Many tools are available for assessing and monitoring public financial management systems, including:

• • the Public Expenditure and Financial Accountability (PEFA) framework;

• • the Open Budget Survey (OBS);

• • the Public Investment Management Assessment (PIMA); and

• • the Tax Administration Diagnostic Assessment Tool (TADAT).

These tools are used by external institutions to assess projects, institutions and programs to improve the management of PFM outputs and outcomes. They can also monitor and evaluate PFM reform efforts. The application of these tools can act as an external navigation system that helps the ship safely reach its destination.

This chapter discusses each of these PFM assessment tools in detail.

5.1 PUBLIC EXPENDITURE AND FINANCIAL ACCOUNTABILITY FRAMEWORK

The Public Expenditure and Financial Accountability (PEFA) framework is a program designed to provide snapshots of PFM performance at specific points in time that can be used in successive assessments and provide a summary of changes over time. It provides a framework for assessing and reporting on the strengths and weaknesses of PFM using quantitative indicators to measure performance. The PEFA framework includes a reporting mechanism that provides an overview of the PFM system and its performance. It can create a foundation for reform planning, dialogue on strategy and priorities, and progress monitoring.

PEFA is also a critical tool that can help governments achieve sustainable improvements in PFM practices by providing a means to measure and monitor performance using a set of indicators across a range of public financial management institutions, systems, and processes. The PEFA methodology draws on international standards and good practices for PFM, as identified by experienced practitioners.

PEFA offers a common basis for examining PFM performance across national and subnational governments. PEFA scores and reports allow all users of the information to gain a quick overview of the strengths and weaknesses of a country’s PFM system. In addition to guidance for analysis and reporting, the PEFA Secretariat provides support, monitoring, and analysis of PEFA assessments. The PEFA Secretariat offers free advice on the use of PEFA as one of many sources of information for examining and improving PFM performance.

5.1.1 Scope and Coverage of the Framework

What Does PEFA Assess?

The purpose of a sound PFM system is to ensure that a government’s policies are implemented as intended and achieve its objectives.