Evaluation of Public Financial Management Reform in Ghana, 2001-2010

2012:8 Joint Evaluation
Mary Betley
Andrew Bird
Adom Ghartey
Evaluation of Public
Financial Management Reform
in Ghana, 2001–2010
Final Country Case Study Report
Joint Evaluation 2012:8
Evaluation of Public Financial

Management Reform
in Ghana 2001–2010
Mary Betley
Andrew Bird
Adom Ghartey
Submitted by Fiscus Public Finance Consultants and Mokoro Ltd

to the Evaluation Management Group
June 2012
Authors: Mary Betley, Andrew Bird, Adom Ghartey
The views and interpretations expressed in this report are the author and do not necessarily reflect those of
the commissioning agencies, Sida, Danida and AfDB.
Joint Evaluation 2012:8

Commissioned by Sida, Danida and AfDB
Date of final report: June 2012
Published by: Sida, 2012
Copyright: Mary Betley, Andrew Bird, Adom Ghartey
Digital edition published by: Sida, 2012
Layout and print: Citat/Edita 2012
Art.no. SIDA61499en
urn:nbn:se:sida-61499en
ISBN: 978-91-586-4196-9
This publication can be downloaded/ordered from: www.Sida.se/publications
Acronyms and Abbreviations
AAP (HIPC) Annual Assessment & Action Plan

ADMD Aid and Debt Management Division
AfDB African Development Bank
AFROSAI Africa Organisation of Supreme Audit Institutions
ARIC Audit Recommendation Implementation Committees
BDU Budget Development Unit
BMZ German Ministry of Cooperation and Development
BPEMS Budget and Public Expenditure Management System
CABRI Collaborative African Budget Reform Initiative
CAGD Controller and Accountant General’s Department
CEPS Customs, Excise and Preventative Service
CFAA Country Financial Accountability Assessment
CHRAJ Commission on Human Rights and Administrative Justice
CIDA Canadian International Development Agency
CPIA Country Policy & Institutional Assessment
CSO Civil Society Organisations
DAC Development Assistance Committee (of the OECD)
DANIDA Danish International Development Assistance
DC Developing Country
DFID Department for International Development of the UK
DP Development Partner
EC European Commission
ERPFM External Review of the Public Finance Management
EU European Union
FAA Financial Administration Act
FAR Financial Administration Regulations
FC Finance Committee
FMIS Financial Management Systems
GAS Ghana Audit Service
GBS General Budget Support 5
GDP Gross Domestic Product

GIFMIS Ghana Integrated Financial Management Information System
G-JAS Ghana Joint Assistance Strategy
GNI Gross National Income
GoG Government of Ghana
GPRS Growth and Poverty Reduction Strategy
GRA Ghana Revenue Authority
GSGDA Ghana Shared Growth and Development Agenda
GTZ German Technical Cooperation
HDI Human Development Index
HIPC Highly Indebted Poor Countries
IAA Internal Audit Agency
IAU Internal Audit Unit
ICR Implementation Completion Report
IDA International Development Assistance
IEG Independent Evaluation Group (World Bank)
IFMS Integrated Financial Management System
IMF International Monetary Fund
INTOSAI International Organisation of Supreme Audit Institutions
IPPD Integrated Personnel and Payroll Database system
LGA Local Government Authority
MDAs Ministries, Departments and Agencies
MDBS Multi-Donor Budget Support
MDBS-F Multi-Donor Budget Support Framework
MDG Millennium Development Goal
MMDAs Metropolitan, Municipal, and District Assemblies
MoFEP Ministry for Financial and Economic Planning
MoLGRD Ministry of Local Government and Rural Development
MPs Members of Parliament
MTEF Medium Term Expenditure Framework
NAO National Audit Office
NDC National Democratic Congress
NDPC National Development Planning Commission
6
NPM New Public Management

NPP New Patriotic Party
ODA Official Development Assistance
OECD Organisation for Economic Cooperation & Development
OHCS Office of the Head of Civil Service
PAC Public Accounts Committee
PAF Progress Assessment Framework
PBAs Programme Based Approaches
PD Paris Declaration
PEFA Public Expenditure & Financial Accountability
PER Public Expenditure Review
PETS Public Expenditure Tracking Survey
PFM Public Finance Management
PIU Project Implementation Unit
PPB Public Procurement Board
PPP Purchasing Power Parity
PSC Public Service Commission
PUFMARP Public Financial Management Reform Programme
RAGB Revenue Agency Government Board
SAP Strategic Action Plan
SBS Sector Budget Support
SEC State Enterprises Commission
SECO Swiss – State Secretariat for Economic Affairs
SMTAP Short and Medium Term Action Plan for PFM
SSA Sub-Saharan Africa
ST/MTAP Short & Medium Term Action Plan (for PFM Reform)
TA Technical Assistance
TIN Taxpayer Identification Number
TSA Treasury Single Account
UNDP United Nations Development Programme
UNICEF United Nations Children’s Fund
USD United States Dollar
WB World Bank
7
Table of Contents
Executive Summary....................................................................................10
1 Summary of Objectives and Approach..............................................13
1.1 Objectives of the evaluation...............................................................13
1.2 Evaluation approach..........................................................................13
1.3 Evaluation questions..........................................................................17
1.4 Fieldwork process.............................................................................18
1.5 Report Structure................................................................................19
2 Inputs and Context: the design of PFM reform................................ 20
2.1 The Reform context............................................................................20
2.2 PFM reform baseline.........................................................................25
2.3 Direct Reform Inputs.........................................................................27
2.4 Structures to design and manage PFM reform inputs..................31
2.5 Complementary Donor inputs to PFM reform................................33
2.6 C ivil Society pressure for PFM reform............................................35
2.7 Relevance of PFM Reform Inputs.....................................................36
3 Outputs: the Delivery of PFM reform............................................... 43
3.1 Key reform outputs ...........................................................................43
3.2 Efficiency and coordination of reform outputs ...............................50
3.3 External drivers and blockers of change ........................................52
4 Outcomes and Overall Assessment................................................. 56
4.1 Changes in PEFA scores ...................................................................56
4.2 Relevance of PFM improvements for service
delivery, especially for women�� 61
4.3 The effectiveness of PFM reforms: from inputs
to intermediate outcomes ��63
5 Conclusions and Wider Lessons.......................................................67
5.1 Summary of key conclusions............................................................67
5.2 Wider lessons.....................................................................................68
5.3 Recommendations for the Design and Management
of PFM reform processes��71
Annex A: Summary Matrices of Responses to Evaluation Questions for
Country and Component Case Histories�� 77
Annex B: List of Persons Consulted.........................................................117
Annex C: List of References.....................................................................120
Annex D: Summary of PFM reform inputs, outputs
and intermediate outcomes��124
Annex E: Terms of Reference...................................................................130
8 Joint Evaluations.......................................................................................142
Table of Contents
Table of Figures & Tables
Figure 1. The Evaluation Framework and the place of the Evaluation

Questions within the Intervention Logic��16
Table 1: Overall Budgetary Trends, 2001-2010..............................................22

Table 2: DP allocations to PFM reform activities...........................................28
Table 3: Overview of Development Partner funding
for PFM reform��28
Table 4: T otal MDBS Commitments and Disbursements
2003-2010��29
Table 5: Poverty-Reducing Expenditures....................................................... 61
Box 1: Evaluation questions.............................................................................17

Box 2: Summary of Key PFM Events, Late 1990s-present...........................24
Box 3: Summary of PUFMARP 1997-2003......................................................26
Box 4: Summary of GoG’s PFM Short and Medium
Term Action Plan 2006-2009��27
Box 5: Comparison of 2006-09 Short & Medium
Term Action Plan with identified weaknesses��37
Box 6: Alignment of 2006-2009 Short & Medium
Term Action Plan with PEFA Results��40
Box 7: Overview of PFM Reform Outputs and DP Contributions..................46
Box 8: Summary of changes in intermediate outcomes
based on PEFA assessments��58
Box 9: Summary of PFM reform inputs, outputs, and intermediate
outcomes��73
9
Executive Summary
Overview of findings
This Country Report has been prepared by Fiscus Limited, UK, in collabora-
tion with Mokoro Ltd, Oxford, as one of three country reports in the Joint
Evaluation of Public Financial Management Reform, managed by the Afri-
can Development Bank, Denmark and Sweden. The evaluation looked at two
main questions: (i) where and why do Public Finance Management (PFM)
reforms deliver results and (ii) where and how does donor support to PFM
reform efforts contribute most effectively to results? Our overall conclusions
are presented in the Summary Matrix contained in Annex A, which summa-
rises, for the overall Ghana PFM reform programme 2001 -2010 and for four
component areas within the reform programme, our answers to the 12 Evalu-
ation Questions, posed within the study.
The study’s main conclusion is that, relative to the significant funds expended
on Public Finance Management (PFM) reform over the study period, success
has been largely disappointing. The most substantial progress was found in a
stronger legislative base. However, similarly to other countries, Government
of Ghana (GoG) has experienced significant challenges in implementing the
new laws. Otherwise, the most effective reforms appear to have been the rev-
enue management activities, as they have led to a sustained output in the form
of changed processes and a significant increase in revenues as a share of Gross
Domestic Product (GDP) during the period studied.
During the period studied, PFM outcomes deteriorated in a number of key
areas, including budget credibility, the build-up of expenditure arrears, and
compliance with expenditure controls. The deterioration in outcomes is
largely a consequence of the failure to achieve a number of desired PFM
reform outputs, including a fully-functioning Medium Term Expenditure
Framework (MTEF), a workable Financial Management Information System,
and greater efficiency in resource flows to Ministries, Departments and Agen-
cies (MDAs) and MMDAs. The limited improvements in intermediate out-
comes were largely independent of PFM reform actions.
On the other hand, Ghana has experienced significant improvements in
regard to external oversight. The most notable achievements have been the
clearance of the backlog of audits, the introduction of open Public Accounts
Committee (PAC) hearings on audit reports, and the timely submission of cen-
tral government audit reports to Parliament.
The degree of political commitment and leadership was found to be the main
binding constraint to the relative success of PFM reform. Commitment tend-
10
Executive Summary
ed to be relatively strong at the beginning of reforms, which enabled legisla-

tion to be enacted and reform programmes to be initiated, but commitment
has tended to wane over time as other political priorities have taken prece-
dence, thus hampering the completion of reforms under way and the imple-
mentation of the new legislation. Political incentives for reform were found to
be strongest at the beginning of a new government. However, progress was at
times hampered by disruptions to the continuity of senior management per-
sonnel following electoral change. The political cycle also led to a recurring
pattern of rapid fiscal expansion, followed by fiscal consolidation and the
imposition of stronger expenditure controls. As a consequence, for two years
either side of each election both administrative effort and political attention
have been repeatedly diverted away from the implementation of reforms.
In terms of the role of DPs in the success, or otherwise, of reforms, it did not
appear that Development Partner (DP) support was a key positive factor in
achieving PFM reform progress. While the total amount of resources
appeared to be sufficient, and disbursement delays were not a critical hin-
drance to reform, the effectiveness of DP contributions was undermined by
policy space constraints, particularly in terms of the appropriate design of spe-
cific reforms. In particular, there has been a tendency to focus on technologi-
cal solutions rather than changes to the underlying processes. There has also
been a failure to adapt reform designs in the light of implementation results.
External support has therefore appeared to have greater traction at the early
stages of reforms, in facilitating design and the initial implementation, than
subsequently in sustaining or deepening reform initiatives, which would clear-
ly call for adaptation of initial designs and the application of the lessons of
implementation experience. Exceptions to this have occurred where there
have been sustained DP contributions over a longer period of time, with sup-
port demand-driven, targeted to specific needs, and adaptable in terms of
design and re-design. Reforms to revenue administration are the most salient
example.
Implications
As Ghana, a newly middle-income country enters a phase characterised by
likely changes in its partnership with DPs, including in terms of the MDBS, its
government and senior management are likely to exercise greater active con-
trol of its reform programme, including the provision of resources. The study
highlighted the following areas of potential risk management for both GoG
and DPs in its future PFM reforms.
• GoG and DPs should recognise the importance of continuity in reform
initiatives and consider longer-term and flexible approaches to support
that can take advantage of windows of opportunity (e.g. political space)
while allowing for scaling back when conditions for making progress
are less favourable.
11
Executive Summary
• Explicit analyses should be undertaken of stakeholder readiness for

reform, particularly for Information Technology (IT) projects and
reforms involving functions to be devolved. A technological (IT) solu-
tion may not always be appropriate, particularly if the underlying
manual processes (e.g. internal controls) are inadequate.
• Identify demand and management factors that are likely to facilitate
successful reform, including the role of Civil Society Organisations
(CSOs) and peer-to-peer learning opportunities.
• Allow adequate time to plan and sequence reforms, including plan-
ning, designing, testing (piloting), reviewing, and taking action based
on reviews of the testing, and completing reforms. Successful reform
programmes should not be led by systems (and technology).
• Consider the provision of training in leadership for senior political and
administrative levels, particularly for those in newly-appointed posi-
tions.
• Improve incentives for active senior management linked to reform per-
formance.
• In light of the impact of the electoral cycle, build into the reform pro-
gramme periods of review or a pause in the timetable for bringing on
board new stakeholders.
12
1. S
ummary of Objectives
and Approach
This Country Report has been prepared by Fiscus Limited, UK, in collabora-
tion with Mokoro Ltd, Oxford, as one of three country reports in the Joint
Evaluation of Public Financial Management Reform, managed by the Afri-
can Development Bank, Denmark and Sweden. It incorporates the comments
received on the first draft by the Management Group and the peer reviewer as
well as those of the in-country stakeholders, who attended the presentation of
the draft report in Accra during January 2012. This report, together with the
evaluation of PFM Reforms in Malawi and Burkina Faso, has been incorpo-
rated into an accompanying synthesis report and will be the subject of a wider
process of dissemination within the Africa region and beyond.
1.1 Objectives of the evaluation

The evaluation aims to address two core questions presented in the Terms of
Reference:
a) Where and why do PFM reforms deliver results (i.e. improvements in the
quality of budget systems)?;
and
b) Where and how does donor support to PFM reform efforts contribute most
effectively to results?
It is thus a dual evaluation, involving first an evaluation of the overall pro-

grammes of PFM reform conducted over 2001 to 2010 in Ghana, and second-
ly, an evaluation of the external support provided to these reforms by donors.
1.2 Evaluation approach

The evaluation framework has been defined in the Inception Report for the
3-country study1. It utilises the Organisation for Economic Development
(OECD-DAC) evaluation criteria and thus assesses the relevance, efficiency,
effectiveness and sustainability of both the overall programme of PFM reform
and the external support provided. The overall goal is to draw lessons on (i)
the types of PFM reform pursued and their interaction with the Ghana con-
text and (ii) the mechanisms of external support that most contributed to their
success. Success is associated with improvements in the quality of budget sys-
tems, as measured primarily by changes in the Public Expenditure and Finan-
cial Accountability (PEFA) assessment framework indicators and the narrative
1 Lawson, A. (2011). Joint Evaluation of PFM Reforms in Burkina Faso, Ghana and
Malawi: Inception Report. Oxford, Fiscus Limited, Mokoro Limited.
13
1. Summary of Objectives and Approach
PEFA reports. The evaluation framework characterises these changes as inter-

mediate outcomes in a ‘PFM Theory of Change Framework’, which underlies
the evaluation.
The Framework (presented in Figure 1 below) requires the detailing of
PFM Reform inputs, outputs and intermediate outcomes and the examination
of the relationship between them. In addition, it allows for the analysis of how
external constraints – conceptualised as political, financial and policy space
constraints – impact on the translation of reform inputs into outputs.
Inputs are defined as the resources and other inputs provided in order to
promote PFM reform. These are divided between direct funding by govern-
ments to internal PFM reform efforts, external funding by Donors of PFM
reform efforts and complementary inputs by Donors, aimed at facilitating bet-
ter PFM through the use of country systems and the provision of budget sup-
port, or improving the design and implementation of PFM reforms through
policy dialogue and external monitoring (often linked to budget support or to
IMF supported arrangements).
Outputs are defined as the immediate changes in the architecture and
substance of the PFM system generated by the combined set of inputs. These
are categorised into four groups: i) Changes in human resource endowments
(people and skills); ii) Changes in laws, procedures and rules; iii) Changes in
systems and business processes; and iv) Changes in Organisational factors (the
quality of management, the work culture, the degree of organisational devel-
opment).
Intermediate Outcomes are the changes generated in the quality of
the PFM system, as measured by changes in the quality of:
i) Strategic budgeting;
ii) Budget Preparation (including budget deliberation by the Legislature);
iii) Resource management (covering both inflows and outflows);
iv) Internal controls, audit and monitoring;
v) Accounting and reporting; and
vi) External Accountability.
The framework utilises the PEFA assessment framework to measure changes

in each of these clusters of functions, based on a categorisation of the sub-
dimensions of the PEFA indicators between each of them. The categorisation
is based on Andrews (2010) and is also applied by De Renzio et al (2010). The
characteristics of (a) transparency and comprehensiveness, (b) the quality of
links to policies and plans, and (c) the efficiency and effectiveness of control,
oversight accountability are subsumed within this categorisation.
External constraints are seen to impinge on the PFM reform ‘production
function’, in other words with the capacity of PFM reform inputs to generate
the planned outputs. Key constraints are “political constraints” related to the
degree of ownership and support for given PFM reforms, “financial con-
straints” related to the ability to finance PFM reforms in the face of compet-
ing priorities, and “policy space constraints”, related to the nature of policy
ideas which might potentially be considered in designing PFM reforms.
14
A key task for the evaluation of PFM reforms in Ghana was therefore to
examine whether there have been external constraints which have prevented
or slowed down the translation of reform inputs into reform outputs and which
of the three types of constraint have been most significant in this respect. The
purpose has been to identify what have been the binding constraints on differ-
ent types of reforms and to reach a judgement on whether reform challenges
were due to reform models which lay beyond the prevailing “production pos-
sibility frontier”, examining also the role of donor support in this process.
15
16
Figure 1. The Evaluation Framework and the place of the Evaluation Questions within the Intervention Logic
INPUTS OUTPUTS INTERMEDIATE OUTCOMES FINAL OUTCOMES
PFM Reform Intervention Logic
Government PFM Reform People & Skills: Fiscal Discipline:

Inputs • Numbers of PFM professionals Strategic Budgeting
• Fulfillment of planned fiscal
• Government-funded inputs (auditors, etc.) EQ 9 targets
• Devpt of specific skills, • Maintenance of Sustainable
EQ 1 EQ 2
(incl. reform management) Budget Preparation Deficit
DP funded support to PFM
reform Laws, rules & procedures
(delivered in a harmonised • Changes in Laws. Rules & Resource Strategic Allocation
& aligned manner): Procedures Management of Resources:
EQ 6
• Institutional strengthening EQ 7 EQ 11 • C onsistency of executed
• Advisory TA Systems & Business & approved aggregate /
• Diagnostca Work Processes: Internal control. departmental budgets
• C omputer systems Audit & Monitoring • C onsistency of revenue
• Specific approaches to budget- targets & coIIecfions
Complementary Development ing, accounting addit, treasury

EQ 3 Partner inputs: management, etc. Accounting & Reporting
• Use of Country Systems Operational Efficiency
EQ 10 in Public Spending
• Provision of Budget Support Organisational factors:
• Policy Dialogue & monitoring • Improved management • Evolution of Unit costs of public
External Accountability services
of PFM reform • Organisational development
• Improved work culture. EQ 12
Public & Civil Society pressure
for improved PFM: EQ 8
• Voting preferences
• Political lobbying EQ 5
• Research & advocacy External Constraints on the PFM Reform “production possibility frontier”
• Regional/ international norms • Political Constraints: Degree of leadership / ownership of PFM reform at Administratve and Politcal levels.
• Financial Constraints: Availability & timeliness of funding for PFM reform, presence.' absence of economic crisis.
EQ 4 • Policy Constraints: Openness of the policy reform agenda, receptivity to new ideas. policy space for long-term reforms.
1.3 Evaluation questions
Box 1 : Evaluation questions
A Inputs & context: the design of PFM reform

EQ. 1: What has been the nature and the scale of PFM reform inputs pro-
vided by Government and by Donors?
EQ. 2: What types of structures have been used for the design and man-
agement of these reform inputs? Have these structures served to
provide a coordinated and harmonised delivery framework?
EQ. 3: What types of complementary actions have Donors taken to sup-
port PFM reforms and what has been their significance? Have they
had any influence on the external constraints to reform?
EQ. 4: To what extent has there been domestic public pressure or re-
gional institutional pressure in support of PFM reform and what
has been the influence on the external constraints to reform?
EQ. 5: How relevant was the PFM reform programme to the needs and
the institutional context? Was donor support consistent with na-
tional priorities? To what extent were adaptations made in re-
sponse to the context and the changing national priorities?
B Outputs: the delivery of PFM reform

EQ. 6: What have been the outputs of the PFM reform process and to
what extent has direct donor support contributed to these out-
puts?
EQ. 7: How efficiently were these outputs generated? Was the pacing
and sequencing of reforms appropriate and cost-effective? Was
the cost per output acceptable?
EQ. 8: What have been the binding external constraints on the delivery
of PFM reform outputs: political, financing or policy factors? How
has this varied across different PFM reform components?
C Outcomes: overall assessment of PFM reform & of donor

support to PFM reform
EQ. 9: What have been the intermediate outcomes of PFM reforms,
in terms of changes in the quality of PFM systems?
EQ. 10: To what extent have the outcomes generated been relevant to
improvements in the quality of service delivery, particularly for
women and vulnerable groups?
EQ. 11: Have reform efforts been effective? If not, why not? If yes, to
what extent PFM reform outputs been a causal factor in the
changes identified in intermediate outcomes?
EQ. 12: To what extent do the gains identified at the Intermediate Out-
come levels appear sustainable? Is the process of PFM reform
sustainable?
17
The Ghana study was based on twelve evaluation questions common to the
three country cases (see Box 1 above and the fuller presentation of responses
to evaluation questions and corresponding judgement criteria in Annex A).
The Evaluation Questions are structured so as to provide a standardised
framework for assembling evidence, so that the results of the country studies
can be easily synthesised to provide answers to the overall high-level ques-
tions, which the evaluation addresses. The questions marry core OECD DAC
evaluation questions with the concerns specific to the study.
1.4 Fieldwork process

The research for the country study was undertaken in two phases. The first
phase, an initial desk phase, involved reviewing background documents and
gathering published data on the Ghana context and the specific PFM reforms
carried out from the late 1990s to the present. The output from this phase
was a desk report, whose findings have been included in the current report.2
The study’s second phase, the field visit, involved extensive interviews and
focus group meetings with stakeholders in Accra and in one district adminis-
tration. An Aide-Memoire setting out the findings was circulated following
the field visit.3
While each of the three country case studies examines PFM reforms dur-
ing the 10-year period from 2001 through 2010, the Ghana case study includ-
ed the late 1990s in its review. This extended time period was considered rel-
evant in order to include the whole of the PUFMARP reforms, which began
in 1998, and which provided the foundation for many of the reforms, which
took place during the study period. In addition, the study makes references in
passing to recent reforms that were initiated during 2010 (e.g. in budget for-
mulation [programme-based budgets] and the GIFMIS) in order to comment
on the extent to which they respond to previous reform experience, since it is
too early to evaluate the performance of these reforms.
In Ghana, as in the other two country studies, an assessment was made of
the overall progress of the PFM reform programme and of a number of spe-
cific reforms, as case histories. The case histories focussed on four specific
PFM reforms, specifically, (i) Financial Management Information Systems
(FMIS), including Budget Planning and Expenditure Management System
(BPEMS) and the Integrated Payroll and Personnel Database (IPPD2); (ii) the
Medium Term Expenditure Framework (MTEF); (iii) revenue management;
and (iv) internal audit. Together, these components cover the majority (in
terms of monetary value spent) of the reforms that were carried out during
the period studied. At the same time, they provide for comparative results to
be studied, with two of these reforms (FMIS and MTEF) enjoying significant
DP support, whilst a third (internal audit) had very limited external support.
2 Gordon, A, and M Betley (2011), Evaluation of Public Financial Management Reform

in Ghana 2001-2010: Desk Report, Fiscus/Mokoro: Oxford.
3 Betley, M, A Bird, and A. B. Ghartey (2011), Joint Evaluation of Public Financial
Management Reform in Burkina Faso, Ghana & Malawi: Ghana Country Case Study
18 – Field Visit: Aide-Mémoire, Fiscus/Mokoro: Oxford.
The fourth reform, revenue management, is common to the three case study
countries and provides a contrast in terms of being relatively technical in
nature and relatively self-contained (i.e. predominantly managed by a single
institution).
Reviews of documentation and data, stakeholder interviews and focus
groups provided the main evidence for the analyses against the evaluation
questions. The stakeholders consulted are shown in Annex B, and the docu-
ments examined during the study are listed in Annex C. The former included
representatives from central agencies (specifically, Ministry of Finance and
Economic Planning [MoFEP], Controller and Accountant-General’s Depart-
ment [CAGD], and Ghana Revenue Authority [GRA]), as well as sector min-
istries (Ministry of Health and Ministry of Tourism), and one local govern-
ment unit (a district assembly, known collectively in Ghana as Metropolitan,
Municipal, and District Assemblies [MMDAs]).
While every attempt has been made to ensure that the responses to the
evaluation questions are based on the best evidence available, the lack of rel-
evant, consistent and comprehensive data represents a significant shortcoming
to the analysis. This is particularly true for actual GoG expenditures for
PFM-related activities, as well as for disaggregated data on DP PFM commit-
ments and disbursements. Furthermore, the change in government in 2009,
following a period of 8 years, meant that many of those who were in leader-
ship or management positions during the implementation of the reforms being
studied were no longer in post. This was also true for DP officials involved in
PFM reforms, many of whom moved on to other positions outside of Ghana.
Nonetheless, the study team managed to consult with a number of former
GoG officials who had been involved in the implementation of the reforms
under the previous government.
1.5 Report Structure

The report follows the standardised structure for the three country studies. In
addition to this chapter on the Study objectives and approach, it comprises (i)
a chapter describing the context and evaluating the inputs to PFM reforms in
Ghana; (ii) a chapter on the planned and actual outputs; (iii) a chapter discuss-
ing the intermediate outcomes; and iv) a chapter providing conclusions and
wider lessons.
A series of annexes contain summary matrices of the responses to the 12
Evaluation Questions for Ghana as a whole and for the four PFM reform
“case histories” (Annex A), a list of those consulted during the study (Annex
B), bibliographic references (Annex C), and an overall summary of PFM
reform inputs, outputs and intermediate outcomes over the 2001 – 2010 evalu-
ation period (Annex D).
19
2. Inputs and Context: the design
of PFM reform
2.1 The Reform context

Ghana has a population of 23 million people, of whom around 51% live in
rural areas. Per capita gross national income (GNI) was US$1,530 in 2009.4
The country is divided into 10 administrative regions (Ashanti, Brong Ahafo,
Central, Eastern, Greater Accra, Northern, Upper West, Upper East, Volta
and Western). Ghana has seen progress in reducing poverty in recent years
although there are considerable differences in socio-indicators between the
north and the south, with relatively greater poverty in the northern regions.
The absolute number of poor declined sharply in the south between 1992 and
2006 (2.5 million fewer poor), while it increased in the north (0.9 million more
poor).5
In 2010 the country’s ranking in the United Nations Development Pro-
gramme’s (UNDP) human development index (HDI) was 130 out of 182 coun-
tries. Ghana became the first African country to reach the first Millennium
Development Goal (MDG) on halving its poverty and hunger rates before
2015.
Overview of economic and fiscal performance

When the New Patriotic Party (NPP) won the elections in 2000, it inherited
an economy that had suffered a macroeconomic shock in 1999. Inflation was
running at 41%. The budget deficit and external and domestic debts were at
unsustainable levels and this inevitably had a negative impact on expenditure
in social sectors and poverty reduction activities as the Government struggled
to service its debt and stabilise public finances.
However, the anti-inflationary monetary policy and the fiscal consolida-
tion that was implemented by GoG facilitated a subsequent period of positive
growth that was also helped by strong commodity prices. In 2007, the annual
real growth rate reached 6.3%; only the second consecutive year that the
growth rate had been in excess of 6% since the 1980s. Between 2000 and
2007, the average real gross domestic product (GDP) growth rate was 5.2%, a
figure higher than the sub-Saharan average of 4.8% in the same period.6 In
2008 growth rates reached their highest for two decades rising to 7.3%.7 More
recently economic growth has slowed in Ghana as it has globally. In Ghana
economic growth in 2009 dropped to 4.7% – the lowest since 2002. Economic
4 PPP, current international US$ – World Bank (2011)

5 World Bank, 2011
6 Allsop et al, 2009.
7 Using rebased GDP, this figure would be 8.4%.
20
2. Inputs and Context: the design of PFM reform
growth began to recover in 2010 and is projected to accelerate to almost 14%

in 2011 on the back of global recovery, exceptional public investment in the
rising oil sector, and revenues from anticipated new oil discoveries.8
Ghana’s macroeconomic situation is considered to be “delicate” by the
World Bank.9 This is in part due to its reliance on primary products but also
to instability in the region, which has led to Ghana’s hosting refugees from
other countries. Agriculture accounts for about a third of GDP, while the
industrial sector contributes 28%. Ghana continues to be overly dependent on
a few primary commodities. A narrow range of exports constitutes a signifi-
cant part of Ghana’s GDP, specifically, gold (42%) and cocoa (30%), which
together accounted for over 70% of exports in 2009. Despite government poli-
cies over a number of years, which aimed to encourage industrialisation, man-
ufacturing accounts for just 9% of exports.10 The discovery of substantial
reserves of oil and gas in Ghana will provide a new source of revenue but one
which is vulnerable to shocks in global oil prices.
The global financial crisis has had an impact on the Ghanaian economy,
with lower export values, a fall in commodity prices, less and more expensive
foreign capital, lower remittances and fewer tourists. This in turn has had an
impact on income growth, job losses and budgetary pressures, leading to
reduce government spending on social protection systems. However, with the
start of oil production in late 2010, GDP per capita is projected to exceed
$1,400 in 2011.11 For 2010, the Ghana Statistical Services projected a 6.6%
growth in real GDP.12 The impact of oil-related investment expenditures (e.g.
construction, information and communication technologies, hotels, financial
intermediation) and continuously favourable climatic and terms of trade con-
ditions were seen to trigger a slight increase in economic growth in the first
half of 2010. This was reinforced by the moderate rebound in private sector
credit growth which has occurred since June 2009.
The Government’s stabilisation policies led to improved fiscal perfor-
mance post-2001 (Table 1). Revenue generation has been stronger, assisted in
part by improved tax administration, greater collection of internally generat-
ed funds (IGFs), and higher levels of remitted profits, while expenditures have
been contained, partly through reductions in debt servicing requirements.
Domestic revenues increased to nearly 24% of GDP by 2005. This revenue
mobilisation effort, supported by HIPC debt relief, allowed Government both
to reduce its reliance on domestic financing of the deficit and to increase
domestically financed primary expenditure to just fewer than 30% of GDP in
2005, up from 23% in 2002. Fiscal performance has also benefited from lower
domestic interest rates.
8 African Economic Outlook, 2011

9 World Bank, 2010.
10 African Economic Outlook, 2011
11 This figure differs from the GNI figure above as the latter also includes its income
received from other countries (notably interest and dividends), less similar payments
made to other countries.
12 World Bank, 2010 21
Table 1: Overall Budgetary Trends, 2001-2010

% of GDP
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Actual Actual Actual Actual Actual Actual Actual Actual Actual 2 Actual 2
Total
25.0 21.1 25.5 30.2 28.3 27.3 28.8 27.5 16.4 17.4
Revenues1
Total
Expendi- 32.7 26.1 29.0 33.3 30.7 34.3 37.3 41.0 20.4 23.5
tures
Aggregate
(7.7) (5.0) (3.6) (3.1) (2.5) (7.0) (8.5) (13.5) (4.0) (6.1)
Deficit 1
1
Including grants
2
Figures shown are as % of non-oil GDP (re-based)
Source: IMF, WB
Political context
The current political structure in Ghana is framed by the 1992 Constitution.
This established the fourth republic, multi party elections, and a return to
constitutional rule with an elected administration. The period covered by this
study has seen a consolidation of democratic rule in Ghana. The National
Democratic Congress (NDC) party’s rule came to an end in 2000, and the
NPP government took over for 8 years, after which NDC regained power.
There has been evidence over this period of a deepening of democracy,
including a strengthened role for Parliament, and a more active civil society
and media. In 2002, the then-President inaugurated a reconciliation commis-
sion to look into human rights violations that had occurred during the mili-
tary rule.
The NPP Government focused on poverty reduction and, in 2003, the first
Ghana Poverty Reduction Strategy Paper (GPRS I) was published, covering
2003-2005. This was to be the framework for co-ordinating social and eco-
nomic development in Ghana. It was to inform government programmes in
all sectors, and set out a number of priorities for government. The strategy
had a strong emphasis on poverty reduction and improving living standards.
In December 2004, national elections with a strong turn-out (85%) were
held, and the incumbent President was re-elected. In 2006 the new Govern-
ment published the second GPRS (2006-2009), entitled the “Growth and Pov-
erty Reduction Strategy”, marking its emphasis on economic growth and its
aim of facilitating Ghana’s promotion to the status of a middle-income coun-
try by 2015, a goal which was achieved in July 2011, following the rebasing of
GDP.13
22 13 As indicated by the World Bank.

Following close elections (including a run-off election) in December 2008, a

government led by the NDC was elected and took office in January 2009.14
The new government prepared its national development strategy, known as
the Ghana Shared Growth and Development Agenda (GSGDA), covering
2010-2013. The NDC Government also prepared a longer-term strategy doc-
ument, “An Agenda for Shared Growth and Accelerated Development for a
Better Ghana (2010 – 2016) which, as per Ghanaian Constitution requires “...
within two years after assuming office, the President shall present to Parlia-
ment a coordinated programme of economic and social development policies,
including agricultural and industrial programmes at all levels and in all
regions of Ghana”. The implementation of the Coordinated Programme is
planned to be undertaken through Medium-Term National Development Pol-
icy Frameworks. The Ghana Shared Growth and Development Agenda
(GSGDA), 2010 to 2013, covers the first phase of this Coordinated Pro-
gramme. It is expected to form the basis for the preparation of development
plans and annual budgets at the sector and district levels throughout the coun-
try. The Coordinated Programme is expected to be read alongside the Ghana
Shared Growth and Development Agenda (GSGDA), 2010 to 2013 and other
sector specific policy documents mentioned elsewhere in the Coordinated
Programme document.
Box 2 summarises key PFM events from the late 1990s, with the full chro-
nology set out in Annex A of the Ghana Desk Report.
14 It has been noted that the 2008 election provided a test of the country’s democratic
strength; in spite of a very close margin of votes between the two dominant parties,
state institutions, in particular the judiciary and the electoral commission, withstood
significant tension (Allsop et al, 2009). 23
Box 2: Summary of Key PFM Events, Late 1990s-present
F rom late 1990s-early 2000s

• Introduction of new classification system, which simplified the
categorisation of economic expenditures
• Removing dual budgeting
2003-2005
• Greater macro-fiscal stability achieved
• First GPRS, 2003-2005
• Greater links between planning and budgeting process and GPRS in
the form of MTEF workshops with MoFEP and MDAs to determine the
linkage of policy proposals in budget submissions to the GPRS
• APR process (first APR in 2003)
• Achieving of HIPC completion point, leading to greater availability of
resources, to be targeted to investment; included in medium-term
macro-fiscal framework
2005-2006
• 2006 budget was first one passed before beginning of the coming
budget year
• GPRSII 2006-2009
• STAP, emphasising the strengthening of MTEF
• Greater PAC involvement in budget process
• Incorporation of MDRI resources in medium term macro-fiscal
framework
2007-2008
• Greater analysis of links between budgets and GPRS
• Changes in classification; streamlining of MTEF activities
• First introduction of policy hearings
• Greater focus on technical hearings: attempts to place greater
emphasis on justification of budget submissions for allocation of
additional resources
• Preparation of initial MTEF submissions by pilot MMDAs
• MTEF training
2009-2010
• Ghana Revenue Authority Act passed
• Process of initiating Ghana Revenue Authority begins
• Work on GIFMIS (to replace BPEMS) begins
• Plans for the introduction of programme budgeting under way
• Preparation work on Petroleum Revenue Management Bill begins
24
2.2 PFM reform baseline

During the last 15 years, there have been two main PFM reform agendas, (i)
the Public Financial Management Reform Programme (PUFMARP), from
1997-2003; and (ii) GoG’s Short and Medium Term Action Plan (ST/MTAP),
covering 2006-2009. The suite of reforms associated with the Ghana Integrat-
ed Financial Management Information System (GIFMIS), begun in 2010,
may be considered to represent a significant part of the current PFM reform
programme; however, the study focuses on the reforms pre-2009/10, as these
have been under way for a significant enough amount of time to review their
effect.15 These PFM reform programmes have been set in the overall context
of GoG’s national medium-term development plans, the GPRS I, GPRS II,
and the GSGDA. Overall, in comparison with other countries in the region,
Ghana was an early adopter in sub-Saharan Africa of key PFM reforms, such
as the Medium Term Expenditure Framework (MTEF).
The main central GoG agencies relating to PFM are the Ministry of
Finance and Economic Planning (MoFEP), the Controller and Accountant
General’s Department (CAGD)16, the Public Services Commission (PSC), the
Office of the Head of the Civil Service (OHCS), the State Enterprises Com-
mission (SEC), and the National Development Planning Commission
(NDPC). The Bank of Ghana is the Government’s banker; GoG also operates
accounts at commercial banks. Also part of the central management frame-
work, and critical for PFM, are the Public Procurement Authority (PPA)17, the
IAA, and the Ghana Revenue Authority (GRA); these agencies operate under
separate Acts and have a statutory mandate. External scrutiny agencies
include the Ghana Audit Service (GAS), headed by the Auditor-General, and
two Parliamentary committees, the Finance Committee (FC), and the Public
Accounts Committee (PAC).
15 This is for practical reasons but is not to give the impression that PFM reforms have
stalled under the new government or that the evaluation has not been balanced in its
review.
16 The Controller and Accountant General reports to the Minister of Finance.
17 Formerly, the Public Procurement Board 25
Box 3: Summary of PUFMARP 1997-2003
The Public Financial Management Reform Programme (PUFMARP)

was a 6-year multi-component GoG programme to strengthen PFM. The
Programme, which was under way between 1997 and 2003 was supported
mainly by funding from IDA, with co-financing provided by DFID, CIDA, and
the EU. The Programme’s components included:
1. Budget preparation – introduction of an MTEF;

2. BPEMS, an integrated financial management information system;
3. Cash management – introduction of a modern cash management
system;
4. Aid and debt management – improving data on aid and debt management
and the links with CAGD and BoG;
5. Revenue management – introduction of VAT, unique Taxpayer
Identification Number, IT system for tax assessment, collection and
reporting, and strategy for managing customs data;
6. Procurement – formulation of national procurement code and
development of mechanisms for compliance with code;
7. Auditing – development of national audit standards, specification of audit
reports, and introduction of value-for-money audits;
8. Legal framework – review of legislative framework and development of
revised financial rules and regulations for Parliamentary approval;
9. Human resources development – training for staff in programme
component areas.
Components in italics indicate those where the scope was scaled down during project
implementation, due in part to make way for the additional resource requirements of
BPEMS.
26
Box 4: S
ummary of GoG’s PFM Short and Medium-Term Action
Plan 2006-2009
At the beginning of 2006, MoFEP published its three-year strategic plan and
its short and medium-term PFM Action Plan (ST/MTAP), covering the period
2006-2009, in line with GPRSII. The Government updated the Action Plan
in August 2006, following the PEFA assessment. The short-term Action
Plan sets out reforms currently being introduced, which focus on improving
the efficiency of resource and information flows through the system. The
specific measures in the short-term Action Plan include:
• The on-going building of an improved Integrated Personnel and Payroll

Database system (IPPD2);
• The Government’s integrated financial management system: the Budget
and Public Expenditure Management System (BPEMS);
• The introduction of a decentralised payment system, beginning initially
in pilot ministries, including the Ministry of Education;
• Strengthening of internal audit and procurement processes, focusing
mainly on establishing effective internal audit and procurement
institutions and processes in MDAs and MMDAs and accompanying staff
training.
In addition to these short-term measures, the Government’s medium-term

action plan consists of a matrix of reforms centred on 9 focal areas. Within
each focal area, output targets are given, the main agencies responsible
as well as other agencies involved are named, activities to be undertaken
are detailed, and the risks are identified. The reforms are comprehensive
and cover most areas of the PEFA framework. The action plan was revised
following the 2006 PEFA assessment, and the short and medium-term
measures were prioritised and sequenced and a rough estimate of costs
was added.
2.3 Direct Reform Inputs

EQ 1: What has been the nature and scale of PFM reform inputs provided
by Government and Donors?
Country overview
Table 2 summarises DP allocations to PFM reform activities from 1998 to
2010. DPs represented the bulk of funding for PFM reform activities. The
majority of funds have been spent on the FMIS reforms (BPEMS, IPPD2 and
GIFMIS), followed by strategic budgeting (specifically, MTEF-related activi-
ties). Significantly fewer amounts were spent on resource management (reve-
nue, expenditure, aid, and debt), and audit. Additionally, limited diagnostic
work has been undertaken by both the World Bank and the IMF, as well as by
other DPs in preparation for the provision of their programmatic support.
27
Table 2: DP allocations to PFM reform activities

Estimated specific PFM project
PFM Support by Main DP support, 1998-2010 (mn US$)1
World Bank 18.4
EU 11.2
BMZ 10.82
Other 10.7
Total 51.1
Data represent best estimates, based on, in some cases, very limited available data.
1
2
€10.5 million.
Sources: WB, EC, BMZ, DFID, MoFEP
With the exception of FMIS (where the majority of funds were spent on hard-
ware and software), the bulk of the funds on PFM reforms have been spent on
technical assistance. GoG support has been spent primarily on training staff
on existing reform initiatives under way or rolling out such reforms.18 The
main DPs supporting PFM reforms (by value) during the study period include
DFID, the EC, BMZ/GTZ, the IMF, and the World Bank. Others include
Danida, CIDA, Japan, KFW, Switzerland, and UN.
Table 3 summarises the funding from the main DPs on PFM activities
during the study period. PFM-specific DP support was in the form of multi-
component programmes, managed by either a single DP (e.g. Good Financial
Governance), or a pooled-funding arrangement (e.g. GIFMIS).19
Table 3: Overview of Development Partner funding for PFM reform

Estimated specific PFM project
PFM Focal Area support, 1998-2010 (mn US$)1
Strategic budgeting/budget 4.6
preparation
Resource management 19.0
Internal controls, audit, 0.7
monitoring
Accounting, reporting (BPEMS) 15.6
External accountability 11.2
Total 51.1
1
Data represent best estimates, based on, in some cases, very limited available data.
18 It is to be noted that the GoG expenditure estimates given in this section are specifi-
cally related to reform activities (i.e. excluding day-to-day activities of relevant institu-
tions) and do not include personnel-related expenditures.
19 GIFMIS is a pooled fund with a joint steering committee and common funding of
agreed activities. Some harmonisation of M&E has taken place in order to ensure one
28 reporting standard; this was funded by DFID.
There was a marked reduction in DP funding for PFM activities between

2004 and 2006. This coincided with the commencement of a programme of
multi-donor budget support (MDBS), which provided significant funds to the
Consolidated Fund (annual average of just over US$300 mn since 2003)
(Table 4). These funds were available to support GoG’s budget, but were not
aimed specifically at PFM reform activities, nor can it be assumed that they
were used as such. A recent study20 of the benefits of MDBS examined wheth-
er or not the shift to MDBS: (i) resulted in increased DP project funding for
PFM reform (i.e. to support MDBS); and/or (ii) facilitated greater government
spending on PFM reform through a substitution effect. The study found no
evidence to support either proposition.
Table 4: Total MDBS Commitments and Disbursements 2003-2010

2003 2004 2005 2006 2007 2008 20092 2010
Commitments (mn US$)1 281.4 302.2 285.3 372.4 319.6 347.9 601.1 451.5
Actual disbursements
277.9 309.0 281.9 312.2 316.6 368.1 525.2 403.0
(mn US$)
MDBS (actual) as %
30.0% 26.7% 29.3% 33.0% 26.5% 25.7% 34.6% –
of dev. assistance
MDBS (actual) as %
N/A 12.7% 10.2% 8.3% 7.7% 8.3% 9.3% –
of gov’t expend.
1
Data refer to pledges, as officially recorded by MoFEP.
2
Commitments and disbursements reflect funding provided in response to the impact on
the economy of the global financial crisis.
Sources: MoFEP, GAS (audited accounts), BoG (exchange rates)
Component case histories

The FMIS case history includes two main FMIS-related reforms, the intro-
duction of the Budget Planning and Expenditure Management System
(BPEMS) under PUFMARP, and the Integrated Personnel and Payroll Data-
base (IPPD2). For BPEMS, external support was provided mainly between
1997 and 2003 under PUFMARP, with minimal external amounts provided
thereafter. The main sources of funding under PUFMARP were IDA
(US$15.3 mn), and GoG ($4.6 mn). Following the conclusion of PUFMARP,
GoG continued providing funding to BPEMS from its annual budget. It is
notable that the final expenditures under PUFMARP were 50% higher than
originally programmed; this additional expenditure was financed by transfer-
ring part of the budget originally intended for the revenue management com-
ponents (specifically, covering support to Customs, Excise and Preventative
Service (CEPS)). Inputs centred on TA for system design (re-engineering busi-
ness processes), the provision of hardware (including networks), and financial
management software (based on Oracle Financials).
For IPPD2, DP support was provided by DFID, largely for system specifi-
cation, hardware, application licence, customisation costs and training staff in
MDAs.
20 Betley and Burton, 2011. 29

MTEF
The majority of funding for the MTEF came from PUFMARP; total funding
under the programme for the MTEF was estimated at US$4.58 million
(external) and US$ 0.18 million (GoG). The reform inputs, which were
focused primarily on MoFEP and MDAs, were provided mainly as technical
assistance. They involved two main areas of support: (i) the development and
specification of the MTEF at MDA level (mainly activity-based), and (ii)
improvements to the formulation of the annual budget, including budget cir-
cular, installation of budget preparation software in MDAs and staff training.
Following PUFMARP, some limited financing was available from CIDA
(long-term advisory support), GTZ (MTEF training), and UNICEF (interna-
tional site visits and advisory support).
Revenue management
Under the PUFMARP programme, disbursed IDA funding amounted to
US$0.95 mn. Under the subsequent Good Financial Governance programme,
supported by BMZ, disbursed funding for each phase was: (i) Phase I (9/2003
– 8/2006): €2.8 mn; (ii) Phase II (9/2006 – 3/2010): €5.0 mn; Phase III
(4/2010-13) €9 mn. Co-financing of around €2.6 mn has also been provided
by Switzerland (SECO). Otherwise, during 2005/06, DFID provided an advi-
sor on improving non-tax revenue collection in the natural resources sector.
Internal audit
The introduction of a formal internal audit function began with the passage of
the Internal Audit Agency Act in 2003. Previously, internal audit had been
focussed largely on compliance checking of payment vouchers (pre-audit),
rather than on systemic reviews on behalf of management of internal control
systems.
Very limited DP funding was spent during the study period, mainly on
training. This included EC support (estimated at less than €0.5 mn)21 that was
provided towards the end of the study period (in 2008) to train staff in MDAs’
Internal Audit Units (IAUs). Some limited support for training and ICT
equipment was also provided by the World Bank.
GoG funding during the period in question was focussed on getting the
IAA operational, and initiating an internal audit function in MDAs and
MMDAs, including staff familiarisation and training. GoG funds spent on
introducing internal audit amounted to an estimated ¢12 mn per year.22
21 Study team estimates based on project documentation.

30 22 Based on estimates by the IAA.
2.4 S tructures to design and manage

PFM reform inputs
EQ 2: What type of structures has been used for the design and
management
of these reform inputs? Have these structures served to provide
a coordinated and harmonised delivery framework?
Country overview
As described above, the main reform activities during the period studied were
those under the PUFMARP reform programme, the GTZ/BMZ-support for
resource management, the EC support to external audit, and wholly-GoG-
financed reform activities. As such, the institutional structures involved in
PFM reform followed those of the relevant reform programmes.
For the PUFMARP, the governance structure involved ultimate oversight
by a Government Steering Committee, chaired by the Deputy Minister of
Finance, and representatives of senior management of MoFEP, including the
Chief Director, CAGD (Deputy Controller), as well as representatives of major
spending MDAs. Day-to-day functions were the responsibility of the PUF-
MARP Implementation Team, headed by the Project Manager.
As indicated below, the PUFMARP Project Completion Report noted sig-
nificant concerns about the relevance of the design of different aspects of
PUFMARP, including mis-specification and over-estimation of the readiness
of the implementing agencies for the reforms.
Immediately following the PUFMARP, solely GoG-financed reform
activities were co-ordinated by the individual divisions concerned, largely in
MoFEP. Following the publication of its ST/MTAP, MoFEP created a specif-
ic unit in 2007, the Budget Development Unit (BDU), under the Budget Divi-
sion, to facilitate and drive forward budget reforms. From 2001 through 2008,
the overall public sector reform programme was co-ordinated by the Ministry
of Public Sector Reform.
With a limited number of PFM reforms during the study period, and
resources channelled through large PFM programmes, donor harmonisation
of these programmes was less of an issue. As indicated above, from 2003, a
significant proportion of DPs’ annual resources to GoG (around 30%) have
been channelled through MDBS. One of the benefits of MDBS was greater
DP harmonisation of its support, including on PFM, with GoG’s priorities and
programmes.23
23 See Betley and Burton (2011), and Betley (2008). 31

FMIS
There were marked differences in the design and management arrangements
for BPEMS and IPPD2 that reflected differences in the scope and complexity
of the respective reform initiatives:
• BPEMS. There were fundamental weaknesses in the technical design
and management arrangements for BPEMS. It was conceptualised pri-
marily as technology driven reform with insufficient attention given to
changes in PFM processes and procedures that should have preceded
the reform, to change management, and to the assessment of capacity
issues and training requirements. Furthermore, BPEMS was initially
managed through the PUFMARP project implementation unit, which
had no functional or operational responsibility for the reform. This
resulted in implementation of BPEMS being distanced from its two cli-
ent departments (CAGD and the Budget Division), contributing to a
lack of ownership for the reform. It was only following completion of
PUFMARP in 2003 that the responsibility for BPEMS was transferred
to the CAGD. However, coordination between the CAGD and the
Budget Department remained weak, particularly as by then Budget
Division had developed its own software application for budget plan-
ning and managing budget releases.
• IPPD2. By comparison, IPPD2 was a more narrowly specified and
simpler reform, involved only a limited number of users of the sys-
tem, and presented fewer change management issues. It was man-
aged by the CAGD and implemented through a contract with a con-
sultancy firm.
MTEF
Like BPEMS, the MTEF reforms were financed through PUFMARP,
although through parallel funding provided by DFID. The PUFMARP
appraisal document provided only a very general specification of the reform
which emphasised its technical features rather than its institutional and pro-
cess aspects. The reform was implemented independently from the other com-
ponents of PUFMARP through a separate MTEF Project Unit which subse-
quently became the Budget Development Unit that has continued to be
responsible for overseeing the preparation of the Budget and overseeing fur-
ther development of the reform.
Although these arrangements facilitated strong ownership of the reform
within the Budget Division, they may have undermined coordination and
harmonisation between the MTEF and the other elements of the PFM
reforms being supported through PUFMARP. For example, the Budget Divi-
sion developed its own ACTIVATE software application for budget prepara-
tion rather than using the budget preparation module of the BPEMS system.
Delays in the implementation of the BPEMS meant that the performance ele-
ment of the chart of accounts that was meant to support the MTEF budgeting
reforms was not implemented.
32
The design of the MTEF process allows for a review of the experience from
the most recent MTEF/budget planning cycle to be fed into the planning of
the subsequent MTEF. A number of external reviews of the MTEF reform
have been undertaken including a 2003 case study undertaken by the Over-
seas Development Institute as part of wider study of the design and applica-
tion of MTEFs as a tool for poverty reduction, the 2004 PUFMARP project
completion report, and the 2009 External Review of PFM.
Revenue management
The revenue management component of PUFMARP was co-ordinated and
managed through the programme’s Steering Group and the PIU. The more
significant BMZ-funded support was provided directly to the relevant revenue
agencies, specifically the Revenue Agencies Governing Board (RAGB), the
Internal Revenue Service, and the VAT Service. Subsequently, the Secretariat
covering the Taxpayer Identification Numbering (TIN) programme, which
was previously managed by the PUFMARP PIU, was brought under the
RAGB. With only one DP providing support at a time, harmonisation among
DPs was not an issue in practice.
Internal audit
An IAA steering committee was established to provide oversight for the
reform, with the Auditor General as the Chair and the Director General of
the IAA as the Vice Chair. A formal memorandum of understanding between
GAS and IAA spells out the operational relationships between the two organ-
isations, including the sharing of information, reports, resources, and train-
ing. Internal audit standards from International Organisation of Supreme
Audit Institutions (INTOSAI) and African Organisation of Supreme Audit
Commission (AFROSAI-E) were adopted.
However, the reforms have left the IAs confused as to where they belong.
They have dual reporting responsibilities at MDA and MMDA levels between
the IAA and MDA and between IAA and MMDA. The IAA posts the Inter-
nal Auditors to MDAs and MMDAs and, although they report directly to the
IAA, they are expected to be part of the MDA/MMDA. This dual allegiance
has created tensions and suspicion among the IAUs, MDAs and MMDAs.
2.5 C omplementary Donor inputs

to PFM reform
EQ 3: W
hat types of complementary actions have Donors taken to
support PFM reforms and what has been their significance? Have
they had any influence on the external constraints to reform?
Country overview
The primary complementary action undertaken by DPs was the Multi-Donor
Budget Support (MDBS) Framework. In particular, the introduction of
MDBS in 2003 provided a useful forum for policy dialogue around reform in
33
general, but particularly in terms of PFM systems, as well as issues around ser-
vice delivery.24 It provided a forum for shared PFM assessments, with the
meetings for the annual External Reviews of Public Financial Management
and the initial PEFA assessment being open for all stakeholders. The MDBS
framework also facilitated information sharing and harmonisation of DP
reform activities.
However, the more direct way in which the MDBS framework sought to
influence reform actions was primarily through the MDBS triggers. All of the
PFM MDBS triggers were met or declared to be met25, although it may be
argued that there was some interpretation in the achievement of some of the
triggers, particularly with BPEMS.26
Ironically, the MDBS policy dialogue was least successful in dealing with
PFM outcomes. The fiscal crisis of 2008, and the subsequent political fall-out,
had an impact on the collective nature of MDBS dialogue, with the World
Bank opting to undertake its own adjustment programme with GoG outside
of the MDBS framework. This, together with strong future economic growth
prospects, and with the rebased GDP, and DPs’ own fiscal pressures, can be
expected to have an impact on future levels of MDBS.27
In terms of the extent of aid-on-budget for funding for PFM reform meas-
ures, as the majority of funding for the PUFMARP reforms was from an IDA
credit, the resources were on-budget. However, since they used World Bank
procedures, they were not on-Treasury or on-accounting. Reporting on the
use of funds was also separate. Grant-funded programme support tended to
use the DPs’ own procedures28, and was not systematically on budget.29 Under
the MDBS framework, KFW, CIDA and Danida sponsored a number of par-
tial audits of MDAs and MMDAs, known as selected flows audits. Overall,
less than 50% of all external resource flows use government procedures.30
One potential external constraint to PFM reform was the predictability of
external disbursements, on which the PEFA reports indicate that there were
weaknesses in the early part of the period studied, but that predictability had
improved after 2004.31
FMIS
BPEMS was initially implemented as part of PUFMARP, which supported a
relatively comprehensive programme of PFM reforms. In practice, the
24 See Betley and Burton, 2011.

