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Session 5C Measuring Public Financial Management Performance - Charles Seibert
1. CReCER
Managua, October 29-31, 2012
Measuring PFM Performance
The PEFA program and tool
Charles Seibert, PEFA Secretariat
2. Founded in 2001 as a partnership
PEFA Partners
• World Bank
• European Commission
• International Monetary
•UK Department for International
Development
• French Ministry of Foreign Affairs
• Norwegian Ministry of Foreign Affairs
• Swiss State Secretariat for Economic
Affairs.
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. The Strengthened Approach in reform of PFM
Ownership : a country-led A coordinated program of A shared information pool on
agenda reflecting country support from donors and public financial management
priorities and implemented international finance institutions based on a common
through 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. 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. 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. Purpose of the PEFA Framework
The 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. 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
10. The PEFA Secretariat
Location, structure and operations
Funded by the 7 partners and located in Wash DC (World Bank main building). A Steering
Committee comprising the 7 agencies manages the Program while the PEFA Secretariat
implements the PEFA related activities
Main tasks
1. Training
2. 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. Activities of the PEFA Secretariat
Custodian of the PEFA Framework
Development and maintenance of the Framework
Issues guidance notes and clarifications
Support PFM research
Availability of PEFA indicators database
Dissemination
Presentations; PFM blogs; PEFA Newsflashes; sharing PEFA assessment reports
through website
Monitoring
Semi-annual updates of PEFA assessment status list
Periodic monitoring reports
Ad hoc surveys
Promotes 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. 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. 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. Thank You
Stay in touch with PEFA:
Visit the PEFA website: www.pefa.org
Send questions to the Secretariat: services@pefa.org