The purpose of the LPFM task order is to support rapid, sustainable and equitable economic growth in the USAID-assisted countries by enabling USAID to better address public financial management (tax, budget, and expenditure), sound macroeconomic planning and policies, and other selected economic governance issues. LPFM supports USAID Headquarters Bureaus and Offices and missions abroad to: I) support host-country institutional capacity to identify, design, advocate and implement better economic, revenue and financial management policies; II) support USAID Bureaus and Missions implementing USAID Forward’s Implementation and Procurement Reform goal to strengthen partner country capacity to improve aid effectiveness and sustainability by increasing use of reliable partner country systems and institutions to provide support to partner countries; III) improve the evaluation and assessment of the economic, financial and distributional costs and benefits of USAID supported projects and programs; and IV) to strengthen host country management of pharmaceutical and other health sector supply chains.
The following provides an overview of the activities.
USAID’s LPFM project provides support to the EGAT/EG Office on a variety of technical tasks related to tax policy and administration.
Collecting Taxes Database
One of these tasks is to prepare the Collecting Taxes Database that produces data that can be useful for Donors, but particularly for USAID officers, in carrying out high-level assessments of national tax systems and compare those systems to regional and income group norms. The Collecting Taxes database contains performance and structural indicators about countries’ national tax systems. The LPFM team launched the 2010/2011 version of the database in October of 2011 and will make its next update in September of 2012.
Revenue Mobilization Studies
The goal of this task is to produce Revenue Mobilization Studies on an as needed basis for USAID staff. Each study assesses revenue outcomes and performance as well as tax policy and administration for the country in question. These studies compared revenue developments and performance in each country with regional and income group performance.
Research Papers and Best Practice Notes
The LPFM project produces Research Papers and Best Practice Notes that can be useful for Donors and USAID officers, in carrying out project interventions to improve public financial management systems and macroeconomic governance in cooperating countries around the world. The LPFM project draws on the extensive experience in Deloitte’s Global offices in putting forward technically relevant content from a global perspective. The team is currently working on papers in the following areas: Tax Administration, Tax System Benchmarking, and Tax IT.
DRC and CBA
USAID’s LPFM project undertakes work to provide guidance and training on domestic resource cost analysis and cost-benefit analysis aimed at improving USAID programming.
Domestic resource cost analysis
The goal of this activity is to strengthen the analytical and quantitative capacity of EGAT staff. The LPFM team provided a Domestic Resource Cost (DRC) workshop to help USAID Officers improve their ability to evaluate financial and economic implications of agricultural value chain interventions, with particular application to agricultural crops and agricultural processing in a country.
The goal of this activity is to build capacity within USAID to conduct Cost-Benefit Analysis. In so doing, The LPFM team and its implementing partner Duke University designed a Cost-Benefit and Effectiveness Analysis training program with extensive practical case studies and an applied interactive approach. This four week intensive Executive Development Program presented the basic principles and practical applications of Applied Cost-benefit Analysis (CBA) and Cost‐Effectiveness Analysis (CEA) with an integrated analytic framework that is based on the pioneering work of Professor Arnold Harberger.
The LPFM team also provided a one day workshop on the evaluation of road projects with an emphasis on post-conflict environments. This workshop was delivered by LPFM team member Dr. Glenn Jenkins, Cambridge Resources International.
Supporting USAID Field Requests
This activity is aimed at supporting USAID Missions with mission specific requests. Activities include: (1) supporting USAID Global Health missions and public sector supply chain assessments across multiple geographic locations; (2) Host Country Public Financial Management (PFM) Stage II Risk Assessments, and (3) support to USAID missions for targeted sector specific assessments that improve public financial management.
Public Financial Management Risk Assessments
- Feed the Future Rwanda Stage II Public Financial Management Assessment: The LPFM team fielded consultants from Deloitte’s offices worldwide to assist USAID/Rwanda in identifying public financial management risks associated with potential direct Government-to-Government funding to the Ministry of Agriculture and Animal Resources through the Ministry of Finance and Economic Planning. The joint USAID/Rwanda-Deloitte team adapted the USAID Stage 2 Risk Assessment Questionnaire to the agricultural sector in Rwanda, in collaboration with the Agriculture Sector-Wide Approach (SWAp) Committee. Thereafter, the team identified existing fiduciary risks and proposed risk mitigation strategies that were later recommended to the Rwandan Government by USAID/Rwanda.
- Feed the Future Tanzania Stage II Public Financial Management Risk Assessment: Drawing on its Tanzania and South Africa member firms, Deloitte’s LPFM team responded to a request to assess the Government of Tanzania’s ministries, districts, and regions for proposed investment under the Tanzania Feed the Future Multi-Year Strategy. The assessment looked at financial management, accounting, budgeting, procurement, and internal control systems of the potential recipients to determine whether sufficient systems and management capacity to implement USAID activities and funds exists.
