What public financial management reforms actually work?

For over a decade the World Bank, followed by the other donors, has been pushing a standard reform agenda for public financial management. This has usually involved large scale reforms such as the Medium Term Expenditure Framework (MTEF), an Integrated Financial Management System (IFMIS), decentralisation and so on. But where is the evidence that this approach to public financial management reform actually works – especially in the ultimate goal of reducing poverty?

Two important studies issued earlier this year have reviewed the experience across Africa and the Middle East, at least in terms of assessments of public financial management against the PEFA framework.

Mat Andrews, of the Kennedy School of Governance, finds “alarmingly similar reforms” across Sub-Saharan Africa and appeals for “less similarity of reforms and more context appropriateness”. A World Bank study of the Middle East and North Africa finds that medium term sector strategies (MTEF) and large information technology projects (IFMIS) are amongst the most challenging public financial management reforms.

It is to be hoped that the donor community will learn the lessons of this research. The least we can expect is that only reforms which have been proved to be successful in a similar environment are promoted. Developing countries need to learn from the experience of others and not just repeat their mistakes. Reform of public financial management has consisted too much of solutions in search of a problem. We need far more analysis and understanding of individual public financial management systems and processes. We need less dependence on consultants and more on the expert knowledge of the local public financial management practitioners.

Further details of the results of the two surveys are provided below.

How Far Have Public Financial Management Reforms Come in Africa?

Mat Andrews (2010) Harvard: Kennedy School of Governance

web.hks.harvard.edu/publications/getFile.aspx?Id=548

How strong has African public financial management become? How do African public financial management systems now facilitate effective public financial management? Where are the next challenges and how can they be met?

This paper addresses these questions, using PEFA analyses to identify central themes of the continent’s recent public financial management story. The themes emerge from the quantitative and qualitative data from the 31 central government PEFAs completed prior to mid-2008 in Sub-Saharan Africa. The World Bank (2010) study reviewed above similarly uses the results of PEFA analyses for 10 countries in North Africa and the Middle East.

Some of the key findings of this research are:

“Three themes are identified across the process areas in African public financial management systems:

(i) Budgets are made better than they are executed;

(ii) Practice lags behind the creation of processes and laws; and

(iii) Actor concentration pays:

The first theme relates the observation that budget preparation processes are comparatively stronger than budget execution and oversight processes across all African countries. In public financial management jargon, this is commonly presented as ‘upstream processes are stronger than downstream processes’.

The second theme is more nuanced, showing across all process areas that African public financial management systems generally suffer from an implementation deficit—laws and processes may be in place but seldom affect actual behavior. The theme reflects a new institutional differentiation between de jure and de facto reform and is shown in the words of one recent diagnostic, “Legislation and procedures have been improved ... [but] implementation has not yet been achieved.”

The third theme offers even more specificity, suggesting that processes are stronger when narrower, concentrated sets of actors are involved in implementation. Processes are weaker where they involve multiple players, especially outside of central public financial management entities like the budget department or treasury.” (page 1)

“Themes also arise in explaining why countries fall into different leagues. A range of factors are seen to influence the quality of public financial management systems and outcomes, presented as five major themes:

· Growing economies have stronger public financial management.

· Stability delivers PFM progress, although there may be a peculiar ‘starting from scratch’ dividend for countries enjoying post conflict stability.

· States with larger domestic, non-mineral income sources have stronger public financial management.

· Longer periods of broad reform commitment foster public financial management progress.

· And, Colonial heritage matters (maybe).” (page 3)

On the final of the above points, Andrews says that this is certainly true for external audit and may also be true for internal audit.

The paper also questions whether “context is taken seriously in reform design?” (page 42). The paper identifies five leagues in terms of the quality of public financial management (at least shown by the PEFA reports). “The leagues were shown to be significantly different. However, they have alarmingly similar reforms in place” (page 44). So, for example, of the 31 countries reviewed an MTEF was implemented in 28 countries, programme budgeting in 25 and an IFMIS in 20. All the countries had introduced commitment controls, COFOG analysis of expenditure, a single treasury account and IPSAS.

