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Support to Capacity Development in Public Financial Management (PFM)

Carole and Nico Pretorius

EuropeAidIntroduction

Development of practitioners guide to supporting capacity development in PFM

Five case study countries: Lesotho, Nepal, Mali, Morocco and Rwanda

Semi- structured interview process understanding/meaning of key terms, capacity development

(CD), reform and PFM; content, form and duration of CD support; process of design, implementation and assessment; impact and sustainability.

EuropeAidNepal

Ad hoc interventions, predominantly based on technical training and supply driven assistance, government not seen as in driving seat.

‘Need to train right person on right course for right reason’

Gradual move to more coordinated and focussed support with some recognition of political situation, but not of how society/organisations operate

Limited local ownership/management of technical assistance, complaints over micro management, concerns over ‘cut and paste’ approach

Impact not assessed and sustainability constrained by a number of factors e.g. Frequent rotation of senior personnel, low status of financial personnel

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Lesotho Reform programme comprising of traditional technical ‘fixes’ but

addressing issues of professionalization

Level of ‘government’ ownership declined over time, all affected bodies not on board from the outset.

At operational level, preferred technical assistance, those who had practical experience. At micro level, internal CD of organisation, which is emphasising ‘human element’ making progress.

Change management support did not go beyond the ‘communication philosophy’

Sustainability generally and of professionalization process ? “If you train them they leave?”

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Rwanda Reform programme supported by limited number of

knowledgeable donors, high level of mutual trust and respect

Major transformation, but high level of political support with clear vision (even if not realistic)

Joint selection and management of TA, monitoring done by counterparts/senior government officials

Initial attempts at professionalization failed, poor selection process, broader educational issues need to be addressed + high leakage

Sustainability – still highly questionable, shared vision ?, very small civil service, flat pay system, personal motivation issues not addressed

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Morocco High level support by the King, but shared vision across all

senior management still being sought.

The Trésorerie Générale du Royaume (TGR) has sequenced its reform efforts taking account of capacity issues/scope.

Focus on tools viewed as being to the detriment of a focus on enabling people to use those tools for the benefit of their organisations

Government manage technical assistance, effective use of institutional twinning arrangements

Need for donors to adopt flexible approach.

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Mali Lack of involvement of parliament and audit together with protracted

discussions over methodology seen as reducing country ownership.

WAEMU directives – so direction prescribed, but sequencing of reforms has not taken into account country context. Also concerns raised that values, beliefs, ways of doing things not respected – e.g. audit model

Carefully formulated plans are addressing a number of institutional, organisational and individual capacity development issues.

There is a change management strategy, the implementation of which is headed by a dedicated unit; however addressing the influence of vested interests and the need to take into account motivational issues remains.

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Common findings

Understanding and meaning of key terms Variations exist between governments, between donors and

between government and donors leading to some tensions.

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Common findings Still mainly support to new ‘technical’ tools and approaches (MTEF,

IFMIS, TSA), conventional training/workshops

In general focus on traditional imports, not finding solutions to actual (and shared) problems, very limited innovation.

Limited understanding (incorporation) of local context by donors

Timescales still appear to fit donor programming requirements

Capacity Development and change management link not clearly addressed

Recognition only of need for communication strategies and political will (leadership) but not the overall dynamics of change.

EuropeAidApproach to Guide

Guide focuses on how to support not just what to support – holistic perspective on issues that need to be addressed.

Know your country, your subject, yourself (your organisation) Develop relationships that facilitate open and constructive discussion Be transparent and assess with an open mind. Focus on what is there,

not just what is not there In designing support, provide alternatives to the problem, not single

standard solutions, think out of the box Improve the flexibility of funding to accommodate the dynamic nature of

capacity development. In providing assistance ensure there is demand and then look at the

various options involving government in selection/management Take longer term perspective on learning and seek to improve

organisational learning Know your goal/intended benefit at the outset, if not always the exact

path

EuropeAidCapacity Development – A Change Perspective

Human element of reforms/development/change strategyChange challenges at different levels

Societal (values & beliefs e.g. public accountability) Institutional (changing roles e.g. audit independence) Organisational (Culture) Individual (Behaviour)

Include “hard issues” and “soft issues” Institutional frameworks, technical reforms Buy-in, compliance, behavioural change

Managing change Focus on rational processes and emotional responses to

ensure sustainable change

EuropeAidWhy Change Efforts Fail

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Clear Vision Urgency Capacity

Action

Likely Outcome

X X X Fast start, then fizzle out

X X X Bottom of “In” tray

X X XPockets of change, Fear due to lack of skills

X X X False starts, Ad Hoc

X X X X Sustainable change

Based on Kotter, J.P. (2000) Leading Change: Why Transformation Efforts Fail. Harvard Business Review no 4231

Country Findings – Sustainability an Issue – Why is that?

EuropeAidGetting Ready for Change

Making the Case for Change/the Vision Building case in which logic is irrefutable

best practice is not a good argument Have clear criteria for success,

it manages expectations so everyone is clear on

destination Provide insight not prescription

internal drivers, not external forces

Capture P(p)olitical Will Political Level Organisational Level (Senior Management)

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Insight (Case Study: Using PEFA)

Year Ending

Submission of Fin. Statements to AG

Date signed off by AG

Submission to Speaker

Scrutiny by PAC

Date available to Public

2006 31 Mar 07 Not signed Not submitted No Hearing Not released yet

2007 31 Mar 07 Not signed Not submitted No Hearing Not released yet

2008 11 Jun 09 Not signed Not submitted No Hearing Not released yet

EuropeAidBeyond leadership and communication

Rwanda High level political will now, but ...

Mali Change management unit but still battling with how to tackle

vested interestsLesotho

‘Change management consultants told us what we already

knew – not what to do about it’

How do you move to a stage where this is ‘how we do

things around here (now)’

EuropeAidImportance of Culture

“The way we do things”The 80 % principleValues and ethics

Culturally loaded concepts Most difficult to change

Shadow side of Culture (Perception) Loyalty (“Don’t question”) Professional (“High Power Distance”)

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EuropeAidOrganisational Change Strategy (6Ps)

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Purpose What is reason for change?(Making irrefutable case for change!)(Implications if no change?)

Picture What will things look like in future(Vision)(How will it be better than what we got?)

Plan What is timeline? Priorities and Sequence Who is involved in planning?(Top-down, Consultation, Participation?)

Part What is my role in change?(What is expected from me now, duringand after change?)

Passion Emotional response(Anger, fear, cynicism, excitement, etc.)

Personal What is in it for me?(Am I a winner or loser?)(Rewards – financial, self-actualisation?)(Effort – increased workload?)

Organisational IndividualCase Study (South African Civil Service Reforms)

EuropeAidDesign and Implementation Stage

Drivers (strategies) for Sustainable Change Clear strategies for achieving vision One organisation, one strategy Alignment (Development Strategy and Culture) Process must promote urgency Flexible framework that encourages action and limits

opportunity for passivity Detailed implementation Requires management not strategies Appropriate technical and managerial capacity

Internal capacity to manage change process

EuropeAidMonitoring and Evaluation

Formulate Criteria and KPI at Design Stage Keep it simple, Monitor change in behaviour not just

systems and procedures and REACT Process Step Analysis (Inputs, Outputs, Impact, etc)

Example: Open Strategies

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Process Result Uses Benefits

•Developing training Manual

•Document produced

•How is it supposed to be used?•How is it actually used (or not)?

• For Unit, Organisation,

• Specialist Training

• Phd graduate

• How is person being used?• How does organisation learn from that knowledge

• For Organisation, sector, society, individual, etc.