Financial Management for
Africa Centers of
Excellence Project
Presented by Patrick Umah Tete, World Bank
on May 20, 2014 during the launch of the
project in Abuja, Nigeria
Overview of the session
• What is good Financial Management
Practice for an ACE?
• Submitting Withdrawal Applications
• Project Implementation Plan Financial
Management Contents
• Addressing ACE Financial Management
Gaps
• Benefiting from Financial Management
Disbursement Linked Indicators (DLIs)
~2
Good FM Practice for ACE
• Have a work plan that shows how you plan to use ACE
funds.
• Have a budget which costs the annual work plan. The
budget should be approved before the year of its
operation and monitored at least every quarter comparing
actual expenditure with the budget and taking action on
any significant variances.
• Accounts should be prepared monthly and every quarter,
you need to send an Interim Financial Report to the
Ministry of Education and World Bank within 45 days after
the end of the quarter.
• Having a computerized accounting information system is
an advantage compared to a manual accounting system
as accounts are prepared efficiently with minimal errors.
~3
Good FM Practice for ACEs
• Compliance with International Public Sector Accounting
Standards or International Financial Reporting Standards
is highly recommended.
• Having a good Financial Management Manual, Operations
Manual and Project Implementation Manual provides
financial discipline as it defines the mode of operation.
• Having an internal audit department that audits the ACE
regularly based on a risk based approach and writes
reports that are acted upon by management is a very
strong internal control system.
• Having an audit committee made up of non executive
members and meets at least every quarter to follow up on
both internal and external audit issues and actions taken
by management is also a very strong internal control ~ 4
system.
Good FM Practice for ACEs
• Regularly submitting withdrawal applications to the Bank
to ensure the ACE is well funded to operate effectively.
• Having the annual financial statements prepared within 3
months after the end of the financial year and submitting
them for audit.
• Appointing the external auditors in time to conduct the
audit or communicating to the Supreme Audit Institution
to plan for the audit is highly recommended.
• Submitting the audit report to the Ministry of Education
and World Bank within 6 months after the end of the
financial year.
~5
Submitting Withdrawal Applications
• Do read the Disbursement Letter – example shared.
• Submit withdrawal application as guided by the
Disbursement Letter, Project Appraisal Document and
Project Implementation Plan.
• Accounts supporting disbursement reimbursements
should be supported by Eligible Expenditure Programs
(Salaries for ACE staff plus operating expenditure).
• During implementation, withdrawal applications should be
submitted with interim financial reports showing how ACE
funds are being used (comparing actual expenditure with
the budget). Example to be shared.
• Should you have any challenges submitting withdrawal
applications please get in touch asap with the Country
Financial Management Specialist at the World Bank. ~ 6
Project Implementation Plan – FM
Contents
• It should refer to the accounting policies and procedures in the
University or ACE or Government FM Manual (Institutional
Manuals) to be used for the project .
• It should cover the gaps between the existing institutional FM
Manuals and the Financing Agreements with the World Bank.
These areas include:
– Detailing how the ACE funds (US$8 million) will be used. Should include
an account for ACE revenue generated.
– How the financing covenants on ensuring satisfactory FM systems are
maintained through out the project, Interim Financial Reports and annual
audit reports are submitted on time to the Ministry of Education and
World Bank will be complied with.
– Describe in detail the funds flow arrangements and the signatories for
the ACE project. Reference to the PAD to be made.
– How ACE FM action plans will be addressed.
~7
– How FM DLIs will be implemented.
Addressing ACE FM Gaps
A c tio n
IF R fo r m a ts a n d A u d it T o R s : A g re e w ith th e B a n k th e
fo r m a t o f th e I n te rim F in a n c ia l R e p o rts a n d th e e x te rn a l
a u d it te r m s o f re fe re n c e .
D a te d u e b y
N e g o tia tio n
C o n d itio n
R e sp o n s ib le
A ll im p le m e n tin g
e n titie s
2
P r o je c t I m p le m e n ta tio n P la n : P re p a re a n d a g re e th e
P ro je c t Im p le m e n ta tio n M a n u a l (P IM ) .
