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PFM Reform: Why and What?


January 14, 2011

Results of FreeBalance International Customer Survey

Why do governments initiate and sustain public financial management initiatives?  What PFM reform elements are most valuable?

These are questions asked to FreeBalance International customers as part of our annual survey prior to the FreeBalance International Steering Committee conference next week in Madeira.

Motivation for PFM Reform

We used the same questions from the International Consortium on Government Financial Management 2010 survey, Progress in Public Financial Management Reform (embedded below).

What is the most important reason for Public Financial Management reform in your country?

The results of the ICGFM and FreeBalance surveys were similar. FreeBalance customers rated “improve accountability to government and business stakeholders” higher and “increase transparency of government and the involvement and participation of citizens” somewhat lower than the ICGFM survey, conducted by Grant Thornton.

After discussions with customers and some of our consultants, it appears that FreeBalance customers have begun to transition from transparency to accountability as a main focus.  The positive effects of transparency are muted when accountability is lacking. According to Public Expendi ture and Financial Accountability (PEFA) assessments, FreeBalance customers have exhibited higher than average PI-10 Public access to key fiscal information and PI-25 Quality and timeliness of annual financial statement ratings. There remains a high commitment to public financial management and transparency among FreeBalance international customers, according to our survey.

Impact of Public Financial Management Reform Domains

FreeBalance customers were asked to rate the impact of different PFM components.  The implementation of financial management software, such as the Government Resource Planning (GRP) software, the FreeBalance Accountability Suite was rated as having the highest impact. This shouldn’t be a surprise because most of those surveyed have witnessed the impact of this software. And, the core financial functionality with budget controls tends to be the first automation in public financial management. The high scores for procurement and budget preparation show a maturing of implementations among our customers. Many countries are revising procurement policy and progressing to program and performance budgeting.  Once again, budget transparency rated low. That is likely because all of those customers surveyed publish budget preparation and budget execution information on-line.

What is the relative importance of PFM elements?

*The colour coding on the graph is designed to match the Public Financial Management Component Map 

used in prioritizing government needs.

The FreeBalance Customer Survey

The FreeBalance Customer Survey helps achieve a very important company mission: public financial management knowledge transfer, as a For Profit Social Enterprise (FOPSE). It also helps us improve customer-centric processes by gauging satisfaction and measuring trends.

More results of the FreeBalance Customer Survey will be presented on this blog during the FreeBalance International Steering Committee conference in Madeira Portugal. Many of the items on the agenda are built from the survey, so discussions here in Madeira will add more context to the survey results.

2010 Grant Thornton ICGFM Progress in Public Financial Management Reform

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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