By: J. Waterschoot and D. Stella
The Ministry of Health and the Development Partners agreed upon a harmonised PFM analysis plan. The Memorandum of Understanding (MoU) for the Health sector common fund, known as PROSAUDE, foresaw a PFM analysis plan that became the basis of the Harmonised plan; The MoU requires a Public Expenditure and Financial Accountability (PEFA) assessment to be conducted in 2019, which provides evidence to drive reforms for improving health expenditure efficiency. For the 2019 PEFA Assessment, Enabel, jointly with the Swiss Development Cooperation, funded this assessment.
The Government of Flanders is a cooperation partner of the Ministry of Health and the Mozambican health sector. The Government of Flanders also funds the GTAF3 project, and through Enabel, it provides, technical assistance in Public Financial Management for the sector. Enabel decided to invest some of GTAF3 funds in a Public Expenditure and Financial Accountability (PEFA) evaluation of the health sector, which will provide information about the sector’s PFM performance. As such, the PEFA is the measure that will tell whether there was progress, it takes the system’s “temperature”. As mentioned in the introduction, the PEFA assessment is a specific requirement of the MoU for the PROSAUDE Common Fund and is part of the Harmonised PFM analysis plan agreed between the Ministry of Health and the Development Partners. Thus far, 2 PEFA assessments of the health sector have been made in Mozambique, with the previous evaluation dating back to 2015. The new evaluation covers the period 2016 to 2018, that is, the last three years with consolidated accounting information and uses the ‘PEFA 2016’ methodology. It will help gauge the progress done since then.
A PEFA is an evaluation of a country’s public financial management performance. The methodology can be applied to assess the central government’s financial management or the performances of lower levels of government. It assesses the strengths and weaknesses of pubic financial management and provides a complete and consistent analysis, using quantitative and qualitative indicators measuring performances.
Considering that the purpose of a PFM system is to guarantee fiscal discipline and ensure strategic allocation of resources for efficient services, the PEFA methodology measures how the PFM system fulfills this purpose. As such, a PEFA assessment provides a country with an analytical and detailed tool to discuss the performance in managing public finances and assesses the extent in which PFM systems, processes and institutions perform against the standards for each one of the seven pillars that constitute the PEFA framework (for details on the PEFA framework please refer to the official web page www.pefa.org). For this PEFA, the Standard Methodology 2016 needed to be adapted to a sector evaluation. The consultants that were awarded the contract proposed a selection of 23 out of 31 indicators.
A PEFA evaluation includes a launching seminar, with the aim of familiarising government officials and other stakeholders with the PEFA methodology. This seminar was held on March 18th, 2020 and organised by a team of international and local consultants. The team leader could not be present due to the Covid-19 travelling restrictions. Nonetheless, with a clearly structured presentation, the local consultants explained the PEFA methodology and its indicators, and informed stakeholders on the purpose of the evaluation and about the future use of its results. In addition, the consultants explained the rational of the selection of indicators, highlighting the relevance of the choice made. The audience were mainly government officials working in various directorates and institutions in the health sector. Officials from the Ministry of Economy and Finance also participated, as well as members of the donor community and from civil society organisations. Through participative discussions and group exercises on PEFA, this training provided participants with an insight of the tools and the framework to analyse the sector’s public financial management. In addition, it would provide the criteria to design reforms to meet the recommended underlying standard considered for a PEFA evaluation to strengthen the management of public finances. The ultimate objective is to provide the sector with improved PFM systems which, in turn should result in better health outcomes.
After the introduction to the PEFA methodology and indicators, the participants to the workshop were involved in a group exercise. Each group was assigned a PEFA pillar, for which they had to identify the strong and weak points in the Mozambican Health sector and formulate further recommendations for possible or necessary reforms. This active way of learning made the information and possibilities of a PEFA assessment easier to digest, especially considering that most of the participants did not have experience with a PEFA assessment before this seminar.
A PEFA aims at improving PFM and its credibility. Therefore, by taking a snapshot of the PFM performances in all components (planning, budgeting, executing, accounting and reporting, assets management, audit and control and oversight indicators in the cluster SDG16), it is possible to lay a path for improving the performances. Thus, it can be expected that the production of services will ultimately improve performances helping progress in Health service delivery outcomes indicators clustered in SDG3.
With the launching seminar, the PEFA 2019 assessment officially started. There are several next steps in the PEFA evaluation. The preparatory report has been completed, while the final report is scheduled by the end of August (not considering the delays that the current pandemic can introduce). Through this seminar, government officials had a primary introduction to the PEFA and the purposes it serves. The workshop wanted to prepare the grounds for the following stages of the assessment that is the data collection basis for the evaluation. Enabel hopes that the final PEFA report and the seminar will give officials an instrument to measure PFM progress in their sector. As such, participants will be able to use the evaluation, its conclusions and recommendations for implementing further PFM reforms in the sector.