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Budget support

In a budget support programme, a donor's aid is channelled through the recipient government's existing public expenditure management systems. This approach requires that certain minimum standards of public expenditure management and accountability are in place.

This page, which forms part of the Governance Theme section on 'public financial management and accountability', includes a series of key texts that explore this concept.

Page contents

General

Procurement

Key texts: General

World Bank 2002, Country Financial Accountability Assessment Guidelines to Staff, Financial Management Sector Board, World Bank.
These revised guidelines aim at assisting financial management staff in carrying out the Country Financial Accountability Assessment (CFAA). Changes in the Banks business over the years have reduced the relative importance of tracking individual borrower transactions as a source of fiduciary assurance and increased the importance of assessing the countrys own public financial management system. The CFAA is thus an important knowledge tool, providing the Bank with a sound understanding of the broader financial accountability environment within which its funds are spent.
Full document available online

Department for International Development 2002, Strengthening Public Financial Management and Accountability (PFMA), DFID, London
Public Financial Management and Accountability (PFMA) is central to contemporary development programmes. It is premised on the idea that governments must utilise financial resources effectively and efficiently in relation to their citizens needs. This document, issued by DfID and the UK Treasury, outlines the centrality of PFMA to the attainment of the Millennium Development Goals and identifies the institutional changes required to facilitate effective PFMA. It focuses on DfIDs partnership with the World Bank and International Montetary Fund, but also considers the roles of other partners.
Full document available online

Department for International Development 2002, Strengthening Public Financial Management and Accountability and Managing Fiduciary Risk, DFID, London.
This DFID paper sets out a strategy for assistance in strengthening public financial management, accountability and managing fiduciary risk. Recent developments, worldwide, have highlighted the weak state of public financial management in the poorest countries. The process of developing and implementing poverty reduction strategies has focused attention on the budget as the central tool whereby governments translate policies and strategies into investment in pro-poor growth and service delivery.
Full document available online

Brooke, P. 2002, 'Study of short term measures used to address weaknesses in public financial management systems in the context of budget support', Stage 1 Report, Bannock Consulting.
This report from Bannock Consulting reviews the different approaches undertaken by developmental agencies with regards to short-term remedial measures and budget/programmatic support. The first stage of the report takes stock of the measures applied by donors by drawing upon earlier reviews and existing material on the topic, formulating a questionnaire for donor agencies and discussing the results with them.
Full document available online

OECD-DAC, Operations Policy and Country Services, 2002, 'Fiduciary Arrangements for Sectorwide Approaches (SWAps)', OECD-DAC.
Interest in sector wide approaches (SWAps) has grown in recent years. The World Bank is committed to advance proposals to allow for fuller participation in SWAps in a drive to modernise its lending instruments and to support new approaches to donor coordination. This paper from the OECD-DAC looks at ways in which the Bank can adapt its procedures to support sector programmes.
Full document available online

Department for International Development Governance Department 2002, Managing Fiduciary Risk when Providing Direct Budget Support, DFID, London.
A draft policy paper by FDID/PFM provides guidelines to assess and monitor fiduciary risk in the case of budget support. DFID has little control over funds that are directly channelled through central governments or sector ministries. Instead, DFID will need to provide reasonable assurance that direct budget support represents an effective use of aid.
Full document available online

Key texts: Procurement

World Bank currently leads in this area but DFID is also beginning to get more involved. This dimension of public expenditure management may be covered as part of a risk assessment.

World Bank, 1999, Procurement Guidelines, IBRD/World Bank, Washington, D.C.
These World Bank Guidelines for procurement inform those carrying out a project financed in whole or in part by a loan from the IBRD or a credit from the IDA of their rights and obligations.
Full document available online

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