Public Expenditure and Accountability (PEFA) is the name for the diagnosis carried out under the PEFA (Public Expenditure and Financial Accountability) methodology. The PEFA methodology is a methodology to evaluate the situation in which the public financial management system of the central government or a sub-national government is (at a given moment).

The PEFA compares the state of public financial management of the central government or a sub-national government with international good practices.

In other words, it evaluates whether the financial management system meets certain basic requirements, not whether it works well or poorly.

The evaluation is promoted and carried out by the PEFA Secretariat, made up of the World Bank, IMF, Swiss Ministry of Economy (SECO) among other institutions.

The Program for Public Expenditure and Financial Management Assessment (PEFA) began as an instrument to harmonize the assessment of Public Financial Management among all partner organizations. It is a tool endorsed by international organizations such as the International Monetary Fund, World Bank, Inter-American Development Bank and European Organizations. It is a proven and supervised methodology in its application, which shares best practices worldwide and is specialized in the evaluation of financial management.

One of the places where the most PEFA evaluations have been carried out has been Peru. Limberg Chero, PEFA expert and coordinator of 16 evaluations between 2011 and 2018, mentions that the most relevant thing for citizens is what comes after PEFA: the execution of action plans that allow improvements to be made to the way resources are used in the government, so as to guarantee an increasingly better provision of services to citizens.

The PEFA methodology is a methodology for evaluating how public resources are administered. It has been used in 130 countries around the world and on more than 285 occasions to evaluate the PFM (public financial management) system of national, regional or local governments in relation to international good practices.

The evaluation is carried out on the performance of existing systems, processes and procedures, and its application allows the strengths and weaknesses of the PFM system to be identified very clearly.

The PEFA diagnosis has the advantage of being widely recognized internationally as a support mechanism for government initiatives to promote the economic and social development of countries, regions or municipalities. Its initial promoters have been Switzerland, Norway, France, England, IMF and World Bank.