The following is a PEFA assessment for a hypothetical country. Read the text and then assign scores to the PEFA indicators in the table provided. Use simplified scores of A—very good, B—satisfactory, and D—not satisfactory and only enter scores for indicators on which the text provides information.
“Actual revenue and expenditure are very close to forecasted revenue and expenditure, but there are major differences in the composition of expenditures between planned and actual figures. Budget documentation is considered satisfactory but could be improved by a better elaboration of the underlying fiscal strategy. Fiscal risk reporting is very rudimentary, and the operations of the pension fund are not included in the budget. Expenditure arrears have been fully eliminated due to a strong monitoring system. Controls on payroll and non-salary expenditures are strong.
A medium-term budget framework (MTBF) exists, but it is prepared in parallel to the annual budget and differences between the first year of the MTBF and the annual budget are common. Public investment management has been strengthened in recent years but could be improved further. A number of significant weaknesses exist in procurement—most notably the fact that the majority of contracts are not awarded using a competitive process.
Annual financial reports are comprehensive and reliable, while the frequency of in-year reporting could be improved. The work of the Auditor General is of high quality, but the reports are not submitted to the legislature and executive follow-up on recommendations is very limited.”
Aggregate expenditure outturn
Expenditure composition outturn
Central government reporting outside financial reports
Transfers to subnational governments
Performance information for service delivery
Public access to fiscal information
Fiscal risk reporting
Public investment management
Public asset management
Macroeconomic and fiscal forecasting
Medium-term perspective in expenditure budgeting
Budget preparation process
Legislative scrutiny of budget
Accounting for revenue
Predictability of in-year resource allocation
Internal controls on non-salary expenditure
Financial data integrity
In-year budget reports
Annual financial reports
Legislative scrutiny of audit reports