact amount should be included);
  - Grants include the RAND compensation as grants from foreign governments and 40 percent of the SACU receipts (the exact amount should be included) as grants from international organizations;
  - Taxes on international trade (customs and import duties) include 30 percent of the SACU receipts (the exact amount should be included);
  - Compensation of employees adds up the current budget compensation of employees and Parliamentarians interest payment made by the government on their behalf;
  - Interest expense excludes interest paid on behalf of Parliamentarians;
  - Grants expense include grant expense on the capital budget;
  - Other expense only take 50 percent of students’ scholarships and include the pension liabilities repayment;
  - Net acquisition of nonfinancial assets sums up the capital budget excluding grants in the capital budget, plus net acquisition of nonfinancial assets;
  - Transactions in financial assets include 50 percent of students’ scholarship as loans;
  - Net incurrence of liabilities excludes the pension liabilities repayment.
- Recommended Action:
  - Refine the reclassification in the BCG statement of operations and disseminate the annual and monthly series to STA and the National Summary Data Page (NSDP) respectively.

### Appendix I — Assessment of Recommendations from Previous GFS TA Missions (selected status highlights)
- Recommendation 1: Re-evaluate sectorization of LHDA — Done. Agreement reached to reclassify as an EBU.
- Recommendation 2: Finalize institutional table — Not done. No table agreed upon yet.
- Recommendation 3: Establish working group for institutional table — Not done. No working group currently exists (former members moved).
- Recommendation 5: Establish MOF group dedicated to GFS compilation — Done. A team has been set up to compile GFS.
- Recommendation 6: Increase coverage of central government data — Not done.
- Recommendation 7: Submit historical IFS and GFSY data to STA — Partly done. Annual data submitted; high frequency data pending.
- Recommendation 9: Obtain additional TA from STA for COA review — Done. TA mission reviewed the COA and made recommendations.
- Recommendation 11: Expand annual data submissions on BCG assets and liabilities to produce a partial balance sheet — Not done.
- Recommendation 12: Collect BCG monthly data for IFS submission — Partly done. Data collected monthly and posted on NSDP but not reported for the IFS.
- Recommendation 25: Source data for “other accounts payable”, “guarantees” and “pensions” to improve debt compilation — Not done.
- Recommendation 26: Review and disseminate data for the World Bank-IMF PSDS database quarterly from 2009–16 — Not done.
- Recommendation 31: Review Lesotho’s COA classifications with GFSM 2014 economic classifications — Ongoing. A new COA is being developed and recommendations were made for its consistency with the GFSM2014.
- Recommendation 36: Use mission recommendations to align functional and economic classification to GFSM 2014 — Not done. Expected to be done following COA change recommendations.
- Recommendation 41: Gather detailed data on arrears and adopt accrual recording — Not done. Recording in the SGO is still done on a cash basis, omitting inclusion of accounts payable (arrears).

*Source: cr18282 - 1.    Public Sector ___________________________________________________________________________________ 8*

