This assignment was carried out within the Framework Service Contract ECFIN/012/2011 for Operational and PEFA Assessments. Our experts joined a World Bank PEFA team on behalf of DG Economic and Financial Affairs (ECFIN). The following PEFA indicators were covered by our experts:

Internal audit:

• PI-20 Effectiveness of internal controls for non-salary expenditure
• PI-21 Effectiveness of internal audit

External Scrutiny and Audit:

• PI-26 Scope, nature and follow-up of external audit
• PI-27 Legislative scrutiny of the annual budget law
• PI-28 Legislative scrutiny of external audit repo

Inter Governmental Finance:

• PI-8 Transparency of inter-governmental fiscal relation

Donors practices:

• D-1 Predictability of Direct Budget Support
• D-2 Financial information provided by donors for budgeting and reporting on project and program aid
• D-3 Proportion of aid that is managed by use of national procedures

Customs part of revenue related indicators (excluding the tax administration side):

• PI-13 Transparency of taxpayer obligations and liabilities
• PI-14 Effectiveness of measures for taxpayer registration and tax assessment
• PI-20 Effectiveness

In view of improved programming and monitoring of EU Budget Support in Armenia, DT Global and 4Assist were assigned by the EU Delegation to Armenia to provide assistance on the EU Budget Support (BS) operations in Armenia, and to conduct a Public Expenditure and Financial Accountability (PEFA) assessment in the country, in cooperation with an expert from the Asian Development Bank.

The PEFA framework is used by the European Commission to assess the operational performance of the Public Financial Management (PFM) system for budget support operations and as part of its Risk Management Framework.

On February 24, 2023, an EU-financed PFM-PEFA Donor Coordination conference was held in Yerevan to present the Government Fiscal and Debt Policy Priorities and the PEFA-2016 Framework and methodology. The event gathered more than 60 participants from the Ministry of Finance, government institutions and other public bodies, donor organisations, in particular WB, IMF and ADB, and development partners present in Armenia. As indicated by our Sebastien Dubost leading this project, “a common takeaway from the meeting was the importance of PEFA on assessing the extent to which the PFM system is an enabling factor for achieving policy and budgetary outcomes”.

The PEFA assessment is carried out by a truly impressive team that brings in a robust blend of expertise in carrying out PEFA assessments, David Biggs, Elisaveta Teneva and Iain Rennie, an expert from the Asian Development Bank.

Following the PEFA exercise, this EU funded project will provide technical assistance (TA) to the EU Delegation to Armenia and to the Government of Armenia in order to program and identify, prepare and monitor future budget support operations. In doing so, we will place utmost importance on assisting the Government of Armenia to improve PFM performance.

Our Elen Ispiryan, carrying a life-time experience in the entire cycle of the EU Budget Support operations explains: “Budget support is one of the most effective aid modalities in EU development assistance, promoting sustainable development through national systems of partner countries. It is directly linked to reforms and developmental results, assisting the partner countries in their policy reform agenda and linking the disbursement of BS funds to the achievement of reform milestones.”

Our TA PFM-BS team is comprised of three in-house partner associates of 4Assist building on decades of experience in PFM systems and Budget Support, Sebastien Dubost, Irina Grigoryan and Elen Ispiryan.

     Donor Coordination Meeting in Yerevan during the Armenia PEFA assessment 2023