## 1. Priority Recommendations

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---

### Summary of mission outcomes
- A follow-up technical assistance (TA) mission to the Ministry of Economy and Finance (MEF) was conducted remotely during 10 days over the period of December 6, 2021–January 11, 2022.
- The activity was part of Cambodia’s participation in the Japan-funded Government Finance Statistics (GFS) and Public Sector Debt Statistics (PSDS) Project for selected Asian countries (JSA3).
- The mission assisted authorities in improving fiscal data according to the Government Finance Statistics Manual 2014 (GFSM 2014) and the PSDS: Guide for Compilers and Users.
- Tasks implemented (in cooperation with MEF General Department of Policy (GDP)) included:
  - reviewing GFS treatment of selected transactions (social security benefits, subsidies, equity injections, transactions in other accounts receivable/payable);
  - discussing progress reconciling coverage of government deposits and other financial balance sheet data between MEF and the National Bank of Cambodia (NBC);
  - addressing availability and detail of source data on net acquisition of nonfinancial assets;
  - discussing mapping of ministerial programs related to environmental protection to COFOG;
  - reviewing first draft of technical guidelines on compiling and disseminating GFSM 2014-based GFS and PSDS;
  - updating the action plan for GFS and PSDS developments.

### Key findings and technical guidance
- Progress since previous TA mission (April 26 – July 15, 2021) was limited; GDP GFS Team mainly focused on mapping national program classification to COFOG with MEF General Department of Budget (GDB) and selected Line Ministries (LMs).
- In October 2021, MEF reported extended 2019 GFS for general government, including the National Social Security Fund (NSSF) and other public administrative establishments (PAEs). Annual GFS for 2020 cover budgetary central government (BCG) and local governments (LGs) pending more detailed source data from PAEs.
- Quarterly PSDS submissions to the joint World Bank/IMF PSDS Database are still reported on a semi-annual basis following the date of national publication; the most recent PSDS submission relates to 2020 Q2. The mission recommended GDP resume reporting quarterly PSDS and comply with the established calendar (one quarter after the reporting quarter).
- GFS treatment guidance:
  - Social payments to households through the NSSF should be classified as social security benefits. Transfers from BCG to the NSSF to finance payments of social security benefits represent grants between subsectors of the general government sector and are subject to consolidation.
  - GFS treatment of equity injections or other financial support to ARDB and SME Bank depends on factors in GFSM 2014 (Box 6.3): subsidies are current payments calculated based on quantities/values of services; regular transfers to cover recurrent deficits are subsidies; transfers to cover large operating deficits accumulated over two or more years, repayments of banks’ debt liabilities without acquiring an effective claim, or investments without reasonable expectations of return are recorded as capital transfers.
- On other accounts receivable/payable: source data include a line “outstanding operations” offsetting difference between above-the-line and below-the-line transactions pending actual spending data from LMs. Since 2018 “outstanding operations” have been regulated during the complementary period at fiscal year-end; absence of accounts payable was confirmed in subsequent annual GFS time series. GFS accounting basis is considered non-cash as data include in-kind transactions in foreign grants corresponding to acquisitions of nonfinancial assets under externally financed projects.
- MEF GDP and NBC joint reconciliation of government deposits showed limited progress. GDP identified 60 accounts for externally financed projects outside Treasury Single Account representing around 1/3 of total discrepancy between GFS and monetary and financial statistics (MFS) data on government foreign currency deposits. Remaining work: check government deposits at NBC and identify holders of government deposits at commercial banks and other financial corporations. Discrepancies between GFS and external sector statistics are mainly due to different exchange rates.
- Inter-agency Memorandum of Understanding (MoU): final adoption pending. Draft MoU was developed by MEF to encourage data exchange and provide basis for a Technical Working Group on Consistency in the System of Macroeconomic Statistical Accounts. NBC regards current cooperation as good at technical staff level and supports MoU to make cooperation more sustainable. NIS supports inter-agency cooperation in principle but has concerns about capacity and is not prepared to share bridge tables or resulting general government account numbers at this stage.
- COFOG classification quality issues: many LMs map administration and support programs to “not elsewhere classified (n.e.c.)” COFOG categories instead of splitting by relevant subfunctions; for some LMs “n.e.c.” subfunctions represent 50-80% of current expenditure. COFOG for LGs is under development. Mission provided recommendations on bridging LG programs to COFOG (Appendix II). Mission stressed need for concerted efforts by MEF, LMs, and LGs to ensure international comparability and analytical usefulness by COFOG subfunctions, and improvements to capture government expenditure on environmental protection for the IMF Climate Change Indicators Dashboard.
- Source data on net acquisition of nonfinancial assets have limitations. LGs may record major reconstructions together with current maintenance and repairs to simplify budgeting. MEF is developing Guidelines on Accounting for Non-current Assets and the MEF Public Investment Project (PIP) Database Management System. Authorities expressed interest in IMF TA on PIP Database design and needed attributes to classify expenditure and track project cycles.
- Draft GFS/PSDS Technical Compilation and Dissemination Guidelines for Cambodia reviewed. Draft includes overview, institutional arrangements, and general government sector description. Mission advised adding compilation and dissemination procedures, data sources, derivation and bridge tables, reporting formats, relationship to other datasets, and other technical detail to ensure sustainability despite staff rotation.

### Priority recommendations (highlighted)
- May 2022 — Finalize reconciliation of the GG financial balance sheet data between the MEF and the NBC (IIP, MFS), explain the reasons for remaining discrepancies. Responsible: GDP MEF, NBC.
- May 2022 — Include the description of compilations procedures, data sources, derivation and bridge tables, reporting formats, and other technical detail in the draft Technical Guidelines for GFS and PSDS. Responsible: GDP MEF.
- September 2022 — Complete annual GFS time series for 2020 with data for NSSF and other PAEs, report GFS for general government to the IMF. Responsible: GDP MEF.

