Whole System Approach Improving Public Financial Management around the World CIPFA Presentation – November 2010 Alan Edwards, International Director CIPFA

cipfa.org.uk  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 CIPFA

cipfa.org.uk  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 WSA – what is it? CIPFA thanks DFID for kind support

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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

cipfa.org.uk 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 th March 2011 See Fulfilling our charter to strengthen PFM globally