### 1.    Public Sector ___________________________________________________________________________________ 8

### 1.    Public Sector ___________________________________________________________________________________ 8

### Summary of mission outcomes and priority recommendations
- Mission dates: April 30–May 11, 2018.
- Mission objectives:
  - Provide training to GFS compilers on the Government Finance Statistics Manual (GFSM) 2014.
  - Review progress against recommendations from previous GFS TA missions.
  - Review the consistency of above-below-the-line fiscal statistics, and integration of flows and stocks of currently compiled GFS.
  - Identify source data, assess magnitude, and review mechanism for recording guaranteed debt and payment arrears.
  - Review current compilation of debt statistics and assist on improving compilation for reporting data to the World Bank-IMF Public Sector Debt Statistics (PSDS) database.
- Training delivered:
  - Attendance averaged to about six staff in each session.
  - First four days: 12 lectures.
  - Second half of the mission: hands-on training on downloading and uploading data files from the Integrated Correspondent System (ICS), filling the annual and monthly GFS questionnaire, and the quarterly PSDS questionnaire.
- Progress on previous TA recommendations:
  - Out of 43 recommendations from March and November 2016 missions: 6 were completed, 7 partly completed, 2 ongoing, 28 not done.
- Key findings on BCG GFS:
  - Significant accuracy, classification, coverage, and comprehensiveness issues undermine credibility of fiscal statistics.
  - A large and persistent statistical discrepancy averaged to about a third of total revenue in preliminary data for FY2016/17 and FY2017/18.
  - Capital budget classification includes spending not related to capital formation.
  - Close to half of BCG entities (referred to as “parastatals” or “autonomous” bodies) are not being reported on in the statement of operations.
- Local government assistance:
  - Developed a template and compiled data for 10 district councils using financial statements for FY2016/17.
  - Compiled: (1) statement on sources and uses of cash; (2) statement of operations; (3) balance sheet.
  - No data available for Maseru City Council (MCC).
- Chart of accounts review recommendations:
  - Align economic and functional classifications to GFSM 2014 economic classification.
  - Allow aggregation of transactions and stock positions by counterpart sectors.
  - Expand classification by votes to align with the public sector institutional table.
- Debt reporting:
  - Debt department staff were put in touch with World Bank staff for quarterly PSDS reporting.
  - Letter inviting the Ministry of Finance to start reporting QPSDS was sent to the Minister of Finance.
  - Central government debt liabilities data is readily available; comprehensive data for public corporations is not readily available (no data during mission for Lesotho Post Bank and the Public Service Defined Contribution Pension Funds).

Priority recommendations (selected high-weight actions)
- Immediate: Formalize the GFS technical working group by assigning responsibilities and dedicating staff resources for the collection and compilation of GFS. — Responsible: Ministry of Finance.
- Immediate: Finalize and adopt a public sector institutional table for consistent use across all macroeconomic statistics; and regularly review and update the table. — Responsible: Ministry of Finance.
- Immediate: Start collecting and compiling data for BCG entities not currently included in the BCG statement of operations, and start compiling data for local governments (including Maseru city council), and extrabudgetary units (EBU). — Responsible: Ministry of Finance.

### Detailed technical assessment and recommendations — milestones and outcomes
- Target outcomes and target completion dates:
  - GFS are compiled for the general government and its subsectors. — Target Completion: December 2019.
  - Institutional sectors are defined in accordance with GFSM 2014 guidelines. — Status: Completed.
  - Final comprehensive list of general government units exists and is disseminated. — Status: Completed.
  - Functional classification of expenditure transactions follows GFSM 2014 guidelines. — Target Completion: June 2019.
  - Economic classifications of revenue and expense follows GFSM 2014 guidelines. — Status: Completed.
  - Classification of stocks & financial assets & liabilities follows GFSM 2014 guidelines. — Status: Completed.
  - Institutional scope includes all significant general government institutional units. — Target Completion: December 2019.
  - The scope of flows includes all transactions of general government units. — Target Completion: December 2019.
  - The scope of stocks includes all financial assets & liabilities of general government. — Target Completion: December 2019.

A. Implementation of recent GFS TA missions’ recommendations
- Two prior TA missions under EDDI2: March 14–24, 2016 and October 24–November 4, 2016.
- Those missions made 43 recommendations in total; current status: 6 completed, 7 partly completed, 2 ongoing, 28 not done.
- Recommended action:
  - Assign responsibilities for following up on TA recommendations and follow through with implementation.

B. Institutional coverage of the public sector
- Public sector comprises 135 entities/units as reviewed and expanded by the mission.
- Some units are not institutional units as defined in GFSM 2014 and are classified under the sub-sector controlling the unit.
- Agreement reached to classify Lesotho Highlands Development Authority (LHDA) as a central government EBU.
- Need to confirm status of some entities (examples noted: Lesotho Pharmaceutical Corporation privatized; Equestra Fleet Management in process of closure).
- Recommended actions:
  - Review, then finalize and adopt the institutional table of the public sector and use it consistently across all macroeconomic statistics (GFS, National Accounts, Monetary and Financial Statistics, External Sector Statistics).
  - Review and update the institutional table on a regular basis to incorporate new entities and/or remove defunct ones.