As a result of the study, Andrews makes the following three recommendations for public financial management reform:

· there should be less focus on technicalities and more on reform ‘space’

· there should be less concentration and more coverage

· there should be less similarity of reforms and more context appropriateness.

Public Financial Management Reform in the Middle East and North Africa: An Overview of Regional Experience

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/0,,contentMDK:22634529~pagePK:146736~piPK:226340~theSitePK:256299,00.html

This World Bank survey reviews the experience of public financial management reform across the Middle East and North Africa. This includes a review of the results for PEFA reviews for 10 countries across the region.

One of the most important functions governments perform is that of mobilizing and deploying financial resources to achieve their objectives. The way in which this money is spent has huge implications for their broader development trajectory.

For governments to perform their spending function well, their public financial management (PFM) practices should meet certain well-established criteria

Government spending should be affordable, in that it takes place within a framework that ensures expenditure is consistent with monetary and fiscal policy objectives and sustainable in the long term.

Governments should optimize the allocation of public resources between different sectors and expenditure categories in a way that reflects their policy priorities, including sustainable growth as well as human and social development.

Such expenditure should be efficient, in that it maximizes output for a given set of inputs, and effective, in that it supports the successful realization of the government’s goals.

It should also be transparent; and regular, that is conducted in accordance with the relevant laws and regulations; and undertaken with appropriate checks and balances to ensure financial probity.

While such objectives are relatively straightforward, their realization can be challenging. The study provides 10 lessons or promising practices from the experience in the region:

· Know the Value—and Limitations—of Political Economy Analysis

· PFM Reform as Means and Not Ends

· Context Matters, so Swim with the Current

· The Wisdom of “Muddling Through”—Grand Strategy versus Incremental

· Establish Basic Systems before Contemplating More Advanced Reforms

· When Possible, Keep Reforms Quick, Simple and Mutually Reinforcing

· Be Wary of Large Financial Management Information Systems

· Internal Challenges: Leadership, Coordination, Skills and Incentives

· External Stakeholders—Useful, but Don’t Count on Them

· Lessons for Donors: Be More Strategic, Selective, Modest and Flexible.

In many countries in the Middle East and North Africa, public financial management reforms have been on the agenda for a decade or more. This report seeks to reflect upon this experience to date and better understand the nature of the public financial management challenges confronting these countries.

A summary of the successful and challenging public financial management reforms in the region is provided by the following table (page 35):

Successful PFM Reforms	Mixed	Challenging PFM Reforms
• Improving budget classification • Improving budget transparency • Reforms in tax and customs	• Enhance macro-fiscal capacity • Budget integration • Streamlining ex-ante control processes • Commitment control • Payroll management • Treasury operations • Reform of accounting systems • Internal and external audit	• Medium term sector strategies • Improving budget scope and coverage • Introducing performance into the budget • Procurement reforms • Large information technology projects

This study surveys these reforms across ten Arab countries: Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, Syria, Tunisia, the West Bank and Gaza and Yemen. They were selected partly because they are places where the World Bank has been heavily engaged on public financial management issues and been able to gather a wealth of comparative information.

They also represent an interesting cross-section of administrative traditions and different levels of development. Taken together, these countries are home to over two thirds of MENA’s population and nearly one third of its GDP. Many of the findings from this analysis will be of relevance to other MENA countries as well.

Public Audit in Francophone Africa – the complementary roles of the General State Inspectorate and the Court of Accounts

The Inspection générale d’Etat is an African innovation, essentially presidential, which over turns generally accepted paradigms, especially of experts from parliamentary countries or at least non-presidential, which is significantly different from arrangements which exist elsewhere. (Gueye 2007: 199)


Introduction

In most French speaking African countries there is a General State Inspectorate (usually called an Inspection générale d’Etat, but other terms are used). This type of institution evolved in post-colonial Africa and so has no parallels in France, Canada or other developed French speaking countries. Many public financial management advisors consider the General State Inspectorate to be an internal audit institution and most PEFA reports make this assumption. However, in around a third of Francophone African countries the General State Inspectorate is the Supreme Audit Institution and the member of INTOSAI for the country.

