The PEFA Framework – a tool for monitoring government performance ICGFM – New Developments in Governmental Financial Management Miami, May 19-22, 2008 Frans Ronsholt, Head of PEFA Secretariat

What is the PEFA Framework Global Roll-Out A country case PEFA support to users Content

What is the PEFA program? PEFA Public Expenditure & Financial Accountability Objective: Results orientation in development of PFM systems & harmonization of PFM analytical work Established: in 2001 by seven agencies. Today working in tandem with the 25 members of OECD-DAC Joint Venture on PFM Initial target: creation of a common information pool on PFM performance at country level Tool: the PFM Performance Measurement Framework, developed by PEFA and launched in June 2005

PFM Performance Framework (or PEFA) Framework PFM Performance Indicators: –31 high-level indicators, covering the entire budget management cycle and all PFM subjects. PFM Performance Report: –the context; the evidence; the analytical summary Indicator scoring on a 4-point ordinal scale, based on: –Objective and transparent criteria –Evidence (not perception) –Internationally recognized good PFM practice Assessing systems performance –not policy; not causes in detail

What can countries use the PEFA Framework 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

Implementation modality Country focus and decision –Application of the PEFA Framework is entirely decentralized to the country level (if, when, how to use Framework) Inclusiveness –All stakeholders can be involved and any agency can in principle undertake any role in its implementation; it does not ‘belong’ to any organization Supported by a neutral body - the PEFA Secretariat –offers support to any user of the Framework without representing a particular interest –does not undertake or finance assessments –support is free of charge

PEFA Assessment: roll-out trend

Geographical distribution

PEFA Framework adoption Very good progress – globally –Completed in 72 countries, ongoing in a further 10 Increasingly used for Sub-National gov’t –India, Pakistan, Colombia, Tanzania, Uganda, Ethiopia –Guidelines for SN application issued March 2008 High country coverage in many regions –Africa and Caribbean > 80% of countries –Latin America, Eastern Europe, Asia, Pacific 40-60%

Country case - Mozambique PEFA incorporated in PFM reform monitoring system –baseline 2005, repeat assessment 2007, planned follow-up 2010 Important performance improvements in budget execution –revenue administration, cash management, internal controls Improvements resulted from: –Reforms already well under way in 2005 (e.g. IFMIS/SISTAFE and revenue administration) –Small managerial/admin changes (including quick-wins identified on the basis of 2005 assessment) –New reform initiatives in pay-roll control (identified from the 2005 assessment as an important neglected area of reform)

Country case - Norway Findings of Norad-managed self-assessment presented to OECD- DAC in December 2007 The assessment showed low scores for seven areas of PFM system performance Ministry of Finance reaction: –Weaknesses in procurement practices and follow-up to external audit findings need to be addressed. –Three areas of low scoring not considered priority at present (Multi-year program/sector budgeting, Limited extent of internal audit, no consolidated overview of risks from autonomous agencies and public corporations) –Two indicators scored low but are municipal responsibilities; central government will not get involved.

Services provided by the PEFA Secretariat

Support to assessment managers Support tools on the website ( List of completed, ongoing and planned assessments – updated periodically Links to completed reports, when public Support on request: Advice / Video-conference briefings to country teams on assessment planning List of consultants with PEFA experience Review of terms of reference Quality reviews of draft assessment reports

Support to Assessors Support tools on the website: The Framework (English, French, Spanish, Portuguese, Russian, Arabic) Calculation spreadsheets for some indicators Guidance on information / evidence for assessment Clarifications and additional guidance on indicators Training materials Support on request: Indicator interpretation and other advice to assessors during implementation

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