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May 14, 2018

Stocktake of PFM Diagnostic Tools

Pefaimng
Posted by the PEFA Secretariat

The PEFA Secretariat has just published a report that takes stock of the PFM Diagnostic Tools in use as of 2016. The report incorporates feedback following the publication of a consultation draft in 2017. The main objective of the report is to provide governments and their development partners with information to support selection of assessment tools that fits their needs.  A companion guide has been prepared to provide an easy overview of the range of the PFM diagnostic tools.

The latest study is the third in a series of reports of PFM diagnostic tools undertaken by the PEFA Program. The report describes the key characteristics of 45 individual diagnostic tools for PFM systems used internationally and highlights the growth in the number and breadth of these tools since 2010. The report organizes the diagnostic tools in three groups defined by type:

  • broad diagnostic or analytical tools covering all aspects of the PFM system (12 tools)
  • tools focusing on individual PFM elements, institutions or sub-systems and (24 tools)
  • tools used by development partners to assess fiduciary risk (9 tools)

The report describes the tools’ technical and institutional coverage, assessment methodology and application options.

The total number of tools identified has increased from 33 in 2010 to 45 today. The increase in the number of tools has been most noticeable for those which focus on individual PFM elements, institutions or sub-systems, with a concentration of new tools in revenue administration, fiscal transparency, public investment management and sub-national government.

Most of the PFM diagnostic tools identified in 2010 have been updated or replaced by a new version.  Updates and replacements have typically expanded the subject-matter coverage.  The coverage of many tools has been expanded and updated in line with international standards and good practices of PFM.

Detailed assessment tools on specific subjects remain in demand despite the enhanced subject coverage of the broad diagnostic tools. Most PFM functions are covered by such specialized tools but some gaps remain in areas   such as internal control and internal audit where widely accepted international standards exist.

About half of the tools may be undertaken as self-assessments by the government whose PFM systems are being reviewed. The other half can only be undertaken by external assessors.

The 2010 Stocktake included a range of proposals for streamlining coverage of tools and enhancing collaboration between tool custodians. There has been good progress on implementing most of these recommendations. However, less progress has been made on the recommendations to enhance collaboration between development partners at country level to reduce duplicative processes, building government capacity, and reducing transaction costs associated with undertaking diagnostics. 

PEFA has maintained its position as the most commonly used instrument for assessing the quality of public finance management systems. An examination of the relationship between PEFA and other diagnostic tools covered by the report suggests that PEFA is complementary to many of the other tools, particularly those which focus on specific areas of PFM. The PEFA Secretariat would welcome feedback on the report either on the IMF Blog or our Twitter and Facebook Accounts.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

 

 

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