References on Public Financial Management

There is now a large amount of information, papers, guidance, books etc available on the internet on public financial management and audit. Summaries of some of the best material is provided below:

SIDA (2007) Public Finance Management in Development Co-operation – A Handbook for Sida Staff
This handbook provides a useful overview of public financial management (PFM) from the perspective of donor staff. The purpose of this handbook is to support the everyday management of development cooperation to deal with issues related to public finance management (PFM). The handbook shows how PFM affects development cooperation. Its ambition is thus to provide concrete advice for the implementation of operational tasks by presenting answers to what to think of and how to do it.
Appendix 2 (pages 135 -161) provides a useful brief summary of the various aspects of public financial management.
Appendix 4 165 – 171 provides useful glossary.
http://www.train4dev.net/fileadmin/Resources/Publications/SIDA_2007_Public_Finance_Management_in_Development_Co-operation.pdf
tags: public financial management, corruption, audit, accounting, taxation, development, donor

Allen, R & Tommasi, D (eds) (2001) Managing Public Expenditure – a reference book for transitional counties OECD, Paris
The book covers all aspects of public expenditure management from the preparation of the budget to the execution, control and audit stages. It is intended to be a practical, operational guide to help countries that are designing and implementing new laws and procedures relating to public expenditure management, and to improve the transparency of budgetary procedures and information. Beyond its immediate target audience in Central and Eastern Europe, we believe that the book will be of interest to developing countries and countries in transition - and developed countries also - in all parts of the world. Good budgeting systems rest on certain classic principles and practices of administration, wherever these systems are to be found.
http://www.oecd.org/dataoecd/31/40/1891847.pdf
tags: public financial management, budgeting, audit, accounting

PEFA Secretariat (2005) Public Financial Management Performance Measurement Framework, Washington DC: World Bank
PEFA is a partnership between the World Bank, the European Commission, the IMF and various bilateral donors. It aims to support integrated and harmonised approaches to assessment of public financial management (PFM). The PEFA Framework provides an agreed set of benchmarks to assess public financial management which have been used in more than 100 countries since they were launched in 2005
http://www.pefa.org/index2.htm
tags: public financial management, budgeting, audit, accounting

Vivek Ramkumar (2008) Our Money, Our Responsibility: A Citizens' Guide to Monitoring Government Expenditures, Washington DC: International Budget ProjectThis Guide offers an overview of government budget implementation processes and provides practical, tested tools that can be used by civil society organizations interested in monitoring government expenditures. It also provides a non-technical introduction for other users.
http://www.internationalbudget.org/resources/expenditure/IBP-Expenditure-Monitoring-Guide.pdf
tags: public financial management, civil society, budgeting, accounting

Pretorius C and N (2009) Review of PFM Reform Literature, London: DfID
This review of literature on experience with Public Financial Management Reform was commissioned by DFID on behalf of the Dutch Ministry of Foreign Affairs, the
Swedish International Development Cooperation Agency (Sida), the Canadian International Development Agency (CIDA) and the African Development Bank (AfDB). It aims to synthesise the main theoretical approaches and findings from evaluations of PFM reform programmes, and to identify knowledge gaps. The literature reviewed includes academic and technical articles, development practitioner guides, manuals, handbooks and websites.
The review seeks to address two sets of information: an overview of models and approaches, and a review of reform experience. It did not prove possible to relate reform experience to the models presented, which represents a significant shortcoming in our understanding of PFM reform. In reality, the links between theoretical and practical approaches are weak – in the case of the newer approaches, reform experience has pre-dated the models, and indeed informed their development. The evaluations reviewed here did not make use of theoretical models to inform their evaluation frameworks. It would therefore contribute to the PFM evaluation literature if the forthcoming evaluation was to base its design framework explicitly on recent theoretical models, and our understanding of the institutional basis of each model. http://www.sida.se/sida/jsp/sida.jsp?d=118&a=45381&language=en_US
tags: public financial management, corruption, audit, accounting, taxation, development, donor, development

