Joint Financial Management Assessments

Renaud Seligmann Practice Manager Governance, World Bank

Context of Joint Financial Managements

Two key messages have emerged from reviews of IHP+ and the aid effectiveness agenda

• More needs to be done to enhance and increase the use of well functioning country financial management systems • More needs to be done to reduce transaction costs for both DPs and PCs, partly inflated due to duplicate and sometimes unnecessary FM assessments, parallel FM systems, uncoordinated and complicated processes, disjointed technical assistance (TA), and uncoordinated supervision and monitoring

Joint Financial Management Assessment (JFMA) provides a good starting point towards achieving these goals

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Why Joint Financial Assessment?

• Minimize separate and often multiple assessments by DPs in the health sector in a given country • Provides evidence-based information on country-specific circumstances • Provides a good platform for developing comprehensive Joint Fiduciary Arrangements (JFAs) • Minimize ad hoc processes for harmonization, capacity building and alignment through the development of a financial management improvement plan 3

Process for conducting JFMAs

Country Partner (CP) Responsibilities:

• Request made by CP, usually Ministry of Health, to DPs to participate in a JFMA • Form a National Counterpart Team (NCT) with membership from relevant government departments such as Ministry of Finance, Controller and Accountant General’s Office, Ministry of Health, etc.

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Process for conducting JFMAs (continued)

Development Partners (DP) Responsibilities:

• Conduct initial assessment and scoping to prevent duplication and redundancies. This includes:  A joint stocktaking and desk review of all existing assessments and information to determine if and to what extent additional FM field work is required. This allows the assessment team to carefully define the scope of necessary work, bridge any existing gaps, and prevent duplication;  An agreement on the expertise needed, the timing of the assessment, the composition of the assessment team (which includes PC staff), and expected outputs. • Generating buy-in among all participating and future partners. This is done by maintaining joint and open quality assurance, ensuring a good division of labor, and establishing clear Terms of References (ToRs) 5

Process for JFMAs (continued)

Joint DP and CP responsibilities:

• Field mission is conducted by interested DPs and NCT • Prepare JFMA report with an agreed upon time-bound action plan to design common arrangements and to build capacity where needed • Use output of JFMA as a basis drafting a Joint Fiduciary Arrangement between DPs and Country Partner 6

From JFMA to Joint FM arrangement

7 1 Requested by country, MOH and DPs agree to proceed with FM harmonization .

6 Government & donors sign MOU for JFA Government, supported by DPs, implements Action Plan Country start using JFA .

2 3 FM Team appointed: from donors and FM team collects and shares information

Comple ted in parallel

5 government Designs Joint Fiduciary Arrangements together with Action Plan

Yes. Field Financial Management Assessment not required ,

4 Desk review. Existing information is adequate?

No. Field Financial Management Assessment required

4a FM team agrees on scope, content and timeline of field work 7a 4b DPs support the longer term systems In-country mission and FM assessment report 7

Challenges to doing JFMAs

• Determining the entry point or timing for FM assessment could prove difficult • Differences in approaches to FM assessments among DPs. Transaction vs. Principle- based assessments • Differences in the assessed level of fiduciary risk among DPs. This impacts the risk tolerance of DPs for FM harmonization and their interest in JFMAs altogether • Differences in the nature of support provided by DPs to a partner country. Disease-specific vs. systems strengthening support determine the level interest by DPs 8

Challenges to doing JFMAs

• Forming a national counterpart team with the right skills mix • Getting the buy-in of Country Partner on the recommendations and action plan can take time • Enlisting the support and participation of the ministry of finance is critical. Most MoFs are very supportive these assessments generally, however 9

Enablers and Opportunities for JFMAs

• Leadership by CP’s Ministry of Health in determining the need for such an assessment • Strong cooperation between CP’s ministries of health and finance to support the development of sector financial management systems as part of the overall public financial management system • Willingness of DPs to work together in-country 10

Examples of recent JFMAs

Sierra Leone

• Requested by Gov., to identify strength and weaknesses to strengthen fiduciary arrangements for implementing donors and government programs • JFMA conducted by Global Fund, GAVI and World Bank, with WHO in-country coordination and IHP+ support • Created an Integrated Health Projects Administration Unit (IHPAU) to avoid fragmentation and increase sustainability • Joint Fiduciary Arrangement is being developed for alignment and harmonization of budgeting, internal controls, internal audit, fund flow, accounting, financial reporting and external audit • Ebola crisis: points from JFMA helped donors to get right arrangement to response – timely and direct 11

Examples of recent JFMAs (continued)

Ethiopia

• Assess the suitability, reliability and efficiency of the Gov.’s preferred financing mechanism – Millennium Development Goals Fund (MDGF) for managing DPs supports. Focus on MOH and its procurement agency centrally.

• JFMA conducted by AusAID, GAVI, The Netherlands Embassy and the World Bank in June 2011 under the auspices of IHP+ • Recommend to align with country systems of MDGF for future health sectors DP funds • Identified some areas for improvement of MDGF: financial reporting, procurement, supply chain management 12

Senegal

Examples of recent JFMAs (continued)

• The World Bank and USAID were interested in financing MOH’s successful performance based financing program • JFMA conducted by USAID and the World Bank in 2013.

• Differences in PFM risk assessment approach by WB and USAID (level of details, bench mark, timelines). Harmonized by using PEFA. Promote trust, knowledge sharing and leadership.

• USAID then streamline assistance through a Single Donor Trust Fund with the World Bank. 13

Burundi

Examples of recent JFMAs (continued)

• Donors assessed the country system in managing donor funded projects to develop Joint fiduciary arrangement, in which identify areas for country system alignment • JFMA conducted by African Development Bank (AfDB), European Union (EU), The Global Fund (GF) and the World Bank (WB) with IHP+ support in October 2014. Other DPs who did not directly participate in the assessment but were affiliated included, GAVI and USAID • Country PFM system is not yet mature enough. A gradual approach towards alignment has been recommended: o o o o Harmonization of donors procedures and financial management arrangement Development of capacity building for PFM reforms Strengthening control environment of MOH Development of FM procedures consistent with national rules that meet donors requirement 14