Workshop Session I: Public Expenditure Financial Accountability (PEFA) Assessment

The PEFA Initiative & PFM Performance Measurement Framework ICGFM Conference Miami – May 21, 2009 PEFA Secretariat

The PEFA Program
PFM Performance Measurement Framework
Global Roll-Out of the Framework
PEFA support to users
Content

PFM Diagnostics in the 1990s
Large amount of PFM work undertaken,
mostly by development agencies
a good deal of knowledge generated.
LIMITATIONS
Duplication and lack of coordination led to heavy burden on partner governments.
Not possible to demonstrate if PFM performance is improving over time in a country
Monitoring of PFM reforms focused on inputs and activities , rather than performance

PEFA Public Expenditure & Financial Accountability
Objective: Results orientation in development of PFM systems & harmonization of PFM analytical work
Established: in 2001 by seven agencies. Today working in tandem with the 25 members of OECD-DAC Joint Venture on PFM
Strategy: Strengthened Approach to support PFM reform, aligned with Paris Declaration
What is the PEFA program?

The Strengthened Approach to Supporting PFM Reform
A country-led PFM reform program
including a strategy and action plan reflecting country priorities; implemented through government structures
A donor coordinated program of support
covering analytical, technical and financial support
A common information pool
based on a framework for measuring performance and monitoring results over time
i.e. the PEFA PFM Performance Measurement Framework

Implications of the Strengthened Approach?
Focus on improvements in country PFM systems:
Emphasizing country leadership and ownership for result
Common information pool , fewer duplicative diagnostics
Joint donor work in country , reducing transaction costs and creating consistency in analysis
Less emphasis on diagnostics, more on capacity-building
With performance measurement framework, more learning of what works and why

The PEFA Program
Content

COMPONENTS OF THE FRAMEWORK
A standard set of high level PFM indicators (including revenue, expenditure, procurement, financial assets/ liabilities)
28 government performance indicators, covering all aspects of PFM
3 donor indicators, reflecting donor practices influencing the government’s PFM systems
A concise, integrated report – the PFM performance report developed to provide narrative on the indicators and to draw a summary from the analysis

FOCUS OF THE FRAMEWORK
Focused on central government operations
but also applicable at sub-national level, special guidelines available
Links to other parts of the public sector
Sub-National Governments
Public Enterprises,
to the extent these have implications for Central Government

Budget credibility
PFM Out-turns
PI-1 to 4
External scrutiny and audit Accounting, Recording, Reporting Predictability and control in Budget Execution Policy Based budgeting C. Budget Cycle PI-11 to 28 D. Donor Practices D-1 to 3 Comprehensiveness and Transparency STRUCTURE OF THE PERFORMANCE INDICATOR SET B. Cross-cutting features PI-5 to 10

CALIBRATION AND SCORING
Calibrated on a Four Point Cardinal Scale (A, B, C, D)
Reflecting internationally accepted ‘good practice’
Determine score by starting from ‘D’ going upwards
Do not score if evidence is insufficient
Arrow ▲
Can indicate an improvement not reflected in a change of the indicator score

INDICATOR DIMENSIONS
Most indicators have 2, 3 or 4 dimensions
Each dimension must be rated separately
In total 76 dimension ratings to be determined
Aggregating dimension scores to indicators; two methods M1 or M2, as specified for each indicator
Intermediate scores (B+, C+, D+) for multi-dimensional indicators, where dimensions score differently

Content of the PFM Performance Report
An integrated narrative report including:
Introduction with the context for the assessment
Country background information
Evidence and justification for scoring the indicators
Country specific issues
Description of reform progress and factors influencing it
Summary assessment of PFM system impact – bringing the analysis together

Strengths of the PEFA Framework
Rigorous/transparent framework for consistent and objective assessment – fixed content, rating methodology, international standards/accepted good practice
Provides a high level overview of all aspects of PFM systems performance – cost-effective
Provides a focus for PFM reform dialogue and subsequent analysis of selected subjects
Allows tracking of performance changes over time
Widely applicable to countries at different levels of development

