3.30 4.15pm Managing For Results In Pfm (Jean Baptiste Sawadogo)


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Management for results has become a focus of international efforts worldwide. Provides a analysis and observations about Management for Results in PFM

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  • Leader One Inc
  • 3.30 4.15pm Managing For Results In Pfm (Jean Baptiste Sawadogo)

    1. 1. ICGFM Winter Conference: Performance. Results. Outcomes. Understanding Impact in Managing Public Finance ‘ Managing for Results’ (MfR) in ‘ Public Financial Management’ (PFM) . December 2-4, 2009, Washington D.C. . Jean-Baptiste Sawadogo President Leader One Inc Tel. +1 613 721 8087; E-mail: [email_address] © 2009 Leader One Inc.
    2. 2. ‘ Managing for Results’ in ‘Public Financial Management’ <ul><li>New ‘experiment’ in Public Sector Policy and Management </li></ul><ul><li>Very limited studies, literature and evidence </li></ul><ul><li>Provide a bird’s view perspective </li></ul><ul><li>Improve understanding of MfR </li></ul><ul><li>Share observation and reflections on the topic </li></ul><ul><li>Stimulate debate on MfR and its potentials for PFM and good governance </li></ul>© 2009 Leader One Inc.
    3. 3. MfR and its Impact in PFM <ul><li>MfR: results first; then resources, then … </li></ul><ul><li>PFM : money first; then processes; then results?? </li></ul><ul><li>MfR: impact mostly on developed country agencies </li></ul><ul><li>MfR can potentially impact developing country PFM </li></ul><ul><li>MfR to likely suffer from the ‘pendulum effect’ </li></ul><ul><li>The impact of PFM: the improved wellbeing and prosperity of citizens: girls, boys, women, men </li></ul>© 2009 Leader One Inc.
    4. 4. Managing for Results (MfR) is a Strategic Quest for Results <ul><li>MfR practiced for millenniums </li></ul><ul><li>Strong military influence </li></ul><ul><li>‘ Managing for Results ’ - the precursor term for ‘ Strategic Management ’ </li></ul><ul><li>MfR: envisioning results, aligning resources and taking action to achieve results </li></ul><ul><li>The private sector uses MfR to create wealth ; </li></ul><ul><li>The public sector can use MfR to deliver results to citizens </li></ul>© 2009 Leader One Inc.
    5. 5. Global MfR Drivers & Milestones <ul><li>Finance is finite AND “Do more with less!” - early 1990s recession </li></ul><ul><li>Finance is not everything </li></ul><ul><ul><li>CIDA’s Strategic Review and Renewal Exercise (1990+) </li></ul></ul><ul><ul><li>The ‘Government Performance and Results Act’ is enacted in the U.S. (1993) </li></ul></ul><ul><ul><li>Results-Based Management (RBM) at CIDA (1993+) </li></ul></ul><ul><ul><li>Office of the Auditor General of Canada Report (1993+1995) </li></ul></ul><ul><ul><li>Aid Effectiveness Principles adopted by DAC-OECD (1996) </li></ul></ul><ul><ul><li>Assessing Aid: a World Bank report (1998) </li></ul></ul><ul><ul><li>Results for Canadians - a Government-wide RBM Policy (2000) </li></ul></ul><ul><ul><li>Many OEDC countries have adopted a results-focus (+ - 2000) </li></ul></ul><ul><ul><li>The Millennium Declaration on the MDGs at the UN (2000) </li></ul></ul><ul><ul><li>‘ Managing for Development Results’ – WB and OECD (2002) </li></ul></ul><ul><ul><li>Paris Declaration on Aid Effectiveness DAC-OECD-led process (2005+) </li></ul></ul><ul><li>Global consensus on the need for a results focused approach </li></ul>© 2009 Leader One Inc.
    6. 6. A New Global Imperative: ‘Managing for Results’ <ul><li>Demands on governments and their agencies to deliver results and be accountable </li></ul><ul><li>Demands on international organizations to “focus on results” </li></ul><ul><li>Demands on private firms to perform: financially and socially </li></ul><ul><li>Requirement for innovative results oriented management approaches </li></ul><ul><li>Increasing demand for Results-Focused PFM </li></ul>© 2009 Leader One Inc.
