Public Sector Governance and Accountability Series: Budgeting and ...

What Would an Ideal Public Finance Management System Look Like? 363
Budget Cycle: Donor Practice
—Predictability of direct budget support
—Financial information provided by donors for budgeting and reporting
on project or program aid
—Proportion of aid that is managed by use of national procedures
Source: PEFA 2006. See also http://www.pefa.org.
United States and even in undertakings such as the National Performance
Review. 6 Figure 11.1 shows that PFM process areas (in the budget cycle,
including policy-based budgeting, budget execution, accounting and reporting,
and external scrutiny and audit) foster cross-cutting system qualities
(for example, transparency) as well as PFM outturns (for example, budget
credibility). PEFA’s framework requires governments with strong outcomes
to show exactly where these outcomes arise from—allowing the identification
of potential process weaknesses even when outcomes are strong.
c. Budget cycle
d. Donor
practices
Policy-based
budgeting
a. PFM
outturns
External
scrutiny and
audit
b. Cross-cutting
features
Comprehensiveness
and transparency
Predictability
and control in
budget
execution
Budget
credibility
Accounting,
recording, and
reporting
Source: PEFA 2006: 4.
FIGURE 11.1 A Simplified PEFA Framework