Pfm Reform Strategy
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THE REPUBLIC OF UGANDA MINISTRY OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT UGANDA PFM REFORM STRATEGY July 2018 (July 2019 – June 2024) This document is intended to provide an overall framework for public financial management (PFM) reforms in Uganda. It is for the exclusive use of the Government of Uganda and its Development Partners and is not otherwise to be quoted, reproduced or circulated. The Public Financial Management Reform Strategy (2018-2022) 1 | Page Acknowledgement Keith Muhakanizi Permanent Secretary/Secretary tO the Treasury Ministry of Finance, Planning and EconOmic Development The Public Financial Management Reform Strategy (2018-2022) 2 | Page TABLE OF CONTENTS TABLE OF CONTENTS ............................................................................................................. 3 ACRONYMS & ABBREVIATIONS ............................................................................................. 5 EXECUTIVE SUMMARY ........................................................................................................ 10 1 BACKGROUND: PFM REFORM PROGRESS AND CURRENT PERFORMANCE 15 1.1 IntroductiOn ................................................................................................................................ 15 1.2 EconOmic and POlicy COntext ..................................................................................................... 15 1.3 Progress tOwards PFM RefOrms in Uganda (1986 -2018) .......................................................... 17 1.3.1 Level 1 Progress: Impact On Service Delivery .................................................................................. 19 1.3.2 Level 2 Progress: PFM OutcOmes .................................................................................................... 19 1.3.3 Level 3 Progress: PFM Reform Programme ..................................................................................... 22 1.4 Summary Of PFM Strengths and Weaknesses ............................................................................ 22 1.5 OppOrtunities for future PFM refOrms ....................................................................................... 25 1.6 Threats ........................................................................................................................................ 26 1.7 LessOns and Emerging PriOrities fOr PFM refOrm ....................................................................... 27 2 SITUATION ANALYSIS OF PFM PRIORITY AREAS ........................................ 31 2.1 Sustainable ResOurce MObilizatiOn ............................................................................................ 31 2.2 Planning and Budgeting .............................................................................................................. 34 2.3 Public Investment Management ................................................................................................ 38 2.4 Accountability systems and cOmpliance in budget executiOn ................................................... 41 2.5 LOcal Government PFM fOr Service Delivery .............................................................................. 45 2.6 External Oversight and GOvernance Of PFM RefOrms ................................................................ 47 3 PFM REFORM STRATEGY 2019/20 to 2022/23 .................................................... 51 3.1 PFM RefOrm Principles ............................................................................................................... 51 3.2 Overall Vision, Goal and PurpOse ............................................................................................... 51 3.3 Theory Of Change ....................................................................................................................... 52 3.4 Approach tO Sequencing Of PFM refOrms .................................................................................. 53 3.5 Reform PriOrity Areas and Key InterventiOns ............................................................................. 56 3.5.1 Sustainable ResOurce MObilisatiOn ................................................................................................. 56 3.5.2 Planning and Budgeting ................................................................................................................... 58 3.5.3 Public Investment Management ..................................................................................................... 61 3.5.4 Accountability systems and cOmpliance in budget executiOn ........................................................ 63 3.5.5 LOcal Government PFM fOr Service Delivery ................................................................................... 66 3.5.6 External Oversight and GOvernance Of PFM RefOrms ..................................................................... 68 3.6 PFM RefOrm Strategy ContributiOn tO Wider POlicy Objectives ................................................ 70 3.6.1 InternatiOnal pOlicy and PFM standards ......................................................................................... 70 3.6.2 EAC RegiOnal IntegratiOn POlicy ...................................................................................................... 71 3.6.3 NatiOnal DevelOpment Plan (NDP II) ............................................................................................... 71 3.6.4 Accountability Sector Investment Plan (ASSIP) ............................................................................... 72 The Public Financial Management Reform Strategy (2018-2022) 3 | Page 3.6.5 Fiscal DecentralisatiOn ..................................................................................................................... 73 3.7 Other Reforms Complementary tO PFM..................................................................................... 73 3.8 InstitutiOnal Linkages tO the PFM Reform Strategy.................................................................... 74 4 IMPLEMENTATION PLAN .................................................................................... 76 4.1 PFM ImplementatiOn InstitutiOnal Framework .......................................................................... 76 4.2 NatiOnal COOrdinatiOn Arrangements ........................................................................................ 76 4.3 Accountability Sector .................................................................................................................. 76 4.4 The Public Expenditure Management Committee (PEMCOM) .................................................. 80 4.5 PFM Technical Sub-Committees ................................................................................................. 81 4.6 PFM RefOrm Secretariat ............................................................................................................. 81 4.7 Key PFM Reform Implementing InstitutiOns .............................................................................. 81 4.8 Financing of PFM Reforms .......................................................................................................... 82 5 CHANGE MANAGEMENT AND COMMUNICATION ...................................... 87 5.1 RatiOnale for Change Management and COmmunicatiOns ........................................................ 87 5.2 Change Management Strategies fOr PFM refOrm ...................................................................... 87 5.3 Internal CommunicatiOns ........................................................................................................... 89 5.4 External CommunicatiOns........................................................................................................... 90 6 RISK MANAGEMENT ............................................................................................. 92 6.1 Approach tO Risk Management .................................................................................................. 92 6.2 Risk Management PrOcess and MethOd ..................................................................................... 92 7 SUSTAINABILITY PLAN ....................................................................................... 96 7.1 Mainstreaming Of Reforms into Recurrent Government Budget............................................... 96 7.2 Staffing and Public AdministratiOn Structures ........................................................................... 97 7.3 Capacity Building Approach ........................................................................................................ 97 8 MONITORING AND EVALUATION .................................................................... 99 8.1 Strategic Results FramewOrk ...................................................................................................... 99 8.2 M&E FramewOrk and PrOcess .................................................................................................... 99 8.3 M&E Roles and RespOnsibilities ............................................................................................... 100 8.4 Embedding Learning and Feedback .......................................................................................... 100 8.5 Web-based MOnitoring & EvaluatiOn ....................................................................................... 101 8.6 Link between the PFM RefOrm Strategy with GOU's Performance Assessment System ......... 101 8.7 Mechanism fOr updating the Results