C. GFS compilation for the Budgetary Central Government (BCG)

Coverage
- Current coverage is incomplete and limited to entities whose transactions are recorded in the Integrated Financial Management Information System (IFMIS).
- Transactions pertaining to “parastatals” and “agencies”, other than grants sent from the BCG, are not recorded into IFMIS and therefore not in the BCG statement of operations.
- From the list overseen by the Private Sector Development (PSD) department, 24 parastatals and 2 agencies were identified that, according to GFSM 2014 sector classification, belonged to the BCG.
- Recommended action:
  - Start collecting on a more regular basis data on transactions for all parastatals and agencies classified as BCG entities and incorporate the data into the BCG statement of operations.

BCG parastatals and agencies (identified as belonging to BCG)
- Accommodation Catering and Tourism Enterprises (ACTE) — Parastatal
- Basotho Enterprise Development Corporation — Parastatal
- Bureau of Statistics — Parastatal
- Council for Higher Education — Parastatal
- Council of National Manpower — Parastatal
- Exams Council of Lesotho — Parastatal
- Hospital Boards — Parastatal
- Lesotho Casinos and Gambling — Parastatal
- Lesotho Electricity and Water Authority — Parastatal
- Lesotho Institute of Accounts — Parastatal
- Lesotho Medical Board — Parastatal
- Lesotho Millennium Development Agency — Parastatal
- Lesotho National Dairy Board — Parastatal
- Lesotho Opportunities Industrialization Center (LOIC) — Parastatal
- Lesotho Sports and Recreation Commission — Parastatal
- Lesotho Sports Council — Parastatal
- Liquor Licensing Board — Parastatal
- Mental Health Advisory — Parastatal
- National Manpower Development Secretariat — Parastatal
- Olympic Committee — Parastatal
- Roads Directorate — Parastatal
- Stadium Board — Parastatal
- TVET — Parastatal
- Youth council — Parastatal
- Tourism Licensing Board — Agency
- Trade Licensing Board — Agency

Basis of recording
- Recording in the BCG statement of operations is neither fully cash basis nor fully accrual basis.
- Authorities stated transactions are recorded on cash basis, but further discussion indicated recordings are not exactly on a cash basis due to lags between reporting and actual cash flows.
- Expense and transactions in nonfinancial assets recorded in the statement of operations are transactions currently “due for payment” in IFMIS (warrants issued, delivery approved, invoices received) but not necessarily paid immediately.
- IFMIS distinguishes “commitments” (when a warrant is issued or procurement request made) and “payment” (when transaction is posted in the general ledger as paid or payment instruction made).
- When treasury has instructed payment, CBL typically makes the payment in an average of three business days, except at fiscal year-end when processing volumes are high.
- IFMIS is not interfaced with CBL systems to pull information on actual payment dates (true cash recording).
- Recording expenditure transactions on a “commitment” basis in the statement of operations and recognizing the difference between commitments and payments in IFMIS as accounts payable would:
  - Bridge part of the time lag between commitments and cash payments.
  - Improve accuracy of GFS by recognizing payables currently buried in the statistical discrepancy.
  - Allow monitoring of transactions leading to arrears accumulation.
- Recommended actions:
  - Move towards recording transactions on a modified accrual basis and start recording expenditure transactions on “commitment” basis.
  - Start recording transactions below the line on accounts payable as the difference between commitment and payment transactions in IFMIS.

*Source: cr18282 - 1.    Public Sector ___________________________________________________________________________________ 8*

