Posted by Jason Harris
A neglected area of PFM reform is the administrative (or organizational) classification, also known as the administrative segment of the budget classification. There appears to be no publicly-available documentation of comprehensive reform of an administrative classification. This despite the apparently unanimous view of PFM experts that a sound administrative classification is fundamental to a sound budget classification and a sound budget classification is fundamental to a sound PFM system. The article on the reform of Tajikistan’s administrative classification posted earlier this week on this PFM Blog by John Zohrab, Robert Brudzynski, and George Gridilian gives a good illustration of why having a sound administrative classification is important and of the challenges met in introducing one.
A possible reason for the lack of publicly-available documentation of comprehensive reform of an administrative classification is that most countries have relatively sound administrative classifications. According to this view, the work involved in reforming an administrative classification is so obvious and straightforward that it should be part of the day-to-day responsibilities of ministries of finance and should not warrant separate reform status.