Transcript Slide 1

Public Expenditure and Financial Accountability
Introduction to the framework and lessons learned
its use in Mozambique
stão dasfrom
Finanças
Públicas Health Sector
Tanzania, February 2015
de Avaliação do Desempenho
Contents
①
②
③
④
⑤
⑥
⑦
General Introduction
About the Mechanics
The Indicator Set
Performance Reporting (PFM-PR)
Assessment Process
Sector Application
Lessons Learned from Mozambique Health
Sector
① General Introduction
stão das Finanças Públicas
de Avaliação do Desempenho
PFM Links to Development Goals
MDGs, PRSP,
Political Manifesto
Other influencing factors
Dev
Goals
Budget deficit, Sector
allocations, Investment, Debt
ratio, Tax burden, etc
Fiscal / Exp
Policy Goals
Budgetary Outcomes
Fiscal discipline, Strategic
allocation, Operational
efficiency
PEFA Framework
PFM system performance
Range of PFM Diagnostic Tools
•
Traditional products
– CFAA (WB)
– CPAR (WB)
– FRA (DFID)
– Fiscal ROSC (IMF)
– TA reports (IMF)
•
Stand alone PFM-PR
•
Integrated products
– CIFA, IPFMA, PEMFAR
– PEFAR, ERPFM
– IFA
•
Some combined products
are modular (annually
sequenced modules); others
are discrete (full package
every 3-5 years)
What is the PEFA program?
PEFA = Public Expenditure & Financial
Accountability
Objective:
 Results orientation in development of PFM systems
 Harmonization of PFM analytical work
Establishment:
 Established in 2001 by seven agencies
 Works in tandem with OECD-DAC Task Force on PFM
 Contributing to development effectiveness through:
‘Strengthened Approach’ to Supporting PFM Reform
The PEFA stakeholders
PEFA Framework Adoption
Very good progress – globally
 220+ assessments, covering 120+ countries.
 Since 2010, mostly Repeat & Sub-National assessments
High country coverage in many regions
 Africa and Caribbean: 90% of countries
 Latin America, Eastern Europe, Asia, Pacific: 50-80%
Used in many Middle Income Countries
 Upper MICs: Brazil, Turkey, Belarus, South Africa
 Lower MICs: India, Kazakhstan, Ukraine, Morocco, Peru,
Egypt, Thailand, Philippines, Indonesia, Colombia
PEFA Assessments Map
Coverage of PFM-PR in Reform Cycle
Implement
PFM reforms
High level
performance
overview
Formulate
PFM reform
program
PFM-PR
Identify main
main
Identify
PFM
PFM
weaknesses
Recommend
Recommend
PFM reform
PFM
reform
measures
measures
Investigate
underlying
causes
② About the Mechanics
stão das Finanças Públicas
de Avaliação do Desempenho
The PEFA Framework
PFM Performance Measurement Framework
 Better known as ‘the PEFA Framework’ [Blue book]
 The ‘flagship’ product of the PEFA Program
 Launched in June 2005
Designed to measure performance of national PFM
systems
 Applicable to countries at different stages of
development
 Also applicable to Sub-National government systems
 Sectoral application and institutional application …
Purpose of the PEFA Framework
Objective
 To determine if a country has the tools to deliver three
main budgetary outcomes (aggregate fiscal discipline;
strategic resource allocation; efficient service delivery)
It provides:
 High level overview of all aspects of a country’s PFM
systems performance, including revenue, expenditure,
procurement, financial assets/liabilities
It does not provide assessment of:
 Underlying causes for good / poor performance
 Government fiscal / expenditure policies.
Components of the framework
•
A standard set of high level PFM indicators to
assess performance against 6 critical dimensions
of a PFM system
–
–
–
•
28 government indicators, covering all aspects of
PFM
3 donor indicators, reflecting donor practices
influencing the government’s PFM systems
(Now: Test version of 30 Government indicators)
A concise, integrated performance report – the
PFM-PR – developed to provide narrative on the
indicators & draw a summary from the analysis
Dimensions of PFM system performance
Budget
credibility:
External
scrutiny & audit:
Is the budget
realistic, &
implemented as
intended?
Are there effective
arrangements for
scrutiny of public
finances & follow up
by the executive?
Comprehensiveness and
transparency :
Are the budget & fiscal risk
oversight comprehensive, & is
fiscal & budget information
accessible to the public?
Policy-based
budgeting:
Is the budget prepared
with due regard to
government policy?
6 critical
dimensions
of PFM
system
performanc
e
Predictability & control in
budget execution:
Is the budget implemented in a
predictable manner & is control &
stewardship exercised in the
collection & use of public funds?
Accounting,
recording &
reporting:
Are adequate records &
information produced,
maintained & disseminated
to meet decision-making,
control, management &
reporting purposes?