It has been argued that General State Inspectorates should not be considered as external auditors or supreme audit institutions as they are part of the executive. In contrast the Courts of Accounts (Cour des comptes) are claimed to be outside and functionally independent of the executive. General State Inspectorates are usually appointed by the president or the prime minister and their annual reports are sent to these offices rather than to parliament. However, this may also be the case for Court of Accounts and, indeed for Auditors General in Anglophone countries. Independence is not easy to achieve for any Supreme Audit Institution. The new president of the Court of Accounts in France was, for example, in effect appointed by Sarkozy in early 2010, the French president, and the UK government has just failed to establish an ‘independent’ budget office.

Multiple Audit Institutions in Many Countries

INTOSAI requires each country to nominate a Supreme Audit Institution, however, in many countries there are several bodies which contribute to the function of a Supreme Audit Institution. The public sector consists of a complex amalgam of different types of entities, these include central government ministries, departments and agencies, sub-national governments (states, provinces, local governments etc) and state owned enterprises (or parastatal organisations as they are usually termed in Africa). In many countries, the Supreme Audit Institution is only responsible for central government. So, for example, in the UK and US the Supreme Audit Institution is not responsible for the audit of local (or state) governments (as is also the case in Nigeria and Ethiopia). In France and other countries regional Courts of Accounts play a similar role. In addition, in some countries, state owned companies are not audited by the Supreme Audit Institution, they may be audited by private audit firms (for example, UK and Nigeria) or a separate institution, for example, the Audit Service Commission as in Ethiopia and Eritrea. As a result, there is a spectrum of different approaches. In India there is a very powerful Auditor General that is responsible for the audit of almost the totality of the public sector, in contrast in Nigeria there are 74 Auditors General and none of them are allowed to audit the accounts of state owned companies.

Models of Supreme Audit Institution in Francophone Sub-Saharan Africa

Francophone Sub-Saharan African countries have two types of institution which undertake external audit type functions, either of which may be designated as the Supreme Audit Institution for an individual country:

• the Court of Accounts is a division of the Supreme Court or separate court within the judicial system. The individual members of the court (judges or magistrates) are led by a president who is generally appointed by the president of the relevant country. The court, with the support of its staff, judges the legality and regularity of the transactions and accounts of individual public accountants and reports to Parliament on the overall State Account. There is limited follow up of the Court’s reports by Parliament. The professional staff traditionally have a legal rather than accounting or audit backgrounds, but this is expanding in several countries

• the General State Inspectorate reports either to the president or the country’s prime minister, but it is largely independent of the state bureaucracy and has access to all state institutions, public servants and their documents. It usually largely sets its own annual programme. Each public institution may not be visited or reported upon each year. The larger ministries will be reviewed each year, but different departments will be subject to review each year. The professional staff of the General State Inspectorate are usually educated in public financial management at specialist higher education institutions. If irregularities are found they are reported to the relevant ministry or other agency for appropriate action to be taken (Wynne, 2010).

The Court of Accounts, as part of the judiciary, may be considered to be independent of the executive, but their members may be appointed by the president or the council of ministers and their reports may not be submitted direct to parliament. In France, which is the model broadly adopted by most Franco-phone countries, the first president of the accounts court is formally appointed by the council of ministers. The accounts court produces two annual reports. The first is sent to all members of parliament and reviews the execution of the budget. The second annual public report is sent to the president rather than to parliament (Bouvier, Esclassan & Lassale, 2004).

As the General State Inspectorate is accountable to the president or the prime minister they may also have a high degree of independence from the entities (ministries, departments and agencies) which they audit. A distinction could perhaps be made between independence from the executive and independence from the entities which are subject to audit. If the General State Inspectorate has the support of a strong president they may in fact have considerably more independence from the ministries and other bodies which they audit than a Court of Accounts whose budget may have to be submitted through the Ministry of Finance before being agreed by parliament (Wynne, 2010). In addition, there has been a trend in recent years for more General State Inspectorates to make their annual reports public.

