(a)

The two methods for assessing the indicators are:

• 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.
  • Advantage 1: Ensures critical weaknesses are highlighted, preventing an overly optimistic assessment of performance.
  • Advantage 2: Encourages comprehensive improvement across all dimensions to achieve a higher overall score.
• 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 individual dimensions can be independent of the others.
  • Advantage 1: Provides a balanced assessment by considering performance across all dimensions, avoiding overemphasis on a single weak area.
  • Advantage 2: Allows recognition of progress in specific dimensions, even if other areas lag, fostering incremental improvements.                                                                                                                                                                                                                                                                                                                                                                                                                            (b)

    (i) Performance of accounting and reporting a poor performance. In detail, the country performed poor in financial data integrity, and annual financial reporting while performing averagely in in-year budget reports. Poor performance in financial data integrity is reflective of recording and accounting system and technology at play. It is likely that manual system of recording and accounting is used to produce the financial data or less sophisticated technology is applied. Poor annual financial reporting may result from lack of professional competence of the preparers and the use of weak accounting policies and standards. In year budget report is short of excellence because of less robust budgetary control systems.

    (ii) Enhancing the Accounting and Financial Reporting pillar of the PEFA framework is essential for improving transparency, accountability, and decision-making in public financial management. The following are ways by which the pillar could be strengthened:

    • Financial data integrity: Develop a comprehensive data management strategy to ensure that the financial data used in reports is accurate, complete, and reliable. High-quality financial data strengthens the overall reliability of financial reports and decision-making processes.
    • In-year budget reports: Strengthen Zamindar Financial Management Information Systems (ZIFMS). Expand and improve the use of ZIFMS to enhance real-time recording of financial transactions and automate financial reporting processes. An effective ZIFMS system ensures timely, accurate, and comprehensive recording of financial transactions, improving the overall quality of financial reporting.
    • Annual financial reporting: Adopt and fully implement International Accounting Standards. Governments should adopt and implement International Public Sector Accounting Standards (IPSAS) or other recognized international standards to ensure consistency and comparability of financial reports across sectors. IPSAS-based reporting improves the accuracy, reliability, and transparency of financial statements by aligning them with global best practices.