Improving the quality of public expenditures has become a central issue for many countries around the globe because of its importance for economic growth and living standards. PEMPAL (Public Expenditure Management Peer Assisted Learning), a network of practitioners in 22 countries in Europe and Central Asia, was launched in 2006 to help advance public financial management (PFM) reforms and improve practices.
PEMPAL is about contributing and exchanging different perspectives, through discussions and resource materials, in three official languages: English, Russian, and Bosnian. Its three communities of practice, for budget (BCOP), internal audit (IACOP) and treasury (TCOP), meet from time to time in events, study visits, and on-line. The World Bank, OECD/SIGMA, and external experts contribute global knowledge and act as knowledge brokers. Several donors, including the Russian Federation and the Swiss and German development agencies (SECO and GIZ) provide welcome financial support. The Center of Excellence in Finance has since 2008 acted as PEMPAL Secretariat.
In 2012, PEMPAL brought together 434 participants from its member countries in eight regular and five smaller events in 11 countries. Overall, an additional 125 experts and speakers attended these events. This compares to 481 participants attending one plenary, six regular, and three smaller events in six countries in 2011.
Going forward, the agenda remains busy, and preparations for the 2013 spring events are in full swing. BCOP is planning a plenary to address selected aspects of program budgeting, and two study visits will discuss IT systems for budget planning and per capital budgeting in education. IACOP will convene twice, once in a plenary session, to discuss risk assessment, financial inspection, and quality assurance in internal audit. TCOP plans to discuss financial management and control in a plenary meeting, and learn from Estonia’s experience with public sector accounting and reporting in a study visit.
The discussions among practitioners mainly focus on implementation and how to improve it, because implementation has proved to be the real challenge in the daily life of practitioners, more so than reform design and adopting legislation. Besides, implementation takes time and political will, which are often missing. Evidence suggests that exchanging experience about what works well in practice is what practitioners consider especially valuable.
In 2012, discussions in PEMPAL addressed various PFM topics, including reform progress in treasury and external financing; program budgeting practices; risk assessment, quality assurance, and training and certification in internal auditing in the public sector, as well as relations between internal audit, external audit, and financial inspection; strategies for treasury modernization; financial accounting and reporting; and fiscal policy and measures to combat the crisis. Participants also learned from the experience of other PFM systems. Resource materials and a rich depository of national legislation have been exchanged and made freely available through the PEMPAL Virtual Library and Glossary of Terms.
Promoting peer-learning calls for leadership and accountability. Each of the three COPs has been led by an Executive Committee that devises the annual work agenda based on the countries’ needs. The three committees are also entrusted with managing their annual budgets and making sure they stay within the limits set by the multi-stakeholder PEMPAL Steering Committee. Total event expenses in 2012 amounted to EUR 1 million.
A framework for monitoring the value of PEMPAL for the participants has also been set up. It became a valuable tool for monitoring PEMPAL’s performance through a set of qualitative and quantitative indicators as well as success stories, and is aimed to demonstrate good governance, transparency, and accountability of the program (See Progress and Annual Reports for performance indicators.
Public Expenditure Management Peer Assisted Learning (PEMPAL) is a World Bank–supported program that creates a network of public financial management professionals in 22 countries in Europe and Central Asia (ECA). The aim is to benchmark the PFM systems of participating countries against one another and pursue opportunities for peer learning, which increasingly understood to enhance knowledge transfer. The PEMPAL Secretariat is located at the Center of Excellence in Finance (CEF) in Ljubljana, Slovenia.
About the Center of Excellence in Finance
The Center of Excellence in Finance (CEF) was established in January 2001 by the Slovenian Government on the initiative of the Slovenian Ministry of Finance and in close cooperation with ministries of finance of other countries in South East Europe. The initiative to establish the CEF was framed in the context of the Stability Pact for the region. The CEF recognizes the urgent need for capacity development in public financial management and central banking to help countries of the region cope with the challenges of implementing much needed reforms.