How can you modernize public finance management?

1 Align PFM with strategic priorities

A modern PFM system should support the alignment of public spending with the strategic priorities of the government and the citizens. This requires a clear and coherent framework for setting and communicating policy objectives, linking them to budget allocations and performance indicators, and evaluating and reporting on results. You can use tools such as medium-term expenditure frameworks, program-based budgeting, and performance-based management to enhance the strategic orientation of your PFM system.

2 Enhance PFM transparency and accountability

A modern PFM system should also promote transparency and accountability in the use of public funds. This means providing timely, accurate, and comprehensive information on public finances to the public, the legislature, and other oversight bodies. It also means ensuring that public officials are held responsible for their actions and decisions, and that there are mechanisms for feedback, participation, and redress. You can use tools such as open data platforms, fiscal rules, audit institutions, and social accountability initiatives to strengthen the transparency and accountability of your PFM system.

5 Foster PFM collaboration and coordination

A modern PFM system should also foster collaboration and coordination among the various actors and stakeholders involved in public finance. This means establishing and maintaining effective relationships and partnerships across different levels and sectors of government, as well as with external actors, such as donors, civil society, and the private sector. It also means ensuring that the PFM system is coherent and consistent with the broader institutional and legal environment, and that there are mechanisms for harmonization, alignment, and integration. You can use tools such as intergovernmental fiscal relations, sector-wide approaches, and public-private partnerships to foster collaboration and coordination in your PFM system.

6 Develop PFM capacity and culture

A modern PFM system should also develop the capacity and culture of the people who manage and oversee public finances. This means enhancing the skills, knowledge, and competencies of PFM staff and officials, as well as their motivation, commitment, and ethics. It also means creating and sustaining a conducive organizational and behavioral environment that supports PFM values, norms, and practices. You can use tools such as training, mentoring, coaching, and incentives to develop the capacity and culture of your PFM system.