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GOVERNMENT – DEVELOPMENT PARTNERS PFM GROUP COORDINATION MEETING
SANA’A, AUGUST 28 TH 2013
J E A N - M A R C L E P A I N
E U P F M S P E C I A L I S T
J L E P A I N @ Y A H O O . F R
W W W . S L I D E S H A R E . N E T / J E A N M A R C L E P A I N /
Methodology for Preparing the New PFM Action Plan
1. The New Action Plan within the Context of PFM Reforms
Why preparing a new PFM Action Plan?
Last Action Plan covering 2005-2008 never updated since.
Absence of strategic direction in PFM Reforms since 2008 and changes in the environment.
Lack of integration and common strategy between PFM stakeholders (MOF, MOPIC, MOLA, etc.).
Fragmented donor assistance not aligned on Government’s priorities.
Lack of investment in large PFM projects.
Why the Action Plan is strategically Important
The political stability of the country requires new economic policies which cannot be implemented without efficient PFM mechanisms.
Restoration of macroeconomic stability requires sound fiscal policy that cannot be put in place without strengthening revenue collection and an adequate.
Resolution of the liquidity crisis cannot be achieved only through external assistance. It require important structural PFM reform and improvement in budget execution
procedures.
What are the issues that needs to be addressed?
Budget credibility and realism
Revenue mobilisation and revenue management(taxes + customs)
Integration of the Economic Entities Budget with the General Budget
Coordination of investment planning with the recurrent budget
Alignment of budget formulation on Government’s economic priorities;
Budget execution
Fiscal decentralisation
2. Strategic Planning
Guiding Principles
Base reform agenda on well identified priorities linked to specific outcomes.
Introduce reforms in a sequenced order taking a medium term approach
Take time to formulate a comprehensive PFM strategy
Used and integrated approach associating all PFM partners.
Platform 1
Platform 2
Platform 3
Platform 4 Example of reform sequencing and Platform Strategy Enables focus
on what is done with money
A credible budget delivering a reliable and predictable resource to budget managers
Improved internal control to hold managers accountable
Improved linkage of priorities and service targets to budget planning and implementation
Improved linkage of priorities and service targets to budget planning and implementation
Broad Activities • Integration of budget (recurrent &capital budgets)
• Strengthen macro and revenue forecasting
• Streamline spending processes
Broad Activities • Re-design budgeting classification system
• Initial design of FMIS for core business processes
• Define internal audit function
Broad Activities
•Re-design budget cycle (e.g. MTEF)
• Pilot program based budgeting & budget analysis
• Further fiscal decentralisation
Enables a basis for accountability
Broad Activities
• Full design of FMIS
• Develop IT management strategy
• Initial design
Enables more accountability for performance management
Recommended Approach
Reforms can be groups in 3 to 4 ‘blocks’ or ‘platforms’:
1. Budget credibility and macroeconomic stability
2. Accountability and transparency
3. Streamlining of budget execution
4. Fiscal decentralisation
Harmonization Project
Use the Harmonization Project as an essential component that can become the core of the Action Plan.
Expend the Harmonization Project to cover budget execution;
Take into consideration the issue of fiscal decentralisation
Two Phase Strategy
1. Emergency Phase
2. Consolidation Phase
Emergency Phase
2-3 year phase
Focus: budget credibility and budget execution
Objective: support to the implementation of the Transitional Programme for Stabilization and Development
Priorities: measures addressing pressing issues such as increasing revenue and formulating sustainable fiscal policy
Public Expenditure Review and development of a comprehensive PFM strategy
Consolidation Phase
2-3 year phase
At this stage does not need to be detailed.
Should focus on reform sequencing and sound medium term strategy
More emphasis on accountability and transparency
Will be reformulated based on the result of the Public Expenditure Review.
3. Planning Management
Three Levels of Planning
1. Intergovernmental Coordination Committee
2. Ministry level planning Committee
3. Working Groups
Intergovernmental Coordination
Two types of responsibilities:
Coordination of ministerial planning committees and consolidation of the Plan
Monitoring and coordination of crosscutting issues such as the Harmonization Plan, capacity building and fiscal decentralisation
Responsibility of the Intergovernmental Coordination
Consolidation of the Plan
Ensuring that output and outcome are in line with PFM strategy and Government’s priorities
Ensuring realism of the plan in terms (a) of time frame, (b) objectives, (c) coverage, and (d) technical assistance
Identifying deliverables, verification means, key milestone and monitoring indicators
Finalizing management structure
Ministry Level
Planning Committees are responsible for:
Defining sector priorities
Identifying sub-sector components to be assigned to working groups,
Supervising working groups activities
Integrating sub-sector plans in the sector plan
Sequencing activities
Identifying outputs and outcomes, verification means, milestone, and supervision indicators
Working Groups
Working groups are responsible for:
Conducting need assessment and defining sub-sector activities;
Planning the activities of a sub-sector or addressing crosscutting issues (budget integration, fiscal decentralisation, etc.);
Identifying technical assistance needs
Implementation Mechanism
An implementation mechanism needs to be designed. It is likely to include:
1. An Intergovernmental supervision committee
2. Steering committees at ministry level
3. Ad hoc committees for crosscutting issues (harmonization plan, fiscal decentralisation)
4. A PFM Reform Secretariat
PFM Reform Secretariat
International experience shows that the existence of a strong PFM Secretariat is a key success factor of PFM reforms. Responsibilities of a PFM secretariat are:
Monitoring activities of sector and steering committees, and more especially outcomes, deliverables, milestones and achievement indicators;
Preparing regular reports for the Intergovernmental Committee and for the donors;
Identifying bottleneck and implementation issues at and early stage and formulating recommendation for solving them;
Coordinating technical assistance.
4. The Way Forward
Action Plan Preparation Time Table
September to October 2013, preparation of the first draft of the Action Plan;
Beginning of November first Government – Donor Round Table for presentation of the Draft Action Plan based on a need assessment, and first comments by the donors;
November- December 2013 finalization of the Action Plan based on donor comments;
December, second Government – Donor Round Table for presentation of the final Action Plan;
January 2014 approval of the Action Plan by the Cabinet, appointment of the Intergovernmental Coordination Committee by the Cabinet and appointment by ministries and agencies of their Steering Committees.
First Round Table
Date: Between November 18 and November 28
Format: A one day conference
Objectives:
Reviewing proposals from ministries and departments and establishing principles for prioritization of actions
Giving donors a first view of the main challenges
Discussing technical assistance needs based on a need assessment
Second Round Table
Date: Mid-December Format: A one day conference Objectives: Reaching agreement on the overall PFM strategy Finalizing the Action Plan with well identified deciding key
milestones and monitoring indicators Reviewing sector by sector proposed actions, prioritization, time
schedule, outcomes and verification criteria Calibration of technical assistance requests Defining final steps for having the plan formally approved by the
Government and endorsed by the donor community. Agreeing on the Management Structure of the PFM Reform Action
Plan including the Steering Committee and possibly a Secretariat. Agreeing on a way forward to prepare a detail PFM Assessment for
the Action Plan’s phase 2.
THANKS