25 See the Ghana desk report for this study (Gordon and Betley, 2011).
26 See Betley and Burton, 2011.
27 On the other hand, Japan joined the MDBS group.
28 With some exceptions (e.g. Danida)
29 The Budget Statement contains a table of estimated current year-to-date spend on ex-
ternally financed projects, but this is not comprehensive, and the information is often
different to that held by the MDAs and the DPs.
30 A D score was recorded for the D-3 indicator in both the 2006 and 2009 PEFAs.
31 A C score was achieved in the 2006 PEFA for D-2(i), but this had improved to an A
34 score in the 2009 PEFA.
reforms were not well sequenced and were implemented independently of

each other. This meant that the potential benefits of managing the reforms
within a wider reform agenda were not realised.
The subsequent MDBS dialogue had minimal influence on the FMIS
reforms although two triggers were linked to FMIS implementation. The first
required complete deployment of all six BPEMS modules in eight pilot MDAs
by 2006. This was not achieved but was “declared met” by the 2007 MDBS
Review even though it was only partially met. The second involved the inte-
gration of 50% of subverted agencies into the IPPD2 by May 2008 was met in
August 2008.
MTEF
Following the completion of the DFID assistance in 2003, the government has
continued to finance and sustain the MTEF reforms. This has been comple-
mented by limited assistance from CIDA (long-term advisory support), BMZ
(training and short-term advisory support), and UNICEF (MoFEP interna-
tional experience familiarisation and short-term advisory support). There
have been no MDBS triggers relating to the MTEF, and there is no evidence
that the MDBS dialogue has influenced the evolution of the MTEF initiative.
2.6 Civil Society pressure for PFM

reform
EQ 4: T
o what extent have there been domestic public pressure or
regional institutional pressure in support of PFM reform and what
has been the influence on the external constraints to reform?
Country overview
There appears to have been limited domestic public pressure for PFM reforms,
partly due to the perceived technical nature of such reforms. There are few
CSOs undertaking budget analysis and advocacy and little fiscal and budget-
ary analysis undertaken by academia. Non-availability of budget execution
data remains a major constraint to independent budget analysis, and MoFEP
has not actively facilitated such analysis. However, the recent opening of PAC
hearings on external audit reports to the public and the televising of the hear-
ings has increased public awareness of the role of the PAC and led directly to
pressure on the PAC to increase its technical capacities and improve the qual-
ity and timeliness of its scrutiny of GAS reports.32
Regional (African) peer-to-peer experience-sharing is cited as an impor-
tant factor in enabling GoG officials to learn about international experience.
For the Budget Division in MoFEP, CABRI is seen as having been particular-
ly influential. In addition, MoFEP has a programme of enabling staff to gain
international experience (through international degree programmes) and
potentially job-swaps or job placements.
32 We note the request by PAC for support to the Secretariat on analysing external audit
reports. 35
FMIS
There was no discernible engagement with civil society, academia or the
media over the implementation of BPEMS and IPPD2. This was consistent
with the view of the FMIS as technological reform. Similarly there has been
little pressure from regional and international organisation in support of the
reforms, although MoFEP increasingly recognises that the experience with
BPEMS compares unfavourably with the implementation of FMIS initiatives
in other African countries.
MTEF
Unlike some other countries where similar reforms have been introduced,
Ghana’s MTEF has not involved specific measures to involve civil society,
academics and the media in the budget process. MoFEP organises consulta-
tions with CSOs in October each year, but these take place too late in the
budget process to influence resource allocations. Prior to the consultations,
there is a call for submissions from CSOs that is published in the newspapers.
Similarly the MTEF reform has not led to any strengthening of parliamentary
involvement in the budget process, which remains limited to the period fol-
lowing presentation of the draft budget.
There are few CSOs undertaking budget analysis and advocacy and lim-
ited fiscal and budgetary analysis undertaken by academia. Non-availability
of budget execution data remains a major constraint to independent budget
analysis, and MoFEP has done little to encourage such analysis.
There is evidence that regional PFM fora have begun to influence the
MTEF reform. For example, a meeting of Collaborative African Budget
Reform Initiative (CABRI) in the second quarter of 2010 was influential in
convincing officials in the Budget Division to adopt a more strategic pro-
gramme-based approach to budget planning.
2.7 Relevance of PFM Reform Inputs

EQ 5: How relevant was the PFM reform programme to the needs and the
institutional context? Was donor support consistent with national
priorities? To what extent were adaptations made in response to
the context and the changing national priorities?
Country overview
As indicated above, there were a few formal domestic PFM reform strategy
documents during the period studied. It is notable that the ST/MTAP was
revised and re-released in early 2007 following the publication of the first
PEFA assessment; the revised version reflected GoG’s revised policy objectives
in response to weaknesses identified in the PEFA. Specifically, the changes
include: a reprioritisation of activities based on the PEFA assessment; explicit
sections added to explain the prioritisation and the sequencing of reforms;
36 estimates of the likely cost of activities were included, and for each focal area,
the likely outcome (mainly, expected changes in processes) in 2009 (the final
year of the Action Plan) was indicated. However, there was no indication of
the potential impact on service delivery – both original and revised STAPs
focussed more on actions and outputs rather than on outcomes. At the same
time, the issue of how change was to be managed was not addressed, specifi-
cally, the organisational development, capacity development and motivational
initiatives needed to drive each objective.
Box 5: Comparison of 2006-09 Short & Medium Term Action Plan

with identified weaknesses
Inclusion in
Weakness 2006-09 Reform
Identified Programme
(2001 HIPC, (ST=Short-Term
Elements of PFM 2004 CFAA, Action; MT=Med.-
System 2006/09 PEFA) Term Action) DP Support
A. Cross-cutting
Legal Framework HIPC ST
DFID, DE,
Capacity building HIPC, CFAA MT
UNDP
Organisational
structure/functional
reviews
IFMS HIPC ST WB, DFID
Co-ordination
MT
across PFM systems
Budget policy
management
B. Budget credibility
Budget deviations in
PEFA(-/C)
aggregate
Budget deviations
PEFA(D/C) MT
by MDA
Revenue projec-
HIPC MT
tions/outturns
Expenditure arrears
C. Comprehensiveness/transparency
Budget HIPC, CFAA,
MT WB, IMF
classification PEFA(-/C)
Comprehensiveness
MT
of budget docs
37
Inclusion in
Budget comprehen-
CFAA,
siveness & unre- MT
PEFA(C/-)
ported ops
Inter-governmental
PEFA(-/D+) MT UNDP
fiscal management
Aggregate fiscal
PEFA(C/D+) MT
risk/SOEs
Public access to
fiscal info
D. Policy-based budgeting
Structure of budget
HIPC, CFAA
process
MTEF/multi-year HIPC, CFAA DFID, CIDA,
ST, MT
budgeting PEFA(C/-) GIZ, UN
E. Budget execution
Tax administration
PEFA(C/C) MT GIZ
reform
Domestic resource
PEFA(C/-) MT GIZ, DFID
mobilisation
Expend. Predictabil-
HIPC,
ity/commitment MT US
PEFA(C/D+)
controls
Debt, cash manage-
MT IMF, US
ment
Payroll controls CFAA MT DFID
WB, DFID.
Procurement HIPC MT
GIZ
CFAA,
Internal controls MT
PEFA(C/D+)
HIPC, CFAA,
Internal audit MT EC, WB
PEFA(D+/D+)
F. Accounting, recording and reporting
Reconciliation HIPC, CFAA,
MT IMF
38
of accounts PEFA(C/C)
Inclusion in
Resources rec’d by
service delivery PEFA(D) MT
units
In-year budget
CFAA MT
reports
Annual financial
HIPC, CFAA MT
statements
G. External scrutiny/audit
External audit HIPC, CFAA MT EC
Legis. scrutiny of HIPC;
annual budget law PEFA(-/D+)
Legis. scrutiny of ex-
HIPC (-/D+) DFID
ternal audit reports
1
HIPC refers to 2001 HIPC action plan recommendations.
2
CFAA refers to recommendations in the 2004 CFAA Action Plan.
3
PEFA refers to 2006 and 2009 PEFA scores C or D (central government). 2006 & 2009
scores separated by “/”.
4
DP support may not be comprehensive due to lack of available information.
The alignment between the PFM reforms and Government needs (i.e. PFM
weaknesses) may be analysed in two ways: firstly, whether or not the reforms
undertaken adequately reflected PFM weaknesses, and secondly whether or
not DPs’ contributions were appropriately targeted. Box 5 shows the align-
ment between the weaknesses identified (in the 2001 HIPC survey, 2004
CFAA, and 2006 PEFA), their inclusion in the GoG’s 2006-09 PFM reform
programme and the availability of DP support for reform.
In terms of the alignment of DP support with PFM weaknesses, the analy-
sis indicates that, in general, DP support was focussed on those areas with the
greatest needs. Based on the link between DP support on the one hand and
GoG’s PFM needs on the other, as measured by HIPC, CFAA assessments
and the scores of Cs and Ds in the 2006 PEFA assessment, there is a reason-
able correspondence between DP support and those PFM areas assessed as
requiring strengthening. DP support is concentrated disproportionately – but
for good reasons – on budget execution, followed by the MTEF.
DP support has not been provided to any area, which was assessed as being
reasonably strong, although there are relatively few of those. One of the areas
not identified as requiring assistance and without DP support is the establish-
ment of a system to identify and monitor expenditure arrears, although DPs
are reported to have consistently raised this issue with GoG over the past years
but GoG did not request support for such a system during the period studied. 39
The lack of such a system enabled GoG to build up a large stock of new
arrears during 2007 and 2008, which reached an estimated 4% of GDP.33
Box 6 below examines GoG’s reform programme in more detail and
assesses how close it is in practice to the PFM weaknesses as indicated by the
PEFA and to GoG’s PFM medium-term Action Plan. The analysis indicates
that nearly all PEFA indicators are included in the Plan. This was partly by
design, as the Action Plan was revised following the 2006 PEFA assessment.
However, the measures are not prioritised, which undermines the Plan’s use-
fulness. It is interesting to note, however, that the reform programme is in
reality a MoFEP Action Plan since those aspects of PFM undertaken by other
agencies (e.g. internal audit, external audit) largely do not feature (except rev-
enue administration measures).
Box 6: Alignment of 2006-2009 Short & Medium Term Action Plan

with PEFA Results
Related
ST/MTAP Focal 2006 PEFA
Areas1/ Selected Work Indicator/
Key Objectives Plan Activity Results
1. Fiscal Policy Management – Macro-Economic Stability
• To improve fiscal • Linking/integrating revenue PI-14 (C)
resource systems PI-16 (C)
mobilisation • Improving monitoring of PI-8 (C)
• Formulate and expenditure commitments PI-23 (D)
implement sound • Consolidating of fiscal data PI-2 (C)
macro-economic • Public Expenditure Tracking
policies Surveys
• More accurate wage bill
planning
2. Strengthen Budget Formulation/Preparation
• Allocate and • Improving MTEF through PI-12 (C)
manage financial capacity development PI-8 (C)
resources • Harmonising central/local PI-9 (C)
efficiently, classification systems PI-5 (B)
effectively and • Facilitating SOE inputs into the
rationally budget
• Budget classification
3. Strengthen Budget Implementation
• Improve public • Budget reporting PI-24 (C+)
expenditure • Cash releases PI-16 (C)
management • Donor harmonisation D-2 (C)
40 33 As estimated in the IMF Letter of Assessment, March 2010.

Related
ST/MTAP Focal 2006 PEFA
Areas1/ Selected Work Indicator/
Key Objectives Plan Activity Results
• Variance between planned and PI-3 (A)
actual revenues PI-15 (C)
• Inventory control for revenue PI-22 (C)
agencies) PI-7 (A)
• Bank reconciliation
• Comprehensiveness of reported
govt. operations
4. Financial Regulatory and Management Environment
• Account for all • Development of asset register PI-6 (C)
public finances • Production of timely accounts PI-24
properly • Financial instructions (C+),PI-25
• Preparation of statutory (C+)
accounts PI-20 (C)
• Activities for implementing PI-7 (A)
Public Procurement Act PI-19 (C+)
• Activities for implementing IAA PI-21 (C)
Act PI-26 (C+)
• Improvement of capacity of
Audit Service, follow-up
5. Integrated Payroll and Personnel System
• Improve the • Implement IPPD PI-18 (C)
human resource
and institutional
management
capacity
6. External Resource Mobilisation, Aid and Debt Management
• Reduce and • Improve data & reporting on use D-1 (C+),
restructure of ext. assistance D-2 (C)
domestic debt • Improve quality of external and PI-17 (B)
domestic debt data PI-12 (C)
• Debt sustainability analysis and PI-I7 (B)
management
• Fiscal information on external
loans
7. Revenue Management
• Improve fiscal • Revenue database interface, PI-14 (C)
resource improved rev admin PI-15 (C)
mobilisation • Revenue arrears PI-3 (A)
• Analysis of revenues against
targets
41
FMIS
FMIS modernisation was and continues to be a central pillar of the govern-
ment’s reform effort. However, the design and implementation of the donor
assistance failed to synchronise related process and procedural reforms and
change management issues. Due to implementation delays and difficulties,
donor support for both BPEMS and IPPD2 ended before new systems were
operational. Thereafter, the government continued funding the implementation
of the reforms, although in the case of IPPD2 this was after a gap of some years.
Since the NDC government came to office in January 2009 the FMIS reforms
have been more strongly championed by political leadership in MoFEP.
MTEF
Initially there was strong political level support for the more strategic objec-
tive-led approach to budgeting that was to be introduced through the MTEF.
In recent years the focus of political support has shifted away from the MTEF
reforms towards improving the presentation of government’s fiscal and budget
policies and strategies in the Budget Statement. This shift in emphasis may
reflect the perception that the MTEF reforms have not delivered against their
original objectives.
The front-loading of donor assistance under PUFMARP facilitated a very
rapid roll-out of the MTEF reforms. However the PUFMARP implementa-
tion report noted that this had contributed to the reforms being superficial in
a number of key respects. Following the completion of the PUFMARP, the
continuation of the MTEF reforms relied primarily on domestic financing.
However, during this period the focus was on sustaining the reforms that had
been introduced, and little was done to address the fundamental weaknesses
in the design of the MTEF reforms that had become apparent by the end of
PUFMARP.
Revenue management
The GTZ-funded reforms were designed on the basis of an assessment of the
weaknesses in revenue administration. The phased-approach to the pro-
gramme, with a pause after each phase for feeding the results of the evaluation
of that phase into the design of the new phase, seems to have enabled the
reforms to adapt to current circumstances.
42
3. O
utputs: the Delivery of PFM
reform
3.1 Key reform outputs 34
EQ 6: What have been the outputs of the PFM reform process and to what
extent has direct donor support contributed to these outputs?34
Country overview
Outputs achieved during the study period relating to strategic budgeting and
budget preparation include:
• Promulgation of a new Organic Budget Law, the Financial Adminis-
tration Act (FAA), 2003.
• Since 1999, the Budget Statement has provided 3-year forward esti-
mates by MDA for the Consolidated Fund, although the credibility of
these estimates is very weak.
• Establishment of activity-based budgeting process (for service and
investment Consolidated Fund expenditures) in all MDAs, including
preparation of detailed MDA activity-based budget documents.
• The 2006 Budget Statement was the first to be presented to, and the
first Appropriations Act to be promulgated by, Parliament before the
beginning of the budget year to which it related. Each Budget State-
ment since then has been presented to Parliament and promulgated
before the beginning of the relevant budget year.
• In addition, the Budget Statement has improved the amount of infor-
mation it contains (e.g. on retained internally-generated funds [IGFs],
Statutory Funds, and DP funding).35
• Greater stakeholder input into the budget process.
• Preparation of Citizen’s Guide to the Budget (2007 and 2008), as well
as a serialised publication of the budget in the national daily
newspapers.
• Piloting of composite budgets, which aimed to show budgetary infor-
mation for districts and regions, by combining central and local expen-
ditures in each district and region.
Legislation and regulation related to resource management was strengthened
during the study period. In addition to the Financial Administration Act,
2003, a number of revisions of the Financial Administration Regulations
(FAR) have been prepared (2004, 2009, and 2011). Strengthening of public
procurement procedures began with the promulgation of the Public Procure-
34 The Inception Report (op cit) defines outputs as “the immediate changes in the archi-
tecture and substance of the PFM system generated by the combined set of inputs”.
35 It is noted that the issue of comprehensive reporting of “aid on budget” is outstanding. 43
3. Outputs: the Delivery of PFM reform
ment Act, 2003. More recently, legislation relating to revenue administration

(the Ghana Revenue Agency [GRA] Act, 2009) was promulgated.
In addition, the following outputs have been achieved in relation to resource
management:
• introduction of Tax Identification Numbering System;
• introduction of a reworked indirect tax regime (VAT);
• establishment of Tax Policy Unit in MoFEP;
• establishment of the GRA;
• the closing of a significant number of government bank accounts
(including redundant or unauthorised accounts) (intended to be in
preparation for a Single Treasury Account (STA);
• The elaboration of guidelines for a strengthened commitment control
system;
• The establishment of an Expenditure Management Committee to
assist with cash management;
• A harmonised chart of accounts, covering MDAs and MMDAs, was
agreed;
• An integrated payroll and personnel database (IPPD2) became opera-
tional;
• A number of decentralised treasuries were established and became
operational. These treasuries were intended to facilitate more timely
releases of funds to cost centres in critical areas, such as education.
In terms of internal control, audit and monitoring, the main reform output is
related to the passage of legislation for internal audit. The Internal Audit
Agency Act (IAA) was passed in 2003, which established the Internal Audit
Agency, and the process of establishing IAUs in MDAs and MMDAs begun.
The operational framework of the internal audit units was enhanced by the
adoption of public sector internal audit regulations and standards and the use
of an internal audit manual and programmes. The operational efficiency of
the MDAs and MMDAs has been measured and monitored by the IAA by
reviewing the submissions received relating to the: (i) internal audit charters;
(ii) annual audit plans and (iii) quarterly audit reports. The quarterly internal
audit reports are subjected to scrutiny for adherence to quality standards and
compliance with statutory regulations and procedures. Specifically, 342 IAUs
and ARICs in MDAs and MMDAs have been successfully established,
although not all are currently fully functional.
Limited progress on accounting and reporting was made during the peri-
od studied. Some monthly budget execution reports were made available to
the public through MoFEP’s website, and information on retained IGFs began
to be included in budget execution reports.
For external accountability, the promulgation of the External Audit Agen-
cy Act, 2000 was a key output. In addition, clearance of backlogs of external
audit reports by GAS (Consolidated Fund financial statements) occurred in
two batches, 2005 and 2009, both of which occurred one year after elections
(see below for more on this issue). Linked to this, timeliness of submission of
external audit reports to Parliament has improved in recent years.
44
In terms of strategic budgeting and budget planning, disappointing progress

was made in the following areas:
• monitoring and evaluation of the GPRS;
• translating the broader policy objectives in the GPRS into sector strat-
egy documents – experience is mixed;
• translating sector policy objectives into budget priorities (making a
clear link between policy priorities and budgetary allocations);
• Making the budget documents, and the trade-offs therein, clear and
meaningful.
Whilst efforts were made to improve the budget execution process, disap-
pointing progress was made in the following areas:
• the effective operation of the planned commitment control system;
• the introduction of a Single Treasury Account;
• expected improvements in timely expenditure authorisation (including
for commitments) through the implementation of the planned Finan-
cial Management Information System (FMIS) were not forthcoming,
cf. BPEMS;
• Monthly CAGD budget execution reports have not been made public
systematically; there can be a significant lag (the most recent report
available is for March 2007);
• procurement rules and procedures were not followed consistently, con-
tributing to the re-accumulation of arrears after 2006;
• Being able to ensure that appropriated resources were provided for in a
timely fashion and in line with budgetary allocations.
• Little progress has been made in incorporating externally-financed
project expenditures in CAGD reports.
In terms of external accountability, there was less progress on the following:
• Follow-up actions taken by MDAs on audit recommendations; as indi-
cated above, an attempt was made to improve follow-up through the
establishment of Audit Recommendation Implementation Committees
(ARIC) in budget entities, but these are reported to be ineffective in
many cases.
• Whilst audit reports have been presented to Parliament in a timelier
manner recently, challenges remain, particularly in terms of their con-
sideration by PAC, and follow-up actions to PAC recommendations
undertaken by the Executive.
Box 7 summarises the discussion above and assesses the relative contribution
of DP support to the outputs achieved; the analysis only includes those out-
puts, which have been sustained, and thus not all PFM reform measures are
shown. In classifying the role of DP contributions, the table distinguishes
amongst DP support whose attributions are: (i) direct; (ii) indirect; (iii) unclear;
and (iv) none, or not applicable. This classification for each area is shown in
the third column of the table.
45
46
Box 7: Overview of PFM Reform Outputs and DP Contributions
DP contribution – direct,
PFM Area Outputs1 (Type of output) indirect, unclear, N/A Remarks
Strategic budg- MTEF documents prepared by all Significant IDA, and DFID, contribu-
eting/ budget MDAs (systems) tions, under PUFMARP: direct
preparation
CIDA-funded MTEF advisor (1 year):
unclear CIDA advisor’s contract was not
extended by mutual agreement
More financial information in Budg- GoG
et Statement (systems)
Resource man- Introduction of VAT (systems) BMZ direct Unification of revenue agencies
agement – rev- Introduction of TIN (systems) (DFID in earlier period) within GRA still work in progress
enue GRA Act (laws)
Resource man- Closing of numerous bank accounts GoG: indirect (linked to MDBS Nonetheless, significant GoG funds
agement – (organisation) trigger) are still to be found in commercial
Treasury banks.
Related reform, Single Treasury Ac-
count, proving difficult to introduce
More regular reporting on aid and WB with Commonwealth Secretari-
debt management (systems) at direct
Resource Introduction of commitment control IMF support: direct (limited) Commitment control system not
management – system (systems) sustained
expenditures
Introduction of cash forecasting and US Treasury long-term advisory Cash management committees
management process (systems) support: direct (limited) (involving MoFEP, CAGD, BoG, and
MDAs) not sustained
Introduction of BPEMS (systems) WB, GoG: direct, then indirect sub- Was not operational and was
sequently (linked to MDBS trigger) ultimately scrapped
Introduction of payroll and person- GoG (ST/MTAP), DFID, France: Audit reports indicate issues with
nel database (systems) indirect data accuracy and internal control
problems (e.g. ghost workers).
Not all staff from sub-vented agen-
cies are on the system
Introduction of decentralised Treas- GoG (ST/MTAP), DFID: indirect Initially helped improve fund flows to
uries in some MDAs (referred to in- (linked to MDBS trigger) health and education but initial suc-
country as Treasury realignment) cesses undermined by non-inclu-
(systems) sion of all funds and failure to deal
with underlying causes of delays in
releasing funds
Procurement reform: New procure- World Bank, DFID and GIZ: direct Problems have been experienced
ment legislation promulgated (laws) with implementation of legislation
47
48
Internal control, IAA Act passed (laws) GoG

audit and moni- IAUs being established in MDAs and,
toring to lesser extent, in MMDAs (organi-
sation)
Accounting and Limited public access to budget ex- GoG Not consistent or necessarily up-to-
reporting ecution reports (systems) date
External ac- PAC hearings open to the public DFID-sponsored: direct The hearings have been well re-
countability (rules) BMZ provided technical support to ceived and appear to form an impor-
PAC: direct (limited) tant part of the accountability cycle.
External Agency Act passed (laws) GoG
Capacity-building on internal, exter- EC, Danida, CIDA, KfW, (selected Sustainability of stronger capacities
nal audit capacity (HR) flows audit): unclear not clear
1
s described in the Inception Report, outputs have been classified as: (i) changes in human resource endowments (people and skills); (ii) changes in laws, proce-
A
dures and rules; (iii) changes in systems and business processes; or (iv) changes in organisational factors.
FMIS
In practice, there have been limited outputs to show for the investment under-
taken on BPEMS, estimated at around US$ 22.5 million since 1997. By the
end of 2010, the system was not fully operational in any of the 8 pilot MDAs,
with parallel systems still being run alongside, and it was therefore scrapped.
For the IPPD2, the story is marginally more positive, with the system being
used for payroll management36, although the human resource management
module has yet to be fully implemented. Furthermore, implementation of
IPPD2 took place several years after donor funding had ceased when the gov-
ernment actions to strengthen payroll management made the implementation
of an improved payroll management system a priority.
MTEF
Relative to what was expected to be achieved under PUFMARP; the impacts
of the MTEF reforms have been limited. Activity-based budget documents,
prepared by all MDAs, are excessively detailed, are not strategically-focussed
and do not include all expenditures, notably they exclude personnel-related
expenditures, which represent the vast majority of GoG Consolidated Fund
expenditures. There is no strategic framework within which the MDAs’ sub-
missions are prepared, nor are there credible medium-term ceilings. MDAs’
detailed forward estimates for activities continue to be unrealistic. The inclu-
sion of personal emoluments (PE) in the MTEF had been intended as part of
the design to be carried out at some stage; the initial stages of MTEF imple-
mentation concentrated on items 3 (goods and services) and 4 (capital). How-
ever, including PE was a much bigger challenge, as it would have entailed sep-
arating personnel time amongst individual activities, and MTEF implementa-
tion stalled at the initial stage (stopping with items 3 and 4). Weaknesses in the
MTEF approach that had been identified by the end of PUFMARP have not
yet been effectively addressed.
Revenue management:
During the earlier (PUFMARP) period, the outputs were focussed on imple-
menting specific systems and processes, including the introduction of a Tax
Identification Numbering System, covering all types of tax and a new indirect
tax regime (VAT). Later on, the reform turned to more organisational out-
puts, including: the establishment of Tax Policy Unit in MoFEP, and automa-
tion of operations in six IRS pilot offices. Changes in human resource endow-
ment followed, with the training and capacity development of staff, including
in the Tax Policy Unit in MoFEP. Most recently, there has been a legislative
output, with the passage of the GRA Act (2009). Currently, the establishment
of the GRA as a unified organisation is under way.
36 Nonetheless, the system continues to experience problems with its implementation,

as noted in external audit reports. 49
Internal audit
The initiating output for a formal internal audit function was the promulga-
tion of the Internal Audit Agency Act (2003). Thereafter, GoG concentrated
on establishing the organisational structure as set out by the Act, including
that of the IAA itself, as well as Internal Audit Units (IAUs) in each MDA and
MMDA, with a signed charter. By the end of 2010, IAA documentation37 sug-
gests that 146 Internal Audit Units had been established in MDAs, represent-
ing around 85% of all MDAs.38 In MMDAs, 155 IAUs had been established,
representing around 90% of local government; overall, 88% of IAUs had been
established, at least on paper. Signed charters had been completed for 67% of
IAUs in MDAs and MMDAs.
In order to address concerns over limited follow-up to audit recommenda-
tions (both external and internal audit),39 GoG specified that Audit Recom-
mendation Implementation Committees (ARICs) should be established in
MDAs and MMDAs. As such, by the end of 2010, ARICs had been estab-
lished in 135 MDAs (around 78% of MDAs) and 124 MMDAs (73%). In terms
of the preparation and submission of reports, during the most recent year of
implementation, annual audit plans were submitted by around 72% of IAUs.
However, IAUs submitted fewer than 30% of their required quarterly reports.
Interviews with stakeholders indicate that the mere establishment of an
IAU or ARIC does not guarantee their effective functioning. In particular,
the study team found that in a number of cases ARICs did not meet regularly,
or that IAUs continued to carry out their pre-reform functions. The limitation
of resources (primarily, the lack of appropriate skills) appears to hinder the
establishment of fully functioning IAUs and ARICs in all MDAs and
MMDAs.
3.2 E fficiency and coordination of

reform outputs
EQ 7: How efficiently were these outputs generated? Was the pacing and
sequencing of reforms appropriate and cost-effective? Was the
cost per output acceptable?
Country overview
The efficiency of PFM reforms overall may be analysed as a spectrum, look-
ing at the relationship between outputs and inputs for the PFM areas with the
most outputs and those areas with the greatest amount spent. Of the five PFM
focal areas, taking the information provided above on outputs and inputs, the
area with the highest efficiency level appears to be resource management (rev-
enue), whilst that with the lowest would appear to be accounting and report-
37 The IAA’s Annual Report for 2010.

38 In 21 ministries, and 125 departments and agencies, out of 23 ministries
and 149 departments and agencies.
39 IAA estimates a response rate to the follow-up of audit recommendations
50 of around 34%.
ing. In the middle lie external accountability and internal control, audit and
monitoring, whilst strategic budgeting and resource management (expendi-
tures) would lie at the lower end of the middle range.
FMIS
Implementation delays and the limited roll-out of the BPEMS meant that the
FMIS investment had very little impact on PFM (ultimately leading the
BPEMS system to be scrapped), and its efficiency was therefore low. Implemen-
tation of IPPD2, although limited in scope, was relatively more successful after
2005,40 from when it enjoyed stronger political support. A number of factors
explain the poor performance of the FMIS reforms including: (i) weak owner-
ship of the reforms; (ii) seeing BPEMS as primarily a technological reform
rather than a PFM reform; (iii) insufficient technical capacities to implement
and maintain the systems; (iv) over-optimistic scheduling of implementation;
(v) weak procurement management; and (vi) insufficient attention paid to the
underlying business processes in system design and implementation.
MTEF
In a narrow sense the outputs of the MTEF reforms, measured against the ini-
tial specification, were to a considerable extent met, and after initial donor
funding was finished have subsequently been sustained. However, looked at
more broadly, the outputs measured against the requirement to establish a
more realistic and strategic medium-term budgeting process has not been
achieved. These weaknesses were identified relatively early on but were never
satisfactorily addressed. (Most notably the core activity-based budgeting
reform that characterises Ghana’s MTEF continued largely unchanged
despite being widely regarded as having been ineffective, while subsequent
steps to introduce a more strategic approach such as the introduction of MDA
policy hearings have not been sustained.) Overall, the efficiency of the reform
investment should be considered as having been low.
Revenue management
It may be argued that the efficiency of investment is relatively high, given that
a relatively modest investment has led to outputs that have been sustained,
particularly in terms of VAT (which had experienced a false start in the mid-
1990s) and the Taxpayer Identification Number.
Internal audit
With relatively low investment in internal audit reforms (from either GoG or
DPs) and an ambitious reform by nature41, it is perhaps not surprising that
there has been relatively low impact. It could be argued that it is relatively too
40 Though on-going problems with implementation continue.

41 The introduction of an internal audit function throughout government is often found
to be a challenge, due to scale and a lack of understanding of the scope and nature of
internal audit. 51
early to expect a fully operational internal audit function to be in place from

scratch; the 2006 PEFA report did not score the internal audit indicator for
that reason.
3.3 E xternal drivers and blockers

of change
EQ 8: W
hat have been the binding external constraints on the delivery of
PFM reform: political, financing or policy factors? How has this
varied across the different PFM reform components?
Financial context
This study found that neither insufficient resources (either GoG or DP), nor
the timeliness of disbursements were a major impediment to greater progress
on PFM reform. This finding was corroborated by stakeholders associated
with all of the major reforms studied. Indeed, a number of reforms were intro-
duced using GoG’s own resources, including IPPD2, which DPs chose not to
continue to support following problems with the predecessor system, IPPD1.42
GoG also continued to fund BPEMS after the end of DP support; the binding
constraint on BPEMS was political, as discussed below. For the MTEF, while
only limited additional DP resources were made available after the end of
PUFMARP, the binding constraint to further reform, or to fix the problems
found during implementation, was political in nature, rather than financial. A
similar story may be told for both the internal and external audit reforms.
The study period coincided with the introduction of MDBS, which pro-
vided a significant amount of additional resources to the Consolidated Fund
(representing around 30% of total development assistance or 6% of GDP).
While MDBS was not directed explicitly at reform of PFM systems, some trig-
gers were applicable to such systems. However, the MDBS triggers were large-
ly ineffective at facilitating the success of PFM reforms and could be viewed as
a missed opportunity. While GoG met all of the PFM MDBS triggers, many
of them dealt with processes rather than outputs or outcomes (e.g. “continue to
ensure implementation of the Public Procurement Agency”), or they were
selected to facilitate achievement rather than push progress (e.g. “complete
deployment of BPEMS modules in pilot MDAs”, rather than e.g. “BPEMS is
the singular computerised system used to implement, account for, and record
budgetary expenditures”), or their progress was interpreted flexibly by DPs
(i.e. where the spirit of the reform had been taken forward even if the letter of
a particular reform had not been achieved, they were considered to have been
42 IPPD1 was a French supported system that was operational in the 1990s. By the later
1990s the limitations of IPPD1 had become apparent and DFID agreed to support
the design of a new system IPPD2 and the project began in 1999. However, the DFID
support was halted in January 2001 as the project was seen as going nowhere. It was
52 then picked up again by with GoG funding in 2005.
achieved).43 MDBS as a missed opportunity was highlighted during discus-

sions on internal audit reforms. It may be argued that MDBS triggers were
relatively more successful when they focussed on reform initiatives, which
were already prioritised by government. Triggers appear to have been less
successful when they were used to push for reforms which were not high on
GoG’s agenda.
Examination of the revenue management reforms identified a number of
facilitating factors for DP support, including continuity and flexibility of sup-
port, long-term commitment, support which is demand-driven in design, and
the ability to adapt the nature or scope of support to reflect changes in politi-
cal or other contexts. Nonetheless, these lessons were applicable to that partic-
ular context and would not necessarily translate to other reforms, since not all
DPs are able to operate in the way that BMZ does, or to partner a single agen-
cy (the Revenue Agencies Governing Board) in that case.
The relatively strong and largely consistent GDP growth experienced by
Ghana during the period studied, led by favourable commodity prices, ena-
bled a modest increase in domestic revenues as a share of GDP, and facilitated
real increases in wages for public sector workers. External finance increased
by around 50% over the period44, and public expenditures rose to a peak of
41% of GDP in 2008 compared to 28% in 1999. The absence of macro crises
after 1999, debt relief from HIPC and MDRI, and the relatively limited effect
of the global financial crisis, not to mention the recent resource flows from oil,
has stood Ghana in good stead in terms of Treasury resources.
Policy space
Limited policy space appeared to have been a binding constraint for both the
MTEF and BPEMS. At the time, the MTEF was a relatively new as a concept
applied to Africa, and there was limited information on experiences else-
where. The specific design chosen was based on the advice of an external con-
sultancy team, and focused on the bottom-up (MDA) aspect of budget plan-
ning and preparation. Little attention was given to the top-down elements (the
medium-term fiscal framework and strategic resource allocation), which are
now generally seen as the initial stage of an MTEF reform.).
Given the technical nature of the reforms, it would have been difficult for
GoG to debate the pros and cons of different approaches. It can be argued
that Ghana was a testing ground for an MTEF and that GoG was open to
being a pioneer, as it was viewed internationally as a leading reformer in Afri-
ca. Internally, the process was widely discussed, at both political and senior
management levels throughout government, and this helped to cement the
political commitment required (as discussed above).
As an integrated financial management information system, the design of
the BPEMS was relatively ambitious. The choice of IT platform, a leading
international financial management software application, to some extent
43 These points were made by both Betley and Burton, 2011 and the 2010 IEG evalua-
tion of PRSC/MDBS.
44 During the 2000s, excluding the outlier year of 2009 (where DPs provided additional
funds to support GoG during the global financial crisis) 53
reflected GoG’s perspective as a leading reformer and stated ambition of

becoming a middle income country within 15 years. However it brought chal-
lenges of needing to customise the system for use in a government rather than
a corporate context and raised problems of IT infrastructure demands and
connectivity. It is likely that there was insufficient understanding amongst
high-level stakeholders of these implications and also of the requirements for
re-engineering PFM systems and processes.
For the revenue management reforms, the relative openness of the policy
dialogue facilitated the reforms. With a single DP providing support (first,
DFID and then GIZ), there was greater flexibility and more opportunities for
collaboration in the design of the reforms. The VAT re-design took into
account the mistakes of the previous failed introduction and drew on interna-
tional lessons of experience. The scheduling of the reform provided for natural
breaks in implementation that allowed for review and redesign, and in some
cases halting, of individual elements of reform. The support from the DP was
also sufficiently flexible to take into account the impact of the electoral cycle
on implementation and, due to longer-term DP commitment, to respond to
more politically driven elements of the reform when the opportunity arose
(e.g. merging of the revenue agencies).
Looking at the role of the policy dialogue as part of MDBS, GoG officials
reported that they found MDBS to be a valuable forum for discussing PFM
reform issues, including technical ones, for requesting external TA and project
assistance, and in some cases also for keeping up pressure on reform, and
arguably accelerating the pace of some reforms.45 A distinction is made
between the overall indirect effect of the MDBS dialogue and the direct effect
of conditionality (and the related performance incentive effect of the variable
tranche). Whilst the financial penalty was relatively small for the government,
the reputational incentives for the government appear to have been taken very
seriously by MoFEP at least.
Political context
The degree of GoG political commitment to reform has been the main bind-
ing constraint to the success of reforms. GoG showed strong initial commit-
ment to the MTEF, reforms in revenue management, external audit, internal
audit and procurement. This commitment facilitated the programme of PFM
legislative reform in each of these areas during the past decade. However, con-
tinued high-level commitment to these reforms, including to the implementa-
tion of legislation, has been more problematical.
For the MTEF, high-level political (Cabinet-level and Parliament) commit-
ment, as well as that of MDA Chief Directors, was actively sought throughout
its introduction, and this enabled such an MDA-wide systemic change to be
implemented. Political stakeholders were supportive initially as they saw the
reform as being able to facilitate implementation of the policies of the relative-
ly new government (in 1997).
45 See Betley, Burton, 2011. The positive impact of the MDBS on the pace of reform was
54 also cited by the IEG’s 2010 evaluation of PRSC/MDBS.
It may be argued that the MTEF is an example of a process that has been sus-
tained despite the severe limitations of its design.46 This suggests the effective-
ness of the original change management process, which involved the active
involvement of Chief Directors, and regular communication and information
exchange across stakeholders. Arguably the use of the MTEF software to con-
trol fund releases to ministries at the level of individual activities has helped to
institutionalise ownership of the reform within MoFEP.
By contrast, BPEMS did not have anywhere near the same level of politi-
cal or administrative commitment as the MTEF. It was seen as a technical
reform, something that didn’t require political or high-level support, and thus
its original design didn’t actively seek to engage high-level stakeholders. The
failure of BPEMS to move beyond the pilot stage was also influenced by the
senior administration level’s (Chief Directors) not being convinced about the
benefits of change, and having little incentive to implement the required sys-
temic changes in business processes. In the design of the new GIFMIS initia-
tive, much greater attention has been given to involving Cabinet and Parlia-
ment and to addressing change management issues.
The experience with MTEF and BPEMS suggests that GoG found it dif-
ficult to halt reforms that had already absorbed a significant amount of
resources, even when it was clear that these reforms had failed or were not
meeting their objectives. Senior ministry management was either not suffi-
ciently engaged or was unwilling to take decisions that would have reflected
the failure of a reform. It took a change of government for the decision to be
taken to abandon BPEMS and to undertake the assessment of requirements for
updating financial management systems that led to the new GIFMIS reform.
The revenue management reforms also had significant political commit-
ment at the start of the reforms (e.g. to implement the VAT),47 but the reform
progress stalled in the mid-2000s as a result of faltering commitment and lead-
ership for the subsequent reform step of merging the separate revenue agen-
cies. It took a change in government, supported by a committed DP, to
unblock the reforms.
Implementation of internal audit reform was hampered by the failure to
secure the effective support of senior management in many MDAs. Similarly,
the political leadership was slow to understand the intent of the IAA law,
which affected the pace of reform.
All of the PFM reforms have been affected by disruptions in the tenure of
senior management, particularly in MoFEP (e.g. Chief Director and Director
Levels), following a change in political leadership. Most recently, following the
2008 elections, MoFEP did not have a permanently-appointed Chief Director
until July 2011, 30 months after the new government came into power, and 27
months after the previous (long-running) Chief Director had left the post. The
Budget Director was replaced, and there were changes in personnel within
other divisions. Previous changes to senior political leadership in MoFEP had
an adverse effect on BPEMS “progress”.
46 MDAs continue to this day to produce detailed activity-based budgets.

47 It is to be noted that earlier VAT reforms (prior to the period being studied here) were
supported by DFID. 55
4. O
utcomes and Overall
Assessment
4.1 Changes in PEFA scores

EQ 9: What have been the intermediate outcomes of PFM reforms, in
terms of changes in the quality of PFM systems?
The study assessed PFM intermediate outcomes in terms of changes over the
period in HIPC AAP indicators and the PEFA indicators. However, weak-
nesses in the quality of data for the HIPC assessment meant that this study
relies for its analysis on the PEFA assessments undertaken in 2006 and 2009,
which provide a more comprehensive assessment of PFM systems.48 The main
trends in PFM performance across the eight PFM focal areas of the study are
set out in Box 8.
Overall, there were limited improvements in PFM intermediate outcomes
over the period. A total of 7 PEFA indicators registered an improvement
between 2006 and 2009, while 11 showed no change and 8 recorded some
deterioration. This is broadly consistent with the assessment of PFM reform
implementation contained in the previous two chapters. Specifically:
• There was a small improvement in the indicators for: (i) multi-year
budgeting (PI‑12), largely due to a debt sustainability analysis having
being undertaken; (ii) revenue management (PI-15), reflecting improve-
ments in tax collections; and (iii) resources received by service delivery
units, largely due to PETS analyses having been undertaken. Addition-
ally, during the early part of the period, considerable progress was
made in strengthening the legal framework for PFM. However, imple-
mentation of the new legislative and regulatory provision proceeded
slowly and as a result did not significantly impact on the indicator
scores.
• Regarding budget preparation there was some improvement in the
budget calendar sub-indicator (PI-11) following a change that resulted
in the Appropriation Bill now being tabled and approved by Parlia-
ment before the beginning of the fiscal year. While this should have
brought greater credibility and transparency to budget preparation,
the reform was undermined by weakening fiscal discipline, an increase
in the incidence of unauthorised spending, and the failure to maintain
a bridge table showing expenditure by function. As a result overall
there was some deterioration in the performance indicators relating to
budget preparation.
48 Progress and outcomes in the most recent period (2009 and 2010) are not covered due
56 to lack of PEFA data for these years.
4. Outcomes and Overall Assessment
• Outcomes relating to budget execution and accounting were unsatis-

factory. Issues included the level of expenditure arrears (PI-4), the
management of budget and cash releases, the control of commitments
(PI-16) and the implementation of internal expenditure controls (PI-
20). In each of these areas, the PEFA indicators either showed no
improvement or deteriorated between 2006 and 2009. Continued
problems and delays with accounts reconciliation, in-year budget
reporting and annual financial reporting were reflected in no change
in the relevant indicators (PI-22 and PI-24). The lack of progress in
these reform areas was consistent with the failure of the BPEMS
reform.
• In addition, Parliament’s timely review and follow-up of external audit
reports deteriorated, in part due to limited capacities in the Public
Accounts Committee (PAC). The support provided to the PAC by
DFID over 2007 to 2009 does seem to have paid dividends in the sub-
sequent period, however. Notably, progress has been recorded in terms
of timely review of audit reports, with PAC reviewing the 2007 and
2008 audit reports in early 2011. In addition, training of the media in
the role of the PAC and the broadcasting of PAC hearings on radio and
TV served to generate significant public interest and, consequently, to
raise the standard of the proceedings.
57
58
Box 8: Summary of changes in intermediate outcomes based on PEFA assessments
Improvement in Deterioration in No change in inter-
PFM Focal Area intermediate outcome1 intermediate outcome1 mediate outcome1 Remarks
Strategic budg- PI-12 [multi-year budgeting] Improvement largely due to
eting improved from C to C+ Debt Sustainability Analysis
having been undertaken
Budget prepara- PI-11 [budget process] im- Budget credibility indicators é in PI-11[budget process]
tion proved from B to A deteriorated from B (agg. ex- largely due to passage
pend) and A (rev) to C and B of Appropriation Act be-
PI-5 [budget classification] fore fiscal year.
deteriorated from a B to C ê in budget credibility due
to slippage in fiscal dis-
PI-27 [legislative budget cipline

scrutiny] deteriorated from a ê in PI-27 [leg. scrutiny of
C+ to D+ budget] due to slippage
in unauthorised ex-
penditure during yr
ê in PI-5 [budget classifi-
cation] due to not main-
taining bridge table for
fn classification
Resource PI-15 [tax collections] PI-13 [taxpayer liabilities] PI-14 é i
n PI-15 due to improve-
management – improved from C to C+ shown to deteriorate, but ments in the clearance
revenue inconsistent interpretation of tax arrears
of scoring
Resource man- PI-16 [commitment controls] ê in PI-16 [commitment

agement – deteriorated from C to D+ controls] due to slip-
Treasury, aid and PI-17 [cash management] de- page in predictability of
debt manage- teriorated from B to D+ resource flows to MDAs
ment ê in PI-17 [cash manage-
ment] due to slippage in
cash management
Resource man- PI-18 [payroll con- Due to lack of reliable data,
agement – ex- trols] PI-19 [procurement] was not
penditures scored originally
Internal control, PI-20 [non-wage internal ê in PI-20 [non-wage in-

audit and moni- controls] deteriorated from C ternal controls] due to
toring to D+ slippage in commitment
controls
In the first PEFA, PI-21 [in-

ternal audit] was not scored
as it was judged too early to
assess as the internal audit
function was in the early
stages of being-established
59
60
Accounting PI-22 [accounts Continued weaknesses in
and reporting reconciliation] timeliness and accuracy of
PI-24 [in-year in-year and end-year budget
budget reporting] execution reports
PI-25 [annual finan-
cial reporting]
External PI-28 [leg. scrutiny of ext. PI-26 [external au- ê in PI-28 [leg. scrutiny of
accountability audit reports] deteriorated dit] ext. audit reports] due to the
from C to D+ impact of a political dispute
with Auditor-General
1
Based on PEFA results in 2006 compared to 2009.