The following General State Inspectorates are all members of INTOSAI and are the Supreme Audit Institutions for their countries (but each of these countries also has a Court of Accounts or equivalent):

· Burundi - Inspection Générale de l’Etat

· Cameroon - Contrôle Supérieur de l’Etat

· Centrafrique - Inspection Générale d'État

· Guinée Conakry - Inspection Générale d'État

· Mali - Contrôle Générale des Services Publics

· Togo - Inspection Générale d'État.

In these countries, the General State Inspectorates are full and active members of INTOSAI. The General State Inspectorate of Cameroon is currently hosting the Secretariat of CREFIAF, the sub-regional body of Supreme Audit Institutions in Francophone African countries. In 2002 the General State Inspectorate of Cameroon was also a member of the Board of INTOSAI. In the same year the 8th General Assembly of AFROSAI (the regional body of Supreme Audit Institutions in Africa) was held in Burkina Faso when the General State Inspectorate was the Supreme Audit Institution for that country and it was agreed that they would continue as the Secretary General of AFROSAI.

Wide Scope of Francophone Supreme Audit Institutions

Both the General State Inspectorate and the Court of Accounts have a wider scope than would be expected for Auditors General in Anglophone countries. They have be power to follow public money, something that was only recommended in the UK by the Sharman review in 2001 (Sharman). This report defined public money as:

“All money that comes into the possession of, or is distributed by, a public body, and money raised by a private body where it is doing so under statutory authority” (Sharman 2001: 15)

And then the report went on to recommended that public money should be subject to audit by public auditors. This principle is generally followed in Francophone countries and the General State Inspectorate and the Court of Accounts have a wide remit to audit the following:

• all public services, offices and organisations
• local authorities
• parastatal bodies, public companies, enterprises and establishments
• public projects and development agencies
• any bodies benefiting from public financial support (state aid).

The final bullet point may be extended to include all bodies making a public appeals for funds and so may include insurance companies, pension funds and trade unions. In Cameroon this may be extended still further and the General State Inspectorate may audit any private bodies that are strategic for the nation or related to national defence. In Senegal the scope of the Court of Accounts includes all those organisations in the above bullet points, all organisations controlled directly or indirectly by these entities and national appeals for funds from the public and the organisations benefiting from such appeals (World Bank 2009).

Specific Role of the Court of Accounts

In contrast to this wide scope, the Court of Accounts, has a very limited role. The core and original role of the Court of Accounts is to confirm, or otherwise, the legality of the accounts of the public accountants. If their accounts are found to be legal and regular, the public accountant is given quietus, or full discharge, and so is freed of any further personal or financial responsibility for the sums of money that they have paid (Bouvier, Esclassan & Lassale 2004). If any errors or irregularities are found then the public accountant may be required to repay the money concerned and, in addition, they may be required to pay a fine.

The other core role of the Court of Accounts is to provide a report which is sent with the budget out-turn report (financial statements) of the government to the National Assembly. This report may include some broad comments on the level of payments and receipts by the government compared to the budget for the relevant financial year and also a commentary of the general economic and financial environment of the country (Court of Accounts of Ivory Coast 2010). This report also includes a formal opinion or certificate of conformity between the level of payment orders paid by the public accountants and the value of the payments orders raised by the officials with responsibility for raising orders (ordonnateurs) (Lienert 2003).

In addition to this report to the National Assembly, the Court of Accounts provides a General Public Report on the activities of the Court. This is usually addressed to the President and may be made public. This provides general background details of the activities of the Court of Accounts for the year concerned, significant developments, major findings and may include details of training received. It will also usually include a summary of the main activities of the Court and any significant developments.

These quite specific roles of the Court of Accounts mean that the role of the General State Inspectorate may be complementary to the Court. In France, the role of the Court of Accounts has expanded. In Francophone Africa the General State Inspectorate has generally been used to fulfil these additional roles.

Origins of the General State Inspectorate

Under the French approach, there are a series of inspectors for each public service, for example, inspector of education, inspector of health etc. In 1906 the Governor General of French West Africa created the Inspection Service of Administrative Affairs. This body reported directly to the Governor and provided findings and propositions, which were less prescriptive than recommendations (Gueye 2008).

