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)|