PEFA WORK GROUP VIDEO CONFERENCE

Tuesday, March 17, 2009 - 10:00

Friday, February 20, 2009

Ljubljana, Slovenia

Meeting Summary

The PEFA Work Group (WG) held its third video conference (VC) meeting on February 20, 2009. The meeting was video cast from the Center for Excellence in Finance in Ljubljana, Slovenia. Representatives from the following countries participated in the VC:

Georgia
Belarus
Moldova
Armenia
Montenegro
Kyrgyzstan
Ukraine
Tajikistan

Members of the Budget Community of Practice (BCOP) Steering Committee also participated in the VC including Ms. Nina Lupan, Mr. Nicola Vukicevic, and Mr. Papuna Petriashvili as well as Mr. Richard Bartholomew the Head of the PEMPAL Secretariat. Also participating in the meeting from the World Bank Headquarters in Washington DC was Mr. Frans Ronsholt, Head of the PEFA Secretariat.

Ms. Liana Skhirtladze, Chair of the Work Group opened by welcoming the participants and reviewing the meeting agenda. The prior minutes were reviewed with no comment or suggested changes from the participants.

PEFA SECRETARIAT PRESENTATION

The WG was very fortunate and honored to have Mr. Ronsholt, Head of the PEFA Secretariat, participating in the VC. Mr. Ronsholt gave a presentation entitled “Recent Developments of the PEFA Program.” A copy of the full presentation is attached. Some highlights included the following:

To date more than 100 PEFA assessments have been completed with baseline report completed for 90 countries.
The intended use of PEFA reports is to track performance on changes over time; prioritization of reforms; and peer learning.
Similarly Countries have and/or can use the PEFA framework to inform on needed PFM reforms; monitoring the results of reform efforts; a comparing to and learning from peers.
PEFA is preparing a report on the use of PEFA reports in reform formulation which will include country case studies. The Secretariat welcomes and volunteers for the case studies.
Case studies were presented on both Mozambique and the Norway. Mozambique completed its baseline assessment in 2005, a repeat assessment in 2007, and will do a planned follow-up in 2010. Improvements between 2005-2007 were made in revenue administration, cash management, and internal controls. Norway completed its assessment in December of 2007.
It was noted that although the PEFA Framework was primarily developed for in-country use there appeared to be wide interest amongst researchers, donors, and governments to do comparisons amongst countries.
A Monitoring Report will be completed in mid-2009 which will provide trends in the use of the framework and an assessment of quality as well as provide input for the technical maintenance of the framework.

In responding to questions, Mr. Ronsholt noted the following:

It is an individual country’s decision as to whether or not the PEFA Assessment is made public and/or posted on the PEFA Website.
To prepare for a PEFA Assessment a country should form and train a team of its officials. The officials should be stakeholders in the project.
Country teams should do as much of the assessment themselves as possible.
An assessment, whether done internally or independently will have greater successes if it has strong governmental leadership.

Moldova Case Study

Ms. Liuba Ivanciucova (Ministry of Finance of Moldova) provided an excellent presentation on Moldova’s experience in completing the PEFA Assessment. The first assessment was conducted in 2006 with the second completed in 2008. Both assessments were coordinated by the Ministry of Finance. Having completed two assessments Moldova was able to evaluate progress in making reforms. Overall, ten indicators experienced an improved score while two received lower scores.

Moldova noted the following advantages of PEFA:

It provides complex background information
Identifies issues that need to be addressed by the government
Tracks progress on reforms
Forms the bases for recommendations for maintaining and improving scores.

Disadvantages of PEFA that were noted included the following:

Some of the scoring methodologies are incomprehensible, with PI 3 and 25 noted as examples;
Countries with IMF programs may be at a disadvantage because estimates must be more conservative.
There is little flexibility in scoring when there is disagreement about improvements.
Although indicators D1-D3 are for donors they still affect the country’s image.

The main achievements in Moldova were as follows:

Budget formulation was improved though revisions to the budget calendar and more consistency between the budget and the Medium term plan.
Internal auditing
Chart of accounts and budget classifications
Single Treasury Account.
Improved treasury operations.

PEFA Surveys

At the time of the meeting it was reported that only three completed surveys had been received. (However four additional surveys were received during the meeting). A summary of the survey results will be distributed shortly.