This service was reorganised in 1936 and again in 1937. At this stage the service was independent and essentially mobile. Inspectors were not allowed to take on other management or executive responsibilities. The scope of the work was now all administrative services except for the treasury and the technical services of the colonies head quarters. The inspectors had the obligation to inspect each territorial region every year and to provide an annual report of their activities, observations and follow up (Gueye 2008).

In 1943 the name of this service was changed to the General Inspection of Administrative Affairs. The General Inspector was nominated by decree of the Governor and chosen from amongst the governors of the colonies or the chief administrators. The service was based in Dakar and covered all of French West Africa (Gueye 2008).

With independence, the General Inspection of Administrative Affairs reported to the President of the Council and then to the President of the Republic. The General State Inspectorate was formed in Senegal, for example, in 1964.

More recently General State Inspectorates were established in countries which did not have them before, for example, in Djibouti in 2004 and in Mauritania in 2005. In 2001 the Commission on Reform of Structures and Missions of the State in Algeria recommended the formation of a General State Inspectorate reporting to the President to control the functioning of all public services and administration. This was to have been in addition to the Court of Accounts which reviews the financial operations linked to budget execution.
In Djibouti, despite the already existing Court of Accounts, a General State Inspectorate was established in law in 2001. The idea was that the ex post juridical control (after the event legal control) of the Court of Accounts would be complemented by a body which could act during the implementation of the budget (General State Inspectorate, Djibouti, 2007). The general state inspectorate has developed its own approach to audit which takes in to account all management sub-systems, “this includes:
• evaluating whether the character of new or existing programmes are effective, appropriate or pertinent considering their objectives and whether the expected results are achieved

• identifying constraints and performance factors and whether management has identified alternative solutions or the opportunity costs to achieve the programme’s objectives effectively and efficiently

• identifying any overlaps or duplications or conflicts with other programmes and recommending ways of executing programmes in the best manner possible
• evaluating programmes for conformity with laws and regulations, but also the adequacy of systems of internal control and especially systems to monitor their success” (page 10/11).

This first annual public report from the general state inspectorate of Djibouti also notes that:

“The general state inspectorate is a concept specific to Africa, with a universal, general and extended scope. It usually consists of elite staff recruited through competition from amongst the highest officials of the state (magistrates, national directors, secretaries general of ministries etc), at least in Sénégal, Burkina Faso, Côte d'Ivoire etc” (page 24).

This evolution and the spread of the formation of General State Inspectorates shows that the value and the usefulness of such organisations has been clearly demonstrated and recognised across Francophone Africa.

Conclusions

In Francophone African countries the Court of Accounts and the General State Inspectorate both play a complementary role in the audit, review and inspection of the financial management of their governments. In each case their independence is being improved in a number of countries. Their role is becoming more effective and the resources devoted to these institutions is being increased. However, such improvements need to continue.
In 2002 Transparency International made the following recommendations for further improvements in the quality of both the Court of Accounts and General State Inspectorate.

Court of Accounts

• The mission, objectives and the internal regulations should be defined and voted upon by parliament.
• Systems should be developed to protect the autonomy of the magistrates, their nomination and career management.
• The decisions by the Court of Accounts in their evaluation of public accounts should be final and not subject to any further appeal to another body.
• The annual reports of the Court of Accounts should be made public and subject to extensive publicity.
• The Court of Accounts should be provided with the necessary human, financial and material resources to undertake their work.

General State Inspectorate

• General State Inspectorates should be able to determine the majority of their annual work programmes
• The annual reports of the General State Inspectorates should be made public and subject to widespread publicity.
• The relevant authorities should take into account the propositions made the General State Inspectorate especially when these concern cases of fraud or corruption and recommendations to prevent this in future.
• Recruitment to the General State Inspectorate should be by competitive examination to avoid favouritism. Staff should benefit from regulations to protect the security of their positions and their career development.

In some countries co-operation between the Court of Accounts and the General State Inspectorate has improved in recent years. As with the co-operation between internal audit and the Auditor General in Anglophone African countries, there are a number of ways in which this could be further improved including the following steps (Diamond 2002):

• There should be proper coordination to ensure adequate audit coverage and to minimise duplication of effort.

