(a)
(i) Benefits of PEFA Reports in Promoting Open and Orderly PFM Systems
The PEFA Report assesses the public financial management system of countries and it has many uses and applications by government and other interest groups. The uses and application of PEFA reports include:

• Governments use PEFA to obtain a snapshot of their own PFM performance.
• PEFA offers a common basis for examining PFM performance across national and subnational governments.
• PEFA scores and reports allow both governments and other users (such as civil society organisations and international development institutions) of the information to gain a quick overview of the strengths and weaknesses of a country’s PFM system.
• PEFA assist users to appreciate the implications of the overall performance results for the key goals of fiscal discipline, strategic resource allocation, and efficient service delivery.
• The PEFA analysis contributes to dialogue on the need and priorities for PFM reform.
• A PEFA programme provides support, monitoring, and analysis of PEFA assessments.

(ii) Methodology of PEFA in Measuring PFM Performance
The procedures for measuring PFM performance is as follows:

• The Pillars of the PFM are reflective of some indicators or elements of PFM. Thus, the Pillars are measured based on the indicators for each of the Pillars.
• The Indicators of each Pillar are scored based on certain dimensions.
• The dimensions of each indicator are assessed based on a scoring criterion ranking from A to D. There are 1-dimension, 2-dimensional indicators, 3-dimensional indicators and 4-dimensional indicators.
• Most indicators have a number of separate dimensions, each of which must be assessed separately. Each dimension is scored separately on a four-point scale: A, B, C, or D, according to precise criteria established for each dimension. In order to justify a particular score for a dimension, every aspect specified in the scoring requirements must be fulfilled. If the requirements are only partly met, the criteria are not satisfied and a lower score should be given that coincides with achievement of all requirements for the lower performance rating. A score of C reflects the basic level of performance for each indicator and dimension, consistent with good international practices. A score of D means that the feature being measured is present at less than the basic level of performance or is absent altogether, or that there is insufficient information to score the dimension.
• The overall score for an indicator is based on the scores for the individual dimensions. The scores for multiple dimensions are combined into the overall score for the indicator using either the Weakest Link (WL) method or the Averaging (AV) method. Each indicator specifies the method to be used.
• Weakest Link Method: M1 (WL)
  This method is used for multidimensional indicators where poor performance on one dimension is likely to undermine the impact of good performance on other dimensions of the same indicator. In other words, this method is applied where there is a “weakest link” in the connected dimensions of the indicator.
  The steps in determining the aggregate indicator score are as follows:
  • Each dimension is initially assessed separately and given a score on the four-point calibration scale.
  • The aggregate score for the indicator is the lowest score given for any dimension.
• Averaging Method: M2 (AV)
  The aggregate indicator score awarded using this method is based on an approximate average of the scores for the individual dimensions of an indicator, as specified in a conversion table. This method is prescribed for selected multidimensional indicators where a low score on one dimension of the indicator does not necessarily undermine the impact of a high score on another dimension of the same indicator. Though all dimensions of an indicator fall within the same area of the PFM system, in certain areas progress on some indicators’ dimensions can be independent of the others.

(b)
(i) Legislation Scrutiny and Audit Indicator (Method 1: Weakest Link)
Using the principles of Weakest Link, the country where the scores are A, A and D has scored a D on that indicator because the scores are point in public financial management in respect the indicator is it obtains the lowest score, which is a D. This means that the country has performed poorly in this indicator and it calls for the reasons actions.

(ii) Budget Preparation Process Indicator (Method 2: Average Method)
Using the average method, the country that scored B, C, D on the dimensions has scored a C ((3+2+1)/3), which is considered as average performance under the PEFA framework. It is an indicator of minimal achievement of the country and improvement effort will be required.