Account for cash before accounting for accruals Establish external controls before introducing internal control Establish internal control before introducing managerial accountability Operate a reliable accounting system before installing an integrated financial management system Budget for work to be done before budgeting for results to be achieved Enforce formal contracts in the market sector before introducing performance contracts in the public sector Have effective financial auditing before moving to performance auditing Adopt and implement predictable budgets before insisting that managers efficiently use the resources entrusted to them Sources: Allen Schick, 1998 and 2005 D.3 PFM reform lessons from OECD-DAC and DFID Successful reforms: satisfy a demand for reform are country led and owned; donors step back and create space for government to lead fit the country’s circumstance are appropriately sequenced do not have an excessively technocratic focus consider government capacity, and recognise that this is a government, not donor, job often, accompany broader public sector reforms consult widely to create customised solutions, not transplanted solutions strengthen the role of the Supreme Audit Institution embed reforms in regular budget processes and for key spending lines recognise that there is no quick fix have a champion to push agendas and shepherd reforms through the politics use joint diagnostics for better ownership take advantage of external incentives for reform builds ownership, awareness and some capacity in the line ministries and among lower governments reforms fundamental ‘basics’ first (Schick paradigm) do some diagnostic tracking of reform progress Problematic reforms: are often overambitious or rushed tend to overestimate bureaucratic capacity to run more complex systems
Account for cash before accounting for accruals Establish external controls before introducing internal control Establish internal control before introducing managerial accountability Operate a reliable accounting system before installing an integrated financial management system Budget for work to be done before budgeting for results to be achieved Enforce formal contracts in the market sector before introducing performance contracts in the public sector Have effective financial auditing before moving to performance auditing Adopt and implement predictable budgets before insisting that managers efficiently use the resources entrusted to them Sources: Allen Schick, 1998 and 2005 D.3 PFM reform lessons from OECD-DAC and DFID Successful reforms: satisfy a demand for reform are country led and owned; donors step back and create space for government to lead fit the country’s circumstance are appropriately sequenced do not have an excessively technocratic focus consider government capacity, and recognise that this is a government, not donor, job often, accompany broader public sector reforms consult widely to create customised solutions, not transplanted solutions strengthen the role of the Supreme Audit Institution embed reforms in regular budget processes and for key spending lines recognise that there is no quick fix have a champion to push agendas and shepherd reforms through the politics use joint diagnostics for better ownership take advantage of external incentives for reform builds ownership, awareness and some capacity in the line ministries and among lower governments reforms fundamental ‘basics’ first (Schick paradigm) do some diagnostic tracking of reform progress Problematic reforms: are often overambitious or rushed tend to overestimate bureaucratic capacity to run more complex systems