PEFA Framework – NBC Institute

PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

Question

a) Since the creation of Atuum District Assembly (ADA) in 2011, inadequate revenue mobilization has been its major challenge making the Assembly unpopular. The newly appointed District Chief Executive (DCE) is concerned about the effectiveness of the revenue budget system of the Assembly.

Below is the extract of the Revenue Budget of the Assembly for the 2021 financial year:

Revenue	Annual Budget (GH¢)	Actual to March (GH¢)
Licenses	880,000	244,000
Fees and Miscellaneous charges	3,400,000	890,000
Investment income	600,400	178,000
Property rate	5,400,000	1,310,000
Basic Rate	750,000	120,000
Grants and donations	1,000,000	320,000

The budget allocation over the various items over the quarters is in the ratio of 3:3:2:2. The DCE indicates that the budget reliability measures of Public Expenditure and Financial Accountability (PEFA) are ideal for assessing the budget performance of the Assembly. In the framework, the following interpretation is given to budget outturns:

Outturn/variance not greater than 5% is scored as A, indicating very good budget reliability.
Outturn higher than 5% but not exceeding 10% is scored B, indicating good budget reliability.
Outturn higher than 10% but not exceeding 15% is scored C, indicating average budget reliability.
Outturn higher than 15% is scored as D, indicating poor budget reliability.

Note that each revenue item is treated as an indicator under the PEFA framework.

Required:

i) As the Budget Officer, prepare the statement of budget performance for the first quarter of the 2021 financial year, indicating clearly the outturn percentage and the respective scores. (5 marks)
ii) Write a report to the DCE on the budget performance of the Assembly and suggest ways of improving the budget reliability of the Assembly. (6 marks)
iii) Discuss FOUR (4) benefits of effective revenue budgeting in the Assembly. (4 marks)

b) In a recent audit committee meeting, there arose a serious disagreement between the Director of Finance and the Chief Internal Auditor concerning the internal audit role in the public sector. The Internal Auditor insists that internal audit’s primary responsibility in the public sector is to carry out intensive pre-audit or to vouch. He concludes that internal audit without pre-audit is useless and unfit for purpose. The Director of Finance opposed this view vehemently, arguing that pre-audit is an old-fashioned practice in the public sector and in the 21st century this should not be encouraged in a forward-looking organization like theirs.

Required:
As a member of the Audit Committee, educate the two key officers of the organization on the functions of the internal audit under the Public Financial Management Act, 2016 (Act 921). (5 marks)

Answer

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Tags: Budget Performance, Internal Audit, PEFA Framework, Public Financial Management
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2021

PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework

Explain PEFA framework outcomes, limitations, and pillars of PFM systems.

Question

The Finance Minister at a recent public forum on Public Financial Management (PFM) Reforms indicated in his address that the wave of PFM reforms in Ghana has continued throughout the last three decades. The PFM reforms have helped Ghana to attain notable PFM capabilities over the periods, including stronger legislative base and external oversight function. This is evidenced by the country’s improved performance in the 2018 Public Expenditure and Financial Accountability (PEFA) scores in these dimensions.

Required:

As the Head of Finance of your entry;

i) Explain the THREE (3) key outcomes of the PEFA framework. (3 marks)
ii) State TWO (2) limitations with respect to the scope of the PEFA framework. (3 marks)

iii) Discuss FOUR (4) of the broad activity areas (pillars) of the PEFA framework used in assessing the quality of Public Financial Management Systems. (4 marks)

Answer

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Tags: Fiscal Discipline, PEFA Framework, Resource Allocation, Service Delivery
Level: Level 2

Topic: Public expenditure and financial accountability framework
Series: NOV 2023

PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report

Discuss the benefits of the PEFA framework, sources of information for PEFA assessment, and the preparation and interpretation of a budget performance report.

Question

a) The Public Financial Management Regulation, LI 2378 defines Public Financial Management (PFM) as laws, rules, systems, and processes used by the Government to mobilize revenue, allocate public funds, undertake public spending, account for funds, and audit results. In 2001, a group of development partners initiated the Public Expenditure and Financial Accountability (PEFA) framework to assess the status of public financial management at central and local government levels. Since then, Ghana has subjected itself to periodic assessments in an attempt to improve the country’s PFM system.

