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Whole System Approach Improving Public Financial Management around the World

Understand the Whole System Approach for effective Public Financial Management worldwide. Learn why it is vital, what it advocates, and who it involves. Explore key conclusions and recommended actions for strengthening PFM.

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Whole System Approach Improving Public Financial Management around the World

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  1. Whole System ApproachImproving Public Financial Management around the World CIPFA Presentation – November 2010 Alan Edwards, International Director CIPFA

  2. CIPFA • The Chartered Institute of Public Finance and Accountancy (CIPFA) • The Leading Professional Accountancy Body for public services • Key Influencer in the Development of Public Policy • Running major PFM development programmes around the world

  3. WSA – what is it? • Analytical framework that supports development of effective PFM at country level • A prompt for improvement • An holistic model that complements existing assessment tools • A stimulus for review • New thinking supported by DFID CIPFA thanks DFID for kind support

  4. Why do we think its important? • Sound PFM is fundamental to international development and poverty reduction • Public finance should be conducted in public interest • High and exacting standards are needed to engender the public’s trust • Demonstrable efficiency should be evidenced in use of public resources Supports Paris Aid effectiveness declaration 2005

  5. What does it say? Advocates a whole system approach to PFM reform and improvement Proposes a new definition of PFM – explicitly recognises the importance of demonstrating outcomes Suggests a new reference model – assisting countries to chart current institutional architecture Identifies that an holistic approach is necessary – including a supportive country environment A framework for developing and strengthening PFM globally

  6. What is the paper NOT trying to do? Be prescriptive – improvement is local and must be tailored to characteristics, capacities and priorities of each country Create a new tool to measure PFM – PEFA is a useful tool (we train people on how to use it) and there are many diagnostics like the CIPFA FM Model Criticise current PFM practice and reform programmes CIPFA sees its role as prompting critical analysis not being critical

  7. Why whole system? Recognises the interconnectedness of key players Supports the need for financial accountability, citizen involvement, parliamentary scrutiny and absence of corruption Identifies need for improvement across the system – no one initiative on its own is sufficient Recognises there are checks and balances in every system – the key is to act together to make PFM effective The whole is more than the sum of the parts

  8. Who is included in the whole system? International sponsors Global bodies Regional bodies National bodies Sub national/ sector bodies A clear organisational framework is used to help countries to map their own system

  9. Who is it for? Governments, donors and their advisors Ministry of Finance or Treasury in countries focused on PFM reform Accountancy institutes PFM professionals – who design , implement, operate, review, evaluate PFM All countries whatever their state of development

  10. What are key conclusions? Using money well is business of every manager delivering public services PFM is not just for accountants Need to stimulate system wide improvement Better PEFA is not an objective – better outcomes for citizens and changing lives is Selecting the PFM reform approach depends on local priorities and circumstances Do not forget learning and growing is a key part of improvement Donors should not focus on the short term and immediate fiduciary concerns There is no one route to better PFM

  11. What do we want you to do next? Strengthen PFM – international partners should work together Review your whole system of PFM Identify underperformance eg training providers with low technical skills Find if there is an absence of key players eg an accountancy body with PFM training Develop sustainable PFM plans eg not just short courses In short build a PFM profession

  12. What is CIPFA doing next? Sharing lessons learnt re professionalisation Producing case studies based on our experience Lesotho – use of CIPFA International Certificate and Diploma Tanzania – the World Bank PFM SCDI pilot Mozambique – strengthening the SAI Nigeria – CIPFA/ ICAN twinning and developing the Federal Training Agency Holding a major international conference on PFM trust and accountability in London 15-17th March 2011 See www.cipfa.org.uk/international Fulfilling our charter to strengthen PFM globally

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