Country Financial Accountability Country Financial Accountability Assessments Assessments

Paul BerminghamPaul BerminghamHead, Financial Management Sector BoardHead, Financial Management Sector Board

June 22, 2001June 22, 2001

Overview

What is a CFAA?

Strategic Context – Where Does it Fit?

What is a CFAA used for?

Future Directions

What is a CFAA?

What is a CFAA?

Diagnostic tool designed to enhance the Bank’s knowledge of financial accountability arrangements in client countries

Supports both: the exercise of fiduciary responsibilities by helping to identify

risks to the use of Bank funds the Bank’s development objectives by facilitating the design and

implementation of capacity building programs

Together with the PER and CPAR, emerging as a key underpinning for country assistance strategies and programmatic lending

Scope and Content of CFAA

Public sector budgeting

Public sector accounting and financial reporting

Public sector internal control system and records management

Public sector auditing

Legislative scrutiny of the management of public finances

Private sector financial accounting and auditing practices

Corporate governance

Public access to information on public finances

Non-governmental and community-based organizations

Completed

Argentina

Armenia

Bangladesh

Bhutan

Bolivia

Brazil

Colombia

Croatia

Egypt

Ghana

Indonesia

Jamaica

Jordan

Kazakhstan

Korea

Latvia

Maldives

Moldova

Mozambique

Nigeria

Papua New Guinea

Poland

Slovakia

South Africa

Turkey

Uganda

Viet Nam

Yemen

Number of CFAAs Done

28

Algeria

Armenia

Benin

Bhutan

Bosnia-Herz

Chad

India

Mexico

OECS countries

Pakistan

Panama

Peru

Romania

Russia

Ukraine

15

Underway

Burkina Faso

Cameroon

Dominican Republic

Ethiopia

Laos

Madagascar

Malawi

Mozambique

Philippines

South Africa

Tanzania

UnderDiscussion

11

Strategic Context:

Where Does it Fit?

Strategic Context

Country development business model PRSP, CAS, diagnostic work, programmatic support, CDF

Greater realization of the importance of institutions

Shifting Bank resource transfer patternsAdjustment lending, debt relief, sector programs

Fiduciary assessments in CASs (MIC Paper, April 2001)

Fiduciary assessments as an underpinning for PRSCs(PRSC guidelines, May 2001)

Relationship to Bank product lines

Global products and partnerships

Standards

Bank activity

Global products and partnerships

Diagnostic ESW work

Standards

Assessment

Bank activity

Relationship to Bank product lines

Global products and partnerships

Diagnostic ESW work

CAS, lending operations, advice

Standards

Assessment

Response

Bank activity

Relationship to Bank product lines

Public Expenditure and ESW Products

Policy Preparation Execution Reporting Oversight

Budget

Public Expenditure and ESW Products

Policy Preparation Execution Reporting Oversight

PER

Budget

Public Expenditure and ESW Products

Policy Preparation Execution Reporting Oversight

PER

CPAR

Budget

Public Expenditure and ESW Products

Policy Preparation Execution Reporting Oversight

PER

CPAR

CFAA

Budget

Public Expenditure and ESW Products

Policy Preparation Execution Reporting Oversight

PER

CPAR

CFAA

Fiduciary Assessment

Budget

Sources of Information

CFAA

Procurement reviews

Public expenditure reviews

Institutional and governance reviews

CPIA ratings

Bank portfolio performance information

IMF Fiscal transparency reports

IMF Safeguards assessments

IMF “Red cover” reports

MDB and other donor diagnostic products

SAI reports

Other official oversight agencies in client countries

International organizations

World Bank Other

What is a CFAA used for?

Uses of a CFAA

Facilitate dialogue with borrowers and partners on financial accountability matters

An input to the design of the Bank’s overall country assistance strategy (CAS)

Underpins Bank advice and lending to strengthen country financial accountability

Reference point in assessing financial management arrangements in individual projects

Support fiduciary risk management strategy (e.g., staffing, mitigation measures)

CFAA – Future Directions

CFAA - Future Directions

Increased country coverage

Better integration with other diagnostic tools, especially PERs and CPARs

Enhanced linkage to borrower development strategies and Bank programs

Increasingly carried out with development partnersEmerging as a priority area for collaboration in financial management harmonization process

Enhanced quality

Likely to focus more on public sector, as private sector issues addressed by ROSC assessments of accounting and auditing