Financial Management for Africa Centers of Excellence Project [ACE I and ACE II] Workshop Accra, November 7-10 Africa Region

Outline Overall FM Status Project Design including Flow of Funds Reporting and Auditing Requirements Financial Management (FM) related Disbursment Linkded Indicators (DLIs)

Financial Management Status (as of November 7) Indicators ACE I ACE II FM Risk Moderate Substantial FM Performance Moderately Satisfactory Percent Disbursed 47% 17%

Project Design and Funds Flow

Project Design and Funds Flow From results to disbursement….. ACHIEVEMENT OF DLIs/DLRs DISBURSEMENT (First disbursement) IMPLEMENTATION OF ACTIVITIES

Financial Reporting Requirements Schedule 2. Section II. B. 2 of the legal agreement requires the submission of: Unaudited Interim Financial Reports Sources and Uses of Funds Statement of EEPs Purpose Monitoring the implementation each ACE’s approved Implementation Plan (and annual work plans). Report the eligible expenditures (as defined before) incurred during the reporting period, and which are going to be used to support of the withdrawal of funds upon achievement and independent verification of the DLIs/DLRs Content Sources and Uses of Funds. Sources: Include funds received by the ACE from the WB, Government funding (if applicable) and Student fees (if applicable and separately accounted for). Uses of funds: Expenditures classified by major activity of the ACE/Project Implementation Plan (which should be consistent with Annual work plan) Uses of funds. Expenditures classified by activities of the Project Implementation Plan of each ACE (consistent with the activities listed in the Annual Work Program). This report should include a comparison of the actual vs amount planned for the CY or agreed period. The EEP Statement should list the EEPs – selected budget lines- defined for each ACE/University, including: Salaries, [non-procurable] operating costs and/or others. Annex Periodicity Semi-annual Due Date 45 days after the end of the Semester

Reporting Requirements Current practice Interim Financial Report to meet IDA reporting requirements Separate EEP Statement for disbursement Options going forward Option 1 – Continue current practice Option 2 - Combined Interim Financial Report and EEP Statement Part – I Sources and Use of Funds Uses of Funds by PIM Part – II EEP Statement with evidence of linkage to budget lines and budget execution reports

Audit requirements ACE II Audit report of the university financial statements which would ensure that the EEPs are audited Audit report of the ACE Project Financial Statements that would ensure that resources received under the project are audited as well as the activities agreed with in the project implementation plan Audit report should be submitted normally within six months ACE I Audit of Project Financial Statements of the ACE are required by June 30 of each year for the previous calendar year Scope: all project sources and uses of funds and the EEPs (ACE ensures audit TORs include the review and validation of of the EEP Spending Report ;

Financial Management (FM) Disbursment Linked Indicators (DLIs) Verification Protocols – example DLR Description Protocol DLR 3.2: Functioning Audit Committee under the university council. For the first withdrawal application requesting funding for this result: Guidelines/ ToRs for the audit committee constituted under the governing body of the university Members of the audit committee Evidence (report or minutes of meeting) that the Committee has met and discussed the audit for the ACE, the committee’s role in the project, and risks associated with the project. For subsequent withdrawal applications: Evidence (report or minutes of meeting) that the Committee has met and discussed the external audit for the ACE, any internal audit reports, and following up on issues raised to ensure management’s attention and correction. If changes to the Guidelines / ToRs have been made, the revised ToRs or Guidelines should be included. Note, the Audit committee should in principle carry out an institutional review of the audits and follow-up. However, the term functioning will be interpreted only regarding review of the ACE part of the university. Source: Table 3 of Operations Manual – ACE I

FM DLI Results – ACE I Experience Results for 2016 Calendar Year verified in 2017 Overall Percent earned: 49% DLIs with lowest score: 3.2 on Functioning of Audit Committee DLIs with hightest score: 3.1 on Timely submission of Withdrawal Application Summary DLR 3.1: Timely Submission of WA DLR 3.2: Functioning Audit Committee DLR 3.3: Functionning Audit Committee DLR 3.4: Transparency DLR 3 Payout (in SDR) Total Earnnings 363,000 49,500 148,500 709,500 Potential Earnings 1,452,000 Percentage Earned 100% 14% 41% 49%

FM DLI Results – ACE I Experience Results by Country/ACE – Top Performers Country` ACE Projected DLR Payment (in SDR) Percent achieved Benin Université d’Abomey – Calavi (UAC) 66,000 100% Togo University of Lome Ghana University of Ghana – West African Centre for Crop Improvement 49,500 75%   University of Ghana – West African Centre for Cell Biology of Infectious Diseases Kwame Nkrumah University of Science Nigeria Redeemers University Bayero University, Kano, Nigeria 

FM DLI Verification – ACE I Experience Challenges Timeliness of results - lengthy verification process delays disbursments Availability of information on ACE websites for transparency DLR(3.4) Overdue audits has multiple implications on project performance Functioning of audit committee is critical to demonstrate that governance arrangements within ACEs and host universities are working effectively Going Forward Strict adherence to the timeline – August 15–September 30 Improve design and robustness of ACE websites to ease navigation and online search ( ) Timely updates to the websites to achieve DLR on transparency Establish and/or reinforce audit committees at the university level Establish and/or reinforce internal audit unit at the university level

Thank you for your attention Questions and Answers Thank you for your attention