Efficient utilization of overallresources through sound public financial management (PFM),good governance and oversight are priorities in the Lao PDRgovernment’s reform agenda. The strengthening of PFM systemsis fundamental to the successful development of Lao PDR andhas been center stage in the Government’s policy agenda.There has been slow progress since 2010 in strengthening thequality of PFM systems and processes and there has also beena pause in the PFM reform agenda since 2013.This PublicExpenditure and Financial Accountability (PEFA) Lao PDR 2018is intended to assess the current state of PFM in Lao PDR.This PEFA uses the upgraded 2016 methodology that has moredemanding PFM standards with new calibration and scoringcriteria. While it is expected that the assessment generatesrelatively low scores and reveal severe PFM performancegaps. The Government expects that the narrative will alsohighlight the area of ongoing or planned reform action inorder to link the analysis to the existing areas of the newPFM reform agenda and to support the post-PEFA dialogue onthe priorities and sequencing of the reform actions. thiscontext, the GoL agreed at the end of 2016 to carry out aPEFA self-assessment managed by the WB and financed by theEU, to establish a diagnostic study of the PFM system usingthe PEFA 2016 methodology. It is expected that the PEFAexercise gives further impetus to the momentum created bythe launch of the PFM reform agenda, mobilizing theparticipating institutions on the subsequent dialogue on PFMreform policy decisions.The overall objective of the PEFAassessment is to provide a baseline with an evidence-basedPFM performance assessment to guide the Government’s PFMreform strategy and potential engagement with itsdevelopment partners in further strengthening PFM in the country.
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