4.2 Relevance of PFM improvements

for service delivery, especially
for women
EQ 10: T
o what extent are the outcomes generated relevant to
improvements in the quality of service delivery, particularly for
women and vulnerable groups?
It is difficult to obtain reliable data on service delivery for women and vulner-
able groups. The annual budget allocations in 2011 to the Ministry of
Employment and Social Welfare and the Ministry of Women and Children
represented less than 0.5% of the total budget.49 While the share of discretion-
ary (MDA) resources flowing to MDG-related sectors (particularly health and
education) increased relative to other sectors over the past decade, most of this
increase went to pay for significant increases in wage rates; flows relating to
other line items either stagnated or decreased.
Given the weaknesses in GoG budget documentation and subsequent
reporting, it is very difficult to determine the extent to which expenditures
were spent on improved service delivery for women and vulnerable groups, or
the degree to which such expenditures in these areas are prioritised and pro-
tected during times of fiscal consolidation. Expenditures from the Consolidat-
ed Fund on a defined set of “poverty-reducing” activities are able to be
tracked. However, in practice, these activities are not necessarily prioritised
(Table 5).50
Table 5: Poverty-Reducing Expenditures

(GHC mn unless
otherwise specified) 2004 2005 2006 2007 2008 2009
Total expenditures 2
2,196 2,516 3,489 3,964 5,385 8,081
Of which:
Pro-poor expendi-
380.5 493.4 618.6 711.8 1,108.7 1,274.5
tures – MDAs only
HIPC 162.9 195.4 199.8 183.7 187.5 549.9
Pro-poor
(MDAs+HIPC) 24.7% 27.4% 23.5% 22.6% 24.1% 22.6%
as % of total exp
1
Data were not collected prior to 2004, and final figures for 2010 were not yet available
at the time of the review.
2
Total Consolidated Fund expenditures, including both discretionary and
non-discretionary expenditures
Source: Audited Accounts, Ghana Audit Service
49 Figures are all for the Consolidated Fund (GoG discretionary allocations).
50 See World Bank, External Reviews of Public Expenditure Management, e.g. 2009. 61
In terms of planned expenditures, while the very detailed MTEF documenta-

tion provides information down to the activity level, it is far too detailed and
the activities insufficiently strategic, with many of the activities essentially
inputs, such as the purchase of vehicles or the carrying out of seminars, to pro-
vide useful information on their linkage to the delivery of services. At the
same time, the lack of comprehensiveness of the MTEF51 means that it is not
possible to have information even on the total planned allocations in particu-
lar sectors.
Furthermore, due to differences in the Charts of Accounts used between
MoFEP (responsible for budgeting) and CAGD (responsible for accounting,
recording and reporting on actual expenditures), information on actual
expenditures against budgeted appropriations by activity cannot be generat-
ed.52 The Annual Financial Statements produced by CAGD often have signifi-
cant errors, which usually remain even after audit. Limited information is
available on resources received by service delivery units. While PETS analy-
ses were carried out in the health and education sectors in 2007, they only cov-
ered part of resources received, and there were serious concerns about the
quality of the output. The lack of reliable information on actual expenditures
affects the work of civil society organisations trying to hold the government to
account for its policy objectives.
Expenditure commitment controls worsened during the period studied as
a result of the rapid expansion of budgetary expenditures, particularly in
investment spending. This led to a ballooning of the fiscal deficit and a signifi-
cant accumulation of payment arrears. As discussed above, the most recent
period of expansionary fiscal policy occurred during both the build-up to the
last elections and the global financial crisis. Existing weaknesses in PFM sys-
tems and processes to direct resources for service provision were put under
greater pressure by reduced fiscal discipline in the latter part of the period
studied.
Thus, there is little evidence that the PFM reforms contributed to the
improved delivery and to better targeting of services on women and vulnera-
ble groups. Fundamentally this reflected: (i) the failure of the MTEF reform to
result in a more strategic and better targeted approach to budget planning;
and (ii) the lack of progress in strengthening budget execution and monitoring
systems which was linked to the failure of the BPEMS reform.
51 Since the activity basis excludes personnel-related expenditures and those financed
by sources other than the Consolidated Fund, such as the Statutory Funds (e.g. the
National Health Insurance Fund).
52 CAGD had announced that from end-2011 the new Chart of Accounts and the first
phase of GIFMIS would ensure that compatible budget and expenditure figures were
62 available for 2011.
4.3 T he effectiveness of PFM reforms:

from inputs to intermediate
outcomes
EQ 11: H
ave reform efforts been effective? If not, why not? If yes, to what
extent have PFM reform outputs been a causal factor in the
changes identified in intermediate outcomes?
Overall, there has been mixed success with PFM reform efforts. The most
substantial success has been with passing legislation but GoG has faced signif-
icant challenges to implement the new laws. Otherwise, the most effective
reforms appear to have been the revenue management activities, as they have
led to a sustained output in the form of changed processes (successful introduc-
tion of VAT, and the introduction of the TIN), and there has been a signifi-
cant increase in revenues as a share of GDP during the period studied.
Large and complex projects have been less successful than more narrowly-
targeted initiatives. The two major reforms introduced under PUFMARP
involving the introduction of a more policy-led medium-term budget process
and the introduction of a financial management information system to sup-
port budget executions, have not contributed to improved intermediate out-
comes, nor prevented the deterioration in such outcomes. Indeed, the
improvements in intermediate outcomes (as measured by PEFA) were largely
independent of the main PFM reform actions.
The study attempted to explore the reasons why some reforms were suc-
cessful while others were not. It has identified five main factors.
The electoral cycle had a negative influence on consistency of
implementation of the PFM reform agenda. During each of the elec-
toral cycles in the period studied, there was a marked deterioration in fiscal
discipline in the 18 months leading up to the elections. This resulted in the
build-up of arrears and a weakening of commitment controls and other inter-
nal controls (e.g. payroll). In the aftermath of each election, the new govern-
ment undertook clearance of arrears and tightening up of internal controls,
before the following electoral cycle resulted in a repeat of the cycle. This has
resulted in the deterioration in a number of PFM intermediate outcomes as
measured by the PEFA assessment criteria. It has also diverted administrative
effort and political attention away from the implementation of reforms. Politi-
cisations of appointments to senior ministry and administrative positions has
created uncertainty and disrupted the implementation of some reforms.
Technical design flaws – due perhaps to policy space con-
straints – afflicted several of the PFM reforms:
• BPEMS was over-ambitious in its conceptualisation, aiming to imple-
ment an integrated system (covering strategic budget preparation, pro-
curement, execution, accounting, reporting, recording, and HR) to be
rolled out to all MDAs and MMDAs (312 entities at that time).53
53 Relatively early on, the budget preparation and HR components were dropped from
the design. 63
The design of the reform failed to take account of the limited IT famil-
iarity and significant constraints to IT connectivity that until now have
not been fully resolved. It also emphasised a technical, IT-led approach
that failed to address adequately the requirements for underlying
reforms to PFM processes and procedures. The management of the
reforms, under a separate and relatively independent PIU, reinforced
these weaknesses by marginalising key stakeholders, principally the
CAGD and Budget Division, while insufficient attention was given to
capacity issues and training requirements.
• IPPD2, the other main IT reform, was relatively more successful partly
because it was much simpler in design, with its implementation focused
on establishing a payroll processing and personnel management data-
base for MDAs. As payroll processing is a central function, the new IT
system involved only limited numbers of users of the system, which
were concentrated at CAGD. It did not involve as many changes to
underlying processes and hence posed fewer change management
issues. Nevertheless, it also took close to a decade to implement at rela-
tively high cost and in its current, operational form only really com-
prises half of the system originally envisaged, providing a payroll pro-
cessing function only, with no corresponding personnel data-base. As
with BPEMS, weak structures for monitoring progress and coordinat-
ing implementation contributed significantly to these failings.
• Weaknesses in the initial design of the MTEF directly contributed to
its failure to establish a more strategic policy-led approach to budget-
ing. The focus of the reform was on activity based costing and budget-
ing and little attention was give to the top-down strategic elements of
the reform (the macro-fiscal framework, expenditure policy and sector
priorities) and to the role of Cabinet in the budget decision-making
process. Furthermore the new procedures were not applied to person-
nel expenditure despite the fact that these represented the largest share
of most MDA budgets. The result was an excessively detailed budget
planning process that was not comprehensive and which lacked real-
ism, with MDAs continuing to submit budget requests substantially in
excess of the available resource framework.
Insufficient articulation of the PFM reform vision and strategy

contributed to ephemeral political ownership of PFM reforms.
There was no overriding GoG prepared strategy to guide the PFM reform
process. PFM diagnostic studies were largely carried out by the DPs, often in
response to their own programming agendas. PFM reforms were articulated
through a mixture of DP-prepared reform initiatives (e.g. PUFMARP), short
and medium-term action plans prepared by MoFEP, and PFM actions listed
in the annual Budget Statements. The lack of a clear GoG-owned and priori-
tised PFM reform strategy, meant reforms often lacked impetus to address
problems as they arose. As is not unusual, the focus of political leaders shifted
with regularity in response to political needs and did not necessarily follow a
64
logical pattern. This meant that reforms that may have begun with initial
high-level political and administrative support were left to struggle when such
support waned; the continuation of BPEMS after DP support ended is a good
example. It also led to reform initiatives becoming compartmentalised within
a single department without linkage to other elements of the PFM system. For
example, although activity-based budgeting reforms were introduced in the
late 1990s there is still no capability within the PFM system to account for
expenditure by budget activity.
Deficiencies in bureaucratic and management structures
adversely affected the capacity of MoFEP to achieve the success-
ful realisation of PFM reforms. A range of factors can be identified.
These include weaknesses in the high-level management and co-ordination of
the reforms, departmental rivalries, and insufficient attention to change man-
agement requirements, failure to address human resources management and
capacity issues, and ineffective monitoring of progress. The result was a ten-
dency for reforms to continue at the own pace and a failure to take timely
action to redesign or halt reforms that were clearly not working. For example,
although problems with the MTEF design were identified early on, the
MTEF process continued largely unchanged despite it being widely seen as
having failed. Similarly, although issues with BPEMS were identified during
implementation and various solutions were attempted, leading to project
expenditures mushrooming, it took a change in government to halt BPEMS
completely. Weaknesses in management decision-taking processes were also
reflected in the tendency for reforms to get stuck at the pilot stage.
Sustained political commitment has been a key factor to the success-
ful implementation of PFM reforms. Both the revenue reforms and IPPD2
received strong political level support, including at Cabinet level, which
facilitated their implementation. By contrast where such support has not
been present (e.g. external audit and arguably BPEMS), reform progress has
been slower.
The study has also examined the role of DPs and the extent to which this
influenced the success of PFM reforms. DPs played a key role in supporting
the reform process and financing the implementation of the reforms.54 The
level of DP funding appeared to be sufficient, and DPs were responsive to
GoG requests, particularly at times of economic and fiscal difficulty.55 DP dis-
bursements were broadly in line with commitments in aggregate, although the
timing did not always match GoG’s desired timing, which delayed some activ-
ities.56 Nonetheless, disbursement delays were not a critical hindrance to
reform.
The way in which DP support for PFM reform was provided also had an
impact on its success. Specifically:
• Donor support that spanned a relatively long time horizon and which
provided a flexible support framework was better able to respond to
54 See analysis summarised in Section 3, Box 7 above.

55 See Betley, Burton, 2011.
56 This has been the case with GIFMIS, for example, and previously with the develop-
ment and testing of the MTEF. 65
reform opportunities as they arose, which was often linked to the politi-
cal cycle. The revenue reforms supported by BMZ are a good example
of where a flexible approach to support facilitated the reform.
• Effective co-ordination among DPs also played an important role in
reducing transaction costs and avoiding overlapping initiatives.
• DP support that was tightly focused and limited in scope was often
more effective than large ambitious projects, such as PUFMARP,
which covered several component reforms that proved unwieldy to
manage.
EQ 12: To what extent do the gains identified at the Intermediate Outcome
levels appear sustainable? Is the process of PFM reform
sustainable?
The most sustainable improvements in intermediate outcomes appear to be

those in revenue management, including the introduction of the TIN, and of a
functioning VAT. The latter is notable as it followed an earlier failed attempt
at introducing VAT in the mid-1990s. In the more recent introduction, greater
success has been attributed to better public education in advance of the re-
introduction and to the establishment of cross-party support for the re-intro-
duction of VAT. In the first attempt at introducing VAT, a number of tactical
mistakes were made by the NDC Government, which were quickly seized
upon by the opposition. The fact that VAT was re-introduced at a lower rate
(10 %), with rates being increased later once systems were established and
public acceptance well embedded, was also pertinent.
The government which took power in 2009 signalled a renewed commit-
ment to PFM reform through the high priority that it gave to establishing a
functioning financial management information system, its support to the
restructuring of the MTEF with adoption of a more strategic programme-
based budgeting approach, the amalgamation of three revenue agencies, the
development with the assistance of the IMF of a programme for deficit reduc-
tion and the elimination of arrears, and the reestablishment of payment con-
trols. It also initiated the restructuring of MoFEP, creating a new unit respon-
sible for PFM reform, answering to senior management, and facilitated an
emphasis on building PFM capacity (including through the efforts of the
Budget Development Unit) through PFM-related study tours and/or interna-
tional or regional PFM fora (e.g. CABRI) to learn about different PFM sys-
tems. Direct exposure to reforms elsewhere has generated demand for specific
reforms, including recently the introduction of programme-based budgeting.
While it is too early to determine the extent to which these reforms are
likely to result in sustainable improvements in PFM outcomes, the recognition
that PFM reforms have had limited success, the comprehensive approach that
is being taken to tackling key weaknesses in PFM systems and the stronger
demand from parliament to show improvements in PFM outcomes suggests
that there are grounds for optimism.
66
5. C
onclusions and Wider Lessons
5.1 Summary of key conclusions

The study posed the following questions at the beginning: (i) where and why
do PFM reforms deliver results (i.e. improvements in the quality of budget sys-
tems?); and (ii) where and how does donor support to PFM reform efforts con-
tribute most effectively to results? The analysis in Box 9 summarises the rela-
tionship between inputs, outputs and intermediate outcomes and the related
benefitting or inhibiting factors.
The study’s main conclusion is that, relative to the significant funds
expended on PFM reform over the study period, success has been largely dis-
appointing. The most substantial progress was made with strengthening the
legislative base but, in common with other countries, GoG has experienced
significant challenges to implement the new laws. Otherwise, the most effec-
tive reforms appear to have been the revenue management activities, as they
have led to a sustained output in the form of changed processes (successful
introduction of VAT, and the introduction of the TIN), and there has been a
significant increase in revenues as a share of GDP during the period studied.
As VAT is a major source of revenue, it is likely that the successful implemen-
tation of the reform has been an important factor.
The most ambitious reform initiatives have generally been the least
successful,57 with the exception of the revenue management reforms, which
could be considered to be a succession of smaller initiatives. By contrast the
MTEF reform aimed at improving the linkage between policy objectives and
budgetary expenditures and the budget execution reforms that focussed on
improving financial management information systems have not contributed to
improved intermediate outcomes, nor prevented the deterioration in such out-
comes. Indeed, the limited improvements in intermediate outcomes were
independent of PFM reform actions.
The main binding constraint was the extent and continuity of political
commitment and leadership (including the impact of the political cycle), fol-
lowing by issues of policy space. Factors of inter-agency and intra-agency co-
operation (relative incentives), weak bureaucratic management, and an incon-
sistent strategic vision were also features affecting reform progress. The avail-
ability of financial resources, either DP or GoG, does not appear to have been
a constraining external factor. Physical outputs (e.g. legislation, regulations,
standards, documents) appear to be more numerous and more sustainable
than systems changes or the implementation of legislation. Reforms and
57 This is not to say that it is necessarily the size itself which is the sole factor responsible
for the relative lack of success. 67
5. Conclusions and Wider Lessons
changes in intermediate outcomes appear to be more effective with the

upstream elements of PFM than on the downstream ones.
Reforms were hindered where design was inappropriate, scope was over-
ambitious and where there was too much of an emphasis on technological
change (relative to addressing existing weaknesses in underlying business pro-
cesses), and underplaying or under-estimating the required organisational
changes.
Initial commitment to reform (demand from GoG due to fiscal pressures
and DPs, and strong political level leadership) at the beginning of period
(PUFMARP) facilitated early reforms. This commitment was difficult to sus-
tain in the longer term, and hence reform progress flagged, affecting those
reforms being implemented but not yet completed. One response to challenges
in implementing reforms, piloting, sometimes became an end in itself (rather
than a means to an end), to be replaced by something new, rather than learn-
ing and adapting, based on the initial implementation lessons.
The role of the wider economy, in particular strong economic growth, and
the level of commitment to fiscal discipline appeared to have a more signifi-
cant effect on intermediate outcomes (positively or negatively) than did specif-
ic PFM reform activities.
DP contributions have had both direct and indirect effects, but their effec-
tiveness has been undermined by large set-piece and time-bound projects that
focussed on technological solutions rather than changes to the underlying pro-
cesses.58 External support has had greater traction at the beginning of
reforms, to facilitate the design and the initial implementation, over those for
sustaining or deepening reforms. Exceptions to this have occurred where
there has been sustained DP contributions over a longer period of time, with
support demand-driven, targeted to specific needs, adaptable in terms of
design and re-design (willingness to pause), and commitment signalled in
advance. The main benefit from MDBS was in the GoG-DP (overall) policy
dialogue, rather than from the external triggers.
There was pressure from both DPs and GoG for new and ambitious
reforms to be implemented as a response to waning or failing reforms. DP sup-
port emerging from this pressure tended to be inefficient and to lead to poorly-
sustained results.
5.2 Wider lessons

The study identified a number of factors which appeared to facilitate PFM
reforms (though not necessarily ensure their sustainability). These positive
drivers of change include:
• Demand for reform – demand for PFM reforms in Ghana has come from
three main sources: (i) internally (GoG)-generated demand, as the
result of fiscal pressures, internal/external assessments of PFM systems
(e.g. PEFA assessments) or peer-to-peer learning; (ii) public (citizenry)
pressure; and (iii) dialogue with DPs, particularly through the MDBS.
68 58 This is not to say whose initiative (i.e. GoG, DP, or both) these set-pieces projects were.
• Role of media – with an active and open media and a citizenry who are
actively engaged with the media (particularly, radio and print media,
but also television), there is evidence of pressure being brought to bear
on public officials.59 One example is the greater attention placed on the
PAC’s reviews of external audit reports through the hearings being tel-
evised. However, the ability of the public to hold officials to account is
undermined by the lack of timely financial information available to the
public (e.g. in-year fiscal reports), the lack of comprehensibility of key
budget documents (e.g. the Medium Term Expenditure Framework
[MTEF]), and limited expertise on budgetary and financial matters by
some officials, CSOs and the general public.
• Peer-to-peer learning – learning from the experience of relevant peers, e.g.
through the Collaborative African Budget Reform Initiative (CABRI),
has been cited as an important factor for generating internal demand
by technical staff for specific types of reforms. Seeing how reforms
work in practice (e.g. programme-based budgeting in South Africa) has
provided an impetus and guidance for change. However, a sense of
competition amongst different countries can lead to demand for
reforms that are inappropriate to the local context and/or overambi-
tious (e.g. the latest PFM trend) in order to be “first”. MoFEP middle-
level management (particularly in the Budget Division) have also pri-
oritised the training of their staff through relevant mid-length overseas
PFM programmes, which is serving to provide staff with exposure to
alternative PFM processes and to generate a cadre of core staff with
such experience. However, in the absence of progress on reforms, there
is a risk that such training becomes quickly degraded.
• DP support which is flexible, demand-driven, involves a longer-term commitment,
and which explicitly involves the opportunity to design or (re)design the content as
the project goes along (based on the current institutional and policy environment and
an evaluation of the previous phase of support) – this is the basis for the BMZ
work with the Revenue Agencies.
• MDBS dialogue – a recent study of MDBS60 found that the policy dia-
logue as part of the joint GoG-DP MDBS framework facilitated GoG’s
policy- and decision-making process through keeping up pressure on
the issues and arguably enabling GoG to accelerate some reform pro-
cesses. However, in terms of leading to measurable outputs or out-
comes, these pressures appeared to have greater effect on areas other
than PFM (e.g. related to MDGs).
• Involvement of the political level early on, including Cabinet, and Parliament,
appears to have been an important facilitating factor in the reform
process.
59 This pressure may be necessary but not sufficient for there to be action (e.g. an investi-
gation or further consequences) taken.
60 Betley M. and Burton J., (March 2011), Ghana, Assessing the Benefits of Multi-Donor
Budget Support, Mokoro Ltd. 69
The study also identified a number of obstacles to change, including:

• Tendency for overly ambitious reforms – this has led to the inappropriate
design of some reforms, increased the risk of reforms, and led to unre-
alistic expectations of the timetable for undertaking the reforms and
the outcomes of the reforms. The reforms carried out in Ghana illus-
trate the tension between a desire for ambitious (e.g. multi-component)
reforms and the riskiness of doing so.
• A focus on technolog y without addressing underlying processes and incentives – a
number of the reforms in Ghana have been seen largely in technologi-
cal terms, without first addressing the underlying PFM reform issues
and incentives. This has led to a tendency to move (too) quickly to a
technological solution without first tackling the requirement for chang-
es to business processes. This tendency can have three main effects,
namely: (i) ignoring the wider political economy of the reforms and
thereby failing to address the needs of all stakeholders and thus bring
them on board; (ii) raising (often unrealistic) expectations for what the
reforms can achieve; and (iii) automating the underlying weaknesses
rather than addressing them.
• Desire for piloting but no appetite for moving to the next stage based on lessons
learnt – during the period studied, there were a number reforms that
were piloted for many years (up to 8 years in some cases) without being
rolled out; examples include composite budgeting, certain modules in
the Budget Planning and Expenditure Management System (BPEMS)
in pilot MDAs, and the realigned Treasuries, which were all piloted at
the same time, often with the same set of stakeholders. This served to
cause significant confusion for those stakeholders undertaking the
pilots. The failure to move the reforms forward suggests that they had
not been sufficiently planned and tested and that there was insufficient
capacity (or will) to address issues identified during the pilot phase.
• Pressure to introduce new reforms before current ones are embedded – not only
were the pilots not rolled out (or stopped) but they were followed by
new (different) reforms; an example was the composite budgeting
reforms, which began being piloted in 2003 and which were supposed
to be combined with the introduction of MTEFs at the MMDA level,
but which (as of 2011) are now being superseded by the introduction of
programme-budgets and the Ghana Integrated Financial Manage-
ment Information System (GIFMIS). This pressure has led to further
confusion and may potentially have affected full engagement with the
new reforms.
• Tendency for departmental silo working makes PFM reforms more difficult,
particularly with reforms which involve specific MDAs or parts of
MDAs, possibly to the exclusion of others. These may exacerbate exist-
ing inter-MDA or intra-MDA institutional tensions.
• Insufficient time to plan reforms and explore alternatives. Reform planning,
including planning how reforms will affect different stakeholders and
how these changes will be addressed, is likely to take considerable time.
Not exploring alternative methodologies may lead to inappropriately-
70 specified reforms. The MTEF is a relevant example in Ghana.
• Political economy – reforms which potentially work against formal or

informal institutional interests have been harder to achieve. The com-
pletion of the transfer (referred to as “migration” in the Ghana context)
of the subvented agencies on to the central payroll system is one such
example.
5.3 Recommendations for the Design

and Management of PFM reform
processes
The observations outlined above suggest a number of implications for both
GoG and DPs. Any PFM reform involves risk; it is critical for reform planners
and managers to manage the risk, and the points below indicate areas of
potential risk management.
1. Reform of PFM is a process – there is no “beginning” or “end” to reform.
Both GoG and DPs should recognise the importance of continuity of
reform, which may not follow a linear path. Longer-term support to the
broad direction of reform (e.g. as with revenue administration reforms)
can provide helpful continuity of support and allow reform to take
advantage of windows of opportunity, e.g. political space.
2. Understand the risks applicable to each type of reform and explicitly factor in risk
management. One of the aspects to be addressed during the planning
stage should include an analysis of readiness for reform (e.g. large IT
projects should review the existing extent of IT culture in the organisa-
tions involved; the more limited the existing IT culture, the more risky
is the reform).61 In planning reforms where functions are to be
devolved, MoFEP should first test the preparedness and competence of
the agencies involved before functions are devolved.62
3. Less ambitious and stepped reform approaches set within a broader reform frame-
work are likely to be more sustainable and involve less risk. Start out with lim-
ited changes that address a particular issue. Then incorporate the
experience from implementation into the design of the next step in the
reform process.
4. Identify demand and management factors that are likely to facilitate successful
reform:
• a strong demand for change and a common understanding of what
is needed, including the sharing of international experiences with
peers in other countries to build and strengthen a common knowl-
edge base;
61 It is also worth noting, as above, that a technological (IT) solution may not always be
appropriate, particularly if the underlying manual processes (e.g. internal controls) are
inadequate.
62 This implication may be relevant to the current on-going process of fiscal decentrali- 71
zation and devolution of fiscal resources to MMDAs.
• clearly-defined (and understood) roles and responsibilities played by

external stakeholders, particularly where the reforms involve agen-
cies outside of MoFEP;
• strong accountability mechanisms in place, including externally
with external scrutiny bodies and CSOs and internally with project
management;
• an appreciation by stakeholders that the reforms are not only about
technical changes; institutional arrangements need to be clear and
facilitate discipline and decision-making and scrutiny of those deci-
sions;
• strong, clear and evidenced leadership of the reform;
• Effective and respected arrangements for management are in place.
5. Reforms need to be planned and sequenced. Appropriately planned and
sequenced reforms should recognise that planning, design and testing
takes (sometimes significant) time; this step should not be rushed. Sys-
tems (and technology) should support reform and not vice versa. Insti-
tutional and organisational issues (both within and across organisa-
tions) must be addressed as part of reform planning. There should be a
short (time-bound) pilot phase included after testing but only when the
reform is ready to roll out. Finally, it is important to be realistic, bear-
ing in mind the PFM calendar and capacity demands. Too many
reform initiatives may distract staff from their day-to-day tasks; man-
agers should set priorities and manage the sequencing of reforms so
that the budget process continues in a timely fashion.
6. Ensure that there is sufficiently strong, active and appropriately dispersed leader-
ship. The role of leadership of reform is most effective when it is visible,
consistent, at the appropriate level, and actively engaged with the
appropriate level in stakeholder institutions. Effective PFM leaders
manage upwards (to the political level), downwards (to the manage-
ment level), and outwards (both across government, and to those
responsible for external accountability, including Parliament and civil
society). Consideration may be given to providing training in leader-
ship for senior political and administrative levels, particularly for those
in newly-appointed positions.
7. Ensure appropriate management of reform at different levels – effective man-
agers (i) ensure that there is a clear plan to get from where an institu-
tion is currently to the next step(s), (ii) take responsibility for delivering
on the work plan, and (iii) delegate to staff and motivate them to deliv-
er, giving appropriate recognition for activities done well and in a time-
ly fashion, as well as enforcing sanctions when justified. Current efforts
to introduce more performance elements into senior management, par-
ticularly for Chief Directors, are important.
8. Review and evaluate reform progress and be prepared to take action if things go
wrong. In other words, GoG and partners should be ready to admit
when reforms are failing and address weaknesses promptly, or actively
take the decision to halt the reforms. Incentives to improve senior man-
agers’ performance may facilitate in this process.
72
Box 9: Summary of PFM reform inputs, outputs, and intermediate outcomes
PFM focal Inputs1 Specific reform Outputs2 Causal factors in posi- Role of DP Intermediate
area tive/negative progress Contributions3,4 outcomes
Strategic Support to MTEF: TA, MTEF Partial (e.g. excludes Weaknesses in, & am- Direct (design, imple- Deterioration in cred-
budgeting design of MTEF, soft- salary-related costs) bitiousness of, MTEF mentation) ibility of multi-year
ware. Funding of $4.6 activity-based MDA design. Pressure to roll framework
mn (WB) (and GoG of budgets out early.
$0.2 mn). Co-financ-
ing from DFID and Composite Pilot phase has lasted Differences in classifi- Indirect (policy dia-
CIDA. budgets nearly 10 years cation systems between logue)
More comprehensive central, local not re-
budget info, more solved prior to piloting
timely budget calen-
dar: solely GoG inputs
Budget GoG inputs Legislative ba- Finance and Adminis- Commitment by GoG N/A/indirect (policy dia- Improvement in budget
preparation sis for PFM tration Act logue) calendar,
Financial Administra- More transparency in
tion Regulations budget information
(greater accountability
Budget contents More comprehensive Commitment by GoG N/A/indirect (policy dia- to the public)
budget information logue)
Timing of budg- Approp. Act passed be- Commitment by GoG N/A/indirect (policy dia-
et submission to fore beginning of fiscal logue)
Parliament year
More communi- Citizens’ Guides Commitment by GoG N/A
cation with pub- Pre-budget consulta-
lic on budget tions w/ public
Budget information on
website
73
74
Resource TA, training, software, Direct taxes TIN introduced Commitment by GoG, Direct (design, imple- Significant increase in
manage- hardware with DP support mentation) revenues, not clear to
ment – rev- Funding of €6.8 mn what extent this was
enues (BMZ) + €2 mn (SECO). Indirect taxes VAT re-introduced Commitment by GoG, Direct (design, imple- due to improved effi-
Prior funding from with DP support mentation) ciency
DFID.
Greater admin- GRA Act Commitment by GoG, Direct (design, imple-
istrative effi- Tax Policy Unit estab- with DP support mentation)
ciency lished in MoFEP
Beginning the process
of integrating revenue
services
Resource Advisory support, Aid, debt man- Regular reports on amt, Commitment by GoG Direct (design, soft- Slippage in fiscal disci-
manage- software agement composition of public under PUFMARP re- ware) pline (weaknesses in
ment – Funding of $0.2 mn debt, guarantees of ext. forms commitment controls)
Treasury, (WB) + $0.03 mn (GoG) loans to parastatals External software sup-

aid & debt (debt management), port
$0.2 mn (WB) + $0.03
mn (GoG) (cash mng- Commitment New commitment con- GoG-DP policy dialogue Direct (limited, not sus-
mt). Other funding controls trol system introduced Commitment/Institu- tained)
from US Treasury, (not sustained) tional factors/ inter-
WB, and IMF agency co-operation (to
sustain)
Treasury rea- Establishment of sepa- GoG-DP policy dialogue N/A/indirect (policy di-
lignment rate Treasuries in some Commitment/Institu- alog)
MDAs, regions (im- tional factors/ inter-
provements in cash agency co-operation
flows not comprehen-
sive or sustained)
Single Treasury Closing of a number of GoG-DP policy dialogue Direct (but not fully ef-
account redundant bank ac- Commitment/inter- fective), indirect (policy
counts agency co-operation dialogue)
Resource Advisory support Cash manage- Attempts to improve in- GoG-DP policy dialogue, Direct (but not fully ef- Slippage in fiscal disci-
manage- Funding from CIDA, ment formation on cash flows DP trigger fective), indirect (policy pline
ment -ex- WB, IMF, DFID, DKK, to/from MDAs not com- Commitment/Institu- dialogue)
penditures and UNICEF. prehensive. or sus- tional factors/ inter-
tained agency co-operation
Procurement Procurement Act GoG-DP policy dialogue, Direct (design), indirect
passed; challenges with DP trigger (implementation)
implementation Institutional factors
(implementation)
Internal Training Payroll controls IPPD2 being used for Commitment by GoG, Indirect (policy dia- Internal audit function
controls, Funding of €<0.5 mn ministries, depts. but GoG-DP policy dialogue, logue) initiated
audit, & (EU). Other funding only some agencies DP trigger
monitoring from DFID and France.
Internal audit Internal Audit Agency Under PUFMARP re- N/A, indirect (policy dia-
Act passed forms logue)
Internal Audit Agency
established
Standards, manual pro-
duced
IAUs established
ARICs established
Accounting Funding of $15.3 mn FMIS/BPEMS Implementation in 6 pi- Ambitiousness of de- Direct (under PUF- Slippage in fiscal disci-
and report- (WB)+ $4.6 mn (GoG) lot MDAs not sustained. sign, insuff. high-level MARP), then pline
ing (BPEMS) System abandoned. commitment in prac- indirect (policy dia-
tice, seen primarily as logue)
technol. reform, man-
agement problems
(agency ownership),
technical problems
Timeliness of More timely gazetting GoG-DP policy dialogue, N/A/ indirect (policy di-
in-year budget DP trigger alogue)
execution re-
ports
75
76
External TA/capacity building External audit External Audit Agency Commitment by GoG Direct (design, TA sup- Improved accountability
account- (GAS), training, audits Act under PUFMARP report) to the public for public
ability of selected flows. Standards, manual pro- forms, with DP support finances
Funding of €8 mn (EU) duced GoG-DP policy dialogue,
(External audit), €0.5 Performance, VfM au- DP trigger
mn/yr (BMZ) (PAC), dits begun
DFID (GAS, PAC) £0.4 Clearance of audit
mn, KfW, CIDA, DA- backlog
NIDA (DKK 0.5 mn/yr)
Parliamentary More timely PAC review Commitment by GoG, N/A/indirect (policy dia-
scrutiny of pub- of audit reports public pressure logue)
lic finance Public access to PAC
debates
1
DP funding only. GoG funding not available to match this breakdown.
2
Main outputs shown. Does not include staff training, considered an input. Where outputs have not been sustained, this has been noted.
3
Analysis from Box 7 above.
4
DP support shown may not be comprehensive due to non-availability of data.
Annex A: Summary Matrices of
Responses to Evaluation
Questions for Country and
Component Case Histories
77
78
PFM Reform Component/Initiative: Financial Management Information Systems
Judgement criteria/
Evaluation Question Possible indicators Findings
Annex A: S
A Inputs & Context: the design of PFM reform

A.1. What has been the na- • Government funds for • Two major financial management information systems (FMIS) initiatives were launched in the
ture and scale of PFM PFM reforms committed late 1990s: (i) the Budget Planning and Expenditure Management System (BPEMS) which was
reform inputs provided and actually disbursed by funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the
by Government and year over the evaluation Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? period. introduced in the early 1990s (IPPD1). Although implemented as separate projects, the systems
• Donor funds for PFM were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
reforms committed and • Donor support for both BPEMS and IPPD2 had finished by 2003 and minimal donor financing was
actually disbursed by year provided thereafter and the further development of BPEMS and IPPD2 was largely funded from
over the evaluation period domestic sources. Both reforms were strongly profiled as key elements of the PFM reform effort
• Nature of support under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
provided to PFM reform 2006. A follow-on donor funded investment operation was approved in 2010 and involves
efforts (equipment, improvement and updating of the BPEMS system and its transformation into the Ghana
training, TA, diagnostic Integrated Financial Management Information System (GFIMIS).
work.) • The reforms were centred in the Controller and Accountant General’s Department (CAGD) and to
• Focal areas for reforms by a lesser extent the Budget Division in MoFEP. Roll out involved initially the central government
function (based on PFM ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
for Country and Component Case
“clusters” as in Andrews
2010) BPEMS
• Focal areas for reforms by • The original estimated of BPEMS was USD 11.95 million to be financed under a PUFMARP
organisational location/ through an IDA credit. The final expenditure spread over the period 1997-2003 was USD 19.68
level of government million, of which USD 15.28 million was funded by IDA and USD 4.60 million funded by GoG. This
(Ministry of Finance, represented a 50% cost overrun compared with the original estimates.
Sector ministries, Local • The reform inputs covered four main areas:
Governments, Parliament, –– Requirement definition and design – technical assistance for re-engineering of PFM
CSOs, etc.) processes and procedures and the functional design of the system;
–– Technical infrastructure – purchase of hardware systems, installation of LANs in at 56 MDA
sites and linking of 18 sites over a wireless loop.
–– Financial management software – purchase, customisation and installation of the FMIS
software. The system chosen was Oracle Financials with six modules purchased: (i) general
ummary Matrices of Responses to Evaluation Questions
ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector

budgeting; and (vi) accounts receivable. Because Oracle Financials had been designed for the
corporate market and had not been widely used in a government environment, extensive
customisation was required.
–– Training – inputs for training of staff in MoF, CGAD and pilot MDAs. Delays in the development
of the BPEMS system meant that the training inputs were less than originally envisaged.
–– At the completion of PUFMARP, MoFEP decided to continue the implementation of the BPEMS
using its own resources. The annual cost of the Oracle licence and support for the application
is around USD 180,000.
IPPD2
• IPPD2 is a human resources management and payroll system that uses the Oracle HMRS
application. Inputs covered the system specification, cost of IT hardware, the application licence,
level of government million, of which USD 15.28 million was funded by IDA and USD 4.60 million funded by GoG. This
Judgement criteria/ corporate market and had not been widely used in a government environment, extensive
A Inputs & Context: the design of PFM reform –– Training – inputs for training of staff in MoF, CGAD and pilot MDAs. Delays in the development
A.1 What has been the na- • Government funds for • Two the BPEMS
ofmajor financial system meant that
management information inputs were
the trainingsystems (FMIS) less than originally
initiatives envisaged.
were launched in the
ture and scale of PFM PFM reforms committed late the completion
–– At1990s: (i) the Budget of PUFMARP,
Planning MoFEP and Expenditure
decided toManagement
continue theSystem implementation
(BPEMS)of the BPEMS
which was
reform inputs provided and actually disbursed by funded its own
usingunder the resources.
Public Finance The annual cost of the
Management Oracle
Reform Program and support for
licence (PUFMARP), andthe application
(ii) the
by Government and year over the evaluation is around USD 180,000.
Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? period. introduced in the early 1990s (IPPD1). Although implemented as separate projects, the systems
• Donor funds for PFM IPPD2
were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
reforms committed and •
• Donor is a human
IPPD2 support forresources
both BPEMS management
and IPPD2 had payroll system
andfinished by 2003that anduses the Oracle
minimal donor financing
HMRS was
actually disbursed by yearapplication.
provided Inputs covered
thereafter and thethe system
further specification,
development of BPEMS
cost of and IT hardware,
IPPD2 was the application
largely funded licence,
from
over the evaluation periodcustomisation
domestic sources. costs Both
andreforms
training wereof staff in line ministries.
strongly profiled as key elements of the PFM reform effort
• Nature of support The IPPD2
• under the 3project
Year Short beganand inMedium-Term
1999, when theAction decision was
Plan thattaken
wasto prepared
replace by existing
theMoFEP inIPPD1
January
provided to PFM reform system
2006. when it became
A follow-on donor clear
funded that vendor support
investment operationcould wasnoapproved
longer bein guaranteed. Funding for
2010 and involves
efforts (equipment, IPPD2 was provided by DFID but was halted in January
improvement and updating of the BPEMS system and its transformation into the Ghana 2001 due to unsatisfactory progress. The
training, TA, diagnostic project resumed
Integrated Financial in 2005 with GoG funding
Management Information the going
with System live in June 2006 with pilots in the
(GFIMIS).
work.) Ministry
• The reformsof Health, Audit Service
were centred in the and the pensions
Controller office. In October
and Accountant General’s 2006 the system
Department was rolled
(CAGD) and to
• Focal areas for reforms byout
a lesser other MDAs.
to allextent the Budget Division in MoFEP. Roll out involved initially the central government
A. 2. What type of structures Structure(based
• function on PFM
of design ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
team
BPEMS
has been used for the “clusters” in Andrews
and relatedasconsultation
• There were significant limitations in the conceptualisation and design of BPEMS. It was seen
design and manage- 2010) BPEMS
process: Balance of inputsprimarily as a technology driven reform with insufficient attention being given to the changes in
ment of these reform • Focal
by Donors/ • The
for reforms by
areasGovt/ PFMoriginal
processes estimated
and procedures
of BPEMSthat USD 11.95
wasshould eithermillion to be financed
have preceded under
or been a PUFMARP
undertaken in parallel
inputs? Have these organisational through
location/
Consultants; Extent ofwith BPEMS. an IDA Thecredit.
institutional expenditure
The finalanalysis underlying over the
spreadBPEMS andperiod 1997-2003
PUFMARP was wasweakUSD with19.68
structures served to level
input/ofconsultation
governmentwith million,
insufficient of which
attentionUSDgiven15.28to million
change was funded by IDA
management and USD
issues and the million funded
4.60assessment of capacity This
by GoG.issues
provide a coordinated (Ministry of Finance,
end users of PFM system represented a 50% cost overrun
and training requirements. PUFMARPcomparedwas a with the original
complex project estimates.
with 11 major components63
and harmonised deliv- Sector
(Sectorministries, • The
ministries,Local
LGs reform
although theinputs
threecovered four main areas:
largest components (MTEF, BPEMS and Audit) accounted for 87.6% of
ery framework? Governments,
and service institutions).– – Requirement
Parliament,
expenditure under definition and design
the project. – technical assistance
The implementation completion for re-engineering
report (ICR) noted of PFM
the size and
CSOs, etc.)
• Management & co- processes and procedures and
complexity of PUFMARP presented a “serious challenge the functional design oftothe government
system; in terms of coordination
ordination structure for – – Technical
and project management”
infrastructure64–. purchase of hardware systems, installation of LANs in at 56 MDA
PFM reforms (Ad hoc • – – Financial
BPEMS wasmanagement
initially managed software
through – purchase,
the PUFMARP customisation
project implementation
and installationunit of the FMIS
(PIU) which
63 The 10 components of the PUFMARP
Project Units
listedvs.
inNormal
the ICR were:had software.
(i) Budget
no functional The system
preparation chosen
and
responsibility MTEF was
or Oracle Financials
(funded
operational DFID);with
byresponsibility six
(ii) Budget
formodules purchased:
theimplementation/BPEMS;
reform. (i) general
This resulted in the
and debt management
(iii) Cash management; (iv) Aidmanagement ledger;
(v) revenue
structures;system;project (ii) purchase
beingmanagement
distanced fromorder; (iii) accounts
(removed
the clientfrom payable;
departments (iv) cash
the project (CAGDin Novembermanagement;
and the2008Budget (v) public
to Division).
cover theThesector
increased
mid-
Govt-controlled vs. Shared termbudgeting; and (vi) accounts
PUFMARP receivable.
recommended Because Oracle
that transfer Financials had been
management responsibility designed for
for the
cost of the BPEMS software); (vi) procurement; (vii) external and internal
reviewaudit
corporate
of the(funded
market and
by the EC); (viii) human
had not been widely used
resource of development;
in a government
(ix) legal
environment,
framework
extensive
Donor-Govt management;
revision; (x) communications strategy; and (xi) project management.BPEMS, but this was not implemented. It was only when PUFMARP came to an end that
Use of consultants for customisation
responsibility for was
BPEMS required.
was transferred to the BPEMS Secretariat, which was established as a
64 World Bank (May 2004), Implementation on a Credit to the Republic of Ghana for a Public Finance Management Technical Assistance
Questions for Country and Component Case
Annex A: Summary Matrices of Responses to Evaluation
managerial or purely
Completion Report division within MoFEP and located in CAGD. BPEMS relied heavily on consultants for the
Project, World Bank Report No. 28089‑GH,
advisory roles)p6. – – Training – inputs
customisation of thefor training
system and staff
ofthe in MoF, CGAD
development and pilot MDAs.
of supporting Delays
technical in the development
manuals and provision
79
• Arrangements for – At the completion
of– training. Because of thePUFMARP,
consultants MoFEP decided
reported continue
to thetoPIU, the implementation
the relationship of the BPEMS
and accountability to
monitoring & evaluation. CAGDusing and own
itsthe resources.
Budget Division Thewasannual cost of the
weakened. Oracle
At the conclusion
licenceof and support for
PUFMARP, it was application
the decided that
• Level of harmonisation is around USD 180,000.
the further development and roll out of BPEMS should be led by the BPEMS Secretariat with
and alignment of different minimal reliance on external consultants.
donor contributions. IPPD2
• Monitoring of the BPEMS was initially undertaken through PUFMARP. This included World Bank
has been used for the and related consultation • There were significant limitations in the conceptualisation and design of BPEMS. It was seen
design and manage- process: Balance of inputs primarily as a technology driven reform with insufficient attention being given to the changes in
ment of these reform by Donors/ Govt/ PFM processes and procedures that should either have preceded or been undertaken in parallel
inputs? Have these Consultants; Extent of with BPEMS. The institutional analysis underlying BPEMS and PUFMARP was weak with
structures served to input/ consultation with insufficient attention given to change management issues and the assessment of capacity issues
80
provide a coordinated end users of PFM system and training requirements. PUFMARP was a complex project with 11 major components63
and harmonised deliv- (Sector ministries, LGs although the three largest components (MTEF, BPEMS and Audit) accounted for 87.6% of
ery framework? and service institutions). expenditure under the project. The implementation completion report (ICR) noted the size and
Judgement
• Managementcriteria/
& co- complexity of PUFMARP presented a “serious challenge to government in terms of coordination
Evaluation Question Possible indicators
ordination structure for Findings
and project management”64.
PFM reforms (Ad hoc • BPEMS was initially managed through the PUFMARP project implementation unit (PIU) which
Annex A: S
A.1 What has been the na- • Government vs. Normal

Project Unitsfunds for had no
• Two functional
major financial responsibility
management orinformation responsibility
operationalsystems (FMIS)for the reform.
initiatives were This resulted
launched in in
thethe
ture and scale of PFM management
PFM structures;
reforms committed project
late being
1990s: distanced
(i) the Budgetfrom the client
Planning and Expenditure (CAGD and the
departmentsManagement Budget
System Division).
(BPEMS) which mid-
The was
reform inputs provided Govt-controlled
and vs. Shared
actually disbursed by term review
funded underofthe PUFMARP
thePublic Finance recommended
Management that transfer
Reform of management
Program (PUFMARP), responsibility
and (ii) the for
by Government and Donor-Govt
year over themanagement;
evaluation Integrated this was not
BPEMS, butPersonnel andimplemented.
Payroll Database It was only when
2 (IPPD2) PUFMARP
which replaced came to an end
a system thatthat
had been
Donors? Use of consultants for
period. responsibility
introduced in the BPEMS
for early 1990s transferred
was(IPPD1). Although BPEMS Secretariat,
to theimplemented as separatewhich was established
projects, the systems as a
• managerial
Donor fundsorfor purely
PFM division
were within
linked MoFEP
in that and
it was envisaged
located inthatCAGD.
the BPEMS
IPPD2 would heavily on
reliedbecome theconsultants
HR module for the
of BPEMS.
reforms roles)
advisorycommitted and customisation
• Donor support of forthe system
both BPEMS andand development
theIPPD2 of supporting
had finished by 2003 and technical
minimalmanuals and provision
donor financing was
actually disbursed by year of training.
provided thereafter
Becauseand the consultants reported to the
the further development of BPEMS
PIU, theandrelationship
IPPD2 was and accountability
largely funded from to
Arrangements
• over the evaluation
for period domestic the Budget
CAGD andsources. BothDivision
reforms was weakened.
were stronglyAt the conclusion
profiled of PUFMARP,
as key elements of theitPFM
wasreform that
decidedeffort
monitoring
• Nature & evaluation.
of support the further
under the 3development
Year Short and and roll out of BPEMS
Medium-Term Actionshould be led
Plan that was the BPEMS
byprepared Secretariat
by MoFEP with
in January
Level of harmonisation
• provided to PFM reform minimal
2006. reliance on
A follow-on external
donor funded consultants.
investment operation was approved in 2010 and involves
and alignment
efforts of different
(equipment, Monitoring of the
• improvement andBPEMS
updating was initially
of the BPEMS undertaken
system and through PUFMARP. This
its transformation included
into the GhanaWorld Bank
donor contributions.
training, TA, diagnostic led supervisions
Integrated Financial a mid-term review.
andManagement In the years
Information System following
(GFIMIS). PUFMARP no special monitoring
work.) arrangements
• The reforms were were put in place
centred in the although
Controller implementation
and Accountantprogress
General’s and
Department highlighted
issues are(CAGD) and toin
• Focal areas for reforms by the
a external
lesser extentreview
the Budget that were
of PFMDivision in undertaken
MoFEP. Rollin 2006,
out involved and 2009.
2008initially the central government
function (based on PFM ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
“clusters” as in Andrews IPPD2
2010) • The IPPD2 project was managed by the CAGD and implemented through a contract with a
BPEMS
• Focal areas for reforms by consultancy

• The original estimated much simpler
firm. It wasofaBPEMS was USD initiative than BPEMS
11.95 million with its implementation
to be financed under a PUFMARP focused
organisational location/ on establishing
through a payroll
an IDA credit. Thedatabases and management
final expenditure spread over system
the period MDAs. It involved
in the1997-2003 was USD only
19.68
level of government limited number
million, of whichofUSD users of the
15.28 system
million wasand raised
funded by fewer
IDA and systemic
USD 4.60 change management
million funded by GoG.issues.
This
A.3. What types of comple- • Use of country systems: • The IDA funding for the BPEMS was both on plan and on budget. It was administered using World
mentary actions have extent to which external Bank procedures, rather than government systems. The DFID funding for IPPD2 was on plan and
Donors taken to support aid is ‘on plan’, ‘on budget’ administered through a service provider.
PFM reforms and what and ‘on treasury’? • The MDBS dialogue and triggers had very limited influence on the implementation of the FMIS
has been their signifi- • Ranking of donor efforts to reforms and since 2006 only two triggers have been related to FMIS implementation. The first
cance? Have they had support national systems required complete deployment of all six BPEMS module in the eight pilot MDAs by December
any influence on the ex- as expressed in Paris 2006. This was not achieved but was “declared met” by the 2007 review, presumably because it
ternal constraints to re- Declaration monitoring was considered that MoFEP was not in a position to meet the trigger. The second required
form? reports and PEFA integration of 50% of subverted agencies into IPPD2, and conducting a payroll audit to reconcile
indicators D2 and D3. the IPPD2 payroll with the establishment list. This had not been met at the time of the May 2008
• Scale and evolution over annual review, but was subsequently met by August 2008. There were no MDBS triggers related
the evaluation period of aid to IPPD2.
flows provided as GBS,
SBS or debt relief and
relative contribution to
reduction of treasury
management costs and to
discretionary resources
IPPD2
available to Government,
• IPPD2 is a human resources management and payroll system that uses the Oracle HMRS
(including effect on
application. Inputs covered the system specification, cost of IT hardware, the application licence,
financing constraints for
customisation costs and training of staff in line ministries.
PFM reform outputs).
on establishing a payroll databases and management system in the MDAs. It involved only
limited number of users of the system and raised fewer systemic change management issues.
A.3. What types of comple- • Use of country systems: • The IDA funding for the BPEMS was both on plan and on budget. It was administered using World
mentary actions have extent to which external Bank procedures, rather than government systems. The DFID funding for IPPD2 was on plan and
Donors taken to support aid is ‘on plan’, ‘on budget’ administered through a service provider.
PFM reforms and what and ‘on treasury’? • The MDBS dialogue and triggers had very limited influence on the implementation of the FMIS
has been their signifi- • Ranking of donor efforts to reforms and since 2006 only two triggers have been related to FMIS implementation. The first
cance? Have they had support national systems required complete deployment of all six BPEMS module in the eight pilot MDAs by December
any influence on the ex- as expressed in Paris 2006. This was not achieved but was “declared met” by the 2007 review, presumably because it
ternal constraints to re- Declaration monitoring was considered that MoFEP was not in a position to meet the trigger. The second required
form? reports and PEFA integration of 50% of subverted agencies into IPPD2, and conducting a payroll audit to reconcile
indicators D2 and D3. the IPPD2 payroll with the establishment list. This had not been met at the time of the May 2008
Judgement evolution over
• Scale andcriteria/ annual review, but was subsequently met by August 2008. There were no MDBS triggers related
Evaluation Question the evaluation
Possible period of aid
indicators to IPPD2.
Findings
A.1 What has been the na- SBS or debt relief
• Government fundsandfor • Two major financial management information systems (FMIS) initiatives were launched in the
ture and scale of PFM relative
PFM contribution
reforms committedto late 1990s: (i) the Budget Planning and Expenditure Management System (BPEMS) which was
reform inputs provided reduction of treasury
and actually disbursed by funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the
by Government and management
year costs and to
over the evaluation Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? discretionary resources
period. introduced in the early 1990s (IPPD1). Although implemented as separate projects, the systems
• available
Donor fundsto Government,
for PFM were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
(including
reforms committed
effect on and • Donor support for both BPEMS and IPPD2 had finished by 2003 and minimal donor financing was
actually constraints
financingdisbursed for
by year provided thereafter and the further development of BPEMS and IPPD2 was largely funded from
over reform
PFM the outputs).
evaluation period domestic sources. Both reforms were strongly profiled as key elements of the PFM reform effort
•
• Nature
Nature ofand evolution over
support under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
time of dialogue
provided to PFMon PFM
reform 2006. A follow-on donor funded investment operation was approved in 2010 and involves
within GBS/PRSC,
efforts (equipment,SBS improvement and updating of the BPEMS system and its transformation into the Ghana
structures
training, similar
TA,ordiagnostic Integrated Financial Management Information System (GFIMIS).
donor-govt fora, including
• use of PFM
Focal areasreform
for reforms by a lesser extent the Budget Division in MoFEP. Roll out involved initially the central government
conditions
function in GBS/
(based on SBS
PFM ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
disbursement
“clusters” as inconditions.
Andrews
Influence of dialogue on
• 2010) BPEMS
the “political”
• Focal areas forand reforms
“policyby • The original estimated of BPEMS was USD 11.95 million to be financed under a PUFMARP
space” constraints
restricting
level choice of PFM
of government million, of which USD 15.28 million was funded by IDA and USD 4.60 million funded by GoG. This
reform outputs.
(Consistency
• Sector of actual
ministries, Local • The reform inputs covered four main areas:
changes with PFM
Governments, reform
Parliament, –– Requirement definition and design – technical assistance for re-engineering of PFM
triggers
CSOs, and/or points of
etc.) processes and procedures and the functional design of the system;
emphasis in GBS/ PRSC –– Technical infrastructure – purchase of hardware systems, installation of LANs in at 56 MDA
dialogue) sites and linking of 18 sites over a wireless loop.
• Consideration of counter- –– Financial management software – purchase, customisation and installation of the FMIS
factual: software. The system chosen was Oracle Financials with six modules purchased: (i) general
• Outputs: would PFM ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector
reforms have evolved budgeting; and (vi) accounts receivable. Because Oracle Financials had been designed for the
differently in absence of corporate market and had not been widely used in a government environment, extensive

