Using Country PFM Systems for AID

USAID Chief Financial Officer David Ostermeyer spoke at the ICGFM June DC Forum about the use of country PFM systems for donor funding. He introduced some ideas and described efforts to develop a consistent and transferable assessment tool that would objectively evaluate risk in pushing aid dollars through host country PFM systems. According to Ostermeyer, USAID is incredibly risk-averse. He wonders whether innovations and opportunities are lost as a result of shying away from pushing aid through country systems. He questioned how donors can identify country systems as high risk without an objective and standardized assessment tool.

Ostermeyer and his team have a plan to develop a new evaluation tool. The process will begin with analysis pilots in five countries beginning with Liberia and moving throughout 2010 to include Rwanda, Pakistan, Nepal, and Peru. Participating pilot countries were chosen based on how innovative the missions are and how well the mission understands and is committed to the Accra accords. The methodology for creating the assessment tool will involve examining what agencies like DFID and the World Bank have done to evaluate or mitigate risk and to build the capacities of country systems at the national level. This assessment tool will be transferrable among countries. It will also support national and sub-national government tiers.

Ostermeyer hopes that this initiative will assist in achieving stronger capacity and sustainability within host countries. This approach will enable the United States to compare host country systems and evaluate which are most ready to take on ownership of aid allocation and spending.