on Public Financial Management SOP through Local Governance Strengthening Program
The Bureau of Domestic Affairs, Ministry of State is mandated by 6 PNC and by Executive Order No. 452 to post and publish laws and regulations for public viewing, and to raise public awareness through dissemination of all government activities and issues through various media outlets.
Koror, Palau – In a significant step toward enhancing financial transparency and accountability at the state level, the Office of the Public Auditor (OPA), in partnership with the six participating states and the Bureau of Domestic Affairs (BDA), Ministry of State (MOS), successfully conducted a State Validation Activity for the Public Financial Management (PFM) Standard Operating Procedure (SOP) under the Local Governance Strengthening Program (LGSP).
The activity brought together the leadership and key finance staff from the states of Airai, Hatohobei, Kayangel, Ngaraard, Ngatpang, and Sonsorol, demonstrating a shared commitment to strengthening local governance through sound public financial management practices.
Throughout the validation activity, attendees engaged in detailed discussions to review the PFM SOP’s applicability, ensuring the PFM Procedure is not only policy-compliant but also responsive to the operational realities at the state level. The SOP is designed to serve as a procedure for budgeting, cash receipts, expenditure control, financial reporting, and auditing processes in support of stronger public financial governance.
As part of the validation, OPA and MOS formally requested that each participating state adopt the finalized SOP, signalling their commitment to aligning financial procedures with national standards. This adoption represents a crucial step toward scaling up fiscal capacity to institutionalizing good governance practices and achieving consistency across jurisdictions. In addition, state will have the fiscal control measures toward resource mobilizations with future donors.
Through presentations, collaborative discussions, consultations and peer review, the validation process also helped identify state-specific needs and opportunities for capacity support. The SOP, once adopted, will serve as a standardized procurement process for the state governments, promoting improved fiscal transparency, accountability, service delivery and public trust.
OPA, MOS, and BDA expresses its sincere appreciation to all governors, state legislators, delegates, and staff who actively contributed to this critical governance initiative and reiterates its commitment to supporting institutional reforms that strengthen public trust and improve service delivery.