Risk Reporting

The following is a PEFA assessment for a hypothetical country. Read the text and then assign scores to the PEFA indicators in the table provided. Use simplified scores of A—very good, B—satisfactory, and D—not satisfactory and only enter scores for indicators on which the text provides information.

“Actual revenue and expenditure are very close to forecasted revenue and expenditure, but there are major differences in the composition of expenditures between planned and actual figures. Budget documentation is considered satisfactory but could be improved by a better elaboration of the underlying fiscal strategy. Fiscal risk reporting is very rudimentary, and the operations of the pension fund are not included in the budget. Expenditure arrears have been fully eliminated due to a strong monitoring system. Controls on payroll and non-salary expenditures are strong.

A medium-term budget framework (MTBF) exists, but it is prepared in parallel to the annual budget and differences between the first year of the MTBF and the annual budget are common. Public investment management has been strengthened in recent years but could be improved further. A number of significant weaknesses exist in procurement—most notably the fact that the majority of contracts are not awarded using a competitive process.

Annual financial reports are comprehensive and reliable, while the frequency of in-year reporting could be improved. The work of the Auditor General is of high quality, but the reports are not submitted to the legislature and executive follow-up on recommendations is very limited.”

Number	Indicator	Score
PI-1	Aggregate expenditure outturn
PI-2	Expenditure composition outturn
PI-3	Revenue outturn
PI-4	Budget classification
PI-5	Budget documentation
PI-6	Central government reporting outside financial reports
PI-7	Transfers to subnational governments
PI-8	Performance information for service delivery
PI-9	Public access to fiscal information
PI-10	Fiscal risk reporting
PI-11	Public investment management
PI-12	Public asset management
PI-13	Debt management
PI-14	Macroeconomic and fiscal forecasting
PI-15	Fiscal strategy
PI-16	Medium-term perspective in expenditure budgeting
PI-17	Budget preparation process
PI-18	Legislative scrutiny of budget
PI-19	Revenue administration
PI-20	Accounting for revenue
PI-21	Predictability of in-year resource allocation
PI-22	Expenditure arrears
PI-23	Payroll controls
PI-24	Procurement
PI-25	Internal controls on non-salary expenditure
PI-26	Internal audit
PI-27	Financial data integrity
PI-28	In-year budget reports
PI-29	Annual financial reports
PI-30	External audit
PI-31	Legislative scrutiny of audit reports