Limitations of the PEFA Framework
The Framework does NOT provide:
An assessment of underlying causes for good or poor performance i.e. the institutional, organizational and human resource capacity factors
An assessment of public fiscal and financial policies
Full details for each PFM topic (refer to specialized drill-down indicator sets)
Risk of inappropriate application of the Framework – e.g. tick box approach; lacking evidence

The PEFA Program
Content

Implementation modality
Country focus and decision
Application of the PEFA Framework is entirely decentralized to the country level (if, when, how to use Framework)
Inclusiveness
All stakeholders can be involved and any agency can in principle undertake any role in its implementation; it does not ‘belong’ to any organization
Supported by a neutral body - the PEFA Secretariat
offers support to any user of the Framework without representing a particular interest
does not undertake or finance assessments
support is free of charge

Important Steps of a Typical Process 0. Agree the intention to undertake a PEFA based assessment 1. Agree purpose, scope and stakeholder roles 2. Prepare TOR 3. Mobilize assessment team 4. Introduction workshop for stakeholders 5. Review of existing information 6. Inception Report 7. Main field work 8. 1 st Draft Report 9. Quality Review 10. Supplementary field work 11. Draft Final Report 12. Presentation seminar 13. Final report 14. Use of the report for reform dialogue

Evolution of Number of Assessments

PEFA Assessments Map

Very good progress – globally
By February 2009: Completed in 95 countries, ongoing in a further 8, repeat assessments emerging
Increasingly used for Sub-National government
India, Pakistan, Iraq, Brazil, Colombia, Tanzania, Uganda, Ethiopia, Nigeria, Senegal, Switzerland
Guidelines for SN application issued March 2008
High country coverage in many regions
Africa and Caribbean 85-90% of countries
Latin America, Eastern Europe, Asia, Pacific 45-65%
Wide stakeholder involvement
About 25 donor agencies involved (leading, financing reference group)
World Bank and EC taking the lead in 85% of all assessments
Government leadership/self-assessment increasing, but not yet the norm
PEFA Framework adoption

Publication of Reports
Common information pool – facilitated by publication
Publicized by the leading organization – usually on a website
Hyperlinks placed on the PEFA website – for easy access to all public reports
As at April 2009, 52 reports publicly available (out of 77 finalized)

The PEFA Program
Content

New Focus: Support to the use of PEFA reports for
Tracking of performance changes over time
Prioritization and sequencing of PFM reforms
Peer learning
Utilization by stakeholders beyond central finance agencies and donors
… . and enhancing country ownership / donor collaboration for assessments & subsequent reform formulation / implementation
Other objectives will continue as under Phase II:
Support to quality assurance - training, advice, guidance on good practice, peer review and technical maintenance of the Framework = core services of the Secretariat
Monitoring of roll-out & quality ; impact assessment
Expansion of country coverage, espec. MICs and HICs
PEFA Phase III 2009-2011

Support tools on the website ( www.pefa.org ):
List of completed, ongoing and planned assessments – updated periodically
Links to completed reports, when public
Support on request:
Advice / Video-conference briefings to country teams on assessment planning
List of consultants with PEFA experience
Review of terms of reference
Quality reviews of draft assessment reports
Support to assessment managers

Support tools on the website:
The Framework ( English, French, Spanish, Portuguese, Russian, Arabic )
Calculation spreadsheets for some indicators
Guidance on information / evidence for assessment
Clarifications and additional guidance on indicators
Training materials
Support on request:
Indicator interpretation and other advice to assessors during implementation
Support to Assessors

Visit our website: www.pefa.org
Send us questions: [email_address]
Get on our news distribution list: Send us your name and email address
Stay in touch with PEFA

Thank you for your attention

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Workshop Session I: Public Expenditure Financial Accountability (PEFA) Assessment

by icgfmconference on May 13, 2009

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Workshop Session I: Public Expenditure Financial Accountability (PEFA) Assessment — Presentation Transcript