CPIA 2006

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CPIA 2006

• Q13 Quality of Budgetary and Financial
  Management
• BBL
• Ivor Beazley/Steve Knack, 6 December 2006

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Objectives

• Raise awareness of CPIA Q13 and FMs role
• Improve the quality of Q13 ratings
• Provide information on process and resources
• Address issues and concerns

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Context

• Country Policy and Institutional Assessment
  (CPIA)
• Overall CPIA scores help determine shares of IDA
  allocation given to each country
• Annual scoring process
• 16 indicators, No 13 and 16 cover financial
  management and accountability
• Disclosure for IDA countries (scores only)

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How to rate Q13 - principles

• Ratings are based on actual policies and
  performance, not on promises or intentions
• Improvement is measured against benchmark
  criteria,
• Score will not change on the basis that
  Government has started a reform initiative
• Objective criteria have been clearly set out for
  assessing performance on Q13

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Data Requirements

• Substantial work is involved to collect data.
• Q 13 assessment comprises
• 3 sub-questions. Each sub-questions is made up
  of a number of dimensions or lower level
  question
• total of 13 separate pieces of data
• 3 Sub-questions deal with at the quality of
• a) Budget process
• b) Control over expenditure
• c) Accounting, reporting and auditing

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Scoring system

• Countries are scored from 1- 6 on each
  sub-question. For Q13 there is a two stage
  aggregation process
• Stage 1
• Rate each dimension on the 1-6 scale
• Work out the average of the dimensions, rounding
  up or down to the nearest half point
• Stage 2
• Simple average of the 3 sub-questions (rounded to
  the nearest half point) gives overall Q13 score.

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Example Sub-question a) budget link to policy
priorities

• This sub-question covers 5 issues/dimensions
• (i) budget-policy link
• (ii) forward look in budget
• (iii) consultation with spending ministries in
  budget formulation
• (iv) budget classification and
• (v) budget comprehensiveness

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Tools

• A simple worksheet is available to help score
  each dimension on a consistent basis
• A write up template is provided to set out the
  write up on each sub-question

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Worksheet for sub-question a) Budget links to
policy priorities
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Timetable

• Benchmarking exercise
• complete by end Nov
• Mid-Jan deadline for regional submissions
• Scores finalized by OPCS end March

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Issues to be aware of

• Known unknowns, for example on, extent of
  operations outside the budget and arrears
• PREM or FM, or both?
• Upward pressure on ratings
• Not a reward for good intentions
• Need demonstrable progress

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Issues - Quality of write ups

• Insufficient evidence in may write-ups
• Not addressing the specific dimensions which are
  used to measure performance
• 8 out of 20 benchmark countries initially rated
  un-graded on basis of poor write ups
• Particular weakness on points b) and c)

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Information sources

• Not just CFAA
• Internal sources
• CFAA, IFA etc.
• PE(I)R
• Recent DPL and PRSC documents (updates)
• External sources
• PEFA Assessments (EC, DFID etc.)
• IMF Fiscal Transparency ROSC (IMF Website)
• IMF - PRSC Joint Staff Advisory Notes, Art IV
• Direct from Government (MoF)

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Issues going forward

• Consistency with PEFA indicators (PEFA
  Secretariat will do a study)
• Consistency over time changes in basis of
  rating from year to year
• Decentralization
• Procurement?

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Anchor Review Role

• OPCFM and PRMPS review ratings for
• Quality of write up, including evidential support
• Cross check with other available information
• Carefully scrutiny of all changes in ratings
• Do a comparison across countries

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• Anchor is also there to provide support and
  advice
• Good luck!