- Health Sector Rwanda Stage II Public Financial Management Assessment: The LPFM team also fielded consultants from Deloitte’s worldwide offices to assist USAID/Rwanda in assessing Rwanda’s central medical store, the Centrale d’Achats des Medicament Essentiels du Rwanda (CAMERWA). The purpose of this assessment was to assess the accountability environment of CAMERWA, in order to identify public financial management risks of operating directly through the current CAMERWA system and potential risk mitigation strategies. USAID/Rwanda will use the results of this assessment to determine whether or not to proceed with direct funding, and to develop the milestones required for the incremental release of funds. The assessment results will also help inform future technical assistance USAID/Rwanda may provide to CAMERWA.
Pharmaceutical Supply Chain Assessments
The LPFM team provided assistance in assessing the quality and perceived vulnerabilities of pharmaceutical supply chains in USAID partner countries. LPFM developed a methodology for external assessments that can be used to assess the existence and completeness of internal controls over supply chain processes (Plan to Stock sub-processes) and systems (financial and commodity) of host governments receiving. The assessments can be provided in two phases:
- Rapid Assessment: The team developed a rapid assessment methodology designed to provide a limited snap shot of supply chain risk. This rapid assessment will document the major risks in the distribution system and related mitigating internal controls, and help identify potential vulnerabilities that may warrant further study. This tool would indicate if a more in-depth assessment would be required to assess system controls and their effectiveness to provide a more definite assessment of vulnerabilities within the systems.
- In-Depth Assessment: Provides a more in-depth assessment that ranks the overall vulnerabilities in the supply chain, informs USAID where material vulnerabilities lie and specific leading practices to improve controls, and offers USAID risk management plan to manage the supply chain for high value health care commodities through partner country systems.
Both the rapid and the in-depth assessment tools incorporated factors like the effectiveness of internal controls at all levels of the health system, the existence and quality and physical security of warehouses, and the quality and effectiveness of the existing anti-corruption programs. Pilots of the methodology have been completed in Benin, and Mozambique. Further work is underway in Zambia.
Electricity Sector Reform
The Government of Iraq is currently considering options for electricity reform. The objective of the reform program is to improve the electricity services provided, reduce electricity sector subsidies on the national budget, and establish more a sustainable, efficient electricity sector. Deloitte responded to a request to assist the US Embassy and USAID Energy teams in Iraq with a series of assessment workshops that will determine the viability of electricity sector reform in Iraq. The LPFM team continues to work in close collaboration with the USAID Baghdad office, the US Embassy Energy team, and various high ranking officials in the Iraqi Ministry of Electricity.
The LPFM team also supported the Government of Ethiopia to assess the current state and suggest solutions for the Integrated Financial Management Information System (IFMIS). The assessment emphasized the importance of knowledge transfer in Government and communicated industry best practices based on the LPFM team’s extensive experience working in Enterprise Value Delivery across the world.
Training and Workshops
The objective of this activity is to provide technical support to USAID headquarters for training EG, DG and CFO Officers on topics of interest to USAID stakeholders.
The LPFM team and Duke University offered USAID staff with a training program in Fiscal Policy and Management. The training program is a customized training program developed by the LPFM team that exposes USAID staff to the principles and recent trends in fiscal policy reform, public financial management, tax policy design, revenue administration, and fiscal decentralization. The course was designed for USAID practitioners and does not require a formal background in economics or public finance. This topic-driven course consisted of lectures, seminars, and roundtable discussions.
Using Host Country Systems for Sustainability and Impact
The LPFM team is in the process of delivering a training program specifically designed for technical specialists, DG and EG program officers, and controllers in countries pursuing the possibility of using host country systems to provide aid. The training program will consist of a suite of three courses dealing with Government to Government financing covering the themes of programming, risk assessment and implementation. In addition, the LPFM team assisted in the development and delivery of the Implementation and Procurement Reform: Public Financial Management (PFM) training. This training exposed USAID staff to the principles and international best practices in public financial management and examined lessons learned from previous donor interventions in PFM to inform future programming.
Providing Subject Matter Expertise
In addition to these more structured training programs, the LPFM team contributed to other USAID training programs by providing subject matter experts in the areas of:
- Macroeconomic Policy and Reform: Lesson Learned and Best Practices; and
- Public Financial Management in Post-Conflict Countries
- About E3/EG
- Technical Areas
- Commercial Law and Enabling Environment
- Cross Cutting
- Enterprise Development
- Financial Sector
- Asset-Based Finance
- Banking and Financial Infrastructure
- Branchless Banking
- Business Enabling Environment
- Capital Markets
- Credit Bureaus
- Developing Corporate Bond Markets
- Health Sector Financing
- Mobile Money
- Non Banks
- Rapid Financial Soundness Assessment
- Rural and Agriculture Finance
- SME Finance
- Secured Financing
- Sub-Sovereign Finance
- Value Chain Finance
- Project Analysis and Diagnostic Tools
- Ongoing Programs
- Archived Programs
- Resource Library