Public Financial Management Performance Measurement Framework
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Transcript of Public Financial Management Performance Measurement Framework
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Slide 1
Public Financial Management Performance Measurement
Framework
Public Financial Management Performance Measurement
Framework
June 5, 2007
Presentation by Nicola Smithers, AFTPRSlides provided by PEFA Secretariat
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Slide 2
WHAT WE’LL COVER WHAT WE’LL COVER
# WHAT IS THE PFM PERFORMANCE MEASUREMENT FRAMEWORK ?
# AN EXAMPLE
# WHERE AND HOW IS IT APPLIED?
# CASE OF ZAMBIA
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Slide 3
CONTEXT - The Strengthened Approach to Supporting PFM Reform
CONTEXT - 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 assessment and monitoring framework– the PEFA* PFM Performance Measurement Framework*Public Expenditure and Financial Accountability Program
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Slide 4
The link between the different elements of the Strengthened Approach to supporting PFM
reforms
The link between the different elements of the Strengthened Approach to supporting PFM
reforms
Government/Donor
Policy Dialogue
Government PFM Reform Strategy, Action Plan and Results
Coordinated program of
analytical/TA/funding support
Donor Country Assistance Strategy
and knowledge requirement
PFM Performance
report
PFM indicators
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Slide 5
PFM Performance Measurement Framework
PFM Performance Measurement Framework
• A standard set of high level PFM indicators to assess performance– 28 government performance indicators– 3 donor indicators, reflecting donor practices
influencing the government’s PFM
• A concise, integrated report – the PFM Performance Report – Standard content and format– provides the narrative to support the indicator
assessments (the evidence)– draws a summary from the analysis
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Slide 6
Budget credibility
A. PFM Out-turns
External scrutiny and
audit
Accounting, Recording, Reporting
Predictability and
control in Budget
Execution
Policy Based
budgeting
C. Budget Cycle D. Donor Practices
Comprehensiveness and Transparency
B. Cross-cutting features
COVERAGE OF PFM INDICATORS COVERAGE OF PFM INDICATORS
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Slide 7
Content of Indicator SetContent of Indicator Set
A. PFM Out-turnsCredibility of the budget Indicators 1- 4
Deviations from aggregate budgeted expenditure and revenue as well as expenditure composition. Level of expenditure arrears.
B. Key Cross-cutting issuesComprehensiveness and transparency Indicators 5-10
Coverage of budget classification, budget documentation, reporting on extra-budgetary operations, inter-governmental fiscal relations, fiscal risk oversight and public access to information.
C. Budget Cyclei. Policy-based budgeting Indicators 11-12
Annual budget preparation process, multi-year perspective in fiscal planning, expenditure policy and budgeting
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Slide 8
Content of Indicator Set (cont’d)Content of Indicator Set (cont’d)
C. Budget Cycleii. Predictability & control in budget execution Indicators 13-21
Revenue administration, predictability in availability of funds, cash balances, debt & guarantee management, payroll controls, procurement, internal controls and internal audit
iii. Accounting, recording and reporting Indicators 22-25
Accounts reconciliation, reporting on resources at service outlet level, in-year budget execution reports, financial statements
iv. External scrutiny and audit Indicators 26-28
Scope, nature and follow-up on external audit; legislative scrutiny of annual budget law and external audit reports
D. Donor Practices Indicators D1- D3
Predictability of direct budget support; donor information for budgeting and reporting; use of national procedures
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Slide 9
Calibration and ScoringCalibration and Scoring
• Calibrated on four point ordinal scale (A, B, C, D)– Requirements for each score explicitly specified
• Scoring based on internationally recognized ‘Good Practice’
• Indicators have 1, 2, 3 or 4 dimensions– in total 74 dimensions
– to provide detailed information & transparency of score
– each dimension must be rated separately
• Aggregation only from dimensions to indicator
• Two scoring methodologies
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Slide 10
Example Example
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Slide 11
Applying the FrameworkApplying the Framework
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Slide 12
Roll-out of PFM AssessmentsRoll-out of PFM Assessments
• PFM Performance Measurement Framework launched June 2005
• Assessment Status as at March 2007– 45 substantially completed i.e. draft/final report– 24 on-going but report not yet issued– 27 agreed with government but not started– Roll-out rate: a steady 2-3 new assessments per
month
• Outlook for mid 2008– 75-80 countries covered– 8-10 repeat assessments
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Slide 13
Geographical distribution Geographical distribution
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Slide 14
Decentralized ProcessDecentralized Process
• Application of the PEFA Framework to be decided at country level. Decisions to be made:– If and Why ?– When ?– How ?
• Recommended by international organizations as good practice (e.g. OECD-DAC, ComSec)
• No supra-agency mandates or responsibilities. Each country and organization decides its interest in a PEFA assessment and ability to contribute.
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Slide 15
Government InvolvementGovernment Involvement
Government’s role Self-assessment (with external validation) Joint assessment (joint team) Collaboration with donor-led assessment
Determined by interest and capacity What are the benefits to government? Government staff may need training
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Slide 16
Donor CollaborationDonor Collaboration
A donor reference group is essential to ensure that needs of all parties are addressed to ensure common acceptance of findings
The reference group to agree internally and with the government on: Diagnostic packaging Resources for assessment work Stages and timing of the assessment work Quality assurance arrangements
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Slide 17
Implement PFM reforms
Recommend PFM reform measures
High level performance
overview
Diagnostic Packaging – Coverage of PFM Performance Report
Investigate underlying
causes
Formulate PFM reform program
Identify main PFM
weaknesses
Recommend PFM reform measures
PFM-PR
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Slide 18
Quality AssuranceQuality Assurance
• Terms of Reference & Draft Report to be Q.A.’d
• Government and donor reference group– Should ensure that information is used correctly
and reflects the situation in the country• Donor specific arrangements to be respected
e.g. World Bank peer review mechanism• The PEFA Secretariat recommended as a peer
reviewer– Will assess whether the product respects the
Framework’s standards and methodology– Can also provide advice and guidance
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Slide 19
Zambia case Zambia case