AN INTRODUCTION Country Systems

Outline 1. What are Country Systems? 2. What does it mean to use country systems? 3. Why does the ‘use of country systems’ matter: what are the benefits and risks? 4. How do external partners use country systems? 5. What are current commitments on country systems?

What are country systems Definition from Development Cooperation: “National arrangements and procedures for public financial management, accounting, auditing, procurement, results frameworks and monitoring” (Paris Declaration Definition, 2005)

Core National Procedures PlanningBudgetTreasuryProcurementAccountingAuditing Accountability & Reporting

Broadening the definition Of country  ‘Whole of Society’ approach to the definition of country systems, including local CSOs and private sector (USAID, 2013) Of systems  Policy cycle from design to implementation, to evaluation or accountability measures (ODI, 2013)

What does it mean to use country systems?

Why does it Matter? Benefits of using country systems Shift focus towards strengthening a country’s own systems instead of parallel ones Reduces duplication and transaction costs Improves ownership over results of financing Ensures the sustainable management of resources in the future Strengthen transparency and domestic accountability over public resources more generally

Risks of using country systems Political: external funders may lose control over strategic objectives Programmatic: results may be too slow Institutional: weaknesses in domestic controls Environmental: poor regulations to mitigate negative effects Fiduciary: funds are not used for intended purposes

Lessons From Health… Source; Don De Savigny & COHRED

What evidence do we have of external partners using country systems? Examples from Development Cooperation:  48% of donor funds Use country PFM systems in 2010 (target 55%)  43% of donor funds recorded in government accounting systems (target 75%)  Fiduciary risk trumps development risk in decision to UCS  But increasingly, country led development of strategies for UCS  Partner country leadership in the decision to Use Country Systems crucial  Use not just linked to specific aid modality  Not an end in itself  Political economy impacts on decision to use country systems

Percentage of ODA managed through country public financial management systems (2005, 2007 and 2010, selected African countries)

International commitments on country systems Busan Partnership document §19: the use of country systems should be the default approach for development co-operation in support of activities managed by the public sector §34: continue to support national climate change policy and planning as an integral part of development countries’ overall national development plans, and ensure that – when appropriate – these measures are financed, delivered and monitored through developing countries’ systems in a transparent manner. New Consensus on Effective Institutions Linking use of country systems to better public service delivery Partner led assessments and evidence on Country Systems Strengthen domestic accountability institutions