Transcript Eastern and Southern Regional Financial Management

Background to the Workshop
Objective of workshop
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To upgrade fiduciary capacities & facilitate exchange of experiences
& best practices in the implementation of projects
This was in response to requests by project implementers
Coverage
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Fiduciary issues of loan administration, financial management,
procurement, audit & accounting
Sharing of best practices from projects (BI, KE, MG, UG, ZM) to
enable replication
Participation
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Overwhelming!
128 staff from 14 countries, including staff from ministries, auditor
general (SAI), projects, IFAD country offices & HQ (Rome)
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Background to the IFAD ESA portfolio
ESA Loan & DSF Grant Portfolio
Zambia 4% Angola 1%
Uganda 17%
Burundi 9%
Comoros 0%
Eritrea 4%
Ethiopia 13%
Tanzania12%
Kenya 8%
Swaziland 2%
Rwanda 8%
Lesotho 2%
Madagascar
Malawi 3% 7%
Mozambique
Mauritius 1%
9%
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Background to the IFAD ESA portfolio
ESA Portfolio by type
Ongoing projects/ programmes
Project Type
Agricultural Development
Rural Development
Financial Services
Marketing
Livestock
Research extension/training
Irrigation
Fisheries
Total
No
18
13
7
7
3
2
2
1
53
Current Amount
(USD '000)
270 225
341 954
112 367
161 869
44 716
44 993
54 955
12 579
1 043 658
%
25%
34%
10%
15%
4%
6%
5%
1%
100%
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Background to the IFAD ESA portfolio
Disbursements 2009/10 - USD 121 million (36% increase)
WAs processed
IFAD Loans + DSF
IFAD Grants
UNOPS Loans + grants
WB
Total
Average USD value of WAs
Total days processing
2009/10
Total
484
84
55
623
2008/09
Total
245
34
270
56
605
245k
158k
27
53
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Financial Management
IFAD has a fiduciary role to ensure that its funds are
used for the purpose for which intended
Accounting systems

Computerization assists effective/ timely reporting
Reporting
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Financial management reports: sources & uses of funds
for period + cumulative by category + component, assets,
commitments, inputs + outputs
 Physical progress reports: link outputs to related costs
 Procurement reports: compares actual with plan & status
Tips
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Implementation manual - to be used as guide & reference
Regular back up and filing
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Annual Financial Statements
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Project Financial Statements include:
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Statement of sources & use of funds
Cash Flow Statement
Schedule of Withdrawal Applications
Statement of Special account & Reconciliation
Status of Funds/ Financing
Fixed assets schedule
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Accounts should be prepared in accordance with best
practice - internationally accepted accounting principles
(IPSAS or IFRS), using cash or accruals basis
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National systems to be used where possible
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Audit
Purpose:

Provide accountability, verify compliance & make
recommendations
Key points:
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Audit can be conducted by Supreme Audit Institution or
private audit firm approved by IFAD
Audit report to be submitted within 6 months of fiscal year end
3 Audit opinions to be provided on the Financial statements,
the Special Account & Statements of Expenditure
To include a management letter with details of weaknesses in
internal controls and non compliance
Failure to submit within 180 days after due date or
unsatisfactory report will lead to suspension of funding
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Background to the IFAD ESA portfolio
Assessment of 41 Audit Reports received: 1 July 2009 - 30 June 2010
18
16
14
12
10
8
6
4
2
0
Series1
Financial
St at ement s
NOT
Major
cont rol/fin
mgmt issues
Act ion plan
mandat ory
Act ion plan
significant
Audit opinion
missing WAs
10
11
7
17
4
Audit opinion
ESA NOT
Audit or work
missing:
agrees wit h
NOT
SpecialAccoun Audit Opinions
sat isfact ory
5
4
3
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Procurement
Purpose:
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To establish an effective procurement system
that leads to improved procurement performance
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This can be achieved by:
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Preparing a procurement plan before start of financial year &
submit to IFAD for No-objection
Finances to be used for only items in the procurement plan &
provisions of financing agreement
IFAD procurement guidelines to be followed & all steps
adhered to
Plan in advance - consider whether prior or post review applies
& act accordingly
Contract management is key
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Other areas discussed
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Annual work plans and budgets
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Loan administration
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Critical setting of AWPB to ensure milestones met
Monitoring to ensure steady progress & performance
Value for money leads to higher impact from resources
Ensure adequate cashflows + anticipates gaps by
planning
Financing Agreement/ LTB – critical documents
Special account reconciliations, Exchange rates
Loan closure procedures
Challenges faced by particular projects in
implementation
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FM Tools & Resources
FM&GG Internet site:
English: http://www.ifad.org/operations/pf/finance
French: http://www.ifad.org/operations/pf/finance/french/index.htm
Withdrawal Application Tracking System (WATS)
https://webapps.ifad.org/wats/login
Group PC/ Accountants mailing lists – updated names to [email protected]
2010
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2010/11
Regional FM resource packs
Revised Procurement guidelines
Revised Loan Admin
ARTS (Audit Report Tracking System)
procedures
Revised Audit Guidelines
2012
New Loans & Grants system
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Key success factors
Project management – single most important
determinant of project implementation results
FM Workshop test highest results
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Farida Mukungu (CAIIP, Uganda)
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Randrianarimanana Mamitiana (Ad2M, Madagascar)
Zaki K Juma (ASSP/ASDP-L, Zanzibar)
Clear correlation between projects with high fiduciary
ratings and overall implementation progress
2010 Portfolio performance review – highest fiduciary ratings
Country
Rwanda
Rwanda
Uganda
Burundi
Zambia
Loan/Grant No.
Project
Ratings
671/8053-RW
8020/8054-RW
724/784-UG
500-BI
643-ZM
Support Project for the Strategic Plan for the Transformation of Agriculture
Kirehe Community-based Watershed Management Project
Community Agricultural Infrastructure Improvement Programme
Rural Recovery and Development Programme
Rural Finance Programme
1
1
1
2
2
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Fiduciary best practices
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Centralised country control unit
 Use of external services firm
 Additional missions and support
 Internal auditor
 Country finance & procurement working group
 Standardised country rules, procedures, training
 Review of authorised allocations & thresholds
 Proactive staff to accelerate procurement processes
 Reliable computerised financial systems
 Regular (quarterly) reporting
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What next?
Lessons learned
Better efficiency + effectiveness in fiduciary matters
= increased implementation results
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Many best practice examples exist in IFAD projects
 Greater exchange of experiences should occur
 Make use of IFAD tools & resources
Future FM workshops
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When, where, how often, how to finance?
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