What’s new this year?
CABRI’s Peer Review Seminar held in Dakar on 10-12 December 2018 marks the culmination of the second year of our Building PFM Capabilities Programme (BPFMC). 2018 has seen significant additions to the programme with francophone countries joining and the launch of in-country BPFMC in The Gambia and, more recently, in South Africa. In addition, we extended the length of the programme from 31 to 33 weeks, tightened the iteration cycle from 2 to 1 week, added further reflection assignments and included teams’ peer feedback over the action-push period.
The teams’ work unfolded in various contexts ranging from political instability in the Central African Republic (CAR), the ushering in of a new government in Liberia or amidst proliferation of reforms in the Gambia. Over the course of eight months, the teams followed the PDIA approach to maneuver their local context, seeking workable solutions to their problems through a process that facilitated the expansion of their acceptance and authority while continuously learning about their problem and developing their ability to solve it.
Introducing BPFMC in-country programmes
In a bid for deeper in-country engagement and to foster larger national communities of PDIA-driven PFM practitioners CABRI supported, from April to December 2018, a BPFMC in The Gambia. The programme involved, for the first time, two country teams working on interlinked problems pertaining to the high debt service costs and the fiscal risks associated with a weak oversight of state owned enterprises (SOEs). This link facilitated the development of a feedback loop between the teams through which they provided genuine feedback to each other from a parallel understanding of the context where the problem resides and an insider view of the technical and bureaucratic nuances around it.
In November 2018, CABRI launched a BPFMC in South Africa supporting multiple teams in solving the challenging issue of public enterprises and is considering further in-country programmes in 2019.
A glimpse into the teams’ achievements
Teams achieved tangible results over the past 8 months: bank accounts were reconciliated, allocation to health spending was raised, approval of procurement plans increased, reporting improved, spending controls were reinforced… Below are a few highlights of the teams’ presentations that can be downloaded on the event’s page here. These short summaries do not do justice to the teams’ work, estimated at 6556 hours. CABRI will release in the coming months detailed Practice Notes on the teams’ work and learning.
Problem: Deviations between planned and actual capital expenditure
Achievements: Introduced new processes to streamline and reinforce the communication between MDAs and the procurement office and provided a targeted training to a set of MDAs.
Next steps: Minister to approve a set of recommendations stemming from an MDA coordination workshop and install an investment spending accountability committee.
Problem: Budgets allocated to MDAs are not contributing to expected results
Achievements: Setup of a coordination structure between the Budget and Public Investments directorates and provision of targeted training to MDAs credit managers.
Next steps: Support sectoral committees in charge of investment budget allocation and ensure coordination with the Public Investment directorate.
Problem: Overspending by MDAs leading to budget overruns which impede service delivery.
Achievements: Supported the creation of a buffer during the allocation of budget ceilings and improved the relationship between the Ministry of Finance and spending ministries in managing commitments and expenditures.
Next steps: Reinforced monitoring of cash allotments and more updated expenditure reports analysis.
Problem: Ministry of Finance does not know how much MDAs require or when cash is required
Achievements: Improved bank accounts data base management and reconciliation, supported the setup of a Liquidity Management Committee and improved expenditure plans submission.
Next steps: Draft guidelines for expenditure plans submission to be rolled out to MDAs, supporting MDAs in their bank accounts reconciliation and centralizing revenue accounts.
Problem: Inadequate funding of health sector resulting in poor primary health care outcomes
Achievements: Adopted an aid transition plan supported by an inter-ministerial technical working group and facilitated an increased allocation to the health sector budget for 2019 by 8%.
Next steps: Support of procurement processes and implementation of the Financial Accountability Framework for the donor Transition Plan, while identifying alternative funding sources.
Problem: Limited Allocation of Funds for Public Sector Investment Projects and underutilisation of allocated funds.
Achievements: Increase in the approval of procurement plans and in the completion of public sector investment projects; and supported functional budget management committees.
Next steps: Monitor the performance of budget committees, conduct targeted procurement trainings and support further accountability of investment budget execution.
Problems: (1) Weak oversight of SOEs increasing the risk of contingent liabilities and (2) high debt service cost crowding out priority spending.
Achievements: (1) Reviewed the SOE act, gathered inputs for SOE performance measurement and designed a simplified cash flow reporting template; (2) Clarified the cooperation between the Ministry of Finance and the Central Bank and introduced an M&E framework.
Next steps: (1) Ensure approval of the SOE act and introduce SOEs performance measurement with renewed board members; (2) Improve expenditure forecasts and ensure implementation of the M&E framework and the memorandum of understanding with the Central Bank.
What’s our take?
These achievements are just a start. Teams have developed detailed plans to continue solving their problems equipped with a better understanding of their root causes, stronger coalitions and support from their hierarchy as their work gained in visibility.
Teams have chosen to tackle very real problems which complexity became more and more apparent as they started learning about it. The problem resolution process was challenging, and no team has turned their back on the challenges faced, with the continuous support of their coaches.
As an observation, some problem statements were located outside of the realm of traditional PFM, to issues pertaining to State-Owned Enterprises or health financing where the benefits of stronger coordination and breaking of the administrative silos through PDIA are even starker.
For this Peer Review Seminar, CABRI put a strong emphasis on a clear and detailed articulation of the teams’ next steps. Through a “lighter touch” engagement, CABRI coaches will continue to provide support to their teams as the complexity of the problems means that further work will be required for more sustained and holistic progress to be registered.