What PEFA Training Reveals About Real Reform, and How to Act on PEFA
by Doug Hadden, EVP Strategy and Innovation
In the world of public financial management, PEFA is the gold standard. The Public Expenditure and Financial Accountability framework is more than a benchmark, scorecard or roadmap. PEFA motivates reform, signals global credibility, and validates the progress that governments and institutions work hard to achieve. PEFA assessments also validate our contribution to government Public Financial Management (PFM) achievements.
Last week, I joined a global cohort of public finance officials, consultants, civil society, and development partners from around the world in the PEFA Flagship Training. What I walked away with was a deeper understanding of what PEFA means for government reform, how to interpret signals, and why context is everything. These are the 10 lessons that stuck with me.
1. Effective Assessments Tell a Story
Behind every PEFA score is a narrative. And, that narrative is the real substance of the assessment.
PEFA documents aren’t just scorecards. They’re stories. The narrative sections are often the largest and most revealing part of the report. Why? Because context matters. Scores may tell you the ‘what,’ but storytelling reveals the ‘why.’
A well-crafted narrative ties together performance indicators, explains institutional behaviour, and helps those driving public finance reform to understand root causes. It’s the cohesion between facts and findings that turns PEFA from a checklist into a compass.
2. Experience Matters: the PEFA Secretariat Delivers Experience
Having seasoned guides makes all the difference.
At the Flagship Training, instructors like Srinivas Gurazada and Antonio Blasco brought PEFA to life. Their “war stories” from real assessments around the globe helped us see PEFA as a craft, beyond a framework.
They walked us through how to evaluate whether a dimension meets the basic good practices of a “C” score, and shared how assessors often work like detectives—uncovering small clues in budget data, audit trails, and procurement records to reveal broader patterns.
3. Engagement With Attendees Enriches the Experience
The room taught us as much as the instructors.
PEFA training thrives on interaction. Questions from participants opened up new insights, like realizing that contingency funds or suspense accounts are not inherently bad. Instead we learned through discussion that their usefulness depends on governance and oversight.
One of the most surprising discoveries: pandemic-era spending didn’t create the budget execution chaos many expected. In many cases, budget outturns remained close to plan. That’s a testament to the resilience of PFM systems and staff.
4. There’s No Value in Value Judgements
PEFA is about learning rather than ranking.
At the training we also discussed the fact that a “C” score shouldn’t be seen as a failure. In fact, it represents basic good practice. And trying to compare scores across countries misses the point because every country governance and reform context is unique. PEFA is not designed to be a scoreboard for donor applause or regional bragging rights.
That’s why narrative and context are essential. You can’t benchmark integrity with numbers alone.
5. Governments That Own the Assessment Gain the Most
Effective reform starts from within.
Governments signal political will by driving PEFA assessments. Findings become embedded in domestic reform plans. Therefore the most effective way to consider PEFA isn’t as an external audit, but rather as a self-reflective benchmark tool that works best when it’s owned.
Further, it’s important to recognize that the most valuable outcomes aren’t the scores themselves but the insight into strengths and weaknesses that come through the assessment process. Even lower scores may be strategically acceptable, depending on a country’s context and reform priorities.
6. Reform Is a Long Game: PEFA Enables Sustained Reform
Reform isn’t quarterly. Reform is generational.
Unlike the private sector, governments require legal reform to adopt better practices. And, there are few accepted public finance “best practices” as there are in industries. Governments improve practices over time.
PEFA assessments should take place every 4 to 5 years. That rhythm provides room to show progress, embed changes in law and process, and build public trust over time. This long-term cadence reinforces the value of consistent storytelling across assessments. PEFA is your reform documentary.
7. Improving PEFA Scores Is Not the Point
Don’t chase numbers. Chase impact.
We often assume the path to reform is to fix the lowest scores, but the truth is, reforming public financial management is rarely mechanical. Getting a “D” doesn’t mean a dimension is broken. Ds may reflect documentation issues or policy trade-offs.
In some cases, scores can even drop after improvements. Consider how governments temporarily loosened controls during the pandemic to speed up spending, only to reassert discipline later. PEFA captures a snapshot, not the intent or trajectory.
8. Contextual Priorities Should Drive Reform
There’s no one-size-fits-all blueprint.
Every country faces different constraints and opportunities: fiscal space, donor dependence, economic diversification, and citizen trust all matter. That’s why PEFA-based reforms should begin thematically.
Interdependent dimensions can point to cross-cutting priorities. And inconsistencies like high budget credibility but poor internal controls can help governments zero in on where reform matters most.
9. Some PEFA Scoring Still Reflects Outdated Practices
Technology enables PFM process improvements.
Many dimensions, especially around bank reconciliation and reporting timelines, were designed in a pre-digital world. Today, modern integrated financial management information systems (IFMISs), like the FreeBalance Accountability SuiteTM, can automate reconciliations and publish real-time reports. And Government Resource Planning (GRP) tools (ie those specifically designed for governments rather than big corporations) provide important reform functionality like the integration with national strategies.
But here’s the catch: systems only deliver if they’re used. The real limitations aren’t tech but uptake, acceptance, integration, and reform alignment. PEFA scores still depend on how widely and well the IFMIS is adopted.
10. Subnational Governments Are Driving PEFA Innovation
Local matters.
One of the most exciting developments? The evolution of PEFA-SNG (Subnational Government) assessments. These frameworks bring PEFA closer to citizens by including participation indicators and even early models of service delivery assessments.
But implementation is still a challenge. Too often, subnational governments don’t follow up with additional assessments, missing the opportunity to turn insights into reform momentum.
The Bottom Line
The most powerful lessons from PEFA training weren’t about the scores. They were about ownership, context, narrative, and reform readiness. This means that for those working in PFM, we need to stop thinking of PEFA as a framework, but instead think of how the insights gathered through a PEFA assessment can help us to navigate on a journey to improve PFM, governance, transparency and citizen wellbeing.
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