    7. 7. Performance Review Led to MfR in the Public Sector <ul><li>Performance review : spotlight on “Spending” vs. “Results” </li></ul><ul><li>‘ Performance Audit’: ‘Value for Re$ources’ (VfR) in external audit </li></ul><ul><li>‘ Managing for Results’ is now fuelling ‘Performance Audit’ and ‘Performance Budgeting’ </li></ul><ul><li>Leadership of ‘Public Finance’ functions is needed </li></ul>© 2009 Leader One Inc.
    8. 8. The Role of Monitoring and Evaluation (M&E) Towards MfR <ul><li>M&E: precursor practices towards MfR </li></ul><ul><li>Monitoring during project and program implementation </li></ul><ul><li>Evaluation during and after implementation </li></ul><ul><li>M&E functions were first to promote MfR </li></ul>© 2009 Leader One Inc.
    9. 9. The Role of ‘Performance Audit’ <ul><li>Comprehensive Audit: an early form of Performance Audit </li></ul><ul><li>Performance Audit is: </li></ul><ul><li>“… a systematic, purposeful, organized and objective examination of government activities; … designed to promote accountable government; … includes the examination of economy, efficiency, cost effectiveness and environmental effects of government activities ...” </li></ul><ul><li>“ A focus on performance covers both the benefits accomplished [for citizens] and due process and fairness in the delivery of services”(1) </li></ul><ul><li>Performance Audit calls for performance </li></ul><ul><li>(1) Excerpts adapted from the Performance Audit Manual, Office of the Auditor General of Canada - June 2004; pages 13 and 17) </li></ul>© 2009 Leader One Inc.
    10. 10. Growing Impact of Supreme Audit Institutions On PFM Performance <ul><li>Improving SAIs capacity in Performance Audit </li></ul><ul><li>Improving profile and independence </li></ul><ul><li>Increasing innovative audit standards & specialties </li></ul><ul><li>Increasing interaction with parliaments, civil society, the media and citizens </li></ul><ul><li>Increasing transparency, improved anti-corruption, and increasing accountability </li></ul><ul><li>Ultimately, improving PFM performance - results for citizens </li></ul>© 2009 Leader One Inc.
    11. 11. Performance Budgeting - A First Step Towards MfR in PFM <ul><li>Performance budgeting = Results-Based Budgeting </li></ul><ul><li>Emerged within a decade or so </li></ul><ul><li>Conveys government commitment to performance </li></ul><ul><li>A Public Expenditures Management flavor </li></ul><ul><li>Consists in ‘ informing ’ the ‘ Budget ’ with ‘ Results ’ </li></ul><ul><li>Falls short of being truly ‘ results-focused ’ </li></ul><ul><li>First step towards MfR in PFM for greater Public Sector performance </li></ul>© 2009 Leader One Inc.
    12. 12. What is ‘Managing for Results’? <ul><li>A deliberate, systematic, rigorous pursuit of results </li></ul><ul><li>A way of thinking; of doing business </li></ul><ul><li>Linking of ‘ Re$ources ’ with ‘ Results ’ committed to </li></ul><ul><li>Two “brands” of results-focused Management </li></ul><ul><ul><li>Original: ‘Results-Based Management’ (‘RBM’) 1 - Inputs vs . Results (outputs, outcomes, and impacts) </li></ul></ul><ul><ul><li>Consensus: ‘Managing for Development Results’ (‘MfDR’) 2 </li></ul></ul><ul><li>1 Original “brand”: Canadian International Development Agency (CIDA); 1993+ </li></ul><ul><li>2 Subsequent consensus “brand”: DAC-OECD-led consultative process 2002+ </li></ul>© 2009 Leader One Inc.
    13. 13. ‘ Managing for Results’: A Nine-Point Overview <ul><li>‘ Misconceptions’ </li></ul><ul><li>Principles </li></ul><ul><li>Precise vocabulary </li></ul><ul><li>Logical hierarchy of results </li></ul><ul><li>Tools </li></ul><ul><li>Crosscutting Issues </li></ul><ul><li>Performance Management </li></ul><ul><li>Functional Stakeholders </li></ul><ul><li>‘ Rewards’ </li></ul>© 2009 Leader One Inc.