E ffe c tiv e n e s s
C o n d itio n
A ll im p le m e n tin g
e n titie s
3
A c c o u n tin g p o lic ie s a n d p r o c e d u r e s : U n iv e rsite C h e ik h
A n ta D io p , S e n e g a l to p re p a re a n d a g re e th e F in a n c ia l
M a n a g e m e n t M a n u a l w ith ID A in o rd e r to h a v e a d e q u a te
F M p ro c e d u re s a n d g u id e lin e s fo r th e p ro je c t. (in c lu d e d in
P IP )
A u d it R e p o r t b a c k lo g : U n iv e rsity o f d ’A b o m e y -C a la v i,
B e n in & U n iv e rsité d e L o m é , T o g o to a d d re ss th e b a c k lo g
o f a u d ite d a c c o u n ts fo r 2 0 1 2 an d 2 0 1 3 . (in c lu d e d in P IP )
E ffe c tiv e n e s s
C o n d itio n
U n iv e rsite C h e ik h
A n ta D io p , S e n e g a l
E ffe c tiv e n e s s
C o n d itio n
5
A c c o u n tin g S ta ff: U n iv e rs ity o f Y a o u n d e 1 (C E T IC ),
C a m e ro o n ; U n iv e rsity o f G h a n a , W A C C I ; a n d U n iv e rsite
C h e ik h A n ta D io p , S e n e g a l th a t n e e d to re cru it a q u a lifie d
a n d e x p e rie n c e d a c c o u n ta n t to stre n g th e n a c c o u n ta b ility o f
p ro je c t fu n d s.
W ith in 3 m o n th s
a fte r
e ffe c tiv e n e ss
(D a te d
C o v e n a n t)
6
In te r n a l A u d it S ta ff : R e c ru it a n in te r n a l a u d it sta ff to
stre n g th e n th e in te rn a l a u d it a rra n g e m e n ts.
W ith in 3 m o n th s
a fte r
e ffe c tiv e n e ss
(D a te d
C o v e n a n t)
U n iv e rsity o f
d ’A b o m e y -C a la v i,
B e n in & U n iv e rs ité d e
Lo m é, T ogo
U n iv e rsity o f Y a o u n d e
1 (C E T IC ), C a m e ro o n ;
U n iv e rsity o f G h a n a ,
W A C C I; a n d
U n iv e rsite C h e ik h
A n ta D io p , S e n e g a l
U n iv e rsite C h e ik h
A n ta D io p , S e n e g a l;
A fric a n U n iv e rsity o f
S c ie n c e a n d
T e c h n o lo g y, A b u ja ,
N ig e ria ; a n d
A sso c ia tio n o f A fric a n
U n iv e rsitie s .
1
4
~8
Addressing FM ACE Gaps
7
8
9
A c tio n
A c c o u n tin g in fo r m a tio n sy ste m :
(a )
U n iv e rsity o f Y a o u n d e I ( C E T IC ), C a m e ro o n ;
U n iv e rsite C h e ik h A n ta D io p , S e n e g a l; a n d
U n iv e rsity
of
d ’A b o m e y - C a la v i,
B e n in
to
a c q u ire a n a c c o u n tin g in fo rm a tio n s y ste m to
p re p a re th e p ro je c t’s a c c o u n ts in a n e ffic ie n t a n d
e ffe c tiv e m a n n e r. T h is w ill a lso a v o id e rro rs in
th e a c c o u n ts.
(b ) F e d e ra l U n iv e rsity o f A g ric u ltu re , A b e o k u ta ,
N ig e ria a n d U n iv e rsité d e L o m é , T o g o n e e d to
u p g ra d e th e ir c o m p u te riz e d a c c o u n tin g s y ste m to
b e sa tisfa c to r y to p re p a re p ro je c t a c c o u n ts.
(c )
A hm adu
B e llo
U n iv e r sity ,
Z a ria ,
N ig e ria ,
R e d e e m e rs U n iv e rsity a n d U n iv e r sity o f B e n in
w h ic h a re b o th in N ig e ria d o n o t h a v e a c c o u n tin g
in fo r m a tio n
s y ste m s
but
im p le m e n ta tio n
is
u n d e r w a y a n d n e e d s to b e m o n ito re d a n d
c o m p le te d .
(d ) U n iv e rsity o f P o rt H a rc o u rt, N ig e ria n e e d s to
stre n g th e n th e c a p a c ity o f th e te a m m a n a g in g th e
a c c o u n tin g in fo r m a tio n s y ste m (P e a c h tre e ) a s
th e ir c a p a c ity is lo w .
A u d it C o m m itte e : P u t in p la c e a fu n c tio n a l a u d it
c o m m itte e th a t w ill fo llo w u p a u d it re c o m m e n d a tio n s to
e n s u re th e y a re a d d re sse d a p p ro p ria te ly b y m a n a g e m e n t.