GBS and related policy
dialogue structures?
81
• Outcomes: Would of the BPEMS system meant that the training inputs were less than originally envisaged.
intermediate outcomes –– At the completion of PUFMARP, MoFEP decided to continue the implementation of the BPEMS
have been different if use using its own resources. The annual cost of the Oracle licence and support for the application
of country systems had is around USD 180,000.
been lower?
• (Consistency of actual
changes with PFM reform
triggers and/or points of
emphasis in GBS/ PRSC
dialogue)
• Consideration of counter-
82
factual:
• Outputs: would PFM
reforms have
Judgement evolved
criteria/
Evaluation Question differently
Possible in absence of
indicators Findings
A Inputs & Context: the design of PFM
GBSreform
and related policy
Annex A: S
A.1 What has been the na- • Government funds for • Two major financial management information systems (FMIS) initiatives were launched in the
ture and scale of PFM Outcomes:
• PFM reformsWould
committed late 1990s: (i) the Budget Planning and Expenditure Management System (BPEMS) which was
reform inputs provided intermediate
and actually disbursed
outcomesby funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the
by Government and have been different if use
year over the evaluation Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? of country systems had
• been
Donorlower?
funds for PFM were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
A.4. To what extent has • reforms engagement
Nature ofcommitted and •
• Donor support
(Addressed for both
as part BPEMS
of the and
overall IPPD2
PFM had finished by 2003 and minimal donor financing was
review)
there been domestic actually
with PFMdisbursed by year
reform issues provided thereafter and the further development of BPEMS and IPPD2 was largely funded from
public pressure or re- over
withinthe evaluation
civil society, period domestic sources. Both reforms were strongly profiled as key elements of the PFM reform effort
gional institutional • Nature
academia of support
and the media. under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
pressure in support of • provided
Extent of to PFM reform
participation of 2006. A follow-on donor funded investment operation was approved in 2010 and involves
PFM reform and what efforts
CSOs in(equipment,
policy dialogue on improvement and updating of the BPEMS system and its transformation into the Ghana
has been the influence training,
PFM reform.TA, diagnostic Integrated Financial Management Information System (GFIMIS).
on the external con- • work.)
Presence/ absence of • The reforms were centred in the Controller and Accountant General’s Department (CAGD) and to
straints to reform? Focal areas
• specific for reforms
research and by a lesser extent the Budget Division in MoFEP. Roll out involved initially the central government
function
advocacy(based
by CSOs PFM
onon PFM ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
reform issues.
BPEMS
• 2010)
Relevance of PFM issues
• Focal
to political for reforms by • The original estimated of BPEMS was USD 11.95 million to be financed under a PUFMARP
areasoutcomes:
• organisational
Discussion of PFM location/
issues through an IDA credit. The final expenditure spread over the period 1997-2003 was USD 19.68
level government
withinofelection campaigns million, of which USD 15.28 million was funded by IDA and USD 4.60 million funded by GoG. This
• (Ministry
Discussion Finance,
of of service represented a 50% cost overrun compared with the original estimates.
Sector
deliveryministries,
issues related
Localto • The reform inputs covered four main areas:
Governments,
PFM in electionParliament,
campaigns –– Requirement definition and design – technical assistance for re-engineering of PFM
• CSOs, etc.)
Voter concerns during processes and procedures and the functional design of the system;
elections (from Afro –– Technical infrastructure – purchase of hardware systems, installation of LANs in at 56 MDA
Barometer and other sites and linking of 18 sites over a wireless loop.
relevant publications) –– Financial management software – purchase, customisation and installation of the FMIS
• Existence of regional or software. The system chosen was Oracle Financials with six modules purchased: (i) general
international bodies (e.g. ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector
WAEMU, EITI) promoting budgeting; and (vi) accounts receivable. Because Oracle Financials had been designed for the
specific norms on PFM corporate market and had not been widely used in a government environment, extensive
issues, and their relative
influence on domestic –– Training – inputs for training of staff in MoF, CGAD and pilot MDAs. Delays in the development
political discourse. of the BPEMS system meant that the training inputs were less than originally envisaged.
• Evolution in the quality of –– At the completion of PUFMARP, MoFEP decided to continue the implementation of the BPEMS
public/ CSO engagement using its own resources. The annual cost of the Oracle licence and support for the application
with PFM issues over time is around USD 180,000.
and its influence on PFM
reform outputs. IPPD2
• Consideration of counter- • IPPD2 is a human resources management and payroll system that uses the Oracle HMRS
factual: would PFM reform application. Inputs covered the system specification, cost of IT hardware, the application licence,
outputs have evolved customisation costs and training of staff in line ministries.
• Relevance of PFM issues
to political outcomes:
• Discussion of PFM issues
within election campaigns
• Discussion of service
delivery issues related to
PFM in election campaigns
• Voter concerns during
elections (from Afro
Barometer and other
relevant publications)
• Existence of regional or
international bodies (e.g.
WAEMU, EITI)
Judgement promoting
criteria/
Evaluation Question Possible norms on PFM
specificindicators Findings
A.1 What has been the na- influence
• Government on domestic
funds for • Two major financial management information systems (FMIS) initiatives were launched in the
ture and scale of PFM political
PFM discourse.
reforms committed late 1990s: (i) the Budget Planning and Expenditure Management System (BPEMS) which was
reform inputs provided • Evolution in the
and actually disbursedquality ofby funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the
by Government and public/ CSO engagement
year over the evaluation Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? with PFM
period. issues over time introduced in the early 1990s (IPPD1). Although implemented as separate projects, the systems
• and its influence
Donor funds for PFM on PFM were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
reform outputs.
reforms committed and • Donor support for both BPEMS and IPPD2 had finished by 2003 and minimal donor financing was
Consideration
• actually disbursed of counter-
factual:
over thewould
evaluation reform
PFMperiod domestic sources. Both reforms were strongly profiled as key elements of the PFM reform effort
outputs have
• Nature of support evolved under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
differently
provided toinPFMabsence
reform of 2006. A follow-on donor funded investment operation was approved in 2010 and involves
domestic
efforts public pressure
(equipment, improvement and updating of the BPEMS system and its transformation into the Ghana
or pressure
training, TA,from regional/
diagnostic Integrated Financial Management Information System (GFIMIS).
international institutions?
A.5. H ow relevant was the •
• Scale areas
Focaland for reforms
focus of support by • a lesser
The donorextent
supportthe Budget
for BPEMS Division in MoFEP.
and IPPD2 wasRoll out involved
focused on the systems the central
initially design government
and customisation
PFM reform pro- function
in relation(based on PFM
to identified ministries, departments
and the provision and agencies,
of supporting and additionally
IT equipment. Due to thefor IPPD2 the sub-vented
implementation agencies.
delays and difficulties
gramme to the needs “clusters”
PFM as in Andrews
weaknesses at start in rolling out the new systems the donor support ended before the new systems were
and the institutional 2010)
and during implemen BPEMS
operational. However, the government continued funding the implementation of the reforms,
context? Was donor • Focal
tation areas for reforms
of reforms (inclu by • The original
although estimated
in the of BPEMS
case of IPPD2 this was USD 11.95
occurred aftermillion be financed
a gap oftofour years. under a PUFMARP
support consistent with organisational
ding weaknesses location/
in HR through
• FMIS modernisation
an IDA credit.was final
Theand expenditure
remains spread
a central over
pillar of the period 1997-2003
thegovernment’s PFMwasreform 19.68
USDeffort.
national priorities? To level of government
endowments, quality of million,
This is reflected
of whichin USD
the15.28 million was
continuation funded
of the reformsby IDA and
after donor 4.60 million
USDfunding funded
ceased and in GoG.
bythe This
face of
what extent were adap- (Ministry of Finance,
institutions & rules, represented a 50% cost
continued difficulties overrun
in rolling compared
out with the original
the new systems. Under theestimates.
NDC government that came into
tations made in re- Sector
quality ministries,
of systems Local & • The reform inputs covered four main areas:
office in 2008 there was a renewed emphasis on the FMIS reforms which have been strongly
sponse to the context Governments,
business Parliament,
processes, and –– Requirement
championed definition
by the Deputyand design
Minister technical
in–MoFEP. Newassistance for re-engineering
donor financing has been secured
of PFMtotalling
and the changing na- CSOs, etc.)
quality of organisations). USDprocesses
55.8 million
andin procedures
June 2010 and the functional
to establish a countrywide the system;
design ofGIFMIS. The project which is funded by
tional priorities? • Consistency of donor- –– Technical
IDA, infrastructure
DFID, Danida and the EU – purchase
involves aof substantial
hardware upgrade
systems,ofinstallation
BPEMS and LANs
ofits extension
in at 56toMDA
funded support with sites and
regional andlinking 18 sites over a wireless loop.
districtoflevels.
Government PFM reform –– Financial management software – purchase, customisation and installation of the FMIS
efforts, with ongoing software. The system chosen was Oracle Financials with six modules purchased: (i) general
public administration ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector
reforms and overall Govt budgeting; and (vi) accounts receivable. Because Oracle Financials had been designed for the
policies.
• Extent to which scope and
83
focus of support were –– Training – inputs for training of staff in MoF, CGAD and pilot MDAs. Delays in the development
adapted to the context, of the BPEMS system meant that the training inputs were less than originally envisaged.
especially to the level of –– At the completion of PUFMARP, MoFEP decided to continue the implementation of the BPEMS
ownership and the using its own resources. The annual cost of the Oracle licence and support for the application
capacity for reform is around USD 180,000.
tations made in re- quality of systems & office in 2008 there was a renewed emphasis on the FMIS reforms which have been strongly
sponse to the context business processes, and championed by the Deputy Minister in MoFEP. New donor financing has been secured totalling
and the changing na- quality of organisations). USD 55.8 million in June 2010 to establish a countrywide GIFMIS. The project which is funded by
tional priorities? • Consistency of donor- IDA, DFID, Danida and the EU involves a substantial upgrade of BPEMS and its extension to
funded support with regional and district levels.
84
Government PFM reform
efforts, with ongoing
public administration
Judgement
reforms andcriteria/
overall Govt
policies. Findings
• Extent to which scope and
Annex A: S
A.1 What has been the na- focus of support

• Government fundswere
for • Two major financial management information systems (FMIS) initiatives were launched in the
ture and scale of PFM adapted
PFM reforms context,
to thecommitted late 1990s: (i) the Budget Planning and Expenditure Management System (BPEMS) which was
reform inputs provided especially
and actually todisbursed
the level ofby funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the
by Government and ownership
year over the and the
evaluation Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? capacity for reform
• implementation.
Donor funds for PFM were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
Consistency
• reforms & coherence
committed and • Donor support for both BPEMS and IPPD2 had finished by 2003 and minimal donor financing was
with wider
actually Donor policies
disbursed by year provided thereafter and the further development of BPEMS and IPPD2 was largely funded from
in country
over the evaluation period domestic sources. Both reforms were strongly profiled as key elements of the PFM reform effort
Consistency
• Nature with the Paris
of support under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
Declaration
provided objectives
to PFM reformas 2006. A follow-on donor funded investment operation was approved in 2010 and involves
efforts ownership,
regards(equipment, improvement and updating of the BPEMS system and its transformation into the Ghana
harmonisation
training, and
TA, diagnostic Integrated Financial Management Information System (GFIMIS).
alignment.
• Flexibility
Focal areas in design
for reforms
of by a lesser extent the Budget Division in MoFEP. Roll out involved initially the central government
support and
function (basedexistence
on PFMof ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
adequate feed-back/
learning mechanisms in
2010) BPEMS
• Focal to adapt
order areas forthe
reforms
designby • The original estimated of BPEMS was USD 11.95 million to be financed under a PUFMARP
and implementation
organisational of
location/ through an IDA credit. The final expenditure spread over the period 1997-2003 was USD 19.68
support
level to changing
of government million, of which USD 15.28 million was funded by IDA and USD 4.60 million funded by GoG. This
(Ministry
needs. of Finance, represented a 50% cost overrun compared with the original estimates.
Outputs: the delivery of PFM reforms
A.6. What have been the out- • CSOs, etc.)
Documentation of outputs • Theprocesses
performance and procedures
of the two FMIS the functional
and reforms, design of
particularly the system;
BPEMS, has been considered
puts of the PFM reform : –– Technical infrastructure
unsatisfactory. After 15 years – purchase of hardware
of implementation, systems, installation
a comprehensive of LANs
functioning in at
FMIS is56 MDA
still not in
process and to what ex- • by PFM function place.
sitesByandthelinking
end ofof 18 sites
2010, over a wireless
the BPEMS had stillloop.
not been fully implemented in any of the eight pilot
tent has direct donor (according to PFM clusters –
ministries,
– Financialand management software
was still running – purchase,
alongside customisation
the existing manually and installation
based systems. the FMIS
of IPPD2 was
support contributed to in Andrews 2010) and software.
being used for The
HRsystem chosen
and payroll management Financials
was Oracle system, butwith
wassixnotmodules
interfaced purchased:
with BPEMS. (i) general
Since
these outputs? • by type of output (People & ledger;
2003 (ii) purchase
spending on FMISorder; (iii) accounts
development payable;
and roll-out (iv) cash
has management;
been funded (v) public
with minimal donorsector
support
Skills; Laws & Rules; budgeting; and (vi) accounts receivable. Because

and the government has remained committed to the FMIS reforms. Oracle Financials had been designed for the
Systems & Business BPEMS customisation was required.
processes; Organisational • The original timetable for the implementation of BPEMS envisaged pilot implementation by June
changes) –– Training
1998, – inputs
its partial for training
operation for theof1999
staffbudget
in MoF,andCGADfulland pilot MDAs.
operation for theDelays
2000 in the development
budget. By the end
• Matching of outputs to of 2003 BPEMS
of thethe system meant
achievements were that the training
as follows: inputs were
(i) requirement less than
definition originally
and envisaged.
design had been largely
PFM reform inputs, –– At the completion
completed of PUFMARP,
and considered adequate MoFEP
by thedecided
potential continue
tousers; the implementation
(ii) much of the technical of the BPEMS
differentiating if possible infrastructure resources.
using its ownincluding The annual
hardware systems,
cost ofinstallation
the Oracleof licence
MDA LANsand support
was in place; application
for the(iii) a new 41
Government & Donor is around
digit chart ofUSD 180,000.
accounts had been implemented; (iv) the FMIS software had been installed and was
inputs. in partial use in CAGD although in parallel with the older systems; and (v) training had taken
• Analysis of chronology of IPPD2
place. However, the system had yet to be piloted in any ministry. The ICR for PUFMARP
events to determine • IPPD2 is a human
considered resources
that full management
implementation of BPEMS payroll
and could besystem
achieved thatbyuses
2007. the Oracle HMRS
causal links between • application. Inputs covered
In practice, subsequent the system specification,
implementation of BPEMS continued
cost of ITtohardware,
be doggedthe byapplication licence,
delays. A report of
donor support to reform customisation
a donor field visit costs and training
in April 2008 recorded in line
of staffthat ministries.
partial implementation of the BPEMS modules
learning mechanisms in
order to adapt the design
and implementation of
support to changing
needs.
A.6. What have been the out- • Documentation of outputs • The performance of the two FMIS reforms, particularly BPEMS, has been considered
puts of the PFM reform : unsatisfactory. After 15 years of implementation, a comprehensive functioning FMIS is still not in
process and to what ex- • by PFM function place. By the end of 2010, the BPEMS had still not been fully implemented in any of the eight pilot
tent has direct donor (according to PFM clusters ministries, and was still running alongside the existing manually based systems. IPPD2 was
support contributed to in Andrews 2010) and being used for HR and payroll management system, but was not interfaced with BPEMS. Since
these outputs? Judgement
• by type of criteria/
output (People & 2003 spending on FMIS development and roll-out has been funded with minimal donor support
Skills; Laws & Rules; Findings
and the government has remained committed to the FMIS reforms.
Systems & Business BPEMS
A.1 What has been the na- processes; Organisational
• Government The original
• Two
funds for timetable
major financial for the implementation
management information of systems
BPEMS(FMIS) envisaged pilot implementation
initiatives were launched inbythe June
ture and scale of PFM changes)
PFM late
reforms committed its partial
1998,1990s: (i) theoperation
Budget Planning for the 1999 andbudget
Expenditureand full operation for
Management the 2000
System budget.
(BPEMS) By the
which end
was
reform inputs provided Matching
• and actuallyof outputs
funded
disbursed the achievements
of 2003 under
to by the Public Finance follows: (i) requirement
were asManagement Reform Program definition and design
(PUFMARP), had
and been largely
(ii) the
by Government and year reform
PFM over Integrated
theinputs,
evaluation and considered
completed Personnel adequate
and Payroll by the potential
Database 2 (IPPD2)users;which(ii) much
replacedofa the technical
system that had been
Donors? differentiating if possible
period. infrastructure
introduced in theincluding
early 1990s hardware(IPPD1). systems,
Although installation
implemented of MDA as separate
LANs wasprojects,
in place;the (iii) a new 41
systems
• Government
Donor funds & digit chart
were
forDonor
PFM linkedofinaccounts
that it was had been implemented;
envisaged that the IPPD2 (iv) the FMIS
would software
become thehad been installed
HR module of BPEMS. and was
reforms in partial
• Donor
inputs. committed and support
use infor CAGD
bothalthough
BPEMS and in parallel
IPPD2 withhad finished
the olderbysystems;
2003 andand (v) training
minimal donorhad financing
taken was
• actually of chronology
Analysisdisbursed provided of
place. However,
by year thereafter the system
and the had furtheryet todevelopment
be piloted inofany ministry.
BPEMS and The
IPPD2 ICRwas PUFMARP
for largely funded from
events
over considered
domestic
thetoevaluation
determineperiod sources.
that fullBothimplementation
reforms were BPEMS could
of strongly profiled achieved
be as key elements
by 2007.of the PFM reform effort
causal links
• Nature between
In practice,
• under
of support the 3 subsequent
Year Short and implementation
Medium-TermofAction BPEMS continued
Plan be dogged
that wastoprepared byby delays.
MoFEP report of
inAJanuary
donor support
provided to PFM reform
a donor
2006.
toreform field visit in
A follow-on donor 2008 recorded
Aprilfunded investment partial implementation
thatoperation was approved in the BPEMS
of 2010 modules
and involves
and observed
efforts changes at
including the general
improvement
(equipment, and updating
ledgerofand theaccounts
BPEMS system payableand modules had been achieved
its transformation CAGD and
into theinGhana
65
output level.
training, eight pilot ministries.
Integrated
TA, diagnostic . Within these
Financial Management Information ministries
eight pilot System it was estimated that only 6 per cent of
(GFIMIS).
Consideration of
• work.) invoices
• The reformshad been
were processed
centred in the through BPEMS
Controller andinAccountant year. It also
the previousGeneral’s Department inadequate
noted that(CAGD) and to
• counterfactual: training
a lesser had
Focal areas for reforms
would by extent been theprovided
Budget Divisionand the ability
in MoFEP. of staff
Rollinout pilot ministries
theinvolved to work
initially the centralwith BPEMS was
government
these outputs
function (based have been
low. Two years
ministries,
on PFM departments
later whenand GIFMIS project
theagencies, and additionally
was being for prepared
IPPD2 ,the situation had
thesub-vented changed
agencies.
“clusters”
generated as in absence
in Andrewsof
little. There had been no further roll out of the system, and little further deepening in the use of
donor support to PFM
2010) the system. Despite the implementation of a fibre WAN linking MDAs in Accra, connectivity
BPEMS
reform?
• Focal remained
• The original
areas for reforms by a problem.
estimatedThus of BPEMSby 2010, was BPEMS
theUSD 11.95had still not
million to be achieved
financedthe under
levelaof implementation
PUFMARP
through
that had an
organisational location/ originally
IDA credit.beenThe planned for 2000. The
final expenditure pilot ministries
spread over the periodcontinued
1997-2003 on their
to relywas USDmanual
19.68
accounting
million,
level of government systems,
of which USDwhile15.28CAGD million hadwas continued
funded by utilise
toIDA anditsUSD ACCPAC system
4.60 million funded
for thebyproducing
GoG. This
the Public Accounts,
represented
(Ministry of Finance, a 50% cost its monthly
andoverrun and annual
compared reports.
with the original estimates.
2009 External
• The reform
Sector ministries, Local Review of
inputs covered Public
four main Expenditure
areas: and Financial Management noted that “at the
current
–
Governments, Parliament, roll out rate,
– Requirement BPEMS
definition andwill be obsolete
design – technical not maintainable
andassistance for re-engineering
by the time itof reaches
PFM full
CSOs, etc.) coverage”
processes andand considered
procedures thatand”the themain option facing
functional designthe Government
of the system; is relaunching BPEMS
using
– an updated
– Technical version with
infrastructure – purchase
standardof functionalities
hardware systems, of Oracle Financials
installation ofthat
LANs would
in at include
56 MDAa
human
sites resource
and linking module
of 18 sitesto manage the payroll”.
over a wireless loop.These requirements were subsequently
reflected
– – Financial in the design of the
management software
GIFMIS–project
purchase, for which
customisation
financingand wasinstallation
secured inof mid
the2010.
FMIS
IPPD2 ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector
• IPPD2 was operational
budgeting; across all
and (vi) accounts receivable.
MDAs byBecause the end ofOracle
2006. Financials
The systemhad is run
been bydesigned
CAGD andfor the
the
major MDAs are
corporate marketconnected
and hadtonot thebeencentral server
widely used CAGD.
inin Data for smaller
a government ministries
environment, continues
extensive
65 Van der Helm, A., Le Mounier, X., Nehmeyer-Srocke, I., Ostler,

to beG., Owusu-Ayim,
entered
customisation at CAGD J. (May
using
was required. 2008), Report
information on BPEMS
provided and IPPD2
by the MDAs. By August
Field2008 Visits.
IPPD2 had also
been rolled out to over 50% of subvented agencies, although at the end of 2010 a number of major
85
subvented
– – Trainingagencies,
– inputs for including
trainingthe universities,
of staff in MoF, CGAD had still implement
andtopilot MDAs. Delays
IPPD2.inInthe absence of
thedevelopment
theoffull
theroll
BPEMSout ofsystem
IPPD2,meant possible
it is notthat for CAGD
the training inputsto produce
were less a comprehensive government
than originally envisaged.
payroll.
– – At theMoreover,
completion theofmanual
PUFMARP, procedures
MoFEP decidedand controls required
to continue thebefore new employees
implementation of the can be
BPEMS
entered
using into
its own payroll system
the resources. The continue
annual cost to generate
of the Oracle significant
licencedelays in the payments
and support of their
for the application
salaries,
is around in some cases of up to two years. Overall, CAGD considers that the IPPD2 operates
USD 180,000.
effectively although with some limitations.
reform? remained a problem. Thus by 2010, the BPEMS had still not achieved the level of implementation
that had originally been planned for 2000. The pilot ministries continued to rely on their manual
accounting systems, while CAGD had continued to utilise its ACCPAC system for the producing
the Public Accounts, and its monthly and annual reports.
• The 2009 External Review of Public Expenditure and Financial Management noted that “at the
86
current roll out rate, BPEMS will be obsolete and not maintainable by the time it reaches full
coverage” and considered that ”the main option facing the Government is relaunching BPEMS
using an updated version with standard functionalities of Oracle Financials that would include a
Judgement criteria/ human resource module to manage the payroll”. These requirements were subsequently
reflected in the design of the GIFMIS project for which financing was secured in mid 2010.
IPPD2
Annex A: S
A.1 What has been the na- • Government funds for IPPD2
• Two major operational
wasfinancial across all MDAs
management information end of 2006.
by the systems (FMIS)
Theinitiatives
system iswere run by CAGD and
launched the
in the
ture and scale of PFM PFM reforms committed major
late MDAs
1990s: are connected
(i) the to the central
Budget Planning server in CAGD.
and Expenditure Management
Data forSystem ministries
smaller(BPEMS) whichcontinues
was
reform inputs provided and actually disbursed by to be entered
funded underat theCAGD
Public using information
Finance ManagementprovidedReform MDAs. By
by theProgram August 2008
(PUFMARP), IPPD2
and had also
(ii) the
by Government and year over the evaluation Integrated
been rolledPersonnel
out to overand of subvented
50%Payroll Database agencies,
2 (IPPD2)although
which replaced
at the endaof system number
2010 athat of major
had been
Donors? period. subvented agencies,
introduced in the early including the universities,
1990s (IPPD1). Although had still to implement
implemented as separate IPPD2.
projects, absence
In the the systems of
• Donor funds for PFM the full
were roll out
linked of IPPD2,
in that is not possible
it was itenvisaged that the
forIPPD2 to produce
CAGDwould becomea comprehensive
the HR modulegovernment
of BPEMS.
reforms committed and • Donor Moreover,
payroll.support the manual
for both BPEMSprocedures
and IPPD2 had andfinished
controlsby required
2003 and before
minimal employees
newdonor financing be
can was
actually disbursed by year entered into
provided the payroll
thereafter andsystem continue
the further to generate
development significant
of BPEMS and delays
IPPD2 was payments
in thelargely funded of their
from
over the evaluation period salaries, in
domestic some cases
sources. Both of up to two
reforms wereyears. Overall,
strongly CAGD
profiled asconsiders
key elements that the IPPD2
of the PFMoperates
reform effort
• Nature of support effectively
under the 3although
Year Short with
andsome
Medium-Term
limitations.Action Plan that was prepared by MoFEP in January
provided to PFM reform • 2006.
IPPD2Awas supplied
follow-on donor configured
and funded with a number
investment operationof human resources
was approved functionalities
in 2010 and involves that are
efforts (equipment, currently not being
improvement used. These
and updating of theinclude
BPEMS a recruitment
system and its module, a non-monetary
transformation into thebudgeting
Ghana
training, TA, diagnostic module (manpower
Integrated Financialceilings,
Managementheadcount
Information absence
etc.), anSystem management module, and a change
(GFIMIS).
work.) management
• The reforms were module. In practice
centred in the Controller
the largerand MDAsAccountant
have hadGeneral’s their own systems
to invest inDepartment (CAGD)to and to
• Focal areas for reforms by carry
a lesser
outextent
thesethe functions.
BudgetThis is both
Division inefficient
in MoFEP. Rolland
outreduces
involvedthe initially of integration
level the in HR and
central government
function (based on PFM payroll management.
ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
A. 7. How efficiently were • Consistency
2010) of outputs• Implementation delays and the low-level of roll out of BPEMs that has been achieved means that
BPEMS
these outputs gener- produced

• Focal areas with
forplanned the investment
• The
reforms by original estimated
in FMISof systems
BPEMStowas date USD had very
has11.95 little
million toimpact on public
be financed under finance management.
a PUFMARP
ated? Was the pacing programme
organisational (quantity and
location/ through
This wasan despite an estimated
IDA credit. The finalinvestment
expenditure inspread
BPEMSover under thePUFMARP of USD 19.9
period 1997-2003 wasmillion
USD 19.68and
66
and sequencing of re- timing)
level of government subsequent
million, of which
GoG USDfinanced
15.28expenditure
million wassincefunded 2003
by IDA
thatandis probably
USD 4.60 inmillion
excessfunded
of USD by million
2.6GoG. This.
forms appropriate and • Extent of coordination
(Ministry of Finance, Implementation
represented of IPPD2
a 50% has been
cost overrun more successful
compared both because
with the original it was implemented as a
estimates.
cost-effective? Was the between
Sector ministries,
outputs Local simpler
• The reform more focused
andinputs covered reform,
four main and because from 2005 there was strong political support for
areas:
cost per output accept- • Quality of pacing
Governments, and
Parliament,measures
–– Requirement to strengthen
definitionthe and management of the government
design – technical assistance for payroll and wage bill.
re-engineering A number of
of PFM
able? sequencing
CSOs, etc.) of output factors have been
processes cited to explain
and procedures and the
the failure of the
functional BPEMS
design reform:
of the system;
production: – Weak ownership
––– Technical of the reforms.
infrastructure – purchaseThisof applied
hardwareat political
systems, senior management
andinstallation of LANs inlevel
at 56andMDAin
• internally coherent/ the primary
sites and linkingstakeholders
of 18 sitesinover
the areform
wireless(CAGD
loop.and the Budget Division). It reflected
efficient? weaknesses
–– Financial in the design
management of the project,
software principally
– purchase, (i) inadequate
customisation arrangements
and installation for
of the FMIS
• Consistent with capacity coordination
software. Thewith and involvement
system chosen was Oracle with the Financials
executivewith and
levelsix modules the main stakeholders;
among purchased: (i) general
endowments? (ii) management
ledger; (ii) purchase responsibility under PUFMARP
order; (iii) accounts payable;being
(iv) cashassigned
management; which was
to a PIU (v) public distanced
sector
• Appropriate to degree of from the primary
corporate marketstakeholders
and had not been in the project;
widely usedandin(iii) failure
a government to address
environment, management
changeextensive
66 This assumes Oracle licensing and
ownership/
support nature issues
costs ofof$ 1.3 million over period 2004-10
the involved
customisation in introducing
was and anan
required. equivalent expenditure on personnel, training and roll-out costs.
IT based system.
political & admin support –– Seeing BPEMS as primarily a technological reform rather than a PFM reform. The provision
for reform? under PUFMARP
–– Training – inputs for in terms
training both
of of resources
staff and time
in MoF, CGAD andfor pilot review
theMDAs. of business
Delays processes
in the development
• Relative cost of outputs in and
of the
the BPEMS
reformsystem
designmeantand consultation processes
that the training inputswas wereinadequate. This contributed
less than originally envisaged.to the
relation to budgeted costs. lack
–– At theofcompletion
ownership of of PUFMARP,
the changesMoFEP to be introduced
decided towith BPEMS,
continue the particularly
implementation where
of the were
theyBPEMS
• Influence of external seen as
using itspotentially
own resources. threatening entrenched
The annual cost of roles and responsibilities.
the Oracle licence and support The choice
for theof a
application
support to PFM reform sophisticated
is around USDfinancial
180,000.management software system designed for private sector
upon pacing and organisations, necessitated extensive customisation which may have distracted attention
sequencing. IPPD2 from the requirements for re-engineering business processes.
• Counterfactual: would –– Insufficient
• IPPD2 is a human technical
resourcescapacities to implement
management and maintain
and payroll system the thatsystem.
uses theIssues
Oracle system
ofHMRS
pacing & sequencing of availability,
application. unreliability
Inputs coveredof power
the system supply, and connectivity
specification, cost of IT between
hardware, central
the the application and
serverslicence,
outputs have been MDAs have never
customisation costsbeen satisfactorily
and training of staffresolved. Staffs in the MDAs are reported as lacking
in line ministries.
A. 7. How efficiently were • Consistency of outputs • Implementation delays and the low-level of roll out of BPEMs that has been achieved means that
these outputs gener- produced with planned the investment in FMIS systems to date has had very little impact on public finance management.
ated? Was the pacing programme (quantity and This was despite an estimated investment in BPEMS under PUFMARP of USD 19.9 million and
and sequencing of re- timing) subsequent GoG financed expenditure since 2003 that is probably in excess of USD 2.6 million66.
forms appropriate and • Extent of coordination Implementation of IPPD2 has been more successful both because it was implemented as a
cost-effective? Was the between outputs simpler and more focused reform, and because from 2005 there was strong political support for
cost per output accept- • Quality of pacing and measures to strengthen the management of the government payroll and wage bill. A number of
able? sequencing of output factors have been cited to explain the failure of the BPEMS reform:
production: –– Weak ownership of the reforms. This applied at political and senior management level and in
• internally coherent/ the primary stakeholders in the reform (CAGD and the Budget Division). It reflected
efficient? weaknesses in the design of the project, principally (i) inadequate arrangements for
• Consistent with capacity coordination with and involvement with the executive level and among the main stakeholders;
endowments? (ii) management responsibility under PUFMARP being assigned to a PIU which was distanced
• Appropriate
Judgement to degree of
criteria/ from the primary stakeholders in the project; and (iii) failure to address change management
Evaluation Question ownership/
Possible nature of
indicators issues involved in introducing an IT based system.
Findings
political & admin support –– Seeing BPEMS as primarily a technological reform rather than a PFM reform. The provision
A.1 What has been the na- for reform?
• Government funds for • Twounder
major PUFMARP in terms of both
financial management information
resourcessystems and time(FMIS)for theinitiatives
review ofwere business processes
launched in the
ture and scale of PFM Relative
• PFM cost of
reforms outputs in
committed and
late the reform
1990s: (i) the Budget and consultation
design Planning processes
and Expenditure was inadequate.
Management System contributed
This(BPEMS) which the
to was
reform inputs provided relation
and to budgeted
actually disbursedcosts.
by lack of ownership of the changes to be introduced with
funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the were BPEMS, particularly where they
by Government and Influence
• year of external
over the evaluation seen as potentially
Integrated Personnelthreatening
and Payroll entrenched
Database 2 (IPPD2) roles and responsibilities.
which replaced a system The choice
that had
of a been
Donors? support
period. to PFM reform sophisticated
introduced in thefinancial
early 1990s management software
(IPPD1). Although system designed
implemented for private
as separate projects,
sectorthe systems
• upon
Donor pacing
fundsandfor PFM organisations,
were linked in thatnecessitated
it was envisaged extensive
that thecustomisation
IPPD2 wouldwhich become maythe haveHRdistracted
module ofattention
BPEMS.
sequencing.
reforms committed and • Donor the requirements
fromsupport for both BPEMS for re-engineering
and IPPD2 hadbusiness finishedprocesses.
by 2003 and minimal donor financing was
Counterfactual:
• actually disbursed would
by year –– Insufficient
provided technical
thereafter and capacities implement and
the furthertodevelopment maintain
of BPEMS and the system.
IPPD2 wasIssues
largelyoffunded
systemfrom
pacing
over sequencing
the&evaluation of
period availability,
domestic unreliability
sources. Both reformsof power were supply,
strongly connectivity
andprofiled as key between
elements theofcentral
the PFM servers
reform and
effort
outputs have
• Nature of supportbeen MDAs
under thehave
3 Year never
Shortbeenandsatisfactorily
Medium-Term resolved.
Action Plan Staffs in the
that wasMDAspreparedare reported
by MoFEP asinlacking
January
different in
provided to absence
PFM reformof adequate IT skills and confidence operate the system
2006. A follow-on donor funded investment operation was approved in 2010 and involves effectively, reflecting both inadequate
external
efforts PFM support?
(equipment, and inappropriately
improvement and updating timedoftraining.
the BPEMS system and its transformation into the Ghana
training, TA, diagnostic –– Overoptimistic
Integrated Financial timetabling.
Management ThisInformation
remained a System throughout the period. The initial
problem(GFIMIS).
work.) timetabling envisaged that
• The reforms were centred in the Controller BPEMS wouldand be fully operational
Accountant General’s 3-4 years. This
withinDepartment reinforced
(CAGD) and to
• Focal areas for reforms by the focus
a lesser on the
extent the technological
Budget Division aspects
in MoFEP.of the FMIS
Roll outand resulted
involved in less
initially theattention being given to
central government
function (based on PFM given to the
ministries, PFM elements.
departments Subsequently
and agencies, it resulted in
and additionally the
for system
IPPD2 thebeing
sub-vented before it had
pilotedagencies.
“clusters” as in Andrews been properly tested, connectivity issues addressed and staff adequately trained. As a result
2010) BPEMS the piloting phase, instead of lasting for a few months, has been on-going in some ministries,
• Focal areas for reforms by • Thefor example
original Health, since
estimated of BPEMS
2004.was USD 11.95 million to be financed under a PUFMARP
organisational location/ –– Procurement
through management.
an IDA credit. The finalThe splitting of
expenditure procurement
spread for IT systems,
over the period 1997-2003 network
was USD systems
19.68
level of government and connectivity,
million, of which USD and IT hardware
15.28 million was between
fundeddifferent
by IDA and suppliers
USD 4.60 resulted no single
millioninfunded vendor
by GoG. This
(Ministry of Finance, being responsible and fully accountable for
represented a 50% cost overrun compared with the original estimates. the implementation of BPEMS. This contributed to
Sector ministries, Local • Theproblems
reform inputs coordination
in the covered and phasing
four main areas: of procurement with for example IT equipment
Governments, Parliament, –– Requirement in advance
arriving yearsdefinition and
of design
it being–required
technicalfor much delayed
assistance the roll out BPEMS.
for re-engineering of PFMAs result
CSOs, etc.) procurement
processes andfor BPEMS involved
procedures and theconsiderable
functional design inefficiency and excessive waste.
of the system;
The
• –– Technical
design ofinfrastructure
the new donor–funded purchase project
of hardware
that wassystems, in 2010 to support
launchedinstallation of LANsthe upgrading
in at 56 MDA of
BPEMS
sites and it’s relaunching
andlinking of 18 sitesasoverGIFMIS, has taken
a wireless loop.account of many of the lessons from failure to
implement
–– FinancialBPEMS. management Management
software arrangements for the new project
– purchase, customisation and installation
emphasiseofthe theinvolvement
FMIS
of the key stakeholders
software. The systeminchosen specialistwasteam
Oracle to manage
Financials different
with sixelements
modulesof purchased: project.
the GIFMIS(i) general
There is a greater emphasis on re-engineering key business processes
ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector of covering the review
PFM legislation
budgeting; and and(vi) accounts the introduction
legislation,receivable. Because new chart
of aOracle of accounts
Financials and budget
had been designed for the
classification,
corporate market and theand strengthening
had not beeninternal
widely usedexpenditure control practices.
in a government environment, There is also a
extensive

strong emphasis on addressing change management issues and on strengthening PFM
functions it less clear whether issues around the realistic and
87
–– Trainingin–MDAs. inputs However,
for training of staff in MoF, CGAD and pilot MDAs. Delays intimetabling
the development
appropriate
of the BPEMS sequencing
system meantof the reforms
that the have
trainingbeen inputs addressed.
fully were less than originally envisaged.
8. What have been the bind- • Degree of ownership of • The the completion
–– Atoverriding reasons of PUFMARP,
for the failureMoFEPto establish
decidedan to effective
continue FMISthe implementation of the BPEMS
related to the design and
ing external constraints on reforms at the using its own
management of resources.
the reforms. The
The annual
role ofcost
external Oracle licence
of theconstraints is less support
andclear andfor
was the application
probably not
the delivery of PFM reform: administrative and is around USD 180,000.
particularly strong. However:
problems in the coordination and phasing of procurement with for example IT equipment
arriving years in advance of it being required for much delayed the roll out BPEMS. As result
procurement for BPEMS involved considerable inefficiency and excessive waste.
• The design of the new donor funded project that was launched in 2010 to support the upgrading of
BPEMS and it’s relaunching as GIFMIS, has taken account of many of the lessons from failure to
implement BPEMS. Management arrangements for the new project emphasise the involvement
88
of the key stakeholders in specialist team to manage different elements of the GIFMIS project.
There is a greater emphasis on re-engineering key business processes covering the review of
Judgement criteria/ PFM legislation and legislation, the introduction of a new chart of accounts and budget
Evaluation Question Possible indicators classification, and the strengthening internal expenditure control practices. There is also a
Findings
A Inputs & Context: the design of PFM reform strong emphasis on addressing change management issues and on strengthening PFM
functions MDAs. However, it less clear whether issues around the realistic
Annex A: S
A.1 What has been the na- • Government funds for • Two majorinfinancial management information systems (FMIS) initiatives weretimetabling
launched inand the
ture and scale of PFM PFM reforms committed appropriate
late sequencing
1990s: (i) the Budgetof the reforms
Planning have been fully
and Expenditure Management
addressed.System (BPEMS) which was
A.8.reform inputs
What have provided
been the and actually
• Degree disbursed
of ownership ofby • funded under the
The overriding reasons
PublicforFinance Management
the failure Reform
to establish Program
an effective (PUFMARP),
FMIS related to and
the design
(ii) the and
by Government
binding and
external con- reforms
year overatthetheevaluation Integrated
management Personnel and Payroll
of the reforms. Database
The role 2 (IPPD2)
of external which replaced
constraints a system
is less clear and was
thatprobably
had beennot
Donors?
straints on the delivery period.
administrative and introduced the early
particularlyinstrong. 1990s (IPPD1). Although implemented as separate projects, the systems
However:
of PFM reform: politi- Donor funds
• political levels for
(narrow
PFM vs. were
–– Thelinked in that
absence it was envisaged
of external championing that the IPPD2
for the FMIS would become
reforms maythehave module of BPEMS.
HRcontributed to the failure
cal, financing or policy reforms committed
broad; depth of and • Donor support
to address for both BPEMS
management issuesandasIPPD2 had finished
they arose. by 2003
In the start and
up of minimal
GIFMIS donor financing
a workshop briefingwas
factors? How has this actually disbursed
commitment by year
to reform provided thereafter
was organised forand the further development
parliamentarians of BPEMS
at which MoFEP and IPPD2
officials were challenged funded
was largelyover from
the level
varied across the differ- and the evaluation
overmotivations forperiod
this domestic
of government Both reforms
sources.commitment towere strongly
addressing profiled
some of the key elements
asissues that resulted
of theinPFM
the reform effort
failure of
ent PFM reform compo- Nature of support
• commitment). under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
BPEMS.
nents? provided
• Quality ofto PFM reform
interaction 2006. A follow-on
–– Ghana’s relativelydonor funded
strong investment
economic operation
and fiscal was approved
performance 2010 and
duringinthrough theinvolves
mid 2000s may
efforts (equipment,
between administrative improvement
have affected and updating
the priorityof and
theurgency
BPEMSof system and its
measures transformation
to strengthen PFMintoandthe
introduce
Ghana an FMIS.
training,
and TA, diagnostic
political cadres. Integrated
The more Financial
challenging Management
economicInformation System (GFIMIS).
and fiscal environment that faced the NDC government that
• Extent
work.) and nature of • The reforms
came to power
wereincentred in the Controller
2009 coincided and Accountant
with a renewed emphasis General’s Department
on strengthening PFM(CAGD)
systems andinto
Focal areas
• political for reforms by
accountability a lesser extent the Budget Division in
which an effective FMIS was seen as a priority.MoFEP. Roll out involved initially the central government
(within (based
functionruling on PFM
party, vis-à- ministries,
–– Financingdepartments
for BPEMS fell agencies,
andsharply and additionally
following the completionfor IPPD2
of thethe sub-vented
PUFMARP agencies.
in 2003 and
“clusters”
vis as in Andrews
Legislature, vis-à-vis subsequent funding was probably inadequate to support the further development and roll out
2010) BPEMS
Electorate & Civil Society) of BEPEMS. However, it seems that this reflected a lack of management commitment to and
Focal
• and extent
areastofor reforms
which by
this is • The original estimated
confidence of BPEMS
in the reform ratherwasthanUSD 11.95 million
an overriding to be financed
funding constraint under
. a PUFMARP
organisational
patronage or location/ through an IDA credit. The final expenditure spread over the period 1997-2003 was USD 19.68
level of government
performance-based. million, of which USD 15.28 million was funded by IDA and USD 4.60 million funded by GoG. This
Finance,
(Ministry ofcontext
• Economic and its represented a 50% cost overrun compared with the original estimates.
Sector ministries,
influence Local
on financing of • The reform inputs covered four main areas:
Governments,
PFM reform: per Parliament,
capita –– Requirement definition and design – technical assistance for re-engineering of PFM
CSOs,
GDP etc.)
and % growth in processes and procedures and the functional design of the system;
evaluation period, –– Technical infrastructure – purchase of hardware systems, installation of LANs in at 56 MDA
significance of domestic sites and linking of 18 sites over a wireless loop.
revenue, significance of –– Financial management software – purchase, customisation and installation of the FMIS
aid, level of total and software. The system chosen was Oracle Financials with six modules purchased: (i) general
discretionary public ledger; (ii) purchase order; (iii) accounts payable; (iv) cash management; (v) public sector
spending; absence/ budgeting; and (vi) accounts receivable. Because Oracle Financials had been designed for the
presence of macro crises. corporate market and had not been widely used in a government environment, extensive
• Has timeliness of funding
been an issue? –– Training – inputs for training of staff in MoF, CGAD and pilot MDAs. Delays in the development
• Nature of “conventional of the BPEMS system meant that the training inputs were less than originally envisaged.
wisdom” on PFM reforms: –– At the completion of PUFMARP, MoFEP decided to continue the implementation of the BPEMS
does prevailing thinking using its own resources. The annual cost of the Oracle licence and support for the application
exclude certain reform is around USD 180,000.
options?
• Has policy discussion on IPPD2
PFM reform been open in • IPPD2 is a human resources management and payroll system that uses the Oracle HMRS
terms of range of application. Inputs covered the system specification, cost of IT hardware, the application licence,
participants and range of customisation costs and training of staff in line ministries.
Electorate & Civil Society) of BEPEMS. However, it seems that this reflected a lack of management commitment to and
and extent to which this is confidence in the reform rather than an overriding funding constraint .
patronage or
performance-based.
• Economic context and its
influence on financing of
PFM reform: per capita
GDP and % growth in
evaluation period,
significance of domestic
revenue, significance of
aid, level of total and
discretionary public
Judgement
spending;criteria/
absence/
Evaluation Question Possible
presenceindicators
of macro crises. Findings
A Inputs & Context: the design of• PFM
Hasreform
timeliness of funding
A.1 What has been the na- been an issue?
•
Government funds for • Two major financial management information systems (FMIS) initiatives were launched in the
ture and scale of PFM •
Nature
PFM of “conventional
reforms committed late 1990s: (i) the Budget Planning and Expenditure Management System (BPEMS) which was
reform inputs provided wisdom” on PFM reforms:
and actually disbursed by funded under the Public Finance Management Reform Program (PUFMARP), and (ii) the
by Government and year prevailing
doesover thinking
the evaluation Integrated Personnel and Payroll Database 2 (IPPD2) which replaced a system that had been
Donors? exclude certain reform
• options?
Donor funds for PFM were linked in that it was envisaged that the IPPD2 would become the HR module of BPEMS.
Has policy
• reforms discussion
committed on
and • Donor support for both BPEMS and IPPD2 had finished by 2003 and minimal donor financing was
PFM reform
actually been open
disbursed in
terms
over the
ofevaluation
range of period domestic sources. Both reforms were strongly profiled as key elements of the PFM reform effort
participants and
• Nature of support range of under the 3 Year Short and Medium-Term Action Plan that was prepared by MoFEP in January
ideas?
provided to PFM reform 2006. A follow-on donor funded investment operation was approved in 2010 and involves
• efforts what have been
Overall,(equipment, improvement and updating of the BPEMS system and its transformation into the Ghana
the binding
training, TA,constraints
diagnostic on Integrated Financial Management Information System (GFIMIS).
the PFM production
• possibility
Focal areas frontier?
for reforms by a lesser extent the Budget Division in MoFEP. Roll out involved initially the central government
• function this varied
How has (based on PFM ministries, departments and agencies, and additionally for IPPD2 the sub-vented agencies.
between different
“clusters” reform
as in Andrews
components?
2010) BPEMS
• Focal
C. Outcomes & overall assessment of PFMareas for reforms
reform by •
and of donor The original
support to PFMestimated
reform of BPEMS was USD 11.95 million to be financed under a PUFMARP
C.1 – C.4 level of government (Addressed which
million, ofas partUSD
of the15.28 million
overall PFMwas funded by IDA and USD 4.60 million funded by GoG. This
review)
89
90
PFM Reform Component/Initiative: Medium-Term Expenditure Framework
Judgement criteria/
Annex A: S

