IT IS ALSO IMPORTANT TO BE AWARE THAT SOME PRIORITIES ARE BOTH CAUSALLY AND SEQUENTIALLY LINKED. 

For example, improvement in revenue arrears (PI–19) may lead to improved revenue outcomes (as measured by PI-3) but still require better information on revenue collections and more timely reconciliation (PI–20). Table 2.5 offers more examples of proposed reforms and priorities.

Table 2.5 PFM reform matrix example: Proposed reform and priority
Performance indicator or dimension PEFA score Main weaknesses identified Underlying causes Desired outcomes Proposed reform activity (and priority)
PI–1 D Aggregate expenditure outturns exceed original budget by the last three years

Overly optimistic economic and fiscal projections

Unavailable economic and fiscal forecasting models

Lack of capacity in economic and fiscal forecasting

Political involvement in setting fiscal projections

Stronger fiscal discipline through greater adherence to fiscal targets Improved predictability of budget allocations to service delivery ministries

Strengthen macrofiscal forecasting (high)

Implement cashflow forecasting (medium)

PI–2.2 D Significant variation in budget composition by function undermines the predictability and availability of budget allocations to key service delivery agencies Update budget processes and procedures (high)
In the handbook’s matrix example, the country identified three reform priorities based on its desired outcome of improving fiscal discipline (see table 2.6).