Transcript SAR Action Plan - The Wall Street Journal

SAR Action Plan
Technical Board
Briefing
March 4, 2008
Action Plan Overview
Eight related sets of Actions
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Investigations and Legal Action: GOI and WB
Review of Actions Already Taken
India Joint Health Action Plan
India Systemic Action Plan
SAR Governance Action Plan
Other Countries and Sectors in SAR
OPCS and Bank-wide Implications
Internal Accountability
Projects and DIR Time Line
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
India OPS adv recommends INT continue RCH I investig 
GOI adopts GAAP approach; GOI/Bank apply GAAP 
INT shares final RCH I report with SAR 
Bank/GOI agree road map for health projects 
DIR initiated 
DIR issued 
Malaria
TB 1
Orrisa Health
HIV/AIDS II
Food & Drug
PCN
APP BRD EFF
MTR
APP BRD EFF
PCN
CLOS ICR
MTR
APP BRD EFF
PCN APP
CLOS ICR
MTR
BRD EFF
CLOS ICR
MTR
PCN APP
BRD EFF
CLOS ICR
Actions Already Taken (India)
Prior to DIR release
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Phase out PSAs – UNOPS, set up EPW
GAAPs for all new health operations
Disclosed Tech Specs for equipment
Mandate for enhanced accountability of GOI
programs
Created integrated Financial Management Group
and improved Audit TORs
Tighter financial controls in NACO
Tighter selection and oversight of NGOs
Mandatory Pre-award validation of WHO GMP
Actions Already Taken (World Bank)
Prior to DIR release
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Stronger Overall Approach to Governance
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Fraud and Corruption in new Operations
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GAAPs for high risk operations
Strengthened Supervision Processes
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ACGA in Delhi, Guidance notes, Industry structure analytic
work, state level interventions
Increased post procurement reviews and improved
complaints management
Better integration of sector and fiduciary teams
Staffing and Training
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Governance Advisers, procurement staffing, Anti-corruption
training
Investigations
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GoI has reviewed DIR in depth. Summary
reflected in their comments (already
distributed)
Referrals to CBI, and other legal and
administrative actions will follow
INT support will provide support to GoI
INT’s own investigations
Joint Health Action Plan
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Focused on key actions for future
Working groups formed in MoH
SAR worked together with GoI, under their
leadership
Started with review of actions already taken
Plans reviewed and approved at Secretary
and Ministerial level
Detailed plans and action behind each
summary
Thematic Actions
Improving
Monitoring
Strengthening
Centralized
Procurement
Improving
Oversight
Of NGOs
Strengthening
Decentralized
Procurement
Improving Monitoring
… and Financial Control
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GoI already mandated increased accountability
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Implement & apply GoI mechanisms
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Community monitoring, 3rd party reviews, facility
assessments
Central sponsored and state schemes
Complaints redressal mechanism
Enhanced Financial Management Group and
Audit Capacity
Important for institutional accountability
All build on GoI systems
Improving NGO Oversight
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NACO has already strengthened NGO
selection processes and tightened oversight
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Operational Manuals; Financial Controls
Reviews: About 25% terminated
Disclose NGO selection, performance etc
Mainstream annual reviews
Establish Ombudsman
Expand and apply best practice to other
programs
Strengthening
Centralized Procurement
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PSAs already phased out
Continue UNOPS for WB funded central procurement
Strengthen Empowered Procurement Wing
Deploy F&C detection software (already designed)
Train staff in detecting and responding to F&C
Appoint Procurement Audit Agent for all WB funded
Require pre and post shipment inspection
Generic equipment specifications updated
Move to E-procurement (phased, after pilot)
Annual review of drug quality
Strengthening
Decentralized Procurement
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Build state capacity (w/DFID, WB support)
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Certify TNMSC (Tamil Nadu) as first case
Full joint review and clarification of WB
procurement methods
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Certified agent, separate unit
Greater use of framework & rate contracts
Contract terms and post qualification criteria
Limit WB funds for CSS @ district to
operating costs and contractual staff
(Additional) Corrective Actions
Five DIR Projects
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Specific Actions agreed for three key projects
Food and Drug: close June 08, no new proc.,
make labs operational, equip/CW surveys
Orissa: Investigations already underway. 3 of 4
hospitals opened, hospital and equipment
surveys and rehabilitation underway, audit
follow-up, wider governance support
NACP: Reviewed test kits: no health risk;
strengthened kit procurement & test strategy
Risk Mitigation
Nine Ongoing Operations
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Newer projects had “GAAPs”
Apply thematic measures for each project
Systemic civil works and equipment audits
Joint performance reviews
Complaints redressal
Limit who can do WB procurement
Review of WB procurement methods
Rigorous follow through on post procurement
audits
Future Health Interventions
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Health needs in India continue to be great
DIR projects had significant positive health impacts
(even if could have been better)
F&C and Implementation risks can be mitigated, but
they cannot be eliminated, specially in “lagging states”
Any new operations would have Operations Committee
review and require specific plan to mitigate DIR risk
before it comes to Board
Complete review of WB engagement strategy in Health
Sector as input to next CAS
India Systemic Action Plan
At the project/program level (Risk)
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Clear assessment to identify and mitigate
fraud and corruption risks and clarify
accountabilities at the preparation phase
(PCN, QER, and decision meeting).
Invest in smart project design (e.g.,
repeaters, output-based disbursement)
Use fraud detection software and build staff
skills to implement new approaches to
supervision and detect fraud and corruption.
India Systemic Action Plan
Strengthened supervision
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Increase budget by 30% to target high risk projects
Regular supervision structured around the project
supply chain and vulnerable points
Use of multiple sources of information
Strengthen demand-side accountability mechanisms
such as project affected communities, third party
mechanisms, complaint handling mechanisms
Use of dedicated on-the-ground consultants, random
visits in addition to government audits and our own
financial and procurement audits.
India Systemic Action Plan
For FY08 business plan, and beyond
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Reduced number of projects to create space for
better follow up on projects under implementation
All projects going to the Board will be explicitly
screened for mitigation of risks identified in the DIR
(using an integrated risk assessment framework
combining safeguards, procurement and financial
management in one exercise), and will have a
detailed supervision plan.
India Systemic Action Plan
At the strategic level
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Next CAS (FY09) under preparation will address
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Riskiness of the future programs
Strength of the institutions we will be working with
Exposure to and the riskiness of the sector
Geographical spread and our ability to design and supervise
Strengthen our operations by promoting transparency and anti
corruption, building on Right To Information Act and GoI
emphasis in 11th plan on improving governance.
AGAC will play an explicit role in providing advice to the teams
on building in anti corruption measures, and to management in
better assessing riskiness and mitigation
Wider Context …
Important but not focus of this briefing
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All SAR CDs and SDs have already reviewed
and started to develop action plans
Response will only be successful in the
context of a wider engagement on
Governance and Anti-corruption (GAC)
Agenda
OPCS Action Plan
Technical Board
Briefing
March 4, 2008
SYSTEM-WIDE ISSUES TO BE ADDRESSED
BY OPCS AND HDN
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Bank wide dissemination of results of this and earlier DIRs
and implications
Supervision issues: preparation of new guidance on “smart"
supervision and corruption issues
Risk management: assessing and mitigating corruption risks
better
Procurement issues, including addressing decentralized
procurement more effectively
Shortfalls in quality and scope of financial statement audits
Development of training modules for staff
Accountability issues