A.1. What has been the na- • Government funds for • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
ture and scale of PFM PFM reforms committed Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
reform inputs provided and actually disbursed by strategic budgeting and budget preparation processes. The objective in introducing the MTEF
by Government and Do- year over the evaluation was “to improve the planning and budgeting of public expenditures and thus contribute to
nors? period. strengthened fiscal policy formulation and implementation.”67.
• Donor funds for PFM • The funding requirement estimated at PUFMARP appraisal was USD 4.6 million which was
reforms committed and provided as project co-financing by DFID. The actual financing provided by the end of PUFMARP
actually disbursed by year was estimated at USD 4.58 million of donor financing and USD 0.18 million of GoG financing.
over the evaluation period • The reform inputs, which were focused primarily on MoFEP and MDAs, were provided mainly as
• Nature of support technical assistance. They involved two main areas of support:
provided to PFM reform –– The development and specification of the MTEF reform covering: (i) formulation of the
efforts (equipment, program categories for planning, budgeting and accounting; (ii) preparing the expenditure
training, TA, diagnostic profile for each MDA in line with existing policies; (iii) specifying the price basis for forecasts;
work.) (iv) integrating aid financed projects and programs and preparing computer software for this
• Focal areas for reforms by purpose.
function (based on PFM –– Improvements to the formulation of the annual budget covering: (i) the preparation of a model
“clusters” as in Andrews budget circular that included budget ceilings; (ii) the installation of budget software in the
2010) MDAs and (iii) the training of budget and finance staff in the preparation of the MTEF and the
• Focal areas for reforms by information system in its preparation.
organisational location/ • At the completion of the PUFMARP, MoFEP continued the implementation and further
level of government development of the MTEF reforms. A number of specific improvements were introduced aimed
(Ministry of Finance, at improving the policy focus and transparency of the budget process, while further r
Sector ministries, Local development of the ACTIVATE software application took place. However, the main elements of
Governments, Parliament, the MTEF reform and the procedures introduced under PUFMARP remained largely unchanged.
CSOs, etc.) • Very limited short-term assistance was provided by donors after 2003. This included BMZ and
UNICEF, to support the further development of the MTEF reform and related training activities.
There is no data on actual budgetary spending on the MTEF following the completion of
PUFMARP.
67 World Bank (October 1996), Republic of Ghana Public Financial However,
Management in the 2007
Technical Assistance the spending
BudgetReport: allocation
Technical Annex,for the Budget Division relating
World Bank Report No T-6977-GH. to the ‘ improved public expenditure management’ area and ‘human resources development’
policy areas was close to US$ 1.5 million. This figure related to operating expenses and capital
expenditure only and did not include personnel expenses and allowances which are not broken
down by policy area.
A. 2. What types of struc- • Structure of design team • The PUFMARP appraisal document provided only a very general specification of the MTEF
tures have been used and related consultation reform that emphasised the more technical aspects of the reform (formulating program
for the design and man- process: Balance of inputs categories, expenditure profiling, and price basis of forecasts, model budget circular, and budget
agement of these re- by Donors/ Govt/ software). There was little mention of the more strategic elements of an MTEF reform covering
form inputs? Have Consultants; Extent of the development of the medium-term macro-fiscal strategy and framework, and the review of
these structures input/ consultation with sector programs and priorities and their implications for the expenditure prioritisation and
served to provide a co- end users of PFM system budget planning. In practice, the detailed design of the reform was undertaken following project
ordinated and harmo- (Sector ministries, LGs start-up with the arrival of the DFID funded consultants in September 1997. However, its
CSOs, etc.)
Judgement criteria/ • Very limited short-term assistance was provided by donors after 2003. This included BMZ and
Evaluation Question Possible indicators UNICEF, to support the further development of the MTEF reform and related training activities.
Findings
A Inputs & Context: the design of PFM reform There is no data on actual budgetary spending on the MTEF following the completion of
A.1. What has been the na- • Government funds for PUFMARP.
• Ghana’s medium-term the 2007 Budget
However, inexpenditure the spending
framework (MTEF) allocation
initiative for wasthe initiated
BudgetinDivision
1997 underrelating
the
ture and scale of PFM PFM reforms committed Public improved
to the ‘ Finance public expenditure
Management Reformmanagement’
Program (PUFMARP). area and The ‘human MTEF resources
involved development’
reforms to
reform inputs provided and actually disbursed by policy areas was close to US$ 1.5 million. This figure related
strategic budgeting and budget preparation processes. The objective in introducing the MTEF to operating expenses and capital
by Government and Do- year over the evaluation expenditure
was “to improve onlythe did not include
andplanning personnel
and budgeting expenses
of public and allowances
expenditures and thus which
contribute
are notto broken
nors? period. strengthened
down by policyfiscal area.policy formulation and implementation.”67.
A. 2. What types of struc- • Donor funds
• Structure for PFM
of design team •
• The
The funding
PUFMARP requirement
appraisal document at PUFMARP
estimated provided only appraisal
a very general was USD 4.6 million
specification of which
the MTEF was
tures have been used reforms committed
and related and
consultation provided
reform that project co-financing
as emphasised the more DFID. The
bytechnical aspects
actual of financing
the reform provided by the end
(formulating of PUFMARP
program
for the design and man- actually
process:disbursed year
Balance ofbyinputs was estimated
categories, at USD 4.58
expenditure profiling,
millionandof donor
pricefinancing and USD 0.18
basis of forecasts, model million
budget of GoG financing.
circular, and budget
agement of these re- over the evaluation
by Donors/ Govt/ period • The
software).
reformThere inputs, waswhich
littlewere focused
mention of theprimarily on MoFEP
more strategic and MDAs,
elements of anwere
MTEF provided
reform mainly
covering as
form inputs? Have • Nature of support
Consultants; Extent of technical assistance.
the development of the They involved two
medium-term main areas of
macro-fiscal support:
strategy and framework, and the review of
these structures provided to PFM reform
input/ consultation with –– The development
sector programs andand specification
priorities of the
and their MTEF reform
implications for the covering:
expenditure(i) formulation
prioritisationof theand
served to provide a co- efforts (equipment,
end users of PFM system program
budget categories
planning. for planning,
In practice, budgeting
the detailed design and accounting;
of the reform was (ii) preparing
undertaken expenditure
thefollowing project
ordinated and harmo- training, TA, diagnostic
(Sector ministries, LGs start-up
profilewithfor each
the arrival
MDA inofline thewith
DFIDexisting
fundedpolicies;
consultants (iii) specifying
in September the price
1997. basis
However, for forecasts;
its
nised delivery framework.)
and service institutions). (iv) integrating aid financed projects and
emphasis continued to reflect that of the appraisal document. programs and preparing computer software for this
work? • Focal areas for
• Management reforms by
& co- • Thepurpose.
support for the introduction of the MTEF effectively operated as a separate sub-project
function
ordination(based on PFM
structure for –– Improvements
within PUFMARP to the formulation
under an MTEF Project annual
of theUnit. Because
budgetfunding covering: was(i) the preparation
provided directlyof model
byaDFID,
“clusters”
PFM reforms as in Andrews
(Ad hoc thebudget
MTEF circular
component thatoperated budget ceilings;
includedrelatively (ii) the installation
independently of the components of budgetmanaged
softwareby the
inthe
2010)
Project Units vs. Normal MDAs and
PUFMARP project training of budget
(iii) theimplementation and
unit. Thefinance
MTEFstaff Projectin theUnit preparation
subsequently of thebecame
MTEFthe the
andBudget
• Focal areas for
management reforms by
structures; Development
informationUnit systemthatin has preparation.
itscontinued to be responsible for overseeing the preparation of the
organisational
Govt-controlledlocation/
vs. Shared • At the completion
MTEF/budget andof the PUFMARP,
further development MoFEP continued
of the reform. the implementation and further
level of government
Donor-Govt management; While the management
• development of the MTEF reforms. A number
arrangements for the of
MTEFspecific improvements
facilitated were introduced
strong ownership aimed
of the reforms
(Ministry of Finance,
Use of consultants for at improving
within the Budgetthe policy
Division focustheyand transparency
may have undermined of the budget
coordinationprocess, andwhile
harmonisation
further r between
Sector ministries,
managerial or purelyLocal development
the MTEF andof the ACTIVATE
other components software application
of PUFMARP. took place.
For example However,
although the main
BPEMS waselements
specified to of
Governments,
advisory roles)Parliament, the MTEF
include a budget and the procedures
reformpreparation module,introduced
this was never under usedPUFMARP
and instead remained
the Budgetlargely unchanged.
Division
etc.)
Arrangements
• CSOs, for • Very limited
developed itsshort-term
own ACTIVATE assistance
softwarewas provided by
application fordonors
budgetafter 2003. This
preparation andincluded BMZ and
subsequently for
monitoring & evaluation. managing
UNICEF, tobudget support the further
releases. Thedevelopment of the MTEF reform
delays in implementation and roll-outand related
of BPEMS training
meant activities.
that the
• Level of harmonisation There is no data
performance on actual
segment budgetary
of the Chart ofspending
Accountson that
thewasMTEF following
to support thethe completion
MTEF budgeting of reforms
and alignment of different PUFMARP.
was not implemented.
However, inAs thea 2007
resultBudget
although spending allocation
theministries have beenfor the Budget
preparing theirDivision
budgetsrelating
using
donor contributions. to the
an ‘ improved
objective, output public
andexpenditure management’
activity classification sincearea 1999and it has‘human
remained resources
impossibledevelopment’
to monitor
policy areas was close to US$ 1.5 million.
and account for expenditure against this classification. This figure related to operating expenses and capital
• Monitoring of the implementation of the MTEF reforms was initially undertaken within the
A. 2. What types of struc- • Structure of design team • framework
The PUFMARP for monitoring
appraisal document and supervision
provided the wider
of only a veryPUFMARP
general specification
project. Theofexperience
the MTEF from
tures have been used and related consultation the latest
reform MTEF/Budget
that emphasisedcycle the morewas technical to feed into
supposedaspects of the preparation
thereform of the following
(formulating programcycle.
91
for the design and man- process: Balance of inputs The 2009 External
categories, expenditure Review of Public
profiling, Financial
and Management
price basis of forecasts, (ERPFM)
modelcontained an assessment
budget circular, and budget of
68
agement of these re- by Donors/ Govt/ the role MTEF
software). There reform in promoting
was little mention greater
of the moreeffectiveness and efficiency
strategic elements of anin public
MTEF spending
reform covering.
form inputs? Have Consultants; Extent of Ghana was also case
the development of the study
medium-term assessment undertaken
in the 2003macro-fiscal strategy andby the Overseas
framework, and Development
the review of
69
these structures input/ consultation with Institute of the design
sector programs and application
and priorities of the
and their MTEF as tool
implications for thefor poverty
expenditure reduction .
prioritisation and
Donor-Govt management; • While the management arrangements for the MTEF facilitated strong ownership of the reforms
Use of consultants for within the Budget Division they may have undermined coordination and harmonisation between
managerial or purely the MTEF and other components of PUFMARP. For example although BPEMS was specified to
advisory roles) include a budget preparation module, this was never used and instead the Budget Division
• Arrangements for developed its own ACTIVATE software application for budget preparation and subsequently for
monitoring & evaluation. managing budget releases. The delays in implementation and roll-out of BPEMS meant that the
92
• Level of harmonisation performance segment of the Chart of Accounts that was to support the MTEF budgeting reforms
and alignment of different was not implemented. As a result although ministries have been preparing their budgets using
Judgement criteria/ an objective, output and activity classification since 1999 it has remained impossible to monitor
Evaluation Question Possible indicators and account for expenditure against this classification.
Findings
A Inputs & Context: the design of PFM reform • Monitoring of the implementation of the MTEF reforms was initially undertaken within the
framework for monitoring and supervision wider PUFMARP project. The
Annex A: S
A.1. What has been the na- • Government funds for • Ghana’s medium-term expenditure frameworkof the(MTEF) initiative was initiated inexperience
1997 underfromthe
ture and scale of PFM PFM reforms committed the latest
Public MTEF/Budget
Finance Management was supposed
cycleReform Program feed into the preparation
to(PUFMARP). of the following
The MTEF involved reforms tocycle.
reform inputs provided and actually disbursed by The 2009 External Review of Public Financial Management (ERPFM) contained
strategic budgeting and budget preparation processes. The objective in introducing the MTEF an assessment of
68
by Government and Do- year over the evaluation the role
was MTEF reform
“to improve in promoting
the planning greater effectiveness
and budgeting and efficiency
of public expenditures in public
and thus spending
contribute to .
nors? period. Ghana was also
strengthened fiscal
casepolicy in the 2003 assessment
studyformulation undertaken
and implementation.” 67 by the Overseas Development
. 69
• Donor funds for PFM Institute
• The of the
funding requirement application
design andestimated atof
PUFMARP
the MTEFappraisal
as tool forwaspoverty
USDreduction
4.6 million.which was
A.3. What types of comple- • reforms committed
Use of country and
systems: • provided
The externalas project co-financing
aid provided by DFIDbyandDFID.
BMZ The
wasactual financing
provided provided
as direct by the
technical end of PUFMARP
assistance and the
mentary actions have actually
extent todisbursed by year
which external was estimated
expenditure was USD
atnot 4.58 million
recorded in the donor financing
ofgovernment and USD
budget. During 0.18 million
the GoG financing.
periodof2006-09, there were
Donors taken to support over
aid isthe
‘onevaluation period
plan’, ‘on budget’• The reform
no MDBS triggers which were
inputs,relating to thefocused
MTEF reforms. on MoFEP
primarilyThe extent to and MDAs,
which thewere
MDBS provided mainly as
policy dialogue
PFM reforms and what • Nature
and ‘on of support
treasury’? technical
influencedassistance. They involved
the later development oftwo main areas
the MTEF of support:
reforms is no clear.
has been their signifi- • provided
Ranking of PFM reform
todonor efforts to–– The development and specification of the MTEF reform covering: (i) formulation of the
cance? Have they had efforts
support(equipment,
national systems program categories for planning, budgeting and accounting; (ii) preparing the expenditure
any influence on the ex- training, TA, diagnostic
as expressed in Paris profile for each MDA in line with existing policies; (iii) specifying the price basis for forecasts;
ternal constraints to re- work.)
Declaration monitoring (iv) integrating aid financed projects and programs and preparing computer software for this
form? Focal areas
• reports for reforms by
and PEFA purpose.
function
indicators (based
D2 and PFM
onD3. –– Improvements to the formulation of the annual budget covering: (i) the preparation of a model
• “clusters” as in Andrews
Scale and evolution over budget circular that included budget ceilings; (ii) the installation of budget software in the
the evaluation period of aid

• Focal
flows provided
areas foras reforms
GBS, by information system in its preparation.
organisational
SBS or debt relief location/
and • At the completion of the PUFMARP, MoFEP continued the implementation and further
level of government
relative contribution to development of the MTEF reforms. A number of specific improvements were introduced aimed
reduction of treasury at improving the policy focus and transparency of the budget process, while further r
Sector ministries,
management costsLocal
and to development of the ACTIVATE software application took place. However, the main elements of
Governments, Parliament,
discretionary resources the MTEF reform and the procedures introduced under PUFMARP remained largely unchanged.
CSOs, etc.)
available to Government, • Very limited short-term assistance was provided by donors after 2003. This included BMZ and
(including effect on UNICEF, to support the further development of the MTEF reform and related training activities.
financing constraints for There is no data on actual budgetary spending on the MTEF following the completion of
PUFMARP. However, in the 2007 Budget the spending allocation for the Budget Division relating
PFM reform outputs). to the ‘ improved public expenditure management’ area and ‘human resources development’
68 World Bank, Danida, DFID,• KFW Nature(May
and2009), Ghana,
evolution External
over 2009policy areas was close
Review to US$ 1.5
of Public million.
Financial Management
This figure –related
Volume to operating expenses and capital
II, The Medium-Term
Expenditure Framework, World time

Bankof dialogue
Report No.on PFM
47639‑GH.expenditure only and did not include personnel expenses and allowances which are not broken
GBS/PRSC, SBS down by policy area.
69 Short, J. (May 2003), Country within
Case Study 4: Assessment of the MTEF in Ghana, Overseas Development Institute, London.
A. 2. What types of struc- • structures similar
Structure ofordesign team • The PUFMARP appraisal document provided only a very general specification of the MTEF
tures have been used donor-govt
and related fora, including
consultation reform that emphasised the more technical aspects of the reform (formulating program
for the design and man- use of PFM
process: Balance
reformof inputs categories, expenditure profiling, and price basis of forecasts, model budget circular, and budget
agement of these re- conditions
by Donors/in GBS/ SBS
Govt/ software). There was little mention of the more strategic elements of an MTEF reform covering
form inputs? Have disbursement conditions.
Consultants; Extent of the development of the medium-term macro-fiscal strategy and framework, and the review of
these structures • Influence of dialogue
input/ consultation withon sector programs and priorities and their implications for the expenditure prioritisation and
served to provide a co- the “political” and “policy
end users of PFM system budget planning. In practice, the detailed design of the reform was undertaken following project
ordinated and harmo- space” constraints
(Sector ministries, LGs start-up with the arrival of the DFID funded consultants in September 1997. However, its
nised delivery frame- restricting choice of PFM
and service institutions). emphasis continued to reflect that of the appraisal document.
work? reform outputs.
• Management & co- • The support for the introduction of the MTEF effectively operated as a separate sub-project
• (Consistency of actual
ordination structure for within PUFMARP under an MTEF Project Unit. Because funding was provided directly by DFID,
changes with PFM reform
any influence on the ex- as expressed in Paris
ternal constraints to re- Declaration monitoring
form? reports and PEFA
indicators D2 and D3.
• Scale and evolution over
the evaluation period of aid
SBS or debt relief and
relative contribution to
reduction of treasury
management costs and to
discretionary resources
available to Government,
Judgement effect on
(includingcriteria/
Evaluation Question financing
Possible constraints for
indicators Findings
PFMreform
reform outputs).
A.1. What has been the na- • Nature and evolution
• Government funds forover • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
ture and scale of PFM time of
PFM dialogue
reforms on PFM
committed Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
reform inputs provided within
and GBS/PRSC,
actually disbursed
SBSby strategic budgeting and budget preparation processes. The objective in introducing the MTEF
by Government and Do- structures
year over the similar
orevaluation was “to improve the planning and budgeting of public expenditures and thus contribute to
nors? donor-govt fora, including
period. strengthened fiscal policy formulation and implementation.”67.
• use of PFM
Donor funds reform
for PFM • The funding requirement estimated at PUFMARP appraisal was USD 4.6 million which was
conditions
reforms in GBS/ SBS
committed and provided as project co-financing by DFID. The actual financing provided by the end of PUFMARP
disbursement
actually disbursedconditions.
by year was estimated at USD 4.58 million of donor financing and USD 0.18 million of GoG financing.
Influence
• over of dialogue
the evaluation on
period • The reform inputs, which were focused primarily on MoFEP and MDAs, were provided mainly as
the “political”
• Nature and “policy
of support technical assistance. They involved two main areas of support:
space” constraints
restricting
efforts choice of PFM
(equipment, program categories for planning, budgeting and accounting; (ii) preparing the expenditure
reform outputs.
(Consistency of actual
• work.)
(iv) integrating aid financed projects and programs and preparing computer software for this
• changes
Focal areas
withfor PFM reform
reforms by purpose.
triggers and/or points
function (based on PFM of
–– Improvements to the formulation of the annual budget covering: (i) the preparation of a model
emphasis in
“clusters” asGBS/ PRSC
in Andrews budget circular that included budget ceilings; (ii) the installation of budget software in the
dialogue)
• Consideration
• Focal counter-
areas forofreforms by information system in its preparation.
factual:
Outputs:
• level would
of government PFM
development of the MTEF reforms. A number of specific improvements were introduced aimed
reforms have
(Ministry evolved
of Finance, at improving the policy focus and transparency of the budget process, while further r
differently in absence
Sector ministries, of
Local development of the ACTIVATE software application took place. However, the main elements of
dialogue
CSOs, structures?
etc.) • Very limited short-term assistance was provided by donors after 2003. This included BMZ and
• Outcomes: Would
intermediate outcomes
have been different if use
of country systems had
to the ‘ improved public expenditure management’ area and ‘human resources development’
been lower?
A.4. To what extent has • Nature of engagement expenditure
• The only and
MTEF reform hasdid
notnot include
involved personnel
specific expenses
measures and allowances
to involve which
civil society, academia broken
are notand the
there been domestic with PFM reform issues down by
media inpolicy area.
the MTEF and budget process. MoFEP organises consultations with CSOs in October
pressure or re- • each

The PUFMARP to the presentation
year prior appraisal the budget
documentofprovided onlyinaParliament.
very generalHowever, this takes
specification of theplace
MTEFtoo late
A. 2. public
What types of struc- • within
Structure
civilofsociety,
design team
gional institutional academia and the media. to influence
reform budget allocations.
that emphasised the more technical aspects of the reform (formulating program
tures have been used and related consultation
93
pressure in support of • Extent of participation of • The MTEF reform
categories, expenditure
has notprofiling,
resultedand significant
in aprice basis ofincrease in engagement
forecasts, model budget with Parliament
circular, in the
and budget
for the design and man- process: Balance of inputs
PFM reform and what CSOs in policy dialogue on budget
software).process.
ThereUnlike South
was little mention
Africaofand
theUganda, the MTEF
more strategic elements
has notofinvolved
an MTEF preparation
thereform pre-
covering
agement of these re- by Donors/ Govt/
has been the influence PFM budget report that is presented to Parliament setting out the framework, policies
the development of the medium-term macro-fiscal strategy and framework, and the review of and priorities
form inputs? Have Consultants;
reform. Extent of
on external con- • Presence/ of within
sectorwhich the forthcoming
programs and priorities budget
and their
is toimplications
be prepared.for Similarly there is no
the expenditure mid-year budget
prioritisation and
these
the structures input/ consultation
absencewith
straints to reform? specific research implementation
budget planning.review
In practice, presented
that isthe detailed to Parliament.
design of the reform was undertaken following project
served to provide a co- end users of PFM and
system
• Outputs: would PFM
reforms have evolved
differently in absence of
94
• Outcomes: Would
have been different if use
Judgement
of countrycriteria/
systems had
been lower? Findings
A Inputs
A.4. & Context:
To what extent the
hasdesign of• PFM reform
Nature of engagement • The MTEF reform has not involved specific measures to involve civil society, academia and the
there been domestic with PFM reform issues media in the MTEF and budget process. MoFEP organises consultations with CSOs in October
Annex A: S
A.1. W hat has been the • Government funds for • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
public pressure orna-
re- within civil society, each year prior to the presentation of the budget in Parliament. However, this takes place too late
ture and scale of PFM PFM reforms Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
gional institutional academia andcommitted
the media. to influence budget allocations.
reform inputs provided actually by strategic budgeting and budget preparation processes. The objective in introducing the MTEF
pressure in support of • and
Extent of participation
disbursedof • The MTEF reform has not resulted in a significant increase in engagement with Parliament in the
PFM reform and what CSOs in policy dialogue on budget process. Unlike South Africa and Uganda, the MTEF has not involved the preparation pre-
nors?
has been the influence period.
PFM reform.
strengthened fiscal policy formulation and implementation.”67.
budget report that is presented to Parliament setting out the framework, policies and priorities
on the external con- • Donor funds
• Presence/ for PFM
absence of • The funding
within whichrequirement
the forthcoming estimated
budgetatisPUFMARP appraisal
to be prepared. was USD
Similarly there4.6 million
is no mid-year was
whichbudget
straints to reform? reforms committed
specific research and
and provided as project
implementation co-financing
review that is presented
by DFID.to The actual financing provided by the end of PUFMARP
Parliament.
actually disbursed
advocacy by CSOs on PFM by year • was
There estimated at USD
are relatively few4.58 million
CSOs undertaking financing
of donor budget and USD
analysis and0.18
advocacy.
millionThere
of GoGisfinancing.
minimal
over
reform evaluation period
theissues. • The reform
analysis inputs,
of fiscal andwhich were focused
budgetary issues undertaken
primarily onby MoFEP and MDAs,
the academic were provided
community. mainly as
Non-availability
•
• Nature
Relevance of support
of PFM issues technical assistance. They involved two main areas of support:
of budget execution data is seen as a major constraint to independent budget analysis. The
provided
to political PFM reform
tooutcomes: –– The development
Integrated and specification
Social Development the MTEF
Centreof(ISODEC) hasreform
been covering:
responsible (i) formulation
for preparing of the
the Ghana
efforts (equipment,
• Discussion of PFM issues program
report that iscategories
part of thefor planning,
biennial international
budgetingOpenand accounting;
Budget Survey(ii) preparing the expenditure
that is prepared by the
training, TA, diagnostic
within election campaigns Washington
profile forbasedeach MDA in line with
International existing
Budget policies; (iii) specifying the price basis for forecasts;
Partnership.
• work.)
Discussion of service (iv) integrating
• There is evidenceaid thatfinanced
regionalprojects
PFM fora andareprograms and preparing
now influencing the PFM computer software
reform agenda. for this
A meeting
Focal areas
• delivery for
issues related
reformstoby purpose.
of the Collaborative Africa Budget Reform Initiative (CABRI) in the second quarter of 2010 was
function (based on
PFM in election campaigns PFM –– Improvements
influential to the formulation
in convincing officials in the the annual
of Budget budget
Division covering:
that (i) the preparation
activity based of a model
budgeting needed to be
• “clusters”
Voter concerns Andrews
as in during replaced
budgetby circular
a morethat included
strategic program ceilings;
budgetbased (ii) the installation
approach, and that Ghanaof budget
shouldsoftware in the
access relevant
elections (from Afro experience with such reforms in South Africa and Mauritius.
• Focal
Barometer
areasandfor reforms
other by information system in its preparation.
organisational location/
relevant publications) • At the completion of the PUFMARP, MoFEP continued the implementation and further
of government
Existence
• level of regional or development of the MTEF reforms. A number of specific improvements were introduced aimed
international bodies (e.g. at improving the policy focus and transparency of the budget process, while further r
Sector ministries,
WAEMU, EITI) promoting Local development of the ACTIVATE software application took place. However, the main elements of
Governments,
specific norms on PFMParliament, the MTEF reform and the procedures introduced under PUFMARP remained largely unchanged.
CSOs,
issues,etc.)
and their relative • Very limited short-term assistance was provided by donors after 2003. This included BMZ and
influence on domestic UNICEF, to support the further development of the MTEF reform and related training activities.
political discourse. There is no data on actual budgetary spending on the MTEF following the completion of
• Evolution in the quality of PUFMARP. However, in the 2007 Budget the spending allocation for the Budget Division relating
public/ CSO engagement to the ‘ improved public expenditure management’ area and ‘human resources development’
with PFM issues over time policy areas was close to US$ 1.5 million. This figure related to operating expenses and capital
and its influence on PFM expenditure only and did not include personnel expenses and allowances which are not broken
reform outputs. down by policy area.
tures have been used • Consideration of counter-
and related consultation reform that emphasised the more technical aspects of the reform (formulating program
for the design and man- factual:
process:would
Balance PFM ofreform
inputs categories, expenditure profiling, and price basis of forecasts, model budget circular, and budget
agement of these re- outputs
by Donors/ have evolved
Govt/ software). There was little mention of the more strategic elements of an MTEF reform covering
form inputs? Have differently
Consultants; in absence
Extent ofof the development of the medium-term macro-fiscal strategy and framework, and the review of
these structures domestic public pressure
input/ consultation with sector programs and priorities and their implications for the expenditure prioritisation and
served to provide a co- or
endpressure
users offromPFM regional/
system budget planning. In practice, the detailed design of the reform was undertaken following project
ordinated and harmo- international
(Sector ministries,institutions?
LGs start-up with the arrival of the DFID funded consultants in September 1997. However, its
nised delivery frame- and service institutions). emphasis continued to reflect that of the appraisal document.
A.5. How relevant was the • Scale and focus of support • Initially, there was strong political level support for the more strategic objective-led approach to
work? • Management & co- • The support for the introduction of the MTEF effectively operated as a separate sub-project
PFM reform pro- in relation to identified budgeting that was to be introduced through the MTEF, with the Minister and Deputy Minister for
ordination structure for within PUFMARP under an MTEF Project Unit. Because funding was provided directly by DFID,
gramme to the needs PFM weaknesses at start Finance involved in opening workshops organised to inform MDAs about the reforms and the
Barometer and other
relevant publications)
• Existence of regional or
international bodies (e.g.
WAEMU, EITI) promoting
specific norms on PFM
influence on domestic
political discourse.
• Evolution in the quality of
public/ CSO engagement
with PFM issues over time
and its influence
Judgement on PFM
criteria/
Evaluation Question Possible outputs.
reformindicators Findings
Consideration
reform of counter-
factual: would PFM reform
A.1. What has been the na- • Government
outputs havefunds for
evolved • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
ture and scale of PFM PFM reforms
differently committed
in absence of Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
reform inputs provided and actually
domestic disbursed
public pressureby strategic budgeting and budget preparation processes. The objective in introducing the MTEF
by Government and Do- year over the evaluation
or pressure from regional/ was “to improve the planning and budgeting of public expenditures and thus contribute to
nors? period.
international institutions? strengthened fiscal policy formulation and implementation.”67.
A.5. H ow relevant was the reforms
• Scale andcommitted and
focus of support• provided as project
Initially, there co-financing
was strong DFID.
politicalbylevel The actual
support for thefinancing
more strategic
providedobjective-led PUFMARP
by the end ofapproach to
PFM reform pro- actually disbursed
in relation by year
to identified was estimated
budgeting at USD
that was 4.58
to be introduced donor financing
million ofthrough the MTEF, and USD
with the0.18 million
Minister of GoG
and Deputyfinancing.
Minister for
gramme to the needs over
PFM the
weaknesses
evaluationatperiod • The
start reform
Finance inputs,
involved in which
opening were focused primarily
workshops organisedon toMoFEP and MDAs,
inform MDAs aboutwerethe reforms
providedand mainly
the as
and the institutional • Nature of support
and during technical
changes to assistance.
the budgetThey involved
process. Thetwo
Minister
mainwas areas of support:
also actively involved in chairing meetings on
context? Was donor provided
implementation
to PFM of reform –– The
the MTEFdevelopment
reforms within and specification
MoFEP. In recentof theyears
MTEFthe reform
focuscovering:
has shifted (i) formulation
away from the of the
MTEF
support consistent with efforts
reforms(equipment,
(including budgeting
programreforms categories for planning,
towards improving budgeting and accounting;
the presentation of the government’s
(ii) preparingfiscalthe expenditure
and budget
national priorities? To training,
weaknessesTA, diagnostic
in HR policies
profileand forstrategies
each MDA in in the with existing
lineBudget policies; (iii) specifying the price basis for forecasts;
Statement.
what extent were adap- work.)
endowments, quality of • The(iv) integrating
front-loadingaid financed
of the donorprojects
assistanceandfacilitated
programsaand verypreparing
rapid roll computer
out of the MTEFsoftware for this
reforms
tations made in re- • institutions
Focal areas&for reforms by
rules, purpose.
that was initially seen as having very impressive results. The first review of the MTEF held in
sponse to the context function
quality of(based
systems PFM
on & –– Improvements
March 1999 notedto that formulation
the“so far what has of the annual
been budget
achieved hascovering: (i) the preparation
been extraordinary....the first model
of ayear
and the changing na- “clusters” as in Andrews
business processes, and budget
budget has circular
produced thataincluded
change, which
budgethas ceilings;
not been (ii) the
seen installation
in any other budget software
ofcountry, in such ain the
short
2010) MDAs and70 training of budget and finance the preparation of the MTEF
tional priorities? quality of organisations). period” . However,
(iii) theat conclusion of PUFMARP, thestaff
MTEF in reform component was ratedand the
• Focal areas for
Consistency reforms by
of donor- information
‘moderately system in its preparation.
unsatisfactory’ and the Implementation Completion Report noting that “the attempt
organisational
funded supportlocation/
with • to
At put completion
the all elementsofofthe an PUFMARP,
MTEF in place MoFEP continued
in what effectively implementation
the became a single and
cyclefurther
resulted in
level of government
Government PFM reform development of
superficiality in the MTEF reforms.
a number A number
of key respects” 71 of specific improvements were introduced aimed
. It might have been more appropriate for a more
efforts, with ongoing at improving
measured the policy
approach to focus and transparency
have been of the budget
taken to the introduction ofprocess,
the MTEF, while further
and for donorr funding to
Sector ministries, Local
public administration development
have been extended of the ACTIVATE
over a longersoftware
period. application took place. However, the main elements of
Governments,
reforms and overallParliament,
Govt• the MTEF
Within thereform
contextand the procedures
PUFMARP there was introduced
also a lack under PUFMARP remained
of complementarities in thelargely
donorunchanged.
support
CSOs, etc.)
policies. • Very limited
that was short-term
provided. assistance
Thus while was provided
the World Bank wasbyfundingdonorsthe after
BPEMS This included
2003.which includedBMZ and
a budget
• Extent to which scope and UNICEF, to support
preparation module,the further
DFID was development
separately fundingof thetheMTEF ACTIVATE and related
reform budget preparation activities.
trainingapplication
focus of support were through
There is its data on actual
no support budgetary
to the MTEF spending
component on the MTEF following the completion of
of PUFMARP.
adapted to the context, to the ‘ improved public expenditure management’ area and ‘human resources development’
70 Short, J. (May 2003) p17. especially to the level of policy areas was close to US$ 1.5 million. This figure related to operating expenses and capital
ownership and
71 World Bank (May 2004), Implementation the
Completion Report expenditure
on a Credit to onlytheand did not include
Republic of Ghana personnel
for a Publicexpenses
Finance allowances which
andManagement are not
Technical broken
Assistance
capacity for reform down by policy area.
Project, World Bank Report No. 28089‑GH, p8.

implementation.
A. 2. What types of struc- Structure of design team • The PUFMARP appraisal document provided only a very general specification of the MTEF
•
• Consistency & coherence
95
with wider Donor policies
for the design and man- process: categories, expenditure profiling, and price basis of forecasts, model budget circular, and budget
in countryBalance of inputs
• Consistency with the Paris
Declaration objectives as
these structures input/ consultation sector programs and priorities and their implications for the expenditure prioritisation and
regards ownership,with
• Consistency of donor- ‘moderately unsatisfactory’ and the Implementation Completion Report noting that “the attempt
funded support with to put all elements of an MTEF in place in what effectively became a single cycle resulted in
Government PFM reform superficiality in a number of key respects”71. It might have been more appropriate for a more
efforts, with ongoing measured approach to have been taken to the introduction of the MTEF, and for donor funding to
public administration have been extended over a longer period.
96
reforms and overall Govt • Within the context PUFMARP there was also a lack of complementarities in the donor support
policies. that was provided. Thus while the World Bank was funding the BPEMS which included a budget
• Extent to which
Judgement scope and
criteria/ preparation module, DFID was separately funding the ACTIVATE budget preparation application
Evaluation Question Possible support were
focus ofindicators through its support to the MTEF component of PUFMARP.
Findings
adapted to the context,
especially to the level of
A.1. What has been the na- • Government funds • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
Annex A: S
ownership and the for

capacity committed
for reform Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
reform inputs provided and actually disbursed by
implementation. strategic budgeting and budget preparation processes. The objective in introducing the MTEF
by Government and Do- • yearConsistency
over the&evaluation
coherence was “to improve the planning and budgeting of public expenditures and thus contribute to
nors? period.
with wider Donor policies strengthened fiscal policy formulation and implementation.”67.
Donor
• in funds
country for PFM • The funding requirement estimated at PUFMARP appraisal was USD 4.6 million which was
• reforms
Consistencycommitted
with theand Paris provided as project co-financing by DFID. The actual financing provided by the end of PUFMARP
actually disbursed
Declaration by year
objectives as was estimated at USD 4.58 million of donor financing and USD 0.18 million of GoG financing.
over
regards evaluation period
the ownership, • The reform inputs, which were focused primarily on MoFEP and MDAs, were provided mainly as
• Nature of support
harmonisation and technical assistance. They involved two main areas of support:
provided
alignment. to PFM reform –– The development and specification of the MTEF reform covering: (i) formulation of the
efforts (equipment,
• Flexibility in design of program categories for planning, budgeting and accounting; (ii) preparing the expenditure
training,
support andTA, existence
diagnosticof profile for each MDA in line with existing policies; (iii) specifying the price basis for forecasts;
work.)
adequate feed-back/ (iv) integrating aid financed projects and programs and preparing computer software for this
Focal areas
• learning for reforms
mechanisms in by purpose.
function
order to adapt
(basedthe PFM
ondesign –– Improvements to the formulation of the annual budget covering: (i) the preparation of a model
and implementation of budget circular that included budget ceilings; (ii) the installation of budget software in the
2010)
support to changing MDAs and (iii) the training of budget and finance staff in the preparation of the MTEF and the
• Focal
needs. areas for reforms by information system in its preparation.
level of government
Outputs: the delivery of PFM reforms development of the MTEF reforms. A number of specific improvements were introduced aimed
A.6. What have been the out- Documentation
Sector ministries,of outputs
Local: • development
Assessmentsof ofthe
theACTIVATE
outputs ofsoftware reforms are
the MTEFapplication provided
took by the 2004
place. However, thePUFMARP
main elements of
puts of the PFM reform by PFM function
• Governments, Parliament, implementation
the MTEF reformcompletion report which
and the procedures introduced
focusesunder progress in
on thePUFMARP establishing
remained largely MTEF
theunchanged.
process and to what ex- (according
CSOs, etc.) to PFM clusters process
• Very limited the 2009 EPFM
and short-term which assesses
assistance was provided how the MTEF reforms
by donors after 2003. operating.
areThis includedThe different
BMZ and
tent has direct donor in Andrews 2010) and focus
UNICEF, of these two assessments
to support reflects the respective
the further development of the MTEFstage reformin the
andinstitutionalisation of the
related training activities.
support contributed to • by type of output (People & MTEF reforms.
these outputs? Skills; Laws & Rules; • The PUFMARP
PUFMARP. implementation
However, in the 2007completion
Budget thereport spending assessed
allocation progress
the for that had
the Budget Division made
beenrelating
Systems & Business with
to theMTEF reforms
‘ improved by 2003
public expenditure
in termsmanagement’
of five outputs:area and ‘human resources development’
processes; Organisational –– Formulation
policy areas wasofclosethe annual budget
to US$ 1.5 within
million. a complete
This figure related
rollingtoMTEF. While
operating expenses
the mainandelements
capitalof
changes) an MTEF had
expenditure onlybeen
and put in place
did not their
include implementation
personnel expenses had
andbeen
allowances A number
variable.which are not
of broken
• Matching of outputs to weaknesses

down in the process were identified First, insufficient attention had been given to the
by policy area.
PFM reform inputs, upstream tasks of macro-fiscal fiscal planning and forecasting and setting realistic resource
tures have been used and related consultation
differentiating if possible reform
ceilings emphasised
thatfor the more technical
budget preparation. The ICR noted aspectsthatof“allocations
the reform made(formulating
throughprogram
the MTEF
for the design and man- process: Balance
Government of inputs
& Donor categories,
process were expenditure profiling, and
largely irrelevant as resources of forecasts,
price basisactually model
available to sector circular, and budget
budgetmanagement
agement of these re- by Donors/ Govt/
inputs. software).
depended There was little mention
on unpredictable of the more
and opaque in-yearstrategic
decisionselements
about cash MTEF reform
of anreleases”. covering
Second, there
form inputs? Have Consultants;
• Analysis of chronology
Extent of of development
thewas no expenditure medium-term
of thereview process macro-fiscal
in place eitherstrategy and framework,
at the strategic and the
level involving analysis
reviewof of
these structures input/ consultation
events to determinewith sector programs
expenditure and priorities
patterns, issuesandandtheir implications
priorities, for the expenditure
or in assessing prioritisation
on-going spending and
program
served to provide a co- end users
causal links PFM system
of between budget
performance
planning.and In practice, the detailed
achievements. Third,design of the reform
staff related costs were undertaken
was treated as a ministry project
followingoverhead
ordinated and harmo- donor ministries,
(Sectorsupport LGs
to reform start-up
expense withandthe arrival of
excluded the DFID
from funded
the MTEF consultants
budget process.inInSeptember
the education 1997. However,
sector its
this meant that
nised delivery frame- service institutions).
and observed changes at emphasis
around 75% continued
of expenditure
to reflectfell of the appraisal
thatoutside of the MTEF document.
budgeting procedures. Fourth, the
work? Management
• output level. & co- • Theintroduction
support forof the introduction
activity of the MTEF
based budgeting raneffectively
ahead of the operated as a separate
accounting reforms sub-project
with the result
ordination structure
• Consideration of for within
that PUFMARP
expenditures under
were MTEF
annot Project
recorded inUnit. Because funding
the government accounts provided
wasagainst thedirectly by DFID,
new MTEF
PFM reforms (Ad
counterfactual: hoc
would thebudget component operated
MTEF classification, makingrelatively
it impossible independently
to undertake of the components
meaningful expenditure by the
managedanalysis.
needs.
A.6. What have been the out- Documentation of outputs : • Assessments of the outputs of the MTEF reforms are provided by the 2004 PUFMARP
puts of the PFM reform • by PFM function implementation completion report which focuses on the progress in establishing the MTEF
process and to what ex- (according to PFM clusters process and the 2009 EPFM which assesses how the MTEF reforms are operating. The different
tent has direct donor in Andrews 2010) and focus of these two assessments reflects the respective stage in the institutionalisation of the
support contributed to • by type of output (People & MTEF reforms.
these outputs? Skills; Laws & Rules; • The PUFMARP implementation completion report assessed the progress that had been made
Systems & Business with MTEF reforms by 2003 in terms of five outputs:
processes; Organisational –– Formulation of the annual budget within a complete rolling MTEF. While the main elements of
changes) an MTEF had been put in place their implementation had been variable. A number of
Judgement of outputs to
• Matching criteria/ weaknesses in the process were identified First, insufficient attention had been given to the
Evaluation Question PFM reform
Possible inputs,
indicators upstream tasks of macro-fiscal fiscal planning and forecasting and setting realistic resource
Findings
differentiating if possible ceilings for budget preparation. The ICR noted that “allocations made through the MTEF
A.1. What has been the na- Government
• Government funds& Donor for process
• Ghana’s medium-term
were largelyexpenditure
irrelevant asframework
resources (MTEF) available
actuallyinitiative wasto sector management
initiated in 1997 under the
ture and scale of PFM inputs.
PFM reforms committed depended
Public Finance onManagement
unpredictableReform and opaqueProgramin-year
(PUFMARP).
decisions The about MTEF releases”.
cashinvolved Second,
reforms to there
reform inputs provided • Analysis of chronology
and actually disbursed of by was no expenditure review process in place either at the
strategic budgeting and budget preparation processes. The objective in introducinganalysisstrategic level involving the MTEF of
by Government and Do- events
year to determine
over the evaluation wasexpenditure
“to improvepatterns,
the planning issues andand priorities,
budgeting of or in assessing
public expenditures on-going spending
and thus program
contribute to
nors? causal
period. links between performance
strengthened fiscal achievements.
andpolicy formulation Third,
andstaff related costs 67
implementation.” were
. treated as a ministry overhead
• donor
Donorsupport
funds for reform
toPFM • Theexpense
fundingand excluded from
requirement the MTEF
estimated budget process.
at PUFMARP appraisal In the
waseducation
USD 4.6 million
sectorwhichthis meant
was that
and observed
reforms changes
committed andat provided
aroundas 75% of expenditure
project co-financing fellbyoutside
DFID. ofThethe
actual budgeting
MTEFfinancing procedures.
provided by theFourth, the
end of PUFMARP
output level.
actually disbursed by year wasintroduction
estimated at activity
of USD 4.58 based
million budgeting
of donorran ahead of
financing and theUSDaccounting
0.18 millionreforms
of GoG with the result
financing.
Consideration
• over the evaluation
of period • Thethat expenditures
reform inputs, which werewere not recorded in the government
focused primarily on MoFEP accounts
and MDAs, against
werethe new MTEF
provided mainly as
counterfactual:
• Nature of support would technical classification,
budget assistance. They making
involved it impossible to undertake
two main areas of support: meaningful expenditure analysis.
these outputs
provided to PFMhave been
reform –– A comprehensive broad based budget. This had only been
–– The development and specification of the MTEF reform covering: (i) formulation of the partially achieved with a significant
generated
efforts in absence of
(equipment, share of donor
program categoriesfunded forproject
planning, expenditure
budgeting and
and spending
accounting; financed from internally
(ii) preparing generated
the expenditure
donor support
training, to PFM
TA, diagnostic funds still
profile not being
for each MDAcaptured
in line with in the budget.
existing policies; (iii) specifying the price basis for forecasts;
reform?
work.) –– (iv) integrating
Computerised aid budget
financedpreparation
projectsprocess. The delays
and programs in implementing
and preparing computer BPEMS meant
software led
for to
this
• Focal areas for reforms by the Budget Division developing its own budget preparation software application (ACTIVATE)
purpose.
function (based on PFM rather than utilise
–– Improvements to the BPEMS budget
theformulation preparation
of the annual budget module.covering: (i) the preparation of a model
“clusters” as in Andrews –– budget budget on
Printedcircular that MTEF basis.
anincluded budget way in which
Theceilings; (ii) theactivity
installation
basedofbudgeting had been
budget software in the
2010) implemented meant that the budget estimates
MDAs and (iii) the training of budget and finance staff in thebecame document preparationexcessively
of the MTEFdetailedandwith
the a
• Focal areas for reforms by resulting loss of strategic
information system in its preparation. focus.
organisational location/ –– Budget
• At guidelines
the completion approved
of the PUFMARP, by Cabinet. was not clear
MoFEPItcontinued to what extent Cabinet
the implementation and furtherwas involved in
level of government the approval
development ofofthethe budget
MTEF circular
reforms. and budget
A number ceilings.
of specific improvements were introduced aimed
(Ministry of Finance, The improving
atICR considered the policy focus and
that although thetransparency
MTEF budgeting of thereforms
budget had process, while further
not achieved r
their planned
Sector ministries, Local development
outputs, it was likely ACTIVATE
of thethat the progress software madeapplication
would betook place. However,
consolidated and thatthe main
a fully elements
fledged MTEF of
Governments, Parliament, the MTEF
would reform and the procedures introduced under PUFMARP remained largely unchanged.
be achieved.
CSOs, etc.) •
• Very
In thelimited short-term
years following 2003 assistance
the MTEF was provided
process by donors
a number after 2003. This
of improvements included
were BMZ and
introduced into
UNICEF,
the budget. to support
Since 2006 thethefurther
budget development of the MTEF
has been passed reform and
by Parliament related
before the training
start of theactivities.
financial
There
year. Steps data on
is no were actual
taken budgetary spending
to strengthen on the
policy linkage MTEF
with the following
introduction completion
theof sector policy of
PUFMARP.
hearings early However, in the 2007
in the budget Budget
calendar, andthe spending
the preparationallocation for the Budget
of a Citizens’ Guide toDivision
the Budget relating
to the ‘ improved
Statement for thepublic
2007 and expenditure
2008 budgets. management’
The MTEF area and ‘human
budgeting reforms resources
were also development’
rolled out to
policy areas was
pilot MMDAs. However,
close toatUS$ 1.5
the timemillion.
of the 2009 figure related
This ERPFM, manyto ofoperating expenses
the shortcomings that
andhadcapital
been
expenditure
identified in the onlyICR and had
didnot include
notbeen personnel expenses and allowances which are not broken
addressed.
A. 2. What types of struc- • Structure of design team • –– There

The PUFMARPhad been improvements
appraisal document in macro-fiscal
provided onlyforecasting
a very general with budget planning
specification of thewasMTEF based on
tures have been used and related consultation a reasonably
reform that emphasised
accuratethe macro-fiscal
more technical framework
aspects with actual
of the annual
reform (formulating within 3% of
revenues program
97
for the design and man- process: Balance of inputs budget forecasts
categories, expenditure during the period
profiling, and2005-07.
price basis However, this did
of forecasts, not translate
model into a credible
budget circular, and budget
agement of these re- by Donors/ Govt/ budget ceilings
software). There was process. There remained
little mention of the more large differences
withstrategic elementsbetween of an MTEF aggregate
thereform covering
form inputs? Have Consultants; Extent of theindicative
development ceiling of the the final appropriation
andmedium-term macro-fiscalcontained in the
strategy and budget (averaging
framework, and the 10.7%
review
overofthe
these structures input/ consultation with period
sector 2005-07).
programs andCeilings
priorities continued
and their be provided to
to implications forministries
the expenditureonly forprioritisation
services andand
served to provide a co- end users of PFM system investment
budget planning. costs, and not for
In practice, thepersonnel
detailed design
costs ofand theallowances.
reform wasComplianceundertakenwith ceilings
following was
project
The ICR considered that although the MTEF budgeting reforms had not achieved their planned
outputs, it was likely that the progress made would be consolidated and that a fully fledged MTEF
would be achieved.
• In the years following 2003 the MTEF process a number of improvements were introduced into
the budget. Since 2006 the budget has been passed by Parliament before the start of the financial
year. Steps were taken to strengthen policy linkage with the introduction of sector policy
98
hearings early in the budget calendar, and the preparation of a Citizens’ Guide to the Budget
Statement for the 2007 and 2008 budgets. The MTEF budgeting reforms were also rolled out to
Judgement criteria/ pilot MMDAs. However, at the time of the 2009 ERPFM, many of the shortcomings that had been
Evaluation Question Possible indicators identified in the ICR had not been addressed.
Findings
A Inputs & Context: the design of PFM reform –– There had been improvements in macro-fiscal forecasting with budget planning was based on
a reasonably accurate macro-fiscal framework with actual annual revenues
Annex A: S
A.1. What has been the na- • Government funds for • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated inwithin
1997 under
3% of the
ture and scale of PFM PFM reforms committed budget
Public forecasts
Finance during the
Management Reform
periodProgram
2005-07. (PUFMARP).
However, thisThe not translate
did MTEF involvedinto a credible
reforms to
reform inputs provided and actually disbursed by strategic ceilings process.
budgetbudgeting and budget There remained with
preparation large differences
processes. The objective between the aggregate
in introducing the MTEF
by Government and Do- year over the evaluation indicative ceiling and the final appropriation contained
was “to improve the planning and budgeting of public expenditures and thus contribute toin the budget (averaging 10.7% over the
nors? period. period 2005-07).
strengthened fiscalCeilings continued to
policy formulation and provided to ministries
beimplementation.” 67
. only for services and
• Donor funds for PFM • Theinvestment costs, and not
funding requirement for personnel
estimated at PUFMARP costs and allowances.
appraisal was USD Compliance
4.6 million with ceilings
which was was
reforms committed and weak with ministry budget requests for the 2008 budget exceeding
provided as project co-financing by DFID. The actual financing provided by the end of PUFMARP the indicative ceilings by
actually disbursed by year was24%.
estimated at USD 4.58 million of donor financing and USD 0.18 million of GoG financing.
over the evaluation period –– Despite
• The reformthe introduction
inputs, which were of sector
focused policy hearings,
primarily the MTEF
on MoFEP andprocess
MDAs, werestill did not facilitate
provided mainlyaas
• Nature of support clear link
technical between priority
assistance. They involved areas
policy two main budget
andareas of allocations.
support: There was no systematic
provided to PFM reform analysis
–– The and overview
development of the strategic
and specification policy
of the MTEF assumptions and spending
reform covering: (i) formulation
choices of across
the
efforts (equipment, program support the
sectors tocategories forsector and MDA
planning, budgetingresourceand allocations. The very detailed
accounting; (ii) preparing presentation of
the expenditure
training, TA, diagnostic MDA budgets means that the strategies and priorities underlying
profile for each MDA in line with existing policies; (iii) specifying the price basis for forecasts; MDA budgets are not clear.
work.) The continued absence
(iv) integrating aid financed of comprehensive
projects and programs and reliable anddata on budget
preparing execution
computer makes
software for
it this
• Focal areas for reforms by difficult
purpose. to undertake the analysis of budgetary trends and performance that should inform
function (based on PFM and guide resource
–– Improvements to theallocation
formulation decisions.
of the annual budget covering: (i) the preparation of a model
“clusters” as in Andrews The credibility
–– budget circularofthat MDA budgets
included had continued
budget ceilings; to be undermined
(ii) the installationby of shortfalls
budget software and delays
in thein
2010) budget releases against the
MDAs and (iii) the training of budget and planned budget.
finance A major
staff infactor was weak payroll
the preparation planning
of the MTEF andwhich
the
• Focal areas for reforms by resulted in high

information levels
system of variance
in its preparation. in MDA expenditure against their budget (which averaged
organisational location/ 26.5% over the 2003-2007 budgets). Within MDA budgets
• At the completion of the PUFMARP, MoFEP continued the implementation and further difference between budget
level of government development
allocationsof andthereleases
MTEF reforms.were particularly
A number large for services
of specific improvementsand investment,
were introduced
the two aimed
(Ministry of Finance, at improving
categoriesthe of expenditure
policy focuscovered and transparency
by activity of based budgeting).
the budget process, The while of accounts
chart further r still did
Sector ministries, Local development
not includeof codes for the MTEF
the ACTIVATE activity
software classification
application tookwith
place. result that
theHowever, continued
theit main elementsto beof
Governments, Parliament, theimpossible
MTEF reform to report
and the expenditure
procedures against
introducedMTEFunder budget allocations.
PUFMARP remained largely unchanged.
CSOs, etc.) • The study
• Very limitedteam found that
short-term assistance
situation washas changed
providedlittle subsequent
by donors after 2003. 2009
to theThis included
ERPFM.BMZ Indeedandthe
Citizen’s
UNICEF, Guide
to supportto thethe Budget
further and the MTEF policy
development of thehearing
MTEF reformhad lapsed,and related
and thetraining the MTEF/
start ofactivities.
Budget
There ispreparation
no data on actual cycle significantly
budgetary spending delayed.on The theguidelines
MTEF following preparation
for the the completion 2011of budget
were not issued
PUFMARP. However,until September,
in the 2007 Budgetwith ministries
the spending no longer
allocation
beingfor provided
the Budgetwith budget
Divisionceilings.
relating
However, there was
to the ‘ improved increasing
public expenditurerecognition
management’ of the need areafor anda thorough re-engineering
‘human resources of the
development’
MTEF process, with the decision taken in 2010 to replace activity
policy areas was close to US$ 1.5 million. This figure related to operating expenses and capital based budgeting with a more
strategic program-based budgeting
expenditure only and did not include personnel

approach. expenses and allowances which are not broken
A.7. How efficiently were • Consistency of outputs down
• As by policy
noted above,area.the original specification of the MTEF reforms emphasised the “bottom-up”
A. 2. these
What outputs
types ofgenerat-
struc- • produced
Structure with planned
of design team • elements
The PUFMARP of an MTEF
appraisal(program-based
document provided budgeting, only a consistency
very general between MDA budgets
specification of the MTEFand
ed? Was
tures have pacing
thebeen and
used programme (quantity and
and related consultation policies,
reform thatdetailed
emphasised
costingthe andmoreintegration
technical of aid financed
aspects projects).
of the reform It barely mentioned
(formulating program the
sequencing of reforms
for the design and man- timing)
process: Balance of inputs upstream
categories,elements
expenditure MTEF (macro-fiscal
of anprofiling, and price basis framework,
of forecasts, policy and expenditure
model budget circular, review)
and that
budget
appropriate and cost-
agement of these re- • Extent of coordination
by Donors/ Govt/ are conventionally
software). There was seenlittle
as mention
the initialofpriorities establishing
the moreinstrategic a robust
elements of an MTEF
MTEF process.
reform covering
effective?
form inputs? the cost
WasHave between outputs
Consultants; Extent of Implementation
the developmentof ofthe
theMTEF reform largely
medium-term reflected
macro-fiscal this specification,
strategy and framework, except andthat
thethe model
review of
per output
these acceptable?
structures • Quality of pacing and
input/ consultation with chosen emphasised
sector programs more detailed
andapriorities activity
and their based budgeting
implications for the expenditure
approach. prioritisation and
served to provide a co- sequencing of
end users of PFM output
system • In a narrow sense the outputs of reform, measured against the
budget planning. In practice, the detailed design of the reform was undertaken following project initial specification, were to a
ordinated and harmo- production:
(Sector ministries, LGs considerable
start-up with the extent
arrival
met,ofand theafter
DFIDthe funded donor funding
initialconsultants was finished
in September have
1997. subsequently
However, its been
nised delivery frame- • internally
and service coherent/
institutions). sustained.
emphasis continued
However, to in broader
reflect that sense
of the outputs, measured
theappraisal document.against the requirement to
work? efficient?
• Management & co- • establish
The support a more
for therealistic and strategic
introduction of the MTEF medium-term
effectivelybudgeting
operated processas a separatehave not been
sub-project
• Consistent with capacity
ordination structure for achieved. Moreover,
within PUFMARP underthe weaknesses
an MTEF Project in the approach
Unit. Because had been identified
funding was provided on and elaborated
earlydirectly by DFID,
endowments? in both the ICR for PUFMARP, and the 2003 ODI case study of Ghana’s MTEF. It is perhaps
–– The credibility of MDA budgets had continued to be undermined by shortfalls and delays in
budget releases against the planned budget. A major factor was weak payroll planning which
resulted in high levels of variance in MDA expenditure against their budget (which averaged
26.5% over the 2003-2007 budgets). Within MDA budgets difference between budget
allocations and releases were particularly large for services and investment, the two
categories of expenditure covered by activity based budgeting). The chart of accounts still did
not include codes for the MTEF activity classification with the result that it continued to be
impossible to report expenditure against MTEF budget allocations.
• The study team found that situation has changed little subsequent to the 2009 ERPFM. Indeed the
Citizen’s Guide to the Budget and the MTEF policy hearing had lapsed, and the start of the MTEF/
Budget preparation cycle significantly delayed. The guidelines for the preparation 2011 budget
were not issued until September, with ministries no longer being provided with budget ceilings.
However, there was increasing recognition of the need for a thorough re-engineering of the
Judgement criteria/ MTEF process, with the decision taken in 2010 to replace activity based budgeting with a more
strategic program-based budgeting approach.
A Inputs
A.7. How& Context: the
efficiently weredesign of• PFM
Consistency
reform of outputs • As noted above, the original specification of the MTEF reforms emphasised the “bottom-up”
these outputs generat- produced with planned elements of an MTEF (program-based budgeting, consistency between MDA budgets and
A.1. W hat
ed? Was been
hasthe the na-
pacing and • Government
programme (quantity
funds forand • Ghana’s
policies,medium-term
detailed costing expenditure framework
and integration (MTEF) initiative
of aid financed projects).was initiated
It barely in 1997 under
mentioned the the
ture and scale
sequencing of PFM
of reforms PFM reforms committed
timing) Public
upstream Finance Management
elements of an MTEF Reform
(macro-fiscal
Programframework,
(PUFMARP).policy The MTEF involved reforms
and expenditure review) tothat
reform inputs
appropriate andprovided
cost- • and actually
Extent disbursed by
of coordination strategic
are conventionally
budgetingseen and as budget preparation
the initial prioritiesprocesses.
in establishingThe objective
a robustinMTEF introducing
process. the MTEF
by Government
effective? Was the Do-
andcost year
between the evaluation
overoutputs was “to improve the
Implementation of theplanning
MTEF reformand budgeting of public expenditures
largely reflected this specification, and thusexcept contribute to
that the model
67
nors?
per output acceptable? • period.
Quality of pacing and strengthened
chosen emphasised fiscal policy
a more formulation and implementation.”
detailed activity based budgeting approach. .
• sequencing
Donor fundsoffor PFM
output • The
• In a narrow
fundingsenserequirement
the outputs estimated at PUFMARP
of reform, measured appraisal
against the wasinitial 4.6 million which
USD specification, were was to a
reforms
production:committed and provided as project
considerable extentco-financing
met, and after DFID.
bythe initial
Thedonor financing
actualfunding wasprovided
finishedby have end of PUFMARP
thesubsequently been
• actually
internally disbursed
coherent/by year was estimated
sustained. at USD
However, in4.58 million
broader of donor
sense financing
the outputs, measured
and USDagainst0.18 million of GoG financing.
the requirement to
over the evaluation period
efficient? The reform
• establish inputs,
a more which were
realistic focused primarily
and strategic medium-term on MoFEP and MDAs,
budgeting process werehave provided
not been mainly as
•
• Nature
Consistentof support
with capacity technical assistance.
achieved. Moreover, the They involved two
weaknesses main
in the approach
areas ofhad support:
been identified early on and elaborated
provided
endowments? to PFM reform in The development
–– both and specification
the ICR for PUFMARP, and the 2003 MTEF
of theODI casereform
studycovering:
of Ghana’s (i) formulation
MTEF. It is perhapsof the
efforts (equipment,
• Appropriate to degree of surprising
programthat categories
the corefor planning,
activity based budgeting
budgeting and accounting;
reform continued (ii) preparing the expenditure
largely unchanged and that
training,
ownership/ diagnostic
TA,nature of profile for
measures taken MDA in line with
eachsubsequently to support
existinga policies; (iii) specifying
more strategic approach, thesuchpriceas basis
the introduction
for forecasts;of
work.)
political & admin support (iv) integrating aid financed
MDA policy hearings, were not sustained. projects and programs and preparing computer software for this
Focal
• for areas
reform? for reforms by purpose.
• In the view study team a major reason was that with activity based budgeting having been fully
function (based on PFM
• Relative cost of outputs in –– Improvements
implemented acrossto theallformulation of the annual
MDAs and significant budget covering:
investment made in the (i) the preparation
ACTIVATE budget of a model
“clusters”
relation to as in Andrews
budgeted costs. budget circular
software, MoFEP was thatunderstandably
included budgetreluctantceilings; (ii) the installation
to introduce further budget software
of substantial in the
changes.
• 2010)
Influence of external MDAs and (iii) the
Furthermore the buy-intraining of budget
to a wider MTEF and finance
reform process
staff inwas the preparation
insufficient for of the MTEF
MoFEP toand
force the
• Focal areas for reforms
support to PFM reform by information
through changes.system
This in lack preparation.
its of buy-in would appear to reflect two main factors:
organisational
upon pacing and location/ • – the completion
At– There was tendency of thefor PUFMARP, MoFEP
“silo-working” continued
whereby the implementation
a reform initiative is seen and asfurther
belonging to a
level of government
sequencing. development
particular department
of the MTEFwithin reforms. A number
MoFEP whichof specific
then proceedsimprovements
to implement were introduced
it with limitedaimedinputs
of Finance,
Counterfactual:
• (Ministry would at improving the policy focus and transparency of the budget
from other departments. For example, it should have been expected that the Economic process, while further r Policy
Sector
pacing ministries,
& sequencing Local
of development of the ACTIVATE software application took place.
and Forecasting Division in MoFEP should have played a much stronger role in the MTEF of However, the main elements
Governments,
outputs have been Parliament, MTEF reform and the procedures introduced under PUFMARP remained largely unchanged.
thereforms.
CSOs, etc.)
different in absence of Very
• –– The limited
skills short-term
and capacities assistance was provided
in the Budget Division by diddonors
not fullyafter
adjust2003. This included BMZ
to accommodate the moreand
external PFM support? UNICEF,
strategicto support
under an the further
MTEF thatdevelopment
sees budgeting of the MTEF reform
as primarily and related
a policy-led training
planning activities.
function.
There is no data
Elsewhere MTEFon actual
reforms budgetary
have been spending on the MTEF
accompanied by thefollowing
merging of the completion
former sectorofplanning
PUFMARP.
departments However,
into ain combined Budget the
the 2007planning andspending
budgeting allocation
department. for the Budget
The Division relating
establishment of a
to the ‘ improved
Budget public expenditure
Development management’
Unit and an Expenditure area and ‘human
Monitoring Unit in the resources
mid-2000s development’
recognises
policy areas was close to US$ 1.5 million. This figure related to operating
this requirement, although it stops short of building more integrated planning and budgeting expenses and capital
expenditure
capacitiesonly and did
at sector desk include personnel expenses and allowances which are not broken
notlevel.
A. 2. What types of struc- • Structure of design team • –– Over

