The PEFA Framework – a tool for monitoring government performanceICGFM – New Developments in Governmental Financial Management Miami, May 19-22, 2008

Frans Ronsholt, Head of PEFA Secretariat

• What is the PEFA Framework• Global Roll-Out• A country case• PEFA support to users

Content

What is the PEFA program?• PEFA Public Expenditure & Financial

Accountability• Objective: Results orientation in development of PFM

systems & harmonization of PFM analytical work• Established: in 2001 by seven agencies. Today

working in tandem with the 25 members of OECD-DAC Joint Venture on PFM

• Initial target: creation of a common information pool on PFM performance at country level

• Tool: the PFM Performance Measurement Framework, developed by PEFA and launched in June 2005

PFM Performance Framework (or PEFA) Framework• PFM Performance Indicators:

– 31 high-level indicators, covering the entire budget management cycle and all PFM subjects.

• PFM Performance Report:– the context; the evidence; the analytical summary

• Indicator scoring on a 4-point ordinal scale, based on:– Objective and transparent criteria– Evidence (not perception)– Internationally recognized good PFM practice

• Assessing systems performance– not policy; not causes in detail

What can countries use the PEFA Framework 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

Implementation modality• Country focus and decision

– Application of the PEFA Framework is entirely decentralized to the country level (if, when, how to use Framework)

• Inclusiveness– All stakeholders can be involved and any agency can in

principle undertake any role in its implementation; it does not ‘belong’ to any organization

• Supported by a neutral body - the PEFA Secretariat – offers support to any user of the Framework without

representing a particular interest– does not undertake or finance assessments– support is free of charge

PEFA Assessment: roll-out trend Global roll-out of PEFA Framework applications

05

1015202530354045505560657075808590

May'05

Aug'05

Nov'05

Jan'06

May'06

Oct'06

Mar'07

Aug'07

Mar'08

Updates of the list of PEFA assessment

Nu

mb

er

of

assessm

en

ts

Completed

On-going

Geographical distribution

PEFA Framework adoption

• Very good progress – globally– Completed in 72 countries, ongoing in a further 10

• Increasingly used for Sub-National gov’t– India, Pakistan, Colombia, Tanzania, Uganda, Ethiopia– Guidelines for SN application issued March 2008

• High country coverage in many regions– Africa and Caribbean > 80% of countries– Latin America, Eastern Europe, Asia, Pacific 40-60%

Country case - Mozambique• PEFA incorporated in PFM reform monitoring system

– baseline 2005, repeat assessment 2007, planned follow-up 2010

• Important performance improvements 2005-2007 in budget execution– revenue administration, cash management, internal

controls• Improvements resulted from:

– Reforms already well under way in 2005 (e.g. IFMIS/SISTAFE and revenue administration)

– Small managerial/admin changes (including quick-wins identified on the basis of 2005 assessment)

– New reform initiatives in pay-roll control (identified from the 2005 assessment as an important neglected area of reform)

Country case - Norway• Findings of Norad-managed self-assessment presented to

OECD-DAC in December 2007• The assessment showed low scores for seven areas

of PFM system performance• Ministry of Finance reaction:

– Weaknesses in procurement practices and follow-up to external audit findings need to be addressed.

– Three areas of low scoring not considered priority at present (Multi-year program/sector budgeting, Limited extent of internal audit, no consolidated overview of risks from autonomous agencies and public corporations)

– Two indicators scored low but are municipal responsibilities; central government will not get involved.

Services provided by the PEFA Secretariat

Support to assessment managersSupport tools on the website (www.pefa.org):• List of completed, ongoing and planned

assessments – updated periodically• Links to completed reports, when public

Support on request:• Advice / Video-conference briefings to country

teams on assessment planning• List of consultants with PEFA experience• Review of terms of reference• Quality reviews of draft assessment reports

Support to Assessors

Support tools on the website:• The Framework (English, French, Spanish, Portuguese,

Russian, Arabic)• Calculation spreadsheets for some indicators• Guidance on information / evidence for assessment• Clarifications and additional guidance on indicators• Training materials

Support on request:• Indicator interpretation and other advice to

assessors during implementation

Stay in touch with PEFA

• Visit our website: www.pefa.org

• Send us questions: pefa@worldbank.org

• Get on our news distribution list: Send us your name and email address

Thank you for your Attention