Whole System ApproachImproving Public Financial Management around the World

CIPFA Presentation – November 2010

Alan Edwards, International Director CIPFA

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The Chartered Institute of Public Finance and

Accountancy (CIPFA)

The Leading Professional Accountancy Body for public services

Key Influencer in the Development of Public Policy

Running major PFM development programmes around the world

CIPFA

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Analytical framework that supports development of

effective PFM at country level A prompt for improvement An holistic model that complements existing

assessment tools A stimulus for review New thinking supported by DFID

WSA – what is it?

CIPFA thanks DFID for kind support

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Why do we think its important?

Sound PFM is fundamental to international development and poverty reduction

Public finance should be conducted in public interest High and exacting standards are needed to

engender the public’s trust Demonstrable efficiency should be evidenced in use

of public resources

Supports Paris Aid effectiveness declaration 2005

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What does it say?

Advocates a whole system approach to PFM reform and improvement

Proposes a new definition of PFM – explicitly recognises the importance of demonstrating outcomes

Suggests a new reference model – assisting countries to chart current institutional architecture

Identifies that an holistic approach is necessary – including a supportive country environment

A framework for developing and strengthening PFM globally

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What is the paper NOT trying to do?

Be prescriptive – improvement is local and must be tailored to characteristics, capacities and priorities of each country

Create a new tool to measure PFM – PEFA is a useful tool (we train people on how to use it) and there are many diagnostics like the CIPFA FM Model

Criticise current PFM practice and reform programmes

CIPFA sees its role as prompting critical analysis not being critical

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Why whole system?

Recognises the interconnectedness of key players Supports the need for financial accountability,

citizen involvement, parliamentary scrutiny and absence of corruption

Identifies need for improvement across the system – no one initiative on its own is sufficient

Recognises there are checks and balances in every system – the key is to act together to make PFM effective

The whole is more than the sum of the parts

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Who is included in the whole system?

International sponsors Global bodies Regional bodies National bodies Sub national/ sector bodies

A clear organisational framework is used to help countries to map their own system

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Who is it for?

Governments, donors and their advisors Ministry of Finance or Treasury in countries focused

on PFM reform Accountancy institutes PFM professionals – who design , implement,

operate, review, evaluate PFM

All countries whatever their state of development

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What are key conclusions? Using money well is business of every manager

delivering public services PFM is not just for accountants Need to stimulate system wide improvement Better PEFA is not an objective – better outcomes for

citizens and changing lives is Selecting the PFM reform approach depends on local

priorities and circumstances Do not forget learning and growing is a key part of

improvement Donors should not focus on the short term and

immediate fiduciary concerns

There is no one route to better PFM

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What do we want you to do next?

Strengthen PFM – international partners should work together

Review your whole system of PFM Identify underperformance eg training providers with

low technical skills Find if there is an absence of key players eg an

accountancy body with PFM training Develop sustainable PFM plans eg not just short

courses

In short build a PFM profession

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What is CIPFA doing next? Sharing lessons learnt re professionalisation Producing case studies based on our experience

Lesotho – use of CIPFA International Certificate and Diploma Tanzania – the World Bank PFM SCDI pilot Mozambique – strengthening the SAI Nigeria – CIPFA/ ICAN twinning and developing the Federal Training

Agency Holding a major international conference on PFM trust and

accountability in London 15-17th March 2011

See www.cipfa.org.uk/international

Fulfilling our charter to strengthen PFM globally