PFM I - Public Finance Management: Systems and Principles

Practical Information

The course is intended for Commission staff, notably for DG Devco in HQ and Delegation. The course is also open to collegues from the European Institutions, notably DG ECFIN, ELARG, TRADE, ECHO and the EEAS.

This course lasts 4.5 days and can take place both in Brussels (HQ) and Delegation.

For further information, please contact the DEVCO Training Team.

Training Objectives

We aim to provide you with an introduction to the building blocks and architecture of a typical Public Finance Management (PFM) system. In practice, these systems are as varied as their countries’ histories, cultures and institutions. This course forms the basis upon which you can develop a personal framework for developing and deepening your understanding of PFM and its role in development. A deep understanding of PFM and its environment is essential for development and poverty reduction.

Content

The course will be based around the following modules:

Definitions, presentation of PFM objectives and the context of PFM.
Presentation of the budget approaches, the legal framework for PFM and some special issues related to the budget
Presentation of the budget classification system, which is a key instrument for both administering and budget policy analysis. This module will be followed by case studies.
The macroeconomic constraints that frame the budget and the importance of PFM to maximise the contribution of public finance to economic stability and growth.
Budgeting: a first module will review the basic principles for sound budget preparation; a second module will present the MTEF and discuss related issues.
Budget Execution: to provide participants with a good understanding of how the budget is executed as the budget is the instrument to implement policies in practice
Internal Controls and internal audit: internal controls are critical to sound budget execution. Internal audit aims to provide management with support to reinforce and maintain adequate internal controls.
Payroll, procurement and IT: Payroll and Procurement are the two main means by which the budget is executed. Their efficiency and control are key to sound and effective public expenditure.
Revenue Administration.
Treasury management and debt management: cash management and revenue administration, including the collection and custody of public funds determine the extent to which budget execution can be achieved.
Accounting, recording, reporting: these are essential functions of a sound PFM system to enable users and managers to obtain the necessary management information and to enable accountability and openness to parliament and the wider public.
External scrutiny and oversight: the external audit function and legislative scrutiny and oversight of the budget process are outlined and discussed.
PFM issues at sub-national levels and in state owned enterprises: this section aims to provide participants with an understanding of the transfers that support fiscal decentralisation and the links between state owned enterprises and the budget.
Presentation of Public Expenditure and Financial Accountability Performance Measurement Framework (PEFA-PMF), which is a key instrument to assess PFM systems.

Method

Learning methods will include the following:

Introduction to key concepts through “teach and discussion”.
The use of extensive examples from many different countries.
The use of exercises (in particular short exercises, “buzz” sessions) to provoke and consolidate certain points raised.
Provision of references to further reading, details of regional and international standard settings and capacity development support organisations.
On-line follow-up discussions among participants to share their experiences of implementing what they have learned, supported by the trainers and tutors.