Foreword

The Financial Technical Assistance Programme to Support the Continuous Improvement of Peru’s Public Finances – Second Phase (PMC2) began with an inter-institutional agreement signed in 2017 between the Swiss Economic Secretariat – SECO, the Peruvian Ministry of Economy and Finance, and the Peruvian Agency for International Cooperation.

The main objective of the PMC2 is to provide assistance to strengthen the efficient and transparent management of public finances in Peru within the framework of the steering role and guidelines of the National Financial Management Systems, to contribute to sustainable growth, economic development with social inclusion and poverty reduction.

In January 2022, as part of the technical assistance funded by PMC2, the Ministry of Economy and Finance of Peru asked the Organisation for Economic Co-operation and Development (OECD) to conduct a peer review of Peru’s challenges in meeting OECD standards in public financial management. The assessment focused on four strategic areas:

1. 1. budget practices and budgetary governance

2. 2. treasury management and cash management systems

3. 3. fiscal management of human resources

4. 4. public investment programming, budgeting and management.

To carry out this assessment, OECD experts:

• Held more than 30 virtual meetings involving the participation of more than 100 public officials between February and April 2022 with the various directors general and relevant actors in each of the four strategic areas, including representatives from subnational governments, sectoral ministries and public agencies as well as former ministers and other former high-level officials. These meetings aimed to provide a concrete understanding of how the systems that make up public sector financial management work in Peru today, what recent improvements have been made and what challenges remain.

• Undertook a mission to Lima in March 2022 to exchange in person with relevant stakeholders and organise an international seminar, inviting OECD peers to share good practices from their countries with Peruvian public servants and reflect on how these could inspire reforms in Peru.

• Analysed Peru’s practices and challenges in the light of recent practices and reforms in OECD countries and drafted this report with a diagnosis of the main challenges and proposed recommendations to move towards practices aligned with OECD standards.

• Proposed and discussed with the authorities a “road map” for the proposed reforms which prioritises and sequences them.