Budget Support Module 8 Monitoring Outline Module 8

Budget Support Module 8 Monitoring

Outline Module 8 1. Monitoring framework 2. Monitoring the eligibility conditions (FT) and the variable tranche indicators (VT) 3. Monitoring the fundamental values and others 2

Main issues regarding Performance Assessment/Monitoring Frameworks • Address the “missing middle” of the processes for public service delivery • Address the credibility/feasibility of ambitions • Verify existence of baseline/targets/performance objectives with SMART/RACER/CREAM performance indicators • Promote disaggregated indicators (regions, gender or population group) The selection of indicators/benchmarks is an important part of the policy dialogue and may sometimes require strong negotiations with the EU 3

Monitoring Framework Analyse: • Strengths and weaknesses of statistical systems • Availability of data and timing of publication • Availability of policy analysis Monitoring systems should produce and disseminate / provide access to: • Annual progress reports • Result indicators with baseline values and targets: information for national accountability mechanisms, awareness raising and evidence-based decision making • Where these have weaknesses, the EU should indicate how eligibility will be monitored and offer CD for strengthening them

Monitoring a BS programme: a continuous process Follow up and data collection § Reports from MF, Central Bank § IMF/WB / ECFIN Reports § Sector reports (implementation) § Enacted budget § Reports on budget execution § Assessments of PFM (PEFA, PEMFAR, PER, OBI) § Implementation reports of PFM Action Plan § Human rights reports § M&E indicators § Surveys, Statistics Analysis § Macroeconomic framework § Progress in implementing policies § Relevance/credibility of the policies § Progress of PFM reform § DRM (revenue) and Budget (expenditure) execution § Availability/accessibility of budget documents § Monitoring of performance indicators, achievement of results, specific objectives. § Evolution of risks § Monitoring of risk and mitigating measures POLICY DIALOGUE Payment file/annual report § Verify continued relevance/credibility of policies § Macroeconomic assessment § Annual report on PFM § Assessment of progress in transparency § Risk Management Framework (RMF) § M&E systems 5

Monitoring the intervention logic • Are the (implicit) assumptions still valid? • Are the institutional capacities sufficient to ‘drive’ the intervention strategy? • What are the relations between the BS induced output? (contribution to improved macroeconomic management; improved public services; strengthened PFM; strengthened public sector institutions and the policies / Reform supported) • Any slippage; any unforeseen consequences? 6

Outline Module 8 1. Monitoring framework 2. Monitoring the eligibility conditions (FT) and the variable tranche indicators (VT) 3. Monitoring the fundamental values and others 7

Monitoring Eligibility conditions Assessment Requirement Public policy Satisfactory progress in implementation; credible and relevant successor strategy Aligned to partner country’s policy reporting cycle; country’s monitoring and evaluation arrangements; statistical quality; coordinated with Development Partners Macroeconomic stability Stability oriented policies aimed at restoring key balances Identify the country’s vulnerability to external shocks; Coordinate with IMF (‘on track’ or assessment letter) PFM and budget transparency Progress in implementation PFM monitoring table. reforms; satisfactory access Aligned to partner country’s to budget information budget cycle; attention to

Frequency • Macro: If IMF programme: twice x year; if not 1 x per year (Art IV or Central Bank report); • PFM Report combines PFM with Transparency and Oversight • Update of PFM Report is determined by risk in RMF: update every year when PFM risk is substantial or high; Update every three years when PFM risks are low or moderate • Submit PFM Report (one per country) for each BS contract and disbursement request (monitoring table, Annex 3) 9

Monitoring variable tranche indicators • Guidelines: “constant monitoring of conditions and indicators”; guided by the indicator fiche. • FA contains a clause that any revision of indicators or targets can take place at the request of Government (agreement by the Commission; average 3 waivers per BS contract) • Agreed upon ex-ante; at least in the first quarter of the assessed year • Exceptional possibility to either waive or neutralise an indicator (reallocation to other indicators or to next year) 10

Outline Module 8 1. Monitoring framework 2. Monitoring the eligibility conditions (FT) and the variable tranche indicators (VT) 3. Monitoring the fundamental values and others 11

Monitoring of fundamental values • Political reporting by political section / Head of EU Delegation; • Political dialogue between EU and partner country; coordination among DPs • Political dialogue in enlargement context (Enlargement process and stabilisation and Association process): compliance to political criteria for accession, incl fundamental values • EU Human Rights and Democracy country strategy (Universal Periodic Reviews) 12

If things go wrong: gradual and proportional response Change in Fundamental Values Response Stable or positively progressing situation Minor adaptations for fine-tuning if required Concerns arising Mitigation measures to be proposed; roadmap for improvement Significant deterioration Report from EU Delegation to Geographic Director (support by DEVCO/NEAR, EEAS). Next to BBSC. Suggestions for precautionary measures (complementary actions? ); delay in disbursement; reduction of BS Extreme cases Suspension; possible re-allocation of resources to non-governmental activities 13

Monitoring Policy Dialogue and complementary measures • Coherence between policy dialogue and political dialogue (i. e. Art 8 consultation, ACP countries); • Minimum record of the formal dialogue (agenda, notes, brief progress report); And the efficiency and effectiveness of the complementary measures Sufficiently resourced? Amendments required? 14

Thank you for your attention 15