PUBLIC EXPENDITURE AND FINANCIAL ACCOUNTABILITY (PEFA)-PERFORMANCE MEASUREMENT FRAMEWORK Module 4: The Assessment Process, Stakeholders Involvement & Quality Assurance (PEFA check)

OUTLINE OF MODULE 4 Part 1:The assessment process and stakeholders involvement; Part 2: Quality assurance and PEFA check;.

Part 1: The Assessment Process & stakeholders involvement STEPS OF A PROCESS, SOURCES OF INFORMATION & MAIN STAKEHOLDERS IN THE ASSESSMENT PROCESS

4 Important Steps of a Typical Process 0. Agree the intention to undertake a PEFA based assessment 1. Agree purpose, scope and stakeholder roles 2. Prepare CN/TOR 3. Mobilize assessment team 4. Introduction workshop for stakeholders 5. Review of existing information 6. Inception Report 7. Main field work 8. 1 st 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

5 Typical Costs and schedule

6 Key sources of Information 1. Ministry of Finance : Budget directorate, Revenue administration, Income tax, Property tax, VAT, Customs, Internal Audit office, Accountant General Office; 2. Parliament : Public Accounts Committee, Clerk, Budget & Finance Committee 3. Supreme Audit Institution 4. Line ministries and autonomous agencies 5. Local governments 6. Courts 7. Private sector : Tax lawyers, accountants, chamber of commerce 8. NGOs and Association

7 External Source of Information Field guide (May 2012) on PEFA Web-site ( Indicator by indicator Coverage of each indicator Quantitative data needed (but not qualitative) Possible sources of information (but cannot be exhaustive) Queries for the field work

8 DONOR INVOLVEMENT: PRESENT SITUATION 19 donor agencies are currently involved in the PEFA assessment process Six agencies act as lead donor (mainly WB/EC) Thirteen other agencies participate in a way or another : team members, funding of workshops or co-funding of the exercise, review Donors’ collaboration is partial in many cases Work goes well where a PFM donor group or budget support donor group already firmly established Partial in small countries, middle-income, no GBS

9 Government involvement Government’s role Self-assessment (with external donor validation) Joint assessment (joint team) Collaboration with donor-led assessment Determined by interest and capacity

10 Reasons for Government involvement Contribute to fair assessment results Overview of PFM performance identifies strengths & weaknesses identifies areas for in-depth analysis input to review of the PFM reform plans Use as Monitoring Tool measuring impact of PFM reform activities Facilitate donor harmonization tool for reduction of transaction costs in PFM analytical work

11 Government capacity Leadership capacity? Personnel for assessment team? PEFA training of government officials Suitable timing during budget cycle

12 Other stakeholders (1) : oversight institutions Supreme Audit Institution important source of information often directly involved The Legislature important source of information may be interested in direct involvement

13 Other Stakeholders (2): Civil Society & Private Sector Organizations Usually not directly involved (but exceptions) Important sources of information (access to information, tax administration and procurement) Civil society does separate analytical work e.g. on budget transparency in many countries (Open Budget Project)

Part 2: Quality Assurance & PEFA Check QUALITY CONTROL IN PEFA PHASES II & III. PEFA CHECK IN PHASE IV

15 Quality issues in PEFA reports Adherence to PEFA methodology; Quality of quantitative and qualitative data; Quality of analysis and conclusions Quality of summary assessment Timeliness and availability of the reports

16 Existing arrangements for Quality Assurance (Phases II & III) No single defined set of QA arrangements Country specific, depends on stakeholders and lead agency Donor specific e.g. World Bank peer review mechanism PEFA Secretariat contribution (Optional) – can contribute as peer reviewers

PEFA CHECK Enhanced Quality Assurance Mechanism for PEFA Assessments 17

PEFA CHECK → To increase the trust of users in the quality of individual assessment reports → By confirming an adequate quality assurance process in conducting a PEFA assessment 18

PEFA CHECK What is the PEFA check ? Why is PEFA check being introduced? How does the PEFA check work? What is the transition period? 19

What is the PEFA Check ? Verification that “good practices” have been followed → based on 6 formal criteria “Process quality endorsement” 20

PEFA CHECK : why is it being introduced? More and more … PEFA assessments are prepared Stakeholders rely on PEFA assessments PEFA CHECK seeks to: Increase trust of users in the quality of reports Enforce good practices and creates incentive to adhere to them 21

PEFA CHECK: how it works Criteria 1. Quality review: at least 4 independent PFM institutions (Government, lead agency, Secretariat, others) Concept Note 2. Review of draft/final draft 3. Illustrate how comments have been addressed Report 4. Review of draft/final draft 5. Illustrate how comments have been addressed 6. Disclose QA arrangements in the report 22

PEFA CHECK: how it works (2) The PEFA Secretariat: Verifies compliance with 6 criteria using template Authorizes use PEFA CHECK stamp Marks PEFA CHECK (website, data base, list of finalized reports) 23

PEFA CHECK: transition period PEFA CHECK in effect May 1st, 2012 Transition period May 1st-Dec 31 st, 2012 Assessments started prior May - Not subject to PEFA CHECK - Marked not applicable (N/A) 24

CONCLUSION - A PEFA Assessment is a collaborative exercise, which requires careful planning with extensive consultation with other donors, with government, with the PEFA Secretariat & representatives of civil society - A successful outcome is much enhanced by including training workshops at the start of the mission both with respect to the interviews and providing evidence, as well as reviewing the draft PEFA Report - The PEFA check is a new way of ensuring quality of the PEFA exercise. It will apply from July 1, 2012 on. - The final workshop on the Final Report is important to endure buy in - The publication of the report is an expression of transparency on government side. It helps the policy dialogue among stakeholders - A policy dialogue should be entered into that takes into consideration factors beyond just the PEFA scorings in developing realistic expectations for the sequencing and pacing of reform 25

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