The Public Expenditure & Financial Accountability Performance Measurement Framework

1. The Public Expenditure & Financial Accountability Performance Measurement Framework MENA Connecting Voices Retreat May 14, 2013 PEFA Secretariat

2. The PEFA Partners

3. Purpose of the PEFA Framework The Framework provides: • a high level overview of all aspects of a country’s PFM systems performance (including revenue, expenditure, procurement, financial assets/ liabilities): are the tools in place to help deliver the 3 main budgetary outcomes? (aggregate fiscal discipline; strategic resource allocation; efficient service delivery) • It does notprovide an assessment of : • underlying causes for good or poor performance i.e. the capacity factors • government fiscal & financial policies

4. Adoption of the PEFA Framework Very good progress – globally • 330+ assessments, covering 143 countries • Since 2010, mostly Repeat (97) & SN (117) assessments High country coverage in many regions • Africa and Caribbean 90% of countries • Latin America, Eastern Europe, Asia Pacific 50-80% Used in many MICs, e.g. in MENA, 12/21 countries • Algeria, Egypt, Iraq, Jordan, Kuwait, Lebanon, Morocco, Syria, Tunisia, WB & Gaza, Yemen (Oman) Not designed to be ‘league table’

5. Global Roll-out of PEFA applications

6. Components of the PEFA Framework • A standard set of high level PFM performance indicators (PIs) • 31 indicators (with 76 sub-indicators) • compromise between simplicity & comprehensiveness • A standard report format • the PFM Performance Report (PFM-PR) • to provide country background, evidence on the indicators and an integrated, analytical summary

7. Structure of the indicator set

8. Calibration & scoring Calibrated on 4 Point Cardinal Scale (A to D) • Reflecting internationally accepted ‘good practice’ • Determine score by starting from ‘D’, go upwards • Evidence- based: do notscore if insufficient! • Most indicators have 2, 3 or 4 dimensions • Each dimension must be rated separately • Aggregate dimension scores for indicator; two methods M1 or M2, specifiedfor each indicator • Intermediate scores (B+, C+, D+) for multi-dimensional indicators, where dimensions score differently

9. Procurement coverage • Dedicated indicator PI-19 focuses on unique aspects notcaptured in other indicators: 4 dims- • (i)Transparency, comprehensiveness & competition; (ii) Use of competitive methods; (iii) Public Access to procurement information; (iv) Independent complaints mechanism • Other indicators captureaspects of procurement • PI-4 Expenditure arrears typically concern contracts • PI-10 Public access to information on contract awards • PI-12 Multi-year budgeting should consider multi-year contracts • PI-16 Predictability of allocations affect procurement plans • PI-20 Internal controls also cover the procurement system • PI-21 Internal audit should address procurement issues • PI-26 External audit should address procurement issues

10. The Summary Assessment Integrated assessment of strengths & weaknesses in PFM system performance in each of the 6 PFM dimensions Impact of PFM weaknesses on government's ability to achieve the main budgetary outcomes Prospects for reform planning & implementation Other country-specific purposes if ToRs require The mainmessage (the Story line)

11. Stages in a Typical Process • 0. Agree to undertake PEFA assessment 1. Agree purpose, scope and stakeholder roles • 2. Prepare TOR • 3. Mobilize assessment team • 4. Introduction workshop for stakeholders • 5. Review of existing information • 6. Inception Report • 7. Main field work • 8. 1st Draft Report • 9. Quality Review • 10. Supplementary field work • 11. Draft Final Report • 12. Presentation seminar • 13. Final report

12. What can countries use PEFA 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

13. Basis for setting PFM reform priorities PEFA assists government in setting reform priorities through dialogue • Internal – among MoF, MDAs, Parliament, • External – with development agencies, civil society BUT- PEFA is only 1 of several inputs, others are: • political economy analysis • technical linkages • existing capacity to implement reforms • ongoing reforms Scores should not be used simplistically: further analysis required to identify causes of weakness in priority areas

14. Repeat Assessments At April 2013, 97 repeat assessments: more planned, 3-4 years after baseline assessment Want to determine whathas changed, how much? Indicator scores provide overview of changes over time, but - dimensions may change differently; performance may not always change enough to change score: hence more detailed explanation required NB non-performance reasons why scores may change: definitions; improved availability of or access to information; sampling; interpretation in borderline cases; mistakes!

15. Country Comparisons PEFA Framework was developed to measure progressover time in onecountry – notfor Country Comparisons ‘Summary assessment’ to provide nuanced overview of strengths & weaknesses as basis for reform prioritization No method to derive measure for ‘overall performance’ No attempts to create global performance list But: demand from Governments, Researchers & Donors

17. PEFA Program Phase IV: 2012-7, priorities Using assessments for elaboration of PFM reform programs: guidance being developed Strengthening QA arrangements: ‘PEFA Check’ Framework review & update, to reflect newly accepted ‘good practices’ (but recognizing need for time series to allow progress tracking) Encouraging use of the database compiled from completed assessments Initiatives to broaden voice of stakeholders & improve transparency of program management

18. Role of the Secretariat Custodian of the Framework Training: develops & shares training materials; selective delivery of training, mainly on a regional basis; supports training institutes Supports PFM research: database of indicators Dissemination: presentations; PFM blogs; PEFA Newsflashes; sharing PEFA reports via website Monitoring: Semi-annual updates of PEFA assessment status list; periodic monitoring reports; ad hoc surveys Promotes harmonization in assessing PFM systems

19. PEFA Secretariat Quality Review On request, free of charge, rapid feedback (10 days) for CNs/ToRs & Assessment Reports Issues “PEFA Check” – process certification Appraises adequacy of background info & application of performance indicators: correctly interpreted, sufficient evidence, correct scoring method? Considers whether summary assessment brings out clear message, consistent with indicator analysis Follow-up review – evaluates responses

20. Thank you for your attentionwww.pefa.org