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Session 5C Measuring Public Financial Management Performance - Charles Seibert


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Session 5C Measuring Public Financial Management Performance - Charles Seibert

  1. 1. CReCERManagua, October 29-31, 2012Measuring PFM PerformanceThe PEFA program and tool Charles Seibert, PEFA Secretariat
  2. 2. Founded in 2001 as a partnershipPEFA Partners• World Bank• European Commission• International Monetary•UK Department for InternationalDevelopment• French Ministry of Foreign Affairs• Norwegian Ministry of Foreign Affairs• Swiss State Secretariat for EconomicAffairs.
  3. 3. A multi-donor initiative in PFM: The Approach Promote results-orientation in PFM development work Harmonize the support to PFM systems provided to governments by international development agencies Build on the principles of the Strengthened Approach to Supporting PFM Reform, as an approach to aid effectiveness in the area of PFM (Paris Declaration, Accra Agenda for Action, Busan Declaration) Work closely with OECD Development Assistance Committee Task Force on PFM for collaboration with a wider group of stakeholders
  4. 4. The Strengthened Approach in reform of PFMOwnership : a country-led A coordinated program of A shared information pool onagenda reflecting country support from donors and public financial managementpriorities and implemented international finance institutions based on a commonthrough government structures assessment framework The PEFA Performance Measurement Framework C. Budget Cycle C(1) D. Donor Practices Policy-based budgeting (D-1-3) (PI-11-12) A. PFM Outturns C(4) C(2) B. Predictability External Comprehensiveness Budget scrutiny and control and Transparency Credibility and audit in budget (PI-5-10) (PI-1-4) (PI-26-28) Execution (PI-13-21) C(3) Accounting, Recording and Reporting (PI-22-25)
  5. 5. Components of the PEFA Framework A standard set of high level PFM performance indicators (PIs)  31 performance indicators (each 1 to 4 sub-indicators or dimensions, 76 dim. In total )  scored on a 4-grade ordinal scale (A, B, C, D)  grouped in six critical aspects of PFM  a compromise between simplicity and comprehensiveness A standard report format  the PFM Performance Report (PFM-PR)  to provide country background, evidence on the indicators and an integrated, analytical summary
  6. 6. The PEFA Framework PEFA in PFM Reform Cycle Objectives To determine if a country has the tools to deliver three main budgetary outcomes: Implement PFM reforms • aggregate fiscal discipline • strategic resource allocation High level performance Formulate PFM • efficient use of resources for reform program overview service delivery PEFA Assessment• Measures progress through a Identify main set of standardized indicators Recommend PFM PFM reform measures weaknesses• Builds capacity for PFM reform through diagnostic and periodic progress monitoring Investigate• Facilitates donors’ decision on underlying causes use of country systems• Promotes joint country analytical work• Fosters stakeholder coordination around one common assessment tool
  7. 7. Purpose of the PEFA FrameworkThe Framework provides:• a high level overview of all aspects of a country’s PFM systems performance (revenue, expenditure, financial assets/liabilities, procurement): are tools in place to deliver 3 main budgetary outcomes (aggregate fiscal discipline; strategic resource allocation; efficient service delivery)?It does not provide an assessment of:• underlying causes for good or poor performance i.e. capacity factors• government fiscal & financial policies
  8. 8. Global adoption by partner countries and donors Credibility in coverage: 285 assessments prepared in 135 countries including 28 government-led and 103 Sub National assessments: PEFA Framework used by governments in most countries to take control of their PFM reform agendas Effectiveness: adopted globally by 83% of Low Income Countries (LIC) and 89% of Middle Income Countries (MIC) at the baseline level and more than 96 repeat assessments at a completed or planned stage. PEFA experience by income group Country focus and decision 18% 89% 88% 83%  Application entirely decentralized to 100% the country level (if, when, how to 90% use Framework) 80% The Framework does not ‘belong’ to % covered 70%  Not Covered 60% 50% ; any single organization 40% Planned/Ongoing  Applicable for central government 30% 20% level as well as sub-national level 10% Draft  PEFA data provides opportunity for 0% HIC UMIC LMIC LIC peer learning and research Income Group
  9. 9. PEFA assessments map
  10. 10. The PEFA Secretariat Location, structure and operationsFunded by the 7 partners and located in Wash DC (World Bank main building). A SteeringCommittee comprising the 7 agencies manages the Program while the PEFA Secretariatimplements the PEFA related activities Main tasks1. Training2. Quality review of: a) PEFA Concept Notes and Terms of Reference; b) PEFA field assessments;3. Methodological studies and overall guidance on PEFA issues Role: neutral body  supporting / advising any user of the Framework  does not represent a particular interest  does not undertake or finance assessments  support services are free of charge
  11. 11. Activities of the PEFA SecretariatCustodian of the PEFA Framework Development and maintenance of the Framework Issues guidance notes and clarificationsSupport PFM research Availability of PEFA indicators databaseDissemination Presentations; PFM blogs; PEFA Newsflashes; sharing PEFA assessment reports through websiteMonitoring Semi-annual updates of PEFA assessment status list Periodic monitoring reports Ad hoc surveysPromotes harmonization in assessment of PFM systems Working with OECD-DAC Task Force on PFM Stocktaking study of PFM diagnostic instruments Supports developers of ‘drill-down’ assessment tools
  12. 12. What is next? External evaluation of program (2011): “Resoundingly positive”• created credible framework for PFM assessment• assessments comparable over time & constitute common information pool on PFM performance• 95% LICs, 80% MICs (& 8% HICs!) have used it• used by practically all major DPs working with PFM systems (design, monitoring, or FRA)• adopted by many governments to inform design of PFM reforms, monitor progress over time & assess quality of PFM at sub-national levels Phase IV priorities• Using assessments for elaboration of PFM reform programs: guidance being developed• Framework review & update, to reflect newly accepted ‘good practices’ (but recognizing need for time series to allow progress tracking)• encouraging use of the database compiled from completed assessments• initiatives to broaden voice of stakeholders & improve transparency of program management• strengthening QA arrangements: ‘PEFA Check’
  13. 13. Framework review & update Target for new release = 1 July 2014 Purpose of revising the Framework• Incorporate editorial ‘clarifications’• Update ‘good practices’• Improve areas of weakness It is not intended to:• Change the purpose• Undermine comparability over time
  14. 14. Thank YouStay in touch with PEFA: Visit the PEFA website: Send questions to the Secretariat: