IMF | CCAMTAC

Developing Modern HR Policies in Performance Management and Training (November 13 – 24, 2023).
This CCAMTAC-funded in-person CD assignment assisted the Georgia Revenue Service (GRS) in developing modern human resource (HR) policies in performance management and training and development. The expert worked with the GRS Human Resources Management and Development Department and had meetings with the Analytical Department and Tax and Customs Methodology Department. The expert reviewed the existing corporate and HR planning and performance management policies, guidelines and practices, other documentation related to practices in implementing the HR policies, guidelines on using the existing electronic tools, annual plans and reports. The visit focused on the implementation of all HR policies. 

Tax Administration IT and Data Security Review (July 10 – 18, 2023).

At the request of the Revenue Service of Georgia (GRS), an in-person assignment provided advice to GRS on strengthening processes for improving information technology and data security as a component of the tax administration’s enterprise risk management (ERM) system. A 2021 Tax Administration Diagnostic Assessment Tool (TADAT) review highlighted shortcomings for the GRS administration including weaknesses in ERM and business continuity planning. Advice was aimed to reduce the  

Tax Administration (February 6 – 21, 2023)

An in-person mission to evaluate progress of tax reform in the Revenue Service of Georgia (GRS) was conducted by the IMF Fiscal Affairs Department (FAD) and CCAMTAC. Areas of compliance risk management (CRM), Large Taxpayers’ Office (LTO), debt management, filing compliance, tax audit and risk analysis were the focus of the mission. The team also assessed options to adopt a more strategic approach to revenue mobilization efforts using the Medium-Term Revenue Strategy (MTRS) framework. Workshops with relevant GRS staff were delivered on: (i) practical tax audit issues; (ii) measuring and analyzing audit efficiency and developing building blocks for an Audit Intervention Model (AIM); (iii) the main principles of CRM and benefits of cross departmental cooperation in the GRS.

Improving Tax Compliance Risk Analysis (September 14 – 23, 2022).

This CD visit took place at the request of the Revenue Service of Georgia. The purpose was to provide hands-on support to their Analytical Department on improving methods and approaches to analysis of compliance risks. Reviews of progress against a now initiated risk analysis action plan, and of a data structure prototype for the Large Taxpayer Office’s risk assessment model were conducted. As part of the process of reviewing a risk assessment model for other taxpayers, a data analysis model was developed, and its use was elaborated on during several workshop sessions.

Improving Tax Compliance Risk Analysis (June 27 – 28, 2022)

A remote capacity development (CD) assignment took place at the request of the Georgia Revenue Service (GRS). Meetings were organized with managers and technical experts from the Analytical Department of GRS. The purpose of this assignment was to review and provide guidance on further implementation of the action plan for strengthening compliance risk analysis founded on advice by the short-term expert on an earlier visit (April 1-10, 2022). CCAMTAC also supported the planning of a follow-up visit with preliminary timing, scope, and data requirements

Strengthening Analysis of Tax Compliance (April 1–10, 2022)

Building on earlier IMF engagement with CCAMTAC support, the purpose of the assignment was to assist the Georgia Revenue Service (GRS) in improving its tax compliance risk analysis. The short-term expert and GRS team identified the required improvements across all stages of the risk analysis process and prepared an Action Plan. In a risk analysis process, all the steps need to be institutionalized and supported by the documentation standards, internal instructions, tools, and cooperation between different functional areas, especially between the auditors and analysts. Further technical assistance (TA) is planned to support the implementation of this Action Plan.

Risk management, audit, and verification (September 27 – November 30, 2021)

An “on-demand” capacity development was assisting the Revenue Service of Georgia in implementing earlier advice from a multi-year Revenue Mobilization Thematic Fund’s project and supporting further reform efforts as articulated under the current project, with funding from the European Commission's Directorate-General for Neighborhood and Enlargement Negotiations and CCAMTAC. The focus was on large taxpayer management (including the use of Key Performance Indicators (KPI)), management of tax arrears, and the optimization of the value-added tax (VAT) refunds process.