### Action Plan to Improve GFS/PSDS Compilation and Dissemination (selected items)
Outcome: Data are compiled and disseminated using the coverage and scope of the latest manual/guide
- May 2022 — Finalize reconciliation of the GG financial balance sheet data between the MEF and the NBC (IIP, MFS), explain the reasons for remaining discrepancies – priority recommendation. Responsible: GDP MEF, NBC.
- May 2022 — Finalize and approve the draft MoU (including the ToR for the GFS Technical Working Group on Consistency in the System of Macroeconomic Statistical Accounts). Responsible: GDP MEF, NBC, NIS.
- August 2022 — Publish the 2015-2019 consolidated balance sheet (Table 6) for BCG and LGs and relevant metadata as part of GFS on the MEF website and report it to the IMF. Responsible: GDP MEF.
- September 2022 — Complete annual GFS time series for 2020 with data for NSSF and other PAEs, report the extended GFS for general government to the IMF – priority recommendation. Responsible: GDP MEF.
- October 2022 — Reconcile GG data on transactions between MEF and NIS (Production account, Income Accounts, Saving) and explain the reasons for remaining differences. Responsible: GDP MEF, NIS.

Outcome: Data are compiled and disseminated using the classification of the latest manual/guide
- May 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for budgetary central government from FMIS, make necessary corrections of mapping CoA to GFS in FMIS. Responsible: GDP, GDICDM, and GDNT.
- May 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for local governments from FMIS, make necessary corrections of mapping CoA to GFS in FMIS. Responsible: GDP and GDNT, MEF.
- May 2022 — Finalize statistics on Environment Protection expenditure for 2018-2020 and report to the IMF STA for publication at the Climate Indicators Dashboard. Responsible: GDP.
- May 2022 — Include the description of compilations procedures, data sources, derivation and bridge tables, reporting formats, and other technical detail in the draft Technical Compilation and Dissemination Guidelines for GFS and PSDS – priority recommendation. Responsible: GDP MEF.
- June 2022 — Consider improving the mapping of administration and support programs between COFOG sub-functions. Responsible: GDP MEF.
- August 2022 — Finalize the mapping of LGs’ programs to COFOG. Responsible: GDP, GDSNAF, and GDB.
- September 2022 — Compile Table 7 (Expenditure by Functions of Government) covering expense and net acquisitions of NFAs for BCG and report to the IMF as part of annual GFS submission. Responsible: GDP, MEF.

Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public
- May 2022 — Resume reporting to the Joint World Bank–IMF PSDS database. Responsible: GDP and GDICDM, MEF.
- June 2022 — Update explanations on the TOFE/GFS derivation table on the MEF website. Responsible: GDP MEF.
- August 2022 — Improve the frequency of quarterly PSDS reporting to the Joint World Bank–IMF PSDS database and comply with the established calendar (one quarter after the reporting quarter). Responsible: GDP and GDICDM, MEF.
- November 2022 — Review available source data for SOEs and conclude on the possibility of compiling GFS on public sector. Responsible: GDP and GDSPNTR, MEF.

### Appendix II — Recommendations on Mapping Local Governments’ Programs/Subprograms to COFOG (selected mappings and comments)
- Non-tax revenue collection -> 70112 Financial and fiscal affairs. Comment: Includes administration of financial and fiscal affairs and services and operation of taxation schemes, operation of the revenue agency.
- Justice and dispute resolution services -> 70330 Law courts. Comment: Includes activities of civil and criminal law courts and the judicial system, administrative tribunals, ombudsmen.
- Transfers between subnational administrations -> 7018 Transfers of a general character between different levels of government. Comment: Includes transfers between different levels of government that are of a general character and not allocated to a particular function. Important to keep a separate code to facilitate consolidation.
- Security and social order -> 7036 Public order and safety n.e.c. Comment: Program content unclear; could be 7031 Police services, 7032 Fire protection services, 7033 Law courts, 7034 Prisons, or 7035 R&D Public order and safety; otherwise 7036.
- Improving hygiene, environment, people well-being -> 7074 Public health services; alternatively 7056 Environmental protection n.e.c. or 7109 Social protection n.e.c. Comment: Environmental protection should be assigned to 7051–7055 where relevant; “people well-being” unclear — could be 7102 Old age or 71040 Family and children; 7109 usable pending more specification.
- Prevention of disasters and epidemics in all circumstances -> 70560 Environmental protection n.e.c. and/or 70740 Public health services. Comment: Prevention, reduction, elimination of pollution fits environmental protection; prevention and epidemiological activities fit public health services.
- Acceleration of poverty reduction -> 7107 Social exclusion n.e.c. Comment: Includes social protection to persons who are socially excluded or at risk and assistance to alleviate poverty.
- Organizing public road traffic and accident control -> 70310 Police services. Comment: Road traffic regulation and control included.
- Planning electricity in the streets, installation of light poles, maintenance and repairs -> 70640 Street lighting. Comment: Includes administration, installation, operation, maintenance, upgrading of street lighting; lighting for highways classified under 70451 Road transport.
- Provision of health services by hospitals in capital, province -> 7073 Hospital services. Comment: Hospitals defined as institutions offering inpatient care under direct supervision of qualified medical doctors; 7073 split into 70731–70734.
- Provision of health service by health centers and health posts -> 7072 Outpatient services. Comment: Covers medical, dental, paramedical services delivered to outpatients.
- Support for mothers and children to access health and nutrition services -> 70740 Public health services. Comment: Includes administration, inspection, prevention, monitoring (infant nutrition, child health), family planning.
- Construction/repair of health facilities -> 70760 Health n.e.c. Comment: Correct classification depends on type of health facilities.
- Water supply and sanitation in schools, kindergartens, community and housing -> 7063 Water supply. Comment: Includes administration of water supply affairs, supervision, regulation, and nonenterprise-type water supply systems.

