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World Bank Strengthening Accountability and the Fiduciary Environment (SAFE) in public financial management (PFM)

Strengthening the quality of Public Financial Management (PFM) responds to the widely shared concern that many governments in tran- sition countries are not spending their financial resources as effectively and transparently as they should, and that institutional controls on public expenditures are weak.

Strategic Domain:
Economy and Employment
Themes:
Economic Development
Status:
Ongoing
Strategic Partner:
Ministries of Finance BiH
Implementer:
World Bank
Project implemented in:
Federation of Bosnia and Herzegovina, Global and regional projects
Cantons:
Sarajevo Canton
Municipalities (1):
Grad Sarajevo

Rationale

The Strengthen- ing Accountability and Fiduciary Environment Initiative (SAFE) is targeted to promote PFM accountability and reducing fiduciary risk in a systematic way to advance the reform in the ECA (Europe and Central Asia) region.

Objectives and activities

SAFE seeks to improve the status of PFM in participating beneficiaries through the following objectives: i) improving understanding of PFM status in target beneficiaries; ii) supporting design,  implementation  and  management  of the PFM, taking account of government PFM objectives and the intended mid to long-term impact, and; iii) developing knowledge and ex- perience on PFM reform to strengthen reform effectiveness and focus development partner support

To achieve these objectives, SAFE is support- ing activities in the following three interrelated pillars of analytical and associated work:

  1. Assessment of PFM status:
    • Support to government-led or expert reviews of PFM arrangements using the standard in- ternational PEFA  measurement framework or related diagnostic and analytical tools;
    • Preparation and dissemination of reports on financial management performance.
  2. Support  for  PFM reform  design,  imple- mentation and management:
    • Research, analysis and design of PFM re- form action plans, in consultation with other development partners;
    • Developing networks within governments to implement reforms relating to one or more aspects of the PEFA framework;
    • Research  to  obtain  deeper  understanding of the results of diagnostic assessments, as well as identification and design of actions required to address weaknesses;
  3. Expanding PFM knowledge and  capa- bility:
    • Benchmarking and comparative analysis, in- volving studies of progress against specific indicators or groups of indicators, facilitation of working groups across beneficiaries to explore differences and identify practical ac- tions to address weaknesses;
    • Wider experience and knowledge sharing, including provision of forums for exchange of information and experience, and joint activities to address common development priori- ties in PFM across the region.

Governance structure

The SAFE program is composed of a multi-do- nor trust fund supported by SECO and a single donor trust fund on behalf of the EC with bene- ficiaries restricted to the Western Balkan coun- tries. SAFE has a two-tier governance struc- ture with policy and major funding decisions made through a Project Steering Committee composed of World Bank, EC and SECO. Op- erational support is provided through the Trust Fund Secretariat that is administered by the World Bank.

Results so far

So far, 17 projects have been approved under SAFE out of which 14 are completed. SAFE has provided funding for around one third of the PEFA assessments in the region since its establishment, including the first PEFA assess- ment for Bosnia and Herzegovina. In addition, the SAFE program has filled a gap in funding for projects that pursued new directions in the PFM agenda. An independent results-oriented monitoring (ROM) review was undertaken in

2014. It concluded that the SAFE TF provides small, necessary outputs to national PFM ef- forts that do not overlap with other donor inter- ventions.

How to get involved

SAFE follows a demand-driven approach. The SAFE Secretariat is regularly conducting calls for proposals. Eligible countries must apply during these windows for applications and pro- posals need to meet specific criteria as defined in the invitation. It is important to show willing- ness to reform, which goes hand in hand with readiness to budget process transparency as well as to publish the PEFA assessments.