• There should be access to each other’s audit plans and programmes.

• Periodic meetings should be organised to discuss matters of mutual interest.

• There should be an exchange of audit reports.

• Institutional mechanisms should be created to ensure common understanding and sharing of audit techniques and methods.

• Sharing of training and exchange of staff for two-three years in each case.

An effective Supreme Audit Institution is essential to achieve sound public financial management. In Francophone African countries, either the Court of Accounts or the General State Inspectorate may be nominated as the Supreme Audit Institution for a particularly country. However, these institutions play complementary roles. Despite significant improvements in recent years, further work is needed to optimise the independence, capacity and the resources available to both types of organisation.


References:

Bouvier, M, Esclassan, M & Lassale, J (2004) Finances Publiques, Montchrestien: LGDJ (7th edition)

Court of Accounts, Ivory Coast (2010) General Activity Report for 2008/09, Abidjan: Court of Accounts

Diamond, J., (2002) The Role of Internal Audit in Government Financial Management: An
International Perspective, Washington: IMF Working Paper 02/94

General State Inspectorate, Djibouti (2007) Annual Report of the General State Inspectorate, Djibouti

Gueye, Abdou Karim (2008) Inspections générales d’Etat d’Afrique. Réalités, perspectives et enjeux, Djibouti
www.thebookedition.com/inspections-generales-d-etat-d-afrique-Abdou%20karim%20Gueye-p-2871.html

Lienert, I (2003) A Comparison Between Two Public Expenditure Management Systems in Africa, Washington: IMF

Sharman, Lord (2001) Holding to Account—the Review of Audit and Accountability for Central Government, London: Stationery Office

Transparency International (2002) Combattre la Corruption : Enjeux et Perspectives, Berlin : TI

World Bank (2009) Training Needs Assessment for the Court of Accounts of Senegal, Washington DC: World Bank

Wynne, Andy (2010) Independence of Supreme Audit Institutions in Sub-Saharan Africa, International Journal of Governmental Financial Management, May - www.icgfm.org/digest.htm

What are the real risks of adopting accrual accounting?

Many conference presentations, journal articles and books extol the virtues and benefits of governments adopting accrual accounting, but few provide any real evidence of the actual experience. Independent evidence from the UK on the actual benefits which have been achieved to date suggests that the costs of this type of reform were significant, but that the benefits appeared to be limited. In addition, there may be significant risks involved in adopting this approach to public sector accounting. Two audit reports from the Auditor General of the Cayman Islands provide a brutally frank and honest account of what can go wrong. This is in addition to years of qualified audit reports in France and the US after the adoption of accrual accounting.

In 2005, in a study funded by the Association of Chartered Certified Accountants (ACCA), two respected academics (Connolly and Hyndman) from Northern Ireland (a region of the UK) concluded that: “there was little evidence that [accrual] information was extensively used in decision making … [while] the costs were seen as substantial”. This was around five years after accrual accounting had been implemented in central government departments.

In 2007, in another study funded by an accountancy body (this time the Institute of Chartered Accountants in Scotland – ICAS), another three respected academics (Mellett, Macniven & Marriott) reported the results of their research, saying that: “there was no evidence that the perceived benefits from the introduction of... accruals accounting... were being realised”. This was in the National Health Service in England and Wales which had adopted accrual accounting over 15 years previously.

The arguments for the introduction of accrual accounting in the public sector have only re-arisen in recent years (Birmingham City Council introduced it in 1850) and many key officers have recently changed their minds. So, for example, Sir Andrew Likierman was able to say, in a book published in 1992 that:

Those who believe that private sector accounts are superior need to bear two factors in mind. First, that there are no immutable accounting or other financial reporting rules which apply irrespective of the nature and purposes of the organisation whose activities and results are being displayed or the objectives of presentation. Second, that cash accounts, despite their crudeness, have a degree of transparency that accrual accounts cannot give and that many private sector financial reports do not seek to offer.

(page 23, ‘Financial Reporting in the Public Sector’ in Public Sector Accounting and Financial Control, Edited by Sir Douglas Henley and Clive Holtman, Chapman & Hall).