### Appendix III — Implementation Status of the Previous Mission’s Recommendations (as of January 11, 2022)
Outcome: Data are compiled and disseminated using the coverage and scope of the latest manual/guide
- 1. December 2021 — Conclude on the possibility of using cash-based IPSAS reports for 2017-2019 as source data for compiling GFS Statement II (Statement of Sources and Uses of Cash)
  - Responsible Institutions: GDP, MEF
  - Implementation Status (as of January 11, 2022): Partially Implemented
  - Details: The GDP included this activity in the MEF Action Plan (CAP4). The implementation of CAP4 is scheduled to start in 2023.
- 2. December 2021 — Report the coordinated list of general government and public sector units to STA as part of annual GFS metadata
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: The updated list of General Government units was reported to the IMF STA in October 2021 as part of the annual GFS submission. The Techo Startup Center created in 2021 is considered as a PAE (general government). The GDP shared a list of 17 public enterprises: 1. NBC, 2. Phnom Penh Water Supply Authority, 3. Siem Reap Water Supply Authority, 4. Publishing and Distribution House, 5. Building and Public Works Laboratory, 6. Telecom Cambodia, 7. Sihanoukville Autonomous Port, 8. Phnom Penh Autonomous Port, 9. Electricite du Cambodge, 10. Cambodia Post, 11. Agriculture and Rural Development Bank (ARDB), 12. Green Trade Company, 13. Cambodia Reinsurance Company (Cambodia Re). 14. Cambodia Securities Exchange. 15. SME Bank, 16. Credit Gurantee Corperation of Cambodia (CGCC), 17. Enterprise for Managing Transfer Stations and Landfills for Solid Waste (EML).
  - Further work: Market/non-market test for public enterprises functioning for 3 years or more has not been done yet. Newly created enterprises (11–17) are considered part of the PS by convention. Further work needed on coordinating the list of GG units/accounts included in GFS, MFS/BOP, and national accounts.
- 3. December 2021 — Complete annual GFS time series for 2018 with data for NSSF and other PAEs, report 2018 and updated 2019 GFS for general government to the IMF – priority recommendation
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: In October 2021, MEF reported updated GFS for 2019 including data for the NSSF and other PAEs, and GFS for 2020 covering BCG and LGs only. Coverage of 2020 GFS will be expanded once source data for the NSSF and other PAEs become available. GDP considered the quality of detailed source data for the NSSF and other PAEs for 2018 and back as insufficient for GFS compilation. Extended GFS time series for the Cambodian GG can only start by 2019.
- 4. December 2021 — Discuss the draft MoU (including the ToR for the GFS Technical Working Group on Consistency in the System of Macroeconomic Statistical Accounts) with the NIS and the NBC, prepare and approve the final version
  - Responsible Institutions: GDP, MEF, NBC, NIS
  - Implementation Status: Partially Implemented
  - Details: Draft MoU encourages data exchange but does not specify concrete aggregates or balancing items. Draft MoU provides formal basis for creating the Technical Working Group. Draft was discussed at inter-agency workshop (December 22-23, 2021). NBC supports sustainability; NIS supports cooperation in general but staff not prepared to share bridge tables or resulting numbers. NIS staff capacity issues limit participation. Final decision pending. Draft exists in Khmer only.
- 5. December 2021 — Improve GFS for LGs to ensure an accurate split between Compensation of employees (GFS code 21), Use of goods and services (GFS code 22), and Acquisitions of nonfinancial assets (GFS code 31)
  - Responsible Institutions: GDP, GDNT, GDSNAF, MEF
  - Implementation Status: Partially Implemented
  - Details: Some items need reclassification from Use of goods and services (GFS code 22) to Acquisitions of nonfinancial assets (GFS code 31), mostly major road reconstructions recorded together with current maintenance and repairs (CoA code 61053). Share of capital spending included in current expense varies substantially among provinces, complicating time-series corrections. Actual value of government nonfinancial assets in form of roads is underestimated. New Guidelines on Accounting for Non-current Assets remain work in progress; LGs are supposed to use guidelines to improve source data for GFS.
- 6. January 2022 — Reconcile GG financial balance sheet data between the MEF and the NBC (IIP, MFS), explain the reasons for remaining discrepancies, including difference between the GDNT and DMFAS data for loans to GG provided by the banking system– priority recommendation
  - Responsible Institutions: GDP, MEF, NBC
  - Implementation Status: Partially Implemented
  - Details: GDP GFS Team worked with NBC on reconciling GG deposits and other balance sheet positions; main discussions at inter-agency workshop (December 22-23, 2021). GDNT data on BCG deposits in the TOFE covers TSA opened at NBC, deposit accounts at NBC, and other bank accounts at NBC held by MEF or LMs for externally financed projects; coverage around 100 accounts (part of NBC List of Government Accounts at NBC Head Office). NBC numbers for BCG deposits include additional MEF’s and LMs’ accounts outside TSA used for spending cash advances or externally financed projects. GFS team identified 60 outside TSA accounts for externally financed projects totaling 1,315,792 million riels (as of December 31, 2018).
- 7. February 2022 — Reconcile GG data on transactions between MEF and NBC (BOP), explain the reasons for remaining differences
  - Responsible Institutions: GDP, MEF, NBC
  - Implementation Status: Partially Implemented
  - Details: Main reason for discrepancies is difference in exchange rates applied by MEF (GDICDM and GDNT) and NBC. For externally financed projects, NBC receives source data from MEF GDICDM in KHR (irrespective of initial currency), then converts to USD using the average rate for the period. MEF GDNT uses source data converted to KHR at the date of transaction.
- 8. February 2022 — Publish the 2015-2018 consolidated balance sheet (Table 6) for BCG and LGs as part of GFS on the MEF website and report it to the IMF
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: GDP GFS Team has been working with NBC on reconciling GG deposits and other balance sheet positions. Main reasons for discrepancies identified. MEF decision on publishing financial balance sheets remains pending.
- 9. April 2022 — Compile the 2019 consolidated balance sheet (Table 6) for budgetary central government and local governments
  - Responsible Institutions: GDP, MEF
  - Implementation Status: The work has not started yet
- 10. May 2022 — Reconcile GG data on transactions between MEF and NIS (Production account, Income Accounts, Saving), explain the reasons for remaining differences
  - Responsible Institutions: GDP, MEF, NIS
  - Implementation Status: The work has not started yet