Andy Wynne (2008) model National Audit Office Act
This is a rehearsal of a general act which has not been made specific for a particular country. In the event that a country might wish to use this draft as the basis for its own legislation, it is important that its provisions are all subject to expert legal the context of the constitution, legal system and other traditions of the particular country concerned. This will mean that all or some of the sections may not be found to be appropriate or acceptable.
tags: audit, law

Andy Wynne (2008) Model Public Financial Management Act
This is a model act which has not been made specific for a particular country. In the event that a country might wish to use this model as the basis for the reform of its own legislation, it is important that its provisions are all subject to expert legal review in the context of the constitution, legal system and other traditions of the particular country concerned. This will mean that all or some of the sections may not be found to be appropriate or acceptable.
tags: public financial management, budget, law

Andy Wynne (2002) Governance in the Public Sector: An ECSAFA Perspective, Nairobi: ECSAFA
The principles of good governance – openness, integrity and accountability – are not just optional extras. They are the fundamental foundations on which effective organisations are built. In the public sector, governance is as important, or even more important, than in the private sector. This study is appropriate for central government ministries or departments that do not have a governing body. It is assumed that a permanent secretary, who is an executive manager and the head of a paid service reporting to a minister, manages such bodies. The minister is assumed to be politically responsible for the ministry or department.
tags: public financial management, governance, internal control, audit

Andy Wynne (2004) Guidelines on the Good Governance of Parastatal Organisations: An ECSAFA Perspective, Nairobi: ECSAFA
These Guidelines aim to provide practical guidance on good governance for all types of parastatal organisations across Africa, but will also be relevant for other regions of the world. Parastatal organisations are taken to include government business enterprises and state corporations and other organisations, including boards, agencies and institutions which are established as semi-autonomous entities with their own governing bodies. In recent years, some state enterprises which operated on a commercial basis have been privatised, but other governing bodies and agencies have been established to provide public-sector services that were previously provided directly by a ministry. Thus this type of organisation continues to be significant.
tags: public financial management, governance, internal control, audit, state owned enterprises

International Journal of Governmental Financial Management:
A journal on public financial management aimed at practitioners in the global south. Published twice a year and available for free download from:
www.icgfm.org/digest.htm
tags: public financial management, governance, internal control, audit, accounting,

The Paris Declaration - Aid Effectiveness, Ownership, Harmonisation, Alignment, Results And Mutual Accountability (2005)
The Paris Declaration partly aims to ensure greater reliance on countries’ Public Financial Management (PFM) systems to create assurances that aid is used for the intended purposes. It includes the following five commitments:
OWNERSHIP - Partner countries exercise effective leadership over their development policies, and strategies and co-ordinate development actions
ALIGNMENT - Donors base their overall support on partner countries’ national development strategies, institutions and procedures
HARMONISATION - Donors’ actions are more harmonised, transparent and collectively effective
MANAGING FOR RESULTS - Managing resources and improving decision-making for results
MUTUAL ACCOUNTABILITY - Donors and partners are accountable for development results
http://www1.worldbank.org/harmonization/Paris/FINALPARISDECLARATION.pdf
tags: public financial management, governance, aid, partner country

Third High Level Forum on Aid Effectiveness - Accra Agenda for Action, September 2008
The Accra Agenda for Action aimed to accelerate and deepen the approach of Paris Declaration and identified three major challenges facing the development community:
· country ownership
· building more effective and inclusive partnership
· Achieving development results—and openly accounting for them.
http://www.undp.org/mdtf/docs/Accra-Agenda-for-Action.pdf
tags: public financial management, governance, aid, partner country

