Fiduciary Issues for Emergencies & Crisis Case-study: Pioneering FM work in Northern Sudan By Nestor Coffi, Cluster Leader AFTFM

Overview Background Key Country FM Features Project Preparation: arrangements & challenges Project Implementation: arrangements & challenges Experiences with UN Agencies Findings of recent reviews & way forward

Background 2004 Naivasha CPA Ending 21-Year Civil War –Oslo Donors Conference/Pledges –Interim Constitution: 1 Country, 2 Systems –MDTFs Set up / WB Administrator –WB Office re-opened is Sudan as MDTF TS 2004 Darfur Crisis broke up & polarized IC attention

Key Country FM Features in Sudan Lack of exposure to Bank Operational Policies & Procedures since 1993 Poor Country Knowledge available/ No in-depth PFM Diagnostic 2 Separate MDTF Programs (N & S) to Deliver Quick Peace Dividends JAM established 8 Sector Clusters and FM Baseline Status: - North: existence of systems but need to be revamped - North: existence of systems but need to be revamped - South: no system in place; start from scratch

Project Preparation: Arrangements General Framework allowing Special Procedures: –Board Memorandum; Administrative Arrangements WB/Donors; Operational Manual; –Fast track procedures: from IPP to FPP; –One-Stop-Shop: OC standing as Board; Standardized framework/format of project preparation docs; Limited FM Assessment required; Focus on the Basics Vs State-of-the Art Arrangements

Project Preparation: Challenges Resources constrains: –weak PP Unit (Followers Vs Drivers); –No PPF available; –lack of familiarity to Bank jargon/procedures… Time constrains: –time needed to engage counterparts –but impossible b/c Fast-track requirements;

Challenges Continue … Difficult Balance Quality Vs Speed under Conflicting Pressures Fast-Track, Standardization & One-Fit-All Approaches result in: –No chance to experiment Innovative & Creative Solutions (e.g. New Currency: OBD considered but rejected); –Impossible to hold lengthy consultations to develop “Best Practices”

Project Implementation: Arrangements Continuous Implementation Support –Field-based WB FMS interacting w/projects daily –Monitoring Agent Team pre-screen all WA, provide Assistance under FMS supervision; Quarterly Supervision Mission for every project Familiarization & CB Training Session every Quarter (xxx Wshops & clinics; xxxx staff participants)

Project Implementation: Challenges US Sanctions affect MDTF-N despite OFAC License Weak National Institutions but Reluctant to Outsource with Private Auditors Counterpart Funding: a Sensitive Political Issue Moving from Manual to Computerized Accounting Systems Shift from Review/Clearance Mode to Assistance Mode

Experiences with UN Agencies Politically Charged Terrain; UN Agencies claim/advocate to Administer MDTFs; Good interactions w/ UN AI: - Open to collaborate under FMFA though field- based staff not aware of its provisions & implications - Submit IFR regularly; - Cooperate fully during SPN; - highly value FM contributions

Experiences Continue … Gray areas: diffuse accountability for projects implemented by several UN Agencies –audit?, –Government ownership undermined; Disbursement Modalities & OP.8: % upfront release is mostly preferred by UN IA but LOA staff reluctant; - 6-Month Forecast requested for 1-Year Start-up project while an annual budget exists !

Achievements Donors Review confirmed Existence of Sound FM arrangements in place for MDTF program RETF Reviews also Positive for FM arrangements 1 st Biannual Audit (Sept 05 to Sept 07) Good Financial Performance but Controversy over Disbursement rate: –$585M paid-in by Donors Vs $550M pledged –$177M committed into 12 projects in the North; $219M committed for South –$73M disbursed by 10 active projects in the North; $110M disbursed in the South;