About Performance Management and Public Expenditure Reforms - Ministry of Finance

About Performance Management and Public Expenditure Reforms

Introduction:

In March 2015 the President commissioned an assessment of public financial management (PFM) in Afghanistan. The Government was presented with analysis that outlines a comprehensive reform process for the way the economic strategy is developed, for the budget process and for institutional arrangements that support the Government’s reform objectives. One of the key recommendations from the March Review was for the reform process to be implemented through a team-based performance management and public expenditure reform approach. The Performance Management Team (PMT) was established in the Macro-Fiscal Performance Department (MFPD)to facilitate the development and implementation of the Government’s flagship fiscal reform program – the Fiscal Performance Improvement Plan (FPIP). The PMT Formally Called the PM&PER works with all teams across the MOF and partner agencies to develop sequenced five year rolling plans linked to international benchmarks. The PMT facilitatesassessments and independent validations of progress and outcomes based on the FPIP. Performance reports are developed and disseminated to all the stakeholders.

Some of the main Key challenges identified within the financial systems of the country are Over-Budgeting and related challenges, rigidities in spending control systems; Transparency; Medium-term Strategic Budgeting; Taxation System; Non-Tax Revenue; Predictability and Expenditure Control; Procurement ; Internal Audit; Accounting Recording and Reporting; External Audit; Parliamentary Scrutiny; Banking Supervision; Donor Practices; Budgeting; Budget execution and Shifting from ex ante to ex post controls. The required reforms will be led by the Minister for Finance and his Ministry; and was commenced with the establishment of a performance management framework and an inaugural 5-year rolling plan starting in 2016 also known as the Fiscal Performance Improvement Plan (FPIP). The Performance Management and Public Expenditure Reforms (PMT) team provide support to the required reforms. The PMT provide strategic advice to the Minister as he works with the leadership at the MOF to guide the overall reform process.This work is initially focused on establishing performance management capabilities within MoF around business units’ reform and action plans first, prior to rolling out to other agencies. The inaugural 5-year plan includes 19 Directorate Generals and 63 Teams, covering all parts of the MOF and 2 external agencies, the National Procurement Authority and the AEITI Secretariat. The future plan is to extend this program to the whole of the GOIRA; with five new agencies (line ministries and Independent agencies) to be included every year. This first plan includes medium term reform and action business plans for every organizational unit within MoF, along with aspirational medium term performance targets against various international benchmarks, such as PEFA, OBI, TADAT and Trading across borders.

Fig. 1: Assessment and Reporting Schedule (subject to change)

Fig. 2: PM&PFMR Structure

Fiscal Performance Improvement Plan:

Improvement in fiscal planning and management is crucial for the long-term development of Afghanistan. This plan covers the full spectrum of reforms, from developing a fiscal policy framework to guide the budget, to improved reporting and audit of public expenditure.

Inaugural 5 year plans:

Inaugural 5 year plans  is designed to continue over 5 year   and is subject to regularreview and updating

2016 Mid-Year Assessment of progress against plans

The first mid-year assessment of progress against the Rolling 5-Year Fiscal Improvement Plan was conducted from 14 July until 3 August 2016. Teams conducted a self‑assessment of progress against 2016 activities from their 5-year plans.

Independent Validation Team:

Teams conducted a self‑assessment of progress against 2016 activities from their 5 year plans. These self‑assessments were then subjected to an independent validation process by the validation Team in the Performance Management and Public Expenditure Reforms Unit.