S tr e n g th e n g o v e r n a n c e a n d a n ti-c o r r u p tio n sy ste m s :
T h is w ill n e e d to b e d o n e b y p u ttin g in p la c e a fu n c tio n a l
a n d in d e p e n d e n t c o m p la in t h a n d lin g m e c h a n is m ; se ttin g
u p a fu n c tio n a l ris k m a n a g e m e n t a n d a n ti -c o rru p tio n
c o m m itte e ; a n d p u b lis h in g b u d g e ts, fin a n c ia l re p o rts a n d
a u d ite d
a c c o u n ts
on
th e ir
w e b site s
to
p ro m o te
tra n sp a re n c y a n d a c c o u n ta b ility .
D a te d u e b y
W ith in 6 m o n th s
a fte r
e ffe c tiv e n e ss
(D a te d
C o v e n a n t)
R e sp o n s ib le
(a )U n iv e rs ity o f
Y a o u n d e I (C E T IC ),
C a m e ro o n ; U n iv e rsite
C h e ik h A n ta D io p ,
S e n e g a l; a n d
U n iv e rsity o f
d ’A b o m e y -C a la v i,
B e n in .
(b ) F e d e ra l U n iv e rsity
o f A g ric u ltu re ,
A b e o k u ta , N ig e ria a n d
U n iv e rsité d e L o m é ,
T ogo.
(c ) A h m a d u B e llo
U n iv e rsity , Z a ria ,
N ig e ria ; R e d e e m e rs
U n iv e rsity ; a n d
U n iv e rsity o f B e n in a ll
in N ig e ria .
(d ) U n iv e rsity o f P o rt
H a rc o u rt, N ig e ria .
W ith in 6 m o n th s
a fte r
e ffe c tiv e n e ss
(D a te d
C o v e n a n t)
D u rin g
I m p le m e n ta tio n
A ll im p le m e n tin g
e n titie s e x c e p t
U n iv e rsity o f B e n in ,
N ig e ria a n d U n iv e rsity
of G hana.
A ll im p le m e n tin g
e n titie s b u t U n iv e rsity
o f B e n in a n d F e d e ra l
U n iv e rsity o f
A g ric u ltu re , A b e o k u ta ,
b o th in N ig e ria a re
e x e m p t fro m se ttin g a n
a n ti-c o rru p tio n
c o m m itte e .
~9
Addressing ACE FM Gaps
10
11
12
13
A ction
Internal aud it reporting : Internal A ud it units are
encouraged to report on a quarterly basis on the project
using a risk based approach.
Strengthen internal au dit skills: Internal audit units are
encouraged to strengthen their system s b y im proving their
internal audit m anuals w ith good practices issued b y the
Institute of Internal A uditors; acquiring internal audit
softw are to be m ore efficient and effective w hen
conducting audits; train in perform ance auditing to
strengthening value for m one y auditing; and train in risk
based auditing to strengthen internal audit skills.
Internal A udit w ork pla n : Internal A udit units to include
the project in their annual w ork plan to ensure audits are
done based on a risk based approach.
Strengthening internal control system
(a) Strengthen Internal C ontrol S ystem s related to
preparing
tim ely
bank
reconciliations,
updating/coding fixed assets and providing
explanatio ns for variances between actual and
budgeted expenditure.
(b) A ddress internal audit issues in a tim ely m anner.
D ate due by
D uring
Im plem entatio n
R esponsible
A ll im plem enting
entities
D uring
Im plem entatio n
A ll im plem enting
entities
D uring
Im plem entatio n
A ll im plem enting
entities
D uring
Im plem entatio n
(a) A hm adu B ello
U niversity and A frican
U niversity of Science
and T echnology both
in N igeria.
(b)Jos U niversity,
N igeria.
~ 10
Benefiting from FM DLI#3
These are:
• ACEs submitting timely withdrawal applications supported
by financial reports showing how funds have been
utilized.
• Universities under the university council having
functioning audit committee that will amongst other
assignments follow up audit issues related to the ACE.
• Universities having functioning internal audit units that
will support the ACEs.
• ACEs publishing annual work plans, budgets, interim
financial reports and audited reports on their websites to
promote transparency and accountability.
~ 11
Thanks for listening to me.
Email contact: pumahtete@worldbank@org
~ 12
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Second Presentaion by Patrick Umah Tete, World bank