Outcome: Data are compiled and disseminated using the classification of the latest manual/guide
- 11. December 2021 — Use available financial reports of PAEs (in addition to their budget execution tables) as source data for 2020 annual GFS
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Not Implemented
  - Details: Neither 2020 budget execution reports, nor financial reports for PAEs were available by the time of the mission.
- 12. December 2021 — Review GFS Table 2 (Expense) for budgetary central government generated from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP and FMIS Team, MEF
  - Implementation Status: Implemented
  - Details: Review finalized and moved to production phase. For upcoming 6 months, GFS team plans to keep a parallel GFS reporting using the Classification Assistant.
- 13. December 2021 — Review GFS Table 2 (Expense) for local governments generated from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP and FMIS Team, MEF
  - Implementation Status: Implemented
  - Details: Review finalized and moved to production phase. For upcoming 6 months, GFS team plans to keep a parallel GFS reporting using the Classification Assistant.
- 14. January 2022 — Prepare the first draft of technical guidelines on compiling and disseminating the GFSM 2014–based GFS and Quarterly PSDS
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: First draft Technical Compilation and Dissemination Guidelines for GFS and PSDS was shared on last day of mission’s work. Draft includes general overview, advantages of using GFS/PSDS, selected provisions on institutional arrangements, and description of the general government sector. Needs extension with compilation procedures, data sources, derivation and bridge tables, reporting formats, relationship to other datasets, and other technical detail.
- 15. February 2022 — Consider improving the coverage and classification of expenditure on environmental protection by cross-checking with the Cambodia Climate Public Expenditure Review (CPER) database
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partly Implemented
  - Details: GFS coverage goes beyond GG and includes NGOs and climate-related projects outside GG. GFS team compiled environmental protection expenditure for BCG for 2018-2020 under COFOG code 705 and subcodes. Methodology for GFS is based on COFOG (international comparability); CPER methodology is national-based. FMIS-based source data show only two LMs reporting Government Expenditures on Environmental Protection (COFOG 705): Ministry of Environment (MoE) and Ministry of Water Resources and Meteorology (MoWRAM). Largest part falls under COFOG 7056 Environmental protection not elsewhere classified. Additional checks did not provide detail to reallocate 7056 to 7051–7054. Detail of MoWRAM’s programs is absent. Further work needed on programs of the Ministry of Public Works and Transportation related to waste water management (COFOG 7052).
- 16. March 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for budgetary central government from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP, GDICDM, GDNT
  - Implementation Status: The work has not started yet
- 17. March 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for local governments from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP and GDNT, MEF
  - Implementation Status: The work has not started yet
- 18. June 2022 — Compile Table 7 (Expenditure by Functions of Government) covering expense and net acquisitions of NFAs and report to the IMF as part of annual GFS submission
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: GFS Team focused on mapping national program classification to COFOG with MEF GDB and selected LMs. Key limitations: mapping support programs and local branch administration under “not elsewhere classified (n.e.c.)” leading to high shares (50-80%) of current expense considered as n.e.c. Limited availability and detail of source data for net acquisition of NFA. Guideline on Accounting for Non-current Assets and MEF Public Investment Project Database Management System (both under development) will enhance source data for GFS and PSDS.

Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public
- 19. December 2021 — Update explanations on the advantages of using GFS in fiscal analysis and the TOFE/GFS derivation table (by adding transactions in financial assets) on the MEF website
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: Financing part has been added to the derivation table. Metadata on the MEF site need additional explanations on differences between TOFE and GFSM 2014-based GFS and the content of the derivation table.
- 20. April 2022 — Report to the Joint World Bank–IMF PSDS database on a quarterly basis
  - Responsible Institutions: GDP and GDICDM, MEF
  - Implementation Status: The work has not started yet
- 21. April 2022 — Improve data coverage of quarterly PSDS to include accounts payable and report to the Joint World Bank–IMF PSDS database
  - Responsible Institutions: GDP and GDICDM, MEF
  - Implementation Status: The work has not started yet
- 22. May 2022 — Review available source data for SOEs and conclude on the possibility of compiling GFS on public sector
  - Responsible Institutions: GDP and GDSPNTR, MEF
  - Implementation Status: The work has not started yet

### Appendix IV — Officials Met During the Mission
- H.E. Cheang Vanarith — Director General, GDP
- Dr. Chhau Somethea — Deputy Director General of the GDP
- Sok Khorn — Director, Statistics and Economic Analysis Department, GDP
- Yorn Sambath — Deputy Director, Statistics and Economic Analysis Department, GDP, MEF
- Khut Chankanika — Young Economist Professional, GDP, MEF
- Prak Tha Achharawadei — Young Economist Professional, GDP, MEF

