The sector budget support funded by GPE and AFD is completely fungible with national resources. As a result, these funds are not tied to specific items of expenditure.
The funding is completely aligned to national systems and requires no special execution procedures, and consequently no additional transaction costs in terms of program management. In this way, monitoring and dialogue can be fully focused on the national system and on the targeted reforms.
The fiduciary risks associated with the provision of budget support through the Treasury Single Account were identified in the PADES design phase.
In Senegal, the risk associated with the evaluation of Public Financial Management (PFM) performance using the standard PEFA methodology was deemed to be acceptable. It should be noted that PFM is one of the four eligibility criteria for PADES budget support and is therefore applicable to all disbursements (fixed part and variable part).
Support to program priorities
Through its alignment to the national systems responsible for public expenditure, PADES seeks to support and strengthen the country’s involvement in promoting the structural reform of the education system across the country in various key focus areas of the PAQUET-EF:
- Quality of learning in the foundational years of primary school, with an emphasis on reading;
- The capacity of the administration to target resources for the implementation of actions that benefit the most vulnerable schools and children, as well as efforts to reduce dropout rates;
- Performance and efficiency gains in the implementation of all State investment programs in education.
These structural enhancements are broken down into a number of indicators and targets, which are then used to determine the variable part disbursements of sector budget support.
Support based on key reforms to strengthen the system
Results-based financing helps incentivize change and focuses attention and dialogue on the existing structural shortcomings of the system. PADES seeks, therefore, to transform the system through a theory of change that establishes a link between the diagnostic analysis of the system’s shortcomings in terms of the delivery of education services and the acceleration of the reforms needed to overcome them.
By aligning to national systems and policies, PADES helps finance the State’s crosscutting reforms and plays a catalytic role in the implementation of these reforms in the education sector.
The indicators for the disbursement of the variable part are intended to leverage these reforms, which relate mainly to results-based public financial management associated with the implementation of the program budget, the deconcentration and decentralization of education management, the improved accountability of education stakeholders through the use of performance contracts, and public procurement.