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

380 Matthew Andrews
highest PEFA score is given to governments where strategies for sectors
reflecting at least 75 percent of primary expenditure exist with full costing
of recurrent and investment expenditure, broadly consistent with fiscal
forecasts. 19 The PEFA score does not ask about the quality of costing (only
that there is full costing) or the quality of strategic plans (only that they cover
recurrent and investment expenditure and are disciplined by a broad fiscal
framework). In governments that are more strategic, one finds additional
quality dimensions clearly addressed, to ensure that plans facilitate strategic
decisions and introduce incentives for efficient management. The following
quality criteria are important, for instance: 20
Strategic plans identify goals well.
Strategic plans identify activities required to meet these goals through a full
assessment of strengths, weaknesses, and so forth.
Strategic plans provide measurable indicators of all outputs and objectives,
including baseline data for each.
All objectives, outputs, and activities are fully costed, with a clear description
of costing methods and assumptions.
Strategic plans differentiate clearly between goals and activities already
financed through budgets and those presented as new initiatives for new
financing.
The annual strategic planning process is sufficiently long to allow sector ministries
(and other entities) enough time to plan effectively.
Both the budget and the policy staff are responsible for developing strategic
plans, which may be developed with some external support (through consultants)
but are largely internal products.
The more strategic indicators go into quality dimensions of the PEFA
indicators as well as beyond these indicators—suggesting that progress from
level 1 to level 2 to level 3 involves both steps to deepen technical processes and
improve the substance within and steps to add new processes and concepts.
A fuller set of more strategic practice indicators is proposed for discussion
at http://ksghome.harvard.edu/~mandrew/. It should be noted that, when
one is making the comparisons with practices in more strategic systems,
there are no comparators in the world that would routinely be called more
strategic in all process areas. However, some countries might be considered
more strategic in individual process areas: for instance, New Zealand, South
Africa, Sweden, and the United Kingdom in strategic planning and budget
preparation; Australia in accounting and reporting; or Germany in internal
and external audit. This is one of the interesting aspects of the work on
establishing more strategic PFM systems—few governments have really