*Source: 1khmea2023001 - 1. Priority Recommendations*

### 1. Priority Recommendations _____________________________________________________________________ 7

### 1. Priority Recommendations

### Summary of mission outcomes
- A follow-up technical assistance (TA) mission to the Ministry of Economy and Finance (MEF) was conducted remotely during 10 days over the period of December 6, 2021–January 11, 2022.  
- The activity was part of Cambodia’s participation in the Japan-funded Government Finance Statistics (GFS) and Public Sector Debt Statistics (PSDS) Project for selected Asian countries (JSA3).  
- The mission assisted authorities in improving fiscal data according to the Government Finance Statistics Manual 2014 (GFSM 2014) and the PSDS: Guide for Compilers and Users.  
- Tasks implemented (in cooperation with MEF General Department of Policy (GDP)) included:
  - reviewing GFS treatment of selected transactions (social security benefits, subsidies, equity injections, transactions in other accounts receivable/payable);
  - discussing progress reconciling coverage of government deposits and other financial balance sheet data between MEF and the National Bank of Cambodia (NBC);
  - addressing availability and detail of source data on net acquisition of nonfinancial assets;
  - discussing mapping of ministerial programs related to environmental protection to COFOG;
  - reviewing first draft of technical guidelines on compiling and disseminating GFSM 2014-based GFS and PSDS;
  - updating the action plan for GFS and PSDS developments.

### Key findings and technical guidance
- Progress since previous TA mission (April 26 – July 15, 2021) was limited; GDP GFS Team mainly focused on mapping national program classification to COFOG with MEF General Department of Budget (GDB) and selected Line Ministries (LMs).  
- In October 2021, MEF reported extended 2019 GFS for general government, including the National Social Security Fund (NSSF) and other public administrative establishments (PAEs). Annual GFS for 2020 cover budgetary central government (BCG) and local governments (LGs) pending more detailed source data from PAEs.  
- Quarterly PSDS submissions to the joint World Bank/IMF PSDS Database are still reported on a semi-annual basis following the date of national publication; the most recent PSDS submission relates to 2020 Q2. The mission recommended GDP resume reporting quarterly PSDS and comply with the established calendar (one quarter after the reporting quarter).  
- GFS treatment guidance:
  - Social payments to households through the NSSF should be classified as social security benefits. Transfers from BCG to the NSSF to finance payments of social security benefits represent grants between subsectors of the general government sector and are subject to consolidation.
  - GFS treatment of equity injections or other financial support to ARDB and SME Bank depends on factors in GFSM 2014 (Box 6.3): subsidies are current payments calculated based on quantities/values of services; regular transfers to cover recurrent deficits are subsidies; transfers to cover large operating deficits accumulated over two or more years, repayments of banks’ debt liabilities without acquiring an effective claim, or investments without reasonable expectations of return are recorded as capital transfers.
- On other accounts receivable/payable: source data include a line “outstanding operations” offsetting difference between above-the-line and below-the-line transactions pending actual spending data from LMs. Since 2018 “outstanding operations” have been regulated during the complementary period at fiscal year-end; absence of accounts payable was confirmed in subsequent annual GFS time series. GFS accounting basis is considered non-cash as data include in-kind transactions in foreign grants corresponding to acquisitions of nonfinancial assets under externally financed projects.
- MEF GDP and NBC joint reconciliation of government deposits showed limited progress. GDP identified 60 accounts for externally financed projects outside Treasury Single Account representing around 1/3 of total discrepancy between GFS and monetary and financial statistics (MFS) data on government foreign currency deposits. Remaining work: check government deposits at NBC and identify holders of government deposits at commercial banks and other financial corporations. Discrepancies between GFS and external sector statistics are mainly due to different exchange rates.
- Inter-agency Memorandum of Understanding (MoU): final adoption pending. Draft MoU was developed by MEF to encourage data exchange and provide basis for a Technical Working Group on Consistency in the System of Macroeconomic Statistical Accounts. NBC regards current cooperation as good at technical staff level and supports MoU to make cooperation more sustainable. NIS supports inter-agency cooperation in principle but has concerns about capacity and is not prepared to share bridge tables or resulting general government account numbers at this stage.
- COFOG classification quality issues: many LMs map administration and support programs to “not elsewhere classified (n.e.c.)” COFOG categories instead of splitting by relevant subfunctions; for some LMs “n.e.c.” subfunctions represent 50-80% of current expenditure. COFOG for LGs is under development. Mission provided recommendations on bridging LG programs to COFOG (Appendix II). Mission stressed need for concerted efforts by MEF, LMs, and LGs to ensure international comparability and analytical usefulness by COFOG subfunctions, and improvements to capture government expenditure on environmental protection for the IMF Climate Change Indicators Dashboard.
- Source data on net acquisition of nonfinancial assets have limitations. LGs may record major reconstructions together with current maintenance and repairs to simplify budgeting. MEF is developing Guidelines on Accounting for Non-current Assets and the MEF Public Investment Project (PIP) Database Management System. Authorities expressed interest in IMF TA on PIP Database design and needed attributes to classify expenditure and track project cycles.
- Draft GFS/PSDS Technical Compilation and Dissemination Guidelines for Cambodia reviewed. Draft includes overview, institutional arrangements, and general government sector description. Mission advised adding compilation and dissemination procedures, data sources, derivation and bridge tables, reporting formats, relationship to other datasets, and other technical detail to ensure sustainability despite staff rotation.

### Priority recommendations (highlighted)
- May 2022 — Finalize reconciliation of the GG financial balance sheet data between the MEF and the NBC (IIP, MFS), explain the reasons for remaining discrepancies. Responsible: GDP MEF, NBC.  
- May 2022 — Include the description of compilations procedures, data sources, derivation and bridge tables, reporting formats, and other technical detail in the draft Technical Guidelines for GFS and PSDS. Responsible: GDP MEF.  
- September 2022 — Complete annual GFS time series for 2020 with data for NSSF and other PAEs, report GFS for general government to the IMF. Responsible: GDP MEF.