Comment on IMF PFM Blog questioning the continued emphasis on balanced budgets (Wynne, 2009)
Based on the historical experience of the US and the UK in the post -1945 years, the author argues that budget deficits and government debt may, in certain circumstances be beneficial for economic development
http://blog-pfm.imf.org/pfmblog/2009/05/are-balanced-budgets-really-still-essential-in-the-fight-against-global-recession-and-poverty.html
tags: budget, deficits, fiscal framework, development, history

Jens Martens (2007) The Precarious State of Public Finance
Where do public revenues in developing countries come from – and why are they not higher? What are public revenues used for – and why not only for development and the fight against poverty?
www.taxjustice.net/cms/upload/pdf/martens_precarious_finance__2007.pdf
tags: public financial management, aid, taxation, development

ActionAid (2002) Real Aid 2: Making Technical Assistance Work
A review of the quality of aid provided especially by the UK agency DfID. This report argues that root-and-branch reform of technical assistance is urgently needed to ensure that the aid increases pledged in 2005 result in genuine benefits for people living in the poorest countries. These reforms need to be anchored in four guiding principles: of putting recipient countries in the lead; giving them freedom to choose their own development path; of mutual accountability between donors and recipients; and of country specificity.
http://www.actionaid.org.uk/doc_lib/real_aid2.pdf
tags: aid, donors, education, health, technical assistance, development

F. Weyzig & M. Kokke (2008) Taxation and Financing for Development, Amsterdam: SOMODomestic tax revenues are an essential source of financing for development. However, compared to other key development financing topics such as trade, aid, and debt, taxation has only received limited attention so far. This paper describes some of the main problems that undermine direct tax revenues in developing countries, with a focus on tax evasion and aggressive tax avoidance by multinational corporations.http://somo.nl/publications-en/Publication_2955
tags: taxation, aid, development

Odd-Helge Fjeldstad, Mick Moore (2008) Revenue Authorities and State Capacity in Anglophone Africa, CMI Working Paper, no. 2008:1, Chr. Michelsen Institute, BergenWhat has driven the spread of Autonomous Revenue Authorities (ARAs) in Sub-Saharan Africa? What are their implications for public authority? This working paper from the Chr. Michelsen Institute, Norway, analyses the experience of ARAs in Africa.
Since the early 1990s, many countries in Sub-Saharan Africa, mainly Anglophone countries, have established ARAs organisationally distinct from Ministries of Finance, with some real operational autonomy, and with staff paid at rates substantially higher than those in comparable public sector jobs. ARAs are seen by some as a step to weaken the central state and to privatise tax collection. This is a misreading of the story of ARAs in Africa. ARAs remain under close government control both financially and politically.
http://www.cmi.no/publications/publication/?2952=revenue-authorities-and-state-capacity-in
tags: revenue, taxation, development


Santiso, C (2007) Understanding the politics of the budget: What drives change in the budget process? London: DfID
The purpose of this briefing note is to:
distil the findings of political analyses of the budget process in developing countries;
highlight why a good political understanding of the budget process is important to improve aid effectiveness, particularly in the context of poverty reduction budget support (PRBS);
suggest entry points for donors to engage with the politics of the budget and strengthen domestic demand for accountability in public finances; and
provide operational guidance on how to undertake politics of the budget reviews.
http://www.dfid.gov.uk/pubs/files/politics-of-the-budget.pdf
tags: politics, budget, aid, partner country

Richard Allen (2009) The Challenge of Reforming Budgetary Institutions in Developing Countries, Washington DC: IMF WP/09/96
The development of sound budgetary institutions in countries such as France, the U.K. and the U.S. has taken a very long time―200 years or more―and is still evolving. Institutional reform is also likely to be very slow in developing countries since the budget is especially prone to rent-seeking influences. The paper discusses the currently fashionable emphasis on complex, multiannual PFM reform strategies, which have been strongly promoted by the donor community; and advocates a simpler approach grounded on Schick’s important principle of “getting the basics right.”
www.imf.org/external/pubs/ft/wp/2009/wp0996.pdf
tags: public financial management, budget, donor, aid, MTEF, reform

