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    Day1-Sp3 ICGFM May 2014 PhilSinnett en

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    International Consortium on Governmental Financial Management
    The document provides an overview of the progress made in revising the PEFA (Public Expenditure and Financial Accountability) Framework. It discusses the purpose of revising the Framework to incorporate clarifications, update accepted good practices, and improve weaknesses, without changing its overall purpose or undermining comparability over time. It outlines the revision process undertaken, including the formation of task teams, initial proposals received, decisions made by the Steering Committee, and current proposals as of April 2014. These include removing some indicators and dimensions, adding new indicators for fiscal strategy, public investment management, and asset management, and making several other edits. Next steps discussed are further feasibility testing and seeking stakeholder comments before the Steering Committee approves the

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    Day1-Sp3 ICGFM May 2014 PhilSinnett en

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    International Consortium on Governmental Financial Management
    46 views34 pages
    The document provides an overview of the progress made in revising the PEFA (Public Expenditure and Financial Accountability) Framework. It discusses the purpose of revising the Framework to incorporate clarifications, update accepted good practices, and improve weaknesses, without changing its overall purpose or undermining comparability over time. It outlines the revision process undertaken, including the formation of task teams, initial proposals received, decisions made by the Steering Committee, and current proposals as of April 2014. These include removing some indicators and dimensions, adding new indicators for fiscal strategy, public investment management, and asset management, and making several other edits. Next steps discussed are further feasibility testing and seeking stakeholder comments before the Steering Committee approves the

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    The document provides an overview of the progress made in revising the PEFA (Public Expenditure and Financial Accountability) Framework. It discusses the purpose of revising the Framework to incorporate clarifications, update accepted good practices, and improve weaknesses, without changing its overall purpose or undermining comparability over time. It outlines the revision process undertaken, including the formation of task teams, initial proposals received, decisions made by the Steering Committee, and current proposals as of April 2014. These include removing some indicators and dimensions, adding new indicators for fiscal strategy, public investment management, and asset management, and making several other edits. Next steps discussed are further feasibility testing and seeking stakeholder comments before the Steering Committee approves the

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    46 views34 pages

    Day1-Sp3 ICGFM May 2014 PhilSinnett en

    Uploaded by

    International Consortium on Governmental Financial Management
    The document provides an overview of the progress made in revising the PEFA (Public Expenditure and Financial Accountability) Framework. It discusses the purpose of revising the Framework to incorporate clarifications, update accepted good practices, and improve weaknesses, without changing its overall purpose or undermining comparability over time. It outlines the revision process undertaken, including the formation of task teams, initial proposals received, decisions made by the Steering Committee, and current proposals as of April 2014. These include removing some indicators and dimensions, adding new indicators for fiscal strategy, public investment management, and asset management, and making several other edits. Next steps discussed are further feasibility testing and seeking stakeholder comments before the Steering Committee approves the

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    of 34

    Update on the

    PEFA Revision Process


    ICGFM Conference
    19 May, 2014
    PEFA Secretariat

    Content
    Overview of the PEFA Program & Framework

    Purpose of revising the Framework

    Progress to date & next steps
    2
    Content
    Overview of the PEFA Program & Framework

    Purpose of revising the Framework

    Progress to date & next steps
    3
    What is the PEFA Program?
    Aim: contribute to development effectiveness via the
    Strengthened Approach to support PFM Reform (country-
    led; harmonized PFM analytical work; common data pool)
    The Performance Measurement Framework
    the PEFA Framework (Blue Book)
    flagship of the PEFA Program
    launched by 7 Partners in
    June 2005


    Applicable to countries with different traditions & at
    different stages of development
    Strengthened Approach to PFM Reform
    1. A country-led PFM reform program, including a
    strategy & action plan reflecting country priorities;
    implemented through government structures
    2. A donor coordinated program of support, covering
    analytical, technical & financial support
    3. A common information pool, based on a framework
    for measuring performance & monitoring results
    over time i.e. the PFM Performance Measurement
    Framework

    5
    Purpose of the PEFA Framework
    The Framework provides:
    a high level overview of all aspects of a countrys 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
    6
    What can countries use PEFA for?

    Inform PFM reform formulation, priorities
    Monitor results of reform efforts
    Harmonize information needs for external
    agencies around a common assessment tool
    Compare to and learn from peers
    7
    Adoption of the PEFA Framework
    Very good progress globally
    350+ assessments, covering 140+ countries
    Since 2010, mostly Repeat & Sub-National assessments
    High country coverage in many regions
    Africa and Caribbean 90% of countries
    Latin America, Eastern Europe, Asia Pacific 50-80%
    Used in many Middle Income countries
    Upper MICS: e.g. Brazil, Turkey, Belarus, South Africa
    Lower MICS: e.g. India, Kazakhstan, Ukraine, Morocco
    8
    Global Roll-out of the Framework
    9
    Components of the Framework
    A standard set of high level PFM indicators to
    assess performance against 6 critical dimensions
    of a PFM system
    28 government indicators covering all aspects of
    PFM
    3 donor indicators, reflecting donor practices
    influencing the governments PFM systems
    A concise, integrated performance report the
    PRM-PR developed to provide narrative on the
    indicators and draw a summary from the analysis
    10
    Structure of the indicator set
    11
    Standard set of high-level indicators
    A. CREDIBILITY OF THE BUDGET: PFM OUT-TURNS (1- 4)
    B. COMPREHENSIVENESS & TRANSPARENCY (5 - 10)
    C. BUDGET CYCLE
    C1 POLICY-BASED BUDGETING (11 12)
    C2 PREDICTABILITY & CONTROL IN BUDGET EXECUTION (13
    21)
    C3 ACCOUNTING, RECORDING & REPORTING (22 25)
    D. EXTERNAL SCRUTINY & AUDIT (26 28)
    E. INDICATORS OF DONOR PRACTICES (D1 D3)




