1. Moving Forward PFM reforms
In Kyrgyz Republic
On behalf of the
DFID and World Bank
Bishkek, September 26, 2005

2. Background
GoK expresses strong voice on harmonizing donor support in content and process
Consensus created among donors in Kyrgyz to work together on PFM reform
PEFA assessment, Public Expenditure Reviews, and GSAC has already paved a platform toward a more strengthened approach to PFM reforms in Kyrgyz Republic

3. The New Approach to PFM Reform
A country-led agenda – including a PFM reform strategy and action plan
A donor coordinated program of support – coordinated, coherent, multi-year program of PFM work that supports and is aligned with the government’s PFM strategy
A shared information pool – a common framework and information set for measuring and monitoring results over time

4. A country-led PFM reform strategy and action plan
The government-led reform program
Home-grown, country specific agenda.
Good practices suggest (i) sequence and priorities of reform activities and measures, (ii) holistic view of the PFM system, institutions and processes.
Informed by policy dialogue with donors.
Planning and undertaking diagnostic work over time.
Designing a prioritized and sequenced reform program.
Implementing reforms
Monitoring of progress over time.

5. 2. A donor coordinated program of support
What we don’t want
Government reform strategy influenced by ad-hoc donors requests encourages a fragmented approach to PFM reforms
The Strengthened Approach
A government-led reform strategy, supported by a coordinated program of work by donors, facilitates an integrated and sequenced reform process.
Donor 2
Donor 3
Government-led PFM Reform Strategy
External audit
Procurement
Donor 4
Budget preparation
Coordinated program of support by donors
Treasury reforms
Donor 1

6. 3. Monitoring of progress of PFM reforms
Monitoring of progress enables decision-makers in government and donor agencies to assess the success and difficulties of the reform process and make decisions accordingly.
Reform measures/activities (training, new law, etc.).
Implemented institutional and system changes (IFMS, new budget calendar, etc.).
Changes in the performance of the PFM system over the years.
-> requires a framework that ensures:
Consistency over time;
Precise, objective measurement of progress;
Systematic coverage of the budget cycle.

7. Success Factors policy coherence
Coordinated policy agendas, consistent with government strategy or priorities
Sector policy work that consistent with another sector Policy coherence
improved financial management
certainty in timing of donor approvals, funding availability
funding sync with the government’s budget timetable
More funding channelled through treasury system
better information sharing
Consistent approaches to providing financial/project information to government
Alternative and flexible funding arrangements
programmatic or basket approaches for external assistance funding
Better organization of missions
Coordinated (joint if possible) missions
Sensible timing of missions; e.g., avoid busy periods of budgeting cycle