### 17. The classification of transactions in the BCG statement of operations requires

### 17. The classification of transactions in the BCG statement of operations requires improvements

### Classification issues and required reclassifications
- Overall finding: The current classification of transactions in the BCG statement of operations is broadly aligned to the GFSM 2001/2014, but there remain transactions that are improperly classified. Missions reiterated recommendations from March and November 2016 and identified additional items requiring reclassification.
- Transactions requiring reclassification in the statement of operations:
  - Withholding tax
    - Current recording: receipts on withholding tax recorded in their entirety as other taxes on income, profits, and capital gains.
    - Required action: use LRA details to distinguish between amounts paid by individuals and by corporations and reclassify as tax on income paid either by individuals or corporations.
  - SACU revenue
    - Current recording: classified separately in the statement of operation.
    - Required action: reclassify SACU revenues into appropriate GFS revenue categories for international comparability and include total SACU revenues as a memorandum item for monitoring.
    - Classification guidance:
      - (i) Customs component → Taxes on International Trade and Transactions-Customs and import duties.
      - (ii) Excise component → Taxes on Goods and Services–Excise.
      - (iii) Development component → Grant–from international organizations.
  - Rand compensation
    - Current recording: recorded as Tax on Property–Recurrent taxes on net wealth.
    - Mission finding: the transfer is an unrequited transfer from a foreign government.
    - Required action: reclassify as Grant–from foreign governments.
  - Students’ scholarships
    - Current recording: scholarship payments recorded in entirety as other expense–current transfers.
    - Key statistics:
      - Students’ scholarship payments amounted to 1.8 percent of GDP in FY 2017/18.
      - Averaged a little more than 2 percent of GDP in recent years.
    - Feature: scholarships are repayable upon completion at varying rates: 100 percent (employed abroad), 60 percent (private sector in Lesotho), 50 percent (government).
    - Current problem: repayments are not recorded in the statement of operations; repayments are processed into a “revolving fund” in “trust money accounts” and reflected only as change in government deposits, creating a statistical discrepancy due to missing counterpart entries.
    - Required action: track repayments (with Manpower Development Secretariat, the treasury, and the CBL), apportion scholarship payments between:
      - other expense–current transfers (nonrepayable component), and
      - increase in loan assets (repayable component);
      - when repaid, record decrease in loan assets matching increase in currency and deposits currently recorded.
  - Capital budget transactions
    - Current practice: capital budget transactions include compensation of employees, purchases of goods and services, grants, subsidies, social benefits, and other expense; grants to other levels of government are currently correctly added to grants in the current budget, but other categories are also added to corresponding categories in the current budget.
    - GFSM 2014 guidance: reclassify compensation of employees and purchases of goods and services as acquisition of nonfinancial assets if meant for own-account capital formation (fixed assets) (GFSM 2014 § 6.9 and 6.27).
    - Required action: if capital budget items are for acquisition of nonfinancial assets, classify as acquisition of nonfinancial assets; otherwise, classify under the appropriate expense category (e.g., health and education spending not involving fixed assets).
  - Interest expense on behalf of members of Parliament
    - Current recording: includes payments of interest on loans incurred by Parliamentarians with commercial banks.
    - GFSM principle: interest is payable by units incurring liabilities (GFSM 2014-§ 6.63).
    - Required action: reclassify interest paid on behalf of Parliamentarians as compensation of employees, as wages and salaries in kind.
  - Debt payments on behalf of others
    - Finding: past instances where government paid interest on behalf of other institutional units (other general government units, public and private corporations).
    - Required actions:
      - Identify all such transactions and reclassify accordingly (GFSM 2014 § A3.30 – A3.31).
      - If interest paid on behalf of other general government units → reclassify as a grant unless government acquires an effective claim (then record as a loan asset).
      - If interest paid on behalf of public or private corporations → record as a capital transfer if no effective claim, or as acquisition of a financial asset (equity or loan) if an effective claim is acquired.
      - Repayments by these institutional units should be recorded as reduction of loan assets, not as revenue.
  - Debt assumption
    - Finding: no evidence of recording of debt assumed by government in the BCG statement of operations.
    - Data point: 89.7 million maloti assumed during FY2016/17 (61.6 million maloti: CGM/Presitex Industry; 28.1 million maloti: TZICC) reported in 2016/17 annual debt bulletin and pre-audited consolidated financial statements for the year ending March 2017.
    - GFSM guidance: statistical treatment depends on whether the new debtor acquires an effective financial claim on the original debtor and the relationship/status of the original debtor (GFSM 2014 § A3.26 – A3.29).
    - Required actions:
      - If government acquired an effective claim → record increase in government liabilities (loan from commercial banks) and increase in loan assets (claim on original debtors).
      - If government did not acquire an effective claim → record a capital transfer as counterpart to liability assumed.
  - Policy lending (on-lending)
    - Finding: on-lending transactions are not comprehensively recorded. Pre-audited consolidated financial statements show on-lending stock:
      - 926 million maloti (year ending March 2016).
      - 1,045 million maloti (year ending March 2017).
    - Current recording: loans recorded when incurred by BCG but not when on-lent; repayments by borrowing institutional units not comprehensively recorded.
    - Required action: comprehensively record transactions related to on-lending (loans on-lent and repayments) in the statement of operations.
  - Rent expense
    - Current recording: recorded as rent expense.
    - Mission finding: these are rentals (payments for goods and services) rather than payments to owners of natural resources.
    - Required action: reclassify as purchases of goods and services.
  - Pension liabilities
    - Current recording: pension liabilities recorded in the statement of operations between FY2008/09 and FY2013/14.
    - Mission finding: these did not constitute government pension liabilities; government runs an autonomous defined contributions employment-related pension fund since 2008. Transactions related to bridging contribution-benefit gaps remained on the pension fund books.
    - Required action: reclassify these transactions as a transfer not elsewhere classified under other expense.