    14. 14. 1. Top ‘Misconceptions’ <ul><li>‘ Managing for Results’ is ‘Monitoring & Evaluation’ </li></ul><ul><li>Attribution of ‘Results’ is impossible; so, MfR does not work </li></ul><ul><li>The ‘impact’? Don’t bother during project or program implementation. </li></ul>© 2009 Leader One Inc.
    15. 15. 2. Top Principles <ul><li>Partnership/Participation </li></ul><ul><li>Transparency </li></ul><ul><li>Broad application </li></ul>© 2009 Leader One Inc.
    16. 16. 3. Precise Vocabulary <ul><li>‘ Reach’ : the human element of MfR </li></ul><ul><li>‘ Result ’: an expected or actual achievement </li></ul><ul><li>‘ Indicator ’: ONLY a measure of progress or achievement </li></ul><ul><li>‘ Target’ : desired level for an indicator </li></ul><ul><li>‘ Activity ’: NOT a ‘Result’; IS the ‘ doing ’, the action to achieve a result </li></ul>© 2009 Leader One Inc.
    17. 17. 4. Logical hierarchy of results <ul><li>Impact </li></ul><ul><li>Outcomes … </li></ul><ul><li>Outputs … </li></ul><ul><li>N.B.: Activities are not results </li></ul>© 2009 Leader One Inc.
    18. 18. 5. Top Tools <ul><li>The Logical Framework Analysis (LFA) or Logic Model (LM) </li></ul><ul><li>The Performance Measurement Framework (PMF) </li></ul><ul><li>The Implementation Plan - the business plan integrates all the parts of MfR </li></ul>© 2009 Leader One Inc.
    19. 19. 6. Top Crosscutting Issues <ul><li>Gender Equality Mainstreaming : responsiveness to specific issues of girls, boys, women and men </li></ul><ul><li>Sustainable Environment Mainstreaming: regulatory compliance and proactive developmental sustainability </li></ul><ul><li>Knowledge Management & Sharing; echoes a 4 th RBM principle: ‘Learning by Doing’ </li></ul>© 2009 Leader One Inc.
    20. 20. 7. Performance Management <ul><li>Performance Management is a subset of MfR </li></ul><ul><li>Expected results planned ahead </li></ul><ul><li>Indicators selected and baseline data collected </li></ul><ul><li>Performance management framework </li></ul><ul><li>Implementation: activities; budgets; processes; reports; risk mgt., work plans; etc. </li></ul><ul><li>Continuous monitoring and analysis of results, activities, risks, lessons learned </li></ul><ul><li>Continuous improvement towards results </li></ul>© 2009 Leader One Inc.
    21. 21. 8. Top Functional Stakeholders <ul><li>Managerial functions - corporate and line </li></ul><ul><li>Performance management/review functions (Monitoring, Reporting and Evaluation, MfR) </li></ul><ul><li>Financial functions (Budgeting, Accounting; Control; Procurement; Internal Audit) </li></ul><ul><li>Necessity for functional coordinated contribution towards to results; while managing risk </li></ul>© 2009 Leader One Inc.
    22. 22. 9. Top ‘Rewards’ of MfR <ul><li>Results for citizens - girls, boys, women and men </li></ul><ul><li>Strong focus: elimination of wasteful ‘activities’ </li></ul><ul><li>‘ Guaranteed’ ‘Value for Re$ources’: right results at right efficiency </li></ul><ul><li>Capacity to demonstrate relevance and communicate performance - ‘Results’ vs. ‘Re$ources’ </li></ul><ul><li>‘ Rewards’: recognition; more funding; winning competitive funding </li></ul>© 2009 Leader One Inc.
    23. 23. MfR in PFM - Where Are We? <ul><li>Application of MfR in PFM </li></ul><ul><li>Developing country experiences </li></ul><ul><li>Developed country experiences </li></ul><ul><li>Selected country experiences </li></ul><ul><li>Key challenges of MfR in PFM </li></ul>© 2009 Leader One Inc.
    24. 24. Application of MfR in PFM <ul><li>Public Expenditures Management mentality </li></ul><ul><li>Supremacy of the budget process </li></ul><ul><li>Performance/Results-Based Budgeting mostly </li></ul><ul><li>Some ‘Results for citizens’ reform: deliberate whole-of-government approach; but… </li></ul><ul><li>Strong agency/sector/functional orientation rather than true ‘Results for Citizens’ focus </li></ul>© 2009 Leader One Inc.
