Yemen: Methodology for preparing the new public financial management action plan


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Yemen: Methodology for preparing the new public financial management action plan

  1. 1. GOVERNMENT – DEVELOPMENT PARTNERS PFM GROUP COORDINATION MEETING SANA’A, AUGUST 28TH 2013 J E A N - M A R C L E P A I N E U P F M S P E C I A L I S T J L E P A I N @ Y A H O O . F R W W W . S L I D E S H A R E . N E T / J E A N M A R C L E P A I N / Methodology for Preparing the New PFM Action Plan
  2. 2. 1. The New Action Plan within the Context of PFM Reforms
  3. 3. Why preparing a new PFM Action Plan?  Last Action Plan covering 2005-2008 never updated since.  Absence of strategic direction in PFM Reforms since 2008 and changes in the environment.  Lack of integration and common strategy between PFM stakeholders (MOF, MOPIC, MOLA, etc.).  Fragmented donor assistance not aligned on Government’s priorities.  Lack of investment in large PFM projects.
  4. 4. Why the Action Plan is strategically Important  The political stability of the country requires new economic policies which cannot be implemented without efficient PFM mechanisms.  Restoration of macroeconomic stability requires sound fiscal policy that cannot be put in place without strengthening revenue collection and an adequate.  Resolution of the liquidity crisis cannot be achieved only through external assistance. It require important structural PFM reform and improvement in budget execution procedures.
  5. 5. What are the issues that needs to be addressed?  Budget credibility and realism  Revenue mobilisation and revenue management(taxes + customs)  Integration of the Economic Entities Budget with the General Budget  Coordination of investment planning with the recurrent budget  Alignment of budget formulation on Government’s economic priorities;  Budget execution  Fiscal decentralisation
  6. 6. 2. Strategic Planning
  7. 7. Guiding Principles  Base reform agenda on well identified priorities linked to specific outcomes.  Introduce reforms in a sequenced order taking a medium term approach  Take time to formulate a comprehensive PFM strategy  Used and integrated approach associating all PFM partners.
  8. 8. Platform 1 Platform 2 Platform 3 Platform 4Example of reform sequencing and Platform Strategy Enables focus on what is done with money A credible budget delivering a reliable and predictable resource to budget managers Improved internal control to hold managers accountable Improved linkage of priorities and service targets to budget planning and implementation Improved linkage of priorities and service targets to budget planning and implementation Broad Activities • Integration of budget (recurrent &capital budgets) • Strengthen macro and revenue forecasting • Streamline spending processes Broad Activities • Re-design budgeting classification system • Initial design of FMIS for core business processes • Define internal audit function Broad Activities •Re-design budget cycle (e.g. MTEF) • Pilot program based budgeting & budget analysis • Further fiscal decentralisation Enables a basis for accountability Broad Activities • Full design of FMIS • Develop IT management strategy • Initial design Enables more accountability for performance management
  9. 9. Recommended Approach Reforms can be groups in 3 to 4 ‘blocks’ or ‘platforms’: 1. Budget credibility and macroeconomic stability 2. Accountability and transparency 3. Streamlining of budget execution 4. Fiscal decentralisation
  10. 10. Harmonization Project  Use the Harmonization Project as an essential component that can become the core of the Action Plan.  Expend the Harmonization Project to cover budget execution;  Take into consideration the issue of fiscal decentralisation
  11. 11. Two Phase Strategy 1. Emergency Phase 2. Consolidation Phase
  12. 12. Emergency Phase  2-3 year phase  Focus: budget credibility and budget execution  Objective: support to the implementation of the Transitional Programme for Stabilization and Development  Priorities: measures addressing pressing issues such as increasing revenue and formulating sustainable fiscal policy  Public Expenditure Review and development of a comprehensive PFM strategy
  13. 13. Consolidation Phase  2-3 year phase  At this stage does not need to be detailed.  Should focus on reform sequencing and sound medium term strategy  More emphasis on accountability and transparency  Will be reformulated based on the result of the Public Expenditure Review.
  14. 14. 3. Planning Management
  15. 15. Three Levels of Planning 1. Intergovernmental Coordination Committee 2. Ministry level planning Committee 3. Working Groups
  16. 16. Intergovernmental Coordination Two types of responsibilities:  Coordination of ministerial planning committees and consolidation of the Plan  Monitoring and coordination of crosscutting issues such as the Harmonization Plan, capacity building and fiscal decentralisation
  17. 17. Responsibility of the Intergovernmental Coordination  Consolidation of the Plan  Ensuring that output and outcome are in line with PFM strategy and Government’s priorities  Ensuring realism of the plan in terms (a) of time frame, (b) objectives, (c) coverage, and (d) technical assistance  Identifying deliverables, verification means, key milestone and monitoring indicators  Finalizing management structure
  18. 18. Ministry Level Planning Committees are responsible for:  Defining sector priorities  Identifying sub-sector components to be assigned to working groups,  Supervising working groups activities  Integrating sub-sector plans in the sector plan  Sequencing activities  Identifying outputs and outcomes, verification means, milestone, and supervision indicators
  19. 19. Working Groups Working groups are responsible for:  Conducting need assessment and defining sub-sector activities;  Planning the activities of a sub-sector or addressing crosscutting issues (budget integration, fiscal decentralisation, etc.);  Identifying technical assistance needs
  20. 20. Implementation Mechanism An implementation mechanism needs to be designed. It is likely to include: 1. An Intergovernmental supervision committee 2. Steering committees at ministry level 3. Ad hoc committees for crosscutting issues (harmonization plan, fiscal decentralisation) 4. A PFM Reform Secretariat
  21. 21. PFM Reform Secretariat International experience shows that the existence of a strong PFM Secretariat is a key success factor of PFM reforms. Responsibilities of a PFM secretariat are:  Monitoring activities of sector and steering committees, and more especially outcomes, deliverables, milestones and achievement indicators;  Preparing regular reports for the Intergovernmental Committee and for the donors;  Identifying bottleneck and implementation issues at and early stage and formulating recommendation for solving them;  Coordinating technical assistance.
  22. 22. 4. The Way Forward
  23. 23. Action Plan Preparation Time Table  September to October 2013, preparation of the first draft of the Action Plan;  Beginning of November first Government – Donor Round Table for presentation of the Draft Action Plan based on a need assessment, and first comments by the donors;  November- December 2013 finalization of the Action Plan based on donor comments;  December, second Government – Donor Round Table for presentation of the final Action Plan;  January 2014 approval of the Action Plan by the Cabinet, appointment of the Intergovernmental Coordination Committee by the Cabinet and appointment by ministries and agencies of their Steering Committees.
  24. 24. First Round Table Date: Between November 18 and November 28 Format: A one day conference Objectives:  Reviewing proposals from ministries and departments and establishing principles for prioritization of actions  Giving donors a first view of the main challenges  Discussing technical assistance needs based on a need assessment
  25. 25. Second Round Table Date: Mid-December Format: A one day conference Objectives:  Reaching agreement on the overall PFM strategy  Finalizing the Action Plan with well identified deciding key milestones and monitoring indicators  Reviewing sector by sector proposed actions, prioritization, time schedule, outcomes and verification criteria  Calibration of technical assistance requests  Defining final steps for having the plan formally approved by the Government and endorsed by the donor community.  Agreeing on the Management Structure of the PFM Reform Action Plan including the Steering Committee and possibly a Secretariat.  Agreeing on a way forward to prepare a detail PFM Assessment for the Action Plan’s phase 2.
  26. 26. THANKS