### Recording of project disbursements
- Finding: Recording of transactions related to project disbursements remains a challenge despite compilation matching annual disbursements with expenditures on external capital grants and loans.
- Disbursement forms in-year:
  - (i) direct payments from creditor/donor to a supplier of goods abroad (goods shipped to the country);
  - (ii) direct payments from creditor/donor to a supplier of services (resident or nonresident);
  - (iii) cash transfers to project management accounts within Lesotho banking system.
- Problem: changes in deposits of project accounts (accumulation or drawdowns) are reflected in total government change in currency and deposits, but counterpart above-the-line revenue (disbursement) or expenditure entries may be missing due to lack of comprehensive information on “actual” disbursements and associated spending.
- Consequence: compilers may record all disbursements as spent while some may remain as deposits, creating discrepancies between above-the-line and below-the-line transactions.
- Recommended temporary remedy: identify all government project accounts at the CBL funded with external capital grants and/or loans and adjust expenditure with the change in stock positions in these accounts (upward for drawdowns, downward for accumulation) until comprehensive information on actual disbursements and spending is available.

### Recommended actions (specific to classification and project disbursements)
- Implement all reclassifications recommended during the mission.
- Identify all transactions not currently included, or partially included, in the BCG statement of operations (specifically: (i) students’ scholarships, (ii) debt assumptions and debt payments on behalf of others, (iii) on-lending), incorporate them, and adjust data historically.
- Start to adjust transactions in nonfinancial assets with the change in the stock positions of accounts of government projects at the Central Bank of Lesotho (CBL) funded with external capital grants and/or loans.

### Data accuracy and statistical discrepancy
- Finding: The statistical discrepancy in the BCG statement of operations is high.
- Contributing factors to the statistical discrepancy include:
  - Transactions not comprehensively included in the statement of operations (see paragraph 17 items).
  - Coverage discrepancy: above-the-line coverage limited to a narrow set of institutional units, while deposits data from depository corporations include all central government entities (including BCG entities not currently included and EBUs).
- The mission provided Figure 2 showing trends of the statistical discrepancy and magnitude relative to GDP and to the fiscal balance.
- Recommended actions:
  - Reduce the statistical discrepancy to less than 1 percent of GDP.
  - Ensure proper data management to maintain consistency between the “MF_SGO_DB” and “MF_MTFF_DB” files; ensure that updates to either file are reflected in the other whenever there is an update.
- Data management finding: inconsistencies existed between the “MF_SGO_DB” (used to aggregate monthly fiscal data) and the “MF_MTFF_DB” (used for projections and the medium term fiscal framework); differences were due to updates made to one file and not reflected in the other; changes were made to reconcile the files.

### GFS compilation for local government
- Coverage
  - Finding: No local government GFS is currently compiled for consolidation with BCG GFS.
  - Local government structure: 10 district councils and one city council, Maseru City Council (MCC).
  - Data availability: 10 district councils report comprehensive data to the Ministry of Finance allowing compilation of GFS statements; no data available for MCC.
  - Mission output: audited annual financial statements for the 10 district councils for FY2016/17 were reviewed and three GFS statements compiled: (i) statement of sources and uses of cash; (ii) statement of operations; (iii) balance sheet.
- Templates and basis of recording
  - Templates were created using district councils’ financial statements to compile the three GFS statements.
  - Finding: district councils’ financial statements include noncash transactions on liabilities (accounts payable included in at least Maseru, Leribe, and Botha Bothe).
- Classification and systems
  - Finding: all district councils use the same chart of accounts consistently; chart of accounts is comprehensive and distinguishes expense categories (41: salaries in post and allowances; 42: travel and transport; 43: operating costs; 47: grants; 48: other expense) and nonfinancial asset transactions (53: fixed assets).
  - Issue: the district councils’ classification differs from that used for BCG entities and is not currently used in EPICOR IFMIS; only grants from BCG are recorded in IFMIS.
- Recommended actions for local government GFS:
  - Use the template created during the mission to compile GFS for district councils for previous years and start compiling GFS for district councils regularly.
  - Collect data and start compiling GFS for Maseru City Council.
  - Introduce the new chart of accounts in financial reporting of local governments (district councils and Maseru City Council).
  - Introduce all local governments’ financial data in the new IFMIS.

