Shortcomings in assessment methodology impede key improvements to public financial management (PFM)

A broader approach to analysis of PFM systems is recommended in order to overcome governments failing to achieve improvements in some fundamental aspects of PFM as measured by the Public Expenditure and Financial Accountability (PEFA) methodology
 
BRISBANE, Australia - Nov. 13, 2015 - PRLog -- PFMConnect, a public financial management consultancy, has just published a blog suggesting that the current approach to assessing the performance of government PFM  systems is failing those countries in greatest need of support. The authors believe that the methodology employed in undertaking these assessments should be extended in scope when stakeholders have concerns about ongoing significant poor performance in numerous PFM activities.

In preparing the blog, PFMConnect examined the most recent PEFA assessments of numerous African governments that had very low scores in some PFM performance indicators (PIs) in PEFA assessments first conducted up to nine years ago and found low PI scores continue to be reported for many of the same activities in the most recent repeated assessments.

The current PEFA methodology results in PEFA assessments often giving little attention to some of the broader institutional causes of poor PFM performance as the methodology does not require analysis of such factors including:

·          Relative staff capability

·          The extent of development of finance professionalism

·          The quality of management

·          Overall ICT capacity

·          Planning for the impact of policy changes

·          Inappropriate behaviour of politicians and top officials

Consequently, some PFM reform programmes, launched after PEFA assessments, are failing to address a number of fundamental PFM problems.

PFMConnect believes that at least for those governments in serious difficulty the scope of the present PEFA methodology is too narrow and that there must be a more wide-ranging diagnostic review at the PEFA assessment stage that helps concentrate minds on the root causes of serious PFM shortcomings. It is suggested that these additional findings should be included in an accompanying memorandum.

PFMConnect also believes that in such cases PEFA assessors should be asked to present views on reform priorities timescales and reasons for reform failures.

The authors claim that this extended review process would make much better use of the PEFA assessment experience as a whole and that PFM reform strategies would become more effective.

Read PFMConnect’s blog. The blog is now available at http://blog-pfmconnect.com/ whilst a similar version is available on the Devpolicy Blog from the Development Policy Centre based at the Australian National University’s Crawford School of Public Policy, Canberra, Australia.

Note: PFMConnect is a consultancy designed support the development of good standards of public financial management in order to improve public service delivery, extend public accountability, encourage local business development and combat corruption. Its work is principally centred on developing countries, working in cooperation with governments and other stakeholders.

For additional information on PFMConnect, please visit our website or contact david.fellows@pfmconnect.com or john.leonardo@pfmconnect.com (Ph: 61 (0) 7 38903086, Skype: johnleoroaming).

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