Background to the Workshop

Objective of workshop 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 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 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

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Ethiopia 13%

Zambia 4% Angola 1%Uganda 17%

Tanzania12%

Swaziland 2%

Rwanda 8%Mozambique

9% Mauritius 1%

Malawi 3%Madagascar

7%

Lesotho 2%

Kenya 8%

Comoros 0%Eritrea 4%

Burundi 9%

ESA Loan & DSF Grant Portfolio

Background to the IFAD ESA portfolio

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ESA Portfolio by type

Ongoing projects/ programmes

Project Type No Current Amount

(USD '000) %

Agricultural Development 18 270 225 25%

Rural Development 13 341 954 34%

Financial Services 7 112 367 10%

Marketing 7 161 869 15%

Livestock 3 44 716 4%

Research extension/training 2 44 993 6%

Irrigation 2 54 955 5%

Fisheries 1 12 579 1%

Total 53 1 043 658 100%

Background to the IFAD ESA portfolio

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Disbursements 2009/10 - USD 121 million (36% increase)

WAs processed 2009/10

Total 2008/09

Total IFAD Loans + DSF 484 245 IFAD Grants 84 34 UNOPS Loans + grants - 270 WB 55 56 Total 623 605

Average USD value of WAs 245k 158k

Total days processing 27 53

Financial Management

Accounting systems   Computerization assists effective/ timely reporting

Reporting 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 Implementation manual - to be used as guide & reference Regular back up and filing

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IFAD has a fiduciary role to ensure that its funds are used for the purpose for which intended

Annual Financial Statements

Project Financial Statements include: 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

Accounts should be prepared in accordance with best practice - internationally accepted accounting principles (IPSAS or IFRS), using cash or accruals basis

National systems to be used where possible

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Audit

Purpose: Provide accountability, verify compliance & make

recommendations

Key points:  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

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0

2

4

6

8

10

12

14

16

18

Series1 10 11 7 17 4 5 4 3

Financial Statements

NOT

Major control/fin mgmt issues

Action plan mandatory

Action plan significant

Audit opinion missing WAs

Audit opinion missing:

SpecialAccoun

ESA NOT agrees with

AuditOpinions

Auditor work NOT

satisfactory

Assessment of 41 Audit Reports received: 1 July 2009 - 30 June 2010

Procurement

Purpose: To establish an effective procurement system

that leads to improved procurement performance

This can be achieved by: 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

Annual work plans and budgets 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

Loan administration 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

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FM&GG Internet site:

English: http://www.ifad.org/operations/pf/financeFrench: 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 r.farrant@ifad.org

2010 Revised Procurement guidelines ARTS (Audit Report Tracking System)

2010/11Regional FM resource packsRevised Loan Admin procedures Revised Audit Guidelines

2012New Loans & Grants system

Key success factors

Project management – single most important determinant of project implementation results

FM Workshop test highest results Farida Mukungu (CAIIP, Uganda) 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

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Country Loan/Grant No. Project Ratings

Rwanda 671/8053-RW Support Project for the Strategic Plan for the Transformation of Agriculture 1

Rwanda 8020/8054-RW Kirehe Community-based Watershed Management Project 1

Uganda 724/784-UG Community Agricultural Infrastructure Improvement Programme 1

Burundi 500-BI Rural Recovery and Development Programme 2

Zambia 643-ZM Rural Finance Programme 2

Fiduciary best practices

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

Many best practice examples exist in IFAD projects Greater exchange of experiences should occur Make use of IFAD tools & resources

Future FM workshops When, where, how often, how to finance?

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