Wynne, Andy (2005) Public Financial Management Reforms in Developing Countries: Lessons of Experience from Ghana, Tanzania and Uganda, Working Paper No. 7, The African Capacity Building Foundation
A review of the literature on the actual level of success of two widely promoted reforms, the Medium Term Expenditure Framework (MTEF) and Integrated Financial Management Information Systems (IFMIS)http://www.acbf-pact.org/knowledge/documents/Working%20Paper%207%20on%20Financial%20Management-Final.pdf
http://tinyurl.com/ceuj72
tags: public financial management, governance, aid, partner country, MTEF, IFMIS, reform

Edited by Anwar Shah (2007) Budgeting & Budgetary Institutions, Washington DC: World Bank
This volume provides a comprehensive guide to reforming budgeting and budgetary institutions. The book is divided into two parts. The first part provides a primer on budgeting and budgetary institutions. It covers budget processes, methods, and associated tools and practices. Both the traditional and modern concepts of budgeting and accounting are elaborated. In addition, implementation issues in introducing integrated financial information management systems and assessment methods for public expenditure management and financial accountability are discussed. The second part of this volume presents an overview of issues involved in prioritising and sequencing public expenditure management in Africa and in post-conflict countries. In addition, two case studies on budgeting are presented that cover Kenya and South Africa.
http://go.worldbank.org/G4D6J4X5Z0
tags: public financial management, governance, budget

Wildavsky, A (1978) A budget for all seasons: why the traditional budget lasts,
Public Administration Review, November/December pp 501-509
An explanation for why incremental budgeting continues to be dominant despite attempts to fundamentally reform it over the last forty years.
tags: budget, reform

Vivek Ramkumar and Paolo de Renzio (2009) Improving Budget Transparency and Accountability in Aid Dependent Countries: How Can Donors Help? Washington DC: International Budget Project
Only 20 percent of the world’s governments are providing adequate information for their citizens to begin to hold them accountable for managing the public’s money.
The Survey shows that transparency practices can be improved very quickly and at little cost if there is sufficient political will to implement reforms. The decision to undertake budget transparency reforms can be supported in a number of ways, including by demands for and support of increased transparency within a country by the public, civil society organizations (CSO), legislatures, supreme audit institutions (SAI), and the media. In developing countries, political will can also be supported by external factors, such as the policies and practices adopted by donor agencies and the international community.
http://www.internationalbudget.org/resources/briefs/brief7.pdf
tags: public financial management, budget

Paolo de Renzio and Joachim Wehner (2009) Budget Practices and Procedures in Africa 2008, Pretoria: Collaborative Africa Budget Reform Initiative (CABRI) and the African Development Bank
Write up of budget practices in Africa based on a survey of 26 countries and other material. Provides a good snapshot of budgeting across the continent, good practices and practical reform agendas for similar countries.
http://www.cabri-sbo.org/en/component/ionfiles/?func=download&fileid=7
tags: public financial management, budget, Africa

OECD-DAC (2006) Methodology for Assessment of National Procurement Systems
This manual has been elaborated in collaboration between OECD DAC and the World Bank, based on the Joint Venture on Public Procurement subworking group to the OECD/DAC Working Party on Aid Effectiveness and Donor Practices. It is a very detailed diagnostic instrument on ways of evaluating the status of the partner country’s procurement system, measured with the aid of a substantial number of indicators, both formal and actual compliance indicators.
http://www.oecd.org/dataoecd/1/36/37390076.pdf
tags: procurement

U4 - Corruption in Public Procurement
How does corruption affect public contracting and what can be done about it? These pages give a general overview of the problem, and explore the examples of two sectors - health and education. Guidance is provided on:
Public contracting and procurement - a general introduction
What is public contracting?
How corruption operates in public contracting
Additional risks
What can be done?
http://www.u4.no/themes/procurement/procurementintro.cfm
tags: procurement, corruption