The the period
PUFMARP 2001-10,
appraisal it can be estimated
document provided only
thataaround
very general million was spent
USD 6specification of theon the MTEF
MTEF
72
tures have been used and related consultation related
reform reforms
that emphasised. Since
themost
more the weaknesses
oftechnical aspectsinofthe
theMTEFP
reformthat were identified
(formulating at the
program
99
for the design and man- process: Balance of inputs conclusion
categories, of PUFMARP
expenditure were never
profiling, effectively
and price addressed,
basis of forecasts,the efficiency
model this investment
budgetofcircular, and budget
agement of these re- by Donors/ Govt/ software). considered
must be There was little The initial
low.mention ofemphasis on establishing
the more strategic activity
elements of anbased
MTEFbudgeting was
reform covering
form inputs? Have Consultants; Extent of theprobably a mistake
development of theand a more comprehensive
medium-term macro-fiscal and strategically
strategy focused approach
and framework, to
and the review of
these structures input/ consultation with introducing
sector programs an MTEF might have
and priorities andworked
their implications allowed
better andfor the expenditure
the reformprioritisation address
to evolve and and
served to provide a co- end users of PFM system issues as they arose.
budget planning. In practice, the detailed design of the reform was undertaken following project
Budget Development Unit and an Expenditure Monitoring Unit in the mid-2000s recognises
this requirement, although it stops short of building more integrated planning and budgeting
capacities at sector desk level.
–– Over the period 2001-10, it can be estimated that around USD 6 million was spent on the MTEF
related reforms72. Since most of the weaknesses in the MTEFP that were identified at the
conclusion of PUFMARP were never effectively addressed, the efficiency of this investment
100
must be considered low. The initial emphasis on establishing activity based budgeting was
probably a mistake and a more comprehensive and strategically focused approach to
Judgement criteria/ introducing an MTEF might have worked better and allowed the reform to evolve and address
issues as they arose.
A Inputs
A.8. What Context:
&have beenthe
thedesign of• PFM reform
Degree of ownership of • The MTEF reforms in Ghana have yet to establish a realistic policy-led, medium-term budgeting
binding external con- reforms at the process. The primary reasons for this relate to weaknesses in the original design and roll-out of
Annex A: S
A.1. What has been the na- • Government funds for • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
straints on the delivery administrative and reform and the failure to address the problems with the approach when they were identified. The
ture and scale of PFM PFM reforms committed Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
of PFM reform: politi- political levels (narrow vs. role of external constraints is less clear:
reform inputs provided and actually disbursed by strategic budgeting and budget preparation processes. The objective in introducing the MTEF
cal, financing or policy broad; depth of –– The initial strong political level support for the reform weakened as time went on. This may
factors? How has this commitment to reform have reflected the perception the MTEF process had been effectively institutionalised and was
nors? period. strengthened fiscal policy formulation and implementation.”67.
varied across the differ- and motivations for this no longer seen as a critical PFM reform. Within the donor community there appears to have a
ent PFM reform compo- commitment). been a reluctance to emphasise the MTEF in the context of the MDBS dialogue when other
reforms committed and provided as project co-financing by DFID. The actual financing provided by the end of PUFMARP
nents? • Quality of interaction PFM reforms, particularly those relating to BPEMS were seen as more pressing priority.
actually disbursed by year was estimated at USD 4.58 million of donor financing and USD 0.18 million of GoG financing.
between administrative –– Similarly, the interest of external stakeholders and CSOs in the MTEF reforms has been
over the evaluation period• The reform inputs, which were focused primarily on MoFEP and MDAs, were provided mainly as
and political cadres. limited. The dialogue between GoG and the CSOs on PFM reforms continues to be quite
• Nature of support technical assistance. They involved two main areas of support:
• Extent and nature of limited, and focused the transparency of the budget process, more accessible budget
political accountability documentation, and improving the availability of budget data.
(within ruling party, vis-à- –– The MTEF reform has not been associated with a clear policy imperative (policy space).
vis Legislature, vis-à-vis Relatively strong economic and fiscal performance through the mid-2000s weakened the
Electorate & Civil Society) pressure for expending planning and budget prioritisation reform. At the same time the
and extent to which this is absence of reliable budget execution data remained a more fundamental constraint to
patronage or improved expenditure analysis and budget planning.
performance-based. –– Financing for the MTEF reforms does not appear to have been a significant constraint. The
• Economic context and its reform was well funded through PUFMARP and subsequently the budget of the Budget
influence on financing of Division in MoFEP has included substantial funding for PFM reform.
GDP and % growth in
evaluation period,
spending; absence/
presence of macro crises.
• Has timeliness of funding
72 This is based on assumed expenditure of USD 1.9 million expenditure

under the MTEF only and did not
component of include
PUFMARPpersonnel
duringexpenses
the 2001 and allowances
and 2002, andwhich
subsequent broken
are notGoG
been an issue?
financed spending assumed at Nature of
• around “conventional
USD 0.5 million annually.
A. 2. What types of struc- • wisdom”
Structureon ofPFM reforms:
design team • The PUFMARP appraisal document provided only a very general specification of the MTEF
tures have been used does prevailing
and related thinking
consultation reform that emphasised the more technical aspects of the reform (formulating program
for the design and man- exclude
process:certain
Balance reform
of inputs categories, expenditure profiling, and price basis of forecasts, model budget circular, and budget
agement of these re- options?
by Donors/ Govt/ software). There was little mention of the more strategic elements of an MTEF reform covering
form inputs? Have • Has policy discussion
Consultants; Extent ofon the development of the medium-term macro-fiscal strategy and framework, and the review of
these structures PFM
input/reform been open
consultation within sector programs and priorities and their implications for the expenditure prioritisation and
served to provide a co- terms of range
end users of PFM
of system budget planning. In practice, the detailed design of the reform was undertaken following project
ordinated and harmo- participants and range
(Sector ministries, LGsof start-up with the arrival of the DFID funded consultants in September 1997. However, its
nised delivery frame- ideas?
and service institutions). emphasis continued to reflect that of the appraisal document.
work? • Overall,
Management
what & have
co-been • The support for the introduction of the MTEF effectively operated as a separate sub-project
the
ordination constraints
bindingstructure foron within PUFMARP under an MTEF Project Unit. Because funding was provided directly by DFID,
the PFM production
and extent to which this is absence of reliable budget execution data remained a more fundamental constraint to
patronage or improved expenditure analysis and budget planning.
performance-based. –– Financing for the MTEF reforms does not appear to have been a significant constraint. The
• Economic context and its reform was well funded through PUFMARP and subsequently the budget of the Budget
influence on financing of Division in MoFEP has included substantial funding for PFM reform.
GDP and % growth in
evaluation period,
Judgement absence/
spending;criteria/
Evaluation Question presence
Possible of macro crises.
indicators Findings
Hasreform
timeliness of funding
been an issue?
A.1. What has been the na- •
• Government funds for
Nature of “conventional • Ghana’s medium-term expenditure framework (MTEF) initiative was initiated in 1997 under the
wisdom” on PFMcommitted
reforms: Public Finance Management Reform Program (PUFMARP). The MTEF involved reforms to
reform inputs provided and
doesactually disbursed
prevailing thinkingby strategic budgeting and budget preparation processes. The objective in introducing the MTEF
by Government and Do- year
exclude the evaluation
overcertain reform was “to improve the planning and budgeting of public expenditures and thus contribute to
nors? period.
options? strengthened fiscal policy formulation and implementation.”67.
• Donor
• Has funds
policy discussion
for PFM on • The funding requirement estimated at PUFMARP appraisal was USD 4.6 million which was
reforms
PFM reform committed
been openandin provided as project co-financing by DFID. The actual financing provided by the end of PUFMARP
actually
terms ofdisbursed
range of by year was estimated at USD 4.58 million of donor financing and USD 0.18 million of GoG financing.
over the evaluation
participants period
and range of • The reform inputs, which were focused primarily on MoFEP and MDAs, were provided mainly as
• Nature
ideas? of support technical assistance. They involved two main areas of support:
• provided to PFM
Overall, what reform
have been –– The development and specification of the MTEF reform covering: (i) formulation of the
efforts (equipment,
the binding constraints on program categories for planning, budgeting and accounting; (ii) preparing the expenditure
training, TA, diagnostic
the PFM production profile for each MDA in line with existing policies; (iii) specifying the price basis for forecasts;
work.)
possibility frontier? (iv) integrating aid financed projects and programs and preparing computer software for this
•
• How areas
Focalhas thisfor reforms by
varied purpose.
function
between(based
different PFM
onreform –– Improvements to the formulation of the annual budget covering: (i) the preparation of a model
“clusters”
components? as in Andrews budget circular that included budget ceilings; (ii) the installation of budget software in the
C. Outcomes & overall assessment• Focal
of PFMareas for reforms
reform and of donor
by support information system in its preparation.
to PFM reform
C.1 -C.4 level of government • development
(Addressed asofpart of the overall
the MTEF reforms.PFM
A number
review)of specific improvements were introduced aimed
101
for the design and man- process: Balance of inputs categories, expenditure profiling, and price basis of forecasts, model budget circular, and budget
these structures input/ consultation with sector programs and priorities and their implications for the expenditure prioritisation and
102
PFM Reform Component/Initiative: Revenue Management
Evaluation Question Judgement criteria/ Possible indicators Findings
Annex A: S
A.1. What has been the na- • Government funds for PFM reforms committed and PUFMARP (1997-2003)
ture and scale of PFM actually disbursed by year over the evaluation period. • During the period studied, reform of revenue management was part of
reform inputs provided • Donor funds for PFM reforms committed and the PUFMARP suite of reforms. Reforms were concentrated on: (i)
by Government and Do- actually disbursed by year over the evaluation period improving income tax administration through introducing a unique
nors? • Nature of support provided to PFM reform efforts income taxpayer code; and (ii) improving the efficiency of the
(equipment, training, TA, diagnostic work.) institutional structure administering revenue collections.
• Focal areas for reforms by function (based on PFM • The main problem that the reforms attempted to solve was the fact that
“clusters” as in Andrews 2010) there was a significant tax gap, i.e. that actual revenue collections (e.g.
• Focal areas for reforms by organisational location/ as a % of GDP) were lower than their potential. This was due to the fact
level of government (Ministry of Finance, Sector that: (i) taxpayer compliance (particularly, income tax, but also
ministries, Local Governments, Parliament, CSOs, customs) was considered to be low; and (ii) efficiency of collections was
etc.) weak, as was revenue reporting and forecasting.
• Whilst the reforms were originally targeted at both income tax and
customs duties, and institutional support to the different revenue
services, the PUFMARP project subsequently concentrated its support
on income tax and indirect tax measures, and reallocated other
originally-planned project resources to BPEMS.
• Specifically, the revenue management reforms during this period

covered: (i) introduction of a unique Taxpayer Identification Number; (ii)
the re-introduction of VAT, whose introduction had been stalled since
1995; and (iii) staff training.
• DP support under PUFMARP included a limited amount of IDA funding,
which took the form of: technical assistance, training support, and
limited equipment.
Reforms to RAGB (2003-2008)
• Following PUFMARP, reforms to revenue administration continued
under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
Governance programme.
• These were focussed on the following measures: (i) establishment and
defining the strategic operations of a Tax Policy Unit in MoFEP through

the provision of capacity building, equipment and analytical software;
(ii) improving the efficiency of operations of the Internal Revenue

Service through computerisation and organisational changes; and (iii)
restructuring of the 3 separate revenues services into a unified Ghana
Revenue Authority, including organisational development and HR
changes (on-going).
• Total GTZ funding support (in two 3-year phases, 2003-2005, and 2006-
2008) amounted to €€6.8 mn (BMZ) + €2 mn (SECO).
• The support mainly took the form of technical assistance and training
support.
Introduction of GRA (2010-2013)
1995; and (iii) staff training.
• DP support under PUFMARP included a limited amount of IDA funding,
limited equipment.
Reforms to RAGB (2003-2008)
• Following PUFMARP, reforms to revenue administration continued
under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
• These were focussed on the following measures: (i) establishment and
defining the strategic operations of a Tax Policy Unit in MoFEP through
A.1. What has been the na- • Government funds for PFM reforms committed and Service through
PUFMARP (1997-2003) computerisation and organisational changes; and (iii)
ture and scale of PFM actually disbursed by year over the evaluation period. restructuring
• During the period of the 3 separate
studied, reform revenues services
of revenue into a unified
management was Ghana
part of
reform inputs provided • Donor funds for PFM reforms committed and Revenue
the PUFMARPAuthority,suiteincluding
of reforms. organisational
Reforms were development
concentrated andon:
HR(i)
by Government and Do- actually disbursed by year over the evaluation period changes (on-going).
improving income tax administration through introducing a unique
nors? • Nature of support provided to PFM reform efforts Total GTZ
• income taxpayer
fundingcode; support
and(in
(ii)two 3-year phases,
improving 2003-2005,
the efficiency of the and 2006-
(equipment, training, TA, diagnostic work.) 2008) amounted
institutional to €€6.8
structure administering €2 mn (SECO).
mn (BMZ) + revenue collections.
• Focal areas for reforms by function (based on PFM support
• The main problem
mainlythat
tookthe
thereforms technical assistance
form ofattempted to solve was andthetraining
fact that
“clusters” as in Andrews 2010) support.
there was a significant tax gap, i.e. that actual revenue collections (e.g.
• Focal areas for reforms by organisational location/ as a % of GDP) were lower than their potential. This was due to the fact
Introduction of GRA (2010-2013)
• BMZ continued to support the RAGB (and subsequent form the GRA)
ministries, Local Governments, Parliament, CSOs, customs) was considered to be low; and (ii) efficiency of collections was
through the continuation of its Good Financial Governance programme.
etc.) weak, as was revenue reporting and forecasting.
Total support for the current phase is €9 mn.
• The Swiss State Secretariat for Economic Affairs (SECO) is providing
customs duties, and institutional support to the different revenue
supporting assistance of €2.096 mn for 2010-2013.
services, the PUFMARP project subsequently concentrated its support
A.2. What type of struc- • Structure of design team and related consultation on
Revenue income tax and indirect
management reforms
tax supported
measures, by and reallocated other
PUFMARP:
tures have been used process: Balance of inputs by Donors/ Govt/ • originally-planned
In terms of design, the project resources
appraisal to BPEMS.
document highlighted the revenue
for the design and Consultants; Extent of input/ consultation with end • Specifically,
managementthe revenue
reform management
activities reforms
that would be undertaken, period
during thiscovering
management of these users of PFM system (Sector ministries, LGs and covered:
reforms in introduction
(i)income of a unique
tax, indirect Taxpayer
tax, and customs,Identification
as well asNumber;
support to(ii)
reform inputs? Have service institutions). the re-introduction
National Revenue VAT, whose introduction
of Secretariat (whose duties had
werebeen stalled since
subsequently
these structures • Management & co-ordination structure for PFM 1995;
subsumedand (iii)intostaff
thetraining.
Revenue Agencies Governing Board). The scope of
served to provide a co- reforms (Ad hoc Project Units vs. Normal • DP
the support under PUFMARP
reform activities was veryincluded
ambitious,a limited
and was amount
scaledofback funding,
IDA during
ordinated and harmo- management structures; Govt-controlled vs. Shared which
projecttook the form of: technical
implementation to focus on assistance,
measurestraining
for income support, and
and indirect
nised delivery frame- Donor-Govt management; Use of consultants for limited
taxes. equipment.
work? managerial or purely advisory roles) • As with other PUFMARP areas, the revenue reforms operated as a
Reforms RAGB (2003-2008)
distincttosub-project. Detailed arrangements for responsibility for
• Arrangements for monitoring & evaluation.
• Following
management PUFMARP,
and monitoring
reformsoftotherevenue
revenue administration
reform activitiescontinued
are not
• Level of harmonisation and alignment of different
under GoG support
clearly spelt out separately and GTZin (BMZ),
the project of the latter’s
as partdocument. Good Financial
In practice, as the
reforms are focussed on specific individual revenue services
• These were focussed on the following measures: (i) establishment
(specifically, the Internal Revenue Service (IRS), and the VAT Serviceand
defining
(VATS)), itthewas strategic
senior management
operations of in a Tax Policy
these agencies
Unit inwhoMoFEP
had through
the provision offor
responsibility capacity
managing building,
and monitoring
equipmentthe and analytical
reform software;
activities.

• There were no specific consultancy arrangements for management of
revenue reform activities, and, beyond the overall PUFMARP project
103
management unit, there did not appear to be a specific project unit
covering revenue reforms.
changes (on-going).
• Harmonisation of reforms amongst DPs was simplified by the
delineation in responsibility amongst the two DPs (WB and ODA/DFID)
involved in supporting the revenue activities (direct and indirect tax,
nised delivery frame- Donor-Govt management; Use of consultants for taxes.
work? managerial or purely advisory roles) • As with other PUFMARP areas, the revenue reforms operated as a
• Arrangements for monitoring & evaluation. distinct sub-project. Detailed arrangements for responsibility for
• Level of harmonisation and alignment of different management and monitoring of the revenue reform activities are not
donor contributions. clearly spelt out separately in the project document. In practice, as the
reforms are focussed on specific individual revenue services
104
(specifically, the Internal Revenue Service (IRS), and the VAT Service
(VATS)), it was senior management in these agencies who had
Evaluation Question Judgement criteria/ Possible indicators responsibility for managing and monitoring the reform activities.
Findings
A Inputs & Context: the design of PFM reform • There were no specific consultancy arrangements for management of
A.1. What has been the na- • Government funds for PFM reforms committed and PUFMARP reform activities, and, beyond the overall PUFMARP project
revenue (1997-2003)
Annex A: S
ture and scale of PFM actually disbursed by year over the evaluation period. management
• During the period there did
unit,studied, not appear
reform of revenue specific project
to be amanagement wasunit
part of
reform inputs provided • Donor funds for PFM reforms committed and covering
the PUFMARP revenue reforms.
suite of reforms. Reforms were concentrated on: (i)
by Government and Do- actually disbursed by year over the evaluation period Harmonisation
• improving of reforms amongst DPs was simplified
income tax administration through introducing a unique by the
nors? • Nature of support provided to PFM reform efforts delineation
income in responsibility
taxpayer code; and (ii) amongst
improving thethetwoefficiency
DPs (WB of andtheODA/DFID)
(equipment, training, TA, diagnostic work.) involved in supporting
institutional structure the revenue activities
administering revenue(direct and indirect tax,
collections.
• Focal areas for reforms by function (based on PFM respectively).
• The main problem that the reforms attempted to solve was the fact that
“clusters” as in Andrews 2010) there was
Revenue a significant
management reforms i.e. that actual
tax gap,supported revenue
by GFG collections (e.g.
programme:
• Focal areas for reforms by organisational location/ • as a % of GDP)
Revenue were lower
management reform their potential.
thanmeasures wereThis was due
designed by BMZ
to thestaff
factin
level of government (Ministry of Finance, Sector that: (i) taxpayer
consultation withcompliance
GoG. (particularly, income tax, but also
ministries, Local Governments, Parliament, CSOs, • customs)
The reforms waswereconsidered
managed to be low; and
by staff of the efficiency
(ii)RAGB, andof collections was
subsequently the
etc.) weak,
GRA. as was revenue reporting and forecasting.
A.3. What types of comple- • Use of country systems: extent to which external aid • customs
Both the PUFMARP
duties, andand institutional
GFG programmes
support towere the different
designedrevenue
and
mentary actions have is ‘on plan’, ‘on budget’ and ‘on treasury’? services,
implemented the PUFMARP
as externalproject subsequently
project-type concentrated
interventions; thus, use support
itsof
Donors taken to sup- • Ranking of donor efforts to support national systems on income
country systems
tax andwas indirect tax measures, and reallocated other
limited.
port PFM reforms and as expressed in Paris Declaration monitoring • originally-planned
The revenue reformproject measuresresources to BPEMS.
were largely self-contained, and
what has been their reports and PEFA indicators D2 and D3. • Specifically,
followed onethe revenue
after management
the other reforms during
(i.e. the BMZ-supported this period
reforms followed
significance? Have • Scale and evolution over the evaluation period of aid covered:
logically on(i) introduction
from where the unique Taxpayer
of aPUFMARP reforms Identification
had ended).Number; (ii)
they had any influence flows provided as GBS, SBS or debt relief and relative • the re-introduction
There have been no of VAT, whose
specific revenue-related
introductionMDBS had been stalled
triggers since
or targets.
on the external con- contribution to reduction of treasury management • 1995; and (iii)
The other issues training.
staffrelated to this question are dealt with in the discussion
straints to reform? costs and to discretionary resources available to • DP support
of PFM as a under
whole.PUFMARP included a limited amount of IDA funding,
Government, (including effect on financing which took the form of: technical assistance, training support, and
constraints for PFM reform outputs). limited equipment.
• Nature and evolution over time of dialogue on PFM
within GBS/PRSC, SBS structures or similar donor- Reforms to RAGB (2003-2008)
govt fora, including use of PFM reform conditions in • Following PUFMARP, reforms to revenue administration continued
GBS/ SBS disbursement conditions. under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
• Influence of dialogue on the “political” and “policy Governance programme.
space” constraints restricting choice of PFM reform • These were focussed on the following measures: (i) establishment and
outputs. defining the strategic operations of a Tax Policy Unit in MoFEP through
• (Consistency of actual changes with PFM reform

triggers and/or points of emphasis in GBS/ PRSC
dialogue). (ii) improving the efficiency of operations of the Internal Revenue
• Consideration of counter-factual: restructuring of the 3 separate revenues services into a unified Ghana
• Outputs: would PFM reforms have evolved Revenue Authority, including organisational development and HR
differently in absence of GBS and related policy changes (on-going).
dialogue structures? • Total GTZ funding support (in two 3-year phases, 2003-2005, and 2006-
• Outcomes: Would intermediate outcomes have been 2008) amounted to €€6.8 mn (BMZ) + €2 mn (SECO).
different if use of country systems had been lower? • The support mainly took the form of technical assistance and training
support.
A.4. To what extent has • Nature of engagement with PFM reform issues • The revenue reforms under PUFMARP did not involve explicit
there been domestic within civil society, academia and the media. Introduction
interactions GRA
ofor (2010-2013)
specific activities with civil society. This was probably
public pressure or re- • Extent of participation of CSOs in policy dialogue on • BMZ
due tocontinued to support
the technical naturethe RAGB (and
of reforms subsequent
to tax form the GRA)
administration.
through the continuation of its Good Financial Governance programme.
on the external con- contribution to reduction of treasury management • The other issues related to this question are dealt with in the discussion
straints to reform? costs and to discretionary resources available to of PFM as a whole.
Government, (including effect on financing
constraints for PFM reform outputs).
within GBS/PRSC, SBS structures or similar donor-
govt fora, including use of PFM reform conditions in
GBS/ SBS disbursement conditions.
• Influence of dialogue on the “political” and “policy
space” constraints restricting choice of PFM reform
outputs.
triggers and/or points of emphasis in GBS/ PRSC
Evaluation Question Judgement
dialogue).criteria/ Possible indicators Findings
of PFM
A Inputs & Context: the design • Consideration
reform of counter-factual:
A.1. What has been the na- • Outputs:
• Government would PFM
funds forreforms have evolved
PFM reforms committed and PUFMARP (1997-2003)
ture and scale of PFM differently
actually in absence
disbursed of GBS
by year and
over related
the evaluation
policyperiod. • During the period studied, reform of revenue management was part of
reform inputs provided • Donor funds for PFM reforms committed and the PUFMARP suite of reforms. Reforms were concentrated on: (i)
Outcomes:
by Government and Do- • actually Would intermediate
disbursed outcomes
by year over the evaluation been
haveperiod improving income tax administration through introducing a unique
nors? different
• Nature use of country
ofifsupport provided systems
to PFMhad
reform lower?
beenefforts income taxpayer code; and (ii) improving the efficiency of the
A.4. To what extent has training, TA,
Nature of engagement
• (equipment, diagnostic
with work.)
PFM reform issues The revenuestructure
• institutional reforms underadministering
PUFMARP revenue
did notcollections.
involve explicit
there been domestic Focal areas
• within for reforms
civil society, by function
academia and the(based
media.on PFM • The main problem
interactions that the
or specific reforms
activities attempted
with to solve
civil society. This was
was the fact that
probably
“clusters” as in Andrews 2010)
public pressure or re- • Extent of participation of CSOs in policy dialogue on there was a significant tax gap, i.e. that actual
due to the technical nature of reforms to tax administration.revenue collections (e.g.
gional institutional • Focal areas for reforms by organisational location/
PFM reform. • as a % of GDP)
In contrast to other
werePFMlower than their
areas, therepotential. This was
are very limited due to the
numbers fact
of civil
of government
Presence/
pressure in support of • level absence of (Ministry
specificof
research Sector
Finance,and that: (i) taxpayer
society organisationscompliance (particularly,
or academic income
institutions whotax, but
deal also
with revenue
PFM reform and what ministries,
advocacy byLocalCSOsGovernments,
on PFM reform Parliament,
issues. CSOs, customs)
issues; thewas onesconsidered
that do are tomostly and (ii) efficiency
be low;concerned of collections
with revenue as part was
of
Relevance of PFM issues to political outcomes:
has been the influence • etc.) weak,
overallas fiscal revenue reporting
was analysis. and forecasting.
This will likely change with the implementation
on the external con- –– Discussion of PFM issues within election • Whilst the reforms were originally targeted at both income
of the EITI and the greater emphasis on oil revenue, as there is a greater tax and
straints to reform? campaigns customs
emphasisduties, and institutional
on accountability for thesupport to the
use of oil different revenue
revenue.
–– Discussion of service delivery issues related to services, the PUFMARP
• The evaluation of Phase IIproject subsequently
of the BMZ support to concentrated
the revenue its support
agencies
PFM in election campaigns on income
cited exposuretax and indirect tax measures,
to “international and reallocated
best practice” as being important
other in
–– Voter concerns during elections (from Afro originally-planned
influencing Ghana’sproject tax administration BPEMS.
resources toreforms.
Barometer and other relevant publications) •
• Specifically,
The remaining revenue
theissues management
related reforms
to this question during
are dealt this
withperiod
in the
–– Existence of regional or international bodies (e.g. covered:
discussion introduction
(i) of of a unique Taxpayer Identification Number; (ii)
PFM as a whole.
WAEMU, EITI) promoting specific norms on PFM the re-introduction of VAT, whose introduction had been stalled since
issues, and their relative influence on domestic 1995; and (iii) staff training.
political discourse. • DP support under PUFMARP included a limited amount of IDA funding,
–– Evolution in the quality of public/ CSO engagement which took the form of: technical assistance, training support, and
with PFM issues over time and its influence on limited equipment.
PFM reform outputs. Reforms to RAGB (2003-2008)
• Consideration of counter-factual: would PFM reform • Following PUFMARP, reforms to revenue administration continued
outputs have evolved differently in absence of under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
domestic public pressure or pressure from regional/ Governance programme.
international institutions? • These were focussed on the following measures: (i) establishment and
A.5. How relevant was the • Scale and focus of support in relation to identified • defining the strategic
In the absence operations
of any formal GoG of a Tax
PFM strategy Unit in MoFEP
Policydocument through
outlining GoG
PFM reform pro- PFM weaknesses at start and during implementation the provision
priorities in the capacity
of period building,
studied equipment
prior and analytical
to the Growth and Povertysoftware;
gramme to the needs of reforms (including weaknesses in HR Reduction Strategy (GPRS I and II) and the Short-Term/Medium-term
and the institutional endowments, quality of institutions & rules, quality (ii) improving
Action the efficiency
Plan (ST/MTAP), of operations
in practice, the Internal
the DPofPFM programme Revenue
documents
context? Was donor of systems & business processes, and quality of Service through
(specifically, thosecomputerisation
for PUFMARP and organisational
and the GTZ/BMZ Good changes; and (iii)
Financial
105
support consistent organisations). Governance [GFG] programme), prepared in consultation with GoG,
with national priori- • Consistency of donor-funded support with Revenue
served toAuthority, including organisational development and HR
proxy as such.
ties? To what extent Government PFM reform efforts, with ongoing public • changes
The PUFMARP (on-going).
programme document provides a relevant, if limited,
were adaptations administration reforms and overall Govt policies. • Total
analysis
GTZoffunding support (in
the institutional two
and 3-year phases,
operational 2003-2005,
challenges facingand
the2006-
made in response to • Extent to which scope and focus of support were 2008)
revenue amounted
agenciestobut €€6.8 mn
there is(BMZ) + €2 mn (SECO).
less explanation of how the programme
issues, and their relative influence on domestic
political discourse.
–– Evolution in the quality of public/ CSO engagement
with PFM issues over time and its influence on
PFM reform outputs.
• Consideration of counter-factual: would PFM reform
106
outputs have evolved differently in absence of
domestic public pressure or pressure from regional/
Evaluation Question Judgement criteria/
international Possible indicators
institutions? Findings
A Inputs
A.5. H
ow&relevant
Context:wasthethe of PFM
design • Scalereform
and focus of support in relation to identified • In the absence of any formal GoG PFM strategy document outlining GoG
PFM reform pro-
A.1. What has been the na- PFM weaknesses
• Government start
fundsatfor PFM and
reforms implementation
duringcommitted and PUFMARP in the period studied prior to the Growth and Poverty
priorities(1997-2003)
gramme needs of reforms (including HR Reduction I and II) and the Short-Term/Medium-term
Annex A: S
ture and scale

to theof PFM actually disbursed by weaknesses
year over thein evaluation period. • During theStrategy
period studied,
(GPRS reform of revenue management was part of
and the institutional endowments, quality of institutions
reform inputs provided • Donor funds for PFM reforms committed and & rules, quality Action
the Plan (ST/MTAP),
PUFMARP in practice,
suite of reforms. Reforms
the DPwere programme documents
PFMconcentrated on: (i)
context?
by Was donor
Government and Do- of systems
actually & business
disbursed processes,
by year over theand quality of
evaluation period (specifically, those for PUFMARP and the
improving income tax administration through introducing GTZ/BMZ Good Financial
a unique
support consistent
nors? organisations).
• Nature of support provided to PFM reform efforts Governance [GFG] programme), prepared in consultation
income taxpayer code; and (ii) improving the efficiency of the GoG, with
with national priori- • (equipment, of donor-funded
Consistency training, support with
TA, diagnostic work.) served to proxy
institutional as such.
structure administering revenue collections.
ties? To what extent • Government
Focal areas forPFM reforms
reformby efforts, with
function ongoing
(based public
on PFM •
• The PUFMARP
The main problem programme document
that the reforms attempted relevant,
providestoasolve was if limited,
the fact that
were adaptations administration
“clusters” as inreforms
Andrewsand overall Govt policies.
2010) analysis
there was ofathe institutional
significant tax gap, operational
and i.e. that actualchallenges
revenue collections
facing the (e.g.
made in response to •
• Focal to which
Extentareas scope and
for reforms byfocus
organisational were
of supportlocation/ revenue
as a % ofagencies
GDP) were butlower
therethanis less explanation
their of how
potential. This wasthe programme
due to the fact
the context and the adapted
level to the context,
of government especially
(Ministry to the level
of Finance, of
Sector measures
that: will address
(i) taxpayer compliance these(particularly,
challenges. income tax, but also
changing national pri- ownership and
ministries, Localthe capacity for reform
Governments, Parliament, CSOs, The GTZ/BMZ
• customs) GFG programme was prepared on the basis
was considered to be low; and (ii) efficiency of collections of a needs was
orities? implementation.
etc.) analysis
weak, asundertaken
was revenuewith GTZ support.
reporting and forecasting.
• Consistency & coherence with wider Donor policies • The main change to the PUFMARP measures for
• Whilst the reforms were originally targeted at both income tax andrevenue management.
in country In practice,
customs external
duties, and and GoG support
institutional PUFMARP
support measures
to the different was very
revenue
• Consistency with the Paris Declaration objectives as services,
limited, asthe resources
PUFMARP originally
projectintended for revenue
subsequently management
concentrated its support
regards ownership, harmonisation and alignment. were
on diverted
income to support
tax and indirect BPEMS.
tax measures, and reallocated other
• Flexibility in design of support and existence of Within the long-term
• originally-planned support
project committed
resources by GTZ/BMZ (covering 2003-
to BPEMS.
adequate feed-back/ learning mechanisms in order 2015), each 3-year
• Specifically, the revenue
phasemanagement evaluation,
ended with anreforms leading
during to the
this period
to adapt the design and implementation of support to covered:
design of(i) theintroduction
next 3-yearofphase.
a unique was appreciated
ThisTaxpayer by GoG
Identification Number; (ii)
changing needs. stakeholders.

In terms
• 1995; andof(iii) consistency
thestaff training. of revenue measures with GPRS and ST/
MTAP,
• DP supportthe GPRS
underdocuments
PUFMARPare insufficiently
included a limited specific
amount onofrevenue
IDA funding,
management.
B. Outputs: the delivery of PFM reforms limited equipment.
B.1. What have been the • Documentation of outputs : Reforms to RAGB
• Introduction (2003-2008)
of Tax Identification Numbering System, covering all types
outputs of the PFM re- • by PFM function (according to PFM clusters in • Following
of tax PUFMARP, reforms to revenue administration continued
form process and to Andrews 2010) and GoG support
Introduction
• under of a newand GTZ (BMZ),
indirect as part
tax regime of the latter’s Good Financial
(VAT)
what extent has direct • by type of output (People & Skills; Laws & Rules; • Governance
Establishment programme.
of Large Taxpayer Unit in MoFEP (originally, in IRS?)
donor support contrib- Systems & Business processes; Organisational •
• These were focussed
Establishment of Tax Policy following
on theUnit measures: (i) establishment and
in MoFEP
uted to these outputs? changes) Automation
• defining strategic
the of operations
operations in 6 IRSof a Tax
pilot Policy Unit in MoFEP through
offices
• Matching of outputs to PFM reform inputs, • the provision of capacity
Training/capacity building,
development of equipment
staff and analytical software;
differentiating if possible Government & Donor • The establishment of the GRA

inputs. • (ii) improving
Passage of thethe efficiency
GRA Act, 2009 of operations of the Internal Revenue
• Analysis of chronology of events to determine causal Service through computerisation and organisational changes; and (iii)
links between donor support to reform and observed restructuring of the 3 separate revenues services into a unified Ghana
changes at output level. Revenue Authority, including organisational development and HR
changes (on-going).
• Consideration of counterfactual: would these • Total GTZ funding support (in two 3-year phases, 2003-2005, and 2006-
outputs have been generated in absence of donor 2008) amounted to €€6.8 mn (BMZ) + €2 mn (SECO).
support to PFM reform? • The support mainly took the form of technical assistance and training
support.
B.2. How efficiently were • Consistency of outputs produced with planned • It may be argued that the efficiency of investment is relatively high,
these outputs gener- programme (quantity and timing) Introduction GRA (2010-2013)
given that aofrelatively modest investment has led to outputs that have
ated? Was the pacing • Extent of coordination between outputs BMZ continued
• been sustained,toparticularly
support theinRAGB
terms(and subsequent
of VAT (which had form
experienced
the GRA) a
and sequencing of re- • Quality of pacing and sequencing of output through
false start
theincontinuation
the mid-1990s) of its Good
and the Financial
Taxpayer Governance
Identificationprogramme.
Number.
B.1. What have been the • Documentation of outputs : • Introduction of Tax Identification Numbering System, covering all types
outputs of the PFM re- • by PFM function (according to PFM clusters in of tax
form process and to Andrews 2010) and • Introduction of a new indirect tax regime (VAT)
what extent has direct • by type of output (People & Skills; Laws & Rules; • Establishment of Large Taxpayer Unit in MoFEP (originally, in IRS?)
donor support contrib- Systems & Business processes; Organisational • Establishment of Tax Policy Unit in MoFEP
uted to these outputs? changes) • Automation of operations in 6 IRS pilot offices
• Matching of outputs to PFM reform inputs, • Training/capacity development of staff
differentiating if possible Government & Donor • The establishment of the GRA
inputs. • Passage of the GRA Act, 2009
• Analysis of chronology of events to determine causal
links between donor support to reform and observed
Evaluation Question changes at
Judgement output level.
criteria/ Possible indicators Findings
of PFM
A Inputs & Context: the design • Consideration
reform of counterfactual: would these
A.1. What has been the na- outputs
• Government been generated
havefunds in absence
for PFM reforms of donor
committed and PUFMARP (1997-2003)
ture and scale of PFM support to
actually PFM reform?
disbursed by year over the evaluation period. • During the period studied, reform of revenue management was part of
B.2.reform inputs provided
How efficiently were •
• Consistency
Donor fundsof PFM reforms
foroutputs producedcommitted and
with planned • the PUFMARP
It may be argued suite reforms.
thatofthe Reforms
efficiency were concentrated
of investment is relativelyon: (i)
high,
by Government
these and Do-
outputs gener- actually
programme disbursed by year
(quantity over the evaluation period
and timing) improving
given that aincomerelatively administration
taxmodest through
investment introducing
has led to outputsa unique
that have
nors?
ated? Was the pacing • Extent of
• Nature support provided
ofcoordination to PFM
between reform efforts
outputs income
been sustained,
taxpayerparticularly
code; and (ii)inimproving
terms of VAT efficiency
the (which the
hadofexperienced a
and sequencing of re- • (equipment, training,
Quality of pacing TA, diagnostic
and sequencing work.)
of output institutional
false start instructure administering
the mid-1990s) revenue collections.
and the Taxpayer Identification Number.
Focal areas for reforms by function (based on PFM
forms appropriate and • production: • The main problem that the reforms attempted to solve was the fact that
cost-effective? Was • “clusters” as in Andrews
internally coherent/ 2010)
efficient? there was a significant tax gap, i.e. that actual revenue collections (e.g.
• Focal
the cost per output ac- • Consistent for reforms
areaswith capacityby organisational location/
endowments? as a % of GDP) were lower than their potential. This was due to the fact
ceptable? Appropriate
• level of government
to degree(Ministry of Finance,
of ownership/ Sector
nature of that: (i) taxpayer compliance (particularly, income tax, but also
ministries, Local Governments,
political & admin Parliament, CSOs,
support for reform? customs) was considered to be low; and (ii) efficiency of collections was
etc.)
• Relative cost of outputs in relation to budgeted costs. weak, as was revenue reporting and forecasting.
• Influence of external support to PFM reform upon • Whilst the reforms were originally targeted at both income tax and
pacing and sequencing. customs duties, and institutional support to the different revenue
• Counterfactual: would pacing & sequencing of services, the PUFMARP project subsequently concentrated its support
outputs have been different in absence of external on income tax and indirect tax measures, and reallocated other
PFM support? originally-planned project resources to BPEMS.
B.3. What have been the • Degree of ownership of reforms at the administrative The binding
• covered: external constraint
(i) introduction of a unique
wasTaxpayer political commitment,
primarilyIdentification Number; (ii)
binding external con- and political levels (narrow vs. broad; depth of particularly
the re-introduction organisational
in termsofofVAT, whose introduction
changeshad related
beentostalled
the since
straints on the delivery commitment to reform and motivations for this integration
1995; and (iii) the revenue
ofstaff training.agencies.
of PFM reform: politi- commitment). • DP
Thesupport
change under in government
PUFMARP may have facilitated
included a limited the demonstration
amount of
of IDA funding,
cal, financing or policy • Quality of interaction between administrative and political
which tookcommitment
the form of:and technical
therebyassistance, the reforms.
energised training support, way that
The and
factors? How has this political cadres. the reforms
limited were designed, such that each phase was designed taking
equipment.
varied across the dif- • Extent and nature of political accountability (within into account the current situation and the lessons learnt from the
ferent PFM reform ruling party, vis-à-vis Legislature, vis-à-vis Reforms to RAGB
previous phase,(2003-2008)
helped to enable the reforms to monitor and respond to
components? Electorate & Civil Society) and extent to which this is • Following
availabilityPUFMARP, reforms
(or not) of policy to revenue administration continued
space.
patronage or performance-based. under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
• Economic context and its influence on financing of Governance programme.
PFM reform: per capita GDP and % growth in • These were focussed on the following measures: (i) establishment and
evaluation period, significance of domestic revenue, defining the strategic operations of a Tax Policy Unit in MoFEP through
significance of aid, level of total and discretionary the provision of capacity building, equipment and analytical software;
public spending; absence/ presence of macro crises.
• Has timeliness of funding been an issue? (ii) improving the efficiency of operations of the Internal Revenue

• Nature of “conventional wisdom” on PFM reforms: restructuring of the 3 separate revenues services into a unified Ghana
does prevailing thinking exclude certain reform Revenue Authority, including organisational development and HR
107
options? changes (on-going).
• Has policy discussion on PFM reform been open in • Total GTZ funding support (in two 3-year phases, 2003-2005, and 2006-
terms of range of participants and range of ideas? 2008) amounted to €€6.8 mn (BMZ) + €2 mn (SECO).
• Overall, what have been the binding constraints on • The support mainly took the form of technical assistance and training
the PFM production possibility frontier? support.
ferent PFM reform ruling party, vis-à-vis Legislature, vis-à-vis previous phase, helped to enable the reforms to monitor and respond to
components? Electorate & Civil Society) and extent to which this is availability (or not) of policy space.
patronage or performance-based.
• Economic context and its influence on financing of
PFM reform: per capita GDP and % growth in
evaluation period, significance of domestic revenue,
108
significance of aid, level of total and discretionary
public spending; absence/ presence of macro crises.
Evaluation Question • Has timeliness
Judgement of funding
criteria/ Possiblebeen an issue?
indicators Findings
of PFM
A Inputs & Context: the design • Nature reform
of “conventional wisdom” on PFM reforms:
A.1. What has been the na- does prevailing
• Government thinking
funds exclude
for PFM certain
reforms committed
reform and PUFMARP (1997-2003)
Annex A: S
ture and scale of PFM actually

options?disbursed by year over the evaluation period. • During the period studied, reform of revenue management was part of
reform inputs provided • • Has
Donorpolicy
fundsdiscussion on PFM reform
for PFM reforms committed open in
beenand the PUFMARP suite of reforms. Reforms were concentrated on: (i)
by Government and Do- actually range of participants
terms ofdisbursed by year overand therange of ideas?
evaluation period improving income tax administration through introducing a unique
nors? •
• Nature
Overall,ofwhat
support
haveprovided
been theto binding constraints
PFM reform on
efforts income taxpayer code; and (ii) improving the efficiency of the
the PFM production possibility frontier?
(equipment, training, TA, diagnostic work.) institutional structure administering revenue collections.
• How
• Focalhas
areas varied
thisfor between
reforms different
by function reform
(based on PFM • The main problem that the reforms attempted to solve was the fact that
components?
• Focal
C. Outcomes & overall assessment areas
of PFM for reforms
reform and of by organisational
donor location/
support to PFM reform as a % of GDP) were lower than their potential. This was due to the fact
C.1. What have been the in- • ministries, performance
Changes in Local Governments,
of PFMParliament, period
system overCSOs, The reforms
• customs) waswere intended
considered toto
beincrease
low; andthe
(ii) efficiency of collections
revenue was
termediate outcomes as measured by HIPC AAP indicators and PEFA
etc.) collection.
weak, as wasThe reforms
revenue reporting a significant
enabled and increase in revenues
forecasting.
of PFM reforms, in indicators. • Whilst
during the reforms
period. were originally targeted at both income tax and
terms of changes in the • Nature of PFM system changes identified: In terms of
• customs systems,
duties, and institutional
whilst there support
are threetoPEFA indicators
the different (including
revenue
quality of PFM systems • By PFM function (according to PFM cluster) total 9 dimensions)
services, the PUFMARP administration,
on taxproject subsequentlyin reality, many of the
concentrated its support
? • By nature of change (Upstream, De jure, dimensions
on income tax refer the underlying
andtoindirect legislative
tax measures, basis, or to other
and reallocated otherareas
Concentrated vs. Downstream, De facto, originally-planned
that are affected byproject of administrative
the typeresources to BPEMS. reforms undertaken in
Deconcentrated). Ghana.
C.2. To what extent are the • Changes in quality of PFM system directly relevant to As the
• the reforms relate
re-introduction of to improving
VAT, the efficiency
whose introduction had revenue
ofbeen stalled since
outcomes generated service delivery, especially for women & vulnerable administration,
1995; and
and (iii) staff thus on revenue collections, they provide the
training.
relevant to improve- groups: means with which MDAs and MMDAs undertake their service
• DP support under PUFMARP included a limited amount of IDAprovision. funding,
ments in the quality of • Classification of the budget (PI-5): does this permit which took the form of: technical assistance, training support, and
service delivery, par- protection/ prioritisation of specific functions or limited equipment.
ticularly for women programmes?
and vulnerable • Information in Budget documentation (PI-6): does Reforms to RAGB (2003-2008)
groups? this include performance data or targets for priority • Following PUFMARP, reforms to revenue administration continued
programmes? under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
• Does the quality of in-year reports and final accounts Governance programme.
(PI-24 & 25) and the access of the public (PI-10) • These were focussed on the following measures: (i) establishment and
permit analysis and discussion of spending & defining the strategic operations of a Tax Policy Unit in MoFEP through
performance for priority programmes? the provision of capacity building, equipment and analytical software;
• Is the predictability of funds for commitment of

expenditure (PI-16) improving? (ii) improving the efficiency of operations of the Internal Revenue
• Is the quality of information on resources received by restructuring of the 3 separate revenues services into a unified Ghana
service delivery units (PI-23) improving? Revenue Authority, including organisational development and HR
• Extent to which improvements may be attributed to changes (on-going).
the PFM reform programme, and particularly to • Total GTZ funding support (in two 3-year phases, 2003-2005, and 2006-
external support? 2008) amounted to €€6.8 mn (BMZ) + €2 mn (SECO).
• Consider counterfactual: would these changes have • The support mainly took the form of technical assistance and training
happened in the absence of the reform programme/ support.
the externally supported component of the reform
programme? Introduction of GRA (2010-2013)
• BMZ continued to support the RAGB (and subsequent form the GRA)
C.3. Have reform efforts • Causes of changes, specifically contribution of • Effectiveness is measured
through the continuation ofin
itsterms
Good of
Financial or not the reforms
whetherGovernance were
programme.
outcomes generated service delivery, especially for women & vulnerable administration, and thus on revenue collections, they provide the
relevant to improve- groups: means with which MDAs and MMDAs undertake their service provision.
ments in the quality of • Classification of the budget (PI-5): does this permit
service delivery, par- protection/ prioritisation of specific functions or
and vulnerable • Information in Budget documentation (PI-6): does
groups? this include performance data or targets for priority
programmes?
• Does the quality of in-year reports and final accounts
(PI-24 & 25) and the access of the public (PI-10)
permit analysis and discussion of spending &
performance for priority programmes?
• Is the predictability of funds for commitment of
Evaluation Question expenditure
Judgement criteria/ improving?
(PI-16)Possible indicators Findings
of PFM
A Inputs & Context: the design • Is thereform
quality of information on resources received by
A.1. What has been the na- service delivery
• Government units
funds for(PI-23) improving?
PFM reforms committed and PUFMARP (1997-2003)
ture and scale of PFM • actually which improvements
Extent todisbursed by year overmay be attributed
the evaluation to
period. • During the period studied, reform of revenue management was part of
the PFM reform programme, and particularly
reform inputs provided • Donor funds for PFM reforms committed and to the PUFMARP suite of reforms. Reforms were concentrated on: (i)
by Government and Do- actually
externaldisbursed
support? by year over the evaluation period improving income tax administration through introducing a unique
nors? • Consider
• Nature of counterfactual:
support provided would
to PFMthese changes
reform have
efforts income taxpayer code; and (ii) improving the efficiency of the
(equipment, the absence
happened in training, of the reform
TA, diagnostic programme/
work.) institutional structure administering revenue collections.
• the externally
Focal areas forsupported
reforms bycomponent of the reform
function (based on PFM • The main problem that the reforms attempted to solve was the fact that
programme?
C.3. Have reform efforts •
• Focal
Causes areas for reforms
of changes, by organisational
specifically contributionlocation/
of • as
Effectiveness
a % of GDP)is were lower than
measured in terms potential.
theirof whetherThis was
or not thedue
reforms fact
to the were
been effective? If not, level of government
identified PFM reform (Ministry
outputs. of Finance, Sector that: (i) taxpayer
implemented as compliance
planned. By(particularly,
this measure,income tax, but
the outputs also
achieved
ConsistencyLocal
why not? If yes, to what • ministries, Governments,
of actual changes with Parliament,
objectivesCSOs,
and customs) was considered
matched those expected; nevertheless, (ii) efficiency
to be low; and given greaterof collections was
political
extent PFM reform etc.)
outcome targets of PFM reform programme. weak, as was revenue
commitment, the speed reporting and forecasting.
of implementation of organisational reform in
outputs been a causal • Extent to which external constraints (political, • Whilst
particular reforms
the may havewere
beenoriginally
faster. targeted at both income tax and
factor in the changes financial, policy) have undermined effectiveness of customs duties, and institutional support to the different revenue
identified in intermedi- PFM reform. services, the PUFMARP project subsequently concentrated its support
ate outcomes? • Consider counterfactual: what change could have on income tax and indirect tax measures, and reallocated other
been expected at Intermediate Outcome level in originally-planned project resources to BPEMS.
absence of PFM reform as a whole, and in absence of • Specifically, the revenue management reforms during this period
external support to PFM reform? covered: (i) introduction of a unique Taxpayer Identification Number; (ii)
C.4. To what extent do the • Recent trends in Outcomes: do these suggest past The fact
• 1995; andthat staff training.
(iii)many of the reforms (e.g. TIN, functional VAT) have been
gains identified at the gains will be sustained? • DP
sustained under PUFMARP
supportindicates the level of included a limited
sustainability. amount
This of IDA funding,
is particularly the
Intermediate Out- • Is there a commitment (at political and which
case with
tookthethelatter, of: technical
form since assistance,
an earlier (mid-1990s) training
introduction
support,ofandVAT
come levels appear administrative levels) to continue PFM reforms? limited
was notequipment.
successful. Changes in the specification of the system
sustainable? Is the • Are there organisational structures in place (on (including a more appropriate VAT rate) enabled it to gain traction.
process of PFM re- supply & demand sides) to sustain PFM reforms? Reforms to RAGB (2003-2008)
form sustainable? • Is there the financial and technical capacity within • Following PUFMARP, reforms to revenue administration continued
Government to sustain PFM reform in the absence of under GoG support and GTZ (BMZ), as part of the latter’s Good Financial
external support? Governance programme.
• If not, is there a framework in place for continuing • These were focussed on the following measures: (i) establishment and
external support while building local capacity? defining the strategic operations of a Tax Policy Unit in MoFEP through