    25. 25. MfR in PFM: Developing Countries <ul><li>MfR is a by-product of development aid: </li></ul><ul><ul><li>Applied to aid projects; then programs </li></ul></ul><ul><ul><li>Application in ‘Program-based approaches’; progressively in PRSPs </li></ul></ul><ul><li>Focus on Public Expenditures Management and anticorruption </li></ul><ul><li>Emerging whole-of-government approaches </li></ul>© 2009 Leader One Inc.
    26. 26. MfR in PFM: Developed Countries <ul><li>MfR is a by-product of austerity and crisis management </li></ul><ul><li>Agency/departmental performance management </li></ul><ul><li>Whole-of-government approaches </li></ul><ul><li>Improvement of regulatory and policy frameworks </li></ul><ul><li>Implementation through the budget process </li></ul><ul><li>The pendulum effect after every crisis hardening vs. easing of rules </li></ul><ul><li>Dilemma of stimulus packages: quick results vs. fear of risks </li></ul>© 2009 Leader One Inc.
    27. 27. MfR in PFM - Selected Experiences <ul><li>Canada </li></ul><ul><li>China </li></ul><ul><li>France </li></ul><ul><li>Sweden </li></ul><ul><li>United States of America </li></ul>© 2009 Leader One Inc.
    28. 28. MfR in PFM: Key Challenges <ul><li>‘ Expenditure’ mentality; supremacy of the ‘Budget’ </li></ul><ul><li>Risk-averse culture: across-the-board measures </li></ul><ul><li>Complexity in government/self preserving structures </li></ul><ul><li>Divided governance: Political; Legislative; Public Service; Judiciary; Decentralized regimes… </li></ul><ul><li>Short-to-medium term electoral cycle vision </li></ul><ul><li>Increased discourse but still confusion and insufficient practice </li></ul><ul><li>Difficulty in moving beyond activities and outputs </li></ul>© 2009 Leader One Inc.
    29. 29. MfR in PFM: Where Are We Going? <ul><li>MfR is increasing in awareness and appeal </li></ul><ul><li>Performance budgeting is increasing in popularity </li></ul><ul><li>Citizens will keep pushing for results </li></ul><ul><li>Do we have a choice to practice MfR or not? </li></ul><ul><li>Yes - BUT… </li></ul><ul><li>We must master the art and the science for MfR in PFM </li></ul>© 2009 Leader One Inc.
    30. 30. MfR in PFM: How to Get There? <ul><li>Strong MfR leadership at the top </li></ul><ul><li>Long term orderly MfR implementation (culture change takes time) </li></ul><ul><li>Long-term results-focused country vision </li></ul><ul><li>Comprehensive country results framework </li></ul><ul><li>Results-focused country strategic documents </li></ul><ul><li>Results-friendly risk-mitigation practices </li></ul>© 2009 Leader One Inc.
    31. 31. MfR in PFM: A Final Word <ul><li>‘ Managing for Results’ is here to stay - citizens will keep pushing for results </li></ul><ul><li>Private sector uses MfR; creates enormous wealth </li></ul><ul><li>Private sector flexibility: the budget is a tool </li></ul><ul><li>Public sector rigidity: the budget is the law! </li></ul><ul><li>The Public Sector can and must master MfR to deliver sustainable wellbeing and prosperity - for citizens: girls, boys, women and men… </li></ul><ul><li>If Public Finance professionals catch up with MfR and lead for performance; results; outcome; impact </li></ul><ul><li>To your results-focused leadership! </li></ul>© 2009 Leader One Inc.
    32. 32. For Additional Information: <ul><li>OECD-World Bank: Managing for Development Results: www.mfdr.org </li></ul><ul><li>Canadian International Development Agency: RBM info: http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2H#intro </li></ul><ul><li>Office of the Auditor General of Canada; Performance Audit Methodology: http://www.oag-bvg.gc.ca/internet/English/oag-bvg_e_859.html </li></ul><ul><li>Leader One Inc: e-mail to: [email_address] </li></ul>© 2009 Leader One Inc.