Introducing Financial Management Information Systems in Developing Countries
Jack Diamond & Pokar Khemani International Monetary Fund (IMF) - Fiscal Affairs Department, October 2005, IMF Working Paper No. 05/196
The experience, costs and actual benefits achieved from a decade of significant investment in sophisticate IT systems for public sector financial management in developing countries. The conclusions are that such investments are usually a high risk strategy.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=888065
tags: public financial management, IFMIS, reform

INTOSAI (2004) Guidelines for Internal Control Standards for the Public Sector.
Vienna: INTOSAI
This provides an overview of internal control within the public sector. The concept of internal control is defined and its scope is delineated. Attention is also given to the limitations of internal control. The components of internal control are then presented and discussed. The document ends with consideration of the relevant roles and responsibilities. In each section, the main principles are first presented succinctly followed by further background. Reference is also made to concrete examples. Attached to the document is a glossary containing the most important technical terms.
http://intosai.connexcc-hosting.net/blueline/upload/1guicspubsece.pdf
tags: public financial management, internal control, audit

COSO Enterprise Risk Management — Integrated Framework
The framework defines essential enterprise risk management components, discusses key ERM principles and concepts, suggests a common ERM language, and provides clear direction and guidance for enterprise risk management. The executive summary provides an introduction to this formal approach to risk management. This has been developed for the private sector in industrialised countries, but the model has been widely used.
http://www.coso.org/documents/COSO_ERM_ExecutiveSummary.pdf
tags: governance, internal control

Andy Wynne (2000) Key public-sector internal controls The most important internal controls for public-sector organisations are outlined in this document. This summary was produced from a summary audit report from the previous Auditor-General of The Gambia.http://www.accaglobal.com/pubs/general/activities/library/public_sector/ps_pubs/papers/ps_doc_013.pdf
tags: governance, internal control

Diamond, J. (2002) The Role of Internal Audit in Government Financial Management: An International Perspective (WP/02/94) Washington: IMF
An overview of the role and practice of internal audit in developing countries.
http://www.imf.org/external/pubs/ft/wp/2002/wp0294.pdf
tags: governance, audit

Institute of Internal Auditors (2006) The Role of Auditing in Public Sector Governance
This practice guide presents information on the importance of public sector audit activity to effective governance and defines the key elements needed to maximise the value public sector audit activity provides to all levels of government. The practice guide is intended to point to the roles of audit, methods by which those roles can be fulfilled, and the essential ingredients necessary to support an effective audit function.
www.theiia.org/download.cfm?file=3512
tags: governance, audit

Government Accounting Standards Board (GASB, US) (2006), Why Governmental Accounting and Financial Reporting Is—and Should Be—Different
The first nine pages of this document provide an authoritative summary of the main differences between private sector and public sector accounting and financial reporting.
http://www.gasb.org/white_paper_full.pdf
tags: public sector financial management, financial reporting, accounting

Wynne, A. (2008) Accrual accounting – a fad that has had its day?, International Journal of Governmental Financial Management, 2008: Volume VIII, Number 2
Accrual accounting has been heavily promoted for the public sector in many countries. This paper summarises the actual achievement of the presumed benefits in the UK, Australia and New Zealand. It finds that the costs are significant, but that the benefits are limited. It is now widely recognised that accrual accounting is not appropriate for the governments of developing countries and many members of the OECD have not implemented these reforms.
http://tinyurl.com/ceuj72
tags: public sector financial management, financial reporting, accounting, accrual

IMF Fiscal Transparency Code
http://www.imf.org/external/np/fad/trans/code.htm
tags: public sector financial management, budgeting, financial reporting