### Action Plan to Improve GFS/PSDS Compilation and Dissemination (selected items)
Outcome: Data are compiled and disseminated using the coverage and scope of the latest manual/guide
- May 2022 — Finalize reconciliation of the GG financial balance sheet data between the MEF and the NBC (IIP, MFS), explain the reasons for remaining discrepancies – priority recommendation. Responsible: GDP MEF, NBC.
- May 2022 — Finalize and approve the draft MoU (including the ToR for the GFS Technical Working Group on Consistency in the System of Macroeconomic Statistical Accounts). Responsible: GDP MEF, NBC, NIS.
- August 2022 — Publish the 2015-2019 consolidated balance sheet (Table 6) for BCG and LGs and relevant metadata as part of GFS on the MEF website and report it to the IMF. Responsible: GDP MEF.
- September 2022 — Complete annual GFS time series for 2020 with data for NSSF and other PAEs, report the extended GFS for general government to the IMF – priority recommendation. Responsible: GDP MEF.
- October 2022 — Reconcile GG data on transactions between MEF and NIS (Production account, Income Accounts, Saving) and explain the reasons for remaining differences. Responsible: GDP MEF, NIS.

Outcome: Data are compiled and disseminated using the classification of the latest manual/guide
- May 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for budgetary central government from FMIS, make necessary corrections of mapping CoA to GFS in FMIS. Responsible: GDP, GDICDM, and GDNT.
- May 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for local governments from FMIS, make necessary corrections of mapping CoA to GFS in FMIS. Responsible: GDP and GDNT, MEF.
- May 2022 — Finalize statistics on Environment Protection expenditure for 2018-2020 and report to the IMF STA for publication at the Climate Indicators Dashboard. Responsible: GDP.
- May 2022 — Include the description of compilations procedures, data sources, derivation and bridge tables, reporting formats, and other technical detail in the draft Technical Compilation and Dissemination Guidelines for GFS and PSDS – priority recommendation. Responsible: GDP MEF.
- June 2022 — Consider improving the mapping of administration and support programs between COFOG sub-functions. Responsible: GDP MEF.
- August 2022 — Finalize the mapping of LGs’ programs to COFOG. Responsible: GDP, GDSNAF, and GDB.
- September 2022 — Compile Table 7 (Expenditure by Functions of Government) covering expense and net acquisitions of NFAs for BCG and report to the IMF as part of annual GFS submission. Responsible: GDP, MEF.

Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public
- May 2022 — Resume reporting to the Joint World Bank–IMF PSDS database. Responsible: GDP and GDICDM, MEF.
- June 2022 — Update explanations on the TOFE/GFS derivation table on the MEF website. Responsible: GDP MEF.
- August 2022 — Improve the frequency of quarterly PSDS reporting to the Joint World Bank–IMF PSDS database and comply with the established calendar (one quarter after the reporting quarter). Responsible: GDP and GDICDM, MEF.
- November 2022 — Review available source data for SOEs and conclude on the possibility of compiling GFS on public sector. Responsible: GDP and GDSPNTR, MEF.

### Appendix II — Recommendations on Mapping Local Governments’ Programs/Subprograms to COFOG (selected mappings and comments)
- Non-tax revenue collection -> 70112 Financial and fiscal affairs. Comment: Includes administration of financial and fiscal affairs and services and operation of taxation schemes, operation of the revenue agency.
- Justice and dispute resolution services -> 70330 Law courts. Comment: Includes activities of civil and criminal law courts and the judicial system, administrative tribunals, ombudsmen.
- Transfers between subnational administrations -> 7018 Transfers of a general character between different levels of government. Comment: Includes transfers between different levels of government that are of a general character and not allocated to a particular function. Important to keep a separate code to facilitate consolidation.
- Security and social order -> 7036 Public order and safety n.e.c. Comment: Program content unclear; could be 7031 Police services, 7032 Fire protection services, 7033 Law courts, 7034 Prisons, or 7035 R&D Public order and safety; otherwise 7036.
- Improving hygiene, environment, people well-being -> 7074 Public health services; alternatively 7056 Environmental protection n.e.c. or 7109 Social protection n.e.c. Comment: Environmental protection should be assigned to 7051–7055 where relevant; “people well-being” unclear — could be 7102 Old age or 71040 Family and children; 7109 usable pending more specification.
- Prevention of disasters and epidemics in all circumstances -> 70560 Environmental protection n.e.c. and/or 70740 Public health services. Comment: Prevention, reduction, elimination of pollution fits environmental protection; prevention and epidemiological activities fit public health services.
- Acceleration of poverty reduction -> 7107 Social exclusion n.e.c. Comment: Includes social protection to persons who are socially excluded or at risk and assistance to alleviate poverty.
- Organizing public road traffic and accident control -> 70310 Police services. Comment: Road traffic regulation and control included.
- Planning electricity in the streets, installation of light poles, maintenance and repairs -> 70640 Street lighting. Comment: Includes administration, installation, operation, maintenance, upgrading of street lighting; lighting for highways classified under 70451 Road transport.
- Provision of health services by hospitals in capital, province -> 7073 Hospital services. Comment: Hospitals defined as institutions offering inpatient care under direct supervision of qualified medical doctors; 7073 split into 70731–70734.
- Provision of health service by health centers and health posts -> 7072 Outpatient services. Comment: Covers medical, dental, paramedical services delivered to outpatients.
- Support for mothers and children to access health and nutrition services -> 70740 Public health services. Comment: Includes administration, inspection, prevention, monitoring (infant nutrition, child health), family planning.
- Construction/repair of health facilities -> 70760 Health n.e.c. Comment: Correct classification depends on type of health facilities.
- Water supply and sanitation in schools, kindergartens, community and housing -> 7063 Water supply. Comment: Includes administration of water supply affairs, supervision, regulation, and nonenterprise-type water supply systems.

