This public finance management introductory guide discusses the ministry of finance ‘challenge function’, which describes how the finance ministry investigates and scrutinises the policy and expenditure choices of other public entities.
In OECD countries, the challenge function usually puts a greater emphasis on the high-level policy choices of spending agencies. But in many developing countries the focus is more on basic expenditure control, meaning that the finance ministry challenge function tends to look at detailed spending decisions and compliance with budgeting rules.
This introductory guide summarises some of the literature on the nature of the challenge function, how it works in different countries, as well as options for reform.
This introductory guide is also available in French.