Required:
i) Discuss FOUR (4) benefits the use of the PEFA framework can bring to a country. (6 marks)
ii) Explain FOUR (4) sources of information for PEFA assessment. (4 marks)

b) Budget Performance Report is one of the major accountability provisions under the Public Financial Management laws. Regulation 215(2) of the Public Financial Management Regulation, 2019, LI 2378 provides that each Principal Account Holder shall not later than 31 March of the ensuing year submit an annual budget performance report to parliament. The following is an extract from the GIFMIS platform representing Government of Ghana funding for the Ministry of Sanitation for the year 2023.

Budget Item	Annual Appropriation (GH¢’000)	YTD Warrant (GH¢’000)	YTD Payments (GH¢’000)
Compensation of Employees	25,500	18,280	17,450
Goods and Services	5,000	3,450	3,400
Capital Expenditure	8,780	1,220	550
Total	39,280	22,950	21,400

Required:
i) Explain the meaning of Annual Appropriation and YTD Warrant to the Principal Account Holder of the ministry. (2 marks)
ii) Enumerate TWO (2) issues that should be specified in the Annual Budget Performance Report to be submitted by the Principal Account Holder according to the Regulations 215 of LI 2378. (2 marks)
iii) Prepare a Statement of Budget Performance Report for the year 2023 showing the budget-warrant outturns and warrant utilization rates. (3 marks)
iv) Interpret the budget performance statement in (iii) above to facilitate the Minister’s upcoming meeting with the select committee of parliament as required under the law. (3 marks)

Answer

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Tags: Budget Performance, Financial Reporting, Government Accounting, PEFA Framework, Public Financial Management
Level: Level 2

PSAF – April 2022 – L2 – Q3a – The context of public financial management

Discuss challenges of PFM systems, expected outcomes, and the PEFA framework’s role in building an orderly PFM system.

Question

The goal of the Minister for Finance is to build a robust, resilient, open, and orderly Public Financial Management (PFM) system for the country by the end of 2022. This ambitious target has huge budgetary implications for the government due to the difficult fiscal position imposed by the COVID-19 pandemic. The Minister is optimistic that investing more in PFM systems today will produce the expected outcome in the immediate future.

Required:
i) Discuss THREE (3) challenges of the current Public Financial Management systems of the country. (3 marks)

ii) Explain THREE (3) expected outcomes of an open and orderly Public Financial Management system of the country. (3 marks)

iii) Explain FOUR (4) ways by which the Public Expenditure and Financial Accountability (PEFA) framework can help the Minister build an orderly and open Public Financial Management system for the country. (4 marks)

Answer

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Tags: Challenges, Ghana, Outcomes, PEFA Framework, Public Financial Management
Level: Level 2

Topic: The context of public financial management
Series: APR 2022

PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

Question

Below is the extract of the Revenue Budget of the Assembly for the 2021 financial year:

Revenue	Annual Budget (GH¢)	Actual to March (GH¢)
Licenses	880,000	244,000
Fees and Miscellaneous charges	3,400,000	890,000
Investment income	600,400	178,000
Property rate	5,400,000	1,310,000
Basic Rate	750,000	120,000
Grants and donations	1,000,000	320,000

Outturn/variance not greater than 5% is scored as A, indicating very good budget reliability.
Outturn higher than 5% but not exceeding 10% is scored B, indicating good budget reliability.
Outturn higher than 10% but not exceeding 15% is scored C, indicating average budget reliability.
Outturn higher than 15% is scored as D, indicating poor budget reliability.

Note that each revenue item is treated as an indicator under the PEFA framework.

Required:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Performance, Internal Audit, PEFA Framework, Public Financial Management
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2021

PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework

Explain PEFA framework outcomes, limitations, and pillars of PFM systems.