*Source: 1khmea2023001 - 1. Priority Recommendations*

### Appendix III . Implementation Status of the Previous Mission’s Recommendations

### Appendix III . Implementation Status of the Previous Mission’s Recommendations

### Outcome: Data are compiled and disseminated using the coverage and scope of the latest manual/guide
- 1. December 2021 — Conclude on the possibility of using cash-based IPSAS reports for 2017-2019 as source data for compiling GFS Statement II (Statement of Sources and Uses of Cash)
  - Responsible Institutions: GDP, MEF
  - Implementation Status (as of January 11, 2022): Partially Implemented
  - Details: The GDP included this activity in the MEF Action Plan (CAP4). The implementation of CAP4 is scheduled to start in 2023.
- 2. December 2021 — Report the coordinated list of general government and public sector units to STA as part of annual GFS metadata
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: The updated list of General Government units was reported to the IMF STA in October 2021 as part of the annual GFS submission. The Techo Startup Center created in 2021 is considered as a PAE (general government). The GDP shared a list of 17 public enterprises: 1. NBC, 2. Phnom Penh Water Supply Authority, 3. Siem Reap Water Supply Authority, 4. Publishing and Distribution House, 5. Building and Public Works Laboratory, 6. Telecom Cambodia, 7. Sihanoukville Autonomous Port, 8. Phnom Penh Autonomous Port, 9. Electricite du Cambodge, 10. Cambodia Post, 11. Agriculture and Rural Development Bank (ARDB), 12. Green Trade Company, 13. Cambodia Reinsurance Company (Cambodia Re). 14. Cambodia Securities Exchange. 15. SME Bank, 16. Credit Gurantee Corperation of Cambodia (CGCC), 17. Enterprise for Managing Transfer Stations and Landfills for Solid Waste (EML).
  - Further work: Market/non-market test for public enterprises functioning for 3 years or more has not been done yet. Newly created enterprises (11–17) are considered part of the PS by convention. Further work needed on coordinating the list of GG units/accounts included in GFS, MFS/BOP, and national accounts.
- 3. December 2021 — Complete annual GFS time series for 2018 with data for NSSF and other PAEs, report 2018 and updated 2019 GFS for general government to the IMF – priority recommendation
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: In October 2021, MEF reported updated GFS for 2019 including data for the NSSF and other PAEs, and GFS for 2020 covering BCG and LGs only. Coverage of 2020 GFS will be expanded once source data for the NSSF and other PAEs become available. GDP considered the quality of detailed source data for the NSSF and other PAEs for 2018 and back as insufficient for GFS compilation. Extended GFS time series for the Cambodian GG can only start by 2019.
- 4. December 2021 — Discuss the draft MoU (including the ToR for the GFS Technical Working Group on Consistency in the System of Macroeconomic Statistical Accounts) with the NIS and the NBC, prepare and approve the final version
  - Responsible Institutions: GDP, MEF, NBC, NIS
  - Implementation Status: Partially Implemented
  - Details: Draft MoU encourages data exchange but does not specify concrete aggregates or balancing items. Draft MoU provides formal basis for creating the Technical Working Group. Draft was discussed at inter-agency workshop (December 22-23, 2021). NBC supports sustainability; NIS supports cooperation in general but staff not prepared to share bridge tables or resulting numbers. NIS staff capacity issues limit participation. Final decision pending. Draft exists in Khmer only.
- 5. December 2021 — Improve GFS for LGs to ensure an accurate split between Compensation of employees (GFS code 21), Use of goods and services (GFS code 22), and Acquisitions of nonfinancial assets (GFS code 31)
  - Responsible Institutions: GDP, GDNT, GDSNAF, MEF
  - Implementation Status: Partially Implemented
  - Details: Some items need reclassification from Use of goods and services (GFS code 22) to Acquisitions of nonfinancial assets (GFS code 31), mostly major road reconstructions recorded together with current maintenance and repairs (CoA code 61053). Share of capital spending included in current expense varies substantially among provinces, complicating time-series corrections. Actual value of government nonfinancial assets in form of roads is underestimated. New Guidelines on Accounting for Non-current Assets remain work in progress; LGs are supposed to use guidelines to improve source data for GFS.
- 6. January 2022 — Reconcile GG financial balance sheet data between the MEF and the NBC (IIP, MFS), explain the reasons for remaining discrepancies, including difference between the GDNT and DMFAS data for loans to GG provided by the banking system– priority recommendation
  - Responsible Institutions: GDP, MEF, NBC
  - Implementation Status: Partially Implemented
  - Details: GDP GFS Team worked with NBC on reconciling GG deposits and other balance sheet positions; main discussions at inter-agency workshop (December 22-23, 2021). GDNT data on BCG deposits in the TOFE covers TSA opened at NBC, deposit accounts at NBC, and other bank accounts at NBC held by MEF or LMs for externally financed projects; coverage around 100 accounts (part of NBC List of Government Accounts at NBC Head Office). NBC numbers for BCG deposits include additional MEF’s and LMs’ accounts outside TSA used for spending cash advances or externally financed projects. GFS team identified 60 outside TSA accounts for externally financed projects totaling 1,315,792 million riels (as of December 31, 2018).
- 7. February 2022 — Reconcile GG data on transactions between MEF and NBC (BOP), explain the reasons for remaining differences
  - Responsible Institutions: GDP, MEF, NBC
  - Implementation Status: Partially Implemented
  - Details: Main reason for discrepancies is difference in exchange rates applied by MEF (GDICDM and GDNT) and NBC. For externally financed projects, NBC receives source data from MEF GDICDM in KHR (irrespective of initial currency), then converts to USD using the average rate for the period. MEF GDNT uses source data converted to KHR at the date of transaction.
- 8. February 2022 — Publish the 2015-2018 consolidated balance sheet (Table 6) for BCG and LGs as part of GFS on the MEF website and report it to the IMF
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: GDP GFS Team has been working with NBC on reconciling GG deposits and other balance sheet positions. Main reasons for discrepancies identified. MEF decision on publishing financial balance sheets remains pending.
- 9. April 2022 — Compile the 2019 consolidated balance sheet (Table 6) for budgetary central government and local governments
  - Responsible Institutions: GDP, MEF
  - Implementation Status: The work has not started yet
- 10. May 2022 — Reconcile GG data on transactions between MEF and NIS (Production account, Income Accounts, Saving), explain the reasons for remaining differences
  - Responsible Institutions: GDP, MEF, NIS
  - Implementation Status: The work has not started yet