In July 2008, the Auditor General of the Cayman Islands, Dan Duguay, issued a special report on the State of Financial Accountability Reporting. The Cayman Islands is a British Overseas Territory situated in the Caribbean. In 1997, the Government embarked on a Financial Management Initiative which included the adoption of the accrual basis of accounting for its annual financial statements. Consultants were appointed in 1998 and a Detailed Design and Implementation Strategy was produced in the following year. Accrual based accounts were finally to have been produced for the financial year starting on 1^st July 2004, and which should have seen the Cayman Islands being “at the very forefront of financial accountability reporting among governments of the world”.

Unfortunately, it is still not operating as contemplated. The 2008 Auditor General’s report described “a very grim assessment of the state of financial accountability reporting throughout the Cayman Islands Government”. Ten years after the Cayman Islands agreed to adopt accrual accounting, the first accrual based accounts were 2.5 years late and the Auditor General found the “current situation deplorable”. Furthermore he believed that “the legislative assembly has lost control of the public purse”.

In an update report, issued in April 2010, the Auditor General concluded that, “the state of financial accountability reporting has gotten worse in the two years since I last reported on this matter”. The financial statements for 2004/05 (the first year of accrual accounting) had still not been issued, despite the Government having spent an additional $1 million in the current fiscal year to address the problem. The Auditor General assessed the efforts as being “too limited and therefore insufficient to address the situation”. He estimated that at the current rate it would be “several years before the accounting activities of the Government are up to date” and considered that this was “unacceptable”.

In addition to the financial statements being prepared late, the Auditor General considered that they lacked credibility as most of the statements which had been prepared and audited had received a qualified audit opinion. The Auditor General concluded his second special report by saying: “I believe this situation has become a national crisis that could lead to tremendous consequences for the Cayman Islands Government if not addressed immediately”.

The Cayman Islands is not a poor country: the per capita income is one of the highest in the world and, as it is a tax haven and financial services centre, there are many qualified accountants available locally. If the introduction of accrual accounting can go so horribly wrong in the Cayman Islands, imagine what could happen in the many developing countries where accrual accounting is still actively being promoted for the public sector.

The Government of the Cayman Islands is not the first government to suffer qualified audit opinions after the introduction of accrual accounting. In the US, the Government Accountability Office has been unable to provide an opinion on its accrual based consolidated financial statements for the last 13 years (www.fms.treas.gov/fr/backissues.html). This arises from three major impediments; the serious financial management problems at the Department of Defense, the inability to adequately account for and reconcile intragovernmental activity, and the ineffective process for preparing the consolidated financial statements.

Similarly the French Government has suffered seriously qualified audit opinions on its accounts since the accrual basis was adopted in 2006. In there first year there were 13 substantial reservations. This was reduced to nine the following year, but the latest accounts for 2009 still have eight substantial reservations from the Court of Accounts

(http://www.ccomptes.fr/fr/CC/documents/RCE/Rapport-certification-comptes-Etat-exercice2009.pdf).

The next time you hear a speaker listing the many benefits claimed for accrual accounting, ask what the actual evidence is from the few countries which have adopted this approach. The objective and authoritative studies, from the UK for example, suggest that the costs are significant and that the actual benefits are minimal. Now we have reports from the Cayman Islands of the very real risks associated with adopting this approach to public sector accounting. This is in addition to years of qualified audit reports for the governments of the US and France.

REFERENCES:

Duguay, D (2008) Auditor General report on the State of Financial Accountability Reporting (July) Cayman Islands Government:

http://tinyurl.com/accrualcayman1

Duguay, D (2010) Auditor General report on the State of Financial Accountability Reporting (April) Cayman Islands Government:

http://tinyurl.com/accrualcayman2

Hyndman, N. and Connolly, C. (2005) The impact of introducing resource accounting in Northern Ireland, ACCA, London

http://www.accaglobal.com/publicinterest/activities/research/reports/accountability/rr-087

Mellett, H, Macniven, L, Marriott, N, (2007) NHS Resource Accounting in Wales: Problems of Implementation, ICAS

http://www.icas.org.uk/site/cms/contentviewarticle.asp?article=5232

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).