Question

Required:

As the Head of Finance of your entry;

i) Explain the THREE (3) key outcomes of the PEFA framework. (3 marks)
ii) State TWO (2) limitations with respect to the scope of the PEFA framework. (3 marks)

iii) Discuss FOUR (4) of the broad activity areas (pillars) of the PEFA framework used in assessing the quality of Public Financial Management Systems. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Fiscal Discipline, PEFA Framework, Resource Allocation, Service Delivery
Level: Level 2

Topic: Public expenditure and financial accountability framework
Series: NOV 2023

PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report

Discuss the benefits of the PEFA framework, sources of information for PEFA assessment, and the preparation and interpretation of a budget performance report.

Question

Required:
i) Discuss FOUR (4) benefits the use of the PEFA framework can bring to a country. (6 marks)
ii) Explain FOUR (4) sources of information for PEFA assessment. (4 marks)

Budget Item	Annual Appropriation (GH¢’000)	YTD Warrant (GH¢’000)	YTD Payments (GH¢’000)
Compensation of Employees	25,500	18,280	17,450
Goods and Services	5,000	3,450	3,400
Capital Expenditure	8,780	1,220	550
Total	39,280	22,950	21,400

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Performance, Financial Reporting, Government Accounting, PEFA Framework, Public Financial Management
Level: Level 2

PSAF – April 2022 – L2 – Q3a – The context of public financial management

Discuss challenges of PFM systems, expected outcomes, and the PEFA framework’s role in building an orderly PFM system.

Question

Required:
i) Discuss THREE (3) challenges of the current Public Financial Management systems of the country. (3 marks)

ii) Explain THREE (3) expected outcomes of an open and orderly Public Financial Management system of the country. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Challenges, Ghana, Outcomes, PEFA Framework, Public Financial Management
Level: Level 2

Topic: The context of public financial management
Series: APR 2022

Question Tag: PEFA Framework

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PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework

Explain PEFA framework outcomes, limitations, and pillars of PFM systems.

PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report

Discuss the benefits of the PEFA framework, sources of information for PEFA assessment, and the preparation and interpretation of a budget performance report.

PSAF – April 2022 – L2 – Q3a – The context of public financial management

Discuss challenges of PFM systems, expected outcomes, and the PEFA framework’s role in building an orderly PFM system.

PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework

Explain PEFA framework outcomes, limitations, and pillars of PFM systems.

PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report

Discuss the benefits of the PEFA framework, sources of information for PEFA assessment, and the preparation and interpretation of a budget performance report.

PSAF – April 2022 – L2 – Q3a – The context of public financial management

Discuss challenges of PFM systems, expected outcomes, and the PEFA framework’s role in building an orderly PFM system.

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PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

You're reporting an error for "PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting"

PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework

Explain PEFA framework outcomes, limitations, and pillars of PFM systems.

You're reporting an error for "PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework"

PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report

Discuss the benefits of the PEFA framework, sources of information for PEFA assessment, and the preparation and interpretation of a budget performance report.

You're reporting an error for "PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report"

PSAF – April 2022 – L2 – Q3a – The context of public financial management

Discuss challenges of PFM systems, expected outcomes, and the PEFA framework’s role in building an orderly PFM system.

You're reporting an error for "PSAF – April 2022 – L2 – Q3a – The context of public financial management"

PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting

Analyze the budget performance of Atuum District Assembly and explain the functions of internal audit under the Public Financial Management Act.

You're reporting an error for "PSAF – May 2021 – L2 – Q5a – Public sector fiscal planning and budgeting"

PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework

Explain PEFA framework outcomes, limitations, and pillars of PFM systems.

You're reporting an error for "PSAF- Nov 2023 – L2 – Q3a – Public Expenditure and Financial Accountability Framework"

PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report

Discuss the benefits of the PEFA framework, sources of information for PEFA assessment, and the preparation and interpretation of a budget performance report.

You're reporting an error for "PSAF – March 2024 – L2 – Q3 – PEFA Framework and Budget Performance Report"

PSAF – April 2022 – L2 – Q3a – The context of public financial management

Discuss challenges of PFM systems, expected outcomes, and the PEFA framework’s role in building an orderly PFM system.

You're reporting an error for "PSAF – April 2022 – L2 – Q3a – The context of public financial management"

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