PEFA | Improving public financial management Question

Anonymous
timer Asked: Jun 3rd, 2018

Question description

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.”

Number

Indicator

Score

PI-1

Aggregate expenditure outturn

PI-2

Expenditure composition outturn

PI-3

Revenue outturn

PI-4

Budget classification

PI-5

Budget documentation

PI-6

Central government reporting outside financial reports

PI-7

Transfers to subnational governments

PI-8

Performance information for service delivery

PI-9

Public access to fiscal information

PI-10

Fiscal risk reporting

PI-11

Public investment management

PI-12

Public asset management

PI-13

Debt management

PI-14

Macroeconomic and fiscal forecasting

PI-15

Fiscal strategy

PI-16

Medium-term perspective in expenditure budgeting

PI-17

Budget preparation process

PI-18

Legislative scrutiny of budget

PI-19

Revenue administration

PI-20

Accounting for revenue

PI-21

Predictability of in-year resource allocation

PI-22

Expenditure arrears

PI-23

Payroll controls

PI-24

Procurement

PI-25

Internal controls on non-salary expenditure

PI-26

Internal audit

PI-27

Financial data integrity

PI-28

In-year budget reports

PI-29

Annual financial reports

PI-30

External audit

PI-31

Legislative scrutiny of audit reports

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