### New chart of accounts
- Current chart of accounts (COA) was introduced in 2009 along with current IFMIS.
- A new COA is being developed to address shortcomings of the existing classification which does not allow independent reporting of administrative, functional, and economic classification at a granular level due to lack of segmentation.
- The new COA includes 10 segments, each for a different type of classification (functional, economic, administrative, etc.) and is expected to address existing issues with classification.

*International Monetary Fund — Kingdom of Lesotho mission findings and recommendations (chapter excerpt).*

### 26. The economic and functional classifications of the new COA are broadly aligned with

### 26. The economic and functional classifications of the new COA are broadly aligned with 

### Economic and functional classification review
- The new chart of accounts (COA) is broadly aligned with the GFSM 2001.
- The mission reviewed the new COA at the authorities’ request and found that a few adjustments are required for both the economic and functional classifications to be aligned to the GFSM 2014.
- The mission recommended using the COA update as an opportunity to align classifications to the GFSM 2014 now, rather than deferring alignment to a later COA revision.
- The authorities noted that not shifting to a GFSM 2014-consistent classification was intended to avoid substantial deviation from the existing chart of accounts.

### Mission comments and improvement objectives
- Primary aims of the comments for improving the COA:
  - (1) Use the COA update opportunity to align the economic and functional classifications to the GFSM 2014 economic classification.
  - (2) Allow aggregation of transactions and stock positions by counterpart sectors.
  - (3) Expand the classification by votes to align with the public sector institutional table.

Recommended Action:
- All recommendations made for required changes on the economic and functional classifications of the COA should be implemented for consistency with the GFSM 2014.

### F. Public Sector Debt Statistics — Coverage findings
- Current coverage of compiled and disseminated debt statistics is limited:
  - Coverage is limited to central government external debt and budgetary central government domestic and external debt.
  - No data is currently compiled on extrabudgetary units (EBU) domestic debt.
  - No debt data is currently compiled and disseminated for public corporations and the public sector.
- Financial statements for the 10 district councils (local governments) for FY2016/17 indicated no borrowing, but included small values on accounts payable liabilities.
- There was no information available on MCC to determine whether it borrowed.
- Public corporations: there are only eight public corporations:
  - Three are financial and five are nonfinancial.
  - Financial corporations: CBL, Lesotho Post Bank, and Lesotho Pension Fund. Data on these should be readily available.
- Debt liabilities of CBL were included in the QPSDS reporting template, but excluded IMF loans that are also included in the budgetary central government loan liabilities.

### F. Public Sector Debt Statistics — Mission support and data activities
- The mission introduced the authorities to the World Bank’s Quarterly Public Sector Debt Statistics (QPSDS) reporting and had the Bank invite the authorities to start reporting quarterly debt PSDS.
- The mission assisted in filling a QPSDS reporting template with data on:
  - external central government debt;
  - budgetary central government domestic and external debt;
  - and CBL for 2016: Q3 to 2018: Q3.

Recommended Actions:
- Fill the QPSDS reporting template for quarters prior to 2016: Q3 and disseminate the data.
- Start compiling data on debt statistics for extrabudgetary units, and local governments, and consolidate with BCG data into general government debt statistics.
- Collect and compile debt statistics for public financial and public nonfinancial corporations.
- Start disseminating debt statistics on a quarterly basis to the World Bank PSDS database.

