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Monitoring Public Financial Management System Performance: Lessons and Future Directions. Bill Dorotinsky The World Bank. ICGFM Conference Miami May 3, 2005. Broad L essons from PFM assessment work to date.
The World Bank
Miami May 3, 2005
Comparison of HIPC Expenditure Tracking AssessmentOutcomes of 2001 & 2004
Some improvement in HIPC PEM systems performance since 2001, however a majority still require substantial upgrading.
Source: Fund-Bank AAP database
Unhelpful donor practices
Inadequate sequencing of reforms, due to donor pressure or difficulties for government to determine the path of reforms
Fragmented approach to reforms and limited leadership in government
-- PRSP and PEM reforms separate
Limited monitoring of progress, mainly concentrated on inputs -> did not allow lessons learning and did not encourage focus on results on the ground
Technical reform versus systemic/institutional change
BUT realism important on achievable pace of change
The government-led reform program
Planning and undertaking diagnostic work over time.
Designing a prioritized and sequenced reform program.
Monitoring of progress over time.
Monitoring progress enables decision-makers in government and donor agencies to assess the success and difficulties of the reform process and make decisions accordingly.
Depending of the purpose and interest, different levels for monitoring progress:
An explicit performance measurement framework focuses on capacity-building and results on the ground.
Current indicator set available at WWW.PEFA.ORG
Is the budget realistic, and implemented as intended in a predictable manner?
Accountability and Transparency :
Are effective external financial accountability and transparency arrangements in place?
Six core objectives of PFM system
Comprehensive, Policy-based, budget:
Does the budget capture all relevant fiscal transactions, and is the process, giving regard to government policy?
Is effective control and stewardship exercised in the use of public funds?
Comprehensive fiscal risk oversight :
Is oversight of fiscal risk arising from public enterprises and sub-national governments adequate?
Is adequate fiscal, revenue and expenditure information produced and disseminated to meet decision-making and management purposes?
MEASURING WHAT PERFORMANCE?
The questions the PFM performance indicators seek to answer
Structure of the indicator set
C. Budget Cycle
A. PFM Out-turns
B. Key cross-cutting features
External Scrutiny and Audit
Accounting and Reporting
Dimensions to be assessed: The difference between actual primary expenditure and primary budgeted expenditure (i.e. excluding debt service charges, but also excluding externally financed project expenditure).