FM and the CAS

Fiduciary Forum, March 2008

Ivor Beazley, OPCFM

Session objectives

Why focus on CAS? What are the key FM issues in

CASs, How well have recent CAS’s

dealt with FM issues? Ideas for improvement Examples of good practice

Why focus on the CAS?

CAS drives decisions about resource allocation and staffing

Determines future scope for fiduciary work, AAA, and capacity building support to the government

If it’s not in the CAS it won’t get done

Background to the review

Periodic reviews to assess progress, identify examples of good practice and advise on changes to the design of CAS products

Scope: FY06 and FY07 CASs: 32 CASs, 19 ISNs and 18 PRs

FM drill down

What did we look for?

Compliance with 2001 Guidance

on FM and PR in the CAS Treatment of other issues (harmonization,

private sector, and use of country systems) Experience of FM participation in CAS

preparation and update

2001 Guidance on FM/PR in CAS

Summarize fiduciary and corruption risks in the Bank portfolio and actions to be taken

Identify policy actions and areas for PFM capacity building,

DPLs should be underpinned by up to date PFM/fiduciary AAA

Portfolio review and FM risks Little recognition of fiduciary issues in

discussion of the Bank’s portfolio (61% marginal,16% satisfactory)

Response to risks only marginally better (24% satisfactory)- risk responses often DPL actions or AAA

Fiduciary environment for DPLs well covered (76% S)

Good Practice- Argentina Fiduciary Plan

GAC

Governance and anti -corruption issues are

very well articulated in most CASs (87% S) Focus on country systems - linkage to project

risks less clear Good practice example: Albania. CAS

articulates how to mainstream governance and create opportunities to improve governance.

Fiduciary AAA and capacity building

Moderate level of recognition (50% S, 26% M) of fiduciary AAA slightly more on capacity building (58% S, 29% M)

PFM triggers and milestones feature quite prominently in CAS results matrix. (47% S, 37% M )

Emerging use of PEFA benchmarks to measure progress

Trend in AAA towards integrated fiduciary assessments

Use of country systems

Discussed in few CASs. (18% satisfactory), not mentioned in more than half.

Usually limited to a general statement of intent to use country systems when conditions met.

Accounting and Auditing

Low level of recognition of ROSC A&A in CAS products (21%, compared with 50% for fiduciary)

Poor translation into capacity building agenda (18% satisfactory)

Harmonization

Good treatment of co-ordination of PFM work (87% satisfactory), including joint CASs

PFM analytical work and capacity building main area of collaboration with other donors

Good practice example

Uganda

FM involvement

Aim higher (55% rated satisfactory) Recognized role for fiduciary risk and use of

country systems GAC agenda mostly led by PREM. FM input

not consistent. Good practice: LAC policy notes

underpinning the CAS, Country FM strategies

Quality Assurance

Regional quality assurance

arrangements vary – generally not documented

Quality assurance at regional and anchor level could be better co-ordinated and streamlined.

Way ahead? Teamwork leading to involvement in CAS team.

Integrated PFM and GAC teams are building blocks Engage with FPSI colleagues and CAS team to ensure

recognition of private sector accounting and audit Country FM strategies or policy notes to provide

structured approach to FM issues Template/checklist for review to improve quality, ensure

compliance with guidance Structured analysis of country systems as input to CASs:

What CS currently used (budgeting, accounting, audit)? Obstacles for moving to full UCS Milestones to move to full UCS (e.g. PEFA performance, CPIA ratings

or other expected outcomes on PFM reform agenda) Review/standardize QA arrangements, between FM in

the regions and OPCFM