Every January I offer a Public Financial Management (PFM) executive training course at Harvard with a set of great colleagues from various organizations. We find that the class invariably includes a mixed bag of participants, from different parts of the PFM domain--some are budgeters and some are accountants, and more. The different participants have different answers to the question, What is PFM? We found this interesting, and decided to see if we--drawn from different quarters as well--could agree on a basic ten page article titled 'This is PFM'.
Here it is! http://www.hks.harvard.edu/centers/cid/publications/faculty-working-papers/this-is-pfm
We descided to keep this short and readable, which may make it too simplistic for some (at least in parts). We do try to break some new ground--and provoke conversation a bit--in discussing the way indicators and reforms have focused on 'form' rather than 'function', however...
We agreed that the following table reflects some of the basic functions that a PFM system should provide for, and we show how we think current indicators reflect on these functions. Note the glaring gaps:
- Very few developing countries can tell you if their staff are all paid on time, for instance, even though many countries will boast about their payment systems.
- Very few developing countries can tell you if goods and services are procured on time, for instance, even though many countries will boast about their procurement systems.
- and more.
Good governance has often meant having a system that looks good--in form--but we think it is time to say that good governance is more about being good--in functional practice--and measures should reflect this focus.