109
changes (on-going).
110
PFM Reform Component/Initiative: Internal Audit
Annex A: S
A.1. What has been the na- • Government funds for PFM reforms committed and • Inputs were primarily GoG-based, at approximately ¢12 mn annually.
ture and scale of PFM actually disbursed by year over the evaluation period. External funding of less than an estimated €<0.5 mn was provided by
reform inputs provided • Donor funds for PFM reforms committed and the EU, mainly for on-site training.
by Government and Do- actually disbursed by year over the evaluation period • IAA provided capacity building to IAU staff, including preparation of
nors? • Nature of support provided to PFM reform efforts audit manuals, training, on-site support programmes – going to the
(equipment, training, TA, diagnostic work.) field to help internal auditors, do risk assessment, plan and implement
• Focal areas for reforms by function (based on PFM management observations and response to the observations.
• Focal areas for reforms by organisational location/
level of government (Ministry of Finance, Sector
ministries, Local Governments, Parliament, CSOs,
etc.)
A.2. What type of struc- • Structure of design team and related consultation • The introduction of the internal audit function was designed and
tures have been used process: Balance of inputs by Donors/ Govt/ managed by the IAU with little external support.
for the design and Consultants; Extent of input/ consultation with end
management of these users of PFM system (Sector ministries, LGs and
reform inputs? Have service institutions).

these structures • Management & co-ordination structure for PFM
served to provide a co- reforms (Ad hoc Project Units vs. Normal
ordinated and harmo- management structures; Govt-controlled vs. Shared
nised delivery frame- Donor-Govt management; Use of consultants for
work? managerial or purely advisory roles)
A.3. What types of comple- • Use of country systems: extent to which external aid • There were little/no complementary actions taken by DPs.
mentary actions have is ‘on plan’, ‘on budget’ and ‘on treasury’?
Donors taken to sup- • Ranking of donor efforts to support national systems
port PFM reforms and as expressed in Paris Declaration monitoring
what has been their reports and PEFA indicators D2 and D3.
significance? Have • Scale and evolution over the evaluation period of aid
they had any influence flows provided as GBS, SBS or debt relief and relative
on the external con- contribution to reduction of treasury management
straints to reform? costs and to discretionary resources available to
what has
Evaluation been their
Question reports and
Judgement PEFA indicators
criteria/ D2 and D3.
Possible indicators Findings
A Inputs
significance?
& Context:Have of PFM
the design • Scalereform
and evolution over the evaluation period of aid
A.1. What has been the na- • Government funds for PFM reforms committed and • Inputs were primarily GoG-based, at approximately ¢12 mn annually.
ture and scale of PFM actually disbursed by year over the evaluation period. External funding of less than an estimated €<0.5 mn was provided by
nors? • Nature of support provided to PFM reform efforts audit manuals, training, on-site support programmes – going to the
• Focal areas for reforms by function (based on PFM management observations and response to the observations.
level of government (Ministry of Finance, Sector
outputs.
etc.)
A.2. What type of struc- triggers and/or
• Structure of design points of emphasis
team and related GBS/ PRSC
in consultation • The introduction of the internal audit function was designed and
tures have been used process:
dialogue)Balance of inputs by Donors/ Govt/ managed by the IAU with little external support.
for the design and • Consultants;
ConsiderationExtent of counter-factual:
of input/ consultation with end
management of these Outputs:
• users would
of PFM PFM reforms
system have evolved
(Sector ministries, LGs and
reform inputs? Have differently
service in absence of GBS and related policy
institutions).
these structures dialogue structures?
• Management & co-ordination structure for PFM
Outcomes:
served to provide a co- • reforms (AdWould intermediate
hoc Project Units vs. outcomes
Normal have been
ordinated and harmo- management of country systems
different if usestructures; had been
Govt-controlled vs.lower?
Shared
To what extent has
A.4. work? Nature of engagement
• managerial with PFM
or purely advisory reform issues
roles) • There was little or no external or regional pressure for reform.
there been domestic within civil society,
• Arrangements academia and
for monitoring the media.
& evaluation.
public pressure or re- • • Level
Extentofofharmonisation
participation ofand CSOsalignment
in policyofdialogue
differenton
gional institutional PFM reform.
pressure in support of • Presence/ absence of specific research and
PFM
A.3. W hatreform
types ofand what
comple- advocacy
• Use by CSOs
of country on PFM
systems: reform
extent issues.
to which external aid • There were little/no complementary actions taken by DPs.
mentary the influence
has beenactions have Relevance
• is ‘on plan’,of‘onPFM issues
budget’ and political
to‘on outcomes:
treasury’?
on the external
Donors taken tocon-
sup- –– Discussion
• Ranking of donor of PFM issues
efforts within election
to support national systems
straints
port PFMtoreforms
reform?and as campaigns
expressed in Paris Declaration monitoring
what has been their –– Discussion
reports and PEFA of service delivery
indicators issues
D2 and D3. related to
PFM in election campaigns
they had any influence –– Voter
flows concerns
provided during
as GBS, elections
SBS or debt(from
reliefAfro
and relative
on the external con- contribution
Barometertoand other relevant
reduction publications)
of treasury management
111
straints to reform? –– Existence
costs and to discretionary international
of regional or resources available
bodiesto (e.g.
WAEMU, EITI)
Government, promoting
(including specific
effect norms on PFM
on financing
issues, and
constraints fortheir
PFMrelative
reforminfluence
outputs). on domestic
political
• Nature anddiscourse.
evolution over time of dialogue on PFM
–– Evolution
within in the quality
GBS/PRSC, SBS structures
of public/or CSO engagement
similar donor-
public pressure or re- • Extent of participation of CSOs in policy dialogue on
gional institutional PFM reform.
pressure in support of • Presence/ absence of specific research and
PFM reform and what advocacy by CSOs on PFM reform issues.
has been the influence • Relevance of PFM issues to political outcomes:
on the external con- –– Discussion of PFM issues within election
112
straints to reform? campaigns
–– Discussion of service delivery issues related to
Evaluation Question Judgement election campaigns
PFM in criteria/ Possible indicators Findings
–– Voter concerns during elections (from Afro
A.1. What has been the na- Barometer
• Government funds and other
for PFM relevant
reformspublications)
committed and • Inputs were primarily GoG-based, at approximately ¢12 mn annually.
Annex A: S
ture and scale of PFM –– Existence

actually of regional
disbursed by year international
or over the evaluation (e.g.
bodiesperiod. External funding of less than an estimated €<0.5 mn was provided by
WAEMU, EITI) promoting
reform inputs provided • Donor funds for PFM reforms committed and specific norms on PFM the EU, mainly for on-site training.
by Government and Do- issues,
actually disbursed
and theirby relative
year overinfluence on domestic
the evaluation period • IAA provided capacity building to IAU staff, including preparation of
nors? political
• Nature discourse.
of support provided to PFM reform efforts audit manuals, training, on-site support programmes – going to the
–– Evolution in
(equipment, the quality
training, of public/ CSO
TA, diagnostic work.)engagement field to help internal auditors, do risk assessment, plan and implement
• Focal PFM issues
withareas over time
for reforms by function influence
and its (based on onPFM management observations and response to the observations.
PFM reform
“clusters” as inoutputs.
Andrews 2010)
• Consideration
• Focal counter-factual:
areas forofreforms would PFM
by organisational reform
location/
outputs
level of government differently
have evolved(Ministry in absence
of Finance, of
Sector
domestic public
ministries, Localpressure
Governments,or pressure from regional/
Parliament, CSOs,
international institutions?
etc.)
A.5. H
A.2. Wow
hatrelevant was the
type of struc- • Scale and focus
• Structure of designof support
team and in relation to identified
related consultation • Internal
• The introduction new
audit wasofathe function.
internal Prior
audit function reform,
to the was internal
designed andauditing
PFM
turesreform
have been
pro-used PFM weaknesses
process: Balance of start and
at inputs during implementation
by Donors/ Govt/ was restricted
managed compliance
by thetoIAU with littlechecking
external of payment vouchers (pre-
support.
gramme
for the design needs
to theand of reforms (including
Consultants; Extent ofweaknesses
input/ consultation
in HR with end audit), rather than on systemic reviews on behalf of management of
and the institutional
management of these endowments, quality of institutions
users of PFM system (Sector ministries, LGsquality& rules, and internal control systems. The reporting relationship was with the
context? Was donor
reform inputs? Have of systems
service & business processes, and quality of
institutions). Controller and Accountant General. Under PUFMARP, the audit
support consistent
these structures organisations).
• Management & co-ordination structure for PFM function was separated into internal and external audits.
with
servednational priori-
to provide Consistency
a co- • reforms of donor-funded
(Ad hoc Project Unitssupportvs. Normalwith • The Internal Audit Agency Act specified the new function in broad
ties? To what
ordinated andextent
harmo- Government PFM
management reform efforts,
structures; with ongoing
Govt-controlled public
vs. Shared terms, and this guided the design of the reforms.
were
nisedadaptations
delivery frame- administration
Donor-Govt management;
reforms andUse overall Govt policies.
of consultants for • With little DP support, there were no DP harmonisation issues.
made
work?in response to Extent to which
• managerial or purely and focus
scopeadvisory of support were
roles)
the context and the adapted to the context,
• Arrangements especially
for monitoring to the level of
& evaluation.
changing national pri- • Level ownership and the capacity
of harmonisation and alignment
for reformof different
• Consistency & coherence with wider Donor policies
A.3. What types of comple- • Use of country systems: extent to which external aid
in country • There were little/no complementary actions taken by DPs.
mentary actions have Consistency
• is ‘on plan’, ‘on budget’
with the Paris ‘on treasury’?
and Declaration objectives as
Donors taken to sup- • Ranking of donor efforts
regards ownership, harmonisation
to support andnational systems
alignment.
port PFM reforms and • as expressed
Flexibility in Paris
in design of Declaration
support andmonitoring
existence of
what has been their reports
adequate and PEFA indicators
feed-back/ learning D2 and D3.
mechanisms in order
to adapt the design and implementation of support to

significance? Have • Scale
changing evolution over the evaluation period of aid
andneeds.
B. Outputs: the delivery
on the external contribution to reduction of treasury management
con-of PFM reforms
straints
B.1. W hat have reform?
to been the • costs and to discretionary
Documentation of outputs resources
: available to The main outputs during the study period include:
outputs of the PFM re- • Government,
by PFM function (including
(accordingeffect on financing
to PFM clusters in • Passage of the Internal Audit Agency Act, 2003
form process and to constraints
Andrews 2010) for PFM
and reform outputs). • Establishment of the Internal Audit Agency (IAA) to co-ordinate,
what extent has direct •
• Nature
by type ofand evolution
output (People
over&time of dialogue
Skills; on PFM
Laws & Rules; facilitate and provide quality assurance for internal audit activities
donor support contrib- within
Systems GBS/PRSC,
& Business SBS structures
processes; or similar donor-
Organisational within MDAs and MMDAs. The operational framework of the internal
uted to these outputs? govt fora, including use of PFM reform conditions in
changes) audit units had been enhanced by the adoption of public sector internal
• GBS/
MatchingSBSof disbursement
outputs to PFM conditions.
reform inputs, audit regulations and standards and the use of an internal audit manual
• Influence of dialogue
differentiating on the
if possible “political” and
Government “policy
& Donor and programmes.
space”
inputs. constraints restricting choice of PFM reform • Internal audit standards adopted from INTOSAI and AFROSAI E.
outputs.
ties? To what extent Government PFM reform efforts, with ongoing public terms, and this guided the design of the reforms.
were adaptations administration reforms and overall Govt policies. • With little DP support, there were no DP harmonisation issues.
made in response to • Extent to which scope and focus of support were
the context and the adapted to the context, especially to the level of
changing national pri- ownership and the capacity for reform
• Consistency & coherence with wider Donor policies
in country
• Consistency with the Paris Declaration objectives as
regards ownership, harmonisation and alignment.
• Flexibility in design of support and existence of
adequate feed-back/ learning mechanisms in order
to adapt the design and implementation of support to
Evaluation Question Judgement criteria/ Possible indicators
changing needs. Findings
A
B.Inputs & Context:
Outputs: the design
the delivery PFM reform
of PFMofreforms
A.1. has been
B.1. What have beenthe
thena- • Government
Documentation funds
of outputs
for PFM: reforms committed and •
TheInputs
mainwere primarily
outputs duringGoG-based, at approximately
the study period include: ¢12 mn annually.
outputs
ture andofscale of PFM
the PFM re- • actually disbursed
by PFM function by year over
(according the evaluation
to PFM clusters in period. • External
Passage of funding
the Internal than an
of lessAudit estimated
Agency €<0.5 mn was provided by
Act, 2003
reform
form process provided
inputsand to • Donor funds
Andrews 2010) PFM reforms committed and
forand • the EU, mainly for
Establishment on-site
of the training.
Internal Audit Agency (IAA) to co-ordinate,
by Government
what extent hasand Do-
direct • actually
by type ofdisbursed by year
output (People &over
Skills; evaluation
theLaws period
& Rules; • IAA provided
facilitate and capacity building
provide quality to IAU staff,
assurance forincluding preparation
internal audit activitiesof
donor
nors? support contrib- • Nature
Systems of&support
Business provided to PFM
processes; reform efforts
Organisational audit
withinmanuals,
MDAs and training,
MMDAs. on-site support programmes
The operational framework –ofgoing to the
the internal
uted to these outputs? (equipment,
changes) training, TA, diagnostic work.) field
audittounits internal
helphad been auditors,
enhanceddo byrisk
the assessment,
adoption of public and implement
plan sector internal
• Focal areas
Matching for reforms
of outputs by function
to PFM (based on PFM
reform inputs, management observations
audit regulations and response
and standards and the useto the observations.
of an internal audit manual
“clusters”
differentiating
as inifAndrews
possible 2010)
Government & Donor and programmes.
• Focal
inputs.areas for reforms by organisational location/ • Internal audit standards adopted from INTOSAI and AFROSAI E.
• level of government
Analysis of chronology (Ministry of Finance,
of events Sector
to determine causal • Establishment of Internal Audit Units (IAUs) in MDAs, MMDAs, as
ministries,
links between Local Governments,
donor Parliament,
support to reform CSOs,
and observed follows:
etc.)
changes at output level. –– Ministries: 21 established (out of 23);
• Consideration of counterfactual: would these –– Departments and agencies: 125 (out of 149);
outputs have been generated in absence of donor –– MMDAs: 155 (out of 170).
support to PFM reform? • The operational efficiency of the MDAs and MMDAs has been measured
and monitored by the IAA by reviewing the submissions received
relating to the: (i) internal audit charters; (ii) annual audit plans and (iii)
quarterly audit reports. Data for 2010 show:
–– Annual audit plans: 216 (72%) had been prepared, comprising 14
Ministries, 95 Departments and Agencies and 107 MMDAs.
–– Signed charters: 14 Ministries, 64 Departments and Agencies, 124
MMDAs (total of 67%)
–– Around 27% of quarterly Internal Audit reports were received:
–– Ministries: 27 reports
–– Departments and agencies: 124 reports
–– MMDAs: 172.
A.3. What types of comple- • Use of country systems: extent to which external aid Responsibility
• There to enforce
were little/no and follow up
complementary on auditing
actions takenfindings,
by DPs. including
mentary actions have is ‘on plan’, ‘on budget’ and ‘on treasury’? for internal audit, is given to the Audit Reports Implementation
Donors taken to sup- • Ranking of donor efforts to support national systems Committees (ARICs) (80% of total).
port PFM reforms and as expressed in Paris Declaration monitoring –– Ministries: 22
what has been their reports and PEFA indicators D2 and D3. –– Departments and agencies: 113
–– MMDAs: 124
B.2. they efficiently
How had were • Consistency
flows providedof outputs
as GBS, produced
SBS or debt with planned
relief and relative • The efficiency of the reforms has been hampered by the unclear
any influence
these programme
contribution (quantity
to reduction
andoftiming)
treasury management reporting relationships of the IAUs in MDAs and MMDAs. At MDA and
on theoutputs
externalgener-
con-
113
ated? Was pacing • Extent of coordination
costs and between
to discretionary outputs
resources available to MMDA levels, IAUs have dual reporting responsibilities between the
straints to the
reform?
and sequencing of re- • Quality of pacing
Government, and sequencing
(including of output
effect on financing IAA and MDA and between IAA and MMDA. The IAA posts the Internal
forms appropriate and production:
constraints for PFM reform outputs). Auditors to MDAs and MMDAs and, although they report directly to the
cost-effective? Was •
• internally
Nature and coherent/
evolutionefficient?
over time of dialogue on PFM IAA, they are expected to be part of the MDA/MMDA. This dual
the cost per output ac- • Consistent with capacity
within GBS/PRSC, endowments?
SBS structures or similar donor- allegiance creates tensions and suspicion among the IAs, MDAs and
ceptable? • Appropriate to degree of ownership/ nature of MMDAs, which has reduced the efficiency of reform.
–– Ministries: 27 reports
–– Departments and agencies: 124 reports
–– MMDAs: 172.
• Responsibility to enforce and follow up on auditing findings, including
for internal audit, is given to the Audit Reports Implementation
Committees (ARICs) (80% of total).
114
–– Ministries: 22
–– Departments and agencies: 113
–– MMDAs: 124
A Inputs
B.2. Context: the
How&efficiently of PFM
design •
were Consistency
reform of outputs produced with planned • The efficiency of the reforms has been hampered by the unclear
these outputs gener- programme (quantity and timing) reporting relationships of the IAUs in MDAs and MMDAs. At MDA and
A.1. W hat has
ated? Wasbeen the na-
the pacing •
• Government funds for PFM
Extent of coordination reforms
between committed and
outputs • Inputs
MMDAwere primarily
levels, IAUs have GoG-based,
dual reportingat approximately
responsibilities mn annually.
¢12 between the
Annex A: S
ture
and sequencing
and scale ofofPFM
re- • actually
Quality ofdisbursed
pacing and year over the
bysequencing ofevaluation
output period. External
IAA and MDAfunding
andof less than
between IAA estimated
anand MMDA. €<0.5
The IAA was provided
mnposts by
the Internal
reform inputs provided
forms appropriate Donor funds for PFM reforms committed and
and • production: the EU, mainly for on-site training.
Auditors to MDAs and MMDAs and, although they report directly to the
by Government and
cost-effective? internally
WasDo- • actually disbursed year over the evaluation period
coherent/byefficient? • IAA
IAA,provided capacity building
they are expected to be part IAU
to of staff,
the including preparation
MDA/MMDA. This dual of
nors?
the cost per output ac- • of support
Consistent
• Nature provided
with capacity to PFM reform efforts
endowments? audit manuals,
allegiance training,
creates on-site
tensions and support
suspicionprogrammes – going
among the IAs, MDAs the
to and
ceptable? • (equipment,
Appropriate training,
to degreeTA, diagnostic work.)
of ownership/ nature of field
MMDAs,to help internal
which auditors,
has reduced the risk assessment,
doefficiency of reform.plan and implement
Focal areas
• political for reforms
& admin supportby function
for reform? (based on PFM • management
As internal and observations
external audit and response
need to work the observations.
totogether, the efficiency of
• “clusters”
Relative costas ofin outputs
Andrewsin2010)
relation to budgeted costs. internal audit reforms depends on a good working relationship
•
• Focal areas
Influence of for reforms
external by organisational
support to PFM reform location/
upon between the IAA and Ghana Audit Service (GAS). To this end, attempts
level
pacing government
ofand sequencing. (Ministry of Finance, Sector to strengthen co-operation has been led by a formal dialogue between
ministries, Local Governments, Parliament,
• Counterfactual: would pacing & sequencing of CSOs, the two institutions to examine areas of commonality. Formal dialogue
etc.)
outputs have been different in absence of external has been established with a Memorandum of Understanding that spells
A.2. What type of struc- PFM support?
• Structure of design team and related consultation out the
• The shared planning
introduction of the internal
of auditaudit dialogue
work,function processes
was designedand
anduse of
tures have been used process: Balance of inputs by Donors/ Govt/ managed
outcomesby enhance
to the effectiveness
IAU with little external efficiency. GAS has tried to use
andsupport.
for the design and Consultants; Extent of input/ consultation with end the work of IAA wherever possible in cases where the standards
management of these users of PFM system (Sector ministries, LGs and adopted by the internal audits are sufficiently robust to permit the
reform inputs? Have service institutions). external auditor to place reliance on that work.
these structures • & co-ordination structure for PFM
B.3. W hat have been the • Management

Degree of ownership of reforms at the administrative • Main external constraint has been political commitment, with IAA
served to
binding external a co-
providecon- reforms (Ad hoc
and political levelsProject Units
(narrow vs.vs. Normal
broad; depth of reports being delayed at the senior Executive level (Office of the
ordinated
straints onand
theharmo-
delivery management
commitment to structures;
reform and Govt-controlled
motivations forvs. Shared
this President) before being passed to Parliament. Slow responses from
nised
of reform:frame-
PFMdelivery politi- Donor-Govt
commitment). management; Use of consultants for political leadership, as well as weak administrative decision-making,
work?
cal, Quality of interaction
financing or policy • managerial or purely between roles)
advisory administrative and affected negatively the pace of reform.
factors? How has this • Arrangements
political cadres.for monitoring & evaluation. • Effectiveness of internal audit constrained by inaction (insufficient
varied across the dif- • Level of harmonisation and alignment of different
• Extent and nature of political accountability (within follow-up to audit reports) rather than funding constraints.
ferent PFM reform donor
ruling contributions.
party, vis-à-vis Legislature, vis-à-vis • In addition, the IAA indicates that its main challenge in obtaining higher
A.3. components?
What types of comple- • Electorate
Use of country & Civil Society)
systems: and extent
extent to which to which
external is
thisaid IAU compliance
• There is capacity
were little/no constraints
complementary amongst
actions IAU
taken bystaff
DPs.to undertake
mentary actions have patronage
is ‘on plan’,or‘onperformance-based.
budget’ and ‘on treasury’? their duties to the required standard.
Donors taken to sup- •
• Economic
Ranking ofcontext
donor efforts influence
and itsto supporton financing
national of
systems • Financial resources have not been a binding constraint.
port PFM reforms and PFM reform: per
as expressed capita
in Paris Declaration growth in
GDP and %monitoring
what has been their evaluation
reports andperiod, significance
PEFA indicators domestic
D2ofand D3. revenue,

significance? Have • public
Scale andspending;
evolution absence/
over thepresence
evaluation of macro
periodcrises.
of aid
on the external con- Has timeliness
• contribution to reduction
of fundingof been an issue?
treasury management
straints to reform? Nature
• costs of “conventional
and to discretionary wisdom”
resources on PFM reforms:
available to
does prevailing thinking exclude
Government, (including effect on financing certain reform
constraints
options? for PFM reform outputs).
• Has policy
• Nature anddiscussion on PFM
evolution over timereform
of dialogue
beenon open
PFMin
terms of
within range of participants
GBS/PRSC, SBS structuresand range of ideas?
or similar donor-
Overall,
• govt fora,what have been
including use ofthe
PFMbinding
reform constraints
conditions onin
the PFM
GBS/ SBSproduction
disbursement possibility frontier?
conditions.
• How has this
• Influence varied between
of dialogue different reform
on the “political” and “policy
components?
outputs.
reports being delayed at the senior Executive level (Office of the
straints on the delivery commitment to reform and motivations for this President) before being passed to Parliament. Slow responses from
of PFM reform: politi- commitment). political leadership, as well as weak administrative decision-making,
cal, financing or policy • Quality of interaction between administrative and affected negatively the pace of reform.
factors? How has this political cadres. • Effectiveness of internal audit constrained by inaction (insufficient
varied across the dif- • Extent and nature of political accountability (within follow-up to audit reports) rather than funding constraints.
ferent PFM reform ruling party, vis-à-vis Legislature, vis-à-vis • In addition, the IAA indicates that its main challenge in obtaining higher
components? Electorate & Civil Society) and extent to which this is IAU compliance is capacity constraints amongst IAU staff to undertake
patronage or performance-based. their duties to the required standard.
• Economic context and its influence on financing of • Financial resources have not been a binding constraint.
PFM reform: per capita GDP and % growth in
evaluation period, significance of domestic revenue,
Evaluation Question public spending;
Judgement absence/
criteria/ Possible presence of macro crises.
indicators Findings
of PFM
A Inputs & Context: the design • Has timeliness
reform of funding been an issue?
A.1. What has been the na- • Nature of “conventional
• Government funds for PFMwisdom”
reformson PFM reforms:
committed and • Inputs were primarily GoG-based, at approximately ¢12 mn annually.
ture and scale of PFM does prevailing
actually disbursed thinking exclude
by year certain
over the reform
evaluation period. External funding of less than an estimated €<0.5 mn was provided by
options?
Has policy
by Government and Do- • actually discussion
disbursed on PFM
by year overreform been open
the evaluation in
period • IAA provided capacity building to IAU staff, including preparation of
nors? • Nature
terms ofofrange
supportof participants and range
provided to PFM reform ideas?
ofefforts audit manuals, training, on-site support programmes – going to the
• (equipment, have been
Overall, whattraining, TA,the
diagnostic constraints on
binding work.) field to help internal auditors, do risk assessment, plan and implement
• the PFM
Focal production
areas possibility
for reforms frontier?
by function (based on PFM management observations and response to the observations.
How has this
• “clusters” as varied between
in Andrews 2010)different reform
components?
C. Outcomes & overall assessment level of government
of PFM reform and (Ministry Finance,
of donorofsupport toSector
PFM reform
C.1. What have been the in- • etc.)Changes in performance of PFM system over period • The 2006 PEFA did not score the internal audit indicator, as it was felt
termediate outcomes as measured by HIPC AAP indicators and PEFA that it was too early to assess the internal audit function
A.2. of hat type
WPFM of struc-
reforms, in • Structure
indicators.of design team and related consultation •
• The of the internal
2009 PEFA assessed
The introduction audit
internal function
audit was designed
as follows: PI-21 (i) –and
coverage
tures have
terms been used
of changes Nature ofBalance
in the • process: PFM system of inputs by Donors/
changes Govt/
identified: managed
and qualitybyofthe IAU with
internal little
audit external
function: C;support.
PI-21(ii) – frequency and
quality design
for the of PFM and
sys- • Consultants;
By PFM function Extent(according
of input/toconsultation
PFM cluster) with end distribution of reports: B; and PI-21(iii) – extent of management
management of these
tems? • users of PFM
By nature of change (Sector ministries,
system(Upstream, De jure, LGs and response to IA findings: D.
Concentrated vs. Downstream, De facto, • These results follow a pattern common elsewhere of reports being
these structures • Management
Deconcentrated). & co-ordination structure for PFM issued regularly, but with a lacklustre follow-up (implementation of
served to provide a co- reforms (Ad hoc Project Units vs. Normal recommendations more difficult than setting out what the changes
ordinated and harmo- management structures; Govt-controlled vs. Shared should be).
C.2. To what extent are the
work? Changes in quality
• managerial or purely of PFM system
advisory directly relevant to
roles) • Not applicable. As internal audit is a management tool to ensure
outcomes generated • Arrangements
service delivery,for especially
monitoring for&women & vulnerable
evaluation. internal control systems are operating effectively, it serves to facilitate
relevant to improve- groups:
• Level of harmonisation and alignment of different greater efficiency of MDAs’ expenditures.
ments in the quality of Classification
• donor of the budget (PI-5): does this permit
contributions.
What types
A.3. ticularly of comple-
for women • Use of country
programmes? systems: extent to which external aid • There were little/no complementary actions taken by DPs.
mentary
and actions have
vulnerable Information
• is ‘on plan’, ‘onin Budget and ‘on treasury’?
budget’documentation (PI-6): does
Donors taken to sup-
groups? • Ranking
this includeof donor
performance support
efforts todata national
or targets for systems
priority
programmes?
what has been their • reports
Does theand PEFA
quality ofindicators
in-year reports
D2 andandD3.final accounts
(PI-24 & 25) and the access of the public (PI-10)
they had any influence flows
permitprovided
analysisas GBS,
and SBS or debt
discussion relief and
of spending & relative
on the external con- contribution
performancetofor reduction of treasury management
priority programmes?
115
straints to reform? • costs
Is the and to discretionary
predictability of funds resources available
for commitment ofto
Government,
expenditure (PI-16)(including effect on financing
improving?
• constraints
Is the qualityfor of PFM
information
reform on outputs).
resources received by
• Nature
service and evolution
delivery unitsover time
(PI-23) of dialogue on PFM
improving?
• within
ExtentGBS/PRSC, SBS structures
to which improvements mayor besimilar donor-
attributed to
relevant to improve- groups: greater efficiency of MDAs’ expenditures.
ments in the quality of • Classification of the budget (PI-5): does this permit
and vulnerable • Information in Budget documentation (PI-6): does
groups? this include performance data or targets for priority
116
programmes?
• Does the quality of in-year reports and final accounts
Evaluation Question (PI-24 & 25)
Judgement criteria/
and thePossible the public (PI-10)
access ofindicators Findings
permitreform
analysis and discussion of spending &
performance for priority programmes?
A.1. What has been the na- • Government funds for PFM reforms committed • Inputs were primarily GoG-based, at approximately ¢12 mn annually.
• Is the predictability of funds for commitment of and
Annex A: S
ture and scale of PFM actually disbursed year over the evaluation period. External funding of less than an estimated €<0.5 mn was provided by
expenditure (PI-16)byimproving?
reform inputs provided • Donor PFM reforms and the EU, mainly for on-site training.
• Is the quality
funds of forinformation on committed
resources received by
service delivery units (PI-23) improving?
nors? • support provided to PFM audit manuals, training, on-site support programmes – going to the
Extent to
• Nature ofwhich improvements mayreform
be attributed
effortsto
the PFM reform programme, and particularly to
Focal areas
• external for reforms by function (based on PFM management observations and response to the observations.
support?
• Consider counterfactual: would these changes have
• Focal
happenedareas infor
thereforms
absenceby oforganisational location/
the reform programme/
level of government
the externally (Ministry
supported of Finance,
component Sector
of the reform
ministries,
programme? Local Governments, Parliament, CSOs,
etc.)
C.3. Have reform efforts • Causes of changes, specifically contribution of • Effectiveness of reform is measured by whether or not reforms have
been effective? If not, identified PFM reform outputs. been implemented as intended. In this case, it is arguably too early to
why not? If yes, to what • Consistency of actual changes with objectives and assess the quality of the internal audit function, as opposed to its
extent PFM reform outcome targets of PFM reform programme. organisational establishment, which is still being implemented. As the
outputs been a causal • Extent to which external constraints (political, PEFA assessment made clear, there are challenges with the follow-up
factor in the changes financial, policy) have undermined effectiveness of to audit recommendations.
identified in intermedi- PFM reform.
ate outcomes? • Consider counterfactual: what change could have
been expected at Intermediate Outcome level in
absence of PFM reform as a whole, and in absence of
external support to PFM reform?
C.4. To what extent do the • Level
Recent harmonisation
oftrends in Outcomes:and alignment of different
do these suggest past • As indicated, the internal audit function is in the process of being
gains identified at the donor contributions.
gains will be sustained? implemented.
Intermediate Outcome • Is there a commitment (at political and • Sustainability of the function will depend on political commitment,
levels appear sustain- administrative levels) to continue PFM reforms? particularly in terms of demanding results and follow-up to actions.
able? Is the process of • Are there organisational structures in place (on
PFM reform sustain- supply & demand sides) to sustain PFM reforms?
able? • Is there the financial and technical capacity within
what has been their reports and PEFA indicators D2 and D3.
Government to sustain PFM reform in the absence of
external support?
• If not, is there a framework in place for continuing
external support while building local capacity?
outputs.
Annex B: List of Persons
Consulted
Name Organisation & Position

Adam Hussein DFO, Gomoa West District Assembly
Angela Peasah Head, Research & Development, CAGD
B.G. Godjoe Asst. A-G, GAS
Baptiste Mandouze Programme Officer, Macro-Economic and Trade
Section, EU Delegation
Brigid KfW
Charlotte Afudego Policy Analyst, IFP
D.B. Tenkorang DPO, Gomoa West District Assembly
Dan Boakye Sr. Economist and Former PFM Country Lead,
World Bank
Daniel Atwere Nuer Principal Research Analyst, Ghana Revenue
Authority
Daniel Chachu IFPI/ISODEC Policy Analyst
David Pedley Governance Adviser, DFID
Dennis Nchor Policy Analyst, ISODEC
Edmund Head, GIFMIS, MoH
Barimah-Sarpong
Edward Fiawoyife Dep. Director, Audit, MoH
Eline Okudzeto Macroeconomist, AfDB
Emmanuel Asst Clerk to the Committee on Finance,
Akrofi-Tibo Parliament
Enoch Hemans Chief Director, MoFEP
Eric Lampley GAS Board Member and Advisor to Auditor
General
Eva Mends Director of Budget Development Unit, Budget
Division, MoFEP
F. G. Dakpallah Director, PPME, MoH
Gabriel Tandoh Dep. Director, PPME, Min of Tourism
Grace Adzroe Deputy CAG (F&A), CAGD
H. A. Mustapha Ag. Dep. Director, Finance
Harald Küppers Programme Manager, Good Financial
Governance, BMZ 117
Annex B: L
ist of Persons Consulted
Helmut Schön KfW

Hemis Ussif Macroeconomist, Swiss Co-operation
Herman Dusu DOF, MoH
Hon. Albert Kan Chairman, Public Accounts Committee,
Dapaah Parliament
Hon. James Klutse Chairman, Public Finance Committee,
Avedzi Parliament
Humphrey A. Kuma Director, PPME, Min of Tourism
Irene Nordjo Danida
Isaac Agyare Head of PFM Reform Unit, Budget Division,
MoFEP
Ismaila Ceesay World Bank, FM Advisor
James N. Amponsah Deputy CAG (T), CAGD
K. K. Kufe Ag. DCAG (FMS), CAGD
K.E. Ghansah Ag. DAG, GAS
Kafui Ken-Seneya Head, PBU, MoH
Kirsten Richter BMZ
Kwabena Adjei Former Budget Director (MoFEP) and Former
Mensah Deputy Controller, CAGD
Kwabena Boadu Director – ERFD, MoFEP
Oku-Afari
Kwabena Gyan Asst Economist, ERFD, MoFEP
Kwakye
Kwame Gyesaw Asst Economist, ERFD, MoFEP
Kwame Quandahor PPME, GHS, Head of Budget
Kwasi Owusu Director, Adm, CAGD
Leonard Policy Asst II, ISODEC
Shong-Quartey
Linda Laroson DBA, Gomoa West District Assembly
Marie-Laure Res Rep AfDB
Akin-Olugbade
Mohummed Museah A/D, Gomoa West District Assembly
Nana Juaben-Boaten Former Chief Director, MoFEP
Siriboe
Osa Ahinakwah IMF
Patrick Nomo Head of Internal Audit Agency
(currently on leave)
118
Peace Fiawoyife Clerk to the Committee on Finance, Parliament
Annex B: List of Persons Consulted
Peter Aidoo Economic Planning Officer, MoFEP

Philomena Johnson Co-ordinator, Institute of Fiscal Policy (IFP)
Ramatu Ude Umanta Ag. Director, Finance, GHS
Ranford Agyei Ag. Director General, Internal Audit Agency
Rapheal Tufour Controller and Accountant General (CAG)
Richard Asamoah Deputy Auditor General, Audit Service
Asiedu
Robert Quarshie Ag. DAG/GAD, GAS
Sally Lake Senior Adviser, MoH
Sam K. Boateng Head, Fin Reporting and Monitoring, MoH
Sammy Arkhurst Head of Public Expenditure Monitoring Unit,
Budget Division, MoFEP
Samuel Boateng Director, Procurement & Supply, MoH
Seidu Kotomah Director, GIFMIS, CAGD
Smart Chegabatia Dep. Director, HRD, Min of Tourism
Solomon Otoo Head, FMS, MoH
Steve Gur Senior Advisor, IMF
Sulemana B. Bening Principal Planner, MoH
Theophilus Aidoo- DCE, Gomoa West District Assembly
Mensah
Thomas Peasah Budget Division, MoFEP
Yakubu Zakaria ISODEC
Yaw Sifah Ag. DAG/PSAD, GAS
Yukiyo Oda Project Formulation Adviser, JICA
119
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123
Annex D: Summary of PFM reform
inputs, outputs, and
124
Causal factors in
positive/negative Role of DP Intermediate
1 2
PFM focal area Inputs Specific reform Outputs progress Contributions3,4 outcomes
Strategic Support to MTEF: TA, MTEF Partial (e.g. excludes Weaknesses in, & ambi- Direct (design, im- Deterioration in
budgeting design of MTEF, soft- salary-related costs) tiousness of, MTEF de- plementation) credibility of multi-
ware. Funding of activity-based MDA sign. Pressure to roll out year framework
$4.6 mn (WB) (and budgets early.
GoG of $0.2 mn). Co-
financing from DFID
Composite budgets Pilot phase has last- Differences in classifi- Indirect (policy dia-
and CIDA.
ed nearly 10 years. cation systems between logue)
More comprehen-
central, local not re-
sive budget info,
solved prior to piloting
more timely budget
calendar: solely GoG
inputs
Budget GoG inputs Legislative basis for Finance and Admin- Commitment by GoG N/A/indirect (policy Improvement in
preparation PFM istration Act dialogue) budget calendar,
Financial Adminis- More transparency
tration Regulations in budget informa-
tion (greater ac-
Budget contents More comprehen- Commitment by GoG N/A/indirect (policy countability to the
sive budget informa- dialog) public)
tion
Timing of budget Approp. Act passed Commitment by GoG N/A/indirect (policy
submission to Par- before beginning of dialogue)
liament fiscal year
More communica- Citizens’ Guides Commitment by GoG N/A
tion with public on Pre-budget consul-
budget tations w/ public
Budget information
on website
Resource TA, training, soft- Direct taxes TIN introduced Commitment by GoG, Direct (design, im- Significant increase
management – ware, hardware with DP support plementation) in revenues, not
and intermediate outcomes
revenues73 Funding of €6.8 mn clear to what extent

(BMZ) + €2 mn Indirect taxes VAT re-introduced Commitment by GoG, Direct (design, im- this was due to im-
with DP support plementation)
125
(SECO). Prior fund- proved efficiency
ing from DFID. Greater administra- GRA Act Commitment by GoG, Direct (design, im-
tive efficiency Tax Policy Unit es- with DP support plementation)
tablished in MoFEP
Large Taxpayers
tion
liament fiscal year
126
budget tations w/ public Causal factors in
Budget information positive/negative Role of DP Intermediate
1 2
PFM focal area Inputs Specific reform Outputs
on website progress Contributions3,4 outcomes
Strategic
Resource Support
TA, to MTEF:
training, soft- TA, Direct
MTEF taxes Partial
TIN (e.g. excludes
introduced Weaknesses in,
Commitment by& ambi-
GoG, Direct (design, im- Deterioration
Significant in
increase
budgeting
management – ware, of MTEF, soft-
designhardware salary-related costs) tiousness
with of, MTEF de-
DP support plementation) credibility
in revenues, multi-
of not
revenues73 ware. Funding
Funding of €6.8ofmn activity-based MDA sign. Pressure to roll out year framework
clear to what extent
$4.6 mn
(BMZ) (WB)
+ €2 mn(and Indirect taxes VAT re-introduced
budgets Commitment by GoG,
early. Direct (design, im- this was due to im-
GoG of $0.2
(SECO). mn).
Prior Co-
fund- with DP support plementation) proved efficiency
financing
ing from DFID
from DFID. Greater administra- GRA Act Commitment GoG, Direct (design,
Composite budgets Pilot phase has last- Differences inby
classifi- Indirect (policy im-
dia-
and CIDA. tive efficiency Unit es- plementation)
ed
Taxnearly
Policy10 years. cation
with DPsystems
supportbetween logue)
More comprehen- tablished in MoFEP central, local not re-
sive budget info, Large Taxpayers solved prior to piloting
more timely budget Unit established in
calendar: solely GoG MoFEP
inputs Beginning the pro-
Budget GoG inputs cess of integrating
Legislative basis for Finance and Admin- Commitment by GoG N/A/indirect (policy Improvement in
preparation PFM revenue services
istration Act dialogue) budget calendar,
Resource Advisory support, Aid, debt manage- Financial Adminis-

Regular reports on Commitment by GoG un- Direct (design, soft- More transparency
Slippage in fiscal
management – software ment tration Regulations
amt, composition of der PUFMARP reforms ware) in budget informa-
discipline (weak-
Treasury, aid & Funding of $0.2 mn public debt, guaran- External technical sup- tion (greater ac-
nesses in commit-
debt (WB) + $0.03 mn tees of ext. loans
sive budget informa- to port (software) dialog) ment controls)
(GoG) (debt manage- parastatals public)
tion
ment), $0.2 mn (WB)
+ $0.03 mn (GoG) Commitment
Timing of budgetcon- New commitment
Approp. Act passed GoG-DP
Commitment policybydialogue
GoG Direct (limited,
N/A/indirect not
(policy
Annex D: S ummary of PFM reform inputs, outputs
submission to Par-
(cash mngmt). Other trols control system intro-
before beginning of (to initiate) sustained)
dialogue)
funding from US liament duced (not sus-
fiscal year Commitment/Institu-
Treasury, WB, and tained) tional factors/ inter-
IMF More communica- Citizens’ Guides Commitment
agency co-operation
by GoG (to N/A
tion with public on Pre-budget consul- sustain)
Treasury realign- Establishment
Budget information of GoG-DP policy dialogue N/A/indirect (policy
ment separate
on website Treasuries Commitment/Institu- dialogue)
in some MDAs, re- tional factors/ inter-
Resource TA, training, soft- Direct taxes gions
TIN (improve-
introduced agency co-operation
Commitment by GoG, Direct (design, im- Significant increase
73 The Petroleum Revenue
management –
Management Act is not included in this analysis, since its promulgation
ments in cash flows
(April 2011) occurred after the period being assessed and
ware, hardware with DP support plementation) in revenues, not
revenues tax efficiency
thus its73effect on Funding of €6.8was not comprehensive
mnbeyond the scope of the study. clear to what extent
(BMZ) + €2 mn Indirect taxes VAT re-introduced
or sustained) Commitment by GoG, Direct (design, im- this was due to im-
(SECO). Prior fund- with DP support plementation) proved efficiency
ing from DFID. Single Treasury ac- Closing of a number GoG-DP policy dialogue Direct (but not fully
count
Greater administra- of GRA Act
redundant bank Commitment by GoG,
Commitment/Institu- Direct (design,
effective), im-
indirect
tive efficiency accounts Unit es-
Tax Policy(though with DP
tional support
factors/ inter- plementation)
(policy dialogue)
tablished
this in MoFEP
still leaves many agency co-operation
Large
in Taxpayers
place)
Unit established in
Resource Advisory support Cash management Attempts
MoFEP to improve GoG-DP policy dialogue, Direct (but not fully Slippage in fiscal
management Funding from CIDA, information
Beginning the cash
onpro- DP trigger effective), indirect discipline
-expenditures WB, IMF, DFID, DKK, flows
cess ofto/from MDAs Commitment/Institu-
integrating (policy dialogue)
and UNICEF. not comprehensive
revenue services tional factors/ inter-
on website
tablished in MoFEP
Large Taxpayers
Unit established in
MoFEP
Beginning the pro- Causal factors in
cess of integrating positive/negative Role of DP Intermediate
1 2
PFM focal area Inputs Specific reform Outputs
revenue services progress Contributions3,4 outcomes
Resource
Strategic Advisoryto
Support support,
MTEF: TA, Aid, debt manage-
MTEF reports
Regular(e.g.
Partial on
excludes Commitmentin,
Weaknesses GoG
by& un-
ambi- soft-
Direct (design, im- Slippage in fiscal
Deterioration in
management –
budgeting software
design of MTEF, soft- ment amt, composition
salary-related of
costs) der PUFMARP
tiousness reforms
of, MTEF de- ware)
plementation) discipline (weak-
credibility of multi-
Treasury, aid & Funding
ware. Funding
of $0.2ofmn public debt, guaran-
activity-based MDA External
sign. technical
Pressure sup-
to roll out nesses
year in commit-
framework
debt (WB)mn
$4.6 + $0.03
(WB)mn(and tees of ext. loans to
budgets port (software)
early. ment controls)
(GoG)of(debt
GoG $0.2manage-
mn). Co- parastatals
ment), $0.2
financing from (WB)
mnDFID
Composite
Commitmentbudgets
con- Pilot phase has last-
New commitment Differences
GoG-DP policy in classifi-
dialogue Indirect (policy dia-
Direct (limited, not
+ $0.03
and mn (GoG)
CIDA.
trols ed nearly
control 10 years.
system intro- cation systems between
(to initiate) logue)
sustained)
mngmt). Other
(cash comprehen-
More
duced (not sus- central, local not re-
Commitment/Institu-
funding
sive from
budget US
info,
tained) solved
tional factors/ piloting
prior to inter-
Treasury,
more timelyWB, and
budget
IMF
calendar: solely GoG agency co-operation (to
inputs sustain)
Budget GoG inputs Treasury realign-

Legislative basis for Establishment
Finance and Admin- of GoG-DP
Commitmentpolicybydialogue
GoG N/A/indirect
N/A/indirect (policy
(policy Improvement in
preparation ment
PFM separate Treasuries
istration Act Commitment/Institu- dialogue)
dialogue) budget calendar,
in some MDAs,
Financial re-
Adminis- tional factors/ inter- More transparency
gions
tration(improve-
Regulations agency co-operation in budget informa-
ments in cash flows tion (greater ac-
Budget contents not
Morecomprehensive
comprehen- Commitment by GoG N/A/indirect (policy countability to the
or sustained)
tion
Single Treasury ac- Closing of a number GoG-DP policy dialogue Direct (but not fully
count
Timing of budget of redundant
Approp. bank
Act passed Commitment/Institu-
Commitment by GoG effective),
N/A/indirectindirect
(policy
submission to Par- accounts
before beginning
(thoughof tional factors/ inter- (policy dialogue)
dialogue)
liament this still
fiscal yearleaves many agency co-operation
in place)
Resource Advisory support tion with
Cash public on
management Pre-budget
Attempts to consul-
improve GoG-DP policy dialogue, Direct (but not fully Slippage in fiscal
management Funding from CIDA, budget tations w/ public
information on cash DP trigger effective), indirect discipline
-expenditures WB, IMF, DFID, DKK, Budget
flows information
to/from MDAs Commitment/Institu- (policy dialogue)
and UNICEF. on website
not comprehensive tional factors/ inter-
or sustained agency co-operation
management – ware, hardware Procurement Procurement Act GoG-DP
with policy dialogue,
DP support Direct (design), indi-
plementation) in revenues, not
revenues73 Funding of €6.8 mn passed; challenges DP trigger rect (implementa- clear to what extent
(BMZ) + €2 mn Indirect taxes VAT
withre-introduced
implementation Institutional
Commitmentfactors
by GoG,(im- Direct (design, im-
tion) this was due to im-
with DP support plementation)
127
(SECO). Prior fund- plementation) proved efficiency
ing from DFID. administra- GRA Act GoG, Direct (design,
Internal controls, Training Payroll
Greatercontrols IPPD2 being used for Commitment
Commitment by by GoG, Indirect (policy im-
dia- Internal audit func-
audit, & Funding of €<0.5 mn tive efficiency Tax Policy Unit
ministries, es-
depts. with DP support
GoG-DP policy dialogue, plementation)
logue) tion initiated
monitoring (EU). Other funding tablished
but in MoFEP
only some agen- DP trigger
from DFID and Large Taxpayers
cies
ment separate Treasuries Commitment/Institu- dialogue)
in some MDAs, re- tional factors/ inter-
gions (improve- agency co-operation
ments in cash flows
not comprehensive
or sustained)
128
Single Treasury ac- Closing of a number GoG-DP policy dialogue Direct (but not fully
count of redundant bank Commitment/Institu- effective), indirect
accounts (though Causal
tional factors/ in
factorsinter- (policy dialogue)
this still leaves many positive/negative
agency co-operation Role of DP Intermediate
PFM focal area Inputs1 Specific reform Outputs
in place)2 progress Contributions3,4 outcomes
Strategic
Resource Advisoryto
Support support
MTEF: TA, MTEF
Cash management Partial
Attempts(e.g.
to excludes
improve Weaknesses
GoG-DP policy & ambi-
in,dialogue, Direct (design, im-
(but not fully Deterioration in
Slippage in fiscal
budgeting
management Fundingoffrom
design MTEF,CIDA,
soft- salary-related
information on costs)
cash tiousness
DP triggerof, MTEF de- plementation)
effective), indirect credibility
discipline of multi-
-expenditures WB, IMF,
ware. Funding DKK,
DFID,of activity-based MDA
flows to/from MDAs sign. Pressure to roll out
Commitment/Institu- (policy dialogue) year framework
and UNICEF.
$4.6 mn (WB) (and budgets
not comprehensive early.
tional factors/ inter-
GoG of $0.2 mn). Co- or sustained agency co-operation
financing from DFID
Composite budgets
Procurement Pilot phase has
Procurement last-
Act Differences
GoG-DP policy in classifi-
dialogue, Indirect (policy dia-
Direct (design),
and CIDA.
ed
passed; 10 years.
nearlychallenges cation systems between
DP trigger logue)
indirect (implemen-
More comprehen-
with implementation central,
Institutional
localfactors
not re-(im- tation)
sive budget info,
solved prior to piloting
plementation)
more timely budget
Internal controls, calendar:
Training solely GoG Payroll controls IPPD2 being used Commitment by GoG, Indirect (policy dia- Internal audit func-
audit, inputs
Funding of €<0.5 mn for ministries, depts. GoG-DP policy dialogue, logue) tion initiated
& monitoring
Budget (EU). Other funding
GoG inputs Legislative basis for but only some
Finance and Admin- DP
Commitment
trigger by GoG N/A/indirect (policy Improvement in
preparation from DFID and PFM agencies
France.
Internal audit Financial Adminis-

