Assess PFM in Mestia, Zugdidi, Ozurgeti, and Sighnaghi Municipalities Using the PEFA Framework  

PMCG, as a subcontractor of Tetra Tech, is working with the USAID Local Governance Program (LGP) to implement the “Assess PFM in Mestia, Zugdidi, Ozurgeti, and Sighnaghi Municipalities Using the PEFA Framework” project. 

Project Activities, Details, and Goals 

Specifically, the USAID LGP is supporting four Georgian municipalities to strengthen their public finance management (PFM) by re-assessing their relevant systems using Public Expenditure and Financial Accountability (PEFA) indicators, and assisting the Ministry of Finance of Georgia (MoF) to enhance them. 

Ultimately, the results of this latest assessment of the municipalities’ performance under the PEFA indicators spanning 2021-2023 will be compared with the corresponding results for 2018-2020. Based on this review, a summary of changes recorded since then will be presented, including key achievements as well as highlighting areas in which further PFM improvement is needed. 

By deploying supplementary guidance for subnational PEFA assessments, the municipalities’ systems will be closely examined, after which specific recommendations will be issued along with suggested activities to fill any observed gaps in performance. 

Meanwhile, additional gender indicators are being applied to monitor and ensure the gender responsiveness of the municipalities’ PFM systems. 

PMCG’s Contribution and Expected Outcomes 

Cooperating with the targeted municipalities, PMCG is devising a detailed plan comprising the assessment methodology, data collection techniques, and the timelines for each phase. 

In addition, the team is concluding in-depth PEFA assessment plans with the involvement of municipality leaders. 

Thereafter, assessments will be carried out in each of the four municipalities aided by the PEFA guidance, covering the period of 2021-2023. 

Encompassing 33 indicators and 98 sub-indicators, the assessments focus on the following eight pillars: intergovernmental fiscal relations; budget reliability; transparency of public finances; management of assets and liabilities; policy-based strategy and budgeting, predictability and control in budget execution; accounting and reporting; and external scrutiny and audit. 

In addition, gender-responsive PFM (GRPFM) assessments are being conducted on each of the municipalities. 

Naturally, once the detailed assessments are completed, the team will draft a comprehensive report taking into account the 2023-2026 PFM Strategy, covering the following four main areas: medium-term planning and program budgeting; accounting and accountability; internal audit; and public investment management. 

On top of an extensive final report outlining the work carried out and the results achieved, individual PEFA assessment reports will be prepared, along with GRPFM assessment reports, and particular recommendations for each municipality. 

Anticipated Impacts 

As a consequence of this project, the municipalities’ understanding of their PFM systems will increase, PFM performance will be enhanced by following the recommendations and implementing the suggested activities, and the gender responsiveness of PFM will be boosted.