IPSAS Strategy and Action Plan (November 20 – December 1, 2023).
The objective of the mission was to support the authorities to develop a draft of International Public Sector Accounting Standard (IPSAS) strategy and action plan. This should be in line with the 2023-26 Public Financial Management (PFM) reform strategy, including a transition plan for IT system development to support the consolidated financial reporting process. The mission delivered three key outputs: (i) a strategy; (ii) an action plan with timebound milestones and responsible implementers, and (iii) a template for costing the strategy and action plan. 

Enhancing the fiscal risk statement and long- term fiscal sustainability analysis (October 16 – November 3, 2023).
CCAMTAC supported an IMF-FAD led mission, which was primarily funded by the Swiss State Secretariat for Economic Affairs (SECO). Hands on working sessions were conducted for the Fiscal Risks Management Department and the Macroeconomic Department of the Ministry of Finance to enhance the analysis of, and disclosure in the fiscal risk statement (FRS), of long-term fiscal sustainability (LTFS) analysis. The main mission outputs were: (i) an updated chapter including charts and tables; (ii) an updated long term fiscal analysis Excel tool; (iii) a fiscal risk matrix to record climate specific risk; (iv) a set of power point presentations that were delivered at the workshop, and; (v) a detailed action plan for deepening the analysis in the chapter over the medium term.

State-Owned Enterprise Governance Peer Learning (September 25 – October 6, 2023).

The mission provided peer learning to the Ministry of Finance (MoF) and Ministry of Economy and Sustainable Development (MOESD) on the State-Owned Enterprise (SOE) dual ownership model adopted in New Zealand and supported the development of an SOE governance index, which will be piloted on the six major SOEs as part of the broader SOE risk management framework.

Follow-up on Public Investment Management Assessment Update (November 10 – 25, 2022).

The virtual mission followed up on the July 2022 Public Investment Management Assessment (PIMA) by assessing the draft revisions to the Public Investment Management (PIM) Guidelines proposed by the Ministry of Finance, which were related to structural benchmarks under Georgia’s Stand-By Arrangement (SBA) with the Fund. The mission contributed to a strengthening of the PIM framework which should improve the efficiency of public investment, including in respect of resilience to climate change.

Fiscal Risks Statements (September 5 – 16, 2022).

The follow-up mission assisted the Ministry of Finance in finalizing the enhanced Fiscal Risks Statement (FRS) to accompany the draft 2023 state budget. The ministry requested a further mission, coordinated with additional support from the Asian Development Bank (ADB), to finalize the 2022 FRS. The mission experts prepared and updated: (i) the climate change fiscal risks quantification, including ageing-related spending in the long-term baseline; (ii) the narrative for the climate change chapter of the FRS; and (iii) the pandemic fiscal risks assessment.

Fiscal Risks in Energy Sector (July 25 – October 21, 2022).

The mission team assisted the Ministry of Finance in improving the analysis of fiscal risks arising from infrastructure contracts in the energy sector and on the reform of the current energy sector support schemes based on power purchase agreement (PPAs) with the objective of controlling their fiscal risks.

Accounting Reform (July 15 – August 1, 2022).

The purpose of the HQ-led mission was to assist the Treasury Service of the Ministry of Finance in further improvement of the public sector accounting framework and strengthening of the capacity of the authorities in application of the most important parts of the relevant International Public Sector Accounting Standards (IPSASs). The mission team: i) reviewed the financial statements of the local governments prepared for the first time in line with the most important parts of the most relevant IPSASs; ii) addressed outstanding issues with the revision of the accounting framework; iii) addressed questions on the application of the new framework at the central and local levels, including on reworking the chart of accounts.

Public Investment Management Assessment (PIMA) Update and Climate PIMA (C-PIMA) (July 5-18, 2022)

CCAMTAC contributed to this mission, which was conducted mostly in-person, to update the 2018 PIMA and apply the new C-PIMA module. The PIMA update benchmarked the progress that has been made since 2018 and reinforced the impetus to make further progress, and the C-PIMA introduced the benchmarks that the authorities will endeavor to meet in order to meet the challenges of climate change related to public investment and infrastructure.