Internal Audit Under PUFMARP re- N/A, indirect More transparency
tration
AgencyRegulations
Act passed forms (policy dialogue) in budget informa-
Internal Audit tion (greater ac-
Agency established
sive budget informa- dialog)
Standards, manual public)
tion
produced
Timing of budget IAUs established
Approp. Act passed Commitment by GoG N/A/indirect (policy
Annex D: S ummary of PFM reform inputs, outputs
submission to Par- ARICs

beforeestablished
beginning of dialogue)
liament fiscal year
Accounting and Funding of $15.3 mn FMIS/BPEMS Implementation in 6 Ambitiousness of de- Direct (under Slippage in fiscal
reporting (WB)+ $4.6 mn (GoG) More communica- Citizens’
pilot MDAsGuides
not sus- Commitment
sign, by GoG
insuff. high-level PUFMARP),
N/A then discipline
(BPEMS) tion with public on Pre-budget
tained. Systemconsul- commitment in practice, indirect (policy dia-
abandoned. seen primarily as tech- logue)
Budget information nol. reform, manage-
on website ment problems (agency
ownership), technical
Resource TA, training, soft- Direct taxes TIN introduced Commitment
problems by GoG, Direct (design, im- Significant increase
revenues73 Funding of €6.8 mn Timeliness of in-year More timely GoG-DP policy dialogue, N/A/ indirect clear to what extent
(BMZ) + €2 mn Indirect taxes
budget execution re- VAT re-introduced
gazetting Commitment
DP trigger by GoG, Direct (design,
(policy im-
dialogue) this was due to im-
(SECO). Prior fund- ports with DP support plementation) proved efficiency
ing from DFID. Greater administra- im-
External TA/capacity building External audit External
GRA Act Audit Agen- Commitment
Commitment byby GoG
GoG,un- Direct
Direct (design,
(design, TA Improved account-
accountability (GAS), training, au- tive efficiency cy Policy Unit es-
TaxAct der
withPUFMARP
DP supportreforms, plementation)
support) ability to the public
dits of selected Standards, MoFEP
tablished inmanual with DP support for public finances
flows. Funding of €8 Large Taxpayers
produced GoG-DP policy dialogue,
mn (EU) (External Unit established
Performance, in
VfM DP trigger
audit), €0.5 mn/yr audits
MoFEPbegun
(BMZ) (PAC), DFID Beginning the
Clearance pro-
of audit
(GAS, PAC) £0.4 mn, cess of integrating
backlog
KfW, CIDA, DANIDA revenue services
produced
IAUs established
ARICs established
Accounting and Funding of $15.3 mn FMIS/BPEMS Implementation in 6 Ambitiousness of de- Direct (under Slippage in fiscal
reporting (WB)+ $4.6 mn (GoG) pilot MDAs not sus- sign, insuff. high-level PUFMARP), then discipline
(BPEMS) tained. System commitment in practice, indirect (policy dia-
abandoned. seen primarily as tech- logue)
nol. reform, manage-
ment problems (agency
ownership), technical
problems
Timeliness of in-year More timely Causal
GoG-DPfactors in
policy dialogue, N/A/ indirect
budget execution re- gazetting positive/negative
DP trigger Role
(policy DP
ofdialogue) Intermediate
1
PFM focal area Inputs Specific
ports reform Outputs2 progress Contributions3,4 outcomes
External
Strategic TA/capacity
Support building
to MTEF: TA, External audit
MTEF External
Partial Audit
(e.g. excludes Commitmentin,
Weaknesses GoG
by& un-
ambi- Direct (design, im- Improved account-
Deterioration in
accountability
budgeting (GAS), training,
design of MTEF,au-soft- Agency Act
salary-related costs) der PUFMARP
tiousness reforms,
of, MTEF de- TA support)
plementation) ability to the
credibility of public
multi-
ware.
dits ofFunding
selectedof Standards, manual
activity-based MDA with DP
sign. Pressure
supportto roll out for public
year finances
framework
flows.
$4.6 mnFunding of €8
(WB) (and produced
budgets GoG-DP policy dialogue,
early.
mn (EU)
GoG (External
of $0.2 mn). Co- Performance, VfM DP trigger
audit), €0.5
financing mn/yr
from DFID audits begun
Composite budgets Pilot phase has last- Differences in classifi- Indirect (policy dia-
(BMZ)
and (PAC), DFID
CIDA. Clearance of audit
ed nearly 10 years. cation systems between logue)
More PAC) £0.4 mn,
(GAS, comprehen- backlog
central, local not re-
sive CIDA, DANIDA
KfW,budget info,
Parliamentary scru- More timely PAC resolved
Commitment piloting
prior toby GoG,
N/A/indirect (policy
(DKK 0.5
more mn/yr)
timely budget
calendar: solely GoG tiny of public finance
view of audit reports public pressure dialogue)
inputs Public access to PAC
debates
Budget
1
GoG inputs Legislative basis for Finance and Admin- Commitment by GoG N/A/indirect (policy Improvement in
DP funding
preparation only. GoG funding not available to
PFMmatch this breakdown.
2
input. Where
Main outputs shown. Does not include staff training, considered anFinancial outputs
Adminis- have not been sustained, this has been noted. More transparency
3
Analysis from Box 7 above. tration Regulations in budget informa-
4
DP support shown may not be comprehensive due to non-availability of data. tion (greater ac-
tion
liament fiscal year
Budget information
on website

129
tablished in MoFEP
Large Taxpayers
Unit established in
Annex E: C
onsultant Terms
of Reference
1. Introduction
These Terms of Reference are for case studies to be carried out in Burkina
Faso, Ghana and Malawi on the reform of public financial management (PFM)
systems, the results achieved, the role played by donors and other institutional
and contextual factors that may contribute to or hinder PFM reform outcomes.
The case studies will build on empirical analysis that investigates where and
why PFM reform has delivered results and, conversely, where and why it has
not. The main focus of the case studies will be to investigate whether and how
donor behaviour and the design and implementation of PFM reform makes
a difference to the achievement of results, or whether other domestic contextual
factors carry more weight.
2. Background
he Paris Declaration on Aid Effectiveness and the associated emphasis on the
T
use of country systems, budget support, and governance and anti-corruption
have triggered increased attention on the reform of PFM. Strong PFM systems
are a key element of the institutional and governance framework needed for
building peaceful and stable societies and successful economic and social devel-
opment, essential to improved service delivery and to the achievement of the
Millennium Development Goals.
Nevertheless, PFM systems in many developing countries remain weak
and there is lack of certainty or consensus on the role of donors and the con-
text under which external support can best assist the process of PFM reform.
To address this, the evaluation departments of DANIDA (Denmark), Sida
(Sweden) and the AfDB (African Development Bank) have agreed, in consul-
tation with the OECD-DAC Evaluation Network, to manage a joint evalua-
tion of PFM reforms in developing countries. This and other planned joint
evaluations, including the joint evaluation of the impact of budget support,
public sector governance reform, support to anti-corruption programmes, and
the implementation of the Paris Declaration,will feed into discussions prior to
the next High Level Forum on Aid Effectiveness (HLF-4) in Busan (29
November – 1 December 2011).
The PFM evaluation is interested in finding answers to two related ques-
tions:
(a) Where and why do PFM reforms deliver results (i.e. improvement in
the quality of budget systems); and
(b) W here and how does donor support to PFM reform efforts contribute
most effectively to results?
130
Annex E: Consultant Terms of Reference
To answer these questions the evaluation design is made up of several compo-

nents outlined in summary below.
First, analytical background work has been undertaken both to:
– define what is meant by PFM reform results; and
– consider how results can be measured across countries and over
time to assess the degree to which change in the quality of PFM
systems has occurred (see Lawson/De Renzio Approach and Meth-
odology for the Evaluation of Donor Support to PFM in Develop-
ing Countries Part A July 2009 and Part B September 2009).
• Second a literature review has been completed looking at the range
of approaches to PFM reform, donor support and existing evidence on
success/failure of PFM reform approaches74.
• Third, a quantitative analysis has been undertaken to identify
countries where PFM reform has delivered results in the quality
of PFM systems; where it hasn’t, and the contextual factors that
might explain these differences as well as the correlation with donor
support75.
• Fourth, country case studies will follow up the findings from the
quantitative analysis and explore why, in some cases, donor support
appears correlated with results, and why in others it does not. The case
studies will explore whether and how donor behaviour and the
approach to PFM reform design and implementation makes a differ-
ence to results. Five case studies are planned in Sub-Saharan Africa
starting with Burkina Faso, Ghana and Malawi.
• Finally, a regional Africa synthesis report will be compiled
that will bring together findings from each of the evaluation products
outlined above.
Country case studies have been selected on the basis of data availability (see
below) and because they provide examples where budget institutions improved
with: (i) high donor effort; (ii) low donor effort; and where regardless of donor
effort, budget institutions did not improve.
3. Purpose
The purpose of the evaluation is to identify what factors – institutional and
contextual – contribute to successful PFM reform and how donors can best
support PFM reform processes given the influence of contextual factors on the
process of change. Conversely, the case studies will also identify where PFM
reform has not worked, and whether the application of aid effectiveness princi-
ples to PFM reform is important to results. The evaluation findings are
intended for Governments, donors and PFM practitioners. The intention is to
improve the design of external support for country led PFM reform efforts.
74 Pretorius, C and Pretorius, N. (2008) Review of the Public Financial Management

Literature. London: DFID.
75 de Renzio, P., M. Andrews and Z. Mills (2010) Evaluation of Donor Support to Public
Financial Management (PFM) Reform in Developing Countries. Analytical study of
quantitative cross-country evidence.London: Overseas Development Institute. 131
Annex E: C
onsultant Terms of Reference
4. Scope and Limitations

Country case studies cover the period from 2001–2009.76 The period repre-
sents a time in which donors became increasingly interested in PFM and
agreed to increase the effectiveness of aid expenditure, including by using
country systems to channel and deliver aid finance.
As PFM performance information is only widely available for central gov-
ernment, the scope of the case studies is restricted to central government
organisations. Nevertheless, country visits may provide an opportunity to
gather information (in addition to that contained in PEFA) on the extent to
which PFM reforms are beginning to extend beyond central government insti-
tutions to local government and to service providers. The extent to which the
government is taking a lead in this may indicate ownership and reform sus-
tainability.
The quantitative analysis found a positive and significant, albeit weak, cor-
relation between donor support to PFM reforms and improvements in PFM
systems. It also found some positive correlations between the way aid is pro-
vided and the strength of PFM systems. However, these average effects cannot
be taken as causal and universal, and need to be further investigated. There-
fore the main purpose of the country case studies is to unpack the nature of
PFM reform in different cases where there is found to be: (i) a positive correla-
tion with donor support; (ii) a negative correlation with donor support; and (iii)
no correlation between PFM results and donor support. As such, case studies
will focus on the history of PFM reform inputs; what has been provided, for
what purpose, in what sequence, for how long and at what cost that might help
to explain the correlation (positive or negative) with PFM results or lack of
them. The case studies will therefore not investigate the impact of PFM
reform (particularly on service delivery) but will instead focus on inputs in the
evaluation framework; how they have been identified, designed and delivered
and the significance of this for the delivery of intermediate outcomes
(explained in detail below). In countries where there has been high donor sup-
port to PFM, a key line of enquiry is the extent to which the application of aid
effectiveness principles is found to make a difference to results.
However, given the range of factors that contribute to PFM results, it may
be difficult to directly attribute results to donor support.77PFM reform inter-
ventions are treated as inputs in the evaluation framework and the case study
methodology is centred on the ability to assess the institutional and contextual
factors that helped to support success and/or failure of these inputs at each
stage of the evaluation framework. It may also be possible to link intermediate
outcomes to outputs and donor inputs. For example, one dimension of PFM
reform – linking policy to planning and budget (an intermediate outcome in
the evaluation framework) – may receive substantial donor support because
while it is difficult from a technical perspective it may be relatively easier from
a political perspective. Donor support for the achievement of the other inter-
76 Or the date of the second PEFA report, which might be earlier than 2009.
77 In fact, the quantitative analysis highlights how economic factors in particular explain
132 a large part of variation in the successful implementation of PFM reforms.
mediary outcomes – greater transparency and comprehensiveness and con-

trol, oversight and accountability – may not be as strong because the political
costs of these reforms may be higher despite their relative technical ease. It
will therefore be important for the evaluation case studies to explore the wider
context of reform intervention and whether certain reforms are pursed
because they are politically more palatable than others. In other words, the
case studies would examine the extent to which donor support is concentrated
at particular phases of the budget cycle.
While the evaluation framework identifies final outcomes including the
operational efficiency of public spending, it may be too soon to draw conclu-
sions about the impact and sustainability of results. This is largely due to the
fact that the evaluation period is relatively short and while quality PFM is nec-
essary for the quantity and quality of service delivery, it is not sufficient. Nev-
ertheless, it may be useful to consider what factors help to support on going
reform and what factors risk sustainability e.g. is PFM reform supported by
civil society, the Parliament and the business community; implemented in
a stable and growing economy; building and developing the capacity of the
Ministry of Finance as a key central government body; and spreading further
than the centre to include sector Ministries, local government and service
delivery units; and supported by on going donor support and technical
assistance?
5. Methodology for the Selection of Case Studies

Case study countries have been selected on the basis of data availability. All
case studies have at least two Public Expenditure and Financial Accountabil-
ity (PEFA) assessments available (which covers a period of at least three years)
plus World Bank and IMF HIPC assessments which extends the evaluation
period by at least another four years (or more depending on the date of the
HIPC assessments) which may be sufficient to observe changes in the quality
of PFM systems.
The table below separates the 14 countries in Sub-Saharan Africa that
meet the data requirements, into countries where reforms have delivered
results (i.e. an increase in HIPC/PEFA scores between 2001 and 2007 – or the
date of the second PEFA assessment – and countries where reforms did not
bring about any improvement or where the quality of PFM systems
deteriorated.
PEFA Performance in 14 African Countries 2001–2007

Countries where budget Countries where budget institutions
institutions improved did not improve or deteriorated
Burkina Faso, Ethiopia, Ghana, Benin, Guinea, Madagascar, Malawi,
Mali, Tanzania, Zambia Mozambique, Rwanda, Sao Tome
and Principe, Uganda
Source: P
FM Evaluation Approach Paper Part A: Assessing Budget Institutions
and Budget Reforms in Developing Countries
133
Annex E: C
Of these countries, case studies will be selected so that three types of situation
can be examined:
• One in which donor support appears to be positively correlated with
PFM improvement;
• One in which donor support appears to be negatively correlated with
PFM improvement; and
• One in which significant PFM improvements appear to have occurred
despite relatively low levels of donor support.
This suggests that countries are selected from across the following table.
Relative Impact of Donor Support to PFM reforms in SSA (1998–2007)

Countries where Budget Budget Institutions
PFM Reform Institutions Improved did not improve
High donor Burkina Faso, Tanzania, Benin, Malawi, Mozam-
support Zambia bique, Rwanda, Sao Tome
and Principe, Uganda
Low donor Ethiopia, Ghana, Mali
support
Source: As above
However, as stated above, donor support is not the only factor influencing the
design and implementation of PFM reform measures and their results. Other fac-
tors, notably a range of domestic economic, political and institutional factors, are
likely to determine the dynamic of the reform process as well as the results
achieved. Hence, country case studies have been specifically selected to include
cases where budget performance has improved with little or no donor support for
PFM reform to highlight what specific factors contributed to reform outcomes
and to provide a relevant counter factual.
6. Analytical Approach
The first step in answering the related questions of where and why do PFM
reforms deliver results and where and how does donor support contribute most
effectively to results, is to build a common definition of what is meant by
results. The second step is to identify empirical information that might help to
measure results and compare them across countries and over time (see Assess-
ing Budget Institutions and Budget Reforms in Developing Countries: Over-
view of theoretical approaches and empirical evidence. Paolo de Renzio
July 2009).
For the purpose of this evaluation, the following three dimensions of budg-
et institutions provide a basis for assessing their overall quality:
• Transparency and comprehensiveness: looks at issues related to
the quality of budget information, from the classification system to the
coverage and clarity of budget documents; accessibility to budget infor-
mation by the Legislature, the general public, media and civil society
134
• L inking budgeting, planning and policy: assesses the extent to

which the budget is effective in converting policy objectives into rele-
vant taxation and spending actions; budgets are derived from accurate
medium term forecasts and contain a policy perspective
• Control, oversight and accountability: considers whether ade-
quate mechanisms are in place to promote overall accountability for
the use of public resources
Quality budget institutions are defined as those that exhibit higher degrees of
transparency; policy orientation and control/accountability (see Table 1
below). At the opposite end, weak budget institutions are identified by their
opacity, their lack of linkages with planning and policy, and the absence or
weakness of mechanisms for monitoring and accounting for the use of public
funds.
These dimensions are consistent with parts of the PEFA assessment as well
as with indicators developed for HIPC assessments (Table 1).
Table 1 PEFA Indicators of Budget Performance

Intermediate PEFA
Outcome Definition Indicators
Transparency The quality of budget information, HIPC 1, 2, 4, 5
and Compre- from the classification system to the PEFA 5, 6, 7, 8, 9,
hensiveness coverage and clarity of budget docu- 10, 13, 14, 15
ments; accessibility to budget infor-
mation by the Legislature, the gen-
eral public, media and civil society
Links between Budget is effective in converting pol- HIPC 7, 10
planning, policy icy objectives into relevant taxation PEFA 11, 12, 16,
and budget and spending actions; budgets are 23
derived from accurate medium term
forecasts and contain a policy per-
spective
Control over- Adequate mechanisms are in place HIPC 8, 9, 11, 15
sight and ac- to promote overall accountability for PEFA 17, 18, 19,
countability the use of public resources 20, 21, 22, 24,
25, 26, 27, 28
Unsurprisingly, there are limited sources of information and cross-country data

which can be relied on to assess and compare the quality of budget institutions.
The most comprehensive attempt at constructing a framework to assess the
quality of budget institutions is the PEFA PFM Performance Measurement
Framework (PEFA 2005) based on 31 indicators, which cover institutional
arrangements at all phases of the budget cycle. Moreover, the framework con-
tains all the information needed to measure the quality of budget institutions
long the three dimensions identified above.
135
Annex E: C
The country case studies will explore the extent to which PFM reform is more
likely to produce results when there is an enabling environment for reform,
when donor behaviour follows the principles of aid effectiveness, and when
PFM reform interventions follow certain principles.78 This suggests that PFM
reform is more likely to produce results in the following circumstances:
• Economic Growth and Political Stability: PFM reforms take
place in a stable environment that allows for the time, policy space and
flexibility needed to implement complex governance reforms, and the
additional public funds generated by growth.
• Reform Planning and Design: PFM reform inputs consider the
local context taking into account the strength of existing institutions.
Reform plans have been prioritized and sequenced to implement basics
first and do not overwhelm existing administrative capacity.
• Strengthened Approach: reforms are country owned and managed
through existing processes; with donor support harmonized and
aligned behind country led reform programmes and aid is channeled
through country PFM systems79.
• Political Economy: PFM reforms have sustained high level political
support for governance reforms in general (including civil service
reform) and reflect political priorities and feasibility; political economy
factors (such as patronage networks) are less powerful.
• Demand side governance: PFM reforms build on existing public
demand for improved PFM through strengthening transparency of
decision making and financial information, and there is greater
accountability to the public and users of public services. Countries
where these processes exist are more likely to deliver results in PFM
reform, but this could also be a necessary pre-condition to more diffi-
cult or politically sensitive PFM reforms.
The relevance of these factors to the PFM change process has been incorpo-
rated into an evaluation framework. The purpose of the pilot country case
studies is to test the evaluation framework and to elaborate further on where
and why PFM reforms deliver results and how donor support can more effec-
tively support the PFM change processes.
7. Evaluation Questions
Detailed questions for each country case study regarding PFM reforms are list-
ed below against the OECD DAC evaluation criteria of relevance, efficiency
and effectiveness of PFM reform. The questions have been structured to reflect
the theory of change set out in the evaluation framework in Annex 1. At each
78 See Paolo de Renzio ( July 2009): PFM Evaluation Approach Paper, Part A chapter 6:
“Explaining success in budget reforms: lessons from the political economy of govern-
ment reforms.” The theory of change largely draws on the lessons learnt from first
generation structural adjustment reforms, rather than second generation governance
reforms. However, the theory closely suggests that the principles of aid effectiveness
also apply to PFM reform.
79 While this may appear tautological, there can often be several PFM reform project
interventions and TA initiatives (World Bank, IMF, ADB and so on) operating within one
136 institution, usually the Ministry of Finance with no single agreed strategy for PFM reform,
level of the evaluation framework (inputs, outputs, intermediate and final out-
comes) the evaluation will consider the institutional and contextual factors that
influenced the design and implementation of PFM reform and their significance
in delivering reform success.80 It is important to note that these questions refer to
all PFM reform inputs whether or not they are financed by external donors.
• How relevant is PFM reform to local context and existing
systems?
– Is there a government led PFM reform programme that has high
level political support?
– Does PFM reform respond to domestic priorities, e.g. politically
driven public sector reform agendas, macroeconomic and fiscal
needs, political priorioties for improved service delivery?
– Is donor support designed and structured to support government
led and government managed initiatives?
– Do PFM reform programmes include a component aimed at
strengthening budget reporting e.g. to the public. Or do PFM
reform programmes include components to include the public in
resource allocation decisions?
– Is external support to PFM reform designed to fit with the nature of
political support for reform, to the institutional strengths and weak-
nesses of the existing PFM system, and to the organisational capa-
bility of the lead agencies (e.g. finance ministry) in PFM reform?
Are international models of PFM reform transplanted on a “one-
size fits all” basis or is PFM reform developed incrementally to fit
with existing administrative capacity?81
– Are PFM reforms consistent with on-going public administration
reforms?
– Is donor support based on building existing PFM systems rather
than creating new ones?
– Is there evidence that donor supported reforms have overwhelmed
existing institutional capacity?
– What is the role of technical assistance in PFM reform design?
– Are PFM reform and management processes supported by or
include active consultation and communication with a wide range
of stakeholders involved in the reforms, as well as active measures
to broaden support for reform?
• How efficient and cost effective is PFM reform?
– Efficiency should look at the ratio between costs and output or out-
comes. It will be important to estimate what PFM reform costs?
How much has been spent by Government initiatives and by
donors e.g. on personnel and equipment, to achieve particular
PFM objectives?
80 These questions are a summary of a much longer list of questions taken from Lawson/
de Renzio
81 Assessing political support is not straightforward but evidence could be gathered through
interviews (TA, donor, government officials, and civil society) and through the ability of
the Ministry of Finance (and the Minister of Finance) to lead and implement PFM reforms
across government with strong support from Cabinet and Parliament. 137
Annex E: C
– Is donor support for PFM reform coordinated around a single PFM
reform plan or strategy or is support fragmented across several ini-
tiatives?
– Have donor efforts been slow at getting started or taken longer than
expected, requiring on-going TA support?
– Is donor support reliant on specifically designed PFM reform man-
agement units (project implementation units)?
• How effective is PFM reform?
– Is there any additional evidence of PFM reform that is not captured
in the PEFA framework e.g. reforms extending beyond central gov-
ernment institutions?
– Have PFM reforms (including donor support to reforms) moved
beyond de jure reform aspects, such as approving laws and regula-
tions, to de facto aspects, such as changes in actual budget practic-
es, and have these elements of PFM systems improved?
– Have PFM reforms extended beyond the centre (e.g. Central
Finance Agencies) to include, for example, sector Ministries, local
government and service delivery units and what explains this
spread? Have reforms been effective in improving PFM perfor-
mance beyond central finance agencies?
– In aid dependent countries, to what extent has the use of general
budget support, PFM-related conditionality, and efforts to reduce
aid fragmentation contributed to strengthening PFM performance?
Have these efforts impacted across all aspects of PFM, or on specif-
ic areas such as de jure and concentrated PFM processes?
– Are country systems for financial reporting and accountability uti-
lised by donors?
– To what extent is aid expenditure included in different stages of the
budget process82?
8. Tasks
The consultants will conduct country case studies in Burkina Faso, Ghana
and Malawi.
Task 1: Inception Phase

• Organise consultation workshop (in Tunis) as part of the inception
phase involving key users and stakeholders of the evaluation.
Prepare an Inception Report that would:

• Further develop the evaluation questions, evaluation framework, ana-
lytical tools and overall work plan for the country case studies that
builds on the original approach papers and the literature review to
ensure complementarities and the best possible synthesis report83.
82 For instance see CABRI – dimensions of aid on budget including procurement

83 Lawson/De Renzio Approach and Methodology for the Evaluation of Donor Support
to Public Financial Management (PFM) in Development Countries Part A July 2009
138 and Part B September 2009
• I ncorporate an approach to test the findings and hypotheses emerging

from the quantitative study.
Task 2: Desk Review

• Review existing PEFA/HIPC assessments and performance data (for
the three case study countries) – what does the evidence tell us about
PFM reform progress over the evaluation period? What specific
reforms have been followed and is it possible to track them over time?
• Gather information on donor support to PFM reform over the evalua-
tion period (including project documents where these are available).
While 2001 is the date of the first HIPC assessment, it might also make
sense to extend that period backwards to capture earlier donor PFM
support, and initial reforms that took place in the mid to late 1990s.
• Identify the level and character of government initiatives, and (changes
in) the level of political will to undertake PFM reforms during the eval-
uation period, classifying it according to the following categories:
– Stage of the budget cycle (e.g. preparation, approval, execution,
audit)
– Budgeting time horizon (e.g. annual budget, MTEF)
– Involved stakeholders (e.g. Parliament, CSOs, DPs)
– Type of input (e.g. legislative, human capital, infrastructure)
– Cost (direct and indirect) and time
• Identify donor support (inputs in the evaluation framework) to PFM reform
during the evaluation period in each country case study and classify it
according to the three dimensions of quality PFM (described above) and
the following:
– its phase in the budget cycle e.g. preparation, approval, execution,
audit
– type e.g. technical assistance, training, capacity building, software
and computer installation, budget support, dialogue on PFM
reform;
– process of delivery e.g. project management unit, or through Gov-
ernment systems;
– donor providing the support e.g. World Bank, IMF, AFDB, and
bilaterals and whether it is joined up or implemented through sepa-
rate project agreements;
– cost and time;
• Using project documents, identify the outputs that support interven-
tions are intended to deliver e.g. people, skills and organizational
capacity; changes in laws, rules and procedures; improved information
systems and business processes; and changes in incentives and controls
(see evaluation framework);
• Compile a timeline of support showing the sequencing of donor sup-
ported reform activities (plus investments). Can results in PEFA assess-
ments be linked to specific reforms that have been supported by
donors?
139
Annex E: C
Task 3: Undertake country visits

The purpose of the country visits is to assess the relevance, efficiency, effec-
tiveness and sustainability aspects of the theory of change framework and how
donor support has been designed and implemented.
The evaluation team would be expected to carry out structured and semi
structured interviews with Ministry of Finance officials, other officials in gov-
ernment, sector ministries, local government, politicians, civil society and
a range of donors both those involved in PFM reform and those that are not.
The consultants could consider sending a limited number of questions in
advance of the country visit to both donors and government officials. If a joint
donor/government budget support or PFM group exists detailed discussion
should be held with these groups to review experience over time.
Task 4: Report drafting

The consultants will be expected to produce stand alone reports for each coun-
try case study. Reports should be no longer than 30 pages with additional infor-
mation included as annexes as necessary. Reports should be succinct as it is
important to produce written information which is accessible to a wide audience
and to readers whose first language may not be English (or conversely French).
As far as possible, the initial findings of the evaluation should be discussed with
the participating government, with donor partners and other stakeholders in
country for comment and feedback before the evaluation team departs. Draft
reports would be presented to the Management Group and Evaluation Refer-
ence group for comments and feedback before the final report is produced.
9. Budget
The total cost (fees and reimbursables) for the evaluation must not exceed SEK
3,500,000.
10. Deliverables84 and timetable

The consultant will undertake the following tasks within the timeline set out
below:
Deliverable Submit by
Inception phase consultation workshop in Tunis March 2011
Prepare an Inception Report setting out the ap- 31st March 2011
proach to the case studies. Undertake in country
consultations during the inception stage
Undertake a desk based review of PEFA reports 30th April 2011
and other available evidence about PFM reforms in
the case study countries. The objective is to develop
a preliminary overview of and hypotheses about
how the reforms have been undertaken, partner
government initiatives and the level and character
of the external support.
140 84 All deliverables will be submitted electronically in English and French

Deliverable Submit by
Visit case study countries and undertake a range of May–June 2011
interviews, workshops, and a de-briefing work-
shops at the end of the field visit (following a com-
mon evaluation approach)
Briefing report with preliminary findings from 30th June 2011
country visits
Country case study reports submitted (following 31st August 2011
a common format)
Final Synthesis Submitted 30th September
2011
11. Consultant qualifications and skills

The work will require a small team of consultants who have experience in
PFM reform, with part of that experience being in the evaluation of develop-
ment policy, programs or project operations. Support may be required to
gather information on donor support in both case studies including project
documents, PEFA reports and HIPC data and to provide support with the
desk study. Two consultants will be required for each case study and it will be
important that the team leader is fluent in both English and French (in read-
ing and writing) and involved in all three case studies. Consultants would be
expected to be familiar with reform approaches, partner government initia-
tives and interventions of donor agencies in African countries particularly in
the area of PFM. Familiarity with PEFA assessment systems will be
important.
Compulsory requirements for personnel are specified in section 4.2.1 for
team leader and 4.2.2 for other personnel. Evaluation criteria for qualification
and competence are specified in 7.2.1 for the team leader and 7.2.2 for other
team members.
Final reports should be submitted in both English and French. All reports
submitted should be professionally edited.
12. Management and Administration

The consultant will report to the evaluation task manager for methodological
guidance, preparation and drafting of the report. Draft reports will be sub-
mitted to the Management Committee made up of Sida, DANIDA and
AFDB evaluation departments. Drafts may be circulated to PFM professional
staff in these institutions including country specialists for comments. Final
drafts will also be circulated to a wider group of stakeholders mainly includ-
ing bilateral and multilateral donors and PFM experts who may submit fur-
ther comments. In country support would be provided by donor country
offices.
141
Joint Evaluations
1996:1 The international response to conflict and

genocide: lessons from the Rwanda experience:
Synthesis Report
John Eriksson, Howard Adelman, John Borton, Krishna Kumar,
Hanne Christensen, Astri Suhrke, David Tardif-Douglin, Stein
Villumstad, Lennart Wohlgemuth
Steering Committee of the Joint Evaluation of
Emergency Assistance to Rwanda,1996.
1997:1 Searching for Impact and Methods: NGO

Evaluation Synthesis Study.
Stein-Erik Kruse, Timo Kyllönen, Satu Ojanperä, Roger C. Rid-
dell, Jean-Louis Vielajus
Min of Foreign Affairs Finland, OECD-DAC, Sida, 1997.
1997:2 Measuring and Managing Results: Lessons for

Development Cooperation: Performance Management
Derek Poate
UNDP/OESP Sida, 1997.
2003:1 Local Solutions to Global Challenges: Towards Effec-

tive Partnership in Basic Education. Final Report.
Joint Evaluation of External Support to Basic Educa-
tion in Developing Countries.
Ted Freeman, Sheila Dohoo Faure
Netherlands Ministry of Foreign Affairs, CIDA, DFID, Depart-
ment for Foreign Affairs Ireland, EU, BMZ, JICA, Ministry of
Basic Education and Literacy Burkina Faso, Danida, Norad,
Sida, UNESCO, UNICEF, World Bank. 2003.
2003:2 Toward Country-led Development : a Multi-Partner

Evaluation of the Comprehensive Development Frame-
work : Synthesis report
Carol Lancaster, Alison Scott, Laura Kullenberg, Paul Collier,
Charles Soludo, Mirafe Marcos, John Eriksson, Alison Scott;
Ibrahim Elbadawi;John Randa,
World Bank, OED, CIDA, Danida, Norad, ODI, JICA, Sida, 2003.
142
Joint Evaluations
2005:1 Support to Internally Displaced Persons: Learning

from Evaluation. Synthesis Report of a Joint Evalua-
tion Programme.
John Borton, Margie Buchanan Smith, Ralf Otto
Sida, 2005.
2005:2 Support to Internally Displaced Persons: Learning

from Evaluation. Synthesis Report of a Joint Evalua-
tion Programme: Summary Version
John Borton, Margie Buchanan Smith, Ralf Otto
Sida, 2005.
2005:3 Humanitarian and Reconstruction Assistance to

Afghanistan 2001–2005: From Denmark,
Ireland, the Netherlands, Sweden and the United
Kingdom; A Joint Evaluation. Main report
Danida, Sida, Chr. Michelsen Institute, Copenhagen, DFID,
Development Cooperation Ireland, BMZ, 2005.
2005:4 Humanitarian and Reconstruction Assistance to

Afghanistan 2001–2005: From Denmark,
Ireland, the Netherlands, Sweden and the
United Kingdom; A Joint Evaluation. Summary
Danida, Sida, Chr. Michelsen Institute, Copenhagen, DFID,
Development Cooperation Ireland, BMZ, 2005.
2005:5 An Independent External Evaluation of the Interna-

tional Fund or Agricultural Development
Derek Poate, team leader, Charles Parker, Margaret Slettevold …
IFAD, Sida, CIDA, 2005.
2006:1 Joint Evaluation of the International response to the

Indian Ocean tsunami: Synthesis Report
John Telford, John Cosgrave, contribution Rachel Houghton
Tsunami Evaluation Coalition (TEC) Action aid, AusAID, BMZ
CIDA, Cordaid, Danida, Dara, Irish Aid, DFID, FAO, IFRD,
Federal Min for Economic Cooperation and Development Germa-
ny, JICA, Min des Affaires Étrangères France, Min des Affaires
Étrangères Luxembourg, Norad, NZAID, DEZA, Sida, UN,
UNDP, UNFPA, Unicef, Usaid, WFP, WHO, World Vision, 2006.
2006:2 Impact of the tsunami response on local and national

capacities
Elisabeth Scheper, Arjuna Parakrama, Smruti Patel, contribu-
tion Tony Vaux 143
Joint Evaluations
Tsunami Evaluation Coalition (TEC) Actionaid, AusAID, BMZ,

Federal Min for Economic Cooperation and Development Germa-
ny, JICA, Min des Affaires Étrangères France, Min des Affaires
2006:3 Coordination of International Humanitarian Assis-

tance in Tsunami-affected countries
Jon Bennett, William Bertrand, Clare Harkin, Stanley Samaras-
inghe, Hemantha Wickramatillake
Tsunami Evaluation Coalition (TEC) Actionaid, AusAID, BMZ,
Federal Min for Economic Cooperation and Development Ger-
many, JICA, Min des Affaires Étrangères France, Min des
Affaires Étrangères Luxembourg, Norad, NZAID, DEZA, Sida,
UN, UNDP, UNFPA, Unicef, Usaid, WFP, WHO, World
Vision, 2006.
2006:4 Funding the Tsunami Response: A synthesis of findings

Michael Flint, Hugh Goyder
Tsunami Evaluation Coalition (TEC) Actionaid, AusAID,
BMZm CIDA, Cordaid, Danida, Dara, Irish Aid, DFID, FAO,
IFRD, Federal Min for Economic Cooperation and Develop-
ment Germany, JICA, Min des Affaires Étrangères France, Min
des Affaires Étrangères Luxembourg, Norad, NZAID, DEZA,
Sida, UN, UNDP, UNFPA, Unicef, Usaid, WFP, WHO, World
Vision, 2006.
2006:5 Links between relief, rehabilitation and development

in the Tsunami response: A synthesis of initial findings
Ian Christoplos
Tsunami Evaluation Coalition (TEC) Actionaid, AusAID, BMZm
Federal Min for Economic Cooperation and Development Ger-
many, JICA, Min des Affaires Étrangères France, Min des Affaires
2006:6 The role of needs assessment in the Tsunami response

– Executive summary
Claude de Ville de Goyet, Lezlie C Morinière
Tsunami Evaluation Coalition (TEC) Actionaid, AusAID,
BMZm CIDA, Cordaid, Danida, Dara, Irish Aid, DFID, FAO,
IFRD, Federal Min for Economic Cooperation and Develop-
144
Joint Evaluations
ment Germany, JICA, Min des Affaires Étrangères France, Min

des Affaires Étrangères
Luxembourg, Norad, NZAID, DEZA, Sida, UN, UNDP, UNF-
PA, Unicef, Usaid, WFP, WHO, World Vision, 2006.
2006:7 Evaluation of Coordination and Complementarity of

European Assistance to Local Development: with Ref-
erence to the 3C Principles of the Maastricht Treaty
Robert N. LeBlanc and Paul Beaulieu
Sida, Ministry for Foreign Affairs, Austria, Ministry for Foreign
Affairs, Department for International Development Coopera-
tion. Belgium, Min. des Affairs étrangères/Direction General de
la Cooperation International, France, Department of Foreign
Affairs Development Co-operation Division, Ireland and Minis-
try of Foreign Affairs/Directorate-General for International
Cooperation, the Netherlands, 2006.
2007:1 Evaluation of General Budget Support – Note on

Approach and Methods. Joint Evaluation of
General Budget Support 1994–2004
AFD, DFID, MOFA, NZAID, USAID, AusAID, BMZ, JBIC,
NORAD, Danida, SECO, CIDA, JICA, Min of Foreign Affairs
Spain, Portuguese Development Cooperation, Sida, 2007.
2007:2 Evaluating Co-ordination, Complementarity and

Coherence in EU development policy:
a synthesis
Evaluation Services of the European Union, Sida, Ministry for
Foreign Affairs, Austria,
Ministry for Foreign Affairs, Department for International
Development Cooperation. Belgium, Min. des Affairs
étrangères/Direction General de la Cooperation International,
France, Department of Foreign Affairs Development Co-opera-
tion Division, Ireland and Ministry of Foreign Affairs/Directo-
rate-General for International Cooperation, Netherlands, 2007.
2007:3 Evaluating Democracy Support: Methods and Experi-

ences.
Sida, Department for Evaluation and Internal Audit and Internation-
al Institute for Democracy and Electoral Assistance (IDEA), 2007.
2007:4 Peer Review Evaluation Function at the World Food

Programme (WFP). Peer Panel Members: Jock Baker, Stefan Dahl-
gren, Susanne Frueh, Ted Kliest, Zenda Ofir.Advisors to the Panel:
Ian Christoplos, Peta Sandison Sida, BMZ, UNEG, WFP, 2007.
145
Joint Evaluations
2008:1 Managing Aid Exit and Transformation:

Lessons from Botswana, Eritrea, India, Malawi and
South Africa: Synthesis Report
Anneke Slob, Alf Morten Jerve
Sida, Netherland’s Ministry of Foreign Affairs, Danida and
Norad, 2008.
2008:1:1 Managing Aid Exit and Transformation:

Summary of a Joint Donor Evaluation
Jesper Heldgaar
Norad, 2008.
2008:1:2 Managing Aid Exit and Transformation: India Coun-

try Case Study
Albert de Groot, CK Ramachandran, Anneke Slob, Anja Wil-
lemsen, Alf Morten Jerve
Norad, 2008.
2008:1:3 Managing Aid Exit and Transformation: South Africa

Country Case Study
Elling N Tjønneland, Pundy Pillay, Anneke Slob, Anje Willem-
sen, Alf Morten Jerve
Norad, 2008.
2008:1:4 Managing Aid Exit and Transformation: Eritrea Coun-

try Case Study
Teferi Michael, Rudy Ooijen, Anneke Slob, Alf Morten Jerve
Norad, 2008.

Malawi Country Case Study
Esther van der Meer, Arne Tostensen, Anneke Slob, Alf Morten
Jerve
Norad, 2008.

Botswana Country Case Study
Norad, 2008.
146
Joint Evaluations
Charity Kerapeletswe, Jan Isaksen, Anneke Slob, Alf Morten

Jerve
2008:2 Evaluation of the Implementation of the Paris Declara-
tion: Phase One Synthesis Report
Bernard Wood, Dorte Kabell, Nansozi Muwanda,
Francisco Sagasti
International Reference Group comprising members of the DAC
Network on Development Evaluation, 2008.
2008:3 Joint Evaluation of Citizen’s Voice and
Accountability: Synthesis Report
Alina Rocha Menocal, Bhavna Sharma
Commissioned by Directorate-General for Development Coop-
eration (Belgium) – DGCD, Danish International Development
Assistance – Danida, Federal Ministry for Economic Coopera-
tion and Developmen (Germany) – BMZ, Norwegian Agency for
Development Cooperation – Norad, Swedish International
Development Cooperation Agency – Sida, Swiss Agency for
Development and Cooperation – SDC, Department for Interna-
tional Development – DFID, 2008.
2009:1 Anti-Corruption Approaches: A Literature Review
Arne Disch, Endre Vigeland, Geir Sundet
Commissioned by Asian Development Bank – ADB, Danish
International Development Assistance – Danida, Department for
International Development – DFID, Norwegian Agency for
Development Cooperation – Norad, Swedish Agency for Devel-
opment Evaluation – SADEV, Swedish International Develop-
ment Cooperation Agency – Sida, 2009.
2009:2 Public Financial Management Reform
Literature Review
Carole Pretorius, Nico Pretorius (Evaluation Report EV698)
Commissioned by Department for International Development –
DFID, Dutch Ministry of Foreign Affairs, Swedish International
Development Cooperation Agency – Sida, Canadian Internation-
al Development Agency – CIDA, African Development Bank –
AfDB, 2009.
2009:3 A ripple in development? Long term perspectives on
the response to the Indian Ocean Tsunami: A joint fol-
low-up evaluation of the links between relief, rehabili-
tation and development (LRRD)
Emery Brusset (team leader), Mihir Bhatt, Karen Bjornestad,
John Cosgrave, Anne Davies, Adrian Ferf, Yashwant Deshmukh, 147
Joint Evaluations
Joohi Haleem, Silvia Hidalgo, Yulia Immajati, Ramani Jayasun-

dere, Annina Mattsson, Naushan Muhaimin, Adam Pain, Ric-
cardo Polastro, Treena Wu.
Commissioned by LRRD2 Joint Steering Committee, Sida,
Norad, Danida, the Netherlands Ministry for Foreign Affairs,
CIDA, BAPPENAS, Indonesia; BRR, Indonesia;
Ministry for Plan Implementation, Sri Lanka, Ministry for
National Building, Sri Lanka; ISDR, Bangkok; IFRC, Bangkok;
CARE International;OCHA; UNICEF, 2009.
2009:3:1 A ripple in development? Document review: Annotated

bibliography prepared for the joint follow-up evalua-
tion of the links between relief, rehabilitation and
development (LRRD) in responses to the Indian Ocean
tsunami
John Cosgrave, with the assistance of: Emery Brusset, Mihir
Bhatt, Yashwant Deshmukh, Lucia Fernandez, Yulia Immajati,
Ramani Jayasundere, Annina Mattsson, Naushan Muhaimin,
Riccardo Polastro
Commissioned by LRRD2 Joint Steering Committee, Sida;
Norad; Danida; the Netherlands Ministry for Foreign Affairs;
CIDA; BAPPENAS, Indonesia; BRR, Indonesia; Ministry for
Plan Implementation, Sri Lanka; Ministry for National Building,
Sri Lanka; ISDR, Bangkok; IFRC, Bangkok; CARE Interna-
tional; OCHA; UNICEF, 2009.
2009:3:2 A ripple in development? Long term perspectives on

the response to the Indian Ocean Tsunami: A joint fol-
low-up evaluation of the links between relief, rehabili-
tation and development (LRRD) – Summary Report
Emery Brusset (team leader), Mihir Bhatt, Karen Bjornestad,
John Cosgrave, Anne Davies, Adrian Ferf, Yashwant Deshmukh,
Joohi Haleem, Silvia Hidalgo, Yulia Immajati, Ramani Jayasun-
dere, Annina Mattsson, Naushan Muhaimin, Adam Pain, Ric-
cardo Polastro, Treena Wu.
Commissioned by LRRD2 Joint Steering Committee, Sida;
Norad; Danida; the Netherlands Ministry for Foreign Affairs;
CIDA; BAPPENAS, Indonesia; BRR, Indonesia; Ministry for
Plan Implementation, Sri Lanka; Ministry for National Building,
Sri Lanka; ISDR, Bangkok; IFRC, Bangkok; CARE Interna-
tional; OCHA; UNICEF, 2009.
2010:1 Evaluation of the Joint Assistance Strategy for Zambia

(JASZ) 2007–2010.
Anne Thomson, Dennis Chiwele, Oliver Saasa, Sam Gibson
148
Joint Evaluations
Commissioned by Ministry of Foreign Affairs of

Denmark – Danida, Swedish International Development Coop-
eration Agency – Sida, Irish Aid, 2010.
2011:1 Supporting Child Rights – Synthesis of Lessons

Learned in Four Countries: Final Report
Arne Tostesen, Hugo Stokke, Sven Trygged, Kate
Halvorsen
Commisioned by Swedish International Development Agency –
Sida and Norwegian Agency for Development Cooperation –
Norad, 2011.
2011:2 Aiding the Peace. A Multi-Donor Evaluation of Support

to Conflict Prevention and Peacebuilding in Southern
Sudan 2005–2010. Final Report
Jon Bennett, Emery Brusset, Chris Barnett, Sara Pantuliano,
Wendy Fenton, Anthony Vaux
Commissioned by the Evaluation Departments of Norwegian
Agency for Development Cooperation – NORAD, United King-
dom Department for International Development – DFID, Asian
Development Bank – ADB, Swedish Agency for Development
Evaluation –Sadev, Swedish International Development Coop-
eration Agency – Sida and the Ministry of Foreign Affairs
of Denmark – Danida, 2011.
2012:1 Joint Evaluation of Support to Anti-Corruption Efforts

Synthesis 2002–2009
Derek Poate, Charlotte Vaillant
Evaluation – Sadev, Swedish International Development Coop-
eration Agency – Sida and the Ministry of Foreign Affairs of
Denmark – Danida, 2012.

Bangladesh Country Report
Derek Poate, Charlotte Vaillant , Imran Ahmed, Deborah Mans-
field, Mozammel Hoque, Zarina Rahman Khan
Evaluation – Sadev, Swedish International Development
149
Joint Evaluations
Cooperation Agency – Sida and the Ministry of Foreign Affairs

of Denmark – Danida, 2012.

Nicaragua Country Report
Derek Poate, Paul Harnett, Imran Ahmed, Mignone Vega, Jose
Luis Velasquez

Tanzania Country Report
Charlotte Vaillant, Imran Ahmed, Deborah Mansfield, Anne
Bartholomew, Isaac Kiwango

Vietnam Country Report
Derek Poate, Edmund Attridge, Tim McGrath, Dang Ngoc
Dung, Nguyen Thi Minh Hai

Zambia Country Report
Charlotte Vaillant, Imran Ahmed, Paul Harnett, Deborah
Mansfield, Gilbert Mudenda, Stephen Tembo
150
Joint Evaluations

2012:7 Evaluation of Public Financial Management Reform in

Burkina Faso, Ghana and Malawi 2001–2010 Final Syn-
thesis Report
Andrew Lawson
Commissioned by the African Development Bank – AfDB, the
Swedish International Development Cooperation Agency – Sida,
and the Danish International Development Assistance – DANI-
DA, 2012.
2012:8 Evaluation of Public Financial Management Reform

2001–2010 Ghana Country Report
Mary Betley, Andrew Bird, Adom Ghartey
and the Danish International Development Assistance –
DANIDA, 2012.

Malawi 2001–2010 Final Country Case Study Report
Alta Fölscher, Alex Mkandawire, Ruth Faragher
DANIDA, 2012.

Burkina Faso 2001–2010 Final Country Case Study
Report
Andrew Lawson, Mailan Chiche, Idrissa Ouedraogo
DANIDA, 2012.
151
Evaluation of Public Financial Management Reform
in Ghana, 2001–2010
Where and why do Public Financial Management (PFM) reforms succeed? Where and how does donor support to
PFM reform contribute most effectively to results? To answer these questions, an evaluation of PFM reforms has
been carried out, primarily based on country studies of Burkina Faso, Ghana and Malawi. An international
quantitative study and a literature review were also undertaken. This report presents the findings of the study in
Burkina Faso
The findings from the three country studies are summarised in a separate synthesis report, concluding that
results tend to be good when there is a strong commitment at both political and technical levels, when reform
designs and implementation models are well tailored to the context and when strong, government-led coordina-
tion arrangements are in place to monitor and guide reforms.
Donor funding for PFM reform has been effective in those countries where the context and mechanisms were
right for success, and where external funding was focused on the Government’s own reform programme. The
willingness of some Governments to fund PFM reforms directly shows that external funding may not be the
deciding factor, however. Donor pressure to develop comprehensive PFM reform plans has been a positive
influence in countries receiving Budget Support, but attempts to overtly influence either the pace or the content of
PFM reforms were found to be ineffective and often counter-productive. Key lessons for donor agencies are thus
to focus on where the right preconditions exist, to align to government programmes and, under all circumstances,
to ensure that aid works in favour of the PFM system and not against it.
The evaluation has been commissioned jointly by the African Development Bank (AfDB), the Swedish International
Development Cooperation Agency (Sida) and the Danish International Development Assistance (DANIDA).
SWEDISH INTERNATIONAL DE VELOPMENT COOPER ATION AGENCY

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Evaluation of Public Financial Management Reform in Ghana, 2001-2010

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Evaluation of Public Financial Management Reform in Ghana, 2001-2010

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2012:8 Joint Evaluation

Evaluation of Public Financial

Submitted by Fiscus Public Finance Consultants and Mokoro Ltd

Joint Evaluation 2012:8

Layout and print: Citat/Edita 2012

AAP (HIPC) Annual Assessment & Action Plan

GDP Gross Domestic Product

NPM New Public Management

Table of Figures & Tables

Figure 1. The Evaluation Framework and the place of the Evaluation

Table 1: Overall Budgetary Trends, 2001-2010..............................................22

Box 1: Evaluation questions.............................................................................17

ed to be relatively strong at the beginning of reforms, which enabled legisla-

• Explicit analyses should be undertaken of stakeholder readiness for

1.1 Objectives of the evaluation

It is thus a dual evaluation, involving first an evaluation of the overall pro-

1.2 Evaluation approach

PEFA reports. The evaluation framework characterises these changes as inter-

The framework utilises the PEFA assessment framework to measure changes

PFM Reform Intervention Logic

Government PFM Reform People & Skills: Fiscal Discipline:

Complementary Development ing, accounting addit, treasury

1.3 Evaluation questions

Box 1 : Evaluation questions

A Inputs & context: the design of PFM reform

B Outputs: the delivery of PFM reform

C Outcomes: overall assessment of PFM reform & of donor

1.4 Fieldwork process

2 Gordon, A, and M Betley (2011), Evaluation of Public Financial Management Reform

1.5 Report Structure

2.1 The Reform context

Overview of economic and fiscal performance

4 PPP, current international US$ – World Bank (2011)

growth began to recover in 2010 and is projected to accelerate to almost 14%

8 African Economic Outlook, 2011

Table 1: Overall Budgetary Trends, 2001-2010

22 13 As indicated by the World Bank.

Following close elections (including a run-off election) in December 2008, a

Box 2: Summary of Key PFM Events, Late 1990s-present

F rom late 1990s-early 2000s

2.2 PFM reform baseline

Box 3: Summary of PUFMARP 1997-2003

The Public Financial Management Reform Programme (PUFMARP)

1. Budget preparation – introduction of an MTEF;

• The on-going building of an improved Integrated Personnel and Payroll

In addition to these short-term measures, the Government’s medium-term

2.3 Direct Reform Inputs

Table 2: DP allocations to PFM reform activities

Table 3: Overview of Development Partner funding for PFM reform

There was a marked reduction in DP funding for PFM activities between

Table 4: Total MDBS Commitments and Disbursements 2003-2010

Component case histories

20 Betley and Burton, 2011. 29

21 Study team estimates based on project documentation.

2.4 S tructures to design and manage

23 See Betley and Burton (2011), and Betley (2008). 31

Component case histories

2.5 C omplementary Donor inputs

Component case histories

24 See Betley and Burton, 2011.

reforms were not well sequenced and were implemented independently of

2.6 Civil Society pressure for PFM

Component case histories

Figure 1. The Evaluation Framework and the place of the Evaluation

Box 1: Evaluation questions.............................................................................17

C Outcomes: overall assessment of PFM reform & of donor

1. Budget preparation – introduction of an MTEF;

2.4 S tructures to design and manage

2.5 C omplementary Donor inputs

2.6 Civil Society pressure for PFM

Box 6: Alignment of 2006-2009 Short & Medium Term Action Plan

3.2 E fficiency and coordination of

3.3 E xternal drivers and blockers

Resource man- PI-16 [commitment controls] ê in PI-16 [commitment

Internal control, PI-20 [non-wage internal ê in PI-20 [non-wage in-

4.2 Relevance of PFM improvements

4.3 T he effectiveness of PFM reforms:

5.3 Recommendations for the Design

A.1 What has been the na- • Government vs. Normal

A.1 What has been the na- focus of support

A. 2. What types of struc- • Structure of design team • –– There

A. 2. What types of struc- • Structure of design team • –– Over