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November 07, 2007

IMF public financial management technical assistance — let me count the ways

Posted by Bill Dorotinsky

In the past, IMF member countries generally received technical assistance (TA) from the Fiscal Affairs Department (FAD) through IMF programs with countries. TA requests generally focused on public financial management (PFM) institutional reforms deemed essential for delivering the program and addressing an existing fiscal risk or source of fiscal distress (e.g., treasury management). But the pattern has changed -- member countries are increasingly accessing IMF technical assistance directly, without or outside a program, and on a broader range of PFM topics (e.g., performance budgeting, medium-term expenditure frameworks). There is more recognition that the IMF can help countries improve their PFM systems in general, and hopefully avoid fiscal crises, through such reforms as medium-term expenditure frameworks.

So, how does FAD provide TA? What Types of PFM technical assistance does FAD provide? How can countries access services? Why do countries seek FAD TA? This brief post seeks to answer these questions.

How does FAD provide TA?

There are several approaches or TA services member countries can access. The right service or mix of services depends on country needs, the PFM issue to be addressed, as well as availability of resources to support the work. Options range from short-term, one-off missions to longer-term resident advisors, from providing comments on a draft law, conducting broad PFM system diagnostics, or providing advisory support in implementing specific reforms. Regardless of the type of TA provided, FAD maintains high quality assurance standards, including 'backstopping' arrangements where staff in the field have an headquarters staff to provide real-time review and support.

For a brochure on the IMF FAD TA Divisions, click Download imf_fad_pfm_ta_2007.pdf

What Types of PFM technical assistance does FAD provide?

HQ-based staff assistance - one or two week missions to provide advice on specific topics. For example, budget classification, chart of accounts, ministry of finance reorganization, diagnosing PFM system weaknesses, helping to develop a PFM reform strategy, or implementing a new organic budget law, etc.

Peripatetic assistance - periodic, limited-duration on-site assistance from a PFM expert in implementing a specific reform or action plan. For example, in treasury cash management improvements or establishing a treasury single account.

Long-term resident advisor - assignment of a long-term advisor resident in-country, usually associated with implementing a PFM reform strategy involving numerous actions or PFM areas, and providing on-site training and capacity-building.

Regional technical assistance centers (RTACs) - quick, short-term expert advice on very specific topics, usually to solve an immediate problem, or organize PFM training around regional PFM issues (an upcoming post on RTACs will provide further details on the existing six Centers: AFRITAC (3), METAC, PFTAC, and CARTAC).

TA Workshops or PFM Training - FAD may organize and deliver one day to one week training events on a national or regional basis on PFM topics. Recent examples include: a 2-day workshop introducing medium-term expenditure frameworks to vice-ministers and budget directors from a region or sub-region, or a one-week training course for senior officials on program and performance budgeting.

HQ-based review and advice - FAD HQ-based PFM experts may review and provide comments on draft PFM legislation (e.g. Budget law, extractive industry resource management law, capital budgeting law), regulations or handbooks (e.g. Call circulars, charts of account, budget classification, or budget manuals), or diagnostic reports (e.g. PEFA assessments, other PFM system reviews).

How can countries access services?

Authorities need to formally request technical assistance to the IMF (through the resident representative in the country, area department mission chief, or directly to the FAD Director), usually from the Minister of Finance, and specifying the issues upon which advice or assistance are sought, why, and the desired time-frame for assistance. Based on the nature of the request and PFM reform circumstances, some options are prepared on how best to meet country needs, and these are discussed with authorities. Based on available resources, qualified experts, and competing requests for assistance from other countries, FAD management takes a decision on the request, and promptly informs the authorities. While most IMF TA is financed directly by the Fund itself, about one-third is financed by external parties, such as bilateral donors.

Why do countries seek FAD TA?

Authorities have a variety of reasons for asking for IMF TA. Reasons include: consistently high-quality advice; unbiased advice drawing on global experience; an independent, third-party view on PFM reforms and strategy; practical advice, drawing on FAD staff expertise (nearly all of whom have direct experience working in Ministries of Finance prior to joining the IMF); and quick response times.

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