Fiscal Risks – State-Owned Enterprises Reform (May 2, 2022 – March 31, 2023)

This remote mission, which is expected to span much of the rest of the fiscal year, completed two tasks during the period: (i) advice to the authorities on the formulation of a Prior Action of their new IMF-supported macroeconomic program relating to the financial governance of SOEs; and (ii) advice to the authorities on an end-July structural benchmark of the program relating to the SOE Reform Strategy, in particular the ownership arrangements.

Preparing Fiscal Risks Statement (April 1–29, 2022)

The purpose of this remote mission was to assist the Ministry of Finance in preparation of an enhanced FRS that should accompany the draft 2023 state budget. The CD support included: (i) enhancing the quantified assessment in the previous FRS using Fiscal Affairs Department’s (FAD) pandemic fiscal risks model; (ii) quantifying the assessment of climate change fiscal risks, including those of natural disasters; (iii) enhancing the previous FRS’s disclosures of public debt and PPP fiscal risks with a view to meeting the advance practice requirements of the Fiscal Transparency Code; and (iv) assessing the fiscal risks of legal claims.

Updating the Balance Sheet and Quantifying Climate Change Fiscal Risks (November 17 - December 15, 2021)

A headquarter-led FAD mission updated the public sector balance sheet (PSBS) that was first estimated by a FAD mission in 2019. The coverage and quality of the data have improved significantly, particularly by the efforts of the authorities in improving the disclosures in their annual fiscal risks statements and in producing their first consolidated financial statements based on key International Public Sector Accounting Standards. At the request of the Minister of Finance, the mission updated the PSBS estimates that were first compiled for 2018, updating them to identify the impact of the pandemic. The IMF experts supported to produce the first quantification of climate change fiscal risks for Georgia, building on the qualitative assessment of Georgia’s climate change fiscal risks disclosed in the authorities’ 2021 Fiscal Risks Statement.

Further Developing Fiscal Risks Management, (September 9 – October 29, 2021).

The technical assistance (TA) was delivered to support the Ministry of Finance of Georgia in the preparation of an enhanced Fiscal Risks Statement (FRS) to accompany the draft 2022 state budget. The main priority was to expand the FRS accompanying the 2022 budget, to include analysis of pandemic and climate change fiscal risks. The activities supporting these efforts included the application of the FAD’s COVID-19 Fiscal Stress Test Module, as well as expanding disclosures in the other areas and restructuring the FRS’s presentation to ensure consistency with the IMF’s Fiscal Transparency Code’s principles and make it more accessible to the public.

Counterparty Credit Risk (October 30 – November 4, 2023).
This workshop provided support for the National Bank of Georgia (NBG) for its rollout of Counterparty Credit Risk (CCR) regulations and the surrounding supervisory approach that NBG is considering to rollout in the near to medium-term. The Mission had in-depth discussions about the regulatory approach, which aimed to contribute to the formation of the supervisory policy. Additional discussions focused on and provided support to the supervisors for the assessment of CCR frameworks in banks from a supervisory perspective. The mission was held at the NBGs’ supervision headquarters in Tbilisi.

Interest rate risk in the banking book (IRRBB) (August 21 – 25, 2023).
A workshop for the National Bank of Georgia (NBG) covered key concepts in IRRBB including Basel Principles and expectations from banks and supervisors. Additional focus, among others, was placed on key concepts of economic value and earning-based measures underlying technical elements/calculations as well as the components of the standardized approach, discussion on proportionality in relation to the standardized method and Internal measurement approaches, relationship between interest rates, yield curve and impact on EVE and NII under stressed scenarios as well as treatment of non-maturity deposits, prepayment risk and early redemption risks.