### Outcome: Data are compiled and disseminated using the classification of the latest manual/guide
- 11. December 2021 — Use available financial reports of PAEs (in addition to their budget execution tables) as source data for 2020 annual GFS
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Not Implemented
  - Details: Neither 2020 budget execution reports, nor financial reports for PAEs were available by the time of the mission.
- 12. December 2021 — Review GFS Table 2 (Expense) for budgetary central government generated from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP and FMIS Team, MEF
  - Implementation Status: Implemented
  - Details: Review finalized and moved to production phase. For upcoming 6 months, GFS team plans to keep a parallel GFS reporting using the Classification Assistant.
- 13. December 2021 — Review GFS Table 2 (Expense) for local governments generated from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP and FMIS Team, MEF
  - Implementation Status: Implemented
  - Details: Review finalized and moved to production phase. For upcoming 6 months, GFS team plans to keep a parallel GFS reporting using the Classification Assistant.
- 14. January 2022 — Prepare the first draft of technical guidelines on compiling and disseminating the GFSM 2014–based GFS and Quarterly PSDS
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: First draft Technical Compilation and Dissemination Guidelines for GFS and PSDS was shared on last day of mission’s work. Draft includes general overview, advantages of using GFS/PSDS, selected provisions on institutional arrangements, and description of the general government sector. Needs extension with compilation procedures, data sources, derivation and bridge tables, reporting formats, relationship to other datasets, and other technical detail.
- 15. February 2022 — Consider improving the coverage and classification of expenditure on environmental protection by cross-checking with the Cambodia Climate Public Expenditure Review (CPER) database
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partly Implemented
  - Details: GFS coverage goes beyond GG and includes NGOs and climate-related projects outside GG. GFS team compiled environmental protection expenditure for BCG for 2018-2020 under COFOG code 705 and subcodes. Methodology for GFS is based on COFOG (international comparability); CPER methodology is national-based. FMIS-based source data show only two LMs reporting Government Expenditures on Environmental Protection (COFOG 705): Ministry of Environment (MoE) and Ministry of Water Resources and Meteorology (MoWRAM). Largest part falls under COFOG 7056 Environmental protection not elsewhere classified. Additional checks did not provide detail to reallocate 7056 to 7051–7054. Detail of MoWRAM’s programs is absent. Further work needed on programs of the Ministry of Public Works and Transportation related to waste water management (COFOG 7052).
- 16. March 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for budgetary central government from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP, GDICDM, GDNT
  - Implementation Status: The work has not started yet
- 17. March 2022 — Generate and review GFS Table 3 (Transactions in Assets and Liabilities) for local governments from FMIS, make necessary corrections of mapping CoA to GFS in FMIS
  - Responsible Institutions: GDP and GDNT, MEF
  - Implementation Status: The work has not started yet
- 18. June 2022 — Compile Table 7 (Expenditure by Functions of Government) covering expense and net acquisitions of NFAs and report to the IMF as part of annual GFS submission
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: GFS Team focused on mapping national program classification to COFOG with MEF GDB and selected LMs. Key limitations: mapping support programs and local branch administration under “not elsewhere classified (n.e.c.)” leading to high shares (50-80%) of current expense considered as n.e.c. Limited availability and detail of source data for net acquisition of NFA. Guideline on Accounting for Non-current Assets and MEF Public Investment Project Database Management System (both under development) will enhance source data for GFS and PSDS.

### Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public
- 19. December 2021 — Update explanations on the advantages of using GFS in fiscal analysis and the TOFE/GFS derivation table (by adding transactions in financial assets) on the MEF website
  - Responsible Institutions: GDP, MEF
  - Implementation Status: Partially Implemented
  - Details: Financing part has been added to the derivation table. Metadata on the MEF site need additional explanations on differences between TOFE and GFSM 2014-based GFS and the content of the derivation table.
- 20. April 2022 — Report to the Joint World Bank–IMF PSDS database on a quarterly basis
  - Responsible Institutions: GDP and GDICDM, MEF
  - Implementation Status: The work has not started yet
- 21. April 2022 — Improve data coverage of quarterly PSDS to include accounts payable and report to the Joint World Bank–IMF PSDS database
  - Responsible Institutions: GDP and GDICDM, MEF
  - Implementation Status: The work has not started yet
- 22. May 2022 — Review available source data for SOEs and conclude on the possibility of compiling GFS on public sector
  - Responsible Institutions: GDP and GDSPNTR, MEF
  - Implementation Status: The work has not started yet

### Appendix IV — Officials Met During the Mission
- H.E. Cheang Vanarith — Director General, GDP
- Dr. Chhau Somethea — Deputy Director General of the GDP
- Sok Khorn — Director, Statistics and Economic Analysis Department, GDP
- Yorn Sambath — Deputy Director, Statistics and Economic Analysis Department, GDP, MEF
- Khut Chankanika — Young Economist Professional, GDP, MEF
- Prak Tha Achharawadei — Young Economist Professional, GDP, MEF

*Source: Appendix III . Implementation Status of the Previous Mission’s Recommendations (as of January 11, 2022).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1khmea2023001.pdf_