To respond to a growing number of requests from PEFA users for help on improving their ability to use a SNG PEFA assessment/s to identify bottlenecks in service delivery due to PFM performance, the PEFA Guidance for SNG PEFA assessments introduces a Service Delivery assessment module (the SD module) which is presented in this document.

The SD module is a set of diagnostic questions mapped to the relevant PEFA framework indicators to collect and analyze information, aiming to assess the extent to which a SNG ’s public financial management (PFM) performance enables effective service delivery. At the same time, PEFA methodology is not calibrated to measure sector-specific efficiency nor to assess the equal access for all to public services.

The SD module is introduced as an add-on to the PEFA Guidance for SNG PEFA assessments and is intended to be conducted on an optional basis concurrently with a PEFA assessment. The analysis resulting from the use of the module is presented in an annex to the main PEFA report. While the SD approach may also be carried out as a stand-alone activity, it is highly recommended to do it concurrently with a PEFA assessment to capitalize on data already collected during the PEFA assessment process. This should may result in cost and resource efficiency gains. 

The decision to carry out the SD module would require prior agreement between the subnational government(s) and, when necessary, the central government and development partners. An agreement should also be reached on SD programs/expenditures and SD units to be covered and assessed. The decision to use the SD module, coverage and scope should be documented in the PEFA assessment Concept Note.

The SD module should focus on and be limited to SD functions under the direct responsibility of the assessed SNG. Thus, it should cover programs and services delivered directly by the SNG’s budgetary and extra budgetary units.