IFRS9: Phase III - PII Capital Add-Ons and CET-1 Additional Capital STX (April 3 – 7, 2023)

 An in-person mission was conducted to provide support for the National Bank of Georgia (NBG) for its IFRS9 rollout. The mission included a one-day follow-up discussion with covering the ECL components with the remaining four days dedicated to the Pillar II capital adjustments and CET-1 additional capital calculations. Specific topics included Pillar II internal control and accounting risks, scoring framework within Pillar II as well as IRFS9 reporting frameworks. Some 20 plus staff joined the sessions from Supervision including the staff from specialized risk division.

IFRS9 Model and Components (November 17 – 25, 2022).

The purpose of this mission was to support the National Bank in the effective implementation of the International Financial Reporting Standard (IFRS9). The mission aimed to provide relevant training to the supervisors for the practical calculations for IFRS9 Model and its essential Expected Credit Loss Modeling (ECL) components. Topics included specific areas of focus, which were determined following the scoping mission conducted in June 2022 and the ensuing discussions with authorities. Highly technical discussions shed light on ECL and relevant calculations of ECL components.

Georgia: Enhancing Supervisory Decision-Making Process (October 24 – November 4, 2022).

The purpose of this mission was to support the National Bank of Georgia in its efforts to enhance its Supervisory Decision-Making Process. The mission reviewed the decision-making process and organizational hierarchy in the central bank and made recommendations to enhance the supervisory decision-making process.

Operational and Cyber Risk (May 23 – June 15, 2022)

The technical assistance (TA) mission supported the National Bank of Georgia (NBG) in its efforts to enhance the cyber resilience of the financial system. The NBG was assisted –as requested– by holding a series of workshops and training sessions for financial supervisors addressing (i) topical cybersecurity issues; (ii) critical infrastructure supervision; (iii) cyber crisis exercise planning and execution; (iv) risk management of cloud computing; (v) incorporating cyber risk scenarios in financial stress tests (“cyber stress testing”), and (vi) tackling IT system complexity from a supervisory perspective. In addition, the mission team participated in a meeting organized by NBG for stakeholders in the financial sector and deliver a keynote presentation on topical cybersecurity issues.

Large Exposures (March 31–April 6, 2022).

The purpose of this remote mission was to provide support to the National Bank of Georgia for the effective implementation of Large Exposures regulations, which the central bank rolled out effective January 2022. The new requirements consider the international standards and include the definition of connected parties and the use of supervisory discretion while determining large exposures. The discussions with authorities included the treatment of large exposures and concentrations considering the new regulatory framework and the international practice regarding management of excess concentrations and exposures, where relevant. The mission focused on different types of concentrations in banks in light of the existing regulations and shared practical examples in an open forum/workshop format.

Implementing IFRS9 (January 18 – February 3, 2022)

The National Bank of Georgia (NBG), the main financial supervisor responsible for the supervision of commercial banks, as well as other financial services providers and intermediaries in Georgia, is in the process of transitioning its regulatory reporting and accounting to the International Financial Reporting Standards (IFRS). To support the NBG, a scoping mission was conducted to assess the specific needs in relation to this transition, including (1) the data availability, (2) current supervisory approach towards the assessment of the asset classification and provisioning, (3) potential role of the IFRS 9 parameters and outputs in stress testing/assessment of Pillar 2 capital, and (4) divergences in IFRS9 ECL models across the banking sector. 

Peer-to-Peer Engagement on Monetary Policy Implementation (November 13 – 17, 2023).
CCAMTAC jointly with the National Bank of Georgia (NBG) held a 5-day professional attachment for central banks of Uzbekistan and Kazakhstan at NBG in Tbilisi, Georgia. The aim of the event was to support central banks in enhancing monetary policy implementation and peer-learning. Three experts from the National Bank of Kazakhstan (NBK), four experts from the Central Bank of Uzbekistan (CBU), two experts from the Republican Stock Exchange of Uzbekistan and six officials from the NBG participated in the event. The participants discussed practical aspects of monetary policy implementation: monetary operations, liquidity management and forecasting, FX interventions and FX market functioning, FX code of conduct, monetary policy transmission, and etc. The NBG demonstrated the trading system, settlement and collateral systems. The participants also monitored in live mode the actual securities auctions, and refinancing operations.

