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February 21, 2011

A Whole System Approach to Strengthening PFM (CIPFA Conference)

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Posted by Alan Edwards, International Director, CIPFA

Imagine a UK without CIPFA (or a USA without CPA or Nigeria without ICAN or…) and the Permanent Secretary at the Treasury (or…) inviting an overseas institute of public finance to help create a new qualification for public sector finance staff. That is the analogy we have been using when examining the issues to address when asked to provide PFM and professionalization support in other countries. I find that helps illustrate the scale of challenge involved and the need to think through the whole system impacts of change.

CIPFA’s Whole System Approach to PFM is a more formal and comprehensive analysis of all the key players and processes. CIPFA with the support of DFID has produced this paper to assist with the design of holistic PFM improvement programmes.

The thinking behind the paper has helped shape the agenda for our international PFM conference in London 15-17 March – see www.cipfa.org.uk/pfmconference

The paper advocates a whole system approach to PFM reform and improvement. The new reference model assists with mapping the current institutional architecture in a country. It also recognises that culture is a key determinant of success in PFM reform.

The paper is not a prescriptive improvement tool that should be followed slavishly. We recognise that improvement is local and must be tailored to local characteristics, capacity and priorities. Nor are we suggesting a new tool to measure PFM. PEFA is a good tool – indeed we train people on how to use it! – and we have our own FM model that is being licensed for use internationally to assess individual organisational PFM health.

Our focus is on the whole system so that countries can recognise the interconnectedness of key players and actors. Obviously, we emphasize the importance of financial accountability, citizen involvement, parliamentary scrutiny and the absence of corruption.

Our organisational framework diagrams for each region of the world are particularly useful. In them we map the key players in the whole system including international sponsors and donors plus global, regional and local governmental, professional, training and standard setting bodies. We use this approach to map a clear organisational framework when we start our own PFM reform work around the world.

Our conclusions have shaped the issues we will be talking about at our conference, namely

  •  Using money well is the 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
  •  Local accountancy bodies offering PFM focused training are key players in any country system

In short CIPFA believes there is a need for a stronger PFM profession to sustain improvement programmes.

The full paper plus a user friendly powerpoint version of the Whole System Approach analysis is available on the CIPFA website – www.cipfa.org.uk/international/whole_system_approach.cfm

 

 

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