PEFA Comments

[STONE]

The PEFA Steering Committee is seeking comments from any interested party on proposed revisions to Performance Indicators 2, 3 and 19. These three PIs have been ‘fine-tuned’ in response to feedback from practitioners, and subject to comments received, will be implemented later this year.
 
The PEFA Secretariat sets out the reasons why these three PIs were selected, the intention of the changes, and provides a brief description of the revisions. The revised pages for the English version of the Framework (the ‘BlueBook’) and additional guidance for Assessors are available on the website: www.pefa.org.

Whilst the PEFA Secretariat is inviting comments ( they ask to send comments by email to pefa@worldbank.org AND psinnett@worldbank.org. Comments received will be posted on the PEFA website each week - the exposure period will close on 30th July 2010). I thought it might be of interest to PFM Board Members to have a discussion about them.

The three indicators are:

PI-2.    Composition of expenditure out-turn compared to original approved budget

PI-3.    Aggregate revenue out-turn compared to original approved budget

PI-19. Transparency, competition and complaints mechanisms in procurement

For each of these PEFA provides reasons for the change and the basis of the change.  For the reasons for the change PEFA provides additional materials in attachments that can be accessed on:
 http://www.pefa.org/announcementsmn.php?ann_id=79
 (16-06-10)


PI-2 and PI-3 are directly related to the credibility of the budget.

PI-19 is concerned with the effectiveness of procurement systems.  This could be dealt with elsewhere on the board or kept here to keep the discussion on PEFA Comments in one place. 

I'll have a proper look at what they are proposing and why (for some time I have wanted to consider how budgets that have a programme basis are treated by PEFA - last time I looked they dealt with administrative and functional classifications - what if the virement rules apply to programmes and not to "directorates" or COFOG classifications (who budgets exclusively by functions?).

In the meantime post away...

[Napodano]

STONE, good idea!

From a quick reading of their explainations, it seems to me that the PEFA initiatives to revise PI-2 and PI-3 is to be commended, in particular as it takes in consideration:

• the difficulty in expenditures management
• the uncertainties of revenue forecasting

in period of crisis like the one we are currently living in.

It means for me that the PEFA methodology is alive and well 

[Napodano]

For the one interested attached are the comments from PEFA practitioners on the three Performance Indicators in question.

See attachement at the bottom of this post.

[John Short]

Revision of Performance Indicators PI 2, PI 3 and PI 19.

Links to the full text that replaces the existing wording in the PEFA Performance Measurement Franwork as well as additional guidance for Assessors (including revised calculation spreadsheet) can be found in English, French and Spanish in the left hand navigation box named PFM, Measurement Performance Framework, under Revised PEFA Indicators on the PEFA website.

[Napodano]

Revision of Performance Indicators PI 2, PI 3 and PI 19.

Links to the full text that replaces the existing wording in the PEFA Performance Measurement Franwork as well as additional guidance for Assessors (including revised calculation spreadsheet) can be found in English, French and Spanish in the left hand navigation box named PFM, Measurement Performance Framework, under Revised PEFA Indicators on the PEFA website.

The full text is also available on the PFM Board at 'PEFA Revised indicators, Indicateurs révisés, Indicadores revisados'  http://pfmboard.com/index.php?topic=420.0

[harnett]

For those of you who may be interested in the revision to PI-19, below is a message I sent to the PEFA Secreatariat last July 2010 on that issue.  It highlights a scenario in which a poor complaints mechanism can receive a reasonable score under the proposed new system.

"I have a concern with the revision for PI-19, in particular the proposed dimension (iv).

John Short and myself have been carrying out a PEFA in Serbia.  Under the existing scoring system dimension (iii) scores a "C" because:

"A process exists for submitting and addressing procurement complaints, but it is designed poorly, is located within the PPO, and does not operate in a manner that provides for timely resolution of complaints. It is also questionable whether it conforms to the new Procurement Law (in terms of its independence).  The provisions of the new Public Procurement Law regarding the complaints procedure have not been implemented yet, with the National Assembly in July 2009 declining to ratify a new Complaints commission. "

To paraphrase:  it is a relic of the old law in desperate need of modernisation.

However,  we thought it a good idea to test the new proposed indicator, thinking it would provide a "bridge" for any future PEFA in Serbia.  The result was interesting.  In the words of the Serbian Procurement Specialist (with my comments also attached) who scored both dimensions - existing and revised:

"Complaints are reviewed by a body comprised of experienced professionals, familiar with the legal framework for procurement (Commission for protection of rights in public procurement procedures). This body, which includes members drawn from outside government is not involved in any capacity in procurement transactions or in the process leading to contract award decisions[PH1] ,  does not charge fees that prohibit access by concerned parties (there is a fee but it is minimal – approximately 600 euro’s regardless of the value of the contract[PH2] ). The Commission has the authority to suspend the procurement process and can issue decision that is binding for both parties. Because of the lack of staff, the Commission has problems with meeting the timeframe specified in PPL for issuing decisions."
It should be noted that the current Commission resides within the PPO and is not a body which emanates from the new Law but rather is a residual from the previous Law whilst the National Assembly ratifies a new body, which was due to occur in July 2009 but failed to reach a majority. SCORE B

The fact is, whichever way you look at it, they have at least 3 of the 5 criteria
(i) is not involved in any capacity in procurement transactions or in the process leading to contract award decisions;  They can argue so even though the Commission is located within the PPO
(ii) does not charge fees that prohibit access by concerned parties;They have argued so
(iii) has the authority to suspend the procurement process;  YES
(iv) issues decisions within the timeframe specified in the rules/regulations; and  They will concede this
(v) issues decisions that are binding on both parties. YES

I hope this helps with the refinement of the new indicator (which John and myself welcome as the old one needed revision).

Maybe a way to further refine is:  for (i) the complaints institution should be independant of the procurement office. (as well as the other criteria - and as is under the present dimension).  Also think carefully about what is a reasonable amount to charge so as not to prohibit access (500 x Local big mac price equivalents?  Is €600 reasonable?)."