The State of Financial Accountability Reporting 2008 – Auditor General of Cayman Islands
Ten years after the Cayman Islands agreed to adopt accrual accounting, the first accrual accounts were 2.5 years late and the Auditor General found the “current situation deplorable” and he believed that “the legislative assembly has lost control of the public purse”.
http://www.gov.ky/pls/portal/docs/PAGE/CIGHOME/FIND/ORGANISATIONS/AZAGENCIES/AUD/SPECIALREPORTS/THESTATEOFFINANCIALACCOUNTABILITYREPORTING2008.PDF
tags: public sector financial management, financial reporting, accounting, accrual, audit

INTOSAI Lima Declaration (1977)
The basic principles of public sector external audit by the international body of Auditors General. A short introduction to best practice.
http://www.intosai.org/blueline/upload/limadeklaren.pdf
tags: governance, audit, standards

INTOSAI (1991) Code of Ethics & Auditing Standards: INTOSAI standards for public sector auditing.
A fairly general introduction to the principles of public sector external audit. INTOSAI Auditing Standards do not have mandatory application, but they do reflect a "best practices" consensus among Supreme Audit Institutions. Each Supreme Audit Institution must judge the extent to which the standards are compatible with the achievement of its mandate.
http://www.intosai.org/Level3/Guidelines/3_AudStandComm/3_CodEth_AudStand2001_E.pdf
tags: governance, audit, ethics, standards

INTOSAI (2007) Mexico Declaration on SAI Independence, Vienna: INTOSAI
Supreme Audit Institutions generally recognize eight core principles as essential requirements of proper public sector auditing. Considerations of the extent to which the auditing body is independent of the executive and especially the entities they audit are particularly important.
http://www.intosai.org/blueline/upload/issai10mexikodekle.pdf
tags: governance, audit, independence

Working with Supreme Audit Institutions DfID 2005
An introduction, for donor officials, of the most effective ways of working with Auditors General in developing countries. The briefing outlines the institutions, challenges and best practices of audit.
http://www.train4dev.net/fileadmin/Resources/General_Documents/Working_with_Supreme_Audit_Institutions_PFM.pdf
tags: governance, audit, donor

INTOSAI (2007) Building Capacity in Supreme Audit Institutions: A Guide. London: UK National Audit Office http://cbc.courdescomptes.ma/upload/committee/fichier1.pdf
Assessing Capacity, developing a capacity building strategy, managing and sustaining change. Strengthening professional capacity, organisational capacity and dealing with the external environment.
tags: governance, audit, capacity


Paolo de Renzio (May 2009) Taking Stock: What do PEFA Assessments tell us about PFM systems across countries? London: Overseas Development Institute Working Paper 302
The Public Financial Management (PFM) Performance Measurement Framework, an indicator-based assessment tool developed by the Public Expenditure and Financial Accountability (PEFA) initiative, was launched in 2005 and has been applied so far in over 60 countries. PEFA reports provide detailed accounts of the performance of PFM systems along various dimensions. This paper is based on the results of the 57 PEFA assessments completed as of August 2007. It looks at comparative cross-country PFM performance, overall and across the different budget dimensions defined by the PEFA methodology (out-turns, cross-cutting features, budget cycle), and analyses differences linked to certain country characteristics which might have an influence over PFM system performance, using both bivariate and multivariate analysis. It is based on a numerical conversion of the letter-scores used in the assessments, a methodology which can be considered controversial but which nevertheless yields some interesting results.
http://www.odi.org.uk/resources/download/3333.pdf
tags: public financial management, budgeting, audit, accounting

Joint Venture on Public Financial Management (2009) Managing Development Resources - The Use of Country Systems in Public Financial Management, Paris: OECDwww.sourceoecd.org/development/9789264056152
Reviews the reasons for and the practice of budget support. Provides the reasons for using country PFM systems to deliver aid. Considering aid Effectiveness. Lessons the development community has learned about how to strengthen country PFM systems. Practices in the use of country PFM systems. Developing a country-led reform strategy carried out with co-ordinated donor support and giving attention to the important political dimensions of reform. Measuring the performance of country PFM systems (PEFA).