    12
    Calibration & scoring
    Calibrated on 4 Point Cardinal Scale (A, B, C, D)
    Reflecting internationally accepted good practice
    Determine score by starting from D, go upwards
    Do not score if evidence is insufficient
    Most indicators have 2, 3 or 4 dimensions - each must
    be rated separately
    Aggregate dimension scores for indicator; two methods
    M1 or M2, specified for each indicator
    Intermediate scores (B+, C+, D+) for multi-dimensional
    indicators, where dimensions score differently



    13
    The PFM Performance Report
    An integrated narrative report including:
    Summary assessment of PFM system
    The impact of PFM system performance on budgetary
    outcomes (fiscal discipline; resource allocation; service delivery)
    What is the story line, the number one message? - it may be all
    Minister remembers! (starting point for discussion of reform
    priorities)
    Introduction with the context for the assessment
    Country background information
    Evidence & justification for scoring the indicators
    Country specific issues
    Description of reform progress & factors influencing it
    14
    Content
    Overview of the PEFA Program & Framework

    Purpose of revising the Framework

    Progress to date & next steps
    15
    Purpose of revising the Framework
    Incorporate editorial clarifications
    Update accepted good practices
    Improve areas of weakness

    It is not intended to:
    Change the purpose
    Undermine comparability over time
    16
    Purpose of revising the Framework
    Incorporate editorial clarifications (50%)
    Update accepted good practices (25%)
    Improve areas of weakness (25%)
    Plug gaps?
    It is not intended to:
    Change the purpose
    Undermine comparability over time (although
    relevance is more important!)
    17
    Revision process the plan
    SC approve process (Nov 2012)
    Task Teams formed & begin work
    Checking for internal consistency
    Draft released (Jan 2014)
    Desk & in country testing; Stakeholder comments
    invited (Feb April)
    Revision & refinement, based on comments
    PEFA Partners approve New release (June)
    Live (target, 1 July 2014)
    18
    Content
    Overview of the PEFA Program & Framework

    Purpose of revising the Framework

    Progress to date & next steps
    19
    Progress to SC meeting, June 2013
    Late 2012: Baseline workshops: scope, issues
    Early 2013: 4 Task Teams begin work
    Secretariat eliminated 220+ Clarifications
    EU commissioned 5 Analytical Notes
    Initial proposals from TTs (mixed!): 7 new PIs
    Secretariat complied summary & commentary on
    all proposals: of existing 31 PIs:
    3 or 4 would be removed;
    7 or 8 would require minor amendments;
    20 would require major amendments, including the
    addition of new 18 dimensions
    20
    Steering Committee decisions
    Purpose remains, focused on generally accepted
    good practice = A rating
    C should = basic level of functionality
    Aim for similar number of indicators or less
    Scope: default is CG
    Removal of Donor indicators
    No separate Pis for Resource Rich countries
    Proposals must be tested to see if PEFAerable
    21
    Current proposals: April 2014
    Out
    3 Donor indicators
    PI-4, 12, 13, 20, 23
    Major changes to PIs:
    9, 17 & 26
    Edits to many others

    Current proposals: April 2014
    Out
    3 Donor indicators
    PI-4, 12, 13, 20, 23
    Major changes to PIs:
    9, 17 & 26
    Edits to many others

    In
    3 new PIs
    Credible Fiscal Strategy
    Public Investment Mgt
    Asset Management
    Replacements for 12, 13,
    20, 23
    Plus 14 new dims (now 88
    in total previously 76)
    Structure of the indicator set
    24
    Budget credibility: (1- 4)
    Problems
    Fiscal strategy & macro-forecasting ignored,
    as is Asset management

    Proposals
    New PI for Fiscal Strategy
    New PI for Asset Management

    Comprehensiveness & transparency (5 - 10)
    Problems
    Comprehensiveness - unreported operations
    Budget processes
    Proposals
    Extend coverage & align criteria in 5, 6 & 10
    Unreported operations redesign 7
    Fiscal risks broaden scope & focus on
    management of risks
    Budget processes include participation
    Policy-based budgeting (11 12)
    Problems
    Medium term issues
    Proposals
    Changes to PI-12
    Predict & control in budget exe (13 15)
    Problems
    Piecemeal approach in existing PIs 13, 14, 15
    Limited coverage (tax!)
    Practicality of measurement of tax arrears
    Proposals
    Revamp: separate budgeting/admin/accounting
    Include natural resource revenues

    Predict & control in budget exe (16 21)
    Problems
    Controls are fragmented
    Developments in internal control & internal audit
    Proposals
    Internal control (PI & report narrative)
    Treatment of liabilities
    New PI for Public Investment Management

    Accounting, recording & reporting (22 25)
    Problems
    PI-23: weak link to Service delivery
    Financial statements

    Proposals
    Revamp PI-23: link to Performance Budgeting?
    Financial reports

    External scrutiny & audit (26 28)
    Problems
    Lack of clarity whose performance?
    Not sufficiently generic
    Proposals
    Separate responsibility between Executive &
    Legislature
    Include transparency

    Indicators of donor practices (D1 D3)
    Problems
    Not fit for purpose
    Often not scored
    Proposals
    Remove, but include aspects in PI-1
    Space for new indicators:
    Public Investment Management
    Asset Management
    Next steps
    April & May: Feasibility testing, by Secretariat
    shadowing 3 or 4 planned assessments
    June: Steering Committee requested to release
    for Stakeholder comments
    July, for 3 months (?): Stakeholder comments
    September: Revision & refinement, based on
    comments
    Last months of 2014: final testing
    December: Steering Committee asked to approve
    New release

    33
    Thank you for your attention

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