GFS / PSDS Compilation (January 16 – 27, 2023).

The main task of this joint CCAMTAC and D4D mission was to further support the Ministry of Finance in expanding the coverage of fiscal reporting by including state owned enterprises (SOEs) which operate on a non-market basis. The mission followed on the TA work conducted in 2019, 2021, and 2022, that were devoted to the sectorization of SOEs, compilation of GFS for non-market SOEs, and related institutional arrangements. To this end the mission assisted the authorities to compile GFS on a cash and accrual basis for non-market SOEs for 2021 (statement of operations and balance sheet) for seventeen large SOEs covering around 90 percent of all non-market SOEs in terms of the annual turnover. The compilation was based on the approach introduced by the 2019 TA mission and demonstrated how to bridge SOEs’ data from financial statements into the GFS framework, and how to consolidate them within the general government sector.

Enhancing GFS/PSDS (January 10 – 21, 2022)

The mission followed the work of previous IMF technical assistance missions assisting the authorities in sustainable compilation of GFS for non-market SOEs, which will be consolidated with general government GFS. The mission discussed the progress made with respect to establishing the appropriate institutional arrangements necessary for obtaining sound source data for such compilation. The mission also assisted the authorities with establishing a medium-term work plan for further improvements in GFS and PSDS, which should be transmitted to CCAMTAC in the coming weeks. 

National Accounts (February 6 – 17, 2023).

A remote TA mission assisted the National Statistics Office of Georgia in improving the accuracy of quarterly national accounts (QNA) and the monthly indicator of economic growth (MIEG). Improved methods for compiling volume measures of some QNA aggregates were introduced and the annual overlap technique in chain-linking was applied. Quarterly GDP time series since 2010 were recompiled and are expected to be disseminated in November 2023. The accuracy of MIEG was improved too, bringing it closer to the methods used in the QNA.

Developing CPI Scanner Data (November 28 – December 2, 2022).

The purpose of the remote mission was to assist the National Statistics Office of Georgia (Geostat) with continuing its modernization of the consumer price index (CPI) using scanner data. This new "big data" source gives access to a much broader continuum of products than classical sampling, thus improving inflation measurement in the country. The IMF expert supported the Geostat team with training on scanner data index methods for the CPI, guidance on compiling CPIs on this basis, analyzing the fitness of thus derived indexes for dissemination, and identifying areas for further improvement.

High-Frequency Indicators (July 11 – 15, 2022)

National Statistics Office of Georgia (GEOSTAT) was supported in developing a monthly indicator of economic growth with improved accuracy. The mission reviewed the implementation of recommendations given earlier in November 2021 and followed up on the progress of compiling revised quarterly national accounts (QNA) time series. The expert also assisted GEOSTAT in compiling a monthly indicator of economic growth with improved source data and compilation methods and reviewed the accuracy of revised quarterly GDP time series.

Strengthening Real Sector National Accounts (November 15 – 26, 2021)

The main topics addressed during the TA mission included improving the accuracy of QNA and the monthly rapid indicator of economic growth. The annual overlap technique in chain-linking the QNA was introduced and time series from 2010 were recompiled. As a result, the annual and quarterly GDP growth rates and volume measures in monetary terms are now fully consistent. The accuracy of the monthly indicator of economic growth was reviewed and recommendations were provided to improve its quality. Work on improving the monthly indicator of economic activity should continue in line with the action plan.

Price Statistics (October 4 - 8, 2021)

The mission assisted the National Statistics Office of Georgia with continuing its modernization of the consumer price index (CPI) by developing scanner data. The mission addressed the loading, inspection, and processing of the raw data files, and the mapping of products to a national breakdown of the Classification of Individual Consumption According to Purpose 1999. 

Price Statistics (July 19-23, 2021)

A remote CCAMTAC technical assistance mission assisted the National Statistics Office of Georgia (Geostat) with continuing its modernization of the consumer price index (CPI) using scanner data. The mission provided hands-on training by live coding the loading, inspection, and processing of the raw files as received from the supermarket chains.