Second Public Financial Management Reform Project

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The Project: The Second Public Financial Management Reform Project (PFMRII) was a second phase of support for public financial management (PFM) and built on the outcomes of a series of IDA operations and bilateral donor technical assistance projects that have assisted the Government of Afghanistan (GOA) in establishing the legal framework for PFM and put in place the capacity at the central government level to operate PFM systems and processes for budget planning, execution and monitoring. PFMR II was entirely financed with ARTF donor financing. The objective of the new program was to strengthen public financial management in line with sound financial management standards of monitoring, reporting and control.

PFMR II was specifically designed around the new PFM Roadmap and National Priority Program. Like the first program, it continued to focus on three core areas: treasury, procurement and audit. In addition, it helped establish the basis for an accounting profession in Afghanistan. While the project continued to support good public financial management performance developed in central control entities under the first program, support is during the second phase being extended to line ministries both at the central and the provincial levels to improve their financial management capacity.

KEY RESULTS

1. Donors shift 20 % of their off-budget official development assistance to Afghanistan to on-budget;
2. PEFA ratings for internal audit (P-21) improve to B;
3. PEFA ratings for internal audit (P-26) improve to B;
4. At least 50 % of procurement under the budget is done by line ministries;
5. Conducting stand-alone procurement;
6. Increased number of functions carried out by regular ministry staff that were previously carried out by contracted staff.