P ublic E xpenditure M anagement P eer- A ssisted L earning (The “PEMPAL” Project)

1. Public Expenditure Management Peer-Assisted Learning(The “PEMPAL” Project) Presented by Montenegro Assistant Finance Minister Nikola Vukicevic and Rich Bartholomew to ICGFM – May 21, 2007

2. What is ‘PEMPAL’? A peercapacity-building initiative for Europe and Central Asian public finance officers. Members from: • Moldova, Montenegro, Ukraine, Belarus, Kyrgyzstan, Tajikistan, Turkey, Azerbaijan, Armenia, Georgia, Albania, Kosovo, Uzbekistan, and other places

3. What is ‘PEMPAL’? • Professional Officers and Members - not an organization of countries • Coordinated by Slovenia’s Center of Excellence in Finance (CEF) • Supported by World Bank, DFID, GTZ, Swiss, US Treasury Office of Technical Assistance (OTA) and others

4. What is ‘PEMPAL’? Two complementary elements: • Peer learning • Benchmarking (for focus and measurement of results)

5. Why PEMPAL? • Critical subject: Efficient and effective public finance is at the core of economic development and stability. • Universal practice: Public Expenditure Management is an essential, worldwide task. • Effective peer learning: Many members are trying new approaches. They want to learn from each other.

6. PEMPAL Peer Communities 4 Communities of Practice (COP’s) • Treasury/IT Directors • External Auditors • Internal Auditors • Budget (BCOP)

7. Website http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/EXTECAPUBEXPMAN/0,,contentMDK:20846953~pagePK:64168427~piPK:64168435~theSitePK:2306656,00.html (or write PEMPAL in the search blank on the worldbank.org website) • Documents, meeting notes, learning materials, relevant articles, lists of resource persons, etc. • Practitioner dialogues

8. Videoconferences • common themes discussions • leadership meetings • preparation for on site events

9. Benchmarking • To set goals and measure progress: Where Public Finance Management (PFM) practitioners stand, based on common reference points • Occurs naturally by peer interaction

10. Root Benchmarking Tool: The PEFA Indicators • International standard for comparison • Basis for reforms, technical assistance and donor “assignments” - PEFA assessments are completed in 41 countries, e.g.: Kyrgyz Republic, Georgia. Moldova, Albania, Armenia, Croatia, Serbia, Ukraine, Kosovo - Derivative measurements are in development, e.g.: program budget and internal audit progress calibrations

11. PEFA – Public Expenditure Financial Accountability PEFA is a partnership between the World Bank, the European Commission, the UK's Department for International Development, the Swiss State Secretariat for Economic Affairs, the French Ministry of Foreign Affairs, the Royal Norwegian Ministry of Foreign Affairs, the International Monetary Fund and the Strategic Partnership with Africa. U.S. Treasury OTA supports PEFA’s use by peers.

12. External scrutiny and audit DIMENSIONS OF PEFA PFM SYSTEM PERFORMANCE Policy-based budgeting Six critical dimensions of PFM system performance Comprehensiveness and transparency Accounting, recording and reporting Predictability and control in budget execution Budget credibility

13. Go to PEFA. ORG for full list • PI-17 Recording and management of cash balances, debt and guarantees • PI-19 Competition, value for money and controls in procurement • PI-21 Effectiveness of internal audit • PI-24 Quality and timeliness of in-year budget reports • PI-26 Scope, nature and follow-up of external audit • PI-28 Legislative scrutiny of external audit reports

14. PEMPAL Plenary Events • Early 2008 Event in planning stage - a meeting of 4 communities of practice • Warsaw 2005 & 6 Peer presentation focus – highly effective method - element of competition

15. PEMPAL COP Events: • June 2006 Community of Practice (COP) meeting for Treasury Heads (focused on IT implementation issues) • December 2006 Internal Audit COP – leadership group formed • June 2007 External Audit COP organizational meeting

16. Budget COP Event: 2007 Budget COP Organizational Meeting in Vilnius, Lithuania, March 18-22 (combined with OECD Senior Budget Officers Meeting)

17. Vilnius Actions • Election of Budget COP chairs • Presentations of a study visit, and Georgia PEFA results • Creationof the topic agenda • Introduction to other members and their viewpoints

18. Budget COP Topic Agenda • Program Budgeting • MTEF • Finance Ministry relations with spending units • Intergovernmental Finance • User-friendly IT for budgeting

19. Budget Peer Activities 2007 Bilateral country activities: • Montenegro visited Lithuania to study cash management and report to peers • Georgia will host Program Budget Workshop in June • Tajiks and CEF doing Medium Term Expenditure Framework seminars

20. Budget COP 2007 Activities • Bylaws and Mission Statement • Website development and videoconferencing • ICGFM Miami attendance • Istanbul OECD Representation

21. PEMPAL Governance • Steering Committee • “Founding” organizations - WB, DFID, OECD, US Treasury OTA, and • COP Representatives (rotating by election or appointment) • COP Leadership • Individual decisions by disciplines

22. Issues Going Forward • Content: How can we make the BCOP useful to members? • Leadership: How can leaders give the COP’s credibility and permanence? • Links to Permanent Networks for BCOP and other COPs: SBO’s, INTOSAI, EUROSAI, ICGFM, ……?

23. ICGFM and PEMPAL How can we build a relationship? • Web page links? • Regional contact and participation by ICGFM participants in PEMPAL events? • Annual Miami representation?