Public Financial Management Performance Measurement Framework

1. Public Financial Management Performance Measurement Framework CORE COURSE ON PUBLIC SECTOR GOVERNANCE AND ANTICORRUPTION April 23-26, 2007 Presentation by Nicola Smithers, AFTPR Slides provided by PEFA Secretariat

2. WHAT WE’LL COVER • WHAT IS THE PFM PERFORMANCE MEASUREMENT FRAMEWORK ? • WHERE IS IT BEING USED? • HOW IS IT APPLIED?

3. 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

4. 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

5. COVERAGE OF PFM INDICATORS C. Budget Cycle Policy Based budgeting D. Donor Practices A. PFM Out-turns B. Cross-cutting features External scrutiny and audit Predictability and control in Budget Execution Budget credibility Comprehensiveness and Transparency Accounting, Recording, Reporting

6. Calibration and Scoring • Calibrated onfour point ordinal scale (A, B, C, D) • Requirements for each score explicitly specified • Scoring based on extent of 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

7. Roll-out of PEFA based Assessments

8. Roll-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

9. Geographical distribution

10. Assessment Process Issues

11. Decentralized 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.

12. Government 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

13. Donor 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

14. Quality 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 consider if the product respects the Framework’s standards and methodology • Can also provide advice and guidance

15. THANKSQUESTIONS/DISCUSSION