Municipal Finances Self-Assessment (MFSA)
MFSA, an assessment tool developed by the World Bank and customized for SEE with the support of international and local experts, is aimed at evaluating city’s financial health and identifying specific actions to improve mobilization of local resources, financial management, public spending, public assets management, investment programming and access to external funding. It performs several functions:
(a) it reviews municipal budgets (revenues and expenditures), financial management practices, savings capacity, investments efforts, and financial projections for the next five years;
(b) it provides some benchmarking through a set of simple and comparable key indicators and ratios;
(c) it defines key actions to be included in a Municipal Finance Improvement Plan aiming for greater accountability, visibility and efficiency in the use of public funds.
MFSA framework of analysis includes eight steps organized in four complementary modules and is continually being evolved in practice and validated by all stakeholders. It provides a platform for making a vital connection between data inputs from various municipal financial and technical departments and allows a creditworthy assessment and strategic and capital investment planning anchored in financial realism.
More than 25 municipalities and cities took part in the Municipal Finances Self-Assessment in Phase I of UPP. Phase II intends to scale up the use of diagnostic tools for local governments and take advantage of the great momentum to replicate the LG tools in more municipalities across the region.
Belgrade MFSA Summary
Crikvenica MFSA Summary
Rijeka MFSA Summary
Sabac MFSA Summary
Subotica MFSA Summary
For full MFSA brochure, please click here.
Urban Audit (UA)
The Urban Audit, which provides a snapshot of the levels and quality of the services and infrastructure that the city provides, is typically carried out in parallel and in concentration with MFSA. Its main objectives are the gathering of baseline information of the existing location and condition of infrastructure and services, the identification of patterns of urbanization and pockets of poverty and underserviced areas, and the spatial location and quantification of the gaps, leading to the identification of a priority investment program.
The added value of an Urban Audit is that it should be carried out with:
(1) a full knowledge of the absorptive financial capacity of the municipality based on the findings of the MFSA (reality check); and
(2) with citizen participation in the screening process of priority investments.
The two self-assessments or audits lay the groundwork for a detailed Municipal Program or Contract that includes both a Municipal Finances Improvement Plan and a Priority Investments Plan.