### G. Data Dissemination — integration with STA and templates
- Annual and monthly data dissemination to the IMF’s Statistics Department (STA) should now be easier.
- The mission incorporated into the authorities’ main compilation file, the “MF_SGO_DB” file, two sheets:
  - one for the annual time series GFS questionnaire;
  - and one for the high frequency (monthly) GFS questionnaire.
- The two sheets were linked directly to the data in the “MF_SGO_DB” file so that any changes to the data in the file are directly incorporated into the sheets.
- Dissemination of annual data would only entail copying and pasting data into the annual timeseries questionnaire and uploading the file onto the Integrated Correspondent System (ICS).

### G. Data Dissemination — reclassifications and impact
- The annual and monthly GFS templates were pre-populated with revised data incorporating recommended reclassifications. Some reclassifications require further refinement.
- Reclassifications marginally affect fiscal aggregates:
  - Total revenue remains unchanged.
  - Reclassifications from/to expenditure to/from transactions in financial assets and liabilities averaged to a little less than 1 percent of GDP in data for the last 5 years (Figure 3).

- Reclassifications included in the pre-populated annual and monthly GFS templates:
  - Taxes on property exclude the RAND compensation;
  - Taxes on goods and services (excises) include 30 percent of the SACU receipts (the exact amount should be included);
  - Grants include the RAND compensation as grants from foreign governments and 40 percent of the SACU receipts (the exact amount should be included) as grants from international organizations;
  - Taxes on international trade (customs and import duties) include 30 percent of the SACU receipts (the exact amount should be included);
  - Compensation of employees adds up the current budget compensation of employees and Parliamentarians interest payment made by the government on their behalf;
  - Interest expense excludes interest paid on behalf of Parliamentarians;
  - Grants expense include grant expense on the capital budget;
  - Other expense only take 50 percent of students’ scholarships and include the pension liabilities repayment;
  - Net acquisition of nonfinancial assets sums up the capital budget excluding grants in the capital budget, plus net acquisition of nonfinancial assets;
  - Transactions in financial assets include 50 percent of students’ scholarship as loans;
  - Net incurrence of liabilities excludes the pension liabilities repayment.

Recommended Action:
- Refine the reclassification in the BCG statement of operations and disseminate the annual and monthly series to STA and the National Summary Data Page (NSDP) respectively.

### Appendix I — Assessment of Recommendations from Previous GFS TA Missions (selected status highlights)
- Recommendation 1: Re-evaluate sectorization of LHDA — Done. Agreement reached to reclassify as an EBU.
- Recommendation 2: Finalize institutional table — Not done. No table agreed upon yet.
- Recommendation 3: Establish working group for institutional table — Not done. No working group currently exists (former members moved).
- Recommendation 5: Establish MOF group dedicated to GFS compilation — Done. A team has been set up to compile GFS.
- Recommendation 6: Increase coverage of central government data — Not done.
- Recommendation 7: Submit historical IFS and GFSY data to STA — Partly done. Annual data submitted; high frequency data pending.
- Recommendation 9: Obtain additional TA from STA for COA review — Done. TA mission reviewed the COA and made recommendations.
- Recommendation 11: Expand annual data submissions on BCG assets and liabilities to produce a partial balance sheet — Not done.
- Recommendation 12: Collect BCG monthly data for IFS submission — Partly done. Data collected monthly and posted on NSDP but not reported for the IFS.
- Recommendation 25: Source data for “other accounts payable”, “guarantees” and “pensions” to improve debt compilation — Not done.
- Recommendation 26: Review and disseminate data for the World Bank-IMF PSDS database quarterly from 2009–16 — Not done.
- Recommendation 31: Review Lesotho’s COA classifications with GFSM 2014 economic classifications — Ongoing. A new COA is being developed and recommendations were made for its consistency with the GFSM2014.
- Recommendation 36: Use mission recommendations to align functional and economic classification to GFSM 2014 — Not done. Expected to be done following COA change recommendations.
- Recommendation 41: Gather detailed data on arrears and adopt accrual recording — Not done. Recording in the SGO is still done on a cash basis, omitting inclusion of accounts payable (arrears).

*KINGDOM OF LESOTHO — INTERNATIONAL MONETARY FUND*

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_Source: https://www.imf.org/-/media/files/publications/cr/2018/cr18282.pdf_