1. The Issues of Budgetary Reform Unit 3. PFM Reform – Change Management Module 3.2. Preparing and managing a reform programme

2. Day 1: General presentation of PFM reform Day 2 : PFM sub-systems and prioritization amongst them Day 3: Change management – Reform sequencing issues – Case study Course outline 2

3. 3 Module 3.2: objectives –Examine some core issues related to the preparation and management of a PFM reform

4. Module 3.1 Outline Reform strategy and programme Reform management organisation 4

5. 5 Document “Reform Stratgy” Relatively brief document by the Council of Ministers –Used as a programme for implementation –Detailed examination of the PFM reform programme –Puts forward an institutional framework –Identifies considerable risk factors (legal framework, procurement, viability, etc.) –Outlines a multi-annual expenditure programme –Puts forward a proposal for the deployment of activities, a sequencing and a agenda for implementation –Defines the monitoring an assessment modalities –Puts forward a proposal for funding modalities –Defines the responsibilities for the different components –Serves as a basis for an agreement on the approach amongst the different concerned parties

6. The reform programme (1) 6 Defines the global objective of the PF reform programme Establishes the list of of all the reform components Defines the reform sequencing Defines, for each component: its main objective, its purpose, the main institution in charge of it and its link with other components Prepares an agenda for carrying out each component, with a summary of results, inputs, activities, stages requiring monitoring, and a calendar for implementation Estimates the expenditure previsions, identifies the administrative budget lines of the national budget from which the funding is drawn (including external financing)

7. 7 Outlines the modalities for monitoring and assessment Defines the single financing instrument Outlines the rules of financial management and procurement Outlines the institutional dispositions – including a high- level steering group, a technical direction committee, and work groups The reform programme (2)

8. Risks in carrying out a PFM reform programme 8 Absence of political will Risks due to the contents of the reform Misevaluated technical and capacity constraints Risks due to the reform management institutional dispositions Inadequate management structure No long-term support of the cooperating partners Inefficient monitoring and assessment framework Incomplete or inefficient legal and regulatory framework Risks due to implementation Delays regarding to the activities agenda (eg. Delays regarding procurement, delays in funding) Inadequate implementation agenda

9. Risk mitigation and management 9 Strong and sustained engagement of political actors and cooperating partners Monitor capacity building Adequate and efficient management structures Coordinated, flexible and unique funding mechanism, undergoing control and report publishing Coordinated approach of the legal and regulatory framework Effective and efficient procurement system Adequate agenda A particular attention must be drawn on the management of the link between different components, implementation and sequencing of the agenda Coordination o the PFM reform programme with other reforms concerning the public sector

10. 10 Budgetary and financial management of the PFM reform programme Preparation of the expenditure programme (5 to 7 years) as well as the modalities of the forecasted cash flows Preparation of annual budgets (work programmes) with explicit result objectives, indicating funding sources Preparation of procurement and trimestral allocation plans Distinguish: Recurring and non-recurring expenditures Direct and indirect costs Preparing monthly expenditure declarations Preparing annual monitoring and audit reports Submitting annually controlled statements

11. 11 Monitoring of inputs Monitoring of activities Monitoring of the number of trained employees Monitoring of preparation and finalisation of legal and regulatory texts Monitoring of reports publishing PFM outputs indicators PEFA indicators, if necessary Quality indicators Indicators regarding the issues that are not tackled by PEFA (eg. stock account state, physical assets records) OECD/CAD indicators concerning procurement Monitoring and assessment

12. Conditions of viability 12 Integration within the national budget Management rooted in the public administration structures If possible, permanent positions in the Reform Secretary Retaining in office trained personnel Regularly informing all parties of the evolution of progress

13. Module 3.2 Outline Reform strategy and programme Reform management organisation 13

14. Reform management: three levels Strategic level: defining the objectives, the approach and the decisions Interministerial committee, Council of Ministers Management board Technical, national level Reform Secretary Technical Thematic task force Ministerial departments level 14

15. Example of reform management organisation 15

16. Key messages A reform strategy and programme must be established An efficient reform management system must be put in place 16