③ The Indicator Set
stão das Finanças Públicas
de Avaliação do Desempenho
Structure of the indicator set
The standard set of high-level indicators
A. CREDIBILITY OF THE BUDGET: PFM OUT-TURNS (1- 4)
A. COMPREHENSIVENESS & TRANSPARENCY (5 - 10)
A. BUDGET CYCLE
–
–
–
–
POLICY-BASED BUDGETING (11 – 12)
PREDICTABILITY & CONTROL IN BUDGET EXECUTION (13 – 21)
ACCOUNTING, RECORDING & REPORTING (22 – 25)
EXTERNAL SCRUTINY & AUDIT (26 – 28)
B. INDICATORS OF DONOR PRACTICES (D1 – D3)
Calibration & Scoring
Calibrated on 4 Point Cardinal Scale (A, B, C, D)
•
•
•
Reflecting internationally accepted ‘good practice’
Determine score by starting from ‘D’, go upwards
Do not score if evidence is insufficient
Arrow ▲
•
Can indicate an improvement not reflected in a
change of the indicator score
Indicator dimensions
Most indicators have 2, 3 or 4 dimensions
•
•
•
Each dimension must be rated separately
Aggregate dimension scores for indicator; two
methods M1 or M2, specified for each indicator
Intermediate scores (B+, C+, D+) for multidimensional indicators, where dimensions score
differently
④ Performance
Reporting
stão das Finanças Públicas
de Avaliação do Desempenho
Content of the PFM Performance Report
An integrated narrative report including:
•
•
•
•
•
•
Introduction with the context for the assessment
Country background information
Evidence & justification for scoring the indicators
Country specific issues
Description of reform progress & factors
influencing it
Summary assessment of PFM system impact
⑤ Assessment Process
stão das Finanças Públicas
de Avaliação do Desempenho
Stages in a typical process
0. Agree the intention to undertake a PEFA based 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
14. Use of the report for reform dialogue
⑥ Sector Application
stão das Finanças Públicas
de Avaliação do Desempenho
A sector suggestion
PEFA
PI-1 &
2
PI-4
PI-7
PI-8
PI-11
PI-12
NEW
PI-16
PI-18
PI-19
Split
PI-20
PI-21
PI-23
PI-24
PI-26
PI-27
PI-28
Sector-specific indicator
SI-1. Sector exp out-turn: SI-2 Composition of sector exp vs. original approved
budget
SI-3. Stock & monitoring of expenditure payment arrears payment arrears in sector
SI-4. Extent of unreported government operations in sector
SI-5. Transparency of inter-governmental fiscal relations within sector
SI-6. Orderliness & participation in annual budget process within sector
SI-7. Multi-year perspective in sector expenditure policy & budgeting
SI-8. Sector-specific revenue from service fees
SI-9. Predictability in availability of funds for commitment of expenditures
SI-10. Effectiveness of sector payroll controls
SI-11. Competition & value for money in procurement;
SI-12. Controls in procurement
SI-13. Controls of procured goods
SI-14. Effectiveness of internal controls for non- salary expenditure
SI-15. Effectiveness of internal audit within sector
SI-16. Availability of information on resources received by service delivery units
SI-17. Quality & timeliness of in-year sector budget reports
SI-18. Scope, nature & follow-up of external audit
SI-19. Legislative scrutiny of annual budget law by sector committees (where
applicable)
SI-20. Legislative scrutiny of external audit reports relating to sector
A sector application
Sector I
SI – 1 & 2
SI – 3
SI – 5
SI – 7
SI – 8
SI – 10
SI – 12
SI – 13
SI – 16
SI – 18
SI – 19
Sector exp out-turn & Composition of sector exp vs original approved budget
Aggregate sector user fee collections compared to original approved budget
Classification of the Sector budget
Extent of unreported government operations in the Sector
Transparency of rules & procedures for Provincial & District budgeting
Public access to key fiscal information on the sector
Multi-year perspective in planning & budgeting for the sector
Transparency of obligations and liabilities for care user charges
Predictability in availability of funds for commitment of expenditures
Effectiveness of payroll controls in the sector
SI – 20
SI – 21
SI – 22
SI – 23
SI – 24
SI – 25
Effectiveness of internal controls for non-salary expenditure in the sector
Effectiveness of Internal Audit in the sector
Timeliness and regularity of accounts reconciliation in the sector
Availability of information on resources received by district facilities
Quality and timeliness of in- year budget report s for the sector
Quality and timeliness of annual financial statements for the sector
a) Quality assurance processes in Procurement; b) Price competitiveness in
Procurement of supplies; c) Timeliness of sector Procurement processes; d)
Competitiveness & Transparency in sector Procurement; e) Inventory management in
sector
⑦ Lessons Learned from
Mozambique Health Sector
stão das Finanças Públicas
de Avaliação do Desempenho
Experience in the Health Sector in
Mozambique (using PEFA)
 2008 / 2009: 1st National Health Sector Assessment (PEFA +
OCDE DAC Procurement)
 2010 / 2011: Zambezia Province
 2012: SETSAN Central
 2012/13: 8 Sectors in Tete Province
Assessments by other DPs
using similar
methodologies:
FRA (DFID)
 2013/14: 6 Sectors in Gaza Province
 2014: 6 Sectors in Maputo Province
 2014: 4 Districts in Tete Province
Stage 2 Risk Assessment
(USAID / USG)
EU PFM Monitoring and
Evaluation
(…)
Some of the lessons learned…
• PFM is not just accounting or just auditing
• Planning Vs Budgeting Vs Accounting Vs Reporting
• It is important to know which are the risks and how
vulnerable the sector is (heat map)
• Risk is not just at programme conception, it is trough out
implementation and needs to be part of dialogue
• Where and how to provide meaningful TA
• Documenting the assessment and doing it with partner
institution increases level of acceptance of risk
Some of the lessons learned…
• Solutions / Recommendations are not technically
challenging and are identified by institutions
• PFM is not just the Finance Department or just the Audit
Report – needs a holistic approach within MoH and also
the structure of government
• There are interventions needed above sector and
institutional level
• (….)
Some of the lessons learned…
Some of the lessons learned…
Questions? Comments?
tão das Finanças Públicas
de Avaliação do Desempenho
Revisto Janeiro 2011