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CPIA 2006

CPIA 2006. Q13: Quality of Budgetary and Financial Management BBL Ivor Beazley/Steve Knack, 6 December 2006. Objectives. Raise awareness of CPIA Q13 and FM’s role Improve the quality of Q13 ratings Provide information on process and resources Address issues and concerns. Context.

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CPIA 2006

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  1. CPIA 2006 Q13: Quality of Budgetary and Financial Management BBL Ivor Beazley/Steve Knack, 6 December 2006

  2. Objectives • Raise awareness of CPIA Q13 and FM’s role • Improve the quality of Q13 ratings • Provide information on process and resources • Address issues and concerns

  3. Context • Country Policy and Institutional Assessment (CPIA) • Overall CPIA scores help determine shares of IDA allocation given to each country • Annual scoring process • 16 indicators, No 13 and 16 cover financial management and accountability • Disclosure for IDA countries (scores only)

  4. How to rate Q13 - principles • Ratings are based on actual policies and performance, not on promises or intentions • Improvement is measured against benchmark criteria, • Score will not change on the basis that Government has started a reform initiative • Objective criteria have been clearly set out for assessing performance on Q13

  5. Data Requirements • Substantial work is involved to collect data. • Q 13 assessment comprises: • 3 sub-questions. Each sub-questions is made up of a number of “dimensions” or lower level question • = total of 13 separate pieces of data • 3 Sub-questions deal with at the quality of: a) Budget process b) Control over expenditure c) Accounting, reporting and auditing

  6. Scoring system • Countries are scored from 1- 6 on each sub-question. For Q13 there is a two stage aggregation process: • Stage 1 • Rate each dimension on the 1-6 scale • Work out the average of the dimensions, rounding up or down to the nearest half point • Stage 2 • Simple average of the 3 sub-questions (rounded to the nearest half point) gives overall Q13 score.

  7. Example:Sub-question a) “budget link to policy priorities” • This sub-question covers 5 issues/dimensions: • (i) budget-policy link; • (ii) forward look in budget; • (iii) consultation with spending ministries in budget formulation; • (iv) budget classification; and • (v) budget comprehensiveness

  8. Tools • A simple worksheet is available to help score each dimension on a consistent basis • A write up template is provided to set out the write up on each sub-question

  9. Worksheet for sub-question a) Budget links to policy priorities

  10. Timetable • Benchmarking exercise complete by end Nov • Mid-Jan deadline for regional submissions • Scores finalized by OPCS end March

  11. Issues to be aware of • “Known unknowns”, for example on, extent of operations outside the budget and arrears : • PREM or FM, or both? • Upward pressure on ratings • Not a reward for good intentions • Need demonstrable progress

  12. Issues - Quality of write ups • Insufficient evidence in may write-ups • Not addressing the specific dimensions which are used to measure performance • 8 out of 20 benchmark countries initially rated “un-graded” on basis of poor write ups • Particular weakness on points b) and c)

  13. Information sources • Not just CFAA • Internal sources • CFAA, IFA etc. • PE(I)R • Recent DPL and PRSC documents (updates) • External sources • PEFA Assessments (EC, DFID etc.) • IMF Fiscal Transparency ROSC (IMF Website) • IMF - PRSC Joint Staff Advisory Notes, Art IV • Direct from Government (MoF)

  14. Issues going forward • Consistency with PEFA indicators (PEFA Secretariat will do a study) • Consistency over time – changes in basis of rating from year to year • Decentralization • Procurement?

  15. Anchor Review Role • OPCFM and PRMPS review ratings for: • Quality of write up, including evidential support • Cross check with other available information • Carefully scrutiny of all changes in ratings • Do a comparison